<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES / /
ACT OF 1933
Pre-effective Amendment No. / /
- --------------------------------------------------------------------------------
Post-Effective Amendment No. 45 /X/
----
- --------------------------------------------------------------------------------
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT / /
COMPANY ACT OF 1940
Amendment No. 28 /X/
----
- --------------------------------------------------------------------------------
(Check appropriate box or boxes)
- --------------------------------------------------------------------------------
AMWAY MUTUAL FUND TRUST
(Exact Name of Registrant as Specified in Charter)
2905 Lucerne Dr SE, Grand Rapids, Michigan 49546-7116
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (616) 787-6288
James J. Rosloniec, President and Treasurer
Amway Mutual Fund
7575 Fulton Street East
Ada, Michigan 49355-7150
(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 (DATE) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a) (1)
/ / on (date) pursuant to paragraph (a) (1)
/ / 75 days after filing pursuant to paragraph (a) (2)
/ / on (date) pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
-C-1997, AMWAY CORPORATION, U.S.A.
<PAGE>
AMWAY MUTUAL FUND
CROSS REFERENCE SHEET
PART A
------
Item Caption in Class R Prospectus Page No.
---- ----------------------------- --------
1 Front Page 1
2 Fee Expense Table 2
3 Financial Highlights 3
4 The Fund 3
The Fund's Investment Policy 4
5 Management of the Fund 4
Organization of the Fund 7
6 Stockholder Inquiries 7
Dividend and Capital Gain Distributions to Shareholders 7
7 Purchase of Shares 6
8. Determination of Net Asset Value and Offering Price of
the Fund's Shares 6
8 How Shares are Redeemed 6
9 Not Applicable --
PART B
------
Item Caption in Class R Statement of Additional Information Page No.
---- ------------------------------------------------------ --------
10 Cover Page 1
11 Contents 13
12 Not Applicable --
13 Objectives, Policies and Restrictions on Fund's Investments 3
14 Officers and Trustees of the Fund 5
15 Principal Shareholders 5
16 Investment Adviser 6
Transfer Agent 8
Custodian 8
Auditors 8
<PAGE>
AMWAY MUTUAL FUND
CROSS REFERENCE SHEET
PART B (Continued)
------
Item Caption in Class R Statement of Additional Information Page No.
---- ------------------------------------------------------ --------
17 Portfolio Transactions and Brokerages 4
18 Organization of the Fund 9
19 Purchase of Shares 9
Determination of Net Asset Value and Offering Price of
the Fund's Shares 9
How Shares are Redeemed 10
20 Federal Income Tax 10
21 Investment Performance Information 11
23 Reports to Stockholders and Annual Audit 12
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART A
------
Information Required in a Class R Prospectus
<PAGE>
AMWAY MUTUAL FUND
7575 Fulton Street East
Ada, Michigan, 49355-7150
(616) 787-6288
(800) 346-2670
Contents Page
Fee Expense Table 2
Financial Highlights 3
The Fund 3
The Fund's Investment Policy 4
Management of the Fund 4
Purchase of Shares 4
How Shares are Redeemed 4
Determination of Net Asset Value and
Offering Price of the Fund's Shares 5
Retirement Plans 5
Organization of Fund 5
Dividend and Capital Gain Distributions
to Shareholders 5
Federal Income Tax 5
Shareholder Inquiries 5
Investment Performance Information 6
This Prospectus contains information with respect to Class R of Amway Mutual
Fund. Class R is offered only to tax-exempt retirement and benefit plans of
Amway Corporation and its affiliates. The fund also offers Class A, which is
available to members of the general public. Information about Class A is
contained in the Class A prospectus dated April 28, 1998, which is available
upon request.
AMWAY MUTUAL FUND LOGO
CLASS R
PROSPECTUS
The primary investment objective of the Fund is capital appreciation through
the ownership of common stock of companies in various industries which offer
growth potential. Income, while a factor in portfolio selection, is secondary to
the Fund's principal objective.
This Prospectus sets forth information regarding the Fund that a prospective
investor should know prior to investing. Investors are advised to carefully read
and retain this Prospectus for future reference. Additional information about
the Fund has been filed with the United States Securities and Exchange
Commission. Such information may be examined by any person at the Securities and
Exchange Commission in Washington, D.C. or may be obtained from the Commission
upon payment of the prescribed fee. The Commission maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference, and other information regarding registrants
that file electronically with the Commission. Prospective investors may request,
without charge, the Statement of Additional Information, dated November, 1998,
by writing or telephoning the Fund as indicated above. The Statement of
Additional Information is incorporated into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is November, 1998.
---------------
1
Printed in U.S.A. -C-1998, AMWAY CORPORATION, U.S.A. 795055 L-2598-SAK
<PAGE>
AMWAY MUTUAL FUND
FEE EXPENSE TABLE
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases None
(as a percentage of offering price)
Maximum Sales Charge Imposed on Reinvested None
Dividends (as a percentage of offering price)
Deferred Sales Charge (as a percentage of None
original purchase price or redemption proceeds, as applicable)
Redemption Fees (as a percentage of amount None
redeemed, if applicable)
Exchange Fee None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees .55%
12b-1 Fees None
Other Expenses .48%
-----
Total Fund Operating Expenses 1.03%
-----
-----
</TABLE>
Example*
<TABLE>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end of each
time period: $11 $33 $57 $125
--- --- --- ----
</TABLE>
*This example should not be considered a representation of past or future
expenses and actual expenses may be greater or lesser than those shown.
The purpose of the fee table is to provide an investor with an understanding
of the various costs and expenses incurred by all shareholder accounts that an
investor will bear directly or indirectly. Annual Fund Operating Expenses are
based upon total expenses incurred by the Fund for Class A for the year ended
December 31, 1997, and have been adjusted for Class R to reflect adoption of the
Transfer Agent and Shareholder Servicing Agreement and the elimination of the
12b-1 distribution plan. Operating expenses include the Fund's portfolio
accounting service expenses in the amount of $2,500 per month ($30,000 annually)
which was paid through the use of directed brokerage commissions. The example,
as required by the Securities and Exchange Commission, assumes a 5% annual
return in determining the total expenses paid on an investment. Therefore,
future expenses may be greater or less than those shown in the example.
2
<PAGE>
AMWAY MUTUAL FUND
FINANCIAL HIGHLIGHTS
The table below shows financial information for Amway Mutual Fund expressed
in terms of one share outstanding throughout the period for Class A. The
estimated expenses for Class R, which are lower than the expenses for Class
A, are disclosed in the Fee Expense Table. The investment performance of
Class R is expected to be substantially similar to Class A because both
Classes invest in the same portfolio of securities and investment performance
will differ only to the extent that the Classes do not have the same
expenses. The estimated expenses for Class R, which are lower than the
expenses for Class A, are disclosed in the Fee Expense Table. The financial
statements are contained in the Fund's 1997 Annual Report to Shareholders
along with additional information about the performance of the Fund which may
be obtained by writing or calling the Fund.
(Selected data for each share of beneficial interest in Class A outstanding
throughout each period.)
<TABLE>
<CAPTION>
Year ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995* 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.62 $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87
Income from investment
operations:
Net investment income .09 .10 .10 .03 .02 .02 .06 .08 .16 .16
Net gain (loss) on securities 1.62 1.59 1.98 (.49) .78 .10 2.65 (.01) 1.93 .36
------------------------------------------------------------------------------------------------
Total from investment
operations 1.71 1.69 2.08 (.46) .80 .12 2.71 .07 2.09 .52
------------------------------------------------------------------------------------------------
Distributions:
Dividends (from net
investment income) .10 .09 .11 .03 .02 .02 .06 .08 .16 .15
Distributions (from
capital gains) 1.50 1.41 1.42 .34 .64 .64 1.36 .43 1.16 1.75
------------------------------------------------------------------------------------------------
Total distributions 1.60 1.50 1.53 .37 .66 .66 1.42 .51 1.32 1.90
------------------------------------------------------------------------------------------------
Net Asset Value, end of period $7.73 $7.62 $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49
------------------------------------------------------------------------------------------------
Total Return 22.47% 23.18% 30.55% (5.87%) 10.85% 1.77% 41.81% 1.01% 32.83% 6.89%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $139,164 $113,327 $77,248 $58,921 $61,741 $55,342 $53,238 $38,286 $39,029 $31,274
Ratio of expenses to
average net assets** .9% 1.0% 1.1% 1.1% 1.1% 1.1% 1.1% 1.2% 1.2% 1.3%
Ratio of net income to
average net assets 1.1% 1.2% 1.2% .4% .2% .3% .7% 1.1% 2.0% 1.9%
Portfolio turnover rate 103.1% 100.4% 173.3% 78.1% 91.5% 136.5% 160.4% 171.1% 14.6% 135.5%
Average commission
rate per share $.0574 $.0600 $.0598 $.0597 $.0682 $.0691 $.0697 $.0708 $.0684 $.0672
</TABLE>
The Financial Highlights have been audited by BDO Seidman, LLP, the Independent
Certified Public Accountants for the Fund. The Independent Auditors report is
contained in the Fund's Registration Statement which is available from the Fund.
*Effective May 1, 1995, Ark Asset Management Co., Inc. entered into a
Sub-Advisory Agreement with the Fund. Kemper Financial Services previously
served as the Fund's Sub-Advisor.
**The Fund's base portfolio accounting services expense in the amount of $2,500
per month ($30,000 annual base fee) was paid through the use of directed
brokerage commissions. The ratio includes fees paid with brokerage commissions
for fiscal years ending after September 1, 1995.
THE FUND
Amway Mutual Fund (the "Fund") is a series of Amway Mutual Fund Trust (the
"Trust"), a Delaware business trust. The Fund is the successor to Amway Mutual
Fund, Inc. a Delaware corporation.
The Fund is a mutual fund, i.e. a means by which many persons can, by
purchasing shares of beneficial interests ("shares") of the Fund, pool
relatively small amounts for a more diversified managed investment in securities
than would be possible for a single investor. The Fund will redeem (buy back)
its shares upon the request of a shareholder, at the net asset value of the
shares at the time of redemption (see "How Shares Are Redeemed").
3
<PAGE>
AMWAY MUTUAL FUND
THE FUND'S INVESTMENT POLICY
The primary investment objective of the Fund is capital appreciation. Income,
while a factor in portfolio selection, is secondary to the Fund's principal
objective. In pursuing this objective, it is the Fund's policy to invest a major
portion of its assets in common stocks (or securities convertible into or with
rights to purchase common stock) of companies believed by the Fund to offer good
growth potential over both the intermediate and the long-term period. However,
when current market or economic conditions make it seem advisable by the Fund to
do so, for temporary defensive reasons, the Fund may invest all or any portion
of its assets in other types of securities, including preferred stocks,
high-grade debt securities, or obligations of the United States or of any State,
or may hold its assets in cash.
In view of the Fund's investment objective of capital appreciation, with
income as a secondary objective, the Fund intends to purchase securities for
long-term or short-term profits, as appropriate. Securities will be disposed
of in situations where, in management's opinion, such potential is no longer
feasible or the risk of decline in the market price is too great. Therefore,
in order to achieve the Fund's objectives, the purchase and sale of
securities will be made without regard to the length of time the security is
to be held. Portfolio turnover rates for the years ended December 31, 1997
and 1996 were 103.1% and 100.4%, respectively. A 100% annual turnover rate
would occur if all of a Fund's securities were replaced one time during a
period of one year. In addition, higher portfolio turnover rates can result
in corresponding increases in brokerage commissions.
Although care is being exercised in the selection of securities for investment
by the Fund, the Fund's investments are affected by market fluctuations and are
subject to the risks common to all security investments. Therefore, there can be
no certainty that the Fund's growth or income objective will be realized.
The Fund's investment objective and policy as described above is fundamental
and may not be changed without the approval of the lesser of (i) 67% or more of
the shares present at a meeting at which the holders of more than 50% of the
shares are present in person or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed and under the direction of
the Board of Trustees. The Fund has entered into an Advisory and Service
Contract ("Contract") with Amway Management Company (the "Investment
Advisor"), 7575 Fulton Street East, Ada, Michigan 49355. Under the Contract,
the Fund employs the Investment Advisor to furnish investment advice and manage
on a regular basis the investment portfolio of the Fund, subject to the
direction of the Board of Trustees, and to the provisions of the Fund's current
Prospectus; to furnish for the use of the Fund, office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Fund, and (with certain specific exceptions) administering its affairs; and to
pay the salaries and fees of all Officers and Trustees. Except when otherwise
specifically directed by the Fund, the Investment Advisor will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of portfolio securities for the Fund's account. The Investment Advisor shall be
permitted to enter into an agreement with another advisory organization
(sub-advisor), whereby the sub-advisor will provide all or part of the
investment advice and services required to manage the Fund's investment
portfolio as provided for in this agreement. Amway Management Company has served
as Investment Advisor for the Fund and its predecessor since 1971. The Fund pays
the Adviser a fee at the annual rate of 0.55% on the first $100 million of
average daily net assets of the Fund, 0.50% on the next $50 million in assets,
and 0.45% on the next $50 million in assets. When the Fund's assets reach $200
million the rate would be 0.50% on assets up to $200 million and 0.45% on assets
in excess of $200 million, so long as the Fund continued to have at least $200
million in assets.
4
<PAGE>
AMWAY MUTUAL FUND
The Investment Advisor has entered into a Sub-Advisory Agreement with Ark
Asset Management Co., Inc. ("Sub-Advisor"), One New York Plaza, New York, NY
10004. Under the Sub-Advisory Agreement, the Advisor employs the Sub-Advisor to
furnish investment advice and manage on a regular basis the investment portfolio
of the Fund, subject to the direction of the Advisor, the Board of Trustees, and
to the provisions of the Fund's current Prospectus. Except when otherwise
specifically directed by the Fund or the Advisor, the Sub-Advisor will make
investment decisions on behalf of the Fund and place all orders for the purchase
or sale of portfolio securities for the Fund's account. The Sub-Advisor is
engaged in the management of investment funds for institutional clients in
excess of $23 billion. The Sub-Advisor and its affiliates provide investment
advice and manage investment portfolios for other corporate, pension,
profit-sharing and individual accounts. For services rendered, the Investment
Advisor, not the Fund, pays the Sub-Advisor a fee at the annual rate of 0.45% on
the first $100 million of average daily net assets of the Fund, 0.40% on the
next $50 million in assets, and 0.35% on the next $50 million in assets. When
the Fund's assets reach $200 million the rate would be 0.40% on assets up to
$200 million and 0.35% on assets in excess of $200 million, so long as the Fund
continued to have at least $200 million in assets.
C. Charles Hetzel, Vice Chairman of Ark Asset Management, Inc., is the head of
the Growth at a Reasonable Price Group, which, since April 1995, has been
responsible for management of the Fund's portfolio. He has served as the head of
the Growth at a Reasonable Price Group since 1981. Mr. Hetzel has spent his
entire career at Ark Asset Management, Inc. or a predecessor firm. He received a
B.S. degree from the University of Utah and M.B.A. from the Columbia School of
Business Administration.
The Growth at a Reasonable Price Group determines overall investment strategy
for equity portfolios managed by the Sub-Advisor. The Growth at a Reasonable
Price Group, in addition to Mr. Hetzel, consists of Steven M. Steiner, John E.
Bailey, William G. Steuernagel, and James G. Pontone. The portfolio managers
work together as a team with the firm's research analysts. Equity analysts,
through research, analysis and evaluation, work to develop investment ideas
appropriate for these portfolios. These ideas are studied and debated by the
Growth at a Reasonable Price Group and decisions regarding the portfolio are
made by the Group. After investment decisions are made, equity traders execute
the portfolios transactions through various broker-dealer firms.
Amway Management Company, 7575 Fulton Street East, Ada, Michigan 49355,
performs the Transfer Agent and Shareholder Servicing functions for the Fund and
serves as the dividend disbursing agent.
Jay Van Andel and Richard M. DeVos are controlling persons of the Investment
Advisor and Transfer Agent, since they own, together with their spouses,
substantially all of the outstanding securities of Amway Corporation, which
indirectly controls the outstanding securities of each entity. Amway Corporation
is a Michigan manufacturer and direct selling distributor of home care and
personal care products.
5
<PAGE>
AMWAY MUTUAL FUND
PURCHASE OF SHARES
Pursuant to a Principal Underwriter Agreement, the Investment Advisor acts as
exclusive agent for the sale of shares of the Fund. Investments are made at the
offering price (see "Determination of Net Asset Value and Offering Price of the
Fund's Shares"), next determined after the Fund receives an investment.
Class R shares are offered to tax-exempt retirement and benefit plans of Amway
Corporation and its affiliates. There are no minimum investment requirements
for shares of Class R. Participants in the tax-exempt retirement and benefit
plans of Amway Corporation and its affiliates should contact the Plan
Administrator for information about particular procedures or requirements which
may apply to Plan Participants.
HOW SHARES ARE REDEEMED
The Fund will redeem its shares at the net asset value next determined after
receiving a proper request. There is no redemption charge by the Fund.
The price at which shares will be redeemed by the Fund is the net asset value
per share as next computed after a proper request is received. However, the
right to redeem might be suspended or postponed for more than seven days if the
New York Stock Exchange is closed, other than weekends or holiday closings, or
trading on the Exchange is restricted or the Securities and Exchange Commission
deems an emergency exists. The amount received upon redemption may be more or
less than the initial cost of the shares, depending on the net asset value of
the shares at the time of redemption.
Participants in the tax-exempt retirement and benefit plans of Amway
Corporation and its affiliates should contact the Plan Administrator for
information about particular redemption procedures or requirements which may
apply to Plan Participants.
DETERMINATION OF NET ASSET VALUE AND OFFERING PRICE
OF THE FUND'S SHARES
The net asset value of the Fund's shares is determined by dividing the total
current value of the assets of the Fund, less its liabilities, by the number of
shares outstanding at that time. This determination is made as of the close of
business on the New York Stock Exchange, 4:00 P.M. Eastern time, on each
business day on which that Exchange is open or on any other day in which there
is a sufficient degree of trading in the Fund's portfolio, except no
computation will be made on a day in which no order to purchase or redeem shares
was received.
In determining the current value of the Fund's assets, securities listed or
admitted to trading on a national securities exchange are valued at their last
reported sale price on the market where principally traded, before the time of
valuation. If a security is traded only in the over-the-counter market or if no
sales have been reported for a listed security on that day, it will be valued at
the mean between the current closing bid and asked prices. Securities for which
market quotations are not readily available, including any restricted
securities, and other assets of the Fund are valued at fair market value as
determined in good faith by the Fund's Board of Trustees.
The offering price is the net asset value per share at the next determined
value after the order is placed, as determined above.
6
<PAGE>
AMWAY MUTUAL FUND
RETIREMENT PLANS
The Fund sponsors a prototype Profit-Sharing Trust and Individual Retirement
Accounts. Persons interested in additional information regarding these plans
should contact the Fund.
ORGANIZATION OF THE FUND
The Fund is a series of Amway Mutual Fund Trust, an open-end management
investment company which was organized as a Delaware business trust on February
2, 1998. The Fund is the successor of Amway Mutual Fund, Inc., which was
organized as a Delaware corporation on February 13, 1970.
The Fund is presently the only series of the Trust. The Declaration of Trust
authorizes the Trustees to create additional shares and to issue an unlimited
number of units of beneficial interest, or "shares." The Trustees are also
authorized to issue different classes of shares of any series. No series which
may be issued by the Trust is entitled to share in the assets of any other
series or is liable for the expenses or liabilities of any other series.
When issued, shares of beneficial interest in the Fund will be fully paid and
non-assessable. Shares are freely transferable and have no preemptive,
subscription or conversion rights. Each share has a par value of $1.00.
The Trust is not required to hold annual meetings of shareholders and does not
intend to hold such meetings. Shareholders of the Trust will have voting rights
only with respect to the limited number of matters specified in the Declaration
of Trust, and such other matters as may be determined or as may be required by
law. A meeting will be called for the purpose of voting on the removal of a
Trustee at the written request of holders of 10% of the Trust's outstanding
shares. In the event a meeting of shareholders is held, each share will be
entitled to one vote on all matters presented to shareholders, including the
election of Trustees.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS TO SHAREHOLDERS
It is the policy of the Fund to distribute to shareholders each year as
dividends and distributions substantially all net investment income of the Fund
for the year and substantially all net capital gains received by the Fund, if
any. Such distributions, in the past, have been paid in December. Net investment
income and capital gain distributions, if any, will be paid on a basis which is
consistent with past policy. All net investment income and capital gain
distributions may be received in cash or reinvested in additional shares of the
Fund at their net asset value at the time of distribution, at no sales charge.
This election can be changed at any time by requesting a change in writing,
signed by all account owners.
FEDERAL INCOME TAX
The Fund intends to continue to comply with the provisions of Subchapter M of
the Internal Revenue Code applicable to investment companies. Accordingly, as
the result of paying to its shareholders as dividends and distributions
substantially all net investment income and realized capital gains, if any, the
Fund will be relieved of substantailly all Federal income tax.
Shares of Class R will be held by the qualified retirement and benefit plans
of Amway Corporation and its affiliates (the "Plans") for the benefit of Plan
participants. The Plans do not pay federal income taxes. Plan participants
should consult the Plan's governing documents, and their own tax advisers, for
information about the tax consequences associated with participating in the
Plans.
SHAREHOLDER INQUIRIES
Shareholder inquiries regarding the Fund should be directed to the Fund by
writing or telephoning the Fund at the address or telephone number indicated
on the cover page of the Prospectus. Inquiries relating to a specific account
should be directed to the Plan Administrator for the tax exempt retirement
and benefit plans of Amway Corporation and its affiliates.
7
<PAGE>
AMWAY MUTUAL FUND
INVESTMENT PERFORMANCE INFORMATION
Following is a table illustrating the Fund's performance for annual periods
ended December 31, 1997, and its average annual total return percentages for
one, five, and ten years for Class A. The investment performance of Class R is
expected to be substantially similar to Class A because both Classes invest in
the same portfolio of securities and investment performance will differ only to
the extent that the Classes do not have the same expenses. The estimated
expenses for Class R, which are lower than the expenses for Class A, are
disclosed in the Fee Expense Table.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Accumulative Accumulative
Value of Value of Shares Value of Shares
Calendar Years Initial Accepted As Accepted As
Ended $1,000 Capital Gain Ordinary Income Total
December 31 Investment Distributions Dividends Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1988 $ 825 $ 226 $ 18 $ 1,069
1989 922 451 46 1,419
1990 867 509 58 1,434
1991 1,031 921 82 2,034
1992 962 1,026 82 2,070
1993 980 1,225 89 2,294
1994 874 1,196 89 2,159
1995 944 1,746 129 2,819
1996 968 2,336 168 3,472
1997 982 3,057 214 4,253
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return For
The Periods Ended December 31, 1997
Amway Ark (Sub-advisor) Composite
- --------------------------------------------------------------------------------
<S> <C> <C>
One Year 22.47% 22.67%
Five Years 15.51% 19.56%
Ten Years 15.58% 17.48%
- --------------------------------------------------------------------------------
</TABLE>
Total return performance for the Fund is calculated by making an initial
investment of $1,000 at the beginning of the period, in the Fund's shares at net
asset value (without sales charges) and reinvesting all ordinary income
dividends and capital gain distributions paid during the period in additional
shares at net asset value per share on the reinvestment dates. Prior to 1991 and
1998 the Fund had a maximum sales charge of 6% and 3%, respectively, based upon
amount of shares purchased. The illustration includes recurring expenses
incurred by all shareholder accounts and not those incurred for specific
shareholder purposes such as bank fees for wire transfers.
Total return performance also includes the composite performance of the Fund's
current sub-adviser, ARK Asset Management Company, who has been the Fund's
sub-adviser since May 1, 1995. The composite performance sets forth the returns
of the institutional private accounts managed by the sub-adviser which have
substantially similar investment objectives and policies as the Fund. The data
is provided to illustrate the past performance of the sub-adviser in managing
substantially similar accounts and does not represent the performance of the
Fund.
Shareholders should not consider the composite performance data as an
indication of future performance of the sub-adviser. The investment results of
the sub-adviser composite presented is unaudited and calculated in accordance
with the recommended standards of the Association for Investment Management and
Research retroactively applied to all time periods. All composite returns
presented were calculated on a total return basis and included all dividends and
interest, accrued income and realized and unrealized gains and losses, and
deductions for brokerage commissions and execution costs. Composite returns are
adjusted to assume that the Fund's operating charges, expenses, and fees (the
Fund's historical expense ratio) were deducted during such periods. No
adjustment has been made for the impact on the expense ratio due to growth in
the Fund's assets, recent reduction of management fees, or for the differences
in expenses for Class R identified on the fee expense table.
8
<PAGE>
AMWAY MUTUAL FUND
The average annual total return for the Fund and Ark Composite for a specific
period is found by dividing the ending total value by the cost of the initial
investment for the period and taking this quotient to the Nth root, then
subtracting 1 (N represents the number of years in the period). The average
annual total return reflects the hypothetical annually compounded return that
would have produced the same cumulative total return if the Fund's performance
had been constant over the entire period. Such calculation is with all ordinary
income dividends and capital gain distributions reinvested at net asset value.
No adjustment has been made for any income taxes payable by shareholders on
ordinary income dividends and capital gain distributions accepted in shares
which are payable by shareholders in the tax year received.
Average annual total return percentages of the Fund will vary and the
publication of performance results is not a representation as to future
investment performance. Factors affecting the Fund's performance include general
market conditions, operating expenses and investment management. Net asset
values of the Fund will fluctuate. Additional information about the performance
of the Fund is contained in the Annual Shareholders Report which can be obtained
without charge.
9
<PAGE>
BULK RATE Amway
U.S. POSTAGE Mutual
PAID Fund
ADA, MI
PERMIT 100
CLASS R
PROSPECTUS
November , 1998
AMWAY MUTUAL FUND AMWAY MUTUAL FUND LOGO
7575 Fulton Street East
Ada, Michigan 49355-7150
10
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART B
Information Required in a Class R Statement of Additional Information
<PAGE>
AMWAY MUTUAL FUND LOGO
STATEMENT OF ADDITIONAL INFORMATION
CLASS R
AMWAY MUTUAL FUND
7575 Fulton Street East
Ada, Michigan 49355-7150
(616) 787-6288
(800) 346-2670
This Statement of Additional Information is not a prospectus and, therefore,
should be read only in conjunction with the Class R Prospectus, which can be
requested from the Fund by writing or telephoning as indicated above. This
Class R Statement Of Additional Information relates to the Class R Prospectus
for the Fund dated November, 1998.
This Statement of Additional Information contains information with respect to
Class R of Amway Mutual Fund. Class R is offered only to tax-exempt retirement
and benefit plans of Amway Corporation and its affiliates. The Fund also offer
Class A, which is available to members of the general public. Information about
Class A is contained in the Class A Statement of Additional Information dated
April 28, 1998, which is available upon request.
The date of this Statement of Additional Information is November, 1998.
- -C-1998, AMWAY CORPORATION, U.S.A. 795057 L-2597-SAL
1
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
2
<PAGE>
AMWAY MUTUAL FUND
OBJECTIVES, POLICIES AND RESTRICTIONS ON THE FUND'S INVESTMENTS
The primary investment objective of the Fund is capital appreciation, through
the ownership of common stock of companies in various industries which offer
growth potential. Income, while a factor in portfolio selection, is secondary to
the Fund's principal objective. In addition to the discussion found in the
Prospectus, following is additional information concerning the Fund's
investments.
The Fund has the right to invest up to 10% of its total assets in securities
which are not readily marketable, including "restricted securities"
(securities which have not been registered with the Securities and Exchange
Commission or which are subject to contractual restrictions on resale).
The Fund is subject to certain investment restrictions. In brief, these provide
that the Fund may not:
1. Underwrite securities of other issuers, except that it may acquire
portfolio securities under circumstances where, if sold publicly, it
might be deemed to be an underwriter for purposes of the Securities
Act of 1933, but no more than 10% of the value of the Fund's total
assets will at any time be invested in such securities.
2. Invest more than 5% of its total assets in the securities of any one
issuer other than the United States Government or purchase more than
10% of any class of securities, including voting securities, of any
one issuer.
3. Purchase interests in real estate as an investment, other than
readily marketable securities of companies which may have interests
in real estate.
4. Engage in the purchase and sale of commodities or commodity
contracts.
5. Invest in companies for the purpose of exercising control or
management.
6. Make loans to others, although it may purchase a portion of an issue
of publicly distributed bonds, debentures, or other debt securities.
7. Engage in margin transactions or short sales.
8. Write, purchase, or sell puts, calls, or combinations thereof.
9. Participate in joint trading account.
10. Mortgage, pledge, hypothecate, or in any manner transfer as security
for indebtedness any securities owned or held by the Fund, except as
permitted in the following Item 11.
11. Borrow money, except that as a temporary measure and not for
investment purposes, it may borrow from banks up to 5% of the value
of its total assets taken at cost, which may be secured by up to 10%
of such assets taken at cost. (It should be noted that some states
have laws which are even more restrictive than the Fund's
fundamental policy with respect to this matter. As a result of these
laws, it is the Fund's present operating policy not to mortgage,
pledge, or hypothecate its portfolio securities to the extent that
at any time the percentage of pledged securities plus the sales load
will exceed 10% of the offering price of the Fund's shares.)
12. Invest in securities of other investment companies, except in
connection with a merger with another investment company.
13. Invest more than 5% of its total assets in securities of companies
having a record of less than three years' continuous operation.
14. Retain, in the Fund's portfolio, securities of an issuer any of
whose officers, directors, or security holders is an officer or
director of the Fund or of the Fund's investment advisor, if after
the purchase of such securities one or more of such officers or
directors of the Fund or of the Fund's investment advisor owns
beneficially more than 1/2% of the outstanding securities of such
issuer and such officers and directors owning beneficially more than
1/2% of such outstanding securities together own beneficially more
than 5% of such outstanding securities.
3
<PAGE>
AMWAY MUTUAL FUND
15. Invest more than 5% of its total assets in securities of a foreign
issuer, the purchase of whose securities is subject to the Federal
Interest Equalization Tax, which tax is not in effect at the date of
this Statement of Additional Information.
16. Invest in interests in oil, gas, or other mineral explorations or
development programs, other than readily marketable securities of
corporations which may have interests in such exploration or
development programs.
The Fund's investment objective, policy and restrictions as described above are
fundamental and may not be changed without shareholder approval, as indicated in
the Fund's Prospectus. The Fund is permitted to invest in foreign issuers to the
extent that the investments meet the Fund's primary investment objective. The
Fund does not currently own any warrants and does not intend to own any warrants
in excess of 5% of the Fund's net asset value.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In purchasing and selling portfolio securities for the Fund, it is the policy
of the Fund to obtain the highest possible price on sales and the lowest
possible price on purchases of securities, consistent with the best execution of
portfolio transactions. Amway Management Company, the ("Investment Advisor"),
or Ark Asset Management Co., Inc. ("Sub-Advisor") will select the brokers and
resulting allocation of brokerage commission; but, the Investment Advisor's
practice is subject to review by the Board of Directors of the Fund, which has
the primary responsibility in this regard, and must be consistent with the
policies stated above.
The Investment Advisor and Sub-Advisor, in effecting purchases and sales of
portfolio securities for the account of the Fund, will implement the Fund's
policy of seeking best execution of orders, which includes best net prices.
Consistent with this policy, orders for portfolio transactions are placed with
broker-dealer firms giving consideration to the quality, quantity, and nature of
each firm's professional services which include execution, clearance procedures,
wire service quotations, research information, statistical, and other services
provided to the Fund, Advisor, and the Sub-Advisor. Any research benefits
derived by the Sub-Advisor are available to all clients of the Sub-Advisor.
Since research information, statistical, and other services are only
supplementary to the research efforts of the Sub-Advisor and still must be
analyzed and reviewed by its staff, the receipt of research information is not
expected to materially reduce expenses. Also, subject to the policy of seeking
best price and execution of orders, certain Fund expenses may be paid through
the use of directed brokerage commissions. While the Sub-Advisor will be
primarily responsible for the placement of the Fund's business, the policies and
practices in this regard must be consistent with the foregoing and will at all
times be subject to review by the Directors of the Fund.
The Sub-Advisor furnishes investment advice to other clients. The other
accounts may also make investments in the same investment securities and at the
same time as the Fund. When two or more of such clients are simultaneously
engaged in the purchase or sale of the same security, the transactions are
allocated as to amount and price in a manner considered equitable to each and so
that each receives to the extent practicable the average price of such
transactions, which may or may not be beneficial to the Fund. The Board of
Directors of the Fund believes that the benefits of the Sub-Advisor's
organization outweigh any limitations that may arise from simultaneous
transactions.
The Fund may acquire securities of brokers who execute the Fund's portfolio
transactions. As of December 31, 1997, the Fund owned no such securities.
During the years ended December 31, 1997, 1996, and 1995, the Fund paid total
brokerage commissions on purchase and sale of portfolio securities of $301,990,
$250,136, and $333,077, respectively. Transactions in the amount of
$235,081,998, involving commissions of $268,072, were directed to brokers
because of research services provided during 1997.
4
<PAGE>
AMWAY MUTUAL FUND
PRINCIPAL SHAREHOLDERS
Amway Corporation indirectly, as of August 31, 1998, owned 981,623 shares, or
5.1% of the outstanding shares of the Fund. Jay Van Andel owns all the
outstanding securities of JVA Properties Corporation, the General Partner for
JVA Enterprises Limited Partnership, which owns, as of August 31, 1998,
2,795,038 shares, or 14.45% of the outstanding shares of the Fund. No other
person is known by the Fund to own of record or beneficially 5% or more of
the Fund's shares.
OFFICERS AND TRUSTEES OF THE FUND
The following are the Officers and Trustees of the Fund or the Advisor or both,
together with their principal occupations during the past five years:
<TABLE>
<CAPTION>
Director's
Name and Address Age Office Held Principal Occupation Compensation
<S> <C> <C> <C> <C>
Richard A. DeWitt 84 Trustee of the Fund President, DeWitt Land $5,000
720 Goldenrod and Cattle Company
Holland, Michigan (investments
49423 in land and cattle);
Chairman of the Board,
Maes Board; Maes
Incorporated
manufacturers
(manufacturers of
agricultural
equipment).
Allan D. Engel* 46 Trustee, Vice President, Sr. Manager, $5,000
7575 Fulton Street East Secretary and Assistant Investments and Real
Ada, Michigan Treasurer of the Fund; Estate, Amway
49355-7150 Director, President, Corporation
and Secretary of the
Investment Advisor; and
Director, Vice President,
Secretary and Assistant
Treasurer of the Transfer
Agent.
Donald H. Johnson 67 Trustee of the Fund Retired Vice President- $5,000
609 Second Street Treasurer, SPX
No. Muskegon, Michigan Corporation (Designs,
49445 manufactures and
markets products and
services for the motor
vehicle industry, 1986
to present; Vice
President and Director
Owatonna Tool, 1984 to
1986 (Owatonna Tool
acquired by SPX in
1985); Secretary-
Treasurer, Director
Owatonna Tool, Director
Owatonna Tool, 1969 to
1984.
</TABLE>
5
<PAGE>
AMWAY MUTUAL FUND
<TABLE>
<CAPTION>
Director's
Name and Address Age Office Held Principal Occupation Compensation
<S> <C> <C> <C> <C>
Walter T. Jones 55 Trustee of the Fund Retired, Senior Vice $5,000
936 Sycamore Ave. President-Chief Financial
Holland, Michigan Officer, Prince Corporation
49424 (Automotive interior trim
and interior systems;
automotive designer,
manufacturer and supplier;
and designer and
manufacturer of die casting
machines.)
James J. Rosloniec* 53 Trustee, President and Vice President-Audit and $5,000
7575 Fulton Street East Treasurer of the Fund; Control, Amway Corporation,
Ada, Michigan and Director, Vice- 1991 to present; Vice
49355-7150 President and Treasurer President-Finance and
of the Investment Treasurer, Amway
Advisor; and Director, Corporation, 1979 to 1991.
President and Treasurer
of the Transfer Agent.
Richard E. Wayman 63 Director of the Fund Former Finance Director, $5,000
24578 Rutherford Amway Corporation, 1976 to
Romona, CA 92065 1996
</TABLE>
*These Trustees are interested persons under the Investment Company Act of
1940, as amended.
All Officers and certain Trustees of the Fund and the Investment Advisor are
affiliated with Amway Corporation. The Officers serve without compensation from
the Fund. Fees paid to all Trustees during the year ended December 31, 1997,
amounted to $25,000. Under the Advisory Contracts, the Investment Advisor pays
the fees of the Trustees of the Fund. The Trustees and Officers of the Fund
owned, as a group, less than 1% of the outstanding shares of the Fund. The
advisor also serves as the Fund's principal underwriter (see "Distribution of
Shares").
INVESTMENT ADVISOR AND OTHER SERVICES
The Fund has entered into an Advisory and Service Contract ("Contract") with
Amway Management Company (the "Investment Advisor"). Under the Contract, the
Fund employs the Investment Advisor to furnish investment advice and manage on a
regular basis the investment portfolio of the Fund, subject to the direction of
the Board of Directors of the Fund, and to provisions of the Fund's current
Prospectus; to furnish for the use of the Fund, office space and all necessary
office facilities, equipment, and personnel for servicing the investments of the
Fund; and (with certain specific exceptions) administering its affairs and to
pay the salaries and fees of all Officers and Directors of the Fund. Amway
Corporation provides the Investment Advisor with such employee services on a
contractual basis. The Investment Advisor has served the Fund in that capacity
since 1971. The Investment Advisor will, from time to time, discuss with the
Fund economic investment developments which may affect the Fund's portfolio and
furnish such information as the Investment Advisor may believe appropriate for
this purpose. The Investment Advisor will maintain such statistical and
analytical information with respect to the Fund's portfolio securities as the
Investment Advisor may believe appropriate and shall make such materials
available for inspection by the Fund as may be reasonable. Except when otherwise
specifically directed by the Fund, the Investment Advisor will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of portfolio securities for the Fund's account.
6
<PAGE>
AMWAY MUTUAL FUND
The Investment Advisor shall be permitted to enter into an agreement with
another advisory organization (sub-advisor) whereby the sub-advisor will provide
the investment advice and services required to manage the Fund's investment
portfolio as provided for in the Contract.
Under the Contract, the Fund will pay all its expenses other than those
expressly stated to be payable by the Investment Advisor, which expenses payable
by the Fund include, without implied limitation, (i) registration of the Fund
under the Investment Company Act of 1940; (ii) commissions, fees, and other
expenses connected with the purchase or sale of securities; (iii) auditing,
accounting, and legal expenses; (iv) taxes and interest; (v) government fees;
(vi) expenses of issue, sale, repurchase, and redemption of shares; (vii)
expenses of registering and qualifying the Fund and its shares under federal and
state securities laws and of preparing and printing prospectuses for such
purposes and for distributing the same to shareholders and investors; (viii)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefore; (ix) fees and expenses related to the
determination of the Fund's net asset value; (x) insurance expenses; (xi)
association membership dues; (xii) fees, expenses, and disbursements of
custodians and sub-custodians for all services to the Fund (including without
limitation safekeeping of funds and securities, and keeping of books and
accounts); (xiii) fees, expenses, and disbursement of transfer agents, dividend
disbursing agents, shareholder servicing agents, and registrars for all services
to the Fund; and (xiv) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims, and the
obligation of the Fund to indemnify its Trustees and Officers with respect
thereto.
In return for its management and investment advisory services, the Fund pays
the Advisor, pursuant to the Contract, a fee amounting on an annual basis to
approximately 0.55% on the first $100 million of average daily net assets of the
Fund, 0.50% on the next $50 million in assets, and 0.45% on the next $50 million
in assets. When the Fund's assets reach $200 million the rate would be 0.50% on
assets up to $200 million and 0.45% on assets in excess of $200 million, so long
as the Fund continued to have at least $200 million in assets. The fee is
computed daily and paid quarterly. The advisory fees paid by the Fund to the
Investment Advisor during the years ended December 31, 1997, 1996, and 1995,
were $727,102, $524,637, and $378,693, respectively.
Jay Van Andel and Richard M. DeVos are controlling persons of the Investment
Advisor and Transfer Agent (see "Transfer Agent"), since they own, together
with their spouses, substantially all of the outstanding securities of Amway
Corporation, which in turn indirectly owns all of the outstanding securities of
each entity.
A Sub-Advisory Agreement has been entered into between the Investment Advisor
and Ark Asset Management Co., Inc., One New York Plaza, 29th Floor, New York, NY
10004 (Sub-Advisor). Under the Sub-Advisory Agreement, the Advisor employs the
Sub-Advisor to furnish investment advice and manage on a regular basis the
investment portfolio of the Fund, subject to the direction of the Advisor, the
Board of Directors of the Fund, and to the provisions of the Fund's current
Prospectus. Except when otherwise specifically directed by the Fund or the
Advisor, the Sub-Advisor will make investment decisions on behalf of the Fund
and place all orders for the purchase or sale of portfolio securities for the
Fund's account. For services rendered, the Investment Advisor, not the Fund,
pays the Sub-Advisor a fee amounting on an annual basis to approximately 0.45%
on the first $100 million of average daily net assets of the Fund, 0.40% on the
next $50 million in assets, and 0.35% on the next $50 million in assets. When
the Fund's assets reach $200 million the rate would be 0.40% on assets up to
$200 million and 0.35% on assets in excess of $200 million, so long as the Fund
continued to have at least $200 million in assets.
7
<PAGE>
AMWAY MUTUAL FUND
The Contract and Sub-Advisory Agreement continue in effect indefinitely from
year to year so long as their continuance after the initial two-year period is
specifically approved at least annually by vote of the Board of Trustees, or by
vote of a majority of the outstanding shares of the Fund. In addition, and in
either event, the Contract and Sub-Advisory Agreement and their terms must be
approved at least annually by a vote of a majority of the Trustees of the Fund
who are not parties to the Contract or Sub-Advisory Agreement, or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval. The Contract and Sub-Advisory Agreement were approved
by vote of a majority of the outstanding shares at the Annual Meeting of
Shareholders on April 22, 1998. The Contract and Sub-Advisory Agreement provide
that they will terminate automatically in the event of their assignment. In
addition, the Contract and Sub-Advisory Agreement are terminable at any time
without penalty by the Board of Trustees or by vote of a majority of the Fund's
outstanding shares on 60 days' written notice to the Investment Advisor or
Sub-Advisor, and by the Investment Advisor or Sub-Advisor on 60 days' written
notice to the Fund.
The Fund has entered into an agreement with DST Systems, Inc. ("DSTS")
whereby DSTS provides a portfolio accounting and information system for
portfolio management for the maintenance of records and processing of
information which is needed daily in the determination of the net asset value of
the Fund. Currently, this expense amounts to approximately $2,500 per month.
TRANSFER AGENT
Under a separate contract, the functions of the Transfer Agent and Shareholder
Servicing Agent for the Fund's Class R shares are performed by Amway Management
Company, Ada, Michigan. In return for these services, the Fund pays the
Transfer Agent and Shareholder Servicing Agent a fee at the annual rate of 0.35%
of the Fund's average daily net assets which are attributable to Class R.
CUSTODIAN
The portfolio securities of the Fund are held, pursuant to a Custodian
Agreement, by Michigan National Bank, 77 Monroe Avenue, Grand Rapids, Michigan,
as Custodian. The Custodian performs no managerial or policymaking functions for
the Fund.
AUDITORS
BDO Seidman, LLP, 99 Monroe Avenue, N.W., Suite 800, Grand Rapids, Michigan,
are the independent certified public accountants for the Fund. Services include
an annual audit of the Fund's financial statements, tax return preparation, and
review of certain filings with the SEC.
8
<PAGE>
AMWAY MUTUAL FUND
ORGANIZATION OF THE FUND
The Fund is a series of Amway Mutual Fund Trust, an open-end management
investment company which was organized as a Delaware business trust on February
2, 1998. The Fund is the successor of Amway Mutual Fund, Inc., which was
organized as a Delaware corporation on February 13, 1970.
The Fund is presently the only series of the Trust. The Declaration of Trust
authorizes the Trustees to create additional series and to issue an unlimited
number of units of beneficial interest, or "shares." The Trustees are also
authorized to issue different classes of shares of any series. No series which
may be issued by the Trust is entitled to share in the assets of any other
series or is liable for the expenses or liabilities of any such series.
When issued, shares of beneficial interest ("Shares") in the Fund will be fully
paid and non-assessable. Shares are freely transferable and have no preemptive,
subscription or conversion rights. Each share has a par value of $1.00.
The Trust is not required to hold annual meetings of shareholders and does not
intend to hold such meetings. Shareholders of the Trust will have voting rights
only with respect to the limited number of matters specified in the Declaration
of Trust, and such other matters as may be determined by the Trustees or as may
be required by law. A meeting will be called for the purpose of voting on the
removal of a Trustee at the written request of holders of 10% of the Trust's
outstanding shares. In the event a meeting of shareholders is held, each share
will be entitled to one vote on all matters presented to shareholders, including
the election of Trustees. In the event that Amway Management Company ceases to
be the investment advisor for the Fund or the Trust, the right of the Fund and
the Trust or the Fund to use the identifying name "Amway" may be withdrawn.
PURCHASE OF SHARES
Pursuant to a Principal Underwriter Agreement, the Investment Advisor acts as
exclusive agent for the sale of shares of the Fund., Investments are made at the
offering price (see "Determination of Net Asset Value and Offering Price of the
Fund's Shares"), next determined after the Fund receives an investment.
Class R shares are offered to tax-exempt retirement and benefit plans of Amway
Corporation and its affiliates. There are no minimum investment requirements
for shares of Class R. Participants in the tax-exempt retirement and benefit
plans of Amway Corporation and its affiliates should contact the Plan
Administrator for information about particular procedures or requirements which
may apply to Plan Participants.
DETERMINATION OF NET ASSET VALUE AND OFFERING PRICE
OF THE FUND'S SHARES
The net asset value of the Fund's shares is determined by dividing the total
current value of the assets of the Fund, less its liabilities, by the number of
shares outstanding at that time. This determination is made as of the close of
business on the New York Stock Exchange, 4:00 P.M. Eastern time, on each
business day on which that Exchange is open or on any other day in which there
is a sufficient degree of trading in the Fund's portfolio, except no computation
will be made on a day in which no order to purchase or redeem was received.
National holidays on which the New York Stock Exchange and the Fund will be
closed are: New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
In determining the current value of the Fund's assets, securities listed or
admitted to trading on a national securities exchange are valued at their last
reported sale price on the market where principally traded, before the time of
valuation. If a security is traded only in the over-the-counter market or if no
sales have been reported for a listed security on that day, it will be valued at
the mean between the current closing bid and asked prices. Securities for which
market quotations are not readily available, including any restricted
securities, and other assets of the Fund are valued at fair market value as
determined in good faith by the Fund's Board of Trustees. The offering price is
the net asset value per share at the next determined value after the order is
placed, as determined above.
9
<PAGE>
AMWAY MUTUAL FUND
HOW SHARES ARE REDEEMED
The Fund will redeem its shares at the net asset value next determined after
receiving a proper request, as described in the Prospectus.
Payment for redeemed shares is normally made in cash and mailed within seven
days thereafter. However, under the Investment Company Act of 1940, the right of
redemption may be suspended or the date of payment postponed for more than seven
days: (1) for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings; (2) when trading on the
New York Stock Exchange is restricted, as determined by the SEC; (3) when an
emergency exists, as determined by the SEC, as a result of which it is not
reasonably practicable for the Fund to dispose of its securities or determine
the value of its nets assets; or (4) for such other period as the SEC may by
order permit for the protection of the shareholders. During such a period, a
shareholder may withdraw his request for redemption or receive the net asset
value next computed when regular trading resumes.
The Fund has filed with the SEC an election to pay for all redeemed shares in
cash up to a limit, as to any one shareholder during any 90-day period, of
$250,000 or 1% of the net asset value of the Fund, whichever is less. Beyond
that limit, the Fund is permitted to pay the redemption price wholly or partly
"in kind," that is, by distribution of portfolio securities held by the Fund.
This would occur only upon specific authorization by the Board of Trustees
when, in their judgment, unusual circumstances make it advisable. It is unlikely
that this will ever happen, but if it does, you will incur a brokerage charge in
converting the securities received in this manner into cash. Portfolio
securities distributed "in kind" will be valued as they are valued for the
determination of the net asset value of the Fund's shares.
Participants in the tax-exempt retirement and benefit plans of Amway
Corporation and its affiliates should contact their Plan Administrator for
information about particular procedures or requirements which may apply to Plan
Participants.
FEDERAL INCOME TAX
The Fund intends to continue to comply with the provisions of Subchapter M of
the Internal Revenue Code applicable to investment companies. Accordingly, as
the result of paying to its shareholders as dividends and distributions
substantially all net investment income and realized capital gains, if any, the
Fund will be relieved of substantially all Federal income tax.
Shares of Class R will be held by the qualified retirement and benefit plans of
Amway Corporation and its affiliates (the "Plans") for the benefit of Plan
participants. The Plans do not pay federal income taxes. Plan participants
should consult the Plan's governing documents, and their own tax advisers, for
information about the tax consequences associated with participating in the
Plans.
10
<PAGE>
AMWAY MUTUAL FUND
INVESTMENT PERFORMANCE INFORMATION
Following is a table illustrating the Fund's performance for annual periods
ended December 31, 1997, and its average annual total return percentages for
one, five, and ten years for Class A. The investment performance of Class R is
expected to be substantially similar to Class A because both Classes invest in
the same portfolio of securities and investment performance will differ only to
the extent that the Classes do not have the same expenses. The estimated
expenses for Class R, which are lower than the expenses for Class A, are
disclosed in the Fee Expense Table.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Accumulative Accumulative
Value of Value of Shares Value of Shares
Calendar Years Initial Accepted As Accepted As
Ended $1,000 Capital Gain Ordinary Income Total
December 31 Investment Distributions Dividends Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1988 $ 825 $ 226 $ 18 $ 1,069
1989 922 451 46 1,419
1990 867 509 58 1,434
1991 1,031 921 82 2,034
1992 962 1,026 82 2,070
1993 980 1,225 89 2,294
1994 874 1,196 89 2,159
1995 944 1,746 129 2,819
1996 968 2,336 168 3,472
1997 982 3,057 214 4,253
- ----------------------------------------------------------------------------------------
Average Annual Total Return For
The Periods Ended December 31, 1997
Amway Ark (Sub-advisor) Composite
- ----------------------------------------------------------------------------------------
<S> <C> <C>
One Year 22.47% 22.67%
Five Years 15.51% 19.56%
Ten Years 15.58% 17.48%
- ----------------------------------------------------------------------------------------
</TABLE>
Total return performance for the Fund is calculated by making an initial
investment of $1,000 at the beginning of the period, in the Fund's shares at the
net asset value (without sales charge) and reinvesting all ordinary income
dividends and capital gain distributions paid during the period in additional
shares at net asset value per share on the reinvestment dates. Prior to 1991 and
1998 the Fund had a maximum sales charge of 6% and 3%, respectively, based upon
amount of shares purchased. The illustration includes recurring expenses
incurred by all shareholder accounts and not those incurred for specific
shareholder purposes such as bank fees for wire transfers.
Total return performance also includes the composite performance of the Fund's
current sub-adviser, ARK Asset Management Company, who has been the Fund's
sub-adviser since May 1, 1995. The composite performance sets forth the returns
of the institutional private accounts managed by the sub-adviser which have
substantially similar investment objectives and policies as the Fund. The data
is provided to illustrate the past performance of the sub-adviser in managing
substantially similar accounts and does not represent the performance of the
Fund.
11
<PAGE>
AMWAY MUTUAL FUND
Shareholders should not consider the composite performance data as an
indication of future performance of the sub-adviser. The investment results of
the sub-adviser composite presented is unaudited and calculated in accordance
with the recommended standards of the Association for Investment Management and
Research retroactively applied to all time periods. All composite returns
presented were calculated on a total return basis and included all dividends and
interest, accrued income and realized and unrealized gains and losses, and
deductions for brokerage commissions and execution costs. Composite returns are
adjusted to assume that the Fund's operating charges, expenses, and fees (the
Fund's historical expense ratio) were deducted during such periods. No
adjustment has been made for the impact on the expense ratio due to growth in
the Fund's assets, recent reduction of management fees or the adoption of a
12b-1 Distribution Plan.
The average annual total return for the Fund and Ark Composite for a specific
period is found by dividing the ending total value by the cost of the initial
investment for the period and taking this quotient to the Nth root, then
subtracting 1 (N represents the number of years in the period). The average
annual total return reflects the hypothetical annually compounded return that
would have produced the same cumulative total return if the Fund's performance
had been constant over the entire period. Such calculation is with all ordinary
income dividends and capital gain distributions reinvested at net asset value
exclusive of sales charges. No adjustment has been made for any income taxes
payable by shareholders on ordinary income dividends and capital gain
distributions accepted in shares which are payable by shareholders in the tax
year received.
Average annual total return percentages of the Fund will vary and the
publication of performance results is not a representation as to future
investment performance. Factors affecting the Fund's performance include general
market conditions, operating expenses and investment management. Net asset
values of the Fund will fluctuate. Additional information about the performance
of the Fund is contained in the Annual Shareholders Report which can be obtained
without charge.
REPORTS TO SHAREHOLDERS AND ANNUAL AUDIT
The Fund's year begins on January 1 and ends on December 31. At least
semiannually, the shareholders of the Fund receive reports, pursuant to
applicable laws and regulations, containing financial information. The annual
shareholders report is incorporated by reference into the Statement of
Additional Information. The cost of printing and distribution of such reports to
shareholders is borne by the Fund.
At least once during each year, the Fund is audited by independent certified
public accountants appointed by resolution of the Board of Trustees. The
fees and expenses of the auditors are paid by the Fund.
The financial statements for the Fund are contained in the Fund's 1997 Annual
Report to Shareholders along with additional information about the performance
of the Fund, which is incorporated herein by reference and may be obtained by
writing or calling the Fund. Also, the Funds unaudited Semi-Annual Report to
Shareholders is incorporated herein by reference.
Participants in the tax-exempt retirement and benefits plans of Amway
Corporation and its affiliates may obtain copies of the Fund's reports by
contacting their Plan Administrator.
12
<PAGE>
Amway
AMWAY MUTUAL FUND Mutual
7575 Fulton Street East Fund,
Ada, Michigan, 49355-7150
(616) 787-6288
(800) 346-2670
Contents Page
Objectives, Policies, and
Restrictions on the Fund's
Investments 3
Portfolio Transactions and CLASS R
Brokerage 3
Principal Shareholders 3
Officers and Trustees
of the Fund 3
Investment Advisor
and Other Services 3
Transfer Agent 4
Custodian 4 Statement of
Auditors 4 Additional Information
Organization of Fund 4
Purchase of Shares 4
Determination of Net Asset Value
and Offering Price of the Fund's
Shares 5
How Shares are Redeemed 5
November , 1998
Federal Income Tax 5
Investment Performance
Information 6
Reports to Shareholders and
Annual Audit 7
Printed in U.S.A.
AMWAY MUTUAL FUND LOGO
13
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
The audited financial statements for the period ended
December 31, 1997 listed below are incorporated by reference to
the Registration Statement under the Securities Act of 1933, Post
Effective Amendment No. 43, Part C, Pages 40 through 53, as filed on
February 27, 1998 and the unaudited Semi Annual Report for the
period ended June 30, 1998 is incorporated by reference to the N30D
filing under the Investment Company Act as filed on August 24, 1998.
LOCATION IN REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Part A Part B Part C
(Prospectus) (Statement of
Additional
Information)
Page No. Page No. Page No.
------------ ------------ ------------
<S> <C> <C> <C>
Independent Auditors' Report
Assets and Liabilities
Year Ended December
31, 1997
Statement of Income
Year Ended December
31, 1997
Schedule of Investments
Year Ended December
31, 1997
Changes in Net Assets
Years Ended December
31, 1997 and 1996
Consent of Independent Certified
Public Accountants C-7
</TABLE>
C-1
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(a) Exhibits:
i. DECLARATION OF TRUST
The Declaration of Trust for Amway Mutual Fund Trust (a
Delaware Trust) is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No. 44, Part C, Pages C-7 through
C-35.
ii. BY-LAWS
The By-Laws of Amway Mutual Fund Trust (a Delaware
trust), is incorporated by reference to the Registration
Statement under the Securities Act of 1933, Post Effective
Amendment No. 43, Part C, Pages 83 through 97, as filed on
February 27, 1998.
iii. CERTIFICATE OF OWNERSHIP INTERESTS
The Certificate of Ownership Interests is incorporated
by reference to the Registration Statement under the
Securities Act of 1933, Post Effective Amendment No. 44,
Part C, Page 36, as filed on April 28, 1998.
iv. ADVISORY AND SERVICE CONTRACT BETWEEN AMWAY MUTUAL FUND
AND AMWAY MANAGEMENT COMPANY
The Restated Advisory and Service Contract between
Amway Mutual Fund and Amway Management Company is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post Effective Amendment
No. 44, Pages C-37 through C-39, as filed on April 28,
1998.
v. SUB-ADVISORY AGREEMENT
The Restated Sub-Advisory Agreement between Amway
Management Company and ARK Asset Management Company, Inc.,
with amendments, is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No. 44, Pages C-40 through C-42,
as filed on April 28, 1998.
C-2
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(b) Exhibits:
vi. PRINCIPAL UNDERWRITER AGREEMENT BETWEEN AMWAY MUTUAL FUND
AND AMWAY MANAGEMENT COMPANY
The Restated Principal Underwriter Agreement between
Amway Mutual Fund and Amway Management Company is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post Effective Amendment
No. 44, Pages C-43 through C-48, as filed on April 28,
1998.
vii. CUSTODIAN AGREEMENT
The Amended Custodian Agreement and an Amendment to the
Custodian Agreement are incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No. 41, Part C, Pages C-100
through C-112, as filed on March 1, 1996 and Post
Effective Amendment No. 44, Page C-49, as filed on April
28, 1998.
viii. TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT BETWEEN
AMWAY MUTUAL FUND. AND AMWAY MANAGEMENT COMPANY
The Transfer Agent and Shareholder Services Agreement
between Amway Mutual Fund and Amway Management Company is
included on Pages C-8 through C-14.
ix. COMMON-RECORDS AGREEMENT AMONG AMWAY MUTUAL FUND AND AMWAY
MANAGEMENT COMPANY
The Restated Common-Records Agreement between Amway
Mutual Fund and Amway Management Company is incorporated
by reference to the Registration Statement under the
Securities Act of 1933, Post Effective Amendment No. 44,
Page C-52, as filed on April 28, 1998.
C-3
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(b) Exhibits
x. PORTFOLIO ACCOUNTING AND RESEARCH INFORMATION SYSTEM
The Amendment to the Portfolio Accounting and Research
Information System Agreement between Amway Management
Company and DST Securities, Inc. is incorporated by
reference to the Registration Statement under the
Securities Act of 1933, Post Effective Amendment No. 44,
Pages C-53 through C-56.
xi. LEGAL OPINION
The legal opinion is included on Page C-15.
xii. FINANCIAL STATEMENT
The Annual Report for Amway Mutual Fund, Inc. is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post Effective Amendment
No. 43, Part C, Pages C-8 through C-22, as filed on
February 27, 1998. The Semi-Annual Report to
shareholders is incorporated by reference to the
Registration Statement under the Investment Company Act
of 1940, as filed on August 24, 1998.
xiii. MULTIPLE CLASS 18f-3 PLAN
The Multiple Class 18f-3 Plan is included on Pages C-16
through C-17.
C-4
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statement and Exhibits (Continued)
(b) Exhibits
xiv. APPLICATION ESTABLISHING AN AMWAY MUTUAL FUND INVESTMENT
The Application establishing an investment with Amway
Mutual Fund is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No.42, Part C, Pages C-20 and
C-21.
xv. EXHIBIT OF PERFORMANCE CALCULATIONS
The schedules for computation of each performance
quotation provided in the Registration Statement in
response to Item 22 are incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No. 43, Part C, Pages C-193
through C-195, as filed on February 27, 1998.
xvi. POWER OF ATTORNEY
The Power of Attorney authorizing the signer of the
Registration Statement to sign as Attorney-In-Fact for
certain Trustees is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post Effective Amendment No. 43, Part C, Page C-196, as
filed on February 27, 1998.
C-5
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
LOCATION IN REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Part A Part B Part C
(Prospectus) (Statement of
Additional
Information)
Page No. Page No. Page No.
------------ ------------ ------------
<S> <C> <C> <C>
ITEM 25. Persons Controlled by
or under Common Control C-18
with Registrant
ITEM 26. Number of Holders of
Securities C-18
ITEM 27. Indemnification C-18
ITEM 28. Business and Other
Connections of C-18
Investment Adviser
ITEM 29. Principal Underwriter C-19
ITEM 30. Location of Accounts
and Records C-19
ITEM 31. Management Services C-19
ITEM 32. Undertakings C-20
</TABLE>
C-6
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Amway Mutual Fund
Ada, Michigan
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting a part of this Registration Statement of our
report dated January 16, 1998, relating to the financial statements, schedules
and selected per share data and ratios of Amway Mutual Fund, Inc. appearing in
the Company's Annual Shareholders Report for the year ended December 31, 1997.
We also consent to the reference to us under the captions "Financial
Highlights" in the Prospectus and "Auditors" in the Statement of Additional
Information.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
Grand Rapids, Michigan
September 1, 1998
C-7
<PAGE>
TRANSFER AGENT AND SHAREHOLDER SERVICES
AGREEMENT
THIS AGREEMENT is made and entered into on this 25th day of June, 1998, by
and between Amway Mutual Fund Trust (the "Trust") on behalf of the Amway Mutual
Fund (the "Fund") and Amway Management Company a corporation organized under the
laws of the State of Michigan (hereinafter referred to as the "Agent").
WHEREAS, the Agent is among other things, a transfer and dividend
disbursing agent; and
WHEREAS, the Trust desires to retain the Agent to be the Transfer Agent and
Shareholder Servicing Agent for the Fund's Class R series of units of beneficial
interest.
NOW, THEREFORE, the Trust and the Agent do mutually promise and agree as
follows:
1. Terms of Appointment; Duties of the Transfer Agent.
Subject to the terms and conditions set forth in this Agreement, the Trust
hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent for the Fund's Class R series of units of beneficial interest
("shares").
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of units of shares;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares being held
in the appropriate shareholder account.
C. Process redemption requests received in good order;
D. Pay monies;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory indemnification or surety
bond;
C-8
<PAGE>
H. Prepare and transmit payments for dividends and distributions declared
by the Fund;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic investment,
dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17ad-10(e), a record of the total number of
shares of the Fund which are authorized, issued and outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all purchases,
redemptions and other confirmable transactions as agreed upon with the Fund.
2. Terms of Appointment; Duties of Shareholder Services Agent.
The Trust hereby employs the Agent to be the Shareholder Services Agent for
the Fund's Class R shares for the period and on the terms set forth in this
Agreement. The Agent shall perform such services to the record and/or
beneficial owners of Class R shares as may be agreed to between the Agent and
the Fund, including but not limited to:
A. Mailing Fund prospectuses and periodic Fund reports to Class R
shareholders;
B. Mailing proxy materials to Class R shareholders;
C. Responding to inquiries from Class R shareholders with respect to the
Fund or their particular accounts;
D. Providing information to Class R shareholders about the Fund and about
retirement investments in general; and
E. Conducting financial seminars designed to assist in the education of
Class R shareholders with respect to mutual funds generally and the Fund in
particular.
3. Expenses.
The Agent, at its own expense and without reimbursement from the Trust,
shall furnish office space, and all necessary office facilities, equipment and
executive personnel for performing the services required to be performed by it
under the Agreement. The Agent shall not be required to pay any expenses of the
Fund. The
C-9
<PAGE>
expenses to be borne by the Fund include (but are not limited to) the following:
(i) expenses of issue, sale, repurchase and redemption of shares; (ii) expenses
of registering and qualifying the Fund and its shares under federal and state
securities laws and of preparing and printing prospectuses for such purposes and
for distributing the same to stockholders and investors; (iii) expenses of
reports and notices to stockholders and of meetings of stockholders and proxy
solicitations therefore; and (iv) fees and expenses related to the determination
of the Fund's net asset value.
4. Compensation.
For the services to be rendered by the Agent hereunder, the Fund shall pay
to the Agent a fee, paid monthly, based on the average net assets of the Fund,
as determined by valuations made as of the close of each business day of the
month. The Agent fee shall be 1/12 of .35% (0.35% annually) of such average net
assets, however that for any month in which this Agreement is not in effect for
the entire month, such fee shall be reduced proportionately on the basis of the
number of calendar days during which it is in effect and the fee computed upon
the daily net assets of the business days during which it is so in effect.
5. Representations of Agent.
The Agent represents and warrants to the Trust that:
A. It is a corporation duly organized, existing and in good standing
under the laws of Michigan;
B. It is a registered transfer agent under the Securities Exchange Act of
1934 as amended;
C. It is duly qualified to carry on its business in the state of
Michigan;
D. It is empowered under applicable laws and by its charter and operating
agreement to enter into and perform this Agreement;
E. All requisite company proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement; and
G. It will comply with all applicable requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended, the Investment
Company Act of 1940, as amended, and any laws, rules, and regulations of
governmental authorities having jurisdiction.
C-10
<PAGE>
6. Representations of the Trust.
The Trust represents and warrants to the Agent that:
A. The Trust is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Trust is a Trust organized, existing, and in good standing under
the laws of Delaware;
C. The Fund has been duly authorized as a Series of the Trust and Class R
has been duly authorized as a Class of the Fund;
D. The Trust is empowered under applicable laws and by its Declaration of
Trust and bylaws to enter into and perform this Agreement;
E. All necessary proceedings required by the Declaration of Trust have
been taken to authorize the Trust to enter into and perform this Agreement; and
F. The Trust and the Fund will comply with all applicable requirements of
the Securities and Exchange Acts of 1933 and 1934, as amended, the Investment
Company Act of 1940, as amended, and any laws, rules and regulations of
governmental authorities having jurisdiction.
7. Covenants of Fund and Agent.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with its request.
8. Indemnification; Remedies Upon Breach.
The Agent shall exercise reasonable care in the performance of its duties
under this Agreement. The Agent shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with
matters to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies beyond
the Agent's control, except a loss resulting from the Agent's refusal or failure
to comply with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement, the Fund
shall indemnify and hold harmless the Agent from and against any and all
C-11
<PAGE>
claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which the Agent may sustain or incur or which may be asserted against the
Agent by any person arising out of any action taken or omitted to be taken by it
in performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction provided to
the Agent by any duly authorized officer of the Fund, such duly authorized
officer to be included in a list of authorized officers furnished to the Agent
and as amended form time to time in writing by resolution of the Board of
Directors of the Fund.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Fund or principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other Agreements
between the fund and the Agent, or the Agent's own negligence or bad faith); or
as a result of the Agent acting upon telephone instructions relating to the
exchange or redemption of shares received by the Agent and reasonably believed
by the Agent under a standard of care customarily used in the industry to have
originated from the record owner of the subject shares; or as a result of acting
in reliance upon any genuine instrument or stock certificates signed,
countersigned, or executed by any person or person authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing equipment
to the extent appropriate equipment is available. Representatives of the Fund
shall be entitled to inspect the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Fund may be asked to
indemnify or hold the Agent harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in questions, and it is
further understood that the Agent will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears likely to
present the probability of such a claims for indemnification against the Fund.
The Fund shall have the option to defend the Agent against any claim which
C-12
<PAGE>
may be the subject of this indemnification. In the event that the Fund so
elects, it will so notify the Agent and thereupon the Fund shall take over
Complete defense of the claim, and the Agent shall in such situation initiate no
further legal or other expenses for which it shall seek indemnification under
this section. The Agent shall in no case confess any claim or make any
compromise in any case in which the Fund will be asked to indemnify the Agent
except with the Fund's prior written consent.
The Agent shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any person arising
out of any action taken or omitted to be taken by the Agent as a result of the
Agent's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
9. Confidentiality.
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and its
shareholders and shall not be disclosed to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Agent may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
10. Exclusivity.
The services of the Agent to the Fund hereunder are not to be deemed
exclusive and the Agent shall be free to furnish similar services to others as
long as the services hereunder are not impaired thereby. During the period that
this Agreement is in effect, the Agent shall be the Fund's sole administrator.
11. Records.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and regulations
of appropriate government authorities, in particular, Section 31 of The
Investment Company Act of 1940 as amended (the "Investment Company Act"), and
the rules thereunder. The Agent agrees that all such records prepared or
maintained by The Agent relating to the services to be performed by The Agent
hereunder are the property of the Fund and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Fund on and in accordance with its request.
12. Michigan Law to Apply.
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Michigan.
C-13
<PAGE>
13. Amendment, Assignment, Termination and Notice.
A. This Agreement may be amended by the mutual consent of the parties;
provided, however, that in no event may it be amended without the approval of
the board of directors of the Fund in the manner required by the Act.
B. This Agreement may be terminated upon sixty (60) day's written notice
given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered, or mailed
to the principal place of business of the other party.
E. In the event that the Trust gives to the Agent its written intention
to terminate and appoint a successor transfer agent, the Agent agrees to
cooperate in the transfer of its duties and responsibilities to the successor,
including any and all relevant books, records and other data established or
maintained by the Agent under this Agreement.
F. Should the Trust exercise its rights to terminate, all out-of-pocket
expenses associated with the movement of records and material will be paid by
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
AMWAY MUTUAL FUND TRUST AMWAY MANAGEMENT COMPANY
By: /s/ James J. Rosloniec By: /s/ Allan D. Engel
--------------------------- ---------------------------
James J. Rosloniec Allan D. Engel
President President
C-14
<PAGE>
JOHN DOUGHERTY
ATTORNEY AT LAW
SUITE 500
1155 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20036
TELEPHONE (202) 364-4443
FAX (202) 966-9155
Amway Mutual Fund Trust
7575 East Fulton Road
Ada, Michigan 49355
Re: 1933 Act Registration Statement
No. 2-39663
Dear Sirs:
In connection with the registration under the Securities Act of 1933 of an
indefinite number of Class R shares of beneficial interest, $1.00 par value per
share (the "Shares"), of Amway Mutual Fund (the "Fund"), which is a series of
Amway Mutual Fund Trust (the "Trust"), I have reviewed the actions taken by the
Trustees of the Trust to organize the Trust and to authorize the issuance and
sale of the Shares. In addition, I have examined the Trust's Certificate of
Trust and Agreement and Declaration of Trust, the above captioned Registration
Statement, certificates of public officials and officers of the Fund, and such
other documents as I have considered necessary for the purposes of this opinion.
Based upon the foregoing, and having regard for legal considerations which
I deem relevant, it is my opinion that the Class R Shares have been duly
authorized and, when issued and paid for as described in the Registration
Statement, will be validly issued, fully paid and non-assessable by the Trust.
Very truly yours,
/s/ John Dougherty
John Dougherty
C-15
<PAGE>
AMWAY MUTUAL FUND TRUST
MULTIPLE CLASS PLAN FOR AMWAY MUTUAL FUND
Amway Mutual Fund Trust (the "Trust") hereby adopts this Multiple Class
Plan with respect to the units of beneficial interest ("Shares") of Amway Mutual
Fund (the "Fund"), a series of the Trust. This Plan is adopted pursuant to Rule
18f-3 under the Investment Company Act of 1940 (the "1940 Act").
A. CLASSES OFFERED.
The Fund offers the following classes of Shares:
1. Class A.
Class A shares are offered to members of the general public and are sold
without the imposition of any sales charges. However, shares of Class A are
subject to a Plan and Agreement of Distribution ("Rule 12b-1 Plan"), which the
Trust has adopted pursuant to Rule 12b-1 under the 1940 Act. Under this plan,
Amway Management Company provides certain services in connection with
distributing Class A shares, and receives compensation at a maximum annual rate
of 0.25% of the average daily net assets attributable to the Class A Shares.
Amway Management Company serves as Transfer Agent for Shares of Class A and
receives monthly fees of $1.167 per account, subject to certain adjustments.
Class A shares require a minimum initial investment of $500, and minimum
subsequent investments of $50.
2. Class R.
Class R shares are offered to tax-exempt retirement and benefit plans of
Amway Corporation and its affiliates. Class R Shares are sold without the
imposition of any sales charges or Rule 12b-1 fees.
Amway Management Company serves as Transfer Agent and Shareholder Servicing
Agent for Shares of Class R, and receives compensation at a maximum annual rate
of 0.35% of the average daily net assets attributable to the Class R Shares.
Class R shares are not subject to any minimum requirements for initial or
subsequent investments.
B. EXPENSES.
Expenses that are not attributable to a particular Class are allocated
based on the relative daily net assets of each Class. Certain expenses ("Class
Expenses") are attributable to a particular Class and are charged directly to
the net assets of that Class. Expenses allocated to a particular Class are
borne on a pro rata basis by the outstanding Shares of that Class.
C-16
<PAGE>
Examples of Class Expenses include: (1) Rule 12b-1fees, (2) transfer agent
and shareholder servicing fees attributable to a specific Class, (3) stationary,
printing, postage, and delivery expenses related to preparing and distributing
materials such as shareholder reports, prospectuses, and proxy statements to
current shareholders of a Class, (4) Blue Sky registration fees incurred by a
Class, (5) SEC registration fees incurred by a Class, (6) trustees' fees or
expenses incurred as a result of issues relating to one Class, (8) accounting
fees relating solely to one Class, (9) litigation expenses and legal fees and
expenses relating to a particular Class, and (10) expenses incurred in
connection with shareholders meetings as a result of issues relating to one
Class.
C. VOTING RIGHTS.
Each Class has exclusive voting rights with respect to matters that
exclusively affect that Class.
C-17
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 25. Persons Controlled by or under Common Control with Registrant
Not Applicable.
ITEM 26. Number of Holders of Securities
Listed below is the number of Amway Mutual Fund Trust holders of
shares of beneficial interest as of August 31, 1998 for both Class A
and Class R, the only classes of ownership issued by the Trust, with
a par value of $1.
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
---------------------------- ------------------------
<S> <C>
Class A Beneficial Interests 19,158
Class R Beneficial Interests 0
</TABLE>
ITEM 27. Indemnification
Indemnification is covered in Section 9 of the Principal Underwriter
Agreement between Amway Mutual Fund and Amway Management Company,
which is filed as an exhibit hereto. Also, a Joint Directors and
Officers Liability Insurance Policy for Amway Management Company and
Amway Mutual Fund. is provided by those entities. The Sixth Article
of the Agreement and Declaration of Trust of Amway Mutual Fund, which
is filed as an exhibit hereto, provides for indemnification for any
person to the extent permitted by law.
ITEM 28. Business and Other Connections of Investment Adviser.
Amway Management Company acts as the investment advisor, principal
underwriter, and transfer agent for Amway Mutual Fund and as a
servicing agent for the Cash Equivalent Fund.
Business histories of each Director and Officer of the Investment
Adviser of the Registrant are incorporated by reference to the
Registration Statement under the Securities Act of 1933, Post
Effective Amendment No. 43, Part C, Pages 233 through 240.
Business histories of the Sub-Adviser for the Registrant and of each
of its Directors and Officers are incorporated by reference to the
Registration Statement under the Securities Act of 1933, Post
Effective Amendment No. 43, Part C, Pages 241 through 242.
C-18
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 29. Principal Underwriter
(a) The principal underwriter, Amway Management Company, acts as such only
for Amway Mutual Fund. Listed below is the information required pertaining
to the individual Directors and Officers of the principal underwriter.
There is no other principal underwriter.
<TABLE>
<CAPTION>
(b) Name and Principal Positions and Office Position and Offices
Business Address With Underwriter With Registrant
---------------- ---------------- ---------------
<S> <C> <C>
James J. Rosloniec Vice President, Treasurer President, Treasurer
7575 Fulton Street, East and Director and Trustee
Ada, MI 49355-0001
Allan D. Engel President, Secretary and Secretary, Assistant
7575 Fulton Street, East Director Treasurer and Trustee
Ada, MI 49355-7150
</TABLE>
(c) Not Applicable.
ITEM 30. Location of Accounts and Records
With respect to each account, book, or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR
270.31a-1 to 31a-3) promulgated thereunder, all transfer agent and
shareholder records are in the custody and control of Amway Management
Company., Ada, Michigan, pursuant to the Common Records Agreement
Among Amway Mutual Fund and Amway Management Company, all portfolio
securities held or in transfer are under the control of the Custodian,
Michigan National Bank, Grand Rapids, Michigan; all portfolio security
records and brokerage records related thereto are in the custody and
control of Amway Management Company, Ada, Michigan, or Ark Asset
Management Company, Inc., the Sub-Adviser, pursuant to the
Sub-Advisory Agreement; and all remaining records are in the custody
and control of Amway Mutual Fund, Ada, Michigan.
ITEM 31. Management Services
Amway Management Company has entered into a contract with DST, Inc.
which provides access to a data processing recordkeeping system for
stockholder accounting. The system provides and supports remote
terminal access to DST facilities for the maintenance of stockholder
records, processing of information, and the generation of output with
respect thereto. Pursuant to this agreement, Amway Management has
paid to DST, including equipment costs, telephone lines, and service
fees for the three years ending August 31, 1997, the fiscal year-end,
a total of $279,930.59.
C-19
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Amway Mutual Fund undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Fund's latest Annual Report
to Shareholders, upon request and without charge.
C-20
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(a) Under the Securities Act of 1933, and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized in the Township of Ada, and State of Michigan, on the
first day of September, 1998.
- --------------------------------------------------------------------------------
AMWAY MUTUAL FUND TRUST
- --------------------------------------------------------------------------------
By /s/ James J. Rosloniec
----------------------
JAMES J. ROSLONIEC
President
- --------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the date
indicated:
- --------------------------------------------------------------------------------
Signature Title and Capacity Date
- --------------------------------------------------------------------------------
/s/James J. Rosloniec Principal Executive and August, 1998
- ----------------------- Financial Officer and ------------
JAMES J. ROSLONIEC Trustee
/s/ Allan D. Engel Principal Accounting August, 1998
- ----------------------- Officer and Trustee ------------
ALLAN D. ENGEL
RICHARD A. DEWITT Trustee
DONALD H. JOHNSON Trustee
WALTER T. JONES Trustee
By /s/ James J. Rosloniec
----------------------- August, 1998
JAMES J. ROSLONIEC ------------
(Attorney-in-Fact)
<PAGE>
AMWAY MUTUAL FUND
FORM N-1A
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(a) Under the Securities Act of 1933, and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized in the Township of Ada, and State of Michigan, on the
day of JUNE, 1998.
- --------------------------------------------------------------------------------
AMWAY MUTUAL FUND TRUST
- --------------------------------------------------------------------------------
By _____________________
JAMES J. ROSLONIEC
President
- --------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the date
indicated:
- --------------------------------------------------------------------------------
Signature Title and Capacity Date
- --------------------------------------------------------------------------------
- ------------------------- Principal Executive and June, 1998
JAMES J. ROSLONIEC Financial Officer and ----------
Trustee
-------
- ------------------------- Principal Accounting June, 1998
ALLAN D. ENGEL Officer and Trustee ----------
-------
RICHARD A. DEWITT Trustee
-------
DONALD H. JOHNSON Trustee
-------
WALTER T. JONES Trustee
-------
By June, 1998
----------------------- ----------
JAMES J. ROSLONIEC
(Attorney-in-Fact)
