Registration No. ____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. ___ [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 1 [X]
DAVIS PARK SERIES TRUST
(Exact name of registrant as specified in charter)
P.O. Box 6919, Moraga, California 94570
(Address of principal executive offices)
Registrant's Telephone Number: (800) 394-5064
Nicholas D. Gerber, P.O. Box 6919, Moraga, California 94570
(Name and address of agent for service)
Copy to:
Michael J. Meaney, Esq.
McDonald, Hopkins, Burke & Haber Co., L.P.A.
2100 Bank One Center, 600 Superior Avenue, East, Cleveland, Ohio 44114
Approximate date of proposed public offering: January 1, 2001
<PAGE>
Prospectus
Ameristock Large Company Growth Fund
Ameristock Focused Value Fund
P.O. Box 6919
Moraga, CA 94570
(800) 394-5064
www.ameristock.com
Minimum Investment: $1,000
Sales Charge: None, 100% No-Load
12(b)1 Fee: None
Redemption Fee:
Ameristock Large Company
Growth Fund: None
Ameristock Focused Value Fund 1.00% if shares redeemed
within 3 years of purchase
Ameristock Large Company Growth Fund is a mutual fund with an investment
objective of seeking capital appreciation. This Fund pursues its objective by
investing primarily in equity securities of large capitalization companies
headquartered in the United States.
Ameristock Focused Value Fund is a mutual fund with an investment objective of
seeking capital appreciation. This Fund pursues its objective by investing
primarily in equity securities of companies of all sizes headquartered in the
United States.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.
January 1, 2001
TABLE OF CONTENTS
Risk/Return Summary - Ameristock
Large Company Growth Fund___
Risk/Return Summary - Ameristock
Focused Value Fund___
Fees and Expenses___
How to Buy Shares___
How to Redeem Shares___
Net Asset Value___
Investment Management___
Dividends and Taxes___
Other Information___
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RISK/RETURN SUMMARY - AMERISTOCK LARGE COMPANY GROWTH FUND
Investment Objective
The investment objective of Ameristock Large Company Growth Fund is to seek
capital appreciation.
Principal Investment Strategies
Ameristock Large Company Growth Fund pursues its investment objective
principally by investing in equity securities of large capitalization companies
headquartered in the United States. Generally, a large capitalization company is
one with a market capitalization of at least $15 billion. Equity securities
consist of common stock, preferred stock and securities convertible into common
or preferred stock.
This Fund emphasizes a "growth" style of investing. In selecting equity
securities, the Fund will seek to invest in companies which the Adviser
believes have the potential for superior long term capital appreciation due to
accelerated earnings or revenue growth. The Fund will sell a stock when the
Fund's investment adviser decides that it no longer meets these investment
criteria.
Under normal conditions, this Fund will invest at least 80% of the value of its
total assets in accordance with the investment strategies described above.
However, the Fund may temporarily invest a lower percentage of its assets in
accordance with such strategies in the event of a domestic or international
event which has significantly disrupted, or in the opinion of the Fund's
investment adviser will materially disrupt, the stock market. If the Fund does
so, the Fund may not achieve its investment objective.
This Fund may engage in active and frequent trading of portfolio securities to
achieve its principal investment strategies, thus resulting in a higher
"portfolio turnover" rate than other mutual funds. A higher portfolio turnover
rate will result in (i) increased brokerage commissions payable by the Fund and
(ii) higher amounts of realized investment gain subject to the payment of taxes
by shareholders.
Principal Risks
Investment in Ameristock Large Company Growth Fund is subject to the following
principal risks:
The value of securities in the Fund's portfolio will go up
and down. Consequently, the Fund's share price may decline and
you could lose money.
The stock market is subject to significant fluctuations in
value as a result of political, economic and market
developments. If the stock market declines in value, the Fund
is likely to decline in value.
Because of changes in the financial condition or prospects
of specific companies, the individual stocks selected by the
Fund may decline in value, thereby causing the Fund to decline
in value.
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"Growth" stocks generally are more expensive relative to
their earnings or assets than other types of stocks.
Consequently, these stocks are more volatile than other types
of stocks. In particular, growth stocks are very sensitive to
changes in their earnings. Negative developments in this
regard could cause a stock to decline dramatically, resulting
in a decrease in the Fund's share price.
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 governmental agency.
The Fund may invest in securities convertible into common or
preferred stock. Such securities allow the holder to convert
the securities into another specified security of the same
issuer at a specified conversion ratio at some specified
future date or period. The market value of convertible
securities generally includes a premium that reflects the
conversion right. To the extent that any convertible security
remains unconverted after the expiration of the conversion
period, the market value will fall to the extent represented
by that premium.
Bar Chart and Performance Table
A bar chart and performance table is not provided since this Fund has not had
annual returns for a full calendar year.
RISK/RETURN SUMMARY - AMERISTOCK FOCUSED VALUE FUND
Investment Objective
The investment objective of Ameristock Focused Value Fund is to seek capital
appreciation.
Principal Investment Strategies
Ameristock Focused Value Fund pursues its investment objective principally by
investing in equity securities of companies of all sizes headquartered in the
United States. Equity securities consist of common stock, preferred stock and
securities convertible into common or preferred stock.
This Fund emphasizes a "value" style of investing. For example, shares of
companies with lower ratios of share price to earnings, sales and book value and
higher dividend yields than those of other companies will be considered
attractive investments. This Fund may also invest in companies which the Fund's
investment adviser believes are being undervalued by the securities markets due
to operating losses, litigation or other circumstances which may have depressed
share prices. However, to a lesser extent the Fund will often also invest in
certain "growth" stocks when the Adviser believes that such stocks are being
undervalued by the securities markets. The Fund will sell a stock when the
Fund's investment adviser decides that it no longer meets these investment
criteria.
This Fund also may invest in corporate debt securities of United States
headquartered companies which the Adviser believes have the capacity for capital
appreciation, either (i) because such debt securities are currently trading
below par or (ii) because the Adviser believes that interest rates are about to
decline. Such debt securities may be of any maturity and may include
investment grade securities (those rated within the top four categories of
safety according to rating service companies) as well as lower rated securities
(including securities in the lowest categories of safety and even unrated
securities), sometimes referred to as "junk bonds," which have speculative
characteristics. The Fund will sell a corporate debt security when the Adviser
believes that such security is no longer likely to appreciate in value.
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Under normal conditions, this Fund will invest at least 65% of the value of its
total assets in equity securities. However, the Fund may temporarily invest a
lower percentage of its assets in accordance with such strategies in the event
of a domestic or international event which has significantly disrupted, or in
the opinion of the Fund's investment adviser will materially disrupt, the stock
market. If the Fund does so, the Fund may not achieve its investment objective.
Principal Risks
Investment in Ameristock Focused Value Fund is subject to the following
principal risks:
The value of securities in the Fund's portfolio will go up and
down. Consequently, the Fund's share price may decline and you
could lose money.
The stock market is subject to significant fluctuations in
value as a result of political, economic and market
developments. If the stock market declines in value, the Fund
is likely to decline in value.
Because of changes in the financial condition or prospects of
specific companies, the individual stocks selected by the Fund
may decline in value, thereby causing the Fund to decline in
value.
While this Fund invests in both smaller and larger companies,
the smaller companies in which this Fund invests are
especially sensitive to the factors described above due to
certain characteristics of smaller companies such as absence
of depth of management, insufficient funds necessary for
growth or potential development and limited product or credit
lines. Therefore, smaller companies may be subject to greater
share price fluctuations than other companies. Also,
securities of these smaller companies are often less liquid,
thus possibly limiting the ability of this Fund to dispose of
such securities when the Adviser deems it desirable to do so.
As a result of these factors, securities of these smaller
companies may expose shareholders of this Fund to above
average risk.
There is no assurance that the Fund's "value" style of
investing will achieve its desired result. In fact, the Fund
may decline in value as a result of emphasizing this style of
investing.
"Growth" stocks generally are more expensive relative to their
earnings or assets than other types of stocks. Consequently,
these stocks are more volatile than other types of stocks. In
particular, growth stocks are very sensitive to changes in
their earnings. Negative developments in this regard could
cause a stock to decline dramatically, resulting in a decrease
in the Fund's share price.
<PAGE>
This Fund's portfolio will also be exposed to the following
additional risks in connection with its investments in
corporate debt securities:
- Prices of debt securities rise and fall in response
to interest rate changes for similar securities.
Generally, when interest rates rise, prices of debt
securities fall. Prices of debt securities having
longer maturities are particularly susceptible to
increasing interest rates. The net asset value of
this Fund may decrease during periods of rising
interest rates.
- An issuer of debt securities may default (fail to
repay interest and principal when due). If an issuer
defaults or the risk of such default is perceived to
have increased, this Fund will lose all or part of
its investment. The net asset value of the Fund may
fall during periods of economic downturn when such
defaults or risk of defaults increase.
- Securities rated below investment grade, also known
as junk bonds, generally entail greater risks than
investment grade securities. For example, their
prices are more volatile, their values are more
negatively impacted by economic downturns, and their
trading market may be more limited.
- The Fund may invest in securities convertible into
common or preferred stock. Such securities allow the
holder to convert the securities into another
specified security of the same issuer at a specified
conversion ratio at some specified future date or
period. The market value of convertible securities
generally includes a premium that reflects the
conversion right. To the extent that any convertible
security remains unconverted after the expiration of
the conversion period, the market value will fall to
the extent represented by that premium.
This Fund is a "non-diversified" fund. The Fund is considered
"non-diversified" because, compared to other funds, a higher
percentage of the Fund's assets may be invested in the shares
of a limited number of companies. The Fund's portfolio
securities, therefore, may be more susceptible to a decline in
value as a result of any single economic, political, or
regulatory occurrence than the portfolio securities of a
"diversified" fund.
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 governmental agency.
Bar Chart and Performance Table
A bar chart and performance table is not provided since this Fund has not had
annual returns for a full fiscal year.
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of either Fund.
Shareholder Fees (fees paid directly from your investment)
Large Company Focused Value
Growth Fund Fund
Maximum Sales Charge (Load) Imposed on Purchases None None
Maximum Deferred Sales Charge (Load) None None
Redemption Fee None 1.00%*
*Payable only if shares redeemed within 3 years of purchase.
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Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Large Company Focused Value
Growth Fund Fund
Management Fees 1.00%[*] 1.35%[*]
Distribution (12b-1) Fees 0.00% 0.00%
Other Expenses 0.00%[**] 0.00%[**]
Total Annual Fund Operating Expenses 1.00% 1.35%
*The Fund's Investment Adviser has agreed to pay all operating
expenses of each Fund except for brokerage, taxes, interest and
extraordinary expenses.
**"Other Expenses" are based on estimates for the current fiscal year.
Example: This Example is intended to help you compare the cost of investing in
either Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in a Fund for the time periods indicated 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, that all dividends and
distributions are reinvested 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:
1 year 3 years
Large Company Growth Fund $102 $318
Focused Value Fund $237 $428
HOW TO BUY SHARES
Shares of each Fund are purchased at the net asset value per share (as described
in "Net Asset Value" below) next determined after receipt by the Fund's
Transfer Agent of your investment in proper form as described below. There are
no sales charges. The minimum initial investment is $1,000 and minimum
subsequent investments (excluding reinvestments of dividends and capital gains)
is $100.
To purchase shares, complete and sign the Application to Buy Shares (or
investment stub in the case of a subsequent purchase) and mail it, together with
your check payable to Ameristock Large Company Growth Fund or Ameristock Focused
Value Fund, to:
Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, Ohio 44114
<PAGE>
To purchase shares by wire, transmit funds to:
Firstar Bank, N.A.
Cinti/Trust
ABA#: 0420-0001-3
F/F/C Account No. ___________________
Ameristock Mutual Fund
DDA __________________ (Star Bank Trust)
Your investment will be considered to be in "proper form" if it includes a check
or wire funds transmission together with a completed Application to Buy Shares
or (in the case of a subsequent purchase) a completed investment stub from a
previous purchase or sale confirmation.
Each investment in a Fund, including dividends and capital gains distributions
reinvested in the Fund, is acknowledged by a statement showing the number of
shares purchased, the net asset value at which the shares are purchased, and the
new balance of Fund shares owned. For reasons of economy and convenience, the
Fund will not issue certificates for shares purchased.
You may purchase or sell Fund shares through a broker-dealer, bank or other
financial institution, or an organization that provides recordkeeping and
consulting services to 401(k) plans or other employee benefit plans (a
"Processing Organization"). Processing Organizations may charge you a fee for
this service and may require different minimum initial and subsequent
investments than the Fund. Processing Organizations may also impose other
charges or restrictions different from those applicable to shareholders who
invest in the Fund directly. Therefore, it may cost more for you to purchase
shares through a Processing Organization than to purchase shares directly from
the Fund. A Processing Organization, rather than its customers, may be the
shareholder of record of your shares. Neither Fund is responsible for the
failure of any Processing Organization to carry out its obligations to its
customers. Certain Processing Organizations may receive compensation from
Ameristock Corporation.
Each Fund reserves the right not to accept purchase orders under circumstances
or in amounts considered disadvantageous to existing shareholders.
HOW TO REDEEM SHARES
General
You may redeem (sell) your shares at any time. Each Fund makes payment by check
for the shares redeemed within seven days after it receives a properly completed
redemption request (in accordance with the procedures described in "Redemption
by Mail" or "Redemption by Telephone," below), except as described below. The
redemption price per share is the net asset value determined as described under
"Net Asset Value", less any applicable redemption fee as described below under
"Redemption Fee". Because net asset value fluctuates, the amount received upon
redemption may be more or less than the amount paid for the shares.
Where an investor requests wire payment, the Transfer Agent will normally wire
the redemption proceeds the next business day by federal funds only to the bank
and account designated on the Application to Buy Shares, or in written
instructions subsequently received by the Transfer Agent, and only if the bank
is a commercial bank that is a member of the Federal Reserve System. The
Transfer Agent currently charges a $20.00 fee for each payment made by wire of
redemption proceeds, which fee will be deducted from the investor's account.
<PAGE>
Payment of redemption proceeds with respect to shares purchased by check will
not be made until the check or payment received for investment has cleared,
which may take up to 11 business days.
Redemption proceeds may be paid in whole or in part in securities or other
property rather than in cash.
Each Fund reserves the right to suspend or postpone redemptions during any
period: (i) when trading on the New York Stock Exchange is restricted, (ii)
when, as a result of an emergency, it is not reasonably practicable for the Fund
to dispose of, or determine the fair market value of, its net assets or (iii) as
the Securities and Exchange Commission may by order permit for the protection of
shareholders of the Fund. If the net asset value of the shares in an account is
less than $1,000 as a result of previous redemptions and not market declines,
the Fund may notify the shareholder that unless the account value is increased
to at least the minimum within 60 days the Fund will redeem all shares in the
account and pay the redemption price to the shareholder.
Redemption Fee - Ameristock Focused Value Fund
A redemption fee of 1% payable to and retained by Ameristock Focused Value Fund
is imposed on any redemption of shares within three years of the date of
purchase. The 1% fee is imposed on the net asset value of the redeemed shares at
the time of purchase. No redemption fee will be imposed on shares acquired
through reinvestment of dividends or capital gain distributions or on increases
in the net asset value of an investor's shares above the net asset value at the
time of purchase.
In determining whether a redemption fee is applicable to a redemption, the
calculation will be made in a manner that results the lowest possible rate. It
will be assumed that the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and distributions; then of
amounts representing the increase in net asset value of shares above the total
amount of payments for the purchase of shares made during the preceding year;
then of amounts representing shares purchased more than three years prior to the
redemption; and finally, of amounts representing the cost of shares purchased
within three years prior to the redemption.
No redemption fees are payable by shareholders of Ameristock Large Company
Growth Fund.
Redemption by Mail
Each Fund will redeem all or any part of shares owned upon written request
delivered to the Fund at:
Ameristock Mutual Funds
Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, Ohio 44114
The redemption request must:
1. Include your name and account number.
<PAGE>
2. Specify the name of the Fund from which shares are to be
redeemed.
3. Specify the number of shares or dollar amount to be redeemed,
if less than all shares are to be redeemed.
4. Be signed by all owners exactly as their names appear on the
account.
5. Include a signature guarantee from any "eligible
guarantor institution" as defined by the rules under the
Securities Exchange Act of 1934 if (i) you change ownership
of the account, (ii) you want the redemption proceeds sent
to a different address from that registered on the account,
(iii) the proceeds are to be made payable to someone other
than the account owner(s), or (iv) the redemption request is
for $25,000 or more. Eligible guarantor institutions include
banks, broker/dealers, credit unions, national securities
exchanges, registered securities associations clearin
agencies, and savings associations. A notary public is not
an eligible guarantor.
In the case of shares being redeemed from an IRA or other qualified retirement
account, a statement of whether or not federal income tax should be withheld is
needed; otherwise federal tax will automatically be withheld.
In the case of shares registered in the name of a corporation or other legal
entity, the redemption request should be signed in the name of the corporation
or entity by an officer whose title is stated, and a certified bylaw provision
or resolution of the board of directors authorizing the officer to so act must
be furnished.
Redemption by Telephone
You may redeem shares by telephone by calling either Fund at (800) 394-5064. In
order to use the telephone redemption procedure, a shareholder must have elected
this procedure in writing, and the redemption proceeds must be mailed directly
to the investor or transmitted to the investor's predesignated account at a
domestic bank. To change the designated account or address, a written request
with signature(s) guaranteed must be sent to the Transfer Agent at least 15 days
before the telephone redemption request. Neither Fund nor the Transfer Agent
will be responsible for the authenticity of telephone instructions and will not
be responsible for any loss, damage, cost or expense arising out of any
telephone instructions received for an account. Furthermore, you agree to hold
harmless and indemnify the Fund, the Transfer Agent, and any affiliated
officers, employees, directors, and agents from any losses, expenses, costs or
liabilities (including attorneys' fees) that may be incurred in connection with
either the written or telephone redemption procedures.
By electing the telephone redemption option, you may be giving up a measure of
security that you might have if you were to redeem your shares in writing. For
reasons involving the security of your account, you will be required to provide
a password to verify authenticity before your instructions will be carried out,
and the telephone transaction may be tape recorded.
NET ASSET VALUE
Net asset value per share is determined as of the close of regular trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York time) on
each business day. The net asset value per share of a Fund is computed by
dividing the value of such Fund's net assets by the total number of shares of
such Fund outstanding. The Fund's investments are valued primarily on the basis
of market quotations.
<PAGE>
Each Fund may invest in portfolio securities that are primarily listed on
foreign exchanges that trade on weekends or other days when such Fund does not
price its shares. As a result, each Fund's net asset value may change on days
when shareholders will not be able to purchase or redeem such Fund's shares.
INVESTMENT MANAGEMENT
Each Fund has retained as its investment adviser Ameristock Corporation (the
"Adviser"), an investment management organization. Since 1995, the Adviser has
acted as the investment adviser to Ameristock Mutual Fund, Inc., another mutual
fund. The Adviser manages the investments of each Fund and is responsible for
the overall management of the business affairs of the Fund. The Adviser's
address is P.O. Box 6919, Moraga, California 94570.
As compensation for its services the Adviser receives an annual fee of 1% of
Ameristock Large Company Growth Fund's average net assets and 1.35% of
Ameristock Focused Value Fund's average net assets. The Adviser pays all of the
operating expenses of each Fund except for brokerage, taxes, interest and
extraordinary expenses.
The portfolio managers of Ameristock Large Company Growth Fund are Andrew Ngim
and Robert Nguyen. Mr. Ngim has been a Managing Director of Ameristock
Corporation since 1999 and was a benefits consultant with PriceWaterhouseCoopers
from 1994 to 1999. Previously, he was employed as a stockbroker and stock
analyst with a regional investment banking firm and as an investment consultant
with a third party pension administrator. Mr. Nguyen has been a Managing
Principal of Ameristock Corporation since 2000 and from 1995 to 1999 was an
institutional specialist at Charles Schwab and Co., Inc. Previously, Mr. Nguyen
was an equity portfolio manager with Bank of America and a stockbroker and stock
analyst with Morgan Stanley Dean Witter.
The portfolio managers of Ameristock Focused Value Fund are Nicholas D. Gerber
and Howard Mah. Mr. Gerber has been the Chairman and portfolio manager of
Ameristock Mutual Fund, Inc. since its incorporation in 1995 and previously was
an equity portfolio manager with Bank of America. Mr. Mah has been a tax and
financial consultant in private practice since 1995 and has been a portfolio
manager for the Adviser since January 1, 2001.
DIVIDENDS AND TAXES
Each Fund declares and pays any dividends annually to shareholders. Dividends
are paid to all shareholders invested in such Fund as of the record date. The
record date is the date on which a shareholder must officially own shares in
order to earn a dividend.
In addition, each Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
shares , unless you elect cash payments on the Application to Buy Shares.
If you purchase shares just before a Fund declares a dividend or capital gain
distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
<PAGE>
Each Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions may be both dividends and capital gains. Generally,
distributions from each Fund are expected to be primarily capital gains
distributions. Redemptions are taxable sales. Please consult your tax adviser
regarding your federal, state and local tax liability.
OTHER INFORMATION
Firstar Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201 has been
retained to act as the custodian of each Fund's investments.
Maxus Information Systems (dba Mutual Shareholder Services) 1301 East Ninth
Street, Suite 1005, Cleveland, Ohio 44114, is the transfer agent and dividend
paying agent of each Fund.
McCurdy & Associates CPA's, Inc., 27955 Clemens Road, Westlake, Ohio 44145, has
been selected to serve as independent certified public accountants of each Fund
and, as such, audits the annual financial statements of each Fund.
McDonald, Hopkins, Burke & Haber Co., L.P.A., 2100 Bank One Center, 600 Superior
Avenue, East, Cleveland, OH 44114-2653, is legal counsel to each Fund and the
Adviser.
<PAGE>
AMERISTOCK LARGE COMPANY FUND
AMERISTOCK FOCUSED VALUE FUND
A Statement of Additional Information ("SAI") dated January 1, 2001 is
incorporated by reference into this prospectus. Additional information about
each Fund's investments is available in the Fund's annual and semi-annual
reports to shareholders. The annual report discusses market conditions and
investment strategies that significantly affected each Fund's performance during
its last fiscal year. To obtain the SAI, the annual report, semi-annual report
and other information without charge and to make shareholder inquires, call
either Fund at (800) 394-5064 or visit the Fund's Internet site at
http://www.ameristock.com.
Information about each Fund (including the SAI) can be reviewed and copied at
the Public Reference Room of the Securities and Exchange Commission in
Washington, D.C. Reports and other information about the Fund are available on
the Commission's Internet site at http://www.sec.gov and copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the Commission, Washington, D.C. 20549-0102 or by
electronic request at the following E-mail address: [email protected]. You can
call 202-942-8090 for information on the Public Reference Room's operations and
copying charges.
Ameristock Mutual Funds
P.O. Box 6919
Moraga, California 94570
Investment Adviser
Ameristock Corporation
P.O. Box 6919
Moraga, California 94570
Custodian
Firstar Bank, N.A.
Cincinnati, OH
Transfer Agent
Mutual Shareholder Services
Cleveland, Ohio
Legal Counsel
McDonald, Hopkins, Burke & Haber Co., L.P.A.
Cleveland, Ohio
Independent Auditor
McCurdy & Associates CPAs, Inc.
Westlake, Ohio
Investment Company Act File No. 811-10141
<PAGE>
APPLICATION TO BUY SHARES
Please check one of the following boxes:
Ameristock Large Company Growth Fund
Ameristock Focused Value Fund
Mail to: Minimum Investments:
Ameristock Mutual Funds Initial: $1,000
1301 East Ninth Street Subsequent: $ 100
Suite 1005
Cleveland, OH 44114
---------------------------- -----------------------------------
Owner Joint Owner
---------------------------- -----------------------------------
Address Social Security or Tax Id Number
---------------------------- -----------------------------------
City State Zip Daytime Phone Number
If more than one owner is listed above, then shares will be registered as joint
tenants with right of survivorship and not as tenants in common, unless
otherwise instructed.
This investment represents an:
____ Initial investment payable to: Ameristock Large Company Growth
Fund or Ameristock Focused Value Fund: Amount $________
____ Investment wired to account: Amount $________
All income dividends and capital gains distributions will be reinvested in
additional shares as stated in the Prospectus unless the box below is checked.
____ Please pay all income dividends and capital gains
distributions in cash.
I am a U.S. Citizen [Yes] [No] (circle one)
The Internal Revenue Service (IRS) requires each taxpayer to provide a Social
Security or Taxpayer Identification Number and to make the following
certifications. I certify under penalty of perjury that:
1. The Social Security or Tax ID number stated above is correct.
2. I am not subject to backup withholding because:*
a) The IRS has not informed me that I am subject to
backup withholding.
b) The IRS has notified me that I am no longer subject
to backup withholding.
<PAGE>
* If this statement is not true and you are subject to backup withholding, cross
out Section 2. I/We, the undersigned, have received a copy of the current
Prospectus of the Ameristock Large Company Growth Fund/Ameristock Focused Value
Fund and are purchasing Fund shares in accordance with its provisions. I/We
further certify that the undersigned is of legal age and has full legal capacity
to make this purchase. The purchase price shall be the net asset value next
determined following receipt of the application by the applicable Fund, if the
application is accepted. This application cannot be processed unless accompanied
by payment.
---------------------------
Signature of Owner /Date
<PAGE>
AMERISTOCK LARGE COMPANY GROWTH FUND
AMERISTOCK FOCUSED VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
January 1, 2001
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Prospectus of the Ameristock Large Company Growth Fund
and Ameristock Focused Value Fund (each "Fund" and collectively, the "Funds")
dated January 1, 2001. To obtain a copy of the Prospectus, without charge,
please write to the Funds at P.O. Box 6919, Moraga, CA 94570 or call (800)
394-5064.
TABLE OF CONTENTS
Investments and Risks 1
Management Agreement 6
Management of the Fund 7
Ownership of Shares 8
Portfolio Turnover 8
Portfolio Transactions and Brokerage 8
Share Redemptions 8
Taxation of the Fund 9
Performance Information 9
Additional Information 11
INVESTMENTS AND RISKS
Classification
Ameristock Large Company Growth Fund is a diversified, open-end management
investment company. Ameristock Focused Value Fund is a non-diversified, open-end
management investment company.
Information on Each Fund's Investments
Each Fund has an investment objective of seeking capital appreciation. The
principal investment strategies used by each Fund to pursue this objective,
together with the principal risks of investing in each Fund, are described in
the Prospectus under the headings "Risk/Return Summary - Ameristock Large
Company Growth Fund" and "Risk/Return Summary - Ameristock Focused Value Fund".
Described below are (i) certain other investment strategies (including
strategies to invest in particular types of securities) which are not principal
strategies and (ii) the risks of those strategies:
<PAGE>
Securities Lending. Securities lending allows each Fund to retain ownership of
the securities loaned out and, at the same time, to earn additional income. Each
Fund may lend its portfolio securities constituting up to 30% of its net assets.
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 only be made to U.S. or foreign banks or broker-dealers which have been
rated within the two highest grades assigned by Standard & Poor's or Moody's, or
which have been determined by the Investment Adviser to be of equivalent
quality. Furthermore, securities will only be lent if, in the judgement of the
Investment Adviser, the consideration to be earned from such loans justify the
risk.
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).
Risks of securities lending are (i) loss of rights in the loaned securities
should the borrower fail financially and (ii) investment losses on the loaned
securities.
Illiquid Investments. Illiquid investments are investments that cannot be sold
or disposed of in the ordinary course of business at approximately the prices at
which they are valued. Under the supervision of the Board of Trustees, the
Investment Adviser determines the liquidity of each Fund's investments and,
through reports from the Investment Adviser, the Board of Trustees monitors
investments in illiquid instruments. In determining the liquidity of the Fund's
investments, the Investment Adviser may consider various factors, including (i)
the frequency of trades and quotations, (ii) the number of dealers and
prospective purchasers in the marketplace, (iii) dealer undertakings to make a
market, (iv) the nature of the security (including any demand or tender
features), and (v) the nature of the marketplace for trades (including the
ability to assign or offset the Fund's rights and obligations relating to the
investment). The Fund may not invest in securities or other assets that the
Board of Trustees determines to be illiquid if more than 15% of the Fund's net
assets would be invested in such securities.
Foreign Exposure. Each Fund may invest in (i) stocks of U.S. headquartered
companies having substantial foreign operations or (ii) foreign stocks. These
stocks involve certain inherent risks that are different from those of other
companies, including political or economic instability of the foreign country or
countries, diplomatic developments which could affect U.S. investments in those
countries, changes in foreign currency and exchange rates and the possibility of
adverse changes in investment or exchange control regulations. As a result of
these and other factors, these stocks may be subject to greater price
fluctuations than securities of other companies.
Options. An option on a security is a contract that permits the purchaser of the
option, in return for the premium paid, the right to buy a specified security or
index (in the case of a call option) or to sell a specified security or index
(in the case of a put option) from or to the writer of the option at a
designated price during the term of the option. An option on a securities index
permits the purchaser of the option, in return for the premium paid, the right
to receive from the seller cash equal to the difference between the closing
price of the index and the exercise price of the option. The gain or loss on 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. Each Fund may write a call or put
option only if the option is "covered". This means so long as the Fund is
obligated as the writer of a call option, it will hold the underlying security
subject to the call, or hold a call at the same or lower exercise price, for the
same exercise period, and on the same securities as on the written call. A put
is covered if the Fund maintains liquid assets with a value equal to the
exercise price in a segregated account, or holds a put on the same underlying
securities at an equal or greater exercise price. Put options and call options
typically have similar structural characteristics and operational mechanics
regardless of the underlying instruments on which they are purchased or sold.
<PAGE>
A Fund's purchase of a put option on a security might be designated to protect
its holdings in the underlying instrument (or, in some cases a similar
instrument) against substantial declines in the market value by giving the Fund
the right to sell such instrument at the option exercise price. A Fund's
purchase of a call option on a security or index 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. 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.
The value of the underlying securities on which the options may be written at
any one time will not exceed 15% of either Fund's total assets. A Fund will not
purchase put or call options if the aggregate premium paid for such options
would exceed 5% of the Fund's total assets at the time of purchase.
Even though a Fund will receive the option premium to help protect it against a
loss, a call sold by the 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.
A Fund's ability to close out its position as a purchaser or seller of a 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 an exchange; (v)
inadequacy of the facilities of an exchange 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 instruments,
significant price and rate movements can take place in the underlying markets
that cannot be reflected in the options markets.
Futures. Each Fund's use of options and financial futures 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 management, or other portfolio
management purposes. Typically, maintaining a futures contract requires the Fund
to deposit with a financial intermediary as security for its obligations an
amount of cash or other specified asset (initial margin) which is typically 1%
to 10% of the face amount of the contract (but may be higher in some
circumstances). Additional cash or assets (variation or maintenance 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 a 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 variation or maintenance
margin) for the resulting futures position just as it would for any position.
Futures contracts and options thereon are generally settled by entering into
offsetting transactions but there can be no assurance that the position can be
offset prior to settlement at an advantageous price, not that delivery will
occur.
<PAGE>
A Fund will not enter into a futures contract or related option (except for
closing transactions) if, immediately thereafter, the value of the face amount
of the open futures contracts and options thereon would exceed 25% of the Fund's
total assets.
There can be no assurance that a liquid market will exist at a time when a Fund
seeks to close out a futures or futures option position. The Fund would be
exposed to possible loss on the position during the interval of inability to
close, and would continue to be required to meet margin requirements until the
position was closed, which could result in a decrease in the Fund's net asset
value. The liquidity of a secondary market in a futures contract may be
adversely affected by "daily price fluctuation limits" established by commodity
exchanges which limit the amount of fluctuation in a futures contract price
during a single trading day. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures positions. The trading of futures
contracts is also subject to the risk of trading halts, suspensions, exchange or
clearing house equipment failures, government intervention, insolvency of a
brokerage firm or clearing house or other disruption or normal trading activity,
which could at times make it difficult or impossible to liquidate existing
positions or to recover excess variation margin payments.
Segregated Accounts. Futures contracts, options, and options on futures
contracts require a Fund to segregate liquid high grade assets with its
custodian to the extent Fund 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, or
instruments required to be delivered, or, subject to any regulatory
restrictions, 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.
Fixed Income Securities. Each Fund may invest in fixed income securities
(corporate debt securities, bank certificates of deposit, bank checking account,
and U.S. Government and Agency obligations). All of Ameristock Large Company
Growth Fund's fixed income securities must be rated within the top three
categories of safety according to rating service companies like Standard &
Poor's, Moody's, Fitch, or Duff & Phelps at the time of the investment or, if
not rated, must then be determined by the Investment Adviser to be of comparable
quality. Fixed income securities prices fluctuate inversely with interest rate
movements. Other fixed income risk factors include default risk.
High-Yield Securities - Ameristock Focused Value Fund. Ameristock Focused Value
Fund may, from time to time, invest in lower-rated securities (rated BBB or
lower by Standard & Poor's Corporation Rating Service) or in unrated securities,
when, in the view of the Adviser, such investments are consistent with the
Fund's investment objective. Certain risk factors that investors should
recognize as being associated with the Adviser's discretion to invest in such
securities are set forth below.
In general, when interest rates decline, the value of fixed income securities
can be expected to rise. Conversely, when interest rates rise, the value of
fixed income securities can be expected to decline. Prices of lower-rated
securities (also sometimes referred to as "high-yield" securities) have been
found to be less sensitive to interest rate changes than higher-rated
investments, but more sensitive to adverse economic changes or individual
corporate developments. In addition, periods of economic uncertainty and changes
can be expected to result in increased volatility of market prices of
lower-rated securities.
<PAGE>
The values of lower-rated securities tend to reflect individual corporate
developments to a greater extent than higher-rated securities, which react
primarily to fluctuations in the general level of interest rates. Further,
securities rated BB or lower by Standard & Poor's are below investment grade and
are considered, on balance, to be predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms of the
obligation and will generally involve more credit risk than securities in the
higher rating categories. In some cases, such securities are subordinated to the
prior payment of senior indebtedness, thus potentially limiting the Fund's
ability to receive payments when senior securities are in default or to recover
full principal. Many issuers of lower-rated corporate debt securities are
substantially leveraged, which may impair their ability to meet debt service
obligations. Also, during an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress which
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain additional
financing. Upon any default, the Fund may incur additional expenses to the
extent it is required to seek recovery of the payment of principal or interest
on the relevant portfolio holding.
In addition, lower-rated securities may tend to trade in markets that are
relatively less liquid than the market for higher rated securities. It is thus
possible that the Fund's ability to dispose of such securities, when its
investment adviser deems it desirable to do so, may be limited. The lack of a
liquid secondary market may also have an adverse impact on market price and the
Fund's ability to dispose of particular issues when necessary to met the Fund's
liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the issuer. In addition, a less liquid
market may interfere with the ability of the Fund to accurately value
lower-rated securities and, consequently, value the Fund's assets. Furthermore,
adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of lower-rated securities,
especially in a thinly-traded market.
The market for "high-yield" fixed-income securities has not weathered a major
economic recession and it is unknown what effect a recession might have on such
securities. It is likely, however, that any such recession could severely
disrupt the market for such securities and may have an adverse impact on the
value of such securities. In addition, it is likely that any such economic
downturn would adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon.
Standard & Poor's Corporation ("S&P") is a private service that provides rates
of the credit quality of debt obligations. These ratings represents S&P's
opinion as to the quality of the securities that they undertake to rate. It
should be emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, securities with the same maturity, interest
rate and rating may have different market prices. Subsequent to its purchase by
the Fund, an issue of securities may cease to be rated or its ratings may be
reduced.
Other Investment Companies. Each Fund may invest in securities issued by other
investment companies within the limits prescribed by the Investment Company Act
of 1940. Each Fund intends to limit its investments so that, as determined
immediately after a securities purchase is made: (i) not more than 5% of the
value of the Fund's total assets will be invested in the securities of any one
investment company; (ii) not more than 10% of the value of the Fund's total
assets will be invested in the aggregate in securities of investment companies
as a group; and (iii) not more than 3% of the outstanding voting stock of any
one investment company will be owned by the Fund. To the extent that a Fund
invests in other investment companies, an investor in the Fund will bear not
only his proportionate share of the expenses of the Fund but also indirectly
similar expenses of the underlying investment companies in which the Fund
invests. These expenses consist of advisory fees, expenses related to the
distribution of shares, brokerage commissions, accounting, pricing and custody
expenses, printing, legal and audit expenses and other miscellaneous expenses.
<PAGE>
Policies
Unless otherwise noted, whenever an investment policy states a maximum
percentage of either Fund's assets that may be invested in any security or other
asset, or sets forth a policy regarding quality standards, such a standard or
percentage will be determined immediately after and as a result of such Fund's
acquisition of such security or other asset. Accordingly, any subsequent change
in values, net assets, or other circumstances will not be considered when
determining whether the investment complies with such Fund's investment
objectives and policies.
Each Fund's fundamental investment policies cannot be changed without approval
by a "majority of the outstanding voting securities" (as defined in the
Investment Company Act of 1940) of the Fund. The following are the fund's
fundamental investment policies set forth in their entirety. The Fund may not:
1. purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25%
of the Fund's total assets would be invested in the securities
of companies whose principal business activities are in the
same industry;
2. purchase the securities of any issuer if such purchase, at the
time thereof, would cause the Fund to fail to satisfy the
requirements of the Internal Revenue Code Section 851(b)(3)
(or any successor provision), as amended;
3. issue senior securities, except as permitted under the
Investment Company Act of 1940, the rules and regulations
promulgated thereunder or interpretations of the Securities
and Exchange Commission or its staff;
4. borrow money, except that the Fund may borrow money for
temporary or emergency purposes (not for leveraging or
investment) provided that immediately after such borrowing,
the Fund has asset coverage (as defined in the Investment
Company Act of 1940) of at least 300%;
5. act as an underwriter of securities issued by others, except
to the extent the Fund may be deemed to be an underwriter in
connection with the disposition of portfolio securities;
6. invest in securities or other assets that the Board of
Trustees determines to be illiquid if more than 15% of the
Fund's net assets would be invested in such securities;
7. (a) purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but
this shall not prevent the Fund from purchasing or selling
options and futures contracts or from investing in securities
or other instruments backed by physical commodities), (b)
invest in oil, gas, or mineral exploration or development
programs or leases, or (c) purchase securities on margin.
8. purchase or sell real estate or make real estate mortgage
loans or invest in real estate limited partnerships, except
that the Fund may purchase and sell securities issued by
entities engaged in the real estate industry or instruments
backed by real estate.
<PAGE>
9. make loans, except the Fund may (i) purchase and hold debt
securities in accordance with its investment objective and
policies, and (ii) engage in securities lending as described
in the Prospectus and in the Statement of Additional
Information.
The foregoing restrictions, as well as each Fund's investment objective of
seeking capital appreciation, are fundamental policies that may not be changed
without the approval of a majority of the applicable Fund's outstanding voting
securities. A majority of a Fund's outstanding voting securities means the
lesser of (a) more than 50% of the Fund's outstanding voting securities or (b)
67% or more of the voting securities present at a meeting at which more than 50%
of the outstanding voting securities are present or represented by proxy.
MANAGEMENT AGREEMENT
Each Fund employs the Investment Adviser to furnish advisory and other services.
Under the Investment Adviser's contract with each Fund, the Investment Adviser
acts as Investment Adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the Fund in accordance with the Fund's
investment objective, policies, and limitations. The Investment Adviser also
provides the Fund with all necessary office facilities and personnel for
servicing the Fund's investments, and compensates all officers of the Fund, all
Trustees who are "interested persons" of the Fund or the Investment Adviser, and
all personnel of the Fund or of the Investment Adviser performing services
relating to research, statistical, and investment activities.
In addition, the Investment Adviser, subject to the supervision of the Board of
Trustees, provides the management and administration services necessary for the
operation of the Fund. These services include providing facilities for
maintaining the Fund's organization; supervising relations with custodians,
transfer and pricing agents, accountants, underwriters, and other persons
dealing with the Fund; preparing all general shareholder communications and
conducting shareholder relations; maintaining the Fund's records and the
registration of the Fund's shares under federal and state law; developing
management and shareholder services for the Fund; and furnishing reports,
evaluations, and analysis on a variety of subjects to the Board of Trustees.
The Adviser pays all operating expenses of each Fund except for brokerage,
taxes, interest, and extraordinary expenses (including, without limitation,
litigation and indemnification costs and expenses).
For the services of the Investment Adviser, each Fund pays as compensation a
fee, accrued daily and payable monthly, at an annual rate of 1.00% of Ameristock
Large Company Growth Fund's average net assets and 1.35% of Ameristock Focused
Value Fund's average net assets.
MANAGEMENT OF THE FUND
The Trustees and Officers of the Fund, their business addresses and their
principal occupations during the past five years are set forth below. Those
Trustees who are "interested persons" (as defined in the Investment Company Act
of 1940) by virtue of their affiliation with the Investment Adviser are
indicated by an asterisk (*).
<PAGE>
<TABLE>
<S> <C> <C> <C>
Name and Business Address Age Position Held with Fund Principal Occupation for Last Five Years
------------------------- ----- ------------------------------ -----------------------------------------
Nicholas D. Gerber* (38) Chairman, President, Treasurer President Ameristock Corporation,
P.O. Box 6919 and Trustee Portfolio Manager of the Fund.
Moraga, CA 94570 Portfolio Manager with Bank of America
helping to manage over $250 million in
commingled and mutual fund accounts
(1993-1995).
Stephen J. Marsh (47) Trustee Vice-President with FMV Opinions, Inc.
P.O. Box 6919 (1998-Present). Managing Director,
Moraga, CA 94570 The Mentor Group (1991-1998).
Alev Efendioglu, PhD. (58) Trustee Professor of Management and Small
P.O. Box 6919 Business Institute Director, McLaren
Moraga, CA 94570 School of Business, University of San
Francisco (1977-Present).
</TABLE>
The Trustees of the Fund who are employees or Trustees of the Investment Adviser
receive no compensation from the Fund. Each of the other Trustees is paid an
annual retainer of $1.00 and is reimbursed for the expenses of attending
meetings.
Each Fund and the Investment Adviser have adopted a Code of Ethics under Rule
17j-1 of the Investment Company Act of 1940. The Code of Ethics permits
personnel subject to the Code to invest in securities that may be purchased or
held by the Fund, except that each such person may not purchase or sell any
security which, to his actual knowledge at the time of such purchase or sale (a)
is being considered for purchase or sale by the Fund or (b) is being purchased
or sold by the Fund.
OWNERSHIP OF SHARES
The only person known by the Funds to be holders of record or beneficially of 5%
or more of the shares of either Fund as of November 3, 2000 was Ameristock
Corporation, which owned 100% of the shares of each Fund.
As of November 3, 2000, all Officers and Trustees as a group beneficially
owned 100% of the outstanding shares of each Fund. The shares of each Fund
owned by Ameristock Corporation are deemed to be beneficially owned by Nicholas
D. Gerber, Chairman of the Fund and the President and majority shareholder of
Ameristock Corporation.
PORTFOLIO TURNOVER
While it is difficult to predict, the Investment Adviser expects that the annual
portfolio turnover rate will not exceed 100% for Ameristock Large Company Growth
Fund and 200% for Ameristock Focused Value Fund. A greater rate may be
experienced during periods of marketplace volatility which necessitates more
active trading. A higher portfolio turnover rate involves greater transaction
costs to the Fund and may result in the realization of net capital gains which
would be taxable to shareholders when distributed.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the supervision of the Board of Trustees, decisions to buy and sell
securities for each Fund and negotiation of its brokerage commission rate are
made by the Investment Adviser. Transactions on United States stock exchanges
involve the payment by the Fund of negotiated brokerage commissions. There is
generally no stated commission in the case of securities traded in the
over-the-counter market but the price paid by the Fund usually includes an
undisclosed dealer commission or mark-up. In certain instances, the Fund may
make purchases of underwritten issues at prices which include underwriting fees.
<PAGE>
In selecting a broker to execute each transaction, the Investment Adviser will
take the following into consideration: the best net price available; the
reliability, integrity and financial condition of the broker; the size and
difficulty in executing the order; and the value of the expected contribution of
the broker to the investment performance of the Fund on a continuing basis.
Accordingly, the cost of the brokerage commissions to the Fund in any
transaction may be greater than that available from other brokers if the
difference is reasonably justified, determined in good faith by the Investment
Adviser, by other aspects of the portfolio execution services offered such as
research, economic data, and statistical information about companies and
industries, non-inclusive.
SHARE REDEMPTIONS
The right of redemption may be suspended, or the date of payment postponed
beyond the normal seven-day period by each Fund, under the following conditions
authorized by the 1940 Act: (1) for any period (a) during which the New York
Stock Exchange is closed, other than customary weekend and holiday closing, or
(b) during which trading on the New York Stock Exchange is restricted; for any
period during which an emergency exists as a result of (a) disposal by the Fund
of securities owned by it is not reasonably practicable, or (b) it is not
reasonably practicable for the Fund to determine the fair value of its net
assets; and (3) for such other periods as the SEC may by order permit for the
protection of the Fund's shareholders.
The value of shares of each Fund on redemption may be more or less than the
shareholder's cost, depending upon market value of the Fund's assets at the
time. Shareholders should note that if a loss has been realized on the sale of
shares of the Fund, the loss may be disallowed for tax purposes if shares of the
same Fund are purchased within (before or after) 30 days of the sale.
It is possible that conditions may exist in the future which would, in the
opinion of the Board of Trustees, make it undesirable for the Fund to pay for
redemption's in cash. In such cases the Board may authorize payment to be made
in portfolio securities of the Fund. Securities delivered in payment of
redemptions are valued at the same value assigned to them in computing the net
asset value per share. Shareholders receiving such securities generally will
incur brokerage costs on their sales.
<PAGE>
TAXATION OF THE FUNDS
Each Fund intends to qualify each year as a "regulated investment company" under
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended. Qualification as a regulated investment company will result in each
Fund's paying no taxes on net income and net realized capital gains distributed
to shareholders. If these requirements are not met, a Fund will not receive
special tax treatment and will pay federal income tax, thus reducing the total
return of the Fund.
Statements as to the tax status of each shareholder's dividends and
distributions will be mailed annually by the Fund's transfer agent. Shareholders
are urged to consult their own tax advisors regarding specific questions as to
Federal, state or local taxes.
PERFORMANCE INFORMATION
From time to time, quotations of each Fund's performance may be included in
advertisements, sales literature or reports to shareholders or prospective
investors. Each Fund may also compare its performance figures to the performance
of unmanaged indices which may assume reinvestment of dividends or interest but
generally do not reflect deductions for administrative and management costs.
Examples include, but are not limited to, the Dow Jones Industrial Average, the
Consumer Price Index, Standard & Poor's 500 Composite Price Index (the "S&P
500"), the various NASDAQ indices, and the Wilshire 5000. In addition, the Fund
may compare its performance to the performance of broad groups of mutual funds
with similar investment goals, as tracked by independent organizations such as
Investment Company Data, Inc., Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Morningstar, Inc., Ibbotsen Associates, Value Line Mutual
Fund Survey, and other independent organizations. Also, each Fund may refer to
its ratings and related analysis supporting the ratings from these or other
independent organizations.
From time to time, each Fund may compare its performance against inflation with
the performance of other instruments against inflation, such as short-term
Treasury Bills (which are direct obligations of the U.S. Government) and FDIC-
insured bank money market or certificate of deposit accounts. In addition,
advertising for the Fund may indicate that investors may consider diversifying
their investment portfolios in order to seek protection of the value of their
assets against inflation. From time to time advertising materials for the Fund
may refer to, or include commentary by the Fund's portfolio managers relating to
their respective investment strategies, asset growth, current or past business,
political, economic or financial conditions and other matters of general
interest to investors. In addition, from time to time, advertising materials for
the Funds may include information concerning retirement and investing for
retirement, including information provided by the Social Security
Administration, and may refer to the approximate number of then current Fund
shareholders.
Each Fund may compare its performance to various capital markets such as common
stocks, long-term government bonds, Treasury bills, and the U.S. rate of
inflation as these figures are provided by Ibbotsen Associates and other
independent organizations. Each Fund may also use the performance of these
capital markets in order to demonstrate general risk versus reward investment
scenarios. In addition, each Fund may quote financial or business publications
and periodicals, including model portfolios or allocations, as they relate to
fund management, investment philosophy, and investment techniques.
Each Fund may quote its performance in various ways. All performance information
supplied by the Fund in advertising is historical and is not intended to
indicate future returns. A Fund's share price and total returns fluctuate in
response to market conditions and other factors, and the value of Fund shares
may be more or less than their original cost.
<PAGE>
Total returns quoted in advertising reflect all aspects of a Fund's return
including the effect of reinvesting dividends and capital gain distributions,
and any change in the Fund's net asset value per share (NAV) over the period.
Average annual returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in the Fund over a stated period,
and then calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative return of 100% over ten
years would produce an average annual total return of 7.18%, which is the steady
annual rate of return that would equal 100% growth on a compounded basis in ten
years. While average annual returns are a convenient means of comparing
investment alternatives, the Fund's performance is not consistent over time, but
changes from year to year, and that average annual returns represent figures as
opposed to the actual year-to-year performance of the Fund. The formula for
determining annual average total return expressed as a percentage is:
T = (ERV/P) 1/n - 1
Where:
T = average annual total return
P = a hypothetical initial investment of $1,000
n = number of years.
EVR = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.
In addition to average annual total returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Average annual and cumulative returns may be quoted as a
percentage change or as a dollar amount, and may be calculated for a single
investment, a series of investments, or a series of redemptions, over any time
period. Total returns may be broken down into their component parts of income
and capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contribution to total
return.
ADDITIONAL INFORMATION
Each Fund is an open-end management investment company and is a portfolio of
Davis Park Series Trust, a Delaware business trust organized on August 17, 2000
(the "Trust"). The Trust's Declaration of Trust authorizes the Board of Trustees
to issue an unlimited number of shares of each Fund. Each share of each Fund has
equal voting, dividend, distribution and liquidation rights. In the event that
Ameristock Corporation ceases to be the investment advisor, the right of each
Fund to use the identifying name "Ameristock" may be withdrawn.
Firstar Bank, N.A., Cincinnati, Ohio, is the custodian of the assets of each
Fund. The custodian is responsible for the safekeeping of each Fund's assets and
the appointment of sub-custodians and clearing agencies. The custodian takes no
part in determining the investment policies of either Fund or in deciding which
securities are purchased or sold by each Fund. Each Fund may, however, invest in
obligations of the custodian and may purchase securities from or sell securities
to the custodian. The Investment Adviser, its Officers and Directors, and the
Fund's Trustees may from time to time have transactions with various banks,
including banks servings as custodians for assets advised by the Investment
Adviser. There have been no transactions of this sort to date with the
Custodian.
<PAGE>
The Financial Statements of the Fund included in this Statement of Additional
Information have been so included in reliance on the report of McCurdy &
Associates, Inc., independent certified public accountant, given on the
authority of that firm as experts in accounting and auditing.
Financial Statements to follow this page
<PAGE>
To The Shareholders and Trustees
Davis Park Series Trust:
We have audited the accompanying statement of assets and liabilities of Davis
Park Series Trust (comprising, respectively, Ameristock Large Company Growth
Fund and Ameristock Focused Value Fund) as of November 6, 2000. This financial
statement is the responsibility of the Trust's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. Our procedures included
confirmation of cash held by the custodian as of November 6, 2000, by
correspondence with the custodian. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of each of the
respective portfolios constituting the Davis Park Series Trust as of November 6,
2000, in conformity with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 6, 2000
<PAGE>
DAVIS PARK SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 6, 2000
Ameristock Ameristock
Large Company Focused
Growth Fund Value Fund
ASSETS:
Cash in Bank $10,000 $90,000
------- -------
Total Assets $10,000 $90,000
------- -------
LIABILITIES: $ 0 $ 0
------- -------
Total Liabilities $ 0 $ 0
------- -------
NET ASSETS $10,000 $90,000
------- -------
NET ASSETS CONSIST OF:
Capital Paid In $10,000 $90,000
------- -------
OUTSTANDING SHARES 666.67 6,000.00
NET ASSET VALUE PER SHARE $15.00 $15.00
OFFERING PRICE PER SHARE $15.00 $15.00
See Accountants' Audit Report
<PAGE>
DAVIS PARK SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
November 6, 2000
1. ORGANIZATION
Each Fund is an open-end management investment company and is a
portfolio of Davis Park Series Trust, a Delaware business trust
organized on August 17, 2000 (the "Trust"). The Trust's Declaration of
Trust authorizes the Board of Trustees to issue an unlimited number of
shares of each Fund. Each share of each Fund has equal voting, dividend,
distribution and liquidation rights. In the event that Ameristock
Corporation ceases to be the investment adviser, the right of each Fund
to use the identifying name "Ameristock" may be withdrawn.
The primary investment objective of the Ameristock Large Company Growth
Fund is to seek capital appreciation.
The primary investment objective of the Ameristock Focused Value Fund is
to seek capital appreciation.
Each Fund uses an independent custodian and transfer agent. No
transactions other than those relating to organizational matters and the
sale of 666.67 shares of Ameristock Large Company Growth Fund and
6,000.00 shares of Ameristock Focused Value Fund have taken place to
date.
2. RELATED PARTY TRANSACTIONS
The only person known by the Funds to be holders of record or
beneficially of 5% or more of the shares of either Fund as of November
6, 2000 was Ameristock Corporation, which owned 100% of the shares of
each Fund.
As of November 6, 2000, all Officers and Trustees as a group
beneficially owned 100% of the outstanding shares of each Fund. The
shares of each Fund owned by Ameristock Corporation are deemed to be
beneficially owned by Nicholas D. Gerber, Chairman of the Fund and the
President and majority shareholder of Ameristock Corporation.
Each Fund employs Ameristock Corporation (the "Investment Adviser") to
furnish advisory and other services. Under the Investment Adviser's
contract with each Fund, the Investment Adviser acts as Investment
Adviser and, subject to the supervision of the Board of Trustees,
directs the investments of the Fund in accordance with the Fund's
investment objective, policies, and limitations. The Investment Adviser
also provides the Fund with all necessary office facilities and
personnel for servicing the Fund's investments, and compensates all
officers of the Fund, all Trustees who are "interested persons" of the
Fund or the Investment Adviser, and all personnel of the Fund or of the
Investment Adviser performing services relating to research,
statistical, and investment activities.
In addition, the Investment Adviser, subject to the supervision of the
Board of Trustees, provides the management and administration services
necessary for the operation of the Fund. These services include
providing facilities for maintaining the Fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters, and other
<PAGE>
DAVIS PARK SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
November 6, 2000
2. RELATED PARTY TRANSACTIONS (Cont'd)
persons dealing with the Fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the
Fund's records and the registration of the Fund's shares under federal
and state law; developing management and shareholder services for the
Fund; and furnishing reports, evaluations, and analysis on a variety of
subjects to the Board of Trustees.
The Adviser pays all operating expenses of each Fund except for
brokerage, taxes, interest, extraordinary expenses (including, without
limitation, litigation and indemnification costs and expenses).
For the services of the Investment Adviser, each Fund pays as
compensation a fee, accrued daily and payable monthly, at an annual rate
of 1.00% of Ameristock Large Company Growth Fund's average net assets
and 1.35% of Ameristock Focused Value Fund's average net assets.
3. CAPITAL STOCK AND DISTRIBUTION
At November 6, 2000 paid in capital amounted to $10,000 for Ameristock
Large Company Growth Fund and $90,000 for Ameristock Focused Value Fund.
Transactions in capital stock were as follows:
Ameristock Ameristock
Large Company Focused
Growth Fund Value Fund
Shares Sold 666.67 6,000.00
Shares Redeemed 0 0
---------- ----------
Net Increase 666.67 6,000.00
---------- ----------
Shares Outstanding 666.67 6,000.00
---------- ----------
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits.
Exhibit Description
a Declaration of Trust[*]
b By-Laws[*]
c None
d Management Agreement[*]
e None
f None
g Custody Agreement[*]
h(1) Transfer Agent Agreement[*]
h(2) Accounting Services Agreement[*]
i Opinion and [Consent]
j Consent of Independent Auditors
k None
l Subscription Agreement
m None
n Financial Data Schedule
p Code of Ethics
[*Previously filed].
Item 24. Persons Controlled by or Under Common Control with Registrant.
The Fund and the Adviser may be deemed to be under common
control of Nicholas D. Gerber, the Chairman of the Fund and
President of the Adviser.
<PAGE>
Item 25. Indemnification.
Reference is made to Article IV of the Registrant's Agreement
and Declaration of Trust filed as Exhibit a. The application
of these provisions is limited by the following undertaking
set forth in the rules promulgated by the Securities and
Exchange Commission:
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
foregoing provisions, 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 such 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 registrant in the successful defense of any
action, suite 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 such Act and will be
governed by the final adjudication of such issue.
Item 26. Business and Other Connections of the Investment Adviser.
None.
Item 27. Principal Underwriters.
Not applicable.
Item 28. Location of Accounts and Records.
All accounts, books and documents required to be maintained by
the Registrant pursuant to Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-1 through 31a-3 thereunder
are maintained at the office of the Registrant at 127 Devin
Road, Moraga, California 94556 and the Transfer Agent at The
Tower at Erieview, Suite 1005, 1301 East Ninth Street,
Cleveland, Ohio 44114, except that all records relating to the
activities of the Fund's Custodian are maintained at the
office of the Custodian, Firstar Bank N.A., 425 Walnut Street,
Cincinnati, Ohio 45201.
Item 29. Management Services.
Not applicable.
Item 30. Undertakings.
Not applicable.
<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 Amendment
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Moraga, State of California, on the
10th day of November, 2000.
DAVIS PARK SERIES TRUST
By: Nicholas D. Gerber, Chairman
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.
Signature Title Date
Nicholas D. Gerber Chairman, President, Treasurer November 10, 2000
and Trustee
Alev Efendioglu, PhD Trustee November 10, 2000
Stephen J. Marsh Trustee November 10, 2000
<PAGE>
Exhibit i
November ___, 2000
Davis Park Series Trust
P.O. Box 6919
Moraga, California 94570
Re: Davis Park Series Trust
Gentlemen:
We have acted as counsel for Davis Park Series Trust, a Delaware
business trust (the "Trust"), in connection with the filing by the Trust of a
Registration Statement on Form N-1A pursuant to the Securities Act of 1933 and
the Investment Company Act of 1940 (the "Registration Statement") with respect
to the proposed sale of an indefinite number of shares (the "Shares") of each of
(i) the Ameristock Large Company Growth Fund Series, a series of shares of
beneficial interest of the Trust representing the beneficial interest of
shareholders in the Ameristock Large Company Growth Fund, a separate investment
portfolio of the Trust, and (ii) the Ameristock Focused Value Fund Series, a
series of shares of beneficial interest of the Trust representing the beneficial
interest of shareholders in the Ameristock Focused Value Fund, a separate
investment portfolio of the Trust. Except as otherwise indicated, capitalized
terms used herein shall have the same meanings ascribed to such terms in the
Agreement. The law covered by the opinions expressed herein is limited to the
laws of the State of Delaware and the federal laws of the United States.
In rendering the opinion expressed herein, we have examined executed
originals, counterparts, or copies thereof of all such records of the Trust,
such agreements, certificates of officers of the Trust, public officials and
others, and such other documents, certificates and other records as we have
deemed necessary as a basis for the opinions expressed in this letter,
including, without limitation, the Certificate of Trust, the Agreement and
Declaration of Trust (the "Declaration of Trust"), the Bylaws of the Trust and
the records and proceedings of the Trustees of the Trust from the date of
formation of the Trust.
As to questions of fact material to the opinions expressed herein, we
have relied upon, and assumed the accuracy of, such certificates, records,
searches and other documents that we have reviewed in connection with giving the
opinions expressed herein. We have assumed that there are no other facts,
conditions or circumstances which conflict with or are inconsistent with those
set forth in any of the foregoing. With respect to such matters, we have not
made any independent investigation or verification of the information contained
therein for purposes of this opinion letter. In rendering the opinions expressed
herein, we have not conducted any investigation into the types of businesses and
activities in which any party engages or the manner in which any party conducts
its business as would enable us to render any opinion (and, accordingly, we
express no opinion) as to the applicability to any party of any federal or state
law or regulation not of general applicability to business trusts.
<PAGE>
In connection with rendering the opinions expressed herein, we have
with your permission assumed, without independent investigation, the following:
(i) the legal capacity of natural persons, the absence of duress, fraud and
undue influence of all signatures on documents submitted to us, and the absence
of mutual mistake of fact or misunderstanding; (ii) the genuineness of all
signatures on documents submitted to us; and (iii) the authenticity,
completeness and accuracy of all documents, materials and records submitted to
us as originals and the conformity to authentic original documents of all
documents, materials and records submitted to us as certified, conformed or
photostatic copies
Based upon and subject to the assumptions and qualifications set forth
herein, we are of the opinion that The Shares, when issued pursuant to the
terms, provisions and conditions of the Declaration of Trust and in the
Registration Statement, and upon receipt of the full authorized consideration
therefor in cash, will be validly issued, fully paid and non-assessable by the
Trust.
The opinions expressed herein are given as of the date hereof and speak
as of only that date. We assume no obligation to advise you of any changes in
facts or law or of anything coming to our attention bearing upon the accuracy of
or completeness of any assumption, whether or not material, which may be brought
to our attention at a later date.
The opinions expressed in this letter are intended solely for your use
in the above-described transaction and may not be reproduced, filed publicly or
relied upon by any other persons or entities for any purpose without the express
written consent of the undersigned.
Very truly yours,
McDonald, Hopkins,
Burke & Haber Co., L.P.A.
<PAGE>
Exhibit j
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated November 6, 2000 in Davis Park Series Trust's
Pre-Effective Amendment Number 1 and to all references to our firm
included in or made a part of this Pre-Effective Amendment.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 6, 2000
<PAGE>
EXHIBIT l
AMERISTOCK CORPORATION
P.O. Box 6919
Moraga, CA 94570
November 6, 2000
Davis Park Series
P.O. Box 6919
Moraga, CA 94570
Re: Subscription Agreement
Gentlemen:
We are purchasing from you today (i) 666.67 shares of Ameristock Large
Company Growth Fund, a portfolio of Davis Park Series Trust, a Delaware business
trust (the "Trust"), at a price of $15.00 per share, and (ii) 6,000 shares of
Ameristock Focused Value Fund, a separate portfolio of the Trust, at a price of
$15.00 per share, for an aggregate price of $100,000 to provide the initial
capital you require pursuant to Section 14 of the Investment Company Act of 1940
in order to make a public offering of shares of the Fund.
We hereby represent that we are acquiring said shares for investment
and not for distribution or resale to the public.
Very truly yours,
AMERISTOCK CORPORATION
By:
-------------------------
Nicholas D. Gerber, President
<PAGE>
EXHIBIT P
CODE OF ETHICS
AMERISTOCK LARGE COMPANY GROWTH FUND
AMERISTOCK FOCUSED VALUE FUND
Section 1 - Definitions
(a) "Fund" means Ameristock Large Company Growth Fund or Ameristock Focused
Value Fund.
(b) "Access person" means any director, officer, general partner, or
advisory person of the Fund.
(c) "Advisory person" means (i) any employee of the Fund or of any company
in a control relationship to the Fund, who, in connection with his or
her regular functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by the Fund,
or whose functions relate to the making of any recommendations with
respect to such purchases or sales; and (ii) any natural person in a
control relationship the Fund who obtains information concerning
recommendations made to the Fund with regard to the purchase or sale of
a security.
(d) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the recommendation,
when such person seriously considers making such a recommendation.
(e) "Beneficial ownership" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions
of Section 16 of the Securities Exchange Act of and the rules and
regulations thereunder, except that the determination of direct or
indirect beneficial ownership shall apply to all securities which an
access person has or acquires.
(f) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Investment Company Act.
(g) "Disinterested trustee" means a trustee of the Fund who is not an
"interested person" of the Fund within the meaning of Section 2(a)(19)
of the Investment Company Act.
(h) "Purchase or sale of a security" includes, inter alia, the writing of
an option to purchase or sell a security.
<PAGE>
(i) "Security" shall have the meaning set forth in Section 2(a)(36) of the
Investment Company Act, except that it shall not include shares of
registered open-end investment companies, securities issued by the
Government of the United States, short term debt securities which are
"government securities" within the meaning of Section 2(a)(16) of the
Investment Company Act, bankers' acceptances, bank certificates of
deposit, commercial paper and such other money market instruments as
designated by the Board of Trustees.
Section 2 - Exempted Transactions
The prohibitions of Section 3 of this Code shall not apply to:
(a) purchases or sales effected in any account over which the access
person has no direct or indirect influence or control;
(b) purchases or sales of securities which are not eligible for purchase or
sale by the Fund;
(c) purchases or sales which are non-volitional on the part of either the
access person or the Fund;
(d) purchases which are part of an automatic dividend reinvestment plan;
and
(e) purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired.
Section 3 - Prohibited Purchases and Sale
No access person shall purchase or sell, directly or indirectly, any security in
which he has, or by reason of such transaction acquires, any direct or indirect
beneficial ownership and which to his actual knowledge at the time of such
purchase or sale:
(a) is being considered for purchase or sale by the Fund; or
(b) is being purchased or sold by the Fund.
The effective date for the prohibited purchases and sale shall be two weeks
after the acquisition of any such actual knowledge.
Section 4 - Reporting
(a) Every access person shall report to the Fund the information described
in Section 4(b) of this Code with respect to transactions in any
security in which such access person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership in
the security; provided, however, that an access person shall not be
required to make a report with respect to transactions effected for any
account over which such person does not have any direct or indirect
influence.
(b) Every report shall be made not later than 15 business days after the
end of the calendar quarter in which the transaction to which the
report relates was effected, and shall contain the following
information:
(i) the date of the transaction, the title and the number of
shares, and the principal amount of each security involved;
<PAGE>
(ii) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) the price at which the transaction was effected; and
(iv) the name of the broker, dealer or bank with or through whom
the transaction was effected.
(c) Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he has
any direct or indirect beneficial ownership in the security to which
the report relates.
As an alternative to the above reports, an access person may direct the
brokerage firm to send duplicate monthly account statements of said brokerage
accounts to the compliance officer.
Section 5 - Sanctions
Upon discovering a violation of this Code, the Board of Trustees of the Fund may
impose such sanctions as it deems appropriate, including, inter alia, a letter
of censure or suspension or termination of the employment of the violator.
<PAGE>