SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. 1 / X /
Post-Effective Amendment No. / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT of 1940 / /
Amendment No. 1 / X /
(Check appropriate box or boxes.)
Securities Management & Timing Funds - File Nos. 333-47429 and 811-08687
(Exact Name of Registrant as Specified in Charter)
620 Woodmere Avenue, Suite B, Traverse City, MI 49686
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (616) 947-8200
Craig M. Pauly, Securities Management & Timing Funds, 620 Woodmere Avenue,
Suite B, Traverse City, MI 49686
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares
Omit from the facing sheet reference to the other Act if the
Registration Statement or amendment is filed under only one of the Acts. Include
the "Approximate Date of Proposed Public Offering" and "Title of Securities
Being Registered" only where securities are being registered under the
Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective such date as the Commission, acting pursuant to said Section 8(a) may
determine.
<PAGE>
Securities Management & Timing Funds
CROSS REFERENCE SHEET
FORM N-1A
THE SMT FUND
<TABLE>
ITEM SECTION IN PROSPECTUS
<S> <C>
1........................Cover Page
2........................Summary of Fund Expenses
3........................Performance Information
4........................The Fund, Investment Objective and Strategies and Risk Considerations,
Operation of the Fund, General Information
5........................Operation of the Fund
5A............................. None
6........................Cover Page, Dividends and Distributions, Taxes, General Information,
How to Redeem Shares
7........................Cover Page, How to Invest in the Fund, Share Price Calculation,
Operation of the Fund, How to Redeem Shares
8........................How to Redeem Shares
9........................None..
13........................Investment Objectives and Strategies and Risk Considerations
15........................General Information
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10........................Cover Page
11........................Table of Contents
12........................None..
13........................Additional Information About Fund Investments and Risk Considerations,
Investment Limitations
14........................Trustees and Officers
15........................Description of the Trust
16........................The Investment Adviser, Custodian, Transfer Agent, Accountants,
Trustees and Officers
17........................Portfolio Transactions and Brokerage
18........................Description of the Trust
19........................Determination of Share Price
20........................None..
21........................Distributor
22........................Investment Performance
23........................None..
</TABLE>
<PAGE>
THE SMT FUND
PROSPECTUS ______________, 1998
620 Woodmere Avenue, Suite B
Traverse City, Michigan 49686
For Information, Shareholder Services and Requests:
(888) ________________
The SMT Fund (the "Fund") is a diversified, open-end mutual fund whose
investment objective is to provide long term capital appreciation. The Fund
seeks to achieve this objective by following a market timing strategy which is
based on a proprietary investment model developed by Securities Management &
Timing, Inc., the Fund's adviser. The Fund attempts to be "in the market"
(invested in a broad range of common stocks) when the market is rising and "out
of the market" (invested in money market instruments) when the market is
declining.
This Prospectus provides the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission (the "SEC") dated __________, 1998, which is incorporated
herein by reference and can be obtained without charge by calling the Fund at
the phone number listed above. The SEC maintains a Web Site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding registrants that file electronically
with the SEC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the management fees paid by the Fund
are substantially higher than those paid by most mutual funds. As a result,
total Fund operating expenses will be higher than most mutual funds. There are,
however, no sales charges, commissions or 12b-1 fees. Unlike most other mutual
funds, the Fund does not pay directly for transfer agency, pricing, custodial,
auditing or legal services, nor does it pay directly any general administrative
or other significant operating expenses. The Adviser pays all of the expenses of
the Fund except brokerage, taxes, interest, fees and expenses of non-interested
person trustees and extraordinary expenses.
Shareholder Transaction Expenses1
Sales Load Imposed on Purchases ..........................................NONE
Sales Load Imposed on Reinvested Dividends................................NONE
Deferred Sales Load.......................................................NONE
Redemption Fee............................................................NONE
Exchange Fees.............................................................NONE
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees.................................................4.95%
12b-1 Charges...................................................NONE
Other Expenses2.................................................0.04%
Total Fund Operating Expenses............................................4.99%
1 Processing organizations may impose transactional fees on shareholders.
2 The Fund estimates that other expenses (fees and expenses of the trustees who
are not "interested persons" as defined in the Investment Company Act) will be
less than 0.04% of average net assets for the first fiscal year.
Example
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1 Year 3 Years
------ -------
$------ $------
<PAGE>
THE FUND
The SMT Fund (the "Fund") was organized as a series of Securities
Management & Timing Funds, an Ohio business trust (the "Trust") on __________,
1998. This prospectus offers shares of the Fund and each share represents an
undivided, proportionate interest in the Fund. The investment adviser to the
Fund is Securities Management & Timing, Inc. (the "Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS
The investment objective of the Fund is to provide long term capital
appreciation. The Fund seeks to achieve this objective by following a market
timing strategy which is based on a proprietary investment model developed by
the Adviser. The Fund attempts to be "in the market" (invested in a broad range
of common stocks) when the market is rising and "out of the market" (invested in
money market instruments) when the market is declining.
The Adviser's market timing strategy uses a proprietary,
computer-driven technical model that generates buy and sell signals. When the
technical indicators in the model generate a buy signal, the Fund will
substantially invest in a broad range of high quality stocks selected by the
Adviser. When the indicators generate a sell signal, the stocks will be sold and
the proceeds invested in money market instruments. If the strategy is
successful, the Fund generally will participate in rising markets and avoid the
risk of declining markets. Of course, the Adviser may position the fund
improperly for future market movements, in which case the Fund could lose money
and/or underperform. The model does not recommend or select specific securities
for purchase or sale by the Fund, but is designed to generate buy and sell
signals for the market as a whole.
The Fund's market timing strategy is designed to take advantage of
rising markets and avoid the risk of declining markets. If the Adviser
successfully positions the Fund for market trends, the Fund should outperform an
equivalent portfolio held through periods of market decline. However, there is
the risk that the Adviser may not be successful, and the Fund could be exposed
to declining markets or could miss a market rise. At the moment of any signal,
the Adviser will not know whether that particular signal will turn out to have
indicated the start of a major or minor market move in either direction, or
whether it will prove to be a false signal.
Over the past six years, the Adviser's model has generated an average
of 28 buy signals and 28 sell signals annually. Based on the buy and sell
signals, the Adviser's model has been "in the market" an average of 50% of each
year and "out of the market" an average of 50% of each year. The Fund,
therefore, can be expected to have extremely high portfolio turnover (2800%),
which will result in significantly greater short term gains and transaction
costs than funds with lower portfolio turnover. Short term gains are taxable to
many shareholders as ordinary income (see "Taxes"). The Fund is designed for
long term investors, and because of the tax consequences of the anticipated
portfolio turnover, may be particularly appropriate for tax deferred retirement
plans.
When the Fund is in the market, the Adviser generally intends to stay
fully invested (subject to liquidity requirements) in common stock. The Fund
normally will invest primarily in common
<PAGE>
stocks of companies whose securities, in the opinion of the Adviser, are well
established and enjoy an acceptable degree of liquidity. Most equity securities
in the Fund's portfolio are listed on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ over the counter market. The Fund may also invest
in preferred stocks and warrants. Warrants are options to purchase equity
securities at a specified price valid for a specific time period.
When the Fund is out of the market, the Fund normally will hold all of
its assets in money market instruments (high quality fixed income securities
with maturities of less than one year), securities of money market funds or
repurchase agreements fully collateralized by U.S. government obligations. The
Fund may also invest in such instruments at any time to maintain liquidity or
pending selection of investments in accordance with its policies. If the Fund
acquires securities of money market funds, the shareholders of the Fund will be
subject to duplicative management fees.
Craig M. Pauly, President of the Adviser, has been managing equity
accounts using the Adviser's market timing strategy since January 1, 1992. The
performance of Mr. Pauly's accounts with investment objectives, policies and
strategies substantially similar to those of the Fund appears below. Investors
should be aware that, unlike the Fund, the accounts were invested in other
mutual funds (where persons not associated with the Adviser were selecting the
securities), not directly in securities. The Fund invests directly in common
stocks when in the market and money market instruments when out of the market,
whereas the accounts were invested in growth mutual funds when in the market and
money market funds when out of the market. The data is provided to illustrate
past performance of Mr. Pauly in managing such accounts, as compared to the
growth mutual funds in which the accounts were invested (without the market
timing strategy) and as compared to the S&P 500 Index. Mr. Pauly is responsible
for the performance of the accounts and is also responsible for the investment
management of the Fund. As of December 31, 1997, the assets in those accounts
totaled approximately $10 million.
<TABLE>
Performance Summary
Growth of $10,000 Invested January 1, 1992
to December 31, 1997*
insert graph
with the following data:
<S> <C> <C> <C> <C>
Period Accounts Growth Mutual Funds In Which Accounts S&P 500
------ -------- Were Invested ("Buy & Hold") -------
----------------------------
1991 $10,000 $10,000 $10,000
1992
1993
1994
1995
1996
1997
Total Return Chart
Period Accounts* Growth Mutual Funds In Which Accounts S&P 500
------ --------- Were Invested ("Buy & Hold") ------- -------
----------------------------
1992 45.5% -4.2% 7.3%
1993 36.1% 22.1% 10.6%
<PAGE>
1994 13.2% 16.8% -1.5%
1995 29.2% 19.6% 37.6%
1996 33.6% 8.4% 20.3%
1997 18.8% 16.4% 31.0%
</TABLE>
* The managed account performance of the Adviser, Securities Management &
Timing, Inc., is the dollar-weighted average total return, and is unaudited. For
the period January 1, 1995 through December 31, 1997, the returns represent a
composite of equity accounts having objectives similar to the Fund. Prior to
that period, all accounts were managed in exactly the same way and the returns
are from one of those accounts. Performance figures reflected are net of
management fees and all expenses of the accounts, including transaction costs
and commissions. Results include the reinvestment of dividends and capital
gains.
** The "Buy & Hold" performance is the performance that the managed accounts
would have had if the assets had been continually invested in the growth mutual
fund(s) for the entire year. For the period January 1, 1995 through December 31,
1997, the returns are the [dollar-weighted?] average total returns of the growth
mutual funds in which the accounts were invested. Prior to that period, the
accounts were invested in a single mutual fund.
*** The S&P 500 Index is a widely recognized, unmanaged index of market activity
based upon the aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the reinvestment of
dividends and other distributions. The S&P 500 Index reflects the total return
of securities comprising the Index, including changes in market prices as well
as accrued investment income, which is presumed to be reinvested. Performance
figures for the S&P 500 Index do not reflect deduction of transaction costs or
expenses, including management fees.
The performance of the accounts managed by the Adviser does not represent the
historical performance of the Fund and should not be considered indicative of
future performance of the Fund. Results may differ because of, among other
things, differences in brokerage commissions, account expenses, including
management fees, the size of positions taken in relation to account size and
diversification of securities, timing of purchases and sales, and availability
of cash for new investments. Also, the Fund invests directly in equity
securities and money market instruments, while the managed accounts were
invested in growth mutual funds and money market funds (where persons not
associated with the Adviser selected the securities). In addition, the managed
accounts are not subject to certain investment limitations, diversification
requirements, and other restrictions imposed by the Investment Company Act and
the Internal Revenue Code which, if applicable, may have adversely affected the
performance results of the managed accounts composite. The results for different
periods may vary.
As all investment securities are subject to inherent risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, you should be aware that the Adviser has no prior
experience in managing investment companies and limited experience selecting
individual stocks and money market instruments, and that the Fund has no
operating history. Rates of total return quoted by the Fund may be higher or
lower than past quotations, and there can be no assurance that any rate of total
return will be maintained.
<PAGE>
See "Investment Policies and Techniques and Risk Considerations" for a more
detailed discussion of the Fund's investment practices.
HOW TO INVEST IN THE FUND
Shares of the Fund are sold on a continuous basis, and you may invest
any amount you choose, as often as you wish, subject to a minimum initial
investment of $10,000 ($2,000 for qualified retirement accounts and medical
savings accounts) and minimum subsequent investments of $500. Investors choosing
to purchase or redeem their shares through a broker/dealer or other institution
may be charged a fee by that institution. Investors choosing to purchase or
redeem shares directly from the Fund will not incur charges on purchases or
redemptions. To the extent investments of individual investors are aggregated
into an omnibus account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to the
account of the individual investor.
<PAGE>
Initial Purchase
By Mail - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to The SMT Fund, and sent to the P.O. Box listed below. If you
prefer overnight delivery, use the overnight address listed below:
<TABLE>
<S> <C>
U.S. Mail: The SMT Fund Overnight: The SMT Fund
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 N. Pennsylvania St.
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
</TABLE>
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
By Wire - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call the Transfer Agent at 800-___-____ to set up your account
and obtain an account number. You should be prepared at that time to provide the
information on the application via facsmile. Then, you should provide your bank
with the following information for purposes of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: The SMT Fund
D.D.A. #[ ___________]
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Fund.
<PAGE>
Additional Investments
You may purchase additional shares of the Fund at any time (subject to
minimum investment requirements) by mail, wire, or automatic investment. Each
additional mail purchase request must contain your name, the name of your
account(s), your account number(s), and the name of the Fund. Checks should be
made payable to The SMT Fund and should be sent to the address listed above.
A bank wire should be sent as outlined above.
Automatic Investment Plan
You may make regular investments in the Fund with an Automatic
Investment Plan by completing the appropriate section of the account application
and attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from the Transfer Agent.
Other Purchase Information
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred by the Fund. If
you are already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after
the redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. There is no charge for wire
redemptions; however, the Fund reserves the right to charge for this service.
Any charges for wire redemptions will be deducted from
<PAGE>
the shareholder's Fund account by redemption of shares. Investors choosing to
purchase or redeem their shares through a broker/dealer or other institution may
be charged a fee by that institution.
By Mail - You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
The SMT Fund
c/o Unified Fund Services, Inc.
431 N. Pennsylvania St.
Indianapolis, Indiana 46204
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or the Transfer Agent, a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Transfer Agent at 800-___-____. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the Transfer Agent and the Custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
The telephone redemption and exchange procedures may be terminated at
any time by the Fund or the Transfer Agent. During periods of extreme market
activity it is possible that shareholders may encounter some difficulty in
telephoning the Fund, although neither the Fund nor the Transfer Agent has ever
experienced difficulties in receiving and in a timely fashion responding to
telephone requests for redemptions or exchanges. If you are unable to reach the
Fund by telephone, you may request a redemption or exchange by mail.
Additional Information - If you are not certain of the requirements for
a redemption please call the Transfer Agent at (800) ___-____. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days'
<PAGE>
written notice if the value of his or her shares in the Fund is less than
$10,000 due to redemption, or such other minimum amount as the Fund may
determine from time to time. An involuntary redemption constitutes a sale. You
should consult your tax adviser concerning the tax consequences of involuntary
redemptions. A shareholder may increase the value of his or her shares in the
Fund to the minimum amount within the 30 day period. Each share of the Fund is
subject to redemption at any time if the Board of Trustees determines in its
sole discretion that failure to so redeem may have materially adverse
consequences to all or any of the shareholders of the Fund.
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains and its net short term capital gains
at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. An election to receive a cash payment of dividends and/or
capital gain distributions may be made in the application to purchase shares or
by
<PAGE>
separate written notice to the Transfer Agent. Shareholders will receive a
confirmation statement reflecting the payment and reinvestment of dividends and
summarizing all other transactions. If cash payment is requested, a check
normally will be mailed within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the time of withdrawal,
including the day of withdrawal, will be paid at that time. You may elect to
have distributions on shares held in IRAs and 403(b) plans paid in cash only if
you are 59 1/2 years old or permanently and totally disabled or if you otherwise
qualify under the applicable plan.
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
capital gains to individuals are taxed at the same rate as ordinary income. All
distributions of net capital gains to corporations are taxed at regular
corporate rates. Any distributions designated as being made from net realized
long term capital gains are taxable to shareholders as long term capital gains
regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
On the application or other appropriate form, the Fund will request the
shareholder's certified taxpayer identification number (social security number
for individuals) and a certification that the shareholder is not subject to
backup withholding. Unless the shareholder provides this information, the Fund
will be required to withhold and remit to the U.S. Treasury 31% of the
dividends, distributions and redemption proceeds payable to the shareholder.
Shareholders should be aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund may
make a corresponding charge against the account.
OPERATION OF THE FUND
The Fund is a diversified series of Securities Management & Timing
Funds, an open-end management investment company organized as an Ohio business
trust on __________, 1998. The Board of Trustees supervises the business
activities of the Fund. Like other mutual funds, the Fund retains various
organizations to perform specialized services.
The Fund retains Securities Management & Timing, Inc., 620 Woodmere
Avenue, Suite B, Traverse City, Michigan 49686 (the "Adviser") to manage the
Fund's investments. Craig M. Pauly
<PAGE>
is the sole shareholder of the Adviser and has served as President of the
Adviser since 1993. Prior to 1993, he was the ______________________ of Equity
Investments Timing, another registered investment adviser. Mr. Pauly is
responsible for the day-to-day management of the Fund's portfolio. The Fund is
authorized to pay the Adviser a fee equal to an annual average rate of 4.95% of
its average daily net assets. The Adviser pays all of the operating expenses of
the Fund except brokerage, taxes, interest, fees and expenses on non-interested
person trustees and extraordinary expenses.
The Fund retains Unified Fund Services, Inc., 431 North Pennsylvania
Street, Indianapolis, Indiana 46204 (the "Administrator") to manage the Fund's
business affairs and provide the Fund with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. The Fund also retains Unified Fund Services, Inc. (the "Transfer
Agent") to serve as transfer agent, dividend paying agent and shareholder
service agent. For its services as Administrator and Transfer Agent, Unified
Fund Services, Inc. receives a monthly fee from the Adviser equal to an annual
average rate of ____% of the Fund's average daily net assets. The Fund retains
Unified Management Corporation, 431 North Pennsylvania Street, Indianapolis,
Indiana 46204 (the "Distributor") to act as the principal distributor of the
Fund's shares. The services of the Administrator, Transfer Agent and Distributor
are operating expenses paid by the Adviser.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute
portfolio transactions. The Adviser (not the Fund) may pay certain financial
institutions (which may include banks, brokers, dealers and other industry
professionals) a "servicing fee" for performing certain administrative functions
for the Fund shareholders to the extent these institutions are allowed to do so
by applicable statute, rule or regulation. In addition, the Adviser (not the
Fund) may compensate brokers and other intermediaries for directing assets to or
retaining assets in the Fund.
GENERAL INFORMATION
Fundamental Policies. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
Shareholder Rights. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. The Declaration of Trust can be amended by the Trustees, except that any
amendment that adversely effects the rights of shareholders must be approved by
the shareholders affected. Prior to the offering made by this Prospectus,
_____________ purchased for investment all of the outstanding shares of the Fund
and as a result may be deemed to control the Fund.
PERFORMANCE INFORMATION
<PAGE>
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
<TABLE>
<S> <C>
Investment Adviser Transfer Agent and Administrator
Securities Management & Timing, Inc. Unified Fund Services, Inc.
620 Woodmere Avenue, Suite B 431 North Pennsylvania Street
Traverse City, Michigan 49686 Indianapolis, Indiana 46204
Custodian Auditors
Star Bank, N.A. McCurdy & Associates CPA's, Inc.
425 Walnut Street., M.L. 6118 27955 Clemens Road
Cincinnati, Ohio 45202 Westlake, Ohio 44145
Distributor
Unified Management Corporation
431 North Pennsylvania Street
Indianapolis, Indiana 46204
</TABLE>
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the Fund to sell its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY OF FUND EXPENSES
Shareholder Transaction Expenses
Annual Fund Operating Expenses
THE FUND
INVESTMENT OBJECTIVE AND STRATEGIES AND RISK CONSIDERATIONS
HOW TO INVEST IN THE FUND
Initial Purchase
Additional Investments
Tax Sheltered Retirement Plans
Other Purchase Information
HOW TO REDEEM SHARES
By Mail
By Telephone
Additional Information
SHARE PRICE CALCULATION
DIVIDENDS AND DISTRIBUTIONS
TAXES
OPERATION OF THE FUND
GENERAL INFORMATION
Fundamental Policies
Shareholder Rights
PERFORMANCE INFORMATION
<PAGE>
THE SMT FUND
STATEMENT OF ADDITIONAL INFORMATION
May ___, 1998
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of The SMT Fund dated May ___, 1998.
A copy of the Prospectus can be obtained by writing the Fund at 620 Woodmere
Avenue, Suite B, Traverse City, Michigan 49686, or by calling
___________________.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<S> <C>
PAGE
DESCRIPTION OF THE TRUST................................................................................................ 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS................................................................................................. 1
INVESTMENT LIMITATIONS.................................................................................................. 2
THE INVESTMENT ADVISER.................................................................................................. 4
TRUSTEES AND OFFICERS................................................................................................... 5
PORTFOLIO TRANSACTIONS AND BROKERAGE.................................................................................... 5
DETERMINATION OF SHARE PRICE............................................................................................ 7
INVESTMENT PERFORMANCE.................................................................................................. 7
CUSTODIAN................................................................................................................ 8
TRANSFER AGENT........................................................................................................... 8
ACCOUNTANTS.............................................................................................................. 8
DISTRIBUTOR.............................................................................................................. 8
</TABLE>
<PAGE>
DESCRIPTION OF THE TRUST
The SMT Fund (the "Fund") was organized as a series of Securities
Management & Timing Funds (the "Trust"). The Trust is an open-end investment
company established under the laws of Ohio by an Agreement and Declaration of
Trust dated February ___, 1998 (the "Trust Agreement"). The Trust Agreement
permits the Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value. The Fund is the only series
currently authorized by the Trustees.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series 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 series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Fund's
Prospectus. For a description of the methods used to determine the share price
and value of the Fund's assets, see "Share Price Calculation" in the Fund's
Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objective and Strategies".
Repurchase Agreements. Repurchase transactions are transactions by which The
Fund purchases a U.S. Government obligation and simultaneously commits to resell
that obligation to the seller at an agreed upon price and date. The resale price
reflects the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or maturity of the purchased obligation. A
repurchase transaction involves the obligation of the seller to pay the agreed
upon price, which obligation is in effect secured by the value of the underlying
U.S. Government obligation. In the event of a bankruptcy or other default of the
seller of a repurchase agreement, The Fund could experience both delays in
liquidating the underlying U.S. Government obligation and losses. To minimize
these possibilities, The Fund intends to enter into repurchase agreements only
with its custodian, banks having assets in excess of $1 billion and the largest
and most creditworthy (as
1
<PAGE>
determined by the Board of Trustees and the Adviser) securities dealers. In
addition, the repurchase agreements will be fully collateralized by the
underlying U.S. Government obligations
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff.
3. Underwriting. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
2
<PAGE>
6. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. The Fund will not invest 25% or more of its total
assets in any particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. Borrowing. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
3. Margin Purchases. The Fund will not purchase securities or evidences
of interest thereon on "margin." This limitation is not applicable to short term
credit obtained by the Fund for the clearance of purchases and sales or
redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
4. Options. The Fund will not purchase or sell puts, calls, options or
straddles.
5. Loans. The Fund will not loan its portfolio securities.
3
<PAGE>
THE INVESTMENT ADVISER
The Fund's investment adviser is Securities Management & Timing, Inc.,
620 Woodmere Avenue, Suite B, Traverse City, Michigan 49686 (the "Adviser").
Craig M. Pauly is the sole shareholder and President of the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest, fees and expenses of the non-interested person trustees and
extraordinary expenses. As compensation for its management services and
agreement to pay the Fund's expenses, the Fund is obligated to pay the Adviser a
fee computed and accrued daily and paid monthly at an annual rate of 4.95% of
the average daily net assets of the Fund. The Adviser may waive all or part of
its fee, at any time, and at its sole discretion, but such action shall not
obligate the Adviser to waive any fees in the future.
The Adviser retains the right to use the names "Securities Management &
Timing" and "SMT" in connection with another investment company or business
enterprise with which the Adviser is or may become associated. The Trust's right
to use the names "Securities Management & Timing" and "SMT" automatically ceases
ninety days after termination of the Agreement and may be withdrawn by the
Adviser on ninety days written notice.
The Adviser 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 Fund 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
Fund believes that there would be no material impact on the Fund or its
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 Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
Name, Age Position Principal Occupations
and Address During Past 5 Years
<S> <C> <C>
Craig M. Pauly* Trustee, President Director and President of Securities Management & Timing,
Age: 26 and [Treasurer] Inc. since 1993.
620 Woodmere, Suite B
Traverse City, MI 49686
</TABLE>
Trustee fees are Trust expenses. The following table estimates the
Trustees' compensation for the first full year of the Trust ending ___________,
1999.
Name
Total Compensation from Trust
(the Trust is not in a Fund Complex)
Craig M. Pauly
0
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Fund, 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.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer 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 Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other
4
<PAGE>
information will not reduce the overall cost to the Adviser of performing its
duties to the Fund under the Agreement.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
When the Fund and another of the Adviser's clients seek to purchase or
sell the same security at or about the same time, the Adviser may execute the
transaction on a combined ("blocked") basis. Blocked transactions can produce
better execution for the Fund because of the increased volume of the
transaction. If the entire blocked order is not filled, the Fund may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Fund may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. In the event that the entire blocked order
is not filled, the purchase or sale will normally be allocated on a pro rata
basis. The allocation may be adjusted by the Adviser, taking into account such
factors as the size of the individual orders and transaction costs, when the
Adviser believes adjustment is reasonable. Transactions of advisory clients
(including the Fund) may also be blocked with those of the Adviser. The Adviser
will be permitted to participate in the blocked transaction only after all
orders of advisory clients (including the Fund) are filled.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. 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 and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Share Price
Calculation" in the Prospectus.
The Fund's Prospectus, in the section "How to Invest in the Fund,"
describes certain types of investors for whom sales charges will be waived. The
Trustees have determined that the Fund incurs no appreciable distribution
expenses in connection with sales to these investors and that it is therefore
appropriate to waive sales charges for these investors.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one, five and ten 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 $1,000 initial investment
T = average annual total return
n = number of years
5
<PAGE>
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates, that the maximum sales load is
deducted from the initial $1,000 and that a complete redemption occurs at the
end of the applicable period. If the 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.
From time to time, in advertisements, sales literature and information
furnished to present or to prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance rankings and ratings
reported periodically in national financial publications such as Barron's and
Fortune also may be used.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, M.L. 6118, Cincinnati, Ohio 45202,
is Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
Unified Fund Services, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as the Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other accounting and shareholder service functions. In
addition, Unified Fund Services, Inc., in its capacity as Fund Administrator,
provides the Fund with certain monthly reports, record-keeping and other
management-related services. For a description of the fees paid by the Adviser
on behalf of the Fund for these administrative services, see "Operation of the
Fund" in the Fund's Prospectus.
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Trust for the fiscal year ending ___________, 1999. McCurdy & Associates
CPA's, Inc. performs an annual audit of the Fund's financial statements and
provides financial, tax and accounting consulting services as requested.
DISTRIBUTOR
6
<PAGE>
Unified Management Corporation, Inc., 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, is the exclusive agent for distribution of shares
of the Fund. [The Distributor is obligated to sell shares of the Fund on a best
efforts basis only against purchase orders for the shares. Shares of the Fund
are offered to the public on a continuous basis.]
7
<PAGE>
Securities Management & Timing Funds
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------- ---------------------------------
(a) Financial Statements
Included in Part A: None
Included in Part B: None
(b) Exhibits
(1) Copy of Registrant's Agreement and
Declaration of Trust, which was filed as an
Exhibit to Registrant's Registration
Statement, is hereby incorporated by
reference.
(2) Copy of Registrant's By-Laws, which was
filed as an Exhibit to Registran's
Registration Statement, is hereby
incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificates - None.
(5) Copy of Registrant's Proposed Management
Agreement with its Adviser, Securities
Management & Timing, Inc., which was filed
as an Exhibit to Registrant's Registration
Statement, is hereby incorporated by
reference.
(6) Copy of Registrant's Underwriting or
Distribution Contracts and Agreements with
Principal Underwriters and Distributors (to
be supplied).
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Agreement with the
Custodian (to be supplied).
(9) Other Material Contracts - None.
(10) Opinion and Consent of Brown, Cummins &
Brown Co., L.P.A., whcih was filed as an
Exhibit to Registrant's Registration
Statement, is hereby incorporated by
reference.
(11) Consent of independent public accountants-
None.
(12) Financial Statements Omitted from Item 23-
None.
(13) Copy of Letter of Initial Stockholders
(to be supplied).
<PAGE>
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance
Quotation - None.
(17) Financial Data Schedule - None.
(18) Rule 18f-3 Plan - None.
(19)(i) Power of Attorney for Registrant and
Certificate with respect thereto are filed
herewith.
(ii) Powers of Attorney for the Trustees and
Officers are filed herewith.
Item 25. Persons Controlled by or Under Common Control with the Registrant
- -------- -----------------------------------------------------------------
None.
Item 26. Number of Holders of Securities (as of February 20, 1998)
- -------- ---------------------------------------------------------
Title of Class Number of Record Holders
-------------- ------------------------
The SMT Fund 0
Item 27. Indemnification
- -------- ---------------
(a) Article VI of the Registrant's 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
<PAGE>
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
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.
The Registrant may not pay for insurance which
protects the Trustees and officers against
liabilities rising from action involving willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund
and investment advisory professional and directors
and officers liability policy. The policy, if
maintained, would provide coverage to the Registrant,
its Trustees and officers, and could cover its
Advisers, among others. Coverage under the policy
would include losses by reason of any act, error,
omission, misstatement, misleading statement, neglect
or breach of duty.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and
the Agreement and Declaration of the Registrant or
the By-Laws of the Registrant, 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
<PAGE>
such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Trust 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.
Item 28. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
A. Securities Management & Timing, Inc., 620 Woodmere
Avenue, Suite B, Traverse City, MI 49686 ("SM&T"),
adviser to The SMT Funds, is a registered investment
adviser.
(1) SM&T, its officers and directors have
engaged in no other business during the past
two fiscal years.
Item 29. Principal Underwriters
- -------- ----------------------
(a) Unified Management Corporation, the Registrant's
distributor, acts as distributor for The Star Select
Funds and The Unified Funds, both at 431 North
Pennsylvania Street, Indianapolis, Indiana 46204 and
Saratoga Advantage Trust, 1501 Franklin Avenue,
Mineola, NY 11501.
(b) Information with respect to each director and officer
of Unified Management Corporation is incorporated by
reference to Schedule A of Form BD filed by it under
the Securities Exchange Act of 1934 (File No.
8-23508).
(c) Not applicable.
Item 30. 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 620 Woodmere Avenue, Suite B, Traverse City,
Michigan 49686 and/or by the Registrant's Custodian, Star
Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, and/or
by the Registrant's Transfer Agent, Unified Fund Services,
Inc., 431 North Pennsylvania Street, Indianapolis, Indiana
46204.
Item 31. Management Services Not Discussed in Parts A or B
- -------- -------------------------------------------------
None.
<PAGE>
Item 32. Undertakings
- -------- ------------
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the Registrant's latest annual report to
shareholders, upon request and without charge.
(c) The Registrant hereby undertakes to file a
Post-Effective Amendment, using financial statements
which need not be certified, within four to six
months from the effective date of this registration.
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 on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 20th day of March,
1998.
Securities Management & Timing Funds
By:/s/ Donald S. Mendelsohn
Donald S. Mendelsohn
Attorney-in-Fact
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.
Craig M. Pauly, President and Trustee
By:/s/ Donald S. Mendelsohn
Donald S. Mendelsohn
Attorney-in-Fact
March 20, 1998
<PAGE>
EXHIBIT INDEX
1. Powers of Attorney............................................EX-99.POA
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Securities Management & Timing Funds, a business trust
organized under the laws of the State of Ohio (hereinafter referred to as the
"Trust"), proposes to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended, Pre-Effective Amendment No. 1 to its Registration Statement.
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, its attorneys for it and
in its name, place and stead, to execute and file such Pre Effective Amendment,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as it might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the Trust has caused it names to be subscribed
hereto by the President this 18th day of March, 1998.
ATTEST: Securities Management & Timing Funds
/s/ Richard M. Pauly /s/ Craig M. Pauly
- -------------------- ------------------
RICHARD M. PAULY, Secretary CRAIG M. PAULY, President
STATE OF MICHIGAN )
) ss:
COUNTY OF GRAND TRAVERSE )
Before me, a Notary Public, in and for said county and state,
personally appeared CRAIG M. PAULY, President and RICHARD M. PAULY, Secretary,
who represented that they are duly authorized in the premises, and who are known
to me to be the person described in and who executed the foregoing instrument,
and they duly acknowledged to me that they executed and delivered the same for
the purposes therein expressed.
WITNESS my hand and official seal this 18th day of March, 1998
/s/ Tina C. Partlo
------------------
Notary Public
Tina C. Partlo, Notary Public
Grand Traverse County, Michigan
Commission Expires: 2/27/2002
<PAGE>
CERTIFICATE
The undersigned, Secretary of Securities Management & Timing Funds,
hereby certifies that the following resolution was duly adopted by a majority of
the Board of Trustees by Action by Unanimous Consent of Trustees dated March 18,
1998, and is in full force and effect:
"WHEREAS, Securities Management & Timing Funds, a business
trust organized under the laws of the State of Ohio
(hereinafter referred to as the "Trust"), proposes to file
with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 and the Investment
Company Act of 1940,Pre-Effective Amendment No. 1 to, its
Registration Statement.
NOW, THEREFORE, the Trust hereby constitutes and appoints
JAMES R. CUMMINS and DONALD S. MENDELSOHN, and each of them,
its attorneys for it and in its name, place and stead, to
execute and file such Pre Effective Amendment, hereby giving
and granting to said attorneys full power and authority to do
and perform all and every act and thing whatsoever requisite
and necessary to be done in and about the premises as fully to
all intents and purposes as it might or could do if personally
present at the doing thereof, hereby ratifying and confirming
all that said attorneys may or shall lawfully do or cause to
be done by virtue hereof.
Dated: March 18, 1998 /s/Richard M. Pauly
--------------------
Richard M. Pauly, Secretary
Securities Management & Timing Funds
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, Securities Management & Timing Funds, a business trust
organized under the laws of the State of Ohio (hereinafter referred to as the
"Trust"), proposes to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940,
as amended, Pre Effective Amendment No. 1 to its Registration Statement; and
WHEREAS, the undersigned is a Trustee and the President and Treasurer
of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints JAMES
R. CUMMINS and DONALD S. MENDELSOHN, and each of them, its attorneys for it and
in its name, place and stead, to execute and file such Pre Effective Amendment,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully to all intents and purposes as it might
or could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 18th
day of March, 1998.
/s/ Craig M. Pauly
------------------
CRAIG M. PAULY, Trustee, President and
Treasurer
STATE OF MICHIGAN )
) ss:
COUNTY OF GRAND TRAVERSE )
Before me, a Notary Public, in and for said county and state,
personally appeared CRAIG M. PAULY, known to me to be the person described in
and who executed the foregoing instrument, and who acknowledged to me that he
executed and delivered the same for the purposes therein expressed.
WITNESS my hand and official seal this 18th day of March, 1998
/s/ Tina C. Partlo
------------------
Notary Public
Tina C. Partlo, Notary Public
Grand Traverse County, Michigan
Commission Expires: 2/27/2002
