ENHANS FUNDS
PROSPECTUS DATED MARCH 29, 2000
ENHANS RT 500 FUND
ENHANS MASTER INVESTOR FUND
25 West King Street
Lancaster, PA 17603
(888) 837-1784
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
ENHANS RT 500 FUND...........................................................3
ENHANS MASTER INVESTOR FUND..................................................5
FEES AND EXPENSES OF INVESTING IN THE FUNDS..................................8
HOW TO BUY SHARES............................................................9
HOW TO REDEEM SHARES........................................................11
DETERMINATION OF NET ASSET VALUE............................................12
DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................12
MANAGEMENT OF THE FUNDS.....................................................13
FOR MORE INFORMATION................................................BACK COVER
<PAGE>
ENHANS RT 500 FUND
INVESTMENT OBJECTIVE
The investment objective of the Enhans RT 500 Fund is capital appreciation.
PRINCIPAL STRATEGIES
The Fund seeks to achieve its objective through the purchase, sale and
short sale of S&P Depositary Receipts (commonly referred to as SPDRs) and
purchase and sale of options on the S&P 500 Index. SPDRs are exchange-traded
shares that represent ownership in the SPDR Trust, an investment company which
was established to own the stocks included in the S&P 500 Index. The price and
dividend yield of SPDRs track the movement of the S&P 500 Index relatively
closely. The Fund's adviser, AExpert Advisory, Inc., uses an automated
investment management system called "AExpert Market Minder" to determine the
composition of the Fund's portfolio. In other words, Market Minder determines
whether and to what extent the Fund purchases and sells SPDRs and options and/or
sells SPDRs short. The adviser developed Market Minder by applying an artificial
intelligence technology called "pattern recognition technology" to the S&P 500
Index.
o When the Market Minder predicts a flat market, the Fund will invest in money
market funds or other cash equivalents. During these periods, the Fund may
not achieve its objective of capital appreciation.
o When the Market Minder predicts a rising market, the Fund's portfolio will be
invested to capitalize on the anticipated upward price movement. The Fund may
be fully invested in SPDRs and, depending on the strength of the anticipated
market rise, may also buy call options or write put options on the S&P 500
Index.
o When the Market Minder predicts a market decline, the Fund's exposure to the
stock market will be reduced and the portfolio may be returned to money
market funds or other cash equivalents. Depending on the strength of the
anticipated market decline, the Fund may also sell SPDRs short, and/or buy
put options or write call options on the S&P 500 Index. During these periods
the Fund's assets may be fully invested in short positions and/or options,
subject to the "coverage" requirements that apply to mutual funds.
o The automated Market Minder system generally makes all portfolio investment
decisions. The adviser may override the automated system and move to a cash
position if an unusual event (such as a Federal Reserve Board meeting) is
anticipated but the results are unknown.
Short selling means the Fund sells a SPDR that it does not own, borrows
the same SPDR from a broker or other institution to complete the sale, and buys
the same SPDR at a later date to repay the lender. If the SPDR is overvalued,
and the price declines before the Fund buys the SPDR, the Fund makes a profit.
If the price of the SPDR increases before the Fund buys the SPDR, the Fund loses
money.
When the Fund buys a call option on the S&P 500 Index, it has the right to
any appreciation in the value of the Index over a fixed price (known as the
exercise price) any time up to a certain date in the future (the "expiration
date"). In return for this right, the Fund pays the current market price for the
option (known as the option premium). If an increase in the value of the Index
causes the option to increase in value by more than the option premium the Fund
paid, the Fund will profit on the overall position. When the Fund writes (sells)
a call option, the Fund receives the option premium, but will lose money if an
increase in the value of the Index causes the Fund's costs to cover its
obligations upon exercise to increase by more than the option premium the Fund
received. The Fund will sell a call option only if it has purchased a call
option to cover the Fund's potential settlement obligation. For example, if the
Fund sells a call option with an exercise price of $50, the Fund will hold a
call option with a different expiration date and a strike price of $50 or less.
When the Fund buys a put option on the S&P 500 Index, it has the right to
receive a payment based on any depreciation in the value of the Index below the
exercise price. The Fund will profit on the overall position if a decrease in
the value of the Index causes the option to increase in value by more than the
option premium the Fund paid. When the Fund writes (sells) put options, the Fund
receives the option premium, but will lose money if a decrease in the value of
the Index causes the Fund's costs to cover its obligations upon exercise to
increase by more than the option premium the Fund received. The Fund will sell a
put option only if it has purchased a put option to cover the Fund's potential
settlement obligation. For example, if the Fund sells a put option with an
exercise price of $50, the Fund will hold a put option with a different
expiration date and a strike price of $50 or more.
The adviser will engage in active trading of the Fund's portfolio
securities as a result of its strategy, the effects of which are described below
under "Turnover Risk." The term "RT" in the Fund's name stands for "real time"
trading and refers to the adviser's use of new technologies that permit
intra-day trading. Although there is no guarantee, the adviser believes that if
the Market Minder system is successful, the Fund may outperform the S&P 500
Index by profiting on both upward and downward price movements.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT RISK. The principal risk of the Fund is that the adviser's
strategy may not be successful. The Fund could be exposed to declining
markets and/or could miss a market rise if the adviser's Market Minder system
does not correctly predict market movements. The Fund has no operating
history and the Fund's adviser has no prior experience managing the assets of
a mutual fund.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. If the general level of stock prices fall, so will the value of SPDR
because it represents an interest in a broadly diversified stock portfolio.
Factors such as domestic economic growth and market conditions, interest rate
levels, and political events affect the securities markets and could cause
the Fund's share price to fall.
o ISSUER RISK. - The value of a security owned by the SPDR might decrease in
response to the activities and financial prospects of the issuer. If the
price of a security owned by the SPDR falls , so will the value of SPDR.
o HIGHER EXPENSES. The Fund will indirectly bear its proportionate share of any
fees and expenses paid by SPDRs in addition to the fees and expenses payable
directly by the Fund. Therefore, the Fund will incur higher expenses, many of
which may be duplicative.
o SHORT SALE RISK. The Fund engages in short selling activities which are
significantly different from the investment activities commonly associated
with conservative stock funds. 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 transactions costs, whereas there is no maximum attainable price of
the shorted security. Therefore, in theory, securities sold short have
unlimited risk. Depending on market conditions, the Fund may have difficulty
purchasing the security sold short, and could be forced to pay a premium for
the security. You should be aware of the intrinsic risk involved in the Fund
and be cognizant that any strategy that includes selling securities short can
suffer significant losses. In addition, the strategy may result in increased
transaction costs and taxes that reduce the Fund's return.
o OPTION RISKS. The Fund may terminate an option it has purchased by allowing
it to expire or by exercising the option. If the option is allowed to expire,
the Fund will lose the entire premium it paid (plus related transaction
costs). When the Fund sells covered call options, it receives cash but limits
its opportunity to profit from an increase in the market value of the Index
beyond the exercise price (plus the premium received). When the Fund sells
put options, the Fund receives the option premium, but will lose money if a
decrease in the value of the Index causes the Fund's costs to cover its
obligations upon exercise to increase by more than the option premium the
Fund received.
o SECTOR RISK. SPDRs have a heavy concentration in technology companies.
Technology companies may be significantly affected by falling prices and
profits and intense competition, and their products may be subject to rapid
obsolescence.
o VOLATILITY RISK. The common stocks that comprise the S&P 500 Index tend to be
more volatile than other investment choices.
o TURNOVER RISK. The Fund's investment strategy involves active trading and
will result in a high portfolio turnover rate. A high portfolio turnover can
result in correspondingly greater brokerage commission expenses (which would
lower the Fund's total return). A high portfolio turnover may result in the
distribution to shareholders of additional capital gains for tax purposes,
some of which may be taxable at ordinary rates.
o 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.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
<PAGE>
ENHANS MASTER INVESTOR FUND
The investment objective of the Enhans Master Investor Fund is capital
appreciation.
PRINCIPAL STRATEGIES
The Fund seeks to achieve its objective through the purchase and sale of
publicly traded index products. These index products own stocks included in a
particular index and changes in the price of the index products track the
movement of the associated index relatively closely. The Fund's adviser, AExpert
Advisory, Inc. uses an automated investment management system called "AExpert
Sector Minder" to determine the composition of the Fund's portfolio. The adviser
developed Sector Minder by applying an artificial intelligence technology called
"pattern recognition technology" to select specific securities from a group of
securities.
Sector Minder predicts which index products will increase in price more
rapidly in the group of index products. It is not possible to predict which
sectors or countries Sector Minder will select and the Fund may invest in a
limited number of index products at any given time. This automated system
generally makes all portfolio investment decisions. The adviser may override the
automated system and move to a cash position if an unusual event (such as a
Federal Reserve Board meeting) is anticipated but the results are unknown. The
adviser will engage in active trading of the Fund's portfolio securities as a
result of its strategy, the effects of which are described below under "Turnover
Risk."
Index products include S&P Depositary Receipts ("SPDRs"), DIAMONDS and
other exchange traded funds. SPDRs are exchange-traded traded shares that
represent ownership in the SPDR Trust, an investment company which was
established to own the stocks included in the S&P 500 Index. The price and
dividend yield of SPDRs track the movement of the S&P 500 Index relatively
closely. DIAMONDS are similar to SPDRs, but own the securities consisting of all
of the stocks of the Dow Jones Industrial Average. World Equity Benchmark Shares
("WEBS") represent a broad portfolio of publicly traded stocks in a selected
country. These countries include both developed and less developed or emerging
markets. Each WEBS Index Series seeks to generate investment results that
generally correspond to the market yield performance of a given Morgan Stanley
Capital International ("MSCI") index. MSCI Indices are leading country index
benchmarks, widely used by U.S. investors for their international investments.
When the Fund invests in WEBS, it will be subject to the risks of foreign
investments.
Index products also include S&P MidCap 400 Depositary Receipts and
Nasdaq-100 Shares. These products invest in smaller capitalization companies and
are subject to the risks associated with smaller companies. The Fund may also
invest in various sector index products such as the Basic Industries Select
Sector Index, Consumer Services Select Sector Index, Consumer Staples Select
Sector Index, Cyclical / Transportation Select Sector Index, Energy Select
Sector Index, Financial Select Sector Index, Industrial Select Sector Index,
Technology Select Sector Index, Utilities Select Sector Index. To the extent the
Fund invests in a sector product, the Fund is subject to the risks associated
with that sector. Additionally, the Fund will invest in new exchange traded
shares as they become available.
PRINCIPAL RISKS OF INVESTING IN THE FUND
o MANAGEMENT/ALLOCATION RISK. The principal risk of the Fund is that the
adviser's strategy may not be successful. The Fund's performance depends upon
how its assets are allocated and reallocated among the various index
products. The Fund could be exposed to declining markets in certain index
products and/or could miss a market rise in other index products if the
adviser's Sector Minder system does not correctly predict market movements.
This could result in the Fund not performing as well as if the Market Minder
selected other investments. The Fund has no operating history and the Fund's
adviser has no prior experience managing the assets of a mutual fund.
o MARKET RISK. Overall stock market risks may also affect the value of the
Fund. For example, if the general level of stock prices fall, so will the
value of the SPDR because it represents an interest in a broadly diversified
stock portfolio. Factors such as domestic and foreign economic growth and
market conditions, interest rate levels, and political events affect the
securities markets and could cause the Fund's share price to fall.
o HIGHER EXPENSES. The Fund will indirectly bear its proportionate share of any
fees and expenses paid by the index products in which it invests in addition
to the fees and expenses payable directly by the Fund. Therefore, the Fund
will incur higher expenses, many of which may be duplicative.
o FOREIGN RISK. To the extent the Fund invests in foreign index products, 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 or group
of companies. 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.
o EMERGING MARKET RISK. All of the "foreign risks" described above are
heightened to the extent the Fund invests in WEBS of emerging foreign
markets. There may be greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the economy; less
governmental supervision and regulation; unavailability of currency hedging
techniques; risk of companies that may be newly organized and small; and less
developed legal systems.
o SMALLER COMPANY RISK. To the extent the Fund invests in index products
that invest in smaller capitalization companies, the Fund will be subject to
additional risks. These include:
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.
o SECTOR AND COUNTRY RISK. The Fund's portfolio may at times focus on a limited
number of index products and can be subject to substantially more investment
risk and potential for volatility than a fund that is more diversified. For
example, if the Fund is heavily invested in a utility index product or a
particular country, any event that negatively affects the utility sector or
that country could cause the Fund to lose value. It is not possible to
predict the countries or sectors in which the Fund may focus and, therefore,
it is not possible to detail the risk factors of particular countries or
sectors that will be applicable to the Fund.
o CONCENTRATION RISK. The Fund may invest in index products that concentrate
their investments in a particular industry. An investment in such an index
product may be subject to greater market risk than an investment in an index
product that invests in a broad range of securities.
o ISSUER RISK. - The value of a security owned by an index product might
decrease in response to the activities and financial prospects of the issuer.
If the price of a security owned by an index product falls , so will the
value of the index product.
o LIQUIDITY RISK. Some of the index products in which the Fund invests are
subject to liquidity risk. Liquidity risk exists when an investment is
difficult to purchase or sell, possibly preventing the index product from
selling the illiquid security at an advantageous time or price. Index
products that invest in smaller companies, foreign securities or securities
with greater market risk are more likely to be illiquid.
o VOLATILITY RISK. The common stocks that comprise the various index products
tend to be more volatile than other investment choices.
o TURNOVER RISK. The Fund's investment strategy involves active trading and
will result in a high portfolio turnover rate. A high portfolio turnover can
result in correspondingly greater brokerage commission expenses (which would
lower the Fund's total return). A high portfolio turnover may result in the
distribution to shareholders of additional capital gains for tax purposes,
some of which may be taxable at ordinary rates.
o 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.
o The Fund is not a complete investment program.
o As with any mutual fund investment, the Fund's returns will vary and you
could lose money.
<PAGE>
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, securities of other no-load mutual funds or repurchase agreements.
If a Fund invests in shares of another mutual fund, the shareholders of the Fund
generally will be subject to duplicative management fees. As a result of
engaging in these temporary measures, the Fund may not achieve its investment
objective. Either Fund may also invest in such instruments at any time to
maintain liquidity or pending selection of investments in accordance with its
policies.
The value Fund of your investment in a Fund is directly related to the
investment performance of the index product or products in which it invests and
the value of your Fund shares will go down if there is a decline in the
aggregate share value of an index product in which its invested. The performance
of the index product, in turn, depends upon the performance of the securities in
which these index products invest. Therefore, the risks of investing in a Fund
are closely related to the risks associated with the index products and their
investments.
The principal risks associated with the index products include the risk that
the equity securities in an index product will decline in value due to factors
affecting the issuing companies, their industries, or the equity markets
generally. They also include special risks associated with the particular sector
or countries in which the index product invests.
PAST PERFORMANCE
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 a Fund.
RT 500 RT MASTER
SHAREHOLDER FEES FUND INVESTOR FUND
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases NONE NONE
Maximum Deferred Sales Charge (Load) NONE NONE
Redemption Fee NONE NONE
ANNUAL FUND OPERATING EXPENSES1
(expenses that are deducted from Fund assets)
Management Fee 1.65% 1.65%
Distribution and/or Service (12b-1) Fees 1.00% 1.00%
Other Expenses2 0.25% 0.00%
Total Annual Fund Operating Expenses 2.90% 2.65%
1 Each Fund invest principally in exchange traded index products. To the extent
that a Fund invests in index products, the Fund will indirectly bear its
proportionate share of any fees and expenses paid by such index products, in
addition to the fees and expenses payable directly by the Fund. Therefore, to
the extent that a Fund invests in index products, the Fund will incur higher
expenses, many of which may be duplicative. These expenses will be borne by the
Fund, and are not included in the expenses reflected in the table above or
example below.
2 "Other Expenses" are based on estimated amounts for the current fiscal year
and, for the RT 500 Fund, include dividends on short sales which the adviser
estimates will equal 0.25% (annualized) of the Fund's average net assets.
Example:
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated, reinvest dividends
and distributions, and then redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
RT 500 FUND MASTER INVESTOR FUND
1 YEAR 297 272
3 YEAR 910 834
<PAGE>
HOW TO BUY SHARES
INITIAL PURCHASE
The minimum initial investment in each Fund is $5,000 ($2000 for qualified
retirement accounts and medical savings accounts) and minimum subsequent
investments are $1,000. Investors choosing to purchase or redeem their shares
through a broker/dealer or other institution may be charged a fee by that
institution. To the extent investments of individual investors are aggregated
into an omnibus account established by an investment adviser, broker or other
intermediary, the account minimums apply to the omnibus account, not to the
account of the individual investor.
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);
o a check made payable to the appropriate Fund;
Mail the application and check to:
U.S. Mail: Enhans Funds Overnight: Enhans 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
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 call Unified
Fund Services, Inc., the Funds' transfer agent, at (888) 837-1784 to set up your
account and obtain an account number. You should be prepared at that time to
provide the information on the application. Then, provide your bank with the
following information for purposes of wiring your investment:
Firstar Bank, N.A.
ABA #0420-0001-3
Attn: Enhans Funds
D.D.A.# 821637766
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
Fund's 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 Fund,
custodian and transfer agent are open for business. A wire purchase will not be
considered made until the wired money is received and the purchase is accepted
by the Fund. Any delays which may occur in wiring money, including delays which
may occur in processing by the banks, are not the responsibility of the Fund or
the transfer agent. There is presently no fee for the receipt of wired funds,
but the Fund may charge shareholders for this service in the future.
ADDITIONAL INVESTMENTS
You may purchase additional shares of any Fund (subject to a $1,000
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.
<PAGE>
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.
DISTRIBUTION PLANS
Each Fund has adopted plans under Rule 12b-1 that allow the Fund to pay
distribution fees for the sale and distribution of its shares and allows the
Fund to pay for services provided to shareholders. Each Fund pays annual 12b-1
expenses of 1.00% (of which 0.75% is an asset based sales charge and 0.25% is a
service fee). Because these fees are paid out of each Fund's assets on an
on-going basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
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.
HOW TO EXCHANGE SHARES
As a shareholder in either Fund, you may exchange shares valued at $5,000
or more for shares of the other Enhans RT Fund. You may call the transfer agent
at (888) 837-1784 to exchange shares. An exchange may also be made by written
request signed by all registered owners of the account mailed to the address
listed above. Requests for exchanges received prior to close of trading on the
New York Stock Exchange (4:00 p.m. Eastern Time) will be processed at the next
determined net asset value (NAV) as of the close of business on the same day.
An exchange is made by selling shares of one Fund and using the proceeds to
buy shares of another Fund, with the NAV for the sale and the purchase
calculated on the same day. An exchange results in a sale of shares for federal
income tax purposes. If you make use of the exchange privilege, you may realize
either a long term or short term capital gain or loss on the shares sold.
Before making an exchange, you should consider the investment objective and
risks of the Fund to be purchased. If your exchange creates a new account, you
must satisfy the requirements of the Fund in which shares are being purchased.
You may make an exchange to a new account or an existing account; however, the
account ownership must be identical. Exchanges may be made only in states where
an exchange may legally be made. The Funds reserve the right to terminate or
modify the exchange privilege at any time.
OTHER PURCHASE INFORMATION
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
You may receive redemption payments in the form of a check or federal wire
transfer. 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 the shareholder's Fund account by redemption of shares. If you
redeem your shares through a broker/dealer or other institution, you may be
charged a fee by that institution.
BY MAIL - You may redeem any part of your account in a Fund at no charge
by mail. Your request should be addressed to:
Enhans Funds
c/o Unified Fund Services, Inc.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
"Proper order" means your request for a redemption must include: o the
Fund name and account number, o account name(s) and address, o the dollar amount
or number of shares you wish to redeem.
Requests to sell shares are processed at the net asset value next
calculated after we receive your order in proper form. To be in proper order,
your 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 Unified Fund Services, Inc., you
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 (888) 837-1784. 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.
The Funds may terminate the 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. If
you are unable to reach the Funds by telephone, you may request a redemption or
exchange by mail.
ADDITIONAL INFORMATION - If you are not certain of the requirements for a
redemption please call the transfer agent at (888) 837-1784. 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
$5,000 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
short term 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.
<PAGE>
MANAGEMENT OF THE FUNDS
AExpert Advisory, Inc., 25 West King Street, Lancaster, Pennsylvania 17603,
serves as investment adviser to the Funds. Clients ofAExpert Advisory, Inc.
include individual investors, professional financial advisers, broker-dealers,
banks, insurance companies, pension and profit sharing plans, foundations and
non-profit organizations. Each Fund is authorized to pay the adviser a fee equal
to 1.65% of its average daily net assets.
Kenneth S. Ray is responsible for the day-to-day management of each Fund.
Mr. Ray has more than 23 years experience as a professional investment manager.
He spent 10 years as a broker with Dean Witter Reynolds Securities before
resigning as Vice President of Investments to form AExpert, Inc. Investor
Service Intelligence Systems, predecessor to AExpert, Inc., was formed in 1986
to design, develop and implement computerized investment management systems. In
1990, following successful development of the computerized management systems,
AExpert Advisory, Inc. was formed to facilitate fee based investment management.
AExpert Advisory, Inc. managed client assets for an intentionally small number
of clients as a validation for its automated management systems. Following the
National Securities Improvement Act of 1996 (effective July, 1997) and the
rising popularity of the Internet, AExpert Advisory, Inc. began to make its
investment management services more widely available. Assets under management
have more than quadrupled in the last 2 years and by 3rd quarter, 1999, were in
excess of $60 million. Mr. Ray manages equity accounts for individual and
institutional clients, with a focus on investment in mutual 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), interest, fees and expenses of non-interested person
trustees and extraordinary expenses and expenses incurred pursuant to Rule 12b-1
under the Investment Company Act of 1940. 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) 837-1784 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
Enhans Funds
Enhans RT 500 Fund
Enhans Master Investor Fund
STATEMENT OF ADDITIONAL INFORMATION
March 29, 2000
This Statement of Additional Information ("SAI") is not a prospectus. It
should be read in conjunction with the Prospectus of Enhans RT Funds dated March
29, 2000. A free copy of the Prospectus can be obtained by writing the Transfer
Agent at 431 North Pennsylvania Street, Indianapolis, Indiana 46204, or by
calling 1-888-837-1784.
TABLE OF CONTENTS PAGE
DESCRIPTION OF THE TRUST AND THE FUNDS.........................................2
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS................................................................3
INVESTMENT LIMITATIONS.........................................................4
THE INVESTMENT ADVISER ........................................................6
TRUSTEES AND OFFICERS..........................................................7
PORTFOLIO TRANSACTIONS AND BROKERAGE...........................................8
DETERMINATION OF SHARE PRICE...................................................9
INVESTMENT PERFORMANCE........................................................10
CUSTODIAN.....................................................................11
TRANSFER AGENT................................................................11
ACCOUNTANTS...................................................................11
DISTRIBUTOR...................................................................11
ADMINISTRATOR.................................................................12
DESCRIPTION OF THE TRUST AND THE FUNDS
The Enhans RT 500 Fund and the Enhans Master Investor Fund (each a "Fund"
or collectively, the "Funds") were organized as diversified series of AmeriPrime
Advisors Trust (the "Trust") on December 22, 1999. 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 AExpert Advisory, Inc. (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 March 28, 2000, The Specialty Screw Machine Company, P.O. Box 4185,
Lancaster, PA 17604-4185, owned 99.72% of each Enhans Fund. As the controlling
shareholder, The Specialty Screw Machine Company. 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 The
Specialty Screw Machine Company 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.
<PAGE>
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. 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 which 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 transactions
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. Although not a principal strategy, the Enhans Master Investor Fund may
engage in short selling to a limited extent.
B. Securities Lending. Each Fund Fund may make long and short term loans
of its portfolio securities to parties such as broker-dealers, banks, or
institutional investors. Securities lending allows a Fund to retain ownership of
the securities loaned and, at the same time, to earn additional income. Since
there may be delays in the recovery of loaned securities, or even a loss of
rights in collateral supplied, should the borrower fail financially, loans will
be made only to parties whose creditworthiness has been reviewed and deemed
satisfactory by the Adviser. Furthermore, they will only be made if, in the
judgement of the Adviser, the consideration to be earned from such loans would
justify the risk.
The Adviser understands that it is the current view of the staff of the
Securities and Exchange Commission ("SEC") that a Fund may engage in loan
transactions only under the following conditions: (1) a Fund must receive 100%
collateral in the form of cash, cash equivalents (e.g., U.S. Treasury bills or
notes) or other high grade liquid debt instruments from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, the Fund must be able to terminate the loan
at any time; (4) the Fund must receive reasonable interest on the loan or a flat
fee from the borrower, as well as amounts equivalent to any dividends, interest,
or other distributions on the securities loaned and to any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) the Board of Trustees must be able to vote proxies on the
securities loaned, either by terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the Fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
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. Neither Fund will invest 25% or more of its total assets
in any investment company that concentrates, although each Fund will itself
concentrate its investments in investment companies. 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 per centage 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.
THE INVESTMENT ADVISER
The Funds' investment adviser isAExpert Advisory Inc., 25 West King
Street, Lancaster, Pennsylvania 17603.AExpert Advisory Inc. is a wholly owned
subsidiary of AExpert Inc. Kenneth S. Ray and Y W Kim may be deemed to
controlAExpert Inc. due to their respective share of the ownership ofAExpert
Inc.
Under the terms of the management agreement (the "Agreement"), the adviser
manages the Funds' investments subject to approval of the Board of Trustees and
pays all of the expenses of the Funds except brokerage, taxes, borrowing costs
(such as interest and dividend expense of securities sold short), Rule 12b-1
expenses, fees and expenses of non-interested person trustees and extraordinary
expenses. As compensation for its management services and agreement to pay the
Funds' expenses, each Fund is obligated to pay the Adviser a fee computed and
accrued daily and paid monthly at an annual rate of 1.65% of the average daily
net assets of the Fund. The adviser may waive all or part of its fee, at any
time, and at its sole discretion, but such action shall not obligate the adviser
to waive any fees in the future.
The adviser retains the right to use the name "Enhans RT" 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 "Enhans RT"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. 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 which provide such
services; however, in selecting investments for the Fund, no preference will be
shown for such securities.
The Trust and the Adviser have each adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code significantly restricts
the personal investing activities of all employees of the Adviser. The Code
requires that all employees of the Adviser preclear any personal securities
investment. The preclearance requirement and associated procedures are designed
to identify any substantive prohibition or limitation applicable to the proposed
investment. In addition, no employee may purchase or sell any security which at
the time is being purchased or sold, or to the knowledge of the employee is
being considered for purchase or sale, by the Fund. The substantive restrictions
also include a ban on acquiring any securities in an initial public offering and
provides for trading "blackout periods" which prohibit trading by portfolio
managers of the Fund within periods of trading by the Fund in the same (or
equivalent) security. The restrictions and prohibitions apply to most securities
transactions by employees of the Adviser, with limited exceptions for some
securities (such as securities which have a market capitalization and average
daily trading volume above certain minimums).
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>
<CAPTION>
Name, Age and Address Position Principal Occupation During Past 5 Years
- --------------------------------------------------------------------------------------
<S> <C> <C>
Kenneth D. Trumpfheller President, President, Treasurer , and Secretary of AmeriPrime
1793 Kingswood Drive Secretary, Financial Services, Inc., the Fund's administrator, and
Suite 200 Treasurer, AmeriPrime Financial Securities, Inc., the Fund's
Southlake, TX 76092 and Trustee distributor, since 1994. President, Secretary, Treasurer and
Trustee of AmeriPrime Funds and AmeriPrime Insurance
Trust. Prior to December, 1994 a senior client executive
Year of Birth: 1958 with SEI Financial Services.
- --------------------------------------------------------------------------------------
Mark W. Muller Trustee Account Manager for Clarion Technologies, a manufacturer
175 Westwood Drive of automotive, heavy truck, and consumer goods, from 1996
Suite 300 to present. From 1986 to 1996, an engineer for Sicor, a
Southlake, TX 76092 telecommunication hardware company.
Year of Birth: 1964
- --------------------------------------------------------------------------------------
Richard J. Wright, Jr. Trustee Various positions with Texas Instruments, a technology
8505 Forest Lane company, since 1995, including the following : Program
MS 8672 Manager for Semi-Conductor Business Opportunity
Dallas, TX 75243 Management System, 1998 to present; Development Manager
for web-based interface, 1999 to present; Systems Manager for
Semi-Conductor Business Opportunity Management System,
1997 to 1998; Development Manager of Acquisition Manager,
1996-1997; Operations Manager for Procurement Systems,
Year of Birth: 1962 1994-1997.
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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.
==========================================
Aggregate
Name Compensation
From Trust1
- ------------------------------------------
Kenneth D. Trumpfheller 0
- ------------------------------------------
Mark W. Muller $6,000
- ------------------------------------------
Richard J. Wright $6,000
==========================================
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. For a description of the methods
used to determine the net asset value (share price), see "Determination of Net
Asset Value" in the Prospectus.
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.
<PAGE>
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 the Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
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 each Fund's shares, acts as dividend and distribution disbursing
agent and performs other transfer agent and shareholder service functions. For
its services as transfer agent, Unified receives a monthly fee from the Adviser
of $1.20 per shareholder (subject to a minimum monthly fee of $900). In
addition, Unified provides each Fund 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,
0.0250% of each Fund's assets from $100 million to $300 million and 0.020% of
each Fund's assets over $300 million (subject to various monthly minimum fees,
the maximum being $2,100 per month for assets of $20 to $100 million).
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 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.
ADMINISTRATOR
The Funds retain AmeriPrime Financial Services, Inc., 1793 Kingswood
Drive, Suite 200, Southlake, TX 76092, (the "Administrator") to manage the
Funds' business affairs and provide the Funds with administrative services,
including all regulatory reporting and necessary office equipment, personnel and
facilities. The Administrator receives a monthly fee from the Adviser equal to
an annual average rate of 0.10% of each Fund's average daily net assets up to
fifty million dollars, 0.075% of each Fund's average daily net assets from fifty
to one hundred million dollars and 0.050% of each fund's average daily net
assets over one hundred million dollars. The Administrator, the Distributor, and
Unified (the Fund's transfer agent) are controlled by Unified Financial
Services, Inc.
