<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 26, 1997.
REGISTRATION NO. 2-75677
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 46 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 47 /X/
------------------------
WESTCORE TRUST
(Exact Name of Registrant as Specified in Charter)
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
Registrant's Telephone Number: (303) 623-2577
W. BRUCE MCCONNEL, III
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
------------------------
It is proposed that this filing will become effective (check appropriate
box):
/ / immediately upon filing pursuant to paragraph (b)
/X/ on October 1, 1997 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
------------------------
Registrant has previously registered an indefinite number of its shares,
which include shares of Class B-1, G-1, H-1, I-1, J-1, S, and X-1 under the
Securities Act of 1933, pursuant to Rule 24f-2 under the Investment Company Act
of 1940. Registrant's Rule 24f-2 Notice for its fiscal year ended May 31, 1997
was filed on July 29, 1997.
------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT OF SHARES OFFERING AGGREGATE OFFERING REGISTRATION FEE
TITLE OF SECURITIES BEING REGISTERED BEING REGISTERED PRICE/SHARE PRICE (1)
<S> <C> <C> <C> <C>
Shares of Beneficial Interest........ 17,548,456 NAV (2) $307,859,606 $0
</TABLE>
(1) Registrant had actual aggregate redemptions of $402,189,098 for its fiscal
year ended May 31, 1997; has used $94,329,492 for reductions pursuant to
Rule 24f-2(c) under the 1940 Act and has previously used no available
redemptions for reductions pursuant to Rule 24e-2(a) of the 1940 Act during
the current year. Registrant elects to use redemptions in the aggregate
amount of $307,859,606 (17,548,456 shares of beneficial interest) for
reductions in its current amendment. No fee is required.
(2) The proposed maximum offering price per share is net asset value. Inasmuch
as the EDGAR submission header requires an actual dollar amount for the
price per share, the figure of $20.90 represents the highest average
redemption price of the portfolios whose shares were redeemed.
The Registrant has registered an indefinite number of securities under the
Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 Notice for the
Registrant's fiscal year ended May 31, 1997 was filed on July 29, 1997.
<PAGE>
The Prospectus and Statement of Additional Information for the Cash Reserve
Fund is incorporated by reference to Post-Effective Amendment No. 43 to the
Registrant's Registration Statement on Form N-1A filed with the Securities and
Exchange Commission on July 14, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WESTCORE TRUST
MIDCO GROWTH FUND, BLUE CHIP FUND, GROWTH AND INCOME FUND,
SMALL-CAP OPPORTUNITY FUND, LONG-TERM BOND FUND,
INTERMEDIATE-TERM BOND FUND AND COLORADO TAX-EXEMPT FUND
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM N-1A ITEM PROSPECTUS CAPTION
- --------------------------------------------------------------- ----------------------------------------------------
<S> <C> <C>
1. Cover Page.......................................... Cover Page.
2. Synopsis............................................ Fund Highlights, and Expense Information.
3. Condensed Financial Information..................... Financial Highlights and Performance Reporting.
4. General Description of Registrant................... Cover Page, Fund Highlights, Fund Specifics,
Information on Investment Policies and Additional
Risk Factors, and Management of the Funds or for
the MIDCO Growth Fund Prospectus: Management of
the Fund.
5. Management of the Fund.............................. Management of the Funds or for the MIDCO Growth Fund
Prospectus: Management of the Fund.
5A. Management's Discussion of Fund Performance......... Information is contained in Registrant's Annual
Report.
6. Capital Stock and Other Securities.................. Investment Objectives and Policies, Distributions
and Taxes, How to Obtain Account Information, Fund
Prices and Fund Performance Information and Management
of the Funds or for the MIDCO Growth Fund
Prospectus: Management of the Fund.
7. Purchase of Securities Being Offered................ General Account Policies.
8. Redemption or Repurchase............................ How to Exchange Fund Shares, and How to Redeem Fund
Shares.
9. Pending Legal Proceedings........................... Inapplicable.
</TABLE>
(i)
<PAGE>
CROSS REFERENCE SHEET
MIDCO GROWTH FUND, BLUE CHIP FUND, GROWTH AND INCOME FUND,
SMALL-CAP OPPORTUNITY FUND, LONG-TERM BOND FUND,
INTERMEDIATE-TERM BOND FUND AND COLORADO TAX-EXEMPT FUND
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
FORM N-1A PART B ITEM INFORMATION CAPTION
- ---------------------------------------------------------------- -----------------------------------------------------
<S> <C> <C>
10. Cover Page........................................... Cover Page
11. Table of Contents.................................... Table of Contents
12. General Information and History...................... Description of Shares
13. Investment Objectives and Policies................... Investment Objectives and Policies
14. Management of Registrant............................. Management of the Funds
15. Control Persons and Principal Holders of
Securities......................................... Description of Shares
16. Investment Advisory and Other Services............... Management of the Funds
17. Brokerage Allocation and other Practices............. Investment Objectives and Policies
18. Capital Stock and Other Securities................... Net Asset Value; Additional Purchase and Redemption
Information; Description of Shares
19. Purchase, Redemption and Pricing of Securities Being
Offered
Additional Purchase and Redemption Information..... Net Asset Value
20. Tax Status........................................... Additional Information Concerning Taxes
21. Underwriters......................................... Not Applicable
22. Calculation of Performance Data...................... Additional Information on Performance Calculations
23. Financial Statements................................. Auditors; Financial Statements
</TABLE>
(ii)
<PAGE>
[Mountain logo]
WESTCORE FUNDS
EQUITY & BOND FUNDS PROSPECTUS
[Black and white photograph of mountain and trees]
WESTCORE EQUITY FUNDS WESTCORE BOND FUNDS
Westcore MIDCO Growth Fund Westcore Long-Term Bond Fund
Westcore Blue Chip Fund Westcore Intermediate-Term Bond Fund
Westcore Growth and Income Fund Westcore Colorado Tax-Exempt Fund
Westcore Small-Cap Opportunity Fund
-------------------------------------------------------------
Westcore Funds are managed by Denver Investment Advisors LLC.
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
October 1, 1997
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.
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, 1997, 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
below. The SAI is incorporated by reference into this Prospectus. The SEC
maintains a Web site (http://www.sec.gov) that contains the SAI, material
incorporated by reference, and other information regarding the Funds.
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.
[Black and white photograph
of mountain and trees]
WESTCORE
FUNDS
EQUITY AND BOND FUNDS
PROSPECTUS
- --------------------------------------------------------------------------------
East Beckwith Mountain (12,432-feet), West Elk Mountains, Colorado
Photographer: Eric Wunrow
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
Westcore Funds
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 more than 39 years of investment management experience
and Denver Investment Advisors currently manages approximately $10.4 billion in
assets for clients such as corporations, insurance companies and individuals.
ALPS Mutual Funds Services, Inc. ("ALPS") serves as the Westcore Funds'
distributor.
TABLE OF CONTENTS
[Black and white photograph of mountain and trees] PAGES
FUND INFORMATION
Fund Highlights........................................................... 2
Expense Information....................................................... 3
Financial Highlights...................................................... 4
Investment Objectives and Policies........................................ 11
Fund Specifics............................................................ 11
Westcore Equity Funds................................................. 11
Westcore Bond Funds................................................... 13
Fundamental Investment Limitations........................................ 17
HOW TO INVEST AND OBTAIN INFORMATION
How to Open and Add to Your Account....................................... 18
Minimum Investments....................................................... 19
How to Exchange Fund Shares............................................... 19
How to Redeem Fund Shares................................................. 20
How to Obtain Account Information, Fund Prices and Fund
Performance Information............................................... 21
General Account Policies.................................................. 21
OTHER INFORMATION
Distributions and Taxes................................................... 23
Performance Reporting..................................................... 25
Management of the Funds................................................... 26
Inquiries................................................................. 29
SUPPLEMENTAL INFORMATION
Information on Investment Policies and Additional Risk
Factors............................................................... 29
APPENDIX
Prior Performance of Investment Adviser for Westcore Growth
and Income Fund....................................................... A-1
Rating Categories......................................................... A-3
370 Seventeenth Street - Suite 3100 - Denver, Colorado 80202 -
1-800-392-CORE
(2673)
-1-
<PAGE>
- --------------------------------------------------------------------------------
[Mountain logo] Westcore Funds Fund Information
FUND HIGHLIGHTS [Black and white photograph of mountain and trees]
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
18.
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, WELL-ESTABLISHED COMPANIES.
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 COMPANIES WITH RELATIVELY SMALL
CAPITALIZATIONS.
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 OF 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 with other mutual funds or types of
investments.
-2-
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
FUNDS CONSERVATIVE MODERATE AGGRESSIVE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund --------------------
Westcore Blue Chip Fund --------------
Westcore Growth and Income Fund ---------------
Westcore Small-Cap Opportunity Fund ------------
Westcore Long-Term Bond Fund ---------
Westcore Intermediate-Term Bond Fund -----------------
Westcore Colorado Tax-Exempt Fund ------------
</TABLE>
-3-
<PAGE>
EXPENSE INFORMATION Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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.
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 "General Account Policies") 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
below.
For more complete descriptions of shareholder transaction expenses and
the Funds' operating expenses, see "General Account Policies" and "Management
of the Funds" in this Prospectus and the financial statements and related
notes included in the SAI.
- -------------------------
THIS EXAMPLE ILLUSTRATES THE EFFECT OF EXPENSES AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN.
[Black and white photograph of mountain and trees]
-4-
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Blue Growth and Small-Cap Long-Term Intermediate- Colorado
Growth Chip Income Opportunity Bond Term Bond Tax-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% 0.60%(1) 0.28%(1) 0.63%(1) 0.28%(1) 0.35%(1) 0.00%(1)
(after fee waivers)
..........................................................................................................................
12b-1 Fees None None None None None None None
..........................................................................................................................
All Other Expenses
0.49% 0.55%(2) 0.87%(2) 0.67%(2) 0.67%(2) 0.50%(2) 0.50%(2)
(after fee waivers and expense reimbursements)
..........................................................................................................................
Total Operating Expenses(3)
1.14% 1.15% 1.15% 1.30% 0.95% 0.85% 0.50%
(after fee waivers and expense reimbursements)
- -------------------------------------------------------------------------------------------------------------------------
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:
- -------------------------------------------------------------------------------------------------------------------------
One Year $12 $12 $12 $13 $10 $ 9 $ 5
..........................................................................................................................
Three Years 36 37 37 41 30 27 16
..........................................................................................................................
Five Years 63 64 64 72 53 47 28
..........................................................................................................................
Ten Years 139 140 140 158 117 105 63
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Without advisory fee waivers, the advisory fee for the Blue Chip, Growth
and Income, Small-Cap Opportunity, Long-Term Bond, Intermediate-Term Bond
and Colorado Tax-Exempt Funds would be 0.65%, 0.65%, 1.00%, 0.45%, 0.45% and
0.50%, respectively.
(2) Without fee waivers and expense reimbursements, "All other Expenses" for
the Blue Chip, Growth and Income, Small-Cap Opportunity, Long-Term Bond,
Intermediate-Term Bond and Colorado Tax-Exempt Funds would be 0.56%, 0.91%,
0.69%, 0.70%, 0.52% and 0.71%, respectively.
(3) The Administrators and the Investment Adviser 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 Funds would be 1.21%, 1.56%,
1.69%, 1.15%, 0.97% and 1.21%, respectively.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-5-
<PAGE>
[Mountain logo] WESTCORE FUNDS FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide supplementary information to each Fund's financial
statements contained in the SAI 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. You should read the tables
together with the financial statements and related notes included in the SAI.
Further information about the performance of the Funds is available in the
Annual Report to Shareholders. You may obtain both the SAI and the Annual
Report to Shareholders free of charge by contacting ALPS or Westcore Trust at
1-800-392-CORE (2673).
-6-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
WESTCORE MIDCO GROWTH FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ----------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18
- ----------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.15) (0.08) 0.00 0.00 0.04 0.06 0.07 0.24
Net realized and unrealized
gain (loss) on investments 1.19 6.58 1.56 1.34 2.48 1.84 3.16 1.32
Total income (loss) from
investment operations 1.04 6.50 1.56 1.34 2.52 1.90 3.23 1.56
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 (0.32) (0.08) (0.24)
Distributions from net realized gain
on investments (3.02) (0.72) (0.53) (1.03) (1.11) (1.20) (0.72) (1.93)
Return of capital 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00
Total dividends, distributions and
return of capital to shareholders (3.02) (0.72) (0.53) (1.04) (1.11) (1.52) (0.80) (2.17)
Net asset value--end of period $20.92 $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57
Total return 5.27% 38.62% 10.05% 8.37% 18.04% 14.09% 30.44% 15.33%
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $590,008 $656,490 $401,760 $335,453 $231,595 $180,681 $131,420 $85,209
Ratio of expenses to average net assets 1.14% 1.08% 0.94% 0.84% 0.83% 0.80% 0.78% 0.83%
Ratio of net investment income (loss)
to average net assets (0.70%) (0.42%) (0.03%) (0.09%) 0.04% 0.12% 0.58% 2.05%
Ratio of expenses to average net assets
without fee waivers 1.14% 1.10% 0.96% 0.87% 0.85% 0.85% 0.88% 0.88%
Ratio of net investment income (loss)
to average net assets without
fee waivers (0.71%) (0.44%) (0.05%) (0.12%) 0.02% 0.07% 0.48% 2.00%
Portfolio turnover rate(1) 60.78% 62.83% 50.19% 52.05% 56.23% 48.17% 75.43% 86.62%
Average commission rate(2) $.0466 -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------
1989 1988
- -----------------------------------------------------------------
<S> <C> <C>
Net asset value--beginning of period $9.82 $12.20
- -----------------------------------------------------------------
Income From Investment Operations
- -----------------------------------------------------------------
Net investment income (loss) 0.19 0.03
Net realized and unrealized
gain (loss) on investments 2.52 (1.47)
Total income (loss) from
investment operations 2.71 (1.44)
- -----------------------------------------------------------------
Dividends and Distributions to Shareholders
- -----------------------------------------------------------------
Dividends from net investment income (0.10) (0.28)
Distributions from net realized gain
on investments (0.25) (0.66)
Return of capital 0.00 0.00
Total dividends, distributions and
return of capital to shareholders (0.35) (0.94)
Net asset value--end of period $12.18 $9.82
Total return 28.46% (13.09%)
- -----------------------------------------------------------------
Ratios/Supplemental Data:
- -----------------------------------------------------------------
Net assets, end of period (000 omitted) $81,948 $557
Ratio of expenses to average net assets 0.80% 1.33%
Ratio of net investment income (loss)
to average net assets 1.21% 0.02%
Ratio of expenses to average net assets
without fee waivers 0.85% 2.20%
Ratio of net investment income (loss)
to average net assets without
fee waivers 1.16% (0.85%)
Portfolio turnover rate(1) 74.03% 91.57%
Average commission rate(2) -- --
- -----------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) 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 30, 1997, were $347,732,853 and $434,312,060, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30, for 1997.
- --------------------------------------------------------------------------------
-7-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE BLUE CHIP FUND
(FORMERLY THE WESTCORE MODERN VALUE EQUITY FUND)
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $17.41 $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.19 0.25 0.23 0.40 0.34 0.28 0.29 0.44 0.39
Net realized and unrealized
gain on investments 3.65 4.03 2.12 0.04 1.13 0.95 1.15 0.82 1.02
Total income from
investment operations 3.84 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 (0.22) (0.27) (0.16) (0.43) (0.21) (0.35) (0.30) (0.46) (0.31)
Distributions from net realized gain
on investments (2.88) (1.30) (0.19) (1.18) (0.74) (0.21) (0.20) (0.16) 0.00
Total dividends and distributions
to shareholders (3.10) (1.57) (0.35) (1.61) (0.95) (0.56) (0.50) (0.62) (0.31)
Net asset value--end of period $18.15 $17.41 $14.70 $12.70 $13.87 $13.35 $12.68 $11.74 $11.10
Total return 24.28% 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) $66,450 $68,286 $52,545 $36,674 $28,176 $30,572 $27,208 $25,857 $28,088
Ratio of expenses to average net assets 1.15% 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 1.02% 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 1.21% 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 0.97% 1.38% 1.73% 2.27% 2.34% 2.11% 2.55% 3.76% 3.49%
Portfolio turnover rate(2) 43.47% 65.11% 61.72% 41.32% 85.53% 123.91% 142.01% 158.54% 175.23%
Average commission rate(3) $.0498 -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</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 30, 1997, were $26,079,205 and $39,904,808, respectively.
(3) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30, for 1997.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-8-
<PAGE>
[Mountain Logo] WESTCORE FUNDS FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE GROWTH AND INCOME FUND
(FORMERLY THE WESTCORE EQUITY INCOME FUND)
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
WESTCORE EQUITY INCOME FUND(1) FOR THE YEAR ENDED MAY 31*
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $12.32 $10.50 $10.62 $11.51 $10.99 $10.10 $9.94 $10.43 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.07 0.15 0.20 0.51 0.32 0.32 0.32 0.36 0.40
Net realized and unrealized
gain (loss) on investments 2.19 2.57 0.15 (0.30) 0.68 1.05 0.48 1.02 1.05
Total income from
investment operations 2.26 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 (0.11) (0.24) (0.21) (0.54) (0.20) (0.43) (0.33) (0.37) (0.33)
Distributions from net realized gain
on investments (1.44) (0.66) (0.26) (0.56) (0.28) (0.05) (0.31) (1.50) (0.69)
Total dividends and distributions
to shareholders (1.55) (0.90) (0.47) (1.10) (0.48) (0.48) (0.64) (1.87) (1.02)
Net asset value--end of period $13.03 $12.32 $10.50 $10.62 $11.51 $10.99 $10.10 $9.94 $10.43
Total return 19.71% 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) $20,725 $25,387 $27,029 $42,644 $35,791 $25,128 $19,932 $16,583 $12,594
Ratio of expenses to average net assets 1.15% 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 0.75% 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 1.56% 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 0.33% 1.05% 2.04% 4.42% 2.71% 2.96% 3.41% 3.40% 3.70%
Portfolio turnover rate(3) 39.80% 88.31% 81.14% 53.86% 61.24% 68.56% 64.94% 59.36% 100.22%
Average commission rate(4) $.0491 -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
</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 30, 1997, were $8,605,246 and $15,958,644, respectively.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30, for 1997.
-9-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE SMALL-CAP OPPORTUNITY FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- -------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value--beginning of period $21.35 $15.95 $14.97 $15.00
- -------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- -------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.04 0.09 0.05
Net realized and unrealized
gain (loss) on investments 3.37 5.86 1.11 (0.05)
Total income from
investment operations 3.40 5.90 1.20 0.00
- -------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
- -------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.02) (0.06) (0.10) (0.03)
Distributions from net realized gain
on investments (0.86) (0.44) (0.12) 0.00
Total dividends and distributions
to shareholders (0.88) (0.50) (0.22) (0.03)
Net asset value--end of period $23.87 $21.35 $15.95 $14.97
Total return 16.28% 37.49% 8.15% (0.07%)(3)
- -------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $35,962 $23,951 $9,703 $2,159
Ratio of expenses to average net assets 1.30% 1.30% 1.27% 1.38%(3)
Ratio of net investment income
to average net assets 0.11% 0.24% 0.61% 1.00%(3)
Ratio of expenses to average net assets
without fee waivers 1.69% 2.20% 2.77% 6.56%(3)
Ratio of net investment income (loss)
to average net assets without
fee waivers (0.28%) (0.67%) (0.89%) (4.18%)(3)
Portfolio turnover rate(2) 77.73% 47.83% 59.17% 64.31%(3)
Average commission rate(4) $.0480 -- -- --
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(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 30, 1997, were $28,693,734 and $22,739,283, respectively.
(3) Annualized.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30, for 1997.
Questions? Call 1-800-392-CORE (2673)
-10-
<PAGE>
[Mountain Logo] WESTCORE FUNDS FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE LONG-TERM BOND FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $9.59 $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.62 0.61 0.59 0.62 0.77 0.80 1.08 0.93 0.91
Net realized and unrealized
gain (loss) on investments 0.26 (0.27) 0.66 (0.51) 0.99 0.56 0.04 (0.21) 0.33
Total income from
investment operations 0.88 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 (0.63) (0.62) (0.60) (0.62) (0.78) (0.77) (1.11) (0.93) (0.88)
Distributions from net realized gain
on investments (0.17) 0.00 0.00 (1.52) (0.33) 0.00 (0.11) (0.04) 0.00
Total dividends, distributions
to shareholders (0.80) (0.62) (0.60) (2.14) (1.11) (0.77) (1.22) (0.97) (0.88)
Net asset value--end of period $9.67 $9.59 $9.87 $9.22 $11.25 $10.60 $10.01 $10.11 $10.36
Total return 9.40% 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) $20,160 $25,070 $33,440 $26,962 $26,281 $30,800 $27,448 $18,113 $15,403
Ratio of expenses to average net assets 0.95% 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 6.37% 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 1.15% 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 6.18% 5.90% 6.49% 5.71% 6.60% 7.55% 8.21% 8.94% 8.88%
Portfolio turnover rate(2) 27.76% 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 30, 1997, were $6,186,953 and $11,561,879, respectively.
* Year ended May 30, for 1997.
- --------------------------------------------------------------------------------
-11-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE INTERMEDIATE-TERM BOND FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989(1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $10.10 $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 0.60 0.58 0.55 0.67 0.78 0.87 0.84 0.85
Net realized and unrealized
gain (loss) on investments 0.13 (0.17) 0.27 (0.52) 0.53 0.39 (0.10) (0.08) (0.04)
Total income from
investment operations 0.73 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) (0.60) (0.53) (0.64) (0.83) (0.88) (0.84) (0.82)
Distributions from net realized gain
on investments 0.00 0.00 0.00 (0.18) 0.00 0.00 0.00 0.00 0.00
Total dividends and distributions
to shareholders (0.60) (0.60) (0.60) (0.71) (0.64) (0.83) (0.88) (0.84) (0.82)
Net asset value--end of period $10.23 $10.10 $10.27 $10.02 $10.70 $10.14 $9.80 $9.91 $9.99
Total return 7.43% 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) $63,169 $83,039 $97,619 $88,965 $99,469 $87,712 $68,958 $107,288 $110,962
Ratio of expenses to average net assets 0.85% 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 5.81% 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 0.97% 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 5.68% 5.67% 5.83% 5.00% 6.35% 7.69% 8.95% 8.27% 8.54%
Portfolio turnover rate(2) 27.47% 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 30, 1997, were $19,161,905 and $39,196,987, respectively.
* Year ended May 30, for 1997.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-12-
<PAGE>
[Mountain Logo] WESTCORE FUNDS FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WESTCORE COLORADO TAX-EXEMPT FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED.)
FOR THE YEAR ENDED MAY 31,*
- -------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $10.61 $10.70 $10.52 $10.71 $10.25 $10.00
- -------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 0.50 0.52 0.52 0.53 0.57 0.58
Net realized and unrealized
gain (loss) on investments 0.17 (0.10) 0.20 (0.19) 0.46 0.23
Total income from
investment operations 0.67 0.42 0.72 0.34 1.03 0.81
- -------------------------------------------------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.50) (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 0.00
Total dividends and distributions
to shareholders (0.50) (0.51) (0.54) (0.53) (0.57) (0.56)
Net asset value--end of period $10.78 $10.61 $10.70 $10.52 $10.71 $10.25
Total return 6.46% 3.97% 7.16% 3.22% 10.27% 8.36%
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $21,348 $13,992 $10,792 $10,553 $7,326 $4,511
Ratio of expenses to average net assets 0.50% 0.44% 0.42% 0.27% 0.22% 0.11%
Ratio of net investment income
to average net assets 4.73% 4.87% 5.03% 4.98% 5.45% 5.84%
Ratio of expenses to average net assets
without fee waivers 1.21% 1.43% 1.62% 1.59% 1.88% 1.65%
Ratio of net investment income
to average net assets without
fee waivers 4.02% 3.88% 3.83% 3.65% 3.79% 4.30%
Portfolio turnover rate(2) 30.78% 10.23% 3.15% 9.76% 1.82% 12.95%
- -------------------------------------------------------------------------------------------------------------------------
</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 30, 1997, were $5,301,891 and $12,283,792, respectively.
* Year ended May 30, for 1997.
- --------------------------------------------------------------------------------
-13-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
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
carefully review 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.
- --------------------------------------------------------------------------------
FUND SPECIFICS:
EQUITY FUNDS
INVESTMENT OBJECTIVES & POLICIES
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. 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
-14-
<PAGE>
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, because of 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 judgment, 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 to have 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 in which the stocks are believed to be
attractively priced based on valuation measures including lower
price-to-earnings ratios 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 that are undervalued and where, in the Investment Adviser's
view, the fundamental business outlook and earnings potential are becoming more
attractive.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-15-
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
FUND SPECIFICS:
EQUITY FUNDS (Continued)
[Black and white photograph of mountain and trees]
IN WHAT TYPES OF SECURITIES DO THE WESTCORE EQUITY FUNDS INVEST?
The Investment Adviser selects securities for each of the Equity Funds from
internally defined universes of large, medium and small companies. These
universes are not mutually exclusive, and a given security may be owned by more
than one of the Equity Funds. Under normal circumstances, at least 65% of the
value of each Equity Fund's total assets will be invested as described.
Companies selected meet the Adviser's standards for business outlook, growth
opportunities and valuation.
Westcore MIDCO Growth Fund, invests primarily in equity securities of medium
capitalization companies. As of August 29, 1997, the median capitalization
of companies held by the Westcore MIDCO Growth Fund was $2.2 billion. The
median capitalization of the companies in the Westcore MIDCO Growth Fund can
be expected to fluctuate over time.
Westcore Blue Chip Fund, invests primarily in equity securities of large
capitalization companies. During normal market conditions, the portfolio
will consist of approximately 50 equity securities of these companies. As of
August 29, 1997, the median capitalization of companies held by the Westcore
Blue Chip Fund was $7.7 billion. The median capitalization of the companies
in the Westcore Blue Chip Fund can be expected to fluctuate over time.
Westcore Growth and Income Fund, invests primarily in large and medium
capitalization companies. As of August 29, 1997, the median capitalization
of companies held by the Westcore Growth and Income Fund was $6.2 billion.
The median capitalization of the companies in the Westcore Growth and Income
Fund can be expected to fluctuate over time.
Westcore Small-Cap Opportunity, invests primarily in small-capitalization
companies. As of August 29, 1997, the median capitalization of companies
held by the Westcore Small-Cap Opportunity Fund was $578 million. The median
capitalization of the companies in the Westcore Small-Cap Opportunity Fund
can be expected to fluctuate over time.
-16-
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
WHAT ARE THE OTHER INVESTMENT POLICIES OF THE WESTCORE EQUITY FUNDS?
Each Westcore Equity Fund may also invest in options, futures, preferred
stocks, warrants, foreign currency transactions and fixed-income securities.
Additionally, the Westcore Equity Funds may invest up to 15% of their total
assets in convertible securities which are below investment grade, whether
rated or unrated, and which are convertible into common stock. The Westcore
MIDCO Growth, Growth and Income, and Blue Chip Funds may also invest,
directly or indirectly, up to 25%, 25% and 5% of their total assets in
securities issued by foreign companies, respectively. 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 of the Equity Funds may invest in
real estate investment trusts ("REITs").
Each Westcore Equity Fund may invest in short-term instruments such as U.S.
government obligations, money market instruments, repurchase agreements
securities issued by other investment companies (within the limits prescribed by
the Investment Company Act of 1940, as amended ["1940 Act"]) and dollar
denominated debt obligations of foreign issuers including foreign corporations
and governments, municipal obligations and money market instruments. In
addition, each Fund may borrow money from banks and may enter into reverse
repurchase agreements for temporary purposes on a limited basis. Each Equity
Fund may lend portfolio securities up to 30% of the total assets of the
particular Fund. 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.
- --------------------------------------------------------------------------------
-17-
<PAGE>
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 29.
-18-
<PAGE>
[Mountain logo] WESTCORE FUNDS Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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.
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 that 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 Equity 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.
-19-
<PAGE>
[Mountain logo] WESTCORE FUNDS Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
FUND SPECIFICS:
BOND FUNDS
WESTCORE BOND FUNDS
[Black and white photograph of mountain and trees]
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.
Questions? Call 1-800-392-CORE (2673)
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[Mountain logo] WESTCORE FUNDS Equity & Bond Funds Prospectus
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FUND SPECIFICS:
BOND FUNDS (Continued)
[Black and white photograph of mountain and trees]
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, instrumentalities and political subdivisions
("Municipal Obligations"). The Fund normally 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 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 "Rating Categories" in the Appendix.
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<PAGE>
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. The Westcore Long-Term Bond and Intermediate-Term Bond
Funds may invest in REITs. 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). Each Bond Fund, other than
Westcore Colorado Tax-Exempt Fund, may lend portfolio securities up to 30% of
the total assets of the particular Fund.
The Westcore Colorado Tax-Exempt Fund may invest in short-term taxable money
market instruments, securities issued by other investment companies that 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.
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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:
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Average
Dollar-Weighted
Fund Maturity
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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
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<PAGE>
Equity & Bond Funds Prospectus
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IS AN INVESTMENT IN THE WESTCORE COLORADO TAX-EXEMPT FUND A TAX-FREE INVESTMENT?
Dividends paid by the Fund that 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 23.
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.
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<PAGE>
[Black and white photograph of mountain & trees]
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.
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.
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Questions? Call 1-800-392-CORE (2673)
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<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
FUND SPECIFICS: 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 because of the Fund's investments in smaller companies.
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 that 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 34.
The Funds, with the exception of the Colorado Tax-Exempt Fund, may lend their
securities. All Funds may 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
-25-
<PAGE>
possible that the Funds will incur losses.
- --------------------------------------------------------------------------------
-26-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FUNDAMENTAL INVESTMENT LIMITATIONS
[Black and white photograph of mountain and trees]
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 this page (a complete
list is set forth in the SAI).
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 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 except Westcore Colorado Tax-Exempt 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
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<PAGE>
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 because of a change
in the value of the Fund's portfolio securities generally will not constitute a
violation.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
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<PAGE>
[Mountain logo] WESTCORE FUNDS HOW TO INVEST AND OBTAIN INFORMATION
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
HOW TO OPEN AND ADD TO YOUR ACCOUNT
Please call Westcore Funds at 1-800-392-CORE (2673) if you have any questions or
need any information. ALPS Mutual Funds Services, Inc. is the distributor for
Westcore Funds and has its principal office at 370 Seventeenth Street, Suite
3100, Denver, CO 80202.
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. 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).
TO OPEN AN ACCOUNT
By Mail Send a completed Account Application and a check or money
order payable in U.S. dollars and drawn on a bank located in
the U.S. to Westcore Trust, P.O. Box 8319, Boston, MA
02266-8319.
- --------------------------------------------------------------------------------
In Person Bring your completed Account Application and a check or
money order payable to Westcore/SSB to Westcore Trust, 370
Seventeenth Street, Suite 3100, Denver, CO 80202.
- --------------------------------------------------------------------------------
Automatically
(from your
bank account) Complete the Automatic Investment Plan Section of your new
Account Application to have money automatically withdrawn
from your bank account monthly, quarterly or annually
(minimum is the equivalent of at least $50 per month). Mail
the Account Application to Westcore Trust, P.O. Box 8319,
Boston, MA 02266-8319.
- --------------------------------------------------------------------------------
By Wire Call 1-800-392-CORE (2673) to receive wiring instructions.
TO ADD TO AN ACCOUNT
By Mail Send a check or money order payable in U.S. dollars and
drawn on a bank located in the U.S. to Westcore Trust, P.O.
Box 8319, Boston, MA 02266-8319. Specify your account
number and the name of the Fund(s) in which you are
investing.
- --------------------------------------------------------------------------------
In Person Bring your check or money order payable to Westcore/SSB to
Westcore Trust, 370 Seventeenth Street, Suite 3100, Denver,
CO 80202.
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
Automatically
(from your
bank account) Complete at any time an Automatic Investment Plan
application to have $50 or more (minimum is the equivalent
of at least $50 per month) automatically withdrawn from your
bank account monthly, quarterly or annually.
By Wire Call 1-800-392-CORE (2673) to receive wiring instructions.
- --------------------------------------------------------------------------------
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<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
MINIMUM INVESTMENTS AMOUNT
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.
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 into a new account must be
for at least $1,000 per transaction. Exchanges for existing accounts must be
for at least $50 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.
By Telephone Call 1-800-392-CORE (2673), and give the account name,
account number, name of Fund and amount of exchange.
- --------------------------------------------------------------------------------
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.
- -------------------
* COMPASS CAPITAL MONEY MARKET PORTFOLIO IS A NO-LOAD MONEY MARKET FUND
ADVISED BY PNC ASSET MANAGEMENT GROUP, INC. AND SUB-ADVISED BY PNC
INSTITUIONAL MANAGEMENT CORPORATION AND DISTRIBUTED BY COMPASS
DISTRIBUTORS, INC.
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<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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;
- include your account number and tax identification number.
Automatically - Call 1-800-392-CORE (2673) to receive instructions for
automatically exchanging shares between Funds on a monthly,
quarterly or annual basis.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
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<PAGE>
[Mountain logo] WESTCORE FUNDS HOW TO INVEST AND OBTAIN INFORMATION (Continued)
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[Black and white photograph of mountain and trees]
HOW TO REDEEM FUND SHARES
You may redeem your Fund shares on any business day on which the New York Stock
Exchange is open. If you have any questions on how to redeem your shares,
please call a Westcore Investor Service Representative at 1-800-392-CORE (2673).
Redemption proceeds generally will be sent by check to the shareholder(s) of
record at the address of record within seven 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 three 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 seven
days after withdrawal. If the shares being redeemed were purchased by check,
telephone or through the Automatic Investment Plan, the Trust may delay the
mailing of your redemption check for up to 15 days from the day of purchase to
allow the purchase to clear.
- --------------------------------------------------------------------------------
By Telephone Call 1-800-392-CORE (2673) and give the account
name, account number, name of Fund and amount of
redemption.
(Available only if you
checked the appropriate box If you do not have and would like to add the
on the Account Application.) telephone redemption feature, send a written
request to Westcore Trust, P.O. Box 8319, Boston,
Not available for retirement MA 02266-8319. The request must be signed (and
accounts or shares held in signatures guaranteed) by each account owner.
certificate form.
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 3100,
Denver, CO 80202.
- --------------------------------------------------------------------------------
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<PAGE>
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
$25,000 or any redemption being mailed to any
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.
- --------------------------------------------------------------------------------
By Wire Call 1-800-392-CORE (2673) or write Westcore
Trust, P.O. Box 8319, Boston, MA 02266-8319. You
(Available only if you will need to provide account name and number, name
checked the appropriate of Fund and amount of redemption ($1,000 minimum
box on the Account per transaction if made by wire).
Application.)
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.
- --------------------------------------------------------------------------------
By Systematic Withdrawal Request monthly, quarterly or annual withdrawals
in any multiple of $50. Call 1-800-392-CORE
(2673) for more information.
Participation requires a minimum of $10,000 in a
Fund in order to initiate this plan.
- --------------------------------------------------------------------------------
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<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
How to Obtain Account Information, Fund Price and Fund Performance Information
By Telephone
Call 1-800-392-CORE (2673) between 7:00 a.m. and 6:00 p.m. Mountain Time to
obtain your current account balances, confirm recent account transactions,
obtain daily NAV prices or quarterly performance information. Current account
balances and daily NAV prices can also be obtained through our automated phone
system 24 hours a day, 7 days a week.
By Internet
Visit our web site at WWW.WESTCORE.COM to find out up-to-date information on
each of the Westcore Funds. In addition, you can obtain your current account
balances and confirm recent account transactions through our TR@NSACTION center.
You must first authorize access to your account by calling a Westcore
Investor Service Representative at 1-800-392-CORE.
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<PAGE>
General Account Policies
- --------------------------------------------------------------------------------
Signature Guarantee
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized transfers. A signature
guarantee is not the same as a notarized signature. You can obtain a signature
guarantee from a bank or trust company, credit union, broker, dealer, securities
exchange or association, clearing agency or savings association, as defined by
federal law.
The guarantee must be an ink stamp or medallion that states "Signature(s)
Guaranteed" and must be signed in the name of the guarantor by an authorized
person with that person's title and the date. Westcore Funds may reject a
signature guarantee if the guarantor is not a member of or participant in a
signature guarantee program. Call your financial institution to see if they
have the ability to guarantee a signature.
Shareholders living abroad may acknowledge their signatures at an overseas
branch of a U.S. bank, member firm of a stock exchange or any foreign bank
having a branch office in the U.S.
To protect your accounts from fraud, the following transactions will require a
signature guarantee:
- - Transferring ownership of an account.
- - Redeeming more than $25,000 from your account.
- - Redeeming by check payable to someone other than the account owner(s).
- - Redeeming by check mailed to an address other than the address of record.
- - Redemption check mailed to an address which has been changed within the
last 30 days of the redemption request without a signature guarantee.
The Funds reserve the right to require a signature guarantee under other
circumstances or to reject or delay a redemption on certain legal grounds.
Redemption of Low Balance Accounts
If your account balance falls below the required minimums presented on page
19, a letter will be sent advising you to either bring the value of the
shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. If action is
not taken within 90 days of the notice, the shares held in the account will
be redeemed and the proceeds will be sent by check to your address of record.
We reserve the right to increase the investment minimums.
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<PAGE>
Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to engage
in activities which are illegal or otherwise believed to be detrimental to the
Fund.
Telephone Transactions
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 earlier.
Address Changes
To change the address on your account, call 1-800-392-CORE (2673) or send a
written request signed by all account owners. Include the name of the Fund, the
account number(s), the name(s) on the account and both the old address and new
address. Certain options may be suspended for 30 days following an address
change unless a signature guarantee is provided.
-37-
<PAGE>
[Mountain logo] WESTCORE FUNDS
- --------------------------------------------------------------------------------
General Account Policies (continued)
Registration Changes
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-392-CORE (2673).
Share Certificates
The Funds will issue share certificates upon written request only. Share
certificates will not be issued until the shares have been held for at least 15
days and will not be issued for accounts that do not meet the minimum investment
requirements.
Quarterly Consolidated Statements and Shareholder Reports
Westcore Funds will send you a consolidated statement quarterly and a
confirmation after every transaction that affects your share balance or your
account registration with the exception of automatic investment plan
transactions and dividend reinvestment transactions. A statement with tax
information regarding the tax status of income dividends and capital gain
distributions will be mailed to you by January 31 of each year and filed with
the Internal Revenue Service.
Each year, we will send you an annual and a semi-annual report. The annual
report includes audited financial statements and a
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<PAGE>
list of portfolio securities as of the fiscal year end. The semi-annual report
includes unaudited financial statements for the first six months of the fiscal
year, as well as a list of portfolio securities at the end of the period. You
will also receive an updated prospectus at least once each year. Please read
these materials carefully, as they will help you understand your investments in
Westcore Funds. Duplicate mailings of Fund materials to shareholders who reside
at the same address may be eliminated.
[Black and white photograph of mountain and trees]
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, if required, are
received by the transfer agent 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 transfer agent 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, 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, when 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
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<PAGE>
requires. Service Organizations may also impose charges, restrictions,
transaction procedures 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.
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Equity & Bond Funds Prospectus
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[Black and white photograph of mountain and trees]
DISTRIBUTIONS AND TAXES
Distributions
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 on the ex-dividend date.
DISTRIBUTION SCHEDULE
- --------------------------------------------------------------------------------
Income Dividends Capital Gains
- --------------------------------------------------------------------------------
Equity Funds Declared and Declared and
paid quarterly* paid in December
- --------------------------------------------------------------------------------
Bond Funds Declared and Declared and
paid monthly paid in December
- --------------------------------------------------------------------------------
*THE WESTCORE MIDCO GROWTH FUND DISTRIBUTES INCOME DIVIDENDS IN DECEMBER ONLY.
When you open an account, all dividends and capital gains will be automatically
reinvested in the distributing Fund unless you specify on your Account
Application that you want to receive your distributions in cash or reinvest them
in another Fund. Income dividends and capital gain distributions will be
reinvested without a sales charge at the net asset value on the ex-dividend
date. You may change your distribution option at any time by writing or calling
1-800-392-CORE (2673).
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 a qualified retirement plan are generally deferred.
Income dividends will qualify for the dividends received deduction for
corporations to the extent of
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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 to a shareholder who is not exempt from
federal income taxes will be taxable as a long-term capital gain, no matter how
long the shareholder has held the Fund's shares.
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<PAGE>
[Mountain logo] WESTCORE FUNDS
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[Black and white photograph of mountain and trees]
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 (i) they qualify as exempt-interest dividends of a regulated
investment company under Section 852(b)(5) of the Code and are attributable to:
- obligations of the State of Colorado or its political subdivisions
issued on or after May 1, 1980; or
- 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;
or (ii) they are attributable to:
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Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
- 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 Funds are intangibles, they are not subject to Colorado property
tax. Shareholders of the Westcore Funds should consult their tax advisers about
other state and local tax consequences of their investment in the Fund.
- --------------------------------------------------------------------------------
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Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
[Black and white photograph of mountain and trees]
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 with 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.
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.
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<PAGE>
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. Because
performance will fluctuate, you cannot necessarily compare an investment in Fund
shares with bank deposits, savings accounts and similar investment alternatives
that often provide an agreed or guaranteed fixed yield for a stated period of
time.
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Questions? Call 1-800-392-CORE (2673)
<PAGE>
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[Black and white photograph of mountain and trees]
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 SAI 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 June 30,
1997, Denver Investment Advisors had approximately $10.4 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.
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.,
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<PAGE>
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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. from Drake
University and his M.B.A. from the University of Denver.
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Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
JEROME R. POWERS, CFA, a Vice President of Denver Investment Advisors, is
primarily responsible for the day-to-day management of Westcore Long-Term
Bond and Intermediate-Term Bond Funds effective October 1, 1997. Mr. Powers
spent 2 years at GNA Corporation where he served as Vice President of
Investments and Senior Portfolio Manager. Prior to his experience at GNA
Corporation, Mr. Powers was employed at Northwestern Mutual Life Insurance
Company where he left as Vice President of Public Fixed Income. He received
his B.B.A. from the University of Minnesota, Duluth and received his M.M. in
Finance from the J.L. Kellogg Graduate School of Management at Northwestern
University.
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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
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<PAGE>
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[Black and white photograph of mountains and trees]
MANAGEMENT OF THE FUNDS (continued)
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 such 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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<PAGE>
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TRANSFER AGENT
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02015,
provides the Funds with transfer agency services in return for compensation.
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.
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.
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Questions? Call 1-800-392-CORE (2673)
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<PAGE>
<TABLE>
<CAPTION>
Effective Advisory Fees for the
Fee Schedule Contractual Advisory Fees Year Ended May 30, 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Westcore MIDCO Growth Fund .65% .65%
- -----------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund .65% .60%
- -----------------------------------------------------------------------------------------------------------
Westcore Growth and Income Fund .65% .28%
- -----------------------------------------------------------------------------------------------------------
Westcore Small-Cap Opportunity Fund 1.00%(1) .63%
- -----------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond Fund .45% .28%
- -----------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term Bond Fund .45% .35%
- -----------------------------------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund .50% .00%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(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.
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Equity & Bond Funds Prospectus
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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 September 8, 1997, 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;
therefore, under the 1940 Act, they may be deemed to be a controlling person of
the Trust.
[Black and white photograph of mountain and trees]
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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[Black and white photograph of mountain and trees]
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 in this
section. 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 that are
secured by the issuer's full faith, credit and taxing power; (ii) revenue
securities that 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 that are normally issued by
special purpose public authorities; and (iv) private activity bonds (such as
bonds issued by industrial development authorities) that 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.
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[Mountain logo] WESTCORE FUNDS Supplemental Information (continued)
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 suffer serious
financial difficulties such that the ability to pay 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.
Each Fund may invest in short-term funding agreements. A funding agreement is a
contract between an issuer and a purchaser that obligates the issuer to pay a
guaranteed rate of interest on a principal sum deposited by the purchaser.
Funding agreements will also guarantee the return of principal and may guarantee
a stream of payments over time. A funding agreement may have either a fixed
rate or variable interest rate that is based on an index and guaranteed for a
set time period. The Funds intend to invest only in funding agreements which
have a put feature which may be exercised on seven days' notice.
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.
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<PAGE>
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 because of adverse market action or delays in
liquidating the underlying obligations. Repurchase agreements are considered to
be loans under the 1940 Act.
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<PAGE>
[Black and white photograph of mountain and trees]
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
(All Westcore Equity 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 because of changes in the
issuer's creditworthiness; and (e) the adverse impact that legislation
restricting lower-rated securities may have on their market.
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Equity & Bond Funds Prospectus
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Securities Lending
(All Westcore Funds, other than Westcore 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
seven 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
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Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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.
Convertible Securities
(All Westcore Funds, other than Westcore Colorado Tax-Exempt Fund)
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 Westcore 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
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[Mountain logo] WESTCORE FUNDS SUPPLEMENTAL INFORMATION
(Continued)
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
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<PAGE>
[Mountain logo] Westcore Funds Supplemental Information (continued)
[Black and white photograph of mountain and trees]
Mortgage-Related Securities
(Westcore Bond Funds, other than Westcore 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 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.
REITs (All Westcore Funds, other than Colorado Westcore Tax-Exempt Fund)
The Funds may invest in equity real estate investment trusts ("REITs") and
mortgage REITs. Equity REITs invest directly in real property. Mortgage REITs
invest in mortgages on real property. The Westcore Bond Funds may invest in
fixed-income securities issued by REITs. The Westcore Equity Funds may invest
in equity securities issued by REITs.
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<PAGE>
REITs may be subject to certain risks associated with the direct ownership of
real estate including declines in the value of real estate, risks related to
general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, and
variations in rental income. Generally, increases in interest rates will
decrease the value of high yielding securities and increase the costs of
obtaining financing, which could decrease the value of the portfolio's
investments. In addition, equity REITs may be affected by changes in the
value of the underlying property owned by the trusts, while mortgage REITs
may be affected by the quality of credit extended. REITs are also subject to
heavy cash flow dependency, defaults by borrowers, self liquidation and the
possibility of failing to qualify for tax-free pass-through of income under
the Internal Revenue Code and to maintain exemption from the 1940 Act.
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<PAGE>
Options and Futures
(All Westcore Funds, other than Westcore 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 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% of its net assets 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 invest to 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.
Equity & Bond Funds Prospectus
[Black and white photograph of mountain and trees]
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.
-64-
<PAGE>
- --------------------------------------------------------------------------------
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 when 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 because of 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
correctly predict the direction of securities prices, interest rates and other
economic factors.
Foreign Currency Exchange Transactions
(All Westcore Equity Funds)
These Funds may buy and sell securities and receive amounts denominated in
currencies other than the U.S. dollar, and 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.
-65-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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 delivery occurs. Because a Fund is required to hold and
maintain in a segregated account until the settlement date cash, U.S. Government
securities or liquid assets, in an amount sufficient to meet the purchase price,
the Fund's 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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-66-
<PAGE>
[Mountain logo] WESTCORE FUNDS
[Black and white photograph of mountain and trees]
Foreign Securities
(All Westcore Funds)
These Funds may invest in foreign securities. 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
-67-
<PAGE>
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.
- --------------------------------------------------------------------------------
-68-
<PAGE>
- --------------------------------------------------------------------------------
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. Up to 25% of the
MIDCO Growth and the Growth and Income Funds' assets, and up to 5% of the Blue
Chip 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 ADRs.
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 have been described
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 currency contracts and structured debt obligations (including
collateralized mortgage obligations and
-69-
<PAGE>
- --------------------------------------------------------------------------------
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 economics and interest rate scenarios.
- --------------------------------------------------------------------------------
-70-
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
APPENDIX [BLACK AND WHITE PHOTOGRAPH OF MOUNTAIN AND TREES]
PRIOR PERFORMANCE OF INVESTMENT ADVISER FOR WESTCORE GROWTH AND INCOME FUND
On January 1, 1996, the name of Westcore's "Equity Income Fund" was changed
to "Growth and Income Fund." The name change reflected a change to a
growth and income investment objective and changes to investment policies
of the Fund. This section provides performance information for an account
managed by the Investment Adviser with growth and income objectives and
policies, prior to the date that such policy and objectives were implemented
for the Westcore Growth and Income Fund.
The table on page A-2 sets forth historical performance data of the
Investment Adviser for the only actual discretionary account managed by the
Investment Adviser during the periods indicated, that had investment
objectives, policies, strategies and risks substantially similar to those
of the Westcore Growth and Income Fund. For the periods prior to October
1, 1995, the performance reflects that of a non-fee paying commingling
account. For the three-month period ended December 31, 1995, performance
reflects that of an account which is a mutual fund. The performance has
been restated to reflect certain expenses, as set forth in footnote 2 to
the table.
The data is provided to illustrate the past performance of the Investment
Adviser in managing a substantially similar account as measured against a
specified market index and does not represent the performance of the
Westcore Growth and Income Fund. Investors should not consider this
performance data as an indication of future performance of the Westcore
Growth and Income Fund or of the Investment Adviser. Share prices and
investment returns will fluctuate reflecting market conditions, as well as
changes in company-specific fundamentals of portfolio securities. All
returns presented were calculated on a total return basis and include all
dividends and interest, accrued income and realized and unrealized gains
and losses. All returns reflect the deduction of custodial fees, if any,
and brokerage commissions and execution costs paid by the account, without
provision for federal or state income taxes. Securities transactions are
accounted for on the trade date and accrual accounting is utilized. Cash
and equivalents are included in performance returns. The monthly returns
of the account are calculated on a time-weighted rate of return that is
revalued whenever cash flows
A-1
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
exceed $500. Quarterly and yearly returns are calculated by geometrically
linking the monthly and quarterly returns, respectively. No leverage was
used in the account. The return of the mutual fund for the three months
ended December 31, 1995 has been calculated by the mutual fund. The use of
a different methodology to calculate performance could result in different
performance data. The performance presentation is not audited.
The commingled account whose performance is reflected on back was not
subject to the same types of expenses to which the Westcore Growth and
Income Fund is subject nor to the diversification requirements, specific
tax restrictions and investment limitations imposed on the Westcore Growth
and Income Fund by the Investment Company Act or Subchapter M of the
Internal Revenue Code. Consequently, the performance results for the
commingled account could have been adversely affected if the account had
been regulated as an investment company under the federal securities laws.
The Investment Adviser's advisory fee schedule for growth and income
investing is .65% of assets. Additional information concerning fees
charged for investment services offered by the Investment Adviser is
contained in Part II of the Investment Adviser's Form ADV which is on file
with the Securities and Exchange Commission and is available upon request.
A-2
<PAGE>
[Mountain logo] Westcore Funds Appendix (continued)
- --------------------------------------------------------------------------------
INVESTMENT ADVISER'S GROWTH AND INCOME PERFORMANCE
<TABLE>
<CAPTION>
Assets Included in
Adviser's Investment Adviser's
Investment Adviser's Growth and Income Total Assets
Growth and Income Performance(3) Under Management(4) Standard & Poor's
Year(1) Performance(2) ($ thousands) ($ thousands) 500 Index(5)
<S> <C> <C> <C> <C>
1986 17.97% $68,227 $2,514,300 18.64%
1987 (0.92)% $57,193 $3,700,500 5.28%
1988 9.79% $49,750 $4,269,900 16.55%
1989 25.32% $49,554 $4,876,900 31.61%
1990 (3.81)% $42,455 $4,171,400 (3.05)%
1991 42.33% $58,368 $5,566,100 30.46%
1992 11.97% $63,106 $6,282,100 7.63%
1993 16.45% $72,620 $7,527,043 10.08%
1994 (4.22)% $69,021 $8,242,854 1.32%
1995 29.95% $25,125 $9,546,291 37.58%
Compounded Annual
Return For 5
Years Ended 1995 18.23% -- -- 16.59%
Compounded Annual
Return For 10
Years Ended 1995 13.58% -- -- 14.87%
- ------------------------------
</TABLE>
(1) All periods are ended December 31.
(2) Annual total return is presented for each year and compounded annual return
is presented for each period, net of expenses. The performance has been
restated to reflect a total expense ratio of 1.15%, which is the expense
ratio that the Westcore Growth and Income Fund is expected to incur during
the current fiscal year and which reflects a management fee of .65% of net
assets. That expense ratio reflects voluntary fee waivers and/or expense
reimbursements by the administrators of the Westcore Growth and Income
Fund. These waivers and/or reimbursements may be modified or terminated at
any time.
(3) Assets whose performance is reflected in the Investment Adviser's growth
and income performance at December 31.
(4) Assets under management of the Investment Adviser at December 31.
(5) Annual total return is presented for each year and compounded annual return
is presented for each period. The S&P 500 Index is an unmanaged Index
containing common
A-3
<PAGE>
- --------------------------------------------------------------------------------
stocks of 500 industrial, transportation, utility and financial companies,
regarded as generally representative of the U.S. stock market. The Index
reflects the investment of income dividends and capital gain distributions,
if any, but does not reflect fees, brokerage commissions, or other expenses
or investing.
A-4
<PAGE>
RATING CATEGORIES
MOODY'S INVESTORS SERVICE, INC.
BOND RATING EXPLANATION
Aaa Highest quality, smallest degree of 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 he 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.
STANDARD & POOR'S RATINGS GROUP, DIVISION OF MCGRAW HILL
BOND RATING EXPLANATION
AAA Highest rating; extremely strong capacity to pay interest
and repay principal.
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 the
CCC, issuer's capacity to meet required interest and
A-5
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
CC,C 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.
A-6
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
<PAGE>
WESTCORE FUNDS
370 17TH STREET
SUITE 3100
DENVER, CO 80202
1-800-392-CORE (2673)
WWW.WESTCORE.COM
FUNDS DISTRIBUTED BY ALPS MUTUAL FUNDS SERVICES, INC., MEMBER NASD
<PAGE>
[mountain logo]
Westcore Funds [Black and white photograph of mountain]
Westcore MIDCO Growth Fund Prospectus
<PAGE>
October 1, 1997
[mountain logo]
Westcore Funds
Prospectus For Westcore MIDCO Growth Fund
This Prospectus describes one mutual fund (the "Fund") offered by Westcore Trust
("Westcore" or the "Trust"). The Fund is a no-load investment. This permits
you to purchase and sell shares of the 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 for the Fund. Denver Investment Advisors
and its predecessors have more than 39 years of investment management experience
and Denver Investment Advisors currently manages approximately $10.4 billion in
assets for clients such as corporations, insurance companies and individuals.
ALPS Mutual Funds Services, Inc. ("ALPS") serves as the Fund's 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 the Fund invests and shareholder
services available to you. Additional information is contained in a Statement
of Additional Information ("SAI"), dated October 1, 1997, 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
on the back cover. The SAI is incorporated by reference into this Prospectus.
The SEC maintains a web site (http://www.sec.gov) that contains the SAI material
incorporated by reference, and other information regarding the Fund.
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.
[photograph of mountain]
-2-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
Table of Contents [black and white photograph of mountain]
- --------------------------------------
Fund Information
Fund Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Expense Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Fund Specifics
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . . . .10
Fundamental Investment Limitations . . . . . . . . . . . . . . . . . . . . 13
How To Invest and Obtain Information
How To Open And Add To Your Account. . . . . . . . . . . . . . . . . . . . 14
Minimum Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
How To Exchange Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . 16
How To Redeem Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . 17
How To Obtain Account Information, Fund Prices and Fund Performance
Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
General Account Policies. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other Information
Distributions And Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Performance Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Management Of Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Inquires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Supplemental Information
Information On Investment Policies And Additional Risk Factors . . . . . . 27
-3-
<PAGE>
[mountain logo] WESTCORE FUNDS
Fund Information
Fund Highlights
This section provides you with a brief overview of the Westcore MIDCO Growth
Fund and summarizes the Fund's investment objective. A detailed discussion of
its investment objective, policies and risks begins on page 10 and complete
information on how to purchase, exchange and redeem Fund shares begins on page
14.
Westcore MIDCO Growth Fund -- seeks to maximize long-term capital appreciation
by investing primarily in medium-sized growth companies.
Expense 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.
Westcore MIDCO Growth Fund
Shareholder Transaction Expenses None
Annual Operating Expenses
(as a percentage of average net assets)
Management Fees 0.65%
12b-1 Fees None
All Other Expenses 0.49%
Total Operating Expenses 1.14%(1)
EXAMPLE: Assume you invest $1,000, the annual return on the Fund is 5%, and the
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 Fund.
One Year $12
Three Years 36
Five Years 63
Ten Years 139
(1) The Administrators and the Investment Adviser have advised the Trust that
they intend to waive fees or reimburse expenses with respect to the Fund so
that the Total Operating Expenses will not exceed 1.15%.
-4-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
[black and white photograph of mountain]
The table and example at left show you the various costs and expenses you will
bear directly or indirectly as an investor in the Fund. Shareholder Transaction
Expenses are charges you pay when buying, exchanging or selling shares of the
Fund. The no-load Westcore MIDCO Growth Fund does 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 the Fund's assets and include fees for portfolio
management, maintenance of shareholder accounts, general Fund administration,
shareholder servicing, accounting and other services.
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
Fund's operating expenses, see "How to Invest" and "Management of the Fund"
in this Prospectus and the financial statements and related notes included in
the SAI.
Financial Highlights
Westcore MIDCO Growth Fund
(For a Fund Share Outstanding Throughout the Periods Indicated.)
The table on page 8 provides supplementary information to the Fund's financial
statements contained in the SAI and sets forth certain information concerning
the historic investment results of Fund shares. The financial highlights are
based on the financial statements of the Fund, which have been audited by
Deloitte & Touche LLP, the Trust's independent auditors. You should read the
table together with the financial statements and related notes included in the
SAI. Further information about the performance of the Fund is available in the
Annual Report to Shareholders. You may obtain both the SAI and the Annual
Report to Shareholders free of charge by contacting ALPS or Westcore Trust at 1-
800-392-CORE (2673).
-5-
<PAGE>
[mountain logo] WESTCORE FUNDS
WESTCORE MIDCO GROWTH FUND PROSPECTUS
<TABLE>
<CAPTION>
(For a Fund Share Outstanding Throughout the Periods Indicated.)
For the Year Ended May 31,*
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value--beginning of period $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $9.82 $12.20
Income From Investment Operations
Net investment income (loss) (0.15) (0.08) 0.00 0.00 0.04 0.06 0.07 0.24 0.19 0.03
Net realized and unrealized
gain (loss) on investments 1.19 6.58 1.56 1.34 2.48 1.84 3.16 1.32 2.52 (1.47)
Total income (loss) from
investment operation 1.04 6.50 1.56 1.34 2.52 1.90 3.23 1.56 2.71 (1.44)
Dividends and Distributions
to Shareholders
Dividends from net
investment income 0.00 0.00 0.00 0.00 0.00 (0.32) (0.08) (0.24) (0.10) (0.28)
Distributions from net realized
gain on investments (3.02) (0.72) (0.53) (1.03) (1.11) (1.20) (0.72) (1.93) (0.25) (0.66)
Return of capital 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00 0.00 0.00 0.00
Total dividends, distributions and
return of capital to shareholders (3.02) (0.72) (0.53) (1.04) (1.11) (1.52) (0.80) (2.17) (0.35) (0.94)
Net asset value--end of period $20.92 $22.90 $17.12 $16.09 $15.79 $14.38 $14.00 $11.57 $12.18 $9.82
Total return 5.27% 38.62% 10.05% 8.37% 18.04% 14.09% 30.44% 15.33% 28.46% (13.09%)
Ratios/Supplemental Data:
Net assets, end of
period (000 omitted) $590,008 $656,490 $401,760 $335,453 $231,595 $180,681 $131,420 $85,209 $81,948 $557
Ratio of expenses to
average net assets 1.14% 1.08% 0.94% 0.84% 0.83% 0.80% 0.78% 0.83% 0.80% 1.33%
Ratio of net investment income
(loss) to average net assets (0.70%) (0.42%) (0.03%) (0.09%) 0.04% 0.12% 0.58% 2.05% 1.21% 0.02%
Ratio of expenses to average
net assets without fee waivers 1.14% 1.10% 0.96% 0.87% 0.85% 0.85% 0.88% 0.88% 0.85% 2.20%(2)
Ratio of net investment
income (loss) to average
net assets without fee waivers (0.71%) (0.44%) (0.05%) (0.12%) 0.02% 0.07% 0.48% 2.00% 1.16% (0.85%)
Portfolio turnover rate(1) 60.78% 62.83% 50.19% 52.05% 56.23% 48.17% 75.43% 86.62% 74.03% 91.57%
Average commission rate(2) $.0466 -- -- -- -- -- -- -- -- --
</TABLE>
__________________
(1) 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 30, 1997, were $347,732,853 and $434,312,060, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
* Year ended May 30, for 1997.
-6-
<PAGE>
[mountain logo] WESTCORE FUNDS
Fund Specifics
Investment Objective and Policies
This section looks more closely at the Fund's investment objective, policies and
securities in which it invests. You should carefully consider your own
investment goals, time horizon and risk tolerance before investing in the Fund.
You should also carefully review the section entitled "Supplemental Information-
Information on Investment Policies and Additional Risk Factors" for a more
detailed discussion of the instruments in which the Fund may invest and their
associated risks. There can be no assurance that the Fund will achieve its
investment objective.
Upon notice to shareholders, the 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 the Fund remains a
suitable investment for you.
The Westcore MIDCO Growth Fund is designed for long-term investors who can
tolerate the risks associated with investments in common stocks. It is 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 MIDCO Growth Fund.
What is the 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. 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.
In what types of securities does the Fund invest?
The Investment Adviser selects securities for the Fund from an internally
defined universe of medium-sized companies. Under normal circumstances, at
least 65% of the value of the Fund's total assets will be invested as described
below. Companies selected meet the Adviser's standard for business outlook,
growth opportunities and valuation.
Westcore MIDCO Growth Fund, invests primarily in equity securities of
medium-sized capitalization companies. As of August 29, 1997, the median
capitalization of companies held by the Westcore MIDCO Growth Fund was $2.2
billion. The median capitalization of the companies in the Westcore MIDCO
Growth Fund can be expected to fluctuate over time.
What are the other investment policies of the Fund?
The Fund may invest in options, futures, preferred stocks, warrants, foreign
currency transactions and fixed-income securities. Additionally, the Fund may
invest up to 15% of its total assets in convertible securities which are below
investment grade, whether rated or unrated, and which are convertible into
common stock. The Fund may also invest, directly or indirectly up to 25% of its
total assets in securities issued by foreign companies. The Fund may invest in
real estate investment trusts ("REITs").
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
The 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")) and dollar denominated
debt obligations of foreign issuers including foreign corporations and
governments, municipal obligations and money market instruments. In addition,
the Fund may borrow money from banks and may enter into reverse repurchase
agreements for temporary purposes on a limited basis. The Fund may lend
portfolio securities up to 30% of its total assets. The 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 Fund may invest, see
"Supplemental Information-Information on Investment Policies and Additional Risk
Factors" beginning on page 27.
Is the Fund diversified and what does that mean?
The Fund is diversified. Diversification is a means of reducing risk by
investing the 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.
How does the Fund try to reduce risk?
- Diversification of the Fund's assets reduces the effect of any single
holding on its overall portfolio value.
- The Fund may adjust the securities it holds to include issues that are
believed to involve less risk.
- The Fund may use futures, options and similar instruments to attempt
to hedge its portfolio against disadvantageous movements in securities
prices and interest rates. The Fund 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 the 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.
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<PAGE>
[mountain logo] WESTCORE FUNDS
What potential risks and rewards may I experience if I invest in the Fund?
An investment in the Fund presents the potential rewards and risks common to
securities investments. The Fund invests 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 market value of debt obligations held by the Fund will also fluctuate,
normally rising when interest rates fall and falling when interest rates rise.
The value of some debt obligations may be more volatile than other types of
instruments.
The Fund 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.
The Fund may purchase certain derivative instruments that 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 32.
The Fund may lend its 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 Fund's investment adviser, Denver Investment Advisors will evaluate the
rewards and risks presented by all securities purchased by the Fund and will
determine how they will be used in furtherance of the investment objective of
the Fund. It is possible, however, that Denver Investment Advisors' evaluations
will prove to be inaccurate and, even when accurate, it is possible that the
Fund will incur losses.
-9-
<PAGE>
Westcore Midco Growth Prospectus
Fundamental Investment Limitations
What are fundamental investment limitations?
Fundamental investment limitations are those investment limitations that the
Fund may not change without the approval of the holders of a majority of the
Fund's outstanding shares. Some are summarized below (a complete list is set
forth in the SAI).
The Westcore MIDCO Growth Fund may not:
- Purchase securities if more than 5% of the 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 the Fund may purchase and hold debt
instruments and enter into repurchase agreements in accordance with
its investment objective and policies. The Fund may also lend
portfolio securities in an amount not exceeding 30% of its total
assets.
The Fund will not 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
the Fund makes an investment, a later change in the percentage because of a
change in the value of the Fund's portfolio securities generally will not
constitute a violation.
Please call the Trust at 1-800-392-CORE (2673) if you have any questions or need
any information.
ALPS Mutual Fund Services, Inc. is the distributor for the Trust and has its
principal office at:
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202.
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<PAGE>
[mountain logo] WESTCORE FUNDS
How To Invest and Obtain Information.
How To Open And Add To Your Account
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. You may open an account and purchase shares of the Fund 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).
To Open An Account
By Mail
Send a completed Account Application and a check or money order payable in U.S.
dollars and drawn on a bank located in the U.S. to Westcore Trust, P.O. Box
8319, Boston, MA 02266-8319.
In Person
Bring your completed Account Application and a check or money order payable to
Westcore/SSB to Westcore Trust, 370 Seventeenth Street, Suite 3100, Denver, CO
80202.
Automatically (from your bank account)
Complete the Automatic Investment Plan Section of your new Account Application
to have money automatically withdrawn from your bank account monthly, quarterly
or annually (minimum is the equivalent of at least $50 per month). Mail the
Account Application to Westcore Trust, P.O. Box 8319, Boston, MA 02266-8319.
By Wire
Call 1-800-392-CORE (2673) to receive wiring instructions.
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<PAGE>
To Add To An Account
By Mail
Send a check or money order payable in U.S. dollars and drawn on a bank located
in the U.S. to Westcore Trust, P.O. Box 8319, Boston, MA 02266-8319. Specify
your account number and the name of the Westcore MIDCO Growth Fund.
In Person
Bring your check or money order payable to Westcore/ SSB to Westcore Trust, 370
Seventeenth Street, Suite 3100, Denver, CO 80202.
Automatically (from your bank account)
Complete at any time an Automatic Investment Plan application to have $50 or
more (minimum is the equivalent of at least $50 per month) automatically
withdrawn from your bank account monthly, quarterly or annually.
By Wire
Call 1-800-392-CORE (2673) to receive wiring instructions.
Minimum Investments Amount
------
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>
[mountain logo] WESTCORE FUNDS
How To Invest and Obtain Information
How To Exchange Fund Shares
You may exchange your Fund shares for shares of the other Westcore investment
portfolios or the Compass Capital Money Market Portfolio.* Exchanges into a
new account must be for at least $1,000 per transaction. Exchanges into
existing accounts must be for at least a $50 per transaction. You should
read the Prospectus for the Westcore investment portfolios 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.
By Telephone
Call 1-800-392-CORE (2673), and give the account name, account number, name of
Fund and amount of exchange.
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;
- include your account number and tax identification number.
Automatically
Call 1-800-392-CORE (2673) to receive instructions for automatically exchanging
shares between Funds on a monthly, quarterly or annual basis.
*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.
-13-
<PAGE>
Westcore MIDCO Growth Fund Prospectus
How To Redeem Fund Shares
You may redeem your Fund shares on any business day on which the New York Stock
Exchange is open. If you have any questions on how to redeem your shares,
please call a Westcore Investor Service Representative at 1-800-392-CORE (2673).
Redemption proceeds generally will be sent by check to the shareholder(s) of
record at the address of record within seven 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 three 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 seven
days after withdrawal. If the shares being redeemed were purchased by check,
telephone or through the Automatic Investment Plan, the Trust may delay the
mailing of your redemption check for up to 15 days from the day of purchase to
allow the purchase to clear.
By Telephone (Available only if you checked the appropriate box on the Account
Application.)
Not available for retirement accounts or shares held in certificate form.
Call 1-800-392-CORE (2673) and give the account name, account number, name of
Fund and amount of redemption.
If you do not have and would like to add the telephone 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.
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 3100, 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 $25,000 or any redemption being mailed to any
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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<PAGE>
[mountain logo] WESTCORE FUNDS
How to Invest and Obtain Information
How to Redeem Fund Shares (Continued)
By Wire (Available only if you checked the appropriate box on the Account
Application.)
Call 1-800-392-CORE (2673) or write Westcore Trust, P.O. Box 8319, Boston, MA
02266-8319.
You will need to provide account name and number, name of Westcore MIDCO Growth
Fund and amount of redemption ($1,000 minimum per transaction if made by wire).
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.
By Systematic Withdrawal
Request monthly, quarterly or annual withdrawals in any multiple of $50. Call
1-800-392-CORE (2673) for more information.
Participation requires a minimum of $10,000 in the Fund in order to initiate
this plan.
How to Obtain Account Information, Fund Prices and Fund Performance Information
By Telephone
Call 1-800-392-CORE (2673) between 7:00 a.m. and 6:00 p.m. Mountain Time to
obtain your current account balances, confirm recent account transactions,
obtain daily NAV prices or quarterly performance information. Current account
balances and daily NAV prices can also be obtained through our automated phone
system 24 hours a day, 7 days a week.
By Internet
Visit our web site at WWW.WESTCORE.COM to find out up-to-date
information on each of the Westcore Funds. In addition, you can obtain your
current account balances and confirm recent account transactions through the
Westcore TR@NSACTION center. You must first authorize access to your account
by calling a Westcore Investor Service Representative at 1-800-392-CORE.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus General Account Policies
Signature Guarantee
A signature guarantee assures that a signature is genuine. The signature
guarantee protects shareholders from unauthorized transfers. A signature
guarantee is not the same as a notarized signature. You can obtain a signature
guarantee from a bank or trust company, credit union, broker, dealer, securities
exchange or association, clearing agency or savings association, as defined by
federal law.
The guarantee must be an ink stamp or medallion that states "Signature(s)
Guaranteed" and must be signed in the name of the guarantor by an authorized
person with that person's title and the date. Westcore Funds may reject a
signature guarantee if the guarantor is not a member of or participant in a
signature guarantee program. Call your financial institution to see if they
have the ability to guarantee a signature.
Shareholders living abroad may acknowledge their signatures at an overseas
branch of a U.S. bank, member firm of a stock exchange or any foreign bank
having a branch office in the U.S.
To protect your accounts from fraud, the following transactions will require a
signature guarantee:
- - Transferring ownership of an account.
- - Redeeming more than $25,000 from your account.
- - Redeeming by check payable to someone other than the account owner(s).
- - Redeeming by check mailed to an address other than the address of record.
- - Redemption check mailed to an address which has been changed within the
last 30 days of the redemption request without a signature guarantee.
The Funds reserve the right to require a signature guarantee under other
circumstances or to reject or delay a redemption on certain legal grounds.
Redemption of Low Balance Accounts
If your account balance falls below the required minimums presented on page
15, a letter will be sent advising you to either bring the value of the
shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. If action is
not taken within 90 days of the notice, the shares held in the account will
be redeemed and the proceeds will be sent by check to your address of record.
We reserve the right to increase the investment minimums.
Involuntary Redemptions
We reserve the right to close an account if the shareholder is deemed to engage
in activities which are illegal or otherwise believed to be detrimental to the
Fund.
Telephone Transactions
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 Fund by telephone during
periods of unusual market activity. If this happens, you may redeem your shares
by mail as described earlier.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Address Changes
To change the address on your account, call 1-800-392-CORE (2673) or send a
written request signed by all account owners. Include the name of the Fund, the
account number(s), the name(s) on the account and both the old address and new
address. Certain options may be suspended for 30 days following an address
change unless a signature guarantee is provided.
Registration Changes
To change the name on an account, the shares are generally transferred to a new
account. In some cases, legal documentation may be required. For more
information call 1-800-392-CORE (2673).
Share Certificates
The Funds will issue share certificates upon written request only. Share
certificates will not be issued until the shares have been held for at least 15
days and will not be issued for accounts that do not meet the minimum investment
requirements.
Quarterly Consolidated Statements and Shareholder Reports
Westcore Funds will send you a consolidated statement quarterly and a
confirmation after every transaction that affects your share balance or your
account registration with the exception of automatic investment plan
transactions and dividend reinvestment transactions. A statement with tax
information regarding the tax status of income dividends and capital gain
distributions will be mailed to you by January 31 of each year and filed with
the Internal Revenue Service.
Each year, we will send you an annual and a semi-annual report. The annual
report includes audited financial statements and a list of portfolio securities
as of the fiscal year end. The semi-annual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You will also receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your investments in Westcore Funds. Duplicate
mailings of Fund materials to shareholders who reside at the same address may be
eliminated.
-17-
<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, if required, are
received by the transfer agent in proper form. The 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 transfer agent 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, purchase orders
will be processed at the NAV next determined after the Service Organization
acting on their behalf receives the purchase order.
The 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. The
Fund's investments are valued at market value or, when 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 requires.
Service Organizations may also impose charges, restrictions, transaction
procedures 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.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Other Information
Distributions And Taxes
The Fund's income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as income dividends. The 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 on the ex-dividend date.
Distribution Schedule
When you open an account, all dividends and capital gains will be automatically
reinvested in the distributing Fund unless you specify on your Account
Application that you want to receive your distributions in cash or reinvest them
in another Fund. Income dividends and capital gain distributions will be
reinvested without a sales charge at the net asset value on the ex-dividend
date. You may change your distribution option at any time by writing or calling
1-800-392-CORE (2673). The Fund distributes income dividends and capital gain
distribution in December only.
Taxes
As with any investment, you should consider the tax implications of an
investment in the Fund. The following briefly summarizes some of the important
tax considerations generally affecting the Fund and its 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 Fund 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.
Any capital gain dividend paid by the 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 the 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 the 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 the Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code (the "Code"), the Fund generally will not be required
to pay federal income taxes on its income and capital gains.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
Performance Reporting
This section will help you understand various terms that are commonly used to
describe the 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 the 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.
Aggregate total return -- reflects income and capital appreciation/depreciation
and establishes a total percentage change in the value of an investment in the
Fund over a specified measuring period.
Average annual total return -- represents the average annual percentage change
in the value of an investment in the 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 the 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 the Fund during the period in Fund shares.
Any fees charged by your Service Organization directly to your account in
connection with an investment in the Fund will not be included in the Fund's
calculations of total return.
Performance quotations of the 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 the Fund will fluctuate so that
your shares, when redeemed, may be worth more or less than their original cost.
Because performance will fluctuate, you cannot necessarily compare an investment
in Fund shares with bank deposits, savings accounts and similar investment
alternatives that often provide an agreed or guaranteed fixed yield for a stated
period of time.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Management Of Fund
Board of Trustees
The business and affairs of the Fund are managed under the direction of the
Trust's Board of Trustees. The SAI contains information about the Board of
Trustees.
Investment Adviser
Denver Investment Advisors serves as the investment adviser to the Fund. The
Investment Adviser has its principal offices at 1225 17th Street, 26th Floor,
Denver, Colorado 80202. As of June 30, 1997, Denver Investment Advisors had
approximately $10.4 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 Fund, 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 Fund and places orders for
all purchases and sales of the Fund's portfolio securities.
Portfolio Manager, Westcore MIDCO Growth Fund [black and white photograph of
Todger Anderson]
Todger Anderson, CFA, President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of the 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.
Todger Anderson, CFA, Portfolio Manager, Westcore Midco Growth Fund.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
Breakdown of Management Expenses and Expense Limits
Co-Administrators
ALPS and Denver Investment Advisors serve as co-administrators to the Fund
(the "Administrators"). As Administrators, they have agreed to: assist in
maintaining the Fund's office; furnish the Fund 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 the Fund's
expense accruals; monitor compliance with the Fund's investment policies and
limitations; and generally assist in the Fund's operations. The
Administrators are entitled to receive a fee from the Fund for administrative
services, computed daily and payable monthly, at the aggregate annual rate of
..30% of the 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 the Fund and to compute the net asset value and certain
other financial information relating to the 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 the Fund through omnibus
accounts ("Beneficial Shares"). The amount reimbursed with respect to the 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 the Fund
without taking into account such 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 the Fund or its shareholders.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Transfer Agent
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02015,
provides the Funds with transfer agency services in return for compensation.
The Fund pays the Investment Adviser an advisory fee under the advisory
agreement. The fee is set forth below and is expressed as an annual percentage
of the Fund's average daily net assets:
The contractual Advisory Fee for the Fee Schedule is .65%.
The Effective Advisory Fee for the Year Ended May 30, 1997 is .65%.
The Investment Adviser may from time to time voluntarily waive all or any
portion of these fees and reimburse expenses of the Fund; however, it may modify
or discontinue this practice at any time.
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
Fund. 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 the Fund will vote separately
on matters pertaining to its investment advisory agreement and any changes in
its fundamental investment limitations.
As of September 8, 1997, 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;
therefore, under the 1940 Act, may be deemed to be a controlling person of the
Trust.
Inquires
Please write or call Westcore Trust at the address or telephone number listed on
the back cover of this Prospectus with any inquiries you may have regarding the
Fund.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
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 the Fund's investment objective.
U.S. Government Obligations
The 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
The 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.
Each Fund may invest in short-term funding agreements. A funding agreement is a
contract between an issuer and a purchaser that obligates the issuer to pay a
guaranteed rate of interest on a principal sum deposited by the purchaser.
Funding agreements will also guarantee the return of principal and may guarantee
a stream of payments over time. A funding agreement may have either a fixed
rate or variable interest rate that is based on an index and guaranteed for a
set time period. The Fund intends to invest only in funding agreements which
have a put feature which may be exercised on seven days' notice.
Repurchase Agreements and Reverse Repurchase Agreements
In a repurchase agreement, the 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 because of adverse market action or delays in
liquidating the underlying obligations. Repurchase agreements are considered to
be loans under the 1940 Act.
The Fund may borrow money for temporary purposes by entering into reverse
repurchase agreements. Under these agreements, the 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.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Lower-Rated Securities
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 because of changes in the issuer's
creditworthiness; and (e) the adverse impact that legislation restricting lower-
rated securities may have on their market.
Securities Lending
The Fund may lend its 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 the Fund's
outstanding loans exceeds 30% of its total assets.
Restricted Securities
The Fund will not 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
seven 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 Fund during periods that qualified institutional
buyers become uninterested in purchasing these restricted securities.
Convertible Securities
The Fund 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 Fund uses 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.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
REITs
The Fund may invest in equity securities of equity real estate investment
trusts ("REITs") and mortgage REITs. Equity REITs invest directly in real
property. Mortgage REITs invest in mortgages on real property. REITs may be
subject to certain risks associated with the direct ownership of real estate
including declines in the value of real estate, risks related to general and
local economic conditions, overbuilding and increased competition, increases
in property taxes and operating expenses, and variations in rental income.
Generally, increases in interest rates will decrease the value of high
yielding securities and increase the costs of obtaining financing, which
could decrease the value of the portfolio's investments. In addition, equity
REITs may be affected by changes in the value of the underlying property
owned by the trusts, while mortgage REITs may be affected by the quality of
credit extended. REITs are also subject to heavy cash flow dependency,
defaults by borrowers, self liquidation and the possibility of failing to
qualify for tax-free pass-through of income under the Internal Revenue Code
and to maintain exemption from the 1940 Act.
Options and Futures
The Fund 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 the Fund maintains in a
segregated account with its custodian cash or U.S. Governmental 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 the Fund owns or has the 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
the Fund will not exceed 5% of its net assets, and options written by the 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.
The Fund may also invest to a limited extent in futures contracts and options on
futures contracts in order to reduce its exposure to movements of security
prices pending investment, for hedging purposes or to maintain liquidity.
Futures contracts obligate the Fund, at maturity, to take or make delivery of
certain securities or the cash value of a contract or securities index. The
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, the
Fund's commodities transactions must constitute bona fide hedging or other
permissible transactions. In addition, the 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, the Fund will create a
segregated account of liquid, high-grade assets or will otherwise cover its
position in accordance with SEC requirements.
Questions? Call 1-800-392-CORE (2673)
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<PAGE>
[mountain logo] WESTCORE FUNDS
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 when the price movements of the securities underlying them
do not follow the price movements of the portfolio securities subject to the
hedge; (2) the 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 because of 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
correctly predict the direction of securities prices, interest rates and other
economic factors.
Foreign Currency Exchange Transactions
Because the Fund may buy and sell securities and receive amounts denominated in
currencies other than the U.S. dollar, it may enter into currency exchange
transactions from time to time. The 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 the 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.
The Fund may maintain "short" positions in forward foreign currency exchange
transactions whereby the Fund would agree to exchange currency that it 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
the 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
The 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 the 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 delivery occurs. Because the Fund is required to hold and
maintain in a segregated account until the settlement date cash, U.S. Government
securities or liquid assets, in an amount sufficient to meet the purchase price,
the Fund's 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 Fund does not intend to engage in when-issued purchases and forward
commitments for speculative purposes.
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
Securities Issued by Other Investment Companies
The Fund may invest in securities issued by other investment companies subject
to the requirements of applicable securities laws. When the 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
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. Up to 25% of the Fund's assets may be invested in securities
issued by foreign companies, either directly (if the company's listed on a
U.S. exchange) or indirectly through ADRs.
Portfolio Turnover
The 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.
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<PAGE>
[mountain logo] WESTCORE FUNDS
Risk Factors Associated with Derivative Instruments
The Fund may purchase certain "derivative" instruments as have been described
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 currency contracts and structured debt obligations.
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 the 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.
Questions? Call 1-800-392-CORE (2673)
[mountain logo] Westcore Funds
370 17th Street
Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
www.westcore.com
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<PAGE>
Westcore MIDCO Growth Fund Prospectus
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<PAGE>
[mountain logo] WESTCORE FUNDS
370 17th Street
Suite 3100
Denver, CO 80202
1-800-392-CORE (2673)
www.westcore.com
Funds distributed by ALPS Mutual Funds Services,
Inc., member NASD
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<PAGE>
WESTCORE TRUST
Statement of Additional Information
for
MIDCO Growth Fund
Blue Chip Fund
Growth and Income Fund
Small-Cap Opportunity Fund
Long-Term Bond Fund
Intermediate-Term Bond Fund
Colorado Tax-Exempt Fund
October 1, 1997
TABLE OF CONTENTS
Page
----
THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . 2
NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . 32
DESCRIPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ADDITIONAL INFORMATION CONCERNING TAXES. . . . . . . . . . . . . . . . . . 36
MANAGEMENT OF THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . 41
CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . 49
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
COUNSEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS . . . . . . . . . . . . 52
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . FS-1
This Statement of Additional Information is meant to be read in
conjunction with the Funds' Prospectus dated October 1, 1997, as the same is
revised from time to time, and is incorporated by reference in its entirety into
the Prospectus. Because this Statement of Additional Information is not itself
a prospectus, no investment in shares of the Funds should be made solely based
upon the information contained herein. Audited financial statements for the
Funds as of May 30, 1997 are attached hereto. Copies of the Funds' Prospectus
and financial statements may be obtained by calling 1-800-392-CORE (2673) or by
writing ALPS Mutual Funds Services, Inc. at 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202. Capitalized terms used but not defined herein have the
same meanings as in the Prospectus.
<PAGE>
THE TRUST
Westcore Trust (the "Trust") is a Massachusetts business trust which
was organized on December 10, 1985 as an open-end management investment company.
The Trust's predecessor was originally incorporated in Maryland on January 11,
1982.
The Trust is authorized to issue separate classes of shares
representing interests in separate investment portfolios. This Statement of
Additional Information pertains to the MIDCO Growth Fund, Blue Chip Fund, Growth
and Income Fund, Small-Cap Opportunity Fund, Long-Term Bond Fund,
Intermediate-Term Bond Fund and Colorado Tax-Exempt Fund (each, a "Fund" and
collectively, the "Funds"). The MIDCO Growth Fund, Blue Chip Fund, Growth and
Income Fund and Small-Cap Opportunity Fund are sometimes referred to as the
"Equity Funds." The Long-Term Bond Fund, Intermediate-Term Bond Fund and
Colorado Tax-Exempt Fund are sometimes referred to as the "Bond Funds." For
information concerning any investment portfolios offered by the Trust, contact
ALPS Mutual Fund Services, Inc. ("ALPS") at 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202 or call 1-800-392-CORE (2673).
INVESTMENT OBJECTIVES AND POLICIES
The Prospectus for the Funds describes the Funds' investment
objectives. The following information supplements and should be read in
conjunction with the description of the investment objective and policies for
each Fund in the Prospectus.
PORTFOLIO TRANSACTIONS
Denver Investment Advisors LLC ("Denver Investment Advisors" or the
"Investment Adviser") serves as the investment adviser to the Funds pursuant to
an investment advisory agreement (the "Advisory Agreement").
Subject to the general supervision of the Trust's Board of Trustees
and the provisions of the Trust's Advisory Agreement relating to the Funds,
Denver Investment Advisors makes decisions with respect to and places orders for
all purchases and sales of portfolio securities for the Funds.
The annualized portfolio turnover rate for each Fund is calculated by
dividing the lesser of purchases or sales of portfolio securities for the year
by the monthly average value of the portfolio securities. The calculation
excludes all securities, including options, that have maturities or expiration
dates at the time of acquisition of one year or less. Portfolio turnover may
vary greatly from year to year as well as within a
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<PAGE>
particular year, and may be affected by cash requirements for redemption of
shares and by requirements which enable the Funds to receive favorable tax
treatment. Portfolio turnover will not be a limiting factor in making portfolio
decisions, and each Fund may engage in short-term trading to achieve its
investment objective.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. During the fiscal years
ended May 31, 1997, 1996 and 1995, the Funds paid the following amounts in
brokerage commissions:
BROKERAGE COMMISSIONS PAID
Year Ended Year Ended Year Ended
May 31, May 31, May 31,
Fund 1997 1996 1995
---- ---- ---- ----
MIDCO Growth Fund $742,296 $674,234 $394,695
Blue Chip Fund 71,227 86,601 68,775
Growth and Income Fund 23,464 61,996 100,312
Intermediate-Term Bond Fund 0 2,343 0
Small-Cap Opportunity Fund 83,927 48,650 30,619
- -------------------------- ------ ------ ------
- -------------------------- ------ ------ ------
Aggregate Commissions $ 920,914 $ 873,824 $594,401
For the same periods the Long-Term Bond Fund and Colorado Tax-Exempt
Fund did not pay any brokerage commissions. During the fiscal years ended May
31, 1997, 1996 and 1995, no brokerage commissions were paid by any Funds to an
affiliated broker of the Trust.
There is generally no stated commission in the case of portfolio
securities traded in the over-the-counter market, but the price includes an
undisclosed commission or mark-up. Securities purchased and sold by the Funds
are generally traded in the over-the-counter market on a net basis (i.e.,
without commission) through dealers, or otherwise involve transactions directly
with the issuer of an instrument. Transactions in the over-the-counter market
are generally principal transactions with dealers and the costs of such
transactions involve dealer spreads rather than brokerage commissions. With
respect to over-the-counter transactions, Denver Investment Advisors will
normally deal directly with the dealers who make a market in the securities
involved, except in those circumstances where better prices and execution terms
are available elsewhere or as
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<PAGE>
described below. The cost of securities purchased from underwriters includes an
underwriting commission or concession, and the prices at which securities are
purchased from and sold to dealers include a dealer's mark-up or mark-down.
The Funds may participate, if and when practicable, in bidding for the
purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
A Fund will engage in this practice, however, only when the Investment Adviser,
in its sole discretion, believes such practice to be otherwise in the Fund's
interests.
The Advisory Agreement for the Funds provides that the Investment
Adviser will seek to obtain the best overall terms available in executing
portfolio transactions and selecting brokers or dealers. In assessing the best
overall terms available for any transaction, Denver Investment Advisors will
consider all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. In addition,
the Advisory Agreement authorizes Denver Investment Advisors to cause any of the
Funds to pay a broker-dealer that furnishes brokerage and research services a
higher commission than that charged by another broker-dealer for effecting the
same transaction, provided that Denver Investment Advisors determines in good
faith that the commission is reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer, viewed in terms
of that particular transaction or the overall responsibilities of Denver
Investment Advisors to the Fund. Such brokerage and research services might
consist of reports and statistics of specific companies or industries, general
summaries of groups of stocks or bonds and their comparative earnings and
yields, or broad overviews of the stock, bond and government securities markets
and the economy.
Supplemental research information so received is in addition to, and
not in lieu of, services required to be performed by the Investment Adviser and
does not reduce the advisory fees payable by the Funds. The Trustees will
periodically review the commissions paid by the Funds to consider whether the
commissions paid over representative periods of time appear to be reasonable in
relation to the benefits inuring to the Funds. It is possible that certain of
the supplementary research or other services received will primarily benefit one
or more other investment companies or other accounts for which investment
discretion is exercised by the Investment Adviser. Conversely, a Fund may be
the primary beneficiary of the research or services received as a result of
portfolio transactions effected for such other account or investment company.
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<PAGE>
The Funds may from time to time purchase securities issued by the
Trust's regular broker/dealers (as defined in Rule 10b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") or their parents. As of
May 31, 1997, the Intermediate-Term Bond Fund held securities of the Trust's
regular broker/dealers (or their parents) that derive more than 15% of their
gross revenues from securities-related activities. As of that date, the Fund's
aggregate holdings of securities of Merrill Lynch & Co. was $1,117,069. Also as
of May 31, 1997, the MIDCO Growth, Blue Chip, Growth and Income, Small-Cap
Opportunity, Long-Term Bond, Intermediate-Term Bond Funds held securities of the
Stagecoach Funds in the amounts of $10,579,132, $461,946, $30,219, $2,221,251,
$360,244 and $2,666,586 respectively. The Colorado Tax-Exempt Fund held
securities of the Provident Institutional Funds in the amount of $ 421,044.
Portfolio securities will not be purchased from or sold to (and
savings deposits will not be made in and repurchase and reverse repurchase
agreements will not be entered into with) the Investment Adviser, ALPS or an
affiliated person (as the term is defined in the 1940 Act) acting as principal,
except to the extent permitted by the Securities and Exchange Commission (the
"SEC"). However, Denver Investment Advisors is authorized in allocating
purchase and sale orders for portfolio securities to broker/dealers and other
financial institutions (including institutions that are affiliated with the
Investment Adviser or principal underwriter) to take into account the sale of
Fund shares if Denver Investment Advisors believes that the quality of the
transaction and the amount of the commission are comparable to those of other
qualified brokerage firms. In addition, the Colorado Tax-Exempt Fund will not
purchase securities during the existence of any underwriting group or related
selling group of which ALPS, the Investment Adviser, or any affiliated person of
any of them, is a member, except to the extent permitted by the SEC. In certain
circumstances, the Funds may be at a disadvantage because of these limitations
in comparison with other investment companies which have similar investment
objectives but are not subject to such limitations.
Investment decisions for each Fund are made independently from those
for the other Funds and investment companies and accounts advised or managed by
the Investment Adviser. Such other investment companies and accounts also may
invest in the same securities as the Funds. When a purchase or sale of the same
security is made at substantially the same time on behalf of a Fund and another
investment company or account, the available securities will be allocated
between the Fund and the other purchaser in a manner which Denver Investment
Advisors believes to be equitable to both. In some instances, this may
adversely affect the price paid or received by a Fund or the size of the
position obtained by or disposed of by the Fund. To the
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<PAGE>
extent permitted by law, Denver Investment Advisors may aggregate the securities
to be sold or purchased for a Fund with those to be sold or purchased for other
investment companies or accounts in executing transactions.
MOODY'S AND S&P RATINGS
The ratings of ratings agencies represent their opinions as to the
quality of debt securities. It should be emphasized, however, that ratings are
general and are not absolute standards of quality, and debt securities with the
same maturity, interest rate and rating may have different yields while debt
securities of the same maturity and interest rate with different ratings may
have the same yield. Subsequent to purchase by a Fund, an issue of debt
securities may cease to be rated or its rating may be reduced below the minimum
rating required for purchase by a Fund. Denver Investment Advisors will
consider such an event in determining whether the Fund involved should continue
to hold the obligation.
The payment of principal and interest on most debt securities
purchased by the Funds will depend upon the ability of the issuers to meet their
obligations. An issuer's obligations under its debt securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the Federal Bankruptcy Code, and laws, if
any, which may be enacted by federal or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon enforcement of such obligations or, in the case of governmental entities,
upon the ability of such entities to levy taxes. The power or ability of an
issuer to meet its obligations for the payment of interest and principal of its
debt securities may be materially adversely affected by litigation or other
conditions.
MUNICIPAL OBLIGATIONS (BOND FUNDS)
Municipal Obligations include "general obligation" securities,
"revenue" securities, private activity bonds and "moral obligation" securities.
General obligation securities are secured by the issuer's pledge of its full
faith, credit and taxing power. Revenue securities are payable only from the
revenues derived from a particular facility, the proceeds of a special excise
tax or another specific revenue source such as the user of the facility being
financed. Private activity bonds (E.G., bonds issued by industrial development
authorities) are issued by or on behalf of public authorities to finance various
privately-operated facilities. Such bonds are included within the term
"Municipal Obligations" only if the interest paid thereon is exempt from regular
federal income tax and, for the Colorado Tax-Exempt Fund, not treated as a
specific tax preference item under the federal alternative minimum tax.
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Private activity bonds are in most cases revenue securities and are not payable
from the unrestricted revenues of the issuer. The credit quality of such bonds
is usually directly related to the credit standing of the corporate user of the
facility involved. Moral obligation securities are normally issued by special
purpose public authorities. If the issuer is unable to meet its debt service
obligations from current revenues, it may draw on a reserve fund, the
restoration of which is a moral commitment but not a legal obligation of the
state or municipality which created the issuer.
Certain of the Municipal Obligations held by the Colorado Tax-Exempt
Fund may be insured as to the timely payment of principal and interest. There
is no guarantee, however, that the insurer will meet its obligations in the
event of the issuer's default. In addition, such insurance will not protect
against market fluctuations caused by changes in interest rates and other
factors.
Although the Colorado Tax-Exempt Fund will invest most of its assets,
under normal circumstances, in intermediate-term Municipal Obligations, the Fund
may also purchase short-term General Obligation Notes, Tax Anticipation Notes,
Bond Anticipation Notes, Revenue Anticipation Notes, Tax-Exempt Commercial
Paper, Construction Loan Notes and other forms of short-term tax-exempt loans.
Such instruments are issued with a short-term maturity in anticipation of the
receipt of tax funds, the proceeds of bond placements or other revenues.
Within the types of Municipal Obligations described above there are
other categories, including municipal leases, which are often sold in the form
of certificates of participation. These obligations are issued by state and
local governments or authorities to finance the acquisition of equipment and
facilities. Certain of these obligations present the risk that a municipality
may not appropriate funds for the lease payments. Moreover, lease obligations
may be limited by municipal charter or other provisions that do not permit
acceleration of the lease obligation upon default. Because certificates of
participation are generally subject to redemption by the issuing municipal
entity under specified circumstances, they are not as liquid or marketable as
other types of Municipal Obligations and are generally valued at par or less
than par in the open market.
There are variations in the quality of Municipal Obligations both
within a particular classification and between classifications, and the yields
on Municipal Obligations depend upon a variety of factors, including general
money market conditions, the financial condition of the issuer, general
conditions of the municipal bond market, the size of a particular
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offering, the maturity of the obligation and the rating of the issue.
Payment on Municipal Obligations relating to certain projects may be
secured by mortgages or deeds of trust. In the event of a default, enforcement
of the mortgages or deeds of trust will be subject to statutory enforcement
procedures and limitations.
In the event of a foreclosure, collection of proceeds may be delayed
and may not be sufficient to pay the principal or accrued interest on the
defaulted Municipal Obligations.
STAND-BY COMMITMENTS (COLORADO TAX-EXEMPT FUND)
The Fund may acquire stand-by commitments with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, a dealer or
bank agrees to purchase from the Fund, at the Fund's option, specified Municipal
Obligations at a specified price. The amount payable to the Fund upon its
exercise of a stand-by commitment is normally (i) the Fund's acquisition cost of
the Municipal Obligations (excluding any accrued interest which the Fund paid on
their acquisition), less any amortized market premium plus any amortized market
or original issue discount during the period the Fund owned the securities, plus
(ii) all interest accrued on the securities since the last interest payment date
during that period. Stand-by commitments may be sold, transferred or assigned
by the Fund only with the underlying instrument.
The Fund intends to enter into stand-by commitments only with dealers,
banks and broker-dealers which, in the Investment Adviser's opinion, present
minimal credit risks. The Fund's reliance upon the credit of these dealers,
banks and broker-dealers will be secured by the value of the underlying
Municipal Obligations that are subject to the commitment. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the Investment Adviser
will review periodically the issuer's assets, liabilities, contingent claims and
other relevant financial information.
The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The acquisition of a stand-by commitment would not affect the
valuation or assumed maturity of the underlying Municipal Obligations, which
would continue to be valued in accordance with the Fund's normal method of
valuation. Stand-by commitments acquired by the Fund would be valued at zero in
determining net asset value.
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SPECIAL CONSIDERATIONS REGARDING INVESTMENTS IN COLORADO OBLIGATIONS (COLORADO
TAX-EXEMPT FUND)
The concentration of the Colorado Tax-Exempt Fund in securities issued
by governmental units of only one state exposes the Fund to risks greater than
those of a more diversified portfolio holding securities issued by governmental
units of different states and different regions of the country.
The Fund believes the information summarized below describes some of
the more significant developments relating to securities of (i) municipalities
or other political subdivisions or instrumentalities of the State of Colorado
(the "State") which rely, in whole or in part, on AD VALOREM real property taxes
and other general funds of such municipalities or political subdivisions or (ii)
the State. The sources of such information include the official publications of
the State, as well as other publicly available documents. The Fund has not
independently verified any of the information contained in such official
publications and other publicly available documents, but is not aware of any
facts which would render such information inaccurate.
ECONOMIC FACTORS. Based on data published by the State of Colorado, Office of
State Planning and Budgeting as presented in the COLORADO ECONOMIC PERSPECTIVE,
FOURTH QUARTER, FISCAL YEAR 1997, JUNE 20, 1997 (the "Economic Report"), nearly
54% of non-agricultural employment in Colorado in 1996 was concentrated in the
retail and wholesale trade and service sectors, reflecting the importance of
tourism to the State's economy and of Denver as a regional economic and
transportation hub. The government and manufacturing sectors followed as the
next largest employment sectors in the State, representing approximately 16.3%
and 10.3%, respectively, of non-agricultural employment in the State in 1996.
The Office of Planning and Budgeting projects similar concentrations for
calendar years 1997 and 1998.
According to the Economic Report, the Colorado unemployment rate
remained unchanged with an average of 4.2% during both 1995 and 1996. Total
retail sales increased by 16.7% during 1996. Colorado continued to surpass the
employment growth rate of the U.S. with a 3.4% rate of growth for Colorado in
1996, as compared with 2.0% for the nation as a whole. However, the rate of job
growth in Colorado is projected in the Economic Report to be lower in 1997 than
1996 as a result of layoffs at various employers.
Personal income rose 6.8% in Colorado during 1996, as compared with an
increase of 5.5% for the nation as a whole.
RESTRICTIONS OF APPROPRIATIONS AND REVENUES. The State Constitution requires
that expenditures for any fiscal year not
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exceed revenues for such fiscal year. By statute, the amount of State General
Fund revenues available for appropriation is based upon revenue estimates which,
together with other available resources, must exceed annual appropriations by
the amount of the unappropriated reserve (the "Unappropriated Reserve"). The
Unappropriated Reserve requirement for fiscal years 1991, 1992 and 1993 was set
at 3% of total appropriations from the General Fund. For fiscal years 1994 and
thereafter, the Unappropriated Reserve requirement has been set at 4%. In
addition to the Unappropriated Reserve, a constitutional amendment approved by
Colorado voters in 1992 requires the State and each local government to reserve
a certain percentage of its fiscal year spending (excluding bonded debt service)
for emergency use (the "Emergency Reserve"). The minimum Emergency Reserve was
set at 1% for 1993 and 2% for 1994 and has been set at 3% for 1995 and later
years. For fiscal year 1992 and thereafter, General Fund appropriations are
also limited by statute to an amount equal to the cost of performing certain
required reappraisals of taxable property plus an amount equal to the lesser of
(i) 5% of Colorado personal income or (ii) 106% of the total General Fund
appropriations for the previous fiscal year. This restriction does not apply to
any General Fund appropriations which are required as a result of a new federal
law, a final state or federal court order or moneys derived from the increase in
the rate or amount of any tax or fee approved by a majority of the registered
electors of the State voting at any general election. In addition, the
statutory limit on the level of General Fund appropriations may be exceeded for
a given fiscal year upon the declaration of a State fiscal emergency by the
State General Assembly.
According to the Economic Report, the fiscal year 1996 ending General
Fund balance was $368.5 million, which was $211.8 million over the combined
Unappropriated Reserve and Emergency Reserve requirements. The 1995 fiscal year
ending General Fund balance was $488.5 million, or $262.4 million over the
required Unappropriated Reserve and Emergency Reserve. Based on Economic Report
estimates, the fiscal year 1997 ending General Fund balance is expected to be
approximately $386.3 million, or $220.3 million over the required Unappropriated
Reserve and Emergency Reserve.
On November 3, 1992, voters in Colorado approved a constitutional
amendment (the "Amendment") which, in general, became effective December 31,
1992, and restricts the ability of the State and local governments to increase
revenues and impose taxes. The Amendment applies to the State and all local
governments, including home rule entities ("Districts"). Enterprises, defined
as government-owned businesses authorized to issue revenue bonds and receiving
under 10% of annual revenue in grants from all Colorado state and local
governments combined, are excluded from the provisions of the Amendment.
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The provisions of the Amendment are unclear and have required judicial
interpretation. Among other provisions, the Amendment requires voter approval
prior to tax increases, the imposition of a new tax, creation of debt, or mill
levy or valuation for assessment ratio increases or a change of tax policy
resulting in a net revenue gain. The Amendment also limits increases in
government spending and property tax revenues to specified percentages. The
Amendment requires that District property tax revenues yield no more than the
prior year's revenues adjusted for inflation, voter approved changes, and
(except with regard to school districts) local growth in property values
according to a formula set forth in the Amendment. School districts are allowed
to adjust property tax revenue levies for changes in student enrollment.
Pursuant to the Amendment, local government spending is to be limited by the
same formula as the limitation for property tax revenues. The Amendment limits
increases in expenditures from the State General Fund and program revenues (cash
funds) to the growth in inflation plus the percentage change in State population
in the prior calendar year. The bases for initial spending and revenue limits
were fiscal year 1992 spending and 1991 property taxes collected in 1992. The
bases for spending and revenue limits for all subsequent fiscal years is the
prior fiscal year's spending and property taxes collected in the prior calendar
year. Debt service changes, reductions and voter-approved revenue changes are
excluded from the calculation bases. The Amendment also prohibits new or
increased real property transfer tax rates, new State real property taxes and
local District income taxes.
Litigation concerning several issues relating to the Amendment has
been brought in the Colorado courts. The litigation has dealt with three
principal issues: (i) whether Districts can increase mill levies to pay debt
service on general obligation bonds without obtaining voter approval; (ii)
whether a multi-year lease-purchase agreement subject to annual appropriation is
an obligation which requires voter approval prior to execution of the agreement;
and (iii) what constitutes an "enterprise" which is excluded from the provisions
of the Amendment. In September 1994, the Colorado Supreme Court held that
Districts can increase mill levies to pay debt service on voter approved general
obligation bonds issued after the effective date of the Amendment; in June 1995,
the Colorado Supreme Court validated mill levy increases to pay general
obligation bonds issued prior to the Amendment provided that such bonds or bonds
issued to refund such bonds were voter approved. In late 1994, the Colorado
Court of Appeals held that multi-year lease-purchase agreements subject to
annual appropriation do not require voter approval. The time to file an appeal
in that case has expired. Finally, in May 1995, the Colorado Supreme Court
ruled that entities with the power to levy taxes may not themselves be
"enterprises" for purposes of the Amendment; however, the Court did not address
the issue of how valid
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enterprises may be created. Many Colorado local governments interpret this
decision to mean that a government with taxing power cannot be an enterprise but
that a business activity (such as a utility) owned by such a government can be.
Additional litigation in the "enterprise" arena may be filed in the future to
clarify these issues. The Colorado Supreme Court has also decided that voters
can authorize a government to keep and spend all revenues received in excess of
the spending limits. Other aspects of the spending limit are being litigated in
district court actions.
According to the Economic Report, for fiscal year 1996, general fund
revenues (adjusted for cash funds that are exempt from the Amendment) were
$3,941.9 million and program revenues (cash funds) were $1,815.5 million, for
revenues totaling $5,757.3 million. During calendar year 1995, population and
inflation grew at rates of 4.4% and 2.7%, respectively, for a combined total
limit of 7.1%. Accordingly, under the Amendment, increases in State
expenditures during the 1996 fiscal year could not exceed $6,166.1 million and
the actual 1996 general fund and program revenues of $6,124.3 million were under
the limit. The limitation for fiscal year 1997 is 5.5% over revenues during the
1996 fiscal year; accordingly, 1997 fiscal year revenues cannot exceed $6,528.5
million. Fiscal year 1997 revenues are estimated to be approximately $140
million over the limitation. The limitation for the 1998 fiscal year is
currently projected to be 5.2% which translates to a revenue limit of
approximately $6,946.5 million for fiscal year 1998. The State currently
projects that revenues will exceed the Amendment limitation for the foreseeable
future. There will be a special session of the legislature in October to
determine how to refund the surplus for fiscal year 1997. It is possible that
in future legislative sessions proposals to reform the state tax structure to
minimize such surpluses may be considered. The State will have to refund, or
obtain voter approval to retain, the excess over the limitation in 1998.
There is also a statutory restriction on the amount of annual
increases in taxes that the various taxing jurisdictions in Colorado can levy
without electoral approval. This restriction does not apply to taxes levied to
pay general obligation debt.
COLORADO STATE FINANCES. As the State experienced revenue shortfalls in the
mid-1980s, it adopted various measures, including impoundment of funds by the
Governor, reduction of appropriations by the General Assembly, a temporary
increase in the sales tax, deferral of certain tax reductions and inter-fund
borrowings. According to State of Colorado Audited Finance Reports, under
generally accepted accounting principles, the State had unrestricted General
Fund ending balances at June 30 of approximately $133.3 million in fiscal year
1992, $326.8 million
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in fiscal year 1993, $320.4 million in fiscal year 1994, $408.0 million in
fiscal year 1995, and $368.5 million for fiscal year 1996.
For fiscal year 1996, the following tax categories generated the
following percentages of the State's $4,268.7 million total revenues (accrual
basis): individual income taxes represented 54.3% of gross fiscal year 1996
receipts; sales, use, and other excise taxes represented 33.2% of gross fiscal
year 1996 receipts; and corporate income taxes represented 4.8% of gross fiscal
year 1996 receipts. For fiscal year 1997, General Fund revenues of
approximately $4,645.8 million and appropriations of approximately
$4,553.2 million are projected. The percentages of General Fund revenue
generated by type of tax for fiscal year 1997 are not expected to be
significantly different from fiscal year 1996 percentages.
DEBT. Under its constitution, the State of Colorado is not permitted to issue
general obligation bonds secured by the full faith and credit of the State.
However, certain agencies and instrumentalities of the State are authorized to
issue bonds secured by revenues from specific projects and activities. The
State enters into certain lease transactions which are subject to annual renewal
at the option of the State. In addition, the State is authorized to issue
short-term revenue anticipation notes. Local government units in the State are
also authorized to incur indebtedness. The major source of financing for such
local government indebtedness is an AD VALOREM property tax. In addition, in
order to finance public projects, local governments in the State can issue
revenue bonds payable from the revenues of a utility or enterprise or from the
proceeds of an excise tax, or assessment bonds payable from special assessments.
Colorado local governments can also finance public projects through leases which
are subject to annual appropriation at the option of the local government.
Local governments in Colorado also issue tax anticipation notes. The Amendment
requires prior voter approval for the creation of any multiple fiscal year debt
or other financial obligation whatsoever, except for refundings at a lower rate
or obligations of an enterprise.
Economic conditions in the State may have continuing effects on other
governmental units within the State (including issuers of the Colorado
obligations in the Fund), which, to varying degrees, have also experienced
reduced revenues as a result of recessionary conditions and other factors.
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U.S. GOVERNMENT OBLIGATIONS (ALL FUNDS)
Each Fund may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Examples of the types of U.S.
Government obligations that may be held by a Fund include, in addition to U.S.
Treasury bonds, notes and bills, the obligations of Federal Home Loan Banks,
Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, Government National Mortgage Association,
Federal National Mortgage Association, General Services Administration, Student
Loan Marketing Association, Central Bank for Cooperatives, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks and Maritime
Administration. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the Government National Mortgage Association,
are supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Export-Import Bank of the United States, are supported by the right
of the issuer to borrow from the Treasury; others, such as those of the Federal
National Mortgage Association, are supported by the discretionary authority of
the U.S. Government to purchase the agency's obligations; still others, such as
those of the Student Loan Marketing Association, are supported only by the
credit of the instrumentality. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored
instrumentalities if it is not obligated to do so by law.
MONEY MARKET INSTRUMENTS (ALL 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, negotiable certificates
of deposit and non-negotiable time deposits, including instruments issued or
supported by the credit of U.S. or foreign banks. Although the Funds will
invest in obligations of foreign banks or foreign branches of U.S. banks only
where the Investment Adviser deems the instrument to present minimal credit
risks, these investments nevertheless entail risks that are different from those
of investments in domestic obligations of U.S. banks due to differences in
political, regulatory and economic systems and conditions. Investments in bank
obligations are limited to the obligations of financial institutions having more
than $1 billion in total assets at the time of purchase. Investments in the
obligations of foreign banks and foreign branches of U.S. banks will not exceed
20% and 25%, respectively, of each Fund's total assets at the time of purchase.
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Commercial paper is a short-term debt obligation with a maturity
ranging from 1 to 270 days issued by banks, corporations and other borrowers.
Investments by a Fund in commercial paper and similar corporate obligations will
consist of issues that are rated within the highest rating category by one or
more Rating Agencies at the time of purchase and unrated paper determined by the
Investment Adviser at the time of purchase to be of comparable quality.
For the Colorado Tax-Exempt Fund, investments in money market
instruments, together with investments in other instruments (such as U.S.
Government obligations and repurchase agreements) that are subject to federal
income tax, will not exceed 20% of the total assets of the Fund except when made
for temporary defensive purposes. The Colorado Tax-Exempt Fund may also hold
uninvested cash reserves which do not earn income pending investment, during
temporary defensive periods or if, in the opinion of its Investment Adviser,
suitable tax-exempt obligations are unavailable. There is no percentage
limitation on the amount of assets which may be held uninvested by the Colorado
Tax-Exempt Fund.
VARIABLE AND FLOATING RATE INSTRUMENTS (BOND FUNDS)
These Funds may purchase variable and floating rate obligations as
described in the Prospectus. The Investment Adviser will consider the earning
power, cash flows and other liquidity ratios of the issuers and guarantors of
such obligations and, if the obligation is subject to a demand feature, will
monitor the issuer's financial ability to meet payment on demand.
Variable and floating rate demand instruments acquired by a Fund may
include participations in Municipal Obligations purchased from and owned by
financial institutions, primarily banks. Participation interests provide a Fund
with a specified undivided interest (up to 100%) in the underlying obligation
and the right to demand payment of the unpaid principal balance plus accrued
interest on the participation interest from the institution upon a specified
number of days' notice, not to exceed thirty days. Each participation interest
is backed by an irrevocable letter of credit or guarantee of a bank that the
Investment Adviser has determined meets the prescribed quality standards for the
Fund. The bank typically retains fees out of the interest paid on the
obligation for servicing the obligation, providing the letter of credit and
issuing the repurchase commitment.
While there may be no active secondary market with respect to a
particular variable or floating rate instrument purchased by the Funds, the
Funds may, from time to time as specified in the instrument, demand payment in
full of the
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principal or may resell the instrument to a third party. The absence of an
active secondary market, however, could make it difficult for a Fund to dispose
of an instrument if the issuer defaulted on its payment obligation or during
periods that the Fund is not entitled to exercise its demand rights, and the
Fund could, for these or other reasons, suffer a loss. Variable and floating
rate instruments with no active secondary market will be included in the
calculation of a Fund's illiquid assets. See "Restricted Securities."
REPURCHASE AGREEMENTS (ALL FUNDS)
A Fund will enter into repurchase agreements only with financial
institutions deemed to be creditworthy by the Investment Adviser, pursuant to
guidelines established by the Trust's Board of Trustees. During the term of any
repurchase agreement, the Investment Adviser will monitor the creditworthiness
of the seller and the seller must maintain the value of the securities subject
to the agreement and held by the Fund as collateral at 101% of the repurchase
price.
Although the securities subject to repurchase agreements may bear
maturities exceeding 13 months, each Fund does not presently intend to enter
into repurchase agreements with deemed maturities in excess of seven days after
notice by the Fund. If in the future a Fund were to enter into repurchase
agreements with deemed maturities in excess of seven days, the Fund would do so
only if such investment, together with other illiquid securities, did not exceed
15% of the value of the Fund's net assets.
The repurchase price under repurchase agreements entered into by a
Fund generally equals the price paid by the Fund plus interest negotiated on the
basis of current short-term rates (which may be more or less than the rate on
the securities underlying the repurchase agreement). Securities subject to
repurchase agreements are held by the Funds' custodian or in the Federal
Reserve/Treasury book-entry system.
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.
REVERSE REPURCHASE AGREEMENTS (ALL FUNDS)
When a Fund enters into a reverse repurchase agreement, it maintains
in a separate custodial account cash, U.S. Government obligations or other
liquid high-grade debt obligations that have a value at least equal to the
repurchase price.
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Reverse repurchase agreements involve the risk that the value of
portfolio securities a Fund sells may decline below the price it must pay when
the transaction closes.
As reverse repurchase agreements are deemed to be borrowings by the
SEC, each Fund is required to maintain continuous asset coverage of 300%.
Should the value of a Fund's assets decline below 300% of borrowings, a Fund may
be required to sell portfolio securities within three days to reduce the Fund's
debt and restore 300% asset coverage.
LOWER-RATED SECURITIES (ALL EQUITY FUNDS)
While any investment carries some risk, certain risks associated with
lower-rated securities (commonly referred to as "junk bonds") are different than
those for investment grade securities. The risk of loss through default is
greater because lower-rated securities are usually unsecured and are often
subordinate to an issuer's other obligations. If an issuer of a security held
by a Fund defaults, the Fund may incur additional expenses to seek recovery.
Additionally, the issuers of these securities frequently have high debt levels
and are thus more sensitive to difficult economic conditions, individual
corporate developments and rising interest rates. Consequently, the market
price of these securities may be quite volatile and may result in wider
fluctuations in a Fund's net asset value per share.
In certain circumstances it may be difficult to determine a security's
fair value due to a lack of reliable objective information. This may occur
where there is no established secondary market for the security or the security
is thinly traded. As a result, a Fund's valuation of a security and the price
it is actually able to obtain when it sells the security could differ.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may adversely affect the value and liquidity of
lower-rated securities held by the Funds, especially in a thinly-traded market.
Illiquid or restricted securities held by the Funds may involve special
registration responsibilities, liabilities, costs and valuation difficulties.
The ratings of Rating Agencies evaluate the safety of a lower-rated
security's principal and interest payments, but do not address market value
risk. Because the ratings of the Rating Agencies may not always reflect current
conditions and events, the Investment Adviser continuously monitors the issuers
of lower-rated securities held in a Fund's portfolio for their ability to make
required principal and interest payments. If a security undergoes a rating
revision, the Fund involved may continue to hold the security if the Investment
Adviser decides this is appropriate.
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SECURITIES LENDING (EQUITY AND BOND FUNDS OTHER THAN THE COLORADO TAX-EXEMPT
FUND)
Each of these Funds may lend its portfolio securities to institutional
investors as a means of earning additional income. Such loans must be
continuously secured by certain liquid, high-grade collateral equal at all times
to at least the market value of the securities loaned. Securities loans will be
made only to borrowers deemed by the Investment Adviser to present minimal
credit risks and when, in its judgment, the income to be earned from the loan
justifies the possible risks.
When a Fund lends its securities, it continues to receive interest or
dividends on the securities loaned and may simultaneously earn interest on the
collateral received from the borrower or from the investment of cash collateral
in readily marketable, high-quality, short-term obligations. Although voting
rights, or rights to consent, attendant to securities on loan pass to the
borrower, these loans may be called at any time and will be called if a material
event affecting the investment were to occur.
Collateral for such securities loans may include cash, securities of
the U.S. Government, its agencies or instrumentalities or an irrevocable letter
of credit issued by a bank which meets the investment standards of a Fund and
whose securities are eligible for purchase under the objectives, policies and
limitations of the Fund. There may be risks of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities fail financially.
RESTRICTED SECURITIES (ALL FUNDS)
No Fund will knowingly invest more than 15% of the value of its net
assets in securities that are illiquid. Securities that are not registered
under the Securities Act of 1933 but that may be purchased by institutional
buyers under Rule 144A are subject to this limitation unless the Investment
Adviser under the supervision of the Board determines that a liquid trading
market exists.
Rule 144A allows for a broader institutional trading market for
securities otherwise subject to restriction on resale to the general public.
Rule 144A establishes a "safe harbor" from the registration requirements of the
Securities Act of 1933 for resales of certain securities to qualified
institutional buyers. The Investment Adviser believes that the market for
certain restricted securities such as institutional commercial paper may expand
further as a result of this regulation and the development of automated systems
for the trading, clearance and
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settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the NASD.
The Investment Adviser monitors the liquidity of restricted securities
in each of the Funds' portfolios under the supervision of the Board of Trustees.
In reaching liquidity decisions, the Investment Adviser will consider such
factors as: (a) the frequency of trades and quotes for the security; (b) the
number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (c) dealer undertakings to make a market in the
security; and (d) the nature of the security and the nature of the marketplace
trades (E.G., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).
RIGHTS OFFERINGS AND WARRANTS TO PURCHASE (EQUITY AND BOND FUNDS)
These Funds may participate in rights offerings and may purchase
warrants. These instruments are privileges enabling the owners to subscribe to
and purchase a specified number of shares of the issuing corporation at a
specified price during a specified period of time. Subscription rights normally
have a short life span to expiration. The purchase of rights or warrants
involves the risk that the Fund involved could lose the purchase value of a
right or warrant if the right to subscribe to additional shares is not exercised
prior to the expiration of the rights and warrants. Also, the purchase of
rights or warrants involves the risk that the effective price paid for them,
when added to the subscription price of the related security, may exceed the
value of the subscribed security's market price. This could occur when there is
no movement in the level of the underlying security.
ASSET-BACKED SECURITIES (BOND FUNDS)
These Funds may purchase asset-backed securities issued by either
governmental or non-governmental entities which represent a participation in, or
are secured by and payable from, a stream of payments generated by particular
assets, most often a pool of assets similar to one another. Primarily, these
securities do not have the benefit of the same security interest in the
underlying collateral. Payment on asset-backed securities of private issues is
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty, or subordination. Assets generating such
payments will consist of such instruments as motor vehicle installment purchase
obligations and credit card receivables. Credit card receivables are generally
unsecured and the debtors are entitled to the protection of a number of state
and federal consumer laws, many of which have given debtors the right to set off
certain amounts owed on the credit cards, thereby reducing the balance due. The
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Funds may also invest in other types of asset-backed securities that may be
available in the future.
The calculation of the average weighted maturity of asset-backed
securities is based on estimates of average life.
Asset-backed securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in an
underlying pool of assets, or as debt instruments, which are also known as
collateralized obligations, and are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and
issuing such debt. Asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. Payments of both
interest and principal on the securities are typically made monthly, thus in
effect "passing through" monthly payments made by the individual borrowers on
the assets that underlie the securities, net of any fees paid to the issuer or
guarantor of the securities.
Asset-backed securities are considered an industry for industry
concentration purposes.
In general, the collateral supporting asset-backed securities is of
shorter maturity than mortgage-related securities. Like other fixed-income
securities, when interest rates rise the value of an asset-backed security
generally will decline; however, when interest rates decline, the value of an
asset-backed security with prepayment features may not increase as much as that
of other fixed-income securities.
MORTGAGE-RELATED SECURITIES (BOND FUNDS)
MORTGAGE BACKED SECURITIES GENERALLY. Mortgage backed securities held
by the Bond Funds represent an ownership interest in a pool of residential
mortgage loans. These securities are designed to provide monthly payments of
interest and principal to the investor. The mortgagor's monthly payments to his
lending institution are "passed-through" to an investor such as the Funds. Most
issuers or poolers provide guarantees of payments, regardless of whether or not
the mortgagor actually makes the payment. The guarantees made by issuers or
poolers are supported by various forms of credit, collateral, guarantees or
insurance, including individual loan, title, pool and hazard insurance purchased
by the issuers or poolers so that they can meet their obligations under the
policies. Mortgage backed securities issued by private issuers or poolers,
whether or not such securities are subject to guarantees, may entail greater
risk than securities directly or indirectly guaranteed by the U.S. Government.
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Interests in pools of mortgage backed securities differ from other
forms of debt securities, which normally provide for periodic payment of
interest in fixed amounts with principal payments at maturity or specified call
dates. Instead, these securities provide a monthly payment which consists of
both interest and principal payments. In effect, these payments are a
"pass-through" of the monthly payments made by the individual borrowers on their
residential mortgage loans, net of any fees paid. Additional payments are
caused by repayments resulting from the sale of the underlying residential
property, refinancing or foreclosure net of fees or costs which may be incurred.
Some mortgage backed securities are described as "modified pass-through". These
securities entitle the holders to receive all interest and principal payments
owed on the mortgages in the pool, net of certain fees, regardless of whether or
not the mortgagors actually make the payments.
The Bond Funds may purchase mortgage-related securities that are
secured by entities such as Government National Mortgage Association ("GNMA"),
Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage
Corporation ("FHLMC"), commercial banks, trusts, financial companies, finance
subsidiaries of industrial companies, savings and loan associations, mortgage
banks and investment banks.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities include
GNMA Mortgage Pass-Through Certificates (also known as "Ginnie Maes") which are
guaranteed as to the timely payment of principal and interest by GNMA and such
guarantee is backed by the full faith and credit of the United States. GNMA is
a wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development. GNMA certificates also are supported by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee. Mortgage-related securities also include FNMA guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA, are not backed by or entitled to the full faith and
credit of the United States and are supported by the right of the issuer to
borrow from the Treasury. FNMA is a government-sponsored organization owned
entirely by private stockholders. Fannie Maes are guaranteed as to timely
payment of principal and interest by FNMA. Mortgage-related securities include
FHLMC Mortgage Participation Certificates (also known as "Freddie Macs" or
"Pcs"). FHLMC is a corporate instrumentality of the United States, created
pursuant to an Act of Congress, which is owned entirely by Federal Home Loan
Banks. Freddie Macs are not guaranteed and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie Macs
entitle the holder to timely payment of interest, which is
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guaranteed by the FHLMC. FHLMC guarantees either ultimate collection or timely
payment of all principal payments on the underlying mortgage loans. When FHLMC
does not guarantee timely payment of principal, FHLMC may remit the amount due
on account of its guarantee of ultimate payment of principal at any time after
default on an underlying mortgage, but in no event later than one year after it
becomes payable.
UNDERLYING MORTGAGES. Pools consist of whole mortgage loans or
participations in loans. The majority of these loans are made to purchasers of
one to four family homes. The terms and characteristics of the mortgage
instruments are generally uniform within a pool but may vary among pools. For
example, in addition to fixed-rate, fixed-term mortgages, the Bond Funds may
purchase pools of variable rate mortgages ("VRM"), growing equity mortgages
("GEM"), graduated payment mortgages ("GPM") and other types where the principal
and interest payment procedures vary. VRM's are mortgages which reset the
mortgage's interest rate periodically with changes in open market interest
rates. To the extent that a Portfolio is actually invested in VRM's, its
interest income will vary with changes in the applicable interest rate on pools
of VRM's. GPM and GEM pools maintain constant interest rates, with varying
levels of principal repayment over the life of the mortgage. These different
interest and principal payment procedures should not impact the Portfolios' net
asset value since the prices at which these securities are valued will reflect
the payment procedures.
All poolers apply standards for qualification to local lending
institutions which originate mortgages for the pools. Poolers also establish
credit standards and underwriting criteria for individual mortgages included in
the pools. In addition, some mortgages included in pools are insured through
private mortgage insurance companies.
Each Fund may invest in multiple class pass-through securities,
including CMOs and REMIC Certificates. These multiple class securities may be
issued or guaranteed by U.S. Government agencies or instrumentalities, including
GNMA, FNMA and FHLMC, or issued by trusts formed by private originators of, or
investors in, mortgage loans. In general, CMOs and REMICs are debt obligations
of a legal entity that are collateralized by, and multiple class pass-through
securities represent direct ownership interests in, a pool of residential
mortgage loans or mortgage pass-through securities (the "Mortgage Assets"), the
payments on which are used to make payments on the CMOs or multiple pass-through
securities. Investors may purchase beneficial interests in REMICs, which are
known as "regular" interests or "residual" interests, which in general are
junior and more volatile than regular interests. The Funds do not intend to
purchase residual interests. Pools created by non-governmental issuers
generally offer a higher rate of interest
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than government and government-related pools because there are no direct or
indirect government guarantees of payments in the former pools. However, timely
payment of interest and principal of these pools is supported by various forms
of insurance or guarantees, including individual loan, title, pool and hazard
insurance purchased by the issuer. The insurance and guarantees are issued by
governmental entities, private insurers and the mortgage poolers. There can be
no assurance that the private insurers or mortgage poolers can meet their
obligations under the policies.
Although certain mortgage-related securities are guaranteed by a third
party or are otherwise similarly secured, the market value of the security,
which may fluctuate, is not so secured. If a Fund purchases a mortgage-related
security at a premium, that amount may be lost if there is a decline in the
market value of the security whether resulting from increases in interest rates
or prepayment of the underlying mortgage collateral. As with other
interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true because mortgages underlying securities are prone to
prepayment in periods of declining interest rates. For this and other reasons,
a mortgage-related security's maturity may be shortened by unscheduled
prepayments on underlying mortgages and, therefore, it is not possible to
accurately predict the security's return to a Fund. Mortgage-related securities
provide regular payments consisting of interest and principal. No assurance can
be given as to the return a Fund will receive when these amounts are reinvested.
The compounding effect from reinvestment of monthly payments received by the
Funds will increase their respective yields to shareholders, compared to bonds
that pay interest semi-annually.
CMOs may involve additional risks other than those found in other
types of mortgage-related obligations. During periods of rising interest rates,
CMOs may lose their liquidity as CMO market makers may choose not to repurchase,
or may offer prices, based on current market conditions, which are unacceptable
to the Fund based on the Fund's analysis of the market value of the security.
As new types of mortgage-backed securities are developed and offered
in the market, the Trust may consider making investments in such new types of
securities.
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OPTIONS (EQUITY AND BOND FUNDS, OTHER THAN THE COLORADO TAX-EXEMPT FUND)
Each Fund, other than the Colorado Tax-Exempt Fund, may purchase put
and call options and may write covered call and secured put options issued by
the Options Clearing Corporation which are traded over-the-counter or are listed
on a national securities exchange. Such options may relate to particular
securities or to various stock or bond indexes, except that a Fund may not write
covered call options on an index. A Fund may also invest in index futures
contracts and options on index futures contracts for hedging purposes. A Fund
may not purchase options or purchase or sell futures contracts or options on
futures contracts unless immediately after any such transaction the aggregate
amount of premiums paid for put options and the amount of margin deposits on its
existing futures positions do not exceed 5% of its total assets. Purchasing
options is a specialized investment technique that may entail the risk of a
complete loss of the amounts paid as premiums to the writer of the option.
In order to close out call or put option positions, the Fund will be
required to enter into a "closing purchase transaction" -- the purchase of a
call or put option (depending upon the position being closed out) on the same
security with the same exercise price and expiration date as the option that it
previously wrote. When a portfolio security subject to a call option is sold, a
Fund will effect a closing purchase transaction to close out any existing call
option on that security. If a Fund is unable to effect a closing purchase
transaction, it will not be able to sell the underlying security until the
option expires or a Fund delivers the underlying security upon exercise.
By writing a covered call option, a Fund forgoes the opportunity to
profit from an increase in the market price of the underlying security above the
exercise price except insofar as the premium represents a profit. In addition,
a Fund is not able to sell the underlying security until the option expires or
is exercised or the Fund effects a closing purchase transaction by purchasing an
option of the same series. If a Fund writes a secured put option, it assumes
the risk of loss should the market value of the underlying security decline
below the exercise price of the option. The use of covered call and secured put
options will not be a primary investment technique of a Fund. If the Investment
Adviser is incorrect in its forecast for the underlying security or other
factors when writing options, a Fund would be in a worse position than it would
have been had the options not been written.
In contrast to an option on a particular security, an option on an
index provides the holder with the right to make or receive a cash settlement
upon exercise of the option. The
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amount of this settlement will be equal to the difference between the closing
price of the index at the time of exercise and the exercise price of the option
expressed in dollars, times a specified multiple.
When a Fund purchases a put or call option, the premium paid by it is
recorded as an asset of the Fund. When a Fund writes an option, an amount equal
to the net premium (the premium less the commission) received by the Fund is
included in the liability section of the Fund's statement of assets and
liabilities as a deferred credit. The amount of this asset or deferred credit
will be subsequently marked-to-market to reflect the current value of the option
purchased or written. The current value of the traded option is the last sale
price or, in the absence of a sale, the average of the closing bid and asked
prices. If an option purchased by a Fund expires unexercised, the Fund realizes
a loss equal to the premium paid. If a Fund enters into a closing sale
transaction on an option purchased by it, the Fund will realize a gain if the
premium received by the Fund on the closing transaction is more than the premium
paid to purchase the option, or a loss if it is less. If an option written by a
Fund expires on the stipulated expiration date or if a Fund enters into a
closing purchase transaction, it will realize a gain (or loss if the cost of a
closing purchase transaction exceeds the net premium received when the option is
sold) and the deferred credit related to such option will be eliminated. If an
option written by a Fund is exercised, the proceeds of the sale will be
increased by the net premium originally received and the Fund will realize a
gain or loss.
As noted in the Prospectus, there are several risks associated with
transactions in options on securities. For example, there are significant
differences between the securities and options markets which could result in an
imperfect correlation between the markets, causing a given transaction not to
achieve its objectives. In addition, a liquid secondary market for particular
options, whether traded over-the-counter or on a national securities exchange
("National Securities Exchange") may be absent for reasons which include the
following: there may be insufficient trading interest in certain options;
restrictions may be imposed by a National Securities Exchange on opening
transactions, closing transactions or both; trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; unusual or unforeseen circumstances may
interrupt normal operations on a National Securities Exchange; the facilities of
a National Securities Exchange or the Options Clearing Corporation may not at
all times be adequate to handle current trading volume; or one or more National
Securities Exchanges could, for economic or other reasons, decide or be
compelled at some future date to discontinue the trading of options (or a
particular class or series of options), in which
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event the secondary market on that National Securities Exchange (or in that
class or series of options) would cease to exist, although outstanding options
that had been issued by the Options Clearing Corporation as a result of trades
on that National Securities Exchange would continue to be exercisable in
accordance with their terms. A Fund will likely be unable to control losses by
closing its position where a liquid secondary market does not exist. Moreover,
regardless of how much the market price of the underlying security increases or
decreases, the option buyer's risk is limited to the amount of the original
investment for the purchase of the option. However, options may be more
volatile than their underlying securities, and therefore, on a percentage basis,
an investment in options may be subject to greater fluctuation than an
investment in the underlying securities.
A decision as to whether, when and how to use options involves the
exercise of skill and judgment, and even a well-conceived transaction may be
unsuccessful to some degree because of market behavior or unexpected events.
FUTURES AND RELATED OPTIONS (EQUITY AND BOND FUNDS, OTHER THAN THE COLORADO
TAX-EXEMPT FUND)
These Funds may invest in futures contracts and related options
(including, but not limited to, interest rate futures contracts and index
futures contracts). For a detailed description of futures contracts and related
options, see Appendix B to this Statement of Additional Information.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS (ALL EQUITY FUNDS)
A forward foreign currency exchange contract is an obligation by the
Fund to purchase or sell a specific currency at a specified price and future
date, which may be any fixed number of days from the date of the contract.
These contracts establish an exchange rate at a future date and are transferable
in the interbank market conducted directly between currency traders (usually
large commercial banks) and their customers. These contracts generally have no
deposit requirement and are traded at a net price without commission. Neither
spot transactions nor forward foreign currency exchange contracts eliminate
fluctuations in the prices of a Fund's portfolio securities or in foreign
exchange rates or prevent loss if the prices of these securities should decline.
Forward foreign currency exchange contracts allow a Fund to hedge the
currency risk of portfolio securities denominated in a foreign currency. This
technique permits the assessment of the merits of a security to be considered
separately from the currency risk. It is thereby possible to focus on the
opportunities presented by the security apart from
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the currency risk. Although these contracts are of short duration, generally
between one and twelve months, they frequently are rolled over in a manner
consistent with a more long-term currency decision. Although foreign currency
hedging transactions tend to minimize the risk of loss due to a decline in the
value of the hedged currency, at the same time they tend to limit any potential
gain that might be realized should the value of the hedged currency increase.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
these securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (ALL FUNDS)
When a Fund agrees to purchase securities on a when-issued basis or
enters into a forward commitment to purchase securities, its custodian will set
aside cash or certain liquid high-grade debt obligations equal to the amount of
the purchase or the commitment in a separate account. Normally, the custodian
will set aside portfolio securities to meet this requirement. The market value
of the separate account will be monitored and in the event of a decline, the
Fund will be required to place additional assets in the separate account in
order to ensure that the value of the account remains equal to the amount of the
Fund's commitments. In the case of a forward commitment to sell portfolio
securities, the Fund's custodian will hold the portfolio securities themselves
in a segregated account while the commitment is outstanding.
The Funds will enter into these transactions only with the intention
of completing them and actually purchasing or selling the securities involved.
However, if deemed advisable as a matter of investment strategy, a Fund may
dispose of or renegotiate a commitment after it is entered into, and may sell
securities it has committed to purchase before those securities are delivered to
the Fund on the settlement date. In these cases the Fund may realize a capital
gain or loss.
When a Fund engages in when-issued and forward commitment
transactions, it relies on the other party to consummate the trade. Failure of
the other party to do so may result in the Fund's incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.
The value of the securities underlying a when-issued or forward
commitment transaction, and any subsequent fluctuations in their value, are
taken into account when determining a Fund's
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net asset value starting on the day the Fund agrees to purchase the securities.
The Fund does not earn interest on the securities until they are paid for and
delivered on the settlement date. When a Fund makes a forward commitment to
sell securities it owns, the proceeds to be received upon settlement are
included in the Fund's assets, and fluctuations in the value of the underlying
securities are not reflected in the Fund's net asset value as long as the
commitment remains in effect.
SECURITIES ISSUED BY OTHER INVESTMENT COMPANIES (ALL FUNDS)
Each Fund may invest up to 10% of its total assets in securities
issued by other investment companies; however, the Colorado Tax-Exempt Fund may
only invest in investment companies which invest in high-quality, short-term
taxable instruments or tax-exempt instruments and which determine their net
asset value per share on the amortized cost or penny-rounding method.
Securities issued by other investment companies may be acquired by the Funds
within the limits prescribed by the 1940 Act.
INVESTMENT LIMITATIONS
A Fund may not change the following investment limitations without the
approval of a majority of the holders of the Fund's outstanding shares (as
defined under "Miscellaneous" below).
No Fund may:
1. Purchase or sell real estate, except that each Fund may purchase
securities of issuers which deal in real estate and may purchase securities
which are secured by interests in real estate.
2. Purchase securities of companies for the purpose of exercising
control.
3. Acquire any other investment company or investment company
security except in connection with a merger, consolidation, reorganization or
acquisition of assets or where otherwise permitted by the 1940 Act.
4. Act as an underwriter of securities within the meaning of the
Securities Act of 1933 except insofar as the Fund might be deemed to be an
underwriter upon disposition of portfolio securities acquired within the
limitation on purchases of restricted securities and except to the extent that
the purchase of obligations directly from the issuer thereof in accordance with
the Fund's investment objective, policies and limitations may be deemed to be
underwriting.
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5. Write or sell put options, call options, straddles, spreads, or
any combination thereof, except for transactions in options on securities,
futures contracts and options on futures contracts. (This exception does not
apply to the Colorado Tax-Exempt Fund.)
6. 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 the value of its total assets at the time of
such borrowing; or mortgage, pledge or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of a Fund's total assets at the
time of such borrowing. No Fund will purchase securities while its borrowings
(including reverse repurchase agreements) in excess of 5% of its total assets
are outstanding. Securities held in escrow or separate accounts in connection
with a Fund's investment practices described in this Statement of Additional
Information or the Prospectus are not deemed to be pledged for purposes of this
limitation.
None of the Equity or Bond Funds may:
1. Purchase securities of any one issuer (other than securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities)
if, immediately after such purchase, more than 5% of the value of the Fund's
total assets would be invested in the securities of such issuer, or more than
10% of the issuer's outstanding voting securities would be owned by the Fund or
the Trust, except that up to 25% of the value of the Fund's total assets may be
invested without regard to these limitations.
2. 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 and may lend portfolio securities in an amount
not exceeding 30% of its total assets.
3. Purchase securities on margin, make short sales of
securities or maintain a short position, except that (a) this investment
limitation shall not apply to each Fund's transactions in futures contracts and
related options, and (b) each Fund may obtain short-term credit as may be
necessary for the clearance of purchases and sales of portfolio securities.
4. Purchase or sell commodity contracts, or invest in oil, gas
or mineral exploration or development programs, except that each Fund may, to
the extent appropriate to its investment objective, purchase publicly traded
securities of companies engaging in whole or in part in such activities, and may
enter into futures contracts and related options.
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5. Purchase any securities that would cause 25% or more of the
Fund's total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry, provided that (a) there is no limitation with respect to obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
(b) wholly-owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of the parents; and (c) utilities will be divided according to their
services, for example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry.
The Colorado Tax-Exempt Fund may not:
1. 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 investment limitation, securities the
interest on which is treated as a specific tax preference item under the federal
alternative minimum tax are considered taxable.
2. 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.
3. Purchase securities of any one issuer if, immediately after such
purchase, more than 5% of the value of the Fund's total assets would be invested
in the securities of such issuer, except that (a) up to 50% of the value of the
Fund's total assets may be invested without regard to this 5% limitation
provided that no more than 25% of the value of the Fund's total assets are
invested in the securities of any one issuer and (b) this 5% limitation does not
apply to securities issued or guaranteed by the U.S. Government, its agencies,
authorities, instrumentalities or political subdivisions. For purposes of this
limitation, a security is considered to be issued by the governmental entity (or
entities) whose assets and revenues back the security, or, with respect to a
private activity bond that is backed only by the assets and revenues of a
nongovernmental user, such nongovernmental user. In certain circumstances, the
guarantor of a guaranteed security may also be considered to be an issuer in
connection with such guarantee, except that a guarantee of a security shall not
be deemed to be a security issued by the guarantor when the value of all
securities issued and guaranteed by the guarantor, and owned by the Fund, does
not exceed 10% of the value of the Fund's total assets.
4. Purchase any securities, except securities issued (as defined in
the preceding investment limitation) or guaranteed by the United States, any
state, territory or possession of the
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United States, the District of Columbia or any of their authorities, agencies,
instrumentalities or political sub-divisions, which would cause 25% or more of
the value of the Fund's total assets at the time of purchase to be invested in
the securities of issuers conducting their principal business activities in the
same industry.
5. Purchase securities on margin, make short sales of securities or
maintain a short position, except that the Fund may obtain short-term credit as
may be necessary for the clearance of purchases and sales of portfolio
securities.
6. Purchase or sell commodity contracts (including futures
contracts) or invest in oil, gas or mineral exploration or development programs,
except that the Fund may, to the extent appropriate to its investment objective,
purchase publicly traded securities of companies engaging in whole or in part in
such activities.
NET ASSET VALUE
The net asset value per share of each Fund is calculated as set forth
in the Prospectus and is calculated separately from the net asset value of the
other Funds. For purposes of such calculation, "assets belonging to" a Fund
consist of the consideration received upon the issuance of shares of the
particular Fund together with all income, earnings, profits and proceeds derived
from the investment thereof, including any proceeds from the sale, exchange, or
liquidation of such investments, any funds or payments derived from any
reinvestment of such proceeds, and a portion of any general assets of the Trust
not belonging to a particular investment portfolio that are allocated to that
Fund by the Trust's Board of Trustees. The Board of Trustees may allocate such
general assets in any manner it deems fair and equitable. Each Fund is charged
with the direct liabilities and expenses of that Fund and with a share of the
general liabilities and expenses of the Trust. Allocations of general assets
and general liabilities and expenses of the Trust to a particular Fund will be
made in accordance with generally accepted accounting principles. Subject to
the provisions of the Declaration of Trust, determinations by the Board of
Trustees as to the direct and allocable liabilities, and the allocable portion
of any general assets, with respect to a particular Fund are conclusive.
Securities that are traded on a recognized stock exchange are valued
at the last sale price occurring prior to the close of regular trading on the
New York Stock Exchange (currently 4:00 Eastern Time). Securities for which
there were no transactions are valued at the mean of the bid and asked prices.
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Securities that are traded on the NASDAQ National Market and the
Over-the-counter market, where last sales prices are available are valued at the
last sales price. If no last sale price is available, then the securities are
valued at the mean of the bid and asked prices.
Foreign securities that are traded on a foreign stock exchange are
valued at the official closing price on the principal exchange. Instances where
the official closing price is not available, the foreign securities are valued
at the last sale price occurring prior to the valuation time determined by a
portfolio pricing service approved by the Board of Trustees to value such types
of securities.
Long-term instruments, including corporate, government and
mortgage-backed securities, having a remaining maturity of greater than 60 days
are valued at the evaluated mean between the bid and ask prices as determined on
the valuation date by a portfolio pricing service approved by the Board of
Trustees to value such types of securities.
Municipal securities are valued at the evaluated bid price as
determined on the valuation date by a portfolio pricing service approved by the
Board of Trustees to value such types of securities.
Restricted securities, securities for which market quotations are not
readily available from the portfolio pricing service, and other assets are
valued at fair value by the Co-Administrators under the supervision of the Board
of Trustees. Inc computing net asset value, the Co-Administrators will "mark to
market" the current value of a Fund's open futures contracts and options.
Securities have a remaining maturity of 60 days or less are valued at amortized
cost which approximates market value.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares in the Funds are sold on a continuous basis by ALPS.
Under the 1940 Act, a Fund may suspend the right of redemption or
postpone the date of payment for shares during any period when (a) trading on
the New York Stock Exchange (the "Exchange") is restricted by applicable rules
and regulations of the SEC; (b) the Exchange is closed for other than customary
weekend and holiday closings; (c) the SEC has by order permitted such
suspension; or (d) an emergency exists as determined by the SEC. (The Funds may
also suspend or postpone the recordation of the transfer of their shares upon
the occurrence of any of the foregoing conditions.)
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Each Fund may redeem shares involuntarily if it appears appropriate to
do so in light of its responsibilities under the 1940 Act or to reimburse the
Fund for any loss sustained by reason of the failure of a shareholder to make
full payment for shares purchased by the shareholder or to collect any charge
relating to a transaction effected for the benefit of a shareholder which is
applicable to Fund shares as provided in the Prospectus from time to time.
The Trust has filed an election pursuant to Rule 18f-1 under the 1940
Act which provides that each portfolio of the Trust is obligated to redeem
shares solely in cash up to $250,000 or 1% of such portfolio's net asset value,
whichever is less, for any one shareholder within a 90-day period. Any
redemption beyond this amount may be made in proceeds other than cash.
A Fund may make payment for redemption in securities or other property
if it appears appropriate to do so in light of the Fund's responsibilities under
the 1940 Act. Shareholders who receive a redemption in kind may incur
additional costs when they convert the securities or property received to cash
and may receive less than the redemption value of their shares, particularly
where the securities are sold prior to maturity.
RETIREMENT PLANS -- EQUITY FUNDS AND BOND FUNDS
PROFIT-SHARING PLAN. The Trust has available a profit-sharing plan
(including a 401(k) option) (the "Profit-Sharing/401(k) Plan") for use by both
self-employed individuals (sole proprietorships and partnerships) and
corporations who wish to use shares of the Funds as a funding medium for a
retirement plan qualified under the Internal Revenue Code ("Code").
The Code provides certain tax benefits for contributions by a
self-employed individual or corporation to the Profit-Sharing/401(k) Plan. For
example, contributions to the Plan are deductible (subject to certain limits)
and the contributions and earnings thereon are not taxed until distributed.
However, distribution of amounts from the Profit-Sharing/401(k) Plan to a
participant before the participant attains age 59 1/2 will (with certain
exceptions) result in an additional 10% tax on the amount included in the
participant's gross income.
INDIVIDUAL RETIREMENT ACCOUNT. The Trust has available a plan (the
"IRA") for use by individuals with compensation for services rendered (including
earned income from self-employment) who wish to use shares of the Funds as a
funding medium for individual retirement saving. However, except for rollover
contributions, an individual who has attained, or will attain, age 70 1/2 before
the end of the taxable year may only contribute to an IRA for his or her
nonworking spouse under age 70 1/2.
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Distributions of an individual's IRA assets (and earnings thereon)
before the individual attains age 59 1/2 will (with certain exceptions) result
in an additional 10% tax on the amount included in the individual's gross
income. Earnings on amounts contributed to the IRA are not taxed until
distributed.
The Trust also permits certain employers (including self-employed
individuals) to make contributions to employees' IRAs if the employer
establishes a Simplified Employee Pension ("SEP") plan and/or a Salary Reduction
SEP ("SARSEP"). A SEP permits an employer to make discretionary contributions
to all of its employees' IRAs (employees who have not met certain eligibility
criteria may be excluded) equal to a uniform percentage of each employees'
compensation (subject to certain limits). If an employer (including a
self-employed individual) establishes a SARSEP, employees may defer a percentage
of their compensation -- pre-tax -- to IRAs (subject to certain limits). The
Code provides certain tax benefits for contributions by an employer, pursuant to
a SEP and/or SARSEP, to an employee's IRA. For example, contributions to an
employee's IRA pursuant to a SEP and/or SARSEP are deductible (subject to
certain limits) and the contributions and earnings thereon are not taxed until
distributed.
In both the Profit-Sharing/401(k) Plan and the IRA, distributions of
net investment income and capital gains will be automatically reinvested.
The foregoing brief descriptions are not complete or definitive
explanations of the Profit-Sharing/401(k) Plan or IRA available for investment
in the Funds. Any person who wishes to establish a retirement plan account may
do so by contacting ALPS directly. The complete Plan documents and applications
will be provided to existing or prospective shareholders upon request, without
obligation. The Trust recommends that investors consult their attorneys or tax
advisors to determine if the retirement programs described herein are
appropriate for their needs.
DESCRIPTION OF SHARES
The Trust is a Massachusetts business trust. Under the Trust's
Declaration of Trust, the beneficial interest in the Trust may be divided into
an unlimited number of full and fractional transferable shares. The 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 additional classes
by setting or changing in any one or more respects, their respective
designations, preferences, conversion or other rights, voting powers,
restrictions, limitations, qualifications and terms and conditions of
redemption. Pursuant to such authority, the Board of Trustees has authorized
the
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issuance of twenty-four classes of shares, each class representing interests in
a separate investment portfolio. The Trustees may similarly classify or
reclassify any particular class of shares into one or more series. Currently,
there are seven classes of shares being offered.
Each share of the Trust has no par value, represents an equal
proportionate interest in a Fund, and is entitled to such dividends and
distributions of the income earned on the Fund's assets as are declared at the
discretion of the Trustees. Shares of the Funds have no preemptive rights and
only such conversion or exchange rights as the Board of Trustees may grant in
its discretion. When issued for payment as described in the Prospectus, a
Fund's shares will be fully paid and nonassessable by the Trust. In the event
of a liquidation or dissolution of the Trust or an individual Fund, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based upon
the relative net asset values of the Trust's respective investment portfolios,
of any general assets not belonging to any particular portfolio which are
available for distribution. Shareholders of a Fund are entitled to participate
in the net distributable assets of the Fund on liquidation, based on the number
of shares of the Fund they hold.
Shareholders of the Funds will vote together in the aggregate and not
separately on a Fund-by-Fund basis, except as otherwise required by law or when
the Board of Trustees determines that the matter to be voted upon affects only
the interests of the shareholders of a particular Fund. Rule 18f-2 under the
1940 Act provides that any matter required to be submitted to the holders of the
outstanding voting securities of an investment company such as the Trust shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each Fund affected by the matter. A
Fund is affected by a matter unless it is clear that the interests of each Fund
in the matter are substantially identical or that the matter does not affect any
interest of the Fund. Under the Rule, the approval of an investment advisory
agreement or any change in a fundamental investment policy would be effectively
acted upon with respect to a Fund only if approved by a majority of the
outstanding shares of such Fund. However, the Rule also provides that the
ratification of the appointment of independent public accountants, the approval
of principal underwriting contracts and the election of trustees may be
effectively acted upon by shareholders of the Trust voting without regard to
particular Funds.
There will normally be no meetings of shareholders for the purpose of
electing trustees unless and until such time as less than a majority of the
trustees holding office have been elected by shareholders, at which time the
trustees then in
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office will call a shareholders meeting for the election of trustees. Shares of
the Trust have noncumulative voting rights and, accordingly, the holders of more
than 50% of the Trust's outstanding shares (irrespective of class) may elect all
of the trustees. The Amended and Restated Declaration of Trust provides that
meetings of the shareholders of the Trust shall be called by the Trustees upon
the written request of shareholders owning at least 10% of the outstanding
shares entitled to vote. Except as set forth above, the Trustees shall continue
to hold office and may appoint successor trustees.
The Amended and Restated Declaration of Trust authorizes the Board of
Trustees, without shareholder approval (unless otherwise required by applicable
law), to: (a) sell and convey the assets belonging to a class of shares to
another management investment company for consideration which may include
securities issued by the purchaser and, in connection therewith, to cause all
outstanding shares of such class to be redeemed at a price which is equal to
their net asset value and which may be paid in cash or by distribution of the
securities or other consideration received from the sale and conveyance; (b)
sell and convert the assets belonging to a class of shares into money and, in
connection therewith, to cause all outstanding shares of such class to be
redeemed at their net asset value; or (c) combine the assets belonging to a
class of shares with the assets belonging to one or more other classes of shares
if the Board of Trustees reasonably determines that such combination will not
have a material adverse effect on the shareholders of any class participating in
such combination and, in connection therewith, to cause all outstanding shares
of any such class to be redeemed or converted into shares of another class of
shares at their net asset value. However, the exercise of such authority may be
subject to certain restrictions under the 1940 Act. The Board of Trustees may
authorize the termination of any class of shares after the assets belonging to
such class have been distributed to its shareholders.
ADDITIONAL INFORMATION CONCERNING TAXES
The following summarizes certain additional tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' Prospectus. No attempt is made to present a detailed explanation of
the tax treatment of the Funds or their shareholders, and the discussion here
and in the Funds' Prospectus are not intended as a substitute for careful tax
planning and is based on tax laws and regulations which are in effect on the
date hereof; such laws and regulations may be changed by legislative or
administrative action. Investors should consult their tax advisors with
reference to their own situation.
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FEDERAL - ALL FUNDS
Each Fund is treated as a separate corporate entity under the Code and
intends to qualify as a regulated investment company for each of its taxable
years. Qualification as a regulated investment company requires, among other
things, that a Fund distribute to its shareholders an amount equal to at least
the sum of 90% of its investment company taxable income (if any) and 90% of its
tax-exempt interest income (if any) net of certain deductions for a taxable
year. In general, a Fund's investment company taxable income will be its
taxable income (including interest and short-term capital gains) subject to
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year. Each Fund intends to distribute substantially all of its investment
company taxable income and net tax-exempt income each taxable year. Such
distributions by the Equity and Bond Funds will be taxable as ordinary income to
their shareholders who are not currently exempt from federal income taxes,
whether such income is received in cash or reinvested in additional shares.
(Federal income taxes for distributions to an IRA or to a qualified retirement
plan are deferred under the Code.)
In addition, in order to qualify as a regulated investment company,
each Fund must satisfy certain requirements with respect to the source of its
income for a taxable year. At least 90% of the gross income of each Fund must
be derived from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stocks, securities or foreign
currencies, and other income (including, but not limited to, gains from options,
futures, or forward contracts) derived with respect to the Fund's business of
investing in such stock, securities or currencies. The Treasury Department may
by regulation exclude from qualifying income foreign currency gains which are
not directly related to the Fund's principal business of investing in stock or
securities, or options and futures with respect to stock or securities. Any
income derived by a Fund from a partnership or trust is treated for this purpose
as derived with respect to the Fund's business of investing in stock, securities
or currencies only to the extent that such income is attributable to items of
income which would have been qualifying income if realized by the Fund in the
same manner as by the partnership or trust.
Another requirement for qualification as a regulated investment
company, which has, however, been repealed for taxable years beginning after
August 4, 1997, is that less than 30% of a Fund's gross income for a taxable
year must be derived from gains realized on the sale or other disposition of the
following investments held for less than three months: (1) stock and securities
(as defined in Section 2(a)(36) of the 1940 Act); (2)
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options, futures and forward contracts other than those on foreign currencies;
and (3) foreign currencies (and options, futures and forward contracts on
foreign currencies) that are not directly related to a Fund's principal business
of investing in stock and securities (and options and futures with respect to
stocks and securities). Interest (including original issue discount and accrued
market discount) received by a Fund upon maturity or disposition of a security
held for less than three months will not be treated as gross income derived from
the sale or other disposition of such security within the meaning of this
requirement. However, any other income which is attributable to realized market
appreciation will be treated as gross income from the sale or other disposition
of securities for this purpose.
Substantially all of each Fund's net realized long-term capital gains,
if any, will be distributed at least annually to Fund shareholders. A Fund will
generally have no tax liability with respect to such gains and the distributions
will be taxable to Fund shareholders who are not currently exempt from federal
income taxes as long-term capital gains, regardless of how long the shareholders
have held Fund shares and whether such gains are received in cash or reinvested
in additional shares.
Each Fund will designate any distribution of long-term capital gains
as a capital gain dividend in a written notice mailed to shareholders within 60
days after the close of its taxable year. Shareholders should note that, upon
the sale or exchange of Fund shares, if the shareholder has not held such shares
for more than six months, any loss on the sale or exchange of those shares will
be treated as long term capital loss to the extent of the capital gain dividends
received with respect to the shares.
Ordinary income of individuals is taxable at a maximum nominal rate of
39.6%, but because of limitations on itemized deductions otherwise allowable and
the phase-out of personal exemptions, the maximum effective marginal rate of tax
for some taxpayers may be higher. An individual's long term capital gains on
stocks and securities are taxable at a maximum nominal rate of 20%, except that
"mid-term gains" (I.E., gains on capital assets held more than 12 months, but
not more than 18 months) are taxable at a maximum nominal rate of 28%. For
corporations, long term capital gains and ordinary income are both taxable at a
maximum average rate of 35% (a maximum effective marginal rate of 39% applies in
the case of corporations having taxable income between $100,000 and $335,000).
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute an amount equal to specified
percentages of their ordinary taxable income and capital gain net income (excess
of capital gains over capital losses). Each Fund intends to make sufficient
distributions or
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deemed distributions of its ordinary taxable income and any capital gain net
income prior to the end of each calendar year to avoid liability for this excise
tax.
If for any taxable year a Fund does not qualify for tax treatment as a
regulated investment company, all of the taxable income of the Fund will be
subject to tax at regular corporate rates, without any deduction for
distributions to shareholders, and the Fund's distributions to shareholders
(whether or not derived from interest on Municipal Obligations) will be taxable
as ordinary dividends to the extent of the current and accumulated earnings and
profits of the particular Fund. Such distributions will be eligible for the
dividends received deduction in the case of corporate shareholders.
The dividends received deduction is not available for dividends
attributable to distributions made by a REIT to a Fund. In addition,
distributions paid by REITS often include a "return of capital." The Code
requires a REIT to distribute at least 95% of its taxable income to investors.
In many cases, however, because of "non-cash" expenses such as property
depreciation, an equity REIT's cash flow will exceed its taxable income. The
REIT may distribute this excess cash to offer a more competitive yield. This
portion of the distribution is deemed a return of capital, and is generally not
taxable to shareholders.
STATE - ALL FUNDS
Depending upon the extent of each Fund's activities in states and
localities in which its offices are maintained, in which its agents or
independent contractors are located or in which they are otherwise deemed to be
conducting business, a Fund may be subject to the tax laws of such states or
localities. In addition, in those states and localities which have income tax
laws, the treatment of the Funds and their shareholders under such laws may
differ from their treatment under federal income tax laws.
ADDITIONAL FEDERAL TAX CONSIDERATIONS FOR THE COLORADO TAX-EXEMPT FUND
As described above and in the Prospectus, the Colorado Tax-Exempt Fund
is designed to provide investors with income exempt from regular federal income
tax and Colorado personal income tax. See above for general federal income tax
considerations. The Fund is not intended to constitute a balanced investment
program and is not designed for investors seeking capital appreciation or
maximum tax-exempt income irrespective of fluctuations in principal. Shares of
the Fund would not be suitable for tax-exempt institutions and may not be
suitable for retirement plans qualified under Section 401 of the Code, H.R. 10
plans and IRAs, because such plans and accounts are
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generally tax-exempt and, therefore, not only would not gain any additional
benefit from the Fund's dividends being tax-exempt, but those dividends would be
ultimately taxable to the beneficiaries when distributed to them. In addition,
the Fund may not be an appropriate investment for entities which are
"substantial users" of facilities financed by private activity bonds or "related
persons" thereof. "Substantial user" is defined under Treasury Regulations to
include a non-exempt person who regularly uses a part of such facilities in his
trade or business and whose gross revenues derived with respect to the
facilities financed by the issuance of bonds are more than 5% of the total
revenues derived by all users of such facilities, or who occupies more than 5%
of the usable area of such facilities or for whom such facilities or a part
thereof were specifically constructed, reconstructed or acquired. "Related
persons" include certain related natural persons, affiliated corporations, a
partnership and its partners and an S Corporation and its shareholders.
In accordance with the Code, the Fund intends to distribute
substantially all of its net tax-exempt income (such distributions are known as
"exempt-interest dividends") and investment company taxable income (if any) each
taxable year. Exempt-interest dividends may be treated by shareholders as items
of interest excludable from their gross income under Section 103(a) of the Code.
The percentage of total dividends paid by the Fund with respect to any taxable
year which qualify as exempt-interest dividends will be the same for all
shareholders receiving dividends during the year. In order for the Fund to pay
exempt-interest dividends with respect to any taxable year, among other things,
at least 50% of the aggregate value of the Fund's portfolio at the close of each
quarter of its taxable year must consist of exempt-interest obligations. After
the close of its taxable year, each Fund will notify each shareholder of the
portion of the dividends paid by the Fund to the shareholder with respect to
such year which constitutes an exempt-interest dividend. However, the aggregate
amount of dividends so designated cannot exceed the excess of the amount of
interest exempt from tax under Section 103 of the Code received by the Fund
during the taxable year over any amounts disallowed as deductions under Sections
265 and 171(a)(2) of the Code.
If a shareholder holds Fund shares for six months or less, any loss on
the sale or exchange of those shares will be disallowed to the extent of the
amount of exempt-interest dividends received with respect to the shares. The
Treasury Department, however, is authorized to issue regulations reducing the
period to not less than the greater of 31 days or the period between regular
distributions where the investment company regularly distributes at least 90% of
its net tax-exempt interest. No such regulations had been issued as of the date
of this Statement of Additional Information.
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If the Fund should hold certain private activity bonds issued after
August 7, 1986, shareholders must include, as an item of tax preference, the
portion of dividends paid by the Fund that is attributable to interest on such
bonds in their federal alternative minimum taxable income for purposes of
determining liability (if any) for the alternative minimum tax applicable to
individuals and corporations. Corporate shareholders must also take all
exempt-interest dividends into account in determining certain adjustments for
federal alternative minimum tax purposes. Shareholders receiving Social
Security benefits should note that all exempt-interest dividends will be taken
into account in determining the taxability of such benefits.
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
The names of the trustees and officers of the Trust, their ages, addresses,
principal occupations during the past five years and other affiliations are set
forth below:
Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
------------------------ ------------- ---------------------------
JACK D. HENDERSON, 70(1) Chairman, Attorney, Jack D.
1600 Broadway Trustee Henderson, Attorney-at-
Suite 1410 Law since 1995; prior
Denver, Colorado thereto partner of the
80202 law firm of Clanahan,
Tanner, Downing &
Knowlton, P.C., Denver,
Colorado from April
1989 through October
1995; Trustee of
Pacifica Funds Trust
through August 1996;
Trustee, Pacific
American Fund through
September 1994.
McNEIL S. FISKE, 64 Trustee Chairman of the Board,
P.O. Box 6154 MacCourt Products;
Littleton, Colorado Director, Scientific
80121 Software Corporation
through December 31,
1994.
JAMES B. O'BOYLE, 69 Trustee Business Consultant;
6115 West Mansfield Trustee of Pacific
Avenue, #239 American Fund through
Denver, Colorado 80235 September 1994.
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Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
------------------------ ------------- ---------------------------
ROBERT L. STAMP, 65 Trustee Prior to April 1995,
6855 So. Depew Street Vice President of
Littleton, Colorado Finance, Treasurer and
80128 Assistant Secretary,
The Gates Corporation;
Vice President, The
Gates Rubber Company;
Director of Gates
Credit Union; Trustee
of Pacific American
Fund through September
1994.
LYMAN E. SEELY, 79 Trustee Director of OECO since
14795 Northeast May 1983; Director of
Lawnview Circle McCall Oil and Chemical
Aurora, Oregon 97002 Co. since 1983;
Director of Great
Western Chemical Co.
since 1983.
KENNETH V. PENLAND, 55 President Chairman and Chief
Denver Investment Executive Officer,
Advisors LLC Denver Investment
1225 17th Street-26th Advisors LLC (and its
Fl. predecessor) since
Denver, Colorado March 1983; Chairman,
80202 Blue Chip Value Fund.
JASPER R. FRONTZ, 28 Treasurer Director of Mutual Fund
Denver Investment Administration, Denver
Advisors, LLC Investment Advisors
1225 17th Street-26th Inc. since June 1997;
Fl. Fund Controller, ALPS
Denver, Colorado 80202 Mutual Funds Services,
Inc. from September
1995 through June 1997;
Senior Accountant,
Deloitte & Touche LLP
from September 1991
through August 1995.
CHAD S. CHRISTENSEN, Assistant Stonebridge Growth
27 Treasurer Fund, Inc. Vice-
ALPS Mutual Funds President and
Services, Inc. Stonebridge Aggressive
370 17th Street Growth Fund, Inc. Vice
Suite 3100 President since August
Denver, Colorado 1997; Fund Controller
80202 of ALPS Mutual Funds
Services, Inc., since
March 1996; Senior
Accountant for Ernst
and Young LLP from July
1994 through March
1996; Auditor for KPMG
Peat Marwick LLP from
September 1992 through
June 1994.
W. BRUCE McCONNEL, Secretary Partner of the law firm
III, 54 of Drinker Biddle &
Drinker Biddle & Reath Reath LLP,
LLP Philadelphia,
1345 Chestnut Street Pennsylvania.
Philadelphia,
Pennsylvania
19107-3496
- ---------------------
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(1) Mr. Henderson is considered to be an "interested person" of the Trust as
defined in the 1940 Act.
-------------------------------
The trustees are responsible for major decisions relating to each
Fund's objective, policies and techniques. The trustees also supervise the
operation of the Funds by their officers and review the investment decisions of
the officers although they do not actively participate on a regular basis in
making such decisions.
Each trustee receives an annual fee of $12,000 plus $500 for each
Board and Board Committee meeting attended and reimbursement of expenses
incurred in attending meetings. The Chairman of the Board is entitled to
receive an additional $4,000 per annum for services in such capacity. The
following chart provides certain information about the trustee fees paid by the
Trust for the fiscal year ended May 31, 1997:
PENSION OR
RETIREMENT
BENEFITS AGGREGATE
AGGREGATE ACCRUED AS COMPENSATION
COMPENSATION PART OF FUND FROM THE FUND
NAME OF PERSON/ FROM THE EXPENSES COMPLEX*
POSITION TRUST
--------------- ------------ ------------ -------------
JACK D. $18,500 $0 $18,500
HENDERSON,
Chairman
McNEIL S. FISKE, $14,500** $0 $14,500
Trustee
JAMES B. $14,500 $0 $14,500
O'BOYLE, Trustee
ROBERT L. STAMP, $14,500** $0 $14,500
Trustee
LYMAN E. SEELY, $14,500 $0 $14,500
Trustee
* Fund Complex includes funds with a common investment adviser or an adviser
which is an affiliated person.
** All of this amount has been deferred at the election of Messrs. Fiske and
Stamp. The total amount of deferred compensation (including interest)
accrued for Mr. Fiske and Mr. Stamp during the fiscal year ended May 31,
1997 is $14,931 and $14,931, respectively.
Each trustee is entitled to participate in the Trust's Deferred
Compensation Plan (the "Plan"). Under the Plan, a trustee may elect to have his
deferred fees treated as if they had been invested by the Trust at a money
market fund rate of return (or, if hereafter permitted under the Plan, other
types
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of investment options, such as Trust shares), and the amount paid to the
trustees under the Plan will be determined based upon the performance of such
investments. Deferral of trustees' fees will have no effect on a portfolio's
assets, liabilities, and net income per share, and will not obligate the Trust
to retain the services of any trustee or obligate a portfolio to any level of
compensation to the trustee. The Trust may invest in underlying securities
without shareholder approval.
Denver Investment Advisors, of which Mr. Penland, President of the
Trust is a member, and Mr. Frontz, Treasurer of the Trust is Director of Mutual
Fund Administration, receives compensation as Adviser and co-administrator. ALPS
Mutual Funds Services, Inc., of which Mr. Christensen is an employee, receives
compensation as co-administrator and bookkeeping and pricing agent and serves as
distributor to the Trust.
Drinker Biddle & Reath LLP, of which Mr. McConnel, Secretary of the
Trust, is a partner, receives legal fees as counsel to the Trust. The trustees
and officers of the Trust, as a group, owned less than 1% of the outstanding
shares of each Fund as of September 8, 1997.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. However, the Amended and Restated Declaration of Trust provides
that shareholders shall not be subject to any personal liability in connection
with the assets of the Trust for the acts or obligations of the Trust, and that
every note, bond, contract, order or other undertaking made by the Trust shall
contain a provision to the effect that the shareholders are not personally
liable thereunder. The Amended and Restated Declaration of Trust provides for
indemnification out of the trust property of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder and not
because of his or her acts or omissions or some other reason. The Amended and
Restated Declaration of Trust also provides that the Trust shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Trust, and shall satisfy any judgment thereon. Thus, the risk
of a shareholder's incurring financial loss on account of shareholder liability
is limited to circumstances in which the Trust itself would be unable to meets
its obligations.
The Amended and Restated Declaration of Trust further provides that
all persons having any claim against the trustees or the Trust shall look solely
to the Trust property for payment; that no trustee, officer or agent of the
Trust shall be personally liable for or on account of any contract, debt, tort,
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claim, damage, judgment or decree arising out of or connected with the
administration or preservation of the Trust property or the conduct of any
business of the Trust; and that no trustee shall be personally liable to any
person for any action or failure to act except by reason of his or her own bad
faith, willful misfeasance, gross negligence or reckless disregard of his or her
duties as trustee. With the exception stated, the Amended and Restated
Declaration of Trust provides that a trustee is entitled to be indemnified
against all liabilities and expense reasonably incurred by him in connection
with the defense or disposition of any proceeding in which he may be involved or
with which he may be threatened by reason of his being or having been trustee,
and that the trustees will indemnify representatives and employees of the Trust
to the same extent that trustees are entitled to indemnification.
INVESTMENT ADVISER
Denver Investment Advisors serves as investment adviser to the Funds
pursuant to an Advisory Agreement. In the Advisory Agreement, the Investment
Adviser has agreed to provide a continuous investment program for each Fund and
to pay all expenses incurred by it in connection with its advisory activities,
other than the cost of securities and other investments, including brokerage
commissions and other transaction charges, if any, purchased or sold for the
Funds.
As indicated in the Prospectus, Denver Investment Advisors permits
investment and other personnel to purchase and sell securities for their own
accounts, including securities that may be held by the Funds, in accordance with
Denver Investment Advisors' policy regarding personal investing by principals,
officers and employees of Denver Investment Advisors. The Denver Investment
Advisors' policy requires all principals, officers and employees to pre-clear
all transactions in securities not otherwise exempt under the policy. In
addition to pre-clearance, the policy subjects principals, officers and
employees of Denver Investment Advisors to various trading restrictions and
reporting obligations. All reportable transactions are reviewed for compliance
with Denver Investment Advisors' policy. The provisions of the policy are
administered by and subject to exceptions authorized by Denver Investment
Advisors.
Prior to March 31, 1996, First Interstate of Denver, N.A. served as
investment adviser, and Denver Investment Advisors served as sub-adviser, to the
MIDCO Growth, Blue Chip, Growth and Income, Long-Term Bond, Intermediate-Term
Bond and Colorado Tax-Exempt Funds. Prior to March 31, 1996, First Interstate
Capital Management, Inc. ("FICM") served as investment adviser and Denver
Investment Advisors served as sub-adviser to the Growth and Income and
Intermediate-Term Bond Funds.
-45-
<PAGE>
The following table summarizes the advisory fees paid by the Funds and
any advisory fee waivers for the last three fiscal years of each Fund:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
May 31, 1997 May 31, 1996 May 31, 1995
--------------------------- --------------------------- --------------------------
Advisory Waiver of Advisory Waiver of Advisory Waiver of
Fund Name Fees Fees Fees Fees Fees Fees
- ------------ ---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
MIDCO Growth $3,834,365 $0 $3,558,326 $0 $2,529,123 $0
Fund
Blue Chip 375,645 26,418 339,161 59,499 271,890 0
Fund
Growth and 62,280 82,796 129,876 49,319 271,513 0
Income Fund
Small-Cap 197,026 114,504 36,740 136,791 0 73,894
Opportunity
Fund
Long-Term 65,709 39,100 102,736 32,618 124,337 0
Bond Fund
Intermediate- 253,825 74,356 350,333 58,864 407,813 0
Term Bond
Fund
Colorado Tax- 0 89,049 0 56,823 0 51,298
Exempt Fund
</TABLE>
For the fiscal years ended May 31, 1997, 1996 and 1995, the investment
advisers reimbursed additional expenses for the Funds as follows:
Year Ended Year Ended Year Ended
Fund Name May 31, 1997 May 31, 1996 May 31, 1995
--------- ------------ ------------ ------------
Small-Cap
Opportunity Fund $0 $0 $20,200
Colorado Tax-Exempt
Fund $0 $22,238 $65,533
First Interstate Bank of Denver, N.A. and FICM each paid 90% of the
advisory fees received by them for the Growth and Income Fund and
Intermediate-Term Bond Fund to Denver Investment Advisors pursuant to the
Sub-Advisory Agreements each formerly had in effect with respect to such Funds.
Denver Investment Advisors also performs investment advisory services
for the Blue Chip Value Fund, Inc. and the
-46-
<PAGE>
Paine Webber Managed Assets Trust-Paine Webber Capital Appreciation Fund, two
other investment company portfolios. Investment decisions for each account
managed by Denver Investment Advisors, including the Funds, are made
independently from those for any other account that is or may in the future
become managed by Denver Investment Advisors or its affiliates. If, however, a
number of accounts managed by Denver Investment Advisors are contemporaneously
engaged in the purchase or sale of the same security, the available securities
or investments may be allocated in a manner believed by Denver Investment
Advisors to be equitable to each account. In some cases, this procedure may
adversely affect the price paid or received by a Fund or the size of the
position obtainable for or disposed of by a Fund.
Each account managed by Denver Investment Advisors has its own
investment objective and policies and is managed accordingly by a particular
portfolio manager or team of portfolio managers. As a result, from time to time
two or more different managed accounts may pursue divergent investment
strategies with respect to investments or categories of investments.
The current Advisory Agreement for the MIDCO Growth, Blue Chip, Growth
and Income, Small-Cap Opportunity and Long Term Bond Funds became effective on
March 31, 1995, and the current Advisory Agreement for the Colorado Tax-Exempt
Fund became effective on October 1, 1995. The Advisory Agreement continued in
effect until September 30, 1997 and thereafter will continue in effect from year
to year so long as such continuance is approved annually by a majority of the
Funds' Trustees who are not parties to the Advisory Agreement or interested
persons of any such party, and by either a majority of the outstanding voting
shares or the trustees of the Funds. The Advisory Agreement i) may be
terminated without the payment of any penalty by the Fund or Denver Investment
Advisors on 60 days' written notice; ii) terminates automatically in the event
of its assignment; and iii) generally, may not be amended without the approval
by vote of a majority of the outstanding voting securities of such Fund.
The Agreement provides that the Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Funds in connection with its performance of services pursuant to the Advisory
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Investment Adviser
in the performance of its duties or from its reckless disregard of its duties
and obligations under the Advisory Agreement.
-47-
<PAGE>
Denver Investment Advisors, as co-administrator, also provides
administrative services to the Funds pursuant to an Administration Agreement and
has agreed to pay all expenses incurred by it in connection with its
administrative activities.
DISTRIBUTOR
ALPS acts as the distributor of the Funds' shares pursuant to a
Distribution Agreement with the Trust (the "Distributor"). Shares are sold on a
continuous basis by ALPS as agent of the Funds, and ALPS has agreed to use its
best efforts to solicit orders for the sale of Fund shares, although it is not
obliged to sell any particular amount of shares. As Distributor, ALPS pays the
cost of printing and distributing prospectuses to persons who are not
shareholders of the Funds (excluding preparation and printing expenses necessary
for the continued registration of the Funds' shares) and of printing and
distributing all sales literature. ALPS is not entitled to any compensation for
its services as Distributor. For the fiscal years ended May 31, 1997, 1996 and
1995, ALPS received $0, $10,614.23 and $108,459 respectively, in underwriting
commissions with respect to all the investment portfolios offered by the Trust.
ADMINISTRATORS, BOOKKEEPING AND PRICING AGENT
ALPS and Denver Investment Advisors, as co-administrators (the
"Administrators"), provide administrative services to the Funds as described in
the Prospectus pursuant to an Administration Agreement, and have agreed to pay
all expenses they incur in connection with their administrative activities.
Under the Administration Agreement, the Administrators are not liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of the agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Administrators in the performance of their duties or from their reckless
disregard of their duties and obligations under the agreement. Prior to the
current Administration Agreement, which became effective on October 1, 1995,
ALPS served as sole Administrator to the Funds.
In addition to the services it provides as co-administrator, ALPS has
agreed, pursuant to a separate Bookkeeping and Pricing Agreement, to maintain
the financial accounts and records of the Funds and to compute the net asset
value and certain other financial information of the Funds. Under the
Bookkeeping and Pricing Agreement, ALPS is not liable for any error of judgment
or mistake of law or for any loss suffered by the Funds, except for a loss
resulting from willful misfeasance, bad faith or negligence on the part of ALPS
in the performance of its duties under the Agreement.
-48-
<PAGE>
The following table summarizes the administration fees paid by the
Funds and any administration fee waivers for the last three fiscal years:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
May 31, 1997 May 31, 1996 May 31, 1995
------------------------- ------------------------- --------------------------
Administration Waiver Administration Waiver Administration Waiver
Fund Name Fees of Fees Fees of Fees Fees of Fees
--------- -------------- ------- -------------- ------- -------------- -------
<S> <C> <C> <C> <C> <C> <C>
MIDCO Growth Fund $1,769,707 $0 $1,230,673 $0 $194,548 $0
Blue Chip Fund 183,360 2,179 133,355 4,948 20,914 0
Growth and Income 60,140 6,818 52,174 4,873 20,885 0
Fund
Small-Cap 86,687 6,753 39,056 1,806 2,787 908
Opportunity Fund
Long-Term Bond Fund 65,598 4,181 58,951 3,520 13,815 0
Intermediate-Term 210,838 7,950 178,366 10,539 45,313 0
Bond Fund
Colorado Tax-Exempt 17,320 36,072 467 24,766 3,624 1,506
Fund
</TABLE>
CUSTODIAN AND TRANSFER AGENT
Wells Fargo (the "Custodian") serves as custodian of the assets of each of
the Funds pursuant to a custody agreement (the "Custody Agreement"). Under the
Custody Agreement, the Custodian has agreed to hold the Funds' assets in
safekeeping and collect and remit the income thereon, subject to the
instructions of each Fund. The Custodian may, at its own expense, open and
maintain a custody account or accounts on behalf of any Fund with other banks or
trust companies, provided that the Custodian shall remain liable for the
performance of all of its duties under the Custody Agreement notwithstanding any
delegation.
From June 1, 1996 through January 22, 1997, for its services as custodian,
the Custodian received compensation based on the aggregate market value of the
portfolio securities of the Funds held by Wells Fargo as custodian: .02% on the
first $50 million of average net assets; .018% on the next $50 million; .013% on
the next $100 million; .01% on the next $300 million; and .005% on assets in
excess of $500 million. The minimum annual custody fee payable by each Fund was
$500. In addition, the Custodian, as custodian, was entitled to certain
transaction charges at the rate of $20 for each transaction involving a domestic
security, $25 for each transaction involving a foreign security, $45 per option
(including issuance of an escrow receipt), and to reimbursement for its
out-of-pocket expenses in connection with the above services. For the fiscal
years ended May 31, 1996 and
-49-
<PAGE>
1995 the Custodian waived all of its custodial fees in the following amounts:
Year Ended Year Ended
Fund Name May 31, 1996 May 31, 1995
--------- ------------ ------------
MIDCO Growth Fund $131,399 $87,850
Blue Chip Fund 24,180 20,142
Growth and Income Fund 22,966 24,014
Small Cap Opportunity Fund 18,793 16,558
Long-Term Bond Fund 14,196 13,006
Intermediate-Term Bond Fund 30,844 28,132
Colorado Tax-Exempt Fund 8,353 5,552
Currently, for its services as custodian, the Custodian is entitled to
receive compensation based on the market value of all assets in aggregate and
pro-rated monthly: $.00075 on the first $250 million of assets; and $.0005 on
assets in excess of $250 million. The minimum annual custody fee payable for
all seven Funds is $25,000. An additional $5,000 fee will be paid with respect
to any additional portfolio which may be created in addition to the existing
seven portfolios. In addition, the Custodian is entitled to certain transaction
charges at the rate of $12 for each book-entry transaction, $20 for each
physical security transaction, and $8 for each paydown transaction. The
Custodian is also entitled to $12 for each wire cash transfer, an annual on-line
access fee of $2,500, and to reimbursement for its out-of-pocket expenses in
connection with the above services. In addition, the Custodian is entitled to
receive $5,000 per year for custodial services in connection with securities
lending activities. For the fiscal year ended May 31, 1997, the custodian was
paid custodial fees and waived custodial fees in the following amounts:
-50-
<PAGE>
Year Ended May 31, 1997
--------------------------------------
Custodial Fee
Name of Fund Paid Waiver of Fees
------------ ------------- --------------
MIDCO Growth Fund $18,065 $44,673
Blue Chip Fund 3,829 8,072
Growth and Income Fund 2,706 3,097
Small Cap Opportunity Fund 2,977 3,722
Long-Term Bond Fund 1,684 3,233
Intermediate-Term Bond Fund 3,578 9,822
Colorado Tax-Exempt Fund 1,422 2,171
It is anticipated that on or about November 1, 1997, BNY Western Trust
Company will become the Trust's custodian, under contract terms substantially
identical to those described above.
State Street Bank and Trust Company ("State Street") serves as Transfer
Agent for each Fund. As Transfer Agent, State Street has, among other things,
agreed to: (a) issue and redeem shares of the Funds; (b) make dividend and other
distributions to shareholders of the Funds; (c) effect transfers of shares; (d)
mail communications to shareholders of the Funds, including reports to
shareholders, dividend and distribution notices, and proxy materials for
meetings of shareholders; and (e) maintain shareholder accounts. Under the
Transfer Agency Agreement, State Street receives from the Trust a fee based upon
each shareholder account and is reimbursed for out-of-pocket expenses.
EXPENSES
Operating expenses borne by the Funds include taxes, interest, fees and
expenses of its trustees and officers, SEC fees, state securities qualification
fees, advisory fees, administrative fees, charges of the Funds' custodian,
shareholder services agent and accounting services agent, certain insurance
premiums, outside auditing and legal expenses, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to existing
shareholders, costs of shareholder reports and meetings and any extraordinary
expenses. The Funds also pay for brokerage fees, commissions and other
transaction charges (if any) in connection with the purchase and sale of
portfolio securities.
-51-
<PAGE>
AUDITORS
Deloitte & Touche LLP, 555 Seventeenth Street, Suite 3600, Denver, Colorado
80202-3942, serves as independent auditors for the Funds. The financial
statements contained herein are so included in reliance upon the report of
Deloitte & Touche LLP given upon their authority as experts in accounting and
auditing.
COUNSEL
Drinker Biddle & Reath LLP (of which Mr. McConnel, Secretary of the Trust,
is a partner), 1345 Chestnut Street, Philadelphia, Pennsylvania 19107-3496,
serves as counsel to the Trust and will pass upon certain legal matters relating
to the Funds.
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS
From time to time, the yields, tax-equivalent yields, effective yields and
the total return of a Fund may be quoted in advertisements, shareholder reports
or other communications to shareholders. Performance information is generally
available by calling ALPS at 1-800-392-CORE (2673).
YIELD CALCULATIONS - BOND FUNDS
Each yield is calculated by dividing the net investment income per share
(as described below) earned by a Fund during a 30-day (or one month) period by
the net asset value per share on the last day of the period and annualizing the
result on a semi-annual basis by adding one to the quotient, raising the sum to
the power of six, subtracting one from the result and then doubling the
difference. A Fund's net investment income per share earned during the period
is based on the average daily number of shares outstanding during the period
entitled to receive dividends and includes dividends and interest earned during
the period minus expenses accrued for the period, net of reimbursements. This
calculation can be expressed as follows:
-52-
<PAGE>
a-b (6)
Yield = 2 [(----- + 1) - 1]
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = net asset value per share on the last day of the period.
For the purpose of determining net investment income earned during the
period (variable "a" in the formula), dividend income on equity securities held
by a Fund is recognized by accruing 1/360 of the stated dividend rate of the
security each day that the security is in the Fund. Interest earned on any debt
obligations held by a Fund is calculated by computing the yield to maturity of
each obligation held by the Fund based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day of each month, or, with respect to obligations purchased during the
month, the purchase price (plus actual accrued interest), and dividing the
result by 360 and multiplying the quotient by the market value of the obligation
(including actual accrued interest) in order to determine the interest income on
the obligation for each day of the subsequent month that the obligation is held
by the Fund. For purposes of this calculation, it is assumed that each month
contains 30 days. The maturity of an obligation with a call provision is the
next call date on which the obligation reasonably may be expected to be called
or, if none, the maturity date. With respect to debt obligations purchased at a
discount or premium, the formula generally calls for amortization of the
discount or premium. The amortization schedule will be adjusted monthly to
reflect changes in the market values of such debt obligations.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the
-53-
<PAGE>
original issue discount calculation. On the other hand, in the case of
tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that are less than the
then-remaining portion of the original issue discount (market premium), the
yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed obligations which
are expected to be subject to monthly payments of principal and interest ("pay
downs"), (a) gain or loss attributable to actual monthly pay downs are accounted
for as an increase or decrease to interest income during the period; and (b) a
Fund may elect either (i) to amortize the discount and premium or the remaining
security, based on the cost of the security, to the weighted average maturity
date, if such information is available, or to the remaining term of the
security, if any, if the weighted average date is not available, or (ii) not to
amortize discount or premium on the remaining security.
Undeclared earned income will be subtracted from the net asset value
per share (variable "d" in the formula). Undeclared earned income is the net
investment income which, at the end of the base period, has not been declared as
a dividend, but is reasonably expected to be and is declared as a dividend
shortly thereafter.
Based on the foregoing calculations, the yields of the Funds for the
30-day period ended May 30, 1997 (after fee waivers) were as follows:
Fund 30-Day Yield
---- ------------
Long-Term Bond Fund 6.42%
Intermediate-Term 5.79%
Bond Fund
Colorado Tax-Exempt 4.59%
Fund
"TAX-EQUIVALENT" YIELD CALCULATIONS - COLORADO TAX-EXEMPT FUND
The Fund's "tax-equivalent" yield is computed by: (a) dividing the
portion of the Fund's yield that is exempt from both federal and Colorado state
income taxes by one minus a stated combined federal and state income tax rate;
(b) dividing the portion of the Fund's yield that is exempt from federal income
tax only by one minus a stated federal income tax rate, and (c) adding the
figures resulting from (a) and (b) above to that
-54-
<PAGE>
portion, if any, of the Fund's yield that is not exempt from federal income tax.
Based on the foregoing calculations, the yield and tax-equivalent
yield of the Fund for the 30-day period ended May 30, 1997 (after fee waivers)
were 4.59% and 6.85%, respectively.
Tax-Equivalent Yield is based upon the combined state and federal tax
rate assumptions of 33% (assuming a 28% federal tax rate and a 5% Colorado tax
rate) for the Colorado Tax-Exempt Fund.
TOTAL RETURN CALCULATIONS
Each Fund computes its average annual total returns by determining the
average annual compounded rates of return during specified periods that equate
the initial amount invested to the ending redeemable value of such investment.
This is done by dividing the ending redeemable value of a hypothetical $1,000
initial payment by $1,000 and raising the quotient to a power equal to one
divided by the number of years (or fractional portion thereof) covered by the
computation and subtracting one from the result. This calculation can be
expressed as follows:
1/n
ERV
T = [(-----) - 1]
P
Where: ERV = ending redeemable value at the end of the period covered by
the computation of a hypothetical $1,000 payment made at the
beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms of
years.
The Funds compute their aggregate total return by determining the
aggregate rates of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment. The
formula for calculating aggregate total return is as follows:
ERV
T = [(----- - 1)]
P
-55-
<PAGE>
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period and includes all recurring fees
charged by the Trust to all shareholder accounts. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete redemption
of the hypothetical investment and the deduction of all nonrecurring charges at
the end of the period covered by the computations.
Based on the foregoing calculations, the average annual total return
(after fee waivers) for the year ended May 30, 1997, for the five year period
ended May 30, 1997 and for the periods since commencement of the Funds'
respective operations were as follows:
<TABLE>
<CAPTION>
Since
Year Five Ten Years Inception
Ended Years Ended Ended to
May 30, May 30, May 30, May 30,
------- ------- ------- -------
Fund 1997 1997 1997 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
MIDCO Growth Fund(1) 5.27% 15.48% 14.68% 5.58%
Blue Chip Fund(2) 24.28% 17.30% N/A 15.05%
Growth and Income 19.71% 11.94% N/A 12.59%
Fund(2)(5)
Small-Cap 16.28% N/A N/A 17.33%
Opportunity Fund(3)
Long-Term Bond Fund(2) 9.40% 8.66% N/A 9.90%
Intermediate-Term 7.43% 6.49% N/A 7.71%
Bond Fund(2)
Colorado Tax-Exempt 6.46% 6.18% N/A 6.54%
Fund(4)
</TABLE>
- ------------------------------
(1) Commenced Operations on August 1, 1986.
(2) Commenced Operations on June 1, 1988.
(3) Commenced Operations on December 28, 1993.
(4) Commenced Operations on June 1, 1991.
(5) The Growth and Income Fund was formerly known as the Equity Income Fund .
The Fund's name was changed on January 1, 1996 to reflect a different
objective and policies. Prior to January 1, 1996, the Fund's objective was
to seek reasonable income through investments in income-producing
securities. On January 1, 1996, the Fund's objective was
-56-
<PAGE>
revised to seek long-term total return through capital appreciation and
current income through investments in equity securities. A new portfolio
manager has managed the Fund since October 1995. Past performance is not
intended to be indicative or representative of future performance.
The Funds may also from time to time include in advertisements, sales
literature, communications to shareholders and other materials (collectively,
"Materials") a total return figure that more accurately compares a Fund's
performance with other measures of investment return. For example, in comparing
a Fund's total return with data published by Lipper Analytical Services, Inc.,
CDA Investment Technologies, Inc. or Weisenberger Investment Company Service, or
with the performance of an index, a Fund may calculate its aggregate total
return for the period of time specified in the Materials by assuming the
investment of $10,000 in shares of a Fund and assuming the reinvestment of all
dividends and distributions. Percentage increases are determined by subtracting
the initial value of the investment from the ending value and by dividing the
remainder by the beginning value.
The Funds may also from time to time include discussions or
illustrations of the effects of compounding in Materials. "Compounding" refers
to the fact that, if dividends or other distributions on an investment in a Fund
are paid in the form of additional shares of the Fund, any future income or
capital appreciation of the Fund would increase the value, not only of the
original investment, but also of the additional shares received through
reinvestment. As a result, the value of the investment in the Fund would
increase more quickly than if dividends or other distributions had been paid in
cash.
In addition, the Funds may also include in Materials discussions
and/or illustrations of the potential investment goals of a prospective
investor, investment management strategies, techniques, policies or investment
suitability of a Fund (such as value investing, market timing, dollar cost
averaging, asset allocation, constant ratio transfer, automatic account
rebalancing, the advantages and disadvantages of investing in tax-deferred and
taxable investments), economic conditions, the relationship between sectors of
the economy and the economy as a whole, various securities markets, the effects
of inflation and historical performance of various asset classes, including but
not limited to, stocks, bonds and Treasury securities. From time to time,
Materials may summarize the substance of information contained in shareholder
reports (including the investment composition of a Fund), as well as the views
of the adviser as to current market, economic, trade and interest rate trends,
legislative, regulatory and monetary developments, investment strategies and
related matters believed to be of relevance to a Fund. The materials may also
refer to or
-57-
<PAGE>
describe the types of clients the Investment Adviser advises, and describe the
Investment Adviser's method of operation, internal work environment, procedure
and philosophy. The Funds may also include in Materials charts, graphs or
drawings which compare the investment objective, return potential, relative
stability and/or growth possibilities of the Funds and/or other mutual funds, or
illustrate the potential risks and rewards of investment in various investment
vehicles, including but not limited to, stocks, bonds, Treasury securities and
shares of a Fund and/or other mutual funds. Materials may include a discussion
of certain attributes or benefits to be derived by an investment in a Fund
and/or other mutual funds, shareholder profiles and hypothetical investor
scenarios, timely information on financial management, tax and retirement
planning and investment alternatives to certificates of deposit and other
financial instruments. Such Materials may include symbols, headlines or other
material which highlight or summarize the information discussed in more detail
therein.
MISCELLANEOUS
As used in this Statement of Additional Information and the Funds'
Prospectus, a "majority of the outstanding shares" of a Fund or a class of
shares means, with respect to the approval of an investment advisory agreement,
a distribution plan or as a change in a fundamental investment policy, the
lesser of (1) 67% of the shares of the particular Fund or class represented at a
meeting at which the holders of more than 50% of the outstanding shares of such
Fund or class are present in person or by proxy, or (2) more than 50% of the
outstanding shares of such Fund or class.
As of September 8, 1997, the following shareholders owned more than 5%
of the outstanding shares of the Funds listed below:
<TABLE>
<CAPTION>
MIDCO GROWTH FUND
<S> <C> <C> <C> <C>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
------------------------------- -------------- ------------- -------------
HEP & Co. 34.40% 9,714,204.5490 $234,986,608.04
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Wells Fargo Bank Ttee 5.16% 1,457,866.8260 $35,265,798.52
FBO Nordstroms Attn: Myke Coles
P.O. Box 9800 Mutual Funds
MAC 9139-027
Calabasas, CA 91372-0800
-58-
<PAGE>
BLUE CHIP FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
HEP & Co. 54.24% 1,724,254.4890 $34,881,668.31
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Charles Schwab & Co., Inc. 11.64% 369,947.5940 $7,484,039.83
Special Account for the Exclusive
Benefit of Customers
Attention Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
Virg & Co. 8.54% 271,345.2130 $5,489,313.66
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
GROWTH AND INCOME FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
Wells Fargo Bank Ttee 20.54% 240,217.5990 $3,509,579.12
FBO Choicemaster
P.O. Box 9800 Mutual Funds
MAC 9139-027
Calabasas, CA 91372-0800
Charles Schwab & Co., Inc. 9.36% 109,494.5300 $1,599,715.08
Special Account for the Exclusive
Benefit of Customers
Attention Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
Virg & Co. 7.85% 91,762.6480 $1,340,652.29
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
SMALL-CAP OPPORTUNITY FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
Bank of New York as Ttee 22.48% 352,040.1650 $9,853,604.22
For Brooklyn Union Gas
Employee Benefit Trust/
Bargaining VEBA
One Wall Street
New York, NY 10005-2501
Colorado State Bank & Trust 22.03% 344,928.6650 $9,654,553.33
1600 Broadway
Denver, CO 80202-4999
-59-
<PAGE>
HEP & Co. 18.35% 287,353.0320 $8,043,011.37
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Charles Schwab & Co., Inc. 7.62% 119,366.7320 $3,341,074.83
Special Account for the Exclusive
Benefit of Customers
Attention Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
Wells Fargo Bank Ttee 5.85% 91,625.6450 $2,564,601.80
FBO Choicemaster
P.O. Box 9800 Mutual Funds
MAC 9139-027
Calabasas, CA 91372-0800
LONG-TERM BOND FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
HEP & Co. 72.90% 1,202,582.9040 $11,989,751.55
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
INTERMEDIATE-TERM BOND FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
HEP & Co. 57.22% 2,883,731.4570 $29,933,132.52
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Virg & Co. 12.60% 635,199.1560 $6,593,367.24
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Wells Fargo Bank Ttee 6.03% 304,095.5880 $3,156,512.20
FBO Choicemaster
P.O. Box 9800 Mutual Funds
MAC 9139-027
Calabasas, CA 91372-0800
Charles Schwab & Co., Inc. 5.57% 280,851.0630 $2,915,234.03
Special Account for the Exclusive
Benefit of Customers
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
-60-
<PAGE>
COLORADO TAX-EXEMPT FUND
NAME AND ADDRESS OF SHAREHOLDER % OF FUND HELD SHARE BALANCE ASSET BALANCE
------------------------------- -------------- ------------- -------------
Charles Schwab & Co., Inc. 17.21% 375,537.7500 $4,097,116.85
Special Account for the Exclusive
Benefit of Customers
Attention Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
DIM & Co. 9.41% 205,243.5130 $2,239,206.73
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
HEP & Co. 8.88% 193,743.3480 $2,113,739.93
Wells Fargo Bank NA
Mutual Funds Dept. MAC 9139-027
PO Box 9800
Calabasas, CA 91372-0800
Cherry Trust & Co. 6.55% 142,918.4630 $1,559,240.43
3033 E. 1st Ave.
Denver, CO 80206-5617
Janet E. Penland 6.53% 142,467.9750 $1,554,325.61
101 S. Franklin St.
Denver, CO 80209-2604
Colorado National Bank 6.29% 137,254.3980 $1,497,445.48
FBO Joe Bishop
Mutual Fund Department
P.O. Box 64010
St. Paul, MN 55164-0010
Dennis E. Larkin 5.33% 116,301.6310 $1,268,850.79
Constance M. Larkin JTWROS
3233 So. Niagara St.
Denver, CO 80224-2825
</TABLE>
- --------------------------
* All above-listed shares of the MIDCO Growth Fund, Blue Chip Fund, Growth
and Income Fund, Small-Cap Opportunity Fund, Long-Term Bond Fund,
Intermediate-Term Bond Fund and Colorado Tax-Exempt Fund were owned of
record by the owners named above, except to the Trust's knowledge where
also owned benefically as indicated above.
-61-
<PAGE>
APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current assessment of
the likelihood of timely payment of debt considered short-term in the relevant
market. The following summarizes the rating categories used by Standard and
Poor's for commercial paper:
"A-1" - The highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
"A-2" - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
"A-3" - Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
"B" - Issues are regarded as having only a speculative capacity for
timely payment.
"C" - This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
"D" - Issues are in payment default.
Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the rating categories used by Moody's for commercial paper:
"Prime-1" - Issuers or related supporting institutions have a superior
capacity for repayment of senior short-term promissory obligations. Prime-1
repayment capacity will often be evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structures with moderate reliance on
debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
A-1
<PAGE>
"Prime-2" - Issuers or related supporting institutions have a strong
ability for repayment of senior short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternative liquidity is
maintained.
"Prime-3" - Issuers or related supporting institutions have an
acceptable ability for repayment of senior short-term promissory obligations.
The effects of industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuers do not fall within any of the Prime rating
categories.
The three rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D-1," "D-2" and "D-3." Duff & Phelps
employs three designations, "D-1+," "D-1" and "D-1-," within the highest rating
category. The following summarizes the rating categories used by Duff & Phelps
for commercial paper:
"D-1+" - Debt possesses highest certainty of timely payment.
Short-term liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty of timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
"D-3" - Debt possesses satisfactory liquidity and other protection
factors qualify issue as investment grade. Risk
A-2
<PAGE>
factors are larger and subject to more variation. Nevertheless, timely payment
is expected.
"D-4" - Debt possesses speculative investment characteristics.
Liquidity is not sufficient to ensure against disruption in debt service.
Operating factors and market access may be subject to a high degree of
variation.
"D-5" - Issuer has failed to meet scheduled principal and/or interest
payments.
Fitch short-term ratings apply to debt obligations that are payable on demand or
have original maturities of generally up to three years. The following
summarizes the rating categories used by Fitch for short-term obligations:
"F-1+" - Securities possess exceptionally strong credit quality.
Issues assigned this rating are regarded as having the strongest degree of
assurance for timely payment.
"F-1" - Securities possess very strong credit quality. Issues
assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated "F-1+."
"F-2" - Securities possess good credit quality. Issues assigned this
rating have a satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as the "F-1+" and "F-1" ratings.
"F-3" - Securities possess fair credit quality. Issues assigned this
rating have characteristics suggesting that the degree of assurance for timely
payment is adequate; however, near-term adverse changes could cause these
securities to be rated below investment grade.
"F-S" - Securities possess weak credit quality. Issues assigned this
rating have characteristics suggesting a minimal degree of assurance for timely
payment and are vulnerable to near-term adverse changes in financial and
economic conditions.
"D" - Securities are in actual or imminent payment default.
Fitch may also use the symbol "LOC" with its short-term ratings to
indicate that the rating is based upon a letter of credit issued by a commercial
bank.
Thomson BankWatch short-term ratings assess the likelihood of an
untimely or incomplete payment of principal or
A-3
<PAGE>
interest of unsubordinated instruments having a maturity of one year or less
which are issued by United States commercial banks, thrifts and non-bank banks;
non-United States banks; and broker-dealers. The following summarizes the
ratings used by Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's highest
rating category and indicates a very high degree of likelihood that principal
and interest will be paid on a timely basis.
"TBW-2" - This designation indicates that while the degree of safety
regarding timely payment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated "TBW-1."
"TBW-3" - This designation represents the lowest investment grade
category and indicates that while the debt is more susceptible to adverse
developments (both internal and external) than obligations with higher ratings,
capacity to service principal and interest in a timely fashion is considered
adequate.
"TBW-4" - This designation indicates that the debt is regarded as
non-investment grade and therefore speculative.
IBCA assesses the investment quality of unsecured debt with an
original maturity of less than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
rating categories used by IBCA for short-term debt ratings:
"A1+" - Obligations which posses a particularly strong credit feature
are supported by the highest capacity for timely repayment.
"A1" - Obligations are supported by the highest capacity for timely
repayment.
"A2" - Obligations are supported by a satisfactory capacity for timely
repayment.
"A3" - Obligations are supported by an adequate capacity for timely
repayment.
"B" - Obligations for which there is an uncertainty as to the capacity
to ensure timely repayment.
"C" - Obligations for which there is a high risk of default or which
are currently in default.
A-4
<PAGE>
CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - This designation represents the highest rating assigned by
Standard & Poor's to a debt obligation and indicates an extremely strong
capacity to pay interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to pay
interest and repay principal and differs from AAA issues only in small degree.
"A" - Debt is considered to have a strong capacity to pay interest and
repay principal although such issues are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay
interest and repay principal. Whereas such issues normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
"BB," "B," "CCC," "CC" and "C" - Debt is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
"BB" - Debt has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.
"B" - Debt has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
A-5
<PAGE>
"CCC" - Debt has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.
"CC" - This rating is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating and is currently highly
vulnerable to nonpayment.
"C" - This rating is typically applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC-" debt rating. The "C" rating
may be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.
"CI" - This rating is reserved for income bonds on which no interest
is being paid.
"D" - Debt is in payment default. This rating is used when interest
payments or principal payments are not made on the date due, even if the
applicable grace period has not expired, unless S & P believes that such
payments will be made during such grace period. "D" rating is also used upon
the filing of a bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.
"r" - This rating is attached to highlight derivative, hybrid, and
certain other obligations that S & P believes may experience high volatility or
high variability in expected returns due to non-credit risks. Examples of such
obligations are: securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an "r"
symbol should not be taken as an indication that an obligation will exhibit no
volatility or variability in total return.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are
A-6
<PAGE>
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds are considered as medium-grade obligations, (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of characteristics
of desirable investment; "Caa" represents a poor standing; "Ca" represents
obligations which are speculative in a high degree; and "C" represents the
lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Con. (---) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b) earnings
of projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
(P)... - When applied to forward delivery bonds, indicates that the
rating is provisional pending delivery of the bonds. The rating may be revised
prior to delivery if changes occur in the legal documents or the underlying
credit quality of the bonds.
A-7
<PAGE>
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's
believes possess the strongest investment attributes are designated by the
symbols, Aa1, A1, Baa1, Ba1 and B1.
The following summarizes the long-term debt ratings used by Duff &
Phelps for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The
risk factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
"AA" - Debt is considered of high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.
"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
"BBB" - Debt possesses below-average protection factors but such
protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these
ratings is considered to be below investment grade. Although below investment
grade, debt rated "BB" is deemed likely to meet obligations when due. Debt
rated "B" possesses the risk that obligations will not be met when due. Debt
rated "CCC" is well below investment grade and has considerable uncertainty as
to timely payment of principal, interest or preferred dividends. Debt rated
"DD" is a defaulted debt obligation, and the rating "DP" represents preferred
stock with dividend arrearages.
To provide more detailed indications of credit quality, the "AA," "A,"
"BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.
The following summarizes the ratings used by Fitch for corporate and
municipal bonds:
"AAA" - Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably foreseeable
events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA." Because bonds rated
in the "AAA" and "AA"
A-8
<PAGE>
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated "F-1+."
"A" - Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
"BB" - Bonds considered to be speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified, which
could assist the obligor in satisfying its debt service requirements.
"B" - Bonds are considered highly speculative. While securities in
this class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the instrument.
"CCC" - Bonds have certain identifiable characteristics that, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
"CC" - Bonds are minimally protected. Default in payments of interest
seems probable over time.
"C" - Bonds are in imminent default in payment of interest or
principal.
"DDD," "DD" and "D" - Bonds are in default on interest and/or
principal payments. Such securities are extremely speculative and should be
valued on the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. "DDD" represents the highest potential for
recovery on these securities, and "D" represents the lowest potential for
recovery.
A-9
<PAGE>
To provide more detailed indications of credit quality, the Fitch
ratings from and including "AA" to "C" may be modified by the addition of a plus
(+) or minus (-) sign to show relative standing within these major rating
categories.
IBCA assesses the investment quality of unsecured debt with an
original maturity of more than one year which is issued by bank holding
companies and their principal bank subsidiaries. The following summarizes the
rating categories used by IBCA for long-term debt ratings:
"AAA" - Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk substantially.
"AA" - Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions may increase investment risk, albeit not very significantly.
"A" - Obligations for which there is a low expectation of investment
risk. Capacity for timely repayment of principal and interest is strong,
although adverse changes in business, economic or financial conditions may lead
to increased investment risk.
"BBB" - Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
adequate, although adverse changes in business, economic or financial conditions
are more likely to lead to increased investment risk than for obligations in
other categories.
"BB," "B," "CCC," "CC," and "C" - Obligations are assigned one of
these ratings where it is considered that speculative characteristics are
present. "BB" represents the lowest degree of speculation and indicates a
possibility of investment risk developing. "C" represents the highest degree of
speculation and indicates that the obligations are currently in default.
IBCA may append a rating of plus (+) or minus (-) to a rating below
"AAA" to denote relative status within major rating categories.
Thomson BankWatch assesses the likelihood of an untimely repayment of
principal or interest over the term to maturity of long term debt and preferred
stock which are issued
A-10
<PAGE>
by United States commercial banks, thrifts and non-bank banks; non-United States
banks; and broker-dealers. The following summarizes the rating categories used
by Thomson BankWatch for long-term debt ratings:
"AAA" - This designation represents the highest category assigned by
Thomson BankWatch to long-term debt and indicates that the ability to repay
principal and interest on a timely basis is extremely high.
"AA" - This designation indicates a very strong ability to repay
principal and interest on a timely basis with limited incremental risk compared
to issues rated in the highest category.
"A" - This designation indicates that the ability to repay principal
and interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
"BBB" - This designation represents Thomson BankWatch's lowest
investment-grade category and indicates an acceptable capacity to repay
principal and interest. Issues rated "BBB" are, however, more vulnerable to
adverse developments (both internal and external) than obligations with higher
ratings.
"BB," "B," "CCC," and "CC," - These designations are assigned by
Thomson BankWatch to non-investment grade long-term debt. Such issues are
regarded as having speculative characteristics regarding the likelihood of
timely payment of principal and interest. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation.
"D" - This designation indicates that the long-term debt is in
default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may
include a plus or minus sign designation which indicates where within the
respective category the issue is placed.
MUNICIPAL NOTE RATINGS
A Standard and Poor's rating reflects the liquidity concerns and
market access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's Ratings Group for municipal
notes:
"SP-1" - The issuers of these municipal notes exhibit a strong
capacity to pay principal and interest. Those issues determined to possess very
strong characteristics are given a plus (+) designation.
A-11
<PAGE>
"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest.
"SP-3" - The issuers of these municipal notes exhibit speculative
capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:
"MIG-1"/"VMIG-1" - Loans bearing this designation are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
"MIG-2"/"VMIG-2" - Loans bearing this designation are of high quality,
with margins of protection ample although not so large as in the preceding
group.
"MIG-3"/"VMIG-3" - Loans bearing this designation are of favorable
quality, with all security elements accounted for but lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.
"MIG-4"/"VMIG-4" - Loans bearing this designation are of adequate
quality, carrying specific risk but having protection commonly regarded as
required of an investment security and not distinctly or predominantly
speculative.
"SG" - Loans bearing this designation are of speculative quality and
lack margins of protection.
Fitch and Duff & Phelps use the short-term ratings described under
Commercial Paper Ratings for municipal notes.
A-12
<PAGE>
APPENDIX B
As stated in the Prospectus, the Equity and Bond Funds, other than the
Colorado Tax-Exempt Fund may enter into futures contracts and options for
hedging purposes. Such transactions are described in this Appendix.
I. INTEREST RATE FUTURES CONTRACTS.
USE OF INTEREST RATE FUTURES CONTRACTS. Bond prices are established
in both the cash market and the futures market. In the cash market, bonds are
purchased and sold with payment for the full purchase price of the bond being
made in cash, generally within five business days after the trade. In the
futures market, only a contract is made to purchase or sell a bond in the future
for a set price on a certain date. Historically, the prices for bonds
established in the futures markets have tended to move generally in the
aggregate in concert with the cash market prices and have maintained fairly
predictable relationships. Accordingly, the Funds may use interest rate futures
as a defense, or hedge, against anticipated interest rate changes and not for
speculation. As described below, this would include the use of futures contract
sales to protect against expected increases in interest rates and futures
contract purchases to offset the impact of interest rate declines.
The Funds presently could accomplish a similar result to that which it
hopes to achieve through the use of futures contracts by selling bonds with long
maturities and investing in bonds with short maturities when interest rates are
expected to increase, or conversely, selling short-term bonds and investing in
long-term bonds when interest rates are expected to decline. However, because
of the liquidity that is often available in the futures market the protection is
more likely to be achieved, perhaps at a lower cost and without changing the
rate of interest being earned by the Funds, through using futures contracts.
DESCRIPTION OF INTEREST RATE FUTURES CONTRACTS. An interest rate
futures contract sale would create an obligation by a Fund, as seller, to
deliver the specific type of financial instrument called for in the contract at
a specific future time for a specified price. A futures contract purchase would
create an obligation by a Fund, as purchaser, to take delivery of the specific
type of financial instrument at a specific future time at a specific price. The
specific securities delivered or taken, respectively, at settlement date, would
not be determined until at or near that date. The determination would be in
accordance with the rules of the exchange on which the futures contract sale or
purchase was made.
Although interest rate futures contracts by their terms call for
actual delivery or acceptance of securities, in most
B-1
<PAGE>
cases the contracts are closed out before the settlement date without the making
or taking of delivery of securities. Closing out a futures contract sale is
effected by a Fund entering into a futures contract purchase for the same
aggregate amount of the specific type of financial instrument and the same
delivery date. If the price of the sale exceeds the price of the offsetting
purchase, a Fund is immediately paid the difference and thus realizes a gain.
If the offsetting purchase price exceeds the sale price, a Fund pays the
difference and realizes a loss. Similarly, the closing out of a futures
contract purchase is effected by the Fund entering into a futures contract sale.
If the offsetting sale price exceeds the purchase price, a Fund realizes a gain,
and if the purchase price exceeds the offsetting sale price, a Fund realizes a
loss.
Interest rate futures contracts are traded in an auction environment
on the floors of several exchanges - principally, the Chicago Board of Trade and
the Chicago Mercantile Exchange and the New York Futures Exchange. The Fund
would deal only in standardized contract's on recognized exchanges. Each
exchange guarantees performance under contract provisions through a clearing
corporation, a nonprofit organization managed by the exchange membership.
A public market now exists in futures contracts covering various
financial instruments including long-term Treasury Bonds and Notes; Government
National Mortgage Association (GNMA) modified pass-through mortgage-backed
securities; three-month Treasury Bills; and ninety-day commercial paper. A Fund
may trade in any futures contract for which there exists a public market,
including, without limitation, the foregoing instruments.
II. STOCK INDEX FUTURES CONTRACTS.
GENERAL. A stock index assigns relative values to the stocks included
in the index and the index fluctuates with changes in the market values of the
stocks included. Some stock index futures contracts are based on broad market
indexes, such as the Standard & Poor's 500 or the New York Stock Exchange
Composite Index. In contrast, certain exchanges offer futures contracts on
narrower market indexes, such as the Standard & Poor's 100 or indexes based on
an industry or market segment, such as oil and gas stocks. Futures contracts
are traded on organized exchanges regulated by the Commodity Futures Trading
Commission. Transactions on such exchanges are cleared through a clearing
corporation, which guarantees the performance of the parties to each contract.
A Fund will sell index futures contracts in order to offset a decrease
in market value of its securities that might otherwise result from a market
decline. A Fund may do so either
B-2
<PAGE>
to hedge the value of its portfolio as a whole, or to protect against declines,
occurring prior to sales of securities, in the value of the securities to be
sold. Conversely, a Fund will purchase index futures contracts in anticipation
of purchases of securities. In a substantial majority of these transactions, a
Fund will purchase such securities upon termination of the long futures
position, but a long futures position may be terminated without a corresponding
purchase of securities.
In addition, a Fund may utilize stock index futures contracts in
anticipation of changes in the composition of its holdings. For example, in the
event that a Fund expects to narrow the range of industry groups represented in
its holdings it may, prior to making purchases of the actual securities,
establish a long futures position based on a more restricted index, such as an
index comprised of securities of a particular industry group. A Fund may also
sell futures contracts in connection with this strategy, in order to protect
against the possibility that the value of the securities to be sold as part of
the restructuring of its portfolio will decline prior to the time of sale.
III. FUTURES CONTRACTS ON FOREIGN CURRENCIES.
A futures contract on foreign currency creates a binding obligation on
one party to deliver, and a corresponding obligation on another party to accept
delivery of, a stated quantity of a foreign currency, for an amount fixed in
U.S. dollars. Foreign currency futures may be used by a Fund to hedge against
exposure to fluctuations in exchange rates between the U.S. dollar and other
currencies arising from multinational transactions.
IV. MARGIN PAYMENTS.
Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Initially,
a Fund will be required to deposit with the broker or in a segregated account
with a Fund's custodian an amount of cash or cash equivalents, the value of
which may vary but is generally equal to 10% or less of the value of the
contract. This amount is known as initial margin. The nature of initial margin
in futures transactions is different from that of margin in security
transactions in that futures contract margin does not involve the borrowing of
funds by the customer to finance the transactions. Rather, the initial margin
is in the nature of a performance bond or good faith deposit on the contract
which is returned to a Fund upon termination of the futures contract assuming
all contractual obligations have been satisfied. Subsequent payments, called
variation margin, to and from the broker, will be made on a daily basis as the
price of the underlying instrument fluctuates making the long and short
B-3
<PAGE>
positions in the futures contract more or less valuable, a process known as
"marking-to-market." For example, when a Fund has purchased a futures contract
and the price of the contract has risen in response to a rise in the underlying
instruments, that position will have increased in value and a Fund will be
entitled to receive from the broker a variation margin payment equal to that
increase in value. Conversely, where a Fund has purchased a futures contract
and the price of the futures contract has declined in response to a decrease in
the underlying instruments, the position would be less valuable and a Fund would
be required to make a variation margin payment to the broker. At any time prior
to expiration of the futures contract, Denver Investment Advisors may elect to
close the position by taking an opposite position, subject to the availability
of a secondary market, which will operate to terminate a Fund's position in the
futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to a Fund, and a Fund
realizes a loss or gain.
V. RISKS OF TRANSACTIONS IN FUTURES CONTRACTS.
There are several risks in connection with the use of futures by a
Fund as a hedging device. One risk arises because of the imperfect correlation
between movements in the price of the future and movements in the price of the
securities which are the subject of the hedge. The price of the future may move
more than or less than the price of the securities being hedged. If the price
of the future moves less than the price of the securities which are the subject
of the hedge, the hedge will not be fully effective but, if the price of the
securities being hedged has moved in an unfavorable direction, a Fund would be
in a better position than if it had not hedged at all. If the price of the
securities being hedged has moved in a favorable direction, this advantage will
be partially offset by the loss on the future. If the price of the future moves
more than the price of the hedged securities, a Fund involved will experience
either a loss or gain on the future which will not be completely offset by
movements in the price of the securities which are the subject of the hedge. To
compensate for the imperfect correlation of movements in the price of securities
being hedged and movements in the price of futures contracts, a Fund may buy or
sell futures contracts in a greater dollar amount than the dollar amount of
securities being hedged if the volatility over a particular time period of the
prices of such securities has been greater than the volatility over such time
period of the future, or if otherwise deemed to be appropriate by Denver
Investment Advisors. Conversely, a Fund may buy or sell fewer futures contracts
if the volatility over a particular time period of the prices of the securities
being hedged is less than the volatility over such time period of the futures
contract being used, or if otherwise deemed to be appropriate by Denver
Investment Advisors. It is also possible that, where a Fund has sold futures to
hedge its
B-4
<PAGE>
portfolio against a decline in the market, the market may advance and the value
of securities held by a Fund may decline. If this occurred, a Fund would lose
money on the future and also experience a decline in value in its portfolio
securities.
Where futures are purchased to hedge against a possible increase in
the price of securities or a currency before a Fund is able to invest its cash
(or cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline instead; if a Fund then concludes not to
invest in securities or options at that time because of concern as to possible
further market decline or for other reasons, a Fund will realize a loss on the
futures contract that is not offset by a reduction in the price of securities
purchased.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the futures and the
securities being hedged, the price of futures may not correlate perfectly with
movement in the cash market due to certain market distortions. Rather than
meeting additional margin deposit requirements, investors may close futures
contracts through off-setting transactions which could distort the normal
relationship between the cash and futures markets. Second, with respect to
financial futures contracts, the liquidity of the futures market depends on
participants entering into off-setting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced thus producing distortions. Third, from
the point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price distortion in the
futures market, and because of the imperfect correlation between the movements
in the cash market and movements in the price of futures, a correct forecast of
general market trends or interest rate movements by Denver Investment Advisors
may still not result in a successful hedging transaction over a short time
frame.
Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Funds
intend to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a liquid
secondary market on any exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be possible to
close a futures investment position, and in the event of adverse price
movements, the Funds would continue to be required to make daily cash payments
of variation margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not
B-5
<PAGE>
be sold until the futures contract can be terminated. In such circumstances, an
increase in the price of the securities, if any, may partially or completely
offset losses on the futures contract. However, as described above, there is no
guarantee that the price of the securities will in fact correlate with the price
movements in the futures contract and thus provide an offset on a futures
contract.
Further, it should be noted that the liquidity of a secondary market
in a futures contract may be adversely affected by "daily price fluctuation
limits" established by commodity exchanges which limit the amount of fluctuation
in a futures contract price during a single trading day. Once the daily limit
has been reached in the contract, no trades may be entered into at a price
beyond the limit, thus preventing the liquidation of open futures positions.
The trading of futures contracts is also subject to the risk of trading halts,
suspensions, exchange or clearing house equipment failures, government
intervention, insolvency of a brokerage firm or clearing house or other
disruptions of normal trading activity, which could at times make it difficult
or impossible to liquidate existing positions or to recover excess variation
margin payments.
Successful use of futures by the Funds is also subject to Denver
Investment Advisor's ability to predict correctly movements in the direction of
the market. For example, if a Fund has hedged against the possibility of a
decline in the market adversely affecting securities held in its portfolio and
securities prices increase instead, a Fund will lose part or all of the benefit
to the increased value of its securities which it has hedged because it will
have offsetting losses in its futures positions. In addition, in such
situations, if a Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market. A
Fund may have to sell securities at a time when it may be disadvantageous to do
so.
VI. OPTIONS ON FUTURES CONTRACTS.
The Funds may purchase options on the futures contracts described
above. A futures option gives the holder, in return for the premium paid, the
right to buy (call) from or sell (put) to the writer of the option a futures
contract at a specified price at any time during the period of the option. Upon
exercise, the writer of the option is obligated to pay the difference between
the cash value of the futures contract and the exercise price. Like the buyer
or seller of a futures contract, the holder, or writer, of an option has the
right to terminate its position prior to the scheduled expiration of the option
by selling, or purchasing, an option of the same series, at which
B-6
<PAGE>
time the person entering into the closing transaction will realize a gain or
loss.
Investments in futures options involve some of the same considerations
that are involved in connection with investments in futures contracts (for
example, the existence of a liquid secondary market). In addition, the purchase
or sale of an option also entails the risk that changes in the value of the
underlying futures contract will not be fully reflected in the value of the
option purchased. Depending on the pricing of the option compared to either the
futures contract upon which it is based, or upon the price of the securities
being hedged, an option may or may not be less risky than ownership of the
futures contract or such securities. In general, the market prices of options
can be expected to be more volatile than the market prices on the underlying
futures contract. Compared to the purchase or sale of futures contracts,
however, the purchase of call or put options on futures contracts may frequently
involve less potential risk to the Funds because the maximum amount at risk is
the premium paid for the options (plus transaction costs). The writing of an
option on a futures contract involves risks similar to those risks relating to
the sale of futures contracts. Although permitted by their fundamental
investment policies, the Funds do not currently intend to write futures options
during the current fiscal year, and will not do so in the future absent any
necessary regulatory approvals.
VII. ACCOUNTING AND TAX TREATMENT.
Accounting for futures contracts and options will be in accordance
with generally accepted accounting principles.
Generally, futures contracts held by the Funds at the close of the
Funds' taxable year will be treated for federal income tax purposes as sold for
their fair market value on the last business day of such year, a process known
as "marking to market." Forty percent of any gain or loss resulting from such
constructive sale will be treated as short-term capital gain or loss and sixty
percent of such gain or loss will be treated as long-term capital gain or loss
without regard to the length of time a Fund holds the futures contract (the
"40-60 rule"). The amount of any capital gain or loss actually realized by a
Fund in a subsequent sale or other disposition of those futures contracts will
be adjusted to reflect any capital gain or loss taken into account by a Fund in
a prior year as a result of the constructive sale of the contracts. With
respect to futures contracts to sell, which will be regarded as parts of a
"mixed straddle" because their values fluctuate inversely to the values of
specific securities held by a Fund, losses as to such contracts to sell will be
subject to certain loss deferral rules which limit the amount of loss currently
deductible on either part of the straddle to the amount thereof which exceeds
the unrecognized
B-7
<PAGE>
gain (if any) with respect to the other part of the straddle, and to certain
wash sales regulations. Under short sales rules, which will also be applicable,
the holding period of the securities forming part of the straddle will (if they
have not been held for the long-term holding period) be deemed not to begin
prior to termination of the straddle. With respect to certain futures
contracts, deductions for interest and carrying charges will not be allowed.
Notwithstanding the rules described above, with respect to futures contracts to
sell which are properly identified as such, a Fund may make an election which
will exempt (in whole or in part) those identified futures contracts from being
treated for federal income tax purposes as sold on the last business day of a
Fund's taxable year, but gains and losses will be subject to such short sales,
wash sales, loss deferral rules and the requirement to capitalize interest and
carrying charges. Under temporary regulations, a Fund would be allowed (in lieu
of the foregoing) to elect either (1) to offset gains or losses from positions
which are part of a mixed straddle by separately identifying each mixed straddle
to which such treatment applies, or (2) to establish a mixed straddle account
for which gains and losses would be recognized and offset on a periodic basis
during the taxable year. Under either election, the 40-60 rule will apply to
the net gain or loss attributable to the futures contracts, but in the case of a
mixed straddle account election, no more than 50% of any net gain may be treated
as long-term and no more than 40% of any net loss may be treated as short-term.
Options on futures contracts generally receive federal tax treatment similar to
that described above.
Certain foreign currency contracts entered into by the Funds may be
subject to the "mark-to-market" process. If the Fund timely elects to treat
such contracts as capital assets, the contracts will be subject to the 40-60
rule, described above. Otherwise, any "mark-to-market" or loss will be treated
as 100% ordinary gain or loss. To receive such federal income tax treatment, a
foreign currency contract must meet the following conditions: (1) the contract
must require delivery of, or the settlement value of the contract must depend on
the value of, a foreign currency of a type in which regulated futures contracts
are traded; (2) the contract must be entered into at arm's length at a price
determined by reference to the price in the interbank market; and (3) the
contract must be traded in the interbank market. The Treasury Department has
broad authority to issue regulations under the provisions respecting foreign
currency contracts. As of the date of this Statement of Additional Information,
the Treasury has not issued any such regulations. Foreign currency contracts
entered into by a Fund may result in the creation of one or more straddles for
federal income tax purposes, in which case certain loss deferral, short sales,
and wash sales rules and the requirement to capitalize interest and carrying
charges may apply.
B-8
<PAGE>
Some investments may be subject to special rules which govern the
federal income tax treatment of certain transactions denominated in terms of a
currency other than the U.S. dollar or determined by reference to the value of
one or more currencies other than the U.S. dollar. The types of transactions
covered by the special rules include the following: (i) the acquisition of, or
becoming the obligor under, a bond or other debt instrument (including, to the
extent provided in Treasury regulations, preferred stock); (ii) the accruing of
certain trade receivables and payables; and (iii) the entering into or
acquisition of any forward contract, futures contract, option and similar
financial instrument. However, regulated futures contracts and non-equity
options are generally not subject to the special currency rules if they are or
would be treated as sold for their fair market value at year-end under the
"mark-to-market" rules, unless an election is made to have such currency rules
apply. The disposition of a currency other than the U.S. dollar by a U.S.
taxpayer is also treated as a transaction subject to the special currency rules.
With respect to transactions covered by the special rules, foreign currency gain
or loss is calculated separately from any gain or loss on the underlying
transaction and is normally taxable as ordinary gain or loss. A taxpayer may
elect to treat as capital gain or loss foreign currency gain or loss arising
from certain identified forward contracts, futures contracts and options that
are capital assets in the hands of the taxpayer and which are not part of a
straddle. In accordance with Treasury regulations, certain transactions subject
to the special currency rules that are part of a "section 988 hedging
transaction" (as defined in the Code and the Treasury regulations) will be
integrated and treated as a single transaction or otherwise treated consistently
for purposes of the Code. "Section 988 hedging transactions" are not subject to
the mark-to-market or loss deferral rules under the Code. It is anticipated
that some of the non-U.S. dollar denominated investments and foreign currency
contracts that a Fund may make or may enter into will be subject to the special
currency rules described above. Gain or loss attributable to the foreign
currency component of transactions engaged in by the Funds which are not subject
to special currency rules (such as foreign equity investments other than certain
preferred stocks) will be treated as capital gain or loss and will not be
segregated from the gain or loss on the underlying transaction.
B-9
<PAGE>
WESTCORE FUNDS DEFINITION OF INDICES
- --------------------------------------------------------------------------------
STANDARD & POOR'S 500 INDEX is a broad-based measurement of changes in
stock-market conditions based on the average performance of 500 widely held
common stocks. It is an unmanaged index.
STANDARD & POOR'S 400 MID-CAP INDEX is a broad-based measurement of changes in
stock-market conditions based on the average performance of 400 middle
capitalization issues. It is an unmanaged index.
RUSSELL 2000 INDEX represents the bottom two-thirds of the largest 3,000
publicly traded companies domiciled in the United States. Only common stocks
are included in the index; in the case of multiple classes of stock, generally
only one is allowed. It is an unmanaged index.
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX includes fixed
rate debt issues rated investment grade or higher by Moody's Investors Services,
Standard & Poor's Corporation or Fitch Investor's Service, in order.
Intermediate indices include bonds with maturities of up to ten years. It is an
unmanaged index.
THE LEHMAN BROTHERS LONG-TERM GOVERNMENT/CORPORATE BOND INDEX includes fixed
rate debt issues rated investment grade or higher by Moody's Investors Services,
Standard & Poor's Corporation or Fitch Investor's Service, in order. Long-term
indices include bonds with maturities of ten years or longer. It is an
unmanaged index.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX is a total return performance benchmark
for the long-term, investment-grade tax-exempt bond market. Returns and
attributes for the Index are calculated semi-monthly using approximately 25,000
municipal bonds. It is an unmanaged index.
THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX includes investment-grade
(Moody's Investor Services Aaa to Baa, Standard & Poor's Corporation AAA to BBB)
tax-exempt bonds with maturities between eight and twelve years. It is an
unmanaged index.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- ---------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore
MIDCO Blue Small-Cap Growth
Growth Chip Opportunity and Income
Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost-see below) $589,512,862 $63,823,060 $35,935,601 $20,561,721
-see accompanying statements
Receivable for investments sold 4,226,293 3,082,568 0 262,506
Dividends and interest receivable 112,306 136,503 30,831 43,196
Shares of beneficial interest sold 567,234 25,014 72,875 16,880
Organizational costs, net of accumulated
amortization 0 0 27,323 0
Prepaid and other assets 8,573 15,562 13,218 9,914
- ---------------------------------------------------------------------------------------------------------------------
Total Assets 594,427,268 67,082,707 36,079,848 20,894,217
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 2,605,051 447,104 72,875 122,016
Accrued investment advisory fee 301,197 34,330 15,861 3,726
Shares of beneficial interest redeemed 1,076,814 95,154 0 8,946
Administration fee 139,014 15,948 8,362 4,446
Trustee fee 1,505 287 104 383
Other payables 296,007 39,585 20,973 29,803
- ---------------------------------------------------------------------------------------------------------------------
Total Liabilities 4,419,588 632,408 118,175 169,320
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS $590,007,680 $66,450,299 $35,961,673 $20,724,897
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $384,809,162 $41,319,854 $26,380,398 $13,166,488
(Over)/Undistributed net investment income (7,288,835) 36,046 8,665 (178,897)
Accumulated net realized gain (loss) from
investment transactions 41,364,326 5,318,638 3,205,648 1,523,275
Net unrealized appreciation of investments 171,123,027 19,775,761 6,366,962 6,214,031
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS $590,007,680 $66,450,299 $35,961,673 $20,724,897
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Net Assets $590,007,680 $66,450,299 $35,961,673 $20,724,897
Shares of beneficial interest outstanding 28,199,971 3,661,011 1,506,707 1,590,242
Net asset value and redemption price per share $20.92 $18.15 $23.87 $13.03
- ---------------------------------------------------------------------------------------------------------------------
COST OF INVESTMENTS $418,389,835 $44,047,299 $29,568,639 $14,347,690
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
Westcore Westcore Westcore
Intermediate- Long-Term Colorado
Term Bond Bond Tax-Exempt
Fund Bond Fund Fund
------------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments, at value
(cost-see below) $62,271,233 $19,818,575 $21,182,715
-see accompanying statements
Receivable for investments sold 0 0 12,507
Dividends and interest receivable 956,757 353,357 475,313
Shares of beneficial interest sold 134,267 25,338 15,000
Organizational costs, net of accumulated
amortization 0 0 0
Prepaid and other assets 15,906 13,272 7,808
- ------------------------------------------------------------------------------------------------------
Total Assets 63,378,163 20,210,542 21,693,343
- ------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 16,668 339 300,600
Accrued investment advisory fee 18,639 2,849 0
Shares of beneficial interest redeemed 38,204 8,008 4,866
Administration fee 15,027 4,454 3,950
Trustee fee 678 515 210
Other payables 120,408 34,125 36,058
- ------------------------------------------------------------------------------------------------------
Total Liabilities 209,624 50,290 345,684
- ------------------------------------------------------------------------------------------------------
NET ASSETS $63,168,539 $20,160,252 $21,347,659
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $64,718,015 $19,402,629 $20,950,580
(Over)/Undistributed net investment income 43,794 18,521 16,069
Accumulated net realized gain (loss) from
investment transactions (1,782,975) 189,440 (31,645)
Net unrealized appreciation of investments 189,705 549,662 412,655
- ------------------------------------------------------------------------------------------------------
NET ASSETS $63,168,539 $20,160,252 $21,347,659
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Net Assets $63,168,539 $20,160,252 $21,347,659
Shares of beneficial interest outstanding 6,173,161 2,085,634 1,980,504
Net asset value and redemption price per share $10.23 $9.67 $10.78
- ------------------------------------------------------------------------------------------------------
COST OF INVESTMENTS $62,081,528 $19,268,913 $20,770,060
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
see notes to financial statements
<PAGE>
STATEMENTS OF INVESTMENTS WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- --------------------------------------------------------------------------------
WESTCORE MIDCO GROWTH FUND
May 30, 1997
Shares Market Value*
- ------ -------------
COMMON STOCKS 98.13%
- ------------------------------------------------------------------------------
CAPITAL GOODS 28.84%
- ------------------------------------------------------------------------------
AEROSPACE & DEFENSE 0.24%
- ------------------------------------------------------------------------------
27,900 Sundstrand Corp $1,388,025
------------
COMPUTER HARDWARE 1.01%
- ------------------------------------------------------------------------------
47,300 Gateway 2000 Inc** 3,139,538
87,600 Sun Microsystems Inc** 2,825,100
------------
5,964,638
------------
COMPUTER SOFTWARE & SERVICES 8.22%
- ------------------------------------------------------------------------------
108,900 American Management Systems** 2,817,788
17,700 America Online Inc** 977,925
28,900 Broderbund Software Inc** 726,112
112,200 Cadence Design Systems 3,730,650
135,700 Electronic Arts Inc** 4,342,400
75,150 Harbinger Corp** 2,329,650
87,900 McAfee Associates Inc** 5,784,919
192,725 Oracle Corp** 8,985,803
141,100 PeopleSoft Inc** 7,301,925
43,900 Renaissance Solutions Inc** 1,624,300
39,800 Security Dynamics Technologies** 1,467,625
150,600 Sterling Commerce Inc** 5,007,450
92,750 Technology Solutions Co** 3,362,188
------------
48,458,735
------------
ELECTRONICS 5.60%
- ------------------------------------------------------------------------------
55,200 Applied Materials Inc** 3,601,800
62,800 Atmel Corp** 1,805,500
72,500 Cabletron Systems Inc 3,190,000
55,500 KLA Tencor Corp** 2,639,719
27,500 Lattice Semiconductor Corp** 1,595,000
57,100 Maxim Integrated Products Inc** 3,069,125
60,000 Microchip Technology Inc** 2,130,000
37,600 Novellus Systems Inc** 3,078,500
79,700 SCI Systems Inc** 5,180,500
52,200 Solectron Corp** 3,262,500
35,300 Unitrode Corp** 1,751,763
32,500 Xilinx Inc** 1,742,812
------------
33,047,219
------------
ENGINEERING & CONSTRUCTION 0.99%
- ------------------------------------------------------------------------------
78,300 Ionics Inc** 3,738,825
67,200 United States Filter** 2,116,800
------------
5,855,625
------------
NETWORKING 1.08%
- ------------------------------------------------------------------------------
44,800 Ascend Communications Inc** 2,497,600
48,500 Cisco Systems Inc** 3,285,875
27,600 Xylan Corp** 576,150
------------
6,359,625
------------
OFFICE PRODUCTS 0.41%
- ------------------------------------------------------------------------------
84,300 Ikon Office Solutions Inc 2,444,700
------------
OTHER CAPITAL GOODS 0.46%
- ------------------------------------------------------------------------------
48,500 Greenfield Industries Inc 1,261,000
38,600 OEA Inc 1,457,150
------------
2,718,150
------------
TELECOMMUNICATIONS 10.83%
- ------------------------------------------------------------------------------
94,200 ADC Telecommunications Inc 3,226,350
19,500 Adtran Inc** 521,624
18,700 Advanced Fibre Communications** 1,030,838
55,850 Brightpoint Inc 1,731,350
32,100 ETEC Systems Inc** 1,428,450
176,100 FORE Systems Inc** 2,916,656
112,400 ICG Communications Inc** 1,798,400
50,700 Intermedia Communications Co** 1,527,338
64,100 Nokia Corp 4,230,600
230,400 Paging Network Inc** 1,728,000
106,500 PairGain Technologies Inc** 2,223,188
55,700 Premiere Technologies Inc** 1,496,938
24,800 Sync Research Inc** 103,850
78,400 Teleport Communications Inc** 2,371,600
10,500 Tellabs Inc** 527,624
79,800 Uniphase Corp** 4,189,500
1,108,290 WorldCom Inc 32,833,091
------------
63,885,397
------------
TOTAL CAPITAL GOODS
(Cost $123,358,772) 170,122,114
------------
CONSUMER CYCLICALS 26.15%
- ------------------------------------------------------------------------------
AUTOMOTIVE 1.10%
- ------------------------------------------------------------------------------
63,100 Cooper Tire & Rubber Co 1,411,862
197,700 Gentex Corp** 3,978,712
45,300 Republic Industries Inc** 1,090,031
------------
6,480,605
------------
BUILDING RELATED 1.16%
- ------------------------------------------------------------------------------
179,300 Newell Co 6,858,225
------------
CONSUMER PRODUCTS 1.40%
- ------------------------------------------------------------------------------
123,100 Callaway Golf Co 3,969,975
76,600 Culligan Water Technologies** 3,408,700
19,500 Samsonite Corp** 875,063
------------
8,253,738
------------
CONSUMER SERVICES 4.43%
- ------------------------------------------------------------------------------
418,132 CUC International Inc 9,617,036
305,600 Loewen Group Inc 10,084,800
40,500 Rental Service Corp 880,874
154,500 Sylvan Learning Systems Inc** 5,542,688
------------
26,125,398
------------
CONSUMER SOFT GOODS 0.69%
- ------------------------------------------------------------------------------
55,300 Jones Apparel Group** 2,592,188
45,600 Warnaco Group Inc Class A 1,493,400
------------
4,085,588
------------
HOTELS/LEISURE 3.93%
- ------------------------------------------------------------------------------
40,400 Four Seasons Hotel Inc 1,050,400
262,700 HFS Inc** 14,152,963
47,900 Hilton Hotels Corp 1,353,175
75,100 MGM Grand Inc** 2,844,413
202,300 Prime Hospitality Corp** 3,767,838
------------
23,168,789
------------
MEDIA-PUBLISHING 4.01%
- ------------------------------------------------------------------------------
43,200 Apollo Group Inc 1,528,200
56,900 Clear Channel Communications 3,008,588
12,200 Emmis Broadcasting Corp** 468,174
294,760 HSN Inc** 9,027,025
83,000 Tribune Co 3,589,750
222,700 Westwood One Inc** 6,068,575
------------
23,690,312
------------
<PAGE>
WESTCORE MIDCO GROWTH FUND
May 30, 1997
Shares Market Value*
- ------ -------------
OTHER CONSUMER CYCLICAL 0.62%
- ------------------------------------------------------------------------------
114,250 Unifi Inc $3,684,563
------------
RETAIL 8.81%
- ------------------------------------------------------------------------------
163,800 Bed Bath & Beyond Inc** 4,647,825
39,500 CVS Corp 1,891,063
231,725 Consolidated Stores Corp 8,863,481
275,341 Dollar General Corp 9,258,341
99,500 Helig Meyers Company 1,641,750
71,800 Kohls Corp** 3,868,225
190,300 Lowe's Companies Inc 7,493,063
224,700 Pier 1 Imports Inc 5,027,663
63,300 Saks Holdings Inc** 1,574,588
23,900 Stein Mart** 722,974
83,400 TJX Companies Inc 4,003,200
147,200 Zale Corp** 2,962,400
------------
51,954,573
------------
TOTAL CONSUMER CYCLICALS
(Cost $100,536,507) 154,301,791
------------
CONSUMER STAPLES 18.82%
- ------------------------------------------------------------------------------
DRUG & HEALTHCARE PRODUCTS 5.55%
- ------------------------------------------------------------------------------
56,400 Arrow International Inc 1,818,900
182,700 Biochem Pharmaceuticals Inc 4,521,825
145,100 Forest Labs Class A** 6,130,475
44,400 Guidant Corp 3,446,550
139,000 North American Vaccine Inc** 2,710,500
44,800 Physio-Control International Corp** 571,200
45,800 Sola International Inc** 1,311,024
190,300 Sybron International Corp** 6,874,588
137,732 Watson Pharmaceuticals Inc** 5,388,765
------------
32,773,827
------------
FOOD, BEVERAGES, & TOBACCO 0.54%
- ------------------------------------------------------------------------------
136,950 Richfood Holdings Inc 3,166,969
------------
HEALTHCARE SERVICES 12.73%
- ------------------------------------------------------------------------------
90,600 Access Health Inc** 1,993,200
10,600 CRA Managed Care Inc** 484,950
183,200 Genesis Health Ventures** 6,022,700
136,400 HBO & Co 8,746,650
192,850 Health Management Assoc Cl A** 5,640,862
193,000 HEALTHSOUTH Corp** 4,414,875
84,900 Occusystems Inc** 2,228,624
394,700 Oxford Health Plans Inc** 27,826,350
73,100 Pediatrix Medical Group** 2,905,725
211,775 PhyCor Inc** 6,062,059
117,200 Total Renal Care Holdings** 4,219,200
95,700 Wellpoint Health Networks Inc** 4,569,675
------------
75,114,870
------------
TOTAL CONSUMER STAPLES
(Cost $70,600,579) 111,055,666
------------
CREDIT SENSITIVE 5.90%
- ------------------------------------------------------------------------------
FINANCIAL SERVICES 2.31%
- ------------------------------------------------------------------------------
39,300 Credit Acceptance Corp** 555,112
69,800 MGIC Investment Corp Wisconsin 6,212,200
16,400 Redwood Trust Inc 936,850
121,100 Schwab Charles Corp 4,919,688
161,600 World Acceptance Corp** 989,800
------------
13,613,650
------------
INSURANCE 2.20%
- ------------------------------------------------------------------------------
40,200 Executive Risk 2,095,425
85,345 Frontier Insurance Group Inc 4,683,307
50,500 Hartford Life Inc** 1,691,750
108,733 Mutual Risk Management Ltd 4,498,828
------------
12,969,310
------------
UTILITIES-ELECTRIC 1.39%
- ------------------------------------------------------------------------------
114,597 AES Corp** 8,222,335
------------
TOTAL CREDIT SENSITIVE
- ------------------------------------------------------------------------------
(Cost $17,649,798) 34,805,295
------------
INTERMEDIATE GOODS &
SERVICES 18.42%
- ------------------------------------------------------------------------------
BUSINESS SERVICES 5.01%
- ------------------------------------------------------------------------------
88,233 AC Nielsen Corp** 1,488,932
50,700 CKS Group Inc** 1,463,963
51,900 Concord EFS Inc 1,167,750
187,000 Medaphis Corp** 1,484,313
55,500 National Techteam Inc** 1,380,563
56,100 Newpark Resources Inc** 2,945,250
424,900 Philip Services** 6,214,163
41,800 Precision Response Corp** 956,175
203,200 USA Waste Services** 7,366,000
63,000 United Waste Systems** 2,417,625
77,300 West Teleservices Corp** 1,227,138
66,300 Wilmar Industries Inc** 1,458,600
------------
29,570,472
------------
CHEMICAL 0.90%
- ------------------------------------------------------------------------------
43,200 Cytec Industries Inc** 1,690,200
68,300 Praxair Inc 3,594,288
------------
5,284,488
------------
DISTRIBUTION 0.27%
- ------------------------------------------------------------------------------
45,000 MSC Industrial Direct Inc Cl A** 1,603,125
------------
ENERGY EQUIPMENT & SERVICES 6.44%
- ------------------------------------------------------------------------------
104,200 BJ Services Inc** 5,757,050
27,700 Camco International Inc 1,419,624
119,800 Falcon Drilling Inc** 5,495,824
205,100 Nabors Industries Inc** 4,601,931
228,000 Noble Drilling Corp** 4,959,000
53,900 Production Operators Corp 3,604,563
162,300 Reading & Bates Corp** 4,118,363
66,400 Tidewater Inc 2,797,100
75,500 Transocean Offshore Inc 5,209,500
------------
37,962,955
------------
ENERGY PRODUCERS 4.97%
- ------------------------------------------------------------------------------
183,600 Anadarko Petroleum 11,566,800
348,900 Apache Corp 11,949,824
90,600 Parker & Parsley Petroleum Co 3,080,400
47,300 Sonat Inc 2,719,750
------------
29,316,774
------------
METALS 0.31%
- ------------------------------------------------------------------------------
38,400 UCAR International Inc** 1,843,200
------------
<PAGE>
WESTCORE MIDCO GROWTH FUND
May 30, 1997
Shares Market Value*
- ------ -------------
TRANSPORTATION 0.52%
- ------------------------------------------------------------------------------
61,100 Comair Holdings Inc $1,588,600
61,000 US Freightways Corp 1,479,250
------------
3,067,850
------------
TOTAL INTERMEDIATE GOODS & SERVICES
(Cost $95,665,047) 108,648,864
------------
TOTAL COMMON STOCKS
(Cost $407,810,703) 578,933,730
------------
WARRANTS 0.00%
- ------------------------------------------------------------------------------
71 Westwood One Inc Warrants 0
------------
TOTAL WARRANTS 0
(Cost $0) ------------
MUTUAL FUNDS 1.79%
- ------------------------------------------------------------------------------
10,527,628 Stagecoach Prime Money Market
Service Class 10,579,132
------------
TOTAL MUTUAL FUNDS 10,579,132
(Cost $10,579,132) ------------
TOTAL INVESTMENTS
(Cost $418,389,835) 99.92% $589,512,862
Other Assets in Excess
of Liabilities 0.08% 494,818
----------------------------------
NET ASSETS 100.00% $590,007,680
----------------------------------
----------------------------------
*See Note 1 of Notes to Financial Statements.
**Denotes non-income producing security.
WESTCORE BLUE CHIP FUND
May 30, 1997
Shares Market Value*
- ------ -------------
COMMON STOCKS 95.35%
- ------------------------------------------------------------------------------
CAPITAL GOODS 13.48%
- ------------------------------------------------------------------------------
AEROSPACE & DEFENSE 4.61%
- ------------------------------------------------------------------------------
21,000 McDonnell Douglas Corp $1,351,875
21,300 United Technologies Corp 1,711,988
------------
3,063,863
------------
COMPUTER SOFTWARE & SERVICES 2.15%
- ------------------------------------------------------------------------------
26,102 Computer Associates International 1,429,084
------------
ELECTRONICS - SEMICONDUCTORS 2.69%
- ------------------------------------------------------------------------------
20,190 Harris Corp 1,789,339
------------
MACHINERY - DIVERSIFIED 2.00%
- ------------------------------------------------------------------------------
23,200 Dover Corp 1,328,200
------------
MANUFACTURING- SPECIALIZED 2.03%
- ------------------------------------------------------------------------------
25,600 Parker-Hannifin Corp 1,347,200
------------
TOTAL CAPITAL GOODS
(Cost $5,281,857) 8,957,686
------------
CONSUMER CYCLICALS 13.41%
- ------------------------------------------------------------------------------
AUTO PARTS & EQUIPMENT 1.40%
- ------------------------------------------------------------------------------
37,500 ITT Industries 928,125
------------
ENTERTAINMENT 2.38%
- ------------------------------------------------------------------------------
41,700 Carnival Corp Class A 1,584,600
------------
HARDWARE & TOOLS 0.95%
- ------------------------------------------------------------------------------
18,100 Black & Decker Corp 628,975
------------
HOTELS-MOTELS 2.07%
- ------------------------------------------------------------------------------
48,700 Hilton Hotels Corp 1,375,775
------------
RETAIL STORES -
GENERAL MERCHANDISE CHAINS 4.38%
- ------------------------------------------------------------------------------
40,500 Dayton Hudson Corp 1,949,063
68,600 K Mart Corp** 960,400
------------
2,909,463
------------
Retail Stores - Specialty Apparel 2.23%
- ------------------------------------------------------------------------------
43,300 GAP Stores Inc 1,483,025
------------
TOTAL CONSUMER CYCLICALS
(Cost $6,487,363) 8,909,963
------------
CONSUMER STAPLES 29.76%
- ------------------------------------------------------------------------------
BEVERAGES-SOFT DRINKS 2.31%
- ------------------------------------------------------------------------------
41,760 PepsiCo Inc 1,534,680
------------
DISTRIBUTORS - FOOD & HEALTH 1.55%
- ------------------------------------------------------------------------------
30,900 SuperValu Inc 1,031,288
------------
DRUGS 6.73%
- ------------------------------------------------------------------------------
12,700 McKesson Corp 954,088
16,500 Pfizer Inc 1,697,437
20,000 Schering-Plough Corp 1,815,000
------------
4,466,525
------------
FOOD 3.28%
- ------------------------------------------------------------------------------
28,500 Dole Food Inc 1,211,250
41,300 IBP Inc 970,550
------------
2,181,800
------------
HEALTHCARE - DIVERSIFIED 3.07%
- ------------------------------------------------------------------------------
27,780 Bristol-Myers Squibb Co 2,038,358
------------
HEALTHCARE SERVICES 2.44%
- ------------------------------------------------------------------------------
17,800 Shared Medical Systems Corp 943,400
20,100 United States Surgical Corp 678,374
------------
1,621,774
------------
MEDICAL PRODUCTS & SUPPLIES 2.12%
- ------------------------------------------------------------------------------
28,600 Becton Dickinson & Co 1,408,550
------------
RETAIL STORES-DRUG STORES 4.95%
- ------------------------------------------------------------------------------
32,600 CVS Corp 1,560,725
37,200 Rite Aid Corp 1,729,800
------------
3,290,525
------------
RETAIL STORES-FOOD CHAINS 1.53%
- ------------------------------------------------------------------------------
36,800 Great Atlantic & Pacific Tea 1,016,600
------------
TOBACCO 1.78%
- ------------------------------------------------------------------------------
13,800 Philip Morris Companies Inc 607,200
17,800 RJR Nabisco Holdings 576,275
------------
1,183,475
------------
TOTAL CONSUMER STAPLES
(Cost $13,954,957) 19,773,575
------------
<PAGE>
WESTCORE BLUE CHIP FUND
May 30, 1997
Shares Market Value*
- ------ -------------
CREDIT SENSITIVE 22.40%
- ------------------------------------------------------------------------------
ELECTRIC COMPANIES 3.82%
- ------------------------------------------------------------------------------
62,550 Edison International $1,462,106
30,730 General Public Utilities 1,075,550
------------
2,537,656
------------
FINANCIAL-MISCELLANEOUS 2.69%
- ------------------------------------------------------------------------------
14,700 Student Loan Marketing Ass'n 1,787,888
------------
INVESTMENT BANKING/BROKERAGE 2.08%
- ------------------------------------------------------------------------------
25,133 Traveler's Group Inc 1,379,173
------------
MAJOR REGIONAL BANKING 3.83%
- ------------------------------------------------------------------------------
14,840 First Union Corp 1,274,385
21,700 NationsBank Corp 1,277,588
------------
2,551,973
------------
MONEY CENTER BANKS 1.83%
- ------------------------------------------------------------------------------
12,850 Chase Manhattan Corp 1,214,325
------------
NATURAL GAS 2.04%
- ------------------------------------------------------------------------------
27,050 Coastal Corp 1,355,881
------------
PROPERTY & CASUALTY INSURANCE 2.03%
- ------------------------------------------------------------------------------
62,600 USF&G Corp 1,345,900
------------
SAVINGS & LOAN 2.03%
- ------------------------------------------------------------------------------
33,100 H.F. Ahmanson & Company 1,348,825
------------
TELECOMMUNICATIONS 2.05%
- ------------------------------------------------------------------------------
27,860 Sprint Corp 1,361,656
------------
TOTAL CREDIT SENSITIVE
(Cost $9,887,142) 14,883,277
------------
INTERMEDIATE GOODS
& SERVICES 16.30%
- ------------------------------------------------------------------------------
CHEMICALS - DIVERSIFIED 2.06%
- ------------------------------------------------------------------------------
23,560 PPG Industries 1,369,425
------------
OIL EXPLORATION & PRODUCTION 1.98%
- ------------------------------------------------------------------------------
28,300 Burlington Resources Inc 1,315,950
------------
OIL INTEGRATED-DOMESTIC 7.21%
- ------------------------------------------------------------------------------
8,800 Atlantic Richfield Co 1,280,400
61,000 Tosco Corp 1,990,125
51,200 USX-Marathon Group 1,523,200
------------
4,793,725
------------
OIL INTEGRATED-INTERNATIONAL 4.01%
- ------------------------------------------------------------------------------
9,600 Mobil Corp 1,342,800
12,100 Texaco Inc 1,320,413
------------
2,663,213
------------
RAILROADS 1.04%
- ------------------------------------------------------------------------------
13,100 CSX Corp 694,300
------------
TOTAL INTERMEDIATE GOODS & SERVICES
(Cost $7,974,034) 10,836,613
------------
TOTAL COMMON STOCKS
(Cost $43,585,353) 63,361,114
------------
MUTUAL FUNDS 0.70%
- ------------------------------------------------------------------------------
447,104 Stagecoach Prime Money Market
Service Class 461,946
------------
TOTAL MUTUAL FUNDS 461,946
(Cost $461,946) ------------
TOTAL INVESTMENTS
(Cost $44,047,299) 96.05% $63,823,060
Other Assets in Excess
of Liabilities 3.95% 2,627,239
----------------------------------
NET ASSETS 100.00% $66,450,299
----------------------------------
----------------------------------
*See Note 1 of Notes to Financial Statements.
**Denotes non-income producing security.
WESTCORE SMALL-CAP OPPORTUNITY FUND
May 30, 1997
Shares Market Value*
- ------ -------------
COMMON STOCKS 93.75%
- ------------------------------------------------------------------------------
BASIC INDUSTRIES 3.80%
- ------------------------------------------------------------------------------
RUBBER & PLASTICS 2.67%
- ------------------------------------------------------------------------------
17,600 Tredegar Industries $961,400
------------
STEEL 1.13%
- ------------------------------------------------------------------------------
16,940 Texas Industries Inc 406,560
------------
TOTAL BASIC INDUSTRIES
(Cost $903,885) 1,367,960
------------
CAPITAL GOODS 6.61%
- ------------------------------------------------------------------------------
CONSTRUCTION EQUIPMENT 1.72%
- ------------------------------------------------------------------------------
19,420 Agco Corp 619,012
------------
MISCELLANEOUS PRODUCTION GOODS 4.89%
- ------------------------------------------------------------------------------
25,600 Flanders Corp** 182,400
20,550 Global Industrial Technologies** 380,175
5,600 Kaynar Technologies** 102,200
10,170 Pittway Corp Class A 539,010
15,060 Smith (A.O.) Corp 553,455
------------
1,757,240
------------
TOTAL CAPITAL GOODS
(Cost $1,928,387) 2,376,252
------------
CONSUMER CYCLICALS 8.51%
- ------------------------------------------------------------------------------
Apparel/Shoes/Textiles 1.24%
- ------------------------------------------------------------------------------
18,500 Oxford Industries Inc 446,312
------------
CONSUMER DURABLES 1.90%
- ------------------------------------------------------------------------------
43,700 Furniture Brands International** 682,813
------------
MISCELLANEOUS -
CONSUMER CYCLICALS 2.85%
- ------------------------------------------------------------------------------
13,600 Amscan Holdings Inc** 176,800
15,500 Gibson Greetings Inc** 337,125
24,600 Russ Berrie & Co 510,450
------------
1,024,375
------------
<PAGE>
WESTCORE SMALL-CAP OPPORTUNITY FUND
May 30, 1997
Shares Market Value*
- ------ -------------
VEHICLES/ACCESSORIES 2.52%
- ------------------------------------------------------------------------------
13,500 Arvin Industries Inc $374,625
16,080 Control Devices** 196,980
18,400 Excel Industries Inc 333,500
------------
905,105
------------
TOTAL CONSUMER CYCLICALS
(Cost $2,650,010) 3,058,605
------------
CONSUMER STAPLES 10.43%
- ------------------------------------------------------------------------------
DRUGS & MEDICAL PRODUCTS 1.10%
- ------------------------------------------------------------------------------
13,820 Sola International Inc** 395,598
FOOD/AGRICULTURE 5.51%
- ------------------------------------------------------------------------------
10,400 Dean Foods 395,200
24,700 Hudson Foods Inc 392,112
25,500 Morningstar Group Inc** 669,375
9,600 Smithfield Foods** 526,800
------------
1,983,487
------------
MISCELLANEOUS- CONSUMER STAPLES 3.82%
- ------------------------------------------------------------------------------
31,000 American Safety Razor Co** 461,125
30,900 Dial Corp** 517,575
19,100 Herbalife International Inc 396,325
------------
1,375,025
------------
TOTAL CONSUMER STAPLES
(Cost $3,092,513) 3,754,110
------------
ENERGY 6.85%
- ------------------------------------------------------------------------------
OIL & NATURAL GAS 6.85%
- ------------------------------------------------------------------------------
10,800 Camco International 553,500
28,700 HS Resources Inc** 416,150
23,400 Offshore Logistics Inc** 424,125
18,000 Pool Energy Services Co** 299,250
30,900 Santa Fe Energy Resources Inc** 467,362
23,000 Tesoro Petroleum Corp** 301,875
------------
2,462,262
------------
TOTAL ENERGY
(Cost $2,284,717) 2,462,262
------------
FINANCIALS 19.89%
- ------------------------------------------------------------------------------
BANKS/SAVINGS & LOANS 10.42%
- ------------------------------------------------------------------------------
10,600 Astoria Financial 437,250
20,860 Deposit Guaranty Corp 654,482
14,764 MAF Bancorp 616,397
22,200 ML Bancorp Inc 385,725
17,400 Magna Group Inc 561,150
16,200 RCSB Financial Inc 663,188
17,000 Reliance Bancorp Inc 429,250
------------
3,747,442
------------
INSURANCE 8.41%
- ------------------------------------------------------------------------------
11,100 Capital RE Corp 487,012
13,700 Enhance Financial Services Group 571,975
22,350 Fremont General Corp 785,044
12,400 Guarantee Life Cos Inc 254,200
9,900 Life Re Corp 425,700
11,350 Selective Insurance Group Inc 502,238
------------
3,026,169
------------
MISCELLANEOUS FINANCIALS 1.06%
- ------------------------------------------------------------------------------
39,100 Cash America International Inc 381,225
------------
TOTAL FINANCIALS
(Cost $5,529,195) 7,154,836
------------
SERVICES 20.60%
- ------------------------------------------------------------------------------
BUSINESS SERVICES 4.24%
- ------------------------------------------------------------------------------
17,060 Comdisco Inc 629,088
15,820 Standard Register Co 551,722
21,800 United Natural Foods** 343,350
------------
1,524,160
------------
MEDICAL & DENTAL 2.37%
- ------------------------------------------------------------------------------
23,070 Bindley Western Industries Inc 507,540
27,200 Novacare Corp** 343,400
------------
850,940
------------
RETAIL STORES 11.30%
- ------------------------------------------------------------------------------
28,200 Eagle Hardware & Garden** 678,562
19,600 Footstar Corp** 436,100
18,000 Long's Drug Stores Corp 427,500
18,288 Proffitt's Inc** 729,234
26,430 Shopko Stores Inc 624,409
19,000 Waban Inc** 577,125
29,300 Zale Corp** 589,663
------------
4,062,593
------------
TRAVEL/RECREATION 2.69%
- ------------------------------------------------------------------------------
14,200 Marcus Corp 347,900
33,260 Prime Hospitality Corp** 619,468
------------
967,368
------------
TOTAL SERVICES
(Cost $5,764,993) 7,405,061
------------
TECHNOLOGY 13.02%
- ------------------------------------------------------------------------------
AEROSPACE 5.33%
- ------------------------------------------------------------------------------
11,500 Ducommun Inc** 301,875
20,400 Kaman Corp 279,225
11,110 Thiokol Corp 798,531
21,100 Tracor Inc** 535,413
------------
1,915,044
------------
COMPUTER & OFFICE 7.69%
- ------------------------------------------------------------------------------
23,500 American Power Conversion Corp** 546,375
18,600 Applied Magnetics Corp Del** 462,675
18,250 Evans & Sutherland Computer** 479,063
25,800 Southern Electronics Corp** 267,675
32,600 Symantec Corp** 621,437
6,800 Tektronix 390,150
------------
2,767,375
------------
TOTAL TECHNOLOGY
(Cost $3,942,436) 4,682,419
------------
TRANSPORTATION 1.44%
- ------------------------------------------------------------------------------
AIR TRANSPORTATION 1.44%
- ------------------------------------------------------------------------------
18,720 Circle International Group Inc 519,480
------------
TOTAL TRANSPORTATION
(Cost $370,202) 519,480
------------
<PAGE>
UTILITIES/REITS 2.60%
- ------------------------------------------------------------------------------
ELECTRIC & GAS 2.60%
- ------------------------------------------------------------------------------
10,940 Central Hudson Gas & Electric $352,815
12,200 Commonwealth Energy System 265,350
12,800 Washington Gas & Light Co 315,200
------------
933,365
------------
TOTAL UTILITIES/REITS
(Cost $881,050) 933,365
------------
TOTAL COMMON STOCKS
(Cost $27,347,388) 33,714,350
------------
MUTUAL FUNDS 6.18%
- ------------------------------------------------------------------------------
1,762,347 Stagecoach Prime Money
Market Service Class 1,769,945
450,000 Stagecoach Treasury Money
Market Service Class 451,306
------------
2,221,251
------------
TOTAL MUTUAL FUNDS 2,221,251
------------
(Cost $2,221,251)
TOTAL INVESTMENTS
(Cost $29,568,639) 99.93% 35,935,601
Other Assets in Excess
of Liabilities 0.07% 26,072
----------------------------------
NET ASSETS 100.00% $35,961,673
----------------------------------
----------------------------------
*See Note 1 of Notes to Financial Statements.
**Denotes non-income producing security.
WESTCORE GROWTH AND INCOME FUND
May 30, 1997
Shares Market Value*
- ------ -------------
COMMON STOCKS 86.30%
- ------------------------------------------------------------------------------
CAPITAL GOODS 9.96%
- ------------------------------------------------------------------------------
AEROSPACE & DEFENSE 2.01%
- ------------------------------------------------------------------------------
1,400 Boeing Co 147,350
5,100 Goodrich B.F. & Co 219,300
1,000 Sundstrand Corp 49,750
------------
416,400
------------
ELECTRICAL EQUIPMENT 3.60%
- ------------------------------------------------------------------------------
10,600 General Electric Co 639,975
2,500 General Signal Corp 105,313
------------
745,288
------------
ELECTRONICS 0.81%
- ------------------------------------------------------------------------------
1,100 Intel Corp 166,650
------------
OFFICE PRODUCTS 0.46%
- ------------------------------------------------------------------------------
3,300 Ikon Office Solutions Inc 95,700
------------
OTHER-CAPITAL GOODS 1.68%
- ------------------------------------------------------------------------------
5,000 Greenfield Industries Inc 130,086
5,800 OEA Inc 218,950
------------
349,036
------------
TELECOMMUNICATIONS 1.40%
- ------------------------------------------------------------------------------
4,400 Nokia Corp 290,400
------------
TOTAL CAPITAL GOODS
(Cost $1,380,442) 2,063,474
------------
CONSUMER CYCLICALS 13.35%
- ------------------------------------------------------------------------------
AUTOMOTIVE 0.51%
- ------------------------------------------------------------------------------
4,700 Cooper Tire & Rubber Co 105,163
------------
BUILDING-RELATED 0.52%
- ------------------------------------------------------------------------------
2,800 Newell Co 107,100
------------
CONSUMER SERVICES 3.33%
- ------------------------------------------------------------------------------
20,900 Loewen Group Inc 689,700
------------
CONSUMER SOFT GOODS 0.54%
- ------------------------------------------------------------------------------
3,400 Warnaco Group Inc Class A 111,350
------------
HOTELS/LEISURE 1.69%
- ------------------------------------------------------------------------------
7,000 Hilton Hotels Corp 197,750
12,000 Sunstone Hotel Investors 153,000
------------
350,750
------------
MEDIA-PUBLISHING 1.04%
- ------------------------------------------------------------------------------
5,000 Tribune Co 216,250
------------
RETAIL 5.72%
- ------------------------------------------------------------------------------
3,200 CVS Corp 153,200
7,981 Dollar General Corp 268,361
5,800 Helig Meyers Co 95,700
4,100 Home Depot Inc 258,551
8,500 Pier 1 Imports Inc 190,188
7,400 Wal-Mart Stores Inc 220,150
------------
1,186,150
------------
TOTAL CONSUMER CYCLICALS
(Cost $2,217,542) 2,766,463
------------
CONSUMER STAPLES 11.55%
- ------------------------------------------------------------------------------
DRUG & HEALTHCARE PRODUCTS 3.84%
- ------------------------------------------------------------------------------
6,200 Arrow International Inc 199,950
3,900 Schering-Plough Corp 353,925
2,400 Warner-Lambert 241,800
------------
795,675
------------
FOOD, BEVERAGES, & TOBACCO 4.09%
- ------------------------------------------------------------------------------
2,700 CPC International Inc 232,200
4,500 Coca-Cola Co 307,125
8,400 PepsiCo Inc 308,700
------------
848,025
------------
HEALTHCARE SERVICES 0.31%
- ------------------------------------------------------------------------------
1,000 HBO & Co 64,125
------------
<PAGE>
WESTCORE GROWTH AND INCOME FUND
May 30, 1997 (CONTINUED)
Shares Market Value*
- ------ -------------
HOUSEHOLD PRODUCTS 3.31%
- ------------------------------------------------------------------------------
1,800 Colgate-Palmolive Co $111,600
3,200 Gillette Co 284,400
2,100 Procter & Gamble Inc 289,537
------------
685,537
------------
TOTAL CONSUMER STAPLES
(Cost $1,518,958) 2,393,362
------------
CREDIT SENSITIVE 32.14%
- ------------------------------------------------------------------------------
BANKS/SAVINGS & LOANS 6.96%
- ------------------------------------------------------------------------------
2,300 Banc One 99,475
6,680 Charter One Financial Inc 313,125
4,000 Corestates Financial Corp 211,500
4,000 Cullen Frost Bankers Inc 157,500
3,400 Nationsbank Corp 200,175
8,600 Norwest Corp 460,100
------------
1,441,875
------------
FINANCIAL SERVICES 5.88%
- ------------------------------------------------------------------------------
3,400 Federal Home Loan Mortgage 112,200
3,500 Household International Inc 343,875
10,450 MBNA Corp 353,994
4,600 MGIC Investment Corp Wisconsin 409,400
------------
1,219,469
------------
INSURANCE 7.00%
- ------------------------------------------------------------------------------
3,400 Executive Risk 177,225
11,040 Frontier Insurance Group Inc 605,820
9,200 GCR Holdings Ltd 246,100
5,300 Hartford Life Inc** 177,550
5,900 Mutual Risk Management Ltd 244,113
------------
1,450,808
------------
REAL ESTATE INVESTMENT TRUST 1.06%
- ------------------------------------------------------------------------------
6,000 Healthcare Realty Trust 157,452
1,100 Redwood Trust Inc 62,838
------------
220,290
------------
UTILITIES-ELECTRIC 5.70%
- ------------------------------------------------------------------------------
13,496 AES Corp** 968,337
9,000 Trigen Energy Corp 213,750
------------
1,182,087
------------
UTILITIES-GAS 4.47%
- ------------------------------------------------------------------------------
4,900 Enron Corp 199,675
6,400 KN Energy Inc 269,600
9,800 PanEnergy Corp 458,150
------------
927,425
------------
UTILITIES-TELEPHONE 1.07%
- ------------------------------------------------------------------------------
3,600 Cincinnati Bell Inc 221,400
------------
TOTAL CREDIT SENSITIVE
(Cost $4,012,452) 6,663,354
------------
INTERMEDIATE GOODS
& SERVICES 19.30%
- ------------------------------------------------------------------------------
BUSINESS SERVICES 4.15%
- ------------------------------------------------------------------------------
7,200 Omnicom Group Inc 417,600
30,300 Philip Services Corp** 443,138
------------
860,738
------------
CHEMICAL-DIVERSIFIED 1.04%
- ------------------------------------------------------------------------------
3,700 PPG Industries Inc 215,063
------------
ENERGY EQUIPMENT & SERVICES 4.07%
- ------------------------------------------------------------------------------
6,500 Production Operators Corp 434,687
4,800 Tidewater Inc 202,200
3,000 Transocean Offshore Inc 207,000
------------
843,887
------------
ENERGY PRODUCERS 7.16%
- ------------------------------------------------------------------------------
3,400 Anadarko Petroleum 214,200
14,500 Apache Corp 496,625
3,900 Mobil Corp 545,513
1,800 Sonat Inc 103,500
4,279 Union Pacific Resources Group 123,556
------------
1,483,394
------------
PAPER & PACKAGING 0.46%
- ------------------------------------------------------------------------------
1,900 Kimberly Clark Corp 95,237
------------
TRANSPORTATION 2.42%
- ------------------------------------------------------------------------------
2,000 Burlington Northern Santa Fe 166,000
3,400 Union Pacific Corp 230,350
4,300 US Freightways Corp 104,275
------------
500,625
------------
TOTAL INTERMEDIATE GOODS & SERVICES
(Cost $2,973,418) 3,998,944
------------
TOTAL COMMON STOCKS
(Cost $12,102,812) 17,885,597
------------
Face Amount
- -----------
CONVERTIBLE DEBENTURES 10.60%
- ------------------------------------------------------------------------------
CAPITAL GOODS 1.88%
- ------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES 0.89%
- ------------------------------------------------------------------------------
$100,000 First Financial Mgmt Corp,
5.00%, 12/15/99 183,500
------------
MACHINERY & EQUIPMENT 0.99%
- ------------------------------------------------------------------------------
200,000 United States Filter,
4.50%, 12/15/01 205,500
------------
TOTAL CAPITAL GOODS
(Cost $326,328) 389,000
------------
CONSUMER CYCLICALS 5.64%
- ------------------------------------------------------------------------------
CONSUMER SERVICES 1.19%
- ------------------------------------------------------------------------------
250,000 CUC International Inc(1),
3.00%, 02/15/02 247,500
------------
HOTELS/LEISURE 3.38%
- ------------------------------------------------------------------------------
100,000 HFS Inc, 4.50%, 10/01/99 293,125
250,000 Prime Hospitality Corp,
7.00%, 04/15/02 407,187
------------
700,312
------------
RETAIL 1.07%
- ------------------------------------------------------------------------------
250,000 Saks Holdings Inc,
5.50%, 09/15/06 222,188
------------
TOTAL CONSUMER CYCLICALS
(Cost $887,006) 1,170,000
------------
<PAGE>
WESTCORE GROWTH AND INCOME FUND
May 30, 1997 (CONTINUED)
Face Amount Market Value*
- ----------- -------------
CONSUMER STAPLES 1.41%
- ------------------------------------------------------------------------------
HEALTHCARE SERVICES 1.41%
- ------------------------------------------------------------------------------
$300,000 PhyCor Inc, SDCV,
4.50%, 02/15/03 $292,125
------------
TOTAL CONSUMER STAPLES
(Cost $288,453) 292,125
------------
INTERMEDIATE GOODS &
SERVICES 1.67%
- ------------------------------------------------------------------------------
BUSINESS SERVICES 1.01%
- ------------------------------------------------------------------------------
200,000 USA Waste Services Inc,
4.00%, 02/01/02 209,000
------------
ENERGY/EQUIPMENT 0.66%
- ------------------------------------------------------------------------------
100,000 Nabors Industries Inc,
5.00%, 05/15/06 135,875
------------
TOTAL INTERMEDIATE GOODS
& SERVICES 344,875
(Cost $325,984) ------------
TOTAL CONVERTIBLE DEBENTURES
(Cost $1,827,771) 2,196,000
------------
Shares
- ------
CONVERTIBLE PREFERRED
STOCK 2.17%
- ------------------------------------------------------------------------------
CONSUMER CYCLICALS 2.17%
- ------------------------------------------------------------------------------
AUTOMOTIVE 0.50 %
- ------------------------------------------------------------------------------
4,300 Republic Industries-TRACES
Automatic CM Sec (RTR) 6.50% 103,200
------------
TELECOMMUNICATIONS 1.67%
- ------------------------------------------------------------------------------
3,300 WorldCom Inc, GA DECS
Ser A, 8.00% $346,705
------------
TOTAL CONSUMER CYCLICALS
(Cost $386,888) 449,905
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $386,888) 449,905
------------
MUTUAL FUNDS 0.14%
- ------------------------------------------------------------------------------
28,482 Stagecoach Prime Money Market
Service Class 30,219
------------
TOTAL MUTUAL FUNDS 30,219
------------
(Cost $30,219)
TOTAL INVESTMENTS
(Cost $14,347,690) 99.21% $20,561,721
Other Assets in Excess
of Liabilities 0.79% $163,176
----------------------------------
NET ASSETS 100.00% $20,724,897
----------------------------------
----------------------------------
*See Note 1 of Notes to Financial Statements.
**Denotes non-income producing security.
(1) Restricted security- See Note 5 of Notes to
Financial Statements.
WESTCORE INTERMEDIATE-TERM BOND FUND
May 30, 1997 (CONTINUED)
Face Amount Market Value*
- ----------- -------------
CORPORATE BONDS 50.63%
- ------------------------------------------------------------------------------
FINANCIAL 16.49%
- ------------------------------------------------------------------------------
LIFE INSURANCE 1.79%
- ------------------------------------------------------------------------------
$1,150,000 Aetna Services Inc,
7.125%, 08/15/06 $1,133,782
------------
OPERATORS OF
NON-RESIDENTIAL BUILDINGS 2.92%
- ------------------------------------------------------------------------------
250,000 Chateau Properties Ltd,
8.75%, 03/02/00 258,508
600,000 Corporate Property Investors,
7.75%, 08/15/04 (1) 616,834
1,000,000 Kimco Realty Corp MTN,
6.83%, 11/14/05 969,042
------------
1,844,384
------------
PERSONAL CREDIT INSTITUTIONS 1.14%
- ------------------------------------------------------------------------------
725,000 General Motors Acceptance Corp
MTN, 6.60%, 01/17/01 720,170
------------
Real Estate Investment Trust 8.87%
- ------------------------------------------------------------------------------
550,000 Camden Property Trust,
6.625%, 02/15/01 536,351
700,000 Developers Diversified Realty
Corp, 7.625%, 05/15/00 709,022
375,000 Evans Withycombe Residential
Notes, 7.50%, 04/15/04 373,957
425,000 Nationwide Health Properties,
7.23%, 11/08/06 415,673
1,000,000 New Plan Realty Trust,
7.75%, 04/06/05 1,023,083
800,000 Price REIT Inc,
7.25%, 11/01/00 794,474
750,000 Washington Real Estate,
7.125%, 08/13/03 747,348
1,000,000 Weingarten Realty Investors
Trust MTN, 7.22%, 06/01/05 999,077
------------
5,598,985
------------
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
May 30, 1997 (CONTINUED)
Face Amount Market Value*
- ----------- -------------
SECURITIES BROKERS,
DEALERS & FLOTATION COS 1.77%
- ------------------------------------------------------------------------------
$1,130,000 Merrill Lynch Corp MTN,
6.50%, 04/01/01 $1,117,069
------------
TOTAL FINANCIAL
(Cost $10,424,959) 10,414,390
------------
INDUSTRIAL 25.06%
- ------------------------------------------------------------------------------
BOOKS - PUBLISHING OR
PUBLISHING & PRINTING 1.47%
- ------------------------------------------------------------------------------
1,000,000 Golden Books Publishing Co,
7.65%, 09/15/02 930,000
------------
BROADCAST - MEDIA 3.46%
- ------------------------------------------------------------------------------
1,100,000 Cox Communications Inc,
6.375%, 06/15/00 1,087,396
1,000,000 TKR Cable I Cable Notes,
10.50%, 10/30/07, Callable
10/30/99 @ 105.25 1,099,582
------------
2,186,978
------------
CABLE & OTHER PAY
TELEVISION SERVICES 1.23%
- ------------------------------------------------------------------------------
775,000 Telecommunications Inc,
8.00%, 08/01/05 776,871
------------
COOKIES & CRACKERS 0.81%
- ------------------------------------------------------------------------------
500,000 RJR Nabisco Inc,
8.625%, 12/01/02 511,149
ELECTRONIC & OTHER
ELECTRICAL EQUIPMENT 1.77%
- ------------------------------------------------------------------------------
1,150,000 Rockwell International Corp,
6.625%, 06/01/05 1,119,618
------------
HOTELS 0.68%
- ------------------------------------------------------------------------------
425,000 Hilton Hotels Corp,
7.95%, 04/15/07 430,876
------------
INDUSTRIAL ORGANIC
CHEMICALS 1.22%
- ------------------------------------------------------------------------------
750,000 International Specialty Products,
9.00%, 03/01/99 771,470
------------
METALS - MISC 1.55%
- ------------------------------------------------------------------------------
$1,000,000 CSR America Inc,
6.875%, 07/21/05 979,541
------------
MOTION PICTURE & VIDEO
TAPE PRODUCTION 3.48%
- ------------------------------------------------------------------------------
TIME WARNER ENTERTAINMENT CO
- ------------------------------------------------------------------------------
1,000,000 9.625%, 05/01/02 1,101,194
1,000,000 8.875%, 10/01/12 1,093,691
------------
2,194,885
------------
NEWSPAPERS - PUBLISHING OR
PUBLISHING & PRINTING 1.22%
- ------------------------------------------------------------------------------
750000 The New York Times Co,
7.625%, 03/15/05 770,298
------------
PHARMACEUTICAL PREPARATIONS 3.46%
- ------------------------------------------------------------------------------
1,200,000 Bayer Corp,
6.50%, 10/01/02 (1) 1,181,328
1,000,000 Upjohn Co MTN Series A,
6.25%, 02/02/98 1,002,570
------------
2,183,898
------------
RETAIL DEPARTMENT STORES 1.56%
- ------------------------------------------------------------------------------
1,000,000 K Mart Corp,
8.125%, 12/01/06 987,500
------------
SEARCH, DETECTION, NAVIGATION
& GUIDANCE AERONAUTICAL SYSTEMS 1.19%
- ------------------------------------------------------------------------------
790,000 Raytheon Co,
6.50%, 07/15/05 753,178
------------
SERVICES - MISCELLANEOUS,
AMUSEMENT & RECREATION 1.96%
- ------------------------------------------------------------------------------
1,250,000 Walt Disney Co,
6.375%, 03/30/01 1,235,235
------------
TOTAL INDUSTRIAL
(Cost $15,756,624) 15,831,497
------------
TRANSPORTATION 5.57%
- ------------------------------------------------------------------------------
AIR TRANSPORTATION, SCHEDULED 5.57%
- ------------------------------------------------------------------------------
$853,486 American Airlines,
9.71%, 01/02/07 945,663
486,053 Continental Airlines,
7.75%, 07/02/14 501,490
1,035,869 Jet Equipment Trust Series 95-B,
7.83%, 02/15/15 (1) 1,059,922
944,627 United Airlines Pass Through
Certificate 95-A1, 9.02%,
04/19/12 1,012,734
------------
3,519,809
------------
TOTAL TRANSPORTATION
(Cost $3,332,664) 3,519,809
------------
UTILITIES 3.51%
- ------------------------------------------------------------------------------
ELECTRIC SERVICES 1.96%
- ------------------------------------------------------------------------------
1,250,000 Central Maine Power Co,
6.25%, 11/01/98 1,237,629
ELECTRIC & OTHER SERVICES
COMBINED 1.55%
- ------------------------------------------------------------------------------
1,000,000 Long Island Lighting Co,
7.125%, 06/01/05 978,503
------------
TOTAL UTILITIES 2,216,132
(Cost $2,225,518) ------------
TOTAL CORPORATE BONDS
(Cost $31,739,765) 31,981,828
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS & MORTGAGE-BACKED
SECURITIES 9.98%
- ------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS 0.75%
- ------------------------------------------------------------------------------
452,924 Collateralized Mortgage Security
Corp, 8.75%, 4/20/19 472,629
------------
MORTGAGE-BACKED
SECURITIES 9.23%
- ------------------------------------------------------------------------------
1,840,398 FHLMC GP #000336,
6.00%, 10/01/24 1,709,491
------------
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
May 30, 1997 (CONTINUED)
Face Amount Market Value*
- ----------- -------------
1,275,892 FNMA Pool #303845,
7.00%, 05/01/11 $1,270,801
1,531,906 FNMA Pool #362443,
6.50%, 12/01/08 1,506,553
1,273,316 GNMA Pool #780019,
9.50%, 12/15/09 1,343,858
----------
5,830,703
----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS &
MORTGAGE-BACKED SECURITIES
(Cost $6,282,855) 6,303,332
----------
U.S. GOVERNMENT
TREASURIES 33.75%
- --------------------------------------------------------------------------------
U.S. Treasury Notes:
2,000,000 7.875%, 01/15/98 2,026,252
4,000,000 7.875%, 04/15/98 4,070,004
3,000,000 6.125%, 05/15/98 3,007,503
2,500,000 6.875%, 08/31/99 2,532,032
2,000,000 7.75%, 11/30/99 2,066,252
2,000,000 7.125%, 02/29/00 2,038,752
3,300,000 6.875%, 03/31/00 3,345,378
1,200,000 6.75%, 04/30/00 1,212,376
1,000,000 7.00%, 07/15/06 1,020,938
----------
21,319,487
----------
TOTAL U.S. GOVERNMENT TREASURIES
(Cost $21,392,322) 21,319,487
-----------
Shares
- ------
MUTUAL FUNDS 4.22%
- --------------------------------------------------------------------------------
2,655,327 Stagecoach Prime Money Market
Service Class 2,666,586
----------
TOTAL MUTUAL FUNDS
(Cost $2,666,586) 2,666,586
----------
TOTAL INVESTMENTS
(Cost $62,081,528) 98.58% $62,271,233
Other Assets in Excess
of Liabilities 1.42% 897,306
------------------------------------
NET ASSETS 100.00% $63,168,539
-------------------------------------
-------------------------------------
*See Note 1 of Notes to Financial Statements
(1) Restricted security - see Note 5 of Notes to Financial Statements.
WESTCORE LONG-TERM BOND FUND
May 30, 1997
CORPORATE BONDS 52.56%
- --------------------------------------------------------------------------------
FINANCIAL 20.56%
- --------------------------------------------------------------------------------
FINANCIAL SERVICES 1.20%
- --------------------------------------------------------------------------------
$250,000 Leucadia National Corp,
7.75%, 08/15/13 $242,899
----------
FIRE MARINE & CASUALTY
INSURANCE 4.03%
- --------------------------------------------------------------------------------
250,000 Geico Corp,
9.15%, 09/15/21 273,153
600,000 Zurich Reinsurance Center
Holdings, 7.125%, 10/15/23 538,384
----------
811,537
----------
HOTELS 0.75%
- --------------------------------------------------------------------------------
150,000 Hilton Hotels Corp,
7.95%, 04/15/07 152,074
----------
LIFE INSURANCE 3.76%
- --------------------------------------------------------------------------------
230,000 Aetna Services Inc,
7.625%, 08/15/26 225,739
----------
500,000 Lincoln National Insurance Co,
9.125%, 10/01/24 532,788
----------
758,527
----------
OPERATORS OF NON-
RESIDENTIAL BUILDINGS 5.60%
- --------------------------------------------------------------------------------
400,000 Kimco Realty Corp,
6.83%, 11/14/05 387,617
500,000 Property Trust of America,
6.875%, 02/15/08 480,729
250,000 Rouse Co,
8.50%, 01/15/03 259,645
----------
1,127,991
----------
REAL ESTATE INVESTMENT TRUSTS 5.22%
- --------------------------------------------------------------------------------
150,000 Camden Property Trust,
6.625%, 02/15/01 146,278
250,000 ERP Operating Limited
Partnership, 7.57%, 08/15/26 253,090
$150,000 Nationwide Health Property MTN,
7.23%, 11/08/06 146,708
250,000 New Plan Trust Realty,
7.75%, 04/06/05 255,771
250,000 Weingarten Realty Investors
Trust MTN, 7.22%, 06/01/05 249,769
----------
1,051,616
----------
TOTAL FINANCIAL
(Cost $4,132,005) 4,144,644
----------
INDUSTRIAL 23.40%
- --------------------------------------------------------------------------------
BOOKS - PUBLISHING
& PRINTING 1.15%
- --------------------------------------------------------------------------------
250,000 GOLDEN BOOKS PUBLISHING CO,
7.65%, 09/15/02 232,500
----------
BROADCAST - MEDIA 1.92%
- --------------------------------------------------------------------------------
400,000 Cox Communications Inc,
7.625%, 06/15/25 386,362
----------
CABLE & OTHER PAY
TELEVISION SERVICES 3.10%
- --------------------------------------------------------------------------------
500,000 Telecommunications Inc,
8.00%, 08/01/05 501,207
125,000 US West Capital Funding
6.95%, 01/15/37 123,236
----------
624,443
----------
DAIRY PRODUCTS 2.20%
- --------------------------------------------------------------------------------
500,000 Borden Inc,
7.875%, 02/15/23 442,193
----------
MISCELLANEOUS CHEMICAL
PRODUCTS 1.89%
- --------------------------------------------------------------------------------
400,000 Lubrizol Corp,
7.25%, 06/15/25 381,732
----------
PERIODICALS - PUBLISHING OR
PUBLISHING & PRINTING 4.10%
- --------------------------------------------------------------------------------
750,000 Time Warner Inc,
9.125%, 01/15/13 826,775
<PAGE>
PHARMACEUTICAL PREPARATIONS 1.68%
- --------------------------------------------------------------------------------
$345,000 Bayer Corp,
6.50%, 10/01/02(1) $339,632
----------
RETAIL - DEPARTMENT STORES 2.19%
- --------------------------------------------------------------------------------
500,000 K Mart Corp,
7.95%, 02/01/23 440,625
----------
SEARCH, DETECTION, NAVIGATION
& GUIDANCE, AERONAUTICAL SYSTEMS 2.51%
- --------------------------------------------------------------------------------
250,000 Lockheed Martin Corp,
7.79%, 06/15/08 258,655
260,000 Raytheon Co,
6.50%, 07/15/05 247,882
----------
506,537
----------
SERVICES- MISCELLANEOUS,
AMUSEMENT & RECREATION 2.66%
- --------------------------------------------------------------------------------
550,000 Walt Disney Co,
6.75%, 03/30/06 537,184
----------
TOTAL INDUSTRIAL
(Cost $4,661,571) 4,717,983
----------
TRANSPORTATION 5.93%
- --------------------------------------------------------------------------------
AIR TRANSPORTATION - SCHEDULED 5.93%
- --------------------------------------------------------------------------------
500,000 AMR Corp,
10.00%, 04/15/21 598,341
335,698 Jet Equipment Trust Series 95-B,
7.83%, 02/15/15(1) 343,492
236,157 United Airlines Pass-Through
Certificates,9.02%, 04/19/12 253,184
1,195,017
----------
TOTAL TRANSPORTATION
(Cost $1,070,098) 1,195,017
----------
UTILITIES 2.67%
- --------------------------------------------------------------------------------
ELECTRIC & OTHER SERVICES
COMBINED 2.67%
- --------------------------------------------------------------------------------
550,000 Long Island Lighting Co,
7.125%, 06/01/05 538,177
----------
TOTAL UTILITIES
(Cost $538,657) 538,177
----------
TOTAL CORPORATE BONDS
(Cost $ 10,402,331) 10,595,821
-----------
MORTGAGE-BACKED
SECURITIES 4.03%
- --------------------------------------------------------------------------------
$443,649 FHLMC GP#000336,
6.00%, 10/01/24 411,925
402,913 FNMA Pc#303845,
7.00%, 5/01/11 401,306
----------
813,231
----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $807,599) 813,231
-----------
U.S. GOVERNMENT
TREASURIES 39.93%
- --------------------------------------------------------------------------------
U.S. Treasury Notes/Bonds 29.28%
- --------------------------------------------------------------------------------
500,000 U.S. Treasury Note,
7.00%, 07/15/06 510,469
U.S. Treasury Bonds:
350,000 7.50%, 11/15/16 368,922
500,000 8.875%, 02/15/19 603,438
1,000,000 8.50%, 02/15/20 1,167,813
1,000,000 7.875%, 02/15/21 1,098,438
1,100,000 8.125%, 08/15/21 1,241,282
1,000,000 6.25%, 08/15/23 911,563
----------
5,901,925
----------
U.S. GOVERNMENT ZERO
COUPON STRIPS 10.65%
- --------------------------------------------------------------------------------
1,000,000 02/15/04 646,198
4,000,000 08/15/11 1,501,156
----------
2,147,354
----------
TOTAL U.S. GOVERNMENT TREASURIES
(Cost $7,698,739) 8,049,279
----------
MUTUAL FUNDS 1.79%
- --------------------------------------------------------------------------------
358,840 Stagecoach Prime Money Market
Fund Service Class 360,244
----------
TOTAL MUTUAL FUNDS
(Cost $360,244) 360,244
----------
TOTAL INVESTMENTS
(Cost $19,268,913) 98.31% 19,818,575
Other Assets
in Excess of Liabilities 1.69% 341,677
------------------------------------
NET ASSETS 100.00% $20,160,252
------------------------------------
------------------------------------
*See Note 1 of Notes to Financial Statements.
(1) Restricted Security - See Note 5 of Notes to Financial Statements.
<PAGE>
WESTCORE COLORADO TAX-EXEMPT FUND
May 30, 1997 Bond Rating**
Face Amount Moody's/S&P Market Value*
- ----------- ----------- -------------
CERTIFICATES OF PARTICIPATION 5.03%
- --------------------------------------------------------------------------------
$100,000 Colorado State Board of Agriculture
Certificate of Participation CSU Research
Foundation Master Lease Purchase
Agreement, 6.45%, 11/01/01, Optional any
time @ 100.00, MBIA Aaa/AAA $104,198
100,000 Lakewood, Jefferson County, Public Building
Authority, Certificate of Participation, Lease
Purchase Agreement 5.625%, 12/01/99,
Optional any time @ 100.00, MBIA Aaa/AAA 102,421
100,000 State of Colorado Certificate of Participation
Master Lease Purchase Agreement 5.25%,
11/01/99, Optional any time @ 100.00,
AMBAC Aaa/AAA 102,134
250,000 State of Colorado Certificate of Participation
Master Lease Purchase Agreement II, 5.10%
11/01/06, Optional any time @100.00, MBIA Aaa/AAA 252,035
510,000 Weld County, Certificate of Participation
Correctional Facilities, Lease Purchase
Agreement 5.35%, 08/01/10, Optional any
time @ 100.00, MBIA Aaa/AAA 511,321
TOTAL CERTIFICATES OF PARTICIPATION
(Cost $1,059,406) 1,072,109
---------
GENERAL OBLIGATION BONDS 62.02%
- --------------------------------------------------------------------------------
COUNTY/CITY/SPECIAL DISTRICT/
SCHOOL DISTRICT 62.02%
- --------------------------------------------------------------------------------
100,000 Adams County School District 12, 7.25%,
12/15/09, Prerefunded 12/15/99 @100.00 NR/A+ 106,755
500,000 Adams County School District 14, 5.30%,
12/01/09, Optional 12/01/07 @ 101.00, FSA Aaa/AAA 506,275
100,000 Adams & Arapahoe Counties Joint School
District 28J 5.75%, 12/01/06, MBIA Aaa/AAA 106,162
100,000 Adams & Arapahoe Counties School
District 29J 5.40%, 12/01/09, Optional
12/01/06 @ 100.00, MBIA Aaa/AAA 101,890
250,000 Adams & Weld Counties School District 27J
5.55% 12/01/09, Optional 12/01/06 @ 100.00,
FGIC Aaa/AAA 256,495
125,000 Alamosa & Conejos Counties School District
Re-11J 4.9%, 12/01/07, Optional 12/01/05
@ 100.00, MBIA Aaa/AAA 124,594
$100,000 Arapahoe County School District 1, 4.85%,
11/01/04, FSA Aaa/AAA 100,044
100,000 Arapahoe County School District 2, 6.75%
12/01/04, Prerefunded 12/01/[email protected] A/NR 105,648
25,000 Arapahoe County School District 2 6.75%
12/01/04, Escrowed to Maturity A/NR 27,623
Arapahoe County School District 5:
250,000 5.25%, 12/15/04, Optional 12/15/03 @ 100.00 Aa2/AA 256,528
250,000 5.50%, 12/15/06 Aa2/AA 261,513
250,000 Arapahoe County School District 6, 5.50%,
12/01/06 Aa/AA 261,480
250,000 Archuleta & Hinsdale Counties Joint School
District No. 50 JT 5.50%, 12/01/14, Optional
12/01/06 @ 101.00, MBIA Aaa/AAA 249,993
100,000 Basalt & Rural Fire Protection District, Eagle
& Pitkin Counties, 5.20%, 12/01/15, Optional
12/01/06 @ 100.00, AMBAC Aaa/AAA 97,108
150,000 Boulder, Boulder County Library 7.30%,
10/01/08, Prerefunded 10/01/98 @ 100.00 Aaa/AAA 156,227
500,000 Boulder, Boulder County Parks 5.125%,
12/15/09, Optional 12/15/06 @ 100.00 Aa1/AA 499,300
250,000 Boulder & Gilpin Counties Valley School
District Re-2, 5.55%, 12/01/03 A1/AAA 261,218
Boulder, Larimer, & Weld Counties, St. Vrain
Valley School District Re-1J:
100,000 5.50%, 12/15/04, Optional 12/15/02
@ 101.00, MBIA Aaa/AAA 103,989
175,000 5.80%, 12/15/07, Optional 12/15/02
@ 101.00, MBIA Aaa/AAA 183,549
100,000 6.00%, 12/15/10, Optional 12/15/02
@ 101.00, MBIA Aaa/AAA 104,410
205,000 Brighton, Adams County 6.625%, 12/01/11,
Prerefunded 12/01/01 @ 101.00, MBIA Aaa/AAA 223,643
100,000 Carbondale & Rural Fire Protection
District, Garfield, Gunnison, & Pitkin
Counties, 5.20%, 12/01/10, Optional
12/01/04 @ 101.00, AMBAC Aaa/AAA 99,615
150,000 Chaffee County School District R-31,
5.10%, 12/01/09, Optional 12/01/06
@ 100.00, FSA Aaa/AAA 149,451
<PAGE>
$125,000 Colorado Springs, El Paso County 6.60%,
09/01/00, Prerefunded 09/01/99 @ 100.00 NR/AAA $131,100
250,000 Clear Creek County School District Re-1,
5.40%, 12/01/11, Optional 12/01/05
@ 100.00, MBIA Aaa/AAA 251,590
Douglas & Elbert Counties
School District Re-1:
250,000 5.75%, 12/15/05, Optional 12/15/01
@ 101.00, FGIC Aaa/AAA 260,938
250,000 6.15%, 12/15/08, Optional 12/15/04
@ 101.00, MBIA Aaa/AAA 268,942
Eagle, Garfield & Routt Counties School
District Re 50J:
125,000 6.60%, 12/01/99, Prerefunded 12/01/98,
@ 100.00, FGIC Aaa/AAA 129,515
85,000 5.60%, 12/01/01, FGIC Aaa/AAA 88,666
200,000 5.75%, 12/01/03, Optional 12/01/02
@ 100.00, FGIC Aaa/AAA 209,684
125,000 El Paso County School District 3, 6.20%,
12/15/00, Optional 12/15/98 @ 101.00,
MBIA Aaa/AAA 129,429
80,000 El Paso County School District 12 ,
5.90%, 9/15/04 Aa1/NR 85,404
500,000 El Paso County School District 11 5.50%,
12/01/14, Optional 12/01/07 @ 103.00 Aa/AA- 500,000
125,000 El Paso County School District 49 6.75%,
12/01/04, Optional 12/01/00
@ 100.00, MBIA Aaa/AAA 133,520
200,000 Fort Collins, Larimer County 5.55%,
12/01/03, Optional 12/01/02 @ 101.00 Aa/AA 208,520
125,000 Fruita, Mesa County, 6.40%, 10/01/00,
Optional 10/01/97 @ 100.00, AMBAC Aaa/AAA 126,139
250,000 Garfield, Pitkin & Eagle Counties Roaring
Fork School District Re-1, 6.60%, 12/15/14,
Prerefunded 06/15/04 @ 101.00, MBIA Aaa/AAA 278,403
625,000 Goldsmith Metropolitan District Arapahoe
& Denver Counties, 6.50%, 12/01/03,
Optional 12/01/99 @ 101.00, MBIA Aaa/AAA 661,850
Jefferson County School District R-1:
100,000 5.10%, 12/15/99, AMBAC Aaa/AAA 102,025
100,000 5.75%, 12/15/03, Optional 12/15/02 @
101.00, AMBAC Aaa/AAA 105,622
500,000 5.90%, 12/15/04, Optional 12/15/02 @
101.00, AMBAC Aaa/AAA 529,565
250,000 La Plata County School District 9-R, 5.25%,
11/01/05, MBIA Aaa/AAA 256,313
125,000 Larimer County Poudre School District R-1,
7.00%, 12/15/08, Prerefunded 12/15/01
@ 101.00 NR/NR 137,805
$500,000 Larimer, Weld, & Boulder Counties
Thompson School District R2-J 5.40%,
12/15/13, Optional 6/15/07 @ 101.00, FGIC Aaa/AAA 499,335
100,000 Longmont, Boulder County 5.15%,
09/01/99, MBIA Aaa/AAA 101,718
500,000 Mesa County Valley School District 51,
5.40%, 12/01/12, Optional 12/01/06
@ 101.00, MBIA Aaa/AAA 501,510
105,000 Morgan County School District Re-3 6.45%,
12/01/98, Escrowed to Maturity A/NR 108,519
250,000 Northglenn, Adams County Water
5.50%, 12/01/06, Optional 12/01/04
@ 101.00, FSA Aaa/AAA 261,223
100,000 Otero County, East Otero School District
R-1 5.05%, 12/15/09, Optional 12/15/05
@ 100.00, FSA Aaa/AAA 99,172
100,000 Pitkin County School District Re-1, 5.50%,
11/15/00, AMBAC Aaa/AAA 103,109
125,000 Poudre Valley Hospital District, Larimer
County 6.80%, 11/15/02, Prerefunded
11/15/98 @ 101.00 NR/AAA 130,924
Pueblo, Pueblo County Limited Tax:
200,000 5.80%, 06/01/11, Optional 06/01/06 @
100.00, MBIA Aaa/AAA 206,306
250,000 6.00%, 06/01/16, Optional 06/01/06 @
100.00, MBIA Aaa/AAA 259,860
150,000 Rio Grande County School District C-8,
5.35%, 11/15/11, Optional 11/15/05
@ 100, FSA Aaa/AAA 149,877
75,000 Routt County School District Re-2, 5.00%,
12/01/05, Optional 12/01/03 @ 100.00, FGIC Aaa/AAA 75,247
250,000 San Miguel County School District R-1,
5.50%, 12/01/12, Optional 12/01/05 @
101.00, MBIA Aaa/AAA 251,285
Thornton, Adams County Water:
25,000 7.40%, 12/01/98, FGIC Aaa/AAA 26,191
125,000 5.75%, 12/01/04, Optional 12/01/02
@ 101.00, FGIC Aaa/AAA 131,708
250,000 6.00%, 12/01/05, Optional 12/01/02
@ 101.00, FGIC Aaa/AAA 265,785
135,000 Three Lakes Water & Sanitation District,
Grand County Limited Tax, 6.00%, 06/01/00
Optional 06/01/97 @ 101.00, MBIA Aaa/AAA 137,892
<PAGE>
Face Amount Moody's/S&P Market Value*
- ----------- ----------- -------------
Weld County School District 6:
$250,000 5.50%, 12/01/06 Aa/AA- $261,480
250,000 5.20%, 12/01/10, Optional 12/01/07
@ 101.00 Aa/AA- 248,898
150,000 Weld County School District, Re-4, 5.30%,
12/01/10, Optional 12/01/05 @ 100.00, MBIA Aaa/AAA 150,510
100,000 Willows Water District,
Arapahoe County, 6.40%, 12/01/98,
Optional 06/01/97 @ 100.00, MBIA Aaa/AAA 100,197
100,000 Woodland Park, Teller County, 6.30%,
07/01/08, Optional 07/01/00 @ 101.00, FGIC Aaa/AAA 105,526
125,000 Woodmoor Water & Sanitation District 1
El Paso County, 6.20%, 12/01/00, Optional
06/01/97 @ 100.00 MBIA Aaa/AAA 125,008
----------
TOTAL GENERAL OBLIGATION BONDS
(Cost $12,977,801) 13,239,820
----------
REVENUE BONDS 30.21%
- --------------------------------------------------------------------------------
EDUCATION 2.16%
- --------------------------------------------------------------------------------
100,000 State of Colorado Department of Higher
Education by State Board for Community
Colleges & Occupational Education, 5.20%,
11/01/03, Optional 11/01/02 @ 100.00,
AMBAC Aaa/AAA 101,933
100,000 University of Colorado Board of Regents
Auxiliary Facilities, 6.50%, 06/01/01,
Prerefunded 06/01/00 @ 101.00 A1/NR 106,347
250,000 University of Northern Colorado Board of
Trustees, Auxiliary Facilities System
Improvement 5.00%, 06/01/03, MBIA Aaa/AAA 252,710
----------
460,990
----------
PUBLIC FACILITIES 1.01%
- --------------------------------------------------------------------------------
200,000 Denver Metropolitan Major League
Baseball Stadium District Sales Tax,
6.25%, 10/01/02, Prerefunded 10/01/01
@ 101.00, FGIC Aaa/AAA 214,710
----------
SPECIAL TAX 10.67%
- --------------------------------------------------------------------------------
500,000 Boulder County Sales & Use Tax, 5.75%,
12/15/04, FGIC Aaa/AAA 530,070
Face Amount Moody's/S&P Market Value*
- ----------- ----------- -------------
$250,000 Boulder Urban Renewal Authority Tax
Increment, 6.00% 03/01/02, Optional
03/01/00 @ 101.00, MBIA Aaa/AAA $260,940
250,000 Breckenridge, Summit County Excise Tax,
5.20% 12/01/01, Optional 12/01/00
@ 101.00, MBIA Aaa/AAA 256,753
200,000 Castle Rock, Douglas County Sales &
Use Tax 5.25%, 06/01/06, FSA Aaa/AAA 205,192
100,000 Commerce City, Adams County Sales &
Use Tax, 5.375%, 08/01/07, Optional
08/01/03 @ 101.00, MBIA Aaa/AAA 102,888
250,000 Douglas County Sales & Use Tax, 5.25%,
10/15/07, Optional 10/15/06 @ 100.00,
MBIA Aaa/AAA 255,368
500,000 Fort Collins, Larimer County Sales &
Use Tax, 4.90% 06/01/01, FGIC Aaa/AAA 505,610
150,000 Lafayette, Boulder County, Sales &
Use Tax, 6.40%, 11/15/04, Prerefunded
11/15/01 @ 100.00, AMBAC Aaa/AAA 161,519
----------
2,278,340
----------
TRANSPORTATION 1.64%
- --------------------------------------------------------------------------------
250,000 Colorado Springs, El Paso County Airport
System 5.10%, 01/01/10, Optional 01/01/06
@ 101.00, MBIA Aaa/AAA 246,793
100,000 Regional Transportation District RTD
Sales Tax 7.00%, 11/01/98, FGIC Aaa/AAA 104,100
----------
350,893
UTILITY 14.73%
- --------------------------------------------------------------------------------
75,000 Boulder, Boulder County Water & Sewer
5.75%, 12/01/06, Optional 12/01/02
@ 100.00 Aa/AA 77,932
500,000 5.50%, 12/01/11, Optional 12/01/06
@ 100.00 Aa/AA 507,015
250,000 Central Weld County Water District, 5.25%,
12/01/05, Optional 12/01/03 @ 100.00, MBIA Aaa/AAA 255,660
Colorado Springs, El Paso County Utilities
Systems:
100,000 6.40%, 11/15/02, Optional 11/15/01 @ 102.00 Aa/AA 108,348
250,000 5.75%, 11/15/10, Optional 11/15/06 @ 100 Aa/AA 259,218
<PAGE>
Face Amount Moody's/S&P Market Value*
- ----------- ----------- -------------
$250,000 Fort Collins, Larimer County Wastewater
Utility Enterprise Sewer, 5.375%, 12/01/09,
Optional 12/01/05 @ 100.00, FGIC Aaa/AAA $252,633
100,000 Lafayette, Boulder County
Sewer, 4.95%, 09/01/05, FGIC Aaa/AAA 100,734
Municipal Subdistrict, Northern Colorado
Water Conservancy District:
500,000 5.85%, 12/01/02, AMBAC Aaa/AAA 529,585
70,000 6.00%, 12/01/15, Optional any time @ 100.00 A1/A+ 70,110
Platte River Power Authority:
100,000 5.75%, 06/01/04 Optional 06/01/02 @ 102 Aa/A+ 105,290
400,000 5.75%, 06/01/04, MBIA Aaa/AAA 421,404
Ute Water Conservancy District, Mesa
County:
50,000 7.60%, 06/15/01, Prerefunded
06/15/97 @ 100.00 Aaa/AAA 50,079
300,000 4.80%, 6/15/02, MBIA Aaa/AAA 300,792
100,000 Westminster, Adams County Water &
Wastewater Utility Enterprise 6.25%,
12/01/14, Optional 12/01/04 @ 100.00, AMBAC 106,009
----------
3,144,809
----------
TOTAL REVENUE BONDS
(Cost $6,311,809) 6,449,742
----------
Shares
MUTUAL FUNDS 1.97%
- --------------------------------------------------------------------------------
419,918 Provident Institutional
Municipal Money Market Fund 421,044
----------
TOTAL MUTUAL FUNDS
(Cost $421,044) 421,044
----------
TOTAL INVESTMENTS
(Cost $20,770,060) 99.23% $21,182,715
Other Assets in Excess of Liabilities 0.77% 164,944
------------------------
NET ASSETS 100.00% $21,347,659
------------------------
------------------------
*See Note 1 of Notes to Financial Statements.
**Unaudited.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- ----------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore
MIDCO Blue Small-Cap Growth
Growth Chip Opportunity and Income
Fund Fund Fund Fund
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $1,347,931 $1,251,761 $335,661 $323,246
Interest 1,211,985 94,982 102,937 100,980
- ----------------------------------------------------------------------------------------------------
Total Income 2,559,916 1,346,743 438,598 424,226
- ----------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 3,834,365 402,063 311,530 145,076
Administrative fee 1,769,707 185,539 93,440 66,958
Transfer agency 410,189 50,717 27,789 59,939
Fund accounting 177,787 26,107 31,502 31,259
Legal 202,740 19,890 13,378 5,484
Printing 109,059 11,004 4,073 4,205
Registration 75,967 16,590 12,578 16,894
Audit 21,535 10,265 7,040 10,014
Custodian 62,738 11,901 6,699 5,803
Amortization of organization costs 0 0 17,665 0
Insurance 41,042 4,188 1,439 1,627
Trustee fee 57,651 6,098 2,762 2,368
Other 0 3,456 0 0
- ----------------------------------------------------------------------------------------------------
Total Expenses 6,762,780 747,818 529,895 349,627
Expenses waived by:
Investment advisor 0 (26,418) (114,504) (82,796)
Custodian (44,673) (8,072) (3,722) (3,097)
Administrator 0 (2,179) (6,753) (6,818)
- ----------------------------------------------------------------------------------------------------
Net Expenses 6,718,107 711,149 404,916 256,916
- ----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
(LOSS) (4,158,191) 635,594 33,682 167,310
- ----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investment
transactions 86,766,854 9,990,055 4,083,766 2,659,580
Unrealized appreciation (depreciation)
of investments:
Beginning of period 224,240,350 16,896,111 5,147,444 5,137,283
End of period 171,123,027 19,775,761 6,366,962 6,214,031
- ----------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) (53,117,323) 2,879,650 1,219,518 1,076,748
- ----------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 33,649,531 12,869,705 5,303,284 3,736,328
- ----------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $29,491,340 $13,505,299 $5,336,966 $3,903,638
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Westcore Westcore Westcore
Intermediate- Long-Term Colorado
Term Bond Bond Tax-Exempt
Fund Fund Fund
------------- --------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $0 $0 $0
Interest 4,862,184 1,706,068 935,398
- -------------------------------------------------------------------------------------
Total Income 4,862,184 1,706,068 935,398
- -------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 328,181 104,809 89,049
Administrative fee 218,788 69,779 53,392
Transfer agency 39,002 15,897 7,560
Fund accounting 35,116 33,143 40,755
Legal 21,010 5,588 8,784
Printing 13,254 4,206 2,308
Registration 16,599 14,868 1,167
Audit 13,649 9,134 6,837
Custodian 13,400 4,917 3,593
Amortization of organization costs 0 0 0
Insurance 5,432 1,647 857
Trustee fee 7,611 2,690 1,716
Other 0 763 240
- -------------------------------------------------------------------------------------
Total Expenses 712,042 267,441 216,258
Expenses waived by:
Investment advisor (74,356) (39,100) (89,049)
Custodian (9,822) (3,233) (2,171)
Administrator (7,950) (4,181) (36,072)
- -------------------------------------------------------------------------------------
Net Expenses 619,914 220,927 88,966
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME
(LOSS) 4,242,270 1,485,141 846,432
- -------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investment
transactions 18,937 250,648 (21,758)
Unrealized appreciation (depreciation)
of investments:
Beginning of period (930,828) 127,456 155,686
End of period 189,705 549,662 412,655
- -------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) 1,120,533 422,206 256,969
- -------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 1,139,470 672,854 235,211
- -------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,381,740 $2,157,995 $1,081,643
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- ------------------------------------------------------------------------------------------------------------------------
WESTCORE MIDCO GROWTH FUND
-------------------------------
For the Year Ended
-------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
-------------- -------------
<S> <C> <C>
Net investment loss $(4,158,191) $(2,264,013)
Net realized gain on investments 86,766,854 53,405,690
Net unrealized (depreciation) appreciation (53,117,323) 126,272,343
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 29,491,340 177,414,020
- ------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investments
Institutional class (80,255,692) (19,218,923)
Retail class 0 0
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities (50,764,352) 158,195,097
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Net (decrease) increase in net assets derived from institutional class beneficial
interest transactions - Note 2 (15,717,694) 101,245,432
Net decrease in net assets derived from retail class beneficial interest
transactions - Note 2 0 (30,387,017)
NET (DECREASE) INCREASE IN NET ASSETS (66,482,046) 229,053,512
NET ASSETS:
Beginning of period 656,489,726 427,436,214
- ------------------------------------------------------------------------------------------------------------------------
End of period (including overdistributed net investment income of ($7,288,835)
and ($3,130,644), respectively) $590,007,680 $656,489,726
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WESTCORE BLUE CHIP FUND
-------------------------------
For the Year Ended
-------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
--------------- --------------
<S> <C> <C>
Net investment income $635,594 $934,337
Net realized gain on investments 9,990,055 8,541,198
Net unrealized appreciation 2,879,650 6,772,530
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 13,505,299 16,248,065
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (783,962) (976,769)
Distributions to shareholders from net realized gain on investments (9,187,213) (4,826,591)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 3,534,124 10,444,705
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Shares sold 20,944,535 17,435,317
Shares issued in reinvestment of dividends 8,612,339 5,209,936
- ------------------------------------------------------------------------------------------------------------------------
29,556,874 22,645,253
Shares redeemed (34,926,271) (17,349,667)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from beneficial interest transactions (5,369,397) 5,295,586
- ------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN NET ASSETS (1,835,273) 15,740,291
NET ASSETS:
Beginning of period 68,285,572 52,545,281
- ------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $36,046
and $184,414, respectively) $66,450,299 $68,285,572
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
see notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WESTCORE SMALL-CAP OPPORTUNITY FUND
-----------------------------------
For the Year Ended
-----------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
----------------- ---------------
<S> <C> <C>
Net investment income $33,682 $40,704
Net realized gain on investments 4,083,766 1,021,344
Net unrealized appreciation 1,219,518 4,453,584
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,336,966 5,515,632
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income
Institutional class (25,495) (48,100)
Retail class 0 (895)
Distributions to shareholders from net realized gain on investments
Institutional class (1,366,828) (421,504)
Retail class 0 0
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 3,944,643 5,045,133
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets derived from institutional class beneficial interest
transactions - Note 2 8,066,018 9,334,752
Net decrease in net assets derived from retail class beneficial interest
transactions - Note 2 0 (1,065,766)
NET INCREASE IN NET ASSETS 12,010,661 13,314,119
NET ASSETS:
Beginning of period 23,951,012 10,636,893
- ------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $8,665
and $478, respectively) $35,961,673 $23,951,012
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WESTCORE GROWTH AND INCOME FUND
-------------------------------
For the Year Ended
-------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
---------------- -------------
<S> <C> <C>
Net investment income $167,310 $370,186
Net realized gain on investments 2,659,580 3,440,453
Net unrealized appreciation 1,076,748 2,696,285
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 3,903,638 6,506,924
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income
Institutional class (202,251) (518,985)
Retail class 0 (21,581)
Distributions to shareholders from net realized gain on investments
Institutional class (2,273,847) (1,458,171)
Retail class 0 0
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 1,427,540 4,508,187
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Net decrease in net assets derived from institutional class beneficial interest
transactions - Note 2 (6,090,046) (5,892,042)
Net decrease in net assets derived from retail class beneficial interest
transactions - Note 2 0 (4,128,687)
NET DECREASE IN NET ASSETS (4,662,506) (5,512,542)
NET ASSETS:
Beginning of period 25,387,403 30,899,945
- ------------------------------------------------------------------------------------------------------------------------
End of period (including overdistributed net investment income of ($178,897)
and ($143,956), respectively) $20,724,897 $25,387,403
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
see notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WESTCORE INTERMEDIATE-TERM BOND FUND
------------------------------------
For the Year Ended
------------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
----------------- -----------------
<S> <C> <C>
Net investment income $4,242,270 $5,255,183
Net realized gain on investments 18,937 849,471
Net unrealized appreciation (depreciation) 1,120,533 (2,091,659)
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,381,740 4,012,995
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income
Institutional class (4,283,756) (5,220,333)
Retail class 0 (52,026)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 1,097,984 (1,259,364)
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Net decrease in net assets derived from institutional class beneficial interest
transactions - Note 2 (20,968,081) (13,314,494)
Net decrease in net assets derived from retail class beneficial interest
transactions - Note 2 0 (2,577,091)
NET DECREASE IN NET ASSETS (19,870,097) (17,150,949)
NET ASSETS:
Beginning of period 83,038,636 100,189,585
- ------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $43,794
and $85,280, respectively) $63,168,539 $83,038,636
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WESTCORE LONG-TERM BOND FUND
------------------------------------
For the Year Ended
------------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
----------------- -----------------
<S> <C> <C>
Net investment income $1,485,141 $1,824,654
Net realized gain on investments 250,648 810,714
Net unrealized appreciation (depreciation) 422,206 (1,392,287)
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,157,995 1,243,081
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (1,495,971) (1,851,721)
Distributions to shareholders from net realized gain on investments (397,663) 0
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 264,361 (608,640)
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Shares sold 3,753,882 6,252,499
Shares issued in reinvestment of dividends 1,747,726 1,672,703
- ------------------------------------------------------------------------------------------------------------------------
5,501,608 7,925,202
Shares redeemed (10,675,976) (15,686,515)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from beneficial interest transactions (5,174,368) (7,761,313)
- ------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS (4,910,007) (8,369,953)
NET ASSETS:
Beginning of period 25,070,259 33,440,212
- ------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $18,521
and $29,351, respectively) $20,160,252 $25,070,259
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
see notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WESTCORE COLORADO TAX-EXEMPT FUND
------------------------------------
For the Year Ended
------------------------------------
FROM INVESTMENT ACTIVITIES May 30, 1997 May 31, 1996
----------------- -----------------
<S> <C> <C>
Net investment income $846,432 $553,534
Net realized loss on investments (21,758) (7,226)
Net unrealized appreciation (depreciation) 256,969 (139,747)
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,081,643 406,561
- ------------------------------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (842,088) (540,156)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from investment activities 239,555 (133,595)
- ------------------------------------------------------------------------------------------------------------------------
FROM BENEFICIAL INTEREST TRANSACTIONS
Shares sold 8,514,677 3,597,527
Shares issued in reinvestment of dividends 613,448 347,227
- ------------------------------------------------------------------------------------------------------------------------
9,128,125 3,944,754
Shares redeemed (1,941,761) (681,115)
- ------------------------------------------------------------------------------------------------------------------------
Change in net assets derived from beneficial interest transactions 7,186,364 3,263,639
- ------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS 7,425,919 3,130,044
NET ASSETS:
Beginning of period 13,921,740 10,791,696
- ------------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $16,069 and
$11,725, respectively) $21,347,659 $13,921,740
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
see notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE MIDCO GROWTH FUND
outstanding throughout the periods indicated: -------------------------------------------------------------------------------
Institutional Shares Retail Shares
-------------------------------------------------- ---------------------------
For the For the For the
Period Ended Period Ended Period Ended
May 30, May 31, May 31
------------ ------------------------------------- ---------------------------
1997 1996 1995 1994 1993 1996** 1995 1994*
------------ -------- -------- -------- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $22.90 $17.12 $16.09 $15.79 $14.38 $17.10 $16.10 $17.33
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.15) (0.08) 0.00 0.00 0.04 (0.01) (0.03) (0.01)
Net realized and unrealized gain (loss) on investments 1.19 6.58 1.56 1.34 2.48 3.12 1.56 (0.19)
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment operations 1.04 6.50 1.56 1.34 2.52 3.11 1.53 (0.20)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gain on investments (3.02) (0.72) (0.53) (1.03) (1.11) (0.00) (0.53) (1.02)
Return of Capital (0.00) (0.00) (0.00) (0.01) (0.00) (0.00) (0.00) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions and return of
capital to shareholders (3.02) (0.72) (0.53) (1.04) (1.11) (0.00) (0.53) (1.03)
Net asset value - end of period $20.92 $22.90 $17.12 $16.09 $15.79 $20.21 $17.10 $16.10
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total return 5.27% 38.62% 10.05% 8.37% 18.04% 18.19% 9.78% (1.88%)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $590,008 $656,490 $401,760 $335,453 $231,595 $30,827 $25,677 $16,309
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.14% 1.08% 0.94% 0.84% 0.83% 1.16%(3) 1.19% 1.10%(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets (0.70%) (0.42%) (0.03%) (0.09%) 0.04% (0.24%)(3) (0.28%) (0.37%)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 1.14% 1.10% 0.96% 0.87% 0.85% 1.17%(3) 1.21% 1.13%(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets without fee waivers (0.71%) (0.44%) (0.05%) (0.12%) 0.02% (0.26%)(3) (0.30%) (0.40%)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 60.78% 62.83% 50.19% 52.05% 56.23% 62.83% 50.19 52.05%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Average commission rate (2) $.0466 - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$347,732,853 and $434,312,060, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
(3) Annualized.
*For the period October 11, 1993 (inception of offering) to May 31, 1994.
** For the period June 1, 1995 to September 29, 1995.
<PAGE>
Selected data for a share of beneficial interest
outstanding throughout the periods indicated:
<TABLE>
<CAPTION>
WESTCORE BLUE CHIP FUND
---------------------------------------------------------------
For the Year Ended For the Year Ended
May 30, May 31,
--------------------- ----------------------------------------
1997 1996 1995 1994 1993
--------------------- -------- -------- -------- ----------
Net asset value - beginning of period $17.41 $14.70 $12.70 $13.87 $13.35
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.19 0.25 0.23 0.40 0.34
Net realized and unrealized gain on investments 3.65 4.03 2.12 0.04 1.13
- -------------------------------------------------------------------------------------------------------------------
Total income from investment operations 3.84 4.28 2.35 0.44 1.47
- -------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.22) (0.27) (0.16) (0.43) (0.21)
Distributions from net realized gain on investments (2.88) (1.30) (0.19) (1.18) (0.74)
- -------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (3.10) (1.57) (0.35) (1.61) (0.95)
- -------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $18.15 $17.41 $14.70 $12.70 $13.87
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Total return 24.28% 30.48% 19.03% 3.12% 11.62%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $66,450 $68,286 $52,545 $36,674 $28,176
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.15% 1.10% 1.01% 1.06% 0.99%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets 1.02% 1.52% 1.78% 2.30% 2.37%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.21% 1.25% 1.06% 1.09% 1.02%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets without fee waivers 0.97% 1.38% 1.73% 2.27% 2.34%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 43.47% 65.11% 61.72% 41.32% 85.53%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Average commission rate (2) $.0498 - - - -
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$26,079,205 and $39,904,808, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
<PAGE>
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE SMALL-CAP OPPORTUNITY FUND
outstanding throughout the periods indicated: ------------------------------------------------------------------------
Institutional Shares Retail Shares
--------------------------------------------------- -------------------
For the For the For the
Period Ended Period Ended Period Ended
May 30, May 31, May 31
------------ ---------------------------- -------------------------------
1997 1996 1995 1994 1996** 1995 1994*
------------ -------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $21.35 $15.95 $14.97 $15.00 $15.95 $14.96 $15.00
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04 0.09 0.05 0.01 0.06 0.03
Net realized and unrealized gain (loss) on investments 3.37 5.86 1.11 (0.05) 2.25 1.11 (0.04)
- ------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment operations 3.40 5.90 1.20 0.00 2.26 1.17 (0.01)
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.02) (0.06) (0.10) (0.03) (0.02) (0.06) (0.03)
Distributions from net realized gain on investments (0.86) (0.44) (0.12) 0.00 0.00 (0.12) 0.00
- ------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.88) (0.50) (0.22) (0.03) (0.02) (0.18) (0.03)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $23.87 $21.35 $15.95 $14.97 $18.19 $15.95 $14.96
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total return 16.28% 37.49% 8.15% (0.07%) (3)14.14% 7.96% (0.22%)(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $35,962 $23,951 $9,703 $2,159 $1,072 $934 $497
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.30% 1.30% 1.27% 1.38%(3) 1.48%(3) 1.51% 1.63%(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets 0.11% 0.24% 0.61% 1.00%(3) 0.16%(3) 0.37% 0.64%(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 1.69% 2.20% 2.77% 6.56%(3) 2.53%(3) 3.10% 6.81%(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets
without fee waivers (0.28%) (0.67%) (0.89%) (4.18%)(3) (0.89%)(3)(1.22%) (4.54%)(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 77.73% 47.83% 59.17% 64.31%(3) 47.83% 59.17% 64.31%(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Average commission rate (2) $.0480 - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$28,693,734 and $22,739,283, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
(3) Annualized
* For the period December 28, 1993 (inception of offering) to May 31, 1994.
** For the period June 1, 1995 to September 29, 1995.
<PAGE>
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE GROWTH AND INCOME FUND
outstanding throughout the periods indicated: -------------------------------------------------------------------------------
Institutional Shares Retail Shares
-------------------------------------------------- ---------------------------
For the For the For the
Year Ended Year Ended Period Ended
May 30, May 31, May 31,
------------ ------------------------------------- ---------------------------
1997 1996 1995 1994 1993 1996** 1995 1994*
------------ -------- -------- -------- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period: $12.32 $10.50 $10.62 $11.51 $10.99 $10.51 $10.63 $11.65
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.07 0.15 0.20 0.51 0.32 0.05 0.19 0.15
Net realized and unrealized gain (loss) on investments 2.19 2.57 0.15 (0.30) 0.68 0.72 0.14 (0.45)
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment operations 2.26 2.72 0.35 0.21 1.00 0.77 0.33 (0.30)
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.11) (0.24) (0.21) (0.54) (0.20) (0.06) (0.19) (0.16)
Distributions from net realized gain on investments (1.44) (0.66) (0.26) (0.56) (0.28) 0.00 (0.26) (0.56)
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.55) (0.90) (0.47) (1.10) (0.48) (0.06) (0.45) (0.72)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $13.03 $12.32 $10.50 $10.62 $11.51 $11.22 $10.51 $10.63
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total return 19.71% 27.25% 3.73% 1.71% 9.41% 7.35% 3.48% (4.20%)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $20,725 $25,387 $27,029 $42,644 $35,791 $3,921 $3,871 $4,026
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.15% 1.22% 1.17% 1.03% 0.99% 1.58%(3) 1.41% 1.25%(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 0.75% 1.34% 2.09% 4.45% 2.75% 1.40%(3) 1.86% 2.12%(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.56% 1.51% 1.22% 1.06% 1.03% 1.61%(3) 1.47% 1.27%(3)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets
without fee waivers 0.33% 1.05% 2.04% 4.42% 2.71% 1.37%(3) 1.80% 2.09 (3)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 39.80% 88.31% 81.14% 53.86% 61.24% 88.31% 81.14% 53.86%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Average commission rate (2) $.0491 - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$8,605,246 and $15,958,644, respectively.
(2) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
(3) Annualized
* For the period October 11, 1993 (inception of offering) to May 31, 1994.
** For the period June 1, 1995 to September 29, 1995.
<PAGE>
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE INTERMEDIATE-TERM BOND FUND
outstanding throughout the periods indicated: -------------------------------------------------------------------------------
Institutional Shares Retail Shares
-------------------------------------------------- ---------------------------
For the For the For the
Year Ended Year Ended Year Ended
May 30, May 31, May 31,
------------ ------------------------------------- ---------------------------
1997 1996 1995 1994 1993 1996** 1995 1994*
------------ -------- -------- -------- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.10 $10.27 $10.02 $10.70 $10.14 $10.27 $10.03 $10.97
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.60 0.60 0.58 0.55 0.67 0.20 0.56 0.34
Net realized and unrealized gain (loss)
on investments 0.13 (0.17) 0.27 (0.52) 0.53 0.04 0.26 (0.77)
- -----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from investment operations 0.73 0.43 0.85 0.03 1.20 0.24 0.82 (0.43)
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.60) (0.60) (0.60) (0.53) (0.64) (0.21) (0.58) (0.33)
Distributions from net realized gain on investments 0.00 0.00 0.00 (0.18) 0.00 0.00 0.00 (0.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.60) (0.60) (0.60) (0.71) (0.64) (0.21) (0.58) (0.51)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $10.23 $10.10 $10.27 $10.02 $10.70 $10.30 $10.27 $10.03
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total return 7.43% 4.26% 8.93% 0.10% 12.16% 2.34% 8.53%(6.33%)(2)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000) $63,169 $83,039 $97,619 $88,965 $99,469 $2,781 $2,571 $1,941
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.85% 0.81% 0.77% 0.68% 0.65% 0.95%(2) 0.99% 0.95%(2)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 5.81% 5.78% 5.86% 5.03% 6.37% 5.74%(2) 5.64% 4.65%(2)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
without fee waivers 0.97% 0.92% 0.80% 0.70% 0.67% 0.97%(2) 1.02% 0.97%(2)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets
without fee waivers 5.68% 5.67% 5.83% 5.00% 6.35% 5.72%(2) 5.61% 4.63 (2)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 27.47% 71.97% 60.86% 65.04% 87.17% 71.97% 60.86% 65.04%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$19,161,905 and $39,196,987, respectively.
(2) Annualized
* For the period October 11, 1993 (inception of offering) to May 31, 1994.
** For the period June 1, 1995 to September 29, 1995.
<PAGE>
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE LONG-TERM BOND FUND
outstanding throughout the periods indicated: -------------------------------------------------------------
For the For the
Year Ended Year Ended
May 30, May 31,
------------ ----------------------------------------
1997 1996 1995 1994 1993
------------ -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $9.59 $9.87 $9.22 $11.25 $10.60
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.62 0.61 0.59 0.62 0.77
Net realized and unrealized gain (loss)
on investments 0.26 (0.27) 0.66 (0.51) 0.99
- -----------------------------------------------------------------------------------------------------------------
Total income from investment operations 0.88 0.34 1.25 0.11 1.76
- -----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.63) (0.62) (0.60) (0.62) (0.78)
Distributions from net realized
gain on investments (0.17) 0.00 0.00 (1.52) (0.33)
- -----------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (0.80) (0.62) (0.60) (2.14) (1.11)
- -----------------------------------------------------------------------------------------------------------------
Net asset value - end of period $9.67 $9.59 $9.87 $9.22 $11.25
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Total return 9.40% 3.41% 14.37% (.25%) 17.40%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $20,160 $25,070 $33,440 $26,962 $26,281
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.95% 0.90% 0.94% 0.89% 0.77%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 6.37% 6.07% 6.54% 5.74% 6.63%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets without fee waivers 1.15% 1.07% 0.99% 0.92% 0.80%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets without fee waivers 6.18% 5.90% 6.49% 5.71% 6.60%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 27.76% 33.10% 25.09% 52.82% 79.16%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$6,186,953 and $11,561,879, respectively.
<PAGE>
<TABLE>
<CAPTION>
Selected data for a share of beneficial interest WESTCORE COLORADO TAX-EXEMPT FUND
outstanding throughout the periods indicated: -------------------------------------------------------------
For the For the
Year Ended Year Ended
May 30, May 31,
------------ ----------------------------------------
1997 1996 1995 1994 1993
------------ -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.61 $10.70 $10.52 $10.71 $10.25
- -----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.50 0.52 0.52 0.53 0.57
Net realized and unrealized gain (loss) on investments 0.17 (0.10) 0.20 (0.19) 0.46
- -----------------------------------------------------------------------------------------------------------------
Total income from investment operations 0.67 0.42 0.72 0.34 1.03
- -----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income (0.50) (0.51) (0.54) (0.53) (0.57)
Distributions from net realized gain on investments 0.00 0.00 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.50) (0.51) (0.54) (0.53) (0.57)
- -----------------------------------------------------------------------------------------------------------------
Net asset value - end of period $10.78 $10.61 $10.70 $10.52 $10.71
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Total return 6.46% 3.97% 7.16% 3.22% 10.27%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $21,348 $13,922 $10,792 $10,553 $7,326
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.50% 0.44% 0.42% 0.27% 0.22%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets 4.73% 4.87% 5.03% 4.98% 5.45%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets without fee waivers 1.21% 1.43% 1.62% 1.59% 1.88%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratio of net investment income
to average net assets
without fee waivers 4.02% 3.88% 3.83% 3.65% 3.79%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (1) 30.78% 10.23% 3.15% 9.76% 1.82%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 30, 1997 were
$5,301,891 and $12,283,792, respectively.
<PAGE>
NOTES TO FINANCIAL STATEMENTS WESTCORE FUNDS ANNUAL REPORT MAY 30, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Westcore Trust ("the Trust") is registered under the Investment Company Act
of 1940, as amended, as an open-ended management investment company. Interests
in the Westcore MIDCO Growth, Westcore Blue Chip, Westcore Small-Cap
Opportunity, Westcore Growth and Income, Westcore Intermediate-Term Bond,
Westcore Long-Term Bond and Westcore Colorado Tax-Exempt Funds ("the Funds") are
represented by separate classes of beneficial interest of the Trust, which is
organized as a Massachusetts business trust. The Funds, for book and tax
purposes, have a fiscal year of May 31. From October 11, 1993 to September 30,
1995, Westcore MIDCO Growth, Westcore Small-Cap Opportunity, Westcore Growth and
Income and Westcore Intermediate-Term Bond Funds offered Institutional and
Retail classes of shares with a front-end load and their own
distribution/administrative service plan. On October 1, 1995 the Retail class
was merged into the Institutional class at the respective net asset value per
share. The distribution/administrative service plan on the Retail class was
discontinued. The front-end sales load on all the Funds was also discontinued.
The following is a summary of significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. The actual results could differ from those estimates.
INVESTMENT VALUATION - Securities of the Funds are valued at 4:00 p.m.
(Eastern time) on each trading day. Listed and unlisted securities for which
such information is regularly reported are valued at the last sales price of the
day or, in the absence of sales, at values based on the average closing bid and
asked price. Securities for which market quotations are not readily available
are valued under procedures established by the Board of Trustees to determine
fair value in good faith. Short-term securities having a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
FEDERAL INCOME TAXES - It is the Funds' policy to continue to comply with
the provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to shareholders.
Therefore, no federal income tax provision is required. At May 30, 1997 the
Westcore Intermediate-Term Bond and Westcore Colorado Tax-Exempt Funds had
available for federal income tax purposes unused capital loss carryovers of
approximately $1,790,000 and $29,000, respectively, which will expire through
2005.
During the year ended May 30, 1997 the Westcore MIDCO Growth Fund had a
redemption-in-kind in the amount of $8,041,655 based on the fair value of the
individual securities within the portfolio. This transaction realized a gain of
$2,909,055, which will be recognized as a permanent difference for tax purposes.
DISTRIBUTIONS - Distributions of net investment income are distributed
annually for the Westcore MIDCO Growth Fund, quarterly for the Westcore Blue
Chip, Westcore Small-Cap Opportunity and Westcore Growth and Income Funds and
monthly for the Westcore Intermediate-Term Bond, Westcore Long-Term Bond and
Westcore Colorado Tax-Exempt Funds. Distributions of net realized gains, if
any, are declared at least once each year. Distributions to shareholders are
recorded on the ex-dividend date.
ORGANIZATION COSTS - Costs incurred in connection with the organization,
initial registration and public offering of shares have been paid by the Funds.
These costs are being amortized over the period of benefit, but not to exceed
sixty (60) months, from the Funds' commencement of operations.
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES - From October 11,
1993 to September 30, 1995 the Westcore MIDCO Growth, Westcore Small-Cap
Opportunity, Westcore Growth and Income and Westcore Intermediate-Term Bond
Funds allocated income, expenses (other than the class specific expenses) and
gains and losses daily to each class of shares based upon their relative
proportion of net assets represented by each class. Operating expenses directly
attributable to a specific class were charged against the operations of that
class.
OTHER - Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividend income is recorded
on the ex-dividend date. Interest income, which includes amortization of
premiums and accretion of discounts, is accrued and recorded daily. Realized
gains and losses from investment transactions and unrealized appreciation and
depreciation of investments are reported on an identified cost basis which is
the same basis the Funds use for federal income tax purposes.
<PAGE>
2. SHARES OF BENEFICIAL INTEREST
On May 30, 1997, there was an unlimited number of no par value shares of
beneficial interest authorized for each fund. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
WESTCORE MIDCO GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS:
Shares sold 9,603,541 $198,972,553 7,169,895 $142,973,591
Shares issued in reinvestment of dividends 3,872,935 76,722,845 949,284 18,492,060
Shares exchanged from retail class into institutional class 0 0 1,521,981 30,820,114
- ------------------------------------------------------------------------------------------------------------------------------------
Total 13,476,476 275,695,398 9,641,160 192,285,765
Shares redeemed (13,940,907) (291,413,092) (4,438,468) (91,040,333)
- ------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase (464,431) $(15,717,694) 5,202,692 $101,245,432
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL CLASS:
Shares sold 0 $0 101,559 $1,926,763
Shares issued in reinvestment of dividends 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total 0 0 101,559 1,926,763
Shares redeemed 0 0 (78,351) (1,493,666)
Shares exchanged from retail class into institutional class 0 0 (1,524,993) (30,820,114)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease 0 $0 (1,501,785) $(30,387,017)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WESTCORE BLUE CHIP FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
<S> <C> <C>
Shares sold 1,224,040 1,073,492
Shares issued in reinvestment of dividends 529,150 333,778
- ------------------------------------------------------------------------------------------------------------------------------------
Total 1,753,190 1,407,270
Shares redeemed (2,013,538) (1,059,656)
- ------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in shares (260,348) 347,614
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
WESTCORE SMALL-CAP
OPPORTUNITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS:
Shares sold 678,008 $14,705,255 497,964 $9,077,026
Shares issued in reinvestment of dividends 46,681 1,029,681 24,014 444,359
Shares exchanged from retail class into institutional class 0 0 58,947 1,071,652
- ------------------------------------------------------------------------------------------------------------------------------------
Total 724,689 15,734,936 580,925 10,593,037
Shares redeemed (339,754) (7,668,918) (67,659) (1,258,285)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase 384,935 $8,066,018 513,266 $9,334,752
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL CLASS:
Shares sold 0 $0 2,359 $40,334
Shares issued in reinvestment of dividends 0 0 49 886
- ------------------------------------------------------------------------------------------------------------------------------------
Total 0 0 2,408 41,220
Shares redeemed 0 0 (2,064) (35,334)
Shares exchanged from retail class into institutional class 0 0 (58,914) (1,071,652)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease 0 $0 (58,570) $(1,065,766)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WESTCORE GROWTH AND INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS:
Shares sold 427,351 $5,355,720 497,475 $5,580,398
Shares issued in reinvestment of dividends 181,615 2,141,808 150,670 1,624,668
Shares exchanged from retail into institutional class 0 0 349,815 3,921,431
- ------------------------------------------------------------------------------------------------------------------------------------
Total 608,966 7,497,528 997,960 11,126,497
Shares redeemed (1,078,894) (13,587,574) (1,511,113) (17,018,539)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease (469,928) $(6,090,046) (513,153) $(5,892,042)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL CLASS:
Shares sold 0 $0 13,368 $145,165
Shares issued in reinvestment of dividends 0 0 1,911 21,221
- ------------------------------------------------------------------------------------------------------------------------------------
Total 0 0 15,279 166,386
Shares redeemed 0 0 (34,087) (373,642)
Shares exchanged from retail into institutional class 0 0 (349,504) (3,921,431)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease 0 $0 (368,312) $(4,128,687)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
WESTCORE INTERMEDIATE-TERM BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS:
Shares sold 1,716,627 $17,545,780 1,832,976 $18,925,545
Shares issued in reinvestment of dividends 339,628 3,461,645 401,174 4,126,393
Shares exchanged from retail class into institutional class 0 0 270,324 2,781,631
- ------------------------------------------------------------------------------------------------------------------------------------
Total 2,056,255 21,007,425 2,504,474 25,833,569
Shares redeemed (4,107,727) (41,975,506) (3,786,468) (39,148,063)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease (2,051,472) $(20,968,081) (1,281,994) $(13,314,494)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL CLASS:
Shares sold 0 $0 39,293 $404,991
Shares issued in reinvestment of dividends 0 0 4,402 45,023
- ------------------------------------------------------------------------------------------------------------------------------------
Total 0 0 43,695 450,014
Shares redeemed 0 0 (23,810) (245,474)
Shares exchanged from retail class into institutional class 0 0 (270,061) (2,781,631)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease 0 $0 (250,176) $(2,577,091)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WESTCORE LONG-TERM BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
<S> <C> <C>
Shares sold 385,322 628,595
Shares issued in reinvestment of dividends 179,905 168,046
- ------------------------------------------------------------------------------------------------------------------------------------
Total 565,227 796,641
Shares redeemed (1,094,841) (1,570,539)
- ------------------------------------------------------------------------------------------------------------------------------------
Net decrease in shares (529,614) (773,898)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WESTCORE COLORADO TAX-EXEMPT FUND
- ------------------------------------------------------------------------------------------------------------------------------------
For the Year For the Year
Ended May 30, 1997 Ended May 31, 1996
------------------------- --------------------------
<S> <C> <C>
Shares sold 791,641 334,258
Shares issued in reinvestment of dividends 57,178 32,305
- ------------------------------------------------------------------------------------------------------------------------------------
Total 848,819 366,563
Shares redeemed (179,890) (63,463)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in shares 668,929 303,100
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
<TABLE>
<CAPTION>
Westcore Westcore Westcore Westcore
MIDCO Blue Small-Cap Growth and
Growth Chip Opportunity Income
Fund Fund Fund Fund
---- ---- ---- ----
<S> <C> <C> <C> <C>
As of May 30, 1997
Gross appreciation (excess of
value over cost) $188,930,096 $19,914,926 $7,109,356 $6,330,345
Gross depreciation (excess of
cost over value) (17,807,069) (139,165) (742,394) (116,314)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation $171,123,027 $19,775,761 $6,366,962 $6,214,031
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Westcore Westcore Westcore
Intermediate- Long-Term Colorado
Term Bond Bond Tax-Exempt
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
As of May 30, 1997
Gross appreciation (excess of
value over cost) $662,862 $869,113 $420,500
Gross depreciation (excess of
cost over value) (473,157) (319,451) (7,845)
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation $189,705 $549,662 $412,655
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
4. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER RELATED
PARTY TRANSACTIONS
The Trust has entered into an advisory agreement with Denver Investment
Advisors LLC, ("DIA") for all Funds. DIA succeeded First Interstate Capital
Management, Inc. ("FICM") as investment advisor to the Westcore Long-Term Bond
and the Westcore Colorado Tax-Exempt Funds on October 1, 1995. The advisory
agreements have been approved by the Trust's Board of Trustees and shareholders
and contain terms and conditions similar to those which were in these Funds'
former advisory agreement.
Pursuant to its advisory agreement with the Trust, DIA is entitled to an
investment advisory fee, computed daily and payable monthly of 0.65%, 0.65%,
1.00%, 0.65%, 0.45%, 0.45% and 0.50% of the average net assets for Westcore
MIDCO Growth, Westcore Blue Chip, Westcore Small-Cap Opportunity, Westcore
Growth and Income, Westcore Intermediate-Term Bond, Westcore Long-Term Bond and
Westcore Colorado Tax-Exempt Funds, respectively.
Wells Fargo Bank, N.A. ("Custodian") is the custodian of the Funds. All
custodial fees were waived by the Custodian for the period June 1, 1996 to
January 21, 1997. In addition, DIA waived all of its advisory fees from the
Westcore Colorado Tax-Exempt Fund. DIA also waived a portion of its advisory
fees on the Westcore Blue Chip, Westcore Small-Cap Opportunity, Westcore Growth
and Income, Westcore Intermediate-Term Bond and Westcore Long-Term Bond Funds.
Certain officers of the Funds are also officers of DIA and ALPS Mutual
Funds Services, Inc., ("ALPS"). All affiliated and access persons, as defined
in the 1940 Act, follow strict guidelines and policies on personal trading as
outlined in the Trust's Code of Ethics.
<PAGE>
4. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER
RELATED PARTY TRANSACTIONS (CONTINUED)
Effective October 1, 1995, ALPS and DIA entered into a co-administration
agreement to serve as the Funds co-administrators. ALPS and DIA are entitled to
receive a fee from each Fund for its administrative services computed daily and
paid monthly, at the annual rate of 0.30% of the Funds' average net assets. For
the year ended May 30, 1997, ALPS and DIA voluntarily waived a portion of their
co-administration fee payable by Westcore Blue Chip, Westcore Small-Cap
Opportunity, Westcore Growth and Income, Westcore Intermediate-Term Bond,
Westcore Long-Term Bond and Westcore Colorado Tax-Exempt Funds.
Expenses for the Funds include legal fees paid to Drinker Biddle & Reath
LLP. A partner of that firm is secretary of the Trust.
Shareholders holding more than 5% of the Funds' outstanding shares as of
May 30, 1997, constituted 39.25% of Westcore MIDCO Growth, 78.27% of Westcore
Blue Chip, 77.33% of Westcore Small-Cap Opportunity, 58.11% of Westcore Growth
and Income, 74.99% of Westcore Intermediate-Term Bond, 80.33% of Westcore
Long-Term Bond and 61.39% of Westcore Colorado Tax-Exempt Fund.
5. RESTRICTED SECURITIES
The Westcore Growth and Income, Westcore Intermediate-Term Bond and Westcore
Long-Term Bond Funds own restricted securities purchased pursuant to Rule 144A
of the Securities Act of 1933 (the Act). Rule 144A securities amount to 1.19%,
4.52% and 3.39% of the Westcore Growth and Income, Westcore Intermediate-Term
Bond and Westcore Long-Term Bond Funds' Net Assets, respectively, at May 30,
1997 and are listed below.
<TABLE>
<CAPTION>
Acquisition Cost Valuation per Unit as Fair Value as
Security Date per Unit of May 30, 1997 of May 30, 1997
-------- ---- -------- --------------- ---------------
<S> <C> <C> <C> <C>
WESTCORE GROWTH AND INCOME FUND
CUC International Inc, 3.00%, 02/15/02 02/07/97 $100.00 $99.00 $247,500
------------
Total $247,500
------------
------------
WESTCORE INTERMEDIATE-TERM BOND FUND
Bayer Corp, 6.50%, 10/01/02 09/26/95 $99.46 $98.444 $1,181,328
Corporate Property Investors,
7.75%, 08/15/04 06/20/96 $100.104 $102.806 $616,834
Jet Equipment Trust Series 95-B,
7.83%, 02/15/15 07/01/95 $100.00 $102.322 $1,059,922
------------
Total $2,858,084
------------
------------
WESTCORE LONG-TERM BOND FUND
Bayer Corp, 6.50%, 10/01/02 09/26/95 $99.46 $98.444 $339,632
Jet Equipment Trust Series 95-B,
7.83%, 02/15/15 07/01/95 $100.00 $102.322 $343,492
------------
Total $683,124
------------
------------
</TABLE>
<PAGE>
6. SHAREHOLDER TAX INFORMATION (UNAUDITED)
Certain tax information regarding the Westcore Trust is required to be
provided to shareholders based upon each Fund's income and distribution for the
taxable year ended May 30, 1997. The information and distributions reported
herein may differ from information and distributions taxable to the shareholders
for the calendar year ended December 31, 1996.
During the fiscal year ended May 30, 1997, 100% of the dividends paid by
the Westcore Colorado Tax-Exempt Fund from net investment income should be
treated as tax-exempt dividends and 100% of the dividends paid by the Westcore
Blue Chip, Westcore Small-Cap Opportunity and Westcore Growth and Income Funds
from net investment income qualify for the corporate dividends received
deduction.
During the fiscal year ended May 30, 1997, the Westcore Funds paid the
following distributions:
<TABLE>
<CAPTION>
Ordinary Capital Total
Income Dividends Gains Distributions Distributions
---------------- ------------------- -------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund $0.00 $3.02 $3.02
Westcore Blue Chip Fund .22 2.88 3.10
Westcore Small-Cap Opportunity Fund .02 .86 .88
Westcore Growth and Income Fund .11 1.44 1.55
</TABLE>
<PAGE>
[Logo] ------------------------------------------------------
Suite 3600 Telephone: (303) 292-5400
555 Seventeenth Street Facsimile: (303) 312-4000
Denver, Colorado 80202-3942
To the Board of Trustees and Shareholders,
Westcore Trust:
We have audited the accompanying statements of assets and liabilities,
including the statements of investments, of the Westcore MIDCO Growth Fund,
Westcore Blue Chip Fund, Westcore Small-Cap Opportunity Fund, Westcore Growth
and Income Fund, Westcore Intermediate-Term Bond Fund, Westcore Long-Term Bond
Fund and Westcore Colorado Tax-Exempt Fund as of May 30, 1997, the related
statements of operations for the year then ended and the statements of changes
in net assets and financial highlights for each of the periods indicated. These
financial statements and financial highlights are the responsibility of the
Trust's Management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at May 30, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Westcore MIDCO
Growth Fund, Westcore Blue Chip Fund, Westcore Small-Cap Opportunity Fund,
Westcore Growth and Income Fund, Westcore Intermediate-Term Bond Fund, Westcore
Long-Term Bond Fund and Westcore Colorado Tax-Exempt Fund of the Westcore Trust
as of May 30, 1997, and the results of their operations, the changes in their
net assets and financial highlights for each of the periods indicated in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Denver, Colorado
June 27, 1997
<PAGE>
PART C - OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Financial Highlights for the Colorado Tax-Exempt Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund, Blue Chip Fund,
Growth and Income Fund, MIDCO Growth Fund and Small-Cap
Opportunity Fund are included in Part A.
(2) Registrant's audited Annual Reports to Shareholders for the
fiscal year ended May 30, 1997 for the Colorado Tax-Exempt Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund, Blue Chip Fund,
Growth and Income Fund, MIDCO Growth Fund and Small-Cap
Opportunity Fund are included in Part B.
(b) Exhibits
(1) (a) Amended and Restated Declaration of Trust of the Registrant
dated November 19, 1987 is incorporated herein by reference
to Exhibit (1) to Post-Effective Amendment No. 21 to
Registrant's Registration Statement.
(b) Amendment to Amended and Restated Declaration of Trust of
the Registrant dated July 16, 1990 is incorporated herein by
reference to Exhibit (1)(b) to Post-Effective Amendment No.
23 to Registrant's Registration Statement ("Post-Effective
Amendment No. 23").
(2) (a) Registrant's Amended and Restated Code of Regulations is
incorporated by reference to Exhibit 2(a) to Post-Effective
Amendment No. 45.
(3) None.
(4) (a) Specimen copy of share certificate for Class A Shares is
incorporated herein by reference to Exhibit No. 4 to
Post-Effective Amendment No. 7.
C-1
<PAGE>
(b) Specimen copy of form of share certificate is incorporated
herein by reference to Exhibit No. 4(b) to Post-Effective
Amendment No. 34 to Registrant's Registration Statement.
(5) (a) Amended and Restated Advisory Agreement dated October 1,
1995 between Registrant and Denver Investment Advisors LLC
relating to Registrant's Cash Reserve Fund (which has not
yet commenced operations), Colorado Tax-Exempt Fund, Growth
and Income Fund (formerly the Equity Income Fund),
Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO
Growth Fund, Blue Chip Fund (formerly the Modern Value
Equity Fund) and Small-Cap Opportunity Fund is incorporated
by reference to Exhibit 5(b) to Post-Effective Amendment No.
44.
(6) (a) Amended and Restated Distribution Agreement dated as of
October 1, 1997 between Registrant and ALPS Securities, Inc.
relating to Registrant's MIDCO Growth Fund, Blue Chip Fund
(formerly the Modern Value Equity Fund), Growth and Income
Fund (formerly the Equity Income Fund), Intermediate-Term
Bond Fund, and Long-Term Bond Fund is filed herewith.
(b) Form of Broker/Dealer Selling Agreement is incorporated
herein by reference to Exhibit No. 6(c) to Post-Effective
Amendment No. 14.
(c) Form of Bank Agreement is incorporated herein by reference
to Exhibit No. 6(d) to Post-Effective Amendment No. 14.
(7) None.
(8) (a) Custody Agreement dated January 22, 1997 between Registrant
and Wells Fargo Bank, N.A. relating to Registrant's MIDCO
Growth Fund, Blue Chip Fund (formerly the Modern Value
Equity Fund), Growth and Income Fund (formerly the Equity
Income Fund), Intermediate-Term Bond Fund, Long-Term Bond
Fund, Colorado Tax-Exempt Fund and Small-Cap Opportunity
Fund is filed herewith.
(b) Consent to Assignment of Custody Agreement between BNY
Western Trust Company and Westcore Trust dated as of August
13, 1997 is filed herewith.
C-2
<PAGE>
(9) (a) Administration Agreement dated as of October 1, 1995 between
Registrant, Denver Investment Advisors LLC, and ALPS Mutual
Funds Services, Inc. relating to Registrant's Cash Reserve
Fund, Colorado Tax-Exempt Fund, Growth and Income Fund
(formerly the Equity Income Fund), Intermediate-Term Bond
Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund
(formerly the Modern Value Equity Fund) and Small-Cap
Opportunity Fund is incorporated by reference to Exhibit
9(a) of Post-Effective Amendment No. 45.
(b) Amended and Restated Transfer Agency and Service Agreement
dated January 4, 1993 as amended from the Transfer Agency
and Service Agreement dated June 1, 1992 between Registrant
and State Street Bank and Trust Company relating to
Registrant's Blue Chip Fund (formerly the Modern Value
Equity Fund), Growth and Income Fund (formerly the Equity
Income Fund), MIDCO Growth Fund, Intermediate-Term Bond
Fund, Long-Term Bond Fund and Colorado Tax-Exempt Fund is
incorporated herein by reference to Exhibit 9(f) to Post-
Effective Amendment No. 36.
(i) Amendment No. 1 dated as of December 28, 1993 relating
to Registrant's Small-Cap Opportunity Fund is
incorporated herein by reference to Exhibit 9(c)(i) to
Post-Effective Amendment No. 38.
(ii) Amendment No. 2 dated as of November 1, 1994 is
incorporated herein by reference to Exhibit 9(c) (ii)
to Post-Effective Amendment No. 44.
(c) Amended and Restated Bookkeeping and Pricing Agreement dated
January 7, 1993 as amended from the Bookkeeping and Pricing
Agreement dated June 1, 1992 between Registrant and ALPS
Securities, Inc. relating to Registrant's Colorado Tax-
Exempt Fund, Intermediate-Term Bond Fund, Long-Term Bond
Fund, Blue Chip Fund (formerly the Modern Value Equity
Fund), Growth and Income Fund (formerly the Equity Income
Fund), MIDCO Growth Fund and Small-Cap Opportunity Fund is
incorporated herein by reference to Exhibit 9(g) to Post-
Effective Amendment No. 36.
C-3
<PAGE>
(d) Indemnification Agreement dated July 17, 1995 between
Registrant and First Interstate Bancorp is incorporated
herein by reference to Exhibit 9(h) to Post-Effective
Amendment No. 44.
(e) (i) Operating Agreement dated as of November 27, 1995
between Charles Schwab & Co., Inc. and Westcore Trust
relating to the Cash Reserve Fund, Colorado Tax-Exempt
Fund, Growth and Income Fund (formerly the Equity
Income Fund), Intermediate-Term Bond Fund, Long-Term
Bond Fund, MIDCO Growth Fund, Blue Chip Fund (formerly
the Modern Value Equity Fund) and Small-Cap Opportunity
Fund is incorporated by reference to Exhibit 9(e) to
Post-Effective Amendment No. 45.
(ii) Institutional Services Agreement dated as of November
27, 1995 between Charles Schwab & Co. and Westcore
Trust relating to the Cash Reserve Fund, Colorado Tax-
Exempt Fund, Growth and Income Fund (formerly the
Equity Income Fund), Intermediate-Term Bond Fund, Long-
Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund
(formerly the Modern Value Equity Fund) and Small-Cap
Opportunity Fund is incorporated by reference to
Exhibit 9(e) to Post-Effective Amendment No. 45.
(iii) Retail Services Agreement dated as of March 26, 1996
among Westcore Trust, Denver Investment Advisors LLC
and Charles Schwab & Co., Inc. relating to the Cash
Reserve Fund, Colorado Tax-Exempt Fund, Growth and
Income Fund (formerly the Equity Income Fund),
Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO
Growth Fund, Blue Chip Fund (formerly the Modern Value
Equity Fund) and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(e) to Post-
Effective Amendment No. 45.
C-4
<PAGE>
(iv) Side Letter dated as of March 5, 1996 among ALPS Mutual
Fund Services, Inc., Denver Investment Advisors LLC,
State Street Bank & Trust Company and Westcore Trust
relating to the Cash Reserve Fund, Colorado Tax-Exempt
Fund, Growth and Income Fund (formerly the Equity
Income Fund), Intermediate-Term Bond Fund, Long-Term
Bond Fund, MIDCO Growth Fund, Blue Chip Fund (formerly
the Modern Value Equity Fund) and Small-Cap Opportunity
Fund is incorporated by reference to Exhibit 9(e) to
Post-Effective Amendment No. 45.
(v) Retirement Plan Order Processing Amendment dated as of
February 15, 1996 to the Operating Agreement among
Charles Schwab & Co., Inc., the Charles Schwab Company
and Westcore Trust relating to the Cash Reserve Fund,
Colorado Tax-Exempt Fund, Growth and Income Fund
(formerly the Equity Income Fund), Intermediate-Term
Bond Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund (formerly the Modern Value Equity Fund) and
Small-Cap Opportunity Fund is incorporated by reference
to Exhibit 9(e) to Post-Effective Amendment No. 45.
(vi) Confidentiality Agreement dated as of March 26, 1996
between Charles Schwab & Co., Inc. and Denver
Investment Advisors LLC relating to the Cash Reserve
Fund, Colorado Tax-Exempt Fund, Growth and Income Fund
(formerly the Equity Income Fund), Intermediate-Term
Bond Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund (formerly the Modern Value Equity Fund) and
Small-Cap Opportunity Fund is incorporated by reference
to Exhibit 9(e) to Post-Effective Amendment No. 45.
(vii) Transaction Charges Amendment to Services Agreement
dated as of July 1, 1997 is filed herewith.
C-5
<PAGE>
(f) (i) DST FAN WEB Services Agreement dated as of August
1, 1997 among DST Systems, Inc., Westcore Trust
and Denver Investment Advisors LLC is filed
herewith.
(ii) Indemnification Agreement dated as of August 1,
1997 between Denver Investment Advisors LLC and
Westcore Trust is filed herewith.
(g) Shareholder Service Agreement dated as of July 1, 1996
between Wells Fargo Bank, N.A. and Westcore Trust is filed
herewith.
(h) Agency Trading Agreement dated as of May 19, 1997 among Bank
of Oklahoma, N.A., its affiliate Alliance Trust Company,
N.A. and Westcore Trust is filed herewith.
(i) Shareholder Service Agreement dated as of November 22, 1996
among First Trust Corporation, Denver Investment Advisors
LLC and Westcore Trust is filed herewith.
(10) (a) Opinion and consent of counsel with respect to Registrant's
24f-2 Notice was filed with the Securities and Exchange
Commission on July 29, 1997.
(b) Opinion and consent of counsel with respect to Registrant's
registration of Shares pursuant to Rule 24e-2 is filed
herewith.
(11) (a) Consent of Drinker Biddle & Reath LLP.
(b) Consent of Deloitte & Touche LLP.
(12) None.
(13) None.
(14) (a) Prototype Westcore IRA Application, Custodial Account
Statement and Disclosure Statement is filed herewith.
C-6
<PAGE>
(b) Prototype Trust Consultants Inc. 401k Plan
and Engagement Letter is incorporated
herein by reference to Exhibit 14(b) to
Post-Effective Amendment No. 45.
(15) None.
(16) Schedule for Computation of Performance Quotations for
Small-Cap Opportunity Fund is incorporated herein by
reference to Exhibit 16 to Post-Effective Amendment No. 40.
Schedule for Computation of Performance Quotations for
Colorado Tax-Exempt Fund is incorporated herein by reference
to Exhibit (16) to Post-Effective Amendment No. 29.
Schedule for Computation of Performance Quotations for
remaining portfolios incorporated herein by reference to
Exhibit (16) to Post-Effective Amendment No. 23.
(17) Financial Data Schedules as of May 31, 1997.
(18) None.
(19) Powers of Attorney are filed herewith under Rule 483(b)
under the Securities Act of 1933.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by its Board of Trustees. Certain of
Registrant's trustees serve on the board of directors/trustees of certain other
registered investment companies. (See "Management of the Fund - Directors and
Officers" in Part B hereof).
C-7
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES
As of September 8, 1997:
Number of
Title of Class Record Holders
-------------- --------------
Class B Shares
(MIDCO Growth Fund) 7206
Class G Shares
(Long-Term Bond Fund) 204
Class H Shares
(Intermediate-Term Bond Fund) 433
Class I Shares
(Blue Chip Fund) 504
Class J Shares
(Growth and Income Fund) 916
Class S Shares
(Colorado Tax-Exempt Fund) 142
Class X
(Small-Cap Opportunity Fund) 970
Item 27. INDEMNIFICATION
The trustees are indemnified by First Interstate Bancorp ("FIB"), generally
against damages arising out of (i) claims by any person that implementation of
the Agreement and Plan of Reorganization between Pacifica Funds Trust
("Pacifica") and Westcore Trust (the "Plan") constitutes breach or violation of
certain agreements with ALPS Mutual Funds Services, Inc.; and (ii) certain
untrue or alleged untrue statements of material facts or omissions or alleged
omissions of material facts in information furnished by or on behalf of FIB,
intended for use in certain proxy materials or amendments or supplements to the
Registrant's registration statement relating to the Plan.
Under the Plan, Pacifica has agreed to assume certain liabilities of the
Registrant, including certain obligations of the Registrant to indemnify the
Registrant's Trustees acting in their capacity as such with respect to any claim
alleging any breach of fiduciary duty with respect to transactions contemplated
by the Plan or otherwise to the fullest extent permitted by law and the
Registrant's Declaration of Trust as in effect on the date of such Plan.
C-8
<PAGE>
The trustees are indemnified by Denver Investment Advisors LLC generally
against damages arising out of or resulting from use of the Internet financial
access network ("FAN") made available by DST Systems, Inc. The FAN is a
computer and software system which provides an interface between the Internet
and public data network service providers and the Registrant's transfer agent
for the purposes of communication shareholder data and information and/or
transaction requests.
Indemnification of Registrant's trustees, officers and controlling
persons against any and all claims, demands, liabilities and expenses arising
from dissemination of untrue material fact or omission of such material fact by
ALPS is provided for in Section 1.10 of the Amended and Restated Distribution
Agreement filed herewith as Exhibit 6(a).
Indemnification of Registrant's trustees, officers, employees, agents
and controlling persons against any and all losses, claims, damages, liabilities
and expenses arising out of negligence or willful misconduct by Wells Fargo Bank
N.A. ("Wells"), violation by Wells of applicable law, breach by Wells of
material provisions of the Agreement, and breach by Wells of a representation,
warranty or covenant in the Agreement is provided for in Section 15(a) of the
Shareholder Service Agreement included in Exhibit 9(g).
Indemnification of Registrant's trustees, officers, employees, agents
and certain affiliates against any loss, cost, damage, expense and liability
arising from any actual negligent act, omission, intentional misconduct,
material breach of agreement, failure to timely and properly transmit orders and
instructions and cancellation or correction of orders by Bank of Oklahoma
("BOK"), or discrepancies in balances maintained by BOK is provided for in
Section 12(a) of the Agency Trading Agreement included in Exhibit 9(h).
Indemnification of Registrant's principal underwriter against certain
losses is provided for in Section 1.9 of the Distribution Agreement incorporated
herein by reference as Exhibits 6(a). Indemnification of Registrant's
Bookkeeping and Pricing Agent against certain losses is provided for in Section
6 of the Amended and Restated Bookkeeping and Pricing Agreement incorporated
herein by reference as Exhibit 9(c). Registrant has obtained from a major
insurance carrier a trustees' and officers' liability policy covering certain
types of errors and omissions. Registrant will not pay an insurance premium for
insurance coverage which indemnifies for any act for which Registrant itself
cannot indemnify. In addition, Section 9.3 of the Registrant's Amended and
Restated Declaration of Trust dated November 19, 1987, incorporated herein by
reference as Exhibit 1, provides as follows:
C-9
<PAGE>
9.3 INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND EMPLOYEES. The Trust
shall indemnify each of its Trustees against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by him in connection
with the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, in which he may be involved or with which he may be
threatened, while as a Trustee or thereafter, by reason of his being or having
been such a Trustee EXCEPT with respect to any matter as to which he shall have
been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties, PROVIDED that as to any matter
disposed of by a compromise payment by such person, pursuant to a consent decree
or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees to the effect
that if either the matter of willful misfeasance, gross negligence or reckless
disregard of duty, or the matter of bad faith had been adjudicated, it would in
the opinion of such counsel have been adjudicated in favor of such person. The
rights accruing to any person under these provisions shall not exclude any other
right to which he may be lawfully entitled, PROVIDED that no person may satisfy
any right of indemnity or reimbursement hereunder except out of the property of
the Trust. The Trustees may make advance payments in connection with the
indemnification under this Section 9.3, PROVIDED that the indemnified person
shall have given a written undertaking to reimburse the Trust in the event it is
subsequently determined that he is not entitled to such indemnification.
The Trustees shall indemnify representatives and employees of the
Trust to the same extent that Trustees are entitled to indemnification pursuant
to this Section 9.2.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question
C-10
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Section 9.6 of the Registrant's Amended and Restated Declaration of
Trust dated November 19, 1987, incorporated herein by reference as Exhibit 1,
also provides for the indemnification of shareholders of the Registrant.
Section 9.6 states as follows:
9.6 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by reason of his
being or having been an [sic] Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or, in the
case of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets belonging to the classes of Shares owned by
such Shareholder to be held harmless from and indemnified against all loss and
expense arising from such liability. The Trust shall, upon request by the
Shareholder, assume the defense of any claim made against any Shareholder for
any act or obligations of the Trust and satisfy any judgment thereon from such
assets.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
To Registrant's knowledge, none of the directors or senior executive
officers of Denver Investment Advisors LLC, except those set forth below, is, or
has been at any time during Registrant's past two fiscal years, engaged in any
other business, profession, vocation or employment of a substantial nature. Set
forth below are the names and principal businesses of the directors and certain
of the senior executive officers of Denver Investment Advisors LLC who are or
have been engaged in any other business, profession, vocation or employment of a
substantial nature during the past two years.
C-11
<PAGE>
DENVER INVESTMENT ADVISORS LLC
<TABLE>
<CAPTION>
Position
with Other
Denver Investment Business Type of
Name Advisors LLC Connections Business
- ---- ----------------- ----------- --------
<S> <C> <C> <C>
Jeff Adams Manager/Vice President None N/A
Todger Anderson Executive Manager/President President of Blue Chip Value Fund, Investment Company,
Inc., Tokyo Inc. Restaurant
Terri Baldwin Vice President None N/A
Leo Beserra Vice President None N/A
Glen Cahill Vice President None N/A
Will Chester Vice President None N/A
John Cormey Vice President Vice President of Blue Chip Value Investment Company
Fund, Inc.
Mary Ellen Cox Vice President None N/A
Kathleen Duggan Vice President None N/A
Janet Gardiner Vice President None N/A
Les Garrison Vice President None N/A
Caleb F. Gates, Jr. Vice President None N/A
Dean Graves Vice President None N/A
Grafton Jhung Vice President None N/A
Doug Kidd Vice President None N/A
Dennis Larkin Manager/Vice President None N/A
Robert O. Lindig Vice President Director of Hamilton Manufacturing Manufacturing
Corp. Company
Alex Lock Vice President None N/A
Larry Luchini Manager/Vice President None N/A
JoAnn Nearents Vice President None N/A
Kenneth V. Penland Executive Manager/Chairman Chairman of the Board of Blue Chip Investment Company
Value Fund, Inc.
Charlotte Petersen Vice President None N/A
Jerome Powers Vice President None N/A
</TABLE>
C-12
<PAGE>
<TABLE>
<CAPTION>
Position
with Other
Denver Investment Business Type of
Name Advisors LLC Connections Business
- ---- ----------------- ----------- --------
<S> <C> <C> <C>
Gerald Peterson Vice President None N/A
Jerome Powers Vice President None N/A
Varilyn Schock Vice President Vice President of Blue Chip Value Investment Company
Fund, Inc.
Mil Schulhof Vice President None N/A
Tom Stevens Vice President None N/A
Dave Stueber Vice President/Manager None N/A
</TABLE>
Item 29. PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as the distributor for the
Registrant and the following investment companies: Financial Investors Trust,
Stonebridge Growth Fund, Inc., Stonebridge Aggressive Growth Fund, Inc. and
First Funds.
(b) To the best of Registrant's knowledge, the directors and executive
officers of ALPS Mutual Funds Services, Inc., are as follows:
Positions and Positions and
Name and Principal Offices with Offices with
Business Address ALPS Registrant
- ------------------ ------------- -------------
W. Robert Alexander Chairman None
and CEO
Arthur J. L. Lucey Secretary, None
President and Director
James V. Hyatt General Counsel None
Thomas A. Carter Chief Financial Officer None
Edmund Burke Senior Vice President None
William Paston Vice President None
Chris Woessner Director None
Rick Pederson Director None
C-13
<PAGE>
The principal business address for each of the above directors and
executive officers is 370 Seventeenth Street, Suite 3100, Denver, Colorado
80202.
(c) None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Denver Investment Advisors LLC, 1225 17th Street, 26th Floor, Denver,
Colorado 80202 (records relating to its function as investment adviser
for Registrant's Colorado Tax-Exempt Fund, MIDCO Growth Fund, Blue
Chip Fund (formerly the Modern Value Equity Fund), Long-Term Bond
Fund, Small-Cap Opportunity Fund, Growth and Income Fund (formerly the
Equity Income Fund) and Intermediate-Term Bond Fund).
(2) ALPS Mutual Funds Services, Inc., 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202 (records relating to its functions as
distributor, administrator and bookkeeping and pricing agent for each
of Registrant's investment portfolios).
(3) State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02110 (records relating to its functions as transfer agent for each of
the Registrant's investment portfolios).
(4) Drinker Biddle & Reath LLP, Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107-3496 (Registrant's
Declaration of Trust, Code of Regulations and Minute Books).
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a
prospectus is delivered, a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
C-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, and State of Colorado, on the 26th day of September, 1997.
WESTCORE TRUST
Registrant
By: /s/ Kenneth V. Penland
----------------------
Kenneth V. Penland
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment to Registrant's Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
*/s/ Jack D. Henderson
- ----------------------
Jack D. Henderson Chairman of the
Board of Trustees September 26, 1997
*/s/ McNeil S. Fiske
- ----------------------
McNeil S. Fiske Trustee September 26, 1997
*/s/ James B. O'Boyle
- ----------------------
James B. O'Boyle Trustee September 26, 1997
*/s/ Robert L. Stamp
- ----------------------
Robert L. Stamp Trustee September 26, 1997
*/s/ Lyman Seely
- ----------------------
Lyman Seely Trustee September 26, 1997
*/s/ Kenneth V. Penland President (Principal
- ---------------------- Executive Officer) September 26, 1997
Kenneth V. Penland
*/s/ Jasper Frontz Treasurer (Principal September 26, 1997
- ---------------------- Financial Officer
Jasper Frontz and Chief Accounting
Officer)
*By: /s/ Kenneth V. Penland
----------------------
Kenneth V. Penland
Attorney-in-fact
C-15
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(6)(a) Amended and Restated Distribution Agreement dated as of
October 1, 1997.
(8)(a) Custody Agreement dated January 22, 1997.
(8)(b) Consent of Assignment of Custody Agreement dated as of
August 13, 1997.
(9)(e)(vii) Transaction Charges Amendment to Services Agreement dated as
of July 1, 1997.
(9)(f)(i) DST FAN WEB Services Agreement dated as of August 1, 1997.
(9)(f)(ii) Indemnification Agreement dated as of August 1, 1997.
(9)(g) Shareholder Service Agreement dated as of July 1, 1996.
(9)(h) Agency Trading Agreement dated as of May 19, 1997.
(9)(i) Shareholder Service Agreement dated as of November 22, 1996.
(10)(b) Opinion and consent of counsel.
(11)(a) Consent of Drinker Biddle & Reath LLP.
(11)(b) Consent of Deloitte & Touche LLP.
(14)(a) Prototype Westcore IRA Application, Custodial Account
Statement and Disclosure Statement.
(17) Financial Data Schedules.
(19) Powers of Attorney.
<PAGE>
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
October 1, 1997
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 2700
Denver, CO 80202
Dear Sirs:
This is to confirm that in consideration of the agreements hereinafter
contained, the undersigned, Westcore Trust, a Massachusetts business trust (the
"Trust"), has agreed that you shall be, for the period of this Agreement, the
distributor of shares of beneficial interest (the "Shares") of the Trust's MIDCO
Growth Fund, Blue Chip Fund, Long-Term Bond Fund, Intermediate-Term Bond Fund,
Growth and Income Fund, Small-Cap Opportunity Fund and Colorado Tax-Exempt Fund
(the "Funds").
1. SERVICE AS DISTRIBUTOR
1.1 You will act as agent for the distribution of Shares in
accordance with the instructions of the Trust's Board of Trustees and the
registration statement and prospectuses then in effect with respect to the Funds
under the Securities Act of 1933, as amended, and will transmit promptly any
orders received by you for the purchase or redemption of Shares either directly
to the Trust's transfer agent for the Fund involved or to any qualified
broker/dealer for transmittal to said agent.
1.2(a) You agree to use your best efforts to solicit orders for the
sale of Shares. You, at your own expense, shall finance appropriate activities
which you deem reasonable which are primarily intended to result in the sale of
Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. In addition, you will provide one or more persons, during
normal business hours, to respond to telephone questions with respect to the
Funds. It is contemplated that you will enter into selling agreements with
qualified broker/dealers and other persons with respect to the offering of
Shares to the public, and in so doing you will act only on your own behalf as
principal.
1.2(b) All Shares of the Funds offered for sale by you shall be
offered for sale to the public at a price per share (the "offering price") equal
to (a) their net asset value
<PAGE>
(determined in the manner set forth in the Trust's Declaration of Trust and then
current prospectuses) plus, except to those classes of persons set forth in the
then current prospectuses (b) a sales charge which shall be the percentage of
the offering price of such shares as set forth in the Trust's then current
prospectuses. The offering price, if not an exact multiple of one cent, shall
be adjusted to the nearest cent. Concessions by you to broker/dealers and other
persons shall be set forth in either the selling agreements between you and such
broker/dealers and persons as from time to time amended, or if such concessions
are described in the Trust's then current prospectuses, shall be as so set
forth. No broker/dealer or other person who enters into a selling agreement
with you shall be authorized to act as agent for the Trust in connection with
the offering or sale of its Shares to the public or otherwise.
1.2(c) If any Shares sold by the Trust are redeemed or repurchased
by the Trust or by you as agent or are tendered for redemption within seven
business days after the date of confirmation of the original purchase of said
Shares, you shall forfeit the amount above the net asset value received by you
in respect of such Shares, provided that the portion, if any, of such amount
re-allowed by you to broker/dealers or other persons shall be repayable to the
Trust only to the extent recovered by you from the broker/dealer or other person
concerned. You shall include in the forms of agreement with such broker/dealers
and other persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Trust or by you as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
1.3 You shall act as distributor of the Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, the Trust's
officers may decline to accept any orders for, or make any sales of, any Shares
until such time as they deem it advisable to accept such orders and to make such
sales and the Trust shall advise you promptly of such determination.
1.5 The Trust agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and
-2-
<PAGE>
for supplying information, prices and other data to be furnished by the Trust
hereunder.
1.6 The Trust agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of the Trust's officers in connection
with the qualification of Shares for sale in such states as you may designate to
the Trust and the Trust may approve, and the Trust agrees to pay all expenses
which may be incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a broker under State or
Federal laws and, except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.7 The Trust shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to the Trust
and the Shares as you may reasonably request, and the Trust warrants that the
statements contained in any such information, when so signed by the Trust's
officers, shall be true and correct. The Trust also shall furnish you upon
request with: (a) annual audited reports of the Trust's books and accounts with
respect to each of the Funds, made by independent public accountants regularly
retained by the Trust, (b) semi-annual reports with respect to each of the Funds
prepared by the Trust, and (c) from time to time such additional information
regarding the Trust's financial condition as you may reasonably request.
1.8 The Trust represents to you that all registration statements and
prospectuses filed by the Trust with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the Shares have
been prepared in conformity with the requirements of said Act and rules and
regulations of the Securities and Exchange Commission thereunder. As used in
this agreement the terms "registration statement" and "prospectus" shall mean
any registration statement and prospectus (together with the related statement
of additional information) filed with the Securities and Exchange Commission
with respect to any of the Shares and any amendments and supplements thereto
which at any time shall have been filed with said Commission. The Trust
represents and warrants to you that any registration statement and prospectus,
when such registration statement becomes effective, will contain all statements
required to be stated therein in conformity with said Act and the rules and
regulations of said Commission; that all statements of fact contained in any
such registration statement and prospectus will be materially true and correct
when such registration statement becomes effective; and that neither any
registration statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a material fact or
-3-
<PAGE>
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Trust may but shall not be obligated
to propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as, in the light
of future developments, may, in the opinion of the Trust's counsel, be necessary
or advisable. If the Trust shall not propose such amendment or amendments
and/or supplement or supplements within fifteen days after receipt by the Trust
of a written request from you to do so, you may, at your option, terminate this
agreement. The Trust shall not file any amendment to any registration statement
or supplement to any prospectus without giving you reasonable notice thereof in
advance; provided, however, that nothing contained in this agreement shall in
any way limit the Trust's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of whatever
character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
1.9 The Trust authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of Shares. The
Trust agrees to indemnify, defend and hold you, your several officers and
directors, and any person who controls you within the meaning of Section 15 of
the Securities Act of 1933, as amended, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon any
untrue statement, or alleged untrue statement, of a material fact contained in
any registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Trust's
agreement to indemnify you, your officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or prospectus in reliance
upon and in conformity with information furnished to the Trust or its counsel by
you and used in the preparation thereof; and provided further that the Trust's
agreement to indemnify you and the Trust's representations and warranties herein
set forth shall not be deemed to cover any liability to the Trust or its
shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless
-4-
<PAGE>
disregard of your obligations and duties under this agreement. The Trust's
agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust's
being notified of any action brought against you, your officers or directors, or
any such controlling person, such notification to be given by letter or by
telegram addressed to the Trust at its principal office within ten days after
the summons or other first legal process shall have been served. The failure so
to notify the Trust of any such action shall not relieve the Trust from any
liability which the Trust may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Trust's indemnity
agreement contained in this paragraph 1.9. The Trust will be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, such defense shall be conducted by counsel of good standing
chosen by the Trust and approved by you. In the event the Trust elects to
assume the defense of any such suit and retain counsel of good standing approved
by you which approval shall not be unreasonably withheld, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Trust does not elect to assume
the defense of any such suit, or in case you do not reasonably approve of
counsel chosen by the Trust, the Trust will reimburse you, your officers and
directors, or the controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained by you or them.
The Trust's indemnification agreement contained in this paragraph 1.9 and the
Trust's representations and warranties in this agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of you, your officers and directors, or any controlling person, and shall
survive the delivery of any Shares. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your several officers and
directors, and their respective estates, and to the benefit of any controlling
persons and their successors. The Trust agrees promptly to notify you of the
commencement of any litigation or proceedings against the Trust or any of its
officers or trustees in connection with the issue and sale of any of the Shares.
1.10 You agree to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its officers or
trustees, or any such controlling person, may incur under the Securities Act of
1933, as amended, or under common law or otherwise, but
-5-
<PAGE>
only to the extent that such liability or expense incurred by the Trust, its
officers or trustees, or such controlling person resulting from such claims or
demands, shall arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished by you to the
Trust or its counsel and used in the Trust's registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished by you to the Trust or its counsel
and required to be stated in such answers or necessary to make such information
not misleading. Your agreement to indemnify the Trust, its officers and
trustees, and any such controlling person, as aforesaid, is expressly
conditioned upon your being notified of any action brought against the Trust,
its officers or trustees, or any such controlling person, such notification to
be given by letter or telegram addressed to you at your principal office within
ten days after the summons or other first legal process shall have been served.
You shall have the right to control the defense of such action, with counsel of
your own choosing, satisfactory to the Trust, if such action is based solely
upon such alleged misstatement or omission on your part, and in any other event
the Trust, its officers or trustees or such controlling person shall each have
the right to participate in the defense or preparation of the defense of any
such action. The failure so to notify you of any such action shall not relieve
you from any liability which you may have to the Trust, its officers or
trustees, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
your indemnity agreement contained in this paragraph 1.10.
1.11 No Shares shall be offered by either you or the Trust under any
of the provisions of this agreement and no orders for the purchase or sale of
such Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as current prospectuses as
required by Section 10 of said Act, as amended, are not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Trust's obligation to repurchase Shares from any shareholder in
accordance with the provisions of the prospectuses or Declaration of Trust.
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1.12 The Trust agrees to advise you promptly in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectuses then in effect;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the registration
statement or prospectuses then in effect or the initiation of any proceeding for
that purpose;
(c) of the happening of any event which makes untrue any statement of
a material fact made in the registration statement or prospectuses then in
effect or which requires the making of a change in such registration statement
or prospectuses in order to make the statements therein not misleading; and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus which may
from time to time be filed with the Securities and Exchange Commission.
2 TERM
2.1 This agreement shall become effective as of the date hereof and,
unless sooner terminated, shall continue until September 30 1998, and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (i) the Trust's Board
of Trustees or (ii) the vote of a majority (as defined in the Investment Company
Act of 1940) of the Funds' outstanding Shares, provided that in either event its
continuance also is approved by a majority of the Trust's trustees who are not
"interested persons" (as defined in said Act) of any party to this agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This agreement is terminable without penalty, on not less than 60
days' notice, by the Trust's Board of Trustees, by vote of the holders of a
majority (as defined in said Act) of the Funds' outstanding Shares, or by you.
This agreement will also terminate automatically in the event of its assignment
(as defined in said Act).
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2.2 Upon effectiveness of this Agreement, the current Distribution
Agreement between the Trust and ALPS Mutual Funds Services, Inc. is deemed to be
terminated by consent of the parties thereto, with a waiver of any applicable
notice.
3 MISCELLANEOUS
3.1 The Trust recognizes that from time to time your directors,
officers and employees may serve as directors, officers and employees of other
corporations or business trusts (including other investment companies) and that
such other corporations and trusts may include the name ALPS as part of their
name, and that you or your affiliates may enter into investment advisory or
other agreements with such other corporations and trusts.
3.2 The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 which is hereby referred
to and a copy of which is on file at the office of the Sate Secretary of the
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of its trustees, representatives or agents are made not individually, but in
such capacity, and are not binding upon any of the trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust property belonging to such class for the enforcement of any claims
against the Trust.
3.3 No provision of this agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
3.4 This agreement shall be governed by Colorado law.
Please confirm that the foregoing is in accordance
with your understanding by indicating your acceptance hereof at
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the place below indicated, whereupon it shall become a binding agreement between
us.
Very truly yours,
WESTCORE TRUST
By:/s/ Jack D. Henderson
---------------------
Jack D. Henderson
Title: Vice President
Accepted:
ALPS MUTUAL FUNDS SERVICES, INC.
By: /S/ Ned Burke
-------------------------------
Ned Burke
Title: Authorized Representative
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CUSTODY AGREEMENT
BLUE CHIP, MIDCO GROWTH
COLORADO TAX-EXEMPT, GROWTH AND INCOME
INTERMEDIATE-TERM BOND, LONG TERM BOND, SMALL-CAP OPPORTUNITY
WESTCORE TRUST
1225 17TH. STREET, 26TH. FLOOR
DENVER, CO 80202
This Agreement is made as of this 22nd day of January, 1997 (the
"Agreement"), by and between WESTCORE TRUST (the "Company"), on behalf of the
Blue Chip, Midco Growth, Colorado Tax-Exempt, Growth and Income,
Intermediate-Term Bond, Long-Term Bond and Small-Cap Opportunity Funds (each a
"Fund" and, collectively, the "Funds"), and WELLS FARGO BANK, N.A. (the
"Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth, the
Company and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning:
1. "Authorized Person" shall be deemed to include the treasurer, the
controller or any other person, whether or not any such person is an Officer or
employee of the Company, duly authorized by the Board of Trustees ("Trustees")
to give Oral Instructions and Written Instructions on behalf of a Fund and
listed in the Certificate attached hereto as Appendix A or such other
Certificate as may be received from time to time by the Custodian.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor(s) and its nominee(s).
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian, which is actually received by the Custodian and signed on behalf
of a Fund by an Officer of the Company.
4. "Clearing Member" shall mean a registered broker-dealer that is a
member of a national securities exchange
<PAGE>
qualified to act as a custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing member.
5. "Depository" shall mean The Depository Trust Company ("DTC"),
Participants Trust Company ("PTC"), and any other clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, its successor(s) and its nominee(s), provided the
Custodian has received a certified copy of a resolution of the Board of Trustees
specifically approving deposits in DTC, PTC or such other clearing agency. The
term "Depository" shall further mean and include any person authorized to act as
a depository pursuant to Section 17, Rule 17f-4 or Rule 17f-5 thereunder, under
the Investment Company Act of 1940, its successor(s) and its nominee(s),
specifically identified in a certified copy of a resolution of the Board of
Trustees approving deposits therein by the Custodian.
6. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, or Clearing Member, or in the name of the Company or a Fund for
the benefit of a broker, dealer, or Clearing Member, or otherwise, in accordance
with an agreement between the Company on behalf of a Fund, the Custodian and a
broker, dealer, or Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or moneys of
a Fund shall be deposited and withdrawn from time to time in connection with
such transactions as a Fund may from time to time determine. Securities held in
the Book-Entry System or the Depository shall be deemed to have been deposited
in, or withdrawn from, a Margin Account upon the Custodian's effecting an
appropriate entry on its books and records.
7. "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and interest
by the government of the United States or agencies or instrumentalities thereof,
commercial paper, certificates of deposit and bankers' acceptances, repurchase
and reverse repurchase agreements with respect to the same and bank time
deposits, where the purchase and sale of such securities normally requires
settlement in federal funds on the same date as such purchase or sale.
8. "Officers" shall be deemed to include the President, Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons duly
authorized by the Trustees of the Company to execute any Certificate,
instruction, notice or other instrument on behalf of a Fund and listed in the
Certificate attached hereto as Appendix B or such other
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Certificate as may be received by the Custodian from time to time.
9. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
10. "Reverse Repurchase Agreement" shall mean an agreement pursuant
to which a Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
11. "Short Sale" shall mean the selling of a financial instrument not
owned, for example, in anticipation of a decline in the value of such
instrument.
12. "Security" or "Securities" shall be deemed to include, without
limitation, Money Market Securities, Reverse Repurchase Agreements, common stock
and other instruments or rights having characteristics similar to common stocks,
preferred stocks, debt obligations issued by state or municipal governments and
by public authorities (including, without limitation, general obligations
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase, sell or subscribe for the same, or evidencing or representing
any other rights or interest therein, or any property or assets.
13. "Segregated Security Account" shall mean an account maintained
under the terms of this Agreement as a segregated account, by recordation or
otherwise, within the custody account in which certain Securities and/or other
assets of a Fund shall be deposited and withdrawn from time to time in
accordance with Certificates received by the Custodian in connection with such
transactions as a Fund may from time to time determine.
14. "Shares" shall mean the shares of common stock of a Fund, each of
which, in the case of a Fund having Series, is allocated to a particular Series.
15. "Written Instructions" shall mean written communications actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to verify by codes or
otherwise with a reasonable degree of certainty the authenticity of the sender
of such communication. Written Instructions shall be signed by two Authorized
Persons if required in accordance with resolutions of the Company's Board of
Trustees delivered to the Custodian pursuant to a Certificate.
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ARTICLE II
APPOINTMENT OF A CUSTODIAN
1. The Company on behalf of a Fund hereby constitutes and appoints
the Custodian as custodian of all the Securities and moneys at any time owned by
a Fund during the term of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform all the duties thereof as set forth in this Agreement.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in Article V, a Fund will deliver or
cause to be delivered to the Custodian all Securities and all moneys owned by
it, including cash received for the issuance of its Shares, at any time during
the term of this Agreement. The Custodian will not be responsible for such
Securities and such moneys until actually received by it. The Custodian will be
entitled to reverse any credits made on a Fund's behalf where such credits have
been previously made and moneys are not finally collected. A Fund shall deliver
to the Custodian a certified resolution of the Trustees of the Company
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a certificate actually received by the
Custodian to deposit in the Book-Entry System all Securities eligible for
deposit therein and to utilize the Book-Entry System to the extent possible in
connection with its performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities, loans of
Securities, and deliveries and returns of Securities collateral. Prior to a
deposit of Securities of a Fund in the Depository, a Fund shall deliver to the
Custodian a certified resolution of the Trustees of the Company approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities eligible for deposit
therein and to utilize the Depository to the extent possible in connection with
its performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys of a
Fund deposited in either the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the Custodian acts
in a fiduciary or representative capacity.
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All books and records maintained by the Custodian which relate to a
Fund's participation in the Book-Entry System or use of a Depository will at all
times during the Custodian's regular business hours be open to the inspection of
the Company's duly authorized employees or agents, and the Company will be
furnished with all information in respect of such services rendered to such Fund
as it may require.
2.A. The Custodian shall credit to a separate account in the name of a
Fund all moneys received by it for the account of a Fund, and shall disburse the
same only:
(a) In payment for Securities purchased, as provided in Article IV
hereof;
(b) In payment of dividends or distributions, as provided in Article
VIII hereof;
(c) In payment of original issue or other taxes, as provided in
Article IX hereof;
(d) In payment for Shares redeemed by it, as provided in Article IX
hereof;
(e) Pursuant to Written Instructions setting forth the name(s) and
address(es) of the person(s) to whom the payment is to be made, and the purpose
for which payment is to be made; or
(f) In payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian, as provided in Article XII hereof.
2B. All such securities and non-cash property are to be held or
disposed of by the Custodian for such Fund pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
resolution of the Company's Board of Trustees authorizing the specific
transaction, the Custodian shall have no power or authority to withdraw,
deliver, assign, hypothecate, pledge or otherwise dispose of any such securities
and investments, except in accordance with the express terms provided for in
this Agreement. In no case may any trustee, officer, employee or agent of the
Company withdraw any securities or other non-cash property.
2C. The Custodian will pay out money only upon receipt of securities
(or upon receipt of a copy of the broker's or dealer's confirmation, the payee's
invoice or comparable confirmation with respect to such securities) and will
deliver securities only upon the receipt of money. The Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver securities
and arrange for payment in accordance with the customs prevailing among dealers
in securities.
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<PAGE>
3. Promptly after the close of business on each day, the Custodian
shall furnish a Fund with confirmations and a summary of all transfers to or
from the account of a Fund during said day. Where Securities are transferred to
the account of a Fund, the Custodian shall also by book-entry or otherwise
identify as belonging to a Fund a quantity of Securities in a fungible bulk of
Securities registered in the name of the Custodian (or its nominee) or shown on
the Custodian's account on the books of the Book-Entry System or the Depository.
The Custodian shall furnish a Fund at least monthly with a detailed statement of
the Securities and moneys held for a Fund under this Agreement. The Custodian
shall also furnish the reports required to be furnished to the Trust pursuant to
Rule 17f-4, as well as such periodic and special reports as the Trust may
reasonably require.
4. Except as otherwise provided in Article V, all Securities held
for a Fund which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the Custodian
in that form; all other Securities held for a Fund may be registered in the name
of a Fund, in the name of any duly appointed registered nominee of the Custodian
as the Custodian may from time to time determine, or in the name of the
Book-Entry System or the Depository or their successor(s) or their nominee(s).
The Company agrees to furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the Book-Entry System or
the Depository, any Securities which it may hold for the account of a Fund and
which may from time to time be registered in the name of a Fund. The Custodian
shall hold all such Securities which are not held in the Book-Entry System or in
the Depository in a separate account in the name of a Fund physically segregated
at all times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless
otherwise instructed to the contrary by Written Instruction, the Custodian by
itself, or through the use of the Book-Entry System or the Depository with
respect to the Securities therein deposited, shall, with respect to all
Securities held for a Fund in accordance with this Agreement:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon such
Securities which are called, but only if either (i) the Custodian receives a
written notice of such call, or (ii) notice of such call appears in one or more
of the publications listed in Appendix C annexed hereto, which may be amended at
any time by the Custodian upon five business days' prior notification to a Fund;
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(c) Present for payment and collect the amount payable upon all
Securities which mature;
(d) Surrender Securities in temporary form for definitive Securities;
(e) Execute, as Custodian, any necessary declarations or certificates
of ownership under the federal income tax laws or the laws or regulations of any
other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of a Fund all
rights and similar securities issued with respect to any Securities held by the
Custodian hereunder.
6. Upon receipt of Written Instruction and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or the
Depository, shall:
(a) Execute and deliver to such persons as may be designated in such
Written Instruction proxies, consents, authorizations, and any other
instruments whereby the authority of a Fund as owner of any Securities may be
exercised;
(b) Deliver any Securities held for a Fund in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any Securities held for a Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(d) Make such transfer or exchanges of the assets of a Fund and take
such other steps as shall be stated in said order to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of a Fund; and
(e) Present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which may
be called as specified in the Written Instruction.
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ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase or sale (as applicable) of
Securities by a Fund, other than a purchase or sale of any Reverse Repurchase
Agreement, a Fund shall deliver to the Custodian (i) with respect to each
purchase or sale of Securities which are not Money Market Securities, a Written
Instruction; and (ii) with respect to each purchase or sale of Money Market
Securities, a Written Instruction, specifying with respect to each such purchase
or sale: (a) the name of the issuer and the title of the Securities; (b) the
number of shares or the principal amount purchased or sold and accrued interest,
if any (c) the date of purchase or sale and settlement date; (d) the purchase or
sale price per unit; (e) the total amount payable upon such purchase or sale;
(f) the name of the person from whom or the broker through whom the purchase or
sale was made, and the name of the clearing broker, if any; (g) in the case of a
purchase, the name of the broker to which payment is to be made; and (h) in the
case of a sale, the name of the broker to whom the Securities are to be
delivered. In the case of a purchase, the Custodian shall, upon receipt of
Securities purchased by or for a Fund, pay out of the moneys held for the
account of a Fund the total amount payable to the person from whom, or the
broker through whom, the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Written Instruction. In the case
of a sale, the Custodian shall deliver the Securities upon receipt of the total
amount payable to a Fund upon such sale, provided that the same conforms to the
total amount payable as set forth in such Written Instruction. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
ARTICLE V
SHORT SALES
1. Promptly after any short sale, a Fund shall deliver to the
Custodian a Written Instruction specifying: (a) the name of the issuer and the
title of the Security; (b) the number of shares or principal amount sold, and
accrued interest or dividends, if any; (c) the dates of the sale and settlement;
(d) the sale price per unit; (e) the total amount credited to a Fund upon such
sale, if any (f) the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in a Segregated Security Account; and (g) the name of the
broker through which such short sale was made. The Custodian shall upon its
receipt of a statement from such broker confirming such sale and that the total
amount credited to a Fund upon such sale, if any, as specified in the
Certificate is held by such broker for
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the account of the Custodian (or any nominee of the Custodian) as custodian of a
Fund, issue a receipt or make the deposits into the Segregated Security Account
specified in the Written Instruction.
2. In connection with the closing-out of any short sale, a Fund
shall promptly deliver to the Custodian a Written Instruction specifying with
respect to each such closing-out: (a) the name of the issuer and the title of
the Security; (b) the number of shares or the principal amount, and accrued
interest or dividends, if any, required to effect such closing-out to be
delivered to the broker; (c) the dates of the closing-out and settlement; (d)
the purchase price per unit; (e) the net total amount payable to a Fund upon
such closing-out; (f) the net total amount payable to the broker upon such
closing-out; (g) the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Segregated Security Account; and (h) the name of
the broker through which a Fund is effecting such closing-out. The Custodian
shall, upon receipt of the net total amount payable to a Fund upon such
closing-out and the return and/or cancellation of the receipts, if any, issued
by the Custodian with respect to the short sale being closed-out, pay out the
moneys held for the account of a Fund to the broker the net total amount payable
to the broker, and make the withdrawals from the Segregated Security Account, as
the same are specified in the Written Instruction.
ARTICLE VI
REVERSE REPURCHASE AGREEMENTS
1. Promptly after a Fund enters into a Reverse Repurchase Agreement
with respect to Securities and money held by the Custodian hereunder, a Fund
shall deliver to the Custodian a Written Instruction, or in the event such
Reverse Repurchase Agreement is a Money Market Security, Written Instructions
specifying: (a) the total amount payable to a Fund in connection with such
Reverse Repurchase Agreement; (b) the broker or dealer through or with which the
Reverse Repurchase Agreement is entered; (c) the amount and kind of Securities
to be delivered by a Fund to such broker or dealer; (d) the date of such Reverse
Repurchase Agreement, and (e) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in a Segregated Security Account in
connection with such Reverse Repurchase Agreement. The Custodian shall, upon
receipt of the total amount payable to a Fund specified in the Written
Instructions make the delivery to the broker or dealer, and the deposits, if
any, to the Segregated Security Account, specified in such Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described
in paragraph I of this Article VI, a Fund
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shall promptly deliver a Written Instruction or, in the event such Reverse
Repurchase Agreement is a Money Market Security, Written Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated;
(b) the total amount payable by a Fund in connection with such termination; (c)
the amount and kind of Securities to be received by a Fund in connection with
such termination; (d) the date of termination; (e) the name of the broker or
dealer with or through which the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind of Securities
to be withdrawn from the Segregated Security Account. The Custodian shall, upon
receipt of the amount and kind of Securities to be received by a Fund specified
in the Written Instructions, make the payment to the broker or dealer, and the
withdrawals, if any, from the Segregated Security Account, specified in such
Written Instructions.
ARTICLE VII
SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Segregated Security Account as specified in a Written
Instruction received by the Custodian. Such Written Instruction shall specify
the amount of cash and/or the amount and kind of Securities to be deposited in,
or withdrawn from, the Segregated Security Account. In the event that a Fund
fails to specify in a Written Instruction the name of the issuer, the title and
the number of shares or the principal amount of any particular Securities to be
deposited by the Custodian into, or withdrawn from, a Segregated Securities
Account, the Custodian shall be under no obligation to make any such deposit or
withdrawal and shall so notify a Fund.
2. In the event that the Custodian shall advance cash as a result of
an Oral or Written Instruction from a Fund, the Custodian shall have a
continuing lien and security interest in and to any property of such Fund at any
time held by the Custodian in any Collateral Account described herein to secure
such advance.
3. Promptly after the close of business on each business day in
which cash and/or Securities are maintained in a Collateral Account, the
Custodian shall furnish a Fund with a statement with respect to a Fund's
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding
the delivery to a Fund of such statement, a Fund shall furnish the Custodian
with Written Instructions specifying the then market value of the Securities
described in such statement.
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4. The Custodian may enter into separate custodial agreements with
various futures commission merchants ("FCMs") that any Fund uses (each an "FCM
Agreement"), pursuant to which such Fund's deposits in any transactions
involving futures contracts and options on futures contracts will be held by the
Custodian in accounts (each an "FCM Account") subject to the disposition by the
FCM involved in such contracts in accordance with the customer contract between
FCM and the Fund ("FCM Contract"), SEC rules governing such segregated accounts,
CFTC rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into upon receipt of Written Instructions from
the Fund which state that (i) a customer agreement between the FCM and the Fund
has been entered into; and (ii) the Fund is in compliance with all the rules and
regulations of the CFTC. Transfers of initial margin shall be made into an FCM
Account only upon Written Instructions; transfers of premium and variation
margin may be made into an FCM Account pursuant to Oral Instructions. Transfers
of funds from an FCM Account to the FCM for which the Custodian holds such an
account may only occur upon certification by the FCM to the Custodian that
pursuant to the FCM Agreement and the FCM Contract, all conditions precedent to
its right to give the Custodian such instruction has been satisfied.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. A Fund shall furnish the Custodian with a copy of the resolution
of the Trustees, either (i) setting forth the date of the declaration of a
dividend or distribution, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount payable
per share to the shareholders of record as of that date and the total amount
payable to the Transfer Agent of a Fund on the payment date, or (ii) authorizing
the declaration of dividends and distributions on a particular date, on a daily
basis or some other periodic basis, in which case the Custodian shall rely on
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined.
2. On the ex-date of the distribution, a Fund shall provide to the
Transfer Agent the amount payable per share to the shareholders of record as of
that date. The Transfer Agent will then provide Written Instructions or a
Certificate to the Custodian of the total amount payable to the Transfer Agent
on the payment date. Upon the payment date specified in such resolution,
Written Instructions or Certificate, the Custodian shall pay to the Fund's
Transfer Agent, as agent for the shareholders of the Fund involved, an amount
equal to the amount
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indicated in said, Written Instructions or Certificate as payable by the Trust
to the shareholders for distribution in cash by the transfer agent to said
shareholders who have elected in proper manner to receive cash distributions.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever a Fund shall sell any of its Shares, it shall notify the
Custodian of the number of Shares sold, trade date, price and the amount of
money to be received by the Custodian for the sale of such Shares.
2. Upon receipt of such money from the Transfer Agent or a
Co-Transfer Agent, the Custodian shall credit such money to the account of a
Fund.
3. Upon issuance of any of a Fund's Shares in accordance with the
foregoing provisions of this Article IX, the Custodian shall pay, out of the
money held for the account of a Fund, all original issue or other taxes required
to be paid by a Fund in connection with such issuance upon the receipt of a
Written Instruction specifying the amount to be paid.
4. Except as provided hereinafter, whenever a Fund shall redeem any
of its Shares, it shall provide Written Instruction to the Custodian of the
number of Shares redeemed and the amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent or co-transfer agent of an
advice setting forth the number of Shares received by the Transfer Agent or
co-transfer agent for redemption, and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the Transfer Agent or
co-transfer agent, as the case may be, out of the moneys held for the account of
a Fund of the total amount specified in the Written Instruction issued pursuant
to paragraph 4 of this Article IX.
6. Notwithstanding the above provisions regarding the redemption of
any of a Fund's Shares, whenever its Shares are redeemed pursuant to any check
redemption privilege which may from time to time be offered by a Fund, the
Custodian, unless otherwise instructed by a Written Instruction, shall, upon
receipt of an advice from a Fund or its agent setting forth that the redemption
is in good form for redemption in accordance with the check redemption
procedure, honor the check presented as part of such check redemption privilege
out of the money held in the account of a Fund for such purposes.
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ARTICLE X
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds on
behalf of a Fund which results in an overdraft because the moneys held by the
Custodian for the account of a Fund shall be insufficient to pay the total
amount payable upon a purchase of Securities as set forth in a Written
Instruction or Oral Instructions issued pursuant to Article IV, or which results
in an overdraft for some other reason, or if a Fund is, for any other reason,
indebted to the Custodian (except a borrowing for investment or for temporary or
emergency purposes using Securities as collateral pursuant to a separate
agreement and subject to the provisions of paragraph 2 of this Article X), such
overdraft or indebtedness shall be deemed to be a loan made by the Custodian to
a Fund payable on demand and shall bear interest from the date incurred at a
rate per annum (based on a 360-day year for the actual number of days involved)
equal to 1/2% over the Custodian's prime commercial lending rate in effect from
time to time, such rate to be adjusted on the effective date of any change in
such prime commercial lending rate but in no event to be less than 6% per annum.
Any such overdraft or indebtedness shall be reduced by an amount equal to the
total of all amounts due a Fund which have not been collected by the Custodian
on behalf of a Fund when due because of the failure of the Custodian to make
timely demand or presentment for payment. In addition, the Company on behalf of
a Fund hereby agrees that the Custodian shall have a continuing lien and
security interest in and to any property at any time held by it for the benefit
of a Fund or in which a Fund may have an interest which is then in the
Custodian's possession or control or in possession or control of any third party
acting on the Custodian's behalf to secure advances made by the custodian on
behalf of such Fund or expenses incurred by the Custodian in performing the
Agreement (except such expenses as arise from its negligence or willful
misconduct). The Company authorizes the Custodian, in its sole discretion, at
any time to charge any such overdraft or indebtedness together with interest due
thereon against any balance of account standing to a Fund's credit on the
Custodian's books.
2. A Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
from which it borrows money for investment or for temporary or emergency
purposes using Securities as collateral for such borrowings, a notice or
undertaking in the form currently employed by any such bank setting forth the
amount which such bank will loan to a Fund against delivery of a stated amount
of collateral. A Fund shall promptly deliver to the Custodian a Written
Instruction specifying with respect to each such borrowing: (a) the name of the
bank; (b) the amount and terms of the borrowing, which may be
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set forth by incorporating by reference an attached promissory note, duly
endorsed by a Fund, or other loan agreement; (c) the time and date, if known, on
which the loan is to be entered into; (d) the date on which the loan becomes due
and payable; (e) the total amount payable to a Fund on the borrowing date; and
(f) the market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal of any particular Securities. The Custodian shall deliver on the
borrowing date specified in a Written Instruction the specified collateral and
the executed promissory note, if any, against delivery by the lending bank of
the total amount of the loan payable, provided that the same conforms to the
total amounts payable as set forth in the Written Instruction. The Custodian
may, at the option of the lending bank, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. The Custodian shall
deliver such Securities as additional collateral as may be specified in a
Written Instruction to collateralize further any transaction described in this
paragraph. A Fund shall cause all Securities released from collateral status to
be returned directly to the Custodian, and the Custodian shall receive from time
to time such return of collateral as may be tendered to it. In the event that a
Fund fails to specify in a Written Instruction the name of the issuer, the title
and number of shares or the principal amount of any particular Securities to be
delivered as collateral by the Custodian, the Custodian shall not be under any
obligation to deliver any Securities.
ARTICLE XI
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. If a Fund is permitted by the terms of the Company's Declaration
of Trust and as disclosed in a Fund's most recent and currently effective
prospectus to lend its portfolio Securities, within twenty-four (24) hours after
each loan of portfolio Securities a Fund shall deliver or cause to be delivered
to the Custodian a Written Instruction specifying with respect to each such
loan; (a) the name of the issuer and the title of the Securities; (b) the number
of shares or the principal amount loaned; (c) the date of loan and delivery; (d)
the total amount to be delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the premium, if any,
separately identified; and (e) the name of the broker, dealer or financial
institution to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or
Depository only
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in the form of a certified or bank cashier's check payable to the order of a
Fund or the Custodian drawn on New York Clearing House funds and may deliver
Securities in accordance with the customs prevailing among dealers in
securities.
2. Promptly after each termination of the loan of Securities by a
Fund, it shall deliver or cause to be delivered to the Custodian a Written
Instruction specifying with respect to each such loan termination and return of
Securities: (a) the name of the issuer and the title of the Securities to be
returned; (b) the number of shares or the principal amount to be returned; (c)
the date of termination; (d) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Written Instruction); and (e) the name of the broker,
dealer or financial institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker, dealer, or
financial institution to which such Securities were loaned and upon receipt
thereof shall pay, out of the moneys held for the account of a Fund, the total
amount payable upon such return of Securities as set forth in the Written
Instruction.
ARTICLE XII
THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including attorney's fees,
resulting from its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence or willful misconduct. The Custodian may, with
respect to questions of law arising hereunder or under any Margin Account
Agreement, apply for and obtain the advice and opinion of counsel to a Fund or
of its own counsel, at the expense of a Fund, and shall be fully protected with
respect to anything done or omitted by it in good faith in conformity with such
advice or opinion. The Custodian shall be liable to a Fund for any loss or
damage resulting from the use of the Book-Entry System or any Depository arising
by reason of any negligence, misfeasance or willful misconduct on the part of
the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold or
written by or for a Fund, the legality of the purchase, sale or writing thereof,
or the propriety of the amount paid or received thereof;
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(b) The legality of the issue or sale of any of a Fund's Shares, or
the sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any of a Fund's Shares, or the
propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any dividend by a
Fund;
(e) The legality of any borrowing by a Fund using Securities as
collateral;
(f) The legality of any loan of portfolio Securities pursuant to
Article XI of this Agreement, nor shall the Custodian be under any duty or
obligation to see to it that any cash collateral delivered to it by a broker,
dealer or financial institution or held by it at any time as a result of such
loan of portfolio Securities of a Fund is adequate collateral for a Fund against
any loss it might sustain as a result of such loan. The Custodian specifically,
but not by way of limitation, shall not be under any duty or obligation
periodically to check or notify a Fund that the amount of such cash collateral
held by it for a Fund is sufficient collateral for a Fund, but such duty or
obligation shall be the sole responsibility of a Fund. In addition, the
Custodian shall be under no duty or obligation to see that any broker, dealer or
financial institution to which portfolio Securities of a Fund are lent pursuant
to Article XI of this Agreement makes payment to it of any dividends or interest
which are payable to or for the account of a Fund during the period of such loan
or at the termination of such loan, provided, however, that the Custodian shall
promptly notify a Fund in the event that such dividends or interest are not paid
and received when due; or
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Segregated Security Account or Collateral Account in
connection with transactions by a Fund. In addition, except as explicitly
provided otherwise herein, the Custodian shall be under no duty or obligation to
see that any broker, dealer, or Clearing Member makes payment to a Fund of any
variation margin payment or similar payment which a Fund may be entitled to
receive from such broker, dealer, or Clearing Member, to see that any payment
received by the Custodian from any broker, dealer, or Clearing Member is the
amount a Fund is entitled to receive, or to notify a Fund of the Custodian's
receipt or non-receipt of any such payment; provided however that the Custodian,
upon a Fund's written request, shall as Custodian, demand from any broker,
dealer, or Clearing Member identified by a Fund the payment of any variation
margin payment or similar payment that a Fund asserts it is entitled to receive
pursuant to
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the terms of a Margin Account Agreement or otherwise from such broker, dealer,
or Clearing Member.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft or other
instrument for the payment of money, received by it on behalf of a Fund until
the Custodian actually receives and collects such money directly or by the final
crediting of the account representing a Fund's interest at the Book-Entry System
or the Depository.
4. The Custodian shall have no responsibility and shall not be
liable for ascertaining or acting upon any calls, conversions, exchanges,
offers, tenders, interest rate changes or similar matters relating to Securities
held in the Depository unless the Custodian shall have actually received timely
notice from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to collect, or for
the late collection or late crediting by the Depository of any amount payable
upon Securities deposited in the Depository which may mature or be redeemed,
retired, called or otherwise become payable. However, upon receipt of a Written
Instruction from a Fund of an overdue amount on Securities held in the
Depository, the Custodian shall make a claim against the Depository on behalf of
a Fund, except that the Custodian shall not be under any obligation to appear
in, prosecute or defend any action, suit or proceeding in respect to any
Securities held by the Depository which in its opinion may involve it in expense
or liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to a Fund from the Transfer Agent
of a Fund nor to take any action to effect payment or distribution by the
Transfer Agent of a Fund of any amount paid by the Custodian to the Transfer
Agent of a Fund in accordance with this Agreement. The Custodian shall notify
the Company as soon as reasonably practicable whenever income due on securities
or other investments is not collected in due course.
6. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by a
Written Instruction and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as sub-
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custodian(s), including, but not limited to, banking institutions located in
foreign countries, of Securities and moneys at any time owned by a Fund, upon
terms and conditions approved in a Written Instruction, which shall, if
requested by the Custodian, be accompanied by an approving resolution of the
Company's Board of Trustees adopted in accordance with Rule 17f-5 under the
Investment Company Act of 1940, as amended. Upon appointment of any
sub-custodian, the Custodian shall remain liable to the Company for the
performance of the sub-custodian's duties. Any sub-custodian must have the
qualifications provided in section 17(f) of the 1940 Act. Appointment of a
foreign sub-custodian shall be subject to the approval of the Company.
8. The Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for the
account of a Fund are such as properly may be held by a Fund under the
provisions of its Articles of Incorporation.
9. The Custodian shall be entitled to receive and each Fund agrees
to pay to the Custodian all out-of-pocket expenses and fees as set forth in
Appendix D attached hereto. The Custodian may charge such fees and any expenses
incurred by the Custodian in the performance of its duties for a Fund against
any money held by it for the account of such Fund, provided the Custodian has
submitted an invoice to the Fund's Administrator. The Company agrees that the
Custodian has the right to charge such compensation and expenses against any
money specifically allocated to such Fund on the eleventh day after the Fund's
Administrator has received the invoice provided that the Custodian has not
received written notification from the Fund's Administrator which specifically
details any charges in dispute and the reasons for such dispute. The Custodian
agrees, provided it has received timely notification, that it will not charge
the disputed compensation and/or expenses against money specifically allocated
to such Fund until it receives written notification from the Fund's
Administrator that the dispute has been resolved. The Custodian shall also be
entitled to charge against any money held by it for the account of a Fund the
amount of any loss, damage, liability or expense, including attorney's fees, for
which it shall be entitled to reimbursement under the provisions of this
Agreement. The expense which the Custodian may charge against the account of a
Fund include, but are not limited to, the expenses of Sub-Custodians of the
Custodian incurred in settling outside of New York City transactions involving
the purchase and sale of Securities of a Fund.
10. The Custodian shall be entitled to rely upon any Written
Instruction, notice or other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be a Written Instruction. The Custodian
shall be entitled to rely upon any Oral Instructions and any Written
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Instructions actually received by the Custodian pursuant to Article IV or VII
hereof. A Fund agrees to forward to the Custodian a Written Instruction or
facsimile thereof, confirming such Oral Instructions or Written Instructions in
such manner so that such Written Instruction or facsimile thereof is received by
the Custodian, whether by hand delivery, telex or otherwise, by the close of
business of the same day that such Oral Instructions or Written Instructions are
given to the Custodian. A Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way affect the
validity of the transactions hereby authorized by a Fund. A Fund agrees that
the Custodian shall incur no liability to a Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions,
provided such instructions reasonably appear to have been received from an
Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, or Clearing Member.
12. The Custodian shall keep and maintain appropriate books and
records for each Fund with respect to its duties hereunder. The books and
records pertaining to the Funds which are in the possession of the Custodian
shall be the property of the Company. The books and records pertaining to a
Fund which are in the possession of the Custodian shall be the property of a
Fund. Such books and records shall be prepared and maintained as required by
the Investment Company Act of 1940, as amended, and other applicable securities
laws, rules and regulations. A Fund, or a Fund's authorized representative(s),
shall have access to such books and records during the Custodian's normal
business hours. Upon the reasonable request of a Fund, copies of any such books
and records shall be provided by the Custodian to a Fund or a Fund's authorized
representative(s) at a Fund's expense.
13. The Custodian shall provide the Company with any report obtained
by the Custodian on the system of internal accounting control of the Book-Entry
System or the Depository within 10 days after receipt by the Custodian of such
report and with such reports on its own systems of internal accounting control
as the Company may reasonably request from time to time.
14. A Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees,
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howsoever arising or incurred because of or in connection with the Custodian's
payment or non-payment of checks pursuant to paragraph 6 of Article IX as part
of any check redemption privilege program of a Fund, except for any such
liability, claim, loss and demand arising out of the Custodian's own negligence
or willful misconduct.
15. Subject to the foregoing provisions of this Agreement, the
Custodian may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers in such Securities.
16. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XIII
DUTIES OF THE CUSTODIAN WITH RESPECT
TO PROPERTY HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as
sub-custodian for the Fund's Foreign Securities (as such term is defined in
paragraph (c) (1) of Rule 17f-5 under the Investment Company Act of 1940, as
amended) and other assets, the entities whose names are set forth on Schedule I
from time to time ("Foreign Custodian") in the foreign jurisdiction set forth on
such schedule from time to time and, if applicable, its network of foreign
banking institutions and foreign securities depositories and clearing agencies
which are designated on Schedule I hereto from time to time ("Foreign
Sub-Custodians") in the foreign jurisdiction set forth on such schedule from
time to time, to carry out their respective responsibilities in accordance with
the terms of a sub-custodian agreement between the Custodian and the Foreign
Custodian ("Foreign Custody Agreement"), and, if applicable, sub-custodian
agreements between a Foreign Custodian and the Foreign Sub-Custodians (each such
agreement, a "Foreign Sub-Custodian Agreement"). Each non-U.S. Foreign
Custodian or Foreign Sub-Custodian shall be an Eligible Foreign Custodian as
defined in Rule 17f-5 under the Investment Company Act of 1940. Upon receipt of
a Certificate from the Company, the Custodian shall cease employment of a
Foreign Custodian or employment of any one or more Foreign Sub-Custodians for
maintaining custody of a Fund's assets, in accordance with such certificate, and
such Foreign Custodian or Foreign Sub-Custodian shall be deemed deleted from
Schedule 1.
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2. Each Foreign Custody Agreement and each Foreign Sub-Custodian
Agreement shall be substantially in the form approved by the Company's Board of
Trustees and will not be amended in a way that materially adversely affects the
Company or a Fund without the Company's prior written consent.
3. Upon request of the Company, the Custodian will, to the extent
permitted by applicable law and subject to any limitations set forth in the
relevant Foreign Custody Agreement or Foreign Sub-Custody Agreement, use its
best efforts to arrange for the independent accountants of the Company to be
afforded access to the books and records of a Foreign Custodian and any Foreign
Sub-Custodian maintained for a Fund's account.
4. The Custodian will supply to the Company from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Fund held by the Foreign Custodians and Foreign Sub-Custodians,
including but not limited to an identification of entities having possession of
each Fund's securities and other assets and advices or notifications of any
transfers of securities to or from each custodial account maintained by a
Foreign Custodian and a Foreign Sub-Custodian for the Custodian on behalf of
each applicable Fund indicating, as to securities acquired for a Fund, the
identity of the entity having physical possession of such securities.
5. The Custodian shall monitor and furnish annually to the Company
information concerning the Foreign Custodians, the Foreign Sub-Custodians
employed by the Foreign Custodian and foreign custody arrangements employed by
the Custodian. In addition, the Custodian shall monitor the Foreign Custodians,
the Foreign Sub-Custodians and the foreign custody arrangements to determine
whether they continue to satisfy the provisions of subparagraph (c) (2) of rule
17f-5 of the Investment Company Act of 1940 and shall promptly inform the
Company in any event that the Custodian learns (a) that a Foreign Custodian or
any Foreign Sub-Custodian fails to satisfy such provisions, (b) of a material
adverse change in the financial condition of a Foreign Custodian or a Foreign
Sub-Custodian, or (c) of any material loss of the assets of the Company, or (d)
of any other material adverse matters relating to a Foreign Custodian or the
Foreign Sub-Custodians or the foreign custody arrangements.
6. The Custodian shall limit the securities and other assets
maintained in the custody of a Foreign Custodian or the Foreign Sub-Custodian
to: (1) "foreign securities," as defined in paragraph (c) (1) of Rule 17f-5
under the Investment company Act of 1940, and (ii) cash and cash equivalents in
such amounts as the Custodian or the Company may determine to be reasonably
necessary to effect the Company's foreign securities transactions.
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7. The Custodian shall identify on its books as belonging to the
Company on behalf of a Fund, the foreign securities of the Company held by each
Foreign Custodian and each Foreign Sub-Custodian.
8. Each agreement with a non-U.S. Foreign Custodian or Foreign
Sub-Custodian shall provide that: (1) the Company's assets will not be subject
to any right, charge, security interest, lien or claim of any kind in favor of
the Foreign Custodian or Foreign Sub-Custodian or its creditors or agents,
except a claim of payment for their safe custody or administration; (ii)
beneficial ownership for the company's assets will be freely transferable
without the payment of money or value other than for custody or administration,
(iii) adequate records will be maintained identifying the assets as belonging to
the Company, and (iv) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Company, will be given
access to the books and records of each Foreign Custodian relating to its
actions under its agreement with the Custodian and of each Foreign Sub-Custodian
relating to its actions under its agreement with the Foreign Custodian.
9. Each agreement with a non-U.S. Foreign Custodian or Foreign
Sub-Custodian shall provide that the Company will be adequately indemnified and
its assets adequately insured in case of loss.
10. The Custodian shall be liable for the acts or omissions of a
Foreign Custodian and a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally in the Agreement and, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank as contemplated by
paragraph 11 hereof The Custodian shall not be liable for any loss, damage,
cost, expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where the
sub-custodian has otherwise exercised reasonable care.
11. Except as otherwise set forth in this Agreement, the provisions
hereof shall not apply where the custody of the Company assets is maintained in
a foreign branch of a qualified U.S. bank as defined in Rule 17f-5 under the
Investment Company Act of 1940. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 7 of Article XII of this Agreement.
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ARTICLE XIV
TERMINATION
1. This Agreement shall become effective as of the date first above
written and shall continue until terminated in accordance herewith. This
Agreement is terminable without penalty, on sixty (60) days' notice, by a Fund
or, by vote of holders of a majority of a Fund's Shares or, upon not less than
ninety (90) days' notice, by the Custodian. In the event such notice is given
by a Fund, on or before the termination date the Fund shall provide a copy of a
resolution of the Trustees of the Company on behalf of a Fund, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians. In the event such notice is
given by the Custodian, a Fund shall, on or before the termination date, deliver
to the Custodian a copy of a resolution of the Trustees, certified by the
Secretary or any Assistant Secretary, designating a successor custodian or
custodians. In the absence of such designation by a Fund, the Custodian may
designate a successor custodian which shall be a bank or trust company having
not less than $20,000,000 aggregate capital, surplus and undivided profits as
shown by its last published report. Upon the date set forth in such notice,
this Agreement shall terminate and the Custodian shall, upon receipt of a notice
of acceptance by the successor custodian, on that date deliver directly to the
successor custodian all Securities and moneys then owned by a Fund and held by
it as Custodian, after deducting all fees and expenses which shall then be
entitled with respect to such Fund.
2. If a successor custodian is not designated by the Company on
behalf of a Fund or the Custodian in accordance with the preceding paragraph, a
Fund shall, upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to a Fund)
and moneys then owned by a Fund, be deemed to be its own custodian, and the
Custodian shall thereby be relieved of all duties and responsibilities pursuant
to this Agreement, other than the duty with respect to Securities held in the
Book-Entry System, in any Depository or by a Clearing Member which cannot be
delivered to a Fund, to hold such Securities hereunder in accordance with this
Agreement.
ARTICLE XV
MISCELLANEOUS
1. The Custodian shall cooperate with the Company's independent
public accountants and shall take all reasonable action in the performance of
its obligations under this Agreement to assure that the necessary information is
made available to
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<PAGE>
such accountants for the expression of their unqualified opinion, as such may be
required by the Company from time to time.
2. In the event of equipment failures beyond the Custodian's
control, the Custodian shall, at no additional expense to the Company, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto. The Custodian shall enter into and maintain in effect
with appropriate parties one or more agreement having reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
3. Annexed hereto as Appendix A is a Certificate signed by an
Officer of the Company, setting forth the names and the signatures of the
present Authorized Persons. The Company agrees to furnish to the Custodian a
new Certificate in similar form in the event that any such present Authorized
Person ceases to be an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the present Authorized Persons as set forth in the last delivered Certificate.
4. Annexed hereto as Appendix B is a Certificate signed by two of
the present Officers of the Company under its seal, setting forth the names and
the signatures of the present Officers of the Company. A Fund agrees to furnish
to the Custodian a new Certificate in similar form in the event any such present
Officer ceases to be an Officer of the Company, or in the event that other or
additional Officers are elected or appointed. Until such new Certificate shall
be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signatures of the Officers as set forth in
the last delivered Certificate.
5. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be deemed sufficiently
given if addressed to the Custodian and mailed or delivered to it at its offices
at 707 Wilshire Blvd., MAC 2818-102, Los Angeles, CA 90017, or at such other
place as the Custodian may from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required
by this Agreement to be given by or on behalf of a Fund, shall be deemed
sufficiently given if addressed to a Fund and mailed or delivered to it at its
office at 370 Seventeenth Street, Suite 2700, Denver, Colorado 80202, or at such
other place as a Fund may from time to time designate in writing.
-24-
<PAGE>
7. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties to this Agreement.
8. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successor(s) and assign(s); provided,
however, that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of its Trustees.
9. This Agreement shall be construed in accordance with the laws of
the State of California.
10. This Agreement may be executed in any number of counterparts,
each which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
11. The Custodian agrees to keep confidential and to treat as
proprietary information of the Company all records of the Company and
information relative to the Company and its shareholders (past, present and
potential), unless the release of such records or information is otherwise
authorized by the Company. The Custodian further agrees that, should the
Custodian be required to provide such information or records to duly constituted
authorities (who may institute civil or criminal contempt proceedings for
failure to comply), the Custodian shall not be required to seek the Company's
consent prior to disclosing such information; provided that the Custodian gives
the Company prior written notice of the provision of such information and
records.
12. The Names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 which is hereby referred
to and a copy of which is on file at the office of State Secretary of the
Commonwealth of Massachusetts and the principal office of the Company. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, shareholders, or representatives of the Trust are made not
individually, but in such capacities and are not binding on any of the Trustees,
shareholders or representatives of the Trust personally, but bind only the Trust
Property, and all persons dealing with any class of shares of the Trust must
look solely to the Trust Property
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<PAGE>
belonging to such class for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective Officers, thereunto duly authorized, as of the
day and year first above written.
WESTCORE TRUST WELLS FARGO BANK, N.A.
By:/s/Kenneth V. Penland By: /s/ David P. Coleville
----------------------------- ------------------------
Name: Kenneth V. Penland Name: David P. Coleville
--------------------------- ----------------------------
Title: President Title: Vice President
------------------------- ---------------------
WESTCORE TRUST WELLS FARGO BANK, N.A.
By: /s/ Jasper R. Frontz By:
---------------------------- ------------------------
Name: Jasper R. Frontz Name:
-------------------------- -----------------------
Title: Treasurer Title:
------------------------- ----------------------
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<PAGE>
APPENDIX B
OFFICERS
Pursuant to Article 1, Para. 8, and Article XIV, Para. 2, of the
Custody Agreement, the term "Officers" does not include any persons other than
the President, Vice President, Secretary, and Treasurer; and the following
persons are Officers of the Company authorized by the Board of Trustees to
execute any Certificate, instruction, notice or other instrument on behalf of a
Fund.
Name: Kenneth Penland, President
---------------------------------
Signature: /s/ Kenneth Penland, President
---------------------------------
Name: Jack Henderson, Vice President
---------------------------------
Signature: /s/ Jack Henderson, Vice President
---------------------------------
Name: Jasper Frontz, Treasurer
---------------------------------
Signature: /s/ Jasper Frontz, Treasurer
---------------------------------
Name: Bruce McConnel, Secretary
---------------------------------
Signature: /s/ Bruce McConnel, Secretary
---------------------------------
Name:
---------------------------------
Signature:
---------------------------------
Name:
---------------------------------
Signature:
---------------------------------
Name:
---------------------------------
By: /s/ Bruce McConnel By: /s/ Kenneth Penland
------------------------- -------------------
Name: Bruce McConnel Name: Kenneth Penland
------------------------- -------------------
Title: SECRETARY Title: President
------------------------- -------------------
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<PAGE>
APPENDIX C
DESIGNATED PUBLICATIONS LIST FOR CALLED INSTRUMENTS
The following publications are designated publications for the
purposes of Article III, Para. 5(b):
A. The Depository Trust Company Notices
B. XCITEK Notices
C. FII notices through SEI's Corporate Actions Processing System
D. The Wall Street Journal
-28-
<PAGE>
APPENDIX D
WELLS FARGO BANK
CUSTODY SERVICES
FEE SCHEDULE
FOR THE WESTCORE MUTUAL FUNDS
A. ANNUAL MAINTENANCE: Based on Market Value of all assets in aggregate and
pro-rated at the end of the billing period (monthly).
Fee
---
First $25,000 $.00075 (3/4 of 1 bp)
Balance $.0005 (1/2 of 1 bp)
Minimum Annual Fee (for seven funds) $25,000*
B. TRANSACTIONS:**
Book-Entry (FBE, DTC) $ 12.00
(Purchase, Sale, Maturity,
Free Receipt/Delivery)
Physical $ 20.00
(Purchase, Sale, Maturity,
Free Receipt/Delivery)
Paydown (P & I) $ 8.00
(Mortgage-Backed & Asset Backed)
C. CASH TRANSFERS:
Wire Transfer $ 12.00
Intra Bank No Charge
D. ON-LINE ACCESS-REPORT MASTER (annual) $2,500.00
E. OUT-OF-POCKET EXPENSES As Billed
(e.g. postage, shipping, insurance
express mail, messenger charges)
- -----------------------------
* An additional $5,000 to be added to minimum for every fund over the
initial seven.
** If you deal in transaction types not listed above, please ask us for
the fees that will be charged.
Revised 9/20/96
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<PAGE>
SCHEDULE I
FOREIGN CUSTODIAN
FOREIGN SUB-CUSTODIANS
COUNTRY ENTITY
<PAGE>
STAGECOACH FUNDS - (MONEY MARKET FUNDS-SERVICE CLASS)
LETTER OF AUTHORIZATION AND DISCLOSURE
INSTITUTIONAL CUSTODY
TO: Wells Fargo Bank, N.A. (hereinafter referred to as the "Bank")
FROM: WESTCORE TRUST ("Account")
-------------------------------
(Account Name)
0101772600/0101773000/0101773100/1010773200/
--------------------------------------------
0101773300/0101779500/010178060
-------------------------------
(Account Number - if known)
(Account Name)
Bank is hereby authorized and instructed to purchase shares of the Service Class
of the Stagecoach Funds Trust ("Fund") selected below with cash balances of the
Account and to redeem such shares as necessary to meet the cash requirements of
the Account automatically and pursuant to such procedures as Bank may establish
from time to time for such transactions.
Fund Cash Balance Selection
- --------------------------------------------------------------------------------
(Check One Only) (Check Either or Both)
[x] Prime Money Market Fund [x] Principal [x] Income
[x] Treasury Money Market Fund
The Stagecoach Funds are not insured by the Federal Deposit Insurance
Corporation, are not deposits or other obligations of Wells Fargo Bank, N.A. and
are not guaranteed by Wells Fargo Bank, N.A. and are subject to investment
risks, including possible loss of the principal invested.
Bank is further authorized to act upon oral instructions, subject to written
confirmation, from the undersigned or other authorized representative of the
Account to charge the portfolio currently authorized for Investment of Account
cash balances. Bank shall not be liable for any loss or expense from acting
upon oral instructions reasonably believed by Bank to be genuine prior to
receipt of the written confirmation.
Bank has no investment responsibility with respect to the selection of the Fund
listed above and the Bank shall be entitled to the following fees:
<PAGE>
INVESTMENT ADVISER FEES
Bank is the investment adviser to the Stagecoach Funds listed above ("Funds").
For its services as investment adviser, Bank is entitled to a monthly fee at the
annual rate of 0.25% of the average daily net assets of each portfolio of the
Funds, which can be reduced by any fee waivers.
CUSTODIAN, TRANSFER AGENT AND PORTFOLIO ACCOUNTING FEES
Wells Fargo Bank, N.A. is the Funds' custodian and transfer agent, and provides
portfolio accounting. For its services as Custodian, Bank is entitled to a fee
of 0.0167% of the daily average net assets of the Fund plus specified
transaction charges. For Transfer Agent services, Bank is entitled to a fee of
0.04% of the average daily net assets of the Fund. For portfolio accounting,
Bank is entitled to a fee of 0.070% of the first $50 million, 0.045% of the next
$50 million, and 0.020% on any excess over $100 million plus a fixed fee amount
of $2000 per month per Fund.
SHAREHOLDER SERVICE FEE
Shareholder service fees up to 0.20% may be paid to Bank for performing
shareholder administration services with respect to clients that invest in the
Fund.
COORDINATION OF FEES
In the case of an Account for which Bank exercises investment discretion, the
assets upon which the Account level investment advisory fee is calculated shall
either exclude or be reduced by the amount of Account assets invested in the
Fund.
ACCOUNT INVESTMENTS
In the case of an Account for which Bank exercises investment discretion, Bank
believes the Fund is an appropriate investment for the Account because it
offers, among other benefits, professional investment management, investment
diversification, daily liquidity and convenience.
OTHER INFORMATION
The Fund is an integral part of the Bank's automated cash management "sweep"
program which fully invests cash balances on a daily basis in shares of a
selected Fund portfolio. Bank and its affiliates receive certain indirect
benefits from investments in the Fund. The greater the Fund's assets, the
greater opportunity for economies of scale and lower Fund expense ratios. To
the extent these factors may help the Fund grow, Bank and its
<PAGE>
affiliates may benefit to the extent their fees from the Fund are based on the
amount of its assets.
I acknowledge receipt of the current prospectus for the Fund and further
acknowledge that certain affiliates of Bank provide services to and receive
compensation from the Fund as described herein.
I represent that I am authorized to give this authorization on behalf of the
Account.
Authorized Signature(s):
/s/ Kenneth V. Penland, President 3/13/97
- --------------------------------- ---------
Signature & Title Date
/s/ Jasper R. Frontz, Treasurer 3/13/97
- --------------------------------- ---------
Signature & Title Date
PLEASE MAIL A SIGNED COPY OF THIS LETTER TO YOUR WELLS FARGO ACCOUNT
REPRESENTATIVE. RETAIN A COPY FOR YOUR RECORDS.
<PAGE>
BNY WESTERN TRUST COMPANY
A SUBSIDIARY OF
THE BANK OF NEW YORK COMPANY, INC.
July 15, 1997
Mr. Steven G. Wine
Director of Mutual Fund Administration
Westcore Funds
1225 17th Street 26th Floor
Denver, CO 80202
RE: Custody Agreement(s) dated as of January 22, 1997 between Westcore Trust
and Wells Fargo as original custodian named therein or acting as successor
in interest Account number(s) 0101772600, 0101772601, 0101773000,
0101773100, 0101773200, 0101773300, 0101779500, 0101780600, 7726009-900,
7730009-900, 7731009-900, 7732009-900, 7733009-900, 7795009-900
Dear Mr. Wine:
As you are aware, BNY Western Trust Company, a wholly owned subsidiary of The
Bank of New York Company, Inc., has agreed to purchase the Custody business from
Wells Fargo. With your consent, we will become successor Custodian and The Bank
of New York, our affiliate, will be appointed by us to provide subcustody and
related services.
We are presently working with Wells Fargo to effect the smooth transition of
your assets. We ask that you sign the enclosed copy of this letter indicating
your consent to the assignment of your Custody Agreement to BNY Western Trust
Company. Once we are in receipt of this signed consent, we will contact you to
determine a mutually agreeable date for the transfer of the assets. Once
transferred, BNY Western Trust Company will assume responsibility for providing
all services to you under the Custody Agreement.
Attached you will find some additional information about BNY Western Trust
Company. If you have any questions regarding the transfer, please call Mona
Milana at (213) 630-6336. We look forward to having the opportunity to provide
you with the attention and quality service that has established us as an
industry leader in the securities processing business.
Very truly yours,
/s/ C. Rodney Cooper
C. Rodney Cooper
Chairman and CEO
CONSENT AND AGREEMENT TO YOUR APPOINTMENT
AS SUCCESSOR CUSTODIAN AND THE ASSIGNMENT TO YOU
OF THE CUSTODY AGREEMENT
By:/s/ Jasper R. Frontz
--------------------
Name: Jasper R. Frontz
Title: Treasurer
Date: 8/13/97
<PAGE>
TRANSACTION CHARGES AMENDMENT TO SERVICES AGREEMENT
This Transaction Charges Amendment is made as of July 1, 1997, by and
between Charles Schwab & Co., Inc. ("Schwab"), a California corporation, Denver
Investment Advisors LLC ("Fund Affiliate"), and Westcore Trust, a registered
investment company ("Fund Company") executing this Amendment on its own behalf
and on behalf of its series or classes of shares ("Fund(s)") which are parties
to a Services Agreement between Schwab, Fund Affiliate and Fund Company, made as
of March 26, 1996, as amended thereafter ("Services Agreement"). This Amendment
amends the Services Agreement. All capitalized terms used in the Amendment and
not defined herein shall have the meaning ascribed to them in the Services
Agreement.
WHEREAS, the parties wish to amend the Services Agreement to allow Schwab
to charge certain transaction fees to its customers for the purchase of Fund
shares and to continue to receive Fees payable to Schwab by the fund parties
under the Services Agreement to service those shares;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Section 3 of the Services Agreement shall be deleted in its entirety
and the following Section 3 shall be inserted in lieu thereof.
3. TRANSACTION FEES
The parties acknowledge and agree that Schwab may collect
transaction fees from certain customers (including "Active Traders," as
Schwab may define that term) for certain services and from other customers
upon such other customers' redemption of certain shares.
2. Section 2 of Exhibit B to the Services Agreement shall be deleted in
its entirety and the following Section 2 shall be inserted in lieu thereof.
2. The Daily Value of Qualifying Shares is the aggregate daily
value of all shares of the Fund held in Schwab brokerage accounts, subject
to the following exclusions ("Qualifying Shares"). There shall be excluded
from the shares (i) shares held in a Schwab brokerage account prior to the
effective date of this Agreement as to the Fund and (ii) shares first held
in a Schwab brokerage account after the termination of this Agreement as to
the Fund.
<PAGE>
3. Except as specifically set forth herein, all other provisions of the
Services Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
CHARLES SCHWAB & CO., INC. DENVER INVESTMENT ADVISORS LLC
By:/s/ Matthew L. Sadler By:/s/ Kenneth Penland
---------------------------- ---------------------------
Matthew L. Sadler
Vice President Name: Kenneth Penland
Mutual Funds -------------------------
Title: President
------------------------
Date: July 2, 1997 Date: June 30, 1997
---------------------- -------------------------
WESTCORE TRUST, on its own
behalf and on behalf of each
of its Funds
By: /s/ Jasper R. Frontz
---------------------------
Name: Jasper R. Frontz
---------------------------
Title: Treasurer
---------------------------
Date: June 30, 1997
---------------------------
-2-
<PAGE>
DST FAN WEB SERVICES AGREEMENT
AGREEMENT made as of August 1, 1997 (the "Effective Date") by and between
DST Systems, Inc., a Delaware corporation ("DST"), Denver Investment Advisors,
LLC, a Colorado limited liability company ("DIA") and Westcore Trust, a
Massachusetts business trust (the "Investment Company") (collectively, DIA and
Investment Company shall be referred to as "Customer"). DST and Customer are
together referred to herein as the "Parties" and individually as the "Party."
WHEREAS, DST is a provider of transfer agency and shareholder record
keeping and accounting services to the mutual fund industry utilizing
proprietary computer software programs and systems developed by DST and
maintained on computers located at DST facilities, including the Financial
Access Network-TM- and DST FAN Web Services-TM-.
WHEREAS, DIA provides various services to the Investment Company, a
registered investment company which is comprised of investment portfolios (each
a "Fund"; collectively the "Funds");
WHEREAS, among the services DIA provides to the Investment Company is
assistance with a World Wide Website, through which visitors to such website may
obtain information about the Investment Company;
WHEREAS, Customer desires to utilize the Investment Company's Web Site, the
Internet and DST FAN Web Services to provide shareholders of the Investment
Company with access to account information and certain on-line transaction
request capabilities in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows.
ARTICLE I
DEFINITIONS
-----------
The following definitions shall apply to this Agreement.
- "Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such Person.
- "Control" over a Person shall mean (i) the possession, directly or
indirectly, of more than 50% of the voting power to elect directors, in the case
of a Person that is a corporation,
-1-
<PAGE>
or members of a comparable governing body, in the case of a limited liability
company, firm, joint-venture, association or other entity, in each case whether
through the ownership of voting securities or interests, by contract or
otherwise and (ii) with respect to a partnership, a general partner thereof or a
Person having management rights comparable to those of a general partner shall
be deemed to control such Person. The terms "Controlling" and "Controlled"
shall have corollary meanings.
- "DST FAN Web Services" shall mean the services provided by DST
utilizing FAN-Registered Trademark-, the DST Web Site, the Internet, and other
software, equipment and systems provided by DST and telecommunications carriers
and firewall providers, whereby Transactions may be requested in each Fund by
accessing the DST Web Site via hypertext link from the Investment Company Web
Site. DST FAN Web Services are described further in the "Advanced Package" and
"Basic Package" documentation provided to Customer as part of DST FAN Web
Services.
- "DST Web Site" shall mean the collection of electronic documents or
pages residing on the DST computer system, linked to the Internet and accessible
by hypertext link through the World Wide Web, where the Transaction data fields
and related screens provided by DST may be viewed by Persons who access such
site.
- "FAN" shall mean the DST Financial Access Network, a DST computer and
software system which provides an interface between the Internet and public data
network service providers and the transfer agency systems of the Funds for the
purposes of communicating Shareholder data and information and Transaction
requests.
- "FAN Options" shall mean the series of edits and instructions provided
by Customer and which reside on a DST computer, through which Customer specifies
its instructions for Transactions which may be requested through DST FAN Web
Services, e.g., minimum and maximum purchase, redemption and exchange amounts.
- "Fund(s)" shall mean the various portfolios of a registered investment
company (mutual funds) for which DIA provides various services and which
Customer has designated to participate in DST FAN Web Services. Customer has
provided DST with a list of the Funds on or prior to the Effective Date.
- "Investment Company Web Site" shall mean the collection of electronic
documents or pages residing on the computer system of Customer (or an Internet
Service Provider ("ISP") hired by Customer) connected to the Internet and
accessible by hypertext link through the World Wide Web, where Persons may view
information about the Funds and access the various Transaction screens provided
by Customer.
-2-
<PAGE>
- "Person" shall mean an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
- "Service Commencement Date" shall mean the first date upon which
Transaction requests are available through DST FAN Web Services to Shareholders.
- "Shareholder" shall mean the record owner or authorized agent of the
owner of shares of a Fund.
- "Transactions" shall mean account inquiries, purchases, redemptions
through Automated Clearing House, fed wire, or check to the address of record
for the Fund account, exchanges and other transactions offered through DST FAN
Web Services.
ARTICLE II
USE OF DST FAN WEB SERVICES BY CUSTOMER
---------------------------------------
Section 2.1 DST RESPONSIBILITIES. During the Term and subject to the
provisions of this Agreement, DST shall perform the DST FAN Web Services and
shall, at its expense (unless otherwise provided for herein):
(a) provide, or hire other Persons to provide, all computers,
telecommunications equipment and other equipment and software reasonably
necessary to develop and maintain the DST Web Site;
(b) receive Transaction requests electronically transmitted to
the DST Web Site via the Internet following execution of a link from the
Investment Company Web Site to the DST Web Site and route Transaction requests
through FAN to the Customer's transfer agency system;
(c) deliver to Customer a DST FAN Options Workstation User
Guide; and
(d) deliver a monthly billing report to Customer, which shall
include a report of Transactions, by type, processed through DST FAN Web
Services.
Section 2.2 CUSTOMER RESPONSIBILITIES. During the Term and subject to the
provisions of this Agreement, Customer shall at its expense (unless otherwise
provided for herein):
(a) provide all computers, telecommunications equipment and
other equipment and software reasonably necessary to develop and maintain the
Investment Company Web Site;
-3-
<PAGE>
(b) design and develop the Investment Company Web Site
functionality necessary to facilitate and maintain the hypertext links to the
DST Web Site and the various Transaction Web pages and otherwise make the
Investment Company Web Site available to Shareholders;
(c) maintain all DST on-screen disclaimers and copyright,
trademark and service mark notifications provided by DST in writing from time to
time, and all "point and click" features of the Investment Company Web Site
relating to Shareholder acknowledgment and acceptance of such disclaimers and
notifications; and
(d) provide the FAN Options to DST for such Transactions as
Customer shall authorize for each Fund in the format requested by DST and keep
the FAN Options current at all times.
Section 2.3 SELECTION OF SERVICES AND DESIGNATION OF FUNDS. DST FAN Web
Services are offered in a Basic Package and an Advanced Package. Exhibit A
reflects Customer's choice of Package at the Effective Date and Exhibit B
reflects the fees relating to both Packages at the Effective Date. If Customer
initially selects the Basic Package, upon thirty (30) days prior notice to DST,
Customer may elect to upgrade from the Basic Package to the Advanced Package by
signing two copies of the Upgrade Request Form attached to Exhibit A and
delivering such forms to DST along with payment of the Upgrade Fee in the
current amount then charged by DST. Upon thirty (30) days prior notice to DST,
Customer may also change the Funds designated to participate in DST FAN Web
Services by delivering to DST, in writing, a revised list of participating
Funds.
Section 2.4 SCOPE OF DST OBLIGATIONS. Customer acknowledges and agrees
that the use of DST FAN Web Services is solely at Customer's sole risk. DST
shall not be obligated to (a) ensure or verify the accuracy or actual receipt of
any of the data or information contained in any transmission via DST FAN Web
Services or ensure the consummation of any Transaction requested by any
Shareholder via DST FAN Web Services, (b) ensure or verify the timely
transmission of any data or information or the consummation of any Transaction
requested via DST FAN Web Services; or (c) adopt any procedures (other than the
encryption procedures required by DST for all DST FAN Web Services customers) to
protect the integrity, confidentiality or secrecy of, or to prevent the
unauthorized interception, corruption, use of, or access to, any data or
information transmitted via DST FAN Web Services, all of which is the sole
responsibility of Customer. Customer acknowledges that the processing of
Transaction requests by FAN in accordance with the FAN Options is solely an
accommodation to Customer to avoid excessive numbers of Transactions being
rejected during the nightly processing cycle
-4-
<PAGE>
of Customer. Customer acknowledges and agrees further that it will not rely
upon FAN or the DST FAN Web Services to edit or otherwise qualify or test any
Transaction for validity, acceptability or approval. All data and information
transmissions via DST FAN Web Services are for information purposes only, and
are not intended to satisfy regulatory requirements or comply with any laws,
rules, requirements or standards of any federal, state or local governmental
authority, agency or industry regulatory body, including the securities
industry, which compliance is the sole responsibility of Customer and each Fund.
Customer acknowledges and agrees that Customer and its Shareholders are
responsible for verify the accuracy and receipt of all data or information
transmitted via DST FAN Web Services. Customer is responsible for advising
Shareholders of their responsibility for promptly notifying the Fund's transfer
agent of any errors or inaccuracies relating to Shareholder data or information
transmitted via DST FAN Web Services.
Section 2.5 CUSTOMERS TO BE TREATED AS A SINGLE ENTITY. For purposes of
performance by DST of its obligations under this Agreement, DIA and Investment
Company shall be treated as a single party. Performance by DST of any of its
obligations for either such party shall constitute performance for both such
parties. DST shall be entitled to rely exclusively upon all instructions given
to it by DIA, whether written or oral, and DST shall be entitled to deal
exclusively with DIA in connection with the performance of all obligations under
this Agreement. DIA shall confirm in writing its oral instructions. In no
event shall DST be required to perform any obligation to a greater extent than
it would have been required to perform if the Customers under this Agreement
were a single party. This Agreement may only be amended in a writing signed by
DST, DIA and Investment Company.
ARTICLE III
FEES
----
As consideration for the performance by DST of the DST FAN Web Services,
DIA will pay the fees set forth in Exhibit B, except that Investment Company
will pay the Transaction Fees set forth in Exhibit B. Investment Company will
not be liable for payment of any other fees hereunder.
ARTICLE IV
PROPRIETARY RIGHTS
------------------
Customer acknowledges and agrees that it obtains no rights in or to any of
the software, hardware, processes, trade secrets, proprietary information or
distribution and communication networks of DST. Any software DST provides to
Customer pursuant
-5-
<PAGE>
to this Agreement shall be used by Customer only during the term of this
Agreement and only in accordance with the provisions of this Agreement to
provide connectivity to and through DST, and shall not be used by Customer to
provide connectivity to or through any other system or Person. Any interfaces
and software developed by DST shall not be used to connect Customer to any
transfer agency system or any other Person without DST's prior written approval.
Except in the normal course of business and in conformity with Federal copyright
law or with DST's consent, Customer shall not copy, decompile or reverse
engineer any software provided to Customer by DST.
The web pages that make up the Investment Company Web Site contain
intellectual property, including, but not limited to, copyrighted works,
trademarks, and trade dress, that is the property of Customer and/or Investment
Company. Customer and/or Investment Company retain all rights in the
intellectual property that resides on the Investment Company Web Site, not
including any intellectual property provided by or otherwise obtained from DST.
To the extent that the intellectual property of Customer and/or Investment
Company is duplicated within the DST Web Site to replicate the "look and feel,"
trade dress or other aspect of the appearance or functionality of the Investment
Company Web Site, Customer and/or Investment Company grants to DST a
non-exclusive, non-transferable license to such intellectual property for the
duration of this Agreement. This license is limited to the intellectual
property of Customer and/or Investment Company needed to replicate the
appearance of the Investment Company Web Site and does not extend to any other
intellectual property owned by Customer and/or Investment Company.
DST warrants that it has sufficient right, title and interest in the DST
Web Site, FAN and FAN Web Services to enter into this Agreement and that the use
of the DST Web Site, FAN and FAN Web Services will not infringe any U.S. patent,
U.S. copyright or other U.S. proprietary right of any third party.
ARTICLE V
PROJECT COMMITTEE; CONFLICT RESOLUTION
--------------------------------------
Section 5.1 APPOINTMENT OF PROJECT COMMITTEE. Each of the parties shall,
promptly after the execution of this Agreement, appoint and advise the other in
writing, of the name, title, address and telephone number, of a Project Officer
of such company (the "Project Officer"). The two persons so designated shall
constitute the "Project Committee."
Section 5.2 OPERATION OF PROJECT COMMITTEE. In the event of any material
dispute arising under this Agreement, the members of the Project Committee shall
confer within five (5) business days of the request of either party for such a
meeting, and shall
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<PAGE>
engage in good faith negotiations to resolve such dispute. If they are unable
to resolve the dispute in a mutually acceptable manner within the following ten
(10) business days, the matter shall be referred for similar negotiations by
senior management representatives of each of the parties.
ARTICLE VI
TERM AND TERMINATION
--------------------
Section 6.1 TERM. This Agreement shall be effective as of the Effective
Date and shall continue in force and effect for twelve (12) months following the
Service Commencement Date (the "Initial Term"). This Agreement shall
automatically renew at the end of the Initial Term for additional, successive
twelve (12) month terms (each, a "Renewal Term") unless terminated by either
party by written notice to the other at least sixty (60) days prior to the end
of the initial term or any renewal term, in which case the effective date of
such termination notice shall be the end of the relevant initial term or renewal
term. The Initial Term and any Renewal Term(s) are referred to herein as the
Term.
Section 6.2 TERMINATION. Throughout the Term, either Party shall have the
right to terminate this Agreement on (a) written notice to the other Party of
the other Party's material breach of this Agreement and such Party's failure to
cure such breach within thirty (30) days, and (b) on 60 days written notice to
the other Party for any reason or no reason. Throughout the term, Customer
shall have the right to terminate this agreement immediately by written notice
to DST in the event that State Street Bank and Trust Company ceases to be
qualified to act as the Fund's transfer agent pursuant to applicable law.
Section 6.3 EFFECT OF TERMINATION. In the event of a termination under
the provisions of this Article VI, the Parties will have no continuing
obligations to one another other than the obligation to return to one another
the confidential or proprietary materials of the other in their possession.
ARTICLE VII
INDEMNIFICATION; LIABILITY LIMITATIONS
--------------------------------------
Section 7.1 NO WARRANTIES. EXCEPT AS PROVIDED IN ARTICLE IV,
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT AND ITS EXHIBITS, THE DST FAN WEB
SERVICE AND ALL SOFTWARE AND SYSTEMS DESCRIBED IN THIS AGREEMENT AND ITS
EXHIBITS ARE PROVIDED "AS-IS," ON AN "AS AVAILABLE" BASIS. EXCEPT AS PROVIDED
IN ARTICLE IV, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT AND ITS EXHIBITS, DST
HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE EQUIPMENT,
-7-
<PAGE>
SOFTWARE, SYSTEMS AND SERVICES PROVIDED BY DST HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, THE DST FAN WEB SERVICES, OR ANY EQUIPMENT, SOFTWARE, SYSTEMS OR
DATA PROVIDED TO DST BY ANY TELECOMMUNICATIONS CARRIER, EQUIPMENT MANUFACTURER,
FIREWALL PROVIDER OR ENCRYPTION DEVELOPER, OR ANY OTHER VENDOR OR OTHER THIRD
PARTY, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE. NOTHING CONTAINED IN THE DOCUMENTATION PROVIDED TO
CUSTOMER AS PART OF DST FAN WEB SERVICES SHALL CONSTITUTE ANY REPRESENTATION OR
WARRANTY.
Section 7.2 LIMITATION OF LIABILITY. Customer acknowledges that the
Internet is an unsecure, unstable, unregulated, unorganized and unreliable
environment, and that the ability of DST to deliver the DST FAN Web Services is
dependent upon the Internet and equipment, software, systems, data and services
provided by various telecommunications carriers, equipment manufacturers,
firewall providers and encryption system developers and other vendors and third
parties. Customer agrees that DST shall not be liable in any respect for the
functions or malfunctions of the Internet or the actions or omissions of any
such third parties or for the selection of any such third party. Under no
circumstances shall DST be liable for indirect, incidental, consequential,
special or exemplary damages (even if DST has been advised of or has foreseen
the possibility of such damages), arising from the use or inability to use the
DST FAN Web Services, the DST Web Site, FAN, the Internet, any telecommunication
system, any firewall, encryption system or other security device, or under any
provision of this Agreement, such as, but not limited to, loss of revenue or
anticipated profits or lost business. In the event of any breach of the terms
of this Agreement (other than Section 8.1, for which the Parties shall also have
the remedies provided in Section 8.2) by DST, the sole and exclusive remedy of
Customer shall be termination pursuant to Article VI. Without limiting any of
the foregoing terms of this Section, in no event shall DST be liable under this
Agreement in tort or otherwise for an amount exceeding the aggregate fees
actually received by DST pursuant to Article III during the Initial Term of this
Agreement.
Section 7.3 INDEMNITY. Customer hereby indemnifies and holds DST and
its officers, directors, agents and employees harmless from, and shall defend
them against any and all claims, demands, liabilities, costs or expenses,
including reasonable attorneys' fees ("Liabilities"), arising in connection with
the use of, or inability to use, the Investment Company Web Site, the DST Web
Site or the DST FAN Web Services by the Customer, any Shareholder or any other
Person who obtains, or attempts to obtain, any access thereto via the Investment
Company Web Site, except to the extent such Liabilities result directly from the
gross negligence or knowing and willful misconduct of DST.
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<PAGE>
ARTICLE VIII
CONFIDENTIALITY
---------------
Section 8.1 CONFIDENTIAL INFORMATION. Each of the Parties hereby
acknowledges that in the course of performing its obligations hereunder, the
other may disclose to it certain information and know-how of a technical,
financial, operational or other sort, that is nonpublic and otherwise
confidential or proprietary to the disclosing Party. Each Party acknowledges
that any such proprietary or confidential information disclosed to it is of
considerable commercial value and that the disclosing Party would likely be
economically or otherwise disadvantaged or harmed by the direct or indirect use
or disclosure thereof, except as specifically authorized by the disclosing
Party. Each Party therefore agrees to keep in strict confidence all such
information that may from time to time be disclosed to it, and agrees not to use
such information except as expressly permitted hereby or to disclose such
information to any third Party for any purpose without the prior consent of the
other. The provisions of this Section 8.1 shall not apply to versions of this
document which contain no references to Customer and which are used by DST with
other entities, or to any information if and to the extent it was (i)
independently developed by the receiving Party as evidenced by documentation in
such Party's possession, (ii) lawfully received by it free of restrictions from
another source having the right to furnish the same, (iii) generally known or
available to the public without breach of this Agreement by the receiving Party
or (iv) known to the receiving Party free of restriction at the time of such
disclosure. The Parties agree that immediately upon termination of this
Agreement, without regard to the reason for such termination, the Parties shall
forthwith return to one another all written materials and computer software
which are the property of the other Party.
Section 8.2 SPECIFIC PERFORMANCE. Each of the Parties agrees that the
nonbreaching Party would not have an adequate remedy at law in the event of the
other Party's breach or threatened breach of its obligations under Section 8.1,
and that the nonbreaching Party would suffer irreparable injury and damage as a
result of any such breach. Accordingly, in the event either Party breaches or
threatens to breach the obligations set forth in Section 8.1, in addition to and
not in lieu of any legal or other remedies such Party may pursue hereunder or
under applicable law, each Party hereby consents to the granting of equitable
relief (including the issuance of a temporary restraining order, preliminary
injunction or permanent injunction) against it by a court of competent
jurisdiction, without the necessity of providing actual damages or posting any
bond or other security therefor, prohibiting any such breach or threatened
breach. In any proceeding upon a motion for such equitable relief, a Party's
ability to answer in damages shall
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<PAGE>
not be interposed as a defense to the granting of such equitable relief.
ARTICLE IX
FORCE MAJEURE
-------------
DST shall not be liable for any delays or failures to perform any of its
obligations hereunder to the extent that such delays or failures are due to
circumstances beyond its reasonable control, including acts of God, strikes,
riots, acts of war, power failures, functions or malfunctions of the Internet,
telecommunications services, or firewalls, encryption systems and security
devices, or governmental regulations imposed after the date of this Agreement.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.1 GOVERNING LAW; JURISDICTION. This Agreement shall be
interpreted, construed and enforced in all respects in accordance with the laws
of the state of Missouri, without reference to the conflict of laws provisions
thereof.
Section 10.2 OPTIONS. Captions used herein are for convenience of
reference only, and shall not be used in the construction or interpretation
hereof.
Section 10.3 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall be deemed one and the same Agreement.
Section 10.4 PARTIES' INDEPENDENT CONTRACTORS. The Parties to this
Agreement are and shall remain independent contractors, and nothing herein shall
be construed to create a partnership or joint venture between them, and none of
them shall have the power of authority to bind or obligate the others in any
manner not expressly set forth herein.
Section 10.5 SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby unless either of the Parties shall, in its
reasonable determination, conclude that it shall be materially prejudiced by
such holding of invalidity, illegality or unenforceability, in which case such
Party may terminate this Agreement by thirty (30) days written notice to the
other.
Section 10.6 NO WAIVER. No term or provision hereof shall be deemed
waived and no breach excused unless such waiver or
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<PAGE>
consent shall be in writing and signed by the Party claimed to have waived or
consented. Any consent by any Party to, or waiver of, a breach by the other,
whether express or implied, shall not constitute a consent to, waiver of, or
excuse for any other different or subsequent breach.
Section 10.7 AGREEMENT. Neither this Agreement nor all or any of the
rights and obligations of either Party hereunder shall be assigned, whether by
agreement or by operation of law to any Person other than an Affiliate of the
assigning Party, without the prior written consent of the other Party, and any
attempt to do so shall be void. No such permitted assignment shall relieve the
assigning Party of its obligations under this Agreement. This Agreement shall
be binding upon and inure to the benefit of the respective successors, permitted
assigns and legal representatives of the Parties hereto,
Section 10.8 NOTICES. All notices, requests or communications required
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery, if delivered personally against written receipt, (ii) three (3)
days after posting by certified mail, postage prepaid, return receipt requested,
(iii) upon confirmed receipt, if delivered by telecopier or (iv) the next day if
delivered by a recognized overnight commercial courier, such as Federal Express
or DHL, addressed in each instance to the Parties at the addresses set forth
below the signatures of the parties at the end of this Agreement (or at such
other addresses as shall be given by either of the Parties to the other in
accordance with this Section 10.8).
Section 10.9 NON-SOLICITATION. Each of the Parties agrees that it will
not, during the Term, solicit or encourage to leave the employ or service of the
other, any employee employed by or consultant serving with the other during such
time, without the other's prior written consent. Such obligation will continue
with respect to any person leaving the employ or service of the other Party for
six (6) months after his or her departure.
Section 10.10 MASSACHUSETTS BUSINESS TRUST. The names "Westcore Trust"
and "Trustees of Westcore Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Amended and Restated Declaration of Trust dated November 19, 1987
as amended July 16, 1990 and as may be further amended from time to time which
is hereby referred to and a copy of which is on file at the office of the State
Secretary of the Commonwealth of Massachusetts and the principal office of the
Trust. The obligations of "Westcore Trust" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or
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<PAGE>
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
Section 10.11 ENTIRE AGREEMENT. This Agreement and its Exhibits together
constitute the complete understanding and agreement of the Parties with respect
to the subject matter hereof, and supersede all prior communications with
respect thereto. They may not be modified, amended or in any way altered,
except in a writing signed by both Parties. No agent of any Party hereto is
authorized to make any representation, promise or warranty inconsistent with the
terms hereof.
IN WITNESS WHEREOF, the Parties hereto have set their hands by their
authorized representatives as of the year and date first hereinabove indicated.
DENVER INVESTMENT ADVISORS, LLC DST SYSTEMS, INC.
By /s/ Kenneth V. Penland By /s/ Robert L. Tucker
--------------------------------- --------------------------------------
Name: Kenneth V. Penland Name: Robert L. Tucker
Title: President Title:Chief Technology Officer
Address: 1225 17th St., 26th Fl. 1055 Broadway, 9th Fl.
Denver, CO 80202 Kansas City, MO 64105-1594
Tel: (303) 312-5000 Tel: (816) 435-6568
FAX: (303) 312-4900 FAX: (816) 435-8630
WESTCORE TRUST
By /s/ Jack D. Henderson
---------------------------------
Name: Jack D. Henderson
Title: Vice President
Address: 370 17th St., Suite 2700
Denver, CO 80202
Tel: (303) 623-3577
FAX: (303) 623-7850
Copy to:
Drinker Biddle & Reath LLP
1345 Chestnut Street
Philadelphia, PA 19107-3496
Attention: W. Bruce McConnel
Telecopy: (215) 988-2757
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<PAGE>
EXHIBITS
--------
A - Selection of Basic or Advanced Package (Upgrade Request Form attached if
Basic Package is initially selected)
B - Fees
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<PAGE>
EXHIBIT A
Customer selects the following DST FAN Web Services Package:
/ / Basic Package
/x/ Advanced Package
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<PAGE>
EXHIBIT B
DST Systems, Inc.
FAN Web Services - TA2000 Client
Base Fee
Basic Package(1) $ 10,000
Advanced Package(2) $ 15,000
FAN Set-up Fee $ 5,000
Transaction Fees
Account Inquiry (Position) $.05
Account Inquiry (History) $.05
Transactions(3) $.50
Monthly Minimum Transaction Fees $2,000
Other Fees
Fund-Specific Enhancements/Consulting $150/hour
Tutorial Web Site $5,000
Maintenance Agreement(4) To Be
Determined
Notes:
1. These fees apply only to cases where the fund provides a link from their
web site to the DST transaction web site.
2. The FAN Base Fee and the fees for the Tutorial Web Site (if desired) are
one-time charges. DIA will only incur each of these charges once,
regardless of the number of FAN services in which DIA participates.
3. Other transactions may be supported in the future, the fees for which will
be determined at that time. DIA will not be obligated to offer new
transaction types.
4. The Advanced Package Fee will be paid as follows: (a) 1/3 at such time as
the DST Web Site and the DST FAN Web Services have been fully operational
for a period of 30 days; (b) 1/3 at such time as the DST Web Site and the
DST FAN Web Services have been fully operational for a period of 60 days;
(c) 1/3 at such time as the DST Web Site and the DST FAN Web Services have
been fully operational for a period of 90 days.
- ---------------------
(1) Includes 10 hours of consulting. Additional hours will be billed at
$150/hour.
(2) Includes 15 hours of consulting. Additional hours will be billed at
$150/hour.
(3) Transactions include ACH purchase, exchange, redemption via ACH, wire, or
check.
(4) Available after 12 months.
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<PAGE>
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into as of
August 1, 1997 between Denver Investment Advisors LLC, a Colorado limited
liability company ("DIA"), and Westcore Trust, a Massachusetts business trust
(the "Trust").
R E C I T A L S
WHEREAS, DIA desires the Board of Trustees of the Trust to consider the
Trust's use of the DST FAN (as defined below); and
WHEREAS, the Board of Trustees of the Trust desires that DIA provide the
Trust with written indemnification of existing and future claims arising out of
use of the DST FAN.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, the terms used in this
Agreement shall have the meanings assigned to such terms in this Section 1.
"CLAIMS" means any and all actions, suits, claims, rights, causes of
action, demands, damages, losses, liabilities, expenses, costs, attorneys' fees
or charges of whatever kind or nature, whether contingent or fixed, whether
known or unknown, whether suspected or unsuspected, which any person (i) now has
or claims to have, (ii) at any time had or claimed to have, or (iii) at any time
hereafter may have or claim to have.
"DAMAGES" means any and all costs, liabilities, obligations, losses,
claims, expenses, damages or judgments of any kind, including reasonable
attorneys' fees and the fees of accountants and experts.
"DST FAN" means the computer and software system, or "financial access
network," made available by DST Systems, Inc., a Delaware corporation, which
provides an interface between the Internet and public data network service
providers and the Trust's transfer agent for purposes which may include
communicating shareholder data and/or transaction requests.
-1-
<PAGE>
"INDEMNIFIED PARTIES" means, collectively, (i) the Trust; (ii) each
current, former and future officer, trustee, beneficial interest holder,
employee, agent, attorney, predecessor, successor, representative or affiliate
of the Trust, but not DIA or any of DIA's current, former and future officers,
trustees, beneficial interest holders, employees, agents, attorneys,
predecessors, successors or representatives; (iii) any successor, assign, heir,
estate or legal representative of any of the parties described in clauses (i) or
(ii); and (iv) any series or portfolio of the Trust.
2. INDEMNIFICATION.
(a) DIA shall defend, indemnify and hold harmless each Indemnified
Party from and against all Damages arising out of or resulting from any Claims
against such Indemnified Party related to or arising out of the use of the DST
FAN by DIA, the Trust, the Trust's shareholders or transfer agent at any time
(including prior to and on and after the date of execution hereof and of any
written agreement, if any, with DST Systems, Inc.).
(b) If any Indemnified Party receives notice of the assertion of any
Claim with respect to which DIA is or may be obligated to provide
indemnification (an "Indemnifiable Claim"), the Indemnified Party shall promptly
notify DIA in writing (the "Claim Notice") of the Indemnifiable Claim; provided,
however, that the failure to provide such notice shall not relieve or otherwise
affect the obligation of DIA to provide indemnification hereunder, except to the
extent that any Damages directly resulted or were caused by such failure.
(c) DIA shall have thirty (30) days after receipt of the Claim Notice
to undertake, conduct and control, through counsel of its own choosing (subject
to the consent of the Indemnified Party, which consent shall not be unreasonably
withheld), and at its expense, the settlement or defense thereof, and the
Indemnified Party shall cooperate with DIA in connection therewith; provided,
however, that (i) DIA shall permit the Indemnified Party to participate in such
settlement or defense through separate counsel chosen by the Indemnified Party
(subject to the consent of DIA, which consent shall not be unreasonably
withheld), provided that the fees and expenses of such counsel shall not be
borne by DIA unless one of the following conditions shall exist: (x) DIA shall
have failed to assume the defense of such claim or employ counsel reasonably
satisfactory to the Indemnified Party, or (y) there exists or will exist a
conflict of interest between the Indemnified Party and DIA which would make it
inappropriate in the reasonable judgment of DIA and the Indemnified Party for
the same counsel to represent both DIA and the Indemnified Party and (ii) DIA,
in defense of any action assumed by it, shall not, without the consent of the
Indemnified Party, which shall not be unreasonably withheld, consent to entry
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<PAGE>
of any judgment or enter into any settlement of such action which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the Indemnified Party of a release from all liability in respect to such
action. The Indemnified Party shall not pay or settle any Indemnifiable Claim
without DIA's consent, which shall not be unreasonably withheld. To the extent
that a party is the losing party in litigation regarding the reasonableness of
the withholding of a consent, that party shall bear the legal fees and expenses
of the other party to the litigation.
(d) If DIA does not notify the Indemnified Party within thirty (30)
days after receipt of the Claim Notice that it elects to undertake the defense
of the Indemnifiable Claim described therein, the Indemnified Party shall have
the right to contest, settle or compromise the Indemnifiable Claim in the
exercise of its reasonable discretion; provided, however, that the Indemnified
Party shall notify DIA of any compromise or settlement of any such Indemnifiable
Claim.
3. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
replaces all prior negotiations and agreements, written or oral.
4. AMENDMENT AND WAIVER. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
5. NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be given by personal delivery, overnight air
courier (with signed receipt of acknowledgement) or by telecopy (with
"answerback" confirmation of receipt), addressed to the parties at their
respective addresses set forth on the signature page hereto, or at such other
address as shall be designated by either party in a written notice to the other
party. All such notices and other communications shall be deemed to have been
delivered upon receipt.
6. MASSACHUSETTS BUSINESS TRUST. The names "Westcore Trust" and "Trustees
of Westcore Trust" refer respectively to the
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<PAGE>
Trust created and the Trustees, as trustees but not individually or personally,
acting from time to time under the Amended and Restated Declaration of Trust
dated November 19, 1987 as amended July 16, 1990 and as may be further amended
from time to time which is hereby referred to and a copy of which is on file at
the office of the State Secretary of the Commonwealth of Massachusetts and the
State Secretary of the Commonwealth of Massachusetts and the principal office of
the Trust. The obligations of "Westcore Trust" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property, and all persons dealing with any class of shares of the
Trust must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
7. MISCELLANEOUS.
(e) This Agreement shall be binding upon each of the undersigned and
its representatives and assigns and shall inure to the benefit of (and may be
enforced by) each Indemnified Party.
(f) In the event any Indemnified Party seeks to enforce his, her or
its rights hereunder, such Indemnified Party shall be entitled to recover all
reasonable fees and costs incurred in connection therewith, including reasonable
attorneys' fees.
(g) This Agreement shall in all respects be governed under the
internal laws (and not the laws of conflicts) of the State of Colorado.
(h) If any provision of this Agreement is held to be illegal or
invalid by a court of competent jurisdiction, such provision shall be severed
and deleted, and neither such provision nor its severance and deletion shall
effect the validity of the remaining provisions hereof.
(i) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which counterparts shall
together constitute a single agreement.
(j) The section headings of this Agreement are inserted for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
(k) This Agreement shall continue from the day first above written
until the expiration of all applicable statutes of limitations for any Claims.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
Denver Investment Advisors LLC
By: /s/ Kenneth V. Penland
----------------------
Print Name: Kenneth V. Penland
Its: President
----------------------
Title
Address for Notices:
Denver Investment Advisors LLC
1225 17th Street, 26th Floor
Denver, Colorado 80202
Attention: Kenneth V. Penland
Telecopy: (303) 312-4981
Westcore Trust
By: /s/ Jack D. Henderson
---------------------
Print Name: Jack D. Henderson
Its: Vice President
---------------
Title
Address for Notices:
Westcore Trust
c/o ALPS Mutual Funds Services Inc.
370 Seventeenth Street, Suite 2700
Denver, Colorado 80202
Attention: Chad Christensen
Telecopy: (303) 623-7850
with a copy to:
Drinker Biddle and Reath LLP
1345 Chestnut Street, Suite 100
Philadelphia, PA 19107-3496
Attention: W. Bruce McConnel
Telecopy: (215) 988-2757
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<PAGE>
WELLS FARGO
SHAREHOLDER SERVICE AGREEMENT
This SHAREHOLDER SERVICE AGREEMENT ("Agreement") is made as of July 1,
1996, by and among WELLS FARGO BANK, N.A., a national banking association
("WELLS"), and Westcore Trust, a Massachusetts business trust which is an
investment company registered under the Investment Company Act of 1940 (the
"Act") (the "Company"), and ALPS Mutual Funds Services, Inc., a Colorado
corporation and the distributor of the Funds ("Distributor") and Denver
Investment Advisors LLC, a Colorado Limited liability company (the
"Administrator").
RECITALS
WHEREAS, the parties hereto desire that WELLS provide certain shareholder
and administrative services to Company relating to the Company's investment
portfolios identified in Exhibit A hereto (the "Funds");
WHEREAS, WELLS is a subsidiary of Wells Fargo & Co., a bank holding
company, which owns certain other banks (the "Affiliates");
WHEREAS, WELLS and Affiliates act as trustee or custodian of various
employee benefit plans (the "Plans") and WELLS acts as subcustodian and
recordkeeper of the Plans for which the Affiliates act as trustee or custodian;
WHEREAS, a named fiduciary of the Plans has made an independent
determination of the Funds to be offered as investment options under the Plans;
WHEREAS, various participants of the Plans may instruct WELLS, either
directly or through an Affiliate, to invest a portion of their accounts in
shares of the Funds; each participant shall have an undivided beneficial
interest in the shares of the Funds to be maintained by WELLS; and,
WHEREAS, certain policies, procedures and information are necessary to
enable WELLS to have the Plans purchase and sell shares in the Funds.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties agree as follows:
AGREEMENT
1. THE SERVICES. WELLS shall provide shareholder and administration
services for the Plans as shareholders of the
<PAGE>
Company. Such services may include, without limitation: answering inquiries
regarding the Company on matters such as share prices, account balances and
dividend amounts and dates, establishment and maintenance of shareholder
accounts and records; assistance in processing purchase and redemption
transactions; providing periodic statements showing a shareholder's account
balance and integration of such statements with those of other transactions and
balances in the shareholder's other accounts serviced by WELLS, if any; and such
other information and services as Company may reasonably request, to the extent
WELLS is permitted by applicable statute, rule or regulation to provide such
information or services (collectively, the "Services").
2. THE ACCOUNT. WELLS will maintain on behalf of the Plans one
account per Fund (the "Account"), which Account will be opened upon completion
of the application forms then applicable to the desired Fund. In connection
with such Account, WELLS represents and warrants that it has the authority to
act on behalf of the Plans, it has examined any trust instruments, corporate
authorizations or other authorizing documentation and the person or persons who
signed WELLS' or Affiliates' contracts with the Plans were themselves properly
authorized by the Plans and the entities which they represent. The Funds shall
designate the Accounts with an account number. Account numbers will be the
means of identification when the parties are transacting in the Accounts. The
assets in the Accounts are assets of the Plans, are segregated from WELLS' own
assets and are carried free of any lien or payment. The Company agrees to cause
all of the Accounts to be kept open on each Fund's books regardless of a lack of
activity or small position size except to the extent WELLS takes specific action
to close an Account or to the extent the Fund's prospectus reserves the right to
close accounts which are inactive or of a small position size. In the latter
two cases, the Company will give prior notice to WELLS before closing an
Account.
3. PRICING INFORMATION. Distributor will provide to WELLS on each
day a Fund is open for trading (a "Business Day"), that day's closing net asset
value, dividends, income accrual factors, and capital gains information for such
Funds no later than 6:30 p.m. Eastern Time.
4. PRICE ERRORS.
(a) In the event adjustments are required to correct any error
in the computation of the net asset value of Fund shares, Distributor shall
notify WELLS as soon as practicable after discovering the need for those
adjustments. Notification may be made orally or via direct or indirect systems
access. Such notification must state for each day for which an error occurred
the incorrect price, the correct price, and, to
-2-
<PAGE>
the extent communicated to the Fund's shareholders, the reason for the price
change. Distributor agrees that WELLS may send this written notification or
derivation thereof (so long as such derivation is approved in advance by
Distributor) to Plan participants whose accounts are affected by the price
change.
(b) If an Account received amounts in excess of the amounts to
which it otherwise would have been entitled prior to an adjustment for an error,
WELLS, when requested by Distributor, will make a good faith attempt to collect
such excess amounts from the Plan. In no event, however, shall WELLS be liable
to Distributor for any such amounts.
(c) If an adjustment is to be made in accordance with subsection
4(a) above to correct an error which has caused an Account to receive an amount
less than that to which it is entitled, Distributor shall make all necessary
adjustments (within the parameters specified in subsection 4(a)) to the number
of shares owned in the Account and distribute to WELLS the amount of such
underpayment for credit to the Plans.
5. PURCHASE AND REDEMPTION ORDERS. On each Business Day, WELLS
shall aggregate and calculate the net purchase and redemption orders for each
Account that it received prior to 1:00 p.m., Pacific Time (i.e., the close of
trading), and communicate to Distributor, by facsimile or, in WELLS' discretion,
by telephone, the net aggregate purchase or redemption order (if any) for each
Account for such Business Day. (Such Business Day is sometimes referred to
herein as the "Trade Date.") WELLS will communicate such orders to Distributor
prior to 8:00 a.m., Pacific Time, on the next' Business Day following the Trade
Date. All trades communicated to Distributor by the foregoing deadline shall be
treated by Distributor as if they were received by Distributor prior to 1:00
p.m., Pacific Time, on the Trade Date.
6. SETTLEMENT OF TRANSACTIONS.
(a) Purchases. WELLS will transmit the purchase price of each
purchase order to Distributor in accordance with written instructions provided
by Distributor to WELLS for the applicable Fund by wire transfer prior to 10:00
a.m., Pacific Time, on the next Business Day following the Trade Date. WELLS
agrees that if it fails to (i) wire the purchase price to Distributor before
such 10:00 a.m. deadline or (ii) provide Distributor with a Federal Funds wire
system reference number evidencing the wire transfer of the purchase price to
Distributor prior to such 10:00 a.m. deadline, it will indemnify and hold
harmless Distributor and the Fund for which such purchase order was placed from
any liabilities, costs and damages either may suffer as a result of such
failure.
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<PAGE>
(b) Redemptions. Company will use its best efforts to transmit
to WELLS the proceeds of all redemption orders placed by WELLS by 10:00 a.m.,
Pacific Time, on the Business Day immediately following the Trade Date by wire
transfer on that Business Day. Should Company need to extend the settlement on
a trade, it will contact WELLS to discuss the extension. For purposes of
determining the length of settlement, Company agrees to treat the Accounts the
same as it treats other direct shareholders of the Funds. Each wire transfer of
redemption proceeds shall indicate, on the Fed Funds wire system, the amount
thereof attributable to each Fund; provided, however, that if the number of
entries would be too great to be transmitted through the Federal Funds wire
system, Company shall, on the day the wire is sent, fax such entries to WELLS or
if possible, send via direct or indirect systems access.
Redemption wires should be sent to:
ABA #122000218
Credit to #250090909
Further Credit to Account Number
(See Exhibit C Attached)
Fax supplements should be sent to:
WELLS FARGO BANK, N.A.
(818) 880-7224
Attention: Mutual Funds
7. AGENCY. Distributor hereby appoints WELLS as its agent for the
limited purpose of accepting orders from the Plans and their participants for
the purchase and redemption of shares of the Funds by WELLS on behalf of each
Plan.
8. PARTICIPANT RECORDKEEPING. Recordkeeping and other
administrative services to Plan participants shall be the responsibility of
WELLS and shall not be the responsibility of the Company or Distributor or
Administrator. The Company will recognize WELLS as a single shareholder and as
an unallocated account in the Funds and will not maintain separate accounts for
Plans or Plan participants. Upon the request of the Company or Distributor or
Administrator, WELLS shall provide copies of all records relating to the Funds
as may reasonably be requested to enable the Funds or their representatives to
comply with any request of a governmental body or self-regulatory organization.
9. ACCOUNT ACTIVITY AND DISTRIBUTION INFORMATION.
(a) Distributor and/or Company will provide WELLS (i)
confirmations of Account activity within five Business Days after each day on
which a purchase or redemption of Shares is effected for an Account, (ii)
statements detailing activity in
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<PAGE>
each Account no less frequently than monthly, and (iii) such other information
as may be reasonably requested by WELLS.
(b) As to each Fund, Distributor shall provide WELLS with all
distribution announcement information as soon as it is announced by such Fund.
The distribution information shall set forth ex-dates, record date, payable
date, distribution rate per share, record date share balances, cash and
reinvested payment amounts and all other information reasonably requested by
WELLS, Where possible, Distributor shall provide WELLS with direct or indirect
systems access to Distributor's systems for obtaining such distribution
information. If direct or indirect systems access is not possible, Distributor
shall fax distribution information to:
WELLS FARGO BANK, N.A.
(818) 880-7224
Attention: Mutual Funds
(c) All dividends and capital gains distributions will be
automatically reinvested on payable date at net asset value in accordance with
each Fund's then current prospectus.
10. PROXIES. WELLS will distribute all proxy material furnished by
the Funds to each Plan and will vote the Plan's shares as directed by the Plan
participants or the Plan administrator. WELLS shall not in any way recommend
action in connection with or oppose or interfere with the solicitation of such
proxies.
11. FUND EXPENSES. WELLS shall not bear any of the expenses for the
cost of registration of the Funds' shares, preparation of the Funds'
prospectuses, proxy, materials and reports, and the preparation of other related
statements and notices required by law.
12. PLAN PARTICIPANT COMMUNICATIONS. Distributor shall provide to
WELLS or its authorized representative, at no expense to WELLS, the following
shareholder communications materials prepared for circulation to shareholders of
record of a Fund in quantities requested by WELLS which are sufficient to allow
mailing thereof by WELLS, to the extent required by applicable law, to all Plan
participants which indirectly hold shares in a Fund through the Plan: proxy or
information statements, annual reports, semiannual reports, and all updated
prospectuses, supplements and amendments thereof.
13. WELLS COMPENSATION AND EXPENSES. In consideration of its
providing the Services, WELLS shall be entitled to receive from the
Administrator the fees as set forth in Exhibit B attached hereto. The Company
is not liable to WELLS for the fee hereunder. In addition, Administrator shall
reimburse WELLS for
-5-
<PAGE>
all reasonable out-of-pocket expenses incurred in connection with providing such
Services. These expenses shall include, but shall not be limited to, actual
postage expense of mailing updated prospectuses, financial reports and proxies
to shareholders. The payment of such fees and expenses has or will be
authorized to the extent necessary by the Board of Directors of the Company.
The Company will not bear directly or indirectly the cost of any activity
primarily intended to result in the distribution of Fund shares.
14. COMPLIANCE WITH LAWS.
(a) Company, Administrator and Distributor acknowledge and agree
that WELLS is not responsible for: (i) any information contained in any
prospectus, registration statement, annual report, proxy statement, or item of
advertising or marketing material prepared by Company or Distributor of or
relating to any Fund, (ii) the registration or qualification of any shares of
any Fund under any federal or applicable state laws and (iii) the compliance by
Company, Distributor, any Fund and an "affiliated person" (as that term is
defined in the Act) of any of them (each, an "Affiliate"), with all applicable
federal or state law, rule or regulation (including the Act, the Investment
Advisers Act of 1940, as amended, and the rules and regulations thereunder) and
the rules and regulations of any self-regulatory organization with jurisdiction
over Company, Distributor, a Fund or an Affiliate (the foregoing laws, rules and
regulations are collectively referred to herein as "Applicable Law").
(b) WELLS shall comply with any Applicable Law relating to the
services WELLS provides pursuant to this Agreement including record keeping and
preservation of records requirements of the Investment Company Act of 1940 and
the rules thereunder and other applicable statutes.
(c) Each party hereto is entitled to rely on any written
records or instructions provided to it by the other party.
15. INDEMNIFICATION.
(a) WELLS shall indemnify, defend and hold harmless Company,
Administrator, Distributor and each Fund and each of their directors, officers,
employees and agents and each person who controls them within the meaning of the
Securities Act of 1933, as amended ("Company Indemnitees"), from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
attorney's fees) they incur ("Losses") insofar as such Losses arise out of or
are based upon (i) WELLS' negligence or willful misconduct in the performance of
its duties and obligations under this Agreement, (ii) WELLS' violation of
Applicable Law in connection with the performance of its duties
-6-
<PAGE>
and obligations under this Agreement, (iii) any breach by WELLS of any material
provision of this Agreement (including the failure to wire funds or provide the
Federal Funds reference number thereof by the deadline established in Section
6(a) hereof), and (iv) any breach by WELLS of a representation, warranty or --
covenant made by it in this Agreement. WELLS shall also promptly reimburse the
Company Indemnitees for any legal or other expenses reasonably incurred, as
incurred, by them in connection with investigating or defending against such
Losses. This indemnity agreement is in addition to any other liability which
WELLS may otherwise have.
(b) Company shall indemnify, defend and hold harmless WELLS and
its parent, Affiliates, directors, officers, employees and agents and each
person who controls them within the meaning of the Securities Act of 1933, as
amended (the "Bank Indemnitees"), from and against any and all Losses insofar as
such Losses arise out of or are based upon (i) Company's negligence or willful
misconduct in the performance of its duties and obligations under this
Agreement, (ii) Company's violation of Applicable Law in connection with
Distributor's advertising, offering and selling of shares of a Fund or the
performance of its duties and obligations under this Agreement, (iii) any breach
by Company of any material provision of this Agreement, and (iv) any breach by
Company of a representation, warranty or covenant made in this Agreement.
Company shall also promptly reimburse the Bank Indemnitees for any legal or
other expenses reasonably incurred, as incurred, by them in connection with
investigating or defending against such Losses. This indemnity agreement is in
addition to any other liability which Company may otherwise have.
(c) Distributor shall indemnify, defend and hold harmless the
Bank Indemnitees from and against any and all Losses insofar as such Losses
arise out of or are based upon (i) Distributor's negligence or willful
misconduct in the performance of its duties and obligations under this
agreement, (ii) Distributor's violation of Applicable Law in connection with
Distributor's advertising, offering and selling of shares of a Fund or the
performance of its duties and obligations under this Agreement, (iii) any breach
by Distributor of any material provision of this Agreement, and (iv) any breach
by Distributor of a representation, warranty or covenant made in this Agreement.
Distributor shall also promptly reimburse the Bank Indemnitees for any legal or
other expenses reasonably incurred, by them in connection with investigating or
defending against such Losses. This indemnity agreement is in addition to any
other liability which Distributor may otherwise have.
(d) Administrator shall indemnify, defend and hold harmless the
Bank Indemnitees from and against any and all Losses insofar as such Losses
arise out of or are based upon (i) Administrator's negligence or willful
misconduct in the
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<PAGE>
performance of its duties and obligations under this agreement, (ii)
Administrator's violation of Applicable Law in connection with Distributor's
advertising, offering and selling of shares of a Fund or the performance of its
duties and obligations under this Agreement, (iii) any breach by Administrator
of any material provision of this Agreement, and (iv) any breach by
Administrator of a representation, warranty or covenant made in this Agreement.
Administrator shall also promptly reimburse the Bank Indemnitees for any legal
or other expenses reasonably incurred, by them in connection with investigating
or defending against such Losses. This indemnity agreement is in addition to
any other liability which Administrator may otherwise have.
(e) Promptly after receipt by a party entitled to
indemnification under this Section 15 (an "Indemnified Party") of notice of the
commencement of an investigation, action, claim or proceeding, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 15, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any Indemnified Party otherwise than
under this paragraph. In case any such action is brought against any
Indemnified Party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, assume the defense thereof, with counsel
satisfactory to such Indemnified Party. After notice from the indemnifying
party of its intention to assume the defense of an action, the Indemnified Party
shall bear the expenses-of any additional counsel obtained by it, and the
indemnifying party shall not be liable to such Indemnified Party under this
paragraph for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation.
16. REPRESENTATIONS AND WARRANTIES.
(a) Company, Administrator and Distributor. Each of Company,
Administrator and Distributor each hereby represent and warrant to WELLS with
respect to itself only:
(i) It has the power and the authority to enter into and
perform all of its duties and obligations under this Agreement;
(ii) This Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms;
(iii) No consent or authorization of, filing with, or other
act by or in respect of any governmental authority, is required in connection
with the execution,
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<PAGE>
delivery, performance, validity or enforceability of this Agreement;
(iv) The execution, performance and delivery of this
Agreement by it will not result in it violating any Applicable Law or breaching
or otherwise impairing any of its contractual obligations; and
(v) The Funds are each registered as investment companies
under the Act and Fund shares sold by the Funds are, and will be, registered
under the Securities Act of 1933.
(b) WELLS. WELLS hereby represents and warrants to Company,
Administrator and Distributor:
(i) It has the corporate power and the authority to enter
into and perform all of its duties and obligations under this Agreement;
(ii) This Agreement constitutes its legal, valid and binding
obligation and is enforceable against it in accordance with its terms;
(iii) No consent or authorization of, filing with, or other
act by or in respect of any governmental authority, is required in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement;
(iv) The execution, performance and delivery of this
Agreement will not result in WELLS violating any Applicable Law or breaching or
otherwise impairing any of its contractual obligations;
(v) WELLS is not an investment fiduciary with respect to
the selection of the Funds as an investment option under the Plans:
(vi) WELLS will disclose to representatives of the Plans
that it provides services with respect to the Funds and that it receives
compensation for providing such services for the Funds.
17. TIME OF THE ESSENCE. Company and Distributor acknowledge that
the time deadlines set forth in this Agreement are essential to the successful
execution by WELLS of its obligations to the Plans. Further, Company and
Distributor acknowledge that the failure by either or both of them to comply
with the deadlines set forth herein may cause damages or expenses to WELLS, its
Affiliates or the Plans.
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<PAGE>
18. TERMINATION. Any party may terminate this Agreement: (a) by
providing 90 days' written notice to the other parties; (b) at any time by
giving 30 days' written notice to the other parties in the event of a material
breach of this Agreement by the other party or parties that is not cured during
such 30 day period; (c) upon institution of formal proceedings relating to the
legality of the terms and conditions of this Agreement by the National
Association of Securities Dealers, Inc., the Securities and Exchange Commission
or any other regulatory body; (d) upon assignment of the Agreement in
contravention of the terms hereof; (e) in the event shares of a Fund are not
registered, issued or sold in conformance with Federal law or such law precludes
the use of Fund shares as an underlying investment medium of the Plans; prompt
notice shall be given by either party to the other in the event the conditions
of this provision occur; and (f) upon such shorter notice as is required by law,
order, or instruction by a court of competent jurisdiction or a regulatory body
or self-regulatory organization with jurisdiction over the terminating party.
19. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of California
applicable to agreements fully executed and to be performed therein; exclusive
of conflicts of laws.
20. AMENDMENT AND WAIVER. No modification of any provision of this
Agreement will be binding unless in writing and executed by the party to be
bound thereby. No waiver of any provision of this Agreement will be binding
unless in writing and executed by the party granting such waiver. Any valid
waiver of a provision set forth herein shall not constitute a waiver of any
other provision of this Agreement. In addition, any such waiver shall
constitute a present waiver of such provision and shall not constitute a
permanent future waiver of such provision.
21. ASSIGNMENT. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective successors and assigns;
provided, however, that neither this Agreement nor any rights, privileges,
duties or obligations of the parties may be assigned by either party without the
written consent of the other party or as expressly contemplated by this
Agreement.
22. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the transactions covered and contemplated
hereunder, and supersedes all prior agreements or understandings between the
parties relating to the subject matter hereof, including any such agreement to
which First Interstate Bank of California, or any its affiliates, was a party.
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<PAGE>
23. NO JOINT VENTURE. Neither the execution nor performance of this
Agreement shall be deemed to create a partnership or joint vesture by and among
any of the parties hereto.
24. NOTICES. All notices hereunder shall be given in writing (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy, by registered or certified mail or by overnight delivery (postage
prepaid, return receipt requested) to WELLS at the address set forth below and
to the Company, the Distributor and the Administrator to the addresses set forth
on the signature pages:
Wells Fargo Bank, N.A.
Trust Operations Center
26610 West Agoura Road
Calabasas, California 92302
Attention: Mutual Funds
25. EXPENSES. All expenses incident to the performance by each party
of its respective duties under this Agreement shall be paid by that party,
except as provided in Section 13 and in Exhibit B.
26. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
27. SURVIVAL. The provisions of Sections 14 and 15 shall survive
termination of this Agreement.
28. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees
that this Agreement and the arrangements described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
29. MANDATORY ARBITRATION. Any controversy or claim among the
parties, including but not limited to those arising out of or relating to this
Agreement or any agreements or instruments relating to or delivered in
connection with them (all of which collectively may be referred to as (the
"Subject Documents"), and any claim based on or arising from an alleged tort,
shall at the request of any party to this Agreement be determined by
arbitration. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in the Subject Documents, and under the Commercial Rules of the
American Arbitration Association ("AAA"). The arbitrator(s) shall resolve all
claims and defenses or other matters in dispute in accordance with applicable
law, including without limitation thereto, all
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<PAGE>
statutes of limitation. Any controversy concerning whether an issue is
arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of
provisional or ancillary remedies shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
30. MASSACHUSETTS BUSINESS TRUST PROVISIONS
The names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby referred
to and copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the
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<PAGE>
Trust must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY DISTRIBUTOR
By:/s/ Jack H. Henderson By:/s/ James Hyatt
------------------------ ---------------------------
Title: Chairman Title:General Counsel
--------------------- ------------------------
Address:370 17th St., Address:370 17th St.,
------------------- ----------------------
Suite 2700 Suite 2700
------------------- ----------------------
Denver, CO 80202 Denver, CO 80202
------------------- ----------------------
WELLS FARGO BANK, N.A. ADMINISTRATOR
By:/s/ Eric A. Lee By: /s/ Kenneth V. Penland
------------------------ ---------------------------
Title:Asst. Vice President Title:President
--------------------- -------------------------
Address:4365 Executive Dr. Address:1225 17th St.
-------------------- -----------------------
Suite 1700 26th Floor
-------------------- -----------------------
San Diego, CA 92121 Denver, CO 80202
-------------------- -----------------------
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<PAGE>
EXHIBIT A
The Distributor will compensate WELLS for the services and facilities provided
under the Agreement at the maximum annual rates for the following funds:
Westcore Blue Chip
Westcore Growth & Income
Westcore Intermediate Term Bond
Westcore Long Term Bond
Westcore Midco Growth
Westcore Small-Cap Opportunity
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<PAGE>
EXHIBIT B
Payments to WELLS under Section 13 of the Agreement will be made according to
the following schedule:
Fees are payable monthly at an annual rate of 0.25% for listed equity Funds and
0.20% for listed fixed-income Funds of the net asset value of outstanding shares
of such Fund held by Plans receiving services described in the Agreement with
WELLS. Such fees are payable within 30 days following the end of each period
for which such fees are payable.
Please remit Service Agreement Fees to the following address:
ChoiceMaster Service Center
Attn: Systems Manager
4365 Executive Drive, Suite 1700
San Diego, CA 92121-2130
619-622-6762
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<PAGE>
AGENCY TRADING AGREEMENT
This Agreement is made as of May 19, 1997, between Bank of Oklahoma, N.A. and
its affiliate Alliance Trust Company, N.A., (collectively "BOK"), each
registered investment company ("Fund Company") executing this Agreement, on its
own behalf and on behalf of each of the series or classes of shares, if any,
listed on Schedule I, as amended from time to time (such series or classes being
referred to as the "Fund(s)"), and Fund Affiliate (defined below) that has
executed this Agreement. Fund Company and Fund Affiliate are collectively
referred to herein as "Fund Parties." In the event that there are no series or
classes of shares listed on Schedule I, the term "Fund(s)" shall mean "Fund
Company."
WHEREAS Fund Affiliate is either (i) an investment adviser to or administrator
for the Funds, (ii) the principal underwriter or distributor for the Funds,
(iii) a transfer agent for the Funds or (iv) a bookkeeping and pricing agent for
the Funds.
WHEREAS Fund Parties wish to have BOK perform certain recordkeeping, shareholder
communication, and other services for each Fund.
Recital
WHEREAS, BOK acts as trustee or custodian of certain tax-qualified employee
benefit plans and tax-exempt trusts in
<PAGE>
which plan assets are held (individually, the "Plan," and collectively, the
"Plans"), and invests and reinvests Plan assets as directed by one or more
investment advisors, a Plan sponsor or an administrative committee, as the
case may be, of each Plan (a "Plan Representative"), or upon the direction
of Plan participants ("Participants");
WHEREAS, BOK provides certain recordkeeping and other services for the
Plans, including processing of orders and instructions for the investment
and reinvestment of Plan assets in each Plan's investment options;
WHEREAS, BOK and the Fund Company desire to facilitate the purchase,
exchange and redemptions of shares of the Funds (the "Shares") on behalf of
the Plans through one or more accounts (not to exceed one per Plan) in each
Fund (individually, an "Account" and collectively, the "Accounts"), subject
to the terms and conditions of this Agreement; and
WHEREAS, the Fund Company and BOK desire BOK to serve as the Fund Company's
agent to receive and transmit orders and instructions regarding the
purchase, exchange and redemption of Shares, subject to the terms and
conditions of this Agency Trading Agreement.
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<PAGE>
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties hereto agree as follows.
1. APPOINTMENT OF BOK
The Fund Company hereby appoints BOK as agent for the limited purpose of
accepting orders and instructions with respect to Shares purchased,
exchanged or redeemed by the Plans. BOK hereby accepts its appointment on
the terms and conditions set forth herein.
2. PRICING INFORMATION
The Fund Company will furnish, or caused to be furnished, to BOK on each
business day that the New York Stock Exchange is open for business
("Business Day") with: (i) net asset value information as of the close of
trading on the New York Stock Exchange or as at such other time at which a
Fund's net asset value is calculated as specified in such Fund's prospectus
("Close of Trading"); and (ii) in the case of Funds the principal purpose
of which is the generation of interest income, the daily accrual or
interest rate factor (mil rate). The Fund Company shall use best efforts
to provide such information to BOK by 6:30 p.m. Eastern Time ("ET") on the
same Business Day via 1-800-392-2673 and to provide a fax to BOK by 7:00
p.m. ET on the same Business Day.
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<PAGE>
3. ORDERS FOR PURCHASE, REDEMPTION, OR EXCHANGE
BOK, as agent of the Fund Company, shall (1) receive from, or on behalf of,
Participants or Plan Representatives for acceptance as of the Close of
Trading on each Business Day (the "Trade Date") (based solely upon the
receipt of orders and instructions from such Participants or Plan
Representatives prior to the Close of Trading on any such Business Day)
orders and instructions for the purchase, redemption on exchange of Shares
held by the Plans, and (ii) upon acceptance of any such orders and
instructions, communicate such acceptance to the Fund Company and transmit
to the Fund Company orders and instructions to purchase, exchange or redeem
Shares for specified Accounts. On each business day, BOK shall aggregate
and calculate the net purchase and redemption amounts for such orders for
each Account and communicate such net aggregate amounts to the Fund Company
prior to 9:00 a.m. ET on the Business Day next succeeding the Trade Date.
All communications herein shall be by facsimile or other form of written
electronic transmission. If provided in the applicable shareholder's
account application, dividends, capital gains, and other distributions will
be automatically reinvested on payable date at net asset value in
accordance with each Fund's then current prospectus.
-4-
<PAGE>
4. SETTLEMENT
(a) Purchases. BOK will transmit the purchase price of each purchase
order to the Fund Company in accordance with written instructions provided
by the Fund Company to BOK for the applicable Fund by wire transfer prior
to 1:00 p.m. ET, on the next Business Day following the Trade Date. BOK
agrees that if it fails to (i) wire the purchase price to the Fund Company
before such 1:00 p.m. ET deadline or (ii) provide the Fund Company with a
Federal Funds wire system reference number evidencing, the wire transfer of
the purchase price to the Fund Company prior to such 1:00 p.m. ET deadline.
The cost associated with any delayed wire is the responsibility of BOK.
(b) Redemptions. The Fund Company will use its best efforts to transmit
to BOK the proceeds of all redemption orders placed by BOK by 1:00 p.m. ET
on the Business Day immediately following the Trade Date by wire transfer
on that Business Day. Should a Fund need to extend the settlement on a
trade, the Fund Company will contact BOK to discuss the extension. For
purposes of determining the length of settlement, the Fund Company agrees
to treat the Accounts the same as it treats other direct shareholders of
the Funds. Each wire transfer of redemption proceeds shall indicate, on
the Fed Funds wire system, the amount thereof attributable to each Fund;
provided, however, that if the number of entries would be too great to be
transmitted
-5-
<PAGE>
through the Federal Funds wire system, the Fund Company shall, on the day
the wire is sent, fax such entries to BOK or if possible, send via direct
or indirect systems access. The cost associated with any delayed wire is
the responsibility of the Fund Affiliate sending the wire.
Redemption wires should be sent to:
Bank of Oklahoma, N.A.
ABA # 1039000036
Credit to # Trust Funds #600024642
For Further Credit to Account Number
Attention: Daily Recordkeeping
Fax supplements should be sent to: (918) 588-6411
5. PARTICIPANT RECORDKEEPING
Recordkeeping and other administrative services to a Plan and Plan
Participants shall be the responsibility of BOK and shall not be the
responsibility of the Fund Company. The Fund Company will recognize, as
determined by BOK, each Plan or all Plans, as the case may be, as a single
shareholder and as an unallocated account in the Funds, and, in any event,
the Fund Company will not maintain separate accounts for Plan Participants.
6. FUND INFORMATION
Each Business Day the Fund Company will provide to BOK via electronic or
telephonic data transmission one or more
-6-
<PAGE>
written reports reflecting Plan purchase, exchange and redemption activity
that occurred in each Fund the prior Business Day. Any such report will
reflect the number of Shares purchased, exchanged or redeemed, the price
per Share and the dollar amounts.
BOK will perform a trade reconciliation to ensure that Plan and Account
assets are in balance. BOK shall notify the Fund Company of any
differences between the Plan and/or Participant balances maintained by BOK
and the Account(s) balances maintained by the Fund Company within two (2)
Business Days of receipt of the Fund Company's report. BOK and the Fund
Company shall determine and take, to the extent applicable, appropriate
corrective actions with respect to any such differences. Upon the
reasonable request of BOK, the Fund Company will notify BOK in writing by
electronic or telephonic communication facilities of (i) the ex-date of all
Fund distributions (dividends and capital gains) and (ii) the reinvestment
of Shares as of payable date of any such distribution.
7. PROSPECTUS, PROXIES AND RELATED MATERIALS
The Fund Company shall provide Fund prospectuses, proxy materials, periodic
Fund reports and other similar materials that are required by law to be
sent to shareholders, in such quantities and at such times as BOK shall
reasonably
-7-
<PAGE>
request. BOK hereby expressly acknowledges that BOK, and not the Fund
Company, shall be responsible for the delivery of any such prospectuses,
reports and materials to Plan Participants or Plan Representatives, as the
case may be. BOK shall promptly deliver any such prospectuses, reports and
materials to Plan Participants or Plan Representatives, as the case may be
after delivery thereof by the Fund Company.
BOK will vote Plan Shares as directed by Plan Participants or Plan
Representatives, as the case may be. BOK, in its capacity as Service
Provider hereunder (and its agents), shall not in any way recommend action
in connection with, or interfere with the solicitation of, such proxy
votes.
8. MAINTENANCE OF RECORDS; PLAN INFORMATION; ACCESS
Each party shall maintain and preserve all records, as required by law, in
connection with providing services hereunder and in making Shares available
to the Plans. Except as otherwise provided hereunder, BOK shall provide
copies of all records relating to the Plans, Participants and Funds as may
reasonably be requested by the Fund Company to enable the Fund Company, the
Funds or their representatives to comply with any request of the Fund
Company's internal or external auditors, any governmental agency or similar
entity, to otherwise enable it to comply
-8-
<PAGE>
with all applicable state or Federal laws or to enable the Fund Company to
fulfill its obligations and perform its duties hereunder.
To the extent required under the 1940 Act, and the rules thereunder, BOK
agrees that records maintained by it hereunder are the property of the
Funds and will be preserved, maintained and made available in accordance
with the 1940 Act.
Upon reasonable notice by the Fund Company to BOK, BOK shall make available
during normal business hours such of BOK's facilities and premises employed
in connection with the performance of BOK's duties and responsibilities
under this Agency Trading Agreement for reasonable visitation, inspection
and auditing by the Fund Company or a Fund, or any person retained by the
Fund Company or a Fund for such purposes as may be necessary or desirable
to evaluate the quality of the duties and responsibilities performed by BOK
pursuant hereto.
This Section 8 shall survive termination of this Agreement.
9. COMPLIANCE WITH LAWS
At all times the Fund Company and BOK shall comply with all laws, rules and
regulations, to the extent applicable, by
-9-
<PAGE>
virtue of entering into this Agency Trading Agreement or otherwise.
10. REPRESENTATIONS WITH RESPECT TO THE FUNDS
BOK shall not make, nor shall it allow its affiliates to make
representations concerning a Fund or Shares, except those contained (i) the
then current prospectus of a Fund, (ii) current sales literature created by
or on behalf of the Funds, or (iii) current sales literature created by BOK
which has been submitted to, and approved in writing, by the Funds or their
agents prior to the use or distribution of such sales literature by BOK,
its affiliates or agents.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS
BOK represents, warrants, and covenants that:
(a) it has full power and authority under applicable law, the governing
Plan documents and from the appropriate Plan Representative(s), and has
taken all action necessary, to enter into and perform its obligations and
duties under this Agency Trading Agreement, and that by doing so it will
not breach or otherwise impair any other agreement or understanding with
any other person, corporation or other entity; this Agency Trading
Agreement constitutes its legal, valid and binding obligation and is
enforceable against it in accordance with its terms; no consent or
authorization of, filing with or other act by or in respect of any
-10-
<PAGE>
governmental authority, is required in connection with the execution,
delivery, performances, validity or enforceability of this Agency Trading
Agreement;
(b) it will timely disclose to Plan Representatives or Plan Participants,
as the case may be, the arrangement provided for in this Agency Trading
Agreement;
(c) it is registered, shall register or is exempt from registration as a
transfer agent pursuant to Section 17A of the Securities and Exchange Act
of 1934, as amended (the "1934 Act") (it being understood by the parties
hereto that failure on the part of BOK to so register, if not exempt from
registration, will constitute a material breach of this Agency Trading
Agreement 30 days after the effective date of this Agency Trading Agreement
or such earlier date on which such failure constitutes violation of
applicable law or regulation); if required under applicable regulations,
BOK will amend its TA-1 to disclose its appointment hereunder as a limited
purpose co-transfer agent to the Fund Company;
(d) it is a national bank chartered by the Federal Reserve Board;
(e) all purchases, redemptions and exchanges orders and instructions
received by it on any Business Day and transmitted to the Fund Company for
processing pursuant to this Agency Trading Agreement have been received
prior to the Close of Trading on such Business Day;
-11-
<PAGE>
(f) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agency Trading Agreement shall be effected in accordance with each
Fund's then current prospectus;
(g) it will comply with all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder;
(h) the receipt of any fees by the BOK directly or indirectly relating to
the purchase, exchange or redemption of the Funds has been reviewed by
legal counsel to BOK and not constitute a "prohibited transaction" as such
term is defined in Section 406 of the Employee Retirement Income Security
Act of 1974, as amended, and Section 4975 of the Internal Revenue Code of
1986, as amended, for which an exemption is not available, and is not
otherwise prohibited by any other applicable law, governing instrument or
court order; and
(i) it will promptly notify the Fund Company in the event that it is
unable, for any reason, to perform any of its duties or obligations under
this Agency Trading Agreement or there is a material failure to comply with
in the representation made herein above.
Each of the Fund Company and Fund Affiliate represents, warrants, and
covenants as to itself only and not jointly that:
-12-
<PAGE>
(a) it has full power and authority under applicable law, and has taken
all action necessary, to enter into and perform its duties and obligations
under this Agency Trading Agreement and that by doing so it will not breach
or otherwise impair any other agreement or understanding with any other
person, corporation or other entity;
(b) all purchases, exchanges and redemptions of Fund shares contemplated
by this Agency Trading Agreement shall be effected in accordance with each
Fund's then current prospectus.
(c) it will comply with all applicable state and Federal laws and with the
rules and regulations of authorized regulatory agencies thereunder; and
(d) it will promptly notify BOK in the event that it is unable, for any
reason, to perform any of its duties or obligations under this Agency
Trading Agreement or there is a material failure to comply with the
representations made herein above.
The Fund Company represents, warrants and covenants as to itself only that
the Funds are registered as investment companies under the 1940 Act and
Fund Shares are registered under the Securities Act of 1933, as amended;
-13-
<PAGE>
12. INDEMNIFICATION
(a) BOK shall indemnify and hold harmless the Fund Company, each of the
Fund Affiliates and their respective officers, directors, partners,
trustees, members, shareholders, employees and agents ("Indemnitees")
against any loss, cost, damage, expense, liability or claim including,
without limitations, reasonable legal fees and other out-of-pocket costs of
defending against any such loss, cost, damage, expense, liability or claim,
suffered by all or any of such Indemnitees to the extent arising out of, or
relating to, (i) any actual negligent act or omission or act of intentional
misconduct by BOK or its agents relating to this Agency Trading Agreement
or the services rendered hereunder, (ii) a material breach of any of the
representations, warranties and covenants made hereunder, (iii) the failure
to timely and properly transmit orders and instructions to the Fund Company
(or its affiliates), (iv) cancellation or subsequent correction of any
orders and instructions transmitted to the Fund Company (or its
affiliates), or (v) discrepancies between Participant and Plan balances
maintained by BOK and the Account(s) balances maintained by the Fund
Company (or its affiliates) due to errors caused by BOK.
(b) Fund Company and each Fund Affiliate shall indemnify and hold harmless
BOK and its respective officers, directors, partners, trustees,
shareholders, employees and
-14-
<PAGE>
agents ("Indemnitees") against any loss, cost, damage, expense, liability
or claim including, without limitations, reasonable legal fees and other
out-of-pocket costs of defending against any such loss, cost, damage,
expense, liability or claim, suffered by all or any of such Indemnitees to
the extent arising out of, or relating to, (i) any actual negligent act or
omission or act of intentional misconduct by itself or its own agents
performing duties under this Agency Trading Agreement or the services
rendered hereunder, or (ii) a material breach of any of the
representations, warranties and covenants made hereunder.
(c) In performing its respective duties under this Agency Trading
Agreement, each party hereto shall comply with all applicable federal and
state securities laws and regulations and (1) Westcore Trust and each Fund
Affiliate shall fully indemnity BOK for any claims or liabilities suffered
by BOK or its officers, directors, trustees, employees or agents (including
reasonable legal fees and other out-of-pocket costs of defending against
any such claim or liability or reasonable costs incurred enforcing this
right of indemnification), arising from non-compliance by itself only with
any such laws or regulations and (ii) BOK shall fully indemnify Westcore
Trust, and each Fund Affiliate for any claims or liabilities suffered by
any such party or its respective officers.
-15-
<PAGE>
13. FEES AND EXPENSES
Each party shall bear all expenses incidental to the performance of its
duties and obligations under this Agency Trading Agreement. Each Fund
shall pay the cost of registration of its Shares with the Securities and
Exchange Commission and in any state where required. The cost of preparing
and printing prospectuses, proxy materials, periodic Fund reports and other
similar materials that are required by law to be sent to shareholders
generally shall be paid by the applicable Fund, and the cost of
distributing such items to Plan Participants or Plan Representatives shall
be borne by BOK, the Plans or Plan Representatives, as the case may be.
BOK shall not be entitled to any fee from the Fund Company pursuant to this
Agency Trading Agreement.
14. TERMINATION OF AGREEMENT
This Agency Trading Agreement may be terminated at any time by any party
hereto upon thirty (30) days prior written notice to the other party hereto
or upon such shorter notice as is required by law, order or regulatory or
self-regulatory authority with jurisdiction over the terminating party or
at such time as the parties hereto may agree to in writing.
Notwithstanding the foregoing, this Agency Trading Agreement may be
terminated immediately either (i) upon a
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<PAGE>
material breach by any party hereto not cured within thirty (30) days after
notice from another party hereto or (ii) with respect to a Plan, upon the
termination of services by BOK to any such Plan. The provisions of Section
12 shall survive any termination of this Agency Trading Agreement.
15. NOTICE
Each notice required by this Agency Trading Agreement shall be given in
writing and delivered personally or mailed by certified mail or courier
service, or sent through electronic or telephonic facilities, to the
intended recipient thereof at the following address or such other address
as one party may give written notice to the other party:
If to BOK, to: Bank of Oklahoma, N.A.
Attn: Trust Counsel
One Williams Center - Tenth Floor
Tulsa, OK 74172
If to the Fund Company, to: 370 17th Street
Suite 2700
Denver CO 80202-5627
A notice given in accordance with this Section 15 shall be deemed given
upon actual receipt by the intended recipient thereof.
-17-
<PAGE>
16. CONFIDENTIALITY
Except as otherwise provided under this Agency Trading Agreement, all
notifications, reports, books, records, data and other information supplied
by one party to the other in connection with this Agency Trading Agreement
(collectively, "Information") shall remain the property of the party
supplying such information and, except at otherwise provided hereunder,
shall be kept confidential by the other party; provided, however, that
copies of any such information may be retained by a party to the extent
required by applicable law, court order, or the reasonable internal polices
of a party.
BOK and the Fund Company and Fund Affiliates acknowledge and understand the
competitive value and confidential nature of internal, non-public financial
and business information of the other parties hereto. The parties hereto
also understand that the information is to be considered as confidential,
proprietary and trade secrets of each other party and its affiliates. BOK
and the Fund Company and Fund Affiliates agree to use their best efforts
(the same being not less than that employed to protect their own
confidential and proprietary information) to safeguard such information and
to prevent the unauthorized, negligent or inadvertent use or disclosure
thereof. Except as otherwise provided hereunder, neither BOK nor the Fund
Company and
-18-
<PAGE>
Fund Affiliates shall, without the prior written approval of an officer of
another affected party, directly or indirectly, disclose information to any
person or business entity except for a limited number of employees of each
party (or their respective affiliates) on a need-to-know basis.
Notwithstanding anything in this Agency Trading Agreement to the contrary,
the parties hereto (or their respective affiliates) may disclose any such
information: (a) as may be legally required by a court or governmental
agency or entity; (b) which is or becomes available to the general public
through no act of, failure to act by, or fault of, the disclosing party (or
its affiliates); (c) which is subsequently disclosed to a party hereto (or
its affiliates) on a non-confidential basis by a third party not having a
confidential relationship with another party hereto (or its affiliates)
which rightfully acquired such information; or (d) as independently
developed by a party hereto (or its affiliates).
17. COMPLETE AGREEMENT
This Agency Trading Agreement contains the full and complete understanding
of the parties with respect to the subject matter hereof and supersedes all
prior representations, promises, statements, arrangements, agreements,
warranties and understandings among the parties with respect to the
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<PAGE>
subject matter hereof, whether oral or written, express or implied.
18. MODIFICATION AND WAIVER
This Agency Trading Agreement may be modified or amended, and its terms may
be waived, only by a writing signed by each of the parties hereto;
provided, however, Exhibit A hereto may be amended in writing, without the
need for signatures of the parties hereto, by the fund Company's delivery
of an amended Exhibit A to BOK at least thirty (30) days in advance of the
effective date of any such amended Exhibit A, provided that this Agreement
shall immediately cease to apply with respect to any Fund at such time as
shares of such Fund are no longer offered to the public (except that this
Agreement shall continue to apply with respect to accounts in such Fund
created, and to purchases and redemptions of such Fund made prior to
cessation of public offering).
Any valid waiver of a provision set forth herein shall not constitute a
waiver of any other provision of this Agency Trading Agreement. In
addition, any such waiver shall constitute a present waiver of such
provision only and shall not constitute a permanent, future waiver of such
provision.
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<PAGE>
19. COUNTERPARTS
This Agency Trading Agreement may be executed in several counterparts, each
of which shall be an original but all of which together shall constitute
one and the same instrument.
20. ASSIGNMENT
This Agency Trading Agreement shall not be assigned by a party hereto
without the prior written consent of the other parties hereto except that
the Agreement may be assigned to a successor Fund Affiliate for the Funds,
or any of them, if one is appointed without the consent of the other
parties hereto.
21. HEADINGS
The headings of this Agency Trading Agreement are for reference only and
shall not otherwise affect the interpretation or construction hereof.
22. NON-EXCLUSIVITY
Each of the parties hereto acknowledges and agrees that this Agency Trading
Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities. BOK further acknowledges
that nothing contained herein shall prohibit the Fund Company or any
affiliate of either from providing
-21-
<PAGE>
administrative, sub-accounting, trustee, recordkeeping or similar or
related services to any employee benefit plan (including a Plan) or from
soliciting any such plan or sponsor thereof to enter into any arrangement
with the Fund Company or any affiliate of either for such service.
23. GOVERNING LAW
This Agency Trading Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without
giving effect to the principles of conflicts of law thereof.
24. MASSACHUSETTS BUSINESS TRUST
The Names "Westcore Trust" and "Trustees of Westcore Trust" refer
respectively to the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987 which is hereby
referred to and a copy of which is on file at the office of State Secretary
of the Commonwealth of Massachusetts and the principal office of the
Company. The obligations of "Westcore Trust" entered into in the name or
on behalf thereof by any of the Trustees, shareholders, or representatives
of the Trust personally, but bind only the Trust Property, and all persons
dealing with any class of shares of the Trust must took solely to the Trust
Property
-22-
<PAGE>
belonging to such class for the enforcement of any claims against the
Trust.
IN WITNESS WHEREOF, the undersigned have executed this Agency Trading Agreement
by their duly authorized officers as of the date first written above.
By: Bank of Oklahoma Alliance Trust Company
Name:/s/ Lawrence B. Halka
-----------------------------------
Title: Vice President
-----------------------------------
By: Westcore Trust
Name: /s/ Jasper R. Frontz
-----------------------------------
Title: Treasurer
-----------------------------------
By: ALPS Mutual Funds Services, Inc.
Name: /s/ James Hyatt
-----------------------------------
Title: General Counsel
-----------------------------------
By: Boston Financial Data Services, Inc.
Name: /s/ Allan Satrape
-----------------------------------
Title: Vice President
-----------------------------------
-23-
<PAGE>
SCHEDULE I
TO THE AGENCY TRADING AGREEMENT
Fund
----
Westcore Blue Chip Fund*
Westcore Colorado Tax-Exbond Fund*
Westcore Growth & Income Fund*
Westcore Intermediate Term Bond Fund*
Westcore Long Term Bond Fund*
Westcore Midco Growth Institutional*
Westcore Small-Cap Opportunity Fund*
*Indicates that Fund is a "no-load" or "no sales charge" Fund as defined in
Section 26 of the NASD's Rules of Fair Practice.
Westcore Trust
--------------------------------------
Name of Fund Company
By:/s/ Jasper R. Frontz
--------------------------------
Name: Jasper R. Frontz
-----------------------------
Title: Treasurer
----------------------------
Date: May 19, 1997
-----------------------------
Acknowledged by Accepted by
ALPS Mutual Funds Services,Inc. Bank of Oklahoma
- ------------------------------- -------------------------------
Name of Fund Affiliate
By:/s/ James Hyatt By: /s/ Lawrence B. Halka
------------------------ -------------------------------
Name: James Hyatt Title: Vice President
---------------------- ----------------------------
Title: General Counsel
---------------------
Date: May 19, 1997 Date: May 19, 1997
---------------------- -----------------------------
-24-
<PAGE>
SHAREHOLDER SERVICE AGREEMENT
This Shareholder Service Agreement (this "Agreement") dated as of
November 22, 1996 is made and entered into by and between First Trust
Corporation ("FTC"), a Colorado corporation with its principal office at 717
Seventeenth Street, Denver, Colorado 80202, Denver Investment Advisors LLC (the
"Company"), a Colorado Limited Liability Company, with its principal office at
1225 Seventeenth Street, 26th Floor, Denver, Colorado 80202, and Westcore Trust
("Trust"), a Massachusetts business trust, with its principal office at 370
Seventeenth Street, Suite 2700, Denver, Colorado 80202.
RECITALS AND REPRESENTATIONS
A. FTC is a duly licensed trust company providing trust, custodial
and other services to individual retirement accounts, qualified retirement
plans and taxable investment accounts (the "Plan(s)"). Some of the Plans
contain provisions that permit or require each participant to direct the
investment of that portion of a Plan's assets that is allocated to such
participant's account. Some of the Plans provide for the delegation of
investment authority to investment managers, co-trustees, or named
fiduciaries other than FTC. In no case does FTC have any investment
discretion or authority with respect to any of the Plans, nor does FTC make
any investment recommendations with respect to a Plan.
B. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and offers and
sells shares of each of the series identified on EXHIBIT A hereto. The Trust
may establish additional series and such series may be added to this Agreement
as provided below. The series currently identified on EXHIBIT A hereto and
those added to this Agreement in the future are referred to below individually
as a "Fund" and collectively as the "Funds."
C. The Company is the investment adviser to each of the Funds, and
is authorized to make payments to certain persons for shareholder servicing and
administration of shareholder accounts.
D. The Trust desires to make the Funds available to the Plans, and
FTC desires to provide shareholder accounting and recordkeeping functions
required for purchases and redemptions of, and dividends paid on account of, the
shares of the Funds to be held by FTC for the benefit of the Plans.
<PAGE>
In consideration of the premises and representations contained above, the
parties agree as follows:
1. PROCEDURES FOR ACCOUNTS AND TRANSACTIONS. The Trust will cause
the Funds' transfer agent (the "Transfer Agent") to maintain one or more
accounts (the "FTC Account(s)") on its books for each Fund for the Plans. The
assets of one or more Plans may be held in any FTC Account. The FTC Accounts
will be titled in the nominee name of "FTC & Co., Attn: DATAlynx
#_____________," and FTC, as trustee or custodian of the Plans, will be the
shareholder of record for the FTC Accounts. FTC will purchase or redeem shares
of each Fund for the benefit of the Plans, as applicable, as follows:
(a) The Trust confirms that if FTC notifies the Transfer Agent
prior to 4:00 p.m. on any business day concerning the purchase of a Fund's
shares, the purchase will be effected on such business day, and that if FTC
notifies the Transfer Agent at or after 4:00 p.m. on any business day concerning
the purchase of a Fund's shares, the purchase will be effected on the next
business day. (All times referred to in this Agreement will be Eastern time.)
Purchases will be paid for in cash or by Federal Funds at prices equal to net
asset value. FTC will make reasonable efforts to ensure that payment is
received by the Transfer Agent prior to 4:00 o'clock p.m. on the next business
day following the effective date of the purchase. The Company shall instruct
the Transfer Agent not to cancel orders for up to three business days after the
effective date of purchases in cases where payment is not received by 4:00 p.m.
on the next business day after the effective date of the purchases. In all
cases, FTC will be responsible for any losses incurred by the Funds resulting
from a delay or failure to make payment for orders by 4:00 p.m. on the next
business day after the effective date of the purchase.
(b) The Trust confirms that if FTC notifies the Transfer Agent
prior to 4:00 p.m. on any business day concerning the redemption of a Fund's
shares, the redemption will be effected on such business day, and that if FTC
notifies the Transfer Agent at or after 4:00 p.m. on any business day concerning
the redemption of a Fund's shares, the redemption will be effected on the next
business day. The Trust confirms that the Transfer Agent will wire redemption
proceeds to FTC on the next business day following the effective date of the
redemption.
(c) The Trust confirms that FTC may make orders for the purchase
or redemption of shares of a Fund by telephonic advice.
(d) FTC will maintain separate accounting and recordkeeping for
each of the Plans, and will allocate on its records the number of Fund shares
purchased, accrued as dividends
-2-
<PAGE>
and redeemed, and any cash dividends or distributions paid on account of the
shares of each Fund, for each of the Plans. FTC will reconcile the amounts
posted to each Plan with the amounts recorded on the Transfer Agent's records
for each Fund for each respective FTC Account.
(e) The Trust will be responsible under this Agreement for the
servicing of the respective FTC Accounts and will have no responsibility for the
servicing of the Plans. FTC will provide recordkeeping services to the Plans.
The foregoing obligations of the parties are more particularly described on
EXHIBIT B, which is made a part of this Agreement.
2. FEES. For the accounting and recordkeeping services provided by
FTC under this Agreement, the Company will pay to FTC a quarterly service fee
equal on an annual basis to .25% (O.0625% per quarter) of the average daily net
asset value of the shares of such Fund which are owned beneficially by the Plans
during such period. Such fees will be sent to FTC no later than ten (10) days
following the end of the calendar quarter in which they accrue.
3. MANNER OF PAYMENT. Payments made pursuant to Section 2 of this
Agreement will be made by check, and will be accompanied by one report for each
FTC Account. Such report will show the calculation used to arrive at the amount
paid.
4. REPORTING OF TRANSACTIONS. The Trust will furnish to FTC, on a
transaction-by-transaction basis, a statement that will set forth for each FTC
Account the number of shares purchased or redeemed, the beginning and ending
share balances, and the net asset value per share. The Company will mail such
statement to FTC no later than the business day next following the transaction
being reported.
5. SHAREHOLDER COMMUNICATIONS. FTC will cause the mailing to the
Plans of all currently effective prospectuses of the Fund, proxy materials
(including notices, proxy statements and forms of proxies), reports and other
communications which must be furnished by law to shareholders, in accordance
with the procedures set forth on EXHIBIT B. Upon FTC's request, the Trust will
provide FTC with sufficient copies of any requested communications to ensure FTC
is able to fulfill its obligations as described in this Section 5.
6. COORDINATION OF OPERATIONS. The Trust will cause appropriate
personnel to be made available, as may be reasonably requested by FTC, to
consult with FTC in coordinating operations pursuant to this Agreement.
7. STATUS OF FTC, COMPANY AND TRUST. The parties acknowledge and
agree that the payment of service fees as
-3-
<PAGE>
provided in Section 2 of this Agreement relates to recordkeeping, accounting and
related services only and do not constitute payment for and are not related in
any manner to investment advisory services or the distribution of shares of any
Fund within the meaning of the Securities Act of 1933 or the Investment Company
Act of 1940. This Agreement does not grant FTC any right to purchase shares
from the Funds, nor does it constitute FTC an agent of the Funds, the Trust or
the Company, for purposes of selling shares of the Funds to any dealer or to the
public, or for any other purposes. To the extent FTC enters any purchase or
redemption order for an FTC Account, such purchase or redemption order will be
made by FTC (a) as agent of each of the Plans whose shares are the subject of
such purchase or redemption order, and (b) pursuant to instructions from the
account owner, participant, named fiduciary entity or any other person with
investment discretion and authority for the assets that are the subject of the
transaction. FTC agrees that it will comply with all applicable law and
regulations, including relevant provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), in the course of performing its
duties hereunder. Without limiting the generality of the foregoing, FTC agrees
that it will disclose the receipt of fees payable hereunder to an independent
fiduciary or the beneficial owners of each Plan. FTC represents that it is not
a "fiduciary" of any Plan, as such term is defined in ERISA. The Company
represents that it is (i) a limited liability corporation duly organized and
existing and in good standing under the laws of the State of Colorado, (ii) an
investment advisor registered under the Investment Advisers Act of 1940, as
amended, and (iii) authorized to enter into and perform this Agreement, and the
performance of its obligations hereunder does not and will not violate or
conflict with any governing documents or agreements of Trust with respect to the
Funds or any applicable law. The Trust represents that it is (i) a duly
organized and existing Massachusetts Business Trust in good standing, and (ii)
authorized to enter into and perform this Agreement on behalf of the Funds, and
the performance of its obligations hereunder does not and will not violate or
conflict with any governing documents or agreements of Trust with respect to the
Funds or any applicable law.
8. AMENDMENTS. Any amendment to this Agreement will be valid only
if in writing and signed by all the parties. The parties agree that Funds may
be deleted from and additional Funds may be added to this Agreement (and thus
would become "Funds" for purposes of this Agreement), whenever the parties sign
an addendum that identifies such Funds, at which time this Agreement will be
deemed to have been so amended without further action by the parties.
9. TERMINATION WITHOUT CAUSE. Any party to this Agreement will have
the right to terminate this Agreement for any
-4-
<PAGE>
reason upon 60 days' written notice to the other party, without any liability
arising by reason of such termination.
10. TERMINATION UPON BREACH. Upon any breach of this Agreement by
any party, either of the other two parties may terminate this Agreement upon 10
days' written notice to the other parties.
11. RESOLUTION OF DISPUTES. All disputes arising out of or in
connection with this Agreement (except disputes concerning the Company's or
the Trust's use of FTC proprietary information described in Section 14) will
be settled by arbitration, to be conducted pursuant to the rules of the
American Arbitration Association. All arbitration proceedings will take
place only in Denver, Colorado. To the extent not preempted by federal law,
Colorado statutory law (including without limitation the statutes governing
the award of damages and arbitration) and Colorado common law will control
during arbitration. Each party waives any right it may have to institute or
conduct litigation or arbitration in any other forum or location, or before
any other body, except that FTC expressly reserves the rights granted to it
in Section 14. Arbitration is final and binding on the parties. An award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
over the pertinent party. The prevailing party in any arbitration, or in any
judicial proceeding relating to the rights of FTC under Section 14, will be
entitled to reasonable attorneys' fees and costs.
12. INDEMNIFICATION OBLIGATIONS. FTC agrees to indemnify and hold
harmless each of the Company and the Trust from any loss, expense, cost,
liability or damage (including reasonable attorneys fees) which may be suffered
by it as a result of any breach of this Agreement by FTC or arising from (i) any
dissemination of information regarding the Trust or the Company that is
materially incorrect and that was not provided to FTC, or approved, by the Trust
or the Company, or (ii) any negligent act or omission of FTC in the performance
of its duties under this Agreement. The Company agrees to indemnify and hold
harmless FTC from any loss, expense, cost, liability or damage (including
reasonable attorneys fees) which may be suffered by it as a result of any breach
of this Agreement by the Company or arising from any negligent act or omission
of the Company in the performance of its duties under this Agreement. The Trust
agrees to indemnify and hold harmless FTC from any loss, expense, cost,
liability or damage (including reasonable attorneys fees) which may be suffered
by it as a result of any breach of this Agreement by the Trust or arising from
any negligent act or omission of the Trust in the performance of its duties
under this Agreement.
13. INDEMNIFICATION PROCEDURES. If a person receives notice of the
commencement of any action, suit, or proceeding (an
-5-
<PAGE>
"Action") or notice that any Action may be commenced, and if the person
receiving the notice (the "indemnified person") desires to be indemnified by a
party under this Agreement (the "indemnifying party"), the indemnified person
will give notice to the indemnifying party of the commencement of the Action or
of the possibility that an Action will be commenced. Any omission to notify an
indemnifying parry will not relieve the indemnifying party from any liability
which it may have under this Agreement, except to the extent the failure to
notify the indemnifying party prejudices the rights of the indemnifying party.
The indemnified person will be entitled, at the sole expense and liability of
the indemnifying party, to exercise full control of the defense, compromise or
settlement of any such Action unless the indemnifying party, within a reasonable
time after the giving of such notice by the indemnified person, (1) admits in
writing to the indemnified person the indemnifying party's duty to indemnify the
indemnified person for such Action under the terms of this Section, (2) notifies
the indemnified person in writing of the indemnifying party's intention to
assume such defense, (3) provides evidence reasonably satisfactory to the
indemnified person as to the indemnifying party's ability to pay the amount, if
any, for which the indemnified person may be liable as a result of such Action,
and (4) retains legal counsel reasonably satisfactory to the indemnified person
to conduct the defense of such Action. The indemnified person will cooperate
with the person assuming the defense, compromise or settlement of any Action in
accordance with this Agreement in any manner that such person reasonably may
request. If the indemnifying party so assumes the defense of any such Action,
the indemnified person will have the right to employ a separate counsel and to
participate in (but not control) the defense, compromise or settlement of the
Action, but the fees and expenses of such counsel will be at the expense of the
indemnified person unless (a) the indemnifying party has agreed to pay such fees
and expenses, (b) any relief other than the payment of money damages is sought
against the indemnified person, or (c) the indemnified person has been advised
by its counsel that there may be one or more defenses available to it which are
different from or additional to those available to the indemnifying party and
that a conflict of interest therefore exists, and in any such case that portion
of the fees and expenses of such separate counsel that are reasonably related to
matters covered by the indemnity provided in this Section will be paid by the
indemnifying party. No indemnified person will settle or compromise any such
Action for which it is entitled to indemnification under this Agreement without
the prior written consent of the indemnifying party, unless the indemnifying
party has failed, after reasonable notice, to undertake control of such Action
in the manner provided in this Section. No indemnifying party will settle or
compromise any such Action in which any relief other than the payment of money
damages is sought against any indemnified person
-6-
<PAGE>
without the consent of the indemnified person, such consent not to be
unreasonably withheld.
14. CONFIDENTIALITY OF INFORMATION. Each of the Company and the
Trust recognizes that the information provided to it or to be provided to it
under this Agreement relating to the Plans (including the names and addresses of
the participants, the account numbers of the Plans, and any similar information)
is the proprietary information of FTC and agrees to keep such information
confidential and to prevent the use of such information by others, except to the
extent it is required by law to disclose such information. Each of the Company
and the Trust agrees that, prior to disclosing any such information to any
person in accordance with a requirement of law, it will redact such information
to the greatest extent permissible under law and will provide FTC with a
reasonable opportunity to appear in any judicial, administrative or arbitration
proceeding or investigation to contest the disclosure of such information. Each
of the Company and the Trust also agrees not to use such information for its
benefit or the benefit of any of its affiliates, directly or indirectly. The
obligations of the Company and the Trust under this Section 14 will apply during
the term of this Agreement and for a period of five (5) years after the date
this Agreement is terminated, for whatever reason. Because a violation of the
duties of the Company and the Trust under this Section 14 could cause
irreparable injury to FTC which may not be measurable in money damages, each of
the Company and the Trust agrees that FTC will be entitled to obtain injunctive
relief against it for any violation of such duties, without prejudicing FTC's
right to obtain money damages.
15. INTEREST ON AMOUNTS DUE. Any amount due under this Agreement
from one party to another party will bear interest, from the date such amount is
due until such payment is made, at a rate equal to the "prime rate," as
published from time to time by THE WALL STREET JOURNAL.
16. PRIOR AGREEMENTS. This Agreement supersedes all proposals, prior
communications, advertising, representations, warranties and promises, whether
oral or written, relating to the subject matter of this Agreement.
17. ASSIGNMENT. This Agreement may be assigned by a party only with
the written consent of the other parties.
18. SEPARABILITY. If any provision of this Agreement is deemed to be
in violation of law or is unenforceable, the remainder of this Agreement with
such provision omitted will remain in full force and effect.
19. COMPLIANCE WITH LAWS. Each party agrees to abide by all
applicable federal and state laws and regulations in
-7-
<PAGE>
connection with the performance of its obligations under this Agreement.
20. SURVIVAL OF OBLIGATIONS. The representations and warranties of
the parties and all obligations and responsibilities of the parties under this
Agreement, including all payment obligations, as to periods through the date
this Agreement is terminated, will survive the termination of this Agreement.
Without limiting the foregoing, the provisions of Sections 11, 12, 13, 14, and
15 will continue to apply after termination of this Agreement.
21. NOTICES AND REPORTS. Except as otherwise provided in this
Agreement, all notices and reports given under this Agreement will be given only
by delivery in person, by deposit in the United States mails, using certified
mail, by commercial overnight delivery service, or by facsimile transmission
(with machine confirmation) or electronic mail. All notices and reports will be
in writing and addressed to the party at the address set forth in the first
paragraph of this Agreement (unless a party specifies by a written notice to the
other party that a different address should be used). Notices and reports will
be deemed delivered when delivered in person or, if mailed by certified mail, on
the third business day after the date of deposit into the United States mails,
and upon receipt, if by commercial overnight delivery service. Facsimile
transmission and electronic mail will be deemed received the same day as sent.
FTC will furnish the Trust or its designees with such information as it or they
may reasonably request (including, without limitation, periodic certifications
confirming the provision to FTC customers of the services described in the
Service Agreement, as amended, and blue sky reports at least monthly), and will
otherwise cooperate with the Trust and its designees (including, without
limitation, any auditors designated by the Funds), in connection With the
preparation of reports to the Trust's Board of Trustees concerning the Service
Agreement, as amended, and the monies paid or payable by the Trust pursuant
hereto, as well as any other reports or filings that may be required by law.
22. ADDITIONAL PROVISIONS.
(a) Neither FTC nor any of its officers, employees or agents are
authorized to make any representations concerning the Trust except those
contained in the Trust's then current prospectuses and statements of additional
information, copies of which will be supplied by the Trust to FTC, or in such
supplemental literature or advertising as may be authorized by the Trust or its
distributor in writing.
(b) FTC represents, warrants and agrees that: (i) the services
provided by it under this Agreement, as amended, will in no event be primarily
intended to result in the sale of
-8-
<PAGE>
shares of the Trust; (ii) each of its DATAlynx service customers is an
investment advisor registered under the Investment Advisors Act of 1940, or a
bank or other entity exempt from such registration, and (iii) it will comply, at
all times, with all applicable federal and state securities laws.
(c) The names "Westcore Trust" and "Trustees of Westcore Trust"
refer respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Amended and
Restated Declaration of Trust dated November 19, 1987, which is hereby referred
to and a copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Westcore Trust" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
23. EFFECTIVE DATE. This Agreement will be effective on the date it
is accepted and executed by FTC.
-9-
<PAGE>
24. GOVERNING LAW. This Agreement will be construed by and governed
in accordance with the laws of the State of Colorado.
DENVER INVESTMENT ADVISORS LLC (Company)
By: /s/ Kenneth V. Penland
--------------------------------
Its: President
--------------------------------
Date: November 22, 1996
-------------------------------
WESTCORE TRUST (Trust)
By: /s/ Jack D. Henderson
---------------------------------
Its: Vice President
--------------------------------
Date: November 22, 1996
-------------------------------
Accepted by:
FIRST TRUST CORPORATION (FTC)
By: /s/ Martha J. Moe
---------------------------------
Its: Senior Vice President
--------------------------------
Date: November 22, 1996
-------------------------------
-10-
<PAGE>
EXHIBIT A
TO SHAREHOLDER SERVICE AGREEMENT
PORTFOLIOS OF WESTCORE TRUST
Fund Name Cusip Ticker Symbol Trading Cutoff Time
--------- ----- ------------- -------------------
1. Blue Chip 957904881 WTMVX 4:00 p.m. EST
2. Colorado Tax Exempt 957904782 WCTIZ 4:00 p.m. EST
3. Growth & Income 957904667 WTEIX 4:00 p.m. EST
4. Intermediate-Term Bond 957904675 WTIBX 4:00 p.m. EST
5. Long-Term Bond 957904709 WTLTX 4:00 p.m. EST
6. Midco Growth 957904717 WTMGX 4:00 p.m. EST
7. Small-Cap Opportunity 957904618 WSCIZ 4:00 p.m. EST
* These Funds have adopted a Rule 12b-1 Plan.
-11-
<PAGE>
EXHIBIT B
TO SHAREHOLDER SERVICE AGREEMENT
REGISTRAR, TRANSFER AGENT AND
RECORDKEEPING SERVICES
A. Registrar and Transfer Agency Functions Provided by the Company and the
Trust
1. Process purchases, redemptions and exchanges of Fund shares in
accordance with instructions received from FTC and the then-current
prospectus of the Fund.
2. Provide to FTC one Fund statement for each FTC Account as described in
Section 4 of the Agreement.
3. Provide daily pricing, dividend reinvestment and capital gain
information for each FTC Account.
4. Assist FTC in resolving any account discrepancies between FTC and the
Fund.
B. Recordkeeping and Shareholder Servicing Functions Provided by FTC
1. Provide sub-accounting services in accordance with Section 1(d) of the
Agreement.
2. Timely cause the mailing of Fund prospectuses, proxies and related
information to those Plans and individual participants identified by
FTC and in accordance with Section 5 of the Agreement.
3. Assist in processing purchase and redemption transactions; changing
dividend options, account designations and addresses; and
establishment and maintenance of Plan accounts and records.
4. Provide additional services to the Plans as required in the separate
IRA account, custodial account or service agreement between FTC and
each taxable investment account owner or plan employer, as they may be
amended from time to time.
-12-
<PAGE>
September 22, 1997
Westcore Trust
370 Seventeenth Street
Suite 2700
Denver, CO 80202
RE: POST-EFFECTIVE AMENDMENT NO. 46 TO REGISTRATION
STATEMENT ON FORM N-1A (FILE NO. 2-75677)
-----------------------------------------------
Gentlemen:
We have acted as counsel for Westcore Trust, a Massachusetts business
trust (the "Trust"), in connection with the registration of 17,548,456 of its
shares, no par value (the "Shares"), pursuant to Post-Effective Amendment No. 46
to the Trust's Registration Statement under the Securities Act of 1933, as
amended. The registration of such Shares has been made in reliance upon Rule
24e-2 under the Investment Company Act of 1940, as amended. The Trust is an
open-end investment company authorized to issue an unlimited number of each
class of shares, without par value. We have reviewed the Trust's Declaration of
Trust, its Code of Regulations, resolutions adopted by its Board of Trustees and
shareholders, and such other legal and factual matters as we have deemed
appropriate.
In rendering this opinion, we have relied on the written advice of
Massachusetts counsel as to all matters arising under the laws of the
Commonwealth of Massachusetts.
On the basis on the foregoing, we are of the opinion that, when issued
for payment as described in the Trust's prospectus for the Shares, the Shares
will be validly issued, fully paid and non-assessable by the Trust.
Under Massachusetts law, shareholders of a Massachusetts business
trust could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Restated Declaration of Trust of the
Trust, as amended, disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each note,
bond, contract, order or other undertaking issued
<PAGE>
Westcore Trust
September 22, 1997
Page 2
by or on behalf of the Trust or the Trustees relating to the Trust or any class
of shares of beneficial interest of the Trust. The Restated Declaration of
Trust, as amended, provides for indemnification out of the assets of the
particular class of shares for all loss and expense of any shareholder of that
class held personally liable solely by reason of his being or having been a
shareholder. Thus, the risk of a shareholder's incurring financial loss on
account of shareholder liability is limited to circumstances in which that class
of shares itself would be unable to meet its obligations.
We hereby consent to the filing of our opinion as an exhibit to the
Trust's Registration Statement referred to above.
Very truly yours,
/s/ DRINKER BIDDLE & REATH LLP
DRINKER BIDDLE & REATH LLP
<PAGE>
CONSENT OF COUNSEL
We hereby consent to use of our name and to the reference to our firm
under the caption "Counsel" in the Statement of Additional Information that is
included or incorporated by reference in Post-Effective Amendment No. 46 to the
Registration Statement (No. 2-75677) on Form N-1A under the Securities Act of
1933, as amended, of Westcore Trust. This consent does not constitute a consent
under Section 7 of the Securities Act of 1933, as amended, and in consenting to
the use of our name and the references to our firm under such caption we have
not certified any part of the Registration Statement and do not otherwise come
within the categories of persons whose consent is required under Section 7 or
the rules and regulations of the Securities and Exchange Commission thereunder.
/s/ Drinker Biddle & Reath
--------------------------
Drinker Biddle & Reath
Philadelphia, Pennsylvania
Dated: September 26, 1997
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 46 to Registration Statement No. 2-75677 of our report dated June 27, 1997
appearing in the May 30, 1997 Annual Report of Westcore Trust and to the
references to us under the captions "Financial Highlights" appearing in the
Prospectuses and "Auditors" appearing in the Statement of Additional Information
which are included in such Registration Statement.
DELOITTE & TOUCHE LLP
Denver, Colorado
September 23, 1997
<PAGE>
Rep Name:
----------------------
Westcore Funds
IRA Application/Adoption Agreement
I/We, the individuals signing this Adoption Agreement, establish an Individual
Retirement Account (the "Account") with State Street Bank & Trust Company as
Custodian. I/We agree to the terms of the Account, which are contained in the
document entitled "State Street Bank & Trust Company Individual Retirement
Custodial Account", Disclosure Statement and the IRA Application/Adoption
Agreement. I/We certify the accuracy of the information in this Adoption
Agreement. The Account will be effective upon acceptance by State Street Bank &
Trust Company. If you have any questions about this form, please call 1-800-
392-CORE (2673).
1. Account Holder Information
(Please print or type.)
- --------------------------------------------------
Full Name
- --------------------------------------------------
Address
- --------------------------------------------------
City State Zip Code
- --------------------------------------------------
Daytime Phone Evening Phone
- --------------------------------------------------
Social Security Number Date of Birth
2. Account Type
I am establishing a:
/ / Regular IRA / / Spousal IRA / / SAR-SEP IRA
/ / Rollover IRA / / SEP/IRA
3. Contribution Description
Regular
Rollover SEP Account
Spousal Employee Employer
------------------------------------
For current tax year 19__ Contribution amount:
For prior tax year 19__ Contribution amount:
Rollover contribution amount:
Total contribution enclosed:
Annual fee
($1O per fund, maximum $30):
Total amount of check: $
----------------------------
(Please make payable to Westcore/SSB)
<PAGE>
/ / IRA Transfer Form Enclosed (if performing an IRA transfer.)
4. Westcore Investment Instructions
Please allocate the amount indicated in Section 3 among the following Fund(s)
- -----------------------------------------------------------------------------
Fund Name Amount-or-Percentage
200-WESTCORE MIDCO GROWTH FUND
204-WESTCORE BLUE CHIP FUND
195-WESTCORE GROWTH AND INCOME FUND
208-WESTCORE SMALL-CAP OPPORTUNITY FUND
213-WESTCORE LONG-TERM BOND FUND
198-WESTCORE INTERMEDIATE-TERM BOND FUND
189-COMPASS CAPITAL MONEY MARKET PORTFOLIO
The initial purchase minimum is $250.00 per Fund; subsequent minimum investments
are $50. Please do not send currency or third party checks.
I/We acknowledge that we have received and read a current prospectus for each
Fund I/We have selected and agree to its terms.
5. Beneficiary Designation
I/We hereby designate the following persons as primary and secondary
beneficiaries to receive my/our interest in my/our Westcore IRA according to the
terms of the Custodial Agreement, hereby revoking any such prior designation
made by me/us.
(Attach additional sheet if necessary.)
Primary Beneficiary
- ----------------------------------------------------------
Full Name Social Security Number
- -----------------------------------------------------------
Date of Birth Relationship
- ----------------------------------------------------------
Secondary Beneficiary
- -----------------------------------------------------------
Full Name Social Security Number
- ----------------------------------------------------------
Date of Birth Relationship
Spouse's Agreement:
(For community property states) By signing below, I give to my spouse any
interest I may have in the funds deposited in this account and agree that you
may pay the money in my spouse's IRA as directed in the above beneficiary
designation.
- -----------------------------------------------------------
Spouse's Name (Please print)
x
- ----------------------------------------------------------
Spouse's Signature Date
2
<PAGE>
IRA Application/Adoption Agreement (Continued)
6. Automatic Investment Plan (Optional)
A. / / Yes (Please complete the following.) / / No
I/We hereby authorize Westcore and/or its Custodian to electronically debit
my/our personal checking or savings account on the designated dates to purchase
shares in the following Fund(s) in the amount indicated at the Net Asset Value
determined on that day and invest in my IRA established with this application.
- -----------------------------------------------------------
Fund Name Amount
- -----------------------------------------------------------
200-WESTCORE MIDCO GROWTH FUND $__________
204-WESTCORE BLUE CHIP FUND $__________
195-WESTCORE GROWTH AND INCOME FUND $__________
208-WESTCORE SMALL-CAP OPPORTUNITY FUND $__________
213-WESTCORE LONG-TERM BOND FUND $__________
198-WESTCORE INTERMEDIATE-TERM BOND FUND $__________
189-COMPASS CAPITAL MONEY MARKET PORTFOLIO $__________
Please indicate type of account: / / Checking / / Savings
Please make my investment:
/ / Monthly / / Semi-Annually / / Quarterly / / Annually
on or about the _________________________ day of the month. All
contributions will be for current year unless noted otherwise.
NOTE: YOU MUST SIGN THE BANK AUTHORIZATION IN SECTION 6B AND ATTACH TO THIS
FORM A VOIDED CHECK OR SAVINGS DEPOSIT SLIP FOR THE BANK AMOUNT TO BE DEBITED.
B. Bank Authorization
- --------------------------------------------------------------------------------
Bank Name
- --------------------------------------------------------------------------------
Bank ABA or routing number (the nine-digit number at the bottom left corner of
your check.)
- --------------------------------------------------------------------------------
Bank Account Number
I/We authorize you, the above named bank, to debit my/our account for amounts
drawn by Westcore Trust and/or its Custodian acting as my agent. I/We agree
that your rights in respect to each withdrawal shall be the same as if it were a
check drawn upon you and signed by me/us. This authority shall remain in effect
until I/We revoke it in writing and you receive it. I/We agree that you will
incur no liability when honoring any such check.
I/We further agree that you will incur no liability to me/us if you dishonor any
such withdrawal. This will be so even though such dishonor results in the
forfeiture of investment.
- --------------------------------------------------------------------------------
Bank Account Holder's Name Joint Bank Account Holder's Name
3
<PAGE>
- --------------------------------------------------------------------------------
Bank Account Holder's Signature/Date Joint Bank Account Holder's
Signature/Date
7. Telephone Exchange (Optional)
/ / Telephone exchange is available on all new accounts. If you DO NOT
want this option, please check this box.
8. Customer Signature and Certification
I/We, the undersigned account owner(s), certify that I/We have the power and the
authority to establish this Individual Retirement Account and Spousal IRA
account, if applicable, and select the privileges requested. I/We acknowledge
that I/We have received, read, and understand the IRA Custodial Agreement, the
IRA Disclosure Statement and the current prospectus(es) for the Fund(s)
selected. I/We hereby adopt the Custodial Agreement which is incorporated by
reference. I/We agree that to the extent that reasonable procedures have been
employed to determine the genuineness of telephone instructions, that Westcore
Trust, the Custodian, ALPS Mutual Funds Services, Inc., Denver Investment
Advisors LLC or any of their subsidiaries, affiliates, officers, directors, or
employees will not be liable for any loss, claim, expense, or cost, and agree to
indemnify the same from any losses and damages, for acting upon any
instructions, including telephone exchanges and redemptions (if so indicated
above) and inquiries, believed genuine. "Reasonable procedures" might include,
for example, recording instructions, providing written confirmation of
transactions or requiring a form of personal identification prior to acting on
instructions received by telephone. Accordingly, the undersigned, as a result
of this policy, may bear the risk of fraudulent telephone redemption
transactions. Shares of the funds are not bank deposits, and are not insured by
the FDIC. This account is subject to the terms of the prospectus, as amended
from time to time. Under penalty of perjury, I/We certify that the Social
Security or Taxpayer's Identification Number entered above is correct. I/We
acknowledge that I/We understand past performance is not indicative of future
returns.
x
- ---------------------------------------------------------------
Your Signature Date
x
- ----------------------------------------------------------------
Signature: Spouse's (If opening a Spousal IRA) Date
9. Custodial Acceptance: For Westcore Use Only
Receipt by the Investor of the Westcore Confirmation Statement shall indicate
State Street Bank & Trust Co.'s acceptance to act as Custodian.
x
- ---------------------------------------------------------------
Witness Date
(Use only if the signature of the Depositor or the Custodian is required to be
witness.)
THANK YOU FOR YOUR INVESTMENT IN WESTCORE FUNDS!
4
<PAGE>
Westcore Funds
IRA Application Instructions
Please use these instructions as a guide to completing your Westcore IRA
Application Adoption Agreement.
To open your Westcore IRA, please complete all sections of the agreement. If
you are transferring an existing IRA to Westcore Trust, please complete the
Westcore IRA Transfer form in addition to this application.
Return your completed form, with your check to:
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
1. Account Holder Information
Please print or type the information requested.
2. Account Type
Regular IRA - For contributions of up to $2,000 annually.
Rollover IRA - An IRA used to shelter eligible distributions from a qualified
retirement plan or a rollover from another existing IRA. If you are opening a
Rollover IRA, please read the ROLLOVER STATEMENT at right.
Spousal IRA - For contributions of up to $4,000 annually with an non-earning
spouse. You must open two separate accounts for your spousal IRA. No more than
$2000 may be put in either account annually.
SEP/IRA - A simplified employee pension plan (SEP) is a non-qualified retirement
plan designed for employers with 25 or fewer employees. Contributions are made
to each employee's IRA by their employer. Please consult your tax adviser for
more information.
SAR-SEP/IRA - A salary reduction SEP (SAR-SEP) is an agreement between the
employer and employee to deposit an agreed upon portion of the employee's salary
to an IRA. Please consult your tax adviser for more information.
Rollover Statement
I certify that the assets I now deposit as a rollover contribution meet the
requirements for a Qualifying Rollover Contribution as defined in the Disclosure
Statement, including the requirement that deposit of such cash or property is
being made within 60 days after receipt by me of the qualifying distribution. I
understand that my designation as "rollover" of any assets deposited after March
20, 1986 is irrevocable unless I later determine all or any portion of such
deposit(s) to be an excess contribution.
Authorization to Combine a Contributory IRA and Rollover IRA
I elect to make this contribution(s) to my IRA Rollover account. I understand
that by making such contribution(s), I waive any right to roll this IRA into a
Qualified Trust (as described in Internal Revenue Code Section 401 (a)) in the
future. I hereby release Westcore and the custodian from any loss, damage, or
injury that I may sustain financially as a result of my election to waive any
right of future rollover for the funds deposited to this account.
3. Contribution Description
5
<PAGE>
Please indicate the amount and tax year of each contribution you are making.
Because your Regular, Spousal, SEP or SAR-SEP IRA may be opened and funded up
until the regular tax-filing date (without extensions) for that year (for
example April 15, 1997 for a 1996 plan) it is possible to contribute for two
years at the same time.
If you are making a rollover contribution, please show the amount of all cash to
be included. Your annual administration fee may be included in the total amount
of your check.
Schedule Fees
You can send your annual fee now or anytime throughout the year. If you choose
not to mail a check, the annual fee will be automatically debited from your
account within the first quarter of each year.
IRA Application Instructions (Continued)
4. Westcore Investment Instructions
Be certain to indicate the amount to be invested for each fund. Please read the
current prospectus(es) for each of the funds in which you intend to invest. You
may obtain a prospectus by calling 1-800-392-CORE.
5. Beneficiary Designation
If you should die before your IRA account balance has been fully distributed,
your IRA distributions will be made to your primary beneficiary(ies), or, if
deceased, to the contingent beneficiary(ies) you designate. You may name as
many beneficiaries as you wish; use a separate sheet if necessary. Please be
certain to fill out all the requested information for each beneficiary.
If you reside in a community property state, and are not naming your spouse as
your primary beneficiary, your spouse must sign the Spouse's Agreement.
6. Automatic Investment Plan (Optional)
If you would like to invest automatically on a regular basis from your existing
bank account into your Westcore IRA, fill out this section and sign the Bank
Authorization and include a voided personal check or savings deposit slip with
your IRA Agreement form.
7. Telephone Exchange (Optional)
Please check this section only if you DO NOT want telephone exchange.
Telephone Exchange Agreement
I have authorized the Custodian to act upon instructions received by phone by
persons reasonably believed by the Transfer Agent to be the Registrant(s) or the
broker/dealer, bank or other financial institution ("Service Organization")
acting on behalf of the Registrant(s), for the exchange of shares owned by the
Registrant(s), for shares of any other Fund within the Westcore Funds, I
understand that:
1. If any exchange involves an initial investment into the Fund into
which the shares are to be exchanged, the account registration will
carry the same registration as set forth above.
6
<PAGE>
2. I relieve the Fund, or Custodian, or Service Organizations of any
liability for the loss, cost, or expense for acting upon such
instructions believed to be from me.
3. An exchange deemed to be the initial purchase of a Fund must meet the
minimum size requirement specified for that Fund.
8. April 15 Deadline
Your signed Westcore IRA Application/Adoption Agreement must be received by
Westcore Funds on or before April 15 following the calendar year for which the
contribution is being made. Individual tax filing extensions do not affect the
April 15 deadline.
7
<PAGE>
Westcore Funds
IRA Transfer Form
Complete this form if you are transferring an existing IRA or IRA Rollover to a
Westcore IRA. This instructs your current IRA Custodian to transfer the account
as you specify. Westcore Funds will handle all the details of the transfer
process for you. Include this information with your completed Westcore IRA
Application Adoption Agreement if you are opening a new account. If you have
any questions about transferring your IRA, please call 1-800-392-CORE (2673).
A. Your Name
(as it appears on the IRA Account being transferred.)
- ------------------------------------------------------------
Full Name
- ------------------------------------------------------------
Address
- ------------------------------------------------------------
City State Zip Code
- ------------------------------------------------------------
Social Security Number
- ------------------------------------------------------------
Telephone
B. Current Custodian/Trustee Information
- ------------------------------------------------------------
Name of Current Custodian/Trustee
- ------------------------------------------------------------
Address
- ------------------------------------------------------------
City State Zip Code
- ------------------------------------------------------------
Telephone
- ------------------------------------------------------------
IRA Account Number
8
<PAGE>
C. Customer Instructions to Current Custodian/Trustee
I request that you transfer my current IRA account to Westcore Funds whom I have
named as successor Trustee. Please transfer my assets in the following manner:
Transfer Instructions (Check one)
/ / Liquidate and transfer the entire value of my IRA account.
/ / Liquidate and transfer all securities except those Westcore funds
indicated, which are to be transferred in-kind.
/ / Transfer only the following portion of my cash assets.
Amount: $ or %
-----------------------------------------------
/ / Transfer the proceeds of my CD upon maturity.
Maturity Date:
-----------------------------------------------
NOTE: If you are transferring a Certificate of Deposit (CD) upon maturity, you
must send us this form at least two, but not more than four, weeks prior to the
maturity date.
Custodian Authorization
The Westcore IRA Custodian hereby agrees to accept the transfer of IRA assets
described above and upon receipt of such assets, will establish a Westcore IRA
on behalf of the depositor authorizing this transfer.
Please make check payable to Westcore SSB, FBO:
- ----------------------------------------------------------
Investor's Name
Transfer Agent Acceptance
Mail to:
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
9
<PAGE>
IRA Transfer Form (Continued)
In-Kind Transfer of Westcore Funds
/ / Please transfer the following Westcore fund(s) in-kind.
- --------------------------------------------------------------------------------
Westcore Number Account
Fund of Shares Number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
D. Investment Instructions for Westcore IRA Account
/ / Please deposit transfer proceeds in my existing
Westcore Funds IRA Account.
/ / I am opening a new account and have attached an IRA Application.
Please invest my transfer as follows:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Name Amount-or-Percentage
- --------------------------------------------------------------------------------
200-Westcore MIDCO Growth Fund
Account Number (if existing)
-----------------------------------------------
204-Westcore Blue Chip Fund
Account Number (if existing)
-----------------------------------------------
195-Westcore Growth and income Fund
Account Number (if existing)
-----------------------------------------------
208-Westcore Small-Cap Opportunity Fund
Account Number (if existing)
-----------------------------------------------
213-Westcore Long-Term Bond Fund
Account Number (if existing)
-----------------------------------------------
198-Westcore Intermediate-Term Bond Fund
Account Number (if existing)
-----------------------------------------------
189-Compass Capital Money Market Portfolio
Account Number (if existing)
-----------------------------------------------
E. Account Holder Authorization
I acknowledge that the current Custodian/Trustee named above is hereby removed
as Trustee for the portion of my IRA specified above. I have adopted the
Westcore IRA and have designated the Westcore IRA Custodian as my successor
Trustee. I have initiated and approved this transfer. In addition, I
understand that the transfer may take 3 to 4 weeks and that the cash proceeds
from my current plan may be greater or lesser at that time if they are presently
invested in stocks or mutual funds. This is to be considered a Trustee to
Trustee transfer of assets between IRAs. It is not reported as a
10
<PAGE>
taxable distribution. I shall consult my tax adviser if I have any questions
about this transfer.
x
- ---------------------------------------------------------------------
Signature Date
NOTE: You must obtain a signature guarantee if it is required by the present
custodian of your IRA.
SIGNATURE GUARANTEED BY:
Name of Bank or Member Firm of National Securities Exchange
- ---------------------------------------------------------------------
x
- ---------------------------------------------------------------------
Signature of Officer
- ---------------------------------------------------------------------
Title
THANK YOU FOR YOUR INVESTMENT IN WESTCORE FUNDS!
Mail to:
Westcore Funds
P.O. Box 8319
Boston, MA 02266-8319
Funds distributed by ALPS Mutual Funds Services, Inc., member NASD.
11
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jack D. Henderson, whose signature appears below, does hereby constitute
and appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them,
his true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Jack D. Henderson
-----------------------
Jack D. Henderson
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
McNeil S. Fiske, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ McNeil S. Fiske
--------------------
McNeil S. Fiske
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
James B. O'Boyle, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/James B. O'Boyle
-------------------
James B. O'Boyle
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Robert L. Stamp, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Robert L. Stamp
---------------------
Robert L. Stamp
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Lyman Seely, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Lyman Seely
-----------------------
Lyman Seely
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jasper Frontz, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland, Jack D. Henderson and W. Bruce McConnel, III, and
either of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or either of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Jasper Frontz
----------------------
Jasper Frontz
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Kenneth V. Penland, whose signature appears below, does hereby constitute
and appoint W. Bruce McConnel, III, his true and lawful attorney and agent, with
power of substitution or resubstitution, to do any and all acts and things and
to execute any and all instruments which said attorney and agent may deem
necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorney and agent shall do or cause to be done by virtue thereof.
/s/ Kenneth V. Penland
---------------------------
Kenneth V. Penland
Date: August 12, 1997
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Jasper R. Frontz, whose signature appears below, does hereby constitute and
appoint Kenneth V. Penland, Jack D. Henderson and W. Bruce McConnel, III, and
each of them, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, or each of them, may
deem necessary or advisable or which may be required to enable Westcore Trust, a
Massachusetts business trust (the "Trust"), to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended,
("Acts") and any rules, regulations, or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of any and all amendments (including post-effective amendments) to
the Trust's Registration Statement pursuant to said Acts, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a trustee
and/or officer of the Trust any and all such amendments filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
/s/ Jasper R. Frontz
---------------------
Jasper R. Frontz
Date: August 12, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
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<NAME> BLUE CHIP FUND
<MULTIPLIER> 1,000
<S> <C>
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<NET-ASSETS> 66450
<DIVIDEND-INCOME> 1252
<INTEREST-INCOME> 95
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<EXPENSES-NET> (711)
<NET-INVESTMENT-INCOME> 636
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<NET-CHANGE-FROM-OPS> 13505
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<NUMBER-OF-SHARES-REDEEMED> (2014)
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 19
<NAME> COLORADO TAX EXEMPT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-30-1997
<PERIOD-START> JUN-01-1996
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<PAID-IN-CAPITAL-COMMON> 20951
<SHARES-COMMON-STOCK> 1981
<SHARES-COMMON-PRIOR> 1312
<ACCUMULATED-NII-CURRENT> 16
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> (32)
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<INTEREST-INCOME> 935
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<EXPENSES-NET> (89)
<NET-INVESTMENT-INCOME> 846
<REALIZED-GAINS-CURRENT> (22)
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<NET-CHANGE-FROM-OPS> 1082
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<DISTRIBUTIONS-OF-INCOME> (842)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 792
<NUMBER-OF-SHARES-REDEEMED> (180)
<SHARES-REINVESTED> 57
<NET-CHANGE-IN-ASSETS> 7426
<ACCUMULATED-NII-PRIOR> 12
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (10)
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<GROSS-EXPENSE> 216
<AVERAGE-NET-ASSETS> 17879
<PER-SHARE-NAV-BEGIN> 10.61
<PER-SHARE-NII> .50
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<PER-SHARE-NAV-END> 10.78
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
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<NAME> GROWTH & INCOME FUND
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<PERIOD-START> JUN-01-1996
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<DIVIDEND-INCOME> 323
<INTEREST-INCOME> 101
<OTHER-INCOME> 0
<EXPENSES-NET> (257)
<NET-INVESTMENT-INCOME> 167
<REALIZED-GAINS-CURRENT> 2660
<APPREC-INCREASE-CURRENT> 1077
<NET-CHANGE-FROM-OPS> 3904
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<DISTRIBUTIONS-OF-INCOME> (202)
<DISTRIBUTIONS-OF-GAINS> (2274)
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> (1079)
<SHARES-REINVESTED> 182
<NET-CHANGE-IN-ASSETS> (4663)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1138
<OVERDISTRIB-NII-PRIOR> (144)
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 350
<AVERAGE-NET-ASSETS> 22367
<PER-SHARE-NAV-BEGIN> 12.32
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 2.19
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> (1.44)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.03
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> INTERM.TERM BOND FUND
<MULTIPLIER> 1,000
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<FISCAL-YEAR-END> MAY-30-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> MAY-30-1997
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<TOTAL-ASSETS> 63378
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<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL-LIABILITIES> 210
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 64718
<SHARES-COMMON-STOCK> 6173
<SHARES-COMMON-PRIOR> 8225
<ACCUMULATED-NII-CURRENT> 44
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1783)
<ACCUM-APPREC-OR-DEPREC> 190
<NET-ASSETS> 63169
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4862
<OTHER-INCOME> 0
<EXPENSES-NET> (620)
<NET-INVESTMENT-INCOME> 4242
<REALIZED-GAINS-CURRENT> 19
<APPREC-INCREASE-CURRENT> 1121
<NET-CHANGE-FROM-OPS> 5382
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4284)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1717
<NUMBER-OF-SHARES-REDEEMED> (4108)
<SHARES-REINVESTED> 340
<NET-CHANGE-IN-ASSETS> (19870)
<ACCUMULATED-NII-PRIOR> 85
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1802)
<GROSS-ADVISORY-FEES> 328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 712
<AVERAGE-NET-ASSETS> 73041
<PER-SHARE-NAV-BEGIN> 10.10
<PER-SHARE-NII> .60
<PER-SHARE-GAIN-APPREC> .13
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<TABLE> <S> <C>
<PAGE>
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<NAME> LONG TERM BOND FUND
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<S> <C>
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<PAGE>
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<NAME> MIDCO GROWTH FUND
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<S> <C>
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<PAGE>
<ARTICLE> 6
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<NAME> SMALL CAP OPPORTUNITY
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