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. / /
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Post-Effective Amendment No. 15 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT / /
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OF 1940
Amendment No. 16 / X /
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(Check appropriate box or boxes.)
AmeriPrime Advisors Trust - File Nos. 333-85083 and 811-09541
(Exact Name of Registrant as Specified in Charter)
1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (817) 251-6700
Kenneth Trumpfheller, AmeriPrime Advisors Trust, 1793 Kingswood Drive,
Suite 200, Southlake, Texas 76092
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/_/ immediately upon filing pursuant to paragraph (b)
/_/on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(1)
/_/ on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/_/ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/_/this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
iExchange Diversified Growth Fund
iExchange Small Cap Growth Fund
iExchange New Economy Fund
Prospectus
_______________, 2001
14180 Dallas Parkway
Suite 200
Dallas, Texas 75240
(800)-[ ]
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>
TABLE OF CONTENTS
PAGE
RISK/RETURN SUMMARY.............................................................
FEES AND EXPENSES OF INVESTING IN THE FUNDS.....................................
ADDITIONAL INFORMATION ABOUT STRATEGIES AND RISKS...............................
HOW TO BUY SHARES...............................................................
HOW TO REDEEM SHARES............................................................
DETERMINATION OF NET ASSET VALUE................................................
DIVIDENDS, DISTRIBUTIONS AND TAXES..............................................
MANAGEMENT OF THE FUNDS.........................................................
FOR MORE INFORMATION..................................................BACK COVER
<PAGE>
RISK/RETURN SUMMARY
iExchange Diversified Growth Fund
Investment Objective
The Fund's investment objective is long term capital appreciation.
Principal Strategies
The Fund seeks to provide investors with long term capital appreciation
by investing primarily in a diversified portfolio of common stock of U.S.
companies. The Fund intends to focus on growth stocks, which are those stocks
that generally trade with higher price/earnings ratios, reflecting investors'
willingness to pay a higher share price for potentially steady or higher
earnings growth.
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by members of
the iExchange.com web site known as "Analysts." The iExchange Analysts are
visitors to the iExchange.com web site that actively participate by making price
forecasts, not "Wall Street" analysts.
o The Model weights the stock price forecasts, based on the historical
accuracy of each iExchange Analyst's forecasts.
o The Model uses screens and settings determined by the Fund's adviser,
consistent with the Fund's objective, for factors such as price to earnings
growth ratios, risk measurement, liquidity requirements and sector
allocation. The screens and settings will be changed by the adviser based
on market conditions.
o The Model applies these screens and settings to the weighted stock
forecasts to determine the stocks (and the appropriate amount of each
stock) for the Fund's portfolio.
o The adviser will then review the output of the Model, making any
adjustments it believes are necessary to the Model's settings and resultant
portfolio.
o The portfolio is periodically "rebalanced," at which time portfolio
securities are bought and sold by the Fund. Rebalancing is triggered by one
of three events: a substantial change in the cash component (due to
additional investments or redemptions), a substantial change in the
weighting of the portfolio (due to changes in market value) and a periodic
reevaluation of the portfolio.
It is the intention of the Fund's adviser to rely solely on the Model
(and the forecasts made by the iExchange Analysts) to determine the stocks in
the Fund's portfolio. The Fund's portfolio will not, however, precisely mirror
the iExchange Analysts' selections because the Model applies the adviser's
screens and settings to the input from the iExchange Analysts forecasts. The
adviser could also override the Model's recommendations at any time if the
adviser believes that an unforeseen or extreme market condition warrants such
action.
Although the Fund will be diversified among various companies, it is
likely that the Fund could invest a significant portion of its assets in the
technology sector. In addition to common stock of U.S. companies, the Fund may
invest to a limited degree in foreign companies by purchasing American
Depositary Receipts (ADRs). An ADR is a U.S. dollar denominated certificate that
evidences ownership of shares of a foreign company. They are alternatives to the
direct purchase of the underlying foreign stock.
Principal Risks
Management Risk. The Fund's performance is in large measure dependent on the
iExchange Analysts and the quality of their stock price forecasts. There is no
guarantee that people will participate in the iExchange.com web site, or that
their participation will result in quality recommendations. This is a principal
risk because the adviser only considers companies recommended by iExchange
Analysts. In addition, the Fund could perform poorly if the adviser's
Interactive Portfolio Management Model(TM) does not perform. The adviser has no
prior experience as an investment adviser or using the Model.
On-line Investing Risk. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
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.
Technology Risk. To the extent the Fund invests in the technology sector,
weakness in this sector could result in losses to the Fund. Technology companies
may be significantly affected by falling prices and profits and intense
competition, and their products may be subject to rapid obsolescence. Changes in
governmental policies, such as telephone and cable regulations and anti-trust
enforcement, may have a material effect on the products and services of these
companies. In addition, the rate of technological change often requires
extensive and sustained investment in research and development. It is likely
that some of today's public companies that are benefiting from the growth of the
Internet and other new technologies will not exist in the future. The price of
many of these stocks has risen based on projections of future earnings and
company growth. If a company does not perform as expected, the price of the
stock could decline significantly. Many technology companies are currently
operating at a loss and may never be profitable.
Foreign Risk. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
No Fund is a complete investment program. As with any mutual fund investment,
the Fund's returns will vary and you could lose money.
iExchange Small Cap Growth Fund
Investment Objective
The Fund's investment objective is long term capital appreciation.
Principal Strategies
The Fund seeks to provide investors with long term capital appreciation
by investing at least 65% of its assets in common stock of small capitalization
U.S. companies. The Fund intends to focus on growth stocks, which are those
stocks that generally trade with higher price/earnings ratios, reflecting
investors' willingness to pay a higher share price for potentially steady or
higher earnings growth. The Fund considers a company to be small if its market
capitalization, at the time of purchase by the Fund, is within the
capitalization range of the companies in the Russell 2000 Index (as of the date
of this prospectus, $250 million to $1.5 billion).
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by members of
the iExchange.com web site known as "Analysts." The iExchange Analysts are
visitors to the iExchange.com web site that actively participate by making price
forecasts, not "Wall Street" analysts.
o The Model weights the stock price forecasts, based on the historical
accuracy of each iExchange Analyst's forecasts.
o The Model uses screens and settings determined by the Fund's adviser,
consistent with the Fund's objective, for factors such as price to earnings
growth ratios, risk measurement, liquidity requirements and sector
allocation. The screens and settings will be changed by the adviser based
on market conditions.
o The Model applies these screens and settings to the weighted stock
forecasts to determine the stocks (and the appropriate amount of each
stock) for the Fund's portfolio.
o The adviser will then review the output of the Model, making any
adjustments it believes are necessary to the Model's settings and resultant
portfolio.
o The portfolio is periodically "rebalanced," at which time portfolio
securities are bought and sold by the Fund. Rebalancing is triggered by one
of three events: a substantial change in the cash component (due to
additional investments or redemptions), a substantial change in the
weighting of the portfolio (due to changes in market value) and a periodic
reevaluation of the portfolio.
It is the intention of the Fund's adviser to rely solely on the Model
(and the forecasts made by the iExchange Analysts) to determine the stocks in
the Fund's portfolio. The Fund's portfolio will not, however, precisely mirror
the iExchange Analysts' selections because the Model applies the adviser's
screens and settings to the input from the iExchange Analysts forecasts. The
adviser could also override the Model's recommendations at any time if the
adviser believes that an unforeseen or extreme market condition warrants such
action.
It is likely that the Fund could invest a significant portion of its
assets in the technology sector. In addition to common stock of U.S. companies,
the Fund may invest to a limited degree in foreign companies by purchasing
American Depositary Receipts (ADR's). An ADR is a U.S. dollar denominated
certificate that evidences ownership of shares of a foreign company. They are
alternatives to the direct purchase of the underlying foreign stock. The Fund is
non-diversified, which means that its portfolio may at times focus on a limited
number of companies.
Principal Risks
Management Risk. The Fund's performance is in large measure dependent on the
iExchange Analysts and the quality of their stock price forecasts. There is no
guarantee that people will participate in the iExchange.com web site, or that
their participation will result in quality recommendations. This is a principal
risk because the adviser only considers companies recommended by iExchange
Analysts. In addition, the Fund could perform poorly if the adviser's
Interactive Portfolio Management Model(TM) does not perform. The adviser has no
prior experience as an investment adviser or using the Model.
On-line Investing Risk. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
Foreign Risk. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
Technology Risk. To the extent the Fund invests in the technology sector,
weakness in this sector could result in losses to the Fund. Technology companies
may be significantly affected by falling prices and profits and intense
competition, and their products may be subject to rapid obsolescence. Changes in
governmental policies, such as telephone and cable regulations and anti-trust
enforcement, may have a material effect on the products and services of these
companies. In addition, the rate of technological change often requires
extensive and sustained investment in research and development. It is likely
that some of today's public companies that are benefiting from the growth of the
Internet and other new technologies will not exist in the future. The price of
many of these stocks has risen based on projections of future earnings and
company growth. If a company does not perform as expected, the price of the
stock could decline significantly. Many technology companies are currently
operating at a loss and may never be profitable.
Smaller Company Risk.
o The earnings and prospects of smaller companies are more volatile than
larger companies.
o Smaller companies may experience higher failure rates than do larger
companies.
o 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 experience.
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.
Non-diversification Risk. As a non-diversified fund, the Fund will be subject to
substantially more investment risk and potential for volatility than a
diversified fund because its portfolio may at times focus on a limited number of
companies. The Fund's share price could fall if the Fund is heavily invested in
a particular stock and the price of that stock falls.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
No Fund is a complete investment program. As with any mutual fund investment,
the Fund's returns will vary and you could lose money.
iExchange New Economy Fund
Investment Objective
The Fund's investment objective is long term capital appreciation.
Principal Strategies
The Fund seeks to provide investors with long term capital appreciation
by investing at least 65% of its assets in common stock of companies that the
Fund's adviser believes will benefit from the growth and development of the new
economy technologies. These technologies include Internet and new media, digital
consumer electronics, biotechnology, broadband and fiber optics, wireless
communications and computers.
The Fund's adviser uses its software model (called the Interactive
Portfolio Management Model(TM)) to select the stocks the Fund will buy and sell.
The Model is based primarily on stock price forecasts submitted by members of
the iExchange.com web site known as "Analysts." The iExchange Analysts are
visitors to the iExchange.com web site that actively participate by making price
forecasts, not "Wall Street" analysts.
o The Model weights the stock price forecasts, based on the historical
accuracy of each iExchange Analyst's forecasts.
o The Model uses screens and settings determined by the Fund's adviser,
consistent with the Fund's objective, for factors such as price to earnings
growth ratios, risk measurement, liquidity requirements and sector
allocation. The screens and settings will be changed by the adviser based
on market conditions.
o The Model applies these screens and settings to the weighted stock
forecasts to determine the stocks (and the appropriate amount of each
stock) for the Fund's portfolio.
o The adviser will then review the output of the Model, making any
adjustments it believes are necessary to the Model's settings and resultant
portfolio.
o The portfolio is periodically "rebalanced," at which time portfolio
securities are bought and sold by the Fund. Rebalancing is triggered by one
of three events: a substantial change in the cash component (due to
additional investments or redemptions), a substantial change in the
weighting of the portfolio (due to changes in market value) and a periodic
reevaluation of the portfolio.
It is the intention of the Fund's adviser to rely solely on the Model
(and the forecasts made by the iExchange Analysts) to determine the stocks in
the Fund's portfolio. The Fund's portfolio will not, however, precisely mirror
the iExchange Analysts' selections because the Model applies the adviser's
screens and settings to the input from the iExchange Analysts forecasts. The
adviser could also override the Model's recommendations at any time if the
adviser believes that an unforeseen or extreme market condition warrants such
action.
In addition to common stock of U.S. companies, the Fund may invest to a
limited degree in foreign companies by purchasing American Depositary Receipts
(ADR's). An ADR is a U.S. dollar denominated certificate that evidences
ownership of shares of a foreign company. They are alternatives to the direct
purchase of the underlying foreign stock. In addition it is likely that the Fund
could invest a significant portion of its assets in smaller companies, as well
as the technology sector. The Fund is non-diversified, which means that its
portfolio may at times focus on a limited number of companies.
Principal Risks
Management Risk. The Fund's performance is in large measure dependent on the
iExchange Analysts and the quality of their stock price forecasts. There is no
guarantee that people will participate in the iExchange.com web site, or that
their participation will result in quality recommendations. This is a principal
risk because the adviser only considers companies recommended by iExchange
Analysts. In addition, the Fund could perform poorly if the adviser's
Interactive Portfolio Management Model(TM) does not perform. The adviser has no
prior experience as an investment adviser or using the Model.
On-line Investing Risk. The Fund is designed specifically for on-line investors.
An interruption in on-line services could result in a delay or interruption in
your ability to access the web site, or place purchase or sale orders with the
Fund. A delay in placing an order could result in the investor paying a higher
price, or receiving a lower price, for the shares.
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.
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.
Technology Risk. The Fund is concentrated in the technology sector and
significant weakness in this sector could result in significant losses to the
Fund. Technology companies may be significantly affected by falling prices and
profits and intense competition, and their products may be subject to rapid
obsolescence. Changes in governmental policies, such as telephone and cable
regulations and anti-trust enforcement, may have a material effect on the
products and services of these companies. In addition, the rate of technological
change often requires extensive and sustained investment in research and
development. It is likely that some of today's public companies that are
benefiting from the growth of the Internet and other new technologies will not
exist in the future. The price of many of these stocks has risen based on
projections of future earnings and company growth. If a company does not perform
as expected, the price of the stock could decline significantly. Many companies
that seek to benefit from the new economy are currently operating at a loss and
may never be profitable.
Foreign Risk. To the extent the Fund invests in ADRs, the Fund could be subject
to greater risks because the Fund's performance may depend on issues other than
the performance of a particular company. Changes in foreign economies and
political climates are more likely to affect the Fund than a mutual fund that
invests exclusively in U.S. companies. The value of foreign securities is also
affected by the value of the local currency relative to the U.S. dollar. There
may also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
Smaller Company Risk.
o The earnings and prospects of smaller companies are more volatile than
larger companies.
o Smaller companies may experience higher failure rates than do larger
companies.
o 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 experience.
Volatility Risk. Common stocks of technology companies tend to be more volatile
than other investment choices. Because of its narrow focus, the Fund's
performance is closely tied to any factors which may affect technology companies
and, as a result, is more likely to fluctuate than that of a fund which is
invested in a broader range of companies.
Non-diversification Risk. As a non-diversified fund, the Fund will be subject to
substantially more investment risk and potential for volatility than a
diversified fund because its portfolio may at times focus on a limited number of
companies. The Fund's share price could fall if the Fund is heavily invested in
a particular stock and the price of that stock falls.
An investment in a Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
No Fund is a complete investment program. As with any mutual fund investment,
each Fund's returns will vary and you could lose money.
How the Funds Have 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 Bar Chart and Performance Table that would otherwise
appear in this prospectus have been omitted because each Fund is recently
organized and has less than one year of operations.
<PAGE>
FEES AND EXPENSES OF INVESTING IN THE FUNDS
The tables describe the fees and estimated expenses that you may pay if you buy
and hold shares of the Fund.
<TABLE>
<S> <C> <C> <C>
Shareholder Fees Diversified Small Cap New Economy
(fees paid directly from your investment) Growth Fund Growth Fund Fund
Maximum Sales Charge (Load) Imposed on Purchases NONE NONE NONE
Maximum Deferred Sales Charge (Load) NONE NONE NONE
Redemption Fee NONE NONE NONE
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees 1.00% 1.00% 1.00%
Distribution (12b-1) Fees 0.00% 0.00% 0.00%
Other Expenses1 0.00% 0.00% 0.00%
Total Annual Fund Operating Expenses 1.00% 1.00% 1.00%
1 Other expenses are estimated for the Funds' first fiscal year.
</TABLE>
Example:
The example below is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The example uses
the same assumptions as other mutual fund prospectuses: a $10,000 initial
investment for the time periods indicated, 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
------ -------
Diversified Growth Fund $105 $328
Small Cap Growth Fund $105 $328
New Economy Fund $105 $328
ADDITIONAL INFORMATION ABOUT STRATEGIES AND RISKS
Principal Strategies
The Model. The Funds' adviser uses a software model called the
Interactive Portfolio Management Model(TM) to select the stocks for each Fund's
portfolio. The stock selection process begins with stock price forecasts from
the iExchange Analysts, made via the iExchange.com web site. The iExchange
Analysts are visitors to the iExchange.com web site that actively participate by
making price forecasts, not "Wall Street" analysts. One section of the web site
permits iExchange Analysts to submit stock price forecasts, which convey their
beliefs about a stock's future price. The iExchange.com web site is maintained
by the adviser's parent company, iExchange Holdings, Inc., and iExchange.com,
Inc. provides the stock price forecasts to the adviser. iExchange Holdings, Inc.
also evaluates the stock price forecasts made by the iExchange Analysts using
multiple performance catagories and provides rewards to those iExchange Analysts
with the highest ratings in each performance category.
The Model measures the historical accuracy of each investor's stock
price forecasts. Over several months, these measurements determine the weighting
given to each investor's forecasts. The Model uses the investors' forecasts
(with weighting given to the most accurate forecasts) to determine which stocks
should be bought and sold by the Fund. The Model's process for evaluating and
weighting the investors forecasts are explained in more detail in the Funds'
Statement of Additional Information.
The Model uses the shareholder forecasts to select a group of stocks
for each Fund's portfolio. The Model includes settings determined by the Funds'
adviser, consistent with each Fund's objective, for factors such as risk
measurement, liquidity requirements and sector allocation, which the model
applies to the weighted stock forecasts to determine the appropriate amount of
each stock for the Fund's portfolio. The adviser will then review the output of
the Model, making any adjustments it believes are necessary to the Model's
settings and resultant portfolio. The adviser also considers whether a selection
would make the Fund's portfolio, in the adviser's opinion, too heavily invested
in a particular industry or company. The adviser will buy and sell stocks at
predetermined intervals (currently, on a monthly basis) and in response to cash
management needs. The Fund's investment process may result in active trading of
the portfolio.
Initial Operations. During the initial operations of each Fund (at
least six months), the investors' recommendations will have little impact on the
composition of each Fund's portfolio because the Fund's adviser will select the
Fund's initial investments, and a period of time (at least six months) is
necessary for weightings to be established by the Interactive Portfolio
Management Model(TM) based on the accuracy of investor's forecasts. These
initial investments will dominate the portfolio until investors recommend other
companies for the Fund's portfolio and these recommendations are selected by the
Model and by the Fund's adviser.
On-line Investing. Since the Funds are designed specifically for
on-line investors, an interruption in transmissions over the Internet or a
problem with the www.iExchange.com site could result in a delay or interruption
in your ability to access the web site, place purchase or sale orders with the
Funds or otherwise interact with the Funds.
Non-Principal Strategies
New Issuer Risk. The adviser believes that each Fund may invest to a
limited degree in common stock of new issuers. Investments in relatively new
issuers, i.e., those having continuous operating histories of less than three
years, may be more speculative because such companies are relatively unseasoned.
New issuers may lack sufficient resources, may be unable to generate internally
the funds necessary for growth and may find external financing to be unavailable
on favorable terms or even totally unavailable. New issuers will often be
involved in the development or marketing of a new product with no established
market, which could lead to significant losses. New issuers, particularly those
acquired in an initial public offering, may experience lower trading volumes
and/or greater price volatility than larger capitalization, established
companies and may experience higher growth rates and higher failure rates than
larger capitalization companies.
General. The investment objective of each Fund may be changed without
shareholder approval.
From time to time, each 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, money market funds or repurchase agreements. If a Fund
invests in a money market fund, the shareholders of the Fund will indirectly pay
additional management fees. As a result of engaging in these temporary measures,
a Fund may not achieve its investment objective. Each Fund may also invest in
such instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies.
Each Fund may at times actively and frequently trade stocks and, as
result, have a portfolio turnover rate that is higher than other stock funds.
Higher portfolio turnover would result in correspondingly greater brokerage
commission expenses (which will lower the Fund's total return) and may result in
the distribution to shareholders of additional capital gains for tax purposes
(which would lower the Fund's after-tax return).
HOW TO BUY SHARES
The minimum initial investment in each Fund is $1,000 and minimum
subsequent investments are in $250
The Funds are intended primarily for on-line investors, and we ask
shareholders to accept all information about the Fund(s) in which they invest
through the iExchange.com web site and electronic delivery. When you open your
account you will select a password. You will be prompted to enter your password
whenever you perform a transaction so that the Funds can be sure each purchase
or sale is secure. For your protection, only you should place orders through
your Fund account. When you purchase shares, you will be asked to: (1) confirm
your consent to receive all Fund documentation electronically, (2) provide your
e-mail address and (3) confirm that you have read the Prospectus. The Funds'
current Prospectus will be readily available for viewing and printing on the web
site. You can revoke your consent to electronic document delivery at any time ,
and receive paper based documents by contacting the Funds at 800-___-____.
Initial Purchase
By Mail- To be in proper form, your initial purchase request must include:
o a completed and signed investment application form (which accompanies
this Prospectus or can be downloaded from the www.iExchange.com web
site); and
o a check (subject to the minimum amounts) made payable to the
appropriate Fund.
Mail the application and check to:
<TABLE>
<S> <C>
U.S. Mail: iExchange Funds Overnight: iExchange Funds
c/o Unified Fund Services, Inc. c/o Unified Fund Services, Inc.
P.O. Box 6110 431 North Pennsylvania Street
Indianapolis, Indiana 46206-6110 Indianapolis, Indiana 46204
</TABLE>
By Wire
You may also 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 set up your
account and obtain an account number. Then, provide your bank with the following
information for purposes of wiring your investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: iExchange Funds
D.D.A.#__________________
Fund Name _________________(write in fund name)
Account Name_________________(write in shareholder name)
For the Account #______________(write in account number)
You must mail a signed application to Unified Fund Services, Inc., the
Funds' transfer agent, at the above address in order to complete your initial
wire purchase. Wire orders will be accepted only on a day on which the Funds,
custodian and transfer agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is accepted
by the Fund. Any delays that may occur in wiring money, including delays that
may occur in processing by the banks, are not the responsibility of the Fund or
the transfer agent. There is presently no fee for the receipt of wired funds,
but the Fund may charge shareholders for this service in the future.
Additional Investments
You may purchase additional shares of any Fund (subject to a $250
minimum) by mail, wire, or automatic investment. Each additional mail purchase
request must contain:
o your name
o the name of your account(s),
o your account number(s),
o the name of the Fund
o a check made payable to the Fund
Send your purchase request to the address listed above. A bank wire should be
sent as outlined above.
Automatic Investment Plan
You may make regular investments in a Fund with an Automatic Investment
Plan by completing the appropriate section of the account application and
attaching a voided personal check. Investments may be made monthly to allow
dollar-cost averaging by automatically deducting $250 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time.
Tax Sheltered Retirement Plans
Since the Funds are 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); and other qualified retirement plans. Contact the Transfer agent
for the procedure to open an IRA or SEP plan and more specific information
regarding these retirement plan options. Please consult with your attorney or
tax adviser regarding these plans. You must pay custodial fees for your IRA by
redemption of sufficient shares of the Fund from the IRA unless you pay the fees
directly to the IRA custodian. Call the Transfer agent about the IRA custodial
fees.
Other Purchase Information
The Funds intend to deliver shareholder information electronically.
However, you may receive paper-based information at no extra cost upon request.
Shareholder information includes prospectuses, annual and semi-annual reports,
proxy materials, confirmations and statements.
Each Fund may limit the amount of purchases and refuse to sell to any
person. If your check or wire does not clear, you will be responsible for any
loss incurred by the 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.
The Funds have authorized certain broker-dealers and other financial
institutions (including their designated intermediaries) to accept on their
behalf purchase and sell orders. A Fund is deemed to have received an order when
the authorized person or designee accepts the order, and the order is processed
at the net asset value next calculated thereafter. It is the responsibility of
the broker-dealer or other financial institution to transmit orders promptly to
the Funds' transfer agent.
HOW TO REDEEM SHARES
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. You may receive
redemption payments by check or federal wire transfer. The proceeds may be more
or less than the purchase price of your shares, depending on the market value of
the Funds' securities at the time of your redemption. [Presently there is no
charge for wire redemptions; however, the Funds may charge for this service in
the future.] Any charges for wire redemptions will be deducted from your Fund
account by redemption of shares.
On-line - To sell Fund shares on-line go to the www.iExchange.com web site,
click the [Fund Sell Order] icon and follow the instructions.
By Mail - You may redeem any part of your account in a Fund at no charge by
mail. Your request should be addressed to:
iExchange Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, IN 46204
To be in proper form, your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address, and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. The 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 the Funds or the Funds' transfer agent, a shareholder, prior to
redemption, may be required to furnish additional legal documents to insure
proper authorization.
By Telephone - You may redeem any part of your account in a Fund by
calling the transfer agent at 877-___-____. You must first complete the Optional
Telephone Redemption and Exchange section of the investment application to
institute this option. The Fund, the transfer agent and the custodian are not
liable for following redemption or exchange instructions communicated by
telephone that they reasonably believe to be genuine. However, if they do not
employ reasonable procedures to confirm that telephone instructions are genuine,
they may be liable for any losses due to unauthorized or fraudulent
instructions. Procedures employed may include recording telephone instructions
and requiring a form of personal identification from the caller.
Additional Information - The Funds intend to deliver all shareholder
services, with the exception of the initial purchase, electronically. The Funds
or the transfer agent may terminate the on-line and/or telephone redemption
procedures at any time. During periods of extreme market activity, it is
possible that shareholders may encounter some difficulty in telephoning the
Funds, although neither the Funds nor the transfer agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. An interruption in transmissions over the
Internet or a problem with the www.iExchange.com web site could delay a
redemption request. If you are unable to reach the Funds on-line or by
telephone, you may request a redemption or exchange by mail.
If you are not certain of the requirements for a redemption please
[call the Funds' transfer agent at 877-___-____]. Redemptions specifying a
certain date or share price cannot be accepted and will be returned. You will be
mailed the proceeds on or before the fifth business day following the
redemption. However, payment for redemption made against shares purchased by
check will be made only after the check has been collected, which normally may
take up to fifteen calendar days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing, or under any emergency circumstances (as determined
by the Securities and Exchange Commission) the Funds may suspend redemptions or
postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund may require you to redeem all of your shares in the Fund on
30 days' written notice if the value of your shares in the Fund is less than
$1,000 due to redemption, or such other minimum amount as the Fund may determine
from time to time. An involuntary redemption constitutes a sale. You should
consult your tax adviser concerning the tax consequences of involuntary
redemptions. You may increase the value of your shares in the Fund to the
minimum amount within the 30-day period. Your shares are subject to redemption
at any time if the Board of Trustees determines in its sole discretion that
failure to so redeem may have materially adverse consequences to all or any of
the shareholders of the Funds.
DETERMINATION OF NET ASSET VALUE
The price you pay for your shares is based on the applicable 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 Funds' 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 by the Funds'
adviser at their fair value, according to procedures approved by the Funds'
board of trustees. The Fund may own securities that are traded primarily on
foreign exchanges that trade on weekends or other days the Fund does not price
its shares. As a result, the NAV of the Fund may change on days when you will
not be able to purchase or redeem your shares of the Fund.
Requests to purchase and sell 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.
These distributions are automatically reinvested in the applicable Fund unless
you request cash distributions on your application or through a written request
to the Fund. Each Fund expects that its distributions will consist primarily of
capital gains.
Taxes
In general, selling or exchanging 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. You may want to avoid making
a substantial investment when a Fund is about to make a long term capital gains
distribution because you would be responsible for any taxes on the distribution
regardless of how long you have owned your shares.
Early each year, the Funds 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
iExchange Investment Advisory Services LLC, 14180 Dallas Parkway, Suite
200, Dallas, Texas 75240, serves as investment adviser to the Funds. The adviser
is wholly owned by iExchange.com, Inc. and was established in 2000 in order to
serve as the investment adviser to the Funds. The adviser determines the
securities to be purchased for each Fund, the portfolio securities to be held or
sold by each Fund and the portion of each Fund's assets to be held uninvested,
subject always to the Fund's investment objective, policies and restrictions,
and the policies and instructions as the Trust's Board of Trustees may from time
to time establish. Each Fund is authorized to pay the adviser a fee equal to
1.00% of its average daily net assets. A committee of the adviser is primarily
responsible for the day-to-day management of the Funds.
The adviser pays all of the operating expenses of each Fund except
brokerage, taxes, borrowing costs (such as interest and dividend expense of
securities sold short), fees and expenses of non-interested person trustees,
Rule 12b-1 expenses and extraordinary expenses. In this regard, it should be
noted that most investment companies pay their own operating expenses directly,
while each Fund's expenses, except those specified above, are paid by the
adviser. The adviser (not the Funds) may pay certain financial institutions
(which may include banks, brokers, securities dealers and other industry
professionals) a fee for providing distribution related services and/or for
performing certain administrative servicing functions for Fund shareholders to
the extent these institutions are allowed to do so by applicable statute, rule
or regulation.
<PAGE>
FOR MORE INFORMATION
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations. Annual
and semi-annual 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 at (888) [ ] 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 (SEC) Public
Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours
and operation. You may also obtain reports and other information about the Funds
on the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and
copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section of the SEC, Washington, D.C.
20549-0102.
Investment Company Act #811-09541
<PAGE>
iExchange Diversified Growth Fund
iExchange Small Cap Growth Fund
iExchange New Economy Fund
STATEMENT OF ADDITIONAL INFORMATION
_______________, 2001
This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the Prospectus of iExchange Funds dated
____________, 2000. A free copy of the Prospectus can be obtained by writing the
Funds' transfer agent at 431 North Pennsylvania Street, Indianapolis, Indiana
46204, or by calling 1-800-___-____.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUNDS......................................
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS.............................................................
INVESTMENT LIMITATIONS......................................................
TRUSTEES AND OFFICERS.......................................................
INVESTMENT ADVISER..........................................................
ADDITIONAL INFORMATION ABOUT THE INTERACTIVE PORTFOLIO
MANAGEMENT MODEL............................................................
DISTRIBUTION PLANS .........................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................
DETERMINATION OF SHARE PRICE................................................
INVESTMENT PERFORMANCE......................................................
CUSTODIAN...................................................................
FUND SERVICES...............................................................
ACCOUNTANTS.................................................................
DISTRIBUTOR.................................................................
<PAGE>
DESCRIPTION OF THE TRUST AND THE FUNDS
The iExchange Diversified Growth Fund, iExchange Small Cap Growth Fund
and iExchange New Economy Fund (each a "Fund" or collectively, the "Funds") were
organized as series of AmeriPrime Advisors Trust (the "Trust") on August 10,
2000. The iExchange Diversified Growth Fund is a diversified fund. The iExchange
Small Cap Growth Fund and iExchange New Economy Fund are non-diversified funds.
The Trust is an open-end investment company established under the laws of Ohio
by an Agreement and Declaration of Trust dated August 3, 1999 (the "Trust
Agreement"). The Trust Agreement permits the Trustees to issue an unlimited
number of shares of beneficial interest of separate series without par value.
Each Fund is one of a series of funds currently authorized by the Trustees. The
investment adviser to each Fund is iExchange Investment Advisory Services LLC
(the "Adviser").
The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Funds and the Funds'
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 and 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.
[As of _______, 2000, [_______________], [insert address] owned [____%]
of each iExchange Fund. As the controlling shareholder,
[______________________]. could control the outcome of any proposal submitted to
the shareholders for approval, including changes to a Fund's fundamental
policies or the terms of the management agreement with the Adviser. After the
public offering commences, it is anticipated that [_______________________] will
no longer control the Funds.]
For information concerning the purchase and redemption of shares of the
Funds, see "How to Buy Shares" and "How to Redeem Shares" in the Funds'
Prospectus. For a description of the methods used to determine the share price
and value of each Fund's assets, see "Determination of Net Asset Value" in the
Funds' Prospectus and this Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a discussion of some of the investments the Funds may make
and some of the techniques they may use.
A. Equity Securities. Equity securities consist of common stock,
convertible preferred stock, convertible bonds, rights and warrants. Common
stocks, the most familiar type, represent an equity (ownership) interest in a
corporation. Convertible stocks and bonds are securities that can be converted
into common stock pursuant to their terms. 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. No
Fund may invest more than 5% of its net assets in either convertible preferred
stocks or convertible bonds. The Adviser will limit the Fund's investment in
convertible securities to investment grade (those rated BBB or better by Moodys
Investors Service, Inc. or Standard & Poor's Rating Group) or, if unrated, of
comparable quality in the opinion of the Adviser.
Equity securities include S&P Depositary Receipts ("SPDRs") and other
similar instruments. SPDRs are shares of a publicly traded unit investment trust
which owns the stock included in the S&P 500 Index, and changes in the price of
the SPDRs track the movement of the Index relatively closely. Similar
instruments may track the movement of other stock indexes.
Each Fund may invest in foreign equity securities by purchasing
American Depositary 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. To the extent that a Fund
does invest in ADRs, such investments may be subject to special risks. For
example, there may be less information publicly available about a foreign
company than 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.
Investments in equity securities are subject to inherent market risks
and fluctuations in value due to earnings, economic conditions and other factors
beyond the control of the Adviser. As a result, the return and net asset value
of each Fund will fluctuate. Securities in each Fund's portfolio may decrease in
value or not increase as much as the market as a whole. Although profits in some
Fund holdings may be realized quickly, it is not expected that most investments
will appreciate rapidly.
At times, a portion of each Fund may be invested in companies with
short operating histories ("new issuers") and in initial public offerings
("IPOs"), and such investments could be considered speculative. New issuers are
relatively unseasoned and may lack sufficient resources, may be unable to
generate internally the funds necessary for growth and may find external
financing to be unavailable on favorable terms or even totally unavailable. New
issuers will often be involved in the development or marketing of a new product
with no established market, which could lead to significant losses. To the
extent a Fund invests in smaller capitalization companies, the Fund will also be
subject to the risks associated with such companies. Smaller capitalization
companies, IPOs and new issuers may experience lower trading volumes than larger
capitalization, established companies and may experience higher growth rates and
higher failure rates than larger capitalization companies. Smaller
capitalization companies, IPOs and new issuers also may have limited product
lines, markets or financial resources and may lack management depth.
B. Hedging Transactions. Each Fund may utilize various other investment
strategies as described below to hedge various markets. Such strategies are
generally accepted by modern portfolio managers and are regularly utilized by
many mutual funds and other institutional investors. Techniques and instruments
may change over time as new instruments and strategies are developed or
regulatory changes occur.
In the course of pursuing these investment strategies, each Fund may
purchase and sell exchange-listed and over-the-counter put and call options on
securities, equity and fixed-income indices and other financial instruments, and
purchase and sell financial futures contracts and options thereon (collectively,
all the above are called "Hedging Transactions"). Hedging Transactions may be
used to attempt to protect against possible changes in the market value of
securities held in or to be purchased for a Fund's portfolio resulting from
securities markets fluctuations, to protect the Fund's unrealized gains in the
value of its portfolio securities, to facilitate the sale of such securities for
investment purposes, or to establish a position in the derivatives markets as a
temporary substitute for purchasing or selling particular securities. No more
than 5% of a Fund's assets will be committed to Hedging Transactions entered
into for non-hedging purposes. Any or all of these investment techniques may be
used at any time and there is no particular strategy that dictates the use of
one technique rather than another, as use of any Hedging Transaction is a
function of numerous variables including market conditions. The ability of the
Funds to utilize these Hedging Transactions successfully will depend on the
Adviser's ability to predict pertinent market movements, which cannot be
assured. Each Fund will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Hedging Transactions
involving financial futures and options thereon will be purchased, sold or
entered into only for bona fide hedging, risk management or portfolio management
purposes and not for speculative purposes.
Hedging Transactions have risks associated with them, including
possible default by the other party to the transaction, illiquidity and, to the
extent the Adviser's view as to certain market movements is incorrect, the risk
that the use of such Hedging Transactions would result in losses greater than if
they had not been used. Use of put and call options may result in losses to a
Fund, force the sale or purchase of portfolio securities at inopportune times or
for prices higher than (in the case of put options) or lower than (in the case
of call options) current market values, limit the amount of appreciation the
Fund can realize on its investments or cause the Fund to hold a security it
might otherwise sell. The use of options and futures transactions entails
certain other risks. In particular, the variable degree of correlation between
price movements of futures contracts and price movements in the related
portfolio position of a Fund creates the possibility that losses on the hedging
instrument may be greater than gains in the value of the Fund's position. In
addition, futures and options markets may not be liquid in all circumstances and
certain over-the-counter options may have no markets. As a result, in certain
markets, a Fund might not be able to close out a transaction without incurring
substantial losses, if at all. Although the use of futures and options
transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time it tends to limit
any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Hedging Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Hedging
Transactions had not been utilized.
General Characteristics of Options
Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold. Thus, the following general
discussion relates to each of the particular types of options discussed in
greater detail below. In addition, many Hedging Transactions involving options
require segregation of Fund assets in special accounts, as described below under
"Use of Segregated and Other Special Accounts."
A put option gives the purchaser of the option, upon payment of a
premium, the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, or other instrument at the exercise price. For
example, a Fund's purchase of a put option on a security might be designed to
protect its holdings in the underlying instrument (or, in some cases, a similar
instrument) against a substantial decline in the market value by giving the Fund
the right to sell such instrument at the option exercise price. A call option,
upon payment of a premium, gives the purchaser of the option the right to buy,
and the seller the obligation to sell, the underlying instrument at the exercise
price. A Fund's purchase of a call option on a security, financial future,
index, or other instrument might be intended to protect the Fund against an
increase in the price of the underlying instrument that it intends to purchase
in the future by fixing the price at which it may purchase such instrument. The
Funds are authorized to purchase and sell exchange-listed options and
over-the-counter options ("OTC options"). Exchange-listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to such options.
A Fund's ability to close out its position as a purchaser or seller of
an OCC or exchange-listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.
The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.
OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange-listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. Each
Fund will only sell OTC options (other than OTC currency options) that are
subject to a buy-back provision permitting the Fund to require the Counterparty
to sell the option back to the Fund at a formula price within seven days. The
Fund expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so.
Unless the parties provide for it, there is no central clearing or
guaranty function in an OTC option. As a result, if the Counterparty fails to
make or take delivery of the security or other instrument underlying an OTC
option it has entered into with a Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the Fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Adviser must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. While this type of arrangement allows a Fund greater flexibility to
tailor an option to its need, OTC options generally involve greater credit risk
than exchange-traded options, which are guaranteed by the clearing organization
of the exchanges where they are traded. The risk of illiquidity also is greater
with OTC options, since these options generally can be closed out only by
negotiation with the other party to the option.
If a Fund sells a call option, the premium that it receives may serve
as a partial hedge, to the extent of the option premium, against a decrease in
the value of the underlying securities or instruments in its portfolio or will
increase the Fund's income. The sale of put options can also provide income.
Each Fund may purchase and sell call options on securities, including
U.S. Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and on
securities indices and futures contracts. All calls sold by the Fund must be
"covered" (i.e., the Fund must own the securities or futures contract subject to
the call) or must meet the asset segregation requirements described below as
long as the call is outstanding. Even though a Fund will receive the option
premium to help protect it against loss, a call sold by a Fund exposes the Fund
during the term of the option to possible loss of opportunity to realize
appreciation in the market price of the underlying security or instrument and
may require the Fund to hold a security or instrument which it might otherwise
have sold.
Each Fund may purchase and sell put options on securities including
U.S. Treasury and agency securities, mortgage-backed securities, corporate debt
securities, equity securities (including convertible securities) and on
securities indices and futures contracts other than futures on individual
corporate debt and individual equity securities. No Fund will sell put options
if, as a result, more than 50% of the Fund's assets would be required to be
segregated to cover its potential obligations under such put options other than
those with respect to futures and options thereon. In selling put options, there
is a risk that the Fund may be required to buy the underlying security at a
disadvantageous price above the market price.
General Characteristics of Futures
Each Fund may enter into financial futures contracts or purchase or
sell put and call options on such futures, as a hedge against anticipated
interest rate or equity market changes, and for risk management purposes.
Futures are generally bought and sold on the commodities exchanges where they
are listed with payment of initial and variation margin as described below. The
sale of a futures contract creates a firm obligation by a Fund, as seller, to
deliver to the buyer the specific type of financial instrument called for in the
contract at a specific future time for a specified price (or, with respect to
index futures, the net cash amount). Options on futures contracts are similar to
options on securities except that an option on a futures contract gives the
purchaser the right, in return for the premium paid, to assume a position in a
futures contract and obligates the seller to deliver such option.
Each Fund's use of financial futures and options thereon will in all
cases be consistent with applicable regulatory requirements and in particular
the rules and regulations of the Commodity Futures Trading Commission and will
be entered into only for bona fide hedging, risk or other portfolio management
purposes. Typically, maintaining a futures contract or selling an option thereon
requires the Fund to deposit with a financial intermediary as security for its
obligations an amount of cash or other specified assets (initial margin) which
initially is typically 1% to 10% of the face amount of the contract (but may be
higher in some circumstances). Additional cash or assets (variation margin) may
be required to be deposited thereafter on a daily basis as the mark-to-market
value of the contract fluctuates. The purchase of an option on financial futures
involves payment of a premium for the option without any further obligation on
the part of the Fund. If the Fund exercises an option on a futures contract, it
will be obligated to post initial margin (and potential subsequent variation
margin) for the resulting futures position just as it would for any position.
Futures contracts and options thereon are generally settled by entering into an
offsetting transaction, but there can be no assurance that the position can be
offset prior to settlement at an advantageous price nor that delivery will
occur. The segregation requirements with respect to futures contracts and
options thereon are described below.
Options on Securities Indices and Other Financial Indices
Each Fund also may purchase and sell call and put options on securities
indices and other financial indices and in so doing can achieve many of the same
objectives it would achieve through the sale or purchase of options on
individual securities or other instruments. Options on securities indices and
other financial indices are similar to options on a security or other instrument
except that, rather than settling by physical delivery of the underlying
instrument, they settle by cash settlement, i.e., an option on an index gives
the holder the right to receive, upon exercise of the option, an amount of cash
if the closing level of the index upon which the option is based exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option (except if, in the case of an OTC option, physical delivery is
specified). This amount of cash is equal to the excess of the closing price of
the index over the exercise price of the option, which also may be multiplied by
a formula value. The seller of the option is obligated, in return for the
premium received, to make delivery of this amount. The gain or loss of an option
on an index depends on price movements in the instruments making up the market,
market segment, industry or other composite on which the underlying index is
based, rather than price movements in individual securities, as is the case with
respect to options on securities.
Use of Segregated and Other Special Accounts
Many Hedging Transactions, in addition to other requirements, require
that the Fund that has entered into the transaction segregate liquid high-grade
assets with its Custodian to the extent that Fund's obligations are not
otherwise "covered" through ownership of the underlying security or financial
instrument. In general, either the full amount of any obligation by the Fund to
pay or deliver securities or assets must be covered at all times by the
securities, instruments or currency required to be delivered, or, subject to any
regulatory restriction, an amount of cash or liquid high grade securities at
least equal to the current amount of the obligation must be segregated with the
Custodian. The segregated assets cannot be sold or transferred unless equivalent
assets are substituted in their place or it is no longer necessary to segregate
them. For example, a call option written by a Fund will require the Fund to hold
the securities subject to the call (or securities convertible into the needed
securities without additional consideration) or to segregate liquid high grade
securities sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by a Fund on an index will require the Fund to own
portfolio securities which correlate with the index or to segregate liquid high
grade assets equal to the excess of the index value over the exercise price on a
current basis. A put option written by a Fund requires the Fund to segregate
liquid, high-grade assets equal to the exercise price.
OTC options entered into by a Fund, including those on securities,
financial instruments or indices and OCC-issued and exchange-listed index
options will generally provide for cash settlement. As a result, when a Fund
sells these instruments it will only segregate an amount of assets equal to its
accrued net obligations, as there is no requirement for payment or delivery of
amounts in excess of the net amount. These amounts will equal 100% of the
exercise price in the case of a non-cash settled put, the same as an
OCC-guaranteed listed option sold by the Fund, or the in-the-money amount plus
any sell-back formula amount in the case of a cash-settled put or call. In
addition, when a Fund sells a call option on an index at a time when the
in-the-money amount exceeds the exercise price, the Fund will segregate, until
the option expires or is closed out, cash or cash equivalents equal in value to
such excess. OCC-issued and exchange-listed options sold by a Fund other than
those above generally settle with physical delivery, or with an election of
either physical delivery or cash settlement, and the Fund will segregate an
amount of assets equal to the full value of the option. OTC options settling
with physical delivery, or with an election of either physical delivery or cash
settlement, will be treated the same as other options settling with physical
delivery.
In the case of a futures contract or an option thereon, a Fund must
deposit initial margin and possible daily variation margin in addition to
segregating assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount owed at the expiration of an
index-based futures contract. Such assets may consist of cash, cash equivalents,
liquid debt or equity securities or other acceptable assets.
Hedging Transactions may be covered by other means when consistent with
applicable regulatory policies. Each Fund may also enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Hedging
Transactions. For example, a Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating assets if the Fund held a
futures or forward contract, it could purchase a put option on the same futures
or forward contract with a strike price as high or higher than the price of the
contract held. Other Hedging Transactions may also be offset in combinations. If
the offsetting transaction terminates at the time of or after the primary
transaction no segregation is required, but if it terminates prior to such time,
assets equal to any remaining obligation would need to be segregated.
C. Short Sales. Each 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 that it does not own. To complete the transaction, the
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. The 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. The Fund will realize a profit
if the security declines in price between those dates.
Positions in shorted securities are more risky than long positions
(purchases) in securities because the maximum sustainable loss on a security
purchased is limited to the amount paid for the security plus the transaction
costs, whereas there is no maximum attainable price of the shorted security.
Therefore, in theory, securities sold short have unlimited risk and either Fund
could suffer significant losses. In addition, the strategy may result in
increased transaction costs and taxes that reduce the Fund's return.
In connection with its short sales, each Fund will be required to
maintain a segregated account with its Custodian of cash or high grade liquid
assets equal to the market value of the securities sold less any collateral
deposited with its broker. The Funds also will incur transaction costs in
effecting short sales.
D. Repurchase Agreements. A repurchase agreement is a short-term
investment in which the purchaser (i.e., the Fund) acquires ownership of an
obligation issued by the U.S. Government or by an agency of the U.S. Government
("U.S. Government Obligations") (which may be of any maturity) and the seller
agrees to repurchase the obligation at a future time at a set price, thereby
determining the yield during the purchaser's holding period (usually not more
than seven days from the date of purchase). Any repurchase transaction in which
a 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, a 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 the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which a Fund engages in repurchase transactions.
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 Funds; 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 each Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Funds from entering
into reverse repurchase transactions, provided that the Funds have an asset
coverage of 300% for all borrowings and repurchase commitments of the Funds
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
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 Funds 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 Funds 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.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to each 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 Funds 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
(including reverse repurchase agreements) representing more than one third 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. Options. The Funds will not purchase or sell puts, calls, options or
straddles, except as described in the Funds' Prospectus or Statement of
Additional Information.
5. Illiquid Investments. The Funds will not invest in securities for
which there are legal or contractual restrictions on resale and other illiquid
securities.
6. Short Sales. The Funds will not effect short sales of securities
except as described in the Funds' Prospectus or Statement of Additional
Information.
<PAGE>
Trustees and Officers
The Board of Trustees supervises the business activities of the Trust.
The names of the Trustees and executive officers of the Trust are shown below.
Each Trustee who is an "interested person" of the Trust, as defined in the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<S> <C> <C>
==================================== ================ ======================================================================
Name, Age and Address Position Principal Occupations During Past 5 Years
------------------------------------ ---------------- ----------------------------------------------------------------------
*Kenneth D. Trumpfheller President, Managing Director of Unified Fund Services, Inc., the Fund's
1793 Kingswood Drive Secretary and transfer agent, fund accountant and administrator, since October
Suite 200 Trustee 2000. President, Treasurer and Secretary of AmeriPrime Financial
Southlake, Texas 76092 Services, Inc., a fund administrator, (which merged with Unified
Year of Birth: 1958 Fund Services, Inc.) from 1994 through October 2000. President,
Treasurer and Secretary of AmeriPrime Financial Securities, Inc., the
Fund's distributor, from 1994 through November 2000; President and
Trustee of AmeriPrime Advisors Trust and AmeriPrime Insurance Trust.
------------------------------------ ---------------- ----------------------------------------------------------------------
*Robert A. Chopyak Treasurer and Assistant Vice-President of Financial Administration of Unified Fund
1793 Kingswood Drive Chief Services, Inc., the Fund's transfer agent, fund accountant and
Suite 200 Financial administrator, since August 2000. Manager of AmeriPrime Financial
Southlake, Texas 76092 Officer Services, Inc. from February 2000 to August 2000. Self-employed,
Year of Birth: 1968 performing Y2K testing, January 1999 to January 2000. Vice
President of Fund Accounting, American Data Services, Inc., a mutual
fund services company, October 1992 to December 1998.
------------------------------------ ---------------- ----------------------------------------------------------------------
Mark W. Muller Trustee Account Manager for CMS Hartzell, a manufacturer, from April 2000 to
5016 Cedar River Tr. present. Account Manager for Clarion Technologies, a manufacturer
Fort Worth, Texas 76137 of automotive, heavy truck, and consumer goods, from 1996 to April
Year of Birth: 1964 2000. From 1986 to 1996, an engineer for Sicor, a telecommunication
hardware company.
------------------------------------ ---------------- ----------------------------------------------------------------------
Richard J. Wright, Jr. Trustee Various positions with Texas Instruments, a technology company,
8505 Forest Lane since 1995, including the following: Program Manager for
MS 8672 Semi-Conductor Business Opportunity Management System, 1998 to
Dallas, Texas 75243 present; Development Manager for web-based interface, 1999 to
Year of Birth: 1962 present; Systems Manager for Semi-Conductor Business Opportunity
Management System, 1997 to 1998; Development Manager for Acquisition
Manager, 1996-1997; Operations Manager for Procurement Systems, 1994-1997.
==================================== ================ ======================================================================
</TABLE>
The following table estimates the Trustees' compensation for the first
full fiscal year. Trustee fees are Trust expenses and each series of the Trust
pays a portion of the Trustee fees. The Trust is not in a fund complex.
<TABLE>
<S> <C> <C>
==================================== ======================= ===================================
Aggregate Total Compensation from the Trust
Name Compensation (the Trust is not in a Fund
From Trust Complex)
------------------------------------ ----------------------- -----------------------------------
Kenneth D. Trumpfheller 0 0
------------------------------------ ----------------------- -----------------------------------
Mark W. Muller $_____ $_____
------------------------------------ ----------------------- -----------------------------------
Richard J. Wright $_____ $_____
==================================== ======================= ===================================
</TABLE>
Investment Adviser
The Funds' investment adviser is iExchange Investment Advisory Services
LLC, 14180 Dallas Parkway, Suite 200, Dallas, Texas 75240 (the "Adviser"). The
Adviser is a wholly owned subsidiary of iExchange Holdings, Inc.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages each Fund's investments subject to approval of the Board of
Trustees. As compensation for its management services and agreement to pay the
Funds' expenses (except for brokerage fees and commissions, taxes, borrowing
costs (such as dividend expense on securities sold short and interest), fees and
expenses of the non-interested person trustees, Rule 12b-1 expenses and
extraordinary expenses) each Fund is obligated to pay the Adviser a fee computed
and accrued daily and paid monthly at an annual rate of 1.00% of the average
daily net assets of the Fund.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. If a bank
or other financial institution were prohibited from continuing to perform all or
a part of such services, management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks and other financial
institutions may charge their customers fees for offering these services to the
extent permitted by applicable regulatory authorities, and the overall return to
those shareholders availing themselves of the bank services will be lower than
to those shareholders who do not. The Fund may from time to time purchase
securities issued by banks and other financial institutions that provide such
services; however, in selecting investments for the Fund, no preference will be
shown for such securities.
The Adviser retains the right to use the name "iExchange" 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 "iExchange"
automatically ceases ninety days after termination of its agreement with the
Adviser and may be withdrawn by the Adviser on ninety days written notice.
The Trust, the Adviser and the Funds' distributor have each adopted a
Code of Ethics (the "Code") under Rule 17j-1 of the Investment Company Act of
1940. The personnel subject to the Code are permitted to invest in securities,
including securities that may be purchased or held by a Fund. You may obtain a
copy of the Code from the Securities and Exchange Commission.
ADDITIONAL INFORMATION ABOUT THE INTERACTIVE PORTFOLIO MANAGEMENT MODEL
Interactive Portfolio Management Model Overview
The Interactive Portfolio Management Model(TM) (IPMM) is the core engine that
supports the iExchange Funds. The model includes the calculations and processes
necessary to:
o Score forecasts made by members of the iExchange.com community
("iExchange Analysts")
o Aggregate the forecasts and weight them by the historical scores of the
forecasters
o Determine the implied return of each security based on those forecasts
o Estimate the volatility of the underlying security's returns
o Risk adjust the implied return of the securities, based on the
volatility estimates
o Preferentially rank the securities based on the risk adjusted returns
o Screen securities based on market capitalization and a series of
fundamental screens
o Estimate the covariance of the screened securities (the covariance is
the estimate of how each security moves in relationship to other
securities in the market and is used to make sure that the portfolio is
well diversified)
o Select a portfolio from those securities based on a series of optimizer
settings, as described below
o Track the portfolio and cash component of the fund on an ongoing basis
o Recommend rebalancing and or adjustments based on deviations in the
cash component and/or optimal portfolio and predefined deviation limits
o Introduce new securities to the IPMM process at each
rebalancing/adjustment period
Implementation of the IPMM for the iExchange Funds
The Interactive Portfolio Management Model is designed to use the input of the
iExchange Analysts in management of an equity portfolio, but as mentioned above
does require certain initial and ongoing inputs from the Adviser to maintain
consistency with the prospectus and investment policies of the fund. For
example, the growth funds will use a market capitalization screen and various
fundamental valuation screens, such as price to earnings growth. In addition,
other screening is utilized to ensure that the securities selected for the
portfolio have reasonable levels of market liquidity so that market impact
transaction costs are minimized. These settings may require minor adjustments
over time but, in general, are fixed over the life of the fund.
An optimizer (utilizing quadratic and non-linear programming) is used to select
the portfolio and requires inputs to ensure that the overall portfolio
diversification and risk level is consistent with the prospectus and that the
execution of the portfolio will be cost effective. These optimizer settings
include the adviser's selection of the benchmark for the portfolio, the
selection of the beta level versus the benchmark, deviations from the
benchmark's sector allocation, the selection of the maximum level of turnover
per rebalancing period, constraints on round-lot trading, etc. These settings
will require adjustments over time by the Adviser in order to maximize the
effectiveness of the selection and adjustment process and ensure compliance with
the fund's investment objectives. Finally, the sector allocation will remain
extremely flexible so that the overall securities preferences of the iExchange
Analysts are reflected in the selected portfolio.
The rebalancing and introduction of new securities is triggered by one of three
events: a substantial change in the cash component, a substantial change in the
weighting of the portfolio (due to changes in market value) and a periodic
reevaluation of the portfolio. All of these settings will be changed on a
regular basis by the Adviser based on market conditions.
Role of the Investment Adviser
The Adviser plays a critical and ongoing role in the management of the
iExchange Funds. The Adviser establishes and modifies as necessary the IPMM
settings so that the Fund's portfolio is consistent with the prospectus. Prior
to the execution of any trades for the portfolio, the Adviser will approve the
output of the IPMM, making any adjustments deemed necessary to the IPMM settings
and resultant portfolio. The Adviser will supplement the model's stock selection
in the event that securities forecasted by iExchange Analysts (that meet the
required stock screens) are insufficient, in the Adviser's opinion, to construct
a well-diversified portfolio.
The Adviser will be most actively engaged in adjusting sector
allocation limits, establishing the appropriate cash level, modifying
rebalancing settings and monitoring the portfolio on an ongoing basis. In
addition to these activities, the Adviser will monitor external market forces
and, at the Adviser's discretion, execute hedging strategies to achieve certain
levels of market exposure.
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 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 Advisr 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 , 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.
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.
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 each 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.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
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.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period. If each Fund has been in existence
less than one, five or ten years, the time period since the date of the initial
public offering of shares will be substituted for the periods stated.
Each Fund may also advertise performance information (a
"non-standardized quotation") which is calculated differently from average
annual total return. A non-standardized quotation of total return may be a
cumulative return which measures the percentage change in the value of an
account between the beginning and end of a period, assuming no activity in the
account other than reinvestment of dividends and capital gains distributions. A
non-standardized quotation may also be an average annual compounded rate of
return over a specified period, which may be a period different from those
specified for average annual total return. In addition, a non-standardized
quotation may be an indication of the value of a $10,000 investment (made on the
date of the initial public offering of the Fund's shares) as of the end of a
specified period. These non-standardized quotations do not include the effect of
the applicable sales load which, if included, would reduce the quoted
performance. A non-standardized quotation of total return will always be
accompanied by the Fund's average annual total return as described above.
Each Fund's investment performance will vary depending upon market
conditions, the composition of that Fund's portfolio and operating expenses of
that Fund. These factors and possible differences in the methods and time
periods used in calculating non-standardized investment performance should be
considered when comparing each 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.
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. These
may include the Standard & Poor's 500 Stock Index, the NASDAQ Composite 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 M.L 6118, Cincinnati, Ohio 45202,
is custodian of each Funds' investments. The custodian acts as each Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
FUND SERVICES
Unified Fund Services, Inc. ("Unified"), 431 North Pennsylvania Street,
Indianapolis, Indiana 46204, acts as each Fund's transfer agent and, in such
capacity, maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent and shareholder service functions.
Unified receives a monthly fee from the Adviser of $1.20 per shareholder
(subject to a minimum monthly fee of $900) for these transfer agency services.
In addition, Unified provides the Funds with fund accounting services,
which includes certain monthly reports, record-keeping and other
management-related services. For its services as fund accountant, Unified
receives an annual fee from the Adviser equal to 0.0275% of each Fund's assets
up to $100 million and 0.0250% of the Fund's assets from $100 million to $300
million, and 0.0200% of the Fund's assets over $300 million (subject to various
monthly minimum fees, the maximum being $2,000 per month for assets of $20 to
$100 million.
Unified also provides the Funds with administrative services, including
all regulatory reporting and necessary office equipment, personnel and
facilities. Unified receives a monthly fee from the Adviser equal to an annual
rate of 0.10% of each Fund's assets under $50 million, 0.075% of each Fund's
assets from $50 million to $100 million, and 0.050% of each Fund's assets over
$100 million (subject to a minimum fee of $2,500 per month.
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc., 27955 Clemens Road,
Westlake, Ohio 44145, has been selected as independent public accountants for
the Funds for the first fiscal year. McCurdy & Associates performs an annual
audit of each Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
DISTRIBUTOR
AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092 (the "Distributor"), is the exclusive agent for
distribution of shares of the Funds. Kenneth D. Trumpfheller, a Trustee and
officer of the Trust, is an affiliate of Unified and the Distributor. 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.
<PAGE>
PART C. OTHER INFORMATION
-----------------
Item 23. Exhibits
(a) Articles of Incorporation.
(i) Registrant's Agreement and Declaration of Trust, which was filed as an
Exhibit to Registrant's Registration Statement, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 4, is
hereby incorporated by reference.
(iii) Copy of Amendment No. 2 to Registrant's Declaration of Trust which
was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 4, is hereby incorporated by reference.
(iv) Copies of Amendments No. 3-5 to Registrant's Declaration of Trust,
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 12,
is hereby incorporated by reference.
(b) By-laws. Registrant's By-laws, which were filed as an Exhibit to
Registrant's Registration Statement, are hereby incorporated by reference.
(c) Instruments Defining Rights of Security Holders. None (other than in
the Declaration of Trust and By-laws of the Registrant).
(d) Investment Advisory Contracts.
(i) Registrant's Management Agreement with Stoneridge Investment Partners,
LLC for the Stoneridge Equity Fund, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by
reference.
(ii) Registrant's Management Agreement with Stoneridge Investment Partners,
LLC for the Stoneridge Small Cap Equity Fund, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by reference.
(iii) Registrant's Management Agreement with Stoneridge Investment
Partners, LLC for the Stoneridge Bond Fund, which was filed as an Exhibit to
Registrant's Pre-Effective Amendment No. 1, is hereby incorporated by reference.
(iv) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Opportunity Growth Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3, is hereby incorporated by
reference.
(v) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Value Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 3, is hereby incorporated by reference.
(vi) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Large Cap Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 3, is hereby incorporated by reference.
(vii) Registrant's Management Agreement with Nashville Capital Corporation
for the Monteagle Fixed Income Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 3, is hereby incorporated by
reference.
(viii) Advisory Agreement for the Monteagle Opportunity Growth Fund, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 3, is
hereby incorporated by reference.
(ix) Advisory Agreement for the Monteagle Value Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby incorporated
by reference.
(x) Advisory Agreement for the Monteagle Large Cap Fund, which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby
incorporated by reference.
(xi) Advisory Agreement for the Monteagle Fixed Income Fund, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 3, is hereby
incorporated by reference.
(xii) Registrant's Management Agreement withAExpert Advisory, Inc. for the
Enhans Master Investor Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 9, is hereby incorporated by reference.
(xiii) Registrant's Management Agreement withAExpert Advisory, Inc. for the
Enhans RT 500 Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 9, is hereby incorporated by reference.
(xiv) Registrant's Management Agreement with Cloud, Neff & Associates, Inc.
for the Cloud, Neff Capital Appreciation Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 12, is hereby incorporated by
reference.
(xv) Registrant's Management Agreement with Paragon Capital Management,
Inc. for the Paragon Strategic Ascent Fund (formerly the Paragon Dynamic Hedge
Fund), which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 12, is hereby incorporated by reference.
(xvi) Registrant's Management Agreement with Paragon Capital Management,
Inc. for the Paragon Dynamic Fortress Fund (formerly the Paragon Uncorrelated
Return Fund), which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 12, is hereby incorporated by reference.
(xvii) Registrant's Management Agreement with Riccardi Group LLC for the
Master High Yield Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 12, is hereby incorporated by reference.
(xviii) Registrant's Proposed Management Agreement with iExchange Investment
Advisory Services LLC for the iExchange Diversified Growth Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(xix) Registrant's Proposed Management Agreement with iExchange Investment
Advisory Services LLC for the iExchange Small Cap Growth Fund, which was filed
as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(xx) Registrant's Proposed Management Agreement with iExchange Investment
Advisory Services LLC for the iExchange New Economy Fund, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby incorporated
by reference.
(xxi) Registrant's Proposed Management Agreement with Capital Cities Asset
Management, Inc. for the Chameleon Fund, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 13, is hereby incorporated by
reference.
(e) Underwriting Contracts.
(i) Registrant's Underwriting Agreement with AmeriPrime Financial
Securities, Inc., which was filed as an Exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated by reference.
(ii) Registrant's form of Dealer Agreement, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 6, is hereby incorporated by
reference.
(iii) Amended Exhibit A to Underwriting Agreement, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12,
is hereby incorporated by reference.
(f) Bonus or Profit Sharing Contracts. None.
(g) Custodian Agreements.
(i) Registrant's Custodian Agreement with Firstar Bank, N.A., which was
filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference.
(ii) Amended Appendix B to Custodian Agreement, which was filed as an
Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby incorporated
by reference.
(h) Other Material Contracts. None.
(i) Legal Opinion.
(i) Opinion of Brown, Cummins & Brown Co., L.P.A. , which was filed as
an Exhibit to Registrant's Post-Effective Amendment No. 13, is
hereby incorporated by reference.
(ii) Consent of Brown, Cummins & Brown Co., L.P.A. is filed herewith.
(j) Other Opinions.
(i) Consent of McCurdy & Associates CPA's, Inc. is filed herewith.
(k) Omitted Financial Statements. None.
(l) Initial Capital Agreements. Letter of Initial Stockholder, which
was filed as an Exhibit to Registrant's Pre-Effective Amendment No. 1, is hereby
incorporated by reference.
(m) Rule 12b-1 Plan.
(i) Form of Registrant's Rule 12b-1 Service Agreement for the Enhans RT
Funds, which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 5, is hereby incorporated by reference.
(ii) Form of Registrant's Rule 12b-1 Distribution Plan for the Enhans
RT Funds, which was filed as an Exhibit to Registrant's Post-Effective Amendment
No. 5, is hereby incorporated by reference.
(iii) Form of Rule 12b-1 Distribution Plan for the iExchange Funds
(formerly the MutualMinds.com Funds), which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 12, is hereby incorporated by
reference.
(iv) Registrant's Rule 12b-1 Distribution Plan for the Chameleon Fund
will be supplied.
(n) Rule 18f-3 Plan. None.
(o) Reserved.
(p) Codes of Ethics. Copy of Registrant's Code of Ethics, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 12, is hereby
incorporated by reference.
(q) Powers of Attorney.
(i) Power of Attorney for Registrant and Certificate with respect
thereto, which were filed as an Exhibit to Registrant's Pre-Effective Amendment
No. 1, are hereby incorporated by reference.
(ii) Powers of Attorney for the Trustees, which were filed as an
Exhibit to Registrant's Pre-Effective Amendment No. 1, are hereby incorporated
by reference.
(iii) Power of Attorney for the President, Secretary and Trustee, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 6, is
hereby incorporated by reference.
(iv) Power of Attorney for the Treasurer, which was filed as an Exhibit
to Registrant's Post-Effective Amendment No. 12, is hereby incorporated by
reference.
Item 24. Persons Controlled by or Under Common Control with the Funds
-------- ------------------------------------------------------------
As of November 22, 2000, Security Trust Company Custodian FBO Sheet Metal
Workers Annuity Fund of Local Union #19 - Core Fund, owned 73.40% of the
StoneRidge Equity Fund and 99.57% of the StoneRidge Bond Fund. As a result, the
StoneRidge Equity Fund and the StoneRidge Bond Fund may be deemed to be under
common control.
As of November 22, 2000, First Farmers and Merchant National Bank, Trustee,
owned 100% of the Monteagle Large Cap Fund, the Monteagle Value Fund, and the
Monteagle Fixed Income Fund and 99.96% of the Monteagle Opportunity Growth Fund.
As a result, the Monteagle Funds may be deemed to be under common control.
Item 25. Indemnification
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
Section 6.4 Indemnification of Trustees, Officers, etc. Subject to and except as
otherwise provided in the Securities Act of 1933, as amended, and the 1940 Act,
the Trust shall indemnify each of its Trustees and officers (including persons
who serve at the Trust's request as directors, officers or trustees of another
organization in which the Trust has any interest as a shareholder, creditor or
otherwise (hereinafter referred to as a "Covered Person") against all
liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or 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 Advisors, 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) Pursuant to the Underwriting Agreement, the Trust shall indemnify
Underwriter and each of Underwriter's Employees (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while serving as the underwriter for the Trust or as
one of Underwriter's Employees, or thereafter, by reason of being or having been
the underwriter for the Trust or one of Underwriter's Employees, including but
not limited to liabilities arising due to any misrepresentation or misstatement
in the Trust's prospectus, other regulatory filings, and amendments thereto, or
in other documents originating from the Trust. In no case shall a Covered Person
be indemnified against any liability to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties of such Covered Person.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Trust in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
(a) Stoneridge Investment Partners, LLC ("Stoneridge"), 7 Great Valley Parkway,
Suite 290, Malvern, PA 19355, adviser to the Stoneridge Equity Fund, Stoneridge
Small Cap Equity Fund and Stoneridge Bond Fund, is a registered investment
adviser. (i) Stoneridge has engaged in no other business during the past two
fiscal years.
(ii) Information with respect to each officer and member of Stoneridge
is incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56755).
(b) Nashville Capital Corporation ("NCC"), 209 10th Avenue South, Suite 332,
Nashville, TN 37203, investment manager to the Monteagle Opportunity Growth
Fund, Monteagle Value Fund, Monteagle Large Cap Fund and Monteagle Fixed Income
Fund, is a registered investment adviser.
(i) NCC has engaged in investment banking and general management
consulting in the health care industry since 1992 and has engaged in market
investment advising to institutional investors since 1993. (ii) Information with
respect to each officer and member of NCC is incorporated by reference to
Schedule D of Form ADV filed by it under the Investment Advisors Act (File No.
801-32593).
(c) Robinson Investment Group, Inc. ("Robinson"), 5301 Virginia Way,
Suite 150, Brentwood, Tennessee 37027, adviser to the Monteagle Value Fund is a
registered investment adviser.
(i) Robinson has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each officer and director of Robinson is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisors Act (File No. 801-51450)
(d) Howe and Rusling, Inc. ("Howe and Rusling"), 120 East Avenue,
Rochester, New York 14604, adviser to Monteagle Large Cap Fund
and Monteagle Fixed Income Fund is a registered investment adviser.
(i) Howe and Rusling has engaged in no other business during the past
two fiscal years.
(ii) Information with respect to each officer and director of Howe and Rusling
is incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisors Act (File No. 801-294).
(e) T.H. Fitzgerald, Jr. ("Fitzgerald"), 180 Church Street, Naugatuck,
Connecticut 06770, adviser for the Monteagle Opportunity Growth Fund, is a
registered investment adviser
(i) Fitzgerald has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each principal of Fitzgerald is incorporated by
reference to Schedule D of Form ADV filed by it under the Investment Advisors
Act (File No. 801-12196)
(f) AExpert Advisory, Inc. ("AExpert"), 25 West King Street, Lancaster,
Pennsylvania 17603, adviser to Enhans Master Investor Fund and Enhans RT 500
Fund, is a registered investment adviser.
(i)AExpert has engaged in no other business during the past two fiscal years.
(ii)Information with respect to each officer and director ofAExpert is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-43349).
(g) Cloud, Neff & Associates, Inc. ("Cloud, Neff"), 606 Park Tower,
5314 South Yale, Tulsa, Oklahoma 74135, adviser to the Cloud, Neff Capital
Appreciation Fund, is a registered investment adviser.
(i) Cloud Neff has engaged in no other business during the past two fiscal
years.
ii) Information with respect to each officer and director of Cloud, Neff
is incorporated by reference to Schedule D of Form ADV filed by it under
the Investment Advisers Act (File No. 801-43639).
(h) Paragon Capital Management, Inc. ("Paragon"), 3651 N. 100 E., Suite
275, Provo, Utah 84604, adviser to the Paragon Dynamic Hedge Fund and the
Paragon Uncorrelated Return Fund, is a registered investment adviser.
(i) Paragon has engaged in no other business during the past two fiscal
years.
(ii Information with respect to each officer and director of Paragon is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-45326).
(i) Riccardi Group LLC ("Riccardi"), 340 Sunset Dr., Ft. Lauderdale,
Florida 33301, adviser to the Master High Yield Income Fund, is a registered
investment adviser.
(i) Riccardi has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each officer and member of Paragon is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (File No. 801-56024).
(j) iExchange Investment Advisory Services LLC ("Interactive"), 14180 Dallas
Parkway, Suite 200, Dallas, Texas 75057, adviser to the iExchange Investors
Diversified Growth Fund, iExchange Small Cap Growth Fund and iExchange New
Economy Fund, is a registered investment adviser.
(i) Interactive has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each officer and director of Interactive is
incorporated by reference to Schedule D of Form ADV filed by it under the
Investment Advisers Act (801-59750).
(k) Capital Cities Asset Management, Inc. ("Capital Cities"), 11651
Jollyville Road, Suite 200, Austin, TX 78759, adviser to the Chameleon Fund, is
a registered investment adviser.
(i) Capital Cities has engaged in no other business during the past two fiscal
years.
(ii) Information with respect to each officer and director of Capital Cities
is incorporated by reference to Schedule D of Form ADV filed by it under
the Investment Advisers Act (801-45494).
Item 27. Principal Underwriters
(a) AmeriPrime Financial Securities, Inc. is the Registrant's principal
underwriter. Kenneth D. Trumpfheller, 1793 Kingswood Drive, Suite 200,
Southlake, Texas 76092, is the President, Secretary and Treasurer of the
Underwriter and the President and a Trustee of the Registrant. AmeriPrime
Financial Services, Inc. is also the underwriter for the AmeriPrime Funds,
AmeriPrime Insurance Trust, the Kenwood Funds, the Rockland Funds Trust and the
TANAKA Funds, Inc.
(b) Information with respect to each director and officer of AmeriPrime
Financial Securities, Inc. is incorporated by reference to Schedule A of Form BD
filed by it under the Securities Exchange Act of 1934 (File No. 8-48143).
(c) 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 1793 Kingswood Drive, Suite 200, Southlake,
Texas 76092 and/or by the Registrant's Custodian, Firstar Bank, N.A., 425 Walnut
Street, Cincinnati, Ohio 45202, and/or by the Registrant's Transfer Agent,
Unified Fund Services, Inc., 431 North Pennsylvania Street, Indianapolis,
Indiana 46204.
Item 29. Management Services Not Discussed in Parts A or B
None.
Item 30. Undertakings
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio on the 21st day of
December, 2000.
AmeriPrime Advisors Trust
By:/s/ 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/
Kenneth D. Trumpfheller,* Donald S. Mendelsohn
President and Trustee Attorney-in-Fact
December 21, 2000
Richard Wright,*
Trustee
Mark Muller,*
Trustee
Robert A. Chopyak*
Treasurer and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
1. Consent of Counsel........................................EX-99.23.i.ii
2. Consent of Accountant........................................EX-99.23.j