ROCHDALE MAGNA PORTFOLIO
ROCHDALE ATLAS PORTFOLIO
570 Lexington Avenue
New York, NY 10022-6837
(212) 702-3500
The Rochdale Magna Portfolio (the "Portfolio") is a mutual fund which
invests primarily in large companies, as measured by market capitalization,
incorporated in the United States. The Portfolio seeks to achieve its investment
objective of long-term capital appreciation by investing in securities of
companies that meet the fundamental criteria incorporated in the proprietary
methodology of Rochdale Investment Management ("Rochdale" or the "Advisor"),
including various valuation and financial attributes.
The Rochdale Atlas Portfolio is a mutual fund with the investment
objective of seeking long-term capital appreciation through investment primarily
in companies incorporated in countries outside of the United States. The
Portfolio seeks to achieve its objective by investing in the most attractive
developed and emerging markets as identified through Rochdale's proprietary
methodology incorporating valuation, financial, economic, and political
attributes.
There can be no assurance that either Portfolio will achieve its
investment objective. This Prospectus sets forth basic information about the
Portfolios that prospective investors should know before investing. It should be
read and retained for future reference. A Statement of Additional Information
dated July 7, 1998 as may be amended from time to time, has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. The
Statement of Additional Information is available without charge upon written
request to the Portfolios at the address given above.
TABLE OF CONTENTS
Fees and Expenses of the Portfolio2 Investment Objective, Policies and
Risks4 Management and Administration12 How to Invest in the
Portfolios14 How to Redeem an Investment in the Portfolios16 Services
Available to the Portfolios' Shareholders17 How the Portfolios' Per
Share Value is Determined18 Distributions and Taxes18 General
Information19
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSECTUS ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Prospectus dated July 7, 1998
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FEES AND EXPENSES OF THE PORTFOLIOS
Expenses are one of several factors to consider when investing in the
Portfolios. The purpose of the following fee table is to provide an
understanding of the various costs and expenses which may be borne directly or
indirectly by an investment in the Portfolios. Actual expenses may vary from
those shown; however, Rochdale will reduce its fees and may absorb or reimburse
the Portfolios for certain expenses to the extent necessary to limit total
annual fund operating expenses to the amounts indicated in the table. Shares
will be redeemed at net asset value per share.
BOTH PORTFOLIOS
Shareholder Transaction Expenses
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees 2.00%*
<TABLE>
<CAPTION>
Maximum Annual Portfolio Operating
Expenses (As a percentage of Rochdale Magna Rochdale Atlas
average net assets) Portfolio Portfolio
<S> <C> <C>
Advisory Fees 1.00% 1.00%
12b-1 Expenses 0.25%** 0.25%**
Other Expenses 1.25%** 1.50**
(after reduction)
Maximum Total Portfolio Operating
Expenses 2.50%** 2.75%**
(after reduction)
</TABLE>
*A fee of 2% of the amount redeemed is charged on redemptions of shares held for
eighteen months or less. The fee is payable to the Portfolios and is intended to
benefit the remaining investors.
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**Rochdale has undertaken to reduce its fees or make payments of fund expenses
to assure that the annual ratios of operating expenses to average net assets
will not exceed 2.50% for the Rochdale Magna Portfolio and 2.75% for the
Rochdale Atlas Portfolio. With ' out Rochdale's undertaking, it is estimated
that "Other Expenses" in the above table would be 1.75% for the Rochdale Magna
Portfolio and 2.00% for the Rochdale Atlas Portfolio and "Total Operating
Expenses" would be 3.00% for the Rochdale Magna Portfolio and 3.25% for the
Rochdale Atlas Portfolio. If Rochdale does waive fees or pay fund expenses, the
Portfolios may reimburse Rochdale within the following three years. See
"Management and Administration."Each Portfolio has adopted a Distribution Plan
under which it may pay Rochdale a fee at an annual rate of up to 0.25% of the
Portfolio's net assets for distribution expenses and services. Over an extended
period of time, a long-term shareholder may pay more, directly and indirectly,
in sales charges and such fees than the maximum sales charge permitted under the
rules of the National Association of Securities Dealers, Inc. ("NASD"). This is
recognized and permitted by the NASD. At this time Rochdale has determined that
no 12b- I fee will be assessed for the first year of the Portfolios' operations.
Example of Portfolio Expenses
This table illustrates the net transaction and operating expenses that
would be incurred for an investment in each Portfolio over different time.
periods assuming a $1,000 investment, a 5% annual return, and redemption at the
end of each time period.
Rochdale
Rochdale Magna Atlas
Portfolio Portfolio
With Without With Without
Redemption Redemption Redemption Redemption
One Year $46 $25 $48 $28
Three Years $78 $78 $85 $85
The Example shown above should not be considered a representation of
past or future expenses and actual expenses may be greater or less than shown.
In addition, federal regulations require the Example to assume a 5% annual
return, but a Portfolio's actual return may be higher or lower. See "Management
of the Portfolios."
The Portfolios are diversified series of Rochdale Investment Trust (the
"Trust"),an open-end management investment company. They are "mutual funds"
offering redeemable shares of beneficial interest. Shares of the Portfolios may
be purchased at their net asset value per share. The minimum initial investment
in each Portfolio is US $25,000 with subsequent investments of US $10,000 or
more. Shares will be redeemed at net asset value (less a redemption fee of 2% on
shares
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redeemed that have been held for eighteen months or less).
INVESTMENT OBJECTIVE, POLICIES AND RISKS
ROCHDALE MAGNA PORTFOLIO
Investment Objective. The Portfolio's investment objective is to seek long-term
capital appreciation. The Portfolio seeks capital appreciation in excess of an
appropriate comparison measured by a broad market index such as the Standard &
Poor's 500 ("S & P 500"). The Portfolio seeks to invest in equity securities of
companies that meet the fundamental criteria incorporated in Rochdale's
proprietary methodology, including various-valuation and financial attributes.
Investments in common stocks are emphasized, but the Portfolio also may buy
other types of equity securities, including preferred stocks, convertible
securities or warrants.
The Portfolio selects securities deemed priced at attractive levels
relative to securities of industry peers and of the broad market. Rochdale's.
company selection process focuses on companies whose securities are trading at
reasonable levels relative to their anticipated growth rates. Our investment
style of seeking well-managed companies at attractive relative valuations is
best described as "GARP" or Growth at a Reasonable Price.
Under normal conditions, the Portfolio seeks to achieve its objective
by investing at least 65% of its total assets in equity securities, primarily
common stocks of domestic large-capitalization companies, defined as those
incorporated within the United States and with a market capitalization in excess
of $1 billion. The Portfolio generally invests the remaining 35% in a similar
manner, but may also invest in depository receipts and securities convertible
into equity securities such as warrants, convertible bonds, debentures or
convertible preferred stocks) of publicly traded companies of any size
worldwide.
The Portfolio may invest up to 25% of its total assets in securities of
companies in foreign developed markets and up to 15% of its total assets in
securities of companies in emerging markets.
See "Foreign Securities and Emerging Markets" below.
While not an objective, the Portfolio uses the S & P 500 Index as the
benchmark for the broad market against which the performance of the Portfolio is
measured. Like all mutual funds, there can be no assurance that the Portfolio's
investment objective will be attained.
Investment Policies. The Portfolio is designed for individuals and institutions
who can benefit from investing in growth companies at reasonable prices for
their large-capitalization domestic equity allocation. It is the policy of the
Portfolio to invest primarily in securities that are listed on a securities
exchange or have an established over-the-counter market.
In connection with the Portfolio's focus on long-term capital appreciation,
Rochdale employs "tax-sensitive" strategies, such as tax-lot accounting and
lower turnover, to manage the Portfolio with timing of sales so as to minimize
the impact to shareholders of short-term capital gains. However, the Portfolio
will dispose of a security, regardless of the time it has been held, to avoid
anticipated reduction of value, or to reduce or eliminate a position in a
security which is no longer believed to offer the potential for suitable gains.
Portfolio turnover is not expected to exceed an annual rate of 50%
under normal market conditions. Rochdale attempts to keep turnover low in order
to reduce trading and brokerage costs which the Portfolio must pay. Higher rates
of portfolio turnover may result in additional brokerage commissions or expenses
to the Portfolio, as well as a reduction in investors' after-tax returns.
Investment Strategy. In managing the Portfolio, Rochdale draws a distinction
between stocks which are efficiently valued by the marketplace and those which
are not. Rochdale seeks to add value through a consistent, disciplined, and
quantitative application of an investment methodology to identify reasonably
priced companies with attractive long term growth characteristics. We seek to
identify excellent companies which are temporarily out of favor but possess
strong growth prospects over the long term as demonstrated by fundamental
factors including earning power, profit margins, revenue growth, asset growth,
and cash flows.
In managing the Portfolio, Rochdale employs a quantitative approach. We
apply a multi-factor process and proprietary measures of valuation to identify
securities that are attractively valued. Quantitative criteria are used in
evaluating a company's potential as a prospective investment opportunity.
Rochdale has developed a proprietary methodology that identifies
attractively valued companies according to its proprietary multi-factor
valuation methodology. The multi-factor methodology is used to evaluate
companies based on their fundamentals, including earnings, revenues, cash flows,
and valuation, and is designed to identify those stocks which satisfy the
Portfolio's long term goal of growth at a reasonable price. In evaluating
companies, the multi- factor methodology incorporates a number of fundamental
factors including the following:
-Revenue Growth
-Profit Margin
-Franchise Margin
-Valuation Metrics
-Discounted Cash Flow
-Price to Earnings Growth Rate
-Price to Sales Ratio
The most attractive companies as determined by the multi-factor methodology are
selected for or retained in the Portfolio. A stock is sold because (a) the
fundamental factors have become unattractive, (b)the valuation exceeds our
reasonable price parameters, (c) the position exceeds our
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diversification parameters, or (d) it is displaced by a more attractive stock.
Companies are evaluated within their respective industries as well as
within the overall investment universe. The Portfolio can invest in any
industry, will hold a broadly diversified portfolio across several industries,
and will not concentrate 25% or more of total assets in any single industry as
an ongoing policy. Under normal market conditions, the Portfolio expects to hold
a minimum of 50 positions, with no maximum number. The Portfolio does not expect
to hold more than 5%, at cost, of its total assets in the securities of any one
issuer.
ROCHDALE ATLAS PORTFOLIO
Investment Objective. The Portfolio's investment objective is long-term capital
appreciation, which it seeks by investing in companies within those countries
which Rochdale has identified as the most attractive among developed and
emerging Foreign markets. A country's relative attractiveness is based on
valuation measures and financial and economic attributes incorporated in
Rochdale's proprietary methodology. The Portfolio seeks capital appreciation in
excess of an appropriately weighted benchmark measuring the performance of
developed and emerging market countries in Rochdale's investment universe. The
Morgan Stanley Capital International ("MSCI") World-ex U.S. Index is used as the
benchmark for the broad market against which the performance of the Portfolio is
measured.
The Portfolio invests in securities of issuers in foreign countries,
both developed and emerging. For a discussion of various risks associated with
investing in foreign and emerging market securities, see "Foreign Securities and
Emerging Markets" at page 9.
The Portfolio maintains investments in at least five markets, except
during defensive periods. For the foreign developed markets, the country
universe from which the Portfolio selects securities includes Canada plus those
countries included in the MSCI Europe, Australasia, and Far East Index ("MSCI
EAFE"), except Malaysia and Portugal, which the Rochdale considers emerging
markets. There may be additional developed countries included in the Portfolio
that may not be classified by MSCI EAFE. For emerging markets, the Portfolio
will generally select securities of companies in countries that are considered
to be emerging by the United Nations or the International Finance Corporation
("IFC"), or are otherwise regarded by their authorities as emerging. Currently,
the countries included in the Portfolio's emerging market universe include
Argentina, Brazil, Chile, Greece, India, Indonesia, Israel, Malaysia, Mexico,
the Philippines, Portugal, South Africa, South Korea, Taiwan, Thailand and
Turkey. In the future, the Portfolio may invest in other emerging market
countries.
Under normal conditions, the Portfolio seeks to achieve its objective
by investing at least 65% of its total assets in equity securities of
foreign-domiciled, publicly traded companies worldwide. Equity securities
include common stocks, sponsored or unsponsored American Depository Receipts
("ADRs"), European Depository Receipts ("EDRs"), and Global Depository Receipts
("GDRs") (collectively "depository receipts"), wan-ants, con ' vertible bonds,
debentures
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and convertible preferred stocks. The Portfolio generally invests the remaining
35% in a similar manner, but may invest those assets in equity or debt
securities of companies in countries worldwide. The Portfolio invests a minimum
of 40%, at cost, in developed market securities and may invest up to 60% in
emerging market securities, as deemed appropriate by Rochdale. It is expected
that the majority of companies whose securities are held by the Portfolio will
have a market capitalization of $200 million or more.
The Portfolio seeks to benefit from economic and other developments in
foreign countries or regions as well as relative valuation differences among
foreign markets. The objective of the Portfolio reflects our belief that
investment opportunities result from evolving long-term international trends
favoring more market-oriented economies, especially markets considered emerging.
This trend may be facilitated by local or international political, economic, or
financial developments that could benefit the capital markets of such countries.
Certain of these countries, which may be in the process of developing more
market-oriented economies, may experience relatively high rates of economic
growth. Other countries, although having relatively mature markets, may also be
in a position to benefit from local or international developments encouraging
greater market orientation and diminishing governmental intervention in economic
affairs.
Investment Policies
The Portfolio is designed for individuals and institutions who can
benefit from allocating a portion of their portfolio to a broader investment
universe comprised of securities in foreign developed and emerging markets.
These markets offer the opportunity to invest in countries whose levels of
economic development differ from that of the United States, or whose markets may
have low correlation with the United States. The companies and countries in
which the Portfolio invests may experience more potential for rapid growth than
companies in the United States. In addition, these companies, when combined with
an investors other investments, may broaden portfolio representation in a manner
that could lead to lower overall portfolio volatility. Rochdale believes that
the portion of an investor's portfolio allocated to foreign investing should be
made expecting to remain invested for five or more years.
Rochdale will change the composition of the Portfolio as the relative
attractiveness of countries shifts. This may at times cause the Portfolio to
undergo changes as a result of conditions in the financial markets or economies
ofthe foreign developed and emerging markets. Although the objective of the
Portfolio is long-term capital appreciation, the Portfolio will dispose of a
security, regardless of the time it has been held, to avoid anticipated
reduction in value, or to reduce or eliminate a position in a security which is
no longer believed to offer the potential for suitable gains. Portfolio turnover
is not expected to exceed an annual rate of 1 00% under normal circumstances.
Higher rates of portfolio turnover may result in additional brokerage
commissions or expenses to the Portfolio, as well as a reduction in investors'
after-tax returns.
Investment Strategy. In managing the Portfolio, Rochdale focuses on those
countries within each category, foreign developed or emerging markets, that
appear attractively valued relative to other
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countries within that group. Rochdale employs a proprietary quantitative
methodology comprising several valuation, financial, and economic factors for
each country to arrive at a composite rating for that country which takes each
of these factors into account.
The factors in this process include:
-Price to Book Value
-Price to Earnings, Trailing
-Price to Earnings, Forecasted
-Earnings Yield Gap
-GDP Growth Rate Forecast
-Current Account to GDP
-Revision Ratio
The methodology employed ranks each of the countries on a periodic
basis. Based on the rankings for each country, the Portfolio allocates a certain
percentage of the portfolio to those higher ranked countries. The weighting
allocated to each country is determined by a proprietary method which takes into
account the market capitalization and the composition of the countries selected
by the Portfolio. Country selection process tends to focus on those countries
that are attractive from a valuation perspective, and thus to countries that may
be experiencing or have experienced declines in stock market value or economic
growth in recent periods. The Portfolio invests in companies representing a
minimum of five countries and can be expected to be invested in up to 15 or more
countries in its portfolio under normal conditions.
A portfolio optimization process determines the specific securities
that are selected from each country to represent each selected country's return.
Factors used to select stocks within the countries include:
-Market capitalization
-Liquidity
-Volatility
-Growth
-Earnings/Price
-Industry
The Portfolio can invest in any industry, will seek to hold a broadly
diversified portfolio across several industries, and will not concentrate 25% or
more of total assets in any single industry as an ongoing policy.
RISK FACTORS
All investments involve risk, and there can be no guarantee against
loss resulting from an investment in the Portfolios, nor can there by any
assurance that the Portfolios' investment objectives
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will be attained. As with any investment in securities, the value of and return
from an investment in the Portfolios can decrease as well as increase depending
on a variety of factors which may affect the value and return generated by the
Portfolios' portfolio securities, including general economic conditions and
market factors. To the extent the Portfolios invest in undervalued companies,
there may be a substantial time period before the securities of such companies
return to price levels believed by Rochdale to represent their true value. To
the extent the Portfolios invest in fixed-income securities, their value
generally rises during periods of falling interest rates but falls during
periods of rising interest rates, and are subject to credit risk relative to the
ability of the issuer to repay principal and interest. An investment in the
Portfolios is therefore more appropriate for long-term investors who can bear
the risk of short-term fluctuations in principal and net asset value.
Foreign Securities and Emerging Markets
Both Portfolios may invest, and the Rochdale Atlas Portfolio will
emphasize investments, in securities of foreign issuers, including those of
companies in emerging foreign markets. There are various risks associated with
such investments.
Since foreign securities are normally denominated and traded in foreign
currencies, the value of fund assets may be affected favorably or unfavorably by
changes in currency exchange rates relative to the U.S. dollar. There may be
less information publicly available about a foreign issuer, and foreign issuers
may not be subject to accounting standards comparable to those in the United
States. Currently hedging is not expected as a normal part of the Portfolios'
operations.
The securities of some foreign companies are less liquid, and at times
more volatile, than securities of comparable U.S. companies. Foreign brokerage
commissions and other fees are also generally higher than in the United States.
Foreign settlement procedures and trade regulations may involve certain risks,
such as delay in payment or delivery of securities or in the recovery of find
assets held abroad, and expenses not present in the settlement of domestic
investments.
In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability and diplomatic developments that
could affect the value of investments in certain foreign countries.
Legal remedies available to investors in certain foreign countries may
be limited. The laws of some foreign countries may limit investments in
securities of certain issuers located in those foreign countries. Special tax
considerations apply to foreign securities.
Prior Government approval for foreign investments may be required under
certain circumstances in some foreign countries, and the extent of foreign
investment in foreign companies may be subject to limitation. Foreign ownership
limitations also may be imposed by the charters of individual companies to
prevent, among other concerns, violation of foreign investment limitations.
Repatriation of investment income, capital and the proceeds of sales by foreign
investors
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may require governmental registration and approval in some foreign countries. A
Portfolio could be adversely affected by delays in, or a refusal to grant, any
required governmental approval for such repatriation.
The risks described above are typically greater in less developed
nations, sometimes referred to as "emerging markets." Political and economic
structures in these countries may be in their infancy and developing rapidly,
causing instability. High rates of inflation may adversely affect the economies
and securities markets of such countries. In addition, the small size, limited
trading volume, and relative inexperience of the people managing and working in
the securities markets in these countries may make investments in such countries
less liquid and more volatile than investments in more developed countries.
Investments in emerging markets are regarded as speculative, and in
non-geographically diverse emerging markets as especially speculative.
OTHER INVESTMENT PRACTICES USED BY THE PORTFOLIOS
Short-term Investments
At times, the Portfolios may invest in short-term cash-equivalent
securities. These consist of high quality debt obligations maturing in one year
or less from the date of purchase, such as securities issued by the U.S.
Government, its agencies and instrumentalities, certificates of deposit,
banker's acceptances and commercial paper. High quality means that the
obligations have been rated at least A-1 by S&P or Prime-I by Moody's Investor's
Service, Inc. (Moody's), that the issuer has an outstanding issue of debt
securities rated at least AA by S&P or Aa by Moody's, or are of comparable
quality in Rochdale's opinion.
Fixed-Income Securities
Although equity securities are the primary focus for the Portfolios,
they may also hold fixed-income securities when Rochdale believes that
opportunities for long-term capital growth exist. The Portfolios' investments in
corporate fixed-income securities of domestic and foreign issuers are limited to
corporate debt securities (bonds, debentures, notes and other similar corporate
debt instruments) which meet the minimum ratings criteria set forth for the
Portfolio, or, if unrated, are in Rochdale's view, comparable in quality to
corporate debt securities in which the Portfolio may invest.
The Portfolios may invest up to 25% of their assets in securities rated
B or better by Moody's or Standard & Poor's. Securities rated BBB or better by S
& P or Baa and higher by Moody's are considered investment grade, but those
rated BBB or Baa may have speculative characteristics and changes in economic
conditions may lead to a weakened capacity to make principal and interest
payments than is the case with higher-rated securities.
The Portfolios may invest in securities rated below investment grade by
Moody's and S &
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P, but not rated below B. These securities have speculative characteristics,
including the possibility of default or bankruptcy of their issuers, market
price volatility based on interest rate sensitivity, and limited liquidity of
their trading markets. Because of these characteristics, the market for such
securities could be disrupted by an economic downturn adversely affecting the
issuer's ability to repay principal and interest, the security's market value,
and the portfolios' net asset values.
Investment Companies
Consistent with the provisions of the Investment Company Act of 1940
(the "1940 Act"), the Portfolios may invest in the securities of other
investment companies. As a shareholder 'm any investment company, a Portfolio
will bear its ratable share of such company's expenses, including its advisory
and administration fees.
Securities Lending
Each Portfolio is authorized to make loans of its portfolio securities
to broker-dealers or other institutional investors in an amount not exceeding 33
1/3% of its net assets. The borrower must maintain collateral equal to at least
100% of the value of the borrowed securities, plus any accrued interest. The
Portfolio will receive any interest or dividends paid on the loaned securities
and a fee or portion of the interest earned on the collateral. The risks in
lending portfolio securities include possible delay in receiving additional
collateral or in recovery of the securities, or possible limitation or loss of
rights in the collateral should the borrower fail financially. The Portfolio
will make loans of securities only to firms deemed by Rochdale to be of good
standing and fully creditworthy.
Year 2000
Like other mutual funds and financial and business organizations around
the world, the Portfolios could be adversely affected if the computer systems
used by them, Rochdale and other service providers and entities with computer
systems that are linked to Portfolio records 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 Portfolios and Advisor are
taking steps that are reasonably designed to address the Year 2000 issue with
respect to the computer systems they use and to obtain satisfactory assurances
that comparable steps are being taken by each of the Portfolios' other, major
service providers. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Portfolios.
The Portfolios have adopted certain investment restrictions, which are
described fully in the Statement of Additional Information. Like the Portfolios'
investment objectives, certain of these restrictions are fundamental and may be
changed only by a majority vote of a Portfolio's outstanding shares.
MANAGEMENT AND ADMINISTRATION
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The Board of Trustees of the Trust establishes the Portfolios' policies
and supervises and reviews the management of the Portfolios.
Investment Advisor
Rochdale Investment Management Inc. 570 Lexington Avenue, New York, NY
10022-6837, acts as investment advisor to the Portfolios pursuant to the
Investment Advisory Agreement. Rochdale provides investment advisory services to
individual and institutional investors and manages more than $500 million in
assets. Rochdale was founded in 1986 and is controlled by Mr. Carl Acebes.
Rochdale is affiliated with Rochdale Securities Corporation, a New York Stock
Exchange member firm serving major corporate pension funds.
Mr. Carl Acebes and Mr. Garrett R. D'Alessandro, CFA, are the
Portfolios' portfolio managers. Mr. Acebes has been Chairman and Chief
Investment Officer of Rochdale since its founding. Mr. D'Alessandro, who joined
Rochdale in 1986, is the fn-m's President, Chief Executive Officer and Director
of Research. Mr. Acebes and Mr. D'Alessandro determine those companies that
satisfy the firm's investment criteria for inclusion in the Portfolios' holdings
and direct the efforts of the fn-m's research analysts, as well as develop
Rochdale's proprietary analysis frameworks and multi-factor models.
Rochdale provides the Portfolios with advice on buying and selling
securities, manages the investments of the Portfolios, furnishes the Portfolios
with office space, and provides certain of the personnel needed by the
Portfolios. As compensation, each Portfolio pays Rochdale a monthly management
fee (accrued daily) based upon the average daily net assets of the Portfolio at
the rate of 1.00% annually.
Investment Company Administration Corporation (the "Administrator")
acts as the Portfolios' Administrator under an Administration Agreement. Under
that agreement, the Administrator prepares various federal and state regulatory
filings, reports and returns for the Portfolios; prepares reports and materials
to be supplied to the trustees; monitors the activities of the Portfolios'
custodian, transfer agent and accountants; coordinates the preparation and
payment of Portfolio expenses; and reviews the Portfolios' expense accruals. For
its services, the Administrator receives a monthly fee from each Portfolio at
the rate of 0.10% annually of average net assets, with a minimum annual fee per
Portfolio of $40,000.
Each Portfolio is responsible for its own operating expenses. Rochdale
has agreed to limit the Rochdale Magna Portfolio's operating expenses to assure
that its annual ratio of operating expenses to average net assets ("expense
ratio") will not exceed 2.50% and the Rochdale Atlas Portfolio's expense ratio
so that it will not exceed 2.75%. Rochdale also may waive fees or reimburse
additional amounts to the Portfolios at any time in order to reduce the
Portfolios' expenses. Reductions made by Rochdale in its fees or payments or
reimbursement of expenses which are the Portfolios' obligation are subject to
reimbursement within the following three years by the Portfolios provided that
the Portfolios are able to do so and remain in compliance with applicable
expense
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limitations then in effect.
Rochdale considers a number of factors in determining which brokers or
dealers to use for the Portfolios' portfolio transactions. While these are more
fully discussed in the Statement of Additional Information, the factors include,
but are not limited to, the reasonableness of commissions, quality of services
and execution, and the availability of research which Rochdale may lawfully and
appropriately use in its investment management and advisory capacities. Provided
the Portfolio receives prompt execution at competitive prices, Rochdale may
consider the sale of Portfolio shares as a factor in selecting broker-dealers
for the Portfolios' portfolio transactions. Subject to overall requirements of
obtaining the best combination of price, execution, and research services on a
particular transaction, the Portfolios intend to place eligible portfolio
transactions through their affiliated broker-dealer, Rochdale Securities
Corporation, under procedures adopted by the Board of Trustees pursuant to the
Investment Company Act of 1940 (the "1940 Act") and related rules.
DISTRIBUTION PLAN
The Portfolios have adopted a distribution plan pursuant to Rule 12b-
1. The Plan provides that the Portfolios may pay for distribution and related
expenses of up to an annual rate of 0.25% of each Portfolio's average net assets
to Rochdale as distributor. Expenses permitted to be paid by the Portfolios
under the Plan include: preparation, printing and mailing of prospectuses;
shareholder reports such as semi-annual and annual reports, performance reports
and newsletters; sales literature and other promotional material to prospective
investors; direct mail solicitation; advertising; public relations; compensation
of sales personnel, advisors or other third parties for their assistance with
respect to the distribution of the Portfolios' shares; payments to financial
intermediaries for shareholder support; administrative and accounting services
with respect to Portfolio shareholders; and such other expenses related to the
distribution of the Portfolios' shares. Rochdale does not expect to assess a
12b- I fee during the first year of Portfolio operations.
Plan payments will be reviewed by the Trustees. However, it is possible
that at times the amount of Rochdale's compensation could exceed Rochdale's
distribution expenses, resulting in a profit to Rochdale. If the Plan is
terminated, the Portfolios will not be required to make payments for expenses
incurred after the termination.
HOW TO INVEST IN THE FUNDS
The minimum initial investment in each Portfolio is $25,000. Subsequent
investments must be at least $ 10,000. Rochdale also acts as Distributor of the
Portfolio's shares. Rochdale may, at its discretion, waive the minimum
investment requirements. In addition to cash purchases, subj ect to Rochdale's
discretion, shares may be purchased by tendering payment in kind in the form of
shares of stock, bonds or other securities, provided that any such tendered
security is readily marketable, its acquisition is consistent with the
particular Portfolio's objective and it is otherwise
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acceptable to Rochdale.
Shares of the Portfolios are offered continuously for purchase at their
net asset value per share next determined after a purchase order is received.
Orders received after the time of the determination of a Portfolio's net asset
value will be entered at the next calculated net asset value. Investors may be
charged a fee by a broker or agent if they use such intermediaries to effect a
transaction.
Investors may purchase shares of the Portfolios by check or wire: By
Check: For initial investments, an investor should complete the Portfolios'
Account Application (included with this Prospectus). The completed application,
together with a check payable to "Rochdale Magna Portfolio" or the "Rochdale
Atlas Portfolio" should be mailed to the Portfolios at P.O. Box____ Boston, MA
02105-____ . For purchases by overnight mail, please contact the Portfolio at
(212) 702-3500 for instructions. Investment advisory clients of Rochdale should
contact Rochdale directly for investment instructions.
A stub is attached to the account statement sent to shareholders after
each transaction. For subsequent investments the stub should be detached from
the statement and, together with a check payable to "Rochdale Magna Portfolio,"
or "Rochdale Atlas Portfolio" and mailed in the envelope provided at the address
indicated above. The investor's account number should be written on the check.
Investment advisory clients of Rochdale should contact Rochdale directly
regarding subsequent investments.
By Wire: For initial investments, before wiring the Portfolios an investor
should call (800) 915-6566 between the hours of 8:00 a.m. and 4:00 p.m. Eastern
time, on a day when the New York Stock Exchange ("NYSE") is open for trading in
order to receive an account number. It is necessary to notify the Portfolios
prior to each wire purchase. Wires sent without notifying the Portfolios could
result in a delay of the effective date of purchase. The Portfolios' Transfer
Agent will request the investor's name, address, taxpayer identification number,
amount being wired and wiring bank. The investor should then instruct the wiring
bank to transfer funds by wire to : State Street Bank, ABA #01 1000028, for
credit to Rochdale Magna Portfolio, DDA #58407743 or Rochdale Atlas Portfolio,
DDA. #58407750, for further credit to [investor's name and account number]. The
investor should also ensure that the wiring bank includes the name of the
Portfolio and the account number with the wire. If the funds are received by the
Transfer Agent prior to the time that a Portfolio's net asset value is
calculated, the funds will be invested on that day; otherwise they will be
invested on the next business day. The investor should also write the account
number provided by the Transfer Agent on the Application Form and mail the Form
promptly to the Transfer Agent.
It is essential that complete information regarding the investor's
account be included in all wire instructions in order to facilitate prompt and
accurate handling of investments. Investors may obtain further information from
the Transfer Agent about remitting Portfolios in this manner and from their own
banks about any fees that may be imposed.
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Other Purchase Information. Payments of redemption proceeds will not be made
with respect to any shares of the Portfolios purchased with an initial
investment made by wire until one business day after the completed Account
Application is 'received by the Portfolios. All investments must be made in U.S.
dollars and, to avoid fees and delays, checks should be drawn only on U.S. banks
and should not be made by third party check. A charge may be imposed if any
check used for investment does not clear. The Portfolios and the Distributor
reserve the right to reject any purchase order in whole or in part.
If a fully completed application or wire order, together with payment
made directly to the order of the Portfolio in U.S. dollars, is received by the
Transfer Agent by the close of trading on the NYSE (currently 4:00 p.m., New
York City time), Portfolio shares will be purchased at the offering price
determined as of the close of trading on that day. Otherwise, Portfolio shares
will be purchased at the offering price determined as of the close of trading on
the NYSE on the next business day.
Federal tax law requires that investors provide a certified Taxpayer
Identification Number and certain other required certifications upon opening or
reopening an account in order to avoid backup withholding of taxes at the
maximum rate, currently 31% on taxable distributions and proceeds of
redemptions. See the Portfolios' Account Application for further information
concerning this requirement.
The Portfolios are not required to issue share certificates. All shares
are normally held in non-cerficated form registered on the books of the
Portfolios and the Portfolios' Transfer Agent for the account of the
shareholder.
HOW TO REDEEM AN INVESTMENT IN THE FUNDS
Shareholders have the right to have all or any portion of the outstanding shares
in their account redeemed at their current net asset value on each day the NYSE
is open for trading, subject to a 2% redemption fee imposed on redemptions of
shares within eighteen months of purchase. This fee is paid to the Portfolios
and is designed to reduce transaction costs and disruptive effects of short-term
investment in the Portfolios. The redemption price is the net asset value per
share next determined after the shares are validly tendered for redemption.
Direct Redemption. A written request for redemption must be received by the
Portfolios' Transfer Agent in order to constitute a valid tender for redemption.
Requests for redemption of fund shares should be mailed to the Portfolios at
P.O. Box_____ ., Boston, MA 02105-_____ . To protect the Portfolios and their
shareholders, a signature guarantee is required for certain transactions,
including redemptions of amounts of $5,000 or more. Signature(s) on the
redemption request must be guaranteed by an "eligible guarantor institution" as
defined in the federal securities laws. These institutions include banks,
broker-dealers, credit unions and savings institutions. A broker-dealer
guaranteeing signatures must be a member of a clearing corporation or maintain
net capital of at least
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<PAGE>
$100,000. Credit unions must be authorized to issue signature guarantees.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. A notary public is not an
acceptable guarantor. Investment advisory clients of Rochdale should contact
Rochdale directly for instructions on how to redeem shares.
Telephone Redemption. Shareholders who complete the Redemption. by Telephone
portion of the Portfolios' Account Application may redeem shares on any business
day the NYSE is open by calling the Portfolios Transfer Agent at (800) 915-6566
between the hours of 8:00 a.m. and 4:00 p.m. Eastern time. Redemption proceeds
will be mailed to the address of record or wired at the shareholder's direction
the next business day to the predesignated account. The minimum amount that may
be wired is $ 1,000 (wire charges, if any, will be deducted from redemption
proceeds).
By establishing telephone redemption privileges, a shareholder
authorizes the Portfolios and the Transfer Agent to act upon the instruction of
any person by telephone to redeem from the account for which such service has
been authorized and send the proceeds to the address of record on the account or
transfer the proceeds to the bank account designated in the Authorization. The
Portfolios and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
such instructions. If these procedures are followed, neither the Portfolios nor
their agents will be liable for any loss, liability or cost which results from
acting upon instructions of a person believed to be a shareholder with respect
to the telephone redemption privilege. The Portfolios may change, modify, or
terminate these privileges at any time upon at least 60 days' notice to
shareholders.
Shareholders may request telephone redemption after an account is
opened; however, the authorization form will require a separate signature
guarantee. Shareholders may experience delays in exercising telephone redemption
privileges during periods of abnormal market activity.
Other Redemption Information. Payment of redemption proceeds will be made
promptly, but not later than seven days after the receipt of all documents in
proper form, including a written redemption order with appropriate signature
guarantee in cases where telephone redemption privileges are not being utilized.
The Portfolios may suspend the right of redemption under certain extraordinary
circumstances in accordance with the Rules of the SEC. In the case of shares
purchased by check and redeemed shortly after purchase, the Portfolios will not
mail redemption proceeds until they have been notified that the check used for
the purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal Portfolios wire. A redemption may result in
recognition of a gain or loss for federal income tax purposes.
Due to the relatively high cost of maintaining smaller accounts, the
Portfolios reserve the right to redeem shares in any account, other than
retirement plan or Uniform Gift to Minors Act accounts, if at any time, due to
redemptions by the shareholder, the total value of a shareholder's account does
not equal at least $ 10,000. If the Portfolios determine to make such an
involuntary
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<PAGE>
redemption, the shareholder will first be notified that the value of the account
is less than $1 0,000 and will be allowed 30 days to make an additional
investment to bring the value of his account to at least $10,000 before the
Portfolios take any action.
SERVICES AVAILABLE TO THE PORTFOLIOS' SHAREHOLDERS
Retirement Plans. The Portfolios offer prototype Individual Retirement Account
("IRA") and Roth IRA plans, and information is available from the Distributor or
from your securities dealer with respect to other retirement plans offered.
Investors should consult a tax adviser before establishing any retirement plan.
Automatic Investment Plan. For the convenience of shareholders, the Portfolios
offer an automatic investment plan whereby a preauthorized amount is
automatically drawn on the shareholder's personal checking account each month
(but not less than $1000). Upon receipt of the withdrawn funds, a Portfolio
automatically invests the money in additional shares of the Portfolio at the
current offering price. Applications for this service are available from the
Transfer Agent. There is no charge by the Portfolios for this service. The
Portfolios may terminate or modify this privilege at any time, and shareholders
may terminate their participation by notifying the Transfer Agent in writing,
sufficiently in advance of the next scheduled withdrawal.
Automatic Withdrawals. As another convenience, the Portfolios offer a Systematic
Withdrawal Program whereby shareholders may request that a check drawn in a
predetermined amount be sent to them each month or calendar quarter. A
shareholder's account in a Portfolio must have shares with a value of at least
$25,000 in order to start a Systematic Withdrawal Program, and the minimum
amount that may be withdrawn each month or quarter under the Systematic
Withdrawal Program is $1000. This Program may be terminated or modified by a
shareholder or the Portfolios at any time without charge or penalty.
A withdrawal under the Systematic Withdrawal Program is treated as a
redemption ofshares, is subject to applicable redemption fees, and may result in
a gain or loss for federal income tax purposes. In addition, if the amounts
withdrawn exceed the dividends credited to the shareholder's account, the
account ultimately may be depleted.
HOW THE PORTFOLIOS' PER SHARE VALUE IS DETERMINED
The net asset value of a Portfolio share is determined once daily as of
the close of public trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern time) on each day that Exchange is open for trading. Net asset value per
share is calculated by dividing the value of each Portfolio's total assets, less
its liabilities, by the number of Portfolio shares outstanding.
Portfolio securities are valued using current market values, if
available. Securities for which market quotations are not readily available are
valued at fair values as determined in good faith by or under the supervision of
the Trust's officers in accordance with methods which are specifically
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<PAGE>
authorized by the Board of Trustees. Short-term obligations with remaining
maturities of 60 days or less are valued at amortized cost as reflecting fair
value.
The value of securities denominated in foreign currencies and traded on
foreign exchanges or in foreign markets will be translated into U.S. dollars at
the last price of their respective currency denomination against U.S. dollars
quoted by a major bank or, if no such quotation is available, at the rate of
exchange determined in accordance with policies established in good faith by the
Trustees. Because the value of securities denominated in foreign currencies must
be translated into U.S. dollars, fluctuation in the value of such currencies in
relation to the U.S. dollar may affect the value of the Portfolios' shares even
without any change in the foreign currency denominated values of such
securities.
DISTRIBUTIONS AND TAXES
Dividends and Distributions. Any dividends from net investment income (which
includes realized short-term capital gains) are declared and paid at least
annually. Any undistributed long-term net capital gains realized during the
12-month period ended each October 3 1, as well as any additional undistributed
capital gains realized during the Portfolios' fiscal year, will also be
distributed to shareholders on or about December 31 of each year.
Dividends and capital gain distributions (net of any required tax
withholding) are automatically reinvested in additional shares of a Portfolio at
the net asset value per share on the reinvestment date unless the shareholder
has previously requested in writing to the Transfer Agent that distributions be
made in cash. Any dividend or distribution paid by a Portfolio has the effect of
reducing the net asset value per share on the reinvestment date by the amount of
the dividend or distribution. Investors should note that a dividend or
distribution paid on shares purchased shortly before such dividend or
distribution was declared will be' subject to income taxes as discussed below
even though the dividend or distribution represents, in substance, a partial
return of capital to the shareholder.
Taxes. The Portfolios intend to qualify and elect to be treated as a regulated
investment companies under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As long as the Portfolios continue to so qualify, and as
long as they distribute all of their income each year to the shareholders, the
Portfolios will not be subject to any federal income tax or excise taxes based
on net income. Distributions made by the Portfolios will be taxable to
shareholders whether received in shares (through dividend reinvestment) or in
cash. Distributions derived from net investment income, including net short-term
capital gains, are taxable to shareholders as ordinary income. Any long-term or
mid-term capital gain distributions are taxable to shareholders as long-term
capital gains, respectively, regardless of the length of time shares have been
held. Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December.
Shareholders will be informed annually of the amount and nature of the
Portfolios' distributions. Additional information about taxes is set forth in
the Statement of Additional Information. Shareholders should consult their own
advisers concerning federal, state
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and local tax consequences of investing in the Portfolios.
GENERAL INFORMATION
The Trust. The Portfolios are series of Rochdale Investment Trust (the "Trust").
The Trust was organized as a Delaware business trust on March 10, 1998. The
Agreement and Declaration of Trust permits the Board of Trustees to issue an
unlimited number of full and fractional shares of beneficial interest, without
par value, which may be issued in any number of series. The Board of Trustees
may from time to time classify shares and issue other series, the assets and
liabilities of which will be separate and distinct from any other series.
Shareholder Rights. Shares issued by the Portfolios have no preemptive,
conversion, or subscription rights. Shareholders have equal and exclusive rights
as to dividends and distributions as declared by each Portfolio and to the net
assets of each Portfolio upon liquidation or dissolution. Voting rights are not
cumulative, so that the holders of more than 50% of the shares voting in any
election of Trustees can, if they so choose, elect all of the Trustees. While
the Trust is not required and does not intend to hold annual meetings of
shareholders, such meetings may be called by the Trustees in their discretion,
or upon demand by the holders of 10% or more of the outstanding shares of the
Trust for the purpose of electing or removing Trustees.
Performance Information. From time to time, the Portfolios may publish total
return in advertisements and communications to investors. Total return
information will include a Portfolio's average annual compounded rate of return
over the most recent year and over the period from the Portfolio's inception of
operations. The Portfolios may also advertise aggregate and average total return
information over different periods of time. A Portfolio's total return will be
based upon the value of the shares acquired through a hypothetical $ 1,000
investment at the beginning of the specified period and the net asset value of
such shares at the end of the period, assuming reinvestment of all
distributions. Total return figures will reflect all recurring charges against
Portfolio income, and any applicable sales charges. Investors should note that
the investment results of the Portfolio will fluctuate over time, and any
presentation of a Portfolio's total return for any prior period should not be
considered as a representation of what an investor's total return may be in any
future period.
Custodian and Transfer Agent; Shareholder Inquiries. State Street Bank & Trust
Company serves as custodian of the Portfolios' assets and its transfer and
dividend disbursing agent. Shareholder inquiries should be directed to the
Portfolios at 212-702-3500.
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Advisor and Distributor
Rochdale Investment Management Inc. 570 Lexington Ave.
New York, NY 10022-6837
Custodian, Transfer and Dividend Disbursing Agent
State Street Bank & Trust Company
1776 Heritage Drive
N. Quincy, MA 02171
Auditors
Tait, Weller & Baker 8 Penn Center Plaza Philadelphia, PA 19103
Legal Counsel
Paul, Hastings, Janofsky & Walker LLP 345 California St.
San Francisco, CA 94104
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STATEMENT OF ADDITIONAL INFORMATION
July 7, 1998
ROCHDALE MAGNA PORTFOLIO
ROCHDALE ATLAS PORTFOLIO
570 Lexington Avenue
New York, NY 10022-6837
(212) 702-3500
This Statement of Additional Information is not a prospectus and it
should be read in conjunction with the prospectus of the Rochdale Magna
Portfolio and the Rochdale Atlas Portfolio (the "Portfolios"). A copy of the
prospectus of the Portfolios dated July 7, 1998 is available by calling the
number listed above or (212) 633-9700.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
The Trust.....................................................................................................................B-2
Investment Objective and Policies............................................................................................B-2
Investment Restrictions......................................................................................................B-5
Distributions and Tax Information...........................................................................................B-6
Trustees and Executive Officers................................................................................................B-8
The Portfolio's Investment Advisor..........................................................................................B-9
The Portfolio's Administrator................................................................................................B-10
The Portfolio's Distributor........................................... .......................................................B-10
Execution of Portfolio Transactions.........................................................................................B-11
Additional Purchase and Redemption Information................................................................B-12
Determination of Share Price...................................................................................................B-13
Performance Information......................................................................................................B-14
General Information...........................................................................................................B-15
Statement of Assets and Liabilities...........................................................................................B-16
</TABLE>
<PAGE>
THE TRUST
Rochdale Investment Trust (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust may consist
of various series which represent separate investment portfolios. This Statement
of Additional Information relates only to the initial series of the Trust, the
Rochdale Magna Portfolio and Rochdale Atlas Portfolio. Rochdale Investment
Management Inc. ("Rochdale") is the Portfolio's investment advisor.
INVESTMENT OBJECTIVE AND POLICIES
The Portfolios are mutual funds with an investment objectives of
long-term capital appreciation. The following discussion supplements the
discussion of the Portfolios' investment objectives and policies as set forth in
the Prospectus. There can be no assurance that the objectives of the Portfolios
will be attained.
Depositary Receipts
The Portfolios may invest in securities of foreign issuers in the form
of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receipts ("GDRs") or other securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities for which they may be
exchanged. The Portfolios may also hold American Depository Shares ("ADSs"),
which are similar to ADRs. ADRs and ADSs are typically issued by an American
bank or trust company and evidence ownership of underlying securities issued by
a foreign corporation. EDRs, which are sometimes referred to as Continental
Depository Receipts ("CDRs"), are receipts issued in Europe, typically by
foreign banks and trust companies that evidence ownership of either foreign or
domestic securities. Generally, ADRs in registered form are designed for use in
U.S. securities markets. For purposes of the Portfolios' investment policies,
the Portfolios' investments in ADRs, ADSs, EDRs, GDRs and CDRs will be deemed to
be investments in the equity securities representing securities of foreign
issuers into which they may be converted.
Repurchase Agreements
The Portfolios may enter into repurchase agreements in order to earn
income on available cash, or as a defensive investment in which the purchaser
(i.e., the Portfolio) acquires ownership of a U.S. Government security (which
may be of any maturity) and the seller agrees to repurchase the obligation at a
future time at a set price, thereby determining the yield during the purchaser's
holding period (usually not more than seven days from the date of purchase). Any
repurchase transaction in which a Portfolio engages will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, a Portfolio could experience both delays in liquidating the underlying
security and losses in value. However, the Portfolios intend to enter into
repurchase agreements only with banks with assets of $500 million or more that
are insured by the Federal Deposit Insurance Corporation and with the most
credit worthy registered securities dealers with all such transactions governed
by procedures adopted and regularly reviewed by the Trust's Board of Trustees.
Rochdale monitors the creditworthiness of the banks and securities dealers with
whom the Portfolios engage in repurchase transactions.
If the market value of the U.S. Government security subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Portfolios will direct the seller of the U.S. Government security
to deliver additional securities so that the market value of all securities
subject to the repurchase agreement will equal or exceed the repurchase price.
It is possible that the Portfolios might be unsuccessful in seeking to impose on
the seller a contractual obligation to deliver additional securities.
When-Issued Securities
Each Portfolio may from time to time purchase securities on a
"when-issued" basis. The price of such securities, which may be expressed in
yield terms, is fixed at the time the commitment to purchase is made, but
delivery and payment for the when-issued securities take place at a later date.
Normally, the settlement date occurs within one month of the purchase; during
the period between purchase and settlement, no payment is made by the Portfolio
to the issuer and no interest accrues to the Portfolio. To the extent that
assets of the Portfolio are held in cash pending the settlement of a purchase of
securities, the Portfolio would earn no income. While when-issued securities may
be sold prior to the settlement date, the Portfolios intend to purchase such
securities with the purpose of actually acquiring them unless a sale appears
desirable for investment reasons. At the time a Portfolio makes the commitment
to purchase a security on a when-issued basis, it will record the transaction
and reflect the value of the security in determining its net asset value. The
market value of the when-issued securities may be more or less than the purchase
price. Rochdale does not believe that a Portfolio's net asset value or income
will be adversely affected by the purchase of securities on a when-issued basis.
The Portfolios will segregate liquid assets equal in value to commitments for
when-issued securities, which reduces but does not eliminate leverage.
Options and Futures
The Portfolios may purchase and write call and put options on
securities, securities indexes, and foreign currencies, and enter into futures
contracts and use options on futures contracts. The Portfolios may use these
techniques to hedge against changes in securities prices, foreign currency
exchange rates or as part of its overall investment strategy. The Portfolios
segregate liquid assets to cover obligations under options and futures contracts
to reduce leveraging.
The Portfolios may buy or sell interest rate futures contracts and
options on interest rate futures contracts for the purpose of hedging against
changes in the value of securities owned. The Portfolios will not enter into
futures contracts or options thereon for non-hedging purposes if, immediately
thereafter, the aggregate initial margin deposits on a Portfolio's futures
positions and premiums paid for options thereon would exceed 5% of the
liquidation value of the Portfolio's total assets.
There are risks involved in the use of options and futures, including
the risk that the prices of the hedging vehicles may not correlate perfectly
with the securities held by the Portfolios. This may cause the futures or
options to react differently from the Portfolios' portfolio securities to market
changes. In addition, Rochdale could be incorrect in its expectations for the
direction or extent of market movements. In these events, the Portfolios could
lose money on the options of futures contracts. It is also not certain that a
secondary market for positions in options or futures contracts will exist at all
times, although Rochdale will consider liquidity before entering into these
transactions.
Illiquid Securities
Each Portfolio may invest up to 15% of its net assets in illiquid
securities, including (i) securities for which there is no readily available
market; (ii) securities the disposition of which would be subject to legal
restrictions (so called "restricted securities"); and (iii) repurchase
agreements having more than seven days to maturity. A considerable period of
time may elapse between a Portfolio's decision to dispose of such securities and
the time when the Portfolio is able to dispose of them, during which time the
value of the securities could decline.
Restricted securities issued pursuant to Rule 144A under the Securities
Act of 1933 that have a readily available market are not deemed illiquid for
purposes of this limitation. Investing in Rule 144A securities could result in
increasing the level of a Portfolio's illiquidity if qualified institutional
buyers become, for a time, uninterested in purchasing these securities. Rochdale
will monitor the liquidity of such securities subject to review by the Board of
Trustees.
With respect to liquidity determinations generally, the Board of
Trustees has the ultimate responsibility for determining whether specific
securities are liquid or illiquid. The Board has delegated the function of
making day-to-day determinations of liquidity to Rochdale. Factors encompassed
in the evaluation of liquidity, include, but are not limited to: (i) the
frequency of trading in the security; (ii) the number of dealers that make
quotes for the security; (iii) the number of dealers that have undertaken to
make a market in the security; (iv) the number of other potential purchasers;
and (v) the nature of the security and how trading is effected (e.g., the time
needed to sell the security, how offers are solicited and the mechanics of
transfer). Rochdale will monitor the liquidity of securities in the Portfolios'
portfolios and report periodically on such decisions to the Board of Trustees,
consistent with the guidelines established for making liquidity determinations.
INVESTMENT RESTRICTIONS
The following policies and investment restrictions have been adopted by
each Portfolio and (unless otherwise noted) are fundamental and cannot be
changed without the affirmative vote of a majority of the Portfolio's
outstanding voting securities as defined in the 1940 Act. Neither Portfolio may:
1. Make loans to others, except (a) through the purchase of debt
securities in accordance with its investment objectives and policies, (b)
through the lending of portfolio securities, or (c) to the extent the entry into
a repurchase agreement is deemed to be a loan.
(a) Borrow money, except temporarily for extraordinary or emergency
purposes from a bank and then not in excess of 10% of total assets (at the lower
of cost or fair market value; any such borrowing will be made only if
immediately thereafter there is an asset coverage of at least 300% of all
borrowings and no investments may be made while any borrowings are in excess of
5% of total assets).
(b) Mortgage, pledge or hypothecate any of its assets except in
connection with any such borrowings.
3. Purchase securities on margin, participate on a joint or joint and
several basis in any securities trading account, or underwrite securities,
except that this restriction does not preclude a Portfolio from obtaining such
short-term credit as may be necessary for the clearance of purchases and sales
of its portfolio securities.
4. Purchase or sell real estate, or commodities or commodity contracts,
except that a Portfolio may purchase or sell currencies (including forward
currency exchange contracts), futures contracts, and related options.
5. Invest 25% or more of the market value of its assets in the
securities of companies engaged in any one industry, except that this
restriction does not apply to investment in the securities of the U.S.
Government, its agencies or instrumentalities.
6. Issue senior securities, as defined in the 1940 Act except that this
restriction shall not be deemed to prohibit a Portfolio from (a) making any
permitted borrowings, mortgages or pledges, (b) entering into repurchase
transactions, or (c) engaging in options or futures transactions.
7. Invest in any issuer for purposes of exercising control or
management.
Each Portfolio observes the following policies, which are not deemed
fundamental and which may be changed without shareholder vote. Neither Portfolio
may:
8. Invest in securities of other investment companies except as
provided for in the Investment Company Act of 1940.
9. Invest, in the aggregate, more than 15% of its net assets in
securities with legal or contractual restrictions on resale, securities which
are not readily marketable, and repurchase agreements with more than seven days
to maturity.
If a percentage restriction set forth in the prospectus or in this
Statement is adhered to at the time of investment, a subsequent increase or
decrease in a percentage resulting from a change in the values of assets will
not constitute a violation of that restriction, except with respect to borrowing
and illiquid securities, or as otherwise specifically noted.
DISTRIBUTIONS AND TAX INFORMATION
Distributions
Dividends from net investment income and distributions from net profits
from the sale of securities are generally made annually. Also, each Portfolio
expects to distribute any undistributed net investment income on or about
December 31 of each year. Any net capital gains realized through the one-year
period ended October 31 of each year will also be distributed by December 31 of
each year.
Each distribution by a Portfolio is accompanied by a brief explanation
of the form and character of the distribution. In January of each year the
Portfolio will issue to each shareholder a statement of the federal income tax
status of all distributions made during the preceding calendar year.
Tax Information
Each Portfolio is treated as a separate entity for federal income tax
purposes. Each Portfolio expects to qualify to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code"), provided that it complies with all applicable
requirements regarding the source of its income, diversification of its assets
and timing of distributions. Each Portfolio's policy is to distribute to its
shareholders all of its investment company taxable income and any net realized
long-term and mid-term capital gains for each fiscal year in a manner that
complies with the distribution requirements of the Code, so that the Portfolio
will not be subject to any federal income tax or excise taxes based on net
income. To avoid the excise tax, each Portfolio must also distribute (or be
deemed to have distributed) by December 31 of each calendar year (i) at least
98% of its ordinary income for such year, (ii) at least 98% of the excess of its
realized capital gains over its realized capital losses for the one-year period
ending on October 31 during such year and (iii) any amounts from the prior
calendar year that were not distributed and on which the Portfolio paid no
federal excise tax.
Net investment income consists of interest and dividend income, less
expenses. Net realized capital gains for a fiscal period are computed by taking
into account any capital loss carry forward of a Portfolio.
The Portfolios may write, purchase, or sell certain option and futures
contracts. Such transactions are subject to special tax rules that may affect
the amount, timing, and character of distributions to shareholders. Unless a
Portfolio is eligible to make and makes a special election, such contracts that
are "Section 1256 contracts" will be "marked-to-market" for Federal income tax
purposes at the end of each taxable year (i.e., each contract will be treated as
sold for its fair market value on the last day of the taxable year). In general,
unless the special election referred to in the previous sentence is made, gain
or loss from transactions in such contracts will be 60% long term and 40%
short-term capital gain or loss. Section 1092 of the Code, which applies to
certain "straddles," may affect the taxation of the Portfolio's transactions in
option, futures, and foreign currency contracts. Under Section 1092 of the Code,
the Portfolios may be required to postpone recognition for tax purpose of losses
incurred in certain closing transactions.
Distributions of net investment income and net short-term capital gains
are taxable to shareholders as ordinary income. In the case of corporate
shareholders, a portion of the distributions may qualify for the intercorporate
dividends-received deduction to the extent a Portfolio designates the amount
distributed as a qualifying dividend. The aggregate amount so designated cannot,
however, exceed the aggregate amount of qualifying dividends received by the
Portfolio for its taxable year. The deduction, if any, may be reduced or
eliminated if Portfolio shares held by a corporate investor are treated as
debt-financed or are held for fewer than 46 days.
Any long-term capital gain distributions are taxable to shareholders as
long-term or mid-term capital gains, respectively, regardless of the length of
time they have held their shares. Capital gains distributions are not eligible
for the dividends-received deduction referred to in the previous paragraph.
Distributions of any net investment income and net realized capital gains will
be taxable as described above, whether received in shares or in cash.
Shareholders electing to receive distributions in the form of additional shares
will have a cost basis for federal income tax purposes in each share so received
equal to the net asset value of a share on the reinvestment date. Distributions
are generally taxable when received. However, distributions declared in October,
November or December to shareholders of record on a date in such a month and
paid the following January are taxable as if received on December 31.
Distributions are includable in alternative minimum taxable income in computing
a shareholder's liability for the alternative minimum tax.
Under the Code, the Portfolios will be required to report to the
Internal Revenue Service all distributions of taxable income and capital gains
as well as gross proceeds from the redemption or exchange of Portfolio shares,
except in the case of exempt shareholders, which includes most corporations.
Pursuant to the backup withholding provisions of the Code, distributions of any
taxable income and capital gains and proceeds from the redemption of a
Portfolio's shares may be subject to withholding of federal income tax at the
current maximum Federal tax rate of 31 percent in the case of non-exempt
shareholders who fail to furnish the Portfolios with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. If the backup withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld. Corporate and other exempt shareholders should provide the Portfolios
with their taxpayer identification numbers or certify their exempt status in
order to avoid possible erroneous application of backup withholding. The
Portfolios reserve the right to refuse to open an account for any person failing
to certify the person's taxpayer identification number.
Neither Portfolio will be subject to tax in the State of Delaware as
long as it qualifies as a regulated investment company for federal income tax
purposes. Distributions and the transactions referred to in the preceding
paragraphs may be subject to state and local income taxes, and the tax treatment
thereof may differ from the federal income tax treatment.
Generally, a credit for foreign taxes may not exceed the shareholder's
U.S. federal income tax (determined without reward to the availability of the
credit) attributable to his or her total foreign source taxable income. For this
purpose, the portion of distributions paid by a Portfolio from foreign source
income will be treated as foreign source income. A Portfolio's gains from the
sale of securities will generally be treated as derived from U.S. sources, and
certain currency fluctuation gains and losses, including fluctuation gains from
foreign currency denominated debt securities, receivables and payables will be
treated as derived from U.S. sources. The limitation on the foreign tax credit
is applied separately to foreign source "passive income," such as the portion of
dividends received from a Portfolio which qualifies as foreign source income. In
addition, the foreign tax credit is allowed to offset only 90% of the
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of foreign income taxes paid by the
Portfolios.
The foregoing discussion of U.S. federal income tax law relates solely
to the application of that law to U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts, and estates. Each shareholder who is not a
U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the Portfolios, including the possibility that such a shareholder
may be subject to a U.S. withholding tax at a rate of 30 percent (or at a lower
rate under an applicable income ta treaty) on amounts constituting ordinary
income.
TRUSTEES AND EXECUTIVE OFFICERS x
The Trustees of the Trust, who were elected for an indefinite term by
the initial shareholders of the Trust, are responsible for the overall
management of the Trust, including general supervision and review of the
investment activities of the Portfolio. The Trustees, in turn, elect the
officers of the Trust, who are responsible for administering the day-to-day
operations of the Trust and its separate series. The current Trustees and
officers, their ages and affiliations and principal occupations for the past
five years are set forth below.
Carl Acebes,* 51, Chairman and Trustee
570 Lexington Ave, New York, NY 10022. Chairman and Chief Investment
Officer of the Advisor.
Maxime C. Baretge, 57, Trustee
Hastings, W13, Barbados, West Indies. President, P.A. Pommares
Agencies, S. A. (Luxury Goods Distribution).
Benedict T. Marino, 55, Trustee
144 Fairmount Rd., Ridgewood, NJ 07450. President, BTM Investment Company
(private investments) since January, 1995; formerly Managing Director,
Donaldson, Lufkin, Jenrette Securities Corp. (securities and investment banking)
from 1983-1995.
Garrett R. D'Alessandro,* CFA, 40, President, Secretary and Treasurer
570 Lexington Ave., New York, NY 10022. President, Chief Executive
Officer and Director of Research of the Advisor.
*Indicates an "interested person" of the Trust as defined in the 1940 Act.
Set forth below is the annual compensation rate payable to the
Disinterested Trustees. It is anticipated that the Trustees will waive these
fees during the Portfolio's initial fiscal period. Disinterested Trustees will
receive an annual retainer of $1,000 and a fee of $500 for each regularly
scheduled meeting. Disinterested Trustees are also reimbursed for expenses in
connection with each Board meeting attended. No other compensation or retirement
benefits are received by any Trustee or officer from the Portfolios or any other
portfolios of the Trust.
Name of Trustee Total Compensation
Maxime C. Baretge $3,000
Benedict T. Marino $3,000
THE PORTFOLIOS' INVESTMENT ADVISOR
As stated in the Prospectus, investment advisory services are provided
to the Portfolios by Rochdale, pursuant to an Investment Advisory Agreement.
The Investment Advisory Agreement continues in effect after its initial
two year term from year to year so long as such continuation is approved at
least annually by (1) the Board of Trustees of the Trust or the vote of a
majority of the outstanding shares of the Portfolios, and (2) a majority of the
Trustees who are not interested persons of any party to the Agreement, in each
case cast in person at a meeting called for the purpose of voting on such
approval. The Agreement may be terminated at any time, without penalty, by
either a Portfolio or Rochdale upon sixty days' written notice and is
automatically terminated in the event of its assignment as defined in the 1940
Act.
Rochdale has agreed to reduce fees payable to it or reimburse the
Portfolios; operating expenses to the extent necessary to limit the Portfolio's
ratio of operating expenses to average net assets to no more than 2.50% annually
for the Rochdale Magna Portfolio and 2.75% annually for the Rochdale Atlas
Portfolio. Any such reduction of fees or payment of expenses may be subject to
reimbursement by the Portfolios within the following three years provided that a
Portfolio is able to do so and remain in compliance with applicable expense
limitations then in effect.
THE PORTFOLIOS' ADMINISTRATOR
The Portfolios have entered into an Administration Agreement with
Investment Company Administration Corporation (the "Administrator"). The
Administration Agreement provides that the Administrator will prepare and
coordinate reports and other materials supplied to the Trustees; prepare and/or
supervise the preparation and filing of all securities filings, periodic
financial reports, prospectuses, statements of additional information, tax
returns, shareholder reports and other regulatory reports or filings required of
the Portfolios; prepare all required notice filings necessary to maintain the
Portfolios' ability to sell shares in all states where the Portfolios currently
do or intend to do business; coordinate the preparation, printing and mailing of
all materials (e.g., Annual Reports) required to be sent to shareholders;
coordinate the preparation and payment of Portfolio-related expenses; monitor
and oversee the activities of the Portfolios' servicing agents (e.g., transfer
agent, custodian, fund accountants, etc.); review and adjust as necessary the
Portfolios' daily expense accruals; and perform such additional services as may
be agreed upon by the Portfolios and the Administrator. For its services, the
Administrator receives a monthly fee from each Portfolio at the annual rate of
0.10% of average daily net assets with a minimum annual fee of $40,000.
THE PORTFOLIOS' DISTRIBUTOR
Rochdale also acts as the Portfolios' principal underwriter in a
continuous public offering of the Portfolios' shares. The Distribution Agreement
between the Portfolios and Rochdale continues in effect from year to year if
approved at least annually by (i) the Board of Trustees or the vote of a
majority of the outstanding shares of the Portfolio (as defined in the 1940 Act)
and (ii) a majority of the Trustees who are not interested persons of any such
party, in each case cast in person at a meeting called for the purpose of voting
on such approval. The Distribution Agreement may be terminated without penalty
by the parties thereto upon sixty days, written notice, and is automatically
terminated in the event of its assignment as defined in the 1940 Act.
EXECUTION OF PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Agreement, Rochdale determines
which securities are to be purchased and sold by the Portfolios and which
broker-dealers are eligible to execute the Portfolios' portfolio transactions.
Purchases and sales of securities in the over-the-counter market will generally
be executed directly with a "market-maker" unless, in the opinion of Rochdale, a
better price and execution can otherwise be obtained by using a broker for the
transaction.
Purchases of portfolio securities for the Portfolios also may be made
directly from issuers or from underwriters. Where possible, purchase and sale
transactions will be effected through dealers (including banks) which specialize
in the types of securities which the Portfolios will be holding, unless better
executions are available elsewhere. Dealers and underwriters usually act as
principal for their own account. Purchases from underwriters will include a
concession paid by the issuer to the underwriter and purchases from dealers will
include the spread between the bid and the asked price. If the execution and
price offered by more than one dealer or underwriter are comparable, the order
may be allocated to a dealer or underwriter that has provided research or other
services as discussed below.
In placing portfolio transactions, Rochdale will use its best efforts
to choose a broker-dealer capable of providing the services necessary to obtain
the most favorable price and execution available. The full range and quality of
services available will be considered in making these determinations, such as
the size of the order, the difficulty of execution, the operational facilities
of the firm involved, the firm's risk in positioning a block of securities, and
other factors. In those instances where it is reasonably determined that more
than one broker-dealer can offer the services needed to obtain the most
favorable price and execution available, consideration may be given to those
broker-dealers which furnish or supply research and statistical information to
Rochdale that it may lawfully and appropriately use in its investment advisory
capacities, as well as provide other service in addition to execution services.
Rochdale considers such information, which is in addition to and not in lieu of
the services required to be performed by it under its Agreement with the
Portfolios, to be useful in varying degrees, but of indeterminable value.
Portfolio transactions may be placed with broker-dealers who sell shares of the
Portfolios subject to rules adopted by the National Association of Securities
Dealers, Inc.
While it is the Portfolios' general policy to seek first to obtain the
most favorable price and execution available, in selecting a broker-dealer to
execute portfolio transactions for the Portfolios, weight may also be given to
the ability of a broker-dealer to furnish brokerage and research services to the
Portfolios or to Rochdale, even if the specific services were not imputed just
to the Portfolios and may be useful to Rochdale in advising other clients. In
negotiating commissions with a broker or evaluating the spread to be paid to a
dealer, the Portfolios may therefore pay a higher commission or spread than
would be the case if no weight were given to the furnishing of these
supplemental services, provided that the amount of such commission or spread has
been determined in good faith by Rochdale to be reasonable in relation to the
value of the brokerage and/or research services provided by such broker-dealer.
The standard of reasonableness is to be measured in light of Rochdale's overall
responsibilities to the Portfolios.
Investment decisions for the Portfolios are made independently from
those of other client accounts or mutual funds managed or advised by Rochdale.
Nevertheless, it is possible that at times identical securities will be
acceptable for both the Portfolios and one or more of such client accounts or
other funds. In such event, the position of the Portfolios and such client
account(s) or other funds in the same issuer may vary and the length of time
that each may choose to hold its investment in the same issuer may likewise
vary. However, to the extent any of these client accounts or other funds seeks
to acquire the same security as a Portfolio at the same time, the Portfolio may
not be able to acquire as large a portion of such security as is desired, or may
have to pay a higher price or obtain a lower yield for such security. Similarly,
a Portfolio may not be able to obtain as high a price for, or as large an
execution of, an order to sell any particular security at the same time. If one
or more of such client accounts or other funds simultaneously purchases or sells
the same security that a Portfolio is purchasing or selling, each day's
transactions in such security will be allocated between the Portfolio and all
such client accounts or other funds in a manner deemed equitable by Rochdale,
taking into account the respective sizes of the accounts and the amount being
purchased or sold. It is recognized that in some cases this system could have a
detrimental effect on the price or value of the security insofar as a Portfolio
is concerned. In other cases, however, it is believed that the ability of the
Portfolio to participate in volume transactions may produce better executions
for the Portfolio.
The Portfolios do not effect securities transactions through brokers in
accordance with any formula, nor do they effect securities transactions through
such brokers solely for selling shares of the Portfolios, although the
Portfolios may consider the sale of shares as a factor in allocating brokerage.
However, as stated above, broker-dealers who execute brokerage transactions may
effect purchase of shares of the Portfolios for their customers.
Subject to overall requirements of obtaining the best combination of
price, execution and research services on a particular transaction, the
Portfolios may place eligible portfolio transactions through its affiliated
broker-dealer, Rochdale Securities Corporation, under procedures adopted by the
Board of Trustees pursuant to the Investment Company Act of 1940 (the "1940
Act") and related rules.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Trust reserves the right in its sole discretion (i) to suspend the
continued offering of the Portfolios' shares, (ii) to reject purchase orders in
whole or in part when in the judgment of Rochdale or the Distributor such
rejection is in the best interest of the Portfolios, and (iii) to reduce or
waive the minimum for initial and subsequent investments for certain fiduciary
accounts or under circumstances where certain economies can be achieved in sales
of the Portfolios' shares.
Payments to shareholders for shares of a Portfolio redeemed directly
from the Portfolio will be made as promptly as possible but no later than seven
days after receipt by the Portfolios' Transfer Agent of the written request in
proper form, with the appropriate documentation as stated in the Prospectus,
except that the Portfolios may suspend the right of redemption or postpone the
date of payment during any period when (a) trading on the New York Stock
Exchange is restricted as determined by the SEC or such Exchange is closed for
other than weekends and holidays; (b) an emergency exists as determined by the
SEC making disposal of portfolio securities or valuation of net assets of the
Portfolios not reasonably practicable; or (c) for such other periods as the SEC
may permit for the protection of the Portfolios' shareholders. At various times,
the Portfolios may be requested to redeem shares for which they have not yet
received confirmation of good payment; in this circumstance, the Portfolios may
delay payment of the redemption proceeds until payment for the purchase of such
shares has been collected and confirmed to the Portfolios.
The Portfolios intend to pay cash (U.S. dollars) for all shares
redeemed, but, under abnormal conditions which make payment in cash unwise, the
Portfolios may make payment partly in securities with a current market value
equal to the redemption price. Although the Portfolios do not anticipate that
they will make any part of a redemption payment in securities, if such payment
were made, an investor may incur brokerage costs in converting such securities
to cash. The Trust and Portfolios have elected to be governed by the provisions
of Rule 18f-1 under the 1940 Act, which contains a formula for determining the
minimum redemption amounts that must be paid in cash.
The value of shares on redemption or repurchase may be more or less
than the investor's cost, depending upon the market value of a Portfolio's
securities at the time of redemption or repurchase.
As discussed in the Prospectus, the Portfolios provide an Automatic
Investment Plan for the convenience of investors who wish to purchase shares of
the Portfolios on a regular basis. All record keeping and custodial costs of the
Plan are paid by the Portfolios. The market value of the Portfolios' shares is
subject to fluctuation, so before undertaking any plan for systematic
investment, the investor should keep in mind that this plan does not assure a
profit nor protect against depreciation in declining markets.
DETERMINATION OF SHARE PRICE
As noted in the Prospectus, the net asset value and offering price of shares of
the Portfolios will be determined once daily at the close of public trading on
the New York Stock Exchange, ("NYSE"), currently 4:00 p.m., New York City time,
on each day the NYSE is open for trading. It is expected that the Exchange will
be closed on Saturdays and Sundays and on New Year's Day, Martin Luther King Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas. The Portfolios do not expect to determine the
net asset value of their shares on any day when the Exchange is not open for
trading even if there is sufficient trading in their portfolio securities on
such days to materially affect the net asset value per share.
In valuing the Portfolios' assets for calculating net asset value,
readily marketable portfolio securities listed on a national securities exchange
or NASDAQ are valued at the last sale price on the business day as of which such
value is being determined. If there has been no sale on such exchange or on
NASDAQ on such day, the security is valued at the closing bid price on such day.
Readily marketable securities traded only in an over-the-counter market and not
on NASDAQ are valued at the current or last bid price. If no bid is quoted on
such day, the security is valued by such method as the Board of Trustees of the
Trust shall determine in good faith to reflect the security's fair value. All
other assets of the Portfolios are valued in such manner as the Board of
Trustees in good faith deems appropriate to reflect their fair value.
The net asset value per share of each Portfolio is calculated as
follows: all liabilities incurred or accrued are deducted from the valuation of
total assets, which includes accrued but undistributed income; the resulting net
assets are divided by the number of shares of the Portfolio outstanding at the
time of the valuation; and the result (adjusted to the nearest cent) is the net
asset value per share.
PERFORMANCE INFORMATION
From time to time, the Portfolios may state their total return in
advertisements and investor communications. Total return may be stated for any
relevant period as specified in the advertisement or communication. Any
statements of total return will be accompanied by information on the Portfolios'
average annual compounded rates of return over the most recent year and the
period from the Portfolios' inception of operations. The Portfolios may also
advertise aggregate and average total return information over different periods
of time. A Portfolio's average annual compounded rate of return is determined by
reference to a hypothetical $1,000 investment that includes capital appreciation
and depreciation for the stated periods, according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of $1,000
from which the maximum sales load is deducted T = average
annual total return n = number of years ERV = ending
redeemable value of the hypothetical $1,000 purchase at the
end of the period
Aggregate total return is calculated in a similar manner, except that
the results are not annualized. Each calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period.
The Portfolios' total returns may be compared to relevant domestic and
foreign indices, including those published by Lipper Analytical Services, Inc.
From time to time, evaluations of the Portfolios' performance by independent
sources may also be used in advertisements and in information furnished to
present or prospective investors in the Portfolios.
Investors should note that the investment results of the Portfolios
will fluctuate over time, and any presentation of the Portfolios' total returns
for any period should not be considered as a representation of what an
investment may earn or what an investor's total return may be in any future
period.
<PAGE>
GENERAL INFORMATION
Investors in the Portfolios will be informed of the Portfolios'
progress through periodic reports. Financial statements certified by independent
public accountants will be submitted to shareholders at least annually.
State Street Bank & Trust Company acts as Custodian of the securities
and other assets of the Portfolios as well as the Portfolios' transfer and
shareholder service agent.
The Trust is registered with the SEC as a management investment
company. Such a registration does not involve supervision of the management or
policies of the Portfolios. The Prospectus of the Portfolios and this Statement
of Additional Information omit certain of the information contained in the
Registration Statement filed with the SEC. Copies of such information may be
obtained from the SEC upon payment of the prescribed fee.
<PAGE>
TAIT,WELLER&BAKER
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Rochdale Investment Trust
New York, New York
We have audited the accompanying statement of assets and liabilities of
Rochdale Investment Trust (comprising, respectively, the Rochdale Magna
Portfolio and the Rochdale Atlas Portfolio) as of June 29, 1998. This financial
statement is the responsibility of the Fund's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets and liabilities is
free of material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, a well as evaluating the overall
financial statement presentation. We believe that our audit of the statement of
assets and liabilities provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Rochdale Magna Portfolio and the Rochdale Atlas Portfolio as of June 29, 1998,
in conformity with generally accepted accounting principles.
Philadelphia, Pennsylvania
June 29, 1998
<PAGE>
Rochdale Investment Trust (Note 1)
Statement of Assets and Liabilities
June 29, 1998
Rochdale Rochdale
Magna Atlas
Portfolio Portfolio
ASSETS
Cash $50,000 $50,000
Deferred organization
expenses (Note 2) $37,500 $37,500
Total Assets $87,500 $87,500
LIABILITIES
Due to Advisor $37,500 $37,500
NET ASSETS $50,000 $50,000
Shares of beneficial interest
outstanding, unlimited
amount authorized 2,000 2,000
Net asset value, offering and
redemption price per share $25.00 $25.00
At June 29, 1998 the components of
net assets were as follows:
Paid-in capital $50,000 $50,000
ROCHDALE INVESTMENT TRUST
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
June 29, 1998
(1) ORGANIZATION
Rochdale Investment Trust (the "Trust"), is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company and is authorized to issue shares of beneficial
interests in separate series. The Trust currently offers shares of beneficial
interests in two diversified series, the Rochdale Magna Portfolio and the
Rochdale Atlas Portfolio.
The Trust was organized on March 10, 1998, and between that date and
June 29, 1998 the Trust had no operations other than those relating to
organizational matters and the registration of its shares under applicable
securities laws.
(2) SIGNIFICANT ACCOUNTING POLICY
DEFERRED ORGANIZATION EXPENSES
All of the expenses incurred by the Trust in connection with the
organization and the registration of the shares were borne equally by each
Portfolio and are being amortized to expense on a straight-line basis over a
period of five years. Certain of the Trust's organization expenses were advanced
by Rochdale Investment Management Inc. (the "Advisor") which the Trust will
reimburse after operations commence.
