MAXUS INCOME FUND
MAXUS EQUITY FUND
MAXUS LAUREATE FUND
MAXUS OHIO HEARTLAND FUND
MAXUS AGGRESSIVE VALUE FUND
INVESTOR SHARES
INSTITUTIONAL SHARES
MAXUS INCOME FUND has an investment objective of obtaining the highest total
return, a combination of income and capital appreciation, consistent with
reasonable risk. The Fund pursues this objective by investing primarily in
income-producing securities.
MAXUS EQUITY FUND has an investment objective of obtaining a total return, a
combination of capital appreciation and income. The Fund pursues this objective
by investing primarily in equity securities.
MAXUS LAUREATE FUND has an investment objective of achieving a high total
return, a combination of capital appreciation and income, consistent with
reasonable risk. This Fund pursues its objective by investing primarily in other
mutual funds which invest on a global basis.
MAXUS OHIO HEARTLAND FUND has an investment objective of obtaining a high total
return (a combination of income and capital appreciation). The Fund pursues this
objective by investing primarily in equity securities of companies headquartered
in the State of Ohio.
MAXUS AGGRESSIVE VALUE FUND has an investment objective of obtaining capital
appreciation. The Fund pursues this objective by investing primarily in equity
securities of companies whose equity securities have a total market value of
between $10,000,000 and $200,000,000.
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.
PROSPECTUS/April 30, 2000
<PAGE> 1
MAXUS INCOME FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND MAIN INVESTMENT STRATEGIES
The investment objective of Maxus Income Fund is to obtain the highest total
return, a combination of income and capital appreciation, consistent with
reasonable risk. The Fund pursues this objective by investing primarily in
income-producing securities (such as debt securities, preferred stocks and
common and preferred shares of closed-end investment companies (also known as
"closed-end funds") having portfolios consisting primarily of income-producing
securities). Certain of the debt securities and preferred stocks in which the
Fund invests may be convertible into common shares. To a lesser degree, the Fund
will invest directly in common shares bearing high dividends.
Maxus Income Fund will alter the composition of its portfolio as economic
and market trends change. The Adviser will increase its investment in short-term
debt securities during periods when it believes interest rates will rise and
will increase its investment in long-term debt securities when it believes
interest rates will decline. Maxus Income Fund may invest in debt securities of
any maturity.
In selecting corporate debt securities for Maxus Income Fund the Adviser
intends to invest principally in securities rated BBB or better by Standard &
Poor's Corporation rating service, but may invest in securities rated as low as
BB, B, CCC or CC or unrated securities when these investments are believed by
the Adviser to be sound. The Fund will not invest more than 20% of its portfolio
in (i) securities rated BB or lower by Standard & Poor's Corporation and/or (ii)
unrated securities which, in the opinion of the Adviser, are of quality
comparable to those rated BB or lower. Securities rated lower than BBB by
Standard & Poor's, sometimes referred to as "junk bonds," are usually considered
lower-rated securities and have speculative characteristics. Please refer to
Appendix A of this Prospectus for a description of these ratings.
In selecting closed-end funds for Maxus Income Fund, the Adviser will invest
in closed-end funds which, in choosing corporate debt securities in which they
invest, adhere to ratings criteria no less strict than those followed by Maxus
Income Fund in
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<PAGE> 2
selecting its direct investments in corporate debt securities. Such closed-end
funds may invest in debt securities of United States or foreign issuers.
When the Adviser believes that market conditions warrant a temporary
defensive posture, the Fund may invest up to 100% of its assets in high-quality
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely impact the ability of the Fund to
achieve its investment objective.
MAIN RISKS
Volatility. The value of securities in Maxus Income Fund's portfolio will go
up and down. The Fund's portfolio will reflect changes in the prices of
individual portfolio securities or general changes in securities valuations.
Consequently, the Fund's share price may decline and you could lose money.
Debt Securities Risks. The Fund's portfolio will also be exposed to the
following additional risks in connection with its investments in debt securities
and in closed-end funds which invest primarily in debt securities:
- Prices of debt securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise,
prices of debt securities fall. The net asset value of the Fund may
decrease during periods of rising interest rates.
- An issuer of debt securities may default (fail to repay interest and
principal when due). If an issuer defaults or the risk of such default is
perceived to have increased, the Fund will lose all or part of its
investment. The net asset value of the Fund may fall during periods of
economic downturn when such defaults or risk of defaults increase.
- Securities rated below investment grade, also known as junk bonds,
generally entail greater risks than investment grade securities. For
example, their prices are more volatile, their values are more negatively
impacted by economic downturns, and their trading market may be more
limited.
Closed-End Funds. The closed-end funds in which the Fund invests typically
pay an advisory fee for the management of their portfolios, as well as other
expenses.
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<PAGE> 3
Therefore, the investment by the Fund in closed-end funds often results in a
duplication of advisory fees and other expenses, thereby resulting in a lower
return for the Fund than would be the case in the absence of such duplication.
In addition, since these closed-end funds invest in debt securities, they
are subject to the same risks described above in "Debt Securities Risks".
Also, certain of the closed-end funds in which Maxus Income Fund invests may
invest part or all of their assets in debt securities of foreign issuers. Such
investments involve the following additional risks:
- Because foreign securities ordinarily are denominated in currencies other
than the U.S. dollar, changes in foreign currency exchange rates will
affect the closed-end fund's net asset value, the value of dividends and
interest earned, gains and losses realized on the sale of securities and
net investment income and capital gain, if any, to be distributed to
shareholders by the closed-end fund. If the value of a foreign currency
declines against the U.S. dollar, the value of the closed-end fund's
assets denominated in that currency will decrease. Although these
closed-end funds may enter into "hedging" transactions intended to
minimize the risk of loss due to a decline in the value of the subject
foreign currency, in some cases all or a portion of the closed-end fund's
portfolio remains subject to this risk of loss.
- There are additional risks relating to political, economic, or regulatory
conditions in foreign countries; withholding or other taxes; trading,
settlement, custodial, and other operational risks; and the potentially
less stringent investor protection and disclosure standards of foreign
markets. All of these factors can make foreign investments of such
closed-end funds more volatile and potentially less liquid than U.S.
investments.
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks of
investing in Maxus Income Fund by showing changes in the Fund's performance from
year to year over a 10-year period and by showing how the Fund's average annual
returns for one, five, and ten years compare to those of a broad-based
securities
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<PAGE> 4
market index. How the Fund has performed in the past is not necessarily an
indication of how the Fund will perform in the future.
MAXUS INCOME FUND
INVESTOR SHARES
[GRAPH]
<TABLE>
<S> <C>
1990 1.70%
1991 19.30%
1992 7.90%
1993 8.70%
1994 -4.50%
1995 16.40%
1996 9.20%
1997 11.50%
1998 3.50%
1999 -5.70%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 7.79% (quarter ending March 31, 1991) and the lowest return for a
quarter was -4.56% (quarter ending December 31, 1999).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST PAST PAST
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR 5 YEARS 10 YEARS
- - ------------------------------------------ -------- ------- --------
<S> <C> <C> <C>
Maxus Income Fund....................... -5.72% 6.72% 6.53%
Ryan Labs Treasury Index*............... -6.21% 6.86% 6.90%
Lehman Intermediate Corporate Index**... 0.16% 7.77% 7.89%
</TABLE>
- - ---------------
* The Ryan Labs Treasury Index is an equal weighted index of all Treasuries
having maturities longer than one year.
** The Lehman Intermediate Corporate Index is an index of investment grade
corporate bonds having at least $100,000,000 principal amount outstanding and
maturities of from one to ten years.
5
<PAGE> 5
MAXUS EQUITY FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND MAIN STRATEGIES
The investment objective of Maxus Equity Fund is to obtain a total return, a
combination of capital appreciation and income. This Fund pursues this objective
by investing primarily in equity securities of both smaller and larger
companies. Under normal circumstances at least 65% of the Fund's total assets
will consist of equity securities. Equity securities consist of common stock and
securities convertible into common stock. The Fund emphasizes a "value" style of
investing. In deciding which securities to buy and which to sell, the Adviser
will give primary consideration to fundamental factors. For example, securities
having relatively low ratios of share price to book value, net asset value,
earnings and cash flow will generally be considered attractive investments.
Additionally, the Adviser will give secondary consideration to insider
transactions and the growth of earnings.
When the Adviser believes that market conditions warrant a temporary
defensive posture, the Fund may invest up to 100% of its assets in high-quality,
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
MAIN RISKS
Volatility. The value of securities in Maxus Equity Fund's portfolio will go
up and down. The Fund's portfolio will reflect changes in the prices of
individual portfolio securities or general changes in securities valuations.
Consequently, the Fund's share price may decline and you could lose money.
Smaller Companies. The prices of equity securities fluctuate based on
changes in a company's activities and financial condition and in overall market
conditions. While Maxus Equity Fund invests in both smaller and larger
companies, the smaller companies in which the Fund invests are especially
sensitive to these factors and therefore may be subject to greater share price
fluctuations than other companies. Also, securities of these smaller companies
are often less liquid, thus possibly limiting
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<PAGE> 6
the ability of the Fund to dispose of such securities when the Adviser deems it
desirable to do so. As a result of these factors, securities of these smaller
companies may expose shareholders of the Fund to above average risk.
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks of
investing in Maxus Equity Fund by showing changes in the Fund's performance from
year to year over the life of the Fund and by showing how the Fund's average
annual returns for one and five year periods and the life of the Fund compare to
those of a broad-based securities market index. How the Fund has performed in
the past is not necessarily an indication of how the Fund will perform in the
future.
MAXUS EQUITY FUND
INVESTOR SHARES
[GRAPH]
<TABLE>
<S> <C>
1990 -10.80%
1991 36.40%
1992 13.60%
1993 24.50%
1994 0.60%
1995 22.40%
1996 19.10%
1997 28.20%
1998 -8.70%
1999 12.90%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 27.03% (quarter ending March 31, 1991) and the lowest return for a
quarter was -21.06% (quarter ending September 30, 1998).
7
<PAGE> 7
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST PAST PAST
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR 5 YEARS 10 YEARS
- - ------------------------------------------ -------- ------- --------
<S> <C> <C> <C>
Maxus Equity Fund....................... 12.93% 14.02% 12.80%
Lipper Multicap Value Index*............ 5.94% 17.82% 13.03%
Value Line Arithmetic Index**........... 10.56% 17.78% 13.46%
</TABLE>
- - ---------------
* The Lipper Multicap Value Index is an equal weighted index of mutual funds
that invest in undervalued securities within multiple capitalization ranges.
** The Value Line Arithmetic Index is an equal weighted index of the more than
1,700 stocks followed by Value Line Publishing, Inc.
MAXUS LAUREATE FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND MAIN INVESTMENT STRATEGY
The investment objective at Maxus Laureate Fund is to achieve a high total
return, a combination of capital appreciation and income, consistent with
reasonable risk. The Fund pursues this objective by investing primarily in other
mutual funds which invest on a global basis. The Fund will structure its
portfolio of mutual funds by (1) identifying certain global investment themes
(for example, global telecommunication or emerging markets) which are expected
to provide a favorable return over the next six to twelve months and (ii)
selecting one or more mutual funds with management styles (for example, value
vs. growth or large cap vs. small cap) or investment concentrations which
represent each theme. As market conditions change, the Fund will exit those
investment themes which appear to have run their course and replace them with
more attractive opportunities. The Fund also will look for opportunities caused
by market-moving events (such as political events, currency devaluations and
natural disasters) that cause a disequilibrium between securities prices and
their underlying intrinsic values.
The Fund may also seek to achieve its objective by investing in mutual funds
whose investment objectives are to provide investment results which either (i)
generally correspond to the performance of a recognized stock price index
("index funds"), (ii) generally correspond to a specified multiple of (for
example, two times) the performance of a recognized stock price index
("leveraged index funds"),
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<PAGE> 8
(iii) generally correspond to the inverse (opposite) of the performance of a
recognized stock price index ("bear funds") or (iv) generally correspond to a
specified multiple of the inverse (opposite) of the performance of a recognized
stock price index ("leveraged bear funds").
The Fund may invest in index funds and/or leveraged index funds when the
Adviser believes that equity prices in general are likely to rise in the near
term. Investments in index funds and leveraged index funds are designed to allow
the Fund to seek to profit from anticipated increases in the indexes to which
such funds generally are correlated. The Fund may invest in bear funds and/or
leveraged bear funds when the Adviser believes that equity prices in general are
likely to decline in the near term. Investments in bear funds and leveraged bear
funds are designed to allow the Fund to seek to profit from anticipated
decreases in the indexes to which such funds generally are inversely correlated.
When the Adviser believes that market conditions warrant a temporary
defensive posture, the Fund may invest up to 100% of its assets in high-quality
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
Because the Fund reallocates fund investments across potentially numerous
asset subclasses as evolving economic and financial conditions warrant, the
portfolio turnover rate of the Fund is much higher than that of most other funds
with similar objectives. Although the Fund invests exclusively in underlying
funds that do not charge front-end or deferred sales loads, a sub-custodian of
the Fund does impose a small transaction charge for each purchase or sale of
underlying fund shares. The higher the portfolio turnover rate, the greater will
be the custodial transaction charges borne by the Fund. Also, a high rate of
portfolio turnover will result in high amounts of realized investment gain
subject to the payment of taxes by shareholders. Any realized net short-term
investment gain will be taxed to shareholders as ordinary income. See
"Dividends, Distributions and Taxes" below.
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<PAGE> 9
MAIN RISKS
Volatility. The value of securities in Maxus Laureate Fund's portfolio will
go up and down. The Fund's portfolio will reflect changes in the prices of
individual portfolio securities or general changes in securities valuations.
Consequently, the Fund's share price may decline and you could lose money.
Foreign Exposure. Many of the underlying funds in which this Fund invests
have substantial investments in foreign markets. Foreign securities, foreign
currencies, and securities issued by U.S. entities with substantial foreign
operations can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include fluctuations in
foreign currencies; withholding or other taxes; trading, settlement, custodial
and other operational risks; and the less stringent investor protection and
disclosure standards of some foreign markets. All of these factors can make
foreign investments, especially those in emerging markets, more volatile and
potentially less liquid than U.S. investments. In addition, foreign markets can
perform differently than the U.S. market. If these factors cause the net asset
values of the underlying funds to decline, the Fund's share price will decline.
Index and Leveraged Index Funds. The Fund may invest in "index funds" or
"leveraged index funds." If equity prices generally decline while the Fund is
invested in an index fund or funds, the Fund could experience substantial
losses. Such losses would be magnified to the extent the Fund is invested in a
leveraged index fund or funds.
Bear and Leveraged Bear Funds. The Fund may also invest in "bear funds" or
"leveraged bear funds." If equity prices generally rise while the Fund is
invested in a bear fund or funds, the Fund could experience substantial losses.
Such losses would be magnified to the extent the Fund is invested in a leveraged
bear fund or funds.
Duplication of Expenses. An investor in the Fund will bear not only his
proportionate share of the expenses of the Fund but also indirectly similar
expenses of the underlying mutual funds in which the Fund invests. These
expenses consist of advisory fees, expenses related to the distribution of
shares, brokerage commissions, accounting, pricing and custody expenses,
printing, legal and audit expenses and other miscellaneous expenses.
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<PAGE> 10
Industry Concentration. Through its investment in underlying funds, the Fund
indirectly may invest more than 25% of its assets in one industry. Such indirect
concentration of the Fund's assets may subject the shares of the Fund to greater
fluctuation in value than would be the case in the absence of such
concentration.
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks of
investing in Maxus Laureate Fund by showing changes in the Fund's performance
from year to year over the life of the Fund and by showing how the Fund's
average annual returns for one and five year periods and the life of the Fund
compare to those of a broad-based securities market index. How the Fund has
performed in the past is not necessarily an indication of how the Fund will
perform in the future.
MAXUS LAUREATE FUND
INVESTOR SHARES
[GRAPH]
<TABLE>
<S> <C>
1994 -3.4%
1995 14.4%
1996 21.0%
1997 5.5%
1998 35.1%
1999 50.6%
</TABLE>
During the 6-year period shown in the bar chart, the highest return for a
quarter was 27.10% (quarter ending December 31, 1999) and the lowest return for
a quarter was -7.60% (quarter ending December 31, 1997).
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<PAGE> 11
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST PAST SINCE
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR 5 YEARS INCEPTION
- - ------------------------------------------ -------- ------- ---------
<S> <C> <C> <C>
Maxus Laureate Fund..................... 50.58% 25.36% 18.61%
Morgan Stanley Capital
International World Index*............ 24.94% 19.76% 16.65%
</TABLE>
- - ---------------
* The Morgan Stanley Capital International World Index is a total return market
capitalization weighted index of the equity markets of 23 developed countries.
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<PAGE> 12
MAXUS OHIO HEARTLAND FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND MAIN INVESTMENT STRATEGIES
The investment objective of Maxus Ohio Heartland Fund is to obtain a high
total return (a combination of income and capital appreciation). The Fund
pursues this objective primarily by investing in equity securities of companies
headquartered in the State of Ohio. Under normal circumstances the Fund will
invest at least 65% of its total assets in such securities. Equity securities
consist of common stock and securities convertible into common stock. In
selecting such companies, the Fund emphasizes a "value" style of investing. In
deciding which securities to buy and which to sell, the Adviser will give
primary consideration to fundamental factors. For example, securities having
relatively low ratios of share price to book value, net asset value, earnings
and cash flow will generally be considered attractive investments.
While investments may be made in all types and sizes of companies
headquartered in Ohio, the primary focus of this Fund will be to invest in
companies having annual revenues or a market capitalization of less than $5
billion, many of which may be traded in the over-the-counter market. However,
the Fund will generally not invest in companies having annual revenues less than
$25,000,000.
When the Adviser believes that market conditions warrant a temporary
defensive posture, the Fund may invest up to 100% of its assets in high-quality
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
MAIN RISKS
Volatility. The value of securities in Maxus Ohio Heartland Fund's portfolio
will go up and down. The Fund's portfolio will reflect changes in the prices of
individual portfolio securities or general changes in securities valuations.
Consequently, the Fund's share price may decline and you could lose money.
Geographic Concentration. Since this Fund concentrates its investments in
the State of Ohio, its assets may be at greater risk because of economic,
political or
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<PAGE> 13
regulatory risk which may become associated with the State. For example, if
adverse tax laws uniquely affecting Ohio-based companies were passed, such a
development could have an adverse effect upon this Fund. This Fund also is
subject to the additional risk that at certain times only a limited number of
securities meeting the Fund's investment criteria may be available.
Smaller Companies. The prices of equity securities fluctuate based on
changes in a company's activities and financial condition and in overall market
and financial conditions. While Maxus Ohio Heartland Fund invests in both
smaller and larger companies, the smaller companies in which the Fund invests
are especially sensitive to these factors and therefore may be subject to
greater share price fluctuations than other companies. Also, securities of these
smaller companies are often less liquid, thus possibly limiting the ability of
the Fund to dispose of such securities when the Adviser deems it desirable to do
so. As a result of these factors, securities of these smaller companies may
expose shareholders of the Fund to above average risk.
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks of
investing in Maxus Ohio Heartland Fund by showing changes in the Fund's
performance over the life of the Fund and by showing how the Fund's average
annual returns for the life of the Fund compare to those of a broad-based
securities market index. How the Fund has performed in the past is not
necessarily an indication of how the Fund will perform in the future.
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<PAGE> 14
MAXUS OHIO HEARTLAND FUND
INVESTOR SHARES
[GRAPH]
<TABLE>
<S> <C>
1999 -11.0%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 15.69% (quarter ending June 30, 1999) and the lowest return for a
quarter was -12.12% (quarter ending September 30, 1999).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR
------------------------------------------ --------
<S> <C>
Maxus Ohio Heartland Fund.............................. -11.03%
Russell 2000 Index*.................................... 20.89%
</TABLE>
- - ---------------
* The Russell 2000 Index is a market capitalization weighted index which
measures the performance of the 2000 smallest companies in the Russell 3000
Index.
MAXUS AGGRESSIVE VALUE FUND
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE AND MAIN INVESTMENT STRATEGIES
The investment objectives of Maxus Aggressive Value Fund is to obtain
capital appreciation. The Fund pursues this objective by investing primarily in
equity securities of companies whose equity securities have a total market value
of between
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<PAGE> 15
$10,000,000 and $200,000,000. Equity securities consist of common stock and
securities convertible into common stock. The Fund emphasizes a "value" style of
investing. In deciding which securities to buy and which to sell, the Adviser
will give primary consideration to fundamental factors. For example, securities
having relatively low ratios of share price to book value, net asset value,
earnings and cash flow will generally be considered attractive investments.
Additionally, the Adviser will give secondary consideration to insider
transactions and the growth of earnings.
As a result of its focus on smaller companies and its intent to take
short-term positions in certain equity securities, this Fund may be considered
to be more "aggressive" than other mutual funds having a "value" style of
investing.
When the Adviser believes that market conditions warrant a temporary
defensive posture, the Fund may invest up to 100% of its assets in high-quality
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
MAIN RISKS
Volatility. The value of securities in Maxus Aggressive Value Fund's
portfolio will go up and down. The Fund's portfolio will reflect changes in the
prices of individual portfolio securities or general changes in securities
valuations. Consequently, the Fund's share price may decline and you could lose
money.
Smaller Companies. The prices of equity securities fluctuate based on
changes in a company's activities and financial condition and in overall market
and financial conditions. The smaller companies in which the Fund invests are
especially sensitive to these factors and therefore may be subject to greater
share price fluctuations than other companies. Also, securities of these smaller
companies are often less liquid, thus possibly limiting the ability of the Fund
to dispose of such securities when the Adviser deems it desirable to do so. As a
result of these factors, securities of these smaller companies may expose
shareholders of the Fund to above average risk.
16
<PAGE> 16
BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the risks of
investing in Maxus Laureate Fund by showing changes in the Fund's performance
over the life of the Fund and by showing how the Fund's average annual returns
for the life of the Fund compare to those of a broad-based securities market
index. How the Fund has performed in the past is not necessarily an indication
of how the Fund will perform in the future.
MAXUS AGGRESSIVE VALUE FUND
INVESTOR SHARES
[GRAPH]
<TABLE>
<S> <C>
1999 21.2%
</TABLE>
During the one year period shown in the bar chart, the highest return for a
quarter was 21.19% (quarter ending June 30, 1999) and the lowest return for a
quarter was -8.82% (quarter ending September 30, 1999).
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST
(FOR THE PERIODS ENDING DECEMBER 31, 1999) ONE YEAR
------------------------------------------ --------
<S> <C>
Maxus Aggressive Value Fund............................. 21.19%
Lipper Small Cap Value Index*........................... 1.32%
</TABLE>
- - ---------------
* The Lipper Small Cap Value Index is an equal weighted index of mutual funds
that invest 75% or more of their assets in companies with a market
capitalization less than 250% of the S&P Small Cap 600 Index median
capitalization.
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<PAGE> 17
FEES AND EXPENSES OF THE FUNDS
This table describes the fees and expenses that you may pay if you buy and
hold shares of a Fund.
Annual Fund Operating Expenses (expenses that are deducted from Fund).
<TABLE>
<CAPTION>
MAXUS MAXUS OHIO
MAXUS INCOME FUND MAXUS EQUITY FUND LAUREATE FUND* HEARTLAND FUND
------------------------ ------------------------ ------------------------ ------------------------
INVESTOR INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR INSTITUTIONAL
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
-------- ------------- -------- ------------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees......... 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Distribution and/or
Service (12b-1)
Fees.................. 0.50% 0.00% 0.50% 0.00% 0.50% 0.00% 0.50% 0.00%
Other Expenses.......... 0.41% 0.41% 0.33% 0.33% 0.42% 0.42% 1.38% 1.38%
Total Annual Fund
Operating Expenses.... 1.91% 1.41% 1.83% 1.33% 1.92% 1.42% 2.88% 2.38%
<CAPTION>
MAXUS AGGRESSIVE
VALUE FUND
------------------------
INVESTOR INSTITUTIONAL
CLASS CLASS
-------- -------------
<S> <C> <C>
Management Fees......... 1.00% 1.00%
Distribution and/or
Service (12b-1)
Fees.................. 0.50% 0.00%
Other Expenses.......... 0.60% 0.60%
Total Annual Fund
Operating Expenses.... 2.10% 1.60%
</TABLE>
* Expenses shown do not include expenses of the underlying funds in which Maxus
Laureate Fund invests.
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<PAGE> 18
A shareholder who requests that the proceeds of a redemption be sent by wire
transfer will be charged for the cost of such wire, which is $20.00 as of the
date of this Prospectus (subject to change without notice).
EXAMPLES: THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF
INVESTING IN THE FUND WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLES ASSUME 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
EXAMPLES ALSO ASSUME 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:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Investor Shares
Maxus Income Fund..................... $194 $600 $1,032 $2,233
Maxus Equity Fund..................... $186 $576 $ 990 $2,148
Maxus Laureate Fund................... $195 $603 $1,037 $2,243
Maxus Ohio Heartland Fund............. $291 $892 $1,518 $3,204
Maxus Aggressive Value Fund........... $213 $658 $1,129 $2,431
Institutional Shares
Maxus Income Fund..................... $144 $446 $ 771 $1,691
Maxus Equity Fund..................... $135 $421 $ 729 $1,601
Maxus Laureate Fund................... $145 $449 $ 776 $1,702
Maxus Ohio Heartland Fund............. $241 $742 $1,270 $2,716
Maxus Aggressive Value Fund........... $163 $505 $ 871 $1,900
</TABLE>
HOW TO PURCHASE SHARES
By this Prospectus, each Fund is offering Investor Shares and Institutional
Shares. Investor Shares and Institutional Shares are identical, except as to
minimum investment requirements and the services offered to and expenses borne
by each class.
INVESTOR SHARES
Investor Shares may be purchased by any investor without a sales charge. A
minimum initial investment of $1,000 is required to open an Investor Shares
account with subsequent minimum investments of $100. Investment minimums may be
waived at the discretion of each Fund.
19
<PAGE> 19
INSTITUTIONAL SHARES
Institutional Shares may be purchased without a sales charge by (1)
financial institutions, such as banks, trust companies, thrift institutions,
mutual funds or other financial institutions, acting on their own behalf or on
behalf of their qualified fiduciary accounts, employee benefit or retirement
plan accounts or other qualified accounts, (2) securities brokers or dealers
acting on their own behalf or on behalf of their clients, (3) directors or
employees of the Funds or of the Adviser or its affiliated companies or by the
relatives of those individuals or the trustees of benefit plans covering those
individuals. These requirements for the purchase of Institutional Shares may be
waived in the sole discretion of the Funds.
A minimum initial investment of $1,000,000 is required to open an
Institutional Shares account with subsequent minimum investments of $10,000.
Investment minimums may be waived at the discretion of each Fund.
SHAREHOLDERS' ACCOUNTS
When a shareholder invests in a Fund, Mutual Shareholder Services ("Mutual
Shareholder Services"), the Transfer Agent for each Fund, will establish an open
account to which all full and fractional shares (to three decimal places) will
be credited, together with any dividends and capital gains distributions, which
are paid in additional shares unless the shareholder otherwise instructs the
Transfer Agent. Stock certificates will be issued for full shares only when
requested in writing. Each shareholder is notified of the status of his account
following each purchase or sale transaction.
INITIAL PURCHASE
The initial purchase may be made by check or by wire in the following manner:
BY CHECK. The Account Application which accompanies this Prospectus should be
completed, signed, and, along with a check for the initial investment payable to
Maxus Income Fund, Maxus Equity Fund, Maxus Laureate Fund, Maxus Ohio Heartland
Fund or Maxus Aggressive Value Fund, mailed to: Mutual Shareholder Services, The
Tower at Erieview, Suite 1005, 1301 East Ninth Street, Cleveland, Ohio 44114.
20
<PAGE> 20
BY WIRE. In order to expedite the investment of funds, investors may advise
their bank or broker to transmit funds via Federal Reserve Wire System to:
Firstar, N.A. Cinti/Trust, ABA #0420-0001-3, F/F/C Account No. 19-6201 Maxus
Mutual Funds DDA 483617213 (Firstar Trust). Also provide the shareholder's name
and account number. In order to obtain this needed account number and receive
additional instructions, the investor may contact, prior to wiring funds, Mutual
Shareholder Services, at (216) 736-3500. The investor's bank may charge a fee
for the wire transfer of funds.
SUBSEQUENT PURCHASES
Investors may make additional purchases in the following manner:
BY CHECK. Checks made payable to Maxus Income Fund, Maxus Equity Fund, Maxus
Laureate Fund, Maxus Ohio Heartland Fund or Maxus Aggressive Value Fund should
be sent, along with the stub from a previous purchase or sale confirmation, to
Mutual Shareholder Services, The Tower at Erieview, Suite 1005, 1301 East Ninth
Street, Cleveland, OH 44114.
BY WIRE. Funds may be wired by following the previously discussed wire
instructions for an initial purchase.
BY TELEPHONE. Investors may purchase shares up to an amount equal to 3 times the
market value of shares held in the shareholder's account in a Fund on the
preceding day for which payment has been received, by telephoning Mutual
Shareholder Services, at (216) 736-3500 and identifying their account by number.
Shareholders wishing to avail themselves of this privilege must complete a
Telephone Purchase Authorization Form which is available from the Fund. A
confirmation will be mailed and payment must be received within 3 business days
of date of purchase. If payment is not received within 3 business days the Fund
reserves the right to redeem the shares purchased by telephone, and if such
redemption results in a loss to the Fund, redeem sufficient additional shares
from the shareholder's account to reimburse the Fund for the loss. Payment may
be made by check or by wire. The Adviser has agreed to hold the Fund harmless
from net losses resulting from this service to the extent, if any, not
reimbursed from the shareholder's account. This telephone purchase option may be
discontinued without notice.
21
<PAGE> 21
SYSTEMATIC INVESTMENT PLAN
The Systematic Investment Plan permits investors to purchase shares of any
Fund at monthly intervals. Provided the investor's bank or other financial
institution allows automatic withdrawals, shares may be purchased by
transferring funds from the account designated by the investor. At the
investor's option, the account designated will be debited in the specified
amount, and shares will be purchased once a month, on or about the 15th day.
Only an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Investors desiring to
participate in the Systematic Investment Plan should call Mutual Shareholder
Services at (216) 736-3500 to obtain the appropriate forms. The Systematic
Investment Plan does not assure a profit and does not protect against loss in
declining markets.
PRICE OF SHARES
The price paid for shares of a certain class of a Fund is the net asset
value per share of such class of such Fund next determined after receipt by the
Transfer Agent of your investment in proper form, except that the price for
shares purchased by telephone is the net asset value per share next determined
after receipt of telephone instructions. Net asset value per share is computed
for each class of each Fund as of the close of business (currently 4:00 P.M.,
New York time) each day the New York Stock Exchange is open for trading and on
each other day during which there is a sufficient degree of trading in such
Fund's investments to affect materially net asset value of its redeemable
securities.
The assets of the Funds (except Maxus Laureate Fund) are valued primarily on
the basis of market quotations. The assets of Maxus Laureate Fund are valued
primarily on the basis of the reported net asset values of the underlying mutual
funds in which this Fund invests.
OTHER INFORMATION CONCERNING PURCHASE OF SHARES
Each Fund reserves the right to reject any order, to cancel any order due to
non-payment and to waive or lower the investment minimums with respect to any
person or class of persons. If an order is canceled because of non-payment or
because your
22
<PAGE> 22
check does not clear, you will be responsible for any loss that the Fund incurs.
If you are already a shareholder, the Fund can redeem shares from your account
to reimburse it for any loss. The Adviser has agreed to hold each Fund harmless
from net losses to that Fund resulting from the failure of a check to clear to
the extent, if any, not recovered from the investor. For purchases of $50,000 or
more, each Fund may, in its discretion, require payment by wire or cashier's or
certified check.
HOW TO REDEEM SHARES
All shares of each class of each Fund offered for redemption will be
redeemed at the net asset value per share of such class of that Fund next
determined after receipt of the redemption request, if in good order, by the
Transfer Agent. See "Price of Shares." Because the net asset value of each
Fund's shares will fluctuate as a result of changes in the market value of
securities owned, the amount a stockholder receives upon redemption may be more
or less than the amount paid for the shares. Redemption proceeds will be mailed
to the shareholder's registered address of record or, if $5,000 or more, may be
transmitted by wire, upon request, to the shareholder's pre-designated account
at a domestic bank. The shareholder will be charged for the cost of such wire.
If shares have been purchased by check and are being redeemed, redemption
proceeds will be paid only after the check used to make the purchase has cleared
(usually within 15 days after payment by check). This delay can be avoided if,
at the time of purchase, the shareholder provides payment by certified or
cashier's check or by wire transfer.
REDEMPTION BY MAIL
Shares may be redeemed by mail by writing directly to the Funds' Transfer
Agent, Mutual Shareholder Services, The Tower at Erieview, Suite 1005, 1301 East
Ninth Street, Cleveland, Ohio 44114. The redemption request must be signed
exactly as the shareholder's name appears on the registration form, with the
signature guaranteed, and must include the account number. If shares are owned
by more than one person, the redemption request must be signed by all owners
exactly as the names appear on the registration.
23
<PAGE> 23
If a shareholder is in possession of the stock certificate, these
certificates must accompany the redemption request and must be endorsed as
registered with a signature guarantee. Additional documents may be required for
registered certificates owned by corporations, executors, administrators,
trustees or guardians. A request for redemption will not be processed until all
of the necessary documents have been received in proper form by the Transfer
Agent. A shareholder in doubt as to what documents are required should contact
Mutual Shareholder Services at (216) 736-3500.
You should be able to obtain a signature guarantee from a bank,
broker-dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency or savings association. A notary public is not
an acceptable guarantor. A Fund may in its discretion waive the signature
guarantee in certain instances.
REDEMPTION BY TELEPHONE
Shares may be redeemed by telephone by calling Mutual Shareholder Services
at (216) 736-3500 between 9:00 A.M. and 4:00 P.M. eastern time on any day the
New York Stock Exchange is open for trading. An election to redeem by telephone
must be made on the initial application form or on other forms prescribed by the
Fund which may be obtained by calling the Funds at (216) 687-1000. This form
contains a space for the shareholder to supply his own four digit identification
number which must be given upon request for redemption. A Fund will not be
liable for following instructions communicated by telephone that the Fund
reasonably believes to be genuine. If a Fund fails to employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
the Fund may be liable for any losses due to unauthorized or fraudulent
instructions. Any changes or exceptions to the original election must be made in
writing with signature guaranteed, and will be effective upon receipt by the
Transfer Agent. The Transfer Agent and each Fund reserve the right to refuse any
telephone instructions and may discontinue the aforementioned redemption option
without notice. The minimum telephone redemption is $1,000.
24
<PAGE> 24
OTHER INFORMATION CONCERNING REDEMPTION
A shareholder who requests that the proceeds of a redemption be sent by wire
transfer will be charged for the cost of such wire, which is $10.00 as of the
date of this Prospectus (subject to change without notice).
Each Fund reserves the right to take up to seven days to make payment if, in
the judgment of the Fund's Investment Adviser, such Fund could be affected
adversely by immediate payment. In addition, the right of redemption for a Fund
may be suspended or the date of payment postponed (a) for any period during
which the NYSE is closed (other than for customary week-end 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 for protection of that Fund's shareholders.
Due to the high cost of maintaining accounts, each Fund has the right to
redeem, upon not less than 30 days written notice, all of the shares of any
shareholder if, through redemptions, the shareholder's account has a net asset
value of less than $1,000 in the case of Investor Shares or $1,000,000 in the
case of Institutional Shares. A shareholder will be given at least 30 days
written notice prior to any involuntary redemption and during such period will
be allowed to purchase additional shares to bring his account up to the
applicable minimum before the redemption is processed.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders who own shares of a Fund valued at $15,000 or more may elect to
receive a monthly or quarterly check in a stated amount (minimum check amount is
$100 per month or quarter). Shares will be redeemed at net asset value as may be
necessary to meet the withdrawal payments. If withdrawal payments exceed
reinvested dividends and distributions, the investor's shares will be reduced
and eventually depleted. A withdrawal plan may be terminated at any time by the
shareholder or the applicable Fund. Costs associated with a withdrawal plan are
borne by the
25
<PAGE> 25
applicable Fund. Additional information regarding systematic withdrawal plans
may be obtained by calling Mutual Shareholder Services at (216) 736-3500.
INVESTMENT MANAGEMENT
THE INVESTMENT ADVISER
Each Fund has retained as its investment adviser Maxus Asset Management Inc
(the "Adviser"), The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114, an investment management organization founded in 1976.
The Adviser is actively engaged in providing discretionary investment management
services to institutional and individual clients.
Subject to the supervision of each Fund's Board of Trustees, the Adviser
manages each Fund's assets, including buying and selling portfolio securities.
The Adviser also furnishes office space and certain administrative services to
the Fund.
During 1999, the Adviser received from each Fund as compensation for its
services an annual fee of 1% of such Fund's net assets.
PORTFOLIO MANAGERS
Richard A. Barone has been the portfolio manager of Maxus Income Fund, Maxus
Equity Fund and Maxus Aggressive Value Fund since the inception of each Fund.
Mr. Barone has been President of the Adviser since 1976.
Alan Miller has been the portfolio manager of Maxus Laureate Fund since
January 1, 1995. Mr. Miller has been a portfolio manager with the Adviser since
1994.
Denis J. Amato has been the portfolio manager of the Maxus Ohio Heartland
Fund since its inception. Mr. Amato has been Chief Investment Officer of Gelfand
Maxus Asset Management Inc., a subsidiary of RMI, since 1997. Previously, he was
Managing Director of Gelfand Partners Asset Management since 1991.
26
<PAGE> 26
RULE 12b-1 PLAN (INVESTOR SHARES ONLY)
Each Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing
and servicing fees to the Distributor for the sale, distribution and customer
servicing of each Fund's Investor Shares. Such fees are payable at the annual
rate of .50% of the average daily net assets of the Investor Shares of each
Fund. Because Investor Shares pay marketing and servicing fees on an ongoing
basis, your investment cost may be higher over time than other shares with
different sales charges and fees.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund declares and pays any dividends annually to shareholders.
Dividends are paid to all shareholders invested in the Fund on the record date.
The record date is the date on which a shareholder must officially own shares in
order to earn a dividend.
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 a 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.
Each Fund sends 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. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions may be both dividends and capital gains. Generally,
distributions from Maxus Income Fund are expected to be primarily ordinary
income dividends, while distributions from the other Funds are expected to be
primarily capital
27
<PAGE> 27
gains distributions. Redemptions and exchanges are taxable sales. Please consult
your tax adviser regarding your federal, state, and local tax liability.
GENERAL INFORMATION
Maxus Laureate Fund is not available to residents of the State of Montana.
Shares of each Fund are offered exclusively by the Fund's Distributor, Maxus
Securities Corp. an affiliate of the Adviser. The Distributor's address is The
Tower at Erieview, 36th Floor, 1301 East Ninth Street, Cleveland, Ohio 44114.
Firstar, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, is the custodian
for each Fund's securities and cash. Mutual Shareholder Services (an affiliate
of the Advisor), The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114, is each Fund's Transfer, Redemption and Dividend
Distributing Agent.
McCurdy & Associates C.P.A.'s, Inc., 27955 Clemens Road, Westlake, Ohio
44145, have been appointed as independent accountants for the Funds.
McDonald, Hopkins, Burke & Haber Co., L.P.A., 2100 Bank One Center, 600
Superior Avenue E., Cleveland, Ohio 44114, is legal counsel to the Funds and to
the Adviser.
28
<PAGE> 28
MAXUS INCOME FUND
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. 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 (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by McCurdy & Associates C.P.A.'s, Inc., whose
report, along with the Fund's financial statements, are included in the SAI,
which is available upon request.
<TABLE>
<CAPTION>
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
INVESTOR SHARES 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of
Period........... $ 10.61 $ 11.31 $ 10.78 $ 10.54 $ 9.73
Net Investment
Income............. 0.86 0.72 0.67 0.70 0.72
Net Gains or Losses
on Securities
(realized and
unrealized)........ (1.43) (0.33) 0.53 0.24 0.81
------- ------- ------- ------- -------
Total From Investment
Operations......... (0.57) 0.39 1.20 0.94 1.53
Distributions
Net Investment
Income........... (0.82) (0.72) (0.67) (0.70) (0.72)
Capital Gains...... -- (0.37) -- -- --
Return of
Capital.......... -- -- -- -- --
------- ------- ------- ------- -------
Total
Distributions...... (0.82) (1.09) (0.67) (0.70) (0.72)
------- ------- ------- ------- -------
NET ASSET VALUE:
End of Period...... $ 9.22 $ 10.61 $ 11.31 $ 10.78 $ 10.54
======= ======= ======= ======= =======
Total Return......... (5.72%) 3.49% 11.47% 9.20% 16.15%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)........ 24,023 39,650 38,620 35,728 37,387
Ratio of Expenses to
Average Net
Assets............. 1.91% 1.87% 1.91% 1.92% 1.90%
Ratio of Net Income
to Average Net
Assets............. 7.87% 6.52% 6.08% 6.50% 7.01%
Portfolio Turnover
Rate............... 51% 59% 70% 78% 121%
</TABLE>
29
<PAGE> 29
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INSTITUTIONAL SHARES 12/31/99 12/31/98
- - -------------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of
Period........... $ 10.62 $ 11.31
Net Investment
Income............. 0.87 0.33
Net Gains or Losses
on Securities
(realized and
unrealized)........ (1.43) (0.50)
------- -------
Total From Investment
Operations......... (0.56) (0.17)
Distributions
Net Investment
Income........... (0.83) (0.33)
Capital Gains...... -- (0.19)
Return of
Capital.......... -- --
------- -------
Total
Distributions...... (0.83) (0.52)
------- -------
NET ASSET VALUE:
End of Period...... $ 9.23 $ 10.62
======= =======
Total Return......... (5.61%) 3.54%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)........ 2,540 426
Ratio of Expenses to
Average Net
Assets............. 1.41% 1.37%*
Ratio of Net Income
to Average Net
Assets............. 8.37% 7.02%*
Portfolio Turnover
Rate............... 51% 59%*
</TABLE>
- - ---------------
* annualized
** commencement of operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
30
<PAGE> 30
MAXUS EQUITY FUND
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. 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 (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by McCurdy & Associates C.P.A.'s, Inc., whose
report, along with the Fund's financial statements, are included in the SAI,
which is available upon request.
<TABLE>
<CAPTION>
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
INVESTOR SHARES 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of
Period........... $ 15.92 $ 18.23 $ 16.00 $14.57 $12.95
Net Investment
Income............. 0.19 0.20 0.15 0.27 0.30
Net Gains or Losses
on Securities
(realized and
unrealized)........ 1.86 (1.80) 4.33 2.50 2.60
------- ------- ------- ------ ------
Total From Investment
Operations......... 2.05 (1.60) 4.48 2.77 2.90
Distributions
Net Investment
Income........... (0.23) (0.20) (0.15) (0.27) (0.27)
Capital Gains...... (0.25) (0.51) (2.10) (1.07) (1.01)
Return of
Capital.......... -- -- -- -- --
------- ------- ------- ------ ------
Total
Distributions...... (0.48) (0.71) (2.25) (1.34) (1.28)
------- ------- ------- ------ ------
NET ASSET VALUE:
End of Period...... $ 17.49 $ 15.92 $ 18.23 $16.00 $14.57
======= ======= ======= ====== ======
Total Return......... 12.93% -8.74% 28.16% 19.13% 22.43%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)........ 39,885 53,279 55,637 38,765 31,576
Ratio of Expenses to
Average Net
Assets............. 1.83% 1.80% 1.87% 1.90% 1.96%
Ratio of Net Income
to Average Net
Assets............. 1.12% 1.15% 1.80% 1.71% 2.01%
Portfolio Turnover
Rate............... 78% 118% 89% 111% 173%
</TABLE>
31
<PAGE> 31
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INSTITUTIONAL SHARES 12/31/99 12/31/98
- - -------------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of
Period........... $ 15.92 $ 15.92
Net Investment
Income............. 0.25 --
Net Gains or Losses
on Securities
(realized and
unrealized)........ 1.86 --
------- -------
Total From Investment
Operations......... 2.11 --
Distributions Net
Investment Income.. (0.26) --
Capital Gains...... (0.25) --
Return of
Capital.......... -- --
------- -------
Total
Distributions...... (0.51) --
------- -------
NET ASSET VALUE:
End of Period...... $ 17.52 $ 15.92
======= =======
Total Return......... 13.26% 0.00%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)........ 546 0
Ratio of Expenses to
Average Net
Assets............. 1.33% 1.30%*
Ratio of Net Income
to Average Net
Assets............. 1.62% 1.65%*
Portfolio Turnover
Rate............... 78% 118%*
</TABLE>
- - ---------------
* annualized
** commencement of operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
32
<PAGE> 32
MAXUS LAUREATE FUND
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. 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 (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by McCurdy & Associates C.P.A.'s, Inc., whose
report, along with the Fund's financial statements, are included in the SAI,
which is available upon request.
<TABLE>
<CAPTION>
01/01/99 01/01/98 01/01/97 01/01/96 01/01/95
TO TO TO TO TO
INVESTOR SHARES 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of
Period............ $13.29 $10.38 $10.82 $ 9.82 $ 9.62
Net Investment
Income.............. (0.07) (0.12) 0.52 (0.08) (0.19)
Net Gains or Losses on
Securities (realized
and unrealized)..... 6.78 3.76 0.07 2.14 1.57
------ ------ ------ ------ ------
Total From Investment
Operations.......... 6.71 3.64 0.59 2.06 1.38
Distributions
Net Investment
Income............ -- -- (0.52) -- --
Capital Gains....... (0.81) (0.73) (0.51) (1.06) (1.18)
Return of Capital... -- -- -- -- --
------ ------ ------ ------ ------
Total Distributions... (0.81) (0.73) (1.03) (1.06) (1.18)
------ ------ ------ ------ ------
NET ASSET VALUE:
End of Period....... $19.19 $13.29 $10.38 $10.82 $ 9.82
====== ====== ====== ====== ======
Total Return.......... 50.58% 35.14% 5.49% 21.03% 14.41%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)......... 32,324 8,059 3,395 3,156 1,510
Ratio of Expenses to
Average Net
Assets.............. 1.92% 2.63% 2.49% 3.92% 3.85%
Ratio of Net Income to
Average Net
Assets.............. -0.49% -1.10% 4.19% -0.73% -1.69%
Portfolio Turnover
Rate................ 1172% 2792% 1511% 1267% 1377%
</TABLE>
33
<PAGE> 33
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INSTITUTIONAL SHARES 12/31/99 12/31/98
-------------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of
Period............ $13.30 $10.38
Net Investment
Income.............. 0.03 (0.11)
Net Gains or Losses on
Securities (realized
and unrealized)..... 6.78 3.76
------ ------
Total From Investment
Operations.......... 6.81 3.65
Distributions
Net Investment
Income............ -- --
Capital Gains....... (0.81) (0.73)
Return of Capital... -- --
------ ------
Total Distributions... (0.81) (0.73)
------ ------
NET ASSET VALUE:
End of Period....... $19.30 $13.30
====== ======
Total Return.......... 51.29% 35.24%
RATIOS/SUPPLEMENTAL
DATA
Net Assets at End of
Period
(Thousands)......... 1,230 9
Ratio of Expenses to
Average Net
Assets.............. 1.42% 2.13%*
Ratio of Net Income to
Average Net
Assets.............. 0.01% -0.60%*
Portfolio Turnover
Rate................ 1172% 2792%*
</TABLE>
- - ---------------
* annualized
** commencement of operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
34
<PAGE> 34
MAXUS OHIO HEARTLAND FUND
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the period of the Fund's operations. 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 (or
lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by McCurdy & Associates
C.P.A.'s, Inc., whose report, along with the Fund's financial statements, are
included in the SAI, which is available upon request.
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INVESTOR SHARES 12/31/99 12/31/98
--------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of Period.......................... $ 8.16 $ 10.00
Net Investment Income.......................... (0.07) (0.05)
Net Gains or Losses on Securities (realized and
unrealized).................................. (0.83) (1.79)
-------- --------
Total From Investment Operations............... (0.90) (1.84)
Distributions
Net Investment Income........................ -- --
Capital Gains................................ -- --
Return of Capital............................ -- --
-------- --------
Total Distributions............................ -- --
-------- --------
NET ASSET VALUE:
End of Period................................ $ 7.26 $ 8.16
======== ========
Total Return................................... -11.03% -18.40%
RATIOS/SUPPLEMENTAL DATA
Net Assets at End of Period (Thousands)........ 1,057 1,234
Ratio of Expenses to Average Net Assets........ 2.88% 3.24%*
Ratio of Net Income to Average Net Assets...... -0.94% -0.88%*
Portfolio Turnover Rate........................ 33% 7%*
</TABLE>
35
<PAGE> 35
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INSTITUTIONAL SHARES 12/31/99 12/31/98
-------------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of Period.......................... $ 8.18 $ 10.00
Net Investment Income.......................... (0.04) (0.03)
Net Gains or Losses on Securities (realized and
unrealized).................................. (0.83) (1.79)
-------- --------
Total From Investment Operations............... (0.87) (1.82)
Distributions
Net Investment Income........................ -- --
Capital Gains................................ -- --
Return of Capital............................ -- --
-------- --------
Total Distributions............................ -- --
-------- --------
NET ASSET VALUE:
End of Period................................ $ 7.31 $ 8.18
======== ========
Total Return................................... -10.64% -18.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets at End of Period (Thousands)........ 834 753
Ratio of Expenses to Average Net Assets........ 2.38% 2.74%*
Ratio of Net Income to Average Net Assets...... -0.44% -0.38%*
Portfolio Turnover Rate........................ 33% 7%*
</TABLE>
- - ---------------
* annualized
** commencement of operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
36
<PAGE> 36
MAXUS AGGRESSIVE VALUE FUND
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the period of the Fund's operations. 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 (or
lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by McCurdy & Associates
C.P.A.'s, Inc., whose report, along with the Fund's financial statements, are
included in the SAI, which is available upon request.
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INVESTOR SHARES 12/31/99 12/31/98
--------------- -------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of Period............................... $ 4.80 $ 5.00
Net Investment Income............................... (0.06) (0.07)
Net Gains or Losses on Securities (realized and
unrealized)....................................... 1.08 (0.09)
------ -------
Total From Investment Operations.................... 1.02 (0.16)
Distributions
Net Investment Income............................. -- --
Capital Gains..................................... (0.24) (0.04)
Return of Capital................................. -- --
------ -------
Total Distributions................................. (0.24) (0.04)
------ -------
NET ASSET VALUE:
End of Period..................................... $ 5.58 $ 4.80
====== =======
Total Return........................................ 21.19% -3.27%
RATIOS/SUPPLEMENTAL DATA
Net Assets at End of Period (Thousands)............. 9,128 3,159
Ratio of Expenses to Average Net Assets............. 2.10% 2.69%*
Ratio of Net Income to Average Net Assets........... -0.82% -1.33%*
Portfolio Turnover Rate............................. 96% 109%*
</TABLE>
37
<PAGE> 37
<TABLE>
<CAPTION>
01/01/99 02/01/98**
TO TO
INSTITUTIONAL SHARES 12/31/1999 12/31/98
-------------------- ---------- ----------
<S> <C> <C>
NET ASSET VALUE:
Beginning of Period............................. $ 4.82 $ 5.00
Net Investment Income............................. (0.04) (0.05)
Net Gains or Losses on Securities (realized and
unrealized)..................................... 1.08 (0.09)
------ -------
Total From Investment Operations.................. 1.04 (0.14)
Distributions
Net Investment Income........................... -- --
Capital Gains................................... (0.24) (0.04)
Return of Capital............................... -- --
------ -------
Total Distributions............................... (0.24) (0.04)
------ -------
NET ASSET VALUE:
End of Period................................... $ 5.62 $ 4.82
====== =======
Total Return...................................... 21.60% -2.87%
RATIOS/SUPPLEMENTAL DATA
Net Assets at End of Period (Thousands)........... 3,283 1,156
Ratio of Expenses to Average Net Assets........... 1.60% 2.19%*
Ratio of Net Income to Average Net Assets......... -0.32% -0.83%*
Portfolio Turnover Rate........................... 96% 109%*
</TABLE>
- - ---------------
* annualized
** commencement of operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
38
<PAGE> 38
APPENDIX A
DESCRIPTION OF BOND RATINGS*
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in the higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for the bonds in higher rated categories.
BB, B, CCC AND CC: Bonds rated BB, B, CCC and CC are regarded on balance as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
- - ---------------
* As described by Standard & Poor's Corporation.
39
<PAGE> 39
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C>
RISK/RETURN SUMMARY....................................... 2
HOW TO PURCHASE SHARES.................................... 19
HOW TO REDEEM SHARES...................................... 23
SYSTEMATIC WITHDRAWAL PLAN................................ 25
INVESTMENT MANAGEMENT..................................... 26
DIVIDENDS, DISTRIBUTIONS AND TAXES........................ 27
GENERAL INFORMATION....................................... 28
FINANCIAL HIGHLIGHTS...................................... 29
APPENDIX A................................................ 39
</TABLE>
A Statement of Additional Information (SAI) dated April 30, 2000, is
incorporated by reference into this prospectus. Additional information about the
Funds' 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 each Fund's performance during its last
fiscal year. To obtain the SAI, the annual report, semi-annual report and other
information without charge and to make shareholder inquires, call the Funds at
1-800-44-MAXUS.
Information about each Fund (including the SAI) can be reviewed and copied
at the Public Reference Room of the Securities and Exchange Commission in
Washington, D.C. Reports and other information about each Fund are available on
the Commission's Internet site at http://www.sec.gov and copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the Commission, Washington, D.C. 20549-6009. You can
call 1-800-SEC-0330 for information on the Public Reference Room's operations
and copying charges.
The Maxus Funds
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
(216) 687-1000
<TABLE>
<S> <C> <C>
Investment Company Act File Nos: Income Fund: 811-4144
Equity Fund: 811-5865
Laureate Fund: 811-7516
Ohio Heartland and
Aggressive Value Funds: 811-8499
</TABLE>
40
<PAGE> 40
STATEMENT OF ADDITIONAL INFORMATION
April 30, 2000
MAXFUND TRUST
The Tower at Erieview, 36th Floor
1301 East Ninth Street
Cleveland, Ohio 44114
(216) 687-1000
Maxus Ohio Heartland Fund and Maxus Aggressive Value Fund (the "Funds")
are separate diversified portfolios of MaxFund Trust, an open-end management
investment company. The investment objective of Maxus Ohio Heartland Fund is to
obtain a high total return (a combination of capital appreciation and income).
The investment objective of Maxus Aggressive Value Fund is to obtain capital
appreciation. This Statement of Additional Information is not a prospectus. A
copy of the Funds' prospectus can be obtained from the Fund's distributor, Maxus
Securities Corp, The Tower at Erieview, 36th Floor, 1301 East Ninth Street,
Cleveland, Ohio 44114, telephone number (216) 687-1000.
The date of this Statement of Additional Information and of the
prospectus to which it relates is April 30, 2000.
<PAGE> 41
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CAPTION PAGE LOCATION IN PROSPECTUS
- - ------- ---- ----------------------
<S> <C>
Fund History 3 Not Applicable
Investments and Risks 3 Maxus Ohio Heartland Fund -
Risk/Return Summary
Maxus Aggressive Value Fund -
Risk/Return Summary
Management of the Fund 5 Investment Management
Ownership of Shares 7 Not Applicable
Investment Advisory and Other Services 7 Investment Management
Capital Stock and Other Securities 10 Not Applicable
Purchase, Redemption and Pricing 10 How to Purchase Shares/
How to Redeem Shares
Taxation of Fund 11 Dividends, Distributions and Taxes
Distributor 12 Investment Management
Performance Data 12 Not Applicable
Financial Statements 15 Maxus Equity Fund - Financial Highlights
</TABLE>
-2-
<PAGE> 42
FUND HISTORY
MaxFund Trust (the "Trust") was organized as a Trust under the laws of
the State of Ohio pursuant to a Declaration of Trust dated November 7, 1997.
INVESTMENTS AND RISKS
CLASSIFICATION
Each of the Funds is a diversified portfolio of the Trust, an open-end
management investment company.
INVESTMENT STRATEGIES AND RISKS
The principal investment strategies used by each Fund to pursue its
investment objective, together with the principal risks of investing in such
Fund, are described in the Prospectus under the heading "Maxus Ohio Heartland
Fund - Risk/Return Summary" and "Maxus Aggressive Value Fund - Risk/Return
Summary."
Described below are certain other investment strategies (including
strategies to invest in particular types of securities) which are not principal
strategies.
Maxus Ohio Heartland Fund may invest a portion of its total assets in
high-quality commercial paper (i.e., rated A-1 or A-2 by Standard & Poor's) and
other money market instruments, investment grade corporate debt securities
(i.e., rated BBB or better by Standard & Poor's), preferred stock and equity
securities of companies not headquartered in Ohio.
Maxus Aggressive Value Fund may invest a portion of its total assets in
high-quality commercial paper (i.e., rated A-1 or A-2 by Standard & Poor's) and
other money market instruments, investment grade corporate debt securities
(i.e., rated BBB or better by Standard & Poor's), preferred stock and equity
securities of companies having a market value of more than $200,000,000.
The portfolio of each Fund will be exposed to the following additional
risks in connection with its investments in debt securities:
- Prices of debt securities rise and fall in response to interest rate
changes for similar securities. Generally, when interest rates rise,
prices of debt securities fall. To the extent that a Fund invests in
debt securities, the net asset value of the Fund may decrease during
period of rising interest rates.
- An issuer of debt securities may default (fail to repay interest and
principal when due). If an issuer defaults or the risk of such default
is perceived to have increased, the Fund will lose all or part of its
investment. To the extent that a Fund invests in debt securities, the
net asset value of the Fund may fall during periods of economic
downturn when such defaults or risk of defaults increases.
- Securities rated below investment grade, also known as junk bonds,
generally entail greater risks than investment grade securities. For
example, their prices are more volatile, their values are more
negatively impacted by economic downturns, and their trading market may
be more limited.
FUND POLICIES
Each Fund has adopted the following fundamental investment policies and
restrictions. These policies cannot be changed without approval by the holders
of a majority of the outstanding voting securities of the Fund. As defined in
the Act, the "vote of a majority of the outstanding voting securities" of the
Fund means the lesser of the vote of (a) 67% of the shares of the Fund at a
meeting where more than 50% of the outstanding shares are present in person or
by proxy or (b) more than 50% of the outstanding shares of the Fund. The Fund
may not:
-3-
<PAGE> 43
1. invest more than 5% of the value of its total assets in the
securities of any one issuer (except obligations issued or guaranteed
by the United States Government, its agencies and instrumentalities);
2. acquire more than 10% of the outstanding voting securities
of any one issuer;
3. invest more than 25% of the value of such Fund's total
assets in securities of companies in a particular industry (except
obligations issued or guaranteed by the United States Government, its
agencies and instrumentalities);
4. invest in securities of other registered investment
companies, except by purchase in the open market involving only
customary brokerage commissions, or except as part of a merger,
consolidation, reorganization or acquisition;
5. invest in securities of any registered closed-end
investment company, if immediately after such purchase or acquisition
such Fund would own more than 3% of the total outstanding voting stock
of such closed-end company.
6. Invest more than 10% of the Fund's total assets in
securities of issuers which with their predecessors have a record of
less than three years continuous operation.
7. Invest more than 10% of the Fund's net assets in securities
for which market quotations are not readily available and repurchase
agreements maturing in more than seven days.
8. Lend money or securities, provided that the making of
interest-bearing demand deposits with banks and the purchase of debt
securities in accordance with its objective and policies are not
prohibited and the Fund may lend its portfolio securities as described
above under the caption "Lending of Portfolio Securities."
9. Borrow money except for temporary or emergency purposes
from banks (but not for the purpose of purchase of investments) and
then only in an amount not to exceed 5% of the Fund's net assets; or
pledge the Fund's securities or receivables or transfer or assign or
otherwise encumber them in an amount exceeding the amount of the
borrowings secured thereby.
10. Make short sales of securities, or purchase any securities
on margin except to obtain such short-term credits as may be necessary
for the clearance of transactions.
11. Write (sell) put or call options, combinations thereof or
similar options; nor may it purchase put or call options if more than
5% of the Fund's net assets would be invested in premiums on put and
call options, combinations thereof or similar options.
12. Purchase or retain the securities of any issuer if any of
the officers or Trustees of the Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and
together own more than 5% of the securities of such issuer.
13. Invest for the purpose of exercising control or management
of another issuer.
14. Invest in commodities or commodity futures contracts or in
real estate, although it may invest in securities which are secured by
real estate and securities of issuers which invest or deal in real
estate.
15. Invest in interests in oil, gas or other mineral
exploration or development programs, although it may invest in the
securities of issuers which invest in or sponsor such programs.
16. Underwrite securities issued by others except to the
extent the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of portfolio
securities.
17. Issue senior securities as defined in the Act.
-4-
<PAGE> 44
18. Purchase securities subject to restrictions on disposition
under the Securities Act of 1933.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage beyond the specified limit resulting
from a change in values or net assets will not be considered a violation.
DEFENSIVE INVESTMENTS
When the Adviser believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in high-quality
short-term debt securities and money market instruments, such as money market
mutual funds, commercial paper, certificates of deposit and bank or savings and
loan association interest-bearing demand accounts. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
PORTFOLIO TURNOVER
The Funds are not restricted with regard to portfolio turnover and will
make changes in its investment portfolios from time to time as business and
economic conditions and market prices may dictate and its investment policies
may require. The portfolio turnover rates in 1999 and 1998 for Maxus Ohio
Heartland Fund were 33%, and 7%, respectively. The portfolio turnover rates in
1999 and 1998 for Maxus Aggressive Value Fund were 96%, and 109%, respectively.
A high rate of portfolio turnover in any year will increase custodial
transaction charges paid and could result in high amounts of realized investment
gain subject to the payment of taxes by shareholders.
MANAGEMENT OF THE FUNDS
The Board of Trustees is responsible for managing the Funds' business
affairs and for exercising all the Funds' powers except those reserved for the
shareholders. The day-to-day operations of each Fund are conducted by its
officers. The following table provides biographical information with respect to
each current Trustee and officer of each Fund. Each Trustee who is or may be
deemed to be an "interested person" of the Funds, as defined in the Act, is
indicated by an asterisk. Each Trustee of the Funds is also a Trustee of Maxus
Income Fund, Maxus Equity Fund, and Maxus Laureate Fund, three other open-end
management investment companies.
<TABLE>
<CAPTION>
Position Held Principal Occupation(s)
Name and Address With the Fund During Past 5 Years
- - ---------------- ------------- ---------------------
<S> <C> <C>
Richard A. Barone* Chairman, President of Maxus Securities
The Tower at Erieview, 36th Floor Treasurer Corp (broker-dealer), Maxus
1301 East Ninth Street and Trustee Asset Management Inc. (invest-
Cleveland, Ohio 44114 ment adviser) and Resource Management
Inc., dba Maxus Investment Group
(financial services)
Raj Aggarwal PhD. Trustee Professor of Finance
John Carroll University John Carroll University
20700 North Park Blvd.
University Heights, OH 44118
Denis J. Amato* Trustee Chief Investment Officer, Gelfand.
The Tower at Erieview, 36th Floor Maxus Asset Management, Inc. (invest-
1301 East Ninth Street ment adviser) since 1997; previously,
Cleveland, Ohio 44114 Managing Director, Gelfand Partners Asset
Management (investment adviser)
</TABLE>
-5-
<PAGE> 45
<TABLE>
<S> <C> <C>
Kent W. Clapp Trustee Chairman, Medical Mutual of Ohio
2060 East Ninth Street (health insurer)
Cleveland, Ohio 44114
Robert H. Fritz Trustee Retired
12613 West Lake Road
Vermillion, Ohio 44089
Steven M. Kasarnich Trustee President/Business Manager, Northeast
47 Alice Drive Ohio District Council of Carpenters;
Akron, Ohio 44319 Executive Secretary-Treasurer, Ohio
State Council of Carpenters
Burton D. Morgan Trustee Chairman, Morgan Bank (bank);
Park Place President, Basic Search, Inc.
10 West Streetsboro Road (venture capital); Chairman,
Hudson, Ohio 44236 Multi-Color Corporation (printing);
Chairman, Morgan Funshares, Inc. (mutual
fund)
Michael A. Rossi, C.P.A. Trustee Certified Public Accountant
6559 Wilson Mills Road
Highland Heights, Ohio 44143
Joseph H. Smith Trustee Chief Financial Officer, Diocese of
1404 East Ninth Street Cleveland
8th Floor
Cleveland, Ohio 44114
Robert J. Conrad Vice President Vice President, Resource Management,
The Tower at Erieview, 36th Floor Inc.; formerly Vice President, American
1301 East Ninth Street Income Plus
Cleveland, Ohio 44114
Robert W. Curtin Secretary Senior Vice President and Secretary,
The Tower at Erieview, 36th Floor Maxus Securities Corp; formerly
1301 East Ninth Street Executive Vice President,
Cleveland, Ohio 44114 Roulston & Company, Inc.
</TABLE>
No officer, director or employee of Maxus Asset Management Inc. ("MAM"
or the "Investment Adviser") or of any parent or subsidiary receives any
compensation from the Fund for serving as an officer or Trustee of the Fund.
Each Trustee who is not an interested person in MAM will receive from the Fund
the following fees for each Board or shareholders meeting attended: $100 per
meeting if net assets of the Fund are under $10,000,000; $200 per meeting if net
assets of the Fund are between $10,000,000 and $50,000,000; and $300 per meeting
if net assets of the Fund are over $50,000,000. The estimated fees payable to
the Trustees for the most recently completed fiscal year, which are the only
compensation or benefits payable to Trustees, are summarized in the following
table:
-6-
<PAGE> 46
COMPENSATION TABLE
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation From All
Name of Trustee from each Fund Maxus Funds Payable to Trustees
--------------- -------------- -------------------------------
<S> <C> <C>
Richard A. Barone $0 $0
Denis J. Amato $0 $0
Raj Aggarwal $0 $0
Kent W. Clapp $700 $2,500
Robert H. Fritz $0 $0
Steven M. Kasarnich $900 $3,300
Burton D. Morgan $1,000 $3,400
Michael A. Rossi $900 $3,300
Joseph H. Smith $900 $3,300
</TABLE>
OWNERSHIP OF SHARES
As of March 31, 2000, the only persons known by Maxus Ohio
Heartland Fund to be the beneficial owner of more than 5% of the outstanding
shares of Maxus Ohio Heartland Fund were National City Bank, Trustee, Jocelyn
Linsalata Trust, P.O. Box 94984 Cleveland, Ohio 44114, which owned 27,927 shares
(11.30% of the outstanding shares), Resource Management Inc., 1301 East Ninth
Street, Cleveland, Ohio 44114, which owned 20,000 shares (8.09% of the
outstanding shares), and Donaldson Lufkin Jenrette, P.O. Box 2052, Jersey
City, New Jersey 07303, which owned 50,289 shares (20.36% of the outstanding
shares).
As of March 31, 2000, the only persons known by Maxus Aggressive
Value Fund to be the beneficial owner of more than 5% of the outstanding shares
of Maxus Ohio Heartland Fund were Resource Management 401K Profit Sharing Plan,
1301 East Ninth Street, Cleveland, Ohio 44114, which owned 209,852 shares (6.33%
of the outstanding shares), and Key Trust Company, Trustee, FBO Case Alumni-
Gelfand, P.O. Box 94871, Cleveland, Ohio 44101, which owned 195,758 shares
(5.90% of the outstanding shares).
As of March 31, 2000, all officers and Trustees as a group beneficially
owned 40,691 shares of Maxus Ohio Heartland Fund, constituting 16.7% of the
outstanding shares of such Fund, and 111,134 shares of Maxus Aggressive Value
Fund, constituting 3.4% of the outstanding shares of such Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
MAM, the Funds' investment adviser, is a wholly-owned subsidiary of
Resource Management Inc., d/b/a Maxus Investment Group, an Ohio corporation
("RMI") with interests primarily in the financial services industry. RMI also
owns all of the shares of Maxus Securities Corp. ("MSC"), the NASD broker/dealer
through which shares of each Fund are offered. Richard A. Barone is the
president and a principal shareholder of RMI and, therefore, is deemed to be in
control of MAM and MSC.
As compensation for MAM's services rendered to each Fund, each Fund
pays a fee, computed and paid monthly, at an annual rate of 1% of the average
value of the first $150,000,000 of the Fund's daily net assets and 0.75% of
average daily net assets in excess of $150,000,000. For 1999 and 1998 the
Adviser received management fees from Maxus Ohio Heartland Fund in the amounts
of $20,556 and $16,389, respectively. For 1999 and 1998, the Advisor received
management fees from Maxus Aggressive Value Fund in the amounts of $92,017 and
$29,111, respectively.
Subject to the supervision and direction of the Funds' Trustees, MAM,
as investment adviser, manages the Funds' portfolio in accordance with the
stated policies of the Funds. MAM makes investment decisions for the Funds and
places the purchase and sale orders for portfolio transactions. In addition, MAM
furnishes office facilities and clerical and administrative services, and pays
the salaries of all officers and employees who are employed by both it and the
Funds and, subject to the direction of the Funds' Board of Trustees, is
responsible for the overall management of the business affairs of the Funds,
including the provision of personnel for recordkeeping, the preparation of
governmental reports and responding to shareholder communications.
Other expenses are borne by the Funds and include brokerage fees and
commissions, fees of Trustees not affiliated with MAM, expenses of registration
of the Funds and of the shares of each Fund with the Securities and Exchange
Commission (the "SEC") and the various states, charges of the custodian,
dividend and transfer agent, outside auditing and legal expenses, liability
insurance premiums on property or personnel (including officers and trustees),
maintenance of business trust existence, any taxes payable by the Funds,
interest payments relating to Fund borrowings, costs of preparing, printing and
mailing registration statements, prospectuses, periodic reports and other
documents furnished to shareholders and regulatory authorities, costs of
printing share certificates, portfolio
-7-
<PAGE> 47
pricing services and Fund meetings, amortization of organizational expenses and
costs incurred pursuant to the Funds' Distribution and Shareholder Servicing
Plan described below.
DISTRIBUTION PLAN
Each Fund has a Distribution and Shareholder Servicing Plan (the
"Plan") pursuant to Rule 12b-1 under the Act, pursuant to which the Fund pays
MSC 0.50% of average net assets of Investor Shares annually for the costs of
activities intended to result in the sale of Investor Shares, regardless of the
amount of expenses actually incurred by MSC. In 1999, $6,243 (0.50% of
average net assets) was paid by Maxus Ohio Heartland Fund and $32,033
(0.50% of average net assets) was paid by Maxus Aggressive Value Fund to MSC
pursuant to the Plan. Of such amounts, $34,347 was used by MSC to compensate
securities dealers and other persons and organizations for providing
distribution assistance and shareholder services with respect to Investor
Shares, and $3,929 was expended for advertising and marketing.
Neither Fund participates in any joint distribution activities with
respect to another series or investment company.
The Trustees believe that the Plan has benefited and will continue to
benefit the Funds and the holders of Investor Shares. Among these benefits are:
(1) reductions in the per share expenses of the Funds as a result of increased
assets n the Fund; (2) reductions in the cost of executing portfolio
transactions and the possible ability of the Investment Adviser in some cases to
negotiate lower purchase prices for securities, due to the potentially larger
blocks of securities which may be traded by the Funds as its net assets increase
in size; and (3) a more predictable flow of cash which may provide investment
flexibility in seeking the Funds' investment objective and may better enable the
Funds to meet redemption demands without liquidating portfolio securities at
inopportune times.
OTHER SERVICE PROVIDERS
Each Fund has entered into an Administration Agreement with Mutual
Shareholder Services ("MSS"), pursuant to which MSS has agreed to act as the
Fund's Transfer, Redemption and Dividend Disbursing Agent. As such, MSS
maintains each Fund's official record of shareholders and is responsible for
crediting dividends to shareholders' accounts. In consideration of such
services, each Fund pays MSS an annual fee, paid monthly, equal to $6.75 per
shareholder account (with a monthly minimum of $775) plus $12 per month for each
state in which each Fund is registered under such state's securities laws, plus
out-of-pocket expenses. In addition, each Fund has entered into an Accounting
Services Agreement with MSS, pursuant to which MSS has agreed to provide
portfolio pricing and related services, for the payment of an annual fee of
$17,400 for the first $25,000,000 in net assets, $8,500 for the next $25,000,000
in net assets and $4,750 for each additional $25,000,000 in net assets, plus
out-of-pocket expenses. For 1999 and 1998, Maxus Ohio Heartland Fund and Maxus
Aggressive Value Fund paid MSS fees under the Administration Agreement and the
Accounting Services Agreement in the amounts of $5,635 and $4,497, and $23,714
and $7,940, respectively. MSS is a subsidiary of RMI, the parent company of the
Investment Adviser.
Firstar, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, serves as the
Funds' custodian. As custodian, Star Bank maintains custody of the Funds' cash
and portfolio securities.
McCurdy & Associates C.P.A.'s, Inc., independent certified public
accountants located at 27955 Clemens Road, Westlake, Ohio 44145, has been
selected as auditors for the Funds. In such capacity, McCurdy & Associates
C.P.A.'s, Inc. periodically reviews the accounting and financial records of the
Funds and examines their financial statements.
BROKERAGE ALLOCATION
Decisions to buy and sell securities for the Funds are made by MAM
subject to the overall supervision and review by the Funds' Trustees. Portfolio
security transactions for the Funds are effected by or under the supervision of
MAM.
-8-
<PAGE> 48
Transactions on stock exchanges involve the payment of negotiated
brokerage commissions. There is generally no stated commission in the case of
securities traded in the over-the-counter markets, but the price of those
securities includes an undisclosed commission or markup. The cost of securities
purchased from underwriters includes an underwriting commission or concession,
and the prices at which securities are purchased from and sold to dealers
include a dealer's markup or markdown.
In executing portfolio transactions and selecting brokers and dealers,
it is the Funds' policy to seek the best overall terms available. The Investment
Advisory and Administration Agreement between the Funds and MAM provides that,
in assessing the best overall terms available for any transaction, MAM shall
consider the factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, for the specific transaction and on a continuing basis. In addition, the
Investment Advisory and Administration Agreement authorizes MAM, in selecting
brokers or dealers to execute a particular transaction, and, in evaluating the
best overall terms available, to consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) provided to the Funds and/or other accounts over which MAM exercises
investment discretion.
The Funds' Board of Trustees periodically reviews the commissions paid
by the Funds to determine if the commissions paid over representative periods of
time were reasonable in relation to the benefits inuring to the Funds. It is
possible that certain of the services received will primarily benefit one or
more other accounts for which investment discretion is exercised. Conversely,
the Funds may be the primary beneficiary of services received as a result of
portfolio transactions effected for other accounts. MAM's fee under the
Investment Advisory and Administration Agreement is not reduced by reason of
MAM's receiving such brokerage and research services.
Under the Act, with respect to transactions effected on a securities
exchange, a mutual fund may not pay brokerage commissions to an affiliate which
exceed the usual and customary broker's commissions. A commission is deemed as
not exceeding the usual and customary broker's commission if (i) the commission
is reasonable and fair compared to the commission received by other brokers in
connection with comparable transactions involving similar securities being
purchased or sold during a comparable period of time and (ii) the Board of
Trustees, including a majority of the Trustees who are not interested persons of
the mutual fund, have adopted procedures reasonably designed to provide that
such commission is consistent with the above-described standard, review these
procedures annually for their continuing appropriateness and determine quarterly
that all commissions paid during the preceding quarter were in compliance with
these procedures.
The Funds' Board of Trustees has determined that any portfolio
transaction for the Funds may be effected through MSC if, in MAM's judgment, the
use of MSC is likely to result in price and execution at least as favorable as
those of other qualified brokers, and if, in the transaction, MSC charges the
Fund a commission rate consistent with those charged by MSC to comparable
unaffiliated customers in similar transactions. Each quarter, the Trustees
review a report comparing the commissions charged each Fund by MSC to industry
norms for similar sized transactions both (i) with proprietary research or other
valuable services being provided and (ii) without such services being provided.
Based upon such review, the Board of Trustees determines on a quarterly basis
whether the commissions charged by MSC meet the requirements of the Act. MSC
will not participate in commissions from brokerage given by the Fund to other
brokers or dealers. Over-the-counter purchases and sales are transacted through
brokers and dealers with principal market makers. The Funds will in no event
effect principal transactions with MSC in over-the-counter securities in which
MSC makes a market. MSC is a wholly owned subsidiary of RMI, a corporation
controlled by Richard A. Barone, Chairman of the Funds. Richard A. Barone is,
therefore, considered to control MSC.
Even though investment decisions for the Funds are made independently
from those of the other accounts managed by MAM, investments of the kind made by
the Funds may also be made by those other accounts. When the Funds and one or
more accounts managed by MAM are prepared to invest in, or desire to dispose of,
the same security, available investments or opportunities for sales will be
allocated in a manner believed by MAM to be equitable. In some cases, this
procedure may adversely affect the price paid or received by the Funds or the
size of the position obtained for or disposed of by the Funds.
-9-
<PAGE> 49
During 1999 and 1998, the aggregate amount of brokerage commissions
paid by Maxus Ohio Heartlund Fund were $3,425 and $9,769, respectively, all
of which was paid to MSC. During 1999 and 1998, the aggregate amount of
brokerage commissions paid by Maxus Aggressive Value Fund were $64,128 and
$41,250, respectively, all of which were paid to MSC.
CAPITAL STOCK AND OTHER SECURITIES
The Declaration of Trust provides for an unlimited number of authorized
shares of beneficial interest, which may, without shareholder approval, be
divided into an unlimited number of series of such shares, and which are
presently divided into two series of shares, one for Maxus Ohio Heartland Fund
and one for Maxus Aggressive Value Fund. Each share represents an equal
proportionate interest in a Fund with other shares of the same series and class,
and is entitled to such dividends and distributions out of the income earned on
the assets belonging to the Fund as are declared at the discretion of the
Trustees. All consideration received by the Trust for shares of one of the Funds
and all assets in which such consideration is invested will belong to that Fund
and will be subject to the liabilities relating thereto.
Shareholders are entitled to one vote per share (with proportional
voting for fractional shares) on such matters as shareholders are entitled to
vote. Shareholders vote in the aggregate and not by class on all matters except
that (i) shares shall be voted by individual class when required by the 1940 Act
or when the Trustees have determined that the matter affects only the interests
of a particular class, and (ii) only the holders of Investor Shares will be
entitled to vote on matters submitted to shareholder vote with regard to the
Distribution Plan applicable to such class.
Whenever the approval of a majority of the outstanding shares of the
Trust or of a particular Fund is required in connection with shareholder
approval of an investment advisory contract, changes in the investment objective
and policies or the investment restrictions, or approval of a distribution
expense plan, a "majority" shall mean the vote of (i) 67% or more of the shares
of the Trust or such Fund present at a meeting, if the holders of more than 50%
of the outstanding shares of the Trust or such Fund are present in person or by
proxy, or (ii) more than 50% of the outstanding shares of the Trust or such
Fund, whichever is less.
Although the Trust is not required to hold annual meetings of the
shareholders, shareholders holding at least 10% of the Trust's outstanding
shares have the right to call a meeting to elect or remove one or more of the
Trustees of the Trust.
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. The Declaration of Trust also
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of the Fund and that every agreement, obligation or
instrument entered into or executed by a Fund shall contain a provision to the
effect that the shareholders are not personally liable thereunder.
PURCHASE, REDEMPTION AND PRICING OF SHARES
The information pertaining to the purchase and redemption of the Funds'
shares appearing in the Prospectus under the captions "How To Purchase Shares"
and "How To Redeem Shares" is hereby incorporated by reference.
The price paid for shares of a certain class of a Fund is the net asset
value per share of such class next determined after receipt by the Transfer
Agent of properly identified purchase funds, except that the price for shares
purchased by telephone is the net asset value per share next determined after
receipt of telephone instructions. Net asset value per share is computed for
each class of a Fund as of the close of business (currently 4:00 P.M., New York
time) each day the New York Stock Exchange is open for trading and on each other
day during which there is a sufficient degree of trading in a Fund's investments
to affect materially net asset value of its redeemable securities.
-10-
<PAGE> 50
For purposes of pricing sales and redemptions, net asset value per
share of a class of a Fund is calculated by determining the value of the class's
proportional interest in the assets of a Fund, less (i) such class's
proportional share of general liabilities and (ii) the liabilities allocable
only to such class; and dividing such amount by the number of shares of such
class outstanding.
For purposes of computing the net asset value per share of a Fund,
securities listed on a national securities exchange or on the NASDAQ National
Market System will be valued on the basis of the last sale of the date on which
the valuation is made or, in the absence of sales, at the closing bid price.
Over-the-counter securities will be valued on the basis of the bid price at the
close of business on each day or, if market quotations are not readily
available, at fair value as determined in good faith by the Board of Trustees.
Unless the particular circumstances (such as an impairment of the
credit-worthiness of the issuer) dictate otherwise, the fair market value of
short-term securities with maturities of 60 days or less shall be their
amortized cost. All other securities and other assets of the Fund will be valued
at their fair value as determined in good faith by the Board of Trustees.
TAXATION OF THE FUND
Each Fund intends to qualify each year as a "regulated investment
company" under the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). Qualification as a regulated investment company
will result in each Fund's paying no taxes on net income and net realized
capital gains distributed to shareholders. If these requirements are not met,
such Fund will not receive special tax treatment and will pay federal income
tax, thus reducing the total return of such Fund.
Statements as to the tax status of each shareholder's dividends and
distributions will be mailed annually by the Funds' transfer agent. Shareholders
are urged to consult their own tax advisers regarding specific questions as to
Federal, state or local taxes.
Income received by a Fund from a mutual fund in such Fund's portfolio
(including dividends and distributions of short-term capital gains), as well as
interest received on cash held in the Custodian's money market deposit account
and net short-term capital gains received by such Fund on the sale of mutual
fund shares, will be distributed by such Fund (net of expenses incurred by such
Fund) and will be taxable to shareholders as ordinary income. Because each Fund
is actively managed and can realize taxable net short-term capital gains by
selling shares of an underlying fund with unrealized portfolio appreciation,
investing in a Fund rather than directly in the underlying funds may result in
increased tax liability to the shareholder, since each Fund must distribute its
gain in accordance with the rules of the Code.
Distributions of net capital gains received by each Fund from
underlying mutual funds, as well as net long-term capital gains realized by each
Fund from the purchase and sale of underlying mutual fund shares held by each
Fund for more than one year, will be distributed by each Fund and will be
taxable to shareholders as long-term capital gains (even if the shareholder has
held the shares for less than one year). However, if a shareholder who has
received a capital gains distribution suffers a loss on the sale of his shares
not more than six months after purchase, the loss will be treated as a long-term
capital loss to the extent of the capital gains distribution received.
For purposes of determining the character of income received by a Fund
when an underlying fund distributes net capital gains to such Fund, such Fund
will treat the distribution as a long-term capital gain, even if it has held
shares of the mutual fund for less than one year. However, any loss incurred by
a Fund on the sale of that underlying fund's shares held for six months or less
will be treated as a long-term capital loss only to the extent of the gain
distribution. The tax treatment of distributions from 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 a Fund on the reinvestment date.
Each Fund may invest in underlying funds with capital loss
carry-forwards. If such an underlying fund realizes capital gains, it will be
able to offset the gains, it will be able to offset the gains to the extent of
its loss carrying forwards in determining the amount of capital gains which must
be distributed to its shareholders.
-11-
<PAGE> 51
DISTRIBUTOR
Shares of the Funds are offered on a best-efforts basis by MSC, a
registered NASD broker-dealer. MSC is a wholly-owned subsidiary of RMI, which is
controlled by Richard A. Barone, Chairman of the Trust.
Pursuant to the Distribution Agreement between the Funds and MSC, MSC
has agreed to hold itself available to receive orders, satisfactory to MSC, for
the purchase of the Funds' shares, to accept such orders on behalf of the Funds
as of the time of receipt of such orders and to transmit such orders to the
Funds' transfer agent as promptly as practicable. MSC does not receive any
commissions or other compensation for the sale of shares of the Funds. However,
pursuant to the Plan, MSC receives an annual distribution fee of .50% of average
net assets of Shares. Certain employees of MSC may receive compensation under
the Plan. See "Investment Advisory and Other Services - Distribution Plan."
The Distribution Agreement provides that MSC shall arrange to sell the
Funds' Shares as agent for the Funds and may enter into agreements with
registered broker-dealers as it may select to arrange for the sale of such
shares. MSC is not obligated to sell any certain number of shares.
PERFORMANCE
From time to time, the Funds may advertise performance data represented
by a cumulative total return or an average annual total return. Total returns
are based on the overall or percentage change in value of a hypothetical
investment in the Funds and assume all of the Funds' dividends and capital gain
distributions are reinvested. A cumulative total return reflects the Funds'
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have produced
the same cumulative total return if the Funds' performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in the Fund's returns, it should be recognized that they are not the
same as actual year-by-year results. The total returns for Shares of the Funds
for periods ended December 31, 1999 are set forth below.
-12-
<PAGE> 52
MAXUS OHIO HEARTLAND FUND
Average Annual Total Returns Cumulative Total Returns
---------------------------- ------------------------
One Year Life of Fund* One Year Life of Fund*
-11.03% -15.39% -11.03% -27.40%
*From commencement of operations, February 1, 1998.
MAXUS AGGRESSIVE VALUE FUND
Average Annual Total Returns Cumulative Total Returns
---------------------------- ------------------------
One Year Life of Fund** One Year Life of Fund**
21.19% 8.68% 21.19% 17.30%
**From commencement of operations, February 1, 1998.
Performance may be compared to well-known indices such as the Dow Jones
Industrial Average or alternative investments such as Treasury Bills. Also, the
Funds may include published editorial comments compiled by independent
organizations such as Lipper Analytical Services or Morningstar, Inc.
All performance information is historical in nature and is not intended
to represent or guarantee future results. The value of Fund shares when redeemed
may be more or less than their original cost.
Further information about the performance of the Funds is contained in
the Funds' Annual Report to Shareholders which may be obtained from the Funds
without charge.
-13-
<PAGE> 53
INDEPENDENT AUDITOR'S REPORT
----------------------------
To The Shareholders and
Board of Trustees
MaxFund Trust:
We have audited the statements of assets and liabilities including the
portfolios of investments, of the MaxFund Trust (comprising, respectively, of
the Maxus Ohio Heartland Fund and the Maxus Aggressive Value Fund) as of
December 31, 1999, and the related statements of operations, the statements of
changes in net assets, and the financial highlights for each of the periods
indicated. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial 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
December 31, 1999 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting the MaxFund Trust as of
December 31, 1999, the results of their operations, the changes in their net
assets, and the financial highlights for each of the periods indicated in
conformity with generally accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
- - ------------------------------------
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
January 20, 2000
-14-
<PAGE> 54
SCHEDULE OF INVESTMENTS
MAXUS OHIO HEARTLAND FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
=============================================================================
SHARES/PRINCIPAL AMOUNT MARKET VALUE % OF ASSETS
=============================================================================
<S> <C> <C>
COMMON STOCKS
BASIC MATERIALS
2,500 A. Schulman 40,781
3,000 Brush Wellman 50,437
3,500 Hanna, (M.A.) 38,281
5,500 Hawk Group* 31,969
1,500 Lubrizol 46,313
2,000 Oglebay Norton 47,500
10,000 Olympic Steel* 47,500
4,000 RPM Inc 40,750
2,200 Shiloh Industries* 24,200
- - ----------------------------------------------------------------------------
367,731 19.45%
CAPITAL GOODS
4,000 Chart Industries 16,000
6,750 Corrpro* 39,656
2,000 Diebold 47,000
4,000 Keithley Instruments 81,500
5,000 Sifco Industries 34,687
2,000 Standard Register 38,750
3,000 Stoneridge* 46,313
- - ----------------------------------------------------------------------------
303,906 16.07%
CONSUMER PRODUCTS
2,000 Baldwin Piano* 17,000
2,500 Consolidated Stores* 40,625
6,000 Elder Beerman Stores* 30,750
6,000 Huffy 31,500
15,000 International Total Services* 17,813
2,400 Jo-Ann Stores Class B* 24,150
9,000 Officemax* 49,500
6,000 RG Barry* 23,625
5,000 Rocky Shoes & Boots* 38,125
3,000 Bob Evans 46,312
12,500 Royal Appliance* 60,937
2,000 Smucker, (J.M.) Class B 32,500
1,800 Wendy's International 37,125
- - ----------------------------------------------------------------------------
449,962 23.80%
FINANCIALS
5,000 Great Lakes Bancorp* 41,875
2,000 KeyCorp 44,250
3,000 State Auto Financial 27,375
- - ----------------------------------------------------------------------------
113,500 6.00%
HEALTHCARE
4,000 Invacare 80,250
6,000 NCS Healthcare* 14,438
3,000 Steris* 30,937
- - ----------------------------------------------------------------------------
125,625 6.64%
TECHNOLOGY
5,500 Allen Telecom* 63,594
3,918 Datatrak* 14,203
3,000 Kendle International* 29,625
3,000 Structural Dynamics* 38,250
4,000 Telxon 64,000
- - ----------------------------------------------------------------------------
209,672 11.09%
WHOLESALE DISTRIBUTION
3,500 Applied Industrial Technologies 58,187
1,800 Cooper Tire 28,013
6,000 Pioneer Standard Electronics 86,625
5,000 Rainbow Rentals* 35,938
- - ----------------------------------------------------------------------------
208,763 11.04%
REAL ESTATE
4,000 Associated Estates 31,250
4,000 Boykin Lodging 43,750
- - ----------------------------------------------------------------------------
75,000 3.97%
TOTAL FOR COMMON STOCKS 1,854,159 98.06%
CLOSED END EQUITY FUND
4,500 Brantley Capital 36,000 1.91%
CASH EQUIVALENTS
17,453 Firstar Treasury Fund 4.51% 17,453 0.92%
TOTAL INVESTMENTS (Cost - $2,526,908) 1,907,612 100.89%
OTHER ASSETS LESS LIABILITIES (16,844) -0.89%
NET ASSETS 1,890,768 100.00%
*Non-income producing security.
</TABLE>
-15-
<PAGE> 55
SCHEDULE OF INVESTMENTS
MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
======================================================================================
SHARES/PRINCIPAL AMOUNT MARKET VALUE % OF ASSETS
======================================================================================
<S> <C> <C>
COMMON STOCKS
BASIC MATERIALS
900,000 Campbell Resources* 154,687
60,000 Hawk Group* 348,750
12,000 Oglebay Norton 285,000
75,000 Olympic Steel* 356,250
- - --------------------------------------------------------------------------------------
1,144,687 9.22%
CAPITAL GOODS
10,000 Cubic Corp 218,750
20,000 Flow International* 227,500
23,000 Foster, (L.B.)* 112,125
35,000 Osmonics* 321,563
30,000 Park-Ohio Holdings Corp* 296,250
15,000 Tech-Sym* 309,375
- - --------------------------------------------------------------------------------------
1,486,563 11.97%
CONSUMER PRODUCTS
10,100 Allou Health and Beauty Care* 66,912
15,000 Engle Homes 180,000
60,800 First Team Sports* 140,600
30,000 Gibson Greetings* 269,063
29,300 Jaclyn Inc* 80,575
20,000 Lazare Kaplan International* 162,500
126,400 Martin Industries* 213,300
75,000 Michael Anthony Jewelers* 220,313
30,000 Oakwood Homes 95,625
40,000 Rocky Shoes & Boots* 305,000
10,000 Saucony Class A* 147,500
43,600 TCBY Enterprises 166,225
30,000 Zapata* 138,750
- - --------------------------------------------------------------------------------------
2,186,363 17.62%
ENERGY
70,000 Kaneb Services Inc* 306,250
36,000 Patina Oil & Gas 310,500
25,000 Virginia Gas 78,125
- - --------------------------------------------------------------------------------------
694,875 5.60%
</TABLE>
-16-
<PAGE> 56
SCHEDULE OF INVESTMENTS
MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
======================================================================================
SHARES/PRINCIPAL AMOUNT MARKET VALUE % OF ASSETS
======================================================================================
<S> <C> <C>
FINANCIALS
25,000 Atlanta Sosnoff Capital* 215,625
30,000 Frontier Insurance Group 103,125
10,000 Pico Holdings Inc* 123,125
- - --------------------------------------------------------------------------------------
441,875 3.56%
HEALTHCARE
56,000 Carrington Labs* 112,000
15,000 Cholestech* 97,500
30,000 Hologic* 172,500
50,000 Orthologic* 128,125
23,500 Spacelabs Medical* 436,219
- - --------------------------------------------------------------------------------------
946,344 7.62%
REAL ESTATE
10,000 Asset Investors 111,250
45,000 Bluegreen* 225,000
10,000 Boykin Lodging 109,375
15,000 Captec Net Lease Realty 112,500
- - --------------------------------------------------------------------------------------
558,125 4.50%
TECHNOLOGY
30,000 Barringer Technologies* 183,750
50,000 Brown & Sharpe Manufacturing Co. Class A* 106,250
7,000 Communications Systems 91,000
35,000 Datum* 336,875
10,000 Media 100* 264,375
12,000 Northwest Pipe* 168,000
95,000 Perceptron* 380,000
10,000 Standard Microsystems* 108,125
12,000 Veritas DGC* 168,000
- - --------------------------------------------------------------------------------------
1,806,375 14.55%
WHOLESALE DISTRIBUTION
10,000 Aviall* 81,875
164,000 Strategic Distribution* 235,750
52,200 TBC Corp* 326,250
- - --------------------------------------------------------------------------------------
643,875 5.19%
TOTAL FOR COMMON STOCKS 9,908,082 79.83%
</TABLE>
-17-
<PAGE> 57
SCHEDULE OF INVESTMENTS
MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
======================================================================================
SHARES/PRINCIPAL AMOUNT MARKET VALUE % OF ASSETS
======================================================================================
<S> <C> <C>
CLOSED END EQUITY FUNDS
33,100 Brantley Capital 264,800
45,000 Equus II* 464,062
20,000 Templeton China World 158,750
- - --------------------------------------------------------------------------------------
887,612 7.16%
CASH EQUIVALENTS
1,820,716 Firstar Treasury Fund 4.51% 1,820,716 14.67%
TOTAL INVESTMENTS (Cost - $11,908,557) 12,616,410 101.66%
OTHER ASSETS LESS LIABILITIES (205,603) -1.66%
NET ASSETS 12,410,807 100.00%
* - Non-income producing security.
</TABLE>
-18-
<PAGE> 58
STATEMENT OF ASSETS & LIABILITIES
MAXUS OHIO HEARTLAND FUND & MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
OHIO
HEARTLAND AGGRESSIVE
FUND VALUE FUND
---- ----------
<S> <C> <C>
ASSETS:
Investment Securities at Market Value 1,907,612 12,616,410
(Identified Cost - $2,526,908 and $11,908,557)
Receivables:
Receivable for investment securities sold 17,562 -
Receivable for shareholder purchases - 175,200
Dividends and interest receivable 4,347 36,332
Unamortized organization costs 9,404 9,404
---------- ----------
TOTAL ASSETS 1,938,925 12,837,346
---------- ----------
LIABILITIES:
Payable for investment securities purchased 14,875 182,063
Payable for shareholder redemptions - 11,999
Payble to custodian bank 6,547 192,341
Accrued Expenses 26,735 40,136
---------- ----------
TOTAL LIABILITIES 48,157 426,539
---------- ----------
NET ASSETS 1,890,768 12,410,807
========== ==========
NET ASSETS CONSIST OF:
Capital Paid In 2,518,561 11,675,095
Accumulated Undistributed Realized Gain (Loss) on Investments - Net (8,497) 27,859
Unrealized Appreciation (Depreciation) in Value
of Investments Based on identified Cost - Net (619,296) 707,853
---------- ----------
NET ASSETS 1,890,768 12,410,807
========== ==========
Net Assets
Investors Shares 1,056,751 9,128,271
Institutional Shares 834,017 3,282,536
---------- ----------
Total 1,890,768 12,410,807
========== ==========
Shares of capital stock
Investors Shares 145,601 1,635,679
Institutional Shares 114,156 584,310
---------- ----------
Total 259,757 2,219,989
========== ==========
Net asset value per share
Investors Shares $ 7.26 $ 5.58
---------- ---------
Institutional Shares $ 7.31 $ 5.62
---------- ---------
</TABLE>
-19-
<PAGE> 59
STATEMENT OF OPERATIONS
MAXUS OHIO HEARTLAND FUND & MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
OHIO
HEARTLAND AGGRESSIVE
FUND VALUE FUND
----------- ---------
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 35,745 $ 62,965
Interest income 3,890 52,766
----------- ---------
TOTAL INCOME 39,635 115,731
----------- ---------
EXPENSES:
Investment advisory fees (Note 2) 20,556 92,017
Distribution fees (Investor shares) 6,243 32,033
Distribution fees (Institutional shares) - -
Transfer agent fees/Accounting and Pricing 5,635 23,714
Registration and filing fees 3,335 7,602
Audit 6,750 6,750
Custodial fees 4,895 8,879
Legal 3,643 8,549
Organization costs 3,043 3,043
Trustee fees 1,900 2,500
Printing & Other Miscellaneous 2,878 5,621
----------- ---------
TOTAL EXPENSES 58,878 190,708
Net Investment Income (Loss) (19,243) (74,977)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized Gain (Loss) on Investments 20,704 602,160
Unrealized Appreciation (Depreciation) on Investments (253,998) 816,427
----------- ---------
Net Realized and Unrealized Gain (Loss) on Investments (233,294) 1,418,587
----------- ---------
Net Increase (Decrease) in Net Assets from Operations $ (252,537) $1,343,610
=========== =========
</TABLE>
-20-
<PAGE> 60
STATEMENT OF CHANGES IN NET ASSETS
MAXUS OHIO HEARTLAND FUND & MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
<TABLE>
<CAPTION>
OHIO OHIO AGGRESSIVE AGGRESSIVE
HEARTLAND FUND HEARTLAND FUND VALUE FUND VALUE FUND
-------------- -------------- ---------- ----------
01/01/99 02/01/98 01/01/99 02/01/98
TO TO TO TO
12/31/99 12/31/98 12/31/99 12/31/98
-------- -------- -------- --------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income (19,243) (11,953) (74,977) (34,049)
Net Realized Gain (Loss) on Investments 20,704 (29,201) 602,160 66,583
Net Unrealized Appreciation (Depreciation) (253,998) (365,298) 816,427 (108,574)
----------- ----------- ----------- -----------
Increase (Decrease) in Net Assets from Operations (252,537) (406,452) 1,343,610 (76,040)
----------- ----------- ----------- -----------
DISTRIBUTIONS TO INVESTOR SHAREHOLDERS:
Net Investment Income - - - -
Net Realized Gain (Loss) from Security Transactions - - (370,605) (23,824)
DISTRIBUTIONS TO INSTITUTIONAL SHAREHOLDERS:
Net Investment Income - - - -
Net Realized Gain (Loss) from Security - - (128,732) (8,698)
----------- ----------- ----------- -----------
Change in net assets from distributions - - (499,337) (32,522)
----------- ----------- ----------- -----------
FROM CAPITAL SHARE INVESTOR TRANSACTIONS:
Proceeds from sale of shares 487,091 2,041,091 6,985,616 3,390,273
Dividend reinvestment - - 322,221 21,242
Cost of shares redeemed (503,089) (489,980) (1,806,100) (182,918)
FROM CAPITAL SHARE INSTITUTIONAL TRANSACTIONS:
Proceeds from sale of shares 188,675 751,252 2,362,244 1,093,810
Dividend reinvestment - - 79,131 1,418
Cost of shares redeemed (16,692) (8,591) (691,841) -
----------- ----------- ----------- -----------
Change in net assets from capital transactions 155,985 2,293,772 7,251,271 4,323,825
----------- ----------- ----------- -----------
Change in net assets (96,552) 1,887,320 8,095,544 4,215,263
NET ASSETS:
Beginning of period 1,987,320 100,000 4,315,263 100,000
----------- ----------- ----------- -----------
End of period 1,890,768 1,987,320 12,410,807 4,315,263
=========== =========== =========== ===========
INVESTOR SHARE TRANSACTIONS:
Issued 61,455 210,183 1,247,484 694,788
Reinvested - - 54,574 3,666
Redeemed (67,137) (58,900) (324,478) (40,355)
----------- ----------- ----------- -----------
Net increase (decrease) in shares (5,682) 151,283 977,580 658,099
Shares outstanding beginning of period 151,283 - 658,099 -
----------- ----------- ----------- -----------
Shares outstanding end of period 145,601 151,283 1,635,679 658,099
=========== =========== =========== ===========
INSTITUTIONAL SHARE TRANSACTIONS:
Issued 24,318 83,159 447,918 218,945
Reinvested - - 18,965 1,049
Redeemed (2,174) (1,147) (122,567) -
----------- ----------- ----------- -----------
Net increase (decrease) in shares 22,144 82,012 344,316 219,994
Shares outstanding beginning of period 92,012 10,000 239,994 20,000
----------- ----------- ----------- -----------
Shares outstanding end of period 114,156 92,012 584,310 239,994
=========== =========== =========== ===========
</TABLE>
-21-
<PAGE> 61
FINANCIAL HIGHLIGHTS
MAXUS OHIO HEARTLAND FUND
<TABLE>
<CAPTION>
INVESTOR SHARES 01/01/99 2/1/98**
TO TO
12/31/99 12/31/98
-------- --------
<S> <C> <C>
Net Asset Value -
Beginning of Period 8.16 10.00
Net Investment Income (0.07) (0.05)
Net Gains or Losses on Securities
(realized and unrealized) (0.83) (1.79)
------ ------
Total from Investment Operations (0.90) (1.84)
Distributions
Net investment income 0.00 0.00
Capital gains 0.00 0.00
Return of capital 0.00 0.00
------ ------
Total Distributions 0.00 0.00
NET ASSET VALUE -
END OF PERIOD $ 7.26 $ 8.16
====== ======
Total Return -11.03% -18.40%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (thousands) 1,057 1,234
Ratio of expenses to average net assets 2.88% 3.24%*
Ratio of net income to average net -0.94% -0.88%*
assets
Portfolio turnover rate 33% 7%*
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES 01/01/99 2/1/98**
TO TO
12/31/99 12/31/98
-------- --------
<S> <C> <C>
Net Asset Value -
Beginning of Period 8.18 10.00
Net Investment Income (0.04) (0.03)
Net Gains or Losses on Securities
(realized and unrealized) (0.83) (1.79)
------ ------
Total from Investment Operations (0.87) (1.82)
Distributions
Net investment income 0.00 0.00
Capital gains 0.00 0.00
Return of capital 0.00 0.00
------ ------
Total Distributions 0.00 0.00
NET ASSET VALUE -
END OF PERIOD $7.31 $ 8.18
===== ======
Total Return -10.64% -18.20%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (thousands) 834 753
Ratio of expenses to average net assets 2.38% 2.74%*
Ratio of net income to average net -0.44% -0.38%*
assets
Portfolio turnover rate 33% 7%*
</TABLE>
*annualized
**commencement of operations
-22-
<PAGE> 62
FINANCIAL HIGHLIGHTS
MAXUS AGGRESSIVE VALUE FUND
<TABLE>
<CAPTION>
INVESTOR SHARES 01/01/99 2/1/98**
TO TO
12/31/99 12/31/98
-------- --------
<S> <C> <C>
Net Asset Value -
Beginning of Period 4.80 5.00
Net Investment Income (0.06) (0.07)
Net Gains or Losses on Securities
(realized and unrealized) 1.08 (0.09)
------ ------
Total from Investment Operations 1.02 (0.16)
Distributions
Net investment income 0.00 0.00
Capital gains (0.24) (0.04)
Return of capital 0.00 0.00
------ ------
Total Distributions (0.24) (0.04)
------ ------
NET ASSET VALUE -
END OF PERIOD $ 5.58 $ 4.80
====== ======
Total Return 21.19% -3.27%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (thousands) 9,128 3,159
Ratio of expenses to average net assets 2.10% 2.69%*
Ratio of net income to average net assets -0.82% -1.33%*
Portfolio turnover rate 96% 109%*
</TABLE>
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES 01/01/99 2/1/98**
TO TO
12/31/99 12/31/98
-------- --------
<S> <C> <C>
Net Asset Value -
Beginning of Period 4.82 5.00
Net Investment Income (0.04) (0.05)
Net Gains or Losses on Securities
(realized and unrealized) 1.08 (0.09)
------ ------
Total from Investment Operations 1.04 (0.14)
Distributions
Net investment income 0.00 0.00
Capital gains (0.24) (0.04)
Return of capital 0.00 0.00
------ ------
Total Distributions (0.24) (0.04)
NET ASSET VALUE -
END OF PERIOD $ 5.62 $ 4.82
Total Return 21.60% -2.87%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (thousands) 3,283 1,156
Ratio of expenses to average net assets 1.60% 2.19%*
Ratio of net income to average net assets -0.32% -0.83%*
Portfolio turnover rate 96% 109%*
</TABLE>
*annualized
**commencement of operations
-23-
<PAGE> 63
NOTES TO FINANCIAL STATEMENTS
MAXUS OHIO HEARTLAND FUND & MAXUS AGGRESSIVE VALUE FUND
DECEMBER 31, 1999
1.)SIGNIFICANT ACCOUNTING POLICIES
Maxus Ohio Heartland Fund and Maxus Aggressive Value Fund (the "Funds") are
two separate diversified portfolios of MaxFund Trust (the "Trust"), an
open-end management investment company, organized as a Trust under the laws
of the State of Ohio by a Declaration of Trust dated November 7, 1997.
Shares of the Funds are divided into two classes, Investor shares and
Institutional shares. Each share represents an equal proportionate interest
in the Funds with other shares of the same class. Investor shares incur a
distribution expense. The investment objective of Maxus Ohio Heartland Fund
is to obtain a total return (a combination of capital appreciation and
income). The Fund pursues this objective by investing primarily in equity
securities of companies headquartered in the State of Ohio. The investment
objective of Maxus Aggressive Value Fund is to obtain capital appreciation.
The Fund pursues this objective by investing primarily in equity securities
of companies who have a total market value of not less the $10,000,000 or
more that $200,000,000 as of the date of investment. Significant accounting
policies of the Funds are presented below:
SECURITY VALUATION
Both Funds intend to invest in a wide variety of equity and debt
securities. The investments in securities are carried at market value. The
market quotation used for common stocks, including those listed on the
NASDAQ National Market System, is the last sale price on the date on which
the valuation is made or, in the absence of sales, at the closing bid
price. Over-the-counter securities will be valued on the basis of the bid
price at the close of each business day. Short-term investments are valued
at amortized cost, which approximates market. Securities for which market
quotations are not readily available will be valued at fair value as
determined in good faith pursuant to procedures established by the Board of
Directors.
SECURITY TRANSACTION TIMING
Security transactions are recorded on the dates transactions are entered
into (the trade dates). Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded as
earned. Both Funds use the identified cost basis in computing gain or loss
on sale of investment securities. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
INCOME TAXES
It is both Funds' policy to distribute annually, prior to the end of the
calendar year, dividends sufficient to satisfy excise tax requirements of
the Internal Revenue Service. This Internal Revenue Service requirement may
cause an excess of distributions over the book year-end accumulated income.
In addition, it is both Funds' policy to distribute annually, after the end
of the calendar year, any remaining net investment income and net realized
capital gains.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
OTHER
Generally accepted accounting principles require that permanent financial
reporting and tax differences relating to shareholder distributions be
reclassified to paid in capital for the Ohio Heartland Fund and accumulated
undistributed net realized gains for the Aggressive Value Fund.
-24-
<PAGE> 64
2.)INVESTMENT ADVISORY AGREEMENT
The Trust has entered into an investment advisory and administration
agreement with Maxus Asset Management Inc. a wholly owned subsidiary of
Resource Management Inc. The Investment Advisor receives from each Fund as
compensation for its services to that Fund an annual fee of 1% on the first
$150,000,000 of the Fund's net assets, and 0.75% of the Fund's net assets
in excess of $150,000,000.
3.)RELATED PARTY TRANSACTIONS
Resource Management, Inc. has two wholly owned subsidiaries which provide
services to the Funds. These subsidiaries are Maxus Asset Management Inc.
and Maxus Securities Corp. Maxus Asset Management was paid $20,556 by Maxus
Ohio Heartland Fund and $92,017 by Maxus Aggressive Value Fund in
investment advisory fees during the fiscal year ending December 31, 1999.
The Funds have adopted a Distribution and Shareholder Servicing Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Maxus
Securities has served as the national distributor of the Funds shares. The
Funds have entered into a distribution agreement pursuant to which the
Funds pay Maxus Securities a fee, accrued daily and payable monthly at an
annual rate of .50%, based on the average daily net assets for Investor
class only. Maxus Securities was reimbursed $6,243 by Maxus Ohio Heartland
Fund and $32,033 by Maxus Aggressive Value Fund for distribution expenses.
Resource Management, Inc. owns 49% of Mutual Shareholder Services. Mutual
Shareholder Services provides fund accounting and transfer agent services
to the Maxus Ohio Heartland Fund and the Maxus aggressive Value Fund.
Mutual Shareholder Services received fees totaling $5,635 from Maxus Ohio
Heartland Fund and $23,714 from Maxus Aggressive Value Fund for services
rendered to the Fund for the fiscal year ending December 31, 1999. Maxus
Securities is a registered broker-dealer. Maxus Securities effected
substantially all of the investment portfolio transactions for the Fund.
For this service Maxus Securities received commissions of $3,425 from Maxus
Ohio Heartland Fund and $64,128 from Maxus Aggressive Value Fund for the
fiscal year ending December 31, 1999.
Certain officers and/or trustees of the Funds are officers and/or directors
of the Investment Advisor and Administrator. Each director who is not an
"affiliated person" receives an attendance fee of $100 per Fund per
meeting.
4.)CAPITAL STOCK AND DISTRIBUTION
At December 31, 1999, an indefinite number of shares of capital stock ($.10
par value) were authorized, and paid-in capital amounted to $2,518,561 for
the Maxus Ohio Heartland Fund and $11,675,095 for the Maxus Aggressive
Value Fund.
Distributions to shareholders are recorded on the ex-dividend date.
Payments in excess of net investment income or of accumulated net realized
gains reported in the financial statements are due primarily to book/tax
differences. Payments due to permanent differences have been charged to
paid in capital. Payments due to temporary differences have been charged to
distributions in excess of net investment income or realized gains.
5.)PURCHASES AND SALES OF SECURITIES
The table below displays information describing purchases and sales of
investment securities, both U.S. Government obligations and non U.S.
Government obligations, excluding short-term securities, made during the
fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
Maxus Ohio Heartland Maxus Aggressive Value
-------------------- ----------------------
Type of obligation Fund Fund
------------------ ---- ----
<S> <C> <C>
Purchase of non U.S. Government 864,903 13,018,752
Sale of non U.S. Government 653,902 7,615,358
Purchase of U.S. Government 0 0
Sale of U.S. Government 0 0
</TABLE>
-25-
<PAGE> 65
6.)SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments owned at December
31, 1999 was the same as identified cost.
At December 31, 1999, the composition of unrealized appreciation (the
excess of value over tax cost) and depreciation (the excess of tax cost
over value) was as follows:
<TABLE>
<CAPTION>
Maxus Ohio Heartland Maxus Aggressive Value
-------------------- ----------------------
Fund Fund
---- ----
<S> <C> <C>
Appreciation 151,122 1,666,454
(Depreciation) (770,418) (958,601)
--------- ----------
Net Appreciation (Depreciation) (619,296) 707,853
========= ==========
</TABLE>
-26-
<PAGE> 66
