U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No.
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Post-Effective Amendment No. 3
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 4
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(Check appropriate box or boxes)
ATALANTA/SOSNOFF INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
101 Park Avenue
New York, New York 10178
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (212) 867-5000
Anthony G. Miller
Atalanta/Sosnoff Capital Corporation (Delaware)
101 Park Avenue
New York, New York 10178
(Name and Address of Agent for Service)
Copies to:
Tina D. Hosking
Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to Rule 485(b)
/ / on (date) pursuant to Rule 485(b)
/ / 75 days after filing pursuant to Rule 485(a)
/X/ on October 1, 1999 pursuant to Rule 485(a)
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ATALANTA/SOSNOFF INVESTMENT TRUST
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
UNDER THE SECURITIES ACT OF 1933
--------------------------------
PART A
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Item No. Registration Statement Caption Caption in Prospectus
- -------- ------------------------------ ---------------------
1. Front and Back Cover Pages Cover Pages
2. Risk/Return Summary: Risk/Return Summary; Prior
Performance of the Adviser
Investments, Risks,
and Performance
3. Risk/Return Summary: Expense Information
Fee Table
4. Investment Objectives, Principal Investment
Investment Strategies, Strategies and Related
and Related Risks Risks
5. Management's Discussion of Inapplicable (contained in
Fund Performance and Analysis Annual Report
6. Management, Organization, Operation of the Fund
and Capital Structure
7. Shareholder Information How to Purchase Shares; How to
Redeem Shares; Dividend and
Distributions; Taxes;
Calculation of Share Price;
Application
8. Distribution Arrangements Service Plan
9. Financial Highlights Financial Highlights
Information
PART B
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Caption in Statement
of Additional
Item No. Registration Statement Caption Information
- -------- ------------------------------ --------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
(i)
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12. General Information and History The Trust
13. Investment Objectives and Policies Definitions, Policies and
Risk Considerations; Quality
Ratings of Corporate Bonds
and Preferred Stocks;
Investment Limitations;
Securities Transactions;
Portfolio Turnover
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Principal Holders of
Holders of Securities Securities
16. Investment Advisory and The Investment Adviser;
Other Services Service Plan; Custodian;
Auditors; Countrywide Fund
Services, Inc.
17. Brokerage Allocation and Other Securities Transactions
Practices
18. Capital Stock and The Trust
Other Securities
19. Purchase, Redemption and Calculation of Share
Pricing of Securities Price; Other Purchase
Being Offered Information; Redemption in
Kind
20. Tax Status Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Historical Performance
Information
23. Financial Statements Statement of Assets and
Liabilities
PART C
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The information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
(ii)
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[LOGO]
ATALANTA/SOSNOFF FUND
ATALANTA/SOSNOFF FOCUS FUND
ATALANTA/SOSNOFF VALUE FUND
ATALANTA/SOSNOFF BALANCED FUND
Prospectus
October 1, 1999
These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Securities and Exchange Commission passed on the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
<PAGE>
PROSPECTUS
October 1, 1999
ATALANTA/SOSNOFF INVESTMENT TRUST
101 PARK AVENUE
NEW YORK, NEW YORK 10178
(877)767-6633
- --------------------------------------------------------------------------------
The Atalanta/Sosnoff Investment Trust currently offers four separate series of
shares to investors: the Atalanta/Sosnoff Fund, the Atalanta/Sosnoff Focus Fund,
the Atalanta/Sosnoff Value Fund and the Atalanta/Sosnoff Balanced Fund
(individually a "Fund" and collectively the "Funds").
ATALANTA/SOSNOFF FUND
ATALANTA/SOSNOFF FOCUS FUND
ATALANTA/SOSNOFF VALUE FUND
ATALANTA/SOSNOFF BALANCED FUND
This Prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.
TABLE OF CONTENTS
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Page
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RISK/RETURN SUMMARY.......................................................... 2
EXPENSE INFORMATION.......................................................... 3
PRIOR PERFORMANCE OF THE ADVISER............................................. 4
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS ........................... 7
HOW TO PURCHASE SHARES....................................................... 11
HOW TO REDEEM SHARES......................................................... 13
SHAREHOLDER SERVICES......................................................... 14
EXCHANGE PRIVILEGE........................................................... 15
DIVIDENDS AND DISTRIBUTIONS.................................................. 16
TAXES .................................................................... 16
SERVICE PLAN................................................................. 17
OPERATION OF THE FUNDS....................................................... 17
CALCULATION OF SHARE PRICE................................................... 18
FINANCIAL HIGHLIGHTS......................................................... 19
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RISK/RETURN SUMMARY
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WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
The ATALANTA/SOSNOFF FUND seeks long-term capital appreciation, through equity
investments in companies which the Adviser believes are entering into a period
of accelerating earnings momentum.
The ATALANTA/SOSNOFF FOCUS FUND is a non-diversified fund that seeks long-term
capital appreciation by concentrating its investments in a core position of
20-25 common stocks of companies which the Adviser believes are entering into a
period of accelerating earnings momentum.
The ATALANTA/SOSNOFF VALUE FUND seeks long-term capital appreciation by
investing primarily in equity securities which the Adviser believes are
fundamentally undervalued.
The ATALANTA/SOSNOFF BALANCED FUND seeks to preserve capital while producing
long-term capital appreciation by investing in a blend of common stocks and
fixed-income securities.
WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
The Atalanta/Sosnoff Fund and the Atalanta/Sosnoff Focus Fund will each normally
invest 65% of its total assets in common stocks. The Adviser uses quantitative
screening techniques, followed by fundamental analysis, to select stocks for the
Funds. These stocks are then bought and sold based on the relationship of the
stock's current price to its target price (what the Adviser thinks the stock is
worth).
The Atalanta/Sosnoff Value Fund will normally invest 65% of its total assets in
common stocks. The Adviser seeks to identify stocks priced below average in
comparison to such factors as earnings and book value.
The Atalanta/Sosnoff Balanced Fund will normally invest 65% (maximum 75%) of its
assets in common stocks and 35% of its total assets in cash, cash equivalents
and fixed-income securities. The Adviser analyzes macroeconomic factors (i.e.,
inflation, Gross Domestic Product) and individual securities and attempts to
anticipate interest rate changes and monetary policy decisions to determine the
allocation of the Fund's assets.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
Common stocks and fixed-income securities are subject to inherent market risks
and fluctuations in value due to changes in earnings, economic conditions,
quality ratings and other factors beyond the control of the Adviser.
Fixed-income securities are also subject to price fluctuations based upon
changes in the level of interest
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rates, which will generally result in all those securities changing in price in
the same way, i.e., all those securities experiencing appreciation when interest
rates decline and depreciation when interest rates rise. As a result, there is a
risk that you may lose money by investing in the Funds.
The Atalanta/Sosnoff Focus Fund is a non-diversified fund and therefore may
invest more than 5% of its total assets in the securities of one or more
issuers. Because a relatively high percentage of the assets of the Fund may be
invested in the securities of a limited number of issuers, the value of shares
of the Fund may be more sensitive to any single economic, business, political or
regulatory occurrence than the value of shares of a diversified investment
company. This fluctuation, if significant, may affect the performance of the
Fund.
Because the Balanced Fund intends to allocate its assets among common stocks,
cash, cash equivalents and fixed-income securities, it may not be able to
achieve, at times, a total return as high as that of a portfolio with complete
freedom to invest its assets entirely in any one type of security. The
investment results of the Fund depend on the Adviser's ability to correctly
anticipate the relative performance of common stocks, cash, cash equivalents and
fixed-income securities.
An investment in the Funds is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.
EXPENSE INFORMATION
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THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
SHAREHOLDER FEES (fees paid directly from your investment): None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):
Atalanta/ Atalanta/ Atalanta/
Atalanta/ Sosnoff Sosnoff Sosnoff
Sosnoff Focus Value Balanced
Fund Fund Fund Fund
---- ---- ---- ----
Management Fees . . . . . .75% .75% .75% .75%
Service (12b-1) Fees . . .25% .25% .25% .25%
Other Expenses. . . . . . 1.45% .50%(b) .50%(b) .50%(b)
----- ---- ---- ----
Total Annual Fund
Operating Expenses . . . 2.45%(a) 1.50% 1.50% 1.50%
===== ===== ===== =====
Fee Waiver and Expense
Reimbursement . . . . . . .95%(a)
=====
Net Expenses . . . . . . 1.50%(a)
=====
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(a) The Adviser has contracturally agreed to limit Total Fund Operating
Expenses to 1.50% through October 1, 2000.
(b) Other expenses are based on estimated amounts for the current fiscal year.
Actual expenses may be greater or lesser than these shown.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in the respective Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the respective Fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Atalanta/ Atalanta/ Atalanta/
Atalanta/ Sosnoff Sosnoff Sosnoff
Sosnoff Focus Value Balanced
Fund Fund** Fund** Fund**
---- ------ ------ ------
1 Year $ 153 $ 153 $ 153 $ 153
3 Years 764* 474 474 474
5 Years 1,306*
10 Years 2,786*
* USING ACTUAL EXPENSES, NET OF ALL WAIVERS, THE COSTS OF INVESTING IN THE
ATALANTA/SOSNOFF FUND FOR THREE, FIVE AND TEN YEARS WOULD HAVE BEEN $474,
$818 AND $1791, RESPECTIVELY.
** ATALANTA/SOSNOFF FOCUS FUND, ATALANTA/SOSNOFF VALUE FUND AND THE
ATALANTA/SOSNOFF BALANCED FUND ARE CLASSIFIED AS "NEW FUNDS" AND MUST ONLY
INCLUDE ONE AND THREE YEAR COST INFORMATION.
PRIOR PERFORMANCE OF THE ADVISER
- --------------------------------
The investment performance illustrated below represents the composite
performance of all the separate accounts (the "Equity Composite" and the
"Balanced Composite") managed by the Adviser which were managed with investment
objectives, policies and strategies substantially similar to those the Adviser
employs in managing the Atalanta/Sosnoff Fund and the Atalanta/Sosnoff Balanced
Fund, respectively. Martin T. Sosnoff, the Adviser's Chief Investment Officer
and Chairman of its investment committee, has been primarily responsible for the
day-to-day management of the Equity Composite and the Balanced Composite
throughout the entire period presented. Mr. Sosnoff is likewise responsible for
the day-to-day management of each Fund's portfolio. Mr. Sosnoff founded Atalanta
Capital Corp. in 1970 and became its Chief Investment Officer in 1976. After Mr.
Sosnoff founded the Adviser in 1981, all the accounts he managed transferred
from Atalanta
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Capital Corp. to the Adviser. Mr. Sosnoff has not managed a registered
investment company other than the Atalanta/Sosnoff Fund.
The performance data below represents the prior performance of the Equity
Composite and the Balanced Composite and not the prior performance of the Funds
and you should not rely upon it as an indication of future performance of the
Funds. As a point of comparison for the Equity Composite, the performance of the
Standard & Poor's 500 Stock Index (the "S&P 500 Index") is also presented. As
points of comparison for the Balanced Composite, the performance of the S&P 500
Index, the Lehman Brothers Intermediate Government/Corporate Bond Index and a
composite index consisting of 65% of the S&P 500 Index and 35% of the Lehman
Brothers Intermediate Government/Corporate Bond Index (the "65/35 Composite
Index") is presented. The S&P 500 Index is an unmanaged capitalization-weighted
measure of 500 widely held common stocks listed on the New York Stock Exchange,
the American Stock Exchange and the over-the-counter market. The Lehman Brothers
Intermediate Government/ Corporate Bond Index is a widely recognized bond index
composed of intermediate-term debt instruments calculated by Lehman Brothers
which is being used to portray the pattern of bond movement over the stated
period.
PERIODIC RATES OF RETURN FOR THE PAST 10 YEARS
Equity Composite S&P
(dollar weighted 500
and net of fees) Index
---------------- -----
1989 34.95% 31.60%
1990 -0.70% -3.11%
1991 46.63% 30.33%
1992 4.63% 7.62%
1993 18.05% 10.06%
1994 -3.52% 1.31%
1995 34.76% 37.58%
1996 10.55% 22.96%
1997 25.86% 33.37%
1998 30.41% 28.56%
January 1 - June 30, 1999 __.__% __.__%
ANNUALIZED RETURNS FOR PERIODS ENDED JUNE 30, 1999
Equity Composite S&P 500 Index
---------------- -------------
1 year __.__% __.__%
5 years __.__% __.__%
10 years __.__% __.__%
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PERIODIC RATES OF RETURN FOR THE PAST 10 YEARS
Lehman Brothers
Intermediate
Balanced Government/
Composite Corporate S&P 65/35
(dollar weighted Bond 500 Composite
and net of fees) Index Index Index
---------------- ----- ----- -----
1989 26.83% 12.75% 31.60% 24.84%
1990 3.63% 9.17% -3.11% 1.38%
1991 31.94% 14.62% 30.33% 24.79%
1992 6.69 7.17% 7.62% 7.51%
1993 13.81% 8.78% 10.06% 9.62%
1994 -2.30% -1.93% 1.31% 0.19%
1995 29.82% 15.31% 37.58% 29.46%
1996 7.89% 4.06% 22.96% 16.09%
1997 20.66% 7.87% 33.37% 24.11%
1998 27.07% 8.42% 28.56% 22.10%
January 1 -
June 30, 1999 __.__% __-__% __-__% __-__%
ANNUALIZED RETURNS FOR PERIODS ENDED JUNE 30, 1999
Lehman Brothers
Intermediate
Government/
Corporate
Balanced Composite Bond Index S&P 500 Index
------------------ ---------- -------------
1 year __.__% __.__% __.__%
5 years __.__% __.__% __.__%
10 years __.__% __.__% __.__%
65/35
Composite Index
---------------
1 year __.__%
5 years __.__%
10 years __.__%
While the Adviser will employ for the Atalanta/Sosnoff Fund and the
Atalanta/Sosnoff Balanced Fund investment objectives, policies and strategies
that are substantially similar to those that were employed in managing the
Equity Composite and the Balanced Composite, respectively, the Adviser, in
managing the Funds, may be subject to certain restrictions imposed by the
Investment Company Act of 1940, as amended, and the Internal Revenue Code of
1986, as amended, on its investment activities to which, as the investment
adviser to the Composites, it was not previously subject. Examples include
limits on the percentage of assets invested in securities of issuers in a single
industry and requirements on distributing income to shareholders. Such
restrictions, if they had been applicable to the Composites, may have adversely
affected the performance results of the Composites.
The Atalanta/Sosnoff Fund and the Atalanta/Sosnoff Balanced Fund may incur
operating expenses that were not incurred by the Equity Composite and Balanced
Composite. It is anticipated that the fees and expenses of the Atalanta/Sosnoff
Fund and the Atalanta/Sosnoff Balanced Fund will be higher than those of the
Composites, which will lower performance
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results. While the Composites' incur inflows and outflows of cash, there can be
no assurance that the continuous offering of each Fund's shares and each Fund's
obligation to redeem its shares will not impact the Funds' performance.
The performance data above represents the prior performance of each
Composite and not the prior performance of the corresponding Fund and you should
not rely upon it as an indication of future performance of the Funds. The
performance of each Composite, which is unaudited, has otherwise been computed
by the Adviser in accordance with the standards formulated by the Association
for Investment Management and Research ("AIMR"). This method of calculating
performance differs from the standardized methodology used by mutual funds to
calculate performance and results in a total return different from that derived
from the standardized methodology. All performance data presented is net of
advisory fees and other expenses.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
- -------------------------------------------------
Atalanta/Sosnoff Investment Trust (the "Trust") has four Funds. Each Fund
has its own portfolio and investment objective. Each Fund's investment objective
may be changed by the Board of Trustees without shareholder approval, but only
after notification has been given to shareholders and after this Prospectus has
been revised accordingly. Unless otherwise indicated, all investment practices
and limitations of the Funds are nonfundamental policies which may be changed by
the Board of Trustees without shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
GROWTH FUNDS:
ATALANTA/SOSNOFF FUND
AND ATALANTA/SOSNOFF FOCUS FUND
The Adviser selects stocks for the two Growth Funds by using quantitative
screening techniques and fundamental investment analysis. The Adviser first
applies a quantitative screening strategy to a large capitalization universe of
stocks by searching for companies which may have the following general
characteristics, among others: market capitalization over $2 billion; earnings
growth rate above market (the S&P 500 Index, industry averages) for at least 12
months; relative price-to-earnings ratio in the lower one-third of the company's
historical range over the past 5 years; and earnings per share estimated by the
Adviser to be above the consensus as reported in financial industry
publications. Through its evaluation of these general criteria, the Adviser
reduces the initial universe of stocks to a selected list of stocks which are
then subjected to further fundamental research analysis. The Adviser may examine
various factors including, but not limited to, the following:
EARNINGS MOMENTUM - Which companies will experience an accelerating rate of
growth during the next business period?
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GROWTH RATE P/E - What price-to-earnings ratio is being paid for the
company's rate of growth and where does that place it relative to its peers
in its industry and to the overall market?
EARNINGS STABILITY - How consistently has the company been able to grow
operating income over an economic period and how consistently has the
company met earnings estimates?
PRICE PERFORMANCE - Has the stock outperformed the market indices through
the current stock market period?
The Adviser may also cultivate a dialogue with the senior management of the
companies it analyzes. Such a hands-on approach emphasizes direct contact
whereby impressions gained by interviewing management are verified against the
assessments of vendors, competitors and suppliers. The Adviser's conclusions are
often quantified by the development of an earnings model which may be gauged
against the investment community's expectations.
The Adviser's fundamental approach is disciplined by two additional steps.
First, the Adviser screens prospective purchases against valuation criteria such
as historical and relative price-to-earnings ratios. Next, specific target
prices (what the Adviser thinks the stock is worth) are established for each
stock. The Adviser buys and sells stocks based upon the relationship of the
stock's current price to its target price. For example, if a stock's target
price is higher than its current price, the Adviser will consider buying the
stock. Conversely, as a stock's current price approaches its target price, the
Adviser will consider selling.
VALUE FUND:
ATALANTA/SOSNOFF VALUE FUND
The Adviser's value philosophy seeks to identify stocks priced
below-average in comparison to such factors as earnings and book value
(shareholders' equity divided by shares outstanding). Value investing is
predicated on the Adviser's ability to identify undervalued securities. The
Adviser emphasizes stocks that have positive free cash flow, relatively low
price-to-earnings ratios and low debt-to-equity ratios as compared to other
companies in the same industry, to specific competitors and to the overall
market. The dividend yield (annual dividend rate divided by current stock price)
of these stocks tends to be higher.
The Adviser will use a bottom-up approach (focusing on specific companies
rather than the overall market level or industry sectors) in selecting
securities. Before a security is purchased, the Adviser will analyze company
reports and other public information to develop an opinion on the company's
value. The Adviser's company selection process includes but is not limited to
those companies that demonstrate strong cash flows, significant barriers to
competition, and moderate or low requirements for capital reinvestment.
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BALANCED FUND:
ATALANTA/SOSNOFF BALANCED FUND
The Balanced Fund's blend of common stocks (the "equity segment") and cash,
cash equivalents and fixed-income securities (the "fixed-income segment") is
determined by systematically integrating a macroeconomic outlook (which involves
a review of domestic factors such as Gross Domestic Product momentum, interest
rates, inflation and corporate earnings, and a review of international factors
such as geopolitical events, currency parities and other variables) with
individual security analysis. In addition, the Adviser will make asset
allocation decisions in anticipation of interest rate changes and monetary
policy decisions. The Fund will normally invest 65% (maximum 75%) of its total
assets in common stocks and 35% of its total assets in cash, cash equivalents
and fixed-income securities.
The equity segment of the Fund will consist primarily of the common stocks
of larger, more established companies which the Adviser believes are entering
into a period of accelerating earnings momentum. The Adviser uses quantitative
screening techniques, followed by fundamental research analysis, to select the
stocks. In effect, the equity segment's security selection process is identical
to that used by the Atalanta/Sosnoff Fund.
The fixed-income segment of the Fund will consist of a mix of federal,
agency and corporate securities, including U.S. Government obligations and
corporate debt obligations (such as bonds and debentures) maturing in more than
one year from the date of purchase and preferred stock of domestic issuers rated
at the time of purchase in the four highest categories assigned by Moody's
Investors Service, Inc. (Aaa, Aa, A or Baa) or Standard & Poor's Ratings Group
(AAA, AA, A or BBB) or, if unrated, which are determined by the Adviser to be of
comparable quality.
The Adviser's analysis of currencies, inflation rates, Federal Reserve
policy, Gross Domestic Product momentum, interest rates and geopolitical events
is coupled with fundamental bottom-up security research in selecting securities
for the fixed-income segment. The Adviser believes the most critical variable in
managing the fixed-income segment is the overall duration (the time it takes an
investor to recoup his or her investment) of the segment. Thus, the Adviser will
actively manage the duration and maturity of the Fund's fixed-income segment and
will seek to enhance returns from interest rate anticipation, sector allocations
and individual security analysis. For example, if the Adviser anticipates a
decline in interest rates it will extend the segment's duration. Conversely, if
the Adviser anticipates an increase in interest rates will reduce its duration,
depending on the Adviser's analysis. In addition, the Adviser monitors yield
disparities among different asset classes and sectors and will invest the
portfolio accordingly. This determination is a function of the Adviser's
assessment of the securities' credit worthiness and historical yield. For
example, if in the opinion of the Adviser, the disparity between the
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yield of corporate and federal and agency securities is historically large
(i.e., corporate is higher), then corporate securities might be more attractive;
if the disparity is smaller, federal and agency securities might be more
attractive because of their reduced risk as compared to corporate securities.
Because the Fund intends to allocate its assets between common stocks and
cash, cash equivalents and fixed-income securities, it may not be able to
achieve, at times, a total return as high as that of a portfolio with complete
freedom to invest its assets entirely in any one type of security. It should be
noted that, although the Fund intends to invest in fixed-income securities to
reduce the price volatility of the Fund's shares, intermediate and long-term
fixed-income securities do fluctuate in value more than short-term fixed-income
securities. The flow of funds between the equity and fixed-income segments of
the Fund is an ongoing process. Changes in market prices can occur at any time.
Accordingly, there is no assurance that the Fund will achieve its investment
objective. When you redeem your shares, they may be worth more or less than what
you paid for them.
INVESTMENT STRATEGIES APPLICABLE TO EACH FUND
- ---------------------------------------------
TEMPORARY DEFENSIVE POSITION. When the Adviser believes substantial price
risks exist for common stocks, each Fund may temporarily hold for defensive
purposes all or a portion of its assets in short-term obligations such as bank
debt instruments (certificates of deposit, bankers' acceptances and time
deposits), commercial paper, shares of money market investment companies, U.S.
Government obligations having a maturity of less than one year or repurchase
agreements. When the Adviser takes a temporary defensive position, the
applicable Fund may not achieve its investment objective.
PORTFOLIO TURNOVER. Each Fund does not intend to use short-term trading as
a primary means of achieving its investment objective. The Adviser expects the
Atalanta/Sosnoff Focus Fund and the Atalanta/Sosnoff Balanced Fund to maintain
lower portfolio turnover than the Atalanta/Sosnoff Fund and the Atalanta/Sosnoff
Value Fund. However, a Fund's rate of portfolio turnover will depend upon market
and other conditions, and it will not be a limiting factor when portfolio
changes are deemed necessary or appropriate by the Adviser. Although the annual
portfolio turnover rate of each Fund cannot be accurately predicted, it is not
expected to exceed 150%, but may be either higher or lower. A 100% turnover rate
would occur, for example, if all the securities of a Fund were replaced once in
a one-year period. High turnover involves correspondingly greater commission
expenses and transaction costs. High turnover may result in a Fund recognizing
greater amounts of income and capital gains, which would increase the amount of
income and capital gains which the Fund must distribute to shareholders in order
to maintain its status as a regulated investment company and to avoid the
imposition of federal income or excise taxes.
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HOW TO PURCHASE SHARES
- ----------------------
Your initial investment in the Funds ordinarily must be at least $5,000
($2,000 for tax-deferred retirement plans). The Funds may, in the Adviser's sole
discretion, accept certain accounts with less than the stated minimum initial
investment. Shares of the Funds are sold on a continuous basis at the net asset
value next determined after receipt of a purchase order by the Trust. Purchase
orders received by dealers prior to 4:00 p.m., Eastern time, on any business day
and transmitted to the Trust's transfer agent, Countrywide Fund Services, Inc.
(the "Transfer Agent"), by 5:00 p.m., Eastern time, that day are confirmed at
the net asset value determined as of the close of the regular session of trading
on the New York Stock Exchange on that day. It is the responsibility of dealers
to transmit properly completed orders so that they will be received by the
Transfer Agent by 5:00 p.m., Eastern time. Dealers may charge a fee for
effecting purchase orders. Direct purchase orders received by the Transfer
Agent, by 4:00 p.m., Eastern time, are confirmed at that day's net asset value.
Direct investments received by the Transfer Agent after 4:00 p.m., Eastern time,
and orders received from dealers after 5:00 p.m., Eastern time, are confirmed at
the net asset value next determined on the following business day. If you
establish your account through a brokerage firm, you will need to contact your
broker to receive account information. The Transfer Agent will not have access
to your individual account information.
INITIAL INVESTMENT BY MAIL. You may open an account and make an initial
investment in the Funds by sending a check and a completed account application
form to Countrywide Fund Services, Inc., P.O. Box 5354, Cincinnati, Ohio
45201-5354. Checks should be made payable to the appropriate Fund. An account
application is included in this Prospectus. Please mark the appropriate box
indicating the Fund or Funds you are purchasing.
The Trust mails you confirmations of all purchases or redemptions of the
Funds' shares. Certificates representing shares are not issued. The Trust and
the Distributor reserve the right to limit the amount of investments and to
refuse to sell to any person.
Investors should be aware that the Funds' account application contains
provisions in favor of the Trust, the Transfer Agent, the Distributor and
certain of their affiliates, excluding such entities from certain liabilities
(including, among others, losses resulting from unauthorized shareholder
transactions) relating to the various services made available to investors.
If an order to purchase shares is canceled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Trust or the Transfer Agent in the transaction.
INITIAL INVESTMENT BY WIRE. You may also purchase shares of the Funds by
wire. Please telephone the Transfer Agent (Nationwide call toll-free
1-877-SOSNOFF (1-877-767-6633)) for instructions. You should
11
<PAGE>
be prepared to provide a completed, signed account application to the Transfer
Agent by mail or facsimile.
Your investment will be made at the net asset value next determined after
your wire is received together with the account information indicated above. If
the Trust does not receive timely and complete account information, there may be
a delay in the investment of your money and any accrual of dividends. To make
your initial wire purchase, you are required to mail a completed account
application to the Transfer Agent. Your bank may impose a charge for sending
your wire. There is presently no fee for receipt of wired funds, but the Trust
reserves the right to charge shareholders for this service upon 30 days' prior
notice to shareholders.
ADDITIONAL INVESTMENTS. You may purchase and add shares to your account by
mail or by bank wire. Checks should be sent to Countrywide Fund Services, Inc.,
P.O. Box 5354, Cincinnati, Ohio 45201-5354. Checks should be made payable to the
applicable Fund. Bank wires should be sent as outlined above. You may also make
additional investments at the Trust's offices at 101 Park Avenue, New York, New
York 10178. Each additional purchase request must contain the name of your
account and your account number to permit proper crediting to your account.
While there is no minimum amount required for subsequent investments, the Trust
reserves the right to impose such a requirement.
HOW TO REDEEM SHARES
- --------------------
BY MAIL. You may redeem shares of the Funds on each day that the Trust is
open for business by sending a written request to the Transfer Agent. The
request must state the number of shares or the dollar amount to be redeemed and
your account number. The request must be signed exactly as your name appears on
the Trust's account records. If the shares to be redeemed have a value of
$25,000 or more, your signature must be guaranteed by any eligible guarantor
institution, including banks, brokers and dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. If the name(s) or the address on your account has been
changed within 30 days of your redemption request, you will be required to
request the redemption in writing with your signature guaranteed, regardless of
the value of the shares being redeemed.
BY WIRE. Redemption requests may direct that the proceeds be wired directly
to your existing account in any commercial bank or brokerage firm in the United
States as designated on your application. There is currently a $9 charge by the
Custodian for processing wire redemptions. The Transfer Agent reserves the
right, upon 30 days' written notice, to change the processing fee. All charges
will be deducted from your account by redemption of shares in your account. Your
bank or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
12
<PAGE>
THROUGH BROKER-DEALERS. You may also redeem your shares through a brokerage
firm or financial institution that has been authorized to accept orders on
behalf of the Funds. If your order is received by such organization in proper
form before 4:00 p.m., Eastern time, or such earlier time as may be required by
such organization your shares will be redeemed. These organizations may be
authorized to designate other intermediaries to act in this capacity. Such an
organization may charge you transaction fees on redemptions of Fund shares and
may impose other charges or restrictions or account options that differ from
those applicable to shareholders who redeem shares directly through the Transfer
Agent.
ADDITIONAL INFORMATION. You will receive the net asset value per share next
determined after receipt by the Transfer Agent of your redemption request in the
form described above. Payment is normally made within 3 business days after
tender in such form, provided that payment in redemption of shares purchased by
check will be effected only after the check has been collected, which may take
up to 15 days from the purchase date. To eliminate this delay, you may purchase
shares of the Funds by certified check or wire.
At the discretion of the Trust or the Transfer Agent, corporate investors
and other associations may be required to furnish an appropriate certification
authorizing redemptions to ensure proper authorization. The Trust reserves the
right to require you to close your account if at any time the value of your
shares is less than $5,000 (based on actual amounts invested, unaffected by
market fluctuations), or such other minimum amount as the Fund may determine
from time to time. After notification to you of the Trust's intention to close
your account, you will be given 60 days to increase the value of your account to
the minimum amount.
The Trust reserves the right to suspend the right of redemption or to
postpone the date of payment for more than 3 business days under unusual
circumstances as determined by the Securities and Exchange Commission. Under
unusual circumstances, when the Board of Trustees deems it appropriate, the
Trust may make payment for shares redeemed in portfolio securities of the Fund
taken at current value.
SHAREHOLDER SERVICES
- --------------------
Contact the Transfer Agent (Nationwide call toll-free 1-877-SOSNOFF
(1-877-767-6633)) for additional information about the shareholder services
described below.
Automatic Withdrawal Plan
-------------------------
If the shares in your account have a value of at least $25,000, you may
elect to receive, or may designate another person to receive, monthly, quarterly
or annual payments in a specified amount of not less than $100 each. There is no
charge for this service.
13
<PAGE>
Tax-Deferred Retirement Plans
-----------------------------
Shares of the Funds are available for purchase in connection with the
following tax-deferred retirement plans:
-- Keogh Plans for self-employed individuals.
-- Individual retirement account (IRA) plans for individuals and their
non-employed spouses, including Roth IRAs and Education IRAs.
-- Qualified pension and profit-sharing plans for employees, including
those profit-sharing plans with a 401(k) provision.
-- 403(b)(7) custodial accounts for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Internal Revenue Code.
Direct Deposit Plans
--------------------
Shares of the Funds may be purchased through direct deposit plans offered
by certain employers and government agencies. These plans enable a shareholder
to have all or a portion of his or her payroll or social security checks
transferred automatically to purchase shares of the Funds.
Automatic Investment Plan
-------------------------
You may make automatic monthly investments in the Funds from your bank,
savings and loan or other depository institution account on either the 15th or
the last business day of the month or both. The minimum initial and subsequent
investments must be $100 under the plan. The Transfer Agent pays the costs
associated with these transfers, but reserves the right, upon 30 days' written
notice, to make reasonable charges for this service. Your depository institution
may impose its own charge for debiting your account which would reduce your
return from an investment in the Funds.
EXCHANGE PRIVILEGE
- ------------------
Shares of the Funds may be exchanged for each other at net asset value. You
may exchange shares by written request or by telephone. You must sign your
written request exactly as your name appears on our account records. If you are
unable to exchange shares by telephone due to such circumstances as unusually
heavy market activity, you can exchange shares by mail or in person. Your
exchange will be processed at the next determined net asset value after the
Transfer Agent receives your request.
You may only exchange shares into a Fund which is authorized for sale in
your state of residence and you must meet that Fund's minimum initial investment
requirements. The Board of Trustees may change or discontinue the exchange
privilege after giving shareholders 60 days' prior notice. Any gain or loss on
an exchange of shares is a taxable event.
14
<PAGE>
The Trust and the Transfer Agent will consider all written and verbal
instructions as authentic and will not be responsible for the processing of
exchange instructions received by telephone which are reasonably believed to be
genuine or the delivery or transmittal of the redemption proceeds by wire. The
affected shareholders will bear the risk of any such loss. The privilege of
exchanging shares by telephone is automatically available to all shareholders.
The Trust or the Transfer Agent, or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Trust and/or the
Transfer Agent do not employ such procedures, they may be liable for losses due
to unauthorized or fraudulent instructions. These procedures may include, among
others, requiring forms of personal identification prior to acting upon
telephone instructions, providing written confirmation of the transactions
and/or tape recording telephone instructions.
DIVIDENDS AND DISTRIBUTIONS
- ---------------------------
The Atalanta/Sosnoff Fund, the Atalanta/Sosnoff Focus Fund and the
Atalanta/Sosnoff Value Fund each expects to distribute substantially all of its
net investment income, if any, on an annual basis. The Atalanta/Sosnoff Balanced
Fund expects to distribute substantially all of its net investment income, if
any, on a quarterly basis. Each Fund expects to distribute any net realized
long-term capital gains at least once each year. Management will determine the
timing and frequency of the distributions of any net realized short-term capital
gains.
Distributions are paid according to one of the following options:
Share Option - income distributions and capital gains distributions
reinvested in additional shares.
Income Option - income distributions and short-term capital gains
distributions paid in cash; long-term capital gains
distributions reinvested in additional shares.
Cash Option - income distributions and capital gains distributions paid
in cash.
You should indicate your choice of option on your application. If no option
is specified on your application or you have established your account through a
brokerage firm, distributions will automatically be reinvested in additional
shares. All distributions will be based on the net asset value in effect on the
payable date.
If you select the Income Option or the Cash Option and the U.S. Postal
Service cannot deliver your checks or if your checks remain uncashed for six
months, your dividends may be reinvested in your account at the then current net
asset value and your account will be converted to the Share Option. No interest
will accrue on amounts represented by uncashed distribution checks.
15
<PAGE>
TAXES
- -----
The Atalanta/Sosnoff Fund has qualified and each Fund intends to qualify
for the special tax treatment afforded a "regulated investment company" under
Subchapter M of the Internal Revenue Code so that it does not pay federal taxes
on income and capital gains distributed to shareholders. Each Fund intends to
distribute substantially all of its net investment income and any realized
capital gains to its shareholders. Distributions of net investment income and
from net realized short-term capital gains, if any, are taxable to investors as
ordinary income. Distributions of net capital gains (i.e., the excess of net
long-term capital gains over net short-term capital losses) by a Fund are
taxable to you as capital gains, without regard to the length of time you have
held your Fund shares. Dividends distributed by the Funds from net investment
income may be eligible, in whole or in part, for the dividends received
deduction available to corporations.
Redemptions and exchanges of Fund shares are taxable events on which you
may realize a gain or loss. The maximum capital gains rate for individuals is
20% with respect to assets held for more than 12 months. The maximum capital
gains rate for corporate shareholders is the same as the maximum tax rate for
ordinary income.
The Funds will mail a statement to you annually indicating the amount and
federal income tax status of all distributions made during the year. In addition
to federal taxes, you may be subject to state and local taxes on distributions.
You should consult your tax advisors about the tax effect of distributions and
withdrawals from the Funds and the use of the Automatic Withdrawal Plan and
Exchange Privilege. The tax consequences described in this section apply whether
distributions are taken in cash or reinvested in additional shares.
SERVICE PLAN
- ------------
Pursuant to Rule 12b-1 under the 1940 Act, the Trust has adopted a service
plan (the "Plan") under which each Fund is required to compensate the
Distributor for its services to the Fund. The Distributor is responsible for the
payment of any expenses related to the distribution or promotion of Fund shares,
including payments to securities dealers and others who are engaged in
activities related to the servicing of shareholder accounts such as maintaining
personnel who render shareholder support services not otherwise provided by the
Transfer Agent; expenses of formulating and implementing marketing and
promotional activities, including direct mail promotions and mass media
advertising; expenses of preparing, printing and distributing sales literature
and prospectuses and statements of additional information and reports; expenses
of obtaining such information, analyses and reports with respect to marketing
and promotional activities as the Trust may, from time to time, deem advisable;
and any other expenses related to the servicing of Fund shareholders or the
distribution of Fund shares.
The annual limitation for payments to the Distributor pursuant to the Plan
is .25% of each Fund's average daily net assets. In the event
16
<PAGE>
the Plan is terminated by a Fund in accordance with its terms, that Fund will
not be required to make any payments to the Distributor after the date the Plan
terminates. Because these fees are paid pursuant to the Plans and are paid out
of the Funds' assets on an ongoing basis, over time they will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
OPERATION OF THE FUNDS
- ----------------------
Each Fund is a series of the Atalanta/Sosnoff Investment Trust (the
"Trust"), an open-end management investment company organized as an Ohio
business trust. The Atalanta/Sosnoff Fund, the Atalanta/Sosnoff Value Fund and
the Atalanta/Sosnoff Balanced Fund are diversified series of the Trust. The
Atalanta/Sosnoff Focus Fund is a non-diversified series of the Trust. The Board
of Trustees supervises the business activities of the Trust. Like other mutual
funds, the Trust retains various organizations to perform specialized services
for the Funds.
The Trust retains Atalanta/Sosnoff Capital Corporation (Delaware), 101 Park
Avenue, New York, New York 10178 (the "Adviser"), to manage the Funds'
investments. The Adviser is a registered investment adviser that has been
advising individual, institutional and corporate clients since 1982.
Each Fund pays the Adviser a fee, payable monthly, at the annual rate of
.75% of the average value of its daily net assets. The Adviser has
contracturally agreed to waive fees and reimburse Fund expenses when necessary
in order to maintain the Atalanta/Sosnoff Fund's expenses at 1.50%, through
October 1, 2000. The Adviser reserves the right to discontinue the fee waivers
and expense reimbursements at any time.
Atalanta/Sosnoff Management Corporation, 101 Park Avenue, New York, New
York (the "Distributor"), a wholly-owned subsidiary of the Adviser, serves as
principal underwriter for the Trust and, as such, is the exclusive agent for
distribution of the Funds' shares.
Martin T. Sosnoff, C.F.A., Chairman of the Board of the Adviser and the
Distributor, is primarily responsible for the day-to-day management of each
Fund. Mr. Sosnoff founded the Adviser in 1981. He has authored two books on the
money management business, HUMBLE ON WALL STREET (1975) and SILENT INVESTOR,
SILENT LOSER (1986), and currently writes a column for Forbes magazine. Mr.
Sosnoff chairs an investment committee of three senior executives of the Adviser
in managing each Fund's portfolio. Craig B. Steinberg is President and a
Director of the Adviser and has been employed by the Adviser since 1985. Paul P.
Tanico is Executive Vice President of the Adviser and has been employed by the
Adviser since 1997.
YEAR 2000 READINESS. Computer users around the world are faced with the
dilemma of the Year 2000 issue, which stems from the use of two digits in most
computer systems to designate the year. When the year advances from 1999 to
2000, many computers will not recognize "00" as the
17
<PAGE>
Year 2000. This issue could potentially affect every aspect of computer-related
activity, on an individual and corporate level. The Funds could be adversely
impacted if the computer systems used by the Adviser and other service providers
have not been converted to meet the requirements of the new century. The Adviser
has evaluated its internal systems and expects them to handle the change of
millennium. The Adviser is monitoring on an ongoing basis the progress of the
Funds' service providers to convert their systems to comply with the
requirements of the Year 2000. The Adviser currently has no reason to believe
that these service providers will not be fully and timely compliant. However,
you should be aware that there can be no assurance that all systems will be
successfully converted prior to January 1, 2000, in which case it would become
necessary for the Funds to enter into agreements with new service providers or
to make other arrangements. In addition, although the Adviser considers an
issuer's Year 2000 compliance status in the investment decision process,
companies in which the Funds invest may experience Year 2000 difficulties and
the Funds are unable to predict to what extent the Year 2000 issue will impact
the value of those securities.
CALCULATION OF SHARE PRICE
- --------------------------
On each day that the Trust is open for business, the share price (net asset
value) of the shares of each Fund is determined as of the close of the regular
session of trading on the New York Stock Exchange, currently 4:00 p.m., Eastern
time. The Trust is open for business on each day the New York Stock Exchange is
open for business. The net asset value per share of a Fund is calculated by
dividing the sum of the value of the securities held by the Fund plus cash or
other assets minus all liabilities (including estimated accrued expenses) by the
total number of shares outstanding of the Fund, rounded to the nearest cent. The
price at which a purchase or redemption of a Fund's shares is effected is based
on the next calculation of net asset value after the order is placed.
U.S. Government obligations are valued at their most recent bid prices as
obtained from one or more of the major market makers for such securities. Other
portfolio securities are valued as follows: (1) securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of the regular session of trading on the New York Stock
Exchange on the day the securities are being valued, or, if not traded on a
particular day, at the closing bid price, (2) securities traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
last sale price (or, if the last sale price is not readily available, at the
last bid price as quoted by brokers that make markets in the securities) as of
the close of the regular session of trading on the New York Stock Exchange on
the day the securities are being valued, (3) securities which are traded both in
the over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market, and (4) securities (and other assets)
for which market quotations are not readily available are valued at their fair
value as determined in good faith in accordance with consistently applied
procedures established by
18
<PAGE>
and under the general supervision of the Board of Trustees. The net asset value
per share of a Fund will fluctuate with the value of the securities it holds.
FINANCIAL HIGHLIGHTS
- --------------------
The financial highlights table is intended to help you understand the
Atalanta/Sosnoff Fund's financial performance. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by , whose report, along with the Fund's financial
statements, are included in the Statement of Additional Information, which is
available upon request. Information is not provided for the Atalanta/Sosnoff
Focus Fund, the Atalanta/Sosnoff Value Fund or the Atalanta/Sosnoff Balanced
Fund because the public offering of the shares of these Funds was commenced on
July 1, 1999 and those Funds have not had a sufficient performance period as of
the date of this Prospectus.
[To be inserted.]
19
<PAGE>
ATALANTA/SOSNOFF INVESTMENT TRUST
101 Park Avenue
New York, New York 10178
BOARD OF TRUSTEES
Howard A. Drucker
Anthony G. Miller
Toni E. Sosnoff
Irving L. Straus
Aida L. Wilder
INVESTMENT ADVISER
ATALANTA/SOSNOFF CAPITAL CORPORATION (DELAWARE)
101 Park Avenue
New York, New York 10178
212-867-5000
INDEPENDENT AUDITORS
_____________________
_____________________
_____________________
LEGAL COUNSEL
WILLKIE FARR & GALLAGHER
787 Seventh Avenue
New York, New York 10019-6099
DISTRIBUTOR
ATALANTA/SOSNOFF MANAGEMENT CORPORATION
101 Park Avenue
New York, New York 10178
TRANSFER AGENT
COUNTRYWIDE FUND SERVICES, INC.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
Shareholder Services
- --------------------
Nationwide: (Toll-Free 1-877-SOSNOFF (1-877-767-6633))
Additional information about the Funds is included in the Statement of
Additional Information ("SAI") and which is incorporated by reference in its
entirety. Additional information about the Atalanta/Sosnoff Fund's investments
is available in the Fund's annual and semiannual reports to shareholders. In the
Fund's annual report, you will find a discussion of the market conditions and
strategies that significantly affected the Atalanta/Sosnoff Fund's performance
during its last fiscal year.
To obtain a free copy of the SAI, the annual and semiannual reports or other
information about the Funds, or to make inquiries about the Funds, please call
1-800-320-2217 (Nationwide) or 629-2070 (in Cincinnati).
20
<PAGE>
Information about the Funds (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's public reference room in Washington,
D.C. Information about the operation of the public reference room can be
obtained by calling the Commission at 1-800-SEC- 0330. Reports and other
information about the Funds are available on the Commission's Internet site at
http://www.sec.gov. Copies of information on the Commission's Internet site may
be obtained, upon payment of a duplicating fee, by writing to: Securities and
Exchange Commission, Public Reference Section, Washington, D.C. 20549-6009.
File No.: 811-8669
21
<PAGE>
ATALANTA/SOSNOFF INVESTMENT TRUST
---------------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
October 1, 1999
ATALANTA/SOSNOFF FUND
ATALANTA/SOSNOFF FOCUS FUND
ATALANTA/SOSNOFF VALUE FUND
ATALANTA/SOSNOFF BALANCED FUND
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Prospectus of the Atalanta/Sosnoff Investment Trust (the
"Trust") dated October 1, 1999. A copy of the Trust's Prospectus can be obtained
by writing the Trust at 312 Walnut Street, 21st floor, Cincinnati, Ohio 45202 or
by calling the Trust nationwide toll-free at 1-877-SOSNOFF (1-877-767-6633).
- 1 -
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
Atalanta/Sosnoff Investment Trust
101 Park Avenue
New York, New York 10178
Page
----
THE TRUST.................................................................... 4
DEFINITIONS, POLICIES AND RISK CONSIDERATIONS................................ 5
QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS...................... 13
INVESTMENT LIMITATIONS....................................................... 16
PORTFOLIO TURNOVER........................................................... 17
TRUSTEES AND OFFICERS........................................................ 18
CONTROL PERSONS AND PRINCIPAL SECURITY HOLDERS............................... 20
THE INVESTMENT ADVISER....................................................... 20
THE DISTRIBUTOR.............................................................. 21
SERVICE PLAN................................................................. 22
CUSTODIAN.................................................................... 23
AUDITORS..................................................................... 24
COUNTRYWIDE FUND SERVICES, INC............................................... 24
SECURITIES TRANSACTIONS...................................................... 25
CALCULATION OF SHARE PRICE................................................... 27
REDEMPTION IN KIND........................................................... 28
TAXES........................................................................ 28
HISTORICAL PERFORMANCE INFORMATION........................................... 29
ANNUAL REPORT................................................................ 31
- 2 -
<PAGE>
THE TRUST
- ---------
The Atalanta/Sosnoff Investment Trust is an open-end, management investment
company that was organized as an Ohio business trust on January 29, 1998. The
Trust currently offers four series of shares to investors: the Atalanta/Sosnoff
Fund, the Atalanta/Sosnoff Focus Fund, the Atalanta/Sosnoff Value Fund and the
Atalanta/Sosnoff Balanced Fund (referred to individually as a "Fund" and
collectively as the "Funds"). Each Fund has its own investment objective(s) and
policies. The Atalanta/Sosnoff Fund, the Atalanta/Sosnoff Value Fund and the
Atalanta/Sosnoff Balanced Fund, are diversified series of the Trust and The
Atalanta/ Sosnoff Focus Fund is a non-diversified series. The Funds are not
intended to be a complete investment program, and there is no assurance that
each Fund's investment objective can be achieved. If there is a change in a
Fund's investment objective, you should consider whether the Fund remains an
appropriate investment in light of your then current financial position and
needs.
Shares of each Fund have equal voting rights and liquidation rights, and
are voted in the aggregate and not by Fund except in matters where a separate
vote is required by the Investment Company Act of 1940 (the "1940 Act") or when
the matter affects only the interest of a particular Fund. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each full share owned and fractional votes for fractional shares owned. The
Trust does not normally hold annual meetings of shareholders. The Trustees shall
promptly call and give notice of a meeting of shareholders for the purpose of
voting upon removal of any Trustee when requested to do so in writing by
shareholders holding 10% or more of the Trust's outstanding shares. The Trust
will comply with the provisions of Section 16(c) of the 1940 Act in order to
facilitate communications among shareholders.
Each share of a Fund represents an equal proportionate interest in the
assets and liabilities belonging to that Fund with each other share of that Fund
and is entitled to such dividends and distributions out of the income belonging
to the Fund as are declared by the Trustees. The shares do not have cumulative
voting rights or any preemptive or conversion rights, and the Trustees have the
authority from time to time to divide or combine the shares of any Fund into a
greater or lesser number of shares so long as the proportionate beneficial
interest in the assets belonging to that Fund and the rights of shares of any
other Fund are in no way affected. In case of any liquidation of a Fund, the
holders of shares of the Fund or Funds being liquidated will be entitled to
receive as a class a distribution out of the assets, net of the liabilities,
belonging to the Fund. Expenses attributable to any Fund are borne by that Fund.
Any general expenses of the Trust not readily identifiable as
- 3 -
<PAGE>
belonging to a particular Fund are allocated by or under the direction of the
Trustees in such manner as the Trustees determine to be fair and equitable.
Generally, the Trustees allocate such expenses on the basis of relative net
assets or number of shareholders. No shareholder is liable to further calls or
to assessment by the Trust without his express consent.
DEFINITIONS, POLICIES AND RISK CONSIDERATIONS
- ---------------------------------------------
A more detailed discussion of some of the terms used and investment
strategies described in the Prospectus (see "Investment Objectives, Principal
Investment Strategies and Related Risks") and additional investment strategies
and risk consideration appears below:
MAJORITY. As used in the Prospectus and this Statement of Additional
Information, the term "majority" of the outstanding shares of the Trust means
the lesser of (1) 67% or more of the outstanding shares of the Trust (or the
applicable Fund) present at a meeting, if the holders of more than 50% of the
outstanding shares of the Trust (or the applicable Fund) are present or
represented at such meeting or (2) more than 50% of the outstanding shares of
the Trust (or the applicable Fund).
EQUITY SECURITIES. Each Fund may invest in common stocks and securities
convertible into common stocks (such as convertible bonds, convertible preferred
stocks and warrants). Each Fund may also invest in preferred stocks and
convertible bonds which are rated at the time of purchase in the five highest
grades assigned by Moody's Investors Service, Inc. (Aaa, Aa, A, Baa or Ba) or
Standard & Poor's Ratings Group (AAA, AA, A, BBB or BB) or in unrated securities
determined by the Adviser to be of comparable quality. Preferred stocks and
bonds rated Ba, or BB are considered high-yield/high-risk securities. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity of the issuers of these securities to pay principal and interest or to
pay the preferred stock obligations than is the case with higher grade
securities. Subsequent to its purchase by a Fund, a security may cease to be
rated or its rating may be reduced below Ba or BB, and the Adviser will consider
such an event to be relevant in its determination of whether the Fund should
continue to hold such security.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which a
Fund purchases a security and simultaneously commits to resell that security to
the seller at an agreed upon time and price, thereby determining the yield
during the term of the agreement. In the event of a bankruptcy or other default
by the seller of a repurchase agreement, a Fund could experience both delays in
liquidating the underlying
- 4 -
<PAGE>
security and losses. To minimize these possibilities, each Fund intends to enter
into repurchase agreements only with its Custodian, with banks having assets in
excess of $10 billion and with broker-dealers who are recognized as primary
dealers in U.S. Government obligations by the Federal Reserve Bank of New York.
Collateral for repurchase agreements is held in safekeeping in the customer-only
account of the Funds' Custodian at the Federal Reserve Bank. A Fund will not
enter into a repurchase agreement not terminable within seven days if, as a
result thereof, more than 15% of the value of its net assets would be invested
in such securities and other illiquid securities.
Although the securities subject to a repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be more
than one year after the Fund's acquisition of the securities and normally would
be within a shorter period of time. The resale price will be in excess of the
purchase price, reflecting an agreed upon market rate effective for the period
of time the Fund's money will be invested in the securities, and will not be
related to the coupon rate of the purchased security. At the time a Fund enters
into a repurchase agreement, the value of the underlying security, including
accrued interest, will equal or exceed the value of the repurchase agreement,
and in the case of a repurchase agreement exceeding one day, the seller will
agree that the value of the underlying security, including accrued interest,
will at all times equal or exceed the value of the repurchase agreement. The
collateral securing the seller's obligation must be of a credit quality at least
equal to the Trust's investment criteria for portfolio securities and will be
held by the Custodian or in the Federal Reserve Book Entry System.
For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan
from a Fund to the seller subject to the repurchase agreement and is therefore
subject to that Fund's investment restriction applicable to loans. It is not
clear whether a court would consider the securities purchased by that Fund
subject to a repurchase agreement as being owned by a Fund or as being
collateral for a loan by the Fund to the seller. In the event of the
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the securities before repurchase of the security under a repurchase
agreement, a Fund may encounter delay and incur costs before being able to sell
the security. Delays may involve loss of interest or decline in price of the
security. If a court characterized the transaction as a loan and a Fund has not
perfected a security interest in the security, that Fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, a Fund would be at the risk of
losing some or all of the principal and income involved in the transaction. As
with any unsecured debt obligation purchased for a Fund, the Adviser seeks to
minimize the risk of loss through
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<PAGE>
repurchase agreements by analyzing the creditworthiness of the obligor, in this
case, the seller. Apart from the risk of bankruptcy or insolvency proceedings,
there is also the risk that the seller may fail to repurchase the security, in
which case a Fund may incur a loss if the proceeds to a Fund of the sale of the
security to a third party are less than the repurchase price. However, if the
market value of the securities subject to the repurchase agreement becomes less
than the repurchase price (including interest), a Fund will direct the seller of
the security to deliver additional securities so that the market value of all
securities subject to the repurchase agreement will equal or exceed the
repurchase price. It is possible that a Fund will be unsuccessful in seeking to
enforce the seller's contractual obligation to deliver additional securities.
U.S. GOVERNMENT OBLIGATIONS. "U.S. Government Obligations" include
securities which are issued or guaranteed by the United States Treasury, by
various agencies of the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government. U.S. Treasury obligations are backed by the "full faith and credit"
of the United States Government. Other U.S. Government obligations may or may
not be backed by the full faith and credit of the United States. In the case of
securities not backed by the full faith and security of the United States, the
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a claim against
the United States in the event the agency or instrumentality does not meet its
commitments. Shares of the Funds are not guaranteed or backed by the United
States Government.
BANK DEBT INSTRUMENTS. Bank debt instruments in which the Funds may invest
consist of certificates of deposit, bankers' acceptances and time deposits
issued by national banks and state banks, trust companies and mutual savings
banks, or of banks or institutions the accounts of which are insured by the
Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation. Certificates of deposit are negotiable certificates evidencing the
indebtedness of a commercial bank to repay funds deposited with it for a
definite period of time (usually from fourteen days to one year) at a stated or
variable interest rate. Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft which has been drawn on it by a
customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. Time deposits are
non- negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. Investments in time deposits maturing
in more than seven days will be subject to the Trust's restrictions on illiquid
investments (see "Investment Limitations").
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<PAGE>
COMMERCIAL PAPER. Commercial paper consists of short-term (usually from one
to two hundred seventy days) unsecured promissory notes issued by corporations
in order to finance their current operations. Each Fund will only invest in
commercial paper rated A-1 by Standard & Poor's Ratings Group or Prime-1 by
Moody's Investors Service, Inc. or unrated paper of issuers who have outstanding
unsecured debt rated AA or better by Standard & Poor's or Aa or better by
Moody's. Certain notes may have floating or variable rates. Variable and
floating rate notes with a demand notice period exceeding seven days will be
subject to the Trust's restrictions on illiquid investments (see "Investment
Limitations") unless, in the judgment of the Adviser, subject to the direction
of the Board of Trustees, such note is liquid.
The rating of Prime-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. Among the factors considered by Moody's in
assigning ratings are the following: valuation of the management of the issuer;
economic evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; evaluation of the
issuer's products in relation to competition and customer acceptance; liquidity;
amount and quality of long- term debt; trend of earnings over a period of 10
years; financial strength of the parent company and the relationships which
exist with the issuer; and recognition by the management of obligations which
may be present or may arise as a result of public interest questions and
preparations to meet such obligations. These factors are all considered in
determining whether the commercial paper is rated Prime-1. Commercial paper
rated A-1 (highest quality) by Standard & Poor's Ratings Group has the following
characteristics: liquidity ratios are adequate to meet cash requirements;
long-term senior debt is rated "A" or better, although in some cases "BBB"
credits may be allowed; the issuer has access to at least two additional
channels of borrowing; basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances; typically, the issuer's industry is
well established and the issuer has a strong position within the industry; and
the reliability and quality of management are unquestioned. The relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated A-1.
SMALL- AND MEDIUM-SIZED COMPANIES. There is no minimum or maximum market
capitalization of the companies in which the Funds may invest. Investing in
securities of small- and medium-sized companies may involve greater risks since
these securities may have limited marketability and, thus, may be more volatile
than securities of larger, more established companies or the market in general.
Because small- and medium-sized companies normally have
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<PAGE>
fewer shares outstanding than larger companies, it may be more difficult for the
Funds to buy or sell significant amounts of these shares without an unfavorable
impact on prevailing prices. Small-sized companies may have limited product
lines, markets or financial resources and may lack management depth. In
addition, small- and medium-sized companies are typically subject to a greater
degree of changes in earnings and business prospects than are larger, more
established companies. There is typically less publicly available information
concerning small- and medium-sized companies than for larger, more established
ones. Although investing in securities of small- and medium-sized companies
offers potential for above-average returns if the companies are successful, the
risk exists that such companies will not succeed and the prices of their shares
could significantly decline in value.
FOREIGN SECURITIES. Subject to the Trust's investment policies, each Fund
may invest in foreign companies through the purchase of sponsored American
Depository Receipts (certificates of ownership issued by an American bank or
trust company as a convenience to investors in lieu of the underlying shares
which such bank or trust company holds in custody) or other securities of
foreign issuers that are publicly traded in the U.S. Because the Funds may
invest in foreign securities, an investment in the Funds involves risks that are
different in some respects from an investment in a fund which invests only in
securities of U.S. domestic issuers. Foreign investments may be affected
favorably or unfavorably by changes in currency rates and exchange control
regulations. There may be less publicly available information about a foreign
company than about a U.S. company, and foreign companies may not be subject to
accounting, auditing and financial reporting standards and requirements
comparable to those applicable to U.S. companies. There may be less governmental
supervision of securities markets, brokers and issuers of securities. Securities
of some foreign companies are less liquid or more volatile than securities of
U.S. companies, and foreign brokerage commissions and custodian fees are
generally higher than in the U.S. Settlement practices may include delays and
may differ from those customary in United States markets. Investments in foreign
securities may also be subject to other risks different from those affecting
U.S. investments, including local political or economic developments,
expropriation or nationalization of assets, restrictions on foreign investment
and repatriation of capital, imposition of withholding taxes on dividend or
interest payments, currency blockage (which would prevent cash from being
brought back to the United States), and difficulty in enforcing legal rights
outside the U.S.
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<PAGE>
WRITING COVERED CALL AND PUT OPTIONS. Each Fund may write covered call
options on equity or debt securities that it is eligible to purchase to earn
premium income, to assure a definite price for a security it has considered
selling, or to close out options previously purchased. A call option gives the
holder (buyer) the right to purchase a security at a specified price (the
exercise price) at any time from a Fund until a certain date (the expiration
date). A call option is "covered" if a Fund owns the underlying security subject
to the call option at all times during the option period. A covered call writer
is required to deposit in escrow the underlying security in accordance with the
rules of the exchanges on which the option is traded and the appropriate
clearing agency.
The writing of covered call options is a conservative investment technique
which the Adviser believes involves relatively little risk. However, there is no
assurance that a closing transaction can be effected at a favorable price.
During the option period, the covered call writer has, in return for the premium
received, given up the opportunity for capital appreciation above the exercise
price should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security decline.
As long as the Securities and Exchange Commission continues to take the
position that unlisted options are illiquid securities, each Fund will not
commit more than 15% of its net assets to unlisted covered call transactions and
other illiquid securities.
Each Fund may write covered put options on equity securities and debt
securities that it is eligible to purchase to assure a definite price for a
security if it is considering acquiring the security at a lower price than the
current market price or to close out options previously purchased. A put option
gives the holder of the option the right to sell, and the writer has the
obligation to buy, the underlying security at the exercise price at any time
during the option period. The operation of put options in other respects is
substantially identical to that of call options. When a Fund writes a covered
put option, it will maintain a segregated account of cash, U.S. Government
obligations or other liquid securities in an amount not less than the exercise
price at all times while the put option is outstanding.
The risks involved in writing put options include the risk that a closing
transaction cannot be effected at a favorable price and the possibility that the
price of the underlying security may fall below the exercise price, in which
case a Fund may be required to purchase the underlying security at a higher
price than the market price of the security at the time the option is exercised.
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<PAGE>
Each Fund may also write straddles (combinations of puts and calls on the
same underlying security). A Fund will receive a premium from writing a put or
call option, which increases the Fund's return in the event the option expires
unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the remaining term
of the option. By writing a call option, a Fund limits its opportunity to profit
from any increase in the market value of the underlying security above the
exercise price of the option. By writing a put option, a Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security subsequently appreciates in value.
PURCHASING PUT OPTIONS. Each Fund may purchase put options. As the holder
of a put option, a Fund has the right to sell the underlying security at the
exercise price at any time during the option period. Each Fund may enter into
closing sale transactions with respect to such options, exercise them or permit
them to expire. Each Fund may purchase put options for defensive purposes in
order to protect against an anticipated decline in the value of its securities.
An example of such use of put options is provided below.
Each Fund may purchase a put option on an underlying security (a
"protective put") owned as a defensive technique in order to protect against an
anticipated decline in the value of the security. Such hedge protection is
provided only during the life of the put option when a Fund, as the holder of
the put option, is able to sell the underlying security at the put exercise
price regardless of any decline in the underlying security's market price. For
example, a put option may be purchased in order to protect unrealized
appreciation of a security where the Adviser deems it desirable to continue to
hold the security because of tax considerations. The premium paid for the put
option and any transaction costs would reduce any capital gain otherwise
available for distribution when the security is eventually sold.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
forgoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option.
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<PAGE>
Each Fund may also purchase put options on securities or relevant stock
indices at a time when a Fund does not own the underlying security. By
purchasing put options on a security it does not own, a Fund seeks to benefit
from a decline in the market price of the underlying security. If the put option
is not sold when it has remaining value, and if the market price of the
underlying security remains equal to or greater than the exercise price during
the life of the put option, a Fund will lose its entire investment in the put
option. In order for the purchase of a put option to be profitable, the market
price of the underlying security must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
Each Fund will commit no more than 5% of its assets to premiums when
purchasing put options. The premium paid by a Fund when purchasing a put option
will be recorded as an asset in a Fund's statement of assets and liabilities.
This asset will be adjusted daily to the option's current market value, which
will be the latest sale price at the time at which a Fund's net asset value per
share is computed (close of trading on the New York Stock Exchange), or, in the
absence of such sale, the latest bid price. The asset will be extinguished upon
expiration of the option, the selling (writing) of an identical option in a
closing transaction, or the delivery of the underlying security upon the
exercise of the option.
PURCHASING CALL OPTIONS. Each Fund may purchase either exchange-traded or
over-the-counter call options or securities. As the holder of a call option, a
Fund has the right to purchase the underlying security at the exercise price at
any time during the option period. Each Fund may enter into closing sale
transactions with respect to such options, exercise them or permit them to
expire. Each Fund may purchase call options for the purpose of increasing its
current return or avoiding tax consequences which could reduce its current
return. Each Fund may also purchase call options in order to acquire the
underlying securities. Examples of such uses of call options are provided below.
Call options may be purchased by each Fund for the purpose of acquiring the
underlying securities for its portfolio. Utilized in this fashion, the purchase
of call options enables a Fund to acquire the securities at the exercise price
of the call option plus the premium paid. At times the net cost of acquiring
securities in this manner may be less than the cost of acquiring the securities
directly. This technique may also be useful to a Fund in purchasing a large
block of securities that would be more difficult to acquire by direct market
purchases. So long as it holds such a call option rather than the underlying
security
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<PAGE>
itself, a Fund is partially protected from any unexpected decline in the market
price of the underlying security and in such event could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
Each Fund will commit no more than 5% of its assets to premiums when
purchasing call options. Each Fund may also purchase call options on underlying
securities it owns in order to protect unrealized gains on call options
previously written by it. A call option would be purchased for this purpose
where tax considerations make it inadvisable to realize such gains through a
closing purchase transaction. Call options may also be purchased at times to
avoid realizing losses that would result in a reduction of a Fund's current
return. For example, where a Fund has written a call option on an underlying
security having a current market value below the price at which such security
was purchased by a Fund, an increase in the market price could result in the
exercise of the call option written by a Fund and the realization of a loss on
the underlying security with the same exercise price and expiration date as the
option previously written.
Each Fund's ability to terminate options positions established in the
over-the-counter market may be more limited than in the case of exchange-traded
options and may also involve the risk that securities dealers participating in
such transactions would fail to meet their obligations to the Fund. Each Fund
will not purchase any option, which in the opinion of the Adviser, is illiquid
if, as a result thereof, more than 15% of the Fund's net assets would be
invested in illiquid securities.
OPTIONS TRANSACTIONS GENERALLY. Option transactions in which a Fund may
engage involve the specific risks described above as well as the following
risks: the writer of an option may be assigned an exercise at any time during
the option period; disruptions in the markets for underlying instruments could
result in losses for options investors; imperfect or no correlation between the
option and the securities being hedged; the insolvency of a broker could present
risks for the broker's customers; and market imposed restrictions may prohibit
the exercise of certain options. In addition, the option activities of a Fund
may affect its portfolio turnover rate and the amount of brokerage commissions
paid by a Fund. The success of a Fund in using the option strategies described
above depends, among other things, on the Adviser's ability to predict the
direction and volatility of price movements in the options and securities
markets and the Adviser's ability to select the proper time, type and duration
of the options.
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<PAGE>
STOCK INDEX FUTURES CONTRACTS. Each Fund may purchase and sell futures
contracts, including stock and bond index futures contracts, to hedge against
changes in prices. Stock and bond index futures contracts are based on indexes
that reflect the market value of common stock or bonds of the firms included in
the indexes. An index futures contract is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to the
differences between the value of the index at the close of the last trading day
of the contract and the price at which the index contract was originally
written. Each Fund may also write call options and purchase put options on
futures contracts as a hedge to attempt to protect securities in its portfolio
against decreases in value. When a Fund writes a call option on a futures
contract, it is undertaking the obligation of selling a futures contract at a
fixed price at any time during a specified period if the option is exercised.
Conversely, as purchaser of a put option on a futures contract, a Fund is
entitled (but not obligated) to sell a futures contract at the fixed price
during the life of the option.
Each Fund may enter into futures contracts as a hedge against changes in
prevailing levels of stock values in order to establish more definitely the
effective return on securities held or intended to be acquired by each Fund. A
Fund's hedging may include the purchase of futures contracts in anticipation of
purchasing underlying index stocks prior to the availability of sufficient
assets to purchase such stocks or to offset potential increase in stock prices.
Each Fund will not enter into futures contracts for speculation and will
only enter into futures contracts which are traded on national futures exchanges
and are standardized as to maturity date and underlying financial instrument.
The principal futures exchanges in the U.S. are the Board of Trade of the City
of Chicago and the Chicago Mercantile Exchange. Futures exchanges and trading
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission.
When a Fund purchases futures contracts, an amount of cash and cash
equivalents, equal to the underlying commodity value of the futures contracts
(less any related margin deposits), will be deposited in a segregated account
with the Fund's custodian (or the broker, if legally permitted) to collateralize
the position and thereby insure that the use of such futures contract is
unleveraged. When a Fund sells futures contracts, it will either own or have the
right to receive the underlying future or security, or will make deposits to
collateralize the position as discussed above. When a Fund uses futures and
options on futures as hedging devices, there is a risk that the prices of the
securities subject to the futures contracts may not correlate perfectly with the
prices of the securities in the Fund's portfolio. This may cause the futures
contract and any related options to react differently than the portfolio
securities to
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<PAGE>
market changes. In addition, the Adviser could be incorrect in its expectations
about the direction or extent of market factors such as stock and bond price
movements. In these events, a Fund may lose money on the futures contract or
option. It is not certain that a secondary market for positions in futures
contracts or for options will exist at all times. Although the Adviser will
consider liquidity before entering into these transactions, there is no
assurance that a liquid secondary market on an exchange or otherwise will exist
for any particular futures contract or option at any particular time; therefore,
these transactions have an unlimited potential for loss.
A Fund will not enter into a futures contract if, as a result thereof, more
than 5% of a Fund's total assets (taken at market value at the time of entering
into the contract) would be committed to "margin" (down payment) deposits on
such futures Contracts.
WARRANTS AND RIGHTS. Warrants are options to purchase equity securities at
a specified price and are valid for a specific time period. Rights are similar
to warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. Each Fund may purchase warrants and rights, provided
that each Fund does not presently intend to invest more than 5% of its net
assets at the time of purchase in warrants and rights other than those that have
been acquired in units or attached to other securities.
LENDING PORTFOLIO SECURITIES. The Funds may, from time to time, lend
securities on a short-term basis (i.e., for up to seven days) to banks, brokers
and dealers and receive as collateral cash, U.S. Government obligations or
irrevocable bank letters of credit (or any combination thereof), which
collateral will be required to be maintained at all times in an amount equal to
at least 100% of the current value of the loaned securities plus accrued
interest. To be acceptable as collateral, letters of credit must obligate a bank
to pay amounts demanded by a Fund if the demand meets the terms of the letter.
Such terms and the issuing bank must be satisfactory to the Fund. It is the
present intention of the Trust, which may be changed without shareholder
approval, that loans of portfolio securities will not be made with respect to
any Fund if as a result the aggregate of all outstanding loans exceeds one-third
of the value of that Fund's total assets.
Securities lending will afford a Fund the opportunity to earn additional
income because a Fund will continue to be entitled to the interest payable on
the loaned securities and also will receive one or more of (a) negotiated loan
fees, (b) interest on securities used as collateral, or (c) interest on
short-term debt securities purchased with such collateral; either type of
interest may be shared with the borrower. Such loans will be terminable at any
time. Loans of securities involve
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<PAGE>
risks of delay in receiving additional collateral or in recovering the
securities lent or even loss of rights in the collateral in the event of the
insolvency of the borrower of the securities. A Fund will have the right to
regain record ownership of loaned securities in order to exercise beneficial
rights.
The Funds may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a placing
broker provided that the Trustees determine that the fee paid to the placing
broker is reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Adviser or any
affiliated person of the Trust or an affiliated person of the Adviser or other
affiliated person. The terms of the Funds' loans must meet applicable tests
under the Internal Revenue Code and permit the Funds to reacquire loaned
securities on five days' notice or in time to vote on any important matter.
BORROWING AND PLEDGING. A Fund may borrow money from banks provided that,
immediately after any such borrowing, there is asset coverage of 300% for all
borrowings of the Fund. A Fund will not make any borrowing which would cause its
outstanding borrowings to exceed one-third of its total assets. A Fund may
pledge assets in connection with borrowings but will not pledge more than
one-third of its total assets. Borrowing magnifies the potential for gain or
loss on the portfolio securities of a Fund and, therefore, if employed,
increases the possibility of fluctuation in a Fund's net asset value. This is
the speculative factor known as leverage. The Funds' policies on borrowing and
pledging are fundamental policies which may not be changed without the
affirmative vote of a majority of its outstanding shares. It is each Fund's
present intention, which may be changed by the Board of Trustees without
shareholder approval, to limit its borrowings to 5% of its total assets and to
borrow only for emergency or extraordinary purposes and not for leverage.
QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS
- -------------------------------------------------------
The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group for corporate bonds in which each Fund may invest are as follows:
Moody's Investors Service, Inc.
-------------------------------
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are
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<PAGE>
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
Standard & Poor's Ratings Group
-------------------------------
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 a 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 higher rated
categories.
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<PAGE>
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 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 bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group for preferred stocks in which each Fund may invest are as follows:
Moody's Investors Service, Inc.
-------------------------------
aaa - An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.
aa - An issue which is rated aa is considered a high-grade preferred stock.
This rating indicates that there is reasonable assurance that earnings and asset
protection will remain relatively well maintained in the foreseeable future.
a - An issue which is rated a is considered to be an upper- medium grade
preferred stock. While risks are judged to be somewhat greater than in the "aaa"
and "aa" classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa - An issue which is rated baa is considered to be medium grade, neither
highly protected nor poorly secured. Earnings and asset protection appear
adequate at present but may be questionable over any great length of time.
ba - An issue which is rated ba is considered to have speculative elements
and its future cannot be considered well assured. Earnings and asset protection
may be very moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in this class.
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<PAGE>
Standard & Poor's Ratings Group
-------------------------------
AAA - This is the highest rating that may be assigned by Standard & Poor's
to a preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.
AA - A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A - An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the diverse
effects of changes in circumstances and economic conditions.
BBB - An issue rated BBB is regarded as backed by an adequate capacity to
pay the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
BB, B and CCC - Preferred stock rated BB, B and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations. BB indicates the lowest degree of speculation
and CCC the highest degree of speculation. While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
INVESTMENT LIMITATIONS
- ----------------------
The Trust has adopted certain fundamental investment limitations designed
to reduce the risk of an investment in each of Funds. These limitations may not
be changed with respect to any Fund without the affirmative vote of a majority
of the outstanding shares of that Fund.
Under these fundamental limitations, each Fund may not:
(1) Issue senior securities, pledge its assets or borrow money, or purchase
securities on margin except that it may do so if, immediately after such
borrowing, the value of the Fund's assets, including all borrowings then
outstanding, less its liabilities (excluding all borrowings), is equal to
at least 300% of the aggregate amount of borrowings then outstanding, and
may pledge its assets to secure all such borrowings, the proceeds of
borrowing shall only be used for extraordinary or emergency purposes;
- 18 -
<PAGE>
(2) 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;
(3) Make short sales of securities or maintain a short position, except short
sales "against the box";
(4) Make loans to other persons, except (a) by loaning portfolio securities, or
(b) by engaging in repurchase agreements. For purposes of this limitation,
the term "loans" shall not include the purchase of marketable bonds,
debentures, commercial paper or corporate notes, and similar marketable
evidences of indebtedness;
(5) Write, purchase or sell commodities, commodities contracts or related
options;
(6) Invest more than 25% of its total assets in the securities of issuers in
any particular industry (other than securities of the United States
Government, its agencies or instrumentalities);
(7) Purchase or sell real estate or invest in interests in real estate or real
estate limited partnerships (although it may invest in real estate
investment trusts and purchase securities secured by real estate or
interests therein, or issued by companies or investment trusts which invest
in real estate or interests therein);
The following fundamental limitation is applicable only to THE
ATALANTA/SOSNOFF FUND, THE ATALANTA/SOSNOFF VALUE FUND AND THE ATALANTA/SOSNOFF
BALANCED FUND. EACH OF THESE FUNDS MAY NOT:
(8) Purchase the securities of any issuer if with respect to 75% of the value
of the total assets of the Fund, more than 5% of the value of the total
assets of the Fund would be invested in the securities of any one issuer or
the Fund would own more than 10% of the outstanding voting securities of
such issuer, provided that this limitation shall not apply to the purchase
of securities issued by the U.S. Government, its agencies or
instrumentalities.
Percentage restrictions stated as an investment limitation apply at the
time of investment; if a later increase or decrease in percentage beyond the
specified limits results from a change in securities values or total assets, it
will not be considered a violation. However, in the case of the borrowing
limitation (limitation number 1, above), each Fund will, to the extent
necessary, reduce its existing borrowings to comply with the limitation.
- 19 -
<PAGE>
PORTFOLIO TURNOVER
- ------------------
A Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the fiscal year by the monthly
average of the value of the portfolio securities owned by the Funds during the
fiscal year. High portfolio turnover involves correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by the
Funds. The Adviser anticipates that each Fund's portfolio turnover rate normally
will not exceed 150%. A 100% turnover rate would occur if all of a Fund's
portfolio securities were replaced once within a one year period.
Generally, each Fund intends to invest for long-term purposes. However, the
rate of portfolio turnover will depend upon market and other conditions, and it
will not be a limiting factor when the Adviser believes that portfolio changes
are appropriate. For the fiscal period ended May 31, 1999, the Atalanta/Sosnoff
Fund's portfolio turnover rate was 124%.
TRUSTEES AND OFFICERS
- ---------------------
The following is a list of the Trustees and executive officers of the Trust
and their aggregate compensation from the Trust for the fiscal year ended May
31, 1999. Each Trustee who is an "interested person" of the Trust, as defined by
the Investment Company Act of 1940 Act, is indicated by an asterisk.
Name Age Position Held Compensation
- ---- --- ------------- ------------
*Anthony G. Miller 39 Chairman, $ 0
President and Trustee
*Toni E. Sosnoff 55 Vice President 0
and Trustee
+Howard A. Drucker 56 Trustee [8,000]
+Irving L. Straus 77 Trustee [8,000]
+Aida L. Wilder 50 Trustee [8,000]
Robert L. Bennett 57 Treasurer 0
Tina D. Hosking 31 Secretary 0
* Mr. Miller and Mrs. Sosnoff, as affiliated persons of Atalanta/Sosnoff
Capital Corporation (Delaware), the Funds' investment adviser, and
Atalanta/Sosnoff Management Corporation, the Funds' principal underwriter,
are "interested persons" of the Trust within the meaning of Section
2(a)(19) of the Investment Company Act of 1940.
+ Member of Audit Committee which selects the Trust's independent auditor and
reviews the auditor's findings before presenting to the full board.
- 20 -
<PAGE>
The principal occupations of the Trustees and executive officers of the
Trust during the past five years are set forth below:
ANTHONY G. MILLER, 101 Park Avenue, New York, New York, is President and a
Trustee of the Trust. He is Executive Vice President, Chief Operating Officer
("COO") and Chief Financial Officer ("CFO") of Atalanta/Sosnoff Capital
Corporation (Delaware) (the investment adviser to the Trust and parent of
Atalanta/Sosnoff Management Corporation) and Atalanta/Sosnoff Capital
Corporation (parent of Atalanta/Sosnoff Capital Corporation (Delaware)). Mr.
Miller is also Executive Vice President, COO and CFO of Atalanta/Sosnoff
Management Corporation (the Funds principal underwriter).
TONI E. SOSNOFF, 101 Park Avenue, New York, New York, is Vice President of
Atalanta/Sosnoff Capital Corporation (Delaware), (the investment adviser to the
Trust and parent of Atalanta/Sosnoff Management Corporation).
HOWARD A. DRUCKER, 25 East End Avenue, New York, New York is an attorney
and the president of Fundamental Management Corp. which provides real estate
management services. He is also a general partner of East Hartford Estates,
L.P., a real estate company; and a real estate investor and manager with various
properties throughout the United States.
IRVING L. STRAUS, 1501 Broadway #1809, New York, New York, is a Trustee of
the Trust. He is also Chairman of Straus Corporate Communications, a public
relations firm; and President of 100% No-Load Mutual Fund Council, a trade
organization. Mr. Straus also serves as assistant secretary for Spectral
Diagnostics, Inc. which is a publicly-held company in the biotechnology field.
AIDA L. WILDER, 24 Old Albany Post Rd., Rhinebeck, New York, is a Trustee
of the Trust. She is also the Vice President of Wilder Consolidated Enterprises
which engages in restaurant operations and has served in this capacity since
1979.
ROBERT L. BENNETT, 312 Walnut Street, Cincinnati, Ohio, is First Vice
President and Chief Operations Officer of Countrywide Fund Services, Inc. (a
registered transfer agent).
TINA D. HOSKING, 312 Walnut Street, Cincinnati, Ohio, is Associate General
Counsel of Countrywide Fund Services, Inc.
Each non-interested Trustee will receive a quarterly retainer of $1,000 and
a $1,000 fee for each Board meeting attended and will be reimbursed for travel
and other expenses incurred in the performance of their duties.
- 21 -
<PAGE>
CONTROL PERSONS AND PRINCIPAL SECURITY HOLDERS
- ----------------------------------------------
[AS OF JULY 1, 1999, THE DISTRIBUTOR, 101 PARK AVENUE, NEW YORK, NY 10178,
OWNED OF RECORD ______% OF THE TRUST'S SHARES, INCLUDING, _____%] of the
Atalanta/Sosnoff Fund's outstanding shares the Distributor may be deemed a
control person of the Fund because it owns more than 25% of the Fund's Shares.
The Distributor is a corporation organized under the laws of the State of
[_______] and it is a wholly owned subsidiary of Atalanta/Sosnoff Capital
Corporation. For purposes of voting on matters submitted to shareholders, any
person who owns more than 50% of the outstanding shares of the Trust generally
would be able to cast the deciding vote.
As of the share date, the Trustees and officers of the Trust owned of
record or beneficially less than 1% of the outstanding shares of the Trust.
THE INVESTMENT ADVISER
- ----------------------
Atalanta/Sosnoff Capital Corporation (Delaware) (the "Adviser") is the
investment adviser for all four Funds. The Adviser is a wholly-owned subsidiary
of Atalanta/Sosnoff Capital Corporation ("A/SCC"), a public company listed on
the New York Stock Exchange (NYSE: ATL). Martin T. Sosnoff is the controlling
shareholder, Chairman and a Director of A/SCC and the Chairman and a Director of
the Adviser and Atalanta/Sosnoff Management Corporation, the Trust's principal
underwriter (the "Distributor"). Toni E. Sosnoff, the Vice President of the
Adviser is married to Martin T. Sosnoff and serves as a Trustee of the Trust.
Anthony G. Miller is Executive Vice President, COO and CFO of the Adviser, A/SCC
and the Distributor. Mr. Miller is also the President and a Trustee of the
Trust. Messrs. Sosnoff and Miller and Mrs. Sosnoff, by reason of such
affiliation, may directly or indirectly receive benefits from the advisory fees
paid to the Adviser.
Under the terms of the advisory agreements between the Trust and the
Adviser, the Adviser manages each Fund's investments. Each Fund pays the Adviser
a fee computed and accrued daily and paid monthly at an annual rate of .75% of
its average daily net assets. For the fiscal period ended May 31, 1999, the
Atalanta/Sosnoff Fund earned advisory fees of $74,620; however, in order to
reduce the operating expenses of the Fund, the Adviser voluntarily waived its
entire advisory fee and reimbursed the Fund for $20,336 of its operating
expenses. The Adviser intends to continue to limit the total operating expenses
of each Fund to 1.50% of the Fund's average daily net assets. However, the
Adviser reserves the right to discontinue the waivers and reimbursements at any
time.
- 22 -
<PAGE>
Each Fund is responsible for the payment of all expenses incurred in
connection with the organization, registration of shares and operations of that
Fund, including such extraordinary or non-recurring expenses as may arise, such
as litigation to which a Fund may be a party. Each Fund may have an obligation
to indemnify the Trust's officers and Trustees with respect to such litigation,
except in instances of willful misfeasance, bad faith, gross negligence or
reckless disregard by such officers and Trustees in the performance of their
duties. The Adviser bears promotional expenses in connection with the
distribution of each Fund's shares not assumed by the Distributor. The
compensation and expenses of any officer, Trustee or employee of the Trust who
is an officer, director, employee or stockholder of the Adviser are paid by the
Adviser.
By its terms, the advisory agreement for the Atalanta/ Sosnoff Fund will
remain in force until June 1, 2000. The advisory agreement for the
Atalanta/Sosnoff Focus Fund, the Atalanta/Sosnoff Value Fund, and the
Atalanta/Sosnoff Balanced Fund and will remain in force until June 1, 2001. Each
of the advisory agreements will remain in force from year to year thereafter,
subject to annual approval by (a) the Board of Trustees or (b) a vote of the
majority of the Fund's outstanding voting securities; provided that in either
event continuance is also approved by a majority of the Trustees who are not
interested persons of the Trust, by a vote cast in person at a meeting called
for the purpose of voting such approval. Each Fund's advisory agreement may be
terminated at any time, on sixty days' written notice, without the payment of
any penalty, by the Board of Trustees, by a vote of the majority of the Fund's
outstanding voting securities, or by the Adviser. Each of the advisory
agreements automatically terminates in the event of its assignment, as defined
by the 1940 Act and the rules thereunder.
THE DISTRIBUTOR
- ---------------
Atalanta/Sosnoff Management Corporation (the "Distributor"), 101 Park
Avenue, New York, New York 10178, is the exclusive agent for distribution of
shares of the Funds. The Distributor is obligated to sell the shares on a best
efforts basis only against purchase orders for the shares. Shares of the Funds
are offered to the public on a continuous basis. The Distributor pays from its
own resources promotional expenses in connection with the distribution of each
Fund's shares and any other expenses incurred by it in the performance of its
obligations under the Underwriting Agreement with that Fund. The
Atalanta/Sosnoff Fund paid the Distributor $15,460 during the Fund's fiscal
period ended May 31, 1999 as compensation. The types of services rendered are
described below in "Service Plan."
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<PAGE>
By reason of their ownership of shares of the Adviser and the Distributor,
Anthony G. Miller and Toni E. Sosnoff may each be deemed to have a financial
interest in fees paid to the Distributor and the operation of the service plan
described below.
SERVICE PLAN
- ------------
The Trust has adopted a service plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940 which permits each Fund to compensate
the Distributor for its services to that Fund. The Distributor is responsible
for the payment of any expenses incurred in the distribution and promotion of
each Fund's shares or activities related to the servicing of shareholder
accounts, including but not limited to, office space and equipment, telephone
facilities and expenses, answering routine inquiries regarding the Trust,
processing shareholder transactions, and providing such other shareholder
services as the Trust might reasonably request; formulating and implementing of
marketing and promotional activities; the printing of prospectuses, statements
of additional information and reports used for sales purposes, advertisements,
expenses of preparation and printing of sales literature, promotion, marketing
and sales expenses, and other shareholder servicing-related expenses, including
any servicing fees paid to securities dealers or other firms who have executed a
distribution or service agreement with the Distributor.
The Plan expressly limits payments to the Distributor in any fiscal year to
a maximum of .25% of the average daily net assets of each Fund. During the
fiscal period ended May 31, 1999, the Atalanta/Sosnoff Fund paid a total of
$24,873, $15,460 for printing of reports and $9,413 under the Plan as
compensation to the Distributor. The Plan allows each Fund to compensate the
Distributor regardless of its expenses.
Pursuant to the Plan, the Distributor may make payments to banks or other
financial institutions that provide shareholder services and administer
shareholder accounts. The Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities. Although the
scope of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, management of the
Trust believes that the Glass- Steagall Act should not preclude a bank from
providing such services. However, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. If a
bank were prohibited from continuing to perform all or a part of such services,
management of the Trust believes that there would be no material impact on
- 24 -
<PAGE>
the Funds or their shareholders. Banks may charge their customers fees for
offering these services to the extent permitted by applicable regulatory
authorities, and the overall return to those shareholders availing themselves of
the bank services will be lower than to those shareholders who do not. The Funds
may from time to time purchase securities issued by banks which provide such
services; however, in selecting investments for the Funds, no preference will be
shown for such securities.
Agreements implementing the Plan (the "Implementation Agreements"),
including agreements with dealers wherein such dealers agree for a fee to act as
agents for the sale of each Fund's shares, are in writing and have been approved
by the Board of Trustees. All payments made pursuant to the Plan are made in
accordance with written agreements.
The continuance of the Plan and Implementation Agreements must be
specifically approved at least annually by a vote of the Trust's Board of
Trustees and by a vote of the Trustees who are not interested persons of the
Trust and have no direct or indirect financial interest in the Plan (the
"Independent Trustees") at a meeting called for the purpose of voting on such
continuance. The Plan may be terminated by each Fund at any time by a vote of a
majority of the Independent Trustees or by a vote of the holders of a majority
of the outstanding shares of that Fund. In the event a Plan is terminated in
accordance with its terms, that Fund will not be required to make any payments
to the Distributor after the termination date. The Plan may not be amended to
increase materially the amount to be spent under the Plan without shareholder
approval. All material amendments to the Plan must be approved by a vote of the
Trust's Board of Trustees and by a vote of the Independent Trustees.
In approving the Plan, the Trustees determined, in the exercise of their
business judgment and in light of their fiduciary duties as Trustees, that there
is a reasonable likelihood that the Plan will benefit each Fund and its
shareholders. The Board of Trustees believes that expenditure of each Fund's
assets for distribution and shareholder servicing expenses under the Plan should
assist in the growth of a Fund which will benefit the Fund and its shareholders
through increased economies of scale, greater investment flexibility, greater
portfolio diversification and less chance of disruption of planned investment
strategies. The Plan will be renewed only if the Trustees make a similar
determination for each subsequent year of the Plan. There can be no assurance
that the benefits anticipated from the expenditure of the Funds' assets for
shareholder servicing will be realized. While the Plan is in effect, all amounts
spent by the Funds pursuant to the Plan and
- 25 -
<PAGE>
the purposes for which such expenditures were made must be reported quarterly to
the Board of Trustees for its review. In addition, the selection and nomination
of those Trustees who are not interested persons of the Trust are committed to
the discretion of the Independent Trustees during such period.
CUSTODIAN
- ---------
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, has been
retained to act as Custodian for the Funds' investments. Firstar Bank, acts as
each Fund's depository, safekeeps its portfolio securities, collects all income
and other payments with respect thereto, disburses funds as instructed and
maintains records in connection with its duties.
AUDITORS
- --------
The firm of __________ has been selected as independent public accountants
for the Trust for the fiscal year ending May 31, 2000. ___________________, 425
Walnut Street, Cincinnati, Ohio 45202, performs an annual audit of the Trust's
financial statements and advises the Trust as to certain accounting matters.
COUNTRYWIDE FUND SERVICES, INC.
- -------------------------------
The Trust has retained Countrywide Fund Services, Inc. (the "Transfer
Agent") to act as each Fund's transfer agent. The Transfer Agent is an indirect
wholly-owned subsidiary of Countrywide Credit Industries, Inc., a New York Stock
Exchange listed company principally engaged in the business of residential
mortgage lending. The Transfer Agent maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of each Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Transfer Agent receives from each Fund for its services as transfer agent a
fee payable monthly at an annual rate of $20 per account, provided, however,
that the minimum fee is $1,500 per month, per Fund. In addition, each Fund pays
out-of-pocket expenses, including but not limited to, postage, envelopes,
checks, drafts, forms, reports, record storage and communication lines.
The Transfer Agent also provides accounting and pricing services to each
Fund. For calculating daily net asset value per share and maintaining such books
and records as are necessary to enable the Transfer Agent to perform its duties,
each Fund pays the Transfer Agent a fee in accordance with the following
schedule:
- 26 -
Average Monthly Net Assets Monthly Fee
-------------------------- -----------
$ 0 - $ 50,000,000 $2,000
$ 50,000,000 - 100,000,000 $2,500
$100,000,000 - 200,000,000 $3,000
$200,000,000 - 300,000,000 $4,000
Over $300,000,000 $5,000 + .001% of
average net assets
In addition, each Fund pays all costs of external pricing services.
The Transfer Agent also provides administrative services to each Fund. In
this capacity, the Transfer Agent supplies non-investment related statistical
and research data, internal regulatory compliance services and executive and
administrative services. The Transfer Agent supervises the preparation of tax
returns, reports to shareholders of each Fund, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees. For the performance of these
administrative services, each Fund pays the Transfer Agent a fee at the annual
rate of .15% of the average value of its daily net assets up to $50,000,000,
.125% of such assets from $50,000,000 to $100,000,000 and .10% of such assets in
excess of $100,000,000, provided, however, that the minimum fee is $1,000 per
month, per Fund. The Fund paid the Transfer Agent fees of $52,574.
SECURITIES TRANSACTIONS
- -----------------------
Decisions to buy and sell securities for the Funds and the placing of the
Funds' securities transactions and negotiation of commission rates where
applicable are made by the Adviser and are subject to review by the Board of
Trustees of the Trust. In the purchase and sale of portfolio securities, the
Adviser seeks best execution for the Funds, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and responsiveness of the broker
or dealer and the brokerage and research services provided by the broker or
dealer. The Adviser generally seeks favorable prices and commission rates that
are reasonable in relation to the benefits received. For the fiscal year ended
May 31, 1999, the Atalanta/Sosnoff Fund paid brokerage commissions of $31,335.
Generally, the Funds attempt to deal directly with the dealers who make a
market in the securities involved unless better prices and execution are
available elsewhere. Such dealers usually act as principals for their own
account. On occasion, portfolio securities for the Funds may be purchased
directly from the issuer.
- 27 -
<PAGE>
The Adviser is specifically authorized to select brokers who also provide
brokerage and research services to the Funds and/or other accounts over which
the Adviser exercises investment discretion and to pay such brokers a commission
in excess of the commission another broker would charge if the Adviser
determines in good faith that the commission is reasonable in relation to the
value of the brokerage and research services provided. The determination may be
viewed in terms of a particular transaction or the Adviser's overall
responsibilities with respect to the Funds and to accounts over which it
exercises investment discretion. During the fiscal year ended May 31, 1999, the
amount of brokerage transaction and related commissions for the Atalanta/Sosnoff
Fund directed to brokers due to research services provided was $9,532.
Research services include securities and economic analyses, reports on
issuers' financial conditions and future business prospects, newsletters and
opinions relating to interest trends, general advice on the relative merits of
possible investment securities for the Funds and statistical services and
information with respect to the availability of securities or purchasers or
sellers of securities. Although this information is useful to the Funds and the
Adviser, it is not possible to place a dollar value on it. Research services
furnished by brokers through whom the Funds effect securities transactions may
be used by the Adviser in servicing all of its accounts and not all such
services may be used by the Adviser in connection with the Funds.
The Funds have no obligation to deal with any broker or dealer in the
execution of securities transactions. However, the Adviser and other affiliates
of the Trust may effect securities transactions which are executed on a national
securities exchange or transactions in the over-the-counter market conducted on
an agency basis. The Funds will not effect any brokerage transactions in its
portfolio securities with the Adviser if such transactions would be unfair or
unreasonable to its shareholders. Over-the-counter transactions will be placed
either directly with principal market makers or with broker-dealers. Although
the Funds do not anticipate any ongoing arrangements with other brokerage firms,
brokerage business may be transacted from time to time with other firms. Neither
the Adviser, nor affiliates of the Trust, or the Adviser, will receive
reciprocal brokerage business as a result of the brokerage business transacted
by the Funds with other brokers.
The Adviser may aggregate purchase and sale orders for the Funds and its
other clients if it believes such aggregation is consistent with its duty to
seek best execution for the Funds and its other clients. The Adviser will not
favor any advisory account over any other account, and each account that
- 28 -
<PAGE>
participates in an aggregated order will participate at the average share price
for all transactions of the Adviser in that security on a given business day,
with all transaction costs shared on a pro rata basis. The Adviser will prepare,
before entering an aggregated order, a written Allocation Statement as to how
the order will be allocated among the various accounts. If the aggregate order
is filled in its entirety, it shall be allocated among the accounts in
accordance with the Allocation Statement; if the order is partially filled, it
shall be allocated pro rata based on the Allocation Statement. Notwithstanding
the foregoing, the order may be allocated on a basis different from that
specified in the Allocation Statement if all accounts of clients whose orders
are allocated receive fair and equitable treatment and the reason for such
different allocation is explained in writing and is approved in writing by the
Adviser's compliance officer no later than one hour after the opening of the
markets on the trading day following the day on which the order is executed.
CODE OF ETHICS. The Trust, the Adviser and the Distributor have each
adopted a Code of Ethics pursuant to Rule 17j-1 under the Investment Company Act
of 1940. The Code significantly restricts the personal investing activities of
all employees of the Adviser and the Distributor and, as described below,
imposes additional, more onerous, restrictions on investment personnel of the
Adviser. The Code requires that all access persons preclear any personal
securities investment (with limited exceptions, such as U.S. Government
obligations). The preclearance requirement and associated procedures are
designed to identify any substantive prohibition or limitation applicable to the
proposed investment. The substantive restrictions applicable to investment
personnel of the Adviser include a ban on acquiring any securities in an initial
public offering and a prohibition from profiting on short-term trading in
securities.
CALCULATION OF SHARE PRICE
- --------------------------
The share price (net asset value) of the shares of each Fund is determined
as of the close of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time), on each day the Trust is open for business.
The Trust is open for business on every day except Saturdays, Sundays and the
following holidays: New Year's Day, Martin Luther King, Jr. Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. The Trust may also be open for business on other days in
which there is sufficient trading in a Fund's portfolio securities that its net
asset value might be materially affected. For a description of the methods used
to determine the share price, see "Calculation of Share Price" in the
Prospectus.
- 29 -
<PAGE>
U.S. Government obligations are valued at their most recent bid prices as
obtained from one or more of the major market makers for such securities. Other
portfolio securities are valued as follows: (1) securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of the regular session of trading on the New York Stock
Exchange on the day the securities are being valued, or, if not traded on a
particular day, at the closing bid price, (2) securities traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
last sale price (or, if the last sale price is not readily available, at the
last bid price as quoted by brokers that make markets in the securities) as of
the close of the regular session of trading on the New York Stock Exchange on
the day the securities are being valued, (3) securities which are traded both in
the over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market, and (4) securities (and other assets)
for which market quotations are not readily available are valued at their fair
value as determined in good faith in accordance with consistently applied
procedures established by and under the general supervision of the Board of
Trustees. The net asset value per share of a Fund will fluctuate with the value
of the securities it holds.
REDEMPTION IN KIND
- ------------------
Under unusual circumstances, when the Board of Trustees deems it in the
best interest of the Fund's shareholders, a Fund may make payment for shares
repurchased or redeemed in whole or in part in securities of the Fund taken at
current value. If any such redemption in kind is to be made, each Fund intends
to make an election pursuant to Rule 18f-1 under the 1940 Act. This election
will require the Funds to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net asset value of each Fund during any ninety day period
for any one shareholder. Should payment be made in securities, the redeeming
shareholder will generally incur brokerage costs in converting such securities
to cash. Portfolio securities which are issued in an in-kind redemption will be
readily marketable.
TAXES
- -----
The Prospectus describes generally the tax treatment of distributions by
the Funds. This section of the Statement of Additional Information includes
additional information concerning federal taxes.
The Atalanta/Sosnoff Fund has qualified for and each Fund intends to
qualify for the special tax treatment afforded a "regulated investment company"
under Subchapter M of the Internal
- 30 -
<PAGE>
Revenue Code so that it does not pay federal taxes on income and capital gains
distributed to shareholders. To so qualify a Fund must, among other things, (i)
derive at least 90% of its gross income in each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currency, or certain other
income (including but not limited to gains from options, futures and forward
contracts) derived with respect to its business of investing in stock,
securities or currencies; and (ii) diversify its holdings so that at the end of
each quarter of its taxable year the following two conditions are met: (a) at
least 50% of the value of the Funds total assets are represented by cash, U.S.
Government securities, securities of other regulated investment companies and
other securities (for this purpose such other securities will qualify only if
the Funds investments are limited in respect to any issuer to an amount not
greater than 5% of the Funds assets and 10% of the outstanding voting securities
of such issuer) and (b) not more than 25% of the value of a Fund's assets is
invested in securities of any one issuer (other than U.S. Government securities
or securities of other regulated investment companies).
A Fund's net realized capital gains from securities transactions will be
distributed only after reducing such gains by the amount of any available
capital loss carryforwards. Capital losses may be carried forward to offset any
capital gains for eight years, after which any undeducted capital loss remaining
is lost as a deduction. As of May 31, 1999, the Atalanta/Sosnoff Fund had
capital loss carryforwards for federal income tax purposes of $393,549, which
expire May 31, 2007.
A federal excise tax at the rate of 4% will be imposed on the excess, if
any, of a Fund's "required distribution" over actual distributions in any
calendar year. Generally, the "required distribution" is 98% of a Fund's
ordinary income for the calendar year plus 98% of its net capital gains
recognized during the one year period ending on October 31 of the calendar year
plus undistributed amounts from prior years. Each Fund intends to make
distributions sufficient to avoid imposition of the excise tax.
The Funds' use of hedging techniques, such as foreign currency forwards,
futures and options, involves greater risk of unfavorable tax consequences than
funds not engaging in such techniques. Hedging may also result in the
application of the mark-to-market and straddle provisions of the Internal
Revenue Code. These provisions could result in an increase (or decrease) in the
amount of taxable dividends paid by the Funds as well as affect whether
dividends paid by the Funds are classified as capital gains or ordinary income.
- 31 -
<PAGE>
The Trust is required to withhold and remit to the U.S. Treasury a portion
(31%) of dividend income on any account unless the shareholder provides a
taxpayer identification number and certifies that such number is correct and
that the shareholder is not subject to backup withholding.
HISTORICAL PERFORMANCE INFORMATION
- ----------------------------------
From time to time, each Fund may advertise average annual total return.
Average annual total return quotations will be computed by finding the average
annual compounded rates of return over 1, 5 and 10 year periods that would
equate the initial amount invested to the ending redeemable value, according to
the following formula: P (1 + T)n = ERV Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10
year periods (or fractional portion thereof)
The calculation of average annual total return assumes the reinvestment of
all dividends and distributions. If a Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public offering
of shares will be substituted for the periods stated. THE AVERAGE ANNUAL TOTAL
RETURN OF THE ATALANTA/SOSNOFF FUND FOR THE PERIOD SINCE ITS INCEPTION JUNE 17,
1998 THROUGH MAY 31, 1999 IS %.
Each Fund may also advertise total return (a "nonstandardized quotation")
which is calculated differently from average annual total return. A
nonstandardized quotation of total return may be a cumulative return which
measures the percentage change in the value of an account between the beginning
and end of a period, assuming no activity in the account other than reinvestment
of dividends and capital gains distributions. The total return of the
Atalanta/Sosnoff Fund as calculated in this manner for the period since its
inception June 17, 1998 through May 31, 1999 is 23.40%. A nonstandardized
quotation may also indicate average annual compounded rates of return without
including the effect of any applicable initial sales load or over periods other
than those specified for average annual total return. A nonstandardized
quotation of total return will always be accompanied by a Fund's average annual
total return as described above.
- 32 -
<PAGE>
From time to time, each Fund may advertise its yield. A yield quotation is
based on a 30-day (or one month) period and is computed by dividing the net
investment income per share earned during the period by the maximum offering
price per share on the last day of the period, according to the following
formula:
6
Yield = 2[(a-b/cd +1) -1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that the
Fund owns the security. Generally, interest earned (for the purpose of "a"
above) on debt obligations is computed by reference to the yield to maturity of
each obligation held based on the market value of the obligation (including
actual accrued interest) at the close of business on the last business day prior
to the start of the 30-day (or one month) period for which yield is being
calculated, or, with respect to obligations purchased during the month, the
purchase price (plus actual accrued interest). With respect to the treatment of
discount and premium on mortgage or other receivables-backed obligations which
are expected to be subject to monthly paydowns of principal and interest, gain
or loss attributable to actual monthly paydowns is accounted for as an increase
or decrease to interest income during the period and discount or premium on the
remaining security is not amortized.
The performance quotations described above are based on a historical
earning and are not intended to indicate future performance.
To help investors better evaluate how an investment in a Fund might satisfy
their investment objective, advertisements regarding the Funds may discuss
various measures of a Fund's performance, including current performance ratings
and/or rankings appearing in financial magazines, newspapers and publications
which track mutual fund performance. Advertisements may also compare performance
(using the calculation methods set forth in the Prospectus) to performance as
reported by other investments, indices and averages. When advertising current
ratings or rankings, the Funds may use the following publications or indices to
discuss or compare Fund performance: Forbes, Money, The Wall Street Journal,
Business Week, Barrow's, Fortune or Morningstar Mutual Fund Values.
- 33 -
<PAGE>
Lipper Mutual Fund Performance Analysis measures total return and average
current yield for the mutual fund industry and ranks individual mutual fund
performance over specified time periods assuming reinvestment of all
distributions, exclusive of sales loads. Each Fund may provide comparative
performance information appearing in the Growth Funds, Value Funds, and Balanced
Funds category. In addition, the Funds may use comparative performance
information of relevant indices, including the S&P 500 Index, the Dow Jones
Industrial Average and the Lehman Brothers Intermediate Government/Corporate
Bond Index. The S&P 500 Index is an unmanaged index of 500 stocks, the purpose
of which is to portray the pattern of common stock price movement. The Dow Jones
Industrial Average is a measurement of general market price movement for 30
widely held stocks listed on the New York Stock Exchange. The Lehman Brothers
Intermediate Government/Corporate Bond Index is a widely recognized bond index
composed of all bonds of investment grade in the maturity of between one and
three years.
In assessing such comparisons of performance an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the Funds' portfolios, that the averages are
generally unmanaged and that the items included in the calculations of such
averages may not be identical to the formula used by the Funds to calculate
performance. In addition, there can be no assurance that the Funds will continue
this performance as compared to such other averages.
ANNUAL REPORT
- -------------
The Atalanta/Sosnoff Fund's financial statements as of May 31, 1999 appear
in the Trust's annual report which is attached to this Statement of Additional
Information.
- 34 -
<PAGE>
ATALANTA/SOSNOFF INVESTMENT TRUST
---------------------------------
PART C. OTHER INFORMATION
- ------- -----------------
Item 23. Exhibits
- -------- --------
(a) Agreement and Declaration of Trust*
(b) Bylaws*
(c) Incorporated by reference to Agreement and Declaration of
Trust and Bylaws
(d) Advisory Agreement with Atalanta/Sosnoff Capital Corporation
(Delaware)*
(e) Underwriting Agreement with Atalanta/Sosnoff Management
Corporation*
(f) Inapplicable
(g) Custody Agreement with Firstar Bank, N.A.*
(h)(i) Administration Agreement with Countrywide Fund Services,
Inc.*
(ii) Accounting Services Agreement with Countrywide Fund
Services, Inc.*
(iii) Transfer, Dividend Disbursing, Shareholder Service and Plan
Agency Agreement with Countrywide Fund Services, Inc.*
(i) Opinion and Consent of Counsel*
(j) Inapplicable
(k) Inapplicable
(l) Agreement Relating to Initial Capital*
(m) Service Plan Pursuant to Rule 12b-1*
(n) Inapplicable
(o) Inapplicable
______________________________________
* Incorporated by reference to the Trust's registration statement on Form
N-1A.
- 1 -
<PAGE>
Item 24. Persons Controlled by or Under Common Control with Registrant.
- -------- --------------------------------------------------------------
None.
Item 25. Indemnification
- -------- ---------------
Article VI of the Registrant's Agreement and Declaration of Trust
provides for indemnification of officers and Trustees as follows:
"Section 6.4 Indemnification of Trustees, Officers, etc. Subject
to and except as otherwise provided in the Securities Act of
1933, as amended, and the 1940 Act, the Trust shall indemnify
each of its Trustees and officers, including persons who serve at
the Trust's request as directors, officers or trustees of another
organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person") against all liabilities, including but not
limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered
Person in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, and
except that no Covered Person shall be indemnified against any
liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's
office.
Section 6.5 Advances of Expenses. The Trust shall advance
attorneys' fees or other expenses incurred by a Covered Person in
defending a proceeding to the full extent permitted by the
Securities Act of 1933, as amended, the 1940 Act, and Ohio
Revised Code Chapter 1707, as amended. In the event any of these
laws conflict with Ohio Revised Code Section 1701.13(E), as
amended, these
- 2 -
<PAGE>
laws, and not Ohio Revised Code Section 1701.13(E), shall govern.
Section 6.6 Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article VI shall not be
exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article VI, "Covered
Person" shall include such person's heirs, executors and
administrators. Nothing contained in this article shall affect
any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of
any such person."
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The Registrant maintains a standard mutual fund and investment
advisory professional and directors and officers liability policy. The
policy will provide coverage to the Registrant, its Trustees and
officers, Atalanta/Sosnoff Capital Corporation (Delaware) (the
"Adviser") and Atalanta/Sosnoff Management Corporation (the
"Distributor"). Coverage under the policy will include losses by
reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
- 3 -
<PAGE>
The Advisory Agreement with the Adviser provides that the Adviser
shall not be liable for any action taken, omitted or suffered to be
taken by it in its reasonable judgment, in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement, or in accordance with (or in the
absence of) specific directions or instructions from the Trust,
provided, however, that such acts or omissions shall not have resulted
from the Adviser's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to
the Adviser in its actions under this Agreement or breach of its duty
or of its obligations hereunder.
Item 26. Business and Other Connections of the Investment Adviser
- -------- --------------------------------------------------------
(a) The Adviser is a registered investment adviser, providing
investment advisory services to the Registrant. The Adviser has
been engaged since 1982 in the business of providing investment
advisory services to individual, institutional and corporate
clients.
(b) The directors and officers of the Adviser and any other business,
profession, vocation or employment of a substantial nature
engaged in at any time during the past two years:
(i) Martin T. Sosnoff - Chairman & Director of the Adviser.
Chairman, Director and Controlling Shareholder of
Atalanta/Sosnoff Capital Corporation ("A/SCC"), the
Adviser's parent company. Chairman and Director of
Atalanta/Sosnoff Management Corporation, the Registrant's
principal underwriter (the "Distributor").
(ii) Craig B. Steinberg - President and Director of the Adviser
and the Distributor.
(iii) Anthony G. Miller - Executive Vice President, Chief
Operating Officer and Chief Financial Officer of the
Adviser, A/SCC and the Distributor. Chairman, President and
a Trustee of the Trust.
(iv) Paul P. Tanico - Executive Vice President of the Adviser
and the Distributor. General Partner of Castlerock
Partners, an
- 4 -
<PAGE>
investment partnership.
(v) Toni E. Sosnoff - Vice President of the Adviser. Vice
President and a Trustee of the Trust.
Item 27. Principal Underwriters
- -------- ----------------------
(a) Inapplicable
Position Position
with with
(b) Name Underwriter Registrant
---- ----------- ----------
Martin T. Sosnoff Chairman of None
the Board
and Director
Craig B. Steinberg President None
and
Director
Anthony G. Miller Executive Vice Chairman,
President, Chief President and
Operating Officer a Trustee
and Chief
Financial Officer
Paul P. Tanico Executive Vice None
President
John P. O'Brien Vice President; None
Controller
The address of all of the above-named persons is 101 Park Avenue,
New York, New York 10178.
(c) Inapplicable
Item 28. Location of Accounts and Records
- -------- --------------------------------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at its
offices located at 101 Park Avenue, New York, New York 10178 as well
as at the offices of the Registrant's transfer agent located at 312
Walnut Street, 21st Floor, Cincinnati, Ohio 45202.
- 5 -
<PAGE>
Item 29. Management Services
- -------- -------------------
Inapplicable
Item 30. Undertakings
- -------- ------------
Inapplicable
- 6 -
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed below on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and State of New York, on the 2nd day of
August, 1999.
ATALANTA/SOSNOFF INVESTMENT TRUST
By: /s/ Anthony G. Miller
-------------------------
Anthony G. Miller
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/Anthony G. Miller Chairman, August 2, 1999
- ----------------------------- President
Anthony G. Miller and Trustee
/s/ Robert L. Bennett Treasurer August 2, 1999
- -----------------------------
Robert L. Bennett
- ----------------------------- Trustee /s/ Tina D. Hosking
Howard A. Drucker* --------------------
Tina D. Hosking
Attorney-in-fact*
August 2, 1999
- ----------------------------- Trustee
Toni E. Sosnoff*
- ----------------------------- Trustee
Irving L. Straus*
- ----------------------------- Trustee
Aida L. Wilder*
<PAGE>
INDEX TO EXHIBITS
-----------------
(a) Agreement and Declaration of Trust*
(b) Bylaws*
(c) Incorporated by reference to Agreement and Declaration of Trust and
Bylaws
(d) Advisory Agreement*
(e) Underwriting Agreement*
(f) Inapplicable
(g) Custody Agreement*
(h)(i) Administration Agreement*
(ii) Accounting Services Agreement*
(iii) Transfer, Dividend Disbursing, Shareholder Service and Plan Agency
Agreement*
(i) Opinion and Consent of Counsel*
(j) Inapplicable
(k) Inapplicable
(l) Agreement Relating to Initial Capital*
(m) Service Plan Pursuant to Rule 12b-1*
(n) Inapplicable
(o) Inapplicable
____________________________
* Incorporated by reference to the Trust's registration statement on Form
N-1A.
