<PAGE>
As filed with the Securities and Exchange Commission on July 15, 1999
Registration No. 2-75677
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES /X/
ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. _ / /
POST-EFFECTIVE AMENDMENT NO. 49 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /X/
ACT OF 1940
AMENDMENT NO. 50 /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)
[ ] on October 1, 1998 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)
[x] on July 16, 1999 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.
<PAGE>
Title of Securities being registered: Shares of Beneficial Interest.
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.
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<PAGE>
[FRONT COVER]
[MOUNTAIN LOGO]
WESTCORE FUNDS
EQUITY & BOND FUNDS PROSPECTUS
[Black and white photograph of mountain and trees]
October 1, 1999
WESTCORE EQUITY FUNDS
Westcore MIDCO Growth Fund
Westcore Growth and Income Fund
Westcore Blue Chip Fund
Westcore Mid-Cap Opportunity Fund
Westcore Small-Cap Opportunity Fund
WESTCORE BOND FUNDS
Westcore Long-Term Bond Fund
Westcore INTERMEDIATE-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
----------------------------------------
Westcore Funds are managed by Denver
Investment Advisors LLC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUNDS' SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
TABLE OF CONTENTS
PAGES
RISK/RETURN SUMMARY
Westcore Equity Funds.....................................................
Westcore Bond Funds.......................................................
Bar Charts and Performance Tables.........................................
Fees and Expenses of the Funds............................................
TYPES OF INVESTMENT RISK .................................................
HOW TO INVEST AND OBTAIN INFORMATION
How to Contact Westcore Funds.............................................
Purchasing Shares.........................................................
Exchanging Shares.........................................................
Redeeming Shares..........................................................
General Account Policies..................................................
Additional Information on Telephone and Computer Service..................
Distribution and Taxes....................................................
Management of the Funds...................................................
Financial Highlights......................................................
APPENDIX
Prior Performance of Investment Adviser for
Westcore Growth and Income Fund ..........................................A-1
Bond Ratings..............................................................B-1
<PAGE>
[Mountain logo] WESTCORE FUNDS
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RISK/RETURN SUMMARY
WESTCORE EQUITY FUNDS
The Westcore Equity Funds are designed for long-term investors seeking
capital appreciation who can tolerate the risks associated with investments in
common stocks.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE EQUITY FUNDS?
WESTCORE GROWTH FUNDS: emphasize investments in companies that have the
potential to grow their earnings faster than the general economy.
WESTCORE MIDCO GROWTH FUND - long-term capital appreciation by
investing primarily in medium-size growth companies
WESTCORE GROWTH AND INCOME FUND - long-term total return by investing
in equity securities selected for their growth potential and
income-producing abilities.
WESTCORE VALUE FUNDS: emphasize investments in companies that are undervalued
and have improving business prospects due to strong company and industry
dynamics.
WESTCORE BLUE CHIP FUND - long-term total return by investing in stocks
of large, well-established companies whose stocks appear to be
undervalued.
WESTCORE MID-CAP OPPORTUNITY FUND - long-term capital appreciation by
investing primarily in medium-sized companies whose stocks appear to be
undervalued.
WESTCORE SMALL-CAP OPPORTUNITY FUND - long-term capital appreciation
primarily through investments in companies with small capitalizations
whose stocks appear to be undervalued.
Upon notice to shareholders, each Fund's investment objective may be
changed by the Trust's Board of Trustees without the approval of
shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE EQUITY FUNDS?
WESTCORE GROWTH FUNDS:
The portfolio managers of the growth funds work with a team of analysts
who perform intensive research to identify companies in businesses and economic
sectors with attractive growth prospects. Each analyst focuses on specific
industries' products, services and competitive environments. To identify
attractive stocks for the Funds, they study a company's business by analyzing
its financial information, industry, markets and competitors, frequently
visiting their operations and/or interviewing management. Companies considered
for the Funds generally have management teams that the portfolio managers
believe have the ability to execute their business plans and increase market
share with innovative products or services, strong balance sheets and/or the
access to money to finance their growth. Stocks may be sold when conditions have
changed and the company's prospects are no longer attractive.
-3-
<PAGE>
WESTCORE MIDCO GROWTH FUND invests primarily in the common stock of
medium-sized companies. Medium-sized companies may benefit from
factors such as new products and services and more entrepreneurial
management. These companies may also have better opportunities for
growth by increasing their shares of the markets they serve.
Under normal circumstances, the Fund invests at least 65% of its assets
in common stocks of companies whose market capitalizations, at the time
of purchase, are between $____ and $____.
WESTCORE GROWTH AND INCOME FUND invests primarily in the common stock
of large- and medium-sized companies. The Fund may invest up to 25% of
its total assets in bonds convertible into common stock, which provide
greater income while maintaining similar characteristics of common
stocks. This Fund is designed to outperform the total return of the S&P
500 Index while seeking comparable dividend levels and risk.
WESTCORE VALUE FUNDS:
The portfolio managers research historical data using computer power
and mathematical techniques to identify characteristics of companies whose stock
prices increased more than the general market in the past. They have developed
and continue to enhance proprietary computer models from this data to identify
companies with the potential for price appreciation. The process uncovers
companies that appear to be undervalued based on factors such as low price-to-
earnings, low price-to-cash flow, and low price-to-book value ratios. In
addition, the model incorporates factors such as earnings and price momentum
which assist in the timing of purchase and sell decisions. Companies that meet
this criteria are then researched by the Funds' portfolio managers for signs of
solid or improving businesses, such as new products or services, innovative
management and improving growth prospects. A Fund may sell a stock when the
model indicates it is no longer undervalued or its fundamental business changes.
The following describes our three value funds, which execute this strategy for
the large-, medium- and small- company universes.
WESTCORE BLUE CHIP FUND invests in approximately 50 large,
well-established companies whose stocks appear to be undervalued. 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 may result in
increased stability for the company and a lower-risk investment for the
Fund.
WESTCORE MID-CAP OPPORTUNITY FUND invests primarily in medium-sized
companies whose stocks appear to be undervalued. Medium-sized companies
may benefit from factors such as new products and services and more
entrepreneurial management. These companies may also have better
opportunities for growth by increasing their shares of the markets they
serve.
Under normal market conditions, at least 65% of the value of this
Fund's total assets is invested in companies with market
capitalizations of $___ million to $___ billion at the time of
purchase.
WESTCORE SMALL-CAP OPPORTUNITY FUND invests primarily in small
companies with unrecognized potential whose stocks appear to be
undervalued. Small companies may benefit from factors such as new
products and services and more entrepreneurial management. Small
company stocks may have higher return/risk potential than larger
company stocks.
-4-
<PAGE>
Under normal market conditions, at least 65% of the value of this
Fund's total assets is invested in companies with market
capitalizations of $___ billion or less at the time of purchase.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE EQUITY FUNDS?
As with any equity fund, the value of your investment will fluctuate
over short, or even extended periods of time in response to overall movements in
the stock market (market risk). In addition, each of the Equity Funds is subject
to the additional risk that the particular types of stocks held by the Fund will
underperform other types of stocks and may decline in value (management risk).
Therefore, you could lose money by investing in the Funds.
Westcore Small-Cap Opportunity Fund is subject to the additional risk
that the stocks of smaller and newer issuers can be more volatile and more
speculative for reasons such as lack of financial resources, product
diversification and competitive strengths of larger companies. Therefore the
value of this Fund may be more volatile.
An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
-5-
<PAGE>
WESTCORE BOND FUNDS
The Westcore Bond Funds are designed for long-term investors seeking
current income who can tolerate the risks associated with investing in bonds.
WHAT ARE THE INVESTMENT OBJECTIVES OF THE WESTCORE BOND FUNDS?
WESTCORE LONG-TERM BOND FUND -- long-term total rate of return by
investing primarily in investment-grade bonds.
WESTCORE INTERMEDIATE-TERM BOND FUND -- current income with less
volatility of principal than funds with longer maturities by investing
primarily in investment-grade bonds.
WESTCORE COLORADO TAX-EXEMPT FUND -- income exempt from both federal
and Colorado state personal income taxes by emphasizing insured
Colorado municipal bonds with intermediate maturities.
Upon notice to shareholders, each Fund's investment objective may be
changed by the Trust's Board of Trustees without the approval of
shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE BOND FUNDS?
WESTCORE INTERMEDIATE-TERM BOND FUND and WESTCORE LONG-TERM BOND FUND
invest primarily in investment-grade bonds -- those rated in the top four rating
categories by nationally recognized rating agencies such as Moody's or Standard
and Poor's. The dollar-weighted average quality is expected to be "A" or better.
An "A" rating typically is the third highest of four investment-grade
categories, and includes upper medium-grade bonds with strong capacity to pay
interest or repay principal. Westcore Intermediate-Term Bond Fund maintains an
average dollar-weighted maturity of between 3 and 6 years and Westcore Long-Term
Bond Fund at least 10 years.
The Funds emphasize corporate bonds, which may generate more income
than government securities. Corporate bonds also provide opportunities for the
portfolio manager and analysts' research to identify companies with stable or
improving credit characteristics, which may result in price appreciation. In
addition, the Funds invest in other securities including REITs, mortgage-backed
and asset-backed bonds, which may also offer higher interest yield than
government bonds. The attractiveness of REITs and corporate, mortgage- and
asset-backed bonds relative to government bonds is monitored in order to
determine the target weightings for each sector. The combination of valuation
and a disciplined credit research process are the basis for buy/sell decisions.
WESTCORE COLORADO TAX-EXEMPT FUND invests at least 80% of its assets in
bonds 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 ("Tax-Exempt Obligations"). The Fund normally will invest at least
65% of its total assets in Colorado Obligations. The Fund maintains an average
dollar-weighted maturity of between 7 and 10 years.
The investment adviser invests in Colorado municipal bonds which are
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 municipal bonds rated at the time of purchase in the
fourth highest investment-grade category. The fourth category is the lowest
investment grade category and these obligations have
-6-
<PAGE>
speculative characteristics. The Fund may invest in unrated bonds if the
portfolio manager determines they are comparable in quality to instruments that
meet the Fund's rating requirements.
The portfolio manager emphasizes quality in his strategy. To fully
understand the issuer's ability to generate revenues or levy taxes in order to
meet their obligations, the portfolio manager and his team of analysts
researches the financial condition of various counties, public projects, school
districts and taxing authorities whose bonds the Fund owns or may purchase. The
Fund holds bonds from all areas of the state to reduce the risk to the portfolio
of any one local economy that is suffering. The portfolio manager enhances the
quality of the Fund by investing at least 75% of the assets in bonds where the
risk of interest and principal payment default is protected by a third party
insurer.
ALL WESTCORE BOND FUNDS
If the rating on 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 Fund's best interest to do so.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE BOND FUNDS?
Although bond funds may fluctuate less in value than equity funds, bond
fund returns and yields will vary. Therefore you could lose money by investing
in the Funds.
A principal risk of investing in bond funds is that the value of these
securities will fall if interest rates rise (interest rate risk). Generally, the
value of a fixed-income portfolio will decrease when interest rates rise, which
means the Fund's net asset value (NAV) will likewise decrease. Another principal
risk associated with bond funds is credit risk, which is the risk that an issuer
will be unable to make principal and interest payments when due.
A general decline in interest rates may result in prepayments of
certain obligations the Funds will acquire. These prepayments may require the
Fund to reinvest at a lower rate of return, and may reduce the Fund's share
price because the value of those securities may depreciate or may not appreciate
as rapidly as debt securities which cannot be prepaid.
The Westcore Colorado Tax-Exempt Fund is subject to the additional risk
of being a non-diversified fund because it concentrates its investments in
instruments issued by or on behalf of the state of Colorado. This means that the
Fund's performance may be dependent upon fewer securities than is the case with
a diversified portfolio, such as a national tax-exempt fund.
An investment in these Funds is not a bank deposit and is not insured
or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
-7-
<PAGE>
BAR CHARTS AND
PERFORMANCE TABLES The Bar Charts and Tables below show the
Funds' annual returns and their long-
term performance. The Bar Charts show
how the performance of the Funds has
varied from year to year. The Tables
show how each Fund's average annual
returns for one, five and ten years
compare to those of a widely recognized,
unmanaged index of common stock or bond
prices, as appropriate. The Bar Charts
and Performance Tables assume
reinvestment of dividends and
distributions. The Funds' past
performance does not necessarily
indicate how they will perform in the
future. No performance is included for
the Mid-Cap Opportunity Fund as it has
been in operation for less than one full
calendar year.
-8-
<PAGE>
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WESTCORE MIDCO GROWTH FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
29.17 4.42 67.04 6.45 17.47 -1.01 27.42 16.99 14.89 10.40
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 1 '91 28.82%
WORST QUARTER: Q 3 '98 -18.75%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(AUGUST 1, 1986)
<S> <C> <C> <C> <C>
WESTCORE MIDCO GROWTH FUND 10.40% 13.35% 18.08% 15.27%
S&P 400 MID-CAP INDEX 19.11% 18.83% 19.28% 16.78%
</TABLE>
The S&P 400 Mid-Cap Index is an unmanaged capitalization-weighted index that
measures the performance of the mid-range sector of the U.S. stock market. The
S&P 400 Mid-Cap Index figures do not reflect any fees or expenses. Investors
cannot invest directly in this Index.
-9-
<PAGE>
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WESTCORE GROWTH AND INCOME FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
26.37 -2.80 31.21 4.96 11.33 -8.39 22.45 23.25 27.25 6.63
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 4 '98 19.59%
WORST QUARTER: Q 3 '98 -16.81%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE GROWTH AND INCOME FUND 6.63% 13.40% 13.44% 12.77%
S&P 500 INDEX 28.58% 24.05% 19.20% 18.94%
</TABLE>
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally
considered representative of the U.S. stock market. The Index is heavily
weighted towards stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks. The S&P 500 Index figures do not reflect any fees or expenses.
Investors cannot invest directly in the Index.
-10-
<PAGE>
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WESTCORE BLUE CHIP FUND
CALENDAR YEAR RETURNS
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[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
20.55 -0.26 34.48 2.04 12.43 0.36 36.43 21.24 30.92 17.88
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 4 '98 20.31%
WORST QUARTER: Q 3 '90 -15.63%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE BLUE CHIP FUND 17.88% 20.69% 16.94% 15.72%
S&P 500 INDEX 28.58% 24.05% 19.20% 18.94%
</TABLE>
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally
considered representative of the U.S. stock market. The Index is heavily
weighted towards stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks. The S&P 500 Index figures do not reflect any fees or expenses. Investors
cannot invest directly in the Index.
-11-
<PAGE>
WESTCORE SMALL-CAP OPPORTUNITY FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C>
94 95 96 97 98
0.33 29.48 25.58 27.78 -5.73
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 3'97 15.95%
WORST QUARTER: Q 3'98 -20.56%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE INCEPTION
(DECEMBER 28, 1993)
<S> <C> <C> <C>
WESTCORE SMALL-CAP -5.73% 13.91% 14.43%
OPPORTUNITY FUND
RUSSELL 2000 INDEX -2.57% 11.87% 11.87%
</TABLE>
The Russell 2000 Index is an unmanaged index of the smallest 2,000 companies in
the Russell 3000 Index, as ranked by total market capitalization. The Russell
2000 is widely regarded in the industry as an index that accurately reflects the
universe of small capitalization stocks. The Russell 2000 Index figures do not
reflect any fees or expenses. Investors cannot invest directly in this Index.
-12-
<PAGE>
- --------------------------------------------------------------------------------
WESTCORE LONG-TERM BOND FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
15.69 5.14 19.44 8.93 15.92 -7.13 26.69 0.74 13.95 10.21
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 2 '89 9.62%
WORST QUARTER: Q 1 '96 -5.04%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE LONG-TERM BOND FUND 10.21% 8.27% 10.56% 10.57%
LEHMAN BROTHERS LONG-TERM 11.76% 9.12% 11.30% 11.47%
GOVERNMENT/CORPORATE BOND INDEX
</TABLE>
The Lehman Brothers Long-Term Government/Corporate Bond Index is an unmanaged
index comprised of U.S. Treasury issues, publicly issued debt of U.S. Government
agencies, corporate debt guaranteed by the U.S. Government and all publicly
issued, fixed-rate, nonconvertible investment-grade dollar-denominated, SEC-
registered corporate debt. The Index includes bonds with maturities of ten years
or longer. The Lehman Brothers Long-Term Government/Corporate Bond Index figures
do not reflect any fees or expenses. Investors cannot invest directly in this
Index.
<TABLE>
<CAPTION>
30 DAY YIELD AS
OF MAY 31, 1999
---------------
<S> <C>
Westcore Long-Term Bond Fund 5.87%
</TABLE>
CURRENT YIELD INFORMATION: For current yield information please call 1-800-392-
CORE (2673).
-13-
<PAGE>
- --------------------------------------------------------------------------------
WESTCORE INTERMEDIATE-TERM BOND FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
89 90 91 92 93 94 95 96 97 98
11.23 1.57 20.23 7.14 9.87 -3.38 15.01 3.79 8.25 6.47
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 2 '89 6.12%
WORST QUARTER: Q 1 '94 -2.62%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
(JUNE 1, 1988)
<S> <C> <C> <C> <C>
WESTCORE INTERMEDIATE 6.47% 5.86% 7.83% 7.76%
BOND FUND
LEHMAN BROTHERS INTERMEDIATE 8.42% 6.59% 8.51% 8.42%
GOVERNMENT/CORPORATE BOND INDEX
</TABLE>
The Lehman Brothers Intermediate Government/Corporate Bond Index is an unmanaged
index comprised of U.S. Treasury issues, publicly issued debt of U.S. Government
agencies, corporate debt guaranteed by the U.S. Government and all publicly
issued, fixed-rate, nonconvertible investment-grade dollar-denominated, SEC-
registered corporate debt. The Lehman Brothers Intermediate Government/Corporate
Bond Index figures do not reflect any fees or expenses. Investors cannot invest
directly in this Index.
<TABLE>
<CAPTION>
30 DAY YIELD AS
OF MAY 31, 1999
---------------
<S> <C>
Westcore Intermediate-Term Bond Fund 5.81%
</TABLE>
CURRENT YIELD INFORMATION: For current yield information please call 1-800-392-
CORE (2673).
-14-
<PAGE>
- --------------------------------------------------------------------------------
WESTCORE COLORADO TAX-EXEMPT FUND
CALENDAR YEAR RETURNS
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
<S> <C> <C> <C> <C> <C> <C>
92 93 94 95 96 97 98
8.08 9.89 -3.24 13.03 4.29 7.35 5.59
</TABLE>
The Fund's year-to-date return for the period ended June 30, 1999 was __%.
<TABLE>
<S> <C> <C>
BEST QUARTER: Q 1 '95 5.18%
WORST QUARTER: Q 1 '94 -3.64%
</TABLE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE INCEPTION
(JUNE 1, 1991)
<S> <C> <C> <C>
WESTCORE COLORADO 5.59% 5.27% 6.67%
TAX-EXEMPT FUND
LEHMAN BROTHERS 10-YEAR 6.76% 6.35% 7.98%
TAX-EXEMPT BOND INDEX
</TABLE>
The Lehman Brothers 10-year Tax-Exempt Bond Index is an unmanaged index that
tracks the performance of municipal bonds with remaining maturities of 10 years
or less. The Lehman Brothers 10-year Tax-Exempt Bond Index figures do not
reflect any fees or expenses. Investors cannot invest directly in this Index.
<TABLE>
<CAPTION>
30 DAY TAX
30 DAY YIELD AS EQUIVALENT YIELD
OF MAY 31, 1999 AS OF MAY 31, 1999*
--------------- -------------------
<S> <C> <C>
Westcore Colorado Tax-Exempt Fund 3.83% 5.59%
</TABLE>
CURRENT YIELD INFORMATION: For current yield information please call 1-800-392-
CORE (2673).
* 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).
-15-
<PAGE>
FEES AND EXPENSES OF THE FUNDS
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
<TABLE>
<CAPTION>
EQUITY FUNDS BOND FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Growth and Blue Mid-Cap Small-Cap Long-Term Intermediate- Colorado
Growth Income Chip Opportunity Opportunity Bond Term Bond Tax-Exempt
Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder None None None None None None None None
Fees (fees paid
directly from
your investment)
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management 0.65%(1) 0.65%(1) 0.65%(1) 0.75%(1) 1.00%(1) 0.45%(1) 0.45%(1) 0.50%(1)
Fees
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution
(12b-1) Fees None None None None None None None None
- ------------------------------------------------------------------------------------------------------------------------------------
Other 0.54%(2) 1.10%(2) 0.60%(2) 4.58%(2) 0.63%(2) 0.77%(2) 0.56%(2) 0.59%(2)
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual
Fund Operating 1.19% 1.75% 1.25% 5.33% 1.63% 1.22% 1.01% 1.09%
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Fee Waiver
and Expense (0.04)%(1)(2) (0.60)%(1)(2) (0.10)%(1)(2) (4.08)%(1)(2) (0.33)%(1)(2) (0.27)%(1)(2) (0.16)%(1)(2) (0.44)%(1)(2)
Reimbursement
- ------------------------------------------------------------------------------------------------------------------------------------
Net Annual
Fund Operating 1.15%(1)(2) 1.15%(1)(2) 1.15%(1)(2) 1.25%(1)(2) 1.30%(1)(2) 0.95%(1)(2) 0.85%(1)(2) 0.65%(1)(2)
Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-16-
<PAGE>
(1) The Funds' Adviser has contractually agreed to waive a portion of the
management fee for the MIDCO Growth, Growth and Income, Blue Chip, Mid-Cap
Opportunity, Small-Cap Opportunity, Long-Term Bond, Intermediate-Term Bond and
Colorado Tax-Exempt Funds until at least May 31, 2000. As a result, the advisory
fees will be no more than 0.61%, 0.09%, 0.56%, 0.00%, 0.69%, 0.21%, 0.31% and
0.08% for each Fund respectively for that period. You will be notified if these
waivers are discontinued after that date resulting in a material change in the
expense ratio.
(2) The Funds' Administrators have contractually agreed to waive a portion of
the administration fee for the MIDCO Growth, Growth and Income, Blue Chip,
Mid-Cap Opportunity, Small-Cap Opportunity, Long-Term Bond, Intermediate-Term
Bond and Colorado Tax-Exempt Funds until at least May 31, 2000. In addition, for
the Mid-Cap Opportunity Fund, the Adviser has agreed to reimburse expenses until
at least May 31, 2000. As a result, Other Expenses will be no more than 0.54%,
1.06%, 0.59%, 1.25%, 0.61%, 0.74%, 0.54% and 0.57% for the Funds, respectively
for that period. You will be notified if these waivers are discontinued after
that date resulting in a material change in the expense ratio.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUNDS
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUNDS FOR THE TIME PERIODS
INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS AND
THAT NET ANNUAL OPERATING EXPENSES SET FORTH ABOVE ARE INCURRED. THE EXAMPLE
ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE FUNDS'
OPERATING EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR
LOWER, BASED ON THESE ASSUMPTIONS YOUR COSTS WOULD BE:
<TABLE>
<CAPTION>
EQUITY FUNDS BOND FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Westcore Westcore Westcore Westcore Westcore Westcore Westcore Westcore
MIDCO Growth and Blue Mid-Cap Small-Cap Long-Term Intermediate- Colorado
Growth Income Chip Opportunity Opportunity Bond Term Bond Tax-Exempt
Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
One Year $117 $117 $117 $127 $132 $97 $87 $66
- ------------------------------------------------------------------------------------------------------------------------------------
Three Years 365 365 365 396 412 303 271 208
- ------------------------------------------------------------------------------------------------------------------------------------
Five Years 633 633 633 686 713 525 471 362
- ------------------------------------------------------------------------------------------------------------------------------------
Ten Years 1,396 1,396 1,396 1,510 1,566 1,165 1,048 810
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-17-
<PAGE>
TYPES OF INVESTMENT RISK
The principal risks of investing in each Fund are described previously
in this Prospectus. The following list provides more detail about some of those
risks, along with information on additional types of risks which may apply to
the Funds. Risks associated with particular types of investments each Fund makes
are described in this section and in the Statement of Additional Information
referred to on the back page.
GENERAL RISKS OF INVESTING IN EACH OF THE FUNDS
CREDIT RISK -- Bond Funds and, to the extent they invest in fixed income
securities, Equity Funds
The risk that an issuer will be unable to make principal and interest
payments when due is known as "credit risk." U.S. government securities are
generally considered to be the safest type of investment in terms of credit
risk. Tax- Exempt 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.
Securities rated below investment grade are particularly subject to
credit risk. These securities are predominantly speculative and are commonly
referred to as "junk bonds." To the extent a Fund purchases or holds convertible
or other securities that are below investment grade, a greater risk exists as to
the timely repayment of the principal of, and the timely payment of interest or
dividends on, such securities.
Ratings published by Rating Agencies 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.
INTEREST RATE RISK -- Bond Funds, and, to the extent they invest in fixed
income securities, Equity Funds
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.
Changes in interest rates may also extend or shorten the duration of
certain types of instruments, such as asset-backed securities, thereby affecting
their value and the return on your investment. Zero coupon securities, including
stripped securities in which the Bond Funds (other than the Colorado Tax-Exempt
Fund) may invest are subject to greater interest rate risk than many of the more
typical fixed-income securities.
A bond fund's average dollar-weighted maturity is a measure of how the
fund will react to interest rate changes. 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.
-18-
<PAGE>
LIQUIDITY RISK -- ALL FUNDS
Certain securities may be difficult or impossible to sell at the time
and price that the Fund would like. A Fund may have to lower the price, sell
other securities instead or forego an investment opportunity, any of which could
have a negative effect on fund management or performance. This risk applies, for
example, to: variable and floating rate demand notes, variable amount demand
securities and restricted securities which the Funds may purchase, short-term
funding agreements which each Fund may purchase, and the futures contracts in
which each Fund (other than the Colorado Tax-Exempt Fund) may engage. Illiquid
securities also include repurchase agreements, securities loans and time
deposits with notice/termination dates of greater than seven days, certain
municipal leases and certain securities subject to trading restrictions because
they are not registered under the Securities Act of 1933. There may be no active
secondary market for these securities. Each Fund may invest up to 15% of its net
assets at the time of purchase, in securities that are illiquid. A domestically
traded security which is not registered under the Securities Act of 1933 will
not be considered illiquid if the Adviser determines an adequate investment
trading market exists for that security. However, there can be no assurance that
a liquid market will exist for any security at a particular time. Because
illiquid and restricted securities may be difficult to sell at an acceptable
price, they may be subject to greater volatility and may result in a loss to a
Fund.
MANAGEMENT RISK -- ALL FUNDS
A strategy which the Adviser uses may fail to produce the intended
results. The particular securities and types of securities a Fund holds may
underperform other securities and types of securities. There can be no assurance
a Fund will achieve its investment objective. Certain policies of each Fund,
which may not be changed without a shareholder vote, are described in the
Statement of Additional Information.
MARKET RISK -- ALL FUNDS
The value of the securities in which a Fund invests may go up or down
in response to the prospects of individual companies and/or general economic
conditions. Price changes may be temporary or last for extended periods.
OTHER TYPES OF INVESTMENTS -- ALL FUNDS
This Prospectus describes each Fund's principal investment strategies,
and the types of securities in which each Fund principally invests. Each Fund
may, from time to time, make other types of investments and pursue other
investment strategies in support of its overall investment goal. These
supplemental investment strategies - and the risk involved - are described in
detail in the Statement of Additional Information, which is referred to on the
back cover of this Prospectus.
PORTFOLIO TURNOVER RISKS -- ALL FUNDS
The Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater expenses which must be
borne by a Fund and its shareholders. It may result in higher short-term capital
gains taxable to shareholders. These gains are taxable at higher rates than
long-term capital gains. Frequent trading could also mean higher brokerage
commissions and other transaction costs, which could reduce the Fund's return.
See "Financial Highlights" for the Funds' historical portfolio turnover rates.
-19-
<PAGE>
The Westcore MIDCO Growth Fund had a portfolio turnover rate over 100%
in the year ended May 31, 1999.
TEMPORARY DEFENSIVE POSITIONS -- ALL WESTCORE FUNDS
Each Fund may, from time to time, take temporary defensive positions
that are inconsistent with its principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. Such
investments include various short-term instruments. If any Fund takes temporary
position at the wrong time, the position would have an adverse impact on that
Fund's performance. The Funds reserve the right to invest all of their assets in
temporary defensive positions.
ADDITIONAL RISKS WHICH APPLY TO INVESTMENTS IN CERTAIN OF THE FUNDS
EXTENSION RISKS -- BOND FUNDS
This is the risk that an issuer will exercise its right to pay
principal on an obligation held by a Fund (such as a mortgage- or asset-backed
security) later than expected. This may happen when there is a rise in interest
rates. These events may lengthen the duration and potentially reduce the value
of these securities.
PREPAYMENT RISK -- BOND FUNDS
This is the risk that an issuer will exercise its right to pay
principal on an obligation held by a Fund (such as a mortgage- or asset-backed
security) earlier than expected. This may happen when there is a decline in
interest rates. These events may make a Fund unable to recoup its initial
investment and may result in reduced yields.
SMALL CAP STOCK RISK -- SMALL-CAP OPPORTUNITY FUND
Smaller capitalization stocks involve greater risks than those
associated with larger, more established companies. Small company stocks may be
subject to more abrupt or erratic price movements, for reasons including that
the stocks are traded in lower volume and that the issuers are more sensitive to
changing conditions and have less certain growth prospects. Also, there are
fewer market makers for these stocks and wider spreads between quoted bid and
asked prices in the over-the-counter market for these stocks. Small cap stocks
tend to be less liquid, particularly during periods of market disruption. There
normally is less publicly available information concerning these securities.
Small companies in which the Funds may invest may have limited product lines,
markets or financial resources, or may be dependent on a small management group.
In particular, investments in unseasoned companies present risks considerably
greater than investments in more established companies.
TAX RISK -- COLORADO TAX-EXEMPT FUND
This Fund may be more adversely impacted by changes in tax rates and
policies than the other Funds. Because interest income on municipal obligations
is normally not subject to regular federal income taxation, the attractiveness
of municipal obligations in relation to other investment alternatives is
affected by changes in federal income tax rates applicable to, or the continuing
federal income tax-exempt status of, such interest income. Any proposed or
actual changes in such rates or exempt status, therefore, can significantly
affect the
-20-
<PAGE>
demand for and supply, liquidity and marketability of municipal obligations,
which could in turn affect a Fund's ability to acquire and dispose of municipal
obligations at desirable yield and price levels.
YEAR 2000 RISKS -- ALL FUNDS
Like other investment companies and financial service providers, the Fund could
be adversely affected if the computer systems used by the Adviser and the Fund's
other service providers do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Issue". The Year 2000 Issue arises because most computer systems
were designed to only handle a two-digit year, not a four-digit year. When the
year 2000 begins, these computers may interpret "00" as the year 1900 and either
stop processing date-related computations or process them incorrectly. These
failures could have a negative impact on the handling of securities trades,
pricing and account services. The Adviser and Administrators are taking steps to
address the Year 2000 Issue with respect to the computer systems that they use
and to obtain assurance that comparable steps are being taken by the Fund's
other major service providers, none of whom are affiliated with the Adviser or
Administrators. As of the date of this Prospectus, it is not anticipated that
shareholders will experience negative effects on their investment, or on the
services provided in connection therewith, as a result of the Year 2000 Issue.
However, there can be no assurance that these steps will be successful, or that
interaction with other non-complying computer systems will not adversely impact
the Fund as a result of the Year 2000 Issue. In addition, the issuers of
securities the Fund owns could have Year 2000 problems. For instance, the
issuers' ability to make timely payments of dividends or interest and principal
or to continue their operations or services may be impaired by the inadequate
preparation of computer systems for the Year 2000. This may adversely affect the
market values of securities of specific issuers or of securities generally,
which, in turn, could impact the Fund's performance. Also, it is possible that
the normal operations of the Funds will in any event be disrupted significantly
by the failure of communications and public utility companies, governmental
entities, financial processors or others to perform their services as a result
of the Year 2000 problem.
ADDITIONAL RISKS WHICH APPLY TO PARTICULAR TYPES OF INVESTMENTS
ASSET-BACKED SECURITIES -- BOND FUNDS, OTHER THAN COLORADO TAX-EXEMPT FUND
These Funds may purchase asset-backed securities, which are securities
backed by installment sale contracts, credit card receivables or other assets.
The yield characteristics of asset-backed securities differ from traditional
debt securities. A major difference is that the principal amount of the
obligations may be prepaid at any time because the underlying assets (i.e.,
loans) generally may be prepaid at any time. The prepayment rate is primarily a
function of current market rates and conditions. In periods of falling interest
rates, the rate of prepayment tends to increase, and the reinvestment of
prepayment proceeds by a Fund will generally be at a lower rate than the rate on
the prepaid obligation. Prepayments may also result in some loss of a Fund's
principal investment if any premiums were paid. As a result of these yield
characteristics, some high-yielding asset-backed securities may have less
potential for growth in value than conventional bonds with comparable
maturities. These characteristics may result in a higher level of price
volatility for these assets under certain market conditions.
Asset-backed securities are subject to greater risk of default during
periods of economic downturn than conventional debt instruments, and the holder
frequently has no recourse against the entity that originated the security. In
addition, the secondary market for certain asset-backed securities may not be as
liquid as
-21-
<PAGE>
the market for other types of securities, which could result in the Funds'
experiencing difficulty in valuing or liquidating such securities.
CONVERTIBLE SECURITIES -- ALL FUNDS, OTHER THAN 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.
MORTGAGE-RELATED SECURITIES -- INTERMEDIATE-TERM AND LONG-TERM BOND FUNDS
The Westcore Intermediate-Term and Long-Term Bond Funds may invest in
mortgage-backed securities (including collateralized mortgage obligations) that
represent pools of mortgage loans assembled for sale to investors by various
governmental agencies and government-related organizations, such as the
Government National Mortgage Association, the Federal National Mortgage
Association, and the Federal Home Loan Mortgage Corporation. Mortgage-backed
securities provide a monthly payment consisting of interest and principal
payments. Additional payments may be made out of unscheduled repayments of
principal resulting from the sale of the underlying residential property,
refinancing or foreclosure, net of fees or costs that may be incurred.
Prepayments of principal on mortgage-backed securities may tend to increase due
to refinancing of mortgages as interest rates decline. To the extent that the
Fund purchases mortgage-backed securities at a premium, mortgage foreclosures
and prepayments of principal by mortgagors (which may be made at any time
without penalty) may result in some loss of the Fund's principal investment to
the extent of the premium paid. The yield of a Fund that invests in
mortgage-backed securities may be affected by the Fund's need to reinvest
prepayments at higher or lower rates than the original investment.
Other mortgage-backed securities are issued by private companies,
generally originators of and investors in mortgage loans, including savings
associations, mortgage bankers, commercial banks, investment bankers, and
special purpose entities. These private mortgage-backed securities may be
supported by U.S. Government mortgage-backed securities or some form of
non-government credit enhancement. Mortgage-backed securities may be affected by
prepayments of principal on the underlying loans, which generally increase as
interest rates decline; as a result, when interest rates decline, holders of
these securities normally do not benefit from appreciation in market value to
the same extent as holders of other non-callable debt securities. Further, an
issuer of an obligation may exercise its right to pay principal on the
obligation later than expected. This is more likely to happen when interest
rates rise. These events may lengthen the duration and reduce the value of these
obligations. In addition, like other debt securities, the values of
mortgage-related securities, including government-related mortgage pools,
generally will fluctuate in response to market interest rates.
-22-
<PAGE>
OTHER INVESTMENT COMPANIES -- ALL FUNDS
The Funds may invest their cash balances in other investment companies
which invest in high quality, short-term debt securities. A pro rata portion of
the other investment companies' expenses will be borne by the Fund's
shareholders.
REITs -- ALL FUNDS, OTHER THAN THE COLORADO TAX-EXEMPT FUND
TheFunds may invest in securities issued by equity and mortgage REITs,
which are real estate investment trusts. 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, 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 these 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 heavily dependent on cash flow, and are subject to the risk that
borrowers may default.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS -- ALL 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.
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.
SECURITIES LENDING -- ALL FUNDS, OTHER THAN COLORADO TAX-EXEMPT FUND
These Funds may lend their portfolio securities to institutional
investors as a means of earning additional income. Securities loans present
risks of delay in receiving collateral or in recovering the securities loaned or
even a loss of rights in the collateral if the borrower of the securities fails
financially. A loan will not be made if, as a result, the total amount of a
Fund's outstanding loans exceeds 30% of its total assets (including the value of
the collateral for the loan).
TAX-EXEMPT OBLIGATIONS -- COLORADO TAX-EXEMPT FUND
Tax-exempt obligations in which the Westcore Colorado Tax-Exempt Fund
invests 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
-23-
<PAGE>
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 tax-exempt 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 Fund and the Adviser rely on
these opinions and will not review the bases for them.
The Fund concentrates its investments in Colorado obligations. If
Colorado or any of its political subdivisions were to suffer serious financial
difficulties that might jeopardize the ability to pay its obligations, the value
of the Fund could be adversely affected.
U.S. GOVERNMENT OBLIGATIONS -- ALL FUNDS
The Funds 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.
-24-
<PAGE>
WESTCORE FUNDS SPECTRUM
The spectrum below shows the Adviser's 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
FUNDS CONSERVATIVE MODERATE AGGRESSIVE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund _______________
Westcore Growth and Income Fund _______________
Westcore Blue Chip Fund _______________
Westcore Mid-Cap Opportunity Fund _______________
Westcore Small-Cap Opportunity Fund _______________
Westcore Long-Term Bond Fund _______________
Westcore Intermediate-Term Bond Fund ______________
Westcore Colorado Tax-Exempt Fund ______________
</TABLE>
-25-
<PAGE>
HOW TO INVEST AND OBTAIN INFORMATION
<TABLE>
<CAPTION>
HOW TO CONTACT WESTCORE FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
IN PERSON BY REGULAR MAIL BY EXPRESS, CERTIFIED OR BY TELEPHONE ONLINE
[PERSON GRAPHIC] [LETTER GRAPHIC] REGISTERED MAIL [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC]
[PLANE GRAPHIC]
<S> <C> <C> <C> <C>
Westcore Funds Westcore Funds Westcore Funds WESTCORE INVESTOR SERVICES WESTCORE
370 17th Street, Suite P.O. Box 8319 C/O BFDS Weekdays: 7 a.m. to 6 p.m. Mountain TRANS@CTION CENTER
3100 Boston, MA 02266- 66 Brooks Drive Time 24 hours a day, seven
Devner, CO 80202 8319 Boston, MA 02184 -------------------------- days a week
WESTCORE AUTOMATED SERVICE LINE www.westcore.com
24 hours a day, seven days a week - Access account
1-800-392-CORE (2673) information
- Access account information - Place automatic
- Place automatic transactions transactions
- Order duplicate statements, tax
forms or additional checkbooks for
the BlackRock Money Market
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE, EXCHANGE AND REDEEM
This section explains how to purchase, exchange and redeem your Westcore shares.
It also explains various services and features offered in connection with your
account. Please call us at 1-800-392-CORE (2673) if you have any questions or to
obtain a New Account Application.
-26-
<PAGE>
PURCHASING SHARES
You may purchase additional shares through any of the following options below or
in person at the location listed on page __. In addition, if you are an existing
shareholder, you may open a new account with identical registration and account
options in another fund offered by this prospectus by any of these methods.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BY MAIL BY TELEPHONE BY ONLINE ACCESS BY AUTOMATIC BY WIRE
[LETTER GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC] INVESTMENT PLAN [WIRE GRAPHIC]
[CALENDER GRAPHIC]
<S> <C> <C> <C> <C>
OPENING A NEW ACCOUNT If you are an If you are an Complete the Automatic You may purchase Westcore
Read this prospectus. existing shareholder, existing shareholder Investment Plan Section on shares by wire transfer
you may purchase you may purchase your application to have money from your bank account to
Send a completed additional shares additional shares automatically withdrawn from your Westcore account.
application with your by telephone. by telephone. your bank account monthly, There is a $1,000 minimum
check and mail to quarterly or annually. for purchases by wire.
appropriate address Call 1-800-392- Access the 24-hour
CORE (2673) to Westcore Trans@ction The minimum automatic To place a purchase by
ADDING TO YOUR EXISTING speak with an Center located investment must be the wire, please call 1-800-
ACCOUNT Investor Service www.westcore.com. equivalent of at least 392-CORE (2673) to speak
Complete the tear-off Representative $50 per month. with an Investor Service
investment slip from from 7 a.m. to Representative from
your last statement 6 p.m. mountain To add this option to your 7 a.m. to 6 p.m. mountain
and mail with your time or use the account, please call 1-800- time.
check to the 24-hour Westcore 392-CORE (2673) or access
appropriate address. Auromated Service www.westcore.com for the WIRE TO:
Line. appropriate form. State Street Bank
Or, send your check ABA #011000028
and a written request DDA #99046344
following instructions ATTN: Custody and
on page __ and mail to Shareholder Services --
the appropriate Westcore ______________
address. Fund
Name
Your Westcore Account
Number
- ------------------------------------------------------------------------------------------------------------------------------------
For more information on automatic telephone and
online transactions, please see "Additional
Information on Telephone and Online Service" on
page ____.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-27-
<PAGE>
When you purchase shares, your request will be processed at the next NAV (net
asset value) calculated after your order is received and accepted. Please note
the following:
- - Please make your check payable to Westcore Funds in U.S. dollars drawn on a
U.S. bank.
- - Cash, credit card, third party checks or checks drawn on foreign banks will
not be accepted for purchases.
- - If you are purchasing shares in a retirement account, please indicate whether
the purchase is a rollover or a current or prior year contribution.
- - After receipt of your order by wire, telephone or online, your bank account
will be debited the next business day for wire transfers and the second
business day for electronic fund transfers.
- - If a check does not clear your bank, Westcore reserves the right to cancel
the purchase.
- - If Westcore is unable to debit your predesignated bank account on the day of
purchase, they may make additional attempts or cancel the purchase.
- - Westcore reserves the right to reject any order.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. Westcore (or their agents) have the
authority to redeem shares in your account(s) to cover any losses due to
fluctuations in share price. Any profit on such cancellation will accrue to
Westcore.
INVESTMENT MINIMUMS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
AMOUNT
- -------------------------------------------------------------------------------
<S> <C>
To open a new account $1,000
- -------------------------------------------------------------------------------
To open a new retirement or certain other accounts $250
- -------------------------------------------------------------------------------
To open an Automatic Investment Plan account $0
- -------------------------------------------------------------------------------
To add to any type of account $50
- -------------------------------------------------------------------------------
</TABLE>
-28-
<PAGE>
EXCHANGING SHARES
You may exchange your Westcore shares for shares of other Westcore Funds offered
in this prospectus or the BlackRock Money Market Portfolio* through any of the
following options below. You may also place an exchange in person at the
location listed on page __. In addition, if you are an existing shareholder, you
may exchange into a new account copying your existing account registration and
options by any of these methods.
* BlackRock Money market Portfolio is a no-load money market fund advised by
BlackRock Advisors Inc., sub-advised by BlackRock Institutional Management
Corporation and distributed by BlackRock Distributors, Inc.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
BY MAIL BY TELEPHONE BY ONLINE ACCESS AUTOMATICALLY
[MAIL GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC] [CALENDER GRAPHIC]
<S> <C> <C> <C>
Send a written request Call 1-800-392-CORE Access the 24-hour Westcore Call 1-800-392-CORE (2673) to
following instructions on (2673) to speak with an Trans@ction Center located receive instructions for
page __ and mail to the Investor Service www.westcore.com. automatically exchanging shares
appropriate address. Representative from 7 a.m. between funds on a monthly,
to 6 p.m. mountain time or quarterly or annual basis.
use the 24-hour Westcore
Automated Service Line.
- ------------------------------------------------------------------------------------------------------------------------------------
For more information on automatic telephone and
online transactions, please see "Additional
Information on Telephone and Online Service" on
page ____.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Important notes:
- - Exchanges must meet the minimum investment requirements described on page __.
- - Exchanges between accounts will be accepted only if registrations are
identical.
- - If the shares you are exchanging are held in certificate form, the
certificate must be returned with or before your exchange request.
- - Please be sure to read the Prospectus for the Fund into which you are
exchanging.
- - An exchange represents the sale of shares from one fund and the purchase of
shares of another fund. This may produce a taxable gain or loss in your
non-tax-deferred account.
-29-
<PAGE>
REDEEMING SHARES
You may redeem your Westcore shares by any of the options below or in person at
the location listed on page __.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
BY MAIL BY TELEPHONE BY ONLINE ACCESS BY SYSTEMATIC WITHDRAWAL BY WIRE
[LETTER GRAPHIC] [TELEPHONE GRAPHIC] [COMPUTER GRAPHIC] PLAN [WIRE GRAPHIC]
[CALENDER GRAPHIC]
<S> <C> <C> <C> <C>
Send a written request If you are an If you are an You may redeem shares You may redeem Westcore
following instructions existing shareholder, existing shareholder, automatically (in any shares by wire transfer
on page __ and mail you may redeem you may redeem multiple of $50) monthly, from your Westcore account
to the appropriate your shares by your shares online. quarterly or annually. to your bank account.
address. telephone.
Access the 24-hour A systematic withdrawal There is a $1,000 minimum
Call 1-800-392- Westcore Trans@ction plan may be established and you must have established
CORE (2673) to Center located if the shares in your bank instructions to place
speak with an www.westcore.com. Fund are worth at least wire redemptions.
Investor Service $10,000.
Representative To arrange a wire redemption,
from 7 a.m. to To add this option to please call 1-800-392-CORE
6 p.m. mountain your account, please call (2673) to speak with an
time or use the 1-800-392-CORE (2673) or Investor Service
24-hour Westcore access www.westcore.com Representative from 7 a.m.
Auromated Service for the appropriate form. to 6 p.m. mountain time.
Line.
To add bank instructions
to your account, please
call 1-800-392-CORE (2673)
or access www.westcore.com
for the appropriate form.
- ------------------------------------------------------------------------------------------------------------------------------------
For more information on automatic telephone and
online transactions, please see "Additional
Information on Telephone and Online Service" on
page ____.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-30-
<PAGE>
Important notes:
- - You may redeem your Westcore shares on any business day which the New York
Stock Exchange is open.
- - Generally, redemption proceeds will be sent by check to the shareholders'
address of record within seven business days after receipt of a valid
redemption request.
- - A wire transfer will be sent directly into your designated bank account the
next business day after receipt of your order, and an electronic funds
transfer will be sent the second business day after receipt of your order.
- - If the shares you are redeeming are held in certificate form, you must return
the certificate with or before your redemption request.
- - If the shares you are redeeming were purchased by check, telephone, computer
or through the Automatic Investment Plan, Westcore may delay the mailing of
your redemption check for up to 15 days from the day of purchase to allow the
purchase to clear.
-31-
<PAGE>
ADDITIONAL INFORMATION ON TELEPHONE AND ONLINE SERVICE
- - All shareholders (except for certain accounts opened through Service
Organizations and certain retirement accounts) are automatically
granted automatic telephone and online transaction privileges unless
they decline them explicitly on their account application or in writing
to Westcore Funds.
- - Shareholders can follow the instructions provided at the Westcore
Automated Service Line and Westcore Trans@ction Center to access these
service using a personal identification number.
- - Automatic telephone and online purchases and redemptions are completed
by electronic funds transfer from your bank account to your Westcore
account (Wire transfer is not available for automatic telephone or
online transactions.) To establish this privilege, please complete the
"Bank Instructions" section of your account application. You may also
call 1-800-392-CORE (2673) or access www.westcore.com or the
appropriate form.
- - Automatic telephone and online REDEMPTIONS are not available for IRA,
business or fiduciary accounts. In addition, automatic telephone and
online EXCHANGES are not available for business or fiduciary accounts.
- - There is a $25,000 daily maximum for each separate type of automatic
telephone and online transaction (purchases, exchange-in, exchange-out
and redemptions).
- - It may be difficult to reach the Funds by telephone or online during
periods of unusual market activity. If this happens, you may transact
on your account by mail as described in this prospectus.
- - The Funds or their agents may, in case of emergency, temporarily
suspend telephone and online transactions and other shareholder
services.
SECURITY ISSUES
Westcore Funds has designed procedures to enhance security, including the use of
128-bit encryption through the Westcore Trans@ction Center, testing the identity
of the shareholder placing the order and sending prompt written confirmation of
transactions. However, shareholders may give up some level of security by
choosing to transact by telephone or online rather than by mail.
Westcore Funds has designed procedures to confirm that telephone and online
transaction requests are genuine. Westcore Funds and their agents will not be
responsible for any losses resulting from unauthorized telephone or online
transactions when these procedures are followed.
-32-
<PAGE>
[Mountain Logo] WESTCORE FUNDS
GENERAL ACCOUNT POLICIES
[Black and white photograph of mountain and trees]
Westcore Funds may modify or terminate account policies, services and features,
but, subject to the Funds right to limit account activity or redeem
involuntarily as described below, will not materially modify or terminate them
without giving shareholders 60 days' written notice. The Funds reserve the right
to modify the general account policies from time to time or to waive them in
whole or in part for certain types of accounts.
Written Instructions
To process transactions in writing, your request should be sent to Westcore
Funds, P.O. Box 8319, Boston, MA 02266-8319 and must include the following
information:
- - the name of the Fund(s)
- - the account number(s)
- - the amount of money or number of shares
- - the name(s) on the account
- - the signature(s) of all registered account owners (signature guaranteed, if
applicable)
- - your daytime telephone number
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.
-33-
<PAGE>
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 __,
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.
Limit On Account Activity
Because excessive account transactions can disrupt management of the Funds and
increase the Funds' cost for all shareholders, Westcore reserves the right to
refuse a share purchase and/or revoke an investors exchange privilege at any
time.
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.
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. Certain
registration changes may have tax implications. Please contact your tax adviser.
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
requirements.
-34-
<PAGE>
Quarterly Consolidated Statements and Shareholder Reports
Westcore Funds will send you a consolidated statement quarterly and, with the
exception of automatic investment plan transactions and dividend reinvestment
transactions, a confirmation after every transaction that affects your share
balance or your account registration. 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.
[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 is received in good order by
the transfer agent or certain authorized broker-dealers, other institutions or
designated intermediaries 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 or certain authorized broker-dealers or designated intermediaries
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
business 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 and certain other investors, purchase and redemption orders will
be processed at the NAV next determined after the Service Organization (as
defined below) acting on their behalf receives the purchase or redemption order.
Westcore has authorized certain broker-dealers and other institutions to accept
on its behalf purchase and redemption orders made through a 'mutual fund
supermarket'. Such authorized institutions may designate other intermediaries to
accept purchase and redemption orders on behalf of Westcore.
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.
-35-
<PAGE>
[Black and white photograph of mountain and trees]
Accounts Opened Through a Service Organization
You may purchase or sell Fund shares through an account you have with, 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
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.
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 Generally declared and
paid quarterly* paid in December
- --------------------------------------------------------------------------------
Bond Funds Declared and Generally 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).
-36-
<PAGE>
TAXES
Federal Taxes
Each year, the Funds distribute all or substantially all of its taxable
income, including its net capital gain (the excess of long-term capital gain
over short-term capital loss). Distributions attributable to the net capital
gain of a Fund will be taxable to you as long-term capital gain, regardless of
how long you have held your shares. Other Fund distributions (other than
exempt-interest dividends, discussed below) will generally be taxable as
ordinary income. You will be subject to income tax on Fund distributions
regardless whether they are paid in cash or reinvested in additional shares. You
will be notified annually of the tax status of distributions to you.
You should note that if you purchase shares just before a distribution,
the purchase price will reflect the amount of the upcoming distribution. You
will incur taxes on the entire amount of the distribution received, even though,
as an economic matter, you did not participate in these gains and the
distribution simply constitutes a return of capital. This is known as "buying
into a dividend." It is generally not to your advantage to purchase shares just
before a distribution.
You will recognize taxable gain or loss on a sale, exchange or
redemption of your shares, including an exchange for shares of another Fund,
based on the difference between your tax basis in the shares and the amount you
receive for them. (To aid in computing your tax basis, you generally should
retain your account statements for the periods during which you held shares.)
Any loss realized on shares held for six months or less will be treated
as a long-term capital loss to the extent of any capital gain dividends that
were received on the shares.
The one major exception to these tax principles is that distributions
on, and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
The Westcore Colorado Tax-Exempt Fund anticipates that substantially
all of its income dividends will be "exempt interest dividends," which are
exempt from federal income taxes. However, some dividends will be taxable, such
as dividends that are derived from occasional taxable investments, and
distributions of short and long-term capital gains.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Westcore Colorado Tax-Exempt Fund generally will not be deductible
for federal income tax purposes.
You should note that a portion of the exempt-interest dividends paid by
the Westcore Colorado Tax-Exempt Fund may constitute an item of tax preference
for purposes of determining federal alternative minimum tax liability. Exempt-
interest dividends will also be considered along with other adjusted gross
income in determining whether any Social Security or railroad retirement
payments received by you are subject to federal income taxes.
If you receive an exempt-interest dividend with respect to any share
and the share is held by you for six months or less, any loss on the sale or
exchange of the share will be disallowed to the extent of such dividend amount.
-37-
<PAGE>
The foregoing is only a summary of certain tax considerations under
current law, which may be subject to change in the future. Shareholders who are
nonresident aliens, foreign trusts or estates, or foreign corporations or
partnerships, may be subject to different United States federal income tax
treatment. You should consult your tax adviser for further information regarding
federal, state, local and/or foreign tax consequences relevant to your specific
situation.
Colorado State Taxes
Because the Westcore Colorado Tax-Exempt Fund intends to invest
substantially all of its assets in tax-exempt obligations of the State of
Colorado or its political subdivisions, shareholders who are subject to Colorado
state income tax will generally not be subject to such tax on dividends paid by
the Fund to the extent that the dividends are attributable to interest income of
the Fund. However, to the extent dividends are not attributable to exempt
interest income, such as distributions of short or long-term capital gain, they
will not be exempt from Colorado income tax (except to the limited extent that
Colorado may exempt all investment income from state 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.
State and Local Taxes
Shareholders may also be subject to state and local taxes on
distributions and redemptions. State income taxes may not apply, however, to the
portions of each Fund's distributions, if any, that are attributable to interest
on Federal Securities or interest on securities of the particular state or
localities within the state. Shareholders should consult their tax advisers
regarding the tax status of distributions in their state and locality.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Denver Investment Advisors LLC, with principal offices at 1225 17th Street, 26th
Floor, Denver, Colorado 80202, serves as the investment adviser to the Funds.
The Adviser was organized in 1994. It is owned by the principal officers and
employees of its predecessor firm. As of May 31, 1999, it had approximately
$10.5 billion in assets under active management, including $732 million for nine
investment company portfolios.
Denver Investment Advisors provides a continuous investment program for the
Funds, including investment research and management. The Adviser makes
investment decisions for the Funds and places orders for all purchases and sales
of the Funds' portfolio securities.
-38-
<PAGE>
MANAGEMENT EXPENSES
For the fiscal year ended May 31, 1999, each Fund paid the Adviser an advisory
fee. The fees are set forth below and are expressed as an annual percentage of a
Fund's average daily net assets.
<TABLE>
<CAPTION>
Effective Advisory Fees for the
Fee Schedule fiscal Year Ended May 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
Westcore MIDCO Growth Fund .61%
- --------------------------------------------------------------------------------
Westcore Growth and Income .09%
Fund
- --------------------------------------------------------------------------------
Westcore Blue Chip Fund .56%
- --------------------------------------------------------------------------------
Westcore Mid-Cap Opportunity .75%*
Fund
- --------------------------------------------------------------------------------
Westcore Small-Cap Opportunity .69%
Fund
- --------------------------------------------------------------------------------
Westcore Long-Term Bond Fund .21%
- --------------------------------------------------------------------------------
Westcore Intermediate-Term .31%
Bond Fund
- --------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt .00%
Fund
- --------------------------------------------------------------------------------
</TABLE>
* The Mid-Cap Opportunity Fund has operated for less than a full fiscal year.
The fee stated represents the maximum advisory fee.
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. Mr. Anderson works with other securities analysts of the Adviser who from
time to time purchase and sell specific securities under his supervision.
VARILYN K. SCHOCK, CFA, a Vice President and the Director of Quantitative
Strategies with Denver Investment Advisors, has been primarily responsible for
the day-to-day management of Westcore Blue Chip Fund since 1991 and Westcore
Small-Cap Opportunity Fund since its inception. Ms. Schock has been with Denver
Investment Advisors and its predecessor, Denver Investment Advisors, Inc., since
1984 and has been a portfolio manager with the company since 1987.
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. Mr. Schulhof works with other securities
analysts of the Adviser who from time to time purchase and sell specific
securities under his supervision.
-39-
<PAGE>
CHRISTIANNA WOOD, CFA, a Vice President of Denver Investment Advisors, is
primarily responsible for the day-to-day management of Westcore Mid-Cap
Opportunity Fund. Ms. Wood has been a portfolio manager of small to midcap
companies for over 17 years, and has been with Denver Investment Advisors since
1996.
JEROME R. POWERS, CFA, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of Westcore Intermediate-
Term Bond and Long-Term Bond Funds since October 1, 1997. He has been with the
Adviser since 1997, and has been active in the management of fixed income
securities for 18 years.
THOMAS B. STEVENS, CFA, a Vice President of Denver Investment Advisors, has been
primarily responsible for the day-to-day management of the Westcore Colorado
Tax-Exempt Fund since May 28, 1999. Mr. Stevens has 29 years experience in the
institutional bond market and has been with the Adviser since 1986.
CO-ADMINISTRATORS
ALPS Mutual Fund Services, Inc. and Denver Investment Advisors serve as co-
administrators to the Funds and receive fees in such capacity. 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. Pursuant to another agreement, ALPS
responds to certain shareholder inquiries and transaction requests received via
telephone.
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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
-40-
<PAGE>
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLES ARE INTENDED TO HELP YOU UNDERSTAND EACH
FUND'S FINANCIAL PERFORMANCE FOR THE PAST 5 YEARS OR, IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS. CERTAIN INFORMATION REFLECTS FINANCIAL
RESULTS FOR A SINGLE FUND SHARE. THE TOTAL RETURNS IN THE TABLE
REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE EARNED OR LOST ON AN
INVESTMENT IN EACH FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS). THIS INFORMATION HAS BEEN AUDITED BY __________, WHOSE
REPORT, ALONG WITH THE FUNDS' FINANCIAL STATEMENTS, ARE INCLUDED IN THE
ANNUAL REPORT, WHICH IS AVAILABLE UPON REQUEST.
-41-
<PAGE>
WESTCORE MIDCO GROWTH FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $20.54 $20.92 $22.90 $17.12 $16.09
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) (0.23) (0.17) (0.15) (0.08) 0.00
Net realized and unrealized 2.22 3.03 1.19 6.58 1.56
gain/(loss) on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 1.99 2.86 1.04 6.50 1.56
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income 0.00 0.00 0.00 0.00 0.00
Distributions from net realized
gain on investments (2.50) (3.24) (3.02) (0.72) (0.53)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.50) (3.24) (3.02) (0.72) (0.53)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.03 $20.54 $20.92 $22.90 $17.12
TOTAL RETURN 11.87% 15.10% 5.27% 38.62% 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in $277,924 $565,293 $590,008 $656,490 $401,760
thousands)
Ratio of expenses to average 1.15% 1.13% 1.14% 1.08% 0.94%
net assets
Ratio of expenses to average 1.19% 1.13% 1.14% 1.10% 0.96%
net assets without fee waivers
Ratio of net income/(loss) to (0.63%) (0.71%) (0.70%) (0.42%) (0.03%)
average net assets
Ratio of net investment (0.68%) (0.71%) (0.71%) (0.44%) (0.05%)
income/(loss) to average net
assets without fee waivers
Portfolio turnover rate (1) 116.46% 75.79% 60.78% 62.83% 50.19%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$472,523,632 and $816,019,036, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-42-
<PAGE>
WESTCORE GROWTH AND INCOME FUND (1)
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999(3) 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $13.74 $13.03 $12.32 $10.50 $10.62
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.00(4) 0.01 0.07 0.15 0.20
Net realized and unrealized
gain/(loss) on investments 0.66 2.54 2.19 2.57 0.15
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.66 2.55 2.26 2.72 0.35
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.01) (0.07) (0.11) (0.24) (0.21)
Distributions from net realized
gain on investments (2.09) (1.77) (1.44) (0.66) (0.26)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.10) (1.84) (1.55) (0.90) (0.47)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.30 $13.74 $13.03 $12.32 $10.50
TOTAL RETURN 6.25% 20.74% 19.71% 27.25% 3.73%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $12,789 $15,160 $20,725 $25,387 $27,029
Ratio of expenses to average
net assets 1.15% 1.15% 1.15% 1.22% 1.17%
Ratio of expenses to average
net assets without fee waivers 1.75% 1.71% 1.56% 1.51% 1.22%
Ratio of net income/(loss) to
average net assets 0.02% 0.40% 0.75% 1.34% 2.09%
Ratio of net investment
income/(loss) to average net (0.58%) (0.16%) 0.33% 1.05% 2.04%
assets without fee waivers
Portfolio turnover rate (2) 72.59% 41.40% 39.80% 88.31% 81.14%
- ------------------------------------------------------------------------------------------------------------------------------------
</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) 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 period ended May 28, 1999 were
$9,324,065 and $11,974,565, respectively.
(3) Per share amounts calculated based on the average shares
outstanding during the period.
(4) Less than $.005 per share.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-43-
<PAGE>
WESTCORE BLUE CHIP FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $18.81 $18.15 $17.41 $14.70 $12.70
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.04 0.13 0.19 0.25 0.23
Net realized and unrealized
gain/(loss) on investments 1.07 4.66 3.65 4.03 2.12
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from
investment operations 1.11 4.79 3.84 4.28 2.35
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.07) (0.14) (0.22) (0.27) (0.16)
Distributions from net realized
gain on investments (2.62) (3.99) (2.88) (1.30) (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (2.69) (4.13) (3.10) (1.57) (0.35)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.23 $18.81 $18.15 $17.41 $14.70
TOTAL RETURN 7.42% 29.53% 24.28% 30.48% 19.03%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $69,354 $72,477 $66,450 $68,286 $52,545
Ratio of expenses to average
net assets 1.15% 1.15% 1.15% 1.10% 1.01%
Ratio of expenses to average
net assets without fee waivers 1.25% 1.23% 1.21% 1.25% 1.06%
Ratio of net income/(loss) to
average net assets 0.19% 0.60% 1.02% 1.52% 1.78%
Ratio of net investment
income/(loss) to average net 0.09% 0.52% 0.97% 1.38% 1.73%
assets without fee waivers
Portfolio turnover rate (1) 73.39% 48.50% 43.47% 65.11% 61.72%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$48,287,791 and $55,786,517, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-44-
<PAGE>
WESTCORE MID-CAP OPPORTUNITY FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------
1999
- ------------------------------------------------------
<S> <C>
Net asset value
beginning of the period $10.00
- ------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) (0.01)
Net realized and unrealized
gain/(loss) on investments 1.06
- ------------------------------------------------------
Total income/(loss) from 1.05
investment operations
- ------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------
Dividends from net realized
income 0.00
Distributions from net realized 0.00
gain on investments ---
- ------------------------------------------------------
Total distributions 0.00
- ------------------------------------------------------
Net asset value, end of period $11.05
TOTAL RETURN 10.50%
- ------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $2,585
Ratio of expenses to average
net assets 1.25%**
Ratio of expenses to average
net assets without fee waivers 5.33%**
Ratio of net income/(loss) to
average net assets (0.11%)**
Ratio of net investment
income/(loss) to average net (4.19%)**
assets without fee waivers
Portfolio turnover rate (1) 71.65%
- ------------------------------------------------------
</TABLE>
** Annualized
(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 period ended May 28, 1999 were
$4,245,771 and $1,737,775 respectively.
* Year ended May 28 for 1999.
-45-
<PAGE>
WESTCORE SMALL-CAP OPPORTUNITY FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $26.71 $23.87 $21.35 $15.95 $14.97
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.08 0.01 0.03 0.04 0.09
Net realized and unrealized
gain/(loss) on investments (5.35) 6.83 3.37 5.86 1.11
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from (5.27) 6.84 3.40 5.90 1.20
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.05) (0.03) (0.02) (0.06) (0.10)
Distributions from net realized (1.21) (3.97) (0.86) (0.44) (0.12)
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.26) (4.00) (0.88) (0.50) (0.22)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.18 $26.71 $23.87 $21.35 $15.95
TOTAL RETURN (19.72%) 30.40% 16.28% 37.49% 8.15%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in $88,635 $61,069 $35,962 $23,951 $9,703
thousands)
Ratio of expenses to average 1.30% 1.30% 1.30% 1.30% 1.27%
net assets
Ratio of expenses to average 1.63% 1.66% 1.69% 2.20% 2.77%
net assets without fee waivers
Ratio of net income/(loss) to 0.37% 0.03% 0.11% 0.24% 0.61%
average net assets
Ratio of net investment 0.04% (0.33%) (0.28%) (0.67%) (0.89%)
income/(loss) to average net
assets without fee waivers 82.47% 78.48% 77.73% 47.83% 59.17%
Portfolio turnover rate (1)
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$107,762,418 and $65,207,999, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-46-
<PAGE>
WESTCORE LONG-TERM BOND FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $10.36 $9.67 $9.59 $9.87 $9.22
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.57 0.60 0.62 0.61 0.59
Net realized and unrealized
gain/(loss) on investments (0.43) 0.96 0.26 (0.27) 0.66
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.14 1.56 0.88 0.34 1.25
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.57) (0.60) (0.63) (0.62) (0.60)
Distributions from net realized (0.06) (0.27) (0.17) 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.63) (0.87) (0.80) (0.62) (0.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.87 $10.36 $9.67 $9.59 $9.87
TOTAL RETURN 1.21% 16.63% 9.40% 3.41% 14.37%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $21,789 $18,466 $20,160 $25,070 $33,440
Ratio of expenses to average
net assets 0.95% 0.95% 0.95% 0.90% 0.94%
Ratio of expenses to average
net assets without fee waivers 1.22% 1.23% 1.15% 1.07% 0.99%
Ratio of net income/(loss) to
average net assets 5.47% 5.87% 6.37% 6.07% 6.54%
Ratio of net investment
income/(loss) to average net 5.21% 5.58% 6.18% 5.90% 6.49%
assets without fee waivers
Portfolio turnover rate (1) 15.97% 11.05% 27.76% 33.10% 25.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$7,158,147 and $3,218,902, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-47-
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $10.51 $10.23 $10.10 $10.27 $10.02
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.61 0.61 0.60 0.60 0.58
Net realized and unrealized
gain/(loss) on investments (0.24) 0.28 0.13 (0.17) 0.27
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.37 0.89 0.73 0.43 0.85
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.61) (0.61) (0.60) (0.60) (0.60)
Distributions from net realized 0.00 0.00 0.00 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.61) (0.61) (0.60) (0.60) (0.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.27 $10.51 $10.23 $10.10 $10.27
TOTAL RETURN 3.54% 8.88% 7.43% 4.26% 8.93%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $41,155 $50,159 $63,169 $83,039 $97,619
Ratio of expenses to average
net assets 0.85% 0.85% 0.85% 0.81% 0.77%
Ratio of expenses to average
net assets without fee waivers 1.01% 0.98% 0.97% 0.92% 0.80%
Ratio of net income/(loss) to
average net assets 5.72% 5.77% 5.81% 5.78% 5.86%
Ratio of net investment
income/(loss) to average net 5.57% 5.65% 5.68% 5.67% 5.83%
assets without fee waivers
Portfolio turnover rate (1) 24.68% 23.45% 27.47% 71.97% 60.86%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$10,907,758 and $19,558,326, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-48-
<PAGE>
WESTCORE COLORADO TAX-EXEMPT FUND
(SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE
PERIODS INDICATED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED MAY 31,*
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of the period $11.06 $10.78 $10.61 $10.70 $10.52
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income/(loss) 0.47 0.50 0.50 0.52 0.52
Net realized and unrealized
gain/(loss) on investments (0.05) 0.28 0.17 (0.10) 0.20
- ------------------------------------------------------------------------------------------------------------------------------------
Total income/(loss) from 0.42 0.78 0.67 0.42 0.72
investment operations
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends from net realized
income (0.47) (0.50) (0.50) (0.51) (0.54)
Distributions from net realized (0.00) (0.00) 0.00 0.00 0.00
gain on investments
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.47) (0.50) (0.50) (0.51) (0.54)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.01 $11.06 $10.78 $10.61 $10.70
TOTAL RETURN 3.80% 7.32% 6.46% 3.97% 7.16%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) $45,506 $31,501 $21,348 $13,992 $10,792
Ratio of expenses to average
net assets 0.53% 0.50% 0.50% 0.44% 0.42%
Ratio of expenses to average
net assets without fee waivers 1.09% 1.17% 1.21% 1.43% 1.62%
Ratio of net income/(loss) to
average net assets 4.21% 4.54% 4.73% 4.87% 5.03%
Ratio of net investment
income/(loss) to average net 3.65% 3.87% 4.02% 3.88% 3.83%
assets without fee waivers
Portfolio turnover rate (1) 12.12% 24.94% 30.78% 10.23% 3.15%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 period ended May 28, 1999 were
$19,692,877 and $4,530,137, respectively.
* Year ended May 30 for 1997, Year ended May 29 for 1998 and Year ended
May 28 for 1999.
-49-
<PAGE>
APPENDIX I [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
the Investment Adviser's growth and income investing composite.
The table on page A-2 includes historical performance data of the
Investment Adviser for the only actual discretionary accounts 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 commingled account. For the period from October 1, 1995
through June 30, 1997, performance reflects that of the Growth and
Income Fund. Subsequent to June 30, 1997, the performance also includes
that of separately managed account(s) advised by the Investment
Adviser. The Investment Adviser's Growth and Income 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 Adviser
in managing substantially similar accounts 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
exceed $500. Quarterly and yearly returns are calculated by
geometrically linking the monthly and quarterly returns, respectively.
No leverage was used in the accounts. The return of the Growth and
Income Fund has been calculated by the Growth and Income 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 and separately managed accounts whose
performance is reflected below 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
and separately managed accounts could have been adversely affected if
the accounts had been regulated as an investment company under the
federal securities laws.
A-1
<PAGE>
Equity & Bond Funds Prospectus
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
A-2
<PAGE>
[Mountain Logo] WESTCORE FUNDS Appendix (continued)
INVESTMENT ADVISER'S GROWTH AND INCOME PERFORMANCE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Westcore Growth Assets Included
and Income Fund Investment Adviser's Growth
(formerly Westcore Adviser's Growth and Income
Equity Income and Income Performance(1) Standard & Poor's
Year(1) Fund)(2) Performance(2) ($ thousands) 500 Index(3)
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1989 26.36% 25.53% $49,554 31.61%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1990 (2.80)% (3.67)% $42,455 (3.05)%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1991 31.21% 42.51% $58,368 30.46%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1992 4.76% 12.09% $63,106 7.63%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1993 11.33% 16.55% $72,620 10.08%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1994 (8.39%) (4.29)% $69,021 1.32%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1995 22.45% 29.53% $25,125 37.58%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1996 23.25% 22.85% $20,294 26.00%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1997 27.25% 27.84% $41,203 33.36%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1998 6.63% 8.74% $42,000 28.58%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
1999
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Compounded --
Annual Return For
5 Years Ended
June 30, 1999
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Compounded --
Annual Return For
10 Years Ended
June 30, 1999
- ----------------------------------------------------------------------------------------------------
</TABLE>
A-3
<PAGE>
(1) All periods are ended December 31 (and assets are provided at that
date) except 1999 figures are for period ended (and assets at) June 30,
1999 and are not annualized.
(2) Annual total return is presented for each year ended December 31 except
for period ended June 30, 1999 and compounded annual return is
presented for each period, net of expenses. The performance of the
Westcore Growth and Income Fund reflects voluntary fee waivers and/or
expense reimbursements by the adviser and administrators of the
Westcore Growth and Income Fund. These waivers and/or reimbursements
may be modified or terminated. The Investment Adviser's Growth and
Income performance has been restated so that each year's expenses
reflect total expenses (before waivers) which were applicable to the
Westcore Growth and Income Fund for the fiscal year ended immediately
following that year.
(3) Annual total return is presented for each year ended December 31 except
for period ended June 30, 1999 and compounded annual return is
presented for each period. The S&P 500 Index is an unmanaged Index
containing common 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>
APPENDIX II
[Black and white photograph of mountain and trees]
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 be lacking or may be
unreliable over any great length of time. Some
speculative characteristics.
Ba More uncertain, with speculative elements.
Questionable protection of interest and principal
payments.
B Lack characteristics of desirable investment;
potentially low assurance of timely interest and
principal payments or maintenance of other contract
terms over time.
Caa Poor standing, may be in default; elements of danger
with respect to principal or interest payments.
Ca Speculative in a high degree; may be in default.
C Lowest-rated; extremely poor prospects of ever
attaining investment standing; may be in default.
Con Bonds for which the security depends upon completion
of some act; rated conditionally.
B-1
<PAGE>
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
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.
- --------------------------------------------------------------------------------
Questions? Call 1-800-392-CORE (2673)
B-2
<PAGE>
[BACK COVER]
WHERE TO FIND MORE INFORMATION
More Fund information is available to you upon request and without charge:
ANNUAL AND SEMI-ANNUAL REPORT
The Annual and Semi-Annual Reports provide additional information about the
Funds' investments, performance and portfolio holdings. The Annual Report also
contains a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI includes additional information about the Funds' investment policies,
organization and management. It is legally part of this prospectus (it is
incorporated by reference).
Investors can get free copies of the Funds' Annual Report, Semi-Annual Report or
SAI. They may also request other information about the Funds, and make
shareholder inquiries.
Write to:
Westcore Funds
370 17th Street
Suite 3100
Denver, CO 80202
By phone:
1-800-392-CORE (2673)
E-mail: http://www.westcore.com
Information about the Funds (including the Funds' SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, DC. Information about the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. Reports and other information
about the Funds are available on the SEC's Internet site at http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the SEC, Washington, DC 20549-6009.
The Westcore Funds Investment Company Act File No. is 811-3373
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[FRONT COVER]
[MOUNTAIN LOGO]
WESTCORE FUNDS
PROSPECTUS
October 1, 1999
WESTCORE FUNDS
Westcore International Equity Fund
Westcore Small-Cap Growth Fund
Westcore Select Fund
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Westcore Funds are managed by Denver Investment Advisors LLC.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUNDS' SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
TABLE OF CONTENTS
PAGES
RISK/RETURN SUMMARY
Westcore Funds...............................................................
Fees and Expenses of the Funds...............................................
TYPES OF INVESTMENT RISK
HOW TO INVEST AND OBTAIN INFORMATION
How to Contact Westcore Funds................................................
Purchasing Shares............................................................
Exchanging Shares............................................................
Redeeming Shares.............................................................
General Account Policies.....................................................
Additional Information on Telephone Service..................................
Distributions and Taxes......................................................
Management of the Funds......................................................
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RISK/RETURN SUMMARY
WESTCORE INTERNATIONAL EQUITY FUND
The Westcore International Equity Fund is designed for investors seeking
long-term growth of capital and who can tolerate the risks associated with
investments in international common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE INTERNATIONAL EQUITY FUND?
WESTCORE INTERNATIONAL EQUITY FUND seeks long-term growth of capital
primarily through investments in international companies.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE INTERNATIONAL EQUITY
FUND?
WESTCORE INTERNATIONAL EQUITY FUND invests primarily in the common stock
of international companies of all sizes. Under normal circumstances, the
Fund invests at least 65% of its assets in common stocks of foreign
companies in at least five different developed countries. However, at
times the Fund may invest in fewer than five developed countries or even
a single developed country.
The portfolio manager emphasizes those developed countries that appear
strongest from a macro-economic view based on the investment adviser's
analysis. Within each country, the manager performs intensive research to
identify companies in businesses and economic sectors with attractive
growth prospects. To identify attractive stocks for the Fund, the manager
studies a company's business by analyzing its financial information,
industry, markets and competitors, visiting their operations and/or
interviewing management. Companies considered for the Fund generally have
management teams that the investment adviser believes have the ability to
execute their business plans and increase their market share within their
country or internationally though innovative products or services, strong
balance sheets and/or the access to money to finance their growth. Stocks
may be sold when conditions have changed and the company's prospects
and/or valuations are no longer attractive.
The Fund considers foreign companies to include those domiciled outside
the United States, deriving at least half of their revenue from sales or
production outside the United States, or with the principal trading
market of their securities outside the United States. The Fund considers
developed countries to include Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, and the United Kingdom. Emerging market countries are
considered to be those countries not listed as developed countries above.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE INTERNATIONAL EQUITY
FUND?
As with any equity fund, the value of your investment will fluctuate over
short, or even extended periods of time in response to overall movements in the
stock market (market risk). In addition, the Fund is
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subject to the additional risk that the particular types of stocks held by the
Fund will underperform other types of stocks and may decline in value
(management risk). Therefore, you could lose money by investing in the Fund.
Westcore International Equity Fund's exposure to foreign markets can
regularly effect the Net Asset Value (NAV) and total return of the Fund due to
fluctuations in exchange rates or changing political or economic conditions in a
particular country (foreign risk). Emerging market securities are particularly
subject to foreign risks. Therefore the value of this Fund may be more volatile
than equity funds investing only in domestic companies.
The Fund may use a variety of currency hedging techniques to manage
exchange rate risk. The manager believes the use of these techniques will
benefit the Fund, however the fund's performance could be worse if the manager's
judgement proves incorrect.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
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RISK/RETURN SUMMARY
WESTCORE SMALL-CAP GROWTH FUND
The Westcore Small-Cap Growth Fund is designed for investors seeking
long-term growth of capital and who can tolerate the risks associated with
investments in common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE SMALL-CAP GROWTH FUND?
WESTCORE SMALL-CAP GROWTH FUND seeks long-term growth of capital
primarily through investments in small companies with growth potential.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE SMALL-CAP GROWTH FUND?
WESTCORE SMALL-CAP GROWTH FUND invests primarily in the common stock of
small companies which appear to have above average revenue and earnings
growth potential. Small companies may benefit from factors such as new
products and services and more entrepreneurial management. Small company
stocks may have higher return/risk potential than larger company stocks.
The portfolio manager of the Westcore Small-Cap Growth Fund performs
intensive research to identify companies in businesses and economic
sectors with attractive growth prospects. To identify attractive stocks
for the Fund, the manager studies a company's business by analyzing its
financial information, industry, markets and competitors, frequently
visiting their operations and/or interviewing management. Companies
considered for the Fund generally have management teams that the
investment adviser believes have the ability to execute their business
plans and increase their market share with innovative products or
services, strong balance sheets and/or the access to money to finance
their growth. Stocks may be sold when conditions have changed and the
company's prospects and/or valuations are no longer attractive.
Under normal market conditions at least 65% of the value of this Fund's
total assets is invested in companies with market capitalizations of $___
billion or less at the time of purchase.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE SMALL-CAP GROWTH FUND?
As with any equity fund, the value of your investment will fluctuate over
short, or even extended periods of time in response to overall movements in the
stock market (market risk). In addition, the Fund is subject to the additional
risk that the particular types of stocks held by the Fund will underperform
other types of stocks and may decline in value (management risk). Therefore, you
could lose money by investing in the Fund.
Westcore Small-Cap Growth Fund is subject to the additional risk that the
stocks of smaller and newer issuers can be more volatile due to lack of
financial resources, product diversification and competitive
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strengths of larger companies. Therefore the value of this Fund may be more
volatile.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
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RISK/RETURN SUMMARY
WESTCORE SELECT FUND
The Westcore Select Fund is designed for investors seeking long-term
growth of capital and who can tolerate the risks associated with investments in
common stocks.
WHAT IS THE INVESTMENT OBJECTIVE OF THE WESTCORE SELECT FUND?
WESTCORE SELECT FUND seeks long-term growth of capital primarily through
investments in companies of any size selected for their growth potential.
Upon notice to shareholders, the Board of Trustees may change the Fund's
investment objective without the approval of shareholders.
WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE WESTCORE SELECT FUND?
WESTCORE SELECT FUND invests in the common stock of companies of any
size, with an emphasis on larger companies. The portfolio manager looks
for companies in attractive industries with above average revenue and
earnings growth opportunities. The Fund normally concentrates its
investments in a core group of 25 to 35 common stocks.
The portfolio manager of the Westcore Select Fund performs intensive
research to identify companies in businesses and economic sectors with
attractive growth prospects. To identify attractive stocks for the Fund,
the manager studies a company's business by analyzing its financial
information, industry, markets and competitors, frequently visiting their
operations and/or interviewing management. Companies considered for the
Fund generally have management teams that we believe have the ability to
execute their business plans, increase their market share and become
market leaders through innovative products or services, strong balance
sheets and/or the access to money to finance their growth. Stocks are
sold when conditions have changed and the company's prospects and/or
valuations are no longer attractive.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE WESTCORE SELECT FUND?
As with any equity fund, the value of your investment will fluctuate over
short, or even extended periods of time in response to overall movements in the
stock market (market risk). In addition, the Fund is subject to the additional
risk that the particular types of stocks held by the Fund will underperform
other types of stocks and may decline in value (management risk). Therefore, you
could lose money by investing in the Fund.
Westcore Select Fund may from time to time be concentrated in fewer
companies and/or industries than other Westcore portfolios. These companies and
or industries may react similarly to certain negative market or industry
conditions (concentration risk). Also the appreciation or depreciation of a
single stock may have a greater impact on net asset value than if the Fund held
a greater number of issuers. Therefore the value
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of this Fund may be more volatile than more diversified portfolios.
An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the FDIC or any other government agency.
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FEES AND EXPENSES OF THE FUNDS
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
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<TABLE>
<CAPTION>
Westcore Westcore Westcore
International Small-Cap Select
Fund Growth Fund Fund
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly None None None
from your investment)
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ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- -----------------------------------------------------------------------------------------------------------------
Management Fees 1.20%(1) 1.00%(1) 0.65%(1)
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Distribution Fees None None None
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Other Expenses 5.48%(2) 4.77%(2) 4.77%(2)
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Total Annual Fund 6.68% 5.77% 5.42%
Operating Expenses
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Fee Waiver and (5.18)%(1)(2) (4.47)%(1)(2) (4.27)%(1)(2)
Expense Reimbursement
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Net Annual Fund 1.50%(1)(2) 1.30%(1)(2) 1.15%(1)(2)
Operating Expenses
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</TABLE>
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(1) The Funds' Adviser has contractually agreed to waive a portion of the
management fee for the International, Small-Cap Growth and Select Funds until at
least May 31, 2000. As a result, the advisory fees will be 0.00%, 0.00% and
0.00% for each Fund respectively for that period. You will be notified if these
waivers are discontinued after that date.
(2) The Funds' Administrators have contractually agreed to waive a
portion of the administration fee and the Adviser has agreed to reimburse
expenses for the International, Small-Cap Growth and Select Funds until at least
May 31, 2000. As a result, Other Expenses will be no more than 1.50%, 1.30% and
1.15% for the Funds, respectively for that period. You will be notified if these
waivers are discontinued after that date.
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EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUNDS
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUNDS FOR THE TIME PERIODS
INDICATED AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS, AND
THAT NET ANNUAL OPERATING EXPENSES SET FORTH ABOVE ARE INCURRED. THE EXAMPLE
ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE FUNDS'
OPERATING EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR
LOWER, BASED ON THESE ASSUMPTIONS YOUR COSTS WOULD BE:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Westcore
Westcore Small-Cap Westcore
International Growth Select
Fund Fund Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year $153 $132 $117
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Three Years $474 $412 $365
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</TABLE>
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TYPES OF INVESTMENT RISK
The principal risks of investing in each Fund are described previously in
this Prospectus. The following list provides more detail about some of those
risks, along with information on additional types of risks which may apply to
the Funds. Risks associated with particular types of investments each Fund makes
are described in this section and in the Statement of Additional Information
referred to on the back page.
GENERAL RISKS OF INVESTING IN EACH OF THE FUNDS
LIQUIDITY RISK - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP GROWTH
FUND AND WESTCORE SELECT FUND.
Certain securities may be difficult or impossible to sell at the time and
price that the Fund would like. A Fund may have to lower the price, sell other
securities instead or forego an investment opportunity, any of which could have
a negative effect on fund management or performance. This risk applies, for
example, to: variable and floating rate demand notes, variable amount demand
securities and restricted securities which the Funds may purchase, short-term
funding agreements which each Fund may purchase, and the futures contracts in
which each Fund may engage. Illiquid securities also include repurchase
agreements, securities loans and time deposits with notice/termination dates of
greater than seven days, certain municipal leases and certain securities subject
to trading restrictions because they are not registered under the Securities Act
of 1933. There may be no active secondary market for these securities. Each Fund
may invest up to 15% of its net assets at the time of purchase, in securities
that are illiquid. A domestically traded security which is not registered under
the Securities Act of 1933 will not be considered illiquid if the Adviser
determines an adequate investment trading market exists for that security.
However, there can be no assurance that a liquid market will exist for any
security at a particular time. Because illiquid and restricted securities may be
difficult to sell at an acceptable price, they may be subject to greater
volatility and may result in a loss to a Fund.
MANAGEMENT RISK - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP GROWTH
FUND AND WESTCORE SELECT FUND.
A strategy which the Adviser uses may fail to produce the intended
results. The particular securities and types of securities a Fund holds may
underperform other securities and types of securities. There can be no assurance
a Fund will achieve its investment objective. Certain policies of each Fund,
which may not be changed without a shareholder vote, are described in the
Statement of Additional Information.
MARKET RISK - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP GROWTH FUND
AND WESTCORE SELECT FUND.
The value of the securities in which a Fund invests may go up or down in
response to the prospects of individual companies and/or general economic
conditions. Price changes may be temporary or last for extended periods.
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OTHER TYPES OF INVESTMENTS - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND.
This Prospectus describes each Fund's principal investment strategies,
and the types of securities in which each Fund principally invests. Each Fund
may, from time to time, make other types of investments and pursue other
investment strategies in support of its overall investment goal. These
supplemental investment strategies - and the risk involved - are described in
detail in the Statement of Additional Information, which is referred to on the
back cover of this Prospectus.
PORTFOLIO TURNOVER RISKS - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND.
The Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater expenses which must be
borne by a Fund and its shareholders. It may also result in higher short-term
capital gains taxable to shareholders. These gains are taxable at higher rates
than long-term capital gains. Frequent trading could also mean higher brokerage
commissions and other transaction costs, which could reduce the Fund's return.
See "Financial Highlights" for the Funds' historical portfolio turnover rates.
Temporary Defensive Positions--WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND
Each Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal investment strategies in attempting to respond
to adverse market, economic, political, or other conditions. Such investments
include various short-term instruments. If any Fund takes temporary position at
the wrong time, the position would have an adverse impact on that Fund's
performance. The Funds reserve the right to invest all of their assets in
temporary defensive positions.
ADDITIONAL RISKS WHICH APPLY TO INVESTMENTS IN CERTAIN OF THE FUNDS
DERIVATIVE RISK - WESTCORE INTERNATIONAL EQUITY FUND, AND THE WESTCORE SMALL-CAP
GROWTH FUND AND WESTCORE SELECT FUND TO THE EXTENT EACH FUND INVESTS IN
DERIVATIVES.
The term derivative covers a wide number of investments, but in general
it refers to any financial instrument whose value is derived, at least in part,
from the price of another security or a specified index, asset or rate. Some
derivatives may be more sensitive to or otherwise not react in tandem with
interest rate changes or market moves, and some may be susceptible to changes in
yields or values due to their structure or contract terms. Loss may result from
a Fund's investments in options, futures, swaps, structured securities and other
derivative instruments which may be leveraged. A Fund may use derivatives to:
increase yield; hedge against a decline in principal value; invest with greater
efficiency and lower cost than is possible through direct investment; adjust the
Fund's duration; or provide daily liquidity.
Hedging is the use of one investment to offset the effects of another
investment. To the extent that a derivative is used as a hedge against an
opposite position that the Fund also holds, a loss generated by the
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derivative should be substantially offset by gains on the hedged investment, and
vice versa. While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. Hedging also involves correlation risk - the risk that changes
in the value of a hedging instrument may not match those of the asset being
hedged.
To the extent that a derivative is not used as a hedge, the Fund is
directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
FOREIGN SECURITIES RISKS - WESTCORE INTERNATIONAL EQUITY FUND, AND THE WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND TO THE EXTENT EACH FUND INVESTS
IN FOREIGN SECURITIES.
When a Fund invests in foreign securities, it will be subject to special
risks not typically associated with domestic issuers resulting from less
government regulation, less public information and less economic, political and
social stability. Foreign securities, and in particular foreign debt securities,
are sensitive to changes in interest rates. In addition, investment in
securities of foreign governments involves the risk that foreign governments may
default on their obligations or may otherwise not respect the integrity of their
debt. A Fund which invests in foreign securities will also be subject to the
diplomatic risk that an adverse change in the diplomatic relations between the
U.S. and another country might reduce the value or liquidity of investments.
Future political and economic developments, the possible imposition of
withholding taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or freezes on
the convertibility of currency, or the adoption of other governmental
restrictions might adversely affect an investment in foreign securities.
Additionally, foreign banks and foreign branches of domestic banks may be
subject to less stringent reserve requirements, and to different accounting,
auditing and recordkeeping requirements.
Foreign risks will normally be greatest when a Fund invests in issuers
located in emerging markets. Securities issued in emerging market countries, in
particular, may be more sensitive to certain economic changes and less liquid.
These countries are located in the Asia/Pacific region, Eastern Europe, Latin
and South America and Africa. In general, the securities markets of these
countries are less liquid, are subject to greater price volatility, have smaller
market capitalizations and have problems with securities registration and
custody. In addition, because the securities settlement procedures are less
developed in these countries, a Fund may be required to deliver securities
receiving payment and also be unable to complete transactions during market
disruptions. As a result of these and other risks, investments in these
countries generally present a greater risk of loss to a Fund.
Investment in foreign securities also involves higher costs than
investment in U.S. securities, including higher transaction and custody costs as
well as the imposition of additional taxes by foreign governments.
Each of the Funds may invest in foreign currency denominated securities.
A Fund which invests in foreign currency denominated securities will also be
subject to the risk of negative foreign currency rate fluctuations. A change in
the exchange rate between U.S. dollars and foreign currency may reduce the value
of an investment made in a security denominated in that foreign currency. The
International Equity Fund may hedge against foreign currency risk, and the other
Funds may do so on unsettled trades, but none of the funds is required to do so.
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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 Small-Cap Growth and Select Funds' 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.
SMALL CAP STOCK RISK - SMALL-CAP GROWTH FUND
Smaller capitalization stocks involve greater risks than those associated
with larger, more established companies. Small company stocks may be subject to
more abrupt or erratic price movements, for reasons including that the stocks
are traded in lower volume and that the issuers are more sensitive to changing
conditions and have less certain growth prospects. Also, there are fewer market
makers for these stocks and wider spreads between quoted bid and asked prices in
the over-the-counter market for these stocks. Small cap stocks tend to be less
liquid, particularly during periods of market disruption. There normally is less
publicly available information concerning these securities. Small companies in
which the Funds may invest may have limited product lines, markets or financial
resources, or may be dependent on a small management group. In particular,
investments in unseasoned companies present risks considerably greater than
investments in more established companies.
YEAR 2000 RISKS - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP GROWTH
FUND AND WESTCORE SELECT FUND.
Like other investment companies and financial service providers, the Fund could
be adversely affected if the computer systems used by the Adviser and the Fund's
other service providers do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Issue". The Year 2000 Issue arises because most computer systems
were designed to only handle a two-digit year, not a four-digit year. When the
year 2000 begins, these computers may interpret "00" as the year 1900 and either
stop processing date-related computations or process them incorrectly. These
failures could have a negative impact on the handling of securities trades,
pricing and account services. The Adviser and Administrators are taking steps to
address the Year 2000 Issue with respect to the computer systems that they use
and to obtain assurance that comparable steps are being taken by the Fund's
other major service providers, none of whom are affiliated with the Adviser or
Administrators. As of the date of this Prospectus, it is not anticipated that
shareholders will experience negative effects on their investment, or on the
services provided in connection therewith, as a result of the Year 2000 Issue.
However, there can be no assurance that these steps will be successful, or that
interaction with other non-complying computer systems will not adversely impact
the Fund as a result of the Year 2000 Issue. In addition, the issuers of
securities the Fund owns could have Year 2000 problems. For instance, the
issuers' ability to make timely payments of dividends or interest and principal
or to continue their operations or services may be impaired by the inadequate
preparation of computer systems for the Year 2000. This may adversely affect the
market values of securities of specific issuers or of securities generally,
which, in turn, could impact the Fund's performance. Also, it is possible that
the normal operations of the Funds will in any event be disrupted significantly
by the failure of communications and public utility companies, governmental
entities, financial processors or others to perform services as a result of the
Year 2000 problem.
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ADDITIONAL RISKS WHICH APPLY TO PARTICULAR TYPES OF INVESTMENTS
CONVERTIBLE SECURITIES - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP
GROWTH FUND AND WESTCORE SELECT 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.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS - WESTCORE INTERNATIONAL EQUITY FUND, AND
THE WESTCORE SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND TO THE EXTENT EACH
FUND INVESTS IN FOREIGN CURRENCY EXCHANGE TRANSACTIONS.
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 a forward currency exchange contract, 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. Forward currency exchange transactions 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. In addition, 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.
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 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
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strategy is highly uncertain.
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.
OTHER INVESTMENT COMPANIES - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND.
The Funds may invest their cash balances in other investment companies
which invest in high quality, short-term debt securities. A pro rata portion of
the other investment companies' expenses will be borne by the Fund's
shareholders.
REITS - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE SMALL-CAP GROWTH FUND AND
WESTCORE SELECT FUND.
The Funds may invest in securities issued by equity and mortgage REITs,
which are real estate investment trusts. 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,
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 these
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 heavily dependent on
cash flow, and are subject to the risk that borrowers may default.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS - WESTCORE INTERNATIONAL
EQUITY FUND, WESTCORE SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND.
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.
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.
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U.S. GOVERNMENT OBLIGATIONS - WESTCORE INTERNATIONAL EQUITY FUND, WESTCORE
SMALL-CAP GROWTH FUND AND WESTCORE SELECT FUND.
The Funds 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.
WESTCORE FUNDS SPECTRUM
The spectrum below shows the Adviser's 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.
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FUNDS CONSERVATIVE MODERATE AGGRESSIVE
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Westcore International Equity Fund ____________
Westcore Small-Cap Growth Fund ____________
Westcore Select Fund ____________
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HOW TO INVEST AND OBTAIN INFORMATION
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).
HOW TO PURCHASE, EXCHANGE AND REDEEM
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.
HOW TO CONTACT WESTCORE FUNDS
By Regular Mail, Express, Certified
or Registered Mail:
Westcore Funds
370 17th Street, Suite 3100
Denver, CO 80202
By Telephone:
Westcore Investor Service Representative
Weekdays 7 a.m. to 6 p.m. Mountain Time
1-800-392-CORE (2673)
PURCHASING SHARES
By Mail IF YOU ARE OPENING A NEW ACCOUNT:
Send a completed Account Application
with a check or money order made out to
Westcore Funds and mail to Westcore
Funds at the address above. Please be
sure to provide your Social Security or
taxpayer identification number on the
application. Westcore Funds are only
available to U.S. citizens or residents.
IF YOU ARE ADDING TO AN EXISTING ACCOUNT:
Complete the tear-off investment slip
from your last statement and send it
with your check or money order made out
to Westcore Funds at the address above.
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If you do not have an investment slip,
please send a written request, following
the instructions on pg. __, along with
the check or money order made out to
Westcore Funds.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH TO
OPEN A NEW ACCOUNT WITH IDENTICAL REGISTRATION
AND ACCOUNT OPTIONS IN ANOTHER FUND OFFERED BY
THIS PROSPECTUS:
Send a written request, following the
instructions on pg. __ and include a
check or money order made out to
Westcore Funds.
By Telephone IF YOU ARE ADDING TO AN EXISTING ACCOUNT:
You can make purchases into Westcore
Funds accounts by calling 1-800-392-CORE
(2673) and speaking with a Westcore
Investor Service Representative during
normal business hours.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH TO
OPEN A NEW ACCOUNT WITH IDENTICAL REGISTRATION
AND ACCOUNT OPTIONS IN ANOTHER FUND OFFERED BY
THIS PROSPECTUS:
You can open a new account, copying your
existing Westcore Funds account
registration and account options, by
calling 1-800-392-CORE (2673) and
speaking with a Westcore Investor
Service Representative during normal
business hours.
By Automatic Investment Plan 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 application to Westcore Funds
at the address on pg. __.
To add an Automatic Investment Plan to
your existing account, please call us
for the appropriate form.
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HOW TO PURCHASE, EXCHANGE AND REDEEM (CONTINUED)
By Wire IF YOU ARE ADDING TO AN EXISTING ACCOUNT:
You can make purchases into Westcore
Funds accounts by a wire transaction.
Please call 1-800-392-CORE (2673) and
speak with a Westcore Investor Service
Representative during normal business
hours for wiring instructions.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED IN THIS PROSPECTUS AND YOU WISH
TO OPEN A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
You can open a new account copying your
existing Westcore Funds account
registration and account options by
calling 1-800-392-CORE (2673) and
receiving wiring instructions from a
Westcore Investor Service Representative
during normal business hours.
In Person IF YOU ARE OPENING A NEW ACCOUNT IN A FUND
OFFERED IN THIS PROSPECTUS OR ADDING TO AN
EXISTING ACCOUNT:
A Westcore Investor Service
Representative will be happy to assist
you in person at 370 Seventeenth Street,
Suite 3100, Denver, CO 80202 during
normal business hours to open a new
account or add to an existing account.
Please make checks payable to Westcore Funds in U.S. dollars and drawn on a bank
located in the U.S. You may not purchase shares by cash, credit card, third
party checks or checks drawn on foreign banks.
If a check does not clear your bank, the Funds reserve the right to cancel the
purchase. If the Funds are unable to debit your predesignated bank account on
the day of purchase, they may make additional attempts or cancel the purchase.
If your purchase is cancelled, you will be responsible for any losses or fees
imposed by your bank and losses that may be incurred as a result of any decline
in the value of the cancelled purchase. The Funds (or their agents) have the
authority to redeem shares in your account(s) to cover any losses due to
fluctuations in share price. Any profit on such cancellation will accrue to the
Fund. The Funds reserve the right to reject any order.
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EXCHANGING SHARES
You may exchange your Fund shares for shares of the other Funds offered in this
Prospectus. Exchanges must meet the "Minimum Investments" described on pg. __.
Exchanges between accounts will be accepted only if the registrations are
identical. You should read the Prospectus for the Fund into which you are
exchanging. Please remember an exchange represents the sale of shares from one
fund and the purchase of shares of another fund, which may produce a taxable
gain or loss in a non tax-deferred account. For further information on the
exchange privilege, please call a Westcore Investor Service Representative at
1-800-392-CORE (2673).
By Mail IF YOU ARE EXCHANGING INTO AN EXISTING ACCOUNT:
Please send a written request, following
the instructions on pg. __.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH TO
EXCHANGE INTO A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
Please send a written request, following
the instructions on pg. __.
By Telephone IF YOU ARE EXCHANGING INTO AN EXISTING ACCOUNT:
Your account will automatically have
telephone privileges, unless you
specifically decline this option on the
application or in writing. You can make
exchanges into Westcore Funds accounts
by calling 1-800-392-CORE (2673) and
speaking with a Westcore Investor
Service Representative during normal
business hours.
IF YOU ALREADY HAVE AN EXISTING ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS AND YOU WISH TO
EXCHANGE INTO A NEW ACCOUNT WITH IDENTICAL
REGISTRATION AND ACCOUNT OPTIONS IN ANOTHER
FUND OFFERED BY THIS PROSPECTUS:
Your account will automatically have
telephone privileges, unless you
specifically decline this option on the
application or in writing. You can
exchange into a new account copying your
existing Westcore Funds account
registration and account options by
calling 1-800-392-CORE (2673) and
speaking with a Westcore Investor
Service Representative during normal
business hours.
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Automatically Call 1-800-392-CORE (2673) to receive
instructions for automatically exchanging
shares between Funds on a monthly,
quarterly or annual basis.
In Person IF YOU ARE EXCHANGING INTO A NEW ACCOUNT IN A
FUND OFFERED BY THIS PROSPECTUS OR AN EXISTING
ACCOUNT:
A Westcore Investor Service
Representative will be happy to assist
you in person at 370 Seventeenth Street,
Suite 3100, Denver, CO 80202 during
normal business hours to process an
exchange into a new account or between
existing accounts.
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REDEEMING SHARES
You may redeem your Fund shares on any business day which the New York Stock
Exchange is open. If you have any questions about 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 business 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 on the next
business day after receipt of a valid redemption request.
If you have authorized the electronic funds transfer service, your redemption
proceeds will be transferred directly into your designated bank account normally
on the second business day after receipt of a valid redemption request.
If the shares being redeemed were purchased by check, telephone or through the
Automatic Investment Plan, Westcore 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 Mail Please send a written request, following
the instructions on pg. __.
By Telephone Your account will automatically have
telephone privileges, unless you
specifically decline this option on the
application or in writing. You can make
redemptions from Westcore Funds accounts
by calling 1-800-392-CORE (2673) and
speaking with a Westcore Investor Service
Representative during normal business
hours.
By Systematic Withdrawal Plan Complete the Systematic Withdrawal Plan
Section of your new Account Application
or call 1-800-392-CORE (2673) for the
appropriate form to have money
automatically sent to your bank account
monthly, quarterly or annually in any
multiple of $50.
To add a Systematic Withdrawal Plan to
your existing account, please call us for
the appropriate form.
Participation requires a minimum of
$10,000 in a Fund in order to initiate
this plan. All dividends and
distributions credited to your account
must be reinvested.
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By Wire Call 1-800-392-CORE (2673) during normal
business hours or write Westcore Funds,
370 Seventeenth Street, Suite 3100,
Denver, CO 80202. You will need to include
proper written instructions as described
on pg. __. There is a $1,000 minimum per
transaction made by wire.
In Person A Westcore Investor Service Representative
will be happy to assist you in person at
370 Seventeenth Street, Suite 3100,
Denver, CO 80202 during normal business
hours to process a redemption order.
GENERAL ACCOUNT POLICIES
Westcore Funds may modify or terminate account policies, services and features,
but subject to the Funds right to limit account activity or redeem involuntarily
as described below, will not materially modify or terminate them without giving
shareholders 60 days' written notice. The Funds reserve the right to modify the
general account policies from time to time or to waive them in whole or in part
for certain types of accounts.
Minimum Investments Amount
To open a new account $1,000
To open a new account with an
automatic investment plan 0
To add to any type of account 50
Written Instructions
To process transactions in writing, your request should be sent to Westcore
Funds, 370 17th Street, Suite 3100, Denver, Colorado 80202 and must include the
following information:
- - the name of the Fund(s)
- - the account number(s)
- - the amount of money or number of shares
- - the name(s) on the account
- - the signature(s) of all registered account owners (signature guaranteed, if
applicable)
- - your daytime telephone number
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ADDITIONAL INFORMATION ON TELEPHONE SERVICE
Normal business hours to speak with a Westcore Investor Service Representative
at 1-800-392-CORE (2673) are 7 a.m. - 6 p.m. Mountain Time, Monday through
Friday.
You must authorize, on your account application or otherwise in writing, the
ability to perform purchases and redemptions by electronic transfer from your
bank account via the telephone service.
You may choose to initiate certain transactions by telephone. Although Westcore
Funds has designed procedures to enhance security, including testing the
identity of the shareholder placing the order and sending prompt written
confirmation of transactions to the address of record, shareholders may give up
some level of security by choosing to purchase, exchange or redeem shares by
telephone rather than by mail. Westcore Funds and their agents will not be
responsible for any losses resulting from unauthorized telephone transactions
when procedures are followed which are reasonably designed to confirm that the
telephone transaction request is genuine. 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 in this Prospectus.
The Funds or their agents may, in case of emergency, temporarily suspend
telephone transactions and other shareholder services.
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GENERAL ACCOUNT POLICIES (CONTINUED)
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 __,
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.
Limit On Account Activity
Because excessive account transactions can disrupt management of the Funds and
increase the Funds' cost for all shareholders, Westcore reserves the right to
refuse a share purchase and/or revoke an investors exchange privilege at any
time.
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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.
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. Certain
registration changes may have tax implications. Please contact your tax adviser.
For more information call 1-800-392-CORE (2673).
Quarterly Shareholder Statements and Reports
Westcore Funds will send you a shareholder statement quarterly and, with the
exception of automatic investment plan transactions and dividend reinvestment
transactions, a confirmation after every transaction that affects your share
balance or your account registration. 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.
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 or certain authorized broker-dealers, other
institutions or designated intermediaries 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 or certain authorized broker-dealers, other
institutions or designated intermediaries 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 business 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.
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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.
In the case of participants in certain employee benefit plans investing in
certain Funds and certain other investors, purchase and redemption orders will
be processed at the NAV next determined after the Service Organization (as
defined below) acting on their behalf receives the purchase or redemption order.
Westcore has authorized certain broker-dealers and other institutions to accept
on its behalf purchase and redemption orders made through a 'mutual fund
supermarket'. Such authorized institutions may designate other intermediaries to
accept purchase and redemption orders on behalf of Westcore.
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 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 of 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.
DISTRIBUTIONS AND TAXES
A Fund's income from dividends and interest and any net realized short-term
capital gains are paid to shareholders as income dividends. A Fund realizes
capital gains whenever it sells securities for a higher price than it paid for
them. Net realized long-term gains are paid to shareholders as capital gain
dividends. A dividend will reduce the net asset value of a Fund share by the
amount of the dividend on the ex-dividend date. Income dividends are declared
and paid annually and capital gain dividends are generally declared and paid in
December.
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
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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 Taxes
Each year, the Funds distribute all or substantially all of its taxable
income, including its net capital gain (the excess of long-term capital gain
over short-term capital loss). Distributions attributable to the net capital
gain of a Fund will be taxable to you as long-term capital gain, regardless of
how long you have held your shares. Other Fund distributions (other than
exempt-interest dividends, discussed below) will generally be taxable as
ordinary income. You will be subject to income tax on Fund distributions
regardless whether they are paid in cash or reinvested in additional shares. You
will be notified annually of the tax status of distributions to you.
You should note that if you purchase shares just before a distribution,
the purchase price will reflect the amount of the upcoming distribution. You
will incur taxes on the entire amount of the distribution received, even though,
as an economic matter, you did not participate in these gains and the
distribution simply constitutes a return of capital. This is known as "buying
into a dividend." It is generally not to your advantage to purchase shares just
before a distribution.
You will recognize taxable gain or loss on a sale, exchange or redemption
of your shares, including an exchange for shares of another Fund, based on the
difference between your tax basis in the shares and the amount you receive for
them. (To aid in computing your tax basis, you generally should retain your
account statements for the periods during which you held shares.)
Any loss realized on shares held for six months or less will be treated
as a long-term capital loss to the extent of any capital gain dividends that
were received on the shares.
The one major exception to these tax principles is that distributions on,
and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable.
It is expected that the Westcore International Equity Fund will be
subject to foreign withholding taxes with respect to dividends or interest
received from sources in foreign countries. The Westcore International Equity
Fund may make an election to treat a proportionate amount of such taxes as
constituting a distribution to each shareholder, which would allow each
shareholder either (1) to credit such proportionate amount of taxes against U.S.
federal income tax liability or (2) to take such amount as an itemized
deduction.
The foregoing is only a summary of certain tax considerations under
current law, which may be subject to change in the future. Shareholders who are
nonresident aliens, foreign trusts or estates, or foreign corporations or
partnerships, may be subject to different United States federal income tax
treatment. You should consult your tax adviser for further information regarding
federal, state, local and/or foreign tax consequences relevant to your specific
situation.
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State and Local Taxes
Shareowners may also be subject to state and local taxes on distributions
and redemptions. State income taxes may not apply, however, to the portions of
each Fund's distributions, if any, that are attributable to interest on Federal
Securities or interest on securities of the particular state or localities
within the state. Shareowners should consult their tax advisers regarding the
tax status of distributions in their state and locality.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER
Denver Investment Advisors LLP, with principal offices at 1225 17th Street, 26th
Floor, Denver, Colorado 80202, serves as the investment adviser to the Funds.
The Adviser was organized in 1994. It is owned by the principal officers and
employees of its predecessor firm. As of May 31, 1999, it had approximately
$10.5 billion in assets under active management, including $732 million for nine
investment company portfolios.
Denver Investment Advisors provides a continuous investment program for the
Funds, including investment research and management. The Adviser makes
investment decisions for the Funds and places orders for all purchases and sales
of the Funds' portfolio securities.
MANAGEMENT EXPENSES
The management fees are set forth below and are expressed as an annual
percentage of a Fund's average daily net assets.
Contractual Advisory Fees
Fee Schedule
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Westcore International Equity Fund* 1.20 %
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Westcore Small-Cap Growth Fund* 1.00 %
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Westcore Select Fund* 0.65 %
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* The International, Small-Cap Growth and Select Funds have operated for
less than a full fiscal year. The fees stated represents the maximum
contractual investment advisory fees.
INVESTMENT PERSONNEL
__________, _________ of Denver Investment Advisors, has been primarily
responsible for the day-to-day management of the Westcore International Equity
Fund since its inception. _________ has been with Denver Investment Advisors for
___ years. __________ has ___ years experience in the management of __________.
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__________, _________ of Denver Investment Advisors, has been primarily
responsible for the day-to-day management of the Westcore Small-Cap Growth Fund
since its inception. __________ has been with Denver Investment Advisors for ___
years. __________ has ___ years experience in the management of __________.
__________, _________ of Denver Investment Advisors, has been primarily
responsible for the day-to-day management of the Westcore Select Fund since its
inception. __________ has been with Denver Investment Advisors for ___ years.
__________ has ___ years experience in the management of ________.
CO-ADMINISTRATORS
ALPS Mutual Fund Services, Inc. and Denver Investment Advisors serve as
co-administrators to the Funds and receive fees in such capacity. 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.
TRANSFER AGENT
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
provides the Funds with transfer agency services in return for compensation.
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[BACK COVER]
WHERE TO FIND MORE INFORMATION
More Fund information is available to you upon request and without charge:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI includes additional information about the Funds' investment policies,
organization and management. It is legally part of this prospectus (it is
incorporated by reference).
Investors can get free copies of the Funds' SAI. They may also request other
information about the Funds, and make shareholder inquiries.
Write to:
Westcore Funds
370 17th Street
Suite 3100
Denver, CO 80202
By phone:
1-800-392-CORE (2673)
E-mail: http://www.westcore.com
Information about the Funds (including the Funds' SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, DC. Information about the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. Reports and other information
about the Funds are available on the SEC's Internet site at http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the SEC, Washington, DC 20549-6009.
The Westcore Funds Investment Company Act File No. is 811-3373
<PAGE>
WESTCORE TRUST
Statement of Additional Information
for
Westcore MIDCO Growth Fund
Westcore Blue Chip Fund
Westcore Growth and Income Fund
Westcore Small-Cap Opportunity Fund
Westcore Mid-Cap Opportunity Fund
Westcore Small-Cap Growth Fund
Westcore Select Fund
Westcore International Equity Fund
Westcore Long-Term Bond Fund
Westcore Intermediate-Term Bond Fund
Westcore Colorado Tax-Exempt Fund
October 1, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
THE TRUST...................................................................
INVESTMENT OBJECTIVES AND POLICIES..........................................
NET ASSET VALUE.............................................................
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION..............................
DESCRIPTION OF SHARES.......................................................
ADDITIONAL INFORMATION CONCERNING TAXES.....................................
MANAGEMENT OF THE FUNDS.....................................................
CUSTODIAN AND TRANSFER AGENT................................................
EXPENSES....................................................................
AUDITORS AND FINANCIAL STATEMENTS...........................................
COUNSEL.....................................................................
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS..........................
MISCELLANEOUS...............................................................
FINANCIAL STATEMENTS........................................................
APPENDIX A...............................................................A-1
APPENDIX B...............................................................B-1
</TABLE>
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This Statement of Additional Information is meant to be read in conjunction
with the Funds' Prospectuses dated October 1, 1999, as the same is revised from
time to time, and is incorporated by reference in its entirety into the
Prospectus for the particular Fund. 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. Copies of the
Funds' Prospectuses dated October 1, 1999, 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. The Financial Statements
and Independent Accountants Report thereon in this SAI are incorporated by
reference from the Funds' Annual Report, which may be obtained by writing the
address above or calling the toll-free number above. No other part of the Annual
Report is incorporated herein by reference. Capitalized terms used but not
defined herein have the same meanings as in the Prospectuses.
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.
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.
The Trust is authorized to issue separate classes of shares representing
interests in separate investment portfolios. This Statement of Additional
Information pertains to the Westcore MIDCO Growth Fund, Westcore Blue Chip Fund,
Westcore Growth and Income Fund, Westcore Small-Cap Opportunity Fund, Westcore
Mid-Cap Opportunity Fund, Westcore Small-Cap Growth Fund, Westcore Select Fund,
Westcore International Equity Fund, Westcore Long-Term Bond Fund, Westcore
Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund (each, a
"Fund" and collectively, the "Funds"). The Westcore MIDCO Growth Fund, Westcore
Blue Chip Fund, Westcore Growth and Income Fund, Westcore Mid-Cap Opportunity
Fund, Westcore Small-Cap Opportunity Fund, Westcore Small-Cap Growth Fund,
Westcore Select Fund and Westcore International Equity Fund are sometimes
referred to as the "Westcore Equity Funds." The Westcore Long-Term Bond Fund,
Westcore Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund are
sometimes referred to as the "Westcore 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 Trust is an open-end, management investment company. The Funds (other
than the Westcore Colorado Tax-Exempt Fund, which is non-diversified) are
diversified portfolios of the Trust.
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The Prospectuses for the Funds describe the Funds' investment
objectives. The following information supplements and should be read in
conjunction with the description of the investment objective and principal
strategies for each Fund in the Prospectuses.
PORTFOLIO TRANSACTIONS
Denver Investment Advisors LLC ("Denver Investment Advisors" or the
"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 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 28, 1999, May 29, 1998 and May 30, 1997, the Funds paid the following
amounts in brokerage commissions:
BROKERAGE COMMISSIONS PAID
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
MAY 28, 1999 MAY 29, 1998 MAY 30, 1997
------------ ------------ ------------
<S> <C> <C> <C>
Westcore MIDCO Growth Fund $944,694 $793,591 $742,296
Westcore Blue Chip Fund 99,420 74,156 71,227
Westcore Growth and Income Fund 24,139 14,776 23,464
Westcore Small-Cap Opportunity Fund 288,092 113,825 83,927
Westcore Mid-Cap Opportunity Fund 6,468 N/A N/A
---------- -------- --------
Aggregate Commissions $1,362,813 $996,348 $920,914
---------- -------- --------
---------- -------- --------
</TABLE>
For the same periods the Westcore Long-Term Bond Fund, Westcore
Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund did not pay
any
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brokerage commissions. During the fiscal years ended May 28, 1999, May 29, 1998
and May 30, 1997, 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 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 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 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 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
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<PAGE>
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.
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,
1999, the Westcore 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 __________________ was $____________.
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 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 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 Westcore Colorado Tax-Exempt Fund will not purchase securities
during the existence of any underwriting group or related selling group of which
ALPS, the 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 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 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 INVESTORS SERVICE, INC ("MOODY'S") AND STANDARD & POOR'S RATINGS GROUP
("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
5
<PAGE>
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.
DEBT SECURITIES
The Westcore Intermediate-Term Bond Fund and Westcore Long-Term Bond
Fund invest at least 65% of their respective total assets in a broad range of
debt securities during normal market conditions.
TAX-EXEMPT OBLIGATIONS (WESTCORE BOND FUNDS)
Tax-Exempt 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
"Tax-Exempt Obligations" only if the interest paid thereon is exempt from
regular federal income tax and, for the Westcore Colorado Tax-Exempt Fund, not
treated as a specific tax preference item under the federal alternative minimum
tax. 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 Tax-Exempt Obligations held by the Westcore 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.
6
<PAGE>
Although the Westcore Colorado Tax-Exempt Fund will invest most of its
assets, under normal circumstances, in intermediate-term Tax-Exempt Obligations,
the Fund may also invest 25% or more of its net assets in industrial development
bonds, 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. To the extent
that the Fund's assets are concentrated in these types of Tax-Exempt 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.
Within the types of Tax-Exempt 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 Tax-Exempt Obligations and are generally valued at par or less
than par in the open market.
There are variations in the quality of Tax-Exempt Obligations both
within a particular classification and between classifications, and the yields
on Tax-Exempt 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 offering, the
maturity of the obligation and the rating of the issue.
Payment on Tax-Exempt 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 Tax-Exempt Obligations.
STAND-BY COMMITMENTS (WESTCORE COLORADO TAX-EXEMPT FUND)
The Fund may acquire stand-by commitments with respect to Tax-Exempt
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 Tax-Exempt
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 Tax-Exempt 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.
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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 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 Tax-Exempt
Obligations that are subject to the commitment. In evaluating the
creditworthiness of the issuer of a stand-by commitment, the 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 Tax-Exempt 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.
SPECIAL CONSIDERATIONS REGARDING INVESTMENTS IN COLORADO OBLIGATIONS (WESTCORE
COLORADO TAX-EXEMPT FUND)
The concentration of the Westcore 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, STATE REVENUE AND ECONOMIC PROJECTIONS THROUGH FY 2003-04, dated
June 20, 1999 and on similar data from earlier year reports (the "Economic
Report"), nearly 54% of non-agricultural employment in Colorado in 1998 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 15.7% and 10.1%, respectively, of non-agricultural employment in
the State in 1998. The Office of Planning and Budgeting projects similar
concentrations for calendar years 1999 and 2000.
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According to the Economic Report, the Colorado unemployment rate rose
slightly from 3.3% in 1997 to 3.8% in 1998. The unemployment rate is expected to
remain at a low 3.3% during 1999. Total retail sales increased by 6.4% during
calendar year 1998. Colorado continued to surpass the non-agricultural
employment growth rate of the U.S., with a 3.6% rate of growth for Colorado in
1998, as compared with 2.5% for the nation as a whole. Employment growth is
expected to remain healthy, although to slow slightly to 3.1% in the year 2000.
Income rose 8.2% in Colorado during 1998, as compared with an increase
of 5.8% for the nation as a whole.
RESTRICTIONS OF APPROPRIATION AND REVENUES. The State Constitution
requires that expenditures for any fiscal year not exceed revenues for such
fiscal year. By statute, the amount of 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 is 4% of total appropriations from the
General Fund. 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 is 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 1998-99 ending
General Fund reserve will be $645.8 million, which is $457.6 million over the
statutory four percent reserve requirement. The 1997-1998 fiscal year ending
General Fund balance was $901.0 million, or $724.0 million over the statutory
four percent reserve requirement. Based on the Economic Report estimates, the
fiscal year 1999-00 ending General Fund reserve is expected to be approximately
$454.7 million, or $255.1 million over the statutory reserve requirement.
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
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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.
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 each subsequent fiscal years are 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 taxes, 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 deals 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. Recently, the Colorado Supreme Court ruled that Notes
to be issued by the state the repayment of which must be approved by the voters
under the Amendment. The Court distinguished these Notes from lease-purchase
agreements. 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
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
an enterprise. Additional litigation in the "enterprise" arena may be filed in
the future to clarify these issues. The Colorado Supreme Court also has decided
that voters can
10
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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 1997, general fund
revenues (adjusted for cash funds that are exempt from the Amendment) were
$5,348.0 million and program revenues (cash funds) were $2,087.2 million, for
revenues totaling $7,435.2 million. During calendar year 1996, population and
inflation grew at rates of 3.5% and 2.0%, respectively, for a combined total
limit of 5.5%. Accordingly, under the Amendment, increases in State expenditures
during the 1997-98 fiscal year could not exceed $6,872.0 million and the actual
1997-98 general fund and program revenues of $7,435.2 million were over the
limit. In November, 1998, the voters defeated a proposition to permit the State
to keep and spend a portion of the surplus, thus the excess of $563.2 million
was refunded to Colorado taxpayers. The estimated limitation for fiscal year
1998-99 is 5.3% over the revenue limit for the 1998-99 fiscal year; accordingly,
1998-99 fiscal year revenues cannot exceed an estimate of $7,236.2 million.
Fiscal year 1998-99 revenues are estimated to be $528.8 million over the
limitation which means that there will likely be another refund.
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.
Because of the significant anticipated surpluses, many permanent tax
reductions were passed by the General Assembly in early 1999 and signed into law
by the Governor. In total, taxes were permanently reduced by $237.8 million in
fiscal year 2000-01, the first full year of the majority of the tax cuts. The
largest tax cut was a reduction in the income tax rate to 4.75%, effective
January 1, 1999 (previously Colorado's income tax rate was 5.0%). Even given
these tax cuts, the Office of State Planning and Budgeting expects Colorado to
exceed its revenue limit by $686.3 million in fiscal year 1998-99 and expects
the surplus to reach $1,035.6 million by fiscal year 2003-04.
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 20 of approximately $320.4 million in fiscal year
1994, $408.0 million for fiscal year 1995, $368.5 million for fiscal year 1996
and $514.1 million for fiscal year 1997, and $645.8 million for fiscal year
1998.
For fiscal year 1997-98, the following tax categories generated the
following percentages of the State's $5,401.2 million total revenues (accrual
basis): individual income taxes represented 56% of gross fiscal year 1997-98
receipts; sales, use, and other excise taxes represented 30.0% of gross fiscal
year 1997-98 receipts; and corporate income taxes represented 4.9% of gross
fiscal year 1997-98 receipts. For fiscal year 1998-99, General Fund revenues of
approximately $5,766.4 million and appropriations of approximately $5,850.3
million are
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projected. The percentages of General Fund revenue generated by type of tax for
fiscal year 1999-00 are not expected to be significantly different from fiscal
year 1998 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. The State
has submitted to the voters of the State at the November 2, 1999 election a
question of issuing $1,700,000,000 of revenue anticipation notes. The proceeds
of the notes are to be used for highway purposes.
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 WESTCORE 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 ("Fannie Mae"), General Services
Administration, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation ("Freddie Mac"), 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 Fannie Mae,
are supported by the discretionary authority of the U.S. Government to purchase
the agency's obligations; still others, such as those of the Freddie Mac, 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 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, 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
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.
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
Adviser at the time of purchase to be of comparable quality.
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
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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.
For the Westcore 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 Westcore 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 Adviser,
suitable tax-exempt obligations are unavailable. There is no percentage
limitation on the amount of assets which may be held uninvested by the Westcore
Colorado Tax-Exempt Fund.
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. The
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 Tax-Exempt 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
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 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."
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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.
A Fund will enter into repurchase agreements only with financial
institutions deemed to be creditworthy by the Adviser. 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.
REVERSE REPURCHASE AGREEMENTS (ALL WESTCORE FUNDS)
Each Fund may borrow 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.
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.
Reverse repurchase agreements involve the risk of counterparty default
and possible loss of collateral held by the counterparty. In addition, 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.
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LOWER-RATED SECURITIES (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. 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 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 Adviser
decides this is appropriate.
SECURITIES LENDING (ALL WESTCORE FUNDS OTHER THAN THE COLORADO TAX-EXEMPT FUND,
WESTCORE SMALL-CAP GROWTH FUND, WESTCORE SELECT FUND, AND WESTCORE INTERNATIONAL
EQUITY 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 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. Cash collateral
also may be invested in privately-placed interests in a trust or other entity,
which may be affiliated, which invests solely in the instruments permitted for
investment of cash collateral. Such investments are further described under the
caption "Securities Issued by
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Other Investment Companies; Other Entities Investing in Money Market
Instruments." 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.
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. Securities that are not registered under
the Securities Act of 1933, as amended, but that may be purchased by
institutional buyers under Rule 144A are subject to this limitation unless the
Adviser under the supervision of the Board determines that a liquid trading
market exists. 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.
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, as amended, for resales of certain securities to
qualified institutional buyers. The 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 settlement of unregistered securities of domestic and
foreign issuers, such as the PORTAL System sponsored by the NASD.
The 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 (ALL WESTCORE 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
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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 (WESTCORE BOND FUNDS, OTHER THAN THE 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.
Asset-backed securities are 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 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
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value of an asset-backed security with prepayment features may not increase as
much as that of other fixed-income securities.
MORTGAGE-RELATED SECURITIES (WESTCORE BOND FUNDS, OTHER THAN THE WESTCORE
COLORADO TAX-EXEMPT FUND)
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.
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 Funds may purchase mortgage-related securities that are secured by
entities such as Government National Mortgage Association ("GNMA"), Fannie Mae,
Freddie Mac, 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 Fannie Mae guaranteed Mortgage
Pass-Through Certificates which are solely the obligations of Fannie Mae, 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
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from the Treasury. Fannie Mae is a government-sponsored organization owned
entirely by private stockholders. Fannie Mae guaranteed Mortgage Pass-Through
Certificates are guaranteed as to timely payment of principal and interest by
Fannie Mae. Mortgage-related securities include Freddie Mac Mortgage
Participation Certificates (also known as "PCs"). Freddie Mac 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 Mac PCs are not
guaranteed and do not constitute a debt or obligation of the United States or of
any Federal Home Loan Bank. Freddie Mac PCs entitle the holder to timely payment
of interest, which is guaranteed by the Freddie Mac. Freddie Mac guarantees
either ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When Freddie Mac does not guarantee timely payment of
principal, Freddie Mac 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 Fund 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 Funds' 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, Fannie Mae and Freddie Mac, 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 than government and government-related
pools because there are no direct or indirect government guarantees of payments
in the former pools. However,
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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.
OPTIONS (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE COLORADO TAX-EXEMPT FUND)
Each Fund, other than the Westcore 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 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
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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.
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 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 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
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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.
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 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 (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE
COLORADO TAX-EXEMPT FUND)
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
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index. Each Fund may also purchase and sell call and put options on futures
contracts traded on an exchange or board of trade.
In accordance with regulations of the Commodity Futures Trading
Commission, a Fund's commodities transactions must constitute bona fide hedging
or other permissible transactions. In addition, a Fund may not engage in
commodities transactions if the sum of the amount of initial margin deposits and
premiums paid for related options, other than for bona fide hedging
transactions, would exceed 5% of its assets (after certain adjustments). In
connection with a position in a futures contract or related option, a Fund will
create a segregated account of liquid high-grade assets or will otherwise cover
its position in accordance with SEC requirements.
Options trading and futures transactions are highly specialized
activities and carry greater than ordinary investment risks. The primary risks
associated with the use of 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 Adviser's ability to correctly
predict the direction of securities prices, interest rates and other economic
factors.
For a detailed description of futures contracts and related options,
see Appendix B to this Statement of Additional Information.
FOREIGN SECURITIES (ALL WESTCORE FUNDS, OTHER THAN THE WESTCORE COLORADO
TAX-EXEMPT FUND)
Each Fund 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 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
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securities. Up to 25% of the MIDCO Growth, Growth and Income, Blue Chip Mid-Cap
Opportunity, Small-Cap Growth, Select and International Equity Funds' 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.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS (ALL WESTCORE FUNDS, OTHER THAN THE
WESTCORE COLORADO TAX-EXEMPT FUND)
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 a forward currency exchange contract, 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. Forward currency exchange TRANSACTIONS 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. In addition, 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.
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 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.
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
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account consisting of cash or certain liquid high-grade debt securities equal in
value to the market value of the currency involved.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (ALL WESTCORE FUNDS)
Each Fund may purchase or sell securities on a "when-issued" or
"forward commitment" basis which involves a commitment by the Fund to purchase
or sell particular securities with payment and delivery taking place at a future
date. These transactions permit a Fund to lock in a price or yield on a security
it owns or intends to purchase, regardless of future changes in interest rates.
The Fund would bear the risk, however, that the price or yield obtained in a
transaction may be less favorable than the price or yield available in the
market when the 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.
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 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
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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; OTHER ENTITIES INVESTING IN
MONEY MARKET INSTRUMENTS (ALL WESTCORE FUNDS)
Securities issued by other investment companies may be acquired by the
Funds within the limits prescribed by the 1940 Act. The Funds also may invest in
privately-placed interests in a trust or other entity, which may be affiliated,
which invests solely in high quality, short-term, U.S. dollar denominated money
market instruments of U.S. and foreign issuers. The Westcore 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.
When a Fund invests in another investment company or in another type of entity
as described above, it pays its 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.
DERIVATIVE INSTRUMENTS (ALL WESTCORE FUNDS)
Each Fund may purchase certain "derivative" instruments. 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
other types of asset-backed securities and various floating rate instruments,
including inverse floaters).
Derivative instruments present, to varying degrees, market risk that
the performance of the underlying assets, exchange rates or indices will
decline; credit risk that the dealer or other counterparty to the transaction
will fail to pay its obligations; volatility and leveraging risk that, if
interest or exchange rates change adversely, the value of the derivative
instrument will decline more rapidly than the assets, rates or indices on which
it is based; liquidity risk that a Fund will be unable to sell a derivative
instrument when it wants because of lack of market depth or market disruption;
pricing risk that the value of a derivative instrument (such as an option) will
not correlate exactly to the value of the underlying assets, rates or indices on
which it is based or may be difficult to determine because of a lack of reliable
objective information and an established secondary market; and operations risk
that loss will occur as a result of inadequate systems and controls, human error
or otherwise. Many of these instruments are proprietary products that have been
recently developed by investment banking firms, and it is uncertain how they
will perform under different economic and interest rate scenarios.
TEMPORARY DEFENSIVE POSITION
The Westcore Equity and Bond Funds may, from time to time, take
temporary defensive positions that are inconsistent with their principal
investment strategies in attempting to respond to adverse market, economic,
political, or other conditions as follows:
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The Westcore Equity Funds 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 1940 Act) and dollar denominated debt obligations of foreign issuers
including foreign corporations and governments and Tax-Exempt Obligations. In
addition, each Fund may borrow money from banks and may enter into reverse
repurchase agreements for temporary purposes on a limited basis. Each Fund may
hold uninvested cash reserves (which would not earn income) pending investment,
to meet anticipated redemption requests or during temporary defensive periods.
The Westcore Bond Funds 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.
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.
EQUITY AND EQUITY-RELATED SECURITIES IN INTERMEDIATE AND LONG-TERM BOND FUNDS
The Westcore Long-Term Bond and Intermediate Term Bond Funds may
invest in obligations convertible into common stock 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.
REAL ESTATE INVESTMENT TRUSTS (REITS) (ALL WESTCORE FUNDS OTHER THAN WESTCORE
COLORADO TAX-EXEMPT FUND)
The Funds other than the Westcore Colorado Tax-Exempt Fund may invest
in REITs, as further described in the Prospectuses.
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.
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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.
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 Westcore 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 Westcore Equity or Westcore 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
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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.
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.
For purposes of limitation No. 2 above, "total assets" includes
the value of the collateral for the securities loans.
The Westcore 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 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.
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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.
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.
NET ASSET VALUE
The net asset value per share of each Fund is calculated as set forth
in the Prospectuses 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.
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.
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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. In 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.
The Funds are subject to valuation risk. That is the risk that a Fund
has valued certain securities at a higher or lower price than the Fund can sell
them.
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.)
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 Fund's 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.
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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 - WESTCORE MIDCO GROWTH FUND, WESTCORE BLUE CHIP FUND, WESTCORE
GROWTH AND INCOME FUND, WESTCORE SMALL-CAP OPPORTUNITY FUND, WESTCORE MID-CAP
OPPORTUNITY FUND, WESTCORE LONG-TERM BOND FUND, WESTCORE INTERMEDIATE-TERM BOND
FUND AND WESTCORE COLORADO TAX-EXEMPT FUND
INDIVIDUAL RETIREMENT ACCOUNTS. The Trust has available a plan (the
"Traditional 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 a
Traditional IRA for his or her nonworking spouse under age 70 1/2. Distribution
of an individual's Traditional 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 Traditional IRA are not subject to
federal income tax until distributed.
The Trust also has available a Roth Individual Retirement Account (the
"Roth IRA") for retirement saving for use by individuals with compensation for
services rendered. A single individual with adjusted gross income of up to
$110,000 may contribute to a Roth IRA (for married couples filing jointly, the
adjusted gross income limit is $160,000), and contributions may be made even
after the Roth IRA owner has attained age 70 1/2, as long as the account owner
has earned income. Contributions to a Roth IRA are not deductible. Earnings on
amounts contributed to a Roth IRA, however, are not subject to federal income
tax when distributed if the distribution is a "qualified distribution" (the Roth
IRA has been held for at least five years beginning with the first tax year for
which a contribution was made to the Roth IRA and the distribution is due to the
account owner's attainment of age 59 1/2, disability or death, or for qualified
first-time homebuyer expenses). A non-qualified distribution of an individual's
Roth IRA assets (and the earnings thereon) will (with certain exceptions) result
in an additional 10% tax on the amount included in the individual's gross
income.
The Trust permits certain employers (including self-employed
individuals) to make contributions to employees' Traditional IRAs if the
employer establishes a Simplified Employee Pension ("SEP") plan and/or a Salary
Reduction SEP ("SARSEP"). Although SARSEPs may not be established after 1996,
employers may continue to make contributions to SARSEPs established before
January 1, 1997, under the pre-1997 federal tax law. A SEP permits an employer
to make discretionary contributions to all of its employees' Traditional 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) established a
SARSEP before January 1, 1997, employees may defer a percentage of their
compensation -- pre-tax -- to Traditional 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 Traditional IRA. For example,
contributions to an
33
<PAGE>
employee's Traditional 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.
The Trust also has available a plan (the "Education IRA") for use by
individuals who wish to use shares of the Funds as a funding medium to save for
a child's qualified higher-education expenses. An Education IRA is actually an
educational savings account and not a retirement account. An individual who
meets certain income limitations may make nondeductible contributions to an
Education IRA on behalf of any child who is under age 18. However, the aggregate
of all contributions to all Education IRAs for each child is limited to $500 per
year. Contributions to the Education IRA grow tax-free. Withdrawals are not
subject to federal income tax if used for qualified higher-education expenses
such as room, board and tuition, and if the child's qualified higher-education
expenses for the year are at least as great as the amount of the withdrawals for
that year. Distribution of the earnings in the Education IRA which are not used
for qualified higher-education expenses will (with certain exceptions) result in
an additional 10% tax on the amount includible in gross income. Any balance
remaining in the Education IRA when the child attains age 30 must generally be
distributed to the child and will be includible in the child's gross income.
SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES OF SMALL EMPLOYERS. The
Trust also has available a simplified tax-favored retirement plan for employees
of small employers (a "SIMPLE IRA Plan"). If an employer establishes a SIMPLE
IRA Plan, contributions under the Plan are made to eligible employees' SIMPLE
individual retirement accounts ("SIMPLE IRAs"). Each eligible employee may
choose to defer a percentage of his or her pre-tax compensation to the
employee's SIMPLE IRA. The employer must generally make an annual matching
contribution to the SIMPLE IRA of each eligible employee equal to the employee's
salary reduction contributions, up to a limit of 3 percent of the employee's
compensation. Alternatively, the employer may make an annual non-discretionary
contribution to the SIMPLE IRA of each eligible employee equal to 2 percent of
each employee's compensation. As with contributions to an employee's IRA
pursuant to a SEP and/or SARSEP, the Code provides tax benefits for
contributions by an employer, pursuant to a SIMPLE IRA Plan, to an employee's
SIMPLE IRA. For example, contributions to an employee's SIMPLE IRA are
deductible (subject to certain limits) and the contributions and earnings
thereon are not taxed until distributed.
In the SIMPLE IRA Plan and the Traditional, Roth and Education IRAs,
distributions of net investment income and capital gains will be automatically
reinvested.
The foregoing brief descriptions are not complete or definitive
explanations of the SIMPLE IRA Plan, the Education IRA or the Traditional or
Roth IRA available for investment in the Funds. Any person who wishes to
establish a retirement plan account may do so by contacting an Investor Service
Representative at 1-800-392-CORE (2673). 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.
34
<PAGE>
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
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 eight 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 of a
particular Fund, 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
35
<PAGE>
elected by shareholders, at which time the trustees then in 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. Furthermore, 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. 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
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, and to distribute out its income to
shareholders each year, so that the Fund itself generally will be relieved of
federal income and excise taxes. If the Fund were to fail to so qualify: (1) the
Fund would be taxed at regular corporate rates without any deduction for
distributions to shareholders; and (2) shareholders would be taxed as if they
received ordinary dividends, although corporate shareholders could be eligible
for the dividends received deduction.
For the Colorado Tax-Exempt Fund to pay tax-exempt dividends for any
taxable year, at least 50% of the aggregate value of the Fund's assets at the
close of each quarter of the Fund's taxable year must consist of exempt-interest
obligations.
An investment in a Colorado Tax-Exempt Fund is not intended to
constitute a balanced investment program. Shares of the Colorado Tax-Exempt Fund
would not be suitable
36
<PAGE>
for tax-exempt institutions and may not be suitable for retirement plans
qualified under Section 401 of the Code, H.R. 10 plans and individual retirement
accounts because such plans and accounts are generally tax-exempt and,
therefore, not only would the shareholder not gain any benefit from the Fund's
dividends being tax-exempt, but such dividends would be ultimately taxable to
the beneficiaries when distributed. In addition, the Colorado Tax-Exempt 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 use" is defined under U.S. Treasury Regulations to include a
non-exempt person who (i) regularly uses a part of such facilities in his or her
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, (ii) occupies more than 5% of
the usable area of such facilities or (iii) are persons 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.
The tax principles applicable to transactions in financial instruments
and futures contacts and options that may be engaged in by a Fund, and
investments in passive foreign investment companies ("PFICs"), are complex and,
in some cases, uncertain. Such transactions and investments may cause a Fund to
recognize taxable income prior to the receipt of cash, thereby requiring the
Fund to liquidate other positions, or to borrow money, so as to make sufficient
distributions to shareholders to avoid corporate-level tax. Moreover, some or
all of the taxable income recognized may be ordinary income or short-term
capital gain, so that the distributions may be taxable to shareholders as
ordinary income.
In addition, in the case of any shares of a PFIC in which a Fund
invests, the Fund may be liable for corporate-level tax on any ultimate gain or
distributions on the shares if the Fund fails to make an election to recognize
income annually during the period of its ownership of the shares.
37
<PAGE>
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:
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name, Age and Address the Trust Other Affiliations
- --------------------- --------- ------------------
<S> <C> <C>
JACK D. HENDERSON, 72(1) Chairman, Trustee Attorney, Jack D. Henderson, Self-Employed
1600 Broadway Attorney-at-Law since 1995; prior thereto partner of
Suite 1410 the law firm of Clanahan, Tanner, Downing &
Denver, Colorado 80202 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, 66 Trustee Chairman of the Board, MacCourt Products; Director,
P.O. Box 6154 Scientific Software Corporation through December 31,
Littleton, Colorado 80121 1994.
JAMES B. O'BOYLE, 71 Trustee Business Consultant; Trustee of Pacific American
6115 West Mansfield Fund through September 1994.
Avenue, #239
Denver, Colorado 80235
ROBERT L. STAMP, 67 Trustee Prior to April 1995, Vice President of Finance,
6855 So. Depew Street Treasurer and Assistant Secretary, The Gates
Littleton, Colorado 80123 Corporation; Vice President, The Gates Rubber
Company; Trustee of Pacific American Fund through
September 1994.
LYMAN E. SEELY, 81 Trustee Director of OECO since May 1983; Director of McCall
14795 Northeast Oil and Chemical Co. since 1983; Director of Great
Lawnview Circle Western Chemical Co. since 1983.
Aurora, Oregon 97002
38
<PAGE>
KENNETH V. PENLAND, 57 President Chairman and Chief Executive Officer, Denver
Denver Investment Investment Advisors LLC (and its predecessor) since
Advisors LLC March 1983; Chairman, Blue Chip Value Fund.
1225 17th Street-26th Fl.
Denver, Colorado 80202
JASPER R. FRONTZ, 30 Treasurer Treasurer, Blue Chip Value Fund, Inc. since November
Denver Investment 1997; Director of Mutual Fund Administration, Denver
Advisors LLC Investment Advisors LLC since June 1997; Fund
1225 17th Street-26th Fl. Controller, ALPS Mutual Funds Services, Inc. from
Denver, Colorado 80202 September 1995 through June 1997; Senior Accountant,
Deloitte & Touche LLP from September 1991 through
August 1995.
LISA A. BRUCKERT, 26 Assistant Treasurer Fund Controller, ALPS Mutual Fund Services, Inc.
ALPS Mutual Funds since December 1998; Secretary, Stonebridge Funds
Services, Inc. Trust, since February, 1999; Senior Associate,
370 17th Street PricewaterhouseCoopers LLP from October 1994 to
Suite 3100 November 1998.
Denver, Colorado 80202
W. BRUCE McCONNEL, III, 56 Secretary Partner of the law firm of Drinker Biddle & Reath
Drinker Biddle & Reath LLP LLP, Philadelphia, Pennsylvania.
1345 Chestnut Street
Philadelphia, Pennsylvania
19107-3496
</TABLE>
- ---------
(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.
39
<PAGE>
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 28, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PENSION OR
RETIREMENT BENEFITS AGGREGATE
AGGREGATE ACCRUED AS PART OF COMPENSATION FROM THE
NAME OF PERSON/ POSITION COMPENSATION FROM FUND EXPENSES FUND COMPLEX*
THE TRUST
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
JACK D. HENDERSON, Chairman $18,500 $0 $18,500
- -------------------------------------------------------------------------------------------------
McNEIL S. FISKE, Trustee $14,000** $0 $14,500
- -------------------------------------------------------------------------------------------------
JAMES B. O'BOYLE, Trustee $14,500 $0 $14,500
- -------------------------------------------------------------------------------------------------
ROBERT L. STAMP, Trustee $14,500** $0 $14,500
- -------------------------------------------------------------------------------------------------
LYMAN E. SEELY, Trustee $14,500 $0 $14,500
- -------------------------------------------------------------------------------------------------
</TABLE>
* Fund Complex includes funds with a common investment adviser or an adviser
which is an affiliated person. There are currently eleven Westcore Funds in
the Fund Complex.
** 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 28,
1999 is $32,644 and $17,864.
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 at a rate based on the performance of 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 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 Ms. Bruckert is an
employee, receives compensation as co-administrator, bookkeeping
40
<PAGE>
and pricing agent , and shareholder telephone servicing agent to the Trust 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 ____% of the outstanding shares of
the Westcore Mid-Cap Opportunity Fund and ____% of the outstanding shares of the
Westcore Colorado Tax-Exempt Fund as of ____ 1999. The trustees and officers of
the Trust, as a group, owned less than 1% of the outstanding shares of the
Westcore MIDCO Growth Fund, Westcore Growth and Income Fund, Westcore Blue Chip
Fund, Westcore Small-Cap Opportunity Fund, Westcore International Equity Fund,
Westcore Small-Cap Growth Fund, Westcore Select Fund, Westcore Long-Term Bond
Fund, Westcore Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund
as of ________ 1999.
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,
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.
41
<PAGE>
INVESTMENT ADVISER
Denver Investment Advisors serves as investment adviser to the Funds
pursuant to an Advisory Agreement. In the Advisory Agreement, the 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 Prospectuses, 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.
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 28, 1999 May 29, 1998 May 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------
Advisory Waiver of Advisory Waiver of Advisory Waiver of
Fund Name Fees Fees Fees Fees Fees Fees
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund $2,591,504 $196,466 $4,107,999 $0 $3,834,365 $0
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund 383,666 63,138 378,391 48,681 375,645 26,418
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Growth and Income 12,126 74,637 21,739 87,613 62,280 82,796
Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Small-Cap 585,241 269,418 311,243 162,526 197,026 114,504
Opportunity Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore 0 12,726 N/A N/A N/A N/A
Mid-Cap
Opportunity Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond 44,194 50,699 33,851 45,959 65,709 39,100
Fund
- ------------------------------------------------------------------------------------------------------------------------------
42
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term 140,793 63,751 178,738 60,690 253,825 74,356
Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado 0 194,101 0 129,855 0 89,049
Tax-Exempt Fund
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For the fiscal year ended May 28, 1999, the Investment Adviser
reimbursed additional expenses for the Westcore Mid-Cap Opportunity Fund in the
amount of $51,448.
Denver Investment Advisors also performs investment advisory services
for the Blue Chip Value Fund, Inc., a closed-end investment company portfolio.
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 Westcore MIDCO Growth Fund,
Westcore Growth and Income Fund, Westcore Blue Chip Fund, Westcore Small-Cap
Opportunity Fund, Westcore Long-Term Bond Fund, Westcore Intermediate-Term Bond
Fund and Westcore Colorado Tax-Exempt Fund became effective on October 1, 1995,
and the current Advisory Agreement for the Westcore Mid-Cap Opportunity Fund
became effective on October 1, 1998. The current Advisory Agreements for the
Small-Cap Growth, Select and International Equity Funds became effective on
October 1, 1999. Each Advisory Agreement is effective for its first two years
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 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
43
<PAGE>
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 Adviser in the performance of its
duties or from its reckless disregard of its duties and obligations under the
Advisory Agreement.
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 (the "Distributor"), with principal offices at 370 Seventeenth
Street, Suite 3100, Denver, Colorado 80202, acts as the distributor of the
Funds' shares pursuant to a Distribution Agreement with the Trust . 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 28, 1999, May 29,
1998 and May 30, 1997, ALPS received $0, $0, and $0, respectively, in
underwriting commissions with respect to all the investment portfolios offered
by the Trust.
ADMINISTRATORS, BOOKKEEPING AND PRICING AGENT
Pursuant to an Administrative Agreement, ALPS and Denver Investment
Advisors serve as co-administrators to the Funds (the "Administrators"), and
have agreed to pay all expenses they incur in connection with their
administrative activities. 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. Under the
Administrative 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 for a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the
Administrators in the performance of their duties and obligations under the
agreement. 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 with
respect to the Westcore MIDCO Growth Fund, Westcore Growth and Income Fund,
Westcore Blue Chip Fund, Westcore Mid-Cap Opportunity Fund, Westcore
Small-Cap Opportunity Fund, Westcore International Equity Fund, Westcore
Small-Cap Growth Fund, Westcore Select Fund, Westcore Long-Term Bond Fund,
Westcore Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund.
44
<PAGE>
The Administrators have contractually agreed to waive fees set forth in the
prospectus and may voluntarily waive all or any portion of their
administration fees from time to time. 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.
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.
The following table summarizes the administration fees paid by the
Funds and any administration fee waivers for the last three fiscal years:
45
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
May 28, 1999 May 29, 1998 May 30, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
Administration Waiver of Administration Waiver of Administration Waiver of
Fund Name Fees Fees Fees Fees Fees Fees
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Westcore MIDCO Growth Fund $1,271,967 $14,788 $1,896,000 $0 $1,769,707 $0
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund 442,119 4,685 193,253 3,857 183,360 2,179
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Growth and Income 81,241 5,522 43,501 6,969 60,140 6,818
Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Small-Cap 242,098 14,300 132,961 9,175 86,687 6,733
Opportunity Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Opportunity Fund 0 5,089 N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond 58,403 4,859 48,481 4,725 65,958 4,181
Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term 130,268 6,095 153,392 6,227 210,838 7,950
Bond Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado 92,805 23,655 33,180 44,733 17,320 36,072
Tax-Exempt Fund
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition to the services it provides as distributor,
co-administrator and bookkeeping and pricing agent, ALPS has agreed, pursuant to
a separate Telephone and Service Agreement for the Westcore MIDCO Growth Fund,
Westcore Growth and Income Fund, Westcore Blue Chip Fund, Westcore Mid-Cap
Opportunity Fund, Westcore Small-Cap Opportunity Fund, Westcore Long-Term Bond
Fund, Westcore Intermediate-Term Fund and Westcore Colorado Tax-Exempt Fund, to
receive and accept orders for the purchase, redemption and transfer of shares
and deliver the appropriate documentation thereof to the transfer agent. Under
the Telephone and Service 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 misfeasance, bad faith or negligence on the part of ALPS in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. The Trust will pay ALPS a monthly
fee at the annual rate of $15,000 per year during the term of the agreement. In
addition, the Trust will pay ALPS a monthly fee at the annual rate of $2.00 for
each shareholder account
46
<PAGE>
that is open during the immediately preceding month. The Trust will also pay
ALPS a fee of $2.50 for each telephone call received by ALPS from a shareholder
or prospective shareholder in connection with services rendered by ALPS pursuant
to the agreement. Finally, the Trust will reimburse ALPS for out of pocket
expenses, including but not limited to postage, forms, telephone, microfilm and
microfiche.
No fees were paid under the Telephone and Service Agreement during the
fiscal year ended May 30, 1997, however, ALPS was paid $15,000 in fees under
that Agreement for the fiscal year ended May 29, 1998 and $82,674 for the fiscal
year ended May 28, 1999.
CUSTODIAN AND TRANSFER AGENT
BNY Western Trust Company (the "Custodian"), with principal offices at
700 South Flower Street, 2nd Floor, Los Angeles, California 90017, 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. Prior to December 1, 1997, Wells Fargo Bank,
N.A. served as custodian to the Trust.
State Street Bank and Trust Company ("State Street"), P.O. Box 1713,
Boston, Massachusetts, serves as Transfer Agent for the Westcore MIDCO Growth
Fund, Westcore Blue Chip Fund, Westcore Growth and Income Fund, Westcore
Small-Cap Opportunity Fund, Westcore Mid-Cap Opportunity Fund, Westcore
Long-Term Bond Fund, Westcore Intermediate-Term Bond Fund and Westcore Colorado
Tax-Exempt 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 account statements,
confirmations, and dividend and distribution notices; 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.
ALPS, with principal offices at 370 Seventeenth Street, Suite 3100,
Denver, Colorado 80202 serves as Transfer Agent for the Westcore Small-Cap
Growth Fund, Westcore Select Fund and Westcore International Equity Fund. As
Transfer Agent, ALPS 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 account statements,
confirmations, and dividend and distribution notices; and (e) maintain
shareholder accounts. Under the Transfer Agency Agreement, ALPS receives a
fee from the Trust and is reimbursed for out-of-pocket expenses.
47
<PAGE>
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.
AUDITORS AND FINANCIAL STATEMENTS
_____________________, with principal offices at ______________,
serves as independent auditors for the Funds. The Fund's Annual Report to
Shareholders for the fiscal year ended May 28, 1999 has been filed with the SEC.
The financial statements and notes thereto in such Annual Report (the "Financial
Statements") are incorporated by reference into this Statement of Additional
Information. The Financial Statements and Independent Accountants Report
thereon, in such Annual Reports have been incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
COUNSEL
Drinker Biddle & Reath LLP (of which Mr. McConnel, Secretary of the
Trust, is a partner), One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103-6996, 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 newsletters, advertisements and
other publications which 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. Performance
information is generally available by calling ALPS at 1-800-392-CORE (2673).
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
48
<PAGE>
investment alternatives that often provide an agreed or guaranteed fixed yield
for a stated period of time.
YIELD CALCULATIONS - WESTCORE BOND FUNDS
The funds yield shows the rate of income a Fund earns on its
investments as a percentage of its share price. It 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. 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:
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.
49
<PAGE>
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 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 28, 1999 were as follows:
<TABLE>
<CAPTION>
Fund 30-Day Yield 30-Day Yield
---- (before fee waivers) (after fee waivers)
-------------------- -------------------
<S> <C> <C>
Westcore Long-Term Bond Fund 5.29% 5.87%
Westcore Intermediate-Term Bond Fund 5.62% 5.81%
Westcore Colorado Tax-Exempt Fund 3.21% 3.83%
</TABLE>
50
<PAGE>
"TAX-EQUIVALENT" YIELD CALCULATIONS - WESTCORE COLORADO TAX-EXEMPT FUND
The Fund's "tax-equivalent" yield shows the level of the taxable yield
needed to produce an after-tax yield equivalent to the Fund's tax-free yield.
The Fund's tax-equivalent yield will always be higher than its yield. It is
calculated 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
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 28, 1999 (after fee waivers)
were 3.83% and 5.59%, respectively, and before fee waivers were 3.21% and 4.69%,
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 Westcore Colorado Tax-Exempt Fund.
TOTAL RETURN CALCULATIONS
The average annual total return represents the average annual
percentage change in the value of an investment in a Fund over a specified
measuring period. 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.
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 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.
51
<PAGE>
The 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. It is computed 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
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 28, 1999, for the five year period
ended May 28, 1999 and for the periods since commencement of the Funds'
respective operations were as follows:
52
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
FUND YEAR ENDED FIVE TEN YEARS ENDED SINCE INCEPTION
MAY 28, 1999 YEARS ENDED MAY 28, 1999 TO
MAY 28, MAY 28,
1999 1999
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Westcore MIDCO Growth Fund(1) 11.87% 15.63% 16.32% 15.25%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Blue Chip Fund(2) 7.42% 21.83% 16.02% 15.37%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Growth and Income Fund(2)(6) 6.25% 15.17% 12.39% 12.71%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Small-Cap Opportunity Fund(3) (19.72)% 12.59% N/A 11.55%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Mid-Cap N/A N/A N/A 10.50%
Opportunity Fund(5)
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Long-Term Bond Fund(2) 1.21% 8.83% 9.34% 9.67%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Intermediate-Term Bond Fund(2) 3.54% 6.58% 7.32% 7.43%
- --------------------------------------------------------------------------------------------------------------------------------
Westcore Colorado Tax-Exempt Fund(4) 3.80% 5.73% N/A 6.29%
- --------------------------------------------------------------------------------------------------------------------------------
</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) Commenced Operations on October 1, 1998.
(6) The Westcore 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 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
53
<PAGE>
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 describe the types of clients the Adviser advises, and describe the
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. From time to time, the materials may include contests or promotions
which may include the award of Fund shares as prizes, and a waiver of certain
minimum amount requirements to open an account.
54
<PAGE>
MISCELLANEOUS
As used in this Statement of Additional Information, 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 __, 1999, the following shareholders owned more than
5% or more of the outstanding shares of the Funds. In addition, any shareholder
listed below owning 25% or more of the outstanding shares of a Fund may, for
certain purposes, be deemed to control that Fund and be able to affect the
outcome of certain matters presented for a vote of shareholders:
WESTCORE MIDCO GROWTH FUND
<TABLE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WELLS FARGO BANK TTEE
FBO CHOICEMASTER
PO BOX 9800 MUTUAL FUNDS
MAC 9139-027
CALABASAS, CA 91372-0800
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
WESTCORE GROWTH AND INCOME FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WELLS FARGO BANK TTEE
FBO CHOICEMASTER
PO BOX 9800 MUTUAL FUNDS
MAC 9139-027
CALABASAS, CA 91372-0800
CHERRY TRUST & CO
3033 E 1ST AVE.
DENVER, CO 80206-5617
55
<PAGE>
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
WESTCORE BLUE CHIP FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WELLS FARGO BANK TTEE
FBO CHOICEMASTER
PO BOX 9800 MUTUAL FUNDS
MAC 9139-027
CALABASAS, CA 91372-0800
WENDEL & CO A/C #808820
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
WENDEL & CO A/C #589872
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
56
<PAGE>
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
HEP & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
WENDEL & CO A/C #589870
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
WESTCORE MID-CAP OPPORTUNITY FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
DENVER INVESTMENT ADVISORS LLC
C/O LOU KAHANEK
1225 17TH ST FL 26
DENVER, CO 80202-5534
KENNETH V. PENLAND
101 S. FRANKLIN ST.
DENVER, CO 80209-2604
LEO L. BESERRA
6760 E. DORADO PL
ENGLEWOOD, CO 80111-1766
WESTCORE SMALL-CAP OPPORTUNITY FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
COLORADO STATE BANK & TRUST
ACCOUNT #208-20018133
TAX ID #841-1156655
1600 BROADWAY
DENVER, CO 80202-4927
57
<PAGE>
WESTCORE LONG-TERM BOND FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WENDEL & CO A/C #808820
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
WENDEL & CO A/C #589872
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
CHRISTIAN LABOR ASSOC PEN FD
LYLE MASCHOFF TTEE
TR DTD 9/23/67
412 LAKELAND DR NE
PO BOX 738
WILLMAR, MN 56201-0738
WENDEL & CO A/C #589870
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
WENDEL & CO A/C #589871
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
58
<PAGE>
WESTCORE INTERMEDIATE-TERM BOND FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
WENDEL & CO A/C #808820
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
WENDEL & CO A/C #589872
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
CHRISTIAN LABOR ASSOC PEN FD
LYLE MASCHOFF TTEE
TR DTD 9/23/67
412 LAKELAND DR NE
PO BOX 738
WILLMAR, MN 56201-0738
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
VIRG & CO
WELLS FARGO BANK NA
MUTUAL FUNDS DEPT MAC 9139-027
PO BOX 9800
CALABASAS, CA 91372-0800
WELLS FARGO BANK TTEE
FBO CHOICEMASTER
A/C NO 208-3513337
PO BOX 9800 MUTUAL FUNDS
MAC 9139-027
CALABASAS, CA 91372-0800
59
<PAGE>
WENDEL & CO A/C #589870
C/O THE BANK OF NEW YORK
PO BOX 1066 WALL STREET STATION
NEW YORK, NY 10268-1066
COLORADO STATE BANK & TR
ATTN TRUST DEPT
1600 BROADWAY
DENVER, CO 80202-4927
WESTCORE COLORADO TAX-EXEMPT FUND
<CAPTION>
Name and Address of Shareholder % of Fund Held Share Balance Asset Balance
- ------------------------------- -------------- ------------- -------------
<S> <C> <C> <C>
CHARLES SCHWAB & CO INC.
SPECIAL ACCOUNT FOR THE EXCLUSIVE
BENEFIT OF CUSTOMERS
ATTENTION MUTUAL FUNDS
4500 CHERRY CREEK DR S
DENVER, CO 80222
CHERRY TRUST & CO
3033 E 1ST AVE.
DENVER, CO 80206-5617
</TABLE>
- -----------------------------
* All above-listed shares of the Westcore MIDCO Growth Fund, Westcore Blue
Chip Fund, Westcore Growth and Income Fund, Westcore Small-Cap Opportunity Fund,
Westcore Mid-Cap Opportunity Fund, Westcore Long-Term Bond Fund, Westcore
Intermediate-Term Bond Fund and Westcore Colorado Tax-Exempt Fund were owned of
record by the owners named above, except to the Trust's knowledge where also
owned beneficially as indicated above.
60
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APPENDIX A
COMMERCIAL PAPER RATINGS
A Standard & Poor's commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original maturity of no more
than 365 days. The following summarizes the rating categories used by Standard
and Poor's for commercial paper:
"A-1" - Obligations are rated in the highest category indicating that
the obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
"A-2" - Obligations are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.
"A-3" - Obligations exhibit adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
"B" - Obligations are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
"C" - Obligations are currently vulnerable to nonpayment and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
"D" - Obligations are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.
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 supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be
A-1
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evidenced by many of the following characteristics: leading market positions
in well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and
ample asset protection; broad margins in earnings 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.
"Prime-2" - Issuers (or supporting institutions) have a strong ability
for repayment of senior short-term debt 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 alternate liquidity is maintained.
"Prime-3" - Issuers (or supporting institutions) have an acceptable
ability for repayment of senior short-term debt obligations. The effect 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 may require 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 the 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 issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is expected.
A-2
<PAGE>
"D-4" - Debt possesses speculative investment characteristics.
Liquidity is not sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high degree of
variation.
"D-5" - Issuer failed to meet scheduled principal and/or interest
payments.
Fitch IBCA short-term ratings apply to debt obligations that have time
horizons of less than 12 months for most obligations, or up to three years for
U.S. public finance securities. The following summarizes the rating categories
used by Fitch IBCA for short-term obligations:
"F1" - Securities possess the highest credit quality. This designation
indicates the strongest capacity for timely payment of financial commitments and
may have an added "+" to denote any exceptionally strong credit feature.
"F2" - Securities possess good credit quality. This designation
indicates a satisfactory capacity for timely payment of financial commitments,
but the margin of safety is not as great as in the case of the higher ratings.
"F3" - Securities possess fair credit quality. This designation
indicates that the capacity for timely payment of financial commitments is
adequate; however, near-term adverse changes could result in a reduction to
non-investment grade.
"B" - Securities possess speculative credit quality. This designation
indicates minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic conditions.
"C" - Securities possess high default risk. This designation indicates
that default is a real possibility and that the capacity for meeting financial
commitments is solely reliant upon a sustained, favorable business and economic
environment.
"D" - Securities are in actual or imminent payment default.
Thomson Financial BankWatch short-term ratings assess the likelihood
of an untimely payment of principal and interest of debt instruments with
original maturities of one year or less. The following summarizes the ratings
used by Thomson Financial BankWatch:
"TBW-1" - This designation represents Thomson Financial BankWatch's
highest category and indicates a very high likelihood that principal and
interest will be paid on a timely basis.
"TBW-2" - This designation represents Thomson Financial BankWatch's
second-highest category and indicates that while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1."
A-3
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"TBW-3" - This designation represents Thomson Financial BankWatch's
lowest investment-grade category and indicates that while the obligation is more
susceptible to adverse developments (both internal and external) than those with
higher ratings, the capacity to service principal and interest in a timely
fashion is considered adequate.
"TBW-4" - This designation represents Thomson Financial BankWatch's
lowest rating category and indicates that the obligation is regarded as
non-investment grade and therefore speculative.
CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.
"AA" - An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.
"A" - An obligation rated "A" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's capacity to meet
its financial commitment on the obligation is still strong.
"BBB" - An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
Obligations rated "BB," "B," "CCC," "CC" and "C" are regarded as
having significant speculative characteristics. "BB" indicates the least degree
of speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
"BB" - An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the
obligation.
"B" - An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB", but the obligor currently has the capacity to meet its
financial commitment on the
A-4
<PAGE>
obligation. Adverse business, financial or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.
"CCC" - An obligation rated "CCC" is currently vulnerable to
nonpayment, and is dependent upon favorable business, financial and economic
conditions for the obligor to meet its financial commitment on the obligation.
In the event of adverse business, financial, or economic conditions, the obligor
is not likely to have the capacity to meet its financial commitment on the
obligation.
"CC" - An obligation rated "CC" is currently highly vulnerable to
nonpayment.
"C" - The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued.
"D" - An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the taking
of a similar action if payments on an obligation 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 symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
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 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 risk appear somewhat larger than the "Aaa"
securities.
A-5
<PAGE>
"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" are of 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 operating 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.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from "Aa" through "Caa". The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of its generic rating category.
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 to be 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 in periods of greater 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.
A-6
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"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 IBCA for corporate
and municipal bonds:
"AAA" - Bonds considered to be investment grade and of the highest
credit quality. These ratings denote the lowest expectation of credit risk and
are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to be adversely affected
by foreseeable events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. These ratings denote a very low expectation of credit risk and indicate
very strong capacity for timely payment of financial commitments. This capacity
is not significantly vulnerable to foreseeable events.
"A" - Bonds considered to be investment grade and of high credit
quality. These ratings denote a low expectation of credit risk and indicate
strong capacity for timely payment of financial commitments. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic
conditions than is the case for higher ratings.
"BBB" - Bonds considered to be investment grade and of good credit
quality. These ratings denote that there is currently a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered adequate, but adverse changes in circumstances and in economic
conditions are more likely to impair this capacity.
"BB" - Bonds considered to be speculative. These ratings indicate that
there is a possibility of credit risk developing, particularly as the result of
adverse economic change over time; however, business or financial alternatives
may be available to allow financial commitments to be met. Securities rated in
this category are not investment grade.
"B" - Bonds are considered highly speculative. These ratings indicate
that significant credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however, capacity for continued
payment is contingent upon a sustained, favorable business and economic
environment.
A-7
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"CCC", "CC", "C" - Bonds have high default risk. Default is a real
possibility, and capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments. "CC" ratings
indicate that default of some kind appears probable, and "C" ratings signal
imminent default.
"DDD," "DD" and "D" - Bonds are in default. The ratings of obligations
in this category are based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor. While expected
recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines. "DDD" obligations have the
highest potential for recovery, around 90%-100% of outstanding amounts and
accrued interest. "DD" indicates potential recoveries in the range of 50%-90%,
and "D" the lowest recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
To provide more detailed indications of credit quality, the Fitch IBCA
ratings from and including "AA" to "CCC" may be modified by the addition of a
plus (+) or minus (-) sign to show relative standing within these major rating
categories.
Thomson Financial 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 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 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 the lowest investment-grade
category and indicates an acceptable capacity to repay principal and interest.
Issues rated "BBB" are more vulnerable to adverse developments (both internal
and external) than obligations with higher ratings.
A-8
<PAGE>
"BB," "B," "CCC," and "CC," - These designations are assigned by
Thomson Financial 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 factors and market
access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's 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 a
very strong capacity to pay debt service are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.
"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" - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
"MIG-2"/"VMIG-2" - This designation denotes high quality, with margins
of protection that are ample although not so large as in the preceding group.
"MIG-3"/"VMIG-3" - This designation denotes favorable quality, with
all security elements accounted for but lacking the undeniable strength of the
preceding grades.
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Liquidity and cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
"MIG-4"/"VMIG-4" - This designation denotes adequate quality.
Protection commonly regarded as required of an investment security is present
and although not distinctly or predominantly speculative, there is specific
risk.
"SG" - This designation denotes speculative quality. Debt instruments
in this category lack of margins of protection.
Fitch IBCA and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.
A-10
<PAGE>
APPENDIX B
As stated in the Prospectuses, all Westcore Funds, other than the Westcore
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 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
B-1
<PAGE>
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 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.
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<PAGE>
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 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
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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 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
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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 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 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
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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 TREATMENT.
Accounting for futures contracts and options will be in accordance with
generally accepted accounting principles.
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PART C - OTHER INFORMATION
Item 23. EXHIBITS
(a) (1) 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.
(2) 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").
(b) Registrant's Amended and Restated Code of Regulations is
incorporated by reference to Exhibit 2(a) to Post-Effective
Amendment No. 45.
(c) (1) Specimen copy of share certificate for Class A Shares is
incorporated by reference herein to Exhibit 4 of Post
Effective Amendment No. 7.
(2) Specimen copy of form of share certificate is incorporated
by reference to Exhibit 4(b) to Post-Effective Amendment No.
34 to Registrant's Registration Statement
(d) (1) 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.
(2) Addendum No. 1 to Amended and Restated Advisory Agreement
relating to the Mid-Cap Opportunity Fund is filed herewith.
(e) (1) 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 incorporated by
reference to Exhibit 6(a) to Post-Effective Amendment No.
46.
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(i) Amendment No. 1 to Distribution Agreement relating
to the Mid-Cap Opportunity Fund is filed herewith.
(2) Form of Broker/Dealer Selling Agreement is incorporated
herein by reference to Exhibit No. 6(c) to Post-Effective
Amendment No. 14.
(3) Form of Bank Agreement is incorporated herein by reference
to Exhibit No. 6(d) to Post-Effective Amendment No. 14.
(f) (1) Westcore Trust Deferred Compensation Plan (as Amended and
Restated Effective June 22, 1998) is incorporated by
reference to Exhibit 7(a) to Post-Effective Amendment No.
47.
(g) (1) 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 incorporated by reference to Exhibit 8 (a) to
Post-Effective Amendment No. 46.
(2) Consent to Assignment of Custody Agreement between BNY
Western Trust Company and Westcore Trust dated as of August
13, 1997 is incorporated by reference to Exhibit 8 (b) to
Post-Effective Amendment No. 46.
(3) Amendment No. 1 to Custody Agreement relating to the Mid-Cap
Opportunity Fund is filed herewith.
(h) (1) 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.
(i) Amendment No. 1 to Administration Agreement relating
to the Mid-Cap Opportunity Fund is filed herewith.
(2) 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
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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.
(iii) Revised Fee Schedule to Transfer Agency Agreement
dated as of August 3, 1998 is incorporated herein by
reference to Exhibit 9(b)(iii) to Post-Effective
Amendment No. 48.
(iv) Amendment No. 3 to Amended and Restated Transfer
Agency Agreement relating to the Mid-Cap Opportunity
Fund is filed herewith.
(3) Amended and Restated Bookkeeping and Pricing Agreement dated
June 1, 1998 between Registrant and ALPS Mutual Funds
Services, Inc. relating to Registrant's 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 is incorporated by reference to
Exhibit 9(c) to Post-Effective Amendment No. 47.
(i) Amendment No. 1 to Amended and Restated Bookkeeping
and Pricing Agreement relating to the Mid-Cap
Opportunity Fund is filed herewith.
(4) 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.
(5) (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
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Opportunity Fund is incorporated by reference to
Exhibit 9(e) to Post-Effective Amendment No. 45.
(a) Order Placement Procedures Amendment to the
Operating Agreement between Charles Schwab &
Co., Inc. and Westcore Trust dated as of
December 1, 1997 relating to the Cash Reserve
Fund, Colorado Tax-Exempt Fund, Growth and
Income Fund, Intermediate-Term Bond Fund,
Long-Term Bond Fund, MIDCO Growth Fund, Blue
Chip Fund and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit 9(e)(a)
to Post-Effective Amendment No. 47.
(b) Charles Schwab & Company, Inc. Side Letter
Agreement to Order Placement Procedures
Amendment dated as of December 22, 1997 among
Westcore Trust, Denver Investment Advisors
LLC and Boston Financial Data Services, Inc.
relating to the Cash Reserve Fund, Colorado
Tax-Exempt Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond
Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is incorporated by
reference to Exhibit 9(e)(b) to
Post-Effective Amendment No. 47.
(c) Amendment to Operating Agreement dated as of
October 1, 1998 between Charles Schwab & Co.
and Westcore Trust, relating to the Cash
Reserve Fund, Colorado Tax-Exempt Fund,
Growth and Income Fund, Intermediate-Term
Bond Fund, Long-Term Bond Fund, MIDCO Growth
Fund, Blue Chip Fund and Small-Cap
Opportunity Fund is filed herewith.
(d) Side Letter to Amendment to Operating
Agreement among Westcore Trust, Charles
Schwab & Co., and Denver Investment Advisors
("DIA") dated as of October 1 1998, relating
to the Cash Reserve Fund, Colorado Tax-Exempt
Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond
Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is filed herewith.
(e) Amendment to Operating Agreement effective as
of January, 1999, relating to the Cash
Reserve Fund,
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Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term
Bond Fund, MIDCO Growth Fund, Blue Chip Fund
and Small-Cap Opportunity Fund is filed
herewith.
(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.
(a) Amendment to Services Agreement dated as of
July 1, 1998 among Westcore Trust, Denver
Investment Advisors LLC and Charles Schwab &
Co. relating to the Cash Reserve Fund,
Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term
Bond Fund, MIDCO Growth Fund, Blue Chip Fund
and Small-Cap Opportunity Fund is
incorporated by reference to Exhibit
9(e)(iii)(c) to Post-Effective Amendment No.
47.
(iv) Side Letter dated as of March 5, 1996 among ALPS
Mutual Funds 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.
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(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 incorporated by
reference to Exhibit 9 (e) to Post-Effective
Amendment No. 46.
(viii) Amendment to Services Agreement dated as of
October 1, 1998 among Westcore Trust, Schwab and
Denver Investment Advisors is filed herewith.
(6) (i) DST FAN WEB Services Agreement dated as of
August 1, 1997 among DST Systems, Inc., Westcore
Trust and Denver Investment Advisors LLC is
incorporated by reference to Exhibit 9 (f) to
Post-Effective Amendment No. 46.
(ii ) Indemnification Agreement dated as of August
1, 1997 between Denver Investment Advisors LLC and
Westcore Trust is incorporated by reference to
Exhibit 9 (f) to Post-Effective Amendment No. 46.
(7) Shareholder Service Agreement dated as of July 1, 1996
between Wells Fargo Bank, N.A. and Westcore Trust is
incorporated by reference to Exhibit 9 (g) to Post-Effective
Amendment No. 46
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(8) 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 incorporated by reference to
Exhibit 9 (h) to Post-Effective Amendment No. 46.
(9) (i) Shareholder Service Agreement dated as of November
22, 1996 among First Trust Corporation, Denver
Investment Advisors LLC and Westcore Trust is
incorporated by reference to Exhibit 9 (i) to
Post-Effective Amendment No. 46.
(ii) Sideletter to Shareholder Services Agreement dated
as of September 25, 1998 among Westcore Trust, DIA,
and Firstrust is filed herewith.
(10) Agency Trading Agreement dated as of July 15, 1997 among
Westcore Trust, ALPS Mutual Funds Services, Inc., Boston
Financial Data Services, Inc. and Financial Administrative
Services Corporation relating to the Colorado Tax-Exempt
Fund, Growth and Income Fund, Intermediate-Term Bond Fund,
Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is incorporated by reference to
Exhibit 9(j) to Post-Effective Amendment No. 47.
(11) Agency Trading Agreement dated as of January 2, 1998 among
Westcore Trust, ALPS Mutual Funds Services, Inc., Boston
Financial Data Services, Inc. and Wachovia Operational
Services Corporation relating to the Colorado Tax-Exempt
Fund, Growth and Income Fund, Intermediate-Term Bond Fund,
Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is incorporated by reference to
Exhibit 9(k) to Post-Effective Amendment No. 47.
(12) Securities Lending Agency Client Agreement dated as of March
27, 1998 between Westcore Trust and PaineWebber Incorporated
relating to the Growth and Income Fund, Intermediate-Term
Bond Fund, Long-Term Bond Fund, MIDCO Growth Fund, Blue Chip
Fund and Small-Cap Opportunity Fund is incorporated by
reference to Exhibit 9(l) to Post-Effective Amendment No.
47.
(13) Service Agreement dated as of November 10, 1997 among
Westcore Trust, ALPS Mutual Funds Services, Inc., Denver
Investment Advisors LLC and PaineWebber Incorporated
relating to the Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund and Small-Cap Opportunity
Fund is incorporated by reference to Exhibit 9(m) to
Post-Effective Amendment No. 47.
(14) (i) Omnibus Account Services Agreement dated as of
February 26, 1998 among Westcore Trust, Denver
Investment Advisors LLC
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and National Investors Services Corp. relating to
the Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term Bond
Fund, MIDCO Growth Fund, Blue Chip Fund and
Small-Cap Opportunity Fund is incorporated by
reference to Exhibit 9(n) to Post-Effective
Amendment No. 47.
(ii) Side Letter to Omnibus Account Services Agreement
dated as of February 26, 1998 among Westcore Trust,
National Investor Services Corp. and DIA is filed
herewith.
(15) Side Letter appointing Smith Barney Inc. as Agent dated as
of October 6, 1997 between Westcore Trust and Smith Barney
Inc. relating to the Colorado Tax-Exempt Fund, Growth and
Income Fund, Intermediate-Term Bond Fund, Long-Term Bond
Fund, MIDCO Growth Fund, Blue Chip Fund and Small-Cap
Opportunity Fund is incorporated by reference to Exhibit
9(o) to Post-Effective Amendment No. 47.
(16) Telephone and Service Agreement dated as of August 3, 1998
between Westcore Trust and ALPS Mutual Funds Services, Inc.
relating to the Colorado Tax-Exempt Fund, Growth and Income
Fund, Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund and Small-Cap Opportunity
Fund is incorporated herein by reference to Exhibit 9(p) to
Post-Effective Amendment No. 48.
(17) Agency Trading Agreement dated as of August 3, 1998 between
Westcore Trust, Denver Investment Advisors LLC, ALPS Mutual
Funds Services, Inc., Boston Financial Data Services, Inc.
and American Century Retirement Plan Services, Inc. relating
to the Colorado Tax-Exempt Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund, MIDCO
Growth Fund, Blue Chip Fund and Small-Cap Opportunity Fund
is incorporated herein by reference to Exhibit 9(q) to
Post-Effective Amendment No. 48.
(18) (i) Agency Trading Agreement dated as of August 21,
1998 between Westcore Trust, Janney Montgomery
Scott, Inc., ALPS Mutual Funds Services, Inc. and
Boston Financial Data Services, Inc. relating to the
Colorado Tax-Exempt Fund, Growth and Income Fund,
Intermediate-Term Bond Fund, Long-Term Bond Fund,
MIDCO Growth Fund, Blue Chip Fund and Small-Cap
Opportunity Fund is incorporated herein by reference
to Exhibit 9(r) to Post-Effective Amendment No. 48.
(ii) Side Letter to Agency Trading Agreement dated August
21, 1998 between Westcore Trust and Janney
Montgomery Scott, Inc. ("JMS") and dated as of
September 25, 1998 among Westcore Trust, JMS, BFDS
and ALPS, is filed herewith.
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(19) Agency Trading Agreement dated as of September 1, 1998 among
Westcore, DIA, and Fidelity Investment Institutional
Operations Company, Inc. is filed herewith.
(20) No Transaction Fee Mutual Fund Offering/Retail Shareholder
Services Agreement dated as of October 1, 1998 among
Westcore Trust, ALPS and E-Trade is filed herewith.
(i) To be filed by amendment.
(j) (1) Consent of Drinker Biddle & Reath LLP is filed herewith.
(2) Consent of Independent Auditors to be filed by Amendment
(k) None.
(l) (1) Conversion Agreement between Westcore Trust and Denver
Investment Advisors LLC relating to the Mid-Cap Opportunity
Fund is filed herewith.
(m) None
(n) None.
(o) None
(p) Powers of Attorney and Certificate of Secretary certifying
resolution authorizing signature by powers of attorney are filed
herewith under Rule 483(b) under the Securities Act of 1933.
Item 24. 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).
Item 25. 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
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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.
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 incorporated herein by reference as Exhibit
(e)(1).
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 incorporated herein by reference as
Exhibit (h)(7).
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 incorporated
herein by reference as Exhibit (h)(8).
Indemnification of Registrant's officers, directors, partners,
trustees, members, shareholders, employees and agents by Financial
Administrative Services Corporation ("FASCorp") 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
loss, cost, damage, expense, liability or claim, relating to any actual
negligent act or omission, act of intentional misconduct, material breach of
any representations, warranties and covenants, failure to timely and properly
transmit orders and instructions, cancellation or subsequent correction of
any orders and instructions or discrepancies between Participant and Plan
balances maintained by FASCorp and the balances maintained by Registrant is
provided for in Section 12(a) of the Agency Trading Agreement incorporated
herein by reference as Exhibit (h)(10).
Indemnification of Registrant's officers, directors, partners,
trustees, members, shareholders, employees and agents against any loss, cost,
damage, expense, liability or claim by Wachovia Operational Services Corporation
arising out of any actual negligent act, omission, act of intentional
misconduct, material breach of any of the representations, warranties,
covenants,
C-10
<PAGE>
failure to timely and properly transmit orders and instructions,
cancellation or subsequent corrections of any orders and instructions
transmitted, or discrepancies in balances maintained by Wachovia and account
balances maintained by the Trust is provided for in Section 12(a) of the Agency
Trading Agreement incorporated herein by reference as Exhibit (h)(11).
Indemnification of Registrant's directors, trustees, officers,
members, shareholders, employees, agents and each person, if any, who controls
them within the meaning of the Securities Act against losses, claims, damages,
liabilities or expenses to which any one of them may become subject insofar as
those losses, claims, damages, liabilities or expenses or actions in respect
thereof, arising out of or are based upon American Century Retirement Plan
Services, Inc.'s ("Services") negligence, bad faith, or willful misconduct in
performing its obligations under its agreement with the Trust, any breach by
Services of any material provision of the Agreement or any breach by Services of
a representation, warranty or covenant made in the Agreement is provided for in
section 12(a) of the Agency Trading Agreement incorporated herein by reference
as Exhibit (h)(17).
Indemnification of Registrant's 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, any
actual negligent act or omission by Janney Montgomery Scott, Inc. ("JMS") under
its agreement with the Trust; a material breach of any of the representations,
warranties and covenants; failure to timely and properly transmit orders and
instructions; cancellation or subsequent correction of any orders and
instructions transmitted or discrepancies between Participant and Plan
maintained by JMS and account balances maintained by the Trust due to errors
caused by JMS, is provided for in Section 12 of the Agency Trading Agreement
incorporated herein by reference as Exhibit (h)(18)(i).
Indemnification of Registrant's officers, directors, partners,
trustees, member, employees, agents and affiliates ("Indemnitees") against any
and all claims, demands, liabilities and expenses including, without
limitations, reasonable legal fees arising out of, or relating to,
(i) any untrue statement or omission, or alleged untrue statement or omission,
of material fact that E-Trade or its employees make concerning the Fund that is
inconsistent with the Fund's current prospectus, statement of additional
information, periodic reports to shareholders or any other material the Fund
Parties have provided in writing to E-Trade, (ii) any breach by E-Trade of any
representation, warranty or provision contained in the Registrant's Agreement
with E-Trade, or (iii) any willful misconduct or negligence by E-Trade in the
performance of, or failure to perform, its obligations under the Registrant's
Agreement with E-Trade, except to the extent that such claims, liabilities or
expenses are caused by certain parties' breach of the Registrant's Agreement
with E-Trade or willful misconduct or negligence in the performance, or failure
to perform, their respective obligations under this Agreement, is provided for
in Section 4 of the No Transaction Fee Mutual Fund Offering/Retail Shareholder
Services Agreement, included as Exhibit (h)(20).
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
C-11
<PAGE>
Exhibits (e)(1). 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 by reference in 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:
(2) 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
C-12
<PAGE>
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 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 26 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.
DENVER INVESTMENT ADVISORS LLC
<TABLE>
<CAPTION>
Name Position Other Type of
---- With Business Business
Denver Investment Connections --------
Advisors LLC -----------
------------
<S> <C> <C> <C>
Todger Anderson Executive President of Blue Chip Value Investment
Manager/President Fund, Inc.* Company
Kenneth V. Penland Executive Chairman of the Board of Blue Investment
Manager/Chairman Chip Value Fund, Inc.* Company
Varilyn Schock Vice President Vice President of Blue Chip Investment
Value Fund, Inc.* Company
</TABLE>
* The address of the Blue Chip Value Fund, Inc., is 370 Seventeeth Street,
Suite 3100, Denver, Colorado 80202.
C-13
<PAGE>
Item 27 PRINCIPAL UNDERWRITER
(a) ALPS Mutual Funds Services, Inc. acts as the distributor for the
Registrant and the following investment companies: Financial Investors
Trust, Stonebridge Funds Trust, First Funds Trust, Midcap SPDR Trust,
Select Sector SPDR Trust, Nasdaq-100 Trust, SPDR Trust, and DIAMONDS
Trust.
(b) To the best of Registrant's knowledge, the directors and executive
officers of ALPS Mutual Funds Services, Inc., are as follows:
<TABLE>
<CAPTION>
Positions and
Name and Principal Offices with Offices with
Business Address* ALPS Registrant
- ------------------ ------------- -------------
<S> <C> <C>
W. Robert Alexander Chairman of the Board None
and Secretary
Arthur J. L. Lucey President and Director None
Russell Burk General Counsel None
Thomas A. Carter Chief Financial Officer None
Edmund Burke Executive Vice President None
Jeremy May Vice-President None
Robert Szydlowski Vice President None
William Paston Vice President None
Chris Woessner Director None
Rick Pederson Director None
</TABLE>
* 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 28 LOCATION OF ACCOUNTS AND RECORDS
(a) 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
C-14
<PAGE>
Opportunity Fund, Growth and Income Fund (formerly the Equity Income
Fund), Intermediate-Term Bond Fund) and Mid-Cap Opportunity Fund.
(b) 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).
(c) 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).
(d) 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).
(e) BNY Western Trust Company (a subsidiary of Bank of New York), 90
Washington Street, 22nd Floor, New York, NY 10286 (records relating to
its functions as custodian for each of the Registrant's investment
portfolios).
Item 29 MANAGEMENT SERVICES
None.
Item 30 UNDERTAKINGS
None
C-15
<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 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 15th day of July, 1999.
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 July 15, 1999
*/s/ McNeil S. Fiske
- ----------------------
McNeil S. Fiske Trustee July 15, 1999
*/s/ James B. O'Boyle
- ----------------------
James B. O'Boyle Trustee July 15, 1999
*/s/ Robert L. Stamp
- ----------------------
Robert L. Stamp Trustee July 15, 1999
*/s/ Lyman Seely
- ----------------------
Lyman Seely Trustee July 15, 1999
/s/ Kenneth V. Penland President (Principal
- ---------------------- Executive Officer) July 15, 1999
Kenneth V. Penland
*/s/ Jasper Frontz
- ----------------------
Jasper Frontz Treasurer (Principal July 15, 1999
Financial Officer and
Chief Accounting Officer)
*By: /s/ Kenneth V. Penland
----------------------
Kenneth V. Penland
Attorney-in-fact
C-16
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(d)(2) Addendum No. 1 to Amended and Restated Advisory Agreement
(e)(1)(i) Amendment No. 1 to Amended and Restated Distribution Agreement
(g)(3) Amendment No. 1 to Custody Agreement
(h)(1)(i) Amendment No. 1 to Administration Agreement
(h)(2)(iv) Amendment No. 3 to Amended and Restated Transfer Agency Agreement
(h)(3)(i) Amendment No. 1 to Amended and Restated Bookkeeping and Pricing
Agreement between Westcore Trust and ALPS Mutual Fund Services,
Inc. relating to the Mid-Cap Opportunity Fund
(h)(5)(i)(c) Amendment to Operating Agreement between Westcore Trust and
Charles Schwab & Co. ("Schwab")
(h)(5)(i)(d) Sideletter to Amendment to Operating Agreement among Westcore
Trust, Schwab, and Denver Investment Advisors ("DIA")
(h)(5)(i)(e) Amendment to Operating Agreement effective as of January 1, 1999
(h)(5)(viii) Amendment to Services Agreement among Westcore Trust, Schwab, and
DIA
(h)(9)(ii) Sideletter to Shareholder Services Agreement among Westcore
Trust, DIA and Firstrust
(h)(14)(ii) Sideletter to Omnibus Account Services Agreement among Westcore
Trust, National Investor Services Corp., and DIA
(h)(18)(ii) Sideletter to Agency Trading Agreement between Westcore Trust and
Janney Montgomery Scott
(h)(19) Agency Trading Agreement among Westcore Trust, DIA, and Fidelity
Investment Institutional Operations Company, Inc.
(h)(20) No Transaction Fee Mutual Fund Offering/Retail Shareholder
Services Agreement among Westcore Trust, ALPS and E-Trade
(j)(1) Consent of Drinker Biddle & Reath LLP
<PAGE>
EXHIBIT INDEX
Exhibit Number Item
- -------------- ----
(l)(1) Conversion Agreement between Westcore Trust and DIA
(r) Powers of Attorney and Secretary's Certificate.
<PAGE>
EXHIBIT (d)(2)
ADDENDUM NO. 1 TO AMENDED AND
RESTATED INVESTMENT ADVISORY AGREEMENT
This Addendum No. 1, dated as of the 1st day of October, 1998, is
entered into between WESTCORE TRUST (the "Trust"), a Massachusetts business
trust and DENVER INVESTMENT ADVISORS LLC, a Colorado limited liability company,
located in Denver, Colorado (the "Adviser").
WHEREAS, the Trust and the Adviser have entered into an Advisory
Agreement dated as of October 1, 1995 (the "Advisory Agreement"), pursuant to
which the Trust appointed the Adviser to act as investment adviser to the Trust
for its Cash Reserve Fund, Colorado Tax-Exempt Fund, Equity Income Fund,
Intermediate-Term Bond Fund, Small-Cap Opportunity Fund, MIDCO Growth Fund,
Long-Term Bond Fund and Blue Chip Fund (the "Funds").
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Trust establishes one or more additional investment portfolios with
respect to which it desires to retain the Adviser to act as the investment
adviser under the Advisory Agreement, the Company shall so notify the Adviser in
writing, and if the Investment Adviser is willing to render such services it
shall notify the Trust in writing.
WHEREAS, the Trust has notified the Adviser that it has established
one new portfolio, namely the Mid-Cap Opportunity Fund and that it desires to
retain the Adviser to act as the investment adviser therefor, and the Adviser
has notified the Trust that it is willing to serve as investment adviser for the
Mid-Cap Opportunity Fund;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as
investment adviser to the Trust for the Mid-Cap Opportunity Fund for the period
and on the terms set forth in the Advisory Agreement. The Adviser hereby accepts
such appointment and agrees to render the services set forth in the Advisory
Agreement for the compensation herein provided.
2. COMPENSATION. For the services provided and the expenses assumed
pursuant to the Advisory Agreement with respect to the Mid-Cap Opportunity Fund,
the Trust will pay the Adviser and the Adviser will accept as full compensation
therefor fees, computed daily and paid monthly, based on the net assets of the
Mid-Cap Opportunity Fund considered separately on a per-Fund basis, at the
annual rate of .75% of the net assets of the Mid-
-1-
<PAGE>
Cap Opportunity Fund.
3. CAPITALIZED TERMS. From and after the date hereof, the term
"Fund" as used in the Advisory Agreement shall be deemed to include the Mid-Cap
Opportunity Fund. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Advisory Agreement.
4. MISCELLANEOUS. Except to the extent supplemented hereby, the
Advisory Agreement shall remain unchanged and in full force and effect and is
hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date and year first above written.
WESTCORE TRUST
By: /s/Jack D. Henderson
------------------------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/Kenneth V. Penland
------------------------------------
Title: Chairman
-2-
<PAGE>
EXHIBIT (e)(1)(i)
AMENDMENT NO. 1
TO THE DISTRIBUTION AGREEMENT
Amendment dated as of October 1, 1998 to the Amended and Restated
Distribution Agreement (the "Agreement") dated as of October 1, 1997 between
Westcore Trust, a Massachusetts business trust (the "Trust"), and ALPS Mutual
Funds Services, Inc. ("ALPS").
BACKGROUND
1. ALPS serves as the distributor for certain of the Trust's
portfolios pursuant to the Agreement.
2. The Trust desires to employ ALPS as its distributor for the
Mid-Cap Opportunity Fund (the "Fund"), on the terms and for the compensation set
forth in the Agreement and ALPS agrees to provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoint ALPS to act as distributor
for the Fund for the period and on the terms set forth in the Agreement and ALPS
accepts such appointment for said period and on said terms, and agrees to
provide the services set forth in the Agreement and in return for the
compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By: /s/Jack D. Henderson
------------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/Thomas A. Carter
------------------------------------
<PAGE>
EXHIBIT (g)(3)
WESTCORE TRUST
AMENDMENT NO. 1 TO
CUSTODY AGREEMENT
September 30, 1998
BNY Western Trust Company
90 Washington Street
22nd Floor
New York, NY 10286
Dear Sirs:
The purpose of this letter is to confirm that the undersigned, Westcore
Trust (the "Trust"), a Massachusetts business trust, hereby appoints BNY Western
Trust Company, a subsidiary of the Bank of New York Company, Inc., to act as
custodian of the property belonging to its Mid-Cap Opportunity Fund on the terms
and conditions set forth in the Custody Agreement ("Agreement") between the
Trust and Wells Fargo Bank, N.A. as assumed by BNY Western Trust Company, dated
as of January 22, 1997, and for the compensation as agreed upon in writing from
time to time by the Trust and BNY Western Trust Company. Please sign below to
accept this appointment and to agree that the Agreement is hereby amended to
provide that BNY Western Trust Company shall act as the custodian for the
Trust's Mid-Cap Opportunity Fund in accordance with the foregoing.
Very truly yours,
WESTCORE TRUST
By: /s/ Jack D. Henderson
------------------------------------
Accepted:
BNY Western Trust Company,
a subsidiary of Bank of New York
By: /s/C. Rodney Cooper
-------------------------------
Name: C. Rodney Cooper
Title: Chairman & CEO
<PAGE>
EXHIBIT (h)(1)(i)
AMENDMENT NO. 1
TO THE ADMINISTRATION AGREEMENT
Amendment dated as of September 30, 1998 to the Administration
Agreement (the "Agreement") dated as of October 1, 1995 between Westcore Trust,
a Massachusetts business trust (the "Trust"), Denver Investment Advisors LLC
("DIA") and ALPS Mutual Funds Services, Inc. ("ALPS").
BACKGROUND
1. DIA and ALPS serve as the co-administrators for certain of the
Trust's portfolios pursuant to the Agreement.
2. The Trust desires to employ DIA and ALPS as its co-administrators
for the Mid-Cap Opportunity Fund (the "Fund"), on the terms and for the
compensation set forth in the Agreement and DIA and ALPS agree to provide such
services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints DIA and ALPS to act as
co-administrators for the Fund for the period and on the terms set forth in the
Agreement and DIA and ALPS accept such appointment for said period and on said
terms, and agree to provide the services set forth in the Agreement and in
return for the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By: /s/Jack D. Henderson
------------------------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/Kenneth V. Penland
------------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/Thomas A. Carter
------------------------------------
<PAGE>
EXHIBIT (h)(2)(iv)
AMENDMENT NO. 3
TO AMENDED AND RESTATED TRANSFER AGENCY
AND SERVICE AGREEMENT
Amendment dated as of September 30, 1998 to the Amended and Restated
Transfer Agency and Service Agreement dated as of January 4, 1993 (the
"Agreement") between Westcore Trust, a Massachusetts business trust (the
"Trust") and State Street Bank and Trust Company, a Massachusetts trust company
("State Street").
BACKGROUND
1. STATE STREET serves as the transfer agent for certain of the Trust's
portfolios pursuant to the Agreement.
2. The Trust desires to employ STATE STREET as its transfer agent for the
Mid-Cap Opportunity Fund (the "Fund") on the terms and for the compensation set
forth in the Agreement and STATE STREET agrees to provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints STATE STREET to act as
transfer agent for the Fund for the period and on the terms set forth in the
Agreement and STATE STREET accepts such appointment for said period and on said
terms, and agrees to provide the services set forth in the Agreement and in
return for the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall remain in
full force and effect as modified hereby.
<PAGE>
In WITNESS WHEREOF, the parties have hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first dated below.
WESTCORE TRUST
By: /s/Jack D. Henderson
-------------------------------------
Date: September 30, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/Ronald E. Logue
-------------------------------------
Date: September 30, 1998
<PAGE>
EXHIBIT (h)(3)(i)
AMENDMENT NO. 1
TO THE AMENDED AND RESTATED
BOOKKEEPING AND PRICING AGREEMENT
Amendment dates as of September 30, 1998 to the Amended and Restated
Bookkeeping and Pricing Agreement (the "Agreement") dated as of June 1, 1998
between Westcore Trust, a Massachusetts business trust (the "Trust"), and ALPS
Mutual Funds Services, Inc. ("ALPS").
BACKGROUND
1. ALPS serves as the bookkeeping and pricing agent for certain of
the Trust's portfolios pursuant to the Agreement.
2. The Trust desires to employ ALPS as its bookkeeping and pricing
agent for the Mid-Cap Opportunity Fund (the "Fund"), on the terms and for the
compensation set forth in the Agreement and ALPS agrees to provide such
services.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT. The Trust hereby appoints ALPS to act as
bookkeeping and pricing agent for the Fund for the period and on the terms set
forth in the Agreement and ALPS accepts such appointment for said period and on
said terms, and agrees to provide the services set forth in the Agreement and in
return for the compensation provided therein.
2. CONTINUING VALIDITY. The provisions of the Agreement shall
remain in full force and effect as modified hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers designated below on the day and
year first above written.
WESTCORE TRUST
By: /s/Jack D. Henderson
------------------------------------
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/Thomas A. Carter
------------------------------------
<PAGE>
EXHIBIT (h)(5)(i)(c)
AMENDMENT TO OPERATING AGREEMENT
This Amendment ("Amendment") is made as of October 1, 1998, by and between
Charles Schwab & Co., Inc. ("Schwab"), a California corporation, and each
registered investment company ("Fund Company") executing this Amendment on its
own behalf and on behalf of each of its series or classes of shares ("Fund(s)")
listed on Schedule I hereto, and amends the Operating Agreement between the
parties, made as of November 27, 1995, as amended thereafter ("Operating
Agreement"). All capitalized terms used in the Amendment and not defined herein
shall have the meaning ascribed to them in the Operating Agreement.
WHEREAS, the parties wish to amend Schedule I to the Operating Agreement;
and
WHEREAS, the parties wish to institute the payment of Account establishment
and maintenance fees which shall be paid by each Fund added to Schedule I to the
Operating Agreement by this Amendment or any amendment made hereafter;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. The following Section 4. is hereby inserted as Section 4. of the
Operating Agreement. Sections 4. through 12. are renumbered as Section 5.
through 13., respectively.
4. ACCOUNT ESTABLISHMENT AND MAINTENANCE FEES
Fund Company shall pay to Schwab such fees as are set forth on
Schedule II hereto to reimburse Schwab for its costs in establishing and
maintaining Account(s) for each Fund for which the effective date of such
Fund, as set forth on Schedule I to the Operating Agreement, is October 1,
1998, or any date thereafter. Fees attributable to establishment of the
Account(s) for a Fund shall be paid prior to establishment of the
Account(s) for such Fund. Fees attributable to maintaining the Account(s)
for each Fund shall be billed on an annual basis on December 31 and paid
promptly, in no event later than thirty (30) days after billing. Such
payment shall be by wire transfer. Such wire transfers shall be separate
from wire transfers of redemption proceeds or distributions under this
Agreement.
2. Schedule I to the Operating Agreement shall be deleted in its entirety
and the Schedule I attached hereto shall be inserted in lieu thereof.
3. The attached Schedule II is hereby inserted as Schedule II to the
Operating Agreement.
4. Schedule II may be amended by Schwab on forty (40) days' written
notice to Fund Company or such earlier time as shall be agreed to by the
parties.
Exhibit B B-1
<PAGE>
5. Except as specifically set forth herein, all other provisions of the
Operating 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. WESTCORE TRUST, on its own behalf and on
behalf of each Fund listed on Schedule I
By: /s/Fred Potts hereto
--------------------------------
Fred Potts
Vice President/Mutual Funds By: /s/Kenneth V. Penland
Operations Administration ----------------------------------
Name: Kenneth V. Penland
----------------------------------
Date: 10/24/98 Title: President
------------------------------ ----------------------------------
Date: 10/1/98
----------------------------------
Exhibit B B-2
<PAGE>
SCHEDULE I
TO THE OPERATING AGREEMENT
<TABLE>
<CAPTION>
Fund Company/Funds Effective Date
- ------------------ --------------
<S> <C>
Westcore Trust
Westcore Blue Chip Fund* 11/27/95
Westcore Colorado Tax-Exempt Bond Fund* 11/27/95
Westcore Growth and Income Fund* 11/27/95
Westcore Intermediate-Term Bond Fund* 11/27/95
Westcore Long-Term Bond Fund* 11/27/95
Westcore Mid-Cap Opportunity Fund* 10/1/98
Westcore MIDCO Growth Fund* 11/27/95
Westcore Small-Cap Opportunity Fund* 11/27/95
</TABLE>
* Indicates that Fund is a "no-load" or "no sales charge" Fund as defined
in Rule 2830 of the NASDR.
SI Indicates that Fund is available only to MFMP investors through Schwab
Institutional or another advice program offered or made available by
financial institutions clearing transactions through Schwab.
Accepted by:
CHARLES SCHWAB & CO., INC. WESTCORE TRUST, on its own behalf and on
behalf of each Fund listed on this
Schedule I
By: /s/Fred Potts
--------------------------------
Fred Potts
Vice President/Mutual Funds By: /s/Kenneth V. Penland
Operations Administration ----------------------------------
Name: Kenneth V. Penland
----------------------------------
Title: President
Date: 10/24/98 ----------------------------------
------------------------------ Date: 10/1/98
----------------------------------
Exhibit B B-3
<PAGE>
SCHEDULE 11
TO THE OPERATING AGREEMENT
Fees to Establish and Maintain Account(s) for a Fund
ESTABLISHMENT FEES
The Establishment Fee shall be $4,500 for the Account(s) for each Fund
established on Schwab's system for which the effective date of such Fund, as set
forth on Schedule I to the Operating Agreement, is October 1, 1998, or any date
thereafter.
MAINTENANCE FEE
a. The Maintenance Fee as to the Account(s) for each Fund for which the
effective date of such Fund, as set forth on Schedule I to the Operating
Agreement, is October 1, 1998, or any date thereafter, shall be charged in
advance, annually, on December 31 ("Assessment Date") commencing on the first
Assessment Date after the establishment of the Account(s) for such Fund on the
Schwab system. The Maintenance Fee as to the Account(s) of a Fund shall not be
prorated in the event of termination of this Agreement as to such Fund prior to
the end of a calendar year for which such Maintenance Fee has been charged.
b. The Maintenance Fees as to the Account(s) for each Fund shall be
determined based on the aggregate value of all shares of such Fund contained in
all Account(s) at the Fund on the Assessment Date. The Maintenance Fees are as
follows:
<TABLE>
<CAPTION>
Aggregate Value
of All Shares Maintenance Fee
--------------- ---------------
<S> <C>
Up to and including $2.5 million $ 4,500
Over $2.5 million and up to and $ 3,000
including $5 million
Over $5 million $ 0
</TABLE>
c. For purposes of this calculation, the value of the shares of each Fund
will be the net asset value reported by such Fund to the National Association of
Securities Dealers, Inc. Automated Quotation System. No adjustments will be made
to the net asset values to correct errors in the net asset values so reported
for any Assessment Date unless such error is corrected and the corrected net
asset value per share is reported to Schwab before 5 o'clock, p.m., San
Francisco time, on the next business day after the Assessment Date to which the
error relates.
Exhibit B B-4
<PAGE>
EXHIBIT (h)(5)(i)(d)
As of October 1, 1998
WESTCORE TRUST
c/o ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
Denver Investment Advisors LLC
1225 17th Street - 26th Floor
Denver, CO 80202
Re: The Amendment to the Operating Agreement ("Amendment") dated as of
October 1, 1998 between Charles Schwab & Co., Inc., ("Schwab") and
Westcore Trust (the "Trust")
----------------------------------------------------------------------
Dear Sirs:
The Amendment referred to above requires the Trust to pay certain
Account Establishment and Maintenance Fees for funds with an effective date with
Schwab of October 1, 1998 or later. By your signatures below, please signify
that subject to the next paragraph, Denver Investment Advisors LLC ("DIA"),
rather than the Trust, will pay such fees.
Section 3(b) of the Administration Agreement dated October 1, 1995,
provides that the Trust will reimburse DIA for DIA's costs of providing
sub-accounting and recordkeeping services to beneficial shareholders through
omnibus arrangements with shareholders of record.
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 Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
So long as such provision continues in effect between the Trust and
DIA, your agreement in the preceding paragraph is subject to that Section 3(b)
to the extent that Section is applicable to the Account Establishment and
Maintenance Fees.
Yours truly,
Westcore Trust
By: /s/Jack D. Henderson
-------------------------------------
Name: Jack D. Henderson
Title: Vice President
Agreed and Accepted:
Denver Investment Advisors LLC
By: /s/Kenneth V. Penland
--------------------------------
Name: Kenneth V. Penland
Title: Chairman
<PAGE>
EXHIBIT (h)(5)(i)(e)
November 20, 1998
Steven Wine
Director of Sales
Westcore Funds
1225 178th Street 26th Floor
Denver, CO 80202
Re: Amendment to Operating Agreement
Dear Steven:
The volatility we have all been experiencing in the global markets has led us to
re-examine our Operating Procedures regarding settlement practices. In an effort
to continue to be able to provide the best possible service to all our mutual
fund clients, we are amending the Operating Procedures to more vigorously
encourage funds to notify Schwab prior to extending settlement of redemptions.
Specifically, the Operating Procedures have always required and presumed trade
date notification to Schwab if a fund intended to extend settlement of
redemptions and not pay those redemption proceeds on the business day following
trade date. As long as Schwab is notified on trade date of your intention to
extend settlement, there is no change to the current procedure. When Schwab is
notified after trade date, however, we must reserve the right to request
interest charges on the amount of the redemption proceeds due us and extended in
settlement. This is because, when Schwab is not notified of an intention to
extend settlement, Schwab settles fund redemption transactions in customer
accounts on trade date. When we do not receive those proceeds from the fund on
the next day, as anticipated, we find ourselves in a position of serving
involuntarily as a lender to the fund. To counteract the unfortunate result of a
fund's failure in this obligation to notify Schwab, the amended agreement will
require that we receive interest in excess of that which a lender would receive
on loaning such amount to the funds voluntarily. Schwab also intends to charge
the same interest rates on distributions when payments are not made in
accordance with the terms of the Operating Agreement. In addition, Schwab may
choose to net purchase transactions against redemption transactions until the
amount due is settled, minimizing the amount of credit extended.
The Operating Agreement allows us to amend the Operating Procedures (Exhibit A)
upon 40 days notice to you. The enclosed amendment is accordingly made to be
effective 40 days from today's date. We appreciate your help in working with us
to minimize any disruptions in processing orders for the Mutual Fund MarketPlace
which might otherwise eventually occur if such a problem continued unabated.
If you have any questions or concerns regarding these changes, please give me a
call at 415-636-5502.
Sincerely,
/s/Carolyn Mignacco
- -------------------
Carolyn Mignacco
Director
Mutual Fund Relations
<PAGE>
EXHIBIT (h)(5)(i)(e)
AMENDMENT TO OPERATING AGREEMENT
This Amendment ("Amendment") by Charles Schwab & Co., Inc. ("Schwab"),
effective as of January 1, 1999, amends the Operating Agreement between Schwab
and each Fund Company, made as of November 27, 1995, as amended thereafter
("Operating Agreement"). All capitalized terms used in this Amendment and not
defined herein shall have the meaning ascribed to them in the Operating
Agreement.
WHEREAS, Schwab wishes to amend Exhibit A to the Operating Agreement to
provide for procedures in the event that Fund Company fails to (i) settle
redemption orders on the next business day after trade date ("Settlement Date")
without having notified Schwab on trade date, as required under the terms of the
Operating Agreement, or (ii) pay distributions in a timely manner, as required
under the terms of the Operating Agreement; and
WHEREAS, Schwab may unilaterally amend Exhibit A to the Operating Agreement
upon 40 days written notice to Fund Company under the terms of the Operating
Agreement and has provided this executed Amendment to Fund Company 40 days prior
to its effective date.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth in the Operating Agreement, Exhibit A to the Operating Agreement is
hereby amended as follows:
1. SETTLEMENT OF TRANSACTIONS
(a) In the event that a Fund should need to extend settlement on
redemption orders, including but not limited to redemption orders under the
Retirement Plan Order Processing Amendment if in effect, Fund Company must
contact Schwab by 7:00 p.m. Eastern Time on trade date to discuss the extension.
(b) If Fund Company does not settle redemption orders on Settlement Date
and has not contacted Schwab by 7:00 p.m. Eastern Time on trade date to discuss
such extension of settlement (even if such extension is due to a systems problem
unknown on trade date), then Schwab may, at its option, take any or all of the
following actions:
(i) Charge interest on the amount of the redemption proceeds due to
it, as follows:
(A) For the first day, (a) Schwab may charge Fund Company
interest at the Federal Funds "offered" rate for such day as published in the
Wall Street Journal if the amount does not exceed $1 million, or (b) Schwab may
charge Fund Company interest at the Prime Rate for such day as published in The
Wall Street Journal if the amount exceeds $1 million; and
-2-
<PAGE>
(B) For each day following, Schwab may charge Fund Company
interest at the Prime Rate for each such day as published in the Wall Street
Journal, plus 2% per annum; and
(ii) Upon notice to Fund Company, on any subsequent Settlement Date
and for so long as such redemption proceeds are due to it:
(A) Schwab may settle purchase orders and redemption orders net
of each other for such Fund; and/or
(B) Schwab may net any redemption proceeds still due to it
against any net or gross purchase amount due from it to the Funds.
2. DISTRIBUTIONS
(a) With respect to a consolidated omnibus Account, and for purposes of
effecting cash distributions for investors who have elected to receive their
capital gains distributions and/or dividends in cash if Fund Company does not
wire the cash proceeds to Schwab on the next business day after the ex-dividend
date for such distribution (a "Due Date"), as required under the terms of the
Operating Agreement, then Schwab may, at its option, charge interest on the
amount of such cash proceeds outstanding on or after the Due Date as set forth
in Section 2(c) below.
(b) With respect to a cash distribution Account, if Fund Company does not
wire the cash distribution to Schwab on the payable date for such distribution
(a "Due Date"), as required under the terms of the Operating Agreement, then
Schwab may, at its option, charge interest on the amount of such cash
distribution outstanding on or after the Due Date as set forth in Section 2(c)
below.
(c) For the Due Date, (I) Schwab may charge Fund Company interest at the
Federal Funds "offered" rate for such date as published in The Wall Street if
the amount does not exceed $1 million, and (ii) Schwab may charge Fund Company
interest at the Prime Rate for such day as published in The Wall Street Journal
if the amount exceeds $1 million. For each day following the Due Date, Schwab
may charge Fund Company interest at the Prime Rate for each such day as
published din The Wall Street Journal, plus 2% per annum.
3. Except as specifically set forth herein, all other provisions of the
Operating Agreement shall remain in full force and effect. To the extent of any
conflict between this Amendment and the Operating Agreement this Amendment shall
control.
-3-
<PAGE>
IN WITNESS WHEREOF, Schwab has executed this Amendment on the date written
below.
CHARLES SCHWAB & CO., INC.
By: /s/ Fred Potts
----------------------------------
Fred Potts
Vice President/Mutual Funds
Operations Administration
Date: 11/16/98
----------------------------------
-4-
<PAGE>
EXHIBIT (h)(5)(viii)
AMENDMENT TO SERVICES AGREEMENT
This Amendment ("Amendment") is made as of October 1, 1998, by and between
Charles Schwab & Co., Inc. ("Schwab"), a California corporation, each registered
investment company ("Fund Company") executing this Amendment on its own behalf
and on behalf of its series or classes of shares ("Fund(s)") listed on Schedule
I hereto, and Denver Investment Advisors, LLC ("Fund Affiliate"), and amends the
Services Agreement, made as of March 26, 1996, as amended thereafter ("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 Schedule I to the Services Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Schedule I to the Services Agreement shall be deleted in its entirety
and Schedule I attached hereto shall be inserted in lieu thereof.
2. 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. WESTCORE TRUST, on its own behalf and on
behalf of each Fund listed on Schedule I
By: /s/Dennis P. Clark hereto
--------------------------------
Dennis P. Clark
Senior Vice President By: /s/Jack D. Henderson
Mutual Funds ----------------------------------
Name: Jack D. Henderson
----------------------------------
Date: 10/26/98 Title: Vice President
------------------------------ ----------------------------------
Date: 10/1/98
----------------------------------
DENVER INVESTMENT ADVISORS, LLC
By: /s/Kenneth V. Penland
----------------------------------
Name: Kenneth V. Penland
----------------------------------
Title: Chairman
----------------------------------
Date: 10/1/98
----------------------------------
<PAGE>
SCHEDULE I
TO THE SERVICES AGREEMENT
<TABLE>
<CAPTION>
Fund Company/Funds Effective Date
- ------------------ --------------
<S> <C>
Westcore Trust
Westcore Blue Chip Fund* 3/26/96
Westcore Colorado Tax-Exempt Bond Fund* 3/26/96
Westcore Growth and Income Fund* 3/26/96
Westcore Intermediate-Term Bond Fund* 3/26/96
Westcore Long-Term Bond Fund* 3/36/96
Westcore Mid-Cap Opportunity Fund* 10/1/98
Westcore MIDCO Growth Fund* 3/26/96
Westcore Small-Cap Opportunity Fund* 3/26/96
</TABLE>
* Indicates that Fund is a "no-load" or "no sales charge" Fund as defined
in Rule 2830 of the NASDR.
SI Indicates that Fund is available only to MFMP investors through Schwab
Institutional or another advice program offered or made available by
financial institutions clearing transactions through Schwab.
Accepted by:
CHARLES SCHWAB & CO., INC. WESTCORE TRUST, on its own behalf and on
behalf of each Fund listed on Schedule I
By: /s/Dennis P. Clark
--------------------------------
Dennis P. Clark
Senior Vice President By: /s/Jack D. Henderson
Mutual Funds ----------------------------------
Name: Jack D. Henderson
----------------------------------
Date: 10/26/98 Title: Vice President
------------------------------ ----------------------------------
Date: 10/1/98
----------------------------------
Acknowledged by:
DENVER INVESTMENT ADVISORS, LLC
By: /s/Kenneth V. Penland
----------------------------------
Name: Kenneth V. Penland
----------------------------------
Title: Chairman
----------------------------------
Date: 10/1/98
----------------------------------
-2-
<PAGE>
EXHIBIT (h)(9)(ii)
September 25, 1998
Westcore Trust
370 Seventeenth Street, Suite 3100
Denver, CO 80202
Datalynx
717 Seventeenth Street, Suite 1700
Denver, CO 80202
Attn: Bradley Blewett
Denver Investment Advisors LLC
1225 Seventeenth Street, 26th Floor
Denver, CO 80202
VIA: Federal Express
Re: The Shareholder Services Agreement (the "Agreement") dated as of
November 19, 1996 between First Trust Corp., Denver Investment
Advisors LLC, and Westcore Trust.
Dear Sirs:
Commencing on October 1, 1998, Westcore Trust will offer a new
investment portfolio - Westcore Mid-Cap Opportunity Fund. By your signature
below please confirm that effective October 1, 1998, the Agreement (including
any attachments thereto listing the Funds covered by the Agreement) hereby is
amended to include Westcore Mid-Cap Opportunity Fund as a Fund under the
Agreement. In all other respects the Agreement continues in effect in accordance
with its terms.
Please keep one signed original of this letter and return the
remaining originals to:
Westcore Trust,
Attn: Kristine Cook
1225 17th Street, 26th Floor
Denver, CO 80202
If you have any questions regarding the Agreement or Westcore
Trust, please call Steve Wine or Kristine Cook at (800) 734-9378. Please address
any legal concerns to Jasper Frontz at (303) 312-5044.
Yours Truly,
Westcore Trust
By: /s/ Jack D. Henderson
------------------------------------
Name: Jack Henderson
Title: Vice President
Date:
ACCEPTED AND AGREED TO:
First Trust Corp.
By: /s/ Joanne Radmore Ratkai
----------------------------------
Name: Joanne Radmore Ratkai
Title: Vice President - Compliance
Date: 11/18/98
Denver Investment Advisors LLC
By: /s/ Kenneth V. Penland
----------------------------------
Name: Kenneth V. Penland
Title: Chairman
Date: 10/1/98
<PAGE>
EXHIBIT (h)(14)(ii)
September 25, 1998
Westcore Trust
370 Seventeenth Street, Suite 3100
Denver, CO 80202
National Investor Services Corp.
55 Water Street, 32nd Floor
New York, NY 10041
Attn: Peter Wigger
Denver Investment Advisors LLC
1225 17th Street, 26th Floor
Denver, CO 80202
VIA: Federal Express
Re: The Omnibus Account Services Agreement (the "Agreement") dated
as of February 26, 1998 between National Investor Services Corp.,
Denver Investment Advisors LLC and Westcore Trust.
Dear Sir:
Commencing on October 1, 1998, Westcore Trust will offer a new
investment portfolio - Westcore Mid-Cap Opportunity Fund. By your signature
below please confirm that effective October 1, 1998, the Agreement (including
any attachments thereto listing the Funds covered by the Agreement) hereby is
amended to include Westcore Mid-Cap Opportunity Fund as a Fund under the
Agreement. In all other respects the Agreement continues in effect in accordance
with its terms.
Please keep one signed original of this letter and return the
remaining originals to:
Westcore Trust,
Attn: Kristine Cook
1225 17th Street, 26th Floor
Denver, CO 80202.
If you have any questions regarding the Agreement or Westcore Trust,
please call Steve Wine or Kristine Cook at (800) 734-9378. Please address any
legal concerns to Jasper Frontz at (303) 312-5044.
Yours Truly,
WESTCORE TRUST
By: /s/ Jack D. Henderson
------------------------------------
Name: Jack Henderson
Title: Vice President
Date:
ACCEPTED AND AGREED TO:
NATIONAL INVESTOR SERVICES CORP.
By: /s/ Thomas Quercia
----------------------------------
Name: Thomas Quercia
----------------------
Title: Senior Vice President
----------------------
Date: 11/6/98
----------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/ Kenneth V. Penland
----------------------------------
Name: Kenneth V. Penland
----------------------
Title: Chairman
----------------------
Date: 10/1/98
----------------------
<PAGE>
EXHIBIT (h)(18)(ii)
September 25, 1998
Westcore Trust
370 Seventeenth Street, Suite 3100
Denver, CO 80202
Janney Montgomery Scott, Inc.
1801 Market Street
Philadelphia, PA 19103
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street, Suite 3100
Denver, CO 80202
Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, MA 02171
VIA: Federal Express
Re: The Standard Agency Trading Agreement (the "Agreement") dated as
of August 21, 1998 between Janney Montgomery Scott, Inc., Westcore
Trust and its Fund Affiliates.
Dear Sirs:
Commencing on October 1, 1998, Westcore Trust will offer a new
investment portfolio - Westcore Mid-Cap Opportunity Fund. By your signature
below please confirm that effective October 1, 1998, the Agreement (including
any attachments thereto listing the Funds covered by the Agreement) hereby is
amended to include Westcore Mid-Cap Opportunity Fund as a Fund under the
Agreement. In all other respects the Agreement continues in effect in accordance
with its terms.
Please keep one signed original of this letter and return the
remaining originals to:
Westcore Trust
Attn: Kristine Cook
1225 17th Street, 26th Floor
Denver, CO 80202
<PAGE>
If you have any questions regarding the Agreement or Westcore Trust,
please call Steve Wine or Kristine Cook at (800) 734-9378. Please address any
legal concerns to Jasper Frontz at (303) 312-5044.
Yours Truly,
By: /s/ Jack D. Henderson
-----------------------------------
Name: Jack Henderson
Title: Vice President
Date: 10/1/98
ACCEPTED AND AGREED TO:
JANNEY MONTGOMERY SCOTT, INC. BOSTON FINANCIAL DATA SERVICES, INC. ON
BEHALF OF STATE STREET BANK & TRUST CO.
AS TRANSFER AGENT
By: /s/ Charles Sullivan By: /s/ Jennifer Amendolare
------------------------------ -----------------------------------
Name: Charles Sullivan Name: Jennifer Amendolare
Title: Sr. V. P. Title: CSO
Date: 10/23/98 Date: 9/29/98
ALPS MUTUAL FUNDS SERVICES, INC.,
ADMINISTRATOR, DISTRIBUTOR AND
BOOKKEEPING AND PRICING AGENT
By: /s/ Ned Burke
------------------------------
Name: Ned Burke
Title: E.V.P.
Date: 10/2/98
<PAGE>
EXHIBIT (h)(19)
AGREEMENT
AGREEMENT, made as of September 1, 1998 between Denver Investment
Advisors, LLC ("DIA"), ALPS Mutual Funds Services, Inc. ("ALPS") Boston
Financial Data Services, Inc. ("BFDS") and Westcore Trust (the "Trust").
WITNESSETH
WHEREAS, DIA has entered into an Agency Trading Agreement dated
September 1, 1998 with Fidelity Investment Institutional Operations Company,
Inc. ("FIIOC") ("Agency Trading Agreement") which requires DIA to adhere to
certain duties and procedures;
NOW THEREFORE, the parties desire to record their understanding of the
duties and procedures required of DIA under the Agency Trading Agreement and
hereby allocate certain of these duties and procedures as it is agreed between
the parties hereto as follows:
1. RESPONSIBILITY OF ALPS.
ALPS will comply with the following Sections of the Agency
Trading Agreement: Section 3 which relates to pricing information procedures;
and Exhibit C which relates to remote pricing procedures.
2. RESPONSIBILITY OF BFDS.
BFDS will comply with the following Sections of the Agency
Trading Agreement: Section 4 and Exhibit D which relate to trade reporting
procedures; Section 5 which relates to settlements made by wire transfer; and
Section 6 which relates to confirmation and reconciliation.
3. RESPONSIBILITY OF THE TRUST.
The Trust will comply with the following Sections of the Agency
Trading Agreement: Section 8(a) which contains a representation of full
authority to enter into the Agency Trading Agreement and to appoint FIIOC as
agent; Section 8(b) which contains a representation that the Trust has entered
into a transfer agency agreement; Section 8(c) which contains a representation
that the portfolios listed on an attached exhibit are registered under
applicable laws; Section 9 which relates to fund waivers of loads or fees;
Section 11 which relates to mailing and costs of periodic fund materials and
Section 12 which relates to mailing and costs of proxy materials.
<PAGE>
4. INDEMNIFICATION.
The Agency Trading Agreement provides that DIA shall indemnify
FIIOC against certain losses which FIIOC may incur. If and to the extent that:
(a) DIA is required to indemnify FIIOC under the Agency Trading
Agreement, ALPS shall reimburse DIA for any indemnification payments made by DIA
to FIIOC, whether related to expenses or otherwise, to the extent that such
payments are attributable to (i) any misstatement in or omission of a material
fact in any written materials that ALPS has provided to DIA, to FIIOC or to the
Trust for inclusion in the registration statement or any prospectus of the Trust
filed under the Securities Act of 1933, as amended, or (ii) any action or
omission of ALPS that is negligent or constitutes a breach of its obligations
under any contract with DIA; (b) BFDS shall reimburse DIA for any
indemnification payments made by DIA to FIIOC, whether related to expenses or
otherwise, to the extent that such payments are attributable to (i) any
misstatement in or omission of a material fact in any written materials that
BFDS has provided to DIA or to FIIOC, or to the Trust for inclusion in the
registration statement or any prospectus of the Trust filed under the Securities
Act of 1933, as amended, or (ii) any action or omission of BFDS that is
negligent or constitutes a breach of its obligations under any contract with DIA
or the Trust; and (c) the Trust shall reimburse DIA for any indemnification
payments made by DIA to FIIOC, whether related to expenses or otherwise, to the
extent that such payments are attributable to (i) any misstatement in or
omission of a material fact in any written materials that the Trust has provided
to DIA or to FIIOC, or (ii) any action or omission of the Trust that is
negligent or constitutes a breach of its obligations under any contract with
DIA, or (iii) any misstatement in or omission of a material fact by the Trust in
the registration statement or any prospectus of the Trust filed under the
Securities Act of 1933, as amended, except for misstatements or omissions that
are attributable in whole or in part to DIA, ALPS or BFDS.
4. 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 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
-2-
<PAGE>
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.
5. DURATION AND TERMINATION.
This Agreement shall take effect as of the date hereof and shall
terminate upon termination of the Agency Trading Agreement, except with respect
to transactions that occurred prior to such termination, and except that the
indemnification provisions herein shall survive such termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year first
above written.
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/Thomas A. Carter
-------------------------------------
Title: CFO
DENVER INVESTMENT ADVISORS, LLC
By: /s/Kenneth V. Penland
-------------------------------------
Title: Chairman
WESTCORE TRUST
By: /s/Jack D. Henderson
-------------------------------------
Title: Vice President
BOSTON FINANCIAL DATA SERVICES, INC.
By: /s/Jennifer Amendolare
-------------------------------------
Title: CSO
-3-
<PAGE>
EXHIBIT (h)(20)
NO TRANSACTION FEE MUTUAL FUND OFFERING
RETAIL SHAREHOLDER SERVICES AGREEMENT
This Agreement is made as of October 1, 1998, between E*TRADE Group,
Inc. ("E*TRADE"), a Delaware corporation, Westcore Trust ("Fund"), a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company,
and ALPS Mutual Funds Services, Inc. ("ALPS"), a Colorado corporation registered
as a broker-dealer under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and which serves as principal underwriter to Fund and Denver
Investment Advisors LLC, a Colorado limited liability company ("DIA") which
serves as investment adviser to Fund. (Fund, ALPS and DIA are collectively
referred to as "Fund Parties").
WHEREAS, Fund Parties wish to engage E*TRADE to perform certain
record-keeping, shareholder communication, and other shareholder administrative
services for Fund's shareholders; and
WHEREAS, E*TRADE agrees to perform such services on the terms and
conditions set forth in this Agreement;
Now, therefore, in consideration of the foregoing and the mutual
promises set forth below, E*TRADE and Fund Parties agree as follows:
1. SERVICES
E*TRADE shall perform such services for Fund Parties as are designated
in Schedule A to this Agreement ("Services"), as such Schedule A may from time
to time be amended, such amendments to be evidenced by the signature thereto by
a duly authorized representative of each of the Parties.
2. COMPENSATION
In consideration for the Services rendered by E*TRADE pursuant to this
Agreement, DIA shall pay a fee to E*TRADE as shall be calculated pursuant to
Schedule B to this Agreement. Fund and ALPS shall not be obligated under any
circumstances for the fee.
3. TRANSACTION CHARGES
E*TRADE shall not assess against any of its customers any fee for
executing any purchase or sale order where such order involves the securities of
Fund. Notwithstanding this provision, E*TRADE shall have the right to assess
against customers a fee for executing a
<PAGE>
purchase or sale order where the customer has held such position for less than
ninety (90) days, or where E*TRADE provides the customer with a service that is
not contemplated by this Agreement.
4. INDEMNIFICATION
(a) Fund Parties agree to indemnify, defend and hold E*TRADE, its
officers, directors, employees, agents, and affiliates free and harmless
from and against (i) any and all claims, demands, liabilities and expenses,
including reasonable legal expenses, which E*TRADE, its officers,
directors, employees, agents, and affiliates may incur arising out of or
based upon any untrue statement, or alleged untrue statement, of material
fact contained in any registration statement, prospectus or statement of
additional information of Fund, any sales material provided by Fund Parties
to E*TRADE, or other information provided by Fund, or based upon any
omission, or alleged omission, to state a material fact required to be
stated to make the statements contained therein not misleading, except to
the extent that E*TRADE has itself produced such materials; (ii) any breach
by either Fund, ALPS or DIA of any representation, warranty or provision
contained herein, or (iii) any willful misconduct or negligence by Fund,
ALPS or DIA in the performance of, or failure to perform, its respective
obligations under this Agreement, except to the extent that such claims,
liabilities or expenses are caused by E*TRADE's breach of this Agreement or
willful misconduct or negligence in the performance, or failure to perform,
their respective obligations under this Agreement. This section 4(a) shall
survive termination of this Agreement.
(b) E*TRADE agrees to indemnify, defend and hold harmless Fund
Parties, their officers, directors, trustees, members, employees, agents,
and affiliates free and harmless from and against any and all claims,
demands, liabilities and expenses, including reasonable legal expenses,
which Fund Parties, their officers, directors, trustees, members,
employees, agents, and affiliates may incur arising out of or based upon
(i) any untrue statement or omission, or alleged untrue statement or
omission, of material fact that E*TRADE or its employees make concerning
Fund that is inconsistent with Fund's current prospectus, statement of
additional information, periodic reports to shareholders or any other
material the Fund Parties have provided in writing to E*TRADE.; (ii) any
breach by E*TRADE of any representation, warranty or provision contained
herein, or (iii) any willful misconduct or negligence by E*TRADE in the
performance of, or failure to perform, its obligations under this
Agreement, except to the extent that such claims, liabilities or expenses
are caused by Fund Parties' breach of this Agreement or willful misconduct
or negligence in the performance, or failure to perform, their respective
obligations under this Agreement. This section 4(b) shall survive
termination of this Agreement.
5. ROLE OF E*TRADE
The parties acknowledge and agree that the Services performed by
E*TRADE pursuant to this Agreement are not the services of an underwriter or
principal underwriter of Fund within the meaning of the 1940 Act or the
Securities Act of 1933, as amended. This Agreement does not grant E*TRADE any
right to purchase shares from Fund; neither does it
-2-
<PAGE>
preclude E*TRADE's ability to purchase shares from Fund. E*TRADE shall not be
deemed to be an agent of Fund Parties or of Fund for the purposes of selling
Fund's shares to any dealer or the public. To the extent that E*TRADE is
involved in the purchase of shares of any Fund by E*TRADE's customers, such
involvement will be as agent of such customer only.
6. INFORMATION TO BE PROVIDED
Fund parties shall provide to E*TRADE prior to the effectiveness of
this Agreement or as soon thereafter as is reasonably practicable:
(a) Certified resolutions of the board of trustees, as applicable, of
Fund authorizing the execution of this Agreement and the performance by the Fund
Party pursuant to this Agreement; and
(b) Two (2) written copies of each current prospectus and statement of
additional information relating to any of Fund's shares which may be purchased
by customers of E*TRADE. ALPS agrees to submit to E*TRADE one (1) written copy
of any amendment or supplement to or any updated version of such prospectus(es)
and statement(s) of additional information no later than the effective date of
such amendment, supplement or updated version.
7. TERMINATION OF AGREEMENT
This Agreement is terminable, without penalty, at any time upon ninety
(90) days' notice by E*TRADE to Fund, ALPS and DIA or by Fund, ALPS and DIA to
E*TRADE. Termination of this Agreement shall terminate E*TRADE's obligations to
perform the Services, as of the effective date of the termination, and shall
terminate DIA's obligation to pay any compensation hereunder, as of the
effective date of the termination. Not withstanding any provision herein to the
contrary, Fund Parties' obligations pursuant to this Agreement shall not be
terminated with respect to any transactions in Fund's shares commenced prior to
the effective date of the termination of this Agreement.
8. NOTICES
All notices and other communications will be duly given if mailed,
telegraphed, telexed, or transmitted by similar telecommunications device to the
addresses designated on Schedule C hereto.
9. NON-EXCLUSIVITY
Each Party to this Agreement may enter into agreements similar to this
Agreement with other parties for the performance of services similar to those to
be provided under this Agreement, unless otherwise agreed to in writing by the
Parties.
-3-
<PAGE>
10. JURISDICTION AND NON-ASSIGNABILITY
This Agreement will be construed in accordance with the laws of the
State of California and is non-assignable by the parties hereto. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective successors and assigns.
11. FUND PORTFOLIOS AND CLASSES
The portfolios, series and classes of shares of Fund to which this
Agreement shall apply are designated in Schedule C hereto. E*TRADE acknowledges
and agrees that Fund reserves the right, in its sole discretion and without
advance notice, to suspend or withdraw the sale of shares of one or more
portfolios, series or classes.
12. EXHIBITS AND SCHEDULES
Schedules A, B, and C, which are attached hereto, are each a part of
and is incorporated by reference into this Agreement. This Agreement shall not
be deemed to be complete absent such Schedules A, B, or C.
13. ENTIRE AGREEMENT; SEVERABILITY
Each Party recognizes the existence of a Fund/SERV Agreement between
FundSERV and Fund and/or ALPS or DIA dated 2/7/98, as supplemented by a
Supplemental Agreement Regarding Networking, dated 8/24/98 ("Other Agreements").
To the extent of any inconsistency or conflict between the provisions
of this Agreement and any provision of the Other Agreements, such provision of
the Other Agreements shall govern, and the provision of this Agreement shall be
null and void. Except as specified in this Section 13, however, this Agreement
shall supersede any existing agreements between the parties containing general
terms and conditions for retail shareholder services. Each provision and
agreement herein shall be treated as separate and independent from any other
provision of agreement herein and shall be enforceable notwithstanding the
un-enforceability of any such other provision or agreement.
14. REPRESENTATIONS OF THE PARTIES
Each Party represents and warrants to each other Party that (i) it is
duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (ii) the person signing this Agreement on
its behalf is duly authorized to do so, (iii) it has obtained all authorizations
of any governmental body required in connection with this Agreement and such
authorizations are in full force and effect and (iv) the execution, delivery and
performance of this Agreement will not violate any law, ordinance, charter,
by-law or rule applicable to it or any agreement by which it is bound or by
which any of its assets are affected.
-4-
<PAGE>
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original, but all of which together shall
constitute one and the same instrument.
In witness whereof, each Party has executed this Agreement by a duly
authorized representative of such Party.
/s/Jack D. Henderson
- -------------------------------------- ----------------------------------------
WESTCORE TRUST ALPS MUTUAL FUNDS SERVICES, INC.
By: By: /s/Thomas A. Carter
------------------------------- ---------------------------------
Name: Jack D. Henderson Name: Thomas A. Carter
------------------------------- ---------------------------------
Title: Vice President Title: Chief Financial Officer
------------------------------- ---------------------------------
Date: 11/19/98 Date: 10/15/98
------------------------------- ---------------------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/Kenneth V. Penland
-------------------------------------------
Name: Kenneth V. Penland
-------------------------------------------
Title: Chairman
-------------------------------------------
Date: 9/14/98
-------------------------------------------
By: /s/Brian Murray
-------------------------------------------
E*TRADE GROUP, INC.
-5-
<PAGE>
SCHEDULE A
SERVICES
1. RECORD MAINTENANCE
E*TRADE shall maintain the following records with respect to a Fund
for each customer who holds Fund shares in an E*TRADE brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and social
security numbers or taxpayer identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. SHAREHOLDER COMMUNICATIONS
E*TRADE shall:
a. Provide to an approved shareholder mailing agent for the purpose
of providing certain Fund-related materials the names and addresses of all
E*TRADE customers who hold shares of such Fund in their E*TRADE brokerage
accounts. The shareholder mailing agent shall be a person or entity with whom
the Fund has arranged for the distribution of certain Fund-related material in
accordance with the Fund/SERV Agreement. The Fund-related materials shall
consist of updated prospectuses and any supplements and amendments thereto,
annual and other periodic reports, proxy or information statements and other
appropriate shareholder communications. In the alternative, in accordance with
the Fund/SERV Agreement, E*TRADE may distribute the Fund-related materials to
its customers.
b. Deliver current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Deliver statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of such Fund as of a
recent date;
<PAGE>
d. Produce and provide to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in E*TRADE brokerage accounts;
e. Respond to customer inquiries regarding, among other things, share
prices, account balances, dividend amounts and dividend payment dates; and
3. TRANSACTIONAL SERVICES
E*TRADE shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. E*TRADE shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
4. TAX INFORMATION RETURNS AND REPORTS
E*TRADE shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. FUND COMMUNICATIONS
E*TRADE shall, on a monthly basis and for each Fund, report the number
of shares on which the Fee is to be paid pursuant to this Agreement. Such
summaries shall be expressed in both shares and dollar amounts.
OTHER SERVICES
E*TRADE shall:
- - Forward to each customer all proxy statements, periodic shareholder reports
and other communications received from Fund by E*TRADE on behalf of its
customers.
- - Disburse dividends and distributions of Fund to customers of E*TRADE, and
withhold dividends and distributions, and prepare and transmit to its
customers tax information with respect to the dividends and distributions
paid or withheld, in accordance with applicable requirements of federal and
state law.
- - Transfer to Fund's transfer agent, on the date such purchase orders are
effective, federal funds in an amount equal to the amount of all purchase
orders placed by it on behalf of its customers and accepted by Fund. In the
event that Fund fails to receive such federal funds on such date (other
than through fault of Fund or its transfer agent), E*TRADE shall indemnify
Fund against any expense (including overdraft charges) incurred by Fund as
a result of its failure to receive such federal funds.
-2-
<PAGE>
- - Make available to Fund, upon Fund's request, such information relating to
its customers who are beneficial owners of shares of Fund and their
transactions in shares of Fund, as may be required by applicable laws and
regulations or as may be reasonably requested by Fund.
- - Transfer record ownership of a customer's shares of Fund to the customer
promptly upon the request of the customer. In addition, record ownership
will promptly be transferred to the customer in the event that the person
or entity ceases to be a customer of E*TRADE.
- - Except as set forth in the Agreement, E*TRADE shall be solely responsible
for all costs and expenses of providing services under this Agreement.
-3-
<PAGE>
SCHEDULE B
CALCULATION OF FEE
The Fee shall be calculated by multiplying the Daily Value of Qualifying Shares
by the appropriate Fee Rate (indicated below). The Fee shall be paid monthly in
arrears.
The Daily Value of Qualifying Shares is the aggregate daily value of all shares
of the Fund held in E*TRADE brokerage accounts, subject to the following
exclusions. There shall be excluded from the shares: (i) shares as to which a
brokerage customer paid E*TRADE a transaction fee upon the purchase of such
shares; (ii) shares held in an E*TRADE brokerage account prior to the effective
date of this Agreement as to the Fund; and (iii) shares first held in an E*TRADE
brokerage account after the termination of this Agreement as to the Fund.
The Fee Rate is determined based on the aggregate value of the Qualifying Shares
of all Funds listed on Schedule C, as amended from time to time, as of the prior
review date. The review dates are December 31, and June 30. The Fee Rate is
effective from the next business day following the review date up to and
including the next review date. The Fee Rates are as follows:
Up to and including $750 million 35 basis points
Over $750 million and up to
And including $1.5 billion 30 basis points
Over $1.5 billion 25 basis points
Note: The rate scale is not intended to produce a "blended rate." Rather, once a
threshold is reached, the rate applicable to the total amount of assets will be
used for all assets.
For purposes of this exhibit, the daily value of the shares of each Fund will be
the net asset value reported by such Fund to the National Association of
Securities Dealers, Inc. Automated Quotation System. No adjustments will be made
to the net asset values to correct errors in the net asset values so reported
for any day unless such error is corrected and the corrected net asset value per
share is reported to E*TRADE before 5 o'clock p.m., Palo Alto time, on the first
business day after the day to which the error relates.
As soon as is possible after the end of the month, E*TRADE shall provide to DIA
an invoice for the amount of the Fee due for each Fund. In the calculation of
such Fee, E*TRADE's records shall govern unless an error can be shown in the
number of shares used in such calculation.
Fund Parties shall pay E*TRADE the Fee within thirty (30) days after the Fund
Parties receipt of such statement. Such payment shall be by wire transfer,
unless the amount thereof is less than $250.00. Such wire transfers shall be
separate from wire transfers of redemption proceeds or other distributions.
Amounts less than $250.00 may be paid, at DIA's discretion, by check.
<PAGE>
SCHEDULE C
FUND PORTFOLIOS AND CLASSES
<TABLE>
<CAPTION>
FUNDS: EFFECTIVE DATE:
<S> <C>
Westcore MIDCO Growth Fund* 10/1/98
---------------------------
Westcore Blue Chip Fund * 10/1/98
---------------------------
Westcore Growth & Income Fund* 10/1/98
---------------------------
Westcore Small-Cap Opportunity Fund* 10/1/98
---------------------------
Westcore Intermediate-Term Bond Fund* 10/1/98
---------------------------
Westcore Long-Term Bond Fund* 10/1/98
---------------------------
Westcore Colorado Tax-Exempt Fund* 10/1/98
---------------------------
Westcore Mid-Cap Opportunity Fund* 10/1/98
---------------------------
</TABLE>
Asterisk 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 ALPS MUTUAL FUNDS SERVICES, INC.
370 17th Street, Suite 3100 370 17th Street, Suite 3100
Denver, CO 80202 Denver, CO 80202
By:/s/Jack D. Henderson By: /s/Thomas A. Carter
----------------------------------- ---------------------------------
Name: Jack D. Henderson Name: Thomas A. Carter
------------------------------- ---------------------------------
Title: Vice President Title: Chief Financial Officer
------------------------------- ---------------------------------
Date: 11/19/98 Date: 10/15/98
------------------------------- ---------------------------------
DENVER INVESTMENT ADVISORS LLC
By: /s/Kenneth V. Penland
-------------------------------------------
Name: Kenneth V. Penland
-------------------------------------------
Title: CHAIRMAN
-------------------------------------------
Date: 9/14/98
-------------------------------------------
By: /s/Brian Murray
-------------------------------------------
E*TRADE GROUP, INC.
<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. 49 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 LLP
------------------------------
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
Dated: July 15, 1999
<PAGE>
EXHIBIT (l)(1)
CONVERSION OF FUNDS AGREEMENT
AGREEMENT dated as of September 30, 1998, among Westcore Trust, a
Massachusetts business trust on behalf of its Mid-Cap Opportunity Fund (the
"Trust"), and the participants (the "Participants") in the pooled fund
partnership (the "Pooled Fund Partnership") described below and the Pooled Fund
Partnership.
WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, consisting of
eight investment portfolios including the Mid-Cap Opportunity Fund (the
"Portfolio");
WHEREAS, the Pooled Fund Partnership is a partnership comprised of the
Participants whose names are listed below;
WHEREAS, the Participants have jointly invested certain contributions
in a pooled fund in the custody of The Bank of Cherry Creek pursuant to an
Agreement dated January 1, 1998 (the "Partnership Agreement");
WHEREAS, the individual Participants of the Pooled Fund Partnership
desire to transfer their interests in the Pooled Fund Partnership to the
Portfolio in exchange for shares of the Portfolio as hereinafter provided;
WHEREAS, the Partnership Agreement provides that the Partnership
Agreement may be terminated when at least 2/3 of the Participants vote for any
reason for such termination;
WHEREAS, the Participants and the Trust desire that the Pooled Fund
Partnership be terminated immediately upon the transfer described above;
WHEREAS, the Participants intend thereafter to be investors in the
Portfolio;
NOW, THEREFORE, the Participants, the Trust and the Pooled Fund
Partnership, intending to be legally bound, hereby agree as follows:
1. TRANSFER OF PORTFOLIO SHARES. On the date hereof, subject to the
terms and conditions of this Agreement and on the basis of and in reliance upon
the covenants, agreements, and representations and warranties set forth herein,
each Participant shall receive, and the Trust shall issue to each Participant,
shares of the Portfolio (as defined in the prospectus for the Portfolio) with
the aggregate net asset value equal to the aggregate market value of the
Partnership Interests (as hereinafter defined), determined in accordance with
Section 3 hereof.
2. CONSIDERATION. In exchange for the issuance of the shares of the
Portfolio pursuant to this Agreement, each Participant shall transfer the entire
Partnership Interest held by
<PAGE>
it as set forth on Exhibit A hereto (collectively, the "Partnership Interests")
to the Portfolio. It is intended that the transaction will qualify for
nonrecognition treatment pursuant to Section 351 of the Internal Revenue Code of
1996, as amended. No brokerage commissions, fees (except for customary transfer
fees), or other remuneration will be paid by the Trust or the Participants in
connection with the transactions contemplated hereby. The number of shares of
the Portfolio to be issued to each Participant shall be determined by dividing
the aggregate market value (computed as set forth below) of the Partnership
Interest being transferred to the Portfolio by such Participant, determined as
of the close of business on the date hereof, by $10.00, the face value of the
shares of the Portfolio. The Trust believes that the foregoing procedure for
transferring the interest of each Participant to the Portfolio will be
beneficial to each Participant and the Portfolio, and will minimize brokerage
and other costs associated with the transfer of the Securities (as hereafter
defined).
3. DETERMINATION OF MARKET VALUE. The market value of each
Participant's Partnership Interest shall be that Participant's ratable share of
the aggregate market value of the securities and cash held by the Pooled Fund
Partnership as set forth in Exhibit B hereto (collectively, the "Securities").
The aggregate market value of the Securities shall be any cash plus the sum of
the value of each security being transferred, determined in accordance with the
methods for valuing portfolio securities of the Portfolio set forth in the
Prospectus and Statement of Additional Information for the Portfolio.
4. TERMINATION OF PARTNERSHIP AGREEMENT. By their signatures hereto,
the Participants and the Trust vote to terminate the Partnership Agreement as of
the date hereof immediately after the transfer described in Section 1.
Immediately upon termination of the Partnership Agreement, the Securities will
be distributed to the Trust as sole owner of the Partnership Interests in
liquidation of the Partnership, the Partnership will be dissolved and the Trust
will hold the Securities directly.
5. REPRESENTATIONS OF EACH PARTICIPANT. Each Participant hereby
represents and warrants as follows:
(a) The execution and delivery of this Agreement by it
constitutes its valid and binding obligation, enforceable in accordance with its
terms.
(b) At the time of the transfer of the Partnership Interests to
the Trust, it will have good title to its Partnership Interest, free and clear
of all mortgages, security interests, liens, charges, pledges, and encumbrances
whatsoever, and the Pooled Fund Partnership will have good title to the
Securities free and clear of all mortgages, security interests, liens, charges,
pledges, and encumbrances whatsoever. Upon transfer of such Partnership Interest
to the Trust, the Trust will acquire good title to the Partnership Interests
and, upon distribution of the Securities to the Trust, the Trust will acquire
good title to the Securities, in each case free and clear of all mortgages,
security interests, liens, charges, pledges, and encumbrances.
-2-
<PAGE>
6. REPRESENTATIONS OF THE POOLED FUND PARTNERSHIP. The Pooled Fund
Partnership hereby represents and warrants as follows:
(a) The execution and delivery of this Agreement by the Pooled
Fund Partnership has been duly authorized by all requisite partnership action
and constitutes the valid and binding obligation of such Pooled Fund
Partnership, enforceable in accordance with its terms.
(b) At the time of the transfer of the Partnership Interests to
the Trust, the Pooled Fund Partnership will have good title to the Securities,
free and clear of all mortgages, security interests, liens, charges, pledges,
and encumbrances whatsoever. Upon transfer of such Partnership Interests to the
Trust, the Trust will acquire good title to the Partnership Interests, and, upon
distribution of the Securities to the Trust, the Trust will acquire good title
to the Securities, in each case free and clear of all mortgages, security
interests, liens, charges, pledges, and encumbrances.
(c) The Securities constitute permissible investments under the
Portfolio's investment objective, policies, and limitations as set forth in the
Portfolio's registration statement.
7. REPRESENTATIONS OF THE TRUST. The Trust hereby represents and
warrants as follows:
(a) The Trust is entering into this Agreement on behalf of the
Portfolio. The execution and delivery of this Agreement by the Trust has been
duly authorized by all requisite Trust action and (assuming the due execution
and delivery hereof by each Participant) constitutes the valid and binding
obligation of the Trust, enforceable in accordance with its terms.
(b) The issuance and delivery of the shares of the Portfolio in
accordance with the terms of this Agreement have been duly authorized by all
requisite Trust action and such shares, when so issued and delivered against
consideration therefor in accordance with the provisions hereof, will be duly
and validly issued, fully paid, and nonassessable by the Trust.
(c) The shares of the Portfolio that are being issued
pursuant to Section 1 (and any shares which are issued simultaneously
therewith in exchange for cash or property) will constitute at least 80% of
the shares outstanding immediately after such issuance.
(d) There is no plan or intention by the Trust (or its
investment adviser) to dispose of the Securities other than on the normal
course of business operations.
-3-
<PAGE>
8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. 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 with 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
enforcement of any claims against the Trust.
10. INVESTMENT REPRESENTATION OF EACH PARTICIPANT. Each Participant
hereby represents and warrants that it is acquiring the shares of the Portfolio
being issued to it hereunder (the "Shares") solely for investment, and not with
a view to distribution within the meaning of the Securities Act of 1933 and the
Rules and Regulations thereunder (the "Act"), that it understands that the
Shares are not registered under the Act, and that it will not sell the Shares
except in accordance with an exemption from such registration or unless the
Shares are subsequently registered under the Act.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers designated below as of the date
first above written.
WESTCORE TRUST, on behalf of
its Mid-Cap Opportunity Fund
/s/ Mary Jo McCurdie By: /s/ Jack D. Henderson
- ----------------------------------- -------------------------------------
(Attest) Title: Vice President
The Pooled Fund Partnership
by its partners named below.
Each of the following signs in his/her individual or company capacity (as the
case may be) and also as a partner in the Pooled Fund Partnership.
/s/ Alex Lock /s/ Cynthia Pirnack
- ----------------------------------- ----------------------------------------
Name: Alex Lock Name: Cynthia Pirnack
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Robert O. Lindig /s/ Dean Graves
- ----------------------------------- ----------------------------------------
Name: Robert Lindig Name: Dean Graves
On his own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Caleb Gates /s/ Dennis Larkin
- ----------------------------------- ----------------------------------------
Name: Caleb Gates Name: Dennis Larkin
On his own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Charlotte Petersen /s/ Glen Cahill
- ----------------------------------- ----------------------------------------
Name: Charlotte Petersen Name: Glen Cahill
On her own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
-5-
<PAGE>
/s/ Christianna Wood /s/ Janet Gardiner
- ----------------------------------- ----------------------------------------
Name: Christianna Wood Trust Name: Janet Gardiner
On her own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Jasper R. Frontz /s/ Lou Kahanek
- ----------------------------------- ----------------------------------------
Name: Jasper Frontz Name: Lou Kahanek
On his own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Jeffrey Adams /s/ Lucille Morrison
- ----------------------------------- ----------------------------------------
Name: Jeffrey Adams Name: Lucille Morrison
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Joy Fruin /s/ Mary Ellen Cox
- ----------------------------------- ----------------------------------------
Name: Joy Fruin Name: Mary Ellen Cox
On her own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Jerome Powers /s/ Mil Schulhof
- ----------------------------------- ----------------------------------------
Name: Jerome Powers Name: Mil Schulhof
On his own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ JoAnn Nearents /s/ Sam Aybar
- ----------------------------------- ----------------------------------------
Name: JoAnn Nearents Name: Sam Aybar
On her own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Kenneth Penland /s/ Sonja Balstad
- ----------------------------------- ----------------------------------------
Name: Kenneth Penland Name: Sonja Balstad
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
-6-
<PAGE>
/s/ Leo Beserra /s/ Steve Wine
- ----------------------------------- ----------------------------------------
Name: Leo Beserra Name: Steve Wine
On his own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Lester Garrison /s/ Suzanne Quam
- ----------------------------------- ----------------------------------------
Name: Lester Garrison Name: Suzanne Quam
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Terri Baldwin /s/ Todger Anderson
- ----------------------------------- ----------------------------------------
Name: Terri Baldwin Name: Todger Anderson
On her own behalf and as a Partner On his own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Thomas Stevens /s/ Varilyn Schock
- ----------------------------------- ----------------------------------------
Name: Thomas Stevens Name: Varilyn Schock
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ William Chester
- ----------------------------------- ----------------------------------------
Name: William Chester Name: Monica Bowers
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
/s/ Kathleen Duggan
- ----------------------------------- ----------------------------------------
Name: Kathleen Duggan Name: Christel Yehle
On her own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
-7-
<PAGE>
/s/ Jerry Peterson /s/ Lisa Ramirez
- ----------------------------------- ----------------------------------------
Name: Jerry Peterson Name: Lisa Ramirez
On his own behalf and as a Partner On her own behalf and as a Partner
in the Pooled Fund Partnership in the Pooled Fund Partnership
DENVER INVESTMENT ADVISORS LLC
On its own behalf and as a Partner
in the Pooled Fund Partnership
By: /s/ Kenneth V. Penland
--------------------------------
Kenneth V. Penland,
Its: Chairman
-8-
<PAGE>
EXHIBIT A
PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>
Percentage Interest in
Name Pooled Fund Partnership
---- -----------------------
<S> <C>
---------
Total: 100%
</TABLE>
-9-
<PAGE>
EXHIBIT B
Securities and cash held in the Pooled Fund Partnership
<TABLE>
<CAPTION>
AMOUNT CUSIP DESCRIPTION
- ------ ----- -----------
<S> <C> <C>
STOCKS & RELATED ISSUES:
Cash...............$116,054.99
</TABLE>
-10-
<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: May 20, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
McNeil S. Fiske, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, 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: June 8, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
James B. O'Boyle, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, 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: May 19, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Robert L. Stamp, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, 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: May 17, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Lyman Seely, whose signature appears below, does hereby constitute and
appoint Jack D. Henderson, 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: May 19, 1999
<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
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 R. Frontz
--------------------
Jasper R. Frontz
Date: May 20, 1999
<PAGE>
WESTCORE TRUST
POWER OF ATTORNEY
Kenneth V. Penland, whose signature appears below, does hereby constitute
and appoint Jack D. Henderson and W. Bruce McConnel, III, and either of them,
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: May 20, 1999
<PAGE>
WESTCORE TRUST
CERTIFICATE OF SECRETARY
The undersigned, being the duly elected and acting Secretary of
Westcore Trust, a Massachusetts Business Trust (the "Trust"), does hereby
certify that the following resolution was duly adopted by the Board of Trustees
of the Trust at a meeting held on May 12, 1999 at which a quorum was present and
acting throughout and that such resolution has not been amended, modified or
rescinded and remains in full force and effect on the date hereof:
FURTHER RESOLVED, that each of the officers of the Trust who may be
required to execute any amendments to the Trust's Registration Statement
be, and each of them hereby is, authorized to execute a power of attorney
appointing W. Bruce McConnel, III, Kenneth V. Penland and Jack D.
Henderson, and either of them, 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 the Trust to
comply with the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended, and any rules, regulations, or
requirements of the Securities and Exchange Commission in respect thereof,
in connection with the filing and effectiveness of the Trust's Registration
Statement and of any and all amendments (including post-effective
amendments) to the Trust's Registration Statement on Form N-1A pursuant to
either of 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 such officer as an officer of the Trust any and all such
amendments filed with the Securities and Exchange Commission under either
of said acts, and any other instruments or documents related thereto, said
acts of said attorney and agents or either of them by virtue of said
appointment being hereby ratified and approved.
Westcore Trust
July 15, 1999 /s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Secretary
