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PROSPECTUS
October 1, 2000
BROWNIA SMALL-CAP GROWTH FUND
BROWNIA GROWTH EQUITY FUND
Each Fund seeks capital appreciation by investing primarily in common stock.
You may purchase Fund shares without a sales charge and the Funds do not incur
Rule 12b-1 (distribution) fees.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED EITHER
FUND'S SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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[LOGO] TABLE OF CONTENTS
RISK/RETURN SUMMARY 2
FEE TABLES 5
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES
AND PRINCIPAL RISKS 7
MANAGEMENT 12
YOUR ACCOUNT 15
HOW TO CONTACT THE FUNDS 15
GENERAL INFORMATION 15
BUYING SHARES 16
SELLING SHARES 20
EXCHANGE PRIVILEGES 22
RETIREMENT ACCOUNTS 23
OTHER INFORMATION 24
FINANCIAL HIGHLIGHTS 26
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RISK/RETURN SUMMARY [LOGO]
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CONCEPTS TO UNDERSTAND BROWNIA SMALL-CAP GROWTH FUND
COMMON STOCK INVESTMENT OBJECTIVE Capital Appreciation
means an equity or ownership
interest in a company PRINCIPAL INVESTMENT STRATEGY The Fund invests primarily in the common stock of
small domestic growth companies. Growth companies are companies that have
MARKET CAPITALIZATION exhibited an above average increase in earnings over the past few years and that
means the value of a have strong, sustainable earnings prospects and attractive stock prices. The
company's common stock in Fund primarily invests in small companies whose market capitalization is less
the stock market than $1.5 billion at the time of investment.
BROWNIA GROWTH EQUITY FUND
INVESTMENT OBJECTIVE Capital Appreciation
PRINCIPAL INVESTMENT STRATEGY The Fund invests primarily in the common stock of
large domestic companies that have exhibited an above average increase in
earnings over the past few years and that have strong, sustainable earnings
prospects and attractive stock prices. The Fund may also invest in companies
that do not have particularly strong earnings histories but do have other
attributes that may contribute to accelerated growth in the foreseeable future.
The Fund primarily invests in large companies whose market capitalization is
$2.5 billion or greater at the time of investment.
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PRINCIPAL RISKS OF INVESTING IN THE FUNDS
GENERAL RISKS You could lose money on your investment in a Fund, or the Fund
could under perform other investments, if any of the following occur:
o The stock market does not recognize the growth potential of the stocks
in the Fund's portfolio
o Brown Investment Advisory & Trust Company's (the "Adviser") judgment
as to the growth potential of a stock proves to be wrong
o The stock market goes down
SPECIFIC RISKS OF SMALL COMPANIES Because investing in small companies can have
more risk than investing in larger, more established companies, an investment in
BrownIA Small-Cap Growth Fund may have the following additional risks:
o Analysts and other investors typically follow these companies less
actively and therefore information about these companies is not always
readily available
o Securities of many small companies are traded in the over-the-counter
markets or on a regional securities exchange potentially making them
thinly traded, less liquid and their prices more volatile than the
prices of the securities of larger companies
o Changes in the value of small company stocks may not mirror the
fluctuation of the general market
o More limited product lines, markets and financial resources make these
companies more susceptible to economic or market setbacks
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For these and other reasons, the prices of small capitalization securities can
fluctuate more significantly than the securities of larger companies. The
smaller the company, the greater effect these risks may have on that company's
operations and performance. As a result, an investment in BrownIA Small-Cap
Growth Fund may exhibit a higher degree of volatility than the general domestic
securities market.
WHO MAY WANT TO INVEST IN THE FUNDS
A Fund may be appropriate for you if you:
o Are willing to tolerate significant changes in the value of your
investment
o Are pursuing a long-term goal
o Are willing to accept higher short-term risk
A Fund may not be appropriate for you if you:
o Want an investment that pursues market trends or focuses only on
particular sectors or industries
o Need regular income or stability of principal
o Are pursuing a short-term goal or investing emergency reserves
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[LOGO] FEE TABLES
The following tables describe the various fees and expenses that you will bear
if you invest in a Fund.
Shareholder fees are charges you pay when buying, selling or exchanging shares
of a Fund. Operating expenses, which include fees of the Adviser, are paid out
of a Fund's assets and are factored into the Fund's share price rather than
charged directly to shareholder accounts.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Sales Charge (Load) Imposed on Reinvested Distributions None
Maximum Deferred Sales Charge (Load) None
Redemption Fee None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
BROWNIA SMALL-CAP GROWTH FUND
Management Fees 1.00%
Distribution (12b-1) Fees None
Other Expenses (1) 0.35%
TOTAL ANNUAL FUND OPERATING EXPENSES (2) 1.35%
BROWNIA GROWTH EQUITY FUND
Management Fees 0.75%
Distribution (12b-1) Fees None
Other Expenses (1) 0.80%
TOTAL ANNUAL FUND OPERATING EXPENSES (2) 1.55%
(1) Based on amounts for the fiscal year ended May 31, 2000.
(2) The Adviser has voluntarily undertaken to waive a portion of its fees and
assume certain expenses to the extent that total annual fund expenses
exceed 1.25% of the net assets of BrownIA Small-Cap Growth Fund and 1.00%
of the net assets of BrownIA Growth Equity Fund. Fee waivers may be reduced
or eliminated at any time.
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EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in each Fund to the cost of investing in other mutual funds. This
example assumes that you invest $10,000 in a Fund and then redeem all of your
shares at the end of the period. The example also assumes that your investment
has a 5% annual return, that a Fund's operating expenses remain the same as
stated in the table above and that distributions are reinvested. Although your
actual costs may be higher or lower, under these assumptions your costs would
be:
BROWNIA SMALL-CAP BROWNIA GROWTH
GROWTH FUND EQUITY FUND
1 Year $138 $158
3 Years $428 $489
5 Years $739 $844
10 Years $1,624 $1,844
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INVESTMENT OBJECTIVES,
[LOGO] PRINCIPAL INVESTMENT STRATEGIES
AND PRINCIPAL RISKS
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INVESTMENT OBJECTIVES CONCEPTS TO UNDERSTAND
BROWNIA SMALL-CAP GROWTH FUND seeks to achieve capital appreciation by FUNDAMENTAL ANALYSIS
primarily investing in equity securities. means the analysis of a
company's financial
BROWNIA GROWTH EQUITY FUND seeks to achieve capital appreciation by condition to help forecast
primarily investing in equity securities. the future value of its
stock price. This analysis
INVESTMENT STRATEGIES includes a review of a
company's balance sheet
The Adviser relies on selecting individual stocks and does not try to and income statement,
predict when the stock market might rise or fall. The Adviser uses in-house asset history, earnings
research and other sources to conduct analyses of prospective Fund history, product or service
investments. As part of this analysis, the Adviser may visit prospective development and management
companies, their suppliers and customers. productivity.
THE ADVISER'S PROCESSES -- PURCHASING PORTFOLIO
SECURITIES
BROWNIA SMALL-CAP GROWTH FUND The Adviser starts by identifying a universe
of small companies. From these companies, the Adviser selects those with
the potential to grow earnings 20% or more annually and a market
capitalization of less than $1.5 billion. The Adviser then performs a
fundamental analysis of these companies. The Adviser uses the data to
identify companies that have:
o Significant business opportunities relative to their operating
history and size
o Proprietary products, services or distribution systems
o Management with a plan we can understand and monitor
o Attractively priced stocks compared to their growth potential
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The Adviser plans to invest in these companies early in their life cycle
CONCEPTS TO UNDERSTAND and to hold the investments for the long-term if they continue to satisfy
the Fund's investment criteria.
PRICE/EARNINGS RATIO
means the price of a BROWNIA GROWTH EQUITY FUND The Adviser starts by using in-house research
stock divided by the and other sources to identify a universe of superior companies across a
company's earnings per range of industries. Superior companies are businesses that have:
share. o Significant market opportunities (both in terms of magnitude and
duration) where the companies are leaders or potential leaders in
PRICE/SALES RATIO their respective markets
means the amountan o Proprietary products and services, new product development and
investor is willing to product cycle leadership that sustains a strong brand franchise
pay for a dollar of o A strong management team that is proactive, consistently executes
revenue. effectively and anticipates and adapts to change
PRICE/CASH FLOW RATIO The Adviser then focuses on those companies that have the ability to grow
means the price of a at above average rates over several years, given the Adviser's belief that
stock divided by free superior investment returns are better achieved by low portfolio turnover.
cash flow per share.] Factors considered include:
o Product cycles, pricing flexibility and product or geographic mix
o Cash flow and financial strength to fund growth
o Catalysts for growth such as changes in regulation, management,
business cycle, business mix and industry consolidation
The Adviser then uses a range of valuation techniques including analyses of
price/earnings ratios, price/sales ratios and price/cash flow ratios to
identify those companies whose stocks are attractively valued relative to
the market, their peer groups and their own price history. Valuation
techniques also permit the Adviser to mitigate the potential
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downside risk of an investment candidate by demonstrating the difference in the
estimated value of a company's stock compared to its market price.
THE ADVISER'S PROCESSES -- SELLING PORTFOLIO SECURITIES
The Adviser monitors the companies in a Fund's portfolio to determine if there
have been any fundamental changes in the companies. The Adviser may sell a stock
if:
o It subsequently fails to meet the Adviser's initial investment
criteria
o A more attractively priced company is found or if funds are needed for
other purposes
o It becomes overvalued relative to the long-term expectation for the
stock price
INVESTMENT POLICIES
Under normal conditions, BrownIA Small-Cap Growth Fund will invest at least 65%
of its total assets in common stock of small domestic companies and BrownIA
Growth Equity Fund will invest at least 65% of its total assets in common stock
of larger domestic companies. Although common stock often gives the owner the
right to vote on measures affecting the company's organization and operations,
neither Fund intends to exercise control over the management of companies in
which it invests. Common stocks have a history of long-term growth in value, but
their prices tend to fluctuate over the shorter term.
TEMPORARY DEFENSIVE POSITION In order to respond to adverse market, economic,
political or other conditions, a Fund may assume a temporary defensive position
and invest in prime commercial paper
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and other money market instruments. While investing for temporary defensive
purposes, a Fund may not achieve its investment objective.
INVESTMENT RISKS
GENERAL The value of a Fund's investments will fluctuate as the stock market
fluctuates. An investment in a Fund is not by itself a complete or balanced
investment program and there is no guarantee the Fund will achieve its
investment objective. Nevertheless, investing in equity securities with
different capitalizations may be important for investors seeking a diversified
portfolio, particularly for long-term investors able to tolerate short-term
fluctuations in the value of their investments.
Because each Fund invests in growth stocks, there is a risk that the stocks will
not continue to grow at expected rates, thus causing the price of the stock to
decline. There is also the risk that the market will not recognize the growth
potential of a stock. The Adviser's judgment as to the growth potential of a
stock may also prove to be wrong. A decline in investor demand for growth stocks
may also adversely affect the value of these securities.
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SPECIFIC RISKS OF SMALL COMPANIES Because investing in small companies can have
more risk than investing in larger, more established companies, an investment in
BrownIA Small-Cap Growth Fund may have the following additional risks:
o Analysts and other investors typically follow these companies less
actively and information about these companies is not always readily
available
o Securities of many small companies are traded in the over-the-counter
markets or on a regional securities exchange potentially making them
thinly traded, less liquid and their prices more volatile than the
prices of the securities of larger companies
o Changes in the value of small company stocks may not mirror the
fluctuations of the general market
o More limited product lines, markets and financial resources make these
companies more susceptible to economic or market setbacks
For these and other reasons, the prices of small capitalization securities can
fluctuate more significantly than the securities of larger companies. The
smaller the company, the greater effect these risks may have on that company's
operations and performance. As a result, an investment in BrownIA Small-Cap
Growth Fund may exhibit a higher degree of volatility than the general domestic
securities market.
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MANAGEMENT [LOGO]
Each Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company (mutual fund). The business of the Trust and each Fund is
managed under the direction of the Board of Trustees (the "Board"). The Board
formulates the general policies of each Fund and meets periodically to review
the Fund's performance, monitor investment activities and practices and discuss
other matters affecting the Fund. Additional information regarding the Board, as
well as the Trust's executive officers, may be found in the Statement of
Additional Information ("SAI").
THE ADVISER
Each Fund's Adviser is Brown Investment Advisory & Trust Company, Furness House,
19 South Street, Baltimore, Maryland 21202. The Adviser is currently a
privately-owned company. Prior to June 1998, the Adviser operated as a
subsidiary of Bankers Trust Company under the name of Alex Brown Capital
Advisory & Trust Company.
Subject to the general control of the Board, the Adviser makes investment
decisions for each Fund. The Adviser receives an advisory fee of 1.00% of the
average daily net assets of BrownIA Small-Cap Growth Fund and 0.75% of the
average daily net assets of BrownIA Growth Equity Fund.
As of August 31, 2000, the Adviser had approximately $4.8 billion of assets
under management.
A committee of investment professionals makes all investment decisions for each
Fund and no other person is primarily responsible for making recommendations to
that committee.
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OTHER SERVICE PROVIDERS
Forum Financial Group, LLC and its affiliates (collectively "Forum") provide
services to each Fund. As of June 30, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $120 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each Fund's shares. The distributor acts as the representative
of the Trust in connection with the offering of each Fund's shares. The
distributor may enter into arrangements with banks, broker-dealers or other
financial institutions through which investors may purchase or redeem shares and
may, at its own expense, compensate persons who provide services in connection
with the sale or expected sale of each Fund's shares.
Forum Administrative Services, LLC provides administrative services to each
Fund, Forum Accounting Services, LLC is each Fund's accountant, Forum
Shareholder Services, LLC ("Transfer Agent") is each Fund's transfer agent and
Forum Trust, LLC is each Fund's custodian.
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FUND EXPENSES
Each Fund pays for all of its expenses. Each Fund's expenses are comprised of
its own expenses as well as Trust expenses that are allocated among each Fund
and the other funds of the Trust. The Adviser or other service providers may
waive all or any portion of their fees and/or reimburse certain expenses of each
Fund. Any waiver or expense reimbursement increases a Fund's performance for the
period during which the waiver or reimbursement is in effect and may not be
recouped at a later date.
Certain service providers have undertaken to waive a portion of their fees
and/or reimburse certain expenses in order to limit each Fund's expenses
(excluding taxes, interest, portfolio transaction expenses and extraordinary
expenses) to 1.25% or less of the average daily net assets of BrownIA Small-Cap
Growth Fund and 1.00% or less of the average daily net assets of BrownIA Growth
Equity Fund. Waivers may be reduced or eliminated at any time.
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[LOGO] YOUR ACCOUNT
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GENERAL INFORMATION HOW TO CONTACT THE FUNDS
You may purchase or sell (redeem) shares at the net asset value of a share WRITE TO US AT:
(NAV) next calculated after the Transfer Agent receives your request in
proper form. For instance, if the Transfer Agent receives your purchase BrownIA Funds
request in proper form after 4:00 p.m. Eastern time, your transaction will P.O. Box 446
be priced at the next business day's NAV. A Fund cannot accept orders that Portland, ME 04112
request a particular day or price for the transaction or any other special
conditions. OVERNIGHT ADDRESS:
Neither Fund issues share certificates. BrownIA Funds
Two Portland Square
If you purchase shares directly from a Fund, you will receive monthly Portland, Maine 04101
statements and a confirmation of each transaction. You should verify the
accuracy of all transactions in your account as soon as you receive your TELEPHONE US AT:
confirmations. (800) 540-6807 (toll free) or
(207) 879-0001
Each Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any WIRE INVESTMENTS (OR ACH
service or privilege. PAYMENTS) TO:
WHEN AND HOW NAV IS DETERMINED Each Fund calculates its NAV as of the close Bankers Trust Company
of the New York Stock Exchange (normally 4:00 p.m., Eastern time) on each New York, New York
weekday except days when the New York Stock Exchange is closed. The time at ABA #021001033
which NAV is calculated may change in case of an emergency. A Fund's NAV is
determined by taking the market value of all securities owned by the Fund FOR CREDIT TO:
(plus all other assets such as cash), subtracting liabilities and then Forum Shareholder Services, LLC
dividing the result (net assets) by the number of shares outstanding. A Account # 01-465-547
Fund values securities for which market quotations are readily available at Re: (Name of Your Fund)
current market value. If market quotations are not readily available, a (Your Name)
Fund values securities at fair value pursuant to procedures adopted by the (Your Account Number)]
Board.
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TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of the Funds. Financial institutions may charge transaction
fees and may set different minimum investments or limitations on buying or
selling shares. These institutions may also provide you with certain shareholder
services such as periodic account statements and trade confirmations summarizing
your investment activity. Consult a representative of your financial institution
for more information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint, Uniform Gift to Minors
Act ("UGMA") or Uniform Transfers to Minors Act ("UTMA") accounts, the
check must be made payable to Forum Funds or to one or more owners of the
account and endorsed to Forum Funds. For all other accounts, the check must
be made payable on its face to Forum Funds. No other method of check
payment is acceptable (for instance, you may not pay by traveler's check).
PURCHASES BY AUTOMATED CLEARING HOUSE ("ACH") This service allows you to
purchase shares through an electronic transfer of money from a checking or
savings account. When you make a payment by telephone, the Transfer Agent
will automatically debit your pre-designated bank account for the desired
amount. Your financial institution may charge you a fee for this service.
You may call (800) 94FORUM or (800) 943-6786 to request an ACH transaction.
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WIRES Instruct your financial institution to make a Federal Funds wire
payment to us. Your financial institution may charge you a fee for this
service.
MINIMUM INVESTMENTS Each Fund accepts investments in the following minimum
amounts:
MINIMUM INITIAL MINIMUM ADDITIONAL
INVESTMENT INVESTMENT
Standard Accounts $5,000 $100
Traditional and Roth IRA Accounts $2,000 $100
Accounts with Systematic Investment Plans $2,000 $100
ACCOUNT REQUIREMENTS
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TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons required
Individual accounts are owned by one person, as are sole to sign exactly as their names appear on the account
proprietorship accounts.
Joint accounts can have two or more owners (tenants)
GIFTS OR TRANSFERS TO A MINOR o Depending on state laws, you can set up a custodial
(UGMA, UTMA) These custodial accounts provide a way to account under the UGMA or the UTMA
give moeny to a child and obtain tax benefits o The custodian must sign instructions in a manner
indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form
or similar document
TRUSTS o The trust must be established before an account can
be opened
o Provide a certified trust document, or the pages
from the trust document that identify the trustees
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INVESTMENT PROCEDURES
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application (and Corporate o Fill out an investment slip from a confirmation
Organization/Resolution form if applicable) or write us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a check o Mail us the slip (or your letter) and the check
BY WIRE BY WIRE
o Call or write us for an account application (and Corporate o Call to notify us of your incoming wire
Organization/Resolution form if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your application (and resolution form)
o Instruct your bank to wire your money to us
BY ACH PAYMENT BY SYSTEMATIC INVESTMENT
o Call or write us for an account application (and Corporate o Complete the systematic investment section of the
Organization/Resolution form if applicable) application
o Complete the application (and resolution form) o Attach a voided check to your application
o Call us to fax the completed application (and resolution o Mail us the completed application and voided check
form) and we will assign you an account number
o Mail us your original application (and resolution form)
o Make an ACH payment
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SYSTEMATIC INVESTMENTS You may invest a specified amount of money in a Fund once
or twice a month on specified dates. These payments are taken from your bank
account by ACH payment. Systematic investments must be for at least $100.
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LIMITATIONS ON PURCHASES Each Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
a Fund or its operations. This includes those from any individual or group who,
in a Fund's view, is likely to engage in excessive trading (including two or
more substantial redemptions or exchanges out of a Fund followed by substantial
repurchases into the Fund within a calendar year).
CANCELED OR FAILED PAYMENTS Each Fund accepts checks and ACH transfers at full
value subject to collection. If a Fund does not receive your payment for shares
or you pay with a check or ACH transfer that does not clear, your purchase will
be canceled. You will be responsible for any losses or expenses incurred by a
Fund or the Transfer Agent, and the Fund may redeem shares you own in the
account (or another identically registered account that you maintain with the
Transfer Agent) as reimbursement. Each Fund and its agents have the right to
reject or cancel any purchase or exchange due to nonpayment.
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SELLING SHARES
Each Fund processes redemption orders promptly. Generally, a Fund will send
redemption proceeds to you within a week. Delays may occur in cases of very
large redemptions, excessive trading or during unusual market conditions. If a
Fund has not yet collected payment for the shares you are selling, it may delay
sending redemption proceeds for up to 15 calendar days.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The Fund name
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or more
and you did not decline wire redemption privileges on your account application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") or
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption privileges
on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you or
o Wired to you (unless you declined wire redemption privileges on your
account application) (See "By Wire")
SYSTEMATICALLY
o Complete the systematic withdrawal section of the application
o Attach a voided check to your application
o Mail us your completed application
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WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
SYSTEMATIC WITHDRAWALS You may redeem a specified amount of money from your
account once a month on a specified date. These payments are sent from your
account to a designated bank account by ACH payment. Systematic withdrawals must
be for at least $250.
SIGNATURE GUARANTEE REQUIREMENTS To protect you and each Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account registration
has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different registration
(name or ownership) from yours
o Changes to systematic investment or withdrawals, distribution, telephone
redemption or exchange option or any other election
in connection with your account
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SMALL ACCOUNTS If the value of your account falls below $1,000 ($500 for IRAs),
a Fund may ask you to increase your balance. If the account value is still below
$1,000 ($500 for IRAs) after 60 days, a Fund may close your account and send you
the proceeds. A Fund will not close your account if it falls below these amounts
solely as a result of a reduction in your account's market value.
REDEMPTIONS IN KIND Each Fund reserves the right to pay redemption proceeds in
portfolio securities rather than in cash. These redemptions "in kind" usually
occur if the amount to be redeemed is large enough to affect a Fund's operations
(for example, if it represents more than 1% of the Fund's assets).
LOST ACCOUNTS The Transfer Agent will consider your account lost if
correspondence to your address of record is returned as undeliverable, unless
the Transfer Agent determines your new address. When an account is lost, all
distributions on the account will be reinvested in additional Fund shares. In
addition, the amount of any outstanding (unpaid for six months or more) checks
for distributions that have been returned to the Transfer Agent will be
reinvested and the checks will be canceled.
EXCHANGE PRIVILEGES
You may exchange your Fund shares for shares of the other Fund by telephone or
in writing. You may also exchange Fund shares for Investor Shares of the Trust's
money market funds. Because exchanges are treated as a sale and purchase of
shares, they may have tax consequences.
REQUIREMENTS You may make exchanges only between identically registered accounts
(name(s), address and taxpayer ID number).
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There is currently no limit on exchanges, but each Fund reserves the right to
limit exchanges. You may exchange your shares by mail or telephone, unless you
declined telephone redemption privileges on your account application. You may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o The names of each fund you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are requesting
different shareholder privileges
o Obtain a signature guarantee if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption privileges
on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which account is registered
o Additional form of identification
RETIREMENT ACCOUNTS
Each Fund offers IRA accounts, including traditional and Roth IRAs. Each Fund
may also be appropriate for other retirement plans. Before investing in any IRA
or other retirement plan, you should consult your tax adviser. Whenever making
an investment in an IRA, be sure to indicate the year in which the contribution
is made.
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OTHER INFORMATION [LOGO]
DISTRIBUTIONS
Each Fund distributes its net investment income quarterly and net capital gain
at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested. Shares
become entitled to receive distributions on the day after the shares are issued.
TAXES
Each Fund generally intends to operate in a manner such that it will not be
liable for Federal income or excise tax.
A Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. A Fund's distribution of long-term capital
gain is taxable to you as long-term capital gain regardless of how long you have
held your Fund shares. Distributions may also be subject to certain state and
local taxes.
If you buy shares shortly before a Fund makes a distribution, you may pay the
full price for the shares and then receive a portion of the price back as a
distribution that may be taxable to you. The sale or exchange of Fund shares is
a taxable transaction for income tax purposes.
Your Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year.
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For further information about the tax effects of investing in a Fund, including
state and local tax matters, please see the SAI and consult your tax adviser.
ORGANIZATION
The Trust is a Delaware business trust. No Fund expects to hold shareholders'
meetings unless required by Federal or Delaware law. Shareholders of each series
of the Trust are entitled to vote at shareholders' meetings unless a matter
relates only to specific series (such as approval of an advisory agreement for a
Fund). From time to time, large shareholders may control a Fund or the Trust.
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FINANCIAL HIGHLIGHTS [LOGO]
The following table is intended to help you understand the Funds' financial
performance. Total return in the table represents the rate an investor would
have earned (or lost) on an investment in each Fund (assuming the reinvestment
of all distributions). This information has been audited by Deloitte & Touche
LLP. Each Fund's financial statements and the auditor's report are included in
the Funds' Annual Report dated May 31, 2000, which is available upon request,
without charge.
<TABLE>
<S> <C> <C>
BROWNIA SMALL-CAP BROWN IA GROWTH EQUITY
FUND(1) FUND(1)
PERIOD ENDED MAY 31,
2000 2000
SELECTED DATA FOR A SINGLE SHARE
Beginning Net Asset Value $10.00 $10.00
Income From Investment Operations
Net investment income (Loss) (0.10) 0.01
Net realized and unrealized gain on securities 3.92 0.85
Total From Investment Operations 3.82 0.86
Less Distributions
From net investment income -- (0.01)
Ending Net Asset Value $13.82 $10.85
OTHER INFORMATION
Ratios to Average Net Assets
Expenses(2) 1.25% 1.00%
Gross expenses(2)(3) 1.35% 1.55%
Net investment income(Loss)(2) (0.80)% 0.14%
Total Return 38.20% 8.59%
Portfolio Turnover Rate 30% 42%
Net Assets at End of Period (in thousands) $87,959 $31,537
</TABLE>
(1) The Fund commenced operations on June 28, 1999.
(2) Annualized.
(3) Reflects expense ratio in the absence of fee waivers and expense
reimbursements.
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NOTES:
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NOTES:
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BROWNIA SMALL-CAP GROWTH FUND
BROWNIA GROWTH EQUITY FUND
FOR MORE INFORMATION
The following documents are available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about each Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In a Fund's annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund and is incorporated
by reference into this Prospectus.
CONTACTING THE FUND
You can get a free copy of both reports and the SAI, request other information
and discuss your questions about each Fund by contacting the Fund at:
BrownIA Funds
P.O. Box 446
Portland, Maine 04112
800-540-6807 (toll free)
207-879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION
You can also review each Fund's reports and the SAI at the Public Reference Room
of the Securities and Exchange Commission ("SEC"). The scheduled hours of
operation of the Public Reference Room may be obtained by calling the SEC at
202-942-8090. You can get copies of this information, for a fee, by e-mail or
writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
Free copies of the reports and the SAI are available from the SEC's Internet Web
Site at http://www.sec.gov.
Investment Company Act File No. 811-3023
