SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
---
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 1 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 3 / X /
(Check appropriate box or boxes.)
Securities Management & Timing Funds - File Nos. 333-47429 and 811-8687
(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)
/X/ 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.
<PAGE>
THE SMT FUND
PROSPECTUS September __, 1999
620 Woodmere Avenue, Suite B
Traverse City, Michigan 49686
1-877-SMT-FUND (1-877-768-3863)
The investment objective of The SMT Fund is to achieve a higher total
return over the long term than the total return of the United States equity
markets. The Fund seeks to achieve this objective by following a market timing
strategy. 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 Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
ABOUT THE FUND
HOW THE FUND HAS PERFORMED
COSTS OF INVESTING IN THE FUND
HOW TO INVEST IN THE FUND
HOW TO REDEEM SHARES
DETERMINATION OF NET ASSET VALUE
OTHER INFORMATION ABOUT INVESTMENTS AND STRATEGIES
DIVIDENDS, DISTRIBUTION AND TAXES
MANAGEMENT OF THE FUND
YEAR 2000 ISSUE
FINANCIAL HIGHLIGHTS
<PAGE>
ABOUT THE FUND
Investment Objective
The investment objective of the Fund is to achieve a higher total
return over the long term than the total return of the United States equity
markets.
Principal Strategies
The Fund seeks to achieve this objective by following a market timing
strategy which is based on a proprietary investment model developed by 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.
The adviser's market timing strategy uses a proprietary,
computer-driven technical model that generates buy and sell signals. It is
designed to take advantage of rising markets and avoid the risk of declining
markets. 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. 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.
If the strategy is successful, the Fund generally will participate in
rising markets and avoid the risk of declining markets, and should outperform an
equivalent portfolio held through periods of market decline. The Fund will
generally compare its return to that of the S&P 500.
Principal Risks of Investing in the Fund
The principal risk of investing in the Fund is that the adviser's
market timing strategy will not be successful. At the moment of any buy or sell
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. The Fund could be exposed to
declining markets or could miss a market rise if the adviser's model does not
correctly predict market movements.
In addition, the value of the Fund' shares may decrease in response to
the activities and financial prospects of the individual companies in which the
Fund invests. Common stocks tend to be more volatile than other investment
choices.
The Fund's returns will vary and you could lose money by investing in
the Fund.
Is the Fund Right for You?
The Fund is designed for long term investors. It may be particularly
appropriate for tax deferred retirement plans because of the tax consequences of
the Fund's high portfolio turnover.
<PAGE>
HOW THE FUND HAS PERFORMED
The information below shows the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The information
shows how the Fund's average annual total returns over time (net of fees and
expenses) compare to those of a broad-based securities market index. Of course,
the Fund's past performance is not necessarily an indication of its future
performance.
The Fund's year-to-date annual total return as of June 30, 1999 was ___%.
[During the period shown, the highest return for a calendar quarter was
___% in the ___ quarter of 199_, and the lowest return was ____% for the ___
quarter of 199_.]
Average Annual Total Returns for the periods 6/4/98 (inception) to 12/31/98:
The Fund _______%
S&P 500 Index _______%
COSTS OF INVESTING IN THE FUND
The tables describe the fees and expenses that you may pay if you buy
and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)1
Maximum Sales Charge (Load) Imposed on Purchases ...........................NONE
Maximum Deferred Sales Charge (Load)........................................NONE
Redemption Fee..............................................................NONE
Annual Fund Operating (expenses that are deducted from Fund assets)2
Management Fees............................................................[ %]
Distribution (12b-1) Fees...................................................NONE
Other Expenses.............................................................[ %]
Total Annual Fund Operating Expenses.......................................4.99%
1 Processing organizations may impose transactional fees on shareholders.
2 The adviser's fee is equal to 4.95% of the Fund's average daily net assets,
minus the amount by which the Fund's total expenses (including organizational
expenses, but excluding brokerage, taxes, interest and extraordinary expenses)
exceeds 4.99%.
Expense Example:
The example below is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example uses
the same assumptions as other mutual fund prospectuses: a $10,000 initial
investment for the time periods indicated, 5% annual total return, constant
operating expenses, and sale of all shares at the end of each time period.
Although your actual expenses may be different, based on these assumptions your
costs will be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$524 $1, 648 $2,882 $6,526
<PAGE>
HOW TO INVEST IN THE FUND
The minimum initial investment in the Fund is $10,000 ($2,000 for qualified
retirement accounts and medical savings accounts) and minimum subsequent
investments are $500.
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 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> <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 46204-6110 Indianapolis, Indiana 46204
</TABLE>
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. To wire money,
you must call the Fund at 877-SMT-FUND to set up your account and obtain an
account number. You should be prepared at that time to provide the information
on the application by facsimile. Then, provide your bank with the following
information for purposes of wiring your investment:
Firstar Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: The SMT Fund
D.D.A. #488920604
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You must mail a signed application to the Fund's 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 Fund may
charge shareholders for this service in the future.
Additional Investments
You may purchase additional shares of the Fund at any time (minimum of
$500) 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) - a check made payable to The SMT Fund.
Checks should be sent to The SMT Fund at the address indicated
throughout this prospectus. A bank wire should be sent as outlined above. ACH
(Automatic Clearing House) transactions should be established in advance by
contacting the Fund's transfer agent.
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.
<PAGE>
Tax Sheltered Retirement Plans
Since the Fund is oriented to longer term investments, the Fund may be
a particularly 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 Fund's transfer agent for the procedure
to open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Please consult with an attorney or tax adviser
regarding these plans. 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
The Fund may limit the amount of purchases and refuse to sell to any
person. 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
You 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 may charge for this service in the future. Any
charges for wire redemptions will be deducted from your Fund account by
redemption of shares. If you redeem your shares through a broker/dealer or other
institution, you 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. The Fund may require 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, you may be required to furnish
additional legal documents prior to redemption to insure proper authorization.
By Telephone - You may redeem any part of your account in the Fund by
calling the Fund's transfer agent at 877-SMT-FUND. 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.
<PAGE>
The Fund or transfer agent may terminate the telephone redemption and
exchange procedures at any time. During periods of extreme market activity it is
possible that you 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 Fund's transfer agent at (877) SMT-FUND.
Redemptions specifying a certain date or share price cannot be accepted and will
be returned. We will mail you 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 calendar 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 may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your 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. You may increase the value of your shares in the Fund to the
minimum amount within the 30 day period. Your shares are 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.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the Fund's net asset
value per share (NAV). The NAV is calculated at the close of trading (normally
4:00 p.m. Eastern time) on each day the New York Stock Exchange is open for
business (the Stock Exchange is closed on weekends, Federal holidays and Good
Friday). The NAV is calculated by dividing the value of the Fund's total assets
(including interest and dividends accrued but not yet received) minus
liabilities (including accrued expenses) by the total number of shares
outstanding.
The Fund's assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued at their fair
value.
Requests to purchase and sell shares are processed at the NAV next
calculated after we receive your order in proper form.
OTHER INFORMATION ABOUT INVESTMENTS AND STRATEGIES
[Update: 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, which will
result in significantly greater short term capital gains (or losses) and
transaction costs than funds with lower portfolio turnover. During the period
June 5, 1998 (the Fund's inception) to May 31, 1999, the Fund's portfolio
turnover was 10,711%. Short term gains are taxable to many shareholders as
ordinary income (see "Taxes" below). Therefore, you should be aware that the
Fund's anticipated portfolio turnover may result in substantial ordinary income
to shareholders. Investment through a tax deferred retirement plan account is
preferable for that reason.
<PAGE>
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 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.
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 you considered appropriate at the time of your investment in the
Fund.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. The Fund typically distributes
substantially all of its net investment income in the form of dividends and
taxable capital gains to its shareholders every December. These distributions
are automatically reinvested in the Fund unless you request cash distributions
on your application or through a written request. Dividends paid by the Fund may
be eligible in part for the dividends received deduction for corporations. The
Fund expects that its distributions will consist primarily of short term capital
gains.
Taxes. In general, selling shares of the Fund and receiving
distributions (whether reinvested or taken in cash) are taxable events. All
income realized by the Fund, including short term capital gains, will be taxable
to the shareholder as ordinary income. Because distributions of long term
capital gains are subject to capital gains taxes, regardless of how long you
have owned your shares, you may want to avoid making a substantial investment
when the Fund is about to make a long term capital gains distribution. Depending
on the purchase price and the sale price, you may have a gain or a loss on any
shares sold. Any tax liabilities generated by your transactions or by receiving
distributions are your responsibility.
Early each year, the Fund will mail to you a statement setting forth
the federal income tax information for all distributions made during the
previous year. If you do not provide your taxpayer identification number, your
account will be subject to backup withholding.
The tax considerations described in this section do not apply to
tax-deferred accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax adviser about your
investment.
MANAGEMENT OF THE FUND
The Fund retains Securities Management & Timing, Inc., 620 Woodmere
Avenue, Suite B, Traverse City, Michigan 49686 as the Fund's investment adviser.
Craig M. Pauly is the sole shareholder of the adviser and has served as
President of the adviser since June of 1993. He has been managing equity
accounts using the market timing strategy since January 1, 1992. Mr. Pauly is
responsible for the day-to-day management of the Fund's portfolio.
<PAGE>
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, minus the amount by which
the Fund's total expenses (including organizational expenses, but excluding
brokerage, taxes, interest and extraordinary expenses) exceeds 4.99%. 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. For the period June 5, 1998 (inception) through May 31, 1999, the Fund
paid the adviser a fee equal to _____% of its average daily net assets. The
adviser may pay fees to certain fund consultants based on investments made and
maintained by investors that the consultant has referred to the Fund.
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the adviser or the Fund's various service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Issue."
The adviser has taken steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by the
Fund's major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Fund. In
addition, the adviser cannot make any assurances that the Year 2000 Issue will
not affect the companies in which the Fund invests or worldwide markets and
economies.
FINANCIAL HIGHLIGHTS
The following table is intended to help you better understand
the Fund's financial performance since its inception. Certain information
reflects financial results for a single Fund share. The total returns represent
the rate you would have earned (or lost) on an investment in the Fund, assuming
reinvestment of all dividends and distributions. This information has been
audited by McCurdy & Associates CPA's, Inc., whose report, along with the Fund's
financial statements, are included in the Fund's annual report, which is
available upon request.
Year
Ended
May 31,1999
-----------
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning ................................... $ 10.00
Income from investment
Operations:
Net investment income ................................... (0.22)
Net realized and unrealized
gain (loss) on investments.......................... 3.44
------
Total from investment income ............................ 3.22
Less distributions:
Dividends from realized gains............................ (0.97)
Dividend from net investment income...................... 0.00
----
Total distribution............................................ (0.97)
Net asset value at end of period ............................. $ 12.25
======
TOTAL RETURN (a).............................................. 33.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period................................ $16,529,990
Ratio of expenses to average net assets:
Before reimbursement of expenses by Adviser (b).......... 5.06%
After reimbursement of expenses by Adviser (b)........ 4.99%
Ratio of net investment income to average net assets:
Before reimbursement of expenses by Adviser (b).......... (2.01%)
After reimbursement of expenses by Adviser (b)........... (1.94%)
Portfolio turnover ...................................... 10,710.86%
(a) For the period June 5, 1998 (commencement of operations) to May 31, 1999.
(b) Annualized.
<PAGE>
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
Firstar Bank, N.A. McCurdy & Associates CPA's, Inc.
425 Walnut Street., M.L. 6118 27955 Clemens Road
Cincinnati, Ohio 45202 Westlake, Ohio 44145
Legal Counsel Distributor
Brown, Cummins & Brown Co., LPA Unified Management Corporation
3500 Carew Tower 431 North Pennsylvania Street
Cincinnati, Ohio 45202 Indianapolis, Indiana 46204
[BACK COVER PAGE]
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations.
Shareholder reports contain management's discussion of market conditions,
investment strategies and performance results as of the Fund's latest
semi-annual or annual fiscal year end.
Call the Fund at 877-SMT-FUND to request free copies of the SAI and the
Fund's annual and semi-annual reports, to request other information about the
Fund and to make shareholder inquiries.
You may also obtain information about the Fund (including the SAI and
other reports) from the Securities and Exchange Commission on their Internet
site at http://www.sec.gov or at their Public Reference Room in Washington, D.C.
Call the SEC at 800-SEC-0330 for room hours and operation. You may also obtain
fund information by sending a written request and duplicating fee to the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
<PAGE>
THE SMT FUND
STATEMENT OF ADDITIONAL INFORMATION
September_____, 1999
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of The SMT Fund dated September
_____, 1999. This SAI incorporates by reference the financial statements and
independent auditor's report from the Fund's Annual Report to Shareholders for
the fiscal year ended May 31, 1999 ("Annual Report"). 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 1-877-SMT-FUND (1-877-768-3863).
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST AND FUND.........................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS.....
INVESTMENT LIMITATIONS....................................................
THE INVESTMENT ADVISER....................................................
TRUSTEES AND OFFICERS.....................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE......................................
DETERMINATION OF SHARE PRICE..............................................
INVESTMENT PERFORMANCE....................................................
CUSTODIAN.................................................................
TRANSFER AGENT AND ADMINISTRATOR..........................................
ACCOUNTANTS...............................................................
DISTRIBUTOR...............................................................
FINANCIAL STATEMENTS......................................................
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
The SMT Fund (the "Fund") was organized as a diversified series of
Securities Management & Timing Funds (the "Trust") on February 20, 1998 and
commenced operations on June 5, 1998. The Trust is an open-end investment
company established under the laws of Ohio by an Agreement and Declaration of
Trust dated February 20, 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. The investment adviser to the Fund is
Securities Management & Timing, Inc.
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. 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 born 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.
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 entitiled 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 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.
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 "Determination of Net Asset Value" in the
Fund's Prospectus.
<PAGE>
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 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
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 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).
<PAGE>
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.
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.
------
<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, minus the amount by which the Fund's
total expenses (including organizational expenses, but excluding brokerage,
taxes, interest and extraordinary expenses) exceeds 4.99%. 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. For the period
June 5, 1998 (inception) to May 31, 1999, the Fund paid fees of $539,107 to the
Adviser.
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.
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 Trust as a factor in the selection of brokers and dealers to execute
portfolio transactions. In addition, the Adviser (not the Fund) may compensate
brokers and other intermediaries for directing assets to or retaining assets in
the Fund. 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 Board of Trustees supervises the business activities of the Trust.
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. As of June 30,
1999, the officers and trustees as a group owned less than one percent of the
Fund.
<PAGE>
<TABLE>
<S> <C> <C>
===================================== -------------------------- ==================================================
Name, Age Position Principal Occupations
and Address During Past 5 Years
===================================== -------------------------- ==================================================
Craig M. Pauly * Trustee, President Director and President of Securities Management
Age: 28 and Treasurer & Timing, Inc. since 1993.
620 Woodmere, Suite B
Traverse City, MI 49686
===================================== -------------------------- ==================================================
Brian D. Duddles Trustee, Secretary Assistant Vice President of State Savings Bank
Age: 36 of Frankfort since 7/99; Origination Manager at
P.O. Box 1169 Stone Ridge Mortgage from 7/94 to 7/99;
Frankfort, MI 49635 Independent Representative at Royal Alliance, a
broker/dealer, from 1993 to 1994.
===================================== -------------------------- ==================================================
Jeffrey T. Nowicki Trustee Partner at Lamothe & Nowicki, an advertising
Age: 33 company, since 7/97; Partner at Partners
25 W. Michigan Avenue Advertising, an advertising company, from 1/95
Suite 801 to 7/97; Economic Development Special Projects
Battle Creek, MI 49017 Director at Cereal City Development Corporation
from 7/92 to 1/95.
===================================== ========================== ==================================================
Dr. Mark Gulow Trustee Director of North Flight, a medical emergency
Age: 43 and air transportation company, from 7/93 to
401 Peninsula Knolls present.
Traverse City, MI 49686
===================================== ========================== ==================================================
</TABLE>
Trustee fees are Trust expenses. The compensation paid to the Trustees of
the Trust for the fiscal year ended May 31, 1999 is set forth in the following
table.
================================ ============================================
Total Compensation from Trust
Name (the Trust is not in a Fund Complex)
================================ ============================================
Craig M. Pauly $0
================================ ============================================
Brian D. Duddles $1,000
================================ ============================================
Jeffrey T. Nowicki $1,000
================================ ============================================
Dr. Mark Gulow $1,000
================================ ============================================
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. 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 Trust as a factor in
the selection of brokers and dealers to execute portfolio transactions.
<PAGE>
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 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.
For the period June 5, 1998 (inception) to May 31, 1999 the Fund paid
brokerage commissions of $281,902.
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 "Determination of Net
Asset Value" in the Prospectus.
INVESTMENT PERFORMANCE
The Fund may periodically advertise "average annual total return."
"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:
<PAGE>
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
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, 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. The Fund's
average annual total return for the period June 5, 1998 (inception) to May 31,
1999 was 33.14%.
Nonstandardized Total Return
- ----------------------------
The Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from "average
annual total return." A non-standardized 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. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for "average annual total return." In addition, a non-standardized
quotation may be an indication of 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. A non-standardized quotation will always be accompanied by the
Fund's "average annual total return" as described above.
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
Firstar 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 AND ADMINISTRATOR
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 shareholder service functions. In addition, Unified
Fund Services, Inc., in its capacity as fund administrator and fund accountant,
provides the Fund with certain monthly reports, record-keeping and other
management-related services. For its services as administrator, Unified Fund
Services, Inc. receives a monthly fee from the Adviser equal to an annual
average rate of 0.08% of the Fund's average daily net assets, subject to an
annual minimum fee of $17,500. For its services as fund accountant, Unified Fund
Services, Inc. receives a monthly fee from the Adviser equal to an annual
average rate of 0.07% of the Fund's average daily net assets, subject to an
annual minimum fee of $17,500. For the period June 5, 1998 (inception) to May
31, 1999, the Adviser paid Unified Fund Services, Inc., on behalf of the Fund,
$______for fund administration services and $______for fund accounting services.
<PAGE>
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 May 31, 2000. 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
-----------
Unified Management Corporation, 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. Unified Management Corporation
and Unified Fund Services, Inc. are wholly owned subsidiaries of Unified
Financial Services, Inc.
FINANCIAL STATEMENTS
The financial statements and independent auditors' report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the fiscal year
ended May 31, 1999. The Funds will provide the Annual Report without charge at
written request or request by telephone.
Securities Management & Timing Funds
PART C. OTHER INFORMATION
- ------- -----------------
Item 23. Exhibits
- -----------------
(a) Articles of Incorporation. 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.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an
Exhibit to Registrant's Registration Statement, is hereby
incorporated by reference.
(c) Instruments Defining Rights of Security Holders. - None.
(d) Investment Advisory Contracts. Copy of Registrant's
Management Agreement with its Adviser, Securities Management
& Timing, Inc., which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No.2, is hereby
incorporated by reference.
(e) Underwriting Contracts. Copy of Registrant's Underwriting
Agreement with Unified Management Corporation, which was
filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 2, is hereby incorporated by reference.
(f) Bonus or Profit Sharing Contracts. - None.
<PAGE>
(g) Custodian Agreements. Copy of Registrant's Agreement with
the Custodian, Firstar Bank, N.A., which was filed as an
Exhibit to Registrant's Pre-Effective Amendment No. 2, is
hereby incorporated by reference.
(h) Other Material Contracts. - None.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A. which was
filed as an Exhibit to Registrant's Registration
Statement, is hereby incorporated by reference. (ii)
Consent of Brown, Cummins & Brown Co., L.P.A. is filed
herewith.
(j) Other Opinions. Consent of independent public accountants is
filed herewith.
(k) Omitted Financial Statements. - None.
(l) Initial Capital Agreements. Copy of Letter of Initial
Stockholders, which was filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 2, is hereby incorporated by
reference.
(m) Rule 12b-1 Plan. - None.
(n) Financial Date Schedule. - None.
(o) Rule 18f-3 Plan - None.
(p) Power of Attorney.
(i) Power of Attorney for Registrant and Certificate with
respect thereto, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 2, is hereby
incorporated by reference.
(ii) Powers of Attorney for the Trustees and Officers, which
was filed as an Exhibit to Registrant's Pre-Effective
Amendment No. 2, is hereby incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with the Registrant
- --------------------------------------------------------------------------
None.
Item 25. 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 threatened, while in
office or thereafter, by reason of being or
<PAGE>
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 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.
<PAGE>
Item 26. 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 27. Principal Underwriters
- -------- ----------------------
(a) Unified Management Corporation, the Registrant's
distributor, acts as distributor for the following funds:
Industry Leaders Fund The Julius Bear Investment Funds
104 Summit Ave. 330 Madison Ave.
Summit, NJ 07902 New York, NY 10017
Labrador Mutual Fund Milestone Funds
2344 Corte De La Jara 1 Executive Blvd.
Pleasanton, CA 94566 Yonkers, NY
Saratoga Advantage Trust Securities Management & Timing Funds
1501 Franklin Ave. 620 Woodmere Ave. Suite B
Mineola, NY 11501 Traverse City, MI 49686
Sparrow Funds Firstar Select Funds
225 S. Meramec Ave., Suite 732 431 N. Pennsylvania St.
St. Louis, MO 63105 Indianapolis, IN 46204
The Unified Funds
431 N. Pennsylvania St.
Indianapolis, IN 46204
(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 28. Location of Accounts and Records
- ------- ---------------------------------
Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, IN 46204
Will maintain physical possession of the accounts, books, and
other documents required to be maintained by Rule 31a-1(b)(1),
31a-1(b)(2), and 31a-1(b)(4) through 31a-1(b)(11).
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
Will maintain physical possession of the accounts, books, and
other documents required to be maintained by Rule 31a-1(b)(3).
Unified Management Corporation
431 N. Pennsylvania Street
Indianapolis, IN 46204
Will maintain physical possession of the accounts, books, and
other documents required to be maintained by a principal
underwriter under by Rule 31a-1(d).
<PAGE>
Securities Management & Timing, Inc.
620 Woodmere Avenue, Suite B
Traverse City, MI 49686
Will maintain physical possession of the accounts, books, and
other documents required to be maintained by Rule 31a-1(f).
Item 29. Management Services
- ----------------------------
None.
Item 30. Undertakings
- ---------------------
None.
<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 on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on the 21st day of July,
1999.
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
Brian D. Duddles, Trustee
Mark Gulow, Trustee
Jeffrey T. Nowicki, Trustee
By: /s/ Donald S. Mendelsohn
Donald S. Mendelsohn
Attorney-in-Fact
July 21, 1999
<PAGE>
EXHIBIT INDEX
PAGE
1. Consent of Brown, Cummins & Brown Co., L.P.A..................EX-99.B10
2. Consent of McCurdy & Associates, CPA's, Inc...................EX-99.B11
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER
JAMES R. CUMMINS CINCINNATI, OHIO 45202 AARON A. VANDERLAAN
ROBERT S BROWN TELEPHONE (513) 381-2121
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL
LYNNE SKILKEN GILBERT BETTMAN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
July 21, 1999
Securities Management & Timing Funds
620 Woodmere Avenue, Suite B
Traverse City, Michigan 49686
Gentlemen:
A legal opinion that we prepared was filed with your Registration
Statement (the "Legal Opinion"). We hereby give you our consent to incorporate
by reference the Legal Opinion into Post-Effective Amendment No. 1 to your
Registration Statement (the "Amendment"), and consent to all references to us in
the Amendment.
Very truly yours,
/s/ Brown, Cummins & Brown Co., L.P.A.
Brown, Cummins & Brown Co., L.P.A.
BCB/jlm
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated June 22, 1999 and to all references to our firm included in or made
a part of this Post-Effective Amendment No. 1 to the Registration Statement for
Securities Management & Timing Funds.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
July 14, 1999
