Independent Auditor's Report
To the Shareholders and
Board of Directors of
the Allied Owners Action Fund
In planning and performing our audit of the financial statements of the
Allied Owners Action Fund for the period from March 9, 2000 to
September 30, 2000, we considered its internal control, including control
activities for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to
provide assurance on internal control.
The management of the Allied Owners Action Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's objective
of preparing financial statements for external purposes that are fairly
presented in conformity with accounting principles generally accepted in
the United States.
Because of inherent limitations in internal control, error or fraud may
occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce
to a relatively low level the risk that misstatements caused by error or
fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their functions.
However, we noted no matters involving internal control and its operation,
including controls for safeguarding securities, that we consider to be
material weaknesses as defined above as of September 30, 2000.
This report is intended solely for the information and use of management,
the Board of Directors of the Allied Owners Action Fund, and the
Securities and Exchange Commission.
ARTHUR ANDERSEN LLP
New York, New York
November 17, 2000
