<PAGE>
WESTCORE TRUST
370 Seventeenth Street
Suite 2700
Denver, Colorado 80202
1-800-392-CORE (2673)
October 1, 1996
This Prospectus describes seven mutual funds (the "Funds") offered by Westcore
Trust ("Westcore" or the "Trust") including four equity funds, two taxable bond
funds and one tax-exempt bond fund, each with a different investment objective.
All Westcore Funds are no-load investments. This permits you to purchase and
sell shares of a Fund without a sales charge. If you enroll in our Automatic
Investment Plan, you can open your account for as little as $50 a month.
Otherwise, the minimum initial investment is normally $1,000.
Denver Investment Advisors LLC ("Denver Investment Advisors" or the "Investment
Adviser") serves as investment adviser to each Fund. Denver Investment Advisors
and its predecessors have over 38 years of investment management experience and
Denver Investment Advisors currently manages over $9.7 billion in assets for
clients such as corporations, insurance companies and individuals. ALPS Mutual
Funds Services, Inc. ("ALPS") serves as the Westcore Funds' distributor.
This Prospectus sets forth information that you should consider before
investing. Please read this Prospectus and keep it for future reference. It
contains important information including how each Fund invests and shareholder
services available to you. Additional information is contained in a Statement
of Additional Information ("SAI"), dated October 1, 1996, on file with the
Securities and Exchange Commission (the "SEC"). You may obtain a free copy of
the SAI by writing or calling Westcore at the address or telephone number shown
above. The SAI is incorporated by reference into this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
FUND INFORMATION
Fund Highlights ................................................ 2
Expense Information ............................................ 3
Financial Highlights ........................................... 4
Fund Specifics ................................................. 11
Investment Objectives and Policies ............................ 11
Westcore Equity Funds ........................................ 11
Westcore Bond Funds .......................................... 14
Fundamental Investment Limitations ............................. 18
HOW TO INVEST
How to Open and Add to Your Account ............................ 20
Minimum Investments ............................................ 21
How to Exchange Fund Shares .................................... 21
How to Redeem Fund Shares ...................................... 22
Price of Fund Shares ........................................... 23
Accounts Opened Through a Service Organization ................. 23
General Account Policies ....................................... 23
OTHER INFORMATION
Distributions and Taxes ........................................ 24
Performance Reporting .......................................... 26
Management of the Funds ........................................ 27
Inquiries ...................................................... 29
SUPPLEMENTAL INFORMATION
Information on Investment Policies and
Additional Risk Factors ..................................... 30
APPENDIX
Rating Categories .............................................. A-1
<PAGE>
FUND INFORMATION
FUND HIGHLIGHTS
This section provides you with a brief overview of the Westcore Funds and
summarizes each Fund's investment objectives. A detailed discussion of their
investment objectives, policies and risks begins on page 11 and complete
information on how to purchase, exchange and redeem Fund shares begins on
page 20.
WESTCORE EQUITY FUNDS
WESTCORE MIDCO GROWTH FUND -- seeks to maximize long-term capital
appreciation by investing primarily in medium-sized growth companies.
WESTCORE BLUE CHIP FUND -- seeks to maximize long-term total return by
investing in stocks of large companies headquartered in the United States.
WESTCORE GROWTH AND INCOME FUND -- seeks to maximize long-term total return
by investing in equity securities selected for their growth potential and
income-producing abilities.
WESTCORE SMALL-CAP OPPORTUNITY FUND -- seeks to maximize long-term capital
appreciation primarily through investments in domestic and foreign equity
securities of small-capitalization companies.
WESTCORE BOND FUNDS
WESTCORE LONG-TERM BOND FUND -- seeks to maximize long-term total rate of
return by investing primarily in investment grade bonds. The Fund expects
to have an average dollar-weighted maturity of at least 10 years.
WESTCORE INTERMEDIATE-TERM BOND FUND -- seeks current income with less
volatility of principal by investing primarily in investment grade bonds.
The Fund expects to have an average dollar-weighted maturity between 3 and 6
years.
WESTCORE COLORADO TAX-EXEMPT FUND -- seeks to provide income exempt from both
federal and Colorado state personal income taxes by emphasizing insured
Colorado municipal bonds with intermediate maturities.
WESTCORE FUNDS SPECTRUM
The spectrum below shows Denver Investment Advisors' current assessment of
the potential risk of the Westcore Funds relative to one another. The
spectrum is not indicative of the future volatility or performance of the
Funds and should not be used to compare the Funds to other mutual funds or
types of investments.
-3-
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
FUND CONSERVATIVE MODERATE AGGRESSIVE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund X
- ------------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund X
- ------------------------------------------------------------------------------------------------------------
Westcore Growth and Income Fund X
- ------------------------------------------------------------------------------------------------------------
Westcore Small-Cap Opportunity X
Fund
- ------------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond Fund X
- ------------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term Bond X
Fund
- ------------------------------------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund X
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE>
EXPENSE INFORMATION
The tables and example below show you the various costs and expenses you will
bear directly or indirectly as an investor in the Westcore Funds. SHAREHOLDER
TRANSACTION EXPENSES are charges you pay when buying, exchanging or selling
shares of a Westcore Fund. The no-load Westcore Funds do not charge any
Shareholder Transaction Expenses. ANNUAL FUND OPERATING EXPENSES, which are
based on amounts incurred during the most recent fiscal year, restated to
reflect current expenses, are paid out of a Fund's assets and include fees for
portfolio management, maintenance of shareholder accounts, general Fund
administration, shareholder servicing, accounting and other services.
<TABLE>
WESTCORE WESTCORE
SMALL- WESTCORE INTER- WESTCORE
WESTCORE WESTCORE WESTCORE CAP LONG- MEDIATE- COLORADO
MIDCO BLUE GROWTH AND OPPOR- TERM TERM TAX-
GROWTH CHIP INCOME TUNITY BOND BOND EXEMPT
FUND FUND FUND FUND FUND FUND FUND
------- ------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES None None None None None None None
ANNUAL OPERATING EXPENSES
(as a percentage of
average net assets)
Management Fees 0.65% 0.65% 0.65% 1.00% 0.45% 0.45% 0.00%(2)
12b-1 Fees None None None None None None None
All Other Expenses 0.50% 0.50%(1) 0.50%(1) 0.30%(1) 0.50%(1) 0.40%(1) 0.50%(1)
----- -------- -------- -------- -------- -------- --------
TOTAL OPERATING EXPENSES 1.15% 1.15%(1) 1.15%(1) 1.30%(1) 0.95%(1) 0.85%(1) 0.50%(1)
(after fee waivers and ----- -------- -------- -------- -------- -------- --------
expense reimbursements) ----- -------- -------- -------- -------- -------- --------
</TABLE>
_________________
EXAMPLE: Assume you invest $1,000, the annual return on each Fund is 5%, and
each Fund's annual operating expenses remain as listed above. The example below
shows the operating expenses that you would indirectly bear as an investor in
the Funds:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
One Year $12 $12 $12 $13 $10 $ 9 $ 5
Three Years 37 37 37 41 30 27 16
Five Years 64 64 64 72 53 47 28
Ten Years 140 140 140 158 117 105 63
</TABLE>
_________________
(1) The Administrators and the Investment Adviser with respect to the Colorado
Tax Exempt Fund have advised the Trust that they currently intend to waive
fees or reimburse expenses with respect to each of the Funds so that the
Total Operating Expenses of the MIDCO Growth, Blue Chip, Growth and Income,
Small-Cap Opportunity, Long-Term Bond, Intermediate-Term Bond and Colorado
Tax-Exempt Funds will not exceed 1.15%, 1.15%, 1.15%, 1.30%, 0.95%, 0.85%
and 0.50%, respectively. Without such fee waivers and expense
reimbursements, the Total Operating Expenses of the Blue Chip, Growth and
Income, Small-Cap Opportunity, Long-Term Bond, Intermediate-Term Bond and
Colorado Tax-Exempt Bond Funds would be 1.20% 1.50%, 1.75%, 1.10%, 0.95%
and 1.20%, respectively.
(2) Without advisory fee waivers, the advisory fee for the Colorado Tax-Exempt
Fund would be 0.50% of the Fund's average daily net assets.
The fee waivers and expense reimbursements reflected in the table are voluntary
and may be modified or terminated at any time without the Funds' consent.
If you own shares through certain Service Organizations (as described in the
section entitled "How to Invest") you may pay account charges in connection with
the maintenance of your account at the Service Organization. These account
charges are in addition to the expenses shown above.
For more complete descriptions of shareholder transaction expenses and the
Funds' operating expenses, see "How to Invest" and "Management Of The Funds" in
this Prospectus and the financial statements and related notes included in the
Statement of Additional Information.
THE EXAMPLE ILLUSTRATES THE EFFECT OF EXPENSES AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
-5-
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below provide supplementary information to each Fund's
financial statements contained in the Statement of Additional Information and
set forth certain information concerning the historic investment results of
Fund shares. The financial highlights are based on the financial statements
of each Fund, which have been audited by Deloitte & Touche LLP, the Trust's
independent auditors, except that the information in the Financial Highlights
of the Westcore MIDCO Growth Fund (except for total return) for the period
ended May 31, 1987 was audited by other auditors. You should read the tables
together with the financial statements and related notes included in the
Statement of Additional Information. Further information about the performance
of the Funds is available in the Annual Report to Shareholders. You may obtain
both the Statement of Additional Information and the Annual Report to
Shareholders free of charge by contacting ALPS or the Westcore Trust at
1-800-392-CORE (2673).
-6-
<PAGE>
FINANCIAL HIGHLIGHTS
WESTCORE MIDCO GROWTH FUND
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
For the Year Ended May 31,
-----------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(1)
---- ---- ---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of $17.12 $ 16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $ 9.82 $12.20 $10.00
period
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.08) 0.00 0.00 0.04 0.06 0.07 0.24 0.19 0.03 0.20
Net realized and unrealized gain
(loss) on investments 6.58 1.56 1.34 2.48 1.84 3.16 1.32 2.52 (1.47) 2.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment
operations 6.50 1.56 1.34 2.52 1.90 3.23 1.56 2.71 (1.44) 2.20
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income 0.00 0.00 0.00 0.00 (0.32) (0.08) (0.24) (0.10) (0.28) 0.00
Distributions from net realized
gain on investments (0.72) (0.53) (1.03) (1.11) (1.20) (0.72) (1.93) (0.25) (0.66) 0.00
Return of Capital 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends, distributions and
return of capital to shareholders (0.72) (0.53) (1.04) (1.11) (1.52) (0.80) (2.17) (0.35) (0.94) 0.00
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $22.90 $ 17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $9.82 $12.20
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Total return 38.62% 10.05% 8.37% 18.04% 14.09% 30.44% 15.33% 28.46% (13.09%) 26.53%(3)(4)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 $656,490 $401,760 $335,453 $231,595 $180,681 $131,420 $85,209 $81,948 $557 $439
omitted)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net 1.08% 0.94% 0.84% 0.83% 0.80% 0.78% 0.83% 0.80% 1.33% 0.00%(3)
assets
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (0.42%) (0.03%) (0.09%) 0.04% 0.12% 0.58% 2.05% 1.21% 0.02% 2.52%(3)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.10% 0.96% 0.87% 0.85% 0.85% 0.88% 0.88% 0.85% 2.20% 2.20%(3)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets without (0.44%) (0.05%) (0.12%) 0.02% 0.07% 0.48% 2.00% 1.16% (0.85%) 0.32%(3)
fee waivers
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(2) 62.83% 50.19% 52.05% 56.23% 48.17% 75.43% 86.62% 74.03% 91.57% 54.03%(3)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations was on August 1, 1986.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $387,990,462 and $324,571,405, respectively.
(3) Annualized.
(4) Unaudited.
-7-
<PAGE>
FINANCIAL HIGHLIGHTS
WESTCORE BLUE CHIP FUND (Formerly the Westcore Modern Value Equity Fund)
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
For the Year Ended May 31,
-----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10 $10.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.25 0.23 0.40 0.34 0.28 0.29 0.44 0.39
Net realized and unrealized gain
on investments 4.03 2.12 0.04 1.13 0.95 1.15 0.82 1.02
- ----------------------------------------------------------------------------------------------------------------------------
Total income from investment operations 4.28 2.35 0.44 1.47 1.23 1.44 1.26 1.41
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income (0.27) (0.16) (0.43) (0.21) (0.35) (0.30) (0.46) (0.31)
Distributions from net realized gain
on investments (1.30) (0.19) (1.18) (0.74) (0.21) (0.20) (0.16) 0.00
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (1.57) (0.35) (1.61) (0.95) (0.56) (0.50) (0.62) (0.31)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $17.41 $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total return 30.48% 19.03% 3.12% 11.62% 10.02% 13.08% 11.74% 14.42%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $68,286 $52,545 $36,674 $28,176 $30,572 $27,208 $25,857 $28,088
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.10% 1.01% 1.06% 0.99% 0.91% 0.84% 0.85% 0.88%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 1.52% 1.78% 2.30% 2.37% 2.17% 2.65% 3.81% 3.54%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.25% 1.06% 1.09% 1.02% 0.97% 0.94% 0.90% 0.93%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets without fee
waivers 1.38% 1.73% 2.27% 2.34% 2.11% 2.55% 3.76% 3.49%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(2) 65.11% 61.72% 41.32% 85.53% 123.91% 142.01% 158.54% 175.23%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations occurred on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $37,959,388 and $38,051,658, respectively.
-8-
<PAGE>
FINANCIAL HIGHLIGHTS Continued
WESTCORE GROWTH AND INCOME FUND (Formerly the Westcore Equity Income Fund)
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
Westcore Equity Income Fund(1) For the Year Ended May 31,
----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.50 $10.62 $11.51 $10.99 $10.10 $ 9.94 $10.43 $10.00
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.15 0.20 0.51 0.32 0.32 0.32 0.36 0.40
Net realized and unrealized gain (loss)
on investments 2.57 0.15 (0.30) 0.68 1.05 0.48 1.02 1.05
- ---------------------------------------------------------------------------------------------------------------------------
Total income from investment operations 2.72 0.35 0.21 1.00 1.37 0.80 1.38 1.45
- ---------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income (0.24) (0.21) (0.54) (0.20) (0.43) (0.33) (0.37) (0.33)
Distributions from net realized gain
on investments (0.66) (0.26) (0.56) (0.28) (0.05) (0.31) (1.50) (0.69)
- ---------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (0.90) (0.47) (1.10) (0.48) (0.48) (0.64) (1.87) (1.02)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $12.32 $10.50 $10.62 $11.51 $10.99 $10.10 $9.94 $10.43
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total return 27.25% 3.73% 1.71% 9.41% 14.12% 9.07% 14.58% 15.98%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $25,387 $27,029 $42,644 $35,791 $25,128 $19,932 $16,583 $12,594
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.22% 1.17% 1.03% 0.99% 0.95% 0.90% 0.93% 0.97%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 1.34% 2.09% 4.45% 2.75% 3.03% 3.51% 3.45% 3.75%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.51% 1.22% 1.06% 1.03% 1.02% 1.00% 0.98% 1.02%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets without fee
waivers 1.05% 2.04% 4.42% 2.71% 2.96% 3.41% 3.40% 3.70%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(3) 88.31% 81.14% 53.86% 61.24% 68.56% 64.94% 59.36% 100.22%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Westcore Equity Income Fund is the former name of the Westcore Growth
and Income Fund. The Fund's name was changed as of January 1, 1996 to
reflect a different investment objective and different investment policies.
Prior to January 1, 1996, the Fund's investment objective was to seek
reasonable income through investments in income-producing securities. As
of January 1, 1996, the Fund's investment objective was revised to seek
long-term total return through capital appreciation and current income. A
new portfolio manager has managed the Fund since October 1995. Past
performance is not intended to be indicative or representative of future
performance.
(2) Commencement of operations was on the first day of this period.
(3) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $23,528,402 and $35,671,719, respectively.
-9-
<PAGE>
FINANCIAL HIGHLIGHTS
WESTCORE SMALL-CAP OPPORTUNITY FUND
(For a Fund Share Outstanding Throughout the Periods Indicated.)
For the Year Ended May 31,
------------------------------------
1996 1995 1994(1)
------- ------- -------
Net asset value - beginning of period: $15.95 $14.97 $15.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.04 0.09 0.05
Net realized and unrealized gain
(loss) on investments 5.86 1.11 (0.05)
- -------------------------------------------------------------------------------
Total income from investment operations 5.90 1.20 0.00
- -------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income (0.06) (0.10) (0.03)
Distributions from net realized gain on
investments (0.44) (0.12) 0.00
- -------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (0.50) (0.22) (0.03)
- -------------------------------------------------------------------------------
Net asset value - end of period $21.35 $15.95 $14.97
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Total Return (3) 37.49% 8.15% (0.07%)(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $23,951 $9,703 $2,159
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.30% 1.27% 1.38%(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of net investment income to average
net assets 0.24% 0.61% 1.00%(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 2.20% 2.77% 6.56%(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets without fee waivers (0.67%) (0.89%) (4.18%)(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Portfolio turnover rate(2) 47.83% 59.17% 64.31%(3)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) The Fund commenced operations on December 28, 1993.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $14,769,419 and $7,829,753, respectively.
(3) Annualized.
-10-
<PAGE>
FINANCIAL HIGHLIGHTS Continued
WESTCORE LONG-TERM BOND FUND
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
<CAPTION>
For the Year Ended May 31,
---------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(1)
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36 $10.00
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.61 0.59 0.62 0.77 0.80 1.08 0.93 0.91
Net realized and unrealized gain (loss)
on investments (0.27) 0.66 (0.51) 0.99 0.56 0.04 (0.21) 0.33
- -------------------------------------------------------------------------------------------------------------------------------
Total income from investment operations 0.34 1.25 0.11 1.76 1.36 1.12 0.72 1.24
- -------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.62) (0.60) (0.62) (0.78) (0.77) (1.11) (0.93) (0.88)
Distributions from net realized gain
on investments 0.00 0.00 (1.52) (0.33) 0.00 (0.11) (0.04) 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (0.62) (0.60) (2.14) (1.11) (0.77) (1.22) (0.97) (0.88)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $9.59 $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total return 3.41% 14.37% (0.25%) 17.40% 14.04% 11.87% 7.06% 13.03%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $25,070 $33,440 $26,962 $26,281 $30,800 $27,448 $18,113 $15,403
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.90% 0.94% 0.89% 0.77% 0.70% 0.65% 0.73% 0.73%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 6.07% 6.54% 5.74% 6.63% 7.59% 8.29% 8.99% 8.93%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.07% 0.99% 0.92% 0.80% 0.74% 0.73% 0.78% 0.78%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets without fee waivers 5.90% 6.49% 5.71% 6.60% 7.55% 8.21% 8.94% 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(2) 33.10% 25.09% 52.82% 79.16% 51.79% 81.13% 40.21% 68.94%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations occurred on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $9,489,738 and $17,274,608, respectively.
-11-
<PAGE>
FINANCIAL HIGHLIGHTS
WESTCORE INTERMEDIATE-TERM BOND FUND
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
<CAPTION>
For the Year Ended May 31,
---------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(1)
---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.27 $10.02 $10.70 $10.14 $9.80 $9.91 $9.99 $10.00
- -------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.60 0.58 0.55 0.67 0.78 0.87 0.84 0.85
Net realized and unrealized gain (loss)
on investments (0.17) 0.27 (0.52) 0.53 0.39 (0.10) (0.08) (0.04)
- -------------------------------------------------------------------------------------------------------------------------------
Total income from investment operations 0.43 0.85 0.03 1.20 1.17 0.77 0.76 0.81
- -------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.60) (0.60) (0.53) (0.64) (0.83) (0.88) (0.84) (0.82)
Distributions from net realized gain
on investments 0.00 0.00 (0.18) 0.00 0.00 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (0.60) (0.60) (0.71) (0.64) (0.83) (0.88) (0.84) (0.82)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $10.10 $10.27 $10.02 $10.70 $10.14 $9.80 $9.91 $9.99
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total return 4.26% 8.93% 0.10% 12.16% 12.42% 8.30% 7.82% 8.53%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $83,039 $97,619 $88,965 $99,469 $87,712 $68,958 $107,288 $110,962
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.81% 0.77% 0.68% 0.65% 0.61% 0.59% 0.59% 0.60%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 5.78% 5.86% 5.03% 6.37% 7.73% 9.01% 8.32% 8.59%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 0.92% 0.80% 0.70% 0.67% 0.65% 0.65% 0.64% 0.65%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets without fee waivers 5.67% 5.83% 5.00% 6.35% 7.69% 8.95% 8.27% 8.54%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(2) 71.97% 60.86% 65.04% 87.17% 53.92% 80.20% 71.42% 63.30%
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations was on the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $61,945,342 and $78,767,790, respectively.
-12-
<PAGE>
FINANCIAL HIGHLIGHTS Continued
WESTCORE COLORADO TAX-EXEMPT FUND
(For a Fund Share Outstanding Throughout the Periods Indicated.)
<TABLE>
<CAPTION>
For the Year Ended May 31,
----------------------------------------------
1996 1995 1994 1993 1992(1)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.70 $10.52 $10.71 $10.25 $10.00
- -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.52 0.52 0.53 0.57 0.58
Net realized and unrealized gain (loss)
on investments (0.10) 0.20 (0.19) 0.46 0.23
- -------------------------------------------------------------------------------------------
Total income from investment operations 0.42 0.72 0.34 1.03 0.81
- -------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.51) (0.54) (0.53) (0.57) (0.56)
Distributions from net realized gain on
investments 0.00 0.00 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------
Total dividends and distributions to
shareholders (0.51) (0.54) (0.53) (0.57) (0.56)
- -------------------------------------------------------------------------------------------
Net asset value - end of period $10.61 $10.70 $10.52 $10.71 $10.25
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Total Return 3.97% 7.16% 3.22% 10.27% 8.36%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $13,922 $10,792 $10,553 $7,326 $4,511
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.44% 0.42% 0.27% 0.22% 0.11%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 4.87% 5.03% 4.98% 5.45% 5.84%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 1.43% 1.62% 1.59% 1.88% 1.65%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets without fee waivers 3.88% 3.83% 3.65% 3.79% 4.30%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Portfolio turnover rate (2) 10.23% 3.15% 9.76% 1.82% 12.95%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Commencement of operations was the first day of this period.
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding
securities with a maturity date of one year or less at the time of
acquisition) for a period and dividing it by the monthly average of the
market value of such securities during the period. Purchases and sales of
investment securities (excluding short-term securities) for the year ended
May 31, 1996 were $5,353,679 and $1,127,047, respectively.
-13-
<PAGE>
FUND SPECIFICS -- INVESTMENT OBJECTIVES AND POLICIES
To help you decide which Westcore Fund is appropriate for you, this section
looks more closely at the Funds' investment objectives, policies and securities
in which they invest. You should carefully consider your own investment goals,
time horizon and risk tolerance before investing in a Fund. You should also
review carefully the section entitled "Supplemental Information -- Information
on Investment Policies and Additional Risk Factors" for a more detailed
discussion of the instruments in which the Funds may invest and their associated
risks. There can be no assurance that a Fund will achieve its investment
objective.
Upon notice to shareholders each Fund's investment objective and policies may be
changed by the Trust's Board of Trustees without the approval of shareholders.
In the event of a change, you may want to consider whether that Fund remains a
suitable investment for you.
WESTCORE EQUITY FUNDS
The Westcore Equity Funds are designed for long-term investors who can tolerate
the risks associated with investments in common stocks. They are most suitable
for investors with a long-term investment horizon. The following questions are
designed to help you better understand an investment in the Westcore Equity
Funds.
WHAT IS EACH WESTCORE EQUITY FUND'S INVESTMENT OBJECTIVE AND WHAT ARE ITS
PRIMARY INVESTMENTS?
- WESTCORE MIDCO GROWTH FUND seeks to maximize long-term capital
appreciation (rather than current income) by investing primarily in
common stocks. The Investment Adviser uses fundamental research
techniques to identify medium-sized growth companies it believes to
be attractive. The Investment Adviser believes medium-sized companies'
earnings may be greatly impacted by factors such as new products and
services, and more entrepreneurial management than those of large
companies. Medium-sized companies may also have better opportunities
for growth by gaining market share. In the Investment Adviser's view,
medium-sized company securities may tend to be less volatile than the
securities of smaller companies, while providing higher returns than
larger company stocks.
- WESTCORE BLUE CHIP FUND seeks a high level of long-term total return
through capital appreciation and current income consistent with
investment primarily in a diversified portfolio of large company
common stocks. The Investment Adviser uses a value-oriented approach
to identify large, established companies that may be underpriced. The
Investment Adviser believes that, due to their size, large companies
may benefit from attributes such as market dominance, substantial
financial resources and the opportunity to be global leaders in their
industries. These characteristics, in the Investment Adviser's view,
may result in increased stability for the company and a lower-risk
investment. The Investment Adviser combines a quantitative approach
with a qualitative research discipline to individually select and
invest in stocks of larger companies that it believes to be
undervalued and to have improving growth prospects, and to seek to
avoid investing in companies it believes are mature and lack
meaningful opportunities.
- WESTCORE GROWTH AND INCOME FUND seeks long-term total return through
capital appreciation and current income. The stocks purchased by this
Fund are generally large to medium in terms of market capitalization,
and, in the Investment Adviser's judgement, are high quality, based on
financial characteristics and management capability. The Investment
Adviser uses fundamental research techniques in an effort to structure
the portfolio to generally have a dividend yield close to the yield on
the S&P 500 stock index, to have potential earnings growth higher than
the S&P 500, and a market risk level approximately equal to the
S&P 500.
- WESTCORE SMALL-CAP OPPORTUNITY FUND seeks to maximize long-term
capital appreciation primarily through diversified investments in
equity securities of small-capitalization companies. The Investment
Adviser uses a value-oriented style to identify small companies where
the stocks are believed to be attractively priced based on valuation
measures including lower price-to-earnings and lower price-to-book
value ratios. The Investment Adviser believes that this emphasis on
valuation produces a portfolio of stocks with strong potential for
price appreciation -- and lower volatility than is commonly associated
with small company stocks. The investment approach focuses on stock
selection and uses quantitative and qualitative research to identify
small company stocks which are undervalued where, in the Investment
Adviser's view, the fundamental business outlook and earnings potential
is becoming more attractive.
IN WHAT TYPES OF SECURITIES DO THE WESTCORE EQUITY FUNDS INVEST?
- WESTCORE MIDCO GROWTH FUND primarily invests in medium-sized companies
which generally have market capitalizations of $250 million to $5
billion and revenues of $100 million to $6 billion at the time of
purchase. The Fund does not invest in companies that, at the time of
purchase, are ranked among the largest 100 companies in FORTUNE
MAGAZINE'S annual ranking of "The Largest U.S. Industrial and Service
Corporations" in terms of revenues or market capitalization. Up to 25%
of the Fund's assets may be invested in securities issued by foreign
companies, either directly (if the company is listed on a U.S.
exchange) or indirectly through American Depository Receipts ("ADRs").
During normal market conditions, the Fund invests at least 65% of its
total assets in companies with market capitalizations of at least
$250 million.
-14-
<PAGE>
- WESTCORE BLUE CHIP FUND invests primarily in approximately 50 common
stocks from a universe of the 300-400 largest dividend-paying companies
(ranked by either market capitalization or revenues) headquartered in
the United States. During normal market conditions, at least 65% of
the Fund's total assets will be invested in securities of these
companies.
- WESTCORE GROWTH AND INCOME FUND purchases common stocks primarily from
a universe of domestic companies that are selected for their growth
potential and established dividend-paying histories. During normal
market conditions, at least 65% of the Fund's total assets will be
invested in equity securities selected for their potential for capital
appreciation and their ability to produce above average earnings and
dividend growth.
- WESTCORE SMALL-CAP OPPORTUNITY FUND invests primarily in equity
securities of small-capitalization companies. During normal market
conditions, the Fund invests at least 65% of its total assets in the
equity securities of U.S. and foreign companies with capitalizations of
$1 billion or less. Equity securities include common stock, preferred
stock and securities convertible into common stock or preferred stock.
The remaining portion of the Fund's assets may be invested in
securities of companies with larger market capitalizations.
WHAT ARE THE OTHER INVESTMENT POLICIES OF THE WESTCORE EQUITY FUNDS?
Each Westcore Equity Fund may also invest in options and futures. The
Westcore MIDCO Growth, Growth and Income and Small-Cap Opportunity Funds may
also invest in preferred stocks, warrants and foreign currency transactions.
Additionally, the Westcore MIDCO Growth, Growth and Income and Small-Cap
Opportunity Funds may invest up to 15% of their total assets in securities
convertible into common stock rated below investment grade (i.e., lower-rated
securities) or unrated securities determined to be of comparable quality.
The Westcore MIDCO Growth and Growth and Income Funds may also invest,
directly or indirectly, up to 25% of their respective total assets in
securities issued by foreign companies. There is no limitation on the amount
of the Westcore Small-Cap Opportunity Fund's total assets that may be held in
foreign securities.
Each Westcore Equity Fund may invest in short-term instruments such as U.S.
government obligations, money market instruments, repurchase agreements and
securities issued by other investment companies (within the limits prescribed
by the Investment Company Act of 1940, as amended ("1940 Act")). In
addition, each Fund may borrow money from banks and may enter into reverse
repurchase agreements for temporary purposes on a limited basis. Each Fund
may hold uninvested cash reserves (which would not earn income) pending
investment, to meet anticipated redemption requests or during temporary
defensive periods.
WHAT IS THE MAIN RISK OF INVESTING IN AN EQUITY FUND?
The fundamental risk associated with any equity fund is the risk that the value
of the stocks it holds might decrease. Stock values may fluctuate in response
to the activities of an individual company or in response to general market or
economic conditions. Historically, equity securities have provided greater
long-term returns and have entailed greater short-term risks than other
investment choices.
Although smaller or newer issuers are more likely to realize more substantial
growth than larger or more established issuers, they are more likely to suffer
more significant losses. Investments in such companies can be both more
volatile and more speculative.
For a discussion of risks related to such investments as lower rated
securities or "junk bonds," options and futures, foreign currency exchange
transactions and "derivative" instruments in general in which the Funds may
invest, see "Supplemental Information - Information on Investment Policies and
Additional Risk Factors" beginning on page 30.
WHICH WESTCORE EQUITY FUNDS ARE DIVERSIFIED AND WHAT DOES THAT MEAN?
All the Westcore Equity Funds are diversified. Diversification is a means of
reducing risk by investing a Fund's assets in a broad range of stocks or other
securities in various industries and economic sectors. Diversification does not
provide assurance against the possibility of loss.
-15-
<PAGE>
HOW DO THE WESTCORE EQUITY FUNDS TRY TO REDUCE RISK?
- Diversification of a Fund's assets reduces the effect of any single
holding on its overall portfolio value.
- The Funds may adjust the securities they hold to include issues which
are believed to involve less risk.
- A Fund may use futures, options and similar instruments to attempt to
hedge its portfolio against disadvantageous movements in securities
prices and interest rates. The Westcore MIDCO Growth, Growth and
Income and Small-Cap Opportunity Funds may use various currency
hedging techniques, including forward currency contracts, to manage
exchange rate risk when investing directly in foreign markets.
- To the extent that a Fund holds a large cash position, it may not
participate in market declines (or advances) to the same degree as a
fund that is more fully invested in common stocks.
WHAT IS MEANT BY "MARKET CAPITALIZATION?"
Market capitalization is the most commonly used measure of the size and value of
a company. It is computed by multiplying the current market price of a share of
the company's stock by the total number of its shares outstanding. Market
capitalization is an important investment criterion for the Westcore MIDCO
Growth, Blue Chip and Small-Cap Opportunity Funds.
WESTCORE BOND FUNDS
The following questions are designed to help you better understand an investment
in the Westcore Bond Funds.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE BOND FUNDS?
- WESTCORE LONG-TERM BOND FUND seeks a high level of long-term total
rate of return (i.e., income plus capital appreciation).
- WESTCORE INTERMEDIATE-TERM BOND FUND seeks current income with
relatively small volatility of principal through investment in
investment grade securities and high quality money market instruments.
- WESTCORE COLORADO TAX-EXEMPT FUND seeks to provide investors with
income exempt from federal income taxes and Colorado state income
taxes consistent with safety and stability of principal.
WHAT ARE THE PRIMARY INVESTMENTS OF THE WESTCORE BOND FUNDS?
The Westcore Long-Term Bond and Intermediate-Term Bond Funds are diversified
funds that invest at least 65% of their total assets in a broad range of debt
obligations during normal market conditions. Debt obligations include fixed and
variable-rate bonds, asset-backed and mortgage-backed securities, zero coupon
bonds, debentures, obligations convertible into common stocks, obligations
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
dollar-denominated debt obligations of foreign issuers including foreign
corporations and foreign governments, municipal obligations and money market
instruments.
The Westcore Colorado Tax-Exempt Fund is a non-diversified fund that invests
substantially all of its assets (i.e., at least 80%) in debt instruments issued
by or on behalf of the state of Colorado ("Colorado Obligations"), other states,
territories and possessions of the United States, the District of Columbia and
their respective authorities, agencies, instrumentalities and political
subdivisions ("Municipal Obligations"). The Fund normally
-16-
<PAGE>
will invest at least 65% of its total assets in Colorado Obligations. The
Colorado Tax-Exempt Fund currently intends to invest at least 75% of its
assets in Municipal Obligations covered by insurance policies.
WHAT ARE THE EXPECTED MATURITIES OF THE WESTCORE BOND FUNDS?
Except during temporary defensive periods or unusual market conditions, Denver
Investment Advisors expects that the average dollar-weighted portfolio
maturities of the Westcore Bond Funds will be as follows:
FUND AVERAGE DOLLAR-WEIGHTED MATURITY
Westcore Long-Term Bond Fund at least 10 years
Westcore Intermediate-Term Bond Fund 3-6 years
Westcore Colorado Tax-Exempt Fund 7-10 years
WHAT IS THE INVESTMENT QUALITY OF THE ASSETS OF THE WESTCORE BOND FUNDS?
Debt obligations acquired by the Westcore Long-Term Bond and Intermediate-Term
Bond Funds will be at least investment grade at the time of purchase. Each
Fund's dollar-weighted average portfolio quality is expected to be "A" or
better.
Municipal Obligations acquired by the Colorado Tax-Exempt Fund will be rated in
one of the three highest investment grade categories at the time of purchase by
one or more rating agencies. The Fund may invest up to 10% of its total assets
in Colorado Obligations rated at the time of purchase in the fourth highest
investment grade category when acceptable Colorado Obligations with higher
ratings are unavailable for investment by the Fund. The Fund may invest in
unrated obligations only if Denver Investment Advisors determines they are
comparable in quality to instruments that meet the Fund's rating requirements.
If the rating of an obligation held by a Fund is reduced below the Fund's rating
requirements, the Investment Adviser will sell the obligation when it is in the
best interests of the Fund to do so.
For a description of ratings, please review the Appendix "Rating Categories."
DO THE WESTCORE BOND FUNDS INVEST IN ANY OTHER TYPES OF SECURITIES?
The Westcore Long-Term Bond and Intermediate-Term Bond Funds may invest in
obligations convertible into common stocks and may acquire common stocks,
warrants or other rights to buy shares only if they are attached to a
fixed-income obligation. Common stock received through the conversion of
convertible debt obligations will normally be sold in an orderly manner as
soon as possible. Each Fund may also invest in options and futures.
Additionally, each Fund may invest in short-term instruments including
repurchase agreements and securities issued by other investment companies
(within the limits prescribed by the 1940 Act).
The Westcore Colorado Tax-Exempt Fund may invest in short-term taxable money
market instruments, securities issued by other investment companies which invest
in taxable or tax-exempt money market instruments and U.S. Government
obligations.
During temporary defensive periods, each Bond Fund may invest without limitation
in various short-term investments. The Funds also may borrow money from banks
and may enter into reverse repurchase agreements for temporary purposes on a
limited basis.
-17-
<PAGE>
IS AN INVESTMENT IN THE WESTCORE COLORADO TAX-EXEMPT FUND A TAX-FREE INVESTMENT?
Dividends paid by the Fund which are derived from interest on Colorado
Obligations, as well as certain other governmental issuers, will be exempt from
regular federal income taxes and Colorado state income taxes. Dividends derived
from interest on non-Colorado Obligations will be subject to Colorado state
income tax. Because the Fund may invest up to 20% of its net assets in private
activity bonds whose interest may be subject to the federal alternative minimum
tax, a portion of the dividends paid by the Fund may be treated as a tax
preference item for purposes of this tax.
See also "Taxes" in "Other Information" on page 24.
ARE THERE ANY INVESTMENT RISKS UNIQUE TO THE WESTCORE COLORADO TAX-EXEMPT FUND?
Because the Fund concentrates its investments in Colorado Obligations, it is
classified as a non-diversified fund for purposes of the 1940 Act. The Fund's
performance may be dependent upon fewer securities than is the case with a
diversified portfolio and the Fund may experience greater fluctuations in net
asset value. In addition, although the Fund does not presently intend to do so
on a regular basis, it may invest 25% or more of its NET assets in industrial
development bonds and in other Municipal Obligations, the interest on which is
paid solely from revenues of similar projects. To the extent that the Fund's
assets are concentrated in these types of Municipal Obligations and the Fund is
non-diversified, it will be more susceptible to economic, political and legal
developments than a diversified Fund with similar objectives whose assets are
not so concentrated.
HOW DO INTEREST RATES AFFECT THE VALUE OF MY INVESTMENT?
A fundamental risk associated with any fund that invests in fixed-income
securities is the risk that the value of the securities it holds will rise or
fall as interest rates change. Generally, a fixed-income security will
increase in value when interest rates fall and decrease in value when
interest rates rise. Longer-term securities are generally more sensitive to
interest rate changes than shorter-term securities, but they usually offer
higher yields to compensate investors for the greater risks. A bond fund's
average dollar-weighted maturity is a measure of how the fund will react to
interest rate changes.
WHAT IS MEANT BY A FUND'S "AVERAGE DOLLAR-WEIGHTED MATURITY"?
The stated maturity of a bond is the date when the issuer must repay the bond's
entire principal value to an investor, such as a Fund. A bond's term to
maturity is the number of years remaining to maturity. A bond fund does not
have a stated maturity, but it does have an average dollar-weighted maturity.
This is calculated by averaging the terms to maturity of bonds held by a Fund
with each maturity "weighted" according to the percentage of net assets it
represents.
HOW DO THE WESTCORE BOND FUNDS ATTEMPT TO MANAGE INTEREST RATE RISK?
Each Fund may vary the average dollar-weighted maturity of its portfolio to
reflect its portfolio manager's analysis of interest rate trends and other
factors. A Fund's average dollar-weighted maturity will tend to be shorter
when its portfolio manager expects interest rates to rise and longer when its
portfolio manager expects interest rates to fall. The Westcore Long-Term
Bond and Intermediate-Term Bond Funds may also use futures, options and
similar instruments to manage interest rate risk.
-18-
<PAGE>
WHAT IS MEANT BY "CREDIT QUALITY"?
Another fundamental risk associated with all bond funds is credit risk -- the
risk that an issuer will be unable to make principal and interest payments when
due. U.S. government securities are generally considered to be the safest type
of investment in terms of credit risk. Municipal Obligations generally rank
between U.S. government securities and corporate debt securities in terms of
credit safety. Corporate debt securities, particularly those rated below
investment grade, may present the highest credit risk.
HOW IS CREDIT QUALITY MEASURED?
Ratings published by nationally recognized rating agencies ("Rating Agencies"),
such as Standard & Poor's Ratings Group ("S&P") and Moody's Investors Service,
Inc. ("Moody's"), are widely accepted measures of credit risk. The lower a bond
issue is rated by an agency, the more credit risk it is considered to represent.
Lower rated bonds generally pay higher yields to compensate investors for the
greater risk.
IN GENERAL
WHAT POTENTIAL RISKS AND REWARDS MAY I EXPERIENCE IF I INVEST IN THE WESTCORE
FUNDS?
An investment in the Westcore Funds presents the potential rewards and risks
common to securities investments. The Westcore MIDCO Growth, Blue Chip, Growth
and Income and Small-Cap Opportunity Funds invest primarily in common stocks.
Although stocks historically have presented greater potential for capital
appreciation than debt obligations, they do not provide the same assurance of
income and may carry greater risk of loss. The value of an investment in the
Westcore Small-Cap Opportunity Fund, in particular, may experience significant
fluctuations over time due to the Fund's investments in smaller companies and in
convertible securities rated below investment grade which present greater
potential price volatility, i.e., the price may go up or down.
The market value of debt obligations held by the Westcore Funds will also
fluctuate, normally rising when interest rates fall and falling when interest
rates rise. The value of some debt obligations (such as collateralized mortgage
obligations, asset-backed securities, municipal leases and structured notes) may
be more volatile than other types of instruments.
Several of the Funds may invest in foreign securities that are considered
attractive by Denver Investment Advisors. In addition to being more costly,
foreign securities may be subject to potentially adverse political, governmental
and economic developments and changes in foreign currency exchange rates.
Each Fund may purchase certain derivative instruments which derive their value
from the performance of underlying assets, interest or currency exchange rates,
or indices. Derivative instruments present, to varying degrees, special market,
volatility, leveraging, liquidity, pricing and operations risks. See
"Supplemental Information -- Risk Factors Associated with Derivative
Instruments" on page 35.
The Funds may lend their securities and enter into repurchase agreements and
reverse repurchase agreements with banks and broker/dealers that could
experience financial difficulties, and may make limited investments in illiquid
securities.
As the Funds' investment adviser, Denver Investment Advisors will evaluate the
rewards and risks presented by all securities purchased by the Funds and will
determine how they will be used in furtherance of the investment objectives of
the Funds. It is possible, however, that Denver Investment Advisors'
evaluations will prove to be inaccurate and, even when accurate, it is possible
that the Funds will incur losses.
-19-
<PAGE>
FUNDAMENTAL INVESTMENT LIMITATIONS
WHAT ARE FUNDAMENTAL INVESTMENT LIMITATIONS?
Fundamental investment limitations are those investment limitations that a Fund
may not change without the approval of the holders of a majority of the Fund's
outstanding shares. Some are summarized in the tables on the facing page (a
complete list is set forth in the Statement of Additional Information).
The Westcore MIDCO Growth, Blue Chip, Growth and Income, Small-Cap Opportunity,
Long-Term Bond and Intermediate-Term Bond Funds may not:
- Purchase securities if more than 5% of a Fund's total assets will be
invested in the securities of any one issuer. However, up to 25% of
the Fund's total assets may be invested without regard to this 5%
limitation. Certain investments such as U.S. government securities
are not subject to this limitation.
- Make loans, except that each Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with
its investment objective and policies. Each Fund may also lend
portfolio securities in an amount not exceeding 30% of its total
assets.
The Westcore Long-Term Bond, Intermediate-Term Bond and Colorado Tax-Exempt
Funds may not:
- Borrow money or issue senior securities except that each Fund may
borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts up to 10% of its total assets at the
time of such borrowing. No Fund may mortgage, pledge or hypothecate
any assets, unless it is in connection with a permissible borrowing
and the amounts do not exceed the lesser of the dollar amounts
borrowed or 10% of the Fund's total assets at the time of such
borrowing.
In addition, the Westcore Colorado Tax-Exempt Fund may not:
- Invest less than 80% of its net assets in securities the interest on
which is exempt from federal income tax, except during periods of
unusual market conditions. For purposes of this limitation only,
securities, the interest on which is treated as a specific tax
preference item under the federal alternative minimum tax, are
considered taxable.
- Make loans, except that the Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with
its investment objective and policies.
- Purchase securities if more than 5% of its total assets will be
invested in the securities of any one issuer. However, up to 50% of
the Fund's total assets may be invested without regard to the 5%
limitation as long as not more than 25% of the Fund's total assets are
invested in the securities of any one issuer. Certain investments
such as U.S. government securities are not subject to this limitation.
No Fund will purchase securities so long as its outstanding borrowings
(including reverse repurchase agreements) exceed 5% of its total assets.
If a percentage limitation or other statistical requirement is met at the time a
Fund makes an investment, a later change in the percentage due to a change in
the value of the Fund's portfolio securities generally will not constitute a
violation.
HOW TO INVEST
This section tells you how to purchase, exchange and redeem your shares. It
also explains various services and features offered in connection with your
account.
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PLEASE CALL WESTCORE FUNDS AT 1-800-392-CORE (2673) IF YOU HAVE ANY QUESTIONS OR
NEED ANY INFORMATION.
ALPS Mutual Fund Services, Inc. is the distributor for Westcore Funds and
has its principal office at 370 Seventeenth Street, Suite 2700, Denver,
Colorado 80202.
HOW TO OPEN AND ADD TO YOUR ACCOUNT
You may open an account and purchase shares of the Westcore Funds by
completing an Account Application and returning it to Westcore with your
check made payable to Westcore/SSB. You may obtain an Account Application by
calling 1-800-392-CORE (2673).
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- --------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
- --------------------------------------------------------------------------------
BY MAIL - Send a completed Account - Send a check or money
Application and a check order payable in U.S.
or money order payable dollars and drawn on a
in U.S. dollars and bank located in the
drawn on a bank located U.S. to Westcore Trust,
in the U.S. to Westcore P.O. Box 8319, Boston,
Trust, P.O. Box 8319, MA 02266-8319. Specify
Boston, MA 02266-8319. your account number and
the name of the Fund(s)
in which you are
investing.
- --------------------------------------------------------------------------------
IN PERSON - Bring your completed - Bring your check or
Account Application and money order payable to
a check or money order Westcore/SSB, to
payable to Westcore/SSB, Westcore Trust, 370
to Westcore Trust, 370 Seventeenth Street,
Seventeenth Street, Suite 2700, Denver, CO
Suite 2700, Denver, CO 80202.
80202.
- --------------------------------------------------------------------------------
AUTOMATICALLY - Complete the Automatic - Complete at any time an
(from your Investment Plan Section Automatic Investment
bank account) of your new Account Plan application to
Application ($50 minimum have $50 or more
per transaction) and automatically withdrawn
return it to Westcore from your bank account
Trust, P.O. Box 8319, monthly , quarterly or
Boston, MA 02266-8319. annually.
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BY WIRE - Call 1-800-392-CORE - Call 1-800-392-CORE
(2673) to receive wiring (2673) to receive
instructions. wiring instructions.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MINIMUM INVESTMENTS
To open a new account $1,000
To open a new retirement or certain other accounts 250
To open a new account with an Automatic Investment
Plan 0
To add to any type of an account 50
The minimum investment requirements do not apply to reinvested dividends,
purchases by Service Organizations acting on behalf of their customers,
officers, trustees, directors, employees and retirees of the Trust,
Investment Adviser, Administrators or any direct or indirect subsidiary, or
any spouse, parent or child of any of these persons. Please Note: Third
party checks will not be accepted by Westcore for the purchase of shares of a
Fund.
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<PAGE>
HOW TO EXCHANGE FUND SHARES
You may exchange your Fund shares for shares of the other Funds or the Compass
Capital Money Market Portfolio.* Exchanges must be for at least $1,000 in value
per transaction. You should read the Prospectus for the Fund into which you are
exchanging. For further information on the exchange privilege, please call a
Westcore Investor Service Representative at 1-800-392-CORE (2673).
Westcore Trust may modify or terminate the exchange privilege, but will not
materially modify or terminate it without giving shareholders 60 days' notice.
- -----------------
* Compass Capital Money Market Portfolio is a no-load money market fund
advised by PNC Asset Management Group, Inc. and sub-advised by PNC
Institutional Management Corporation and distributed by Compass
Distributors, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BY TELEPHONE - Call 1-800-392-CORE (2673) and give
the account name, account number, name
of Fund and amount of exchange ($1,000
minimum).
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BY MAIL - Send a written request to Westcore
Trust, P.O. Box 8319, Boston, MA
02266-8319. Submit any share
certificates being exchanged, endorsed
for transfer.
- YOUR WRITTEN REQUEST MUST:
- be signed by each account owner; a
signature guarantee is required for
exchanges between accounts with unlike
registrations.
- state the number or dollar
amount of shares to be
exchanged ($1,000 minimum);
- include your account number
and tax identification number.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
You may redeem your Fund shares on any business day. If you have any questions
on how to redeem your shares, please call a Westcore Investor Service
Representative at 1-800-392-CORE (2673).
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<PAGE>
Redemption proceeds generally will be sent by check to the shareholder(s) of
record at the address of record within 7 days after receipt of a valid
redemption request. If you have authorized the wire redemption service, your
redemption proceeds will be wired directly into your designated bank account
normally within 3 business days after receipt of a valid redemption request. If
you have selected the Systematic Withdrawal Plan, your redemption proceeds will
be electronically transferred to your designated bank account within 7 days
after withdrawal. If the shares being redeemed were purchased by check,
telephone or through the Automatic Investment Program, the Trust may delay
the mailing of your redemption check for up to 15 days from the date of
purchase to allow the purchase to clear.
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- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BY TELEPHONE - Call 1-800-392-CORE (2673) and give the
(available only if you account name, account number, name of Fund
checked the appropriate and amount of redemption ($1,000 minimum).
box on the Account
Application)
- Not available for
retirement accounts - If you do not have and would like to add
or shares held in the telephone redemption feature, send a
certificate form. written request to Westcore Trust, P.O.
Box 8319, Boston, MA 02266-8319. The request
must be signed (and signatures guaranteed)
by each account owner.
- The Trust may impose a dollar limit on
telephone redemptions.
- --------------------------------------------------------------------------------
IN PERSON - During normal business hours, bring your
written request to Westcore Trust, 370
Seventeenth Street, Suite 2700,
Denver, CO 80202.
- --------------------------------------------------------------------------------
BY MAIL - Send a written request to Westcore Trust,
P.O. Box 8319, Boston, MA 02266-8319.
Submit any share certificates being
redeemed, endorsed for transfer.
- Your written request must:
- be signed by each account owner; a
signature guarantee is required for any
redemption over $10,000 or any redemption
being mailed to any other address or payee
other than that which is on record.
- state the number or dollar amount of
shares to be redeemed;
- include your account number and tax
identification number.
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BY WIRE - Call 1-800-CORE (2673) or write Westcore
(available only if you Trust, P.O. Box 8319, Boston, MA 02266-
checked the appropriate 8319. You will need to provide: account
box in the Account name and number; name of Fund; and amount
Application) of redemption ($1,000 minimum per
transaction if made by telephone).
- If you have already opened your account and
would like to have the wire redemption
feature, send a written request to Westcore
Trust, P.O. Box 8319, Boston, MA 02266-
8319. The request must be signed (and
signatures guaranteed) by each account
owner.
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BY SYSTEMATIC WITHDRAWAL - Request quarterly or monthly withdrawals in
any multiple of $50. Call 1-800-392-CORE
(2673) for more information or a form.
- Participation requires a minimum of $10,000
in a Fund in order to initiate this Plan.
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<PAGE>
PRICE OF FUND SHARES
All purchases, redemptions and exchanges will be processed at the net asset
value ("NAV") next calculated after your request and payment is received in
proper form. A Fund's NAV is determined by the Administrators as of the close
of regular trading on the New York Stock Exchange (the "NYSE"), currently 4:00
p.m. (Eastern time), on each day that the NYSE is open. In order to receive a
day's price, your order must be received by the close of regular trading on the
NYSE on that day. If not, your request will be processed at the Fund's NAV at
the close of regular trading on the next day. To be in proper form, your order
must include your account number and must state the Fund shares you wish to
purchase, redeem or exchange.
In the case of participants in certain employee benefit plans investing in
certain Funds, their purchase orders will be processed at the NAV next
determined after the Service Organization acting on their behalf receives the
purchase order.
A Fund's NAV is calculated by dividing the total value of its investments and
other assets, less liabilities, by the total number of shares outstanding. Each
Fund's investments are valued at market value or, where market quotations are
not readily available, at fair value as determined in good faith by or under the
direction of the Board of Trustees. Debt securities with maturities of 60 days
or less are valued at amortized cost, which generally equals market value.
ACCOUNTS OPENED THROUGH A SERVICE ORGANIZATION
You may purchase or sell Fund shares through an account you have with Denver
Investment Advisors, any qualified broker/dealer, any bank or any other
institution (your "Service Organization"). Your Service Organization may charge
transaction fees on the purchase and/or sale of Fund shares and may require
different minimum initial and subsequent investments than Westcore. Service
Organizations may also impose other charges, restrictions or cut-off times
different from those applicable to shareholders who invest in Westcore directly.
A Service Organization may receive fees from the Trust or Denver Investment
Advisors for providing services to the Trust or its shareholders. Such services
may include, but are not limited to, shareholder assistance and communication,
transaction processing and settlement, account set-up and maintenance, tax
reporting and accounting. In certain cases, a Service Organization may elect to
credit against the fees payable by its customers all or a portion of the fees
received from the Trust or Denver Investment Advisors with respect to their
customers' assets invested in the Trust. The Service Organization, rather than
you, may be the shareholder of record of your Fund shares. Westcore is not
responsible for the failure of any Service Organization to carry out its
obligations to its customers.
GENERAL ACCOUNT POLICIES
If your account balance falls below $750 as a result of redemption and you do
not increase the amount to at least $750 within 60 days after notice, your
account may be closed and the proceeds sent to you.
You may choose to initiate certain transactions by telephone. Westcore Funds
and their agents will not be responsible for any losses resulting from
unauthorized transactions when procedures designed to verify the identity of
the caller are followed. It may be difficult to reach the Funds by telephone
during periods of unusual market activity. If this happens, you may redeem
your shares by mail as described above.
Westcore Funds or your Service Organization will send you a statement of your
account quarterly and a confirmation after every transaction that affects your
share balance or your account registration. A statement with tax information
will be mailed to you by January 31 of each year and filed with the Internal
Revenue Service. At least twice a year, you will receive financial statements
in the form of Annual and Semi-Annual Reports of the Funds.
-24
<PAGE>
Duplicate mailings of Fund materials to shareholders who reside at the same
address may be eliminated.
The Funds will issue share certificates upon written request only.
OTHER INFORMATION
DISTRIBUTIONS AND TAXES
A Fund's income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as income dividends. A Fund realizes
capital gains whenever it sells securities for a higher price than it paid for
them. Net realized long-term gains are paid to shareholders as capital gain
dividends. A dividend will reduce the net asset value of a Fund share by the
amount of the dividend.
DISTRIBUTION SCHEDULE
When you open an account, you must specify on your Account Application whether
you want to receive your distributions in cash or reinvest them in the
distributing Fund or another Fund. You may change your distribution option at
any time by writing or calling 1-800-392-CORE (2673).
INCOME DIVIDENDS CAPITAL GAINS
---------------- -------------
Equity Funds Declared and paid Declared and paid
quarterly* in December
Bond Funds Declared and paid Declared and paid
monthly in December
____________________
* The Westcore MIDCO Growth Fund distributes income dividends in
December only.
TAXES
FEDERAL
As with any investment, you should consider the tax implications of an
investment in the Funds. The following briefly summarizes some of the
important tax considerations generally affecting the Funds and their
shareholders. You should consult your tax adviser with specific reference to
your own tax situation, including the applicability of any state and local
taxes. You will be advised at least annually regarding the federal tax
treatment of dividends paid to you.
Dividends paid by the Westcore Equity Funds and the Westcore Long-Term Bond
and Intermediate-Term Bond Funds will be subject to federal income tax,
whether they were paid in cash or reinvested in additional shares. Federal
income taxes for dividends paid to an IRA or other qualified retirement plan
are generally deferred. Income dividends will qualify for the dividends
received deduction for corporations to the extent of the total qualifying
dividends received by the distributing Fund from domestic corporations for
the year.
The Colorado Tax-Exempt Fund anticipates that substantially all of its income
dividends will be exempt from federal income tax (these dividends are known
as "exempt-interest dividends") although any dividends derived from
occasional taxable investments will be subject to federal income tax. In
addition, shareholders must treat the portion of dividends paid by the Fund
derived from interest received on certain private activity bonds as an item
of tax preference for purposes of the federal alternative minimum tax.
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<PAGE>
Any capital gain dividend paid by a Fund will be taxable as a long-term
capital gain, no matter how long you have held the Fund's shares.
Any dividends declared by a Fund in October, November or December and payable
to shareholders of record during those months will be deemed to have been
paid by the Fund and received by shareholders on December 31 of the same year
even if the amounts are actually paid in January of the following year.
If you purchase Fund shares before the record date of a dividend, the entire
amount of the dividend, although in effect a return of capital, will be
subject to federal income taxes.
You may realize a taxable gain or loss when you redeem, transfer or exchange
shares of a Fund. If you hold shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
those shares will be treated as a long-term capital loss to the extent of the
earlier distribution.
Because each Fund intends to qualify as a "regulated investment company"
under the Internal Revenue Code (the "Code"), each Fund generally will not be
required to pay federal income taxes on its income and capital gains.
COLORADO STATE TAXES
Shareholders who are subject to Colorado state income tax will not be subject
to such tax on dividends paid by the Westcore Colorado Tax-Exempt Fund to the
extent that they qualify as exempt-interest dividends of a regulated
investment company under Section 852(b)(5) of the Code and are attributable
to any of the following:
- obligations of the State of Colorado or its political subdivisions
issued on or after May 1, 1980;
- obligations of the State of Colorado or its political subdivisions
issued prior to May 1, 1980 to the extent such interest is
specifically exempt from income taxation under the laws of Colorado
authorizing the issuance of such obligations;
- obligations of possessions and territories of the United States to the
extent federal law exempts such obligations from state taxes; or
- obligations of the United States or its possessions to the extent such
obligations are subject to federal income tax.
However, to the extent distributions are received that are not attributable to
the sources described above, such as distributions of short or long-term capital
gain, they will not be exempt from Colorado income tax.
There are no municipal income taxes in Colorado. Moreover, because shares of
the Westcore Colorado Tax-Exempt Fund are intangibles, they are not subject to
Colorado property tax. Shareholders of the Westcore Colorado Tax-Exempt Fund
should consult their tax advisers about other state and local tax consequences
of their investment in the Fund.
PERFORMANCE REPORTING
This section will help you understand various terms that are commonly used to
describe a Fund's performance. You may see references to these terms in
newsletters, advertisements and in media articles. Newsletters,
advertisements and other publications may include comparisons of a Fund's
performance to the performance of various indices and investments for which
reliable performance data are available and to averages, performance rankings
or other information compiled by recognized mutual fund statistical services.
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<PAGE>
AGGREGATE TOTAL RETURN -- reflects income and capital
appreciation/depreciation and establishes a total percentage change
in the value of an investment in a Fund over a specified measuring period.
AVERAGE ANNUAL TOTAL RETURN -- represents the average annual percentage change
in the value of an investment in a Fund over a specified measuring period. It
is calculated by taking the aggregate total return for the measuring period and
determining what constant annual return would have produced the same aggregate
return. Average annual returns for more than one year tend to smooth out
variations in a Fund's return and are not the same as actual annual results.
Both methods of calculating total return assume that you have reinvested
dividends made by a Fund during the period in Fund shares.
YIELD -- shows the rate of income a Fund earns on its investments as a
percentage of its share price. It is calculated by dividing the Fund's net
investment income for a 30-day period by the product of the average daily number
of shares entitled to receive dividends and the Fund's NAV per share at the end
of the 30-day period. The result is then annualized. This represents the
amount you would earn if you remained invested in a Fund for a year and the Fund
continued to have the same yield for the year. Yield does not include changes
in NAV.
TAX-EQUIVALENT YIELD -- of the Westcore Colorado Tax-Exempt Fund shows the level
of the taxable yield needed to produce an after-tax yield equivalent to the
Fund's tax-free yield. It is calculated by increasing the Fund's yield by the
amount necessary to reflect the payment of federal and Colorado personal income
taxes at a stated tax rate. The Fund's tax-equivalent yield will always be
higher than its yield.
Any fees charged by your Service Organization directly to your account in
connection with an investment in a Fund will not be included in the Fund's
calculations of yield and/or total return.
Performance quotations of a Fund represent its past performance, and you
should not consider them representative of future results. The investment
return and principal value of an investment in a Fund will fluctuate so that
your shares, when redeemed, may be worth more or less than their original
cost. Since performance will fluctuate, you cannot necessarily compare an
investment in Fund shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed
yield for a stated period of time.
MANAGEMENT OF THE FUNDS
BOARD OF TRUSTEES
The business and affairs of each Fund are managed under the direction of the
Trust's Board of Trustees. The Statement of Additional Information contains
information about the Board of Trustees.
INVESTMENT ADVISER
Denver Investment Advisors LLC ("Denver Investment Advisors") serves as the
investment adviser to the Funds. The Investment Adviser has its principal
offices at 1225 17th Street, 26th Floor, Denver, Colorado 80202. As of
September 1, 1996, Denver Investment Advisors had approximately $9.7 billion
in assets under active management. In addition to the Trust, Denver
Investment Advisors also advises or sub-advises two other investment company
portfolios, the Blue Chip Value Fund, Inc. and the PaineWebber Managed Assets
Trust-PaineWebber Capital Appreciation Fund.
Subject to the overall authority of the Trust's Board of Trustees, Denver
Investment Advisors has agreed to provide a continuous investment program for
the Funds, including investment research and management. These management
responsibilities include, among other things, furnishing economic and
statistical information as requested by the Trust's trustees and officers.
The Investment Adviser makes investment decisions for the Funds and places
orders for all purchases and sales of the Funds' portfolio securities.
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<PAGE>
INVESTMENT PERSONNEL
Todger Anderson, CFA, President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore MIDCO Growth
Fund since its inception. Mr. Anderson has been a portfolio manager with
Denver Investment Advisors and its predecessor, Denver Investment Advisors,
Inc., since 1975. He received his B.A. from Colby College and his M.B.A.
from the University of Denver.
Varilyn K. Schock, CFA, a Vice President and Director of Quantitative
Strategies with Denver Investment Advisors, has been primarily responsible
for the day-to-day management of Westcore Blue Chip Fund since 1991 and
Westcore Small-Cap Opportunity Fund since its inception. Ms. Schock has been
with Denver Investment Advisors and its predecessor, Denver Investment
Advisors, Inc., since 1984 and has been a portfolio manager with the company
since 1987. She received her B.A. from the University of Denver.
Milford H. Schulhof, II, a Vice President of Denver Investment Advisors, has
been primarily responsible for the day-to-day management of Westcore Growth
and Income Fund since October 1995. Mr. Schulhof has been a Vice President
and portfolio manager with Denver Investment Advisors and its predecessor,
Denver Investment Advisors, Inc. since 1985. He received his B.S.B.A. from
Drake University and his M.B.A. from the University of Denver.
John R. Cormey, CFA, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore Long-Term
Bond Fund and Intermediate-Term Bond Fund since 1991. Prior to managing
these Funds, Mr. Cormey was Vice President and Director of Quantitative
Research for the Investment Adviser. Mr. Cormey joined the company as a
security analyst in 1972. He received his B.S. from the University of
Colorado.
Robert O. Lindig is a Vice President of Denver Investment Advisors. He has
been primarily responsible for the day-to-day management of the Westcore
Colorado Tax-Exempt Fund since its inception. Mr. Lindig has 34 years
experience in the institutional bond market. Prior to his employment with
the Investment Adviser, Mr. Lindig was Vice President and Trust Officer of
First Interstate Bank of Denver, N.A. Mr. Lindig received his B.A. degree
from Dartmouth College and his M.B.A. from Columbia University.
BREAKDOWN OF MANAGEMENT EXPENSES AND EXPENSE LIMITS
Each Fund pays the Investment Adviser an advisory fee under the advisory
agreement. The fees are set forth below and are expressed as an annual
percentage of a Fund's average daily net assets:
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- --------------------------------------------------------------------------------
EFFECTIVE
ADVISORY FEES
CONTRACTUAL FOR THE YEAR
ADVISORY ENDED
FEES MAY 31, 1996
FEE SCHEDULE (%) (%)
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- --------------------------------------------------------------------------------
Westcore MIDCO Growth Fund .65% .65%
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Westcore Blue Chip Fund .65% .55%
- --------------------------------------------------------------------------------
Westcore Growth and Income Fund .65% .47%
- --------------------------------------------------------------------------------
Westcore Small-Cap Opportunity Fund 1.00%(1) .21%
- --------------------------------------------------------------------------------
Westcore Long-Term Bond Fund .45% .36%
- --------------------------------------------------------------------------------
Westcore Intermediate-Term Bond Fund .45% .39%
- --------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund .50% .00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Although the fee payable by Westcore Small-Cap Opportunity Fund is higher
than the fee payable by the other Funds, the Investment Adviser believes
that it is within the range of fees payable by funds with comparable
investment objectives and policies.
The Investment Adviser may from time to time voluntarily waive all or any
portion of these fees and reimburse expenses of a Fund; however, it may modify
or discontinue this practice at any time.
CO-ADMINISTRATORS
ALPS and Denver Investment Advisors serve as co-administrators to the Funds (the
"Administrators"). As Administrators, they have agreed to: assist in
maintaining the Funds' office; furnish the Funds with clerical and certain other
services required by them; compile data for and prepare notices and semi-annual
reports to the SEC; prepare filings with state securities commissions;
coordinate federal and state tax returns; monitor each Fund's expense accruals;
monitor compliance with each Fund's investment policies and limitations; and
generally assist in each Fund's operations. The Administrators are entitled to
receive a fee from each Fund for administrative services, computed daily and
payable monthly, at the aggregate annual rate of .30% of each Fund's average
daily net assets. The Administrators may voluntarily waive all or any portion
of their administration fees from time to time.
Pursuant to a separate agreement, ALPS has agreed to maintain the financial
accounts and records of each Fund and to compute the net asset value and certain
other financial information relating to each Fund.
The Trust has agreed to reimburse Denver Investment Advisors for costs
incurred by Denver Investment Advisors for providing recordkeeping and
sub-accounting services to persons who beneficially own shares of a Fund
through omnibus accounts ("Beneficial Shares"). The amount reimbursed with
respect to a Fund will not exceed the lesser of the costs actually borne by
Denver Investment Advisors or the effective rate for transfer agency services
borne by a Fund without taking into account Beneficial Shares and applying
such rate to such Beneficial Shares. The Administrators are also authorized
to make payments from their administrative fees or other sources to persons
for providing services to a Fund or its shareholders.
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TRANSFER AGENT
State Street Bank and Trust Company, P.O. Box 1713, Boston, Massachusetts
02015, provides the Funds with transfer agency services in return for
compensation.
OTHER INFORMATION CONCERNING THE TRUST AND ITS SHARES
Westcore Trust was originally organized as a Maryland corporation on January
11, 1982. It was reorganized as a Massachusetts business trust on December
10, 1985.
The Trust's Amended and Restated Declaration of Trust authorizes the Board of
Trustees to classify or reclassify any unissued shares of the Trust into one
or more classes of shares. Pursuant to such authority, the Board has
authorized the issuance of an unlimited number of shares representing
interests in the Funds. No other classes or series of shares are currently
offered.
SHAREHOLDER MEETINGS
Westcore Trust does not presently intend to hold meetings of shareholders
except as required by the 1940 Act or other applicable law. Under the 1940
Act, the Board of Trustees is required to call a meeting of shareholders for
the purpose of voting upon the removal of any trustee or trustees when
requested in writing to do so by the record holders of at least 10% of the
outstanding shares. If a shareholders meeting is held, you will be entitled
to one vote for each full share you hold and proportionate fractional votes
for fractional shares you hold. It is contemplated that the shareholders of
each Fund will vote separately by Fund on matters pertaining to its
investment advisory agreement and any changes in its fundamental investment
limitations.
As of August 29, 1996, Wells Fargo Bank and its affiliated banks possessed,
on behalf of their underlying customer accounts, voting or investment power
with respect to a majority of all of the outstanding shares of Westcore
Trust, and the Bank of New York held as Trustee 29.61% of the outstanding
shares of the Westcore Small-Cap Opportunity Fund, and, therefore, under
the 1940 Act, they may be deemed to be a controlling person of the Trust
and Fund, respectively.
INQUIRIES
Please write or call Westcore Trust at the address or telephone number listed
on the cover of this Prospectus with any inquiries you may have regarding the
Funds.
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<PAGE>
SUPPLEMENTAL INFORMATION
INFORMATION ON INVESTMENT POLICIES
AND ADDITIONAL RISK FACTORS
Denver Investment Advisors uses a range of different investments and investment
techniques in seeking to achieve a Fund's investment objective. All Funds do
not use all of the investments and investment techniques described below. The
Westcore MIDCO Growth, Blue Chip, Growth and Income and Small-Cap Opportunity
Funds are referred to collectively as the "Westcore Equity Funds." The Westcore
Long-Term Bond, Intermediate-Term Bond and Colorado Tax-Exempt Funds are
referred to collectively as the "Westcore Bond Funds."
MUNICIPAL OBLIGATIONS (WESTCORE BOND FUNDS)
Municipal Obligations include: (i) "general obligation" securities which are
secured by the issuer's full faith, credit and taxing power; (ii) revenue
securities which are payable only from the revenues derived from a particular
facility or other specific revenue source such as the user of the facility
being financed; (iii) "moral obligation" securities which are normally issued
by special purpose public authorities; and (iv) private activity bonds (such
as bonds issued by industrial development authorities) which are usually
revenue securities issued by or for public authorities to finance a
privately-operated facility.
In many cases, the Internal Revenue Service has not ruled on whether the
interest received on a Municipal Obligation is tax-exempt and, accordingly,
purchases of these securities are based on the opinion of bond counsel to the
issuers at the time of issuance. The Funds and the Investment Adviser rely
on these opinions and will not review the bases for them.
SPECIAL CONSIDERATIONS REGARDING INVESTMENT IN COLORADO OBLIGATIONS (WESTCORE
COLORADO TAX-EXEMPT FUND)
The Fund normally invests at least 65% of its total assets in Colorado
Obligations. If Colorado or any of its political subdivisions suffers
serious financial difficulties such that its ability to pay its obligations
might be jeopardized, the ability of such entities to market their
securities, and the value of the Fund, could be adversely affected.
U.S. GOVERNMENT OBLIGATIONS (ALL WESTCORE FUNDS)
Each Fund may invest in obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Direct obligations of the
U.S. government such as Treasury bills, notes and bonds are supported by its
full faith and credit. Indirect obligations issued by federal agencies and
government sponsored entities generally are not backed by the full faith and
credit of the U.S. Treasury. Some of these indirect obligations may be
supported by the right of the issuer to borrow from the Treasury; others are
supported by the discretionary authority of the U.S. government to purchase
the agency's obligations; still others are supported only by the credit of
the instrumentality.
MONEY MARKET INSTRUMENTS (ALL WESTCORE FUNDS)
Each Fund may invest from time to time in money market instruments such as
bank obligations, commercial paper and corporate bonds with remaining
maturities of 13 months or less. Bank obligations include bankers'
acceptances, certain negotiable certificates of deposit and time deposits
such as U.S. dollar-denominated instruments issued or supported by the credit
of U.S. or foreign banks. Commercial paper is a short-term debt obligation
with a maturity ranging from 1 to 270 days issued by banks, corporations and
other borrowers.
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VARIABLE AND FLOATING RATE INSTRUMENTS (WESTCORE BOND FUNDS)
These Funds may purchase variable and floating rate demand instruments,
including variable amount master demand notes, issued by corporations,
industrial development authorities and governmental entities.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS (ALL WESTCORE FUNDS)
In a repurchase agreement, a Fund agrees to purchase portfolio securities
subject to the seller's agreement to repurchase them at a mutually agreed
upon date and price. Repurchase agreements involve the risk that the seller
will fail to repurchase the securities, as agreed. In that event, the Fund
will bear the risk of possible loss due to adverse market action or delays in
liquidating the underlying obligations. Repurchase agreements are considered
to be loans under the 1940 Act.
Each Fund may borrow money for temporary purposes by entering into reverse
repurchase agreements. Under these agreements, a Fund sells portfolio
securities to financial institutions and agrees to buy them back later at an
agreed upon time and price. Reverse repurchase agreements involve the risk
of counterparty default and possible loss of collateral held by the
counterparty.
LOWER-RATED SECURITIES (WESTCORE MIDCO GROWTH, GROWTH AND INCOME AND
SMALL-CAP OPPORTUNITY FUNDS)
Investments in issuers of securities rated below investment grade (commonly
known as "junk bonds") are considered to be more speculative than securities
rated investment grade and higher. There are particular risks associated
with these securities, including: (a) the relative youth and growth of the
market; (b) their greater sensitivity to interest rate and economic changes
which could negatively affect their value and the ability of issuers to make
principal and interest payments; (c) the relatively low trading market
liquidity for the securities which may adversely affect the price at which
they could be sold; (d) a greater risk of default or price changes due to
changes in the issuer's creditworthiness; and (e) the adverse impact that
legislation restricting lower-rated securities may have on their market.
SECURITIES LENDING (ALL WESTCORE FUNDS, OTHER THAN COLORADO TAX-EXEMPT FUND)
These Funds may lend their portfolio securities to institutional investors as
a means of earning additional income. Securities loans present risks of
delay in receiving collateral or in recovering the securities loaned or even
a loss of rights in the collateral if the borrower of the securities fails
financially. A loan will not be made if, as a result, the total amount of a
Fund's outstanding loans exceeds 30% of its total assets.
RESTRICTED SECURITIES (ALL WESTCORE FUNDS)
No Fund will knowingly invest more than 15% of the value of its net assets in
securities that are illiquid. Illiquid securities include repurchase
agreements, securities loans and time deposits that are not terminable within
7 days, certain municipal leases and certain securities that are not
registered under the securities laws. Pursuant to guidelines adopted by the
Board of Trustees, the Investment Adviser may determine that certain
securities that are not registered under the Securities Act of 1933 are not
illiquid and therefore are not subject to this 15% limitation. However,
there can be no assurance that a liquid market will exist for any security at
a particular time.
In addition, the purchase of such securities could have the effect of
increasing the level of illiquidity of the Funds during periods that
qualified institutional buyers become uninterested in purchasing these
restricted securities.
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CONVERTIBLE SECURITIES (ALL WESTCORE FUNDS, OTHER THAN BLUE CHIP AND COLORADO
TAX-EXEMPT FUNDS)
These Funds may invest in convertible securities, including bonds and
preferred stocks, that may be converted into common stock at a specified
price or conversion ratio. The Funds use the same research intensive
approach and valuation techniques for selecting convertible securities as are
used for the selection of common stocks.
The value of a convertible security is influenced by both interest rates and
the value of the underlying common stock. Investments in convertible
securities, including in particular those with lower ratings, involve the
risk that the securities, when converted, may be worth less than the
prestated price.
ASSET-BACKED SECURITIES (WESTCORE BOND FUNDS, OTHER THAN COLORADO TAX-EXEMPT
FUND)
These Funds may purchase asset-backed securities which are securities backed
by installment sale contracts, credit card receivables or other assets. The
yield characteristics of asset-backed securities differ from traditional debt
securities. A major difference is that the principal amount of the
obligations may be prepaid at any time because the underlying assets (I.E.,
loans) generally may be prepaid at any time. The prepayment rate is
primarily a function of current market rates and conditions. In periods of
rising interest rates, the rate of prepayment tends to increase. During
periods of falling interest rates, the reinvestment of prepayment proceeds by
a Fund will generally be at a lower rate than the rate on the prepaid
obligation. Prepayments may also result in some loss of a Fund's principal
investment if any premiums were paid. As a result of these yield
characteristics, some high-yielding asset-backed securities may have less
potential for growth in value than conventional bonds with comparable
maturities. These characteristics may result in a higher level of price
volatility for these assets under certain market conditions.
Asset-backed securities are subject to greater risk of default during periods
of economic downturn than conventional debt instruments and the holder
frequently has no recourse against the entity that originated the security.
In addition, the secondary market for certain asset-backed securities may not
be as liquid as the market for other types of securities which could result
in the Funds' experiencing difficulty in valuing or liquidating such
securities.
MORTGAGE-RELATED SECURITIES (WESTCORE BOND FUNDS, OTHER THAN COLORADO
TAX-EXEMPT FUND)
These Funds may invest in mortgage-related securities issued or guaranteed by
U.S. government agencies and private issuers. They may include mortgage
pass-through certificates, which provide the holder with a pro rata interest
in the underlying mortgages, and collateralized mortgage obligations
("CMOs"), which provide the holder with a specified interest in the cash flow
of a pool of underlying mortgages or other mortgage-backed securities.
Issuers of CMOs frequently elect to be taxed as pass-through entities known
as real estate mortgage investment conduits ("REMICs"). CMOs are issued in
multiple classes, each with a specified fixed or floating interest rate and a
final distribution date.
Mortgage-related securities involve risks similar to those described above
under "Asset-Backed Securities" including prepayment risks. In addition,
CMOs may exhibit more price volatility and interest rate risk than other
types of mortgage-related obligations.
OPTIONS AND FUTURES (ALL WESTCORE FUNDS, OTHER THAN COLORADO TAX-EXEMPT FUND)
These Funds may buy put options and call options and write covered call and
secured put options on securities and securities indices. A put option gives
the buyer the right to sell, and the writer the obligation to buy, the
underlying security at the stated exercise price at any time prior to the
expiration date of the option. Writing a secured put option means that a
Fund maintains in a segregated account with its custodian cash or U.S.
Government securities in an amount not less than the exercise price of the
option at all times during the option period. A call option gives the buyer
the right to buy the underlying security at the stated exercise price at any
time prior to the expiration of the option. Writing a covered call option
means that a Fund owns or has the
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right to acquire the underlying security subject to call at the stated
exercise price at all times during the option period. Options involving
securities indices provide the holder with the right to make or receive a
cash settlement upon exercise of the option based on movements in the index.
Options purchased by a Fund will not exceed 5%, and options written by a Fund
will not exceed 25%, of its net assets. All options will be listed on a
national securities exchange and issued by the Options Clearing Corporation.
These Funds may also invest to a limited extent in futures contracts and
options on futures contracts in order to reduce their exposure to movements
of security prices pending investment, for hedging purposes or to maintain
liquidity. Futures contracts obligate a Fund, at maturity, to take or make
delivery of certain securities or the cash value of a contract or securities
index. Each Fund may also purchase and sell call and put options on futures
contracts traded on an exchange or board of trade.
In accordance with regulations of the Commodity Futures Trading Commission, a
Fund's commodities transactions must constitute bona fide hedging or other
permissible transactions. In addition, a Fund may not engage in commodities
transactions if the sum of the amount of initial margin deposits and premiums
paid for related options, other than for bona fide hedging transactions,
would exceed 5% of its assets (after certain adjustments). In connection
with a position in a futures contract or related option, a Fund will create a
segregated account of liquid high-grade assets or will otherwise cover its
position in accordance with SEC requirements.
Options trading and futures transactions are highly specialized activities
and carry greater than ordinary investment risks. The primary risks
associated with the use of options and futures contracts are: (1) options
and futures may fail as hedging techniques where the price movements of the
securities underlying them do not follow the price movements of the portfolio
securities subject to the hedge; (2) a Fund will likely be unable to control
losses by closing its position in these investments where a liquid secondary
market does not exist; (3) losses from investing in futures transactions due
to unanticipated market movements are potentially unlimited; and (4) gains
and losses on investments in options and futures depend on the Investment
Adviser's ability to predict correctly the direction of securities prices,
interest rates and other economic factors.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS (WESTCORE EQUITY FUNDS, OTHER THAN BLUE
CHIP FUND)
Because these Funds may buy and sell securities and receive amounts
denominated in currencies other than the U.S. dollar, they may enter into
currency exchange transactions from time to time. A Fund will purchase
foreign currencies on a "spot" or cash basis at the prevailing rate in the
foreign currency exchange market or enter into forward foreign currency
exchange contracts. Under these contracts the Fund would agree with a
financial institution to purchase or sell a stated amount of a foreign
currency at a specified price, with delivery to take place at a specified
date in the future. Because there is a risk of loss to a Fund if the other
party does not complete the transaction, these contracts will be entered into
only with parties approved by the Fund's Board of Trustees.
A Fund may maintain "short" positions in forward foreign currency exchange
transactions whereby the Fund would agree to exchange currency that it
currently did not own for another currency at a future date and at a
specified price. This would be done in anticipation of a decline in the value
of the currency sold short relative to the other currency and not for
speculative purposes. In order to ensure that the short position is not used
to achieve leverage with respect to a Fund's investments, the Fund would
establish with its custodian a segregated account consisting of cash or
certain liquid high-grade debt securities equal in value to the market value
of the currency involved.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (ALL WESTCORE FUNDS)
Each Fund may purchase or sell securities on a "when-issued" or "forward
commitment" basis which involves a commitment by the Fund to purchase or sell
particular securities with payment and delivery taking place at a future
date. These transactions permit a Fund to lock-in a price or yield on a
security it owns or intends to purchase, regardless of future changes in
interest rates. The Fund would bear the risk, however, that the price or
yield obtained in a transaction may be less favorable than the price or yield
available in the market when the
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delivery occurs. Because a Fund is required to set aside cash or liquid
high-grade debt obligations in a segregated account to satisfy these purchase
commitments, its liquidity and ability to manage its portfolio might be
affected during periods in which its commitments exceed 25% of the value of
its assets. The Funds do not intend to engage in when-issued purchases and
forward commitments for speculative purposes.
SECURITIES ISSUED BY OTHER INVESTMENT COMPANIES (ALL WESTCORE FUNDS)
Each Fund may invest in securities issued by other investment companies
subject to the requirements of applicable securities laws. When a Fund
invests in another investment company, it pays a pro rata portion of the
advisory and other expenses of that company as a shareholder of that company.
These expenses would be in addition to the Fund's own expenses.
FOREIGN SECURITIES (ALL WESTCORE FUNDS, OTHER THAN BLUE CHIP FUND)
There are risks and costs involved in investing in securities of foreign
issuers (including foreign governments), which are in addition to the usual
risks inherent in U.S. investments. Investments in foreign securities may
involve higher costs than investments in U.S. securities, including higher
transaction costs as well as the imposition of additional taxes by foreign
governments. Foreign investments may involve further risks associated with
the level of currency exchange rates, less complete financial information
about the issuer, less market liquidity and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on interest income, the possible seizure or nationalization of foreign
holdings, the possible establishment of exchange controls or the adoption of
other governmental restrictions might adversely affect the payment of
principal and interest on foreign obligations. Moreover, foreign banks and
foreign branches of domestic banks may be subject to less stringent reserve
requirements and to different accounting, auditing and recordkeeping
requirements.
Investments in foreign securities may be in the form of American Depository
Receipts ("ADRs"), European Depository Receipts ("EDRs") and similar
securities. These securities may not be denominated in the same currency as
the securities they represent. ADRs are receipts typically issued by a
United States bank or trust company, and EDRs are receipts issued by a
European financial institution evidencing ownership of the underlying foreign
securities.
STAND-BY COMMITMENTS (WESTCORE COLORADO TAX-EXEMPT FUND)
The Fund may acquire stand-by commitments under which a dealer agrees to
purchase certain Municipal Obligations at the Fund's option at a price equal
to their amortized cost value plus interest. These commitments will be used
only to assist in maintaining the Fund's liquidity and not for trading
purposes.
PORTFOLIO TURNOVER (ALL WESTCORE FUNDS)
A Fund may sell a portfolio investment soon after it is purchased if the
Investment Adviser believes that a sale is consistent with the Fund's
investment objective. A high rate of portfolio turnover involves
correspondingly greater brokerage commission expenses, tax consequences
(including the possible realization of additional taxable capital gains and
income) and other transaction costs, which must be borne directly by the Fund
involved and ultimately by its shareholders.
RISK FACTORS ASSOCIATED WITH DERIVATIVE INSTRUMENTS (ALL WESTCORE FUNDS)
Each Fund may purchase certain "derivative" instruments as described above
under various headings. Derivative instruments are instruments that derive
value from the performance of underlying assets, interest or currency
exchange rates, or indices, and include, but are not limited to, futures
contracts, options, forward
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currency contracts and structured debt obligations (including collateralized
mortgage obligations and other types of asset-backed securities and various
floating rate instruments, including inverse floaters).
Derivative instruments present, to varying degrees, market risk that the
performance of the underlying assets, exchange rates or indices will decline;
credit risk that the dealer or other counterparty to the transaction will
fail to pay its obligations; volatility and leveraging risk that, if interest
or exchange rates change adversely, the value of the derivative instrument
will decline more rapidly than the assets, rates or indices on which it is
based; liquidity risk that a Fund will be unable to sell a derivative
instrument when it wants because of lack of market depth or market
disruption; pricing risk that the value of a derivative instrument (such as
an option) will not correlate exactly to the value of the underlying assets,
rates or indices on which it is based or may be difficult to determine
because of a lack of reliable objective information and an established
secondary market; and operations risk that loss will occur as a result of
inadequate systems and controls, human error or otherwise. Many of these
instruments are proprietary products that have been recently developed by
investment banking firms and it is uncertain how they will perform under
different economic and interest rate scenarios.
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APPENDIX
RATING CATEGORIES
BOND
RATING EXPLANATION
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
STANDARD & POOR'S AAA Highest rating; extremely strong capacity
RATINGS GROUP, DIVISION to pay interest and repay principal.
OF MCGRAW HILL
----------------------------------------------------
AA High quality; very strong capacity to pay
interest and repay principal.
----------------------------------------------------
A Strong capacity to pay interest and repay
principal; somewhat more susceptible to
the adverse effects of changing
circumstances and economic conditions.
----------------------------------------------------
BBB Adequate capacity to pay interest and
repay principal; normally exhibit adequate
protection parameters, but adverse
economic conditions or changing
circumstances more likely to lead to a
weakened capacity to pay interest and
repay principal than for higher rated
bonds.
----------------------------------------------------
BB, B, Predominantly speculative with respect to
CCC, CC, the issuer's capacity to meeting required
C interest and principal payments. BB-
lowest degree of speculation; C-the
highest degree of speculation. Quality
and protective characteristics outweighed
by large uncertainties or major risk
exposure to adverse conditions.
----------------------------------------------------
D In default.
----------------------------------------------------
----------------------------------------------------
MOODY'S INVESTORS Aaa Highest quality, smallest degree of
SERVICE, INC. investment risk.
----------------------------------------------------
Aa High quality; together with Aaa bonds,
they compose the high-grade bond group.
----------------------------------------------------
A Upper medium-grade obligations; some
favorable investment attributes.
----------------------------------------------------
Baa Medium-grade obligations; neither highly
protected nor poorly secured. Interest
and principal payments appear adequate for
the present but certain protective
elements may be lacking or may be
unreliable over any great length of time.
Some speculative characteristics.
----------------------------------------------------
Ba More uncertain, with speculative elements.
Questionable protection of interest and
principal payments.
----------------------------------------------------
B Lack characteristics of desirable
investment; potentially low assurance of
timely interest and principal payments or
maintenance of other contract terms over
time.
----------------------------------------------------
Caa Poor standing, may be in default; elements
of danger with respect to principal or
interest payments.
----------------------------------------------------
Ca Speculative in a high degree; may be in
default.
----------------------------------------------------
C Lowest-rated; extremely poor prospects of
ever attaining investment standing.
----------------------------------------------------
D In default.
----------------------------------------------------
----------------------------------------------------
