SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
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Pre-Effective Amendment No. / /
Post-Effective Amendment No. 1 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 2 / X /
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(Check appropriate box or boxes.)
ALPHA ANALYTICS INVESTMENT TRUST - FILE NOS. 333-65407 AND 811-9039
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(Exact Name of Registrant as Specified in Charter)
1901 AVENUE OF THE STARS, SUITE 1100, LOS ANGELES, CA 90067
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (310) 556-4660
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ROBERT E. GIPSON, ALPHA ANALYTICS INVESTMENT TRUST, 1901 AVENUE OF THE STARS,
SUITE 1100, LOS ANGELES, CA 90067
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(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering: December 23, 1998.
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/X/ 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
PROSPECTUS DATED DECEMBER __, 1999
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
ALPHA ANALYTICS DIGITAL FUTURE FUND
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
For Information
Shareholder Services and Requests:
Toll Free: 877-ALPHA40 (877) 257-4240
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
ALPHA ANALYTICS VALUE FUND
INVESTMENT OBJECTIVE
The investment objective of the Value Fund is long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund pursues a value philosophy, investing in stocks of quality companies
that are attractively priced relative to the market. The Fund invests primarily
in common stocks of well established, relatively large U.S. companies (those
with a market capitalization above $1 billion). The Fund's sub-adviser looks for
financially strong companies:
- - Experiencing positive developments that the market has not yet recognized
- - Selling at historically low prices
- - Having seasoned management
- - Enjoying product or market advantages
SOCIAL LIMITATIONS ON COMPANIES INVESTED IN
The Fund will not invest in companies
- - that obtain more than 4% of their gross revenues from the manufacture of
tobacco products, or
- - companies that own directly more than a 4% interest in or operate nuclear
power plants or derive more than 4% of gross revenues from sales to the
nuclear power industry.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- - COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than
the market as a whole.
- - MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
- - VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices. The value of an individual company can be more
volatile than the market as a whole. This volatility affects the value of
the Fund's shares.
- - The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be suitable for:
- - Long-term investors seeking a fund with a value investment strategy
- - Investors willing to accept price fluctuations in their investment
- - Investors who can tolerate the risks associated with common stock
investments
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HOW THE FUND HAS PERFORMED
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. The past performance information that would otherwise appear in this
prospectus has been omitted because the Fund is recently organized and has a
limited performance history.
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ALPHA ANALYTICS SMALL CAP QUANT FUND
INVESTMENT OBJECTIVE
The investment objective of the Quant Fund is long term capital appreciation.
PRINCIPAL STRATEGIES
The Fund invests in stocks of companies which have quantitative characteristics,
which the Fund's adviser believes are associated with growth in market price of
the company's stock. The Fund's adviser uses a proprietary computer-driven
investment model developed by the Fund's portfolio manager to evaluate stocks
based on value and momentum indicators, which include: o Long term earnings
growth o Short term earnings growth o Short term price appreciation o Sales,
earnings and other value indicators
SOCIAL LIMITATIONS ON COMPANIES INVESTED IN
The Fund will not invest in companies
- - that obtain more than 4% of their gross revenues from the manufacture of
tobacco products, or
- - companies that own directly more than a 4% interest in or operate nuclear
power plants or derive more than 4% of gross revenues from sales to the
nuclear power industry.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- - SMALL COMPANY RISK. The risks associated with investing in smaller
companies include:
- - The earnings and prospects of smaller companies are more volatile than
larger companies.
- - Smaller companies may experience higher failure rates than do larger
companies.
- - The trading volume of securities of smaller companies is normally less
than that of larger companies and, therefore, may disproportionately
affect their market price, tending to make them fall more in response to
selling pressure than is the case with larger companies.
- - Smaller companies may have limited markets, product lines or financial
resources and may lack management depth.
- - COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than
the market as a whole.
- - MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
- - VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices. The value of an individual company can be more
volatile than the market as a whole. This volatility affects the value of
the Fund's shares.
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<PAGE>
- - The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
- - Long term investors seeking a Fund with exposure to smaller capitalization
stocks
- - Investors willing to accept the greater market price fluctuations of
smaller companies
- - Investors who can tolerate the greater risks associated with common stock
investments
HOW THE FUND HAS PERFORMED
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. The past performance information that would otherwise appear in this
prospectus has been omitted because the Fund is recently organized and has a
limited performance history.
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ALPHA ANALYTICS DIGITAL FUTURE FUND
INVESTMENT OBJECTIVE
The investment objective of the Digital Future Fund is long-term capital
appreciation.
PRINCIPAL STRATEGIES
The Fund invests in stocks of information technology companies. This industry
sector includes any company involved in creating, using, processing, storing,
and transmitting digital information. This includes, but is not limited to, the
following industries: telecommunications, software, semiconductors, networking
equipment, Internet services and Internet content providers. Thus the
information technology industry sector can potentially include any company
benefiting from the unfolding digital communications revolution.
The Fund's advisor looks for companies that have some or all of the following
characteristics:
- - Have a vision of the future, and the management and resources to
accomplish it
- - Have a demonstrated track record
- - Have a good business model
- - Are developing or have acquired significant new technologies, or are using
technologies in innovative ways
In addition the Fund's advisor uses a proprietary computer-driven investment
model developed by Alpha Analytics Investment Group to evaluate stocks in the
information technology sector, and to rank them in expected order of future
price appreciation. This model includes quantitative characteristics such as:
- - Earnings growth
- - Sales growth
- - Recent and long term price appreciation
- - Price/Earnings and other characteristics
The Fund will purchase companies that score well in both the fundamental
analysis and quantitative screens.
SOCIAL LIMITATIONS ON COMPANIES INVESTED IN
The Fund will not invest in companies
- - that obtain more than 4% of their gross revenues from the manufacture of
tobacco products, or
- - companies that own directly more than a 4% interest in or operate nuclear
power plants or derive more than 4% of gross revenues from sales to the
nuclear power industry.
PRINCIPAL RISKS OF INVESTING IN THE FUND
- - SMALL COMPANY RISK. Some of the companies the Fund will invest in are
small companies. The risks associated with investing in smaller companies
include:
- - The earnings and prospects of smaller companies are more volatile than
larger companies.
- - Smaller companies may experience higher failure rates than do larger
companies.
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- - The trading volume of securities of smaller companies is
normally less than that of larger companies and, therefore, may
disproportionately affect their market price, tending to make them fall
more in response to selling pressure than is the case with larger
companies. o Smaller companies may have limited markets, product lines or
financial resources and may lack management depth.
- - COMPANY RISK. The value of the Fund may decrease in response to the
activities and financial prospects of an individual company in the Fund's
portfolio. The value of an individual company can be more volatile than
the market as a whole.
- - MARKET RISK. Overall stock market risks may also affect the value of the
Fund. Factors such as domestic economic growth and market conditions,
interest rate levels, and political events affect the securities markets.
- - VOLATILITY RISK. Common stocks tend to be more volatile than other
investment choices. The value of an individual company can be more
volatile than the market as a whole. This volatility affects the value of
the Fund's shares.
- - HIGH VOLATILITY. Many of the companies the Fund will invest in are
classified as aggressive growth stocks. These stocks experience much
higher volatility than the market as a whole.
- - The Fund is not a complete investment program. As with any mutual fund
investment, the Fund's returns will vary and you could lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be suitable for:
- - Long-term investors seeking a fund with an aggressive growth investment
strategy focusing on information technology stocks
- - Investors willing to accept price fluctuations in their investment
- - Investors who can tolerate the risks associated with common stock
investments
- - Investors willing to accept the greater market price fluctuations of
smaller companies and technology companies
HOW THE FUND HAS PERFORMED
Although past performance of a fund is no guarantee of how it will perform in
the future, historical performance may give you some indication of the risk of
investing in the fund because it demonstrates how its returns have varied over
time. The past performance information that would otherwise appear in this
prospectus has been omitted because the Fund is recently organized and has a
limited performance history.
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COSTS OF INVESTING IN THE FUNDS
The tables describe the fees and expenses that you may pay if you buy and hold
shares of the Funds.
<TABLE>
<CAPTION>
- ----------------------------------------------------- -------------------------- ------------------------- ------------------------
Alpha Analytics Alpha Analytics Digital Future Fund
Value Fund Small Cap Quant Fund
- ----------------------------------------------------- -------------------------- ------------------------- ------------------------
Shareholder Transaction Fees (fees paid directly
from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases None None None
Maximum Sales Charge (Load) Imposed on Reinvested None None None
Dividends
Maximum Deferred Sales Charge (Load) None None None
Redemption Fees 2.00% 2.00% 2.00%
(as a % of the amount redeemed)(1)
Exchange Fees None None None
Other Expenses(2) None None None
Annual Fund Operating Expense (expenses that are
deducted from Fund assets)
Management Fees 1.50% 1.50% 1.50%
Distribution (12b-1) Fees None None None
Other Expenses(3) 0.00% 0.00% 0.00%
Total Fund Operating Expenses 1.50% 1.50% 1.50%
Annual Fee Waiver(4) .20% .20% .20%
Net Expenses 1.30% 1.30% 1.30%
- ----------------------------------------------------- -------------------------- ------------------------- ------------------------
<FN>
(1) Each Fund charges a redemption fee of 2% on shares redeemed less than 90
days, and 1% on shares redeemed between 91 and 364 days, from the date of
purchase. This redemption fee does not go to the Fund's adviser, but to
the Fund itself for the benefit of the remaining shareholders. This helps
defray the transaction costs and other adverse impacts of short term
investment on the Fund's performance.
(2) A processing fee will be deducted from any wire sales proceeds and paid to
the Fund's custodian.
(3) Each Fund's total operating expenses are equal to the management fee paid
to the adviser because the adviser pays all of the Fund's operating
expenses (except as described below). Through November 30, 2000, the
adviser has agreed to waive 0.20% of average net assets from its fees so
that the management fee of each Fund will be 1.30% of average daily net
assets. Without fee waiver, the management fee of each Fund would be 1.50%
of average daily net assets.
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(4) Through November 30, 2000, the adviser has agreed to pay the fees and
expenses of the trustees who are not "interested persons" as defined by
the Investment Company Act.
</FN>
</TABLE>
EXPENSE EXAMPLE
The example below is intended to help you compare the cost of
investing in the Alpha Analytic Funds with the cost of investing in other mutual
funds. The example uses the same assumptions as other mutual fund prospectuses:
a $10,000 initial investment for the time periods indicated, reinvestment of
dividends and distributions, 5% annual total return, constant operating
expenses, and sale of all shares at the end of each time period. Although your
actual expenses may be different, based on these assumptions your costs will be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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Value Fund
Small Cap Quant Fund
Digital Future Fund
HOW TO BUY, SELL OR EXCHANGE SHARES IN THE ALPHA ANALYTICS FUNDS
The Funds and their transfer agent, American Data Services can be contacted at
the same mailing address and telephone numbers. If you need additional
information on how to buy, sell or exchange shares in the Fund, please contact:
Mail: Phone:
Alpha Analytics Funds 877-257-4240
c/o American Data Services, Inc.
Hauppauge Corporate Center
150 Motor Parkway
Hauppauge, New York 11788-0132
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HOW TO BUY SHARES
INITIAL PURCHASE. The minimum initial investment for each Fund is $5,000 ($2,000
for an IRA or other tax sheltered retirement plan). The minimum subsequent
investment is $250. These minimums may be waived or reduced by the Funds'
adviser for accounts participating in an automatic investment program, or for
other reasons. Investors choosing to purchase or redeem their shares through a
broker/dealer or other institution may be charged a fee by that institution.
Investors choosing to purchase or redeem shares directly from a Fund will not
incur charges on purchases or redemptions, except as described below under "How
To Redeem Shares - Redemption Fee".
BY MAIL. You may make a direct initial investment by following these steps:
- - Complete and sign the investment application form which accompanies this
prospectus (subject to the minimum amounts);
- - Draft a check made payable to the appropriate fund;
- - Mail the application, check and any letter of instruction to the Fund's
transfer agent at the P. O. Box listed below. If you prefer overnight
delivery, use the overnight address listed below.
Mail: Alpha Analytics Funds Overnight: Alpha Analytics Funds
American Data Services, Inc. American Data Services, Inc.
P.O. Box 5536 Hauppauge Corporate Center
Hauppauge, New York 11788-0132 150 Motor Parkway
Hauppauge,
New York11788-5108
Your purchase of shares of a Fund will be effected at the next share price
calculated after receipt of your investment.
BY WIRE. You may purchase shares of a Fund by wiring federal funds from
your bank, which may charge you a fee for doing so. To wire money, you must call
the Fund's transfer agent at 877-257-4240 to set up your account and obtain an
account number. You should be prepared at that time to provide the information
on the application. Then, provide your bank with the following information for
purposes of wiring you investment:
Firstar Bank, N.A. Cinti/Trust for: ALPHA ANALYTICS VALUE FUND
ABA #0420-0001-3
D.D.A.#488-922-568
Attn: Mutual Fund ALPHA ANALYTICS SMALL CAP
Account Name ___________ QUANT FUND
(write in shareholder name) D.D.A. #488-922-477
For the Account #___________ ALPHA ANALYTICS DIGITAL FUTURE FUND
(write in account number) D.D.A. #
You must mail a completed application to the transfer agent after opening an
account by wire transfer. Wire orders will be accepted only on a day on which
the Funds and the custodian bank are open for business. A wire purchase will not
be considered made until the wired money is received and the purchase is
accepted by the Fund. Any delays that may occur in wiring money, including
delays that may occur in processing by the banks, are not the responsibility of
the Funds or the custodian bank. There is presently no fee for the receipt of
wired funds, but the Funds may charge a fee in the future.
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ADDITIONAL INVESTMENTS
You may purchase additional shares of a Fund at any time [(minimum of $100,
$250,)] by mail, wire, or automatic investment. Each additional purchase request
must contain:
- - Your Name;
- - Name of your account(s);
- - Account number(s);
- - Name of the Fund(s) in which you wish to invest.
Checks should be made payable to the appropriate Fund and sent to the addresses
listed above. A bank wire should be sent as outlined above. ACH (Automatic
Clearing House) transactions should be established in advance by contacting the
Transfer Agent.
AUTOMATIC INVESTMENT OPTION
You may make regular investments in the Fund with an Automatic Investment Plan
by completing the appropriate section of the account application and attaching a
voided personal check. Investments may be made monthly or bimonthly to allow
dollar-cost averaging by automatically deducting $100 or more from your bank
checking account. You may [change the amount of you monthly purchase] or
terminate this automatic investment program at any time
TAX SHELTERED RETIREMENT PLANS
Since each Fund is oriented to longer term investments, shares of the Funds may
be an appropriate investment medium for tax sheltered retirement plans,
including:
- - Individual retirement plans (IRAs);
- - Simplified employee pensions (SEPs);
- - SIMPLE plans;
- - 401(k) plans;
- - Qualified corporate pension and profit sharing plans (for employees);
- - Tax deferred investment plans (for employees of public school systems and
certain types of charitable organizations);
- - Other qualified retirement plans.
You should contact the Funds' transfer agent for the procedure to open an IRA or
SEP plan, as well as more specific information regarding these retirement plan
options. Consultation with an attorney or tax adviser regarding these plans is
advisable. You must pay custodial fees for your IRA by redemption of sufficient
shares of the Funds from the IRA unless you pay the fees directly to the IRA
custodian. Call the Funds' transfer agent about the IRA custodial fees.
OTHER PURCHASE INFORMATION
The Funds may limit the amount of purchases and refuse to sell to any person. If
your check or wire does not clear, you will be responsible for any loss incurred
by the Funds. If you are already a shareholder, the Funds can redeem shares from
any identically registered account in the Funds as reimbursement for any loss
incurred. You may be prohibited or restricted from making future purchases in
the Funds.
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<PAGE>
HOW TO SELL SHARES
You may sell shares in a Fund by mail or telephone. The proceeds of the sale may
be more or less than the purchase price of your shares, depending on the market
value of the Fund's securities at the time of your sale. You may receive the
proceeds from the sale in the form of a check or federal wire transfer.
For sales in excess of $50,000, the Funds may require that signatures be
guaranteed by a bank or member firm of a national securities exchange. Signature
guarantees are for the protection of shareholders. At the discretion of any
Fund, a shareholder may be required to furnish additional legal documents to
insure proper authorization.
BY MAIL. Your request for a sale should be addressed to the Alpha Analytics
Funds and must include:
- - Your letter of instruction;
- - The Fund name;
- - Account number(s);
- - Account name(s);
- - The dollar amount or the number of shares you wish to sell.
All registered share owner(s) must sign this request in the exact name(s) and
any special capacity in which they are registered. For joint accounts with right
of survivorship, only one signature is required for withdrawal.
BY TELEPHONE. Telephone redemption privileges are automatically available to all
shareholders. You may sell shares on any business day the New York Stock
Exchange is open by calling the Funds' transfer agent at 877-257-4240 before
4:00 p.m. Eastern Time. The Funds will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. Such procedures will
include requiring a form of personal identification from the caller. Sale
proceeds will be mailed or wired at the shareholder's direction to the
designated account. The minimum amount that may be wired is $1,000. Wire charges
of $10 will be deducted from sales proceeds.
By using the telephone redemption and exchange privileges, a shareholder
authorizes the Funds to act upon the instruction of any person by telephone they
believe to be the shareholder. By telephone, the shareholder may sell shares
from the account and transfer the proceeds to the address of record or the bank
account designated or may exchange into another Fund. The Funds and the transfer
agent are not liable for following instructions communicated by telephone that
they reasonably believe to be genuine. However, if they do not employ reasonable
procedures to confirm that telephone instructions are genuine, they may be
liable for any losses due to unauthorized or fraudulent instructions. The Funds
may change, modify or terminate the telephone redemption or exchange privilege
at any time.
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<PAGE>
EARLY REDEMPTION FEE. If you are selling shares held less than 90 days, the Fund
may deduct a 2% redemption fee. If you are selling shares held less than 365
days, the Fund may deduct a 1% redemption fee. This redemption fee does not go
to the Fund Adviser, but to the Fund itself for the benefit of the remaining
shareholders. This helps defray the transaction costs and other adverse impacts
of short term investment on the Fund's performance.
A redemption fee will not be charged when shares of a Fund are exchanged for
another Alpha Analytics Investment Trust mutual fund; however, the one-year
holding period of the exchanged shares will be calculated from the exchange
date. Solely for purposes of calculating the one-year holding period, each Fund
uses the "first-in, first out" (FIFO) method. That is, the date of any
redemption or exchange will be compared to the earliest purchase date. If this
holding period is less than one year, the applicable fee will be assessed. The
fee will be prorated if a portion of the shares being redeemed or exchanged has
been held for more than one year, or the shares are subject to more than one fee
level. Shares acquired through reinvested dividend or capital gain distributions
are exempt from the fee.
ADDITIONAL INFORMATION. If you are not certain of the requirements for
redemption please call the Funds' transfer agent at 877-257-4240. Sale requests
specifying a certain date or share price cannot be accepted and will be
returned. If you invest by wire, you may sell your shares on the first business
day following such purchase. However, if you invest by a personal, corporate,
cashier's or government check, the sales proceeds will not be paid until your
investment has cleared the bank, which normally may take up to 15 calendar days.
Exchanges into another Fund are, however, permitted without the ten day waiting
period. If the Fund has not yet collected payment for the shares you are
selling, it may delay sending proceeds for up to eight business days or until it
has collected payment.
When the New York Stock Exchange is closed (or when trading is restricted) for
any reason other than its customary weekend or holiday closing or under any
emergency circumstances, as determined by the Securities and Exchange
Commission, we may suspend sales of Fund shares or postpone payment dates. If
you are unable to accomplish your transaction by telephone (for example, during
times of unusual market activity), consider sending your order by express mail
to the Funds.
Because the Funds incur certain fixed costs in maintaining shareholder accounts,
the Funds may ask you to increase your balance if your account falls below
$5,000. If it is still below $5,000 after 30 days, each Fund may close your
account and send you the proceeds. An involuntary sale will create a capital
gain or a capital loss, which may have tax consequences about which you should
consult your tax adviser. You may increase the value of your shares in the Fund
to the minimum amount within the 30 day period.
Your shares are subject to a sale at any time if the Board of Trustees
determines in its sole discretion that failure to sell may have materially
adverse consequences to all or any of the shareholders of the Trust or any Fund
of the Trust.
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<PAGE>
HOW TO EXCHANGE SHARES
As a shareholder in any Fund, you may exchange shares valued at $1,000 or more
for shares of any other Alpha Analytics Funds. You may make an exchange by
telephone or by written request.
You may call the Funds' transfer agent to exchange shares. An exchange may also
be made by written request signed by all registered owners of the account mailed
to the transfer agent.
An exchange is made by selling shares of one Fund and using the proceeds to buy
shares of another Fund, with the NAV for the sale and the purchase calculated on
the same day. An exchange results in a sale of shares for federal income tax
purposes. If you make use of the exchange privilege, you may realize either a
long term or short term capital gain or loss on the shares sold.
Before making an exchange, you should consider the investment objective of the
Fund to be purchased. If your exchange creates a new account, you must satisfy
the requirements of the Fund in which shares are being purchased. You may make
an exchange to a new account or an existing account; however, the account
ownership must be identical. Exchanges may be made only in states where an
exchange may legally be made. The Funds reserve the right to terminate or modify
the exchange privilege in the future upon 60 days prior notice to the
shareholders.
THE PRICE OF SHARES
The price you pay for your shares is based on the Fund's net asset value per
share (NAV). The NAV is calculated at the close of trading (normally 4:00 p.m.
Eastern time) on each day the New York Stock Exchange is open for business (the
Stock Exchange is closed on weekends, Federal holidays and Good Friday). The NAV
is calculated by dividing the value of the Fund's total assets (including
interest and dividends accrued but not yet received) minus liabilities
(including accrued expenses) by the total number of shares outstanding.
The Fund's assets are generally valued at their market value. If market prices
are not available, or if an event occurs after the close of the trading market
that materially affects the values, assets may be valued at their fair value.
Requests to purchase, sell and exchange shares are processed at the NAV next
calculated after we receive your order in proper form.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
DIVIDENDS AND DISTRIBUTIONS. Each Fund typically distributes substantially all
of its net investment income in the form of dividends and taxable capital gains
to its shareholders on an annual basis. These distributions are automatically
reinvested in the Fund unless you request cash distributions on your application
or through a written request. Each Fund expects that its distributions will
consist primarily of long-term capital gains.
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<PAGE>
TAXES. In general, selling shares of a Fund and receiving distributions (whether
reinvested or taken in cash) are taxable events. Depending on the purchase price
and the sale price, you may have a gain or a loss on any shares sold. Any tax
liabilities generated by your transactions or by receiving distributions are
your responsibility. Because distributions of long term capital gains are
subject to capital gains taxes, regardless of how long you have owned your
shares, you may want to avoid making a substantial investment when a Fund is
about to make a long term capital gain distribution.
After the close of the calendar year, each Fund will mail to you a statement
setting forth the federal income tax information for all distributions made
during the previous year. If you do not provide your taxpayer identification
number, your account will be subject to backup withholding.
The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities. Because each investor's tax
circumstances are unique, please consult with your tax adviser about your
investment.
MANAGEMENT OF THE FUNDS
Alpha Analytics Investment Group, LLC, 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067 serves as investment adviser to each Fund. The Adviser was
established in July 1998 and is controlled by Robert E. Gipson. Mr. Gipson is an
attorney (of counsel at Gipson, Hoffman & Pancione), an officer of Corporate
Management Group, Inc. (a business and financial consulting company) and serves
as an officer or director of various public and non-public companies.
John M. Gipson, Vice President of the Funds' Adviser, is primarily responsible
for the day-to-day management of the Small Cap Quant Fund's portfolio. Mr.
Gipson received his Ph.D. in theoretical physics from Yale University in 1982.
He subsequently pursued a career in science. From January 1992 through January
1999 he worked as the senior scientist for NVI, Inc. at NASA's Goddard
Spaceflight Center. Mr. Gipson joined the Adviser part time at its formation in
1998. He began working full time for Alpha Analytics Investment Group, LLC in
February 1999. A committee of the Adviser is primarily responsible for the
day-to-day management of the Digital Future Fund's portfolio.
The Adviser has entered into a Sub-Advisory Agreement with Cambiar Investors,
Inc., 8400 East Prentice Avenue, Suite 460, Englewood, CO 80111 ("Cambiar") to
serve as the sub-adviser of the Value Fund. Cambiar, a Colorado corporation, was
formed in 1973. It is a wholly-owned subsidiary of United Asset Management
Corporation, a holding company established in 1980 for the purpose of acquiring
and owning firms engaged primarily in institutional investment management.
Cambiar provides investment management services to corporations, foundations,
endowments, pension and profit-sharing plans, trusts, estates and other
institutions and individuals. As of June 30, 1998, Cambiar had over $2.5 billion
in assets under management. A committee at Cambiar makes the investment
decisions of the Value Fund, which is primarily responsible for the day-to-day
management of the Value Fund's portfolio. The Adviser has agreed to pay Cambiar
a sub-advisory fee equal to an annual average rate of 0.50% of the average daily
net assets of the Value Fund.
-15-
<PAGE>
Each Fund is authorized to pay the Adviser a fee equal to an annual average rate
of 1.50% of the Fund's average daily net assets. Through November 30, 2000, the
Adviser has agreed to waive a portion of its fees so that the total expenses of
each Fund will be 1.30% of average daily net assets.
HISTORICAL PERFORMANCE OF SUB-ADVISER TO VALUE FUND
The sub-adviser to the Value Fund manages separate accounts that have the same
investment objectives as the Value Fund. The sub-adviser manages these accounts
using techniques and strategies substantially similar, though not always
identical, to those used in managing the Value Fund. A composite of the
performance of these separate accounts is listed below. The performance data for
the managed accounts reflects deductions for all fees and expenses. All fees and
expenses of the separate accounts were less than the operating expenses of the
Value Fund. If the performance of the managed accounts were adjusted to reflect
fees and expenses of the Value Fund, the composite's performance would have been
lower.
The sub-adviser calculated its performance using standards different than the
SEC method. Had the adviser calculated its performance using the SEC's methods,
its results might have differed.
The separately managed accounts are not subject to investment limitations,
diversification requirements, and other restrictions imposed by the 1940 Act and
Internal Revenue Code. If they were, their returns might have been lower. The
performance of these separate accounts is not intended to predict or suggest the
performance of the Value Fund.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Calendar Year Ended Cambiar S&P 500 Index
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
1975 34.80% 37.20%
1976 32.40% 23.80%
1977 14.40% (7.20)%
1978 22.50% 6.60%
1979 24.00% 18.40%
1980 25.50% 32.40%
1981 9.80% (4.90)%
1982 33.30% 21.60%
1983 22.60% 22.40%
1984 2.90% 6.10%
1985 29.30% 31.57%
1986 23.67% 18.21%
1987 6.10% 5.17%
1988 17.11% 16.50%
1989 23.23% 31.43%
1990 2.83% (3.19)%
1991 31.51% 30.55%
1992 9.56% 7.68%
1993 13.66% 10.00%
1994 1.00% 1.33%
1995 33.54% 37.50%
1996 23.92% 23.25%
1997 33.69% 33.36%
1998 13.57% 28.58%
-16-
<PAGE>
- ----------------------------------------------------------------------------------------------------
Summary of Performance
- ----------------------------------------------------------------------------------------------------
Cambiar S&P 500 Index
Cumulative (1/1/75-12/31/98) 7520% 4359%
1-year period ended 12/31/98 (average annual) 13.57% 28.58%
5-year period ended 12/31/98 (average annual) 20.47% 24.80%
10-year period ended 12/31/98 (average annual) 18.07% 20.00%
24-Year average annual return (1/1/75-12/31/98) 21.65% 17.84%
Value of $1 invested during (1/1/75-12/31/98) $75.20 $43.59
- ----------------------------------------------------------------------------------------------------
<FN>
Notes:
1. The annualized return is calculated from monthly data, allowing for
compounding. This method of calculating returns is different than the SEC
Standard, which may produce different results.
2. The cumulative return means that $1 invested in the account on January 1,
1975 had grown to $75.20 by December 31, 1998.
3. The 24-year mean is the arithmetic average of the annual returns for the
calendar years listed.
4. The S&P 500 Index is an unmanaged index which assumes reinvestment of
dividends and is generally considered representative of securities similar
to those invested in by the sub-adviser for the purpose of the composite
performance numbers set forth above.
5. During the period shown (1/1/75-12/31/98), fees on the sub-adviser's
individual accounts ranged from 0.25% to 2.0% (25 basis points to 200
basis points). The sub-adviser's returns presented above are net of the
maximum fee of 2.0%. Net returns to investors vary depending on the
management fee.
</FN>
</TABLE>
[UPDATE]
INFORMATION ABOUT INVESTMENTS
In addition to its principal investment strategies, each Fund's portfolio may
use the investment strategies described below. It may also employ investment
practices that this prospectus does not describe, such as investing in other
equity securities, foreign securities, futures and options, short sales,
repurchase agreements, when-issued and delayed delivery securities, borrowing
and other techniques. For information concerning these investment practices and
their risks, you should read the Funds' Statement of Additional Information
(SAI).
AMERICAN DEPOSITARY RECEIPTS. Each Fund may invest up to 25% of its assets in
foreign equity securities by purchasing American Depository Receipts ("ADRs").
ADRs are certificates evidencing ownership of shares of a foreign-based issuer
held in trust by a bank or similar financial institution. They are alternatives
to the direct purchase of the underlying securities in their national markets
and currencies.
GENERAL
The investment objective of any Fund may be changed without shareholder
approval.
-17-
<PAGE>
From time to time, a Fund may take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. For
example, a Fund may hold all or a portion of its assets in money market
instruments, securities of other no-load mutual funds or repurchase agreements.
If a Fund invests in shares of another mutual fund, the shareholders of the Fund
generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, a Fund may not achieve its investment
objectives.
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by the Funds' adviser or the Funds' various service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known as the "Year 2000
Issue."
The Funds' adviser has taken steps that it believes are reasonably
designed to address the Year 2000 Issue with respect to computer systems that
are used and to obtain reasonable assurances that comparable steps are being
taken by the Funds' major service providers. At this time, however, there can be
no assurance that these steps will be sufficient to avoid any adverse impact on
the Funds. In addition, the Funds' adviser cannot make any assurances that the
Year 2000 Issue will not affect the companies in which the Fund invests or
worldwide markets and economies.
-18-
<PAGE>
FINANCIAL STATEMENTS
The following table is intended to help you better understand
financial performance of the Value Fund and the Small Cap Quant Fund since their
inception. Certain information reflects financial results for a single Fund
share. The total returns represent the rate you would have earned (or lost) on
an investment in a Fund, assuming reinvestment of all dividends and
distributions. This information has been audited by McCurdy & Associates CPA's,
Inc., whose report, along with the financial statements of the Value Fund and
the Small Cap Quant Fund, are included in the Funds' annual report, which is
available upon request.
For a fund share outstanding throughout the period January 1, 1999 (Commencement
of operations) to July 31, 1999.
<TABLE>
<CAPTION>
Value Fund Small Cap Quant Fund
---------- --------------------
<S> <C> <C>
Net asset value, beginning of period $10.00 $10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income 0.01 (0.04)
Net realized and unrealized gain on investments 1.91 (1.10)
TOTAL FROM INVESTMENT OPERATIONS 1.92 (1.14)
LESS DISTRIBUTIONS
Dividends from net investment income 0.00 0.00
Distribution from realized gains from security transactions 0.00 0.00
TOTAL DISTRIBUTIONS 0.00 0.00
NET ASSET VALUE, END OF PERIOD $11.92 $ 8.86
Total return* 19.20% (11.40)%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (in 000's) 2,385 994
Ratio of expenses to average net assets, before reimbursement 2.45%** 3.23%**
Ratio of expenses to average net assets, net of reimbursement 1.3%** 1.3%**
Ratio of net investment income (loss) to average net assets before (1.03)%** (2.80)%**
Reimbursement
Ratio of net investment income to average net assets, net of 0.12%** (0.87)%**
Reimbursement
Portfolio turnover rate 32.98% 3.90%
<FN>
* Based on net asset value per share
** Ratios for this period off operations are annualized
</FN>
</TABLE>
-19-
<PAGE>
INVESTMENT ADVISER INVESTMENT SUB-ADVISER (TO THE VALUE FUND)
Alpha Analytics Investment Group, LLC Cambiar Investors, Inc.
Corporate Management Group, Inc. 8400 East Prentice Avenue, Suite 460
1901 Avenue of the Stars, Suite 1100 Englewood, CO 80111
Los Angeles, CA 90067
LEGAL COUNSEL ADMINISTRATOR
Brown, Cummins & Brown Co., L.P.A. American Data Services, Inc.
3500 Carew Tower, 441 Vine Street 150 Motor Parkway
Cincinnati, OH 45202 Hauppauge, New York 11788-5108
CUSTODIAN DISTRIBUTOR
Firstar Bank, N.A. ADS Distributors, Inc.
425 Walnut Street, M.L. 6118 150 Motor Parkway
Cincinnati, Ohio 45202 Hauppauge, New York 11788-5108
TRANSFER AGENT (ALL PURCHASES AND INDEPENDENT AUDITORS
ALL REDEMPTION REQUESTS) McCurdy & Associates, CPA's
American Data Services, Inc. 27955 Clemens Road
P.O. Box 5536 Westlake, Ohio 44145
Hauppauge, New York 11788-0132
-20-
<PAGE>
[BACK COVER PAGE]
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated by reference into this
prospectus, contains detailed information on Fund policies and operations.
Shareholder reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.
Call the Funds toll free at 877-257-4240 to request free copies of
the SAI and the Funds' annual and semi-annual reports, to request other
information about the Funds and to make shareholder inquiries.
You may review and copy information about the Funds (including the
SAI and other reports) at the Securities and Exchange Commission Public
Reference Room in Washington, D.C. Call the SEC at 800-SEC-0330 for room hours
and operation. You may also obtain Fund information on the SEC's Internet site
at HTTP.//WWW.SEC.GOV, and copies of this information may be obtained by sending
a written request and duplicating fee to the Public Reference Section of the
SEC, Washington, D.C. 20549-6609.
Investment Company Act # [ ]
-21-
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
ALPHA ANALYTICS VALUE FUND
ALPHA ANALYTICS SMALL CAP QUANT FUND
A. Alpha Analytics Digital Future Fund
STATEMENT OF ADDITIONAL INFORMATION
December 30, 1999
This Statement of Additional Information ("SAI") is not a prospectus.
It should be read in conjunction with the Prospectus of Alpha Analytics Value
Fund, Alpha Analytics Small Cap Quant Fund and Alpha Analytics Digital Future
Fund dated December 30, 1999. This SAI incorporates by reference the Fund's
Annual Report to Shareholders for the fiscal year ended June 30 1999 ("Annual
Report"). A free copy of the Prospectus or Annual Report can be obtained by
writing the Transfer Agent at American Data Services, Inc., at P.O. Box 5536,
Hauppauge, New York 11788-0132, or by calling 1-877-257-4240.
TABLE OF CONTENTS
-----------------
PAGE
----
DESCRIPTION OF THE TRUST AND FUNDS..........................................1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS.............................................................1
INVESTMENT LIMITATIONS......................................................5
INVESTMENT ADVISORY ARRANGEMENTS............................................8
TRUSTEES AND OFFICERS.......................................................8
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................9
DETERMINATION OF SHARE PRICE...............................................10
INVESTMENT PERFORMANCE.....................................................11
CUSTODIAN..................................................................12
TRANSFER AGENT.............................................................12
ACCOUNTANTS................................................................12
DISTRIBUTOR................................................................12
<PAGE>
DESCRIPTION OF THE TRUST AND FUND
Alpha Analytics Value Fund (the "Value Fund"), Alpha Analytics Small
Cap Quant Fund (the "Small Cap Quant Fund") and Alpha Analytics Digital Future
Fund ( the "Digital Future Fund") (each a "Fund" or collectively, the "Funds")
were organized as series of Alpha Analytics Investment Trust (the "Trust"). The
Trust is an open-end investment company established under the laws of Ohio by an
Agreement and Declaration of Trust dated August 18, 1998 (the "Trust Agreement")
and has no prior history. The Trust Agreement permits the Trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value.
The Fund does not issue share certificates. All shares are held in
non-certificate form registered on the books of the Fund and the Transfer Agent
for the account of the shareholder. Each share of a series represents an equal
proportionate interest in the assets and liabilities belonging to that series
with each other share of that series and is entitled to such dividends and
distributions out of income belonging to the series as are declared by the
Trustees. The shares do not have cumulative voting rights or any preemptive or
conversion rights, and the Trustees have the authority from time to time to
divide or combine the shares of any series into a greater or lesser number of
shares of that series so long as the proportionate beneficial interest in the
assets belonging to that series and the rights of shares of any other series are
in no way affected. In case of any liquidation of a series, the holders of
shares of the series being liquidated will been titled to receive as a class a
distribution out of the assets, net of the liabilities, belonging to that
series. Expenses attributable to any series are borne by that series. Any
general expenses of the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. No shareholder
is liable to further calls or to assessment by the Trust without his or her
express consent.
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of the Fund have equal voting rights and liquidation rights. The
Declaration of Trust can be amended by the Trustees, except that any amendment
that adversely effects the rights of shareholders must be approved by the
shareholders affected. Each share of the Fund is subject to redemption at any
time if the Board of Trustees determines in its sole discretion that failure to
so redeem may have materially adverse consequences to all or any of the Fund's
shareholders.
As of ____, 1999 the following persons may be deemed to have beneficially
owned five percent (5%) of more of the Fund: [________].
[As of ____, 1999, the officers and trustees as a group benefically owned
less than 1% of the Fund.]
For information concerning the purchase and redemption of shares of
the Fund, see "How to Buy Shares" and "How to Redeem Shares" in the Funds'
<PAGE>
Prospectus. For a description of the methods used to determine the share price
and value of a Fund's assets, see "Price of Shares" in the Funds' Prospectus.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Funds may make and some of the techniques they may use (see the
Prospectus, "Information About Investments").
A. FOREIGN SECURITIES. Each Fund may invest up to 25% of its assets in
foreign equity securities by purchasing American Depository Receipts ("ADRs").
ADRs are certificates evidencing ownership of shares of a foreign-based issuer
held in trust by a bank or similar financial institution. They are alternatives
to the direct purchase of the underlying securities in their national markets
and currencies. The Small Cap Quant Fund and the Digital Future Fund may also
purchase the equity securities of Canadian companies listed on Canadian
exchanges. To the extent that a Fund does invest in foreign securities, such
investments may be subject to special risks. Purchases of foreign securities are
usually made in foreign currencies and, as a result, the Fund may incur currency
conversion costs and may be affected favorably or unfavorably by changes in the
value of foreign currencies against the U.S. dollar. In addition, there may be
less information publicly available about a foreign company then about a U.S.
company, and foreign companies are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Other risks associated with investments in foreign securities include changes in
restrictions on foreign currency transactions and rates of exchanges, changes in
the administrations or economic and monetary policies of foreign governments,
the imposition of exchange control regulations, the possibility of expropriation
decrees and other adverse foreign governmental action, the imposition of foreign
taxes, less liquid markets, less government supervision of exchanges, brokers
and issuers, difficulty in enforcing contractual obligations, delays in
settlement of securities transactions and greater price volatility. In addition,
investing in foreign securities will generally result in higher commissions than
investing in similar domestic securities.
B. EQUITY SECURITIES. Equity securities include common stock, rights
and warrants. Common stocks, the most familiar type, represent an equity
(ownership) interest in a corporation. Warrants are options to purchase equity
securities at a specified price for a specific time period. Rights are similar
to warrants, but normally have a short duration and are distributed by the
issuer to its shareholders. Although equity securities have a history of
long-term growth in value, their prices fluctuate based on changes in a
company's financial condition and on overall market and economic conditions.
C. OPTION TRANSACTIONS. Each of the Small Cap Quant Fund and the
Digital Future Fund may invest up to 5% of its net assets in option transactions
involving individual securities and market indices. An option involves either
(a) the right or the obligation to buy or sell a specific instrument at a
specific price until the expiration date of the option, or (b) the right to
receive payments or the obligation to make payments representing the difference
between the closing price of a market index and the exercise price of the option
expressed in dollars times a specified multiple until the expiration date of the
option. Options are sold (written) on securities and market indices. The
<PAGE>
purchaser of an option on a security pays the seller (the writer) a premium for
the right granted but is not obligated to buy or sell the underlying security.
The purchaser of an option on a market index pays the seller a premium for the
right granted, and in return the seller of such an option is obligated to make
the payment. A writer of an option may terminate the obligation prior to
expiration of the option by making an offsetting purchase of an identical
option. Options are traded on organized exchanges and in the over-the-counter
market. Options on securities which a Fund sells (writes) will be covered or
secured, which means that it will own the underlying security (for a call
option); will segregate with the Custodian high quality liquid debt obligations
equal to the option exercise price (for a put option); or (for an option on a
stock index) will hold a portfolio of securities substantially replicating the
movement of the index (or, to the extent it does not hold such a portfolio, will
maintain a segregated account with the Custodian of high quality liquid debt
obligations equal to the market value of the option, marked to market daily).
When a Fund writes options, it may be required to maintain a margin account, to
pledge the underlying securities or U.S. government obligations or to deposit
liquid high quality debt obligations in a separate account with the Custodian.
The purchase and writing of options involves certain risks; for
example, the possible inability to effect closing transactions at favorable
prices and an appreciation limit on the securities set aside for settlement, as
well as (in the case of options on a stock index) exposure to indeterminate
liability. The purchase of options limits a Fund's potential loss to the amount
of the premium paid and can afford the Fund the opportunity to profit from
favorable movements in the price of an underlying security to a greater extent
than if transactions were effected in the security directly. However, the
purchase of an option could result in a Fund losing a greater percentage of its
investment than if the transaction were effected directly. When a Fund writes a
covered call option, it will receive a premium, but it will give up the
opportunity to profit from a price increase in the underlying security above the
exercise price as long as its obligation as a writer continues, and it will
retain the risk of loss should the price of the security decline. When a Fund
writes a covered put option, it will receive a premium, but it will assume the
risk of loss should the price of the underlying security fall below the exercise
price. When a Fund writes a covered put option on a stock index, it will assume
the risk that the price of the index will fall below the exercise price, in
which case the Fund may be required to enter into a closing transaction at a
loss. An analogous risk would apply if a Fund writes a call option on a stock
index and the price of the index rises above the exercise price.
D. FUTURES CONTRACTS. Each of the Small Cap Quant Fund and the Digital
Future Fund may invest up to 5% of its net assets in futures contracts. When the
Small Cap Quant Fund or the Digital Future Fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future date.
When a Fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when the Fund enters into the contract. Some currently
available futures contracts are based on specific securities, such as U.S.
Treasury bonds or notes, and some are based on indices of securities, such as
the Standard & Poor's 500 Composite Stock Price Index ("S&P 500"). Futures can
be held until their delivery dates, or can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore, purchasing
<PAGE>
futures contracts will tend to increase a Fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When a Fund sells a futures
contract, by contrast, the value of its futures position will tend to move in a
direction contrary to the market. Selling futures contracts, therefore, will
tend to offset both positive and negative market price changes, much as if the
underlying instrument had been sold. Successful use of futures contracts will
depend on the Adviser's ability to predict the future direction of stock prices
or interest rates and incorrect predictions by the Adviser may have an adverse
effect on the Funds. In this regard, it should be noted that the skills and
techniques necessary to arrive at such predictions are different from those
needed to predict price changes in individual stocks.
E. BORROWING. Each Fund may borrow up to one third of the value of its
total assets as a temporary measure for extraordinary or emergency purposes
(including to meet redemption requests). Because the Funds' investments will
fluctuate in value, whereas the interest obligations on borrowed funds may be
fixed, during times of borrowing, the Funds' net asset value may tend to
increase more when its investments increase in value, and decrease more when its
investments decrease in value. In addition, interest costs on borrowings may
fluctuate with changing market interest rates and may partially offset or exceed
the return earned on the borrowed funds. Also, during times of borrowing under
adverse market conditions, the Funds might have to sell portfolio securities to
meet interest or principal payments at a time when fundamental investment
considerations would not favor such sales. No Fund will purchase any securities
while borrowings representing more than 5% of its assets are outstanding.
F. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may purchase
securities on a when-issued or delayed delivery basis. Delivery of and payment
for these securities may take place as long as a month or more after the date of
the purchase commitment. The value of these securities is subject to market
fluctuation during this period and no income accrues to the Fund until
settlement takes place. The Fund maintains with the Custodian a segregated
account containing high grade liquid securities in an amount at least equal to
these commitments. In when-issued and delayed delivery transactions, the Fund
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause the Fund to miss a price or yield considered
to be advantageous. A Fund may engage in these types of purchases in order to
buy securities that fit within its investment objective at attractive prices,
not to increase its investment leverage.
G. REPURCHASE AGREEMENTS Each Fund may invest in repurchase agreements
fully collateralized by obligations issued by the U.S. Government or by agencies
of the U.S. Government ("U.S. Government obligations"). A repurchase agreement
is a short-term investment in which the purchaser (i.e., the Fund) acquires
ownership of a U.S. Government obligation (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 the Fund 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, the Fund could experience both delays
in liquidating the underlying security and losses in value. However, each Fund
intends to enter into repurchase agreements only with Firstar Bank, N.A. (the
Fund's Custodian), other banks with assets of $1 billion or more and registered
<PAGE>
securities dealers determined by the Adviser to be creditworthy. The Adviser
monitors the creditworthiness of the banks and securities dealers with which the
Fund engages in repurchase transactions.
H. SHORT SALES. Both the Small Cap Quant Fund and the Digital Future
Fund may sell a security short in anticipation of a decline in the market value
of the security. When a Fund engages in a short sale, it sells a security which
it does not own. To complete the transaction, a Fund must borrow the security in
order to deliver it to the buyer. The Fund must replace the borrowed security by
purchasing it at the market price at the time of replacement, which may be more
or less than the price at which the Fund sold the security. A Fund will incur a
loss as a result of the short sale if the price of the security increases
between the date of the short sale and the date on which the Fund replaces the
borrowed security. A Fund will realize a profit if the security declines in
price between those dates.
In connection with their short sales, the Small Cap Quant Fund and the
Digital Future Fund will each be required to maintain a segregated account with
the Custodian of cash or high grade liquid assets equal to the market value of
the securities sold less any collateral deposited with its broker. Each Fund
will limit its short sales so that no more than 10% of its net assets (less all
its liabilities other than obligations under the short sales) will be deposited
as collateral and allocated to the segregated account. However, the segregated
account and deposits will not necessarily limit the Fund's potential loss on a
short sale, which is unlimited.
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), I.E., they may not be changed without the affirmative vote of a
majority of the outstanding shares of each Fund. As used in the Prospectus and
the Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. BORROWING MONEY. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
<PAGE>
engagement in such activities is consistent with or permitted by the Investment
Company Act of 1940, as amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and Exchange Commission or its
staff.
3. UNDERWRITING. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. CONCENTRATION. No Fund will invest 25% or more of its total assets
in a particular industry. This limitation is not applicable to investments in
obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
<PAGE>
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
1. PLEDGING. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
2. BORROWING. No Fund will purchase any security while borrowings
representing more than 5% of its total assets are --------- outstanding.
3. MARGIN PURCHASES. No Fund will purchase securities or evidences of
interest thereon on "margin." This limitation is not applicable to short term
credit obtained by a Fund for the clearance of purchases and sales or redemption
of securities, or to arrangements with respect to transactions involving
options, futures contracts, short sales and other permitted investments and
techniques.
4. SHORT SALES. The Alpha Analytics Value Fund will not effect short
sales of securities.
5. OPTIONS. The Alpha Analytics Value Fund will not purchase or sell
puts, calls, options or straddles.
6. ILLIQUID INVESTMENTS. No Fund will invest in securities for which
there are legal or contractual restrictions on resale and other illiquid
securities.
7. LOANS OF PORTFOLIO SECURITIES. No Fund will make loans of portfolio
securities (the Funds have no current intention to loan portfolio securities).
INVESTMENT ADVISORY ARRANGEMENTS
INVESTMENT ADVISER. The investment adviser to each Fund is Alpha
Analytics Investment Group LLC, 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067 (the "Adviser"). Robert E. Gipson, is a Trustee and the
President of the Trust. He is also the President and managing member of the
Adviser and, as such, controls the Adviser. As a result, he is an affiliate of
the Trust and the Adviser.
Under the terms of each Fund's management agreement (each an
"Agreement" or collectively the "Agreements"), the Adviser manages each Fund's
investments subject to approval of the Board of Trustees and pays all of the
expenses of each Fund except brokerage, taxes, interest, fees and expenses of
the non-interested person trustees and extraordinary expenses. As compensation
for its management services and agreement to pay the Fund's expenses, each Fund
is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.50% of the average daily net assets of the Fund.
The Adviser may waive all or part of its fee, at any time, and at its sole
discretion, but such action shall not obligate the Adviser to waive any fees in
the future. For the period _____, 1998 (commencement of operations) through
<PAGE>
_____, 1999, the Value Fund paid advisory fees of $_____ and the Small Cap Quant
Fund paid advisory fees of $______.
The Adviser retains the right to use the name "Alpha Analytics" or any
variation thereof in connection with another investment company or business
enterprise with which the Adviser is or may become associated. The Trust's right
to use the name "Alpha Analytics" in connection with each Fund automatically
ceases ninety days after termination of the respective Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Funds believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Funds believes that there would be no material impact on any Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. Each Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Funds, no preference will be shown for such
securities.
SUB-ADVISER. Cambiar Investors, Inc., ("Cambiar") is the Sub-adviser to
the Value Fund. Cambiar is a wholly-owned subsidiary of United Asset Management
Corporation, a holding company. Under the terms of the Sub-Advisory Agreement,
the Sub-adviser receives a fee from the Adviser computed and accrued daily and
paid monthly at an annual rate of 0.50% of the average daily net assets of the
Fund.
Subject always to the control of the Board of Trustees, the
Sub-Adviser, at its expense, furnishes continuously an investment program for
the Value Fund. The Sub-Adviser must use its best judgement to make investment
decisions on behalf of the Value Fund, place all orders for the purchase and
sale of portfolio securities and execute all agreements related thereto. The
Sub-Adviser makes its officers and employees available to the Adviser from time
to time at reasonable times to review investment policies of the Value Fund and
to consult with the Adviser regarding the investment affairs of the Fund. The
Sub-Adviser maintains books and records with respect to the securities
transactions of the Value Fund and renders to the Adviser such periodic and
special reports as the Adviser or the Trustees may request. The Sub-Adviser pays
all expenses incurred by it in connection with its activities under this
Agreement other than the cost (including taxes and brokerage commissions, if
any) of securities and investments purchased for the Value Fund.
<PAGE>
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
==================================== ============== ================================================================================
NAME, AGE AND ADDRESS POSITION PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
==================================== ============== ================================================================================
<S> <C> <C>
Robert E. Gipson* President and Vice President of Sundance Group, Inc., a holding company, from 1993 to
Age: 53 Trustee present; Chairman of National Mercantile Bancorp from June 1997 to present;
1901 Avenue of the Stars Director of National Mercantile Bancorp from October 1996 to present; Of
Suite 1100 Counsel at Gipson, Hoffman & Pancione from July 1997 to present; Officer at
Los Angeles, CA 90067 Gipson, Hoffman & Pancione from December 1983 to July 1997; Owner/Officer
of Corporate Management Group, Inc., a business and financial consulting
company, from August 1988 to present.
==================================== ============== ================================================================================
Jack P. McNally* Secretary, Vice President of Corporate Management Group, Inc. from 1989 to present.
Age: 44 Treasurer and
1901 Avenue of the Stars Trustee
Suite 1100
Los Angeles, CA 90067
==================================== ============== ================================================================================
Donald J. Alschuler Trustee Partner of Donlyn Company, a private investment company, from 1962 to
Age: 64 present; Vice President of Lyndon Distribution Services, Inc., a warehousing
13104 Nimrod Place and distribution company, from 1988 to 1998; Chairman of Wisdom, Inc., a
Los Angeles, CA 90049 business advisory services company, from 1991 to present; President of
Modern Service Office Supply Co., Inc., an office products marketer and
distributor, from 1963 to 1993.
==================================== ============== ================================================================================
Michelle M. Schoeffel Trustee Chief Executive Officer and Chairwoman of Pacific American Securities, a
Age: 39 broker/dealer, from January 1998 to present; Vice President of Mellon
550 South Hope Street Private Asset Management from November 1993 to April 1997.
Suite 1025
Los Angeles, CA 90071
==================================== ============== ================================================================================
Felice R. Cutler Trustee Partner at the Law Offices of Cutler & Cutler from 1966 to 1998; Director of
Age: 62 Aegis Consumer Funding Group, Inc., a consumer finance company, from 1996 to
813 Greenway Drive 1998; Trustee of Astra Institutional Securities Trust and Astra
Beverly Hills, CA 90210 Institutional Trust from 1995 to 1997; Director and Trustee of Pilgrim Group
Family of Funds from 1986 to 1995.
==================================== ============== ================================================================================
</TABLE>
<PAGE>
Trustee fees are Trust expenses and each series of the Trust pays a
portion of the Trustee fees. The following table sets forth the Trustees'
compensation for the first fiscal period of the Trust ended July 31, 1999.
=================================== =======================================
TOTAL COMPENSATION
FROM TRUST (THE TRUST IS
NAME NOT IN A FUND COMPLEX)
=================================== =======================================
Robert E. Gipson $0
=================================== =======================================
Jack P. McNally $0
=================================== =======================================
Donald J. Alschuler $____
=================================== =======================================
Michelle M. Schoeffel $____
=================================== =======================================
Felice R. Cutler $_____
=================================== =======================================
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for each Fund's portfolio decisions and the placing
of each Fund's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for each Fund, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received. Consistent with
the Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and subject to its obligation of seeking best qualitative execution, the
Adviser may give consideration to sales of shares of the Trust as a factor in
the selection of brokers and dealers to execute portfolio - 10 transactions.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Funds and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Funds effect securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Funds. Although research services and other information are useful to the Funds
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Funds
under the Agreement.
<PAGE>
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to a market maker may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection. For the period ____, 1998 (commencement of operations)
through _______, 1999, the Value Fund paid brokerage commissions of $________
and the Small Cap Quant Fund paid brokerage commissions of $_____.
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of each Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day, Martin
Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. For a description of the methods
used to determine the net asset value (share price), see "Price of Shares" in
the Prospectus.
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return."
"Average annual total return," as defined by the Securities and Exchange
Commission, is computed by finding the average annual compounded rates of return
for the period indicated that would equate the initial amount invested to the
ending redeemable value, according to the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at
the end of the applicable
period of the hypothetical
$1,000 investment made at
the beginning of the
applicable period.
<PAGE>
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
In addition to providing average annual total return, the Funds may
also provide non-standardized quotations of total return for differing periods
and may provide the value of a $10,000 investment (made on the date of the
initial public offering of the Funds' shares) as of the end of a specified
period.
Each Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with each Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue. For the period ________,
1998 (commencement of operations) through ________, 1999, the Value Fund's
average annual total return was ___% and the Small Cap Quant Fund's average
annual total return was __%.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of any of the
Funds may be compared to indices of broad groups of unmanaged securities
considered to be representative of or similar to the portfolio holdings of the
Funds or considered to be representative of the stock market in general. The
Funds may use the Standard & Poor's 500 Stock Index or the Dow Jones Industrial
Average.
In addition, the performance of any of the Funds may be compared to
other groups of mutual funds tracked by any widely used independent research
firm which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or Morningstar, Inc. The
objectives, policies, limitations and expenses of other mutual funds in a group
may not be the same as those of any of the Funds. Performance rankings and
ratings reported periodically in national financial publications such as
Barron's and Fortune also may be used.
CUSTODIAN
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
<PAGE>
TRANSFER AGENT
American Data Services, Inc. ("ADS"), P.O. Box 5536, Hauppauge, New
York 11788-0132, acts as the Funds' transfer agent and, in such capacity,
maintains the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchases and redemptions of the
Funds' shares, acts as dividend and distribution disbursing agent and performs
other accounting and shareholder service functions. In addition, ADS, in its
capacity as Fund Administrator, provides the Funds with certain monthly reports,
record-keeping and other management-related services. [Insert description of the
fees paid by the Adviser on behalf of the Funds for these administrative
services]. For the period ______, 1998 (commencement of operations) through
____, 1999, the Adviser paid fees of $____ on behalf of the Value Fund, and $___
on behalf of the Small Cap Quant Fund, to ADS for these services.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending July 31, 2000. McCurdy & Associates performs an
annual audit of the Funds' financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
ADS Distributors, Inc. (the "Distributor"), P.O. Box 5536, Hauppauge,
New York 11788-0132, is the exclusive agent for distribution of shares of the
Funds. The Distributor is obligated to sell the shares of the Funds on a best
efforts basis only against purchase orders for the shares. Shares of the Funds
are offered to the public on a continuous basis. The Distributor is an
affiliated company of ADS, the Funds' transfer agent.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in the statement of additional information are hereby incorporated
by reference to the Funds' Annual Report to the shareholders for the period
ended July 31, 1999. The Trust will provide the Annual Report without charge by
calling the Fund at 877-ALPHA40 (877-257-4240).
<PAGE>
ALPHA ANALYTICS INVESTMENT TRUST
PART C. OTHER INFORMATION
-----------------
ITEM 23. Exhibits
- -------- --------
(a) Articles of Incorporation. Copy of Registrant's Agreement and
Declaration of Trust, which was filed as an Exhibit to
Registrant's Registration Statement, is hereby incorporated by
reference.
(b) By-laws. Copy of Registrant's By-laws, which was filed as an
Exhibit to Registrant's Registration Statement, is hereby
incorporated by reference.
(c) Instruments Defining Rights of Society Holders - None.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with its
Adviser, Alpha Analytics Investment Group LLC, for the Small
Cap Quant Fund which was filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(ii) Copy of Registrant's Management Agreement with its
Adviser, Alpha Analytics Investment Group LLC, for the Value
Fund which was filed as an Exhibit to Registrant's
Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(iii) Copy of Sub-Advisory Agreement between Alpha Analytics
Investment Group LLC and Cambiar Investors, Inc. which was
filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 1, is hereby incorporated by reference.
(iv) Copy of Registrant's proposed Management Agreement
with its Adviser, Alpha Analytics Investment Group, LLC, for
the Alpha Analytics Digital Future Fund is filed herewith.
(e) Underwriting Contracts. Copy of Registrant's Underwriting
Agreement with ADS Distributors, Inc. which was filed as an
Exhibit to Registrant's Pre-Effective Amendment No. 1, is
hereby incorporated by reference.
(f) Bonus or Profit Sharing - None.
(g) Custodian Agreements. Copy of Registrant's Agreement with the
Custodian, Firstar Bank, N.A. which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference.
-2-
<PAGE>
(h) Other Material Contracts. Copy of Administrative Services
Agreement with American Data Services, Inc. which was filed as
an Exhibit to Registrant's Pre-Effective Amendment No. 1, is
hereby incorporated by reference.
(i) Legal Opinion - Consent of Brown, Cummins & Brown Co., L.P.A.
is filed herewith.
(j) Other Opinions - Consent of Independent Public Accountants is
filed herewith.
(k) Omitted Financial Statements - None.
(l) Initial Capital Agreements. Copy of Letters of Initial
Stockholders are filed herewith.
(m) Rule 12b-1 Plan - None.
(n) Financial Data Schedule. A copy of which was filed as an
Exhibit to Registrant's Pre-Effective Amendment No. 1, is
hereby incorporated by reference.
(o) Rule 18f-3 Plan - None.
(p) Power of Attorney for the Trust (and a Certificate with respect
thereto) and Powers of Attorney for the Trustees and Officers
which were filed as an Exhibit to Registrant's Pre-Effective
Amendment No. 1, are hereby incorporated by reference.
ITEM 24. Persons Controlled by or Under Common Control with the Registrant
As of September 30, 1999, Robert E. Gipson owned 34.93% of the
outstanding shares of the Alpha Analytics Value Fund and 41.80% of the Alpha
Analytics Small Cap Quant Fund, may be deemed to control the Registrant. Mr.
Gipson is also the managing and controlling member of the Alpha Analytics
Investment Group LLC (the Registrant's Adviser), a California limited liability
company, and the sole shareholder of Corporate Management Group, Inc., a
California corporation.
ITEM 25. Indemnification
- -------- ---------------
(a) Article VI of the Registrant's Declaration of
Trust provides for indemnification of officers
and Trustees as follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC.
Subject to and except as otherwise provided in the Securities
Act of 1933, as amended, and the 1940 Act, the Trust shall
indemnify each of its Trustees and officers (including persons
who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise (hereinafter
referred to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense
-3-
<PAGE>
or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative
or legislative body, in which such Covered Person may be or
may have been involved as a party or otherwise or with which
such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a
Trustee or officer, director or trustee, and except that no
Covered Person shall be indemnified against any liability to
the Trust or its Shareholders to which such Covered Person
would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's
office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance
attorneys' fees or other expenses incurred by a Covered Person
in defending a proceeding to the full extent permitted by the
Securities Act of 1933, as amended, the 1940 Act, and Ohio
Revised Code Chapter 1707, as amended. In the event any of
these laws conflict with Ohio Revised Code Section 1701.13(E),
as amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right
of indemnification provided by this Article VI shall not be
exclusive of or affect any other rights to which any such
Covered Person may be entitled. As used in this Article VI,
"Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall
affect any rights to indemnification to which personnel of the
Trust, other than Trustees and officers, and other persons may
be entitled by contract or otherwise under law, nor the power
of the Trust to purchase and maintain liability insurance on
behalf of any such person.
The Registrant may not pay for insurance which protects the
Trustees and officers against liabilities rising from action
involving willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of
their offices.
(b) The Registrant may maintain a standard mutual fund and
investment advisory professional and directors and officers
liability policy. The policy, if maintained, would provide
coverage to the Registrant, its Trustees and officers, and
could cover its Advisers, among others. Coverage under the
policy would include losses by reason of any act, error,
omission, misstatement, misleading statement, neglect or breach
of duty.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant pursuant to the
provisions of Ohio law and the Agreement and Declaration of the
Registrant or the By-Laws of the Registrant, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
trustee, officer or controlling person of the Trust in the
successful defense of any action, suit or proceeding) is
-4-
<PAGE>
asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
ITEM 26. Business and Other Connections of Investment Adviser
- -------
A. Alpha Analytics Investment Group LLC ("AAIG"), 1901 Avenue of
the Stars, Suite 1100, Los Angeles, CA 90067 is a registered
investment adviser.
(1) AAIG has engaged in no other business during the past two
fiscal years.
(2) Information with respect to the substantial business
activities of Robert E. Gipson, the managing member AAIG,
is described in Part B and is hereby incorporated by
reference.
ITEM 27. Principal Underwriters
- -------
(a) ADS Distributors, Inc., the Registrant's distributor, acts as
distributor for Amerindo Technology Fund, The Canandagua Funds,
and America Asia Allocation Growth Fund.
(b) Information with respect to each director and officer of ADS
Distributors, Inc. is incorporated by reference to Schedule A
of Form BD filed by it under the Securities Exchange Act of
1934 (File No. 8-49995).
(d) Not applicable.
ITEM 28. Location of Accounts and Records
- -------
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA 90067 and/or by the
Registrant's Custodian, Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202, and/or by the Registrant's Transfer Agent,
American Data Services, Inc., Hauppauge Corporate Center, 150 Motor
Parkway, Hauppauge, New York 11760.
ITEM 29. Management Services - None.
- -------
ITEM 30. Undertakings
- -------
(a) Not Applicable.
(b) The Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and without
charge.
-5-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio on the 8th day of October,
1999.
Alpha Analytics Investment Trust
By:/s/ Donald S. Mendelsohn
----------------------------
Donald S. Mendelsohn
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
*By:/s/ Donald S. Mendelsohn
----------------------------
Robert E. Gipson* Donald S. Mendelsohn
President and Trustee Attorney-in-Fact
October 8, 1999
Jack P. McNally*
Treasurer and Trustee
Michelle M. Schoeffel*
Trustee
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Felice R. Cutler
Trustee
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Donald J. Alschuler
Trustee
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EXHIBIT INDEX
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PAGE
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1. Management Agreement for the Alpha Analytics Digital Future Fund...EX-99.23.d
2. Consent of Counsel.................................................EX-99.23.i
3. Consent of Independent Public Accountants..........................EX-99.23.j
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MANAGEMENT AGREEMENT
TO: Alpha Analytics Investment Group, LLC
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
Dear Sirs:
Alpha Analytics Investment Trust (the "Trust") herewith confirms our
agreement with you.
The Trust has been organized to engage in the business of an
investment company. The Trust currently offers two series of shares to
investors, one of which is the Alpha Analytics Digital Future Fund (the "Fund").
You have been selected to act as the sole investment adviser of the
Fund and to provide certain other services, as more fully set forth below, and
you are willing to act as such investment adviser and to perform such services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows effective upon the date of the execution of this
Agreement.
1. ADVISORY SERVICES
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You will regularly provide the Fund with such investment advice
as you in your discretion deem advisable and will furnish a continuous
investment program for the Fund consistent with the Fund's investment objectives
and policies. You will determine the securities to be purchased for the Fund,
the portfolio securities to be held or sold by the Fund and the portion of the
Fund's assets to be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further to such policies and instructions as the
Board may from time to time establish. You will advise and assist the officers
of the Trust in taking such steps as are necessary or appropriate to carry out
the decisions of the Board and the appropriate committees of the Board regarding
the conduct of the business of the Fund as it relates to your responsibilities
otherwise provided for in this Agreement. You may delegate any or all of the
responsibilities, rights or duties described in this paragraph 1 to one or more
sub-advisers who shall enter into agreements with you and the Trust, which
agreements shall be approved and ratified by the Board.
2. ALLOCATION OF CHARGES AND EXPENSES
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You will pay all operating expenses of the Fund, including the
compensation and expenses of any employees of the Fund and of any other persons
rendering any services to the Fund; clerical and shareholder service staff
salaries; office space and other office expenses; fees and expenses incurred by
the Fund in connection with membership in investment company organizations;
legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in
connection with the organization and initial registration of shares of the Fund;
insurance expenses; fees and expenses of the custodian, transfer agent, dividend
disbursing agent, shareholder service agent, plan agent, administrator,
accounting and pricing services agent and underwriter of the Fund; expenses,
including clerical expenses, of issue, sale, redemption or repurchase of shares
of the Fund; the cost of preparing and distributing reports and notices to
shareholders, the cost of printing or preparing prospectuses and statements of
additional information for delivery to the Fund's current and prospective
shareholders; the cost of printing or preparing stock certificates or any other
documents, statements or reports to shareholders; expenses of shareholders'
meetings and proxy solicitations; advertising, promotion and other expenses
incurred directly or indirectly in connection with the sale or distribution of
the Fund's shares excluding expenses which the Fund is authorized to pay
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"); and all other operating expenses not specifically assumed by the
Fund.
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The Fund will pay all brokerage fees and commissions, taxes,
borrowing costs (such as (a) interest and (b) dividend expenses on securities
sold short), fees and expenses of the non-interested person trustees and such
extraordinary or non-recurring expenses as may arise, including litigation to
which the Fund may be a party and indemnification of the Trust's trustees and
officers with respect thereto. The Fund will also pay expenses which it is
authorized to pay pursuant to Rule 12b-1 under the 1940 Act. You may obtain
reimbursement from the Fund, at such time or times as you may determine in your
sole discretion, for any of the expenses advanced by you, which the Fund is
obligated to pay, and such reimbursement shall not be considered to be part of
your compensation pursuant to this Agreement.
3. COMPENSATION OF THE ADVISER
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For all of the services to be rendered and payments to be made as
provided in this Agreement, as of the last business day of each month, the Fund
will pay you a fee at the annual rate of 1.50% of the average value of its daily
net assets.
The average value of the daily net assets of the Fund shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust or a resolution of the Board, if required. If, pursuant to such
provisions, the determination of net asset value of the Fund is suspended for
any particular business day, then for the purposes of this paragraph, the value
of the net assets of the Fund as last determined shall be deemed to be the value
of the net assets as of the close of the business day, or as of such other time
as the value of the Fund's net assets may lawfully be determined, on that day.
If the determination of the net asset value of the Fund has been suspended for a
period including such month, your compensation payable at the end of such month
shall be computed on the basis of the value of the net assets of the Fund as
last determined (whether during or prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
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In connection with purchases or sales of portfolio securities for
the account of the Fund, it is understood that you will arrange for the placing
of all orders for the purchase and sale of portfolio securities for the account
with brokers or dealers selected by you, subject to review of this selection by
the Board from time to time. You will be responsible for the negotiation and the
allocation of principal business and portfolio brokerage. In the selection of
such brokers or dealers and the placing of such orders, you are directed at all
times to seek for the Fund the best qualitative execution, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer.
You should generally seek favorable prices and commission rates
that are reasonable in relation to the benefits received. In seeking best
qualitative execution, you are authorized to select brokers or dealers who also
provide brokerage and research services to the Fund and/or the other accounts
over which you exercise investment discretion. You are authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a Fund portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if you determine in good faith that the amount of the commission is
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reasonable in relation to the value of the brokerage and research services
provided by the executing broker or dealer. The determination may be viewed in
terms of either a particular transaction or your overall responsibilities with
respect to the Fund and to accounts over which you exercise investment
discretion. The Fund and you understand and acknowledge that, although the
information may be useful to the Fund and you, it is not possible to place a
dollar value on such information. The Board shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best qualitative
execution as described above, you may give consideration to sales of shares of
the Fund as a factor in the selection of brokers and dealers to execute Fund
portfolio transactions.
Subject to the provisions of the 1940 Act, and other applicable
law, you, any of your affiliates or any affiliates of your affiliates may retain
compensation in connection with effecting the Fund's portfolio transactions,
including transactions effected through others. If any occasion should arise in
which you give any advice to clients of yours concerning the shares of the Fund,
you will act solely as investment counsel for such client and not in any way on
behalf of the Fund. Your services to the Fund pursuant to this Agreement are not
to be deemed to be exclusive and it is understood that you may render investment
advice, management and other services to others, including other registered
investment companies.
5. LIMITATION OF LIABILITY OF ADVISER
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You may rely on information reasonably believed by you to be
accurate and reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither you nor your shareholders, members, officers,
directors, employees, agents, control persons or affiliates of any thereof shall
be subject to any liability for, or any damages, expenses or losses incurred by
the Trust in connection with, any error of judgment, mistake of law, any act or
omission connected with or arising out of any services rendered under, or
payments made pursuant to, this Agreement or any other matter to which this
Agreement relates, except by reason of willful misfeasance, bad faith or gross
negligence on the part of any such persons in the performance of your duties
under this Agreement, or by reason of reckless disregard by any of such persons
of your obligations and duties under this Agreement.
Any person, even though also a director, officer, employee,
member, shareholder or agent of you, who may be or become an officer, director,
trustee, employee or agent of the Trust, shall be deemed, when rendering
services to the Trust or acting on any business of the Trust (other than
services or business in connection with your duties hereunder), to be rendering
such services to or acting solely for the Trust and not as a director, officer,
employee, member, shareholder or agent of you, or one under your control or
direction, even though paid by you.
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall take effect on the date of its execution,
and shall remain in force for a period of two (2) years from the date of its
execution, and from year to year thereafter, subject to annual approval by (i)
the Board or (ii) a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event continuance is also approved by a
majority of the trustees who are not interested persons of you or the Trust, by
a vote cast in person at a meeting called for the purpose of voting such
approval.
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If the shareholders of the Fund fail to approve the Agreement in
the manner set forth above, upon request of the Board, you will continue to
serve or act in such capacity for the Fund for the period of time pending
required approval of the Agreement, of a new agreement with you or a different
adviser or other definitive action; provided that the compensation to be paid by
the Fund to you for your services to and payments on behalf of the Fund will be
equal to the lesser of your actual costs incurred in furnishing such services
and payments or the amount you would have received under this Agreement for
furnishing such services and payments.
This Agreement may, on sixty days written notice, be terminated
with respect to the Fund, at any time without the payment of any penalty, by the
Board, by a vote of a majority of the outstanding voting securities of the Fund,
or by you. This Agreement shall automatically terminate in the event of its
assignment.
7. USE OF NAME
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The Trust and you acknowledge that all rights to the name "Alpha
Analytics" or any variation thereof belong to you, and that the Trust is being
granted a limited license to use such words in its Fund name or in any class
name. In the event you cease to be the adviser to the Fund, the Trust's right to
the use of the name "Alpha Analytics" in connection with the Fund shall
automatically cease on the ninetieth day following the termination of this
Agreement. The right to the name may also be withdrawn by you during the term of
this Agreement upon ninety (90) days' written notice by you to the Trust.
Nothing contained herein shall impair or diminish in any respect, your right to
use the name "Alpha Analytics" in the name of, or in connection with, any other
business enterprises with which you are or may become associated. There is no
charge to the Trust for the right to use this name.
8. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged
or terminated orally, and no amendment of this Agreement shall be effective
until approved by the Board, including a majority of the trustees who are not
interested persons of you or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (if required under
interpretations of the 1940 Act by the Securities and Exchange Commission or its
staff) by vote of the holders of a majority of the outstanding voting securities
of the series to which the amendment relates.
9. LIMITATION OF LIABILITY TO TRUST PROPERTY
-----------------------------------------
The term "Alpha Analytics Investment Trust" means and refers to
the Trustees from time to time serving under the Trust's Declaration of Trust as
the same may subsequently thereto have been, or subsequently hereto be, amended.
It is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust personally, but bind only the trust property of the
Trust, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees and shareholders
of the Trust and signed by officers of the Trust, acting as such, and neither
such authorization by such trustees and shareholders nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
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bind only the trust property of the Trust as provided in its Declaration of
Trust. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the State of Ohio.
10. SEVERABILITY
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In the event any provision of this Agreement is determined to be
void or unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
11. QUESTIONS OF INTERPRETATION
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(a) This Agreement shall be governed by the laws of the State
of Ohio.
(b) For the purpose of this Agreement, the terms "majority
of the outstanding voting securities," "control" and "interested person" shall
have their respective meanings as defined in the 1940 Act and rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under the 1940 Act; and the term
"brokerage and research services" shall have the meaning given in the Securities
Exchange Act of 1934.
(c) Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term or
provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretation thereof, if any, by the United
States courts or in the absence of any controlling decision of any such court,
by the Securities and Exchange Commission or its staff. In addition, where the
effect of a requirement of the 1940 Act, reflected in any provision of this
Agreement, is revised by rule, regulation, order or interpretation of the
Securities and Exchange Commission or its staff, such provision shall be deemed
to incorporate the effect of such rule, regulation, order or interpretation.
12. NOTICES
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Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Trust is 1901 Avenue of
the Stars, Suite 1100, Los Angeles, CA 90067, the address of the manager is 1901
Avenue of the Stars, Suite 1100, Los Angeles, CA 90067.
13. COUNTERPARTS
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This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14. BINDING EFFECT
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Each of the undersigned expressly warrants and represents that he
has the full power and authority to sign this Agreement on behalf of the party
indicated, and that his signature will operate to bind the party indicated to
the foregoing terms.
15. CAPTIONS
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The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
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If you are in agreement with the foregoing, please sign the form
of acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
ATTEST:
Alpha Analytics Investment Trust
By:________________________ By: ________________________
Name/Title_________________ Robert E. Gipson, President
Dated: ___________, 1999
ACCEPTANCE
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The foregoing Agreement is hereby accepted.
ATTEST:
Alpha Analytics Investment Group, LLC
By: By:_______________________
Name/Title:_______________ Name/Title:________________
Dated: ___________, 1999
BROWN, CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER
JAMES R. CUMMINS CINCINNATI, OHIO 45202 AARON A. VANDERLAAN
ROBERT S BROWN TELEPHONE (513) 381-2121
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125 OF COUNSEL
LYNNE SKILKEN GILBERT BETTMAN
AMY G. APPLEGATE
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
October 8, 1999
Alpha Analytics Investment Trust
1901 Avenue of the Stars, Suite 1100
Los Angeles, CA 90067
Gentlemen:
A legal opinion that we prepared was filed with your Registration
Statement on Form N-1A (the "Legal Opinion"). We hereby give you our consent to
incorporate by reference the Legal Opinion into Post-Effective Amendment No. 1
to your Registration Statement (the "Amendment"), and consent to all references
to us in the Amendment.
Very truly yours,
/s/ Brown, Cummins & Brown Co., L.P.A.
Brown, Cummins & Brown Co., L.P.A.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to: 1) the use, in this
Post-effective Amendment No. 1 to the Registration Statement on Form N-1A for
the Alpha Analytics Investment Trust (File No. 811-9039) of our audit report
dated August 23, 1999 and 2) all references to our firm included in or made a
part of this Amendment, including the reference to our firm under the heading
"Accountants" in the Statement of Additiional Information and under the heading
"Financial Statements" in the Prospectus..
/ s /McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
Octobe 7, 1999
