<PAGE> 1
[AMF ASSET MANAGEMENT FUND, INC.]
U.S. GOVERNMENT MORTGAGE
SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
INTERMEDIATE MORTGAGE
SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
SHORT U.S. GOVERNMENT
SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE
(ARM) PORTFOLIO
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PROSPECTUS MARCH 1, 1999
<PAGE> 2
Providing Investment
Opportunities Covering
The Complete Maturity
Range of Fixed Income
Securities
March 1, 1999
- --------------------------------------------------------------------------------
Prospectus
- --------------------------------------------------------------------------------
AMF LOGO
- --------------------------------------------------------------------------------
Asset Management Fund, Inc.
Money Market Portfolio
Short U.S. Government Securities Portfolio
Adjustable Rate Mortgage (ARM) Portfolio
Intermediate Mortgage Securities Portfolio
U.S. Government Mortgage Securities Portfolio
These Funds:
- are not federally insured
- have no bank or government guarantees
- are not endorsed by any bank or government
agency
- may lose value
The Securities and Exchange Commission has not approved or disapproved these
securities or passed on the adequacy of this prospectus. It is a federal offense
to suggest otherwise.
There is no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
<PAGE> 3
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY
- -------------------------------------------
Money Market Portfolio
Short U.S. Government Securities
Portfolio 1
SUMMARY
- -------------------------------------------
Adjustable Rate Mortgage (ARM)
Portfolio
Intermediate Mortgage Securities
Portfolio
U.S. Government Mortgage Securities
Portfolio 6
INVESTMENT INFORMATION 13
- -------------------------------------------
Investment Objectives and Principal
Investment Strategies 13
Money Market Portfolio and Short
U.S. Government Securities
Portfolio 13
Adjustable Rate Mortgage (ARM)
Portfolio, Intermediate
Mortgage Securities Portfolio
and U.S. Government Mortgage
Securities Portfolio 15
Description of Securities and
Related Risks 16
Mortgage-Related Securities 16
Collateralized Mortgage
Obligations 18
When-Issued and Delayed Delivery
Securities 19
Variable and Floating Rate
Securities 20
Repurchase Agreements 20
Year 2000 20
Investment Limitations 21
FUND AND PORTFOLIO INFORMATION 22
- -------------------------------------------
Investment Adviser 22
Advisory Fee Expenses 22
Portfolio Managers 22
Distributor 23
NET ASSET VALUE 23
- -------------------------------------------
INVESTING IN THE FUND 24
- -------------------------------------------
Share Purchases 24
Minimum Investment Required 25
What Shares Cost 25
Confirmations 25
Dividends 25
Capital Gains 25
REDEEMING SHARES 26
- -------------------------------------------
Telephone Redemption 26
Written Requests 27
Signatures 27
Receiving Payment 27
EXCHANGES 27
- -------------------------------------------
STOCKHOLDER INFORMATION 28
- -------------------------------------------
Voting Rights 28
Tax Information 28
FINANCIAL HIGHLIGHTS 29
- -------------------------------------------
Money Market Portfolio 29
Short U.S. Government Securities
Portfolio 30
Adjustable Rate Mortgage (ARM)
Portfolio 31
Intermediate Mortgage Securities
Portfolio 32
U. S. Government Mortgage Securities
Portfolio 33
NEW ACCOUNT APPLICATION
- -------------------------------------------
</TABLE>
<PAGE> 4
MONEY MARKET PORTFOLIO
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Both Portfolios seek to achieve as high a level of current income as is
consistent with the preservation of capital, the maintenance of liquidity
and the differing average maturity of investments held by each.
In pursuing this objective, both Portfolios limit their investments to
those permissible without limitation for federal savings associations,
national banks and federal credit unions under applicable federal law.
MAIN INVESTMENT STRATEGIES
The MONEY MARKET PORTFOLIO invests in high quality short-term money
market instruments (including assets subject to repurchase agreements).
The Portfolio is managed to keep its share price stable at $1.00.
The SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO invests in high-quality
assets, primarily in securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. To help minimize
fluctuations in principal, the Portfolio will maintain a dollar-weighted
average maturity of less than three years. The Portfolio is not a money
market fund.
MAIN RISKS OF INVESTING
Since the Money Market Portfolio attempts to maintain a constant $1.00
share price, the Portfolio should have little risk of principal loss.
Still, all investments carry some degree of risk and despite the
Portfolio's policies of purchasing primarily government securities and
maintaining a short average portfolio maturity, the Portfolio could
experience principal losses and may lose money in the rare event that
portfolio holdings default or interest rates rise sharply in an unusually
short period. Yields may vary with different interest rates. In addition,
neither the Federal Deposit Insurance Corporation (FDIC) nor any other
government agency insures or guarantees investments in the Portfolio.
For the Short U.S. Government Securities Portfolio, the primary risk
factor that may reduce the Portfolio's return is change in interest
rates. Prices of bonds tend to move inversely with changes in interest
rates. While a rise in rates may provide the opportunity to invest
available cash for higher yields, the most immediate effect is usually a
drop in bond prices and, therefore, the Portfolio's share price. A
security backed by the U.S. Treasury or the full faith and credit of the
United States is guaranteed only as to the timely payment of interest and
principal when held to maturity, but not the market value of such
security. Although the Portfolio should have little risk of principal
loss, it does not seek to maintain a constant share price. Your principal
value can fluctuate over time.
Pages two and three provide an illustration of how each Portfolio's
performance has varied over time. The bar charts depict the change in
each Portfolios' performance from year-to-year during the period
indicated. The tables for each Portfolio compare that Portfolio's average
annual returns for the periods indicated to a broad-based securities
market index. A Portfolio's past performance does not necessarily
indicate how it will perform in the future.
1
<PAGE> 5
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
Annual Returns for the Years Ended December 31
Money Market Portfolio Graph
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
----------------------
<S> <C>
'1989' 9.42
'1990' 8.08
'1991' 5.62
'1992' 3.34
'1993' 2.78
'1994' 3.93
'1995' 5.69
'1996' 5.19
'1997' 5.32
'1998' 5.25
</TABLE>
- ---------------
* The year to date return for the three month period ended January 31, 1999 is
1.21%.
During the period shown in the bar chart, the highest return for a quarter was
2.41% (quarter ended 6/30/89) and the lowest return for a quarter was 0.68%
(quarter ended 12/31/93). The Money Market Portfolio's 7-day yield ending on
December 31, 1998 was 4.60%. To obtain the Portfolio's current 7-day yield
information, please call us toll-free at 1-800-527-3713.
Average Annual Total Returns (years ended December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Money Market Portfolio................................... 5.25% 5.07% 5.44%
</TABLE>
2
<PAGE> 6
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Annual Returns for the Years Ended December 31
Short U.S. Government Securities Portfolio Graph
<TABLE>
<CAPTION>
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
------------------------------------------
<S> <C>
'1989' 10.72
'1990' 9.40
'1991' 11.76
'1992' 6.51
'1993' 5.78
'1994' 0.40
'1995' 11.35
'1996' 3.61
'1997' 6.25
'1998' 6.60
</TABLE>
- ---------------
* The year to date return for the three month period ended January 31, 1999 is
0.72%.
During the period shown in the bar chart, the highest return for a quarter was
5.22% (quarter ended 6/30/89) and the lowest return for a quarter was -0.42%
(quarter ended 3/31/94).
Average Annual Total Returns (years ended December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Short U.S. Government Securities Portfolio............ 6.60% 5.58% 7.18%
The Lehman Short Government 1-3 Years Index*.......... 6.97% 5.96% 7.35%
</TABLE>
- ---------------
* The Lehman Short Government 1-3 Years Index is an unmanaged index comprised of
the full range of 1-3 year U.S. Government and agency securities.
3
<PAGE> 7
FEES AND EXPENSES:
Shareholder fees. Neither of the Portfolios impose shareholder fees. These are
the fees charged directly to an investor's account. Examples of shareholder fees
include sales loads, redemption fees or exchange fees.
Annual Portfolio operating expenses are paid out of a Portfolio's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the example shows, these costs are borne indirectly by
shareholders.
FEES AND EXPENSES OF THE PORTFOLIOS
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.
<TABLE>
<CAPTION>
Money Market Short U.S. Government
Portfolio Securities Portfolio
------------ ---------------------
<S> <C> <C>
SHAREHOLDER FEES
Maximum Sales Charge Imposed on Purchases... None None
Maximum Sales Charge Imposed on Reinvested
Dividends................................. None None
Redemption Fees............................. None None
Exchange Fees............................... None None
Maximum Account Fee......................... None None
</TABLE>
<TABLE>
<CAPTION>
Money Market Short U.S. Government
Portfolio Portfolio
------------ ---------------------
<S> <C> <C>
ANNUAL PORTFOLIO OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET ASSETS)
Advisory Fee................................ 0.15%* 0.25%
12b-1 Fees.................................. 0.15% 0.15%
Other Expenses.............................. 0.10% 0.10%
----- -----
Total Fund Operating Expenses............... 0.40% 0.50%
===== =====
</TABLE>
- ---------------
* This table and the example on page 5 have been prepared to illustrate annual
Fund Operating Expenses assuming no fee waivers. The Adviser voluntarily
waived all of its advisory fees during the 1998 fiscal year. Therefore,
"Advisory Fee" and "Total Fund Operating Expenses" for the Money Market
Portfolio were 0% and 0.25%, respectively, for 1998.
4
<PAGE> 8
EXAMPLE
This example is intended to help you compare the cost of investing in a
Portfolio with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in either Portfolio for the time periods indicated and
then redeem all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that a Portfolio's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Portfolio......................... $41 $128 $224 $505
Short U.S. Government Securities Portfolio..... $51 $160 $280 $628
</TABLE>
5
<PAGE> 9
Adjustable Rate Mortgage (ARM) Portfolio
Intermediate Mortgage Securities Portfolio
U.S. Government Mortgage Securities Portfolio SUMMARY
- --------------------------------------------------------------------------------
Investment Objective
The Portfolios seek to achieve as high a level of current income as is
consistent with the preservation of capital, the maintenance of liquidity
and the differing average maturity of investments held by each.
Main Investment Strategies
The ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO seeks lower volatility of
principal than would be provided by fixed rate securities by investing
primarily in high quality adjustable rate mortgage securities. The
Adviser expects that a portfolio of these types of securities will
generally provide higher current yields than money market securities or
alternative investments of comparable quality and market rate volatility.
The INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO invests primarily in
intermediate-term mortgage-related securities guaranteed directly by the
United States or issued or guaranteed by U.S. Government agencies or
instrumentalities. The Portfolio seeks to invest in mortgage-related
securities that will produce less price volatility than would normally be
associated with the ownership of 30-year, fixed-rate mortgage-backed
securities and intends to maintain a dollar-weighted expected average
life of between 2 to 7 years.
The U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO invests primarily in
mortgage-related securities guaranteed directly by the United States or
issued or guaranteed by U.S. Government agencies or instrumentalities.
The Portfolio intends to maintain a dollar-weighted expected average life
of between 4 to 12 years.
Main Risks of Investing
Normally, the values of mortgage-related securities (and in particular,
fixed-rate ones) vary inversely with changes in prevailing interest
rates. However, the potential for appreciation in fixed-rate
mortgage-related securities in the event of a decline in interest rates
could be lessened by increased principal prepayments on those securities
(prepayment risk). Conversely, during periods of rising interest rates,
property owners may prepay their mortgages more slowly than expected,
resulting in slower prepayments of mortgage-backed securities (extension
risk) which reduces the value of the security and increases its duration.
In addition, investments in private issue mortgage-related securities may
expose a Portfolio to
6
<PAGE> 10
the risk that the credit rating of the securities will be downgraded or
the issuers default.
For fixed rate mortgage-related securities, the potential for volatility
in price increases as the duration of the security increases. A security
backed by the U.S. Treasury or the full faith and credit of the United
States is guaranteed only as to the timely payment of interest and
principal when held to maturity and not as to market value.
While the Adjustable Rate Mortgage (ARM) Portfolio seeks to maintain a
stable net asset value, its net asset value may be more volatile than a
money market fund and it might not be able to maintain a stable value. In
addition, interest rates payable under adjustable rate mortgage
securities are typically locked in only for short specified periods of
time. Consequently, an increase in interest rates may cause a decline in
the price of a security until such time as the security's interest rate
is adjusted upward and a decline in prevailing interest rates may cause a
decline in the yield on investments in such securities at the next reset.
The Portfolios are designed for long-term investors. The Portfolios'
returns will vary. There is no assurance that any Portfolio will achieve
its investment objective. Your principal value can fluctuate over time.
Pages eight, nine and ten provide an illustration of how each Portfolio's
performance has varied over time. The bar charts depict the change in
each Portfolios' performance from year-to-year during the period
indicated. The table for each Portfolio compares that Portfolio's average
annual returns for the periods indicated to a broad-based securities
market index. A Portfolio's past performance does not necessarily
indicate how it will perform in the future.
7
<PAGE> 11
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
- --------------------------------------------------------------------------------
Annual Returns for the Years Ended December 31
Adjustable Rate Mortgage Bar Chart
<TABLE>
<CAPTION>
ADJUSTABLE RATE MORTGAGE (ARM)
PORTFOLIO
------------------------------
<S> <C>
1991** 1.95
'1992' 4.42
'1993' 4.70
'1994' 1.97
'1995' 9.13
'1996' 5.92
'1997' 6.51
'1998' 5.14
</TABLE>
- ---------------
* The year to date return for the three month period ended January 31, 1999 is
1.48%.
** From inception September 18, 1991.
During the period shown in the bar chart, the highest return for a quarter was
2.95% (quarter ended 3/31/95) and the lowest return for a quarter was 0.07%
(quarter ended 6/30/94).
Average Annual Total Returns (years ended December 31, 1998)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/18/91)
------ ------- ---------
<S> <C> <C> <C>
Adjustable Rate Mortgage (ARM) Portfolio............. 5.14% 5.71% 5.44%
The Lehman Adjustable Rate Mortgage Index*........... 5.27% 6.11% 6.03%
</TABLE>
- ---------------
* The Lehman Adjustable Rate Mortgage Index is an unmanaged index of adjustable
rate mortgage-related securities. Comparative returns from 9/18/91 through
12/31/92 are from the Lehman Short 1-2 Year Index. The Lehman Adjustable Rate
Mortgage Index, which is a more relevant index, did not exist during this
period.
8
<PAGE> 12
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Annual Returns for the Years Ended December 31
Intermediate Mortgage Securities Portfolio Bar Chart
<TABLE>
<CAPTION>
INTERMEDIATE MORTGAGE SECURITIES
PORTFOLIO
--------------------------------
<S> <C>
'1989' 12.64
'1990' 6.16
'1991' 16.18
'1992' 7.87
'1993' 6.86
'1994' -1.60
'1995' 13.90
'1996' 2.85
'1997' 8.37
'1998' 6.90
</TABLE>
- ---------------
* The year to date return for the three month period ended January 31, 1999 is
1.46%.
During the period shown in the bar chart, the highest return for a quarter was
8.57% (quarter ended 6/30/89) and the lowest return for a quarter was -1.63%
(quarter ended 3/31/94).
Average Annual Total Returns (years ended December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Intermediate Mortgage Securities Portfolio............ 6.90% 5.96% 7.90%
The Lehman U.S. Mortgage Index*....................... 6.96% 7.23% 9.13%
</TABLE>
- ---------------
* The Lehman U.S. Mortgage Index is an unmanaged index of agency mortgage-backed
securities.
9
<PAGE> 13
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
Annual Returns for the Years Ended December 31
Mortgage Securities Bar Chart
<TABLE>
<CAPTION>
U.S. GOVERNMENT MORTGAGE SECURITIES
PORTFOLIO
-----------------------------------
<S> <C>
'1989' 14.34
'1990' 10.05
'1991' 14.77
'1992' 6.44
'1993' 6.82
'1994' -2.33
'1995' 16.15
'1996' 2.82
'1997' 9.67
'1998' 7.05
</TABLE>
* The year to date return for the three month period ended January 31, 1999 is
1.34%.
During the period shown in the bar chart, the highest return for a quarter was
7.99% (quarter ended 6/30/89) and the lowest return for a quarter was -2.37%
(quarter ended 3/31/94).
Average Annual Total Returns (years ended December 31, 1998)
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
U.S. Government Mortgage Securities Portfolio......... 7.05% 6.47% 8.44%
The Lehman U.S. Mortgage Index*....................... 6.96% 7.23% 9.13%
</TABLE>
- ---------------
* The Lehman U.S. Mortgage Index is an unmanaged index of agency mortgage-backed
securities.
10
<PAGE> 14
FEES AND EXPENSES:
Shareholder fees. None of the Portfolios impose shareholder fees. These are the
fees charged directly to an investor's account. Examples of shareholder fees
include sales loads, redemption fees or exchange fees.
Annual Portfolio operating expenses are paid out of a Portfolio's assets and
include fees for portfolio management, maintenance of shareholder accounts,
shareholder servicing, accounting and other services. You do not pay these fees
directly but, as the example shows, these costs are borne indirectly by
shareholders.
FEES AND EXPENSES OF THE PORTFOLIOS
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.
<TABLE>
<CAPTION>
Adjustable Rate Intermediate U.S. Government
Mortgage (ARM) Mortgage Mortgage
Portfolio Securities Portfolio Securities Portfolio
--------------- -------------------- --------------------
<S> <C> <C> <C>
SHAREHOLDER FEES
Maximum Sales Charge Imposed on
Purchases........................ None None None
Maximum Sales Charge Imposed on
Reinvested Dividends............. None None None
Redemption Fees.................... None None None
Exchange Fees...................... None None None
Maximum Account Fee................ None None None
</TABLE>
<TABLE>
<CAPTION>
Adjustable Rate Intermediate U.S. Government
Mortgage (ARM) Mortgage Mortgage
Portfolio Securities Portfolio Securities Portfolio
--------------- -------------------- --------------------
<S> <C> <C> <C>
ANNUAL PORTFOLIO OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS)
Advisory Fee....................... 0.45%(1) 0.35%(2) 0.25%
12b-1 Fees......................... 0.25%(1) 0.15% 0.15%
Other Expenses..................... 0.09% 0.09% 0.13%
----- ----- -----
Total Fund Operating Expenses...... 0.79% 0.59% 0.53%
===== ===== =====
</TABLE>
- ---------------
(1) The fee table and the example on page 12 have been prepared to illustrate
annual Fund Operating Expenses assuming no fee waivers. The Adviser and the
Distributor voluntarily waived a portion of the their fees during the 1998
fiscal year. Therefore, the "Advisory Fee," "12b-1 Fees" and "Total Fund
Operating Expenses" for the Adjustable Rate Mortgage (ARM) Portfolio were
0.25%, 0.15% and 0.49%, respectively, for 1998.
(2) The fee table and the example on page 12 have been prepared to illustrate
annual Fund Operating Expenses assuming no fee waivers. The Adviser
voluntarily waived a portion of its advisory fee during the 1998 fiscal
year. Therefore, the "Advisory Fee" and "Total Fund Operating Expenses" for
the Intermediate Mortgage Securities Portfolio were 0.25% and 0.49%,
respectively, for 1998.
11
<PAGE> 15
EXAMPLE
This example is intended to help you compare the cost of investing in the
Adjustable Rate Mortgage (ARM) Portfolio, Intermediate Mortgage Securities
Portfolio or U.S. Government Mortgage Securities Portfolio with the cost of
investing in other mutual funds. The example assumes that you invest $10,000 in
a Portfolio for the time periods indicated and then redeem all of your shares at
the end of those periods. The example also assumes that your investment has a 5%
return each year and that a Portfolio's operating expenses remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Adjustable Rate Mortgage (ARM) Portfolio........... $81 $252 $439 $978
Intermediate Mortgage Securities Portfolio......... $60 $189 $329 $738
U.S. Government Mortgage Securities Portfolio...... $54 $170 $296 $665
</TABLE>
12
<PAGE> 16
INVESTMENT INFORMATION
Investment Objectives and Principal Investment Strategies
- --------------------------------------------------------------------------------
The investment objective of the Fund is to achieve as high a level of
current income as is consistent with the preservation of capital, the
maintenance of liquidity and the differing average maturity of
investments held by each of the Fund's Portfolios. Each Portfolio pursues
this investment objective by investing in the securities described below.
While there is no assurance that a Portfolio will achieve its investment
objective, each endeavors to do so by following the investment policies
and limitations described below. The Fund's investment objective and
these policies and limitations cannot be changed as to a Portfolio
without approval of that Portfolio's stockholders.
Money Market Portfolio and
Short U.S. Government Securities Portfolio
The Money Market Portfolio invests only in high quality assets (including
assets subject to repurchase agreements) that qualify as "liquid assets"
for savings associations under the regulations of the Office of Thrift
Supervision of the Department of the Treasury ("OTS Regulations") and
that, if included in the Portfolio, will qualify its shares as "liquid
assets." As a result, the Fund believes Portfolio shares qualify as
"liquid assets" under the OTS Regulations. The Portfolio invests in high
quality short-term money market instruments that are determined to
present minimal credit risks and that meet the quality and
diversification requirements of Rule 2a-7 under the Investment Company
Act of 1940. Securities must be rated in the top two rating categories by
the required number of nationally recognized statistical rating
organizations (at least two or, if only one such organization has rated
the security, that one organization) or, if unrated, must be deemed by
the Adviser to be comparable in quality. The diversification requirements
provide generally that the Portfolio may not at the time of acquisition
invest more than 5% of its assets in securities of any one issuer or
invest more than 5% of its assets in securities that have not been rated
in the highest category by the required number of rating organizations
or, if unrated, have not been deemed comparable, except U.S. Government
securities and repurchase agreements collateralized by such securities.
The Portfolio will maintain a dollar-weighted average maturity of 90 days
or less. It is the policy of the Portfolio that it generally holds its
investments to maturity.
The Short U.S. Government Securities Portfolio invests only in high
quality assets (including assets subject to repurchase agreements) that
qualify as "liquid assets" for savings associations under the current OTS
Regulations and that, if included in the Portfolio, will qualify its
shares as "liquid assets." As a result, the Fund believes Portfolio
shares qualify as "liquid assets" under the OTS Regulations. As a
fundamental investment policy, the Portfolio invests, under normal market
conditions, at least 65% of its total assets in U.S. Government
obligations, which consist of obligations issued directly by the United
States and obligations issued by or fully guaranteed by
13
<PAGE> 17
U.S. Government agencies or instrumentalities. In addition, under normal
market conditions, the Portfolio will maintain a dollar-weighted average
maturity of less than three years as a non-fundamental investment policy.
Permissible investments for the Money Market Portfolio and the Short U.S.
Government Securities Portfolio include:
- Obligations issued directly by the U.S. Government or issued by an
agency or instrumentality of the U.S. Government and fully guaranteed
as to principal and interest by the U.S. Government, although not as to
market value. These obligations include U.S. Treasury bonds, notes and
bills and obligations issued by the Federal Financing Bank and the
Government National Mortgage Association. These obligations may also
include variable and floating rate securities.
- Obligations issued by or fully guaranteed as to principal and interest
by the following U.S. Government agencies or instrumentalities: the
Federal Home Loan Banks, Freddie Mac, Fannie Mae, the Federal Farm
Credit Banks and the Student Loan Marketing Association. Since the
obligations issued or guaranteed by these U.S. Government agencies or
instrumentalities are not backed by the full faith and credit of the
U.S. Government, the Portfolio must look principally to the agencies or
instrumentalities for ultimate repayment, and may not be able to assert
claims against the U.S. Government itself if those agencies or
instrumentalities do not meet their commitments.
- Certificates of deposit and other time deposits and savings accounts in
a commercial or savings bank or savings association whose accounts are
insured by the Federal Deposit Insurance Corporation ("FDIC Insured
Institution"), including certificates of deposit issued by and other
time deposits in foreign branches of FDIC insured banks, if they have
remaining maturities of 397 days or less (if negotiable) or 90 days or
less (if non-negotiable). Investments in certificates of deposit issued
by and other time deposits in foreign branches of FDIC insured banks
involve somewhat different investment risks from those affecting
deposits in United States branches of such banks, including the risk of
future political or economic developments, or government action, that
would adversely affect payments on deposits.
- Bankers' acceptances of an FDIC Insured Institution if such acceptances
have remaining maturities of 6 months or less and the Portfolio's total
investment in such acceptances of the same institution does not exceed
0.25% of such institution's total deposits.
Each Portfolio's investments in repurchase agreements and certificates of
deposit and other time deposits of or in FDIC Insured Institutions will
generally not be insured by any government agency. The Board of Directors
has adopted operating policies to further restrict certain investments
(see Statement of Additional Information for these two Portfolios).
14
<PAGE> 18
Adjustable Rate Mortgage (ARM) Portfolio,
Intermediate Mortgage Securities Portfolio and
U.S. Government Mortgage Securities Portfolio
The Adjustable Rate Mortgage (ARM) Portfolio, the Intermediate Mortgage
Securities Portfolio, and the U.S. Government Mortgage Securities
Portfolio (collectively referred to as the "Mortgage Securities
Portfolios") invest primarily in "securities backed by or representing an
interest in mortgages on domestic residential housing or manufactured
housing" meeting the definition of such assets for purposes of the
qualified thrift lender ("QTL") test under the current Office of Thrift
Supervision ("OTS") Regulations. Pending any revisions of the current OTS
Regulations, each Mortgage Securities Portfolio expects that, absent
extraordinary market developments, at least 65% of its assets will
qualify for QTL purposes for savings associations, although actual
percentages may be higher. In addition, each Mortgage Securities
Portfolio will not purchase any investments having a risk-based weighting
in excess of 20% under the current risk-based capital regulations
established by the OTS. Also, each Mortgage Securities Portfolio will not
purchase any investments having a risk-based weighting for banks in
excess of 50% under current federal regulations of the appropriate
regulatory agencies. Furthermore, each Mortgage Securities Portfolio will
not invest in "high risk" securities that do not meet the tests contained
in the "Supervisory Policy Statement on Securities Activities" adopted by
the Federal Deposit Insurance Corporation, the Office of the Comptroller
of the Currency, the OTS and the National Credit Union Administration,
respectively, and each Mortgage Securities Portfolio limits its
investments to those permissible without limitation for federal savings
associations, national banks and federal credit unions under current
applicable regulations.
The Adjustable Rate Mortgage (ARM) Portfolio will invest at least 65% of
its assets in adjustable rate mortgage securities, except when the
Portfolio assumes a temporary defensive position. This investment policy
is deemed fundamental and may not be changed without stockholder
approval. Because of the characteristics of adjustable rate mortgage
securities, the Adviser expects that a portfolio of these types of
securities will generally provide higher current yields than money market
securities or alternative investments of comparable quality and market
value volatility. While the Portfolio's net asset value will be more
volatile than prices of money market securities, it will be less volatile
than prices of fixed-rate securities of similar quality.
The Intermediate Mortgage Securities Portfolio will invest at least 65%
of its assets in mortgage-related securities paying fixed or adjustable
rates of interest, except when the Portfolio assumes a temporary
defensive position. This investment policy is deemed fundamental and may
not be changed without stockholder approval. Generally, the Portfolio
will seek to acquire mortgage-related securities having an expected
average life of 2 to 7 years at the time of purchase and will also seek
to maintain a dollar-weighted expected average life of between 2 to 7
years with respect to such securities held by the Portfolio at any one
time. These goals might be difficult to meet in certain environments when
mortgage prepayments are very
15
<PAGE> 19
high or very low, but in no case would the Portfolio invest in a
mortgage-related security that had an expected average life of greater
than 10 years at the time of purchase.
The U.S. Government Mortgage Securities Portfolio will invest at least
65% of its assets in mortgage-related securities guaranteed directly by
the United States or issued or guaranteed by U.S. Government agencies or
instrumentalities ("Government Mortgage-Related Securities"), except when
the Portfolio assumes a temporary defensive position. This investment
policy is deemed fundamental and may not be changed without stockholder
approval.
In addition to mortgage-related securities, the Mortgage Securities
Portfolios may invest in: (1) certain U.S. Government or agency
securities, certain of which are not backed by the full faith and credit
of the U.S. Government (see the Statement of Additional Information for
the Mortgage Securities Portfolios), (2) investments in certificates of
deposit or other time deposits or accounts of an FDIC Insured
Institution, including foreign branches of FDIC insured banks, (3)
repurchase agreements collateralized by securities in which the
Portfolios may invest, or (4) bankers' acceptances of an FDIC insured
bank if such acceptances have remaining maturities of six months or less
and the Portfolio's total investments in such acceptances of the same
bank do not exceed 0.25% of such bank's total deposits.
The risk-based capital information and QTL qualifying percentages for
each Mortgage Securities Portfolio will be communicated quarterly to the
stockholders. The Board of Directors has adopted operating policies to
further restrict certain investments (see the Statement of Additional
Information for the Mortgage Securities Portfolios). When business or
financial conditions warrant, the Portfolios may take a temporary
defensive position and invest without limit in the foregoing investments.
Description of Securities and Related Risks
- --------------------------------------------------------------------------------
Mortgage-Related Securities
"Mortgage-Related Securities" are high quality securities that directly
or indirectly provide funds principally for residential mortgage loans
made to home buyers in the United States and that represent interests in,
or are collateralized by, pools of mortgage loans originated by private
lenders that have been grouped by various governmental,
government-related and private organizations. Most Mortgage-Related
Securities are pass-through securities, which means that they provide
investors with payments consisting of both principal and interest as
mortgages in the underlying mortgage pool are paid off by the borrowers.
The average maturity of pass-through Mortgage-Related Securities varies
with the maturities of the underlying mortgage instruments and with the
occurrence of unscheduled prepayments of those mortgage instruments. The
text that follows is applicable to the Mortgage Securities Portfolios.
16
<PAGE> 20
Mortgage-Related Securities may be classified into the following
principal categories, according to the issuer or guarantor:
- Government Mortgage-Related Securities consist of both governmental and
government-related securities. Governmental securities are backed by
the full faith and credit of the U.S. Government. The Government
National Mortgage Association ("GNMA"), the principal U.S. Government
guarantor of such securities, is a wholly-owned U.S. Government
corporation within the Department of Housing and Urban Development.
GNMA is authorized to guarantee, with the full faith and credit of the
U.S. Government, the timely payment of principal and interest, but not
of market value, on securities issued by approved institutions and
backed by pools of FHA-insured or VA-guaranteed mortgages. Government-
related securities are issued by U.S. Government-sponsored corporations
and are not backed by the full faith and credit of the U.S. Government.
Issuers include Fannie Mae ("FNMA"), and Freddie Mac ("FHLMC"). FNMA is
a U.S. Government-sponsored corporation owned entirely by private
stockholders. Pass-through securities issued by FNMA are guaranteed as
to timely payment of principal and interest by FNMA. FHLMC issues
Mortgage-Related Securities representing interests in mortgage loans
pooled by it. FHLMC is a U.S. Government-sponsored corporation that
guarantees the timely payment of interest and ultimate collection of
principal, and its stock is publicly traded.
- Private Mortgage-Related Securities represent interests in, or are
collateralized by, pools consisting principally of residential mortgage
loans created by non-governmental issuers. These securities generally
offer a higher rate of interest than governmental and
government-related Mortgage-Related Securities because there are no
direct or indirect government guarantees of payment as in the former
securities, although certain credit enhancements may exist. Securities
issued by private organizations may not have the same degree of
liquidity as those with direct or indirect government guarantees.
Private Mortgage-Related Securities purchased by the Mortgage
Securities Portfolios must be rated in one of the two highest rating
categories by at least one nationally recognized statistical rating
organization.
Mortgage-Related Securities include both fixed-rate and adjustable rate
mortgage securities ("ARMS"). Unlike fixed-rate mortgage securities, ARMS
have periodic adjustments in the coupons on the underlying mortgages. The
adjustable rate feature of the mortgages underlying the ARMS in which the
Mortgage Securities Portfolios invest generally will help to reduce sharp
changes in each Portfolio's net asset value in response to normal
interest rate fluctuations to the extent that each Portfolio is invested
in ARMS. As the interest rates on the mortgages underlying a Portfolio's
investments in ARMS are reset periodically (generally one to twelve
months but as long as five years), the yields of such portfolio
securities will gradually align themselves to reflect changes in market
rates so that the market value of such securities will remain relatively
constant as compared to fixed-rate instruments. This in turn should cause
the net asset value of the Portfolio to fluctuate less than it would if
the Portfolio invested entirely in more traditional longer-term, fixed-
rate debt securities.
17
<PAGE> 21
In contrast to fixed-rate mortgages, which generally decline in value
during periods of rising interest rates, ARMS permit a Portfolio to
participate in increases in interest rates through periodic adjustments
in the coupons of the underlying mortgages. This should produce both
higher current yields and lower price fluctuations during such periods to
the extent the Portfolio has invested in ARMS. Furthermore, if
prepayments of principal are made on the underlying mortgages during
periods of rising interest rates, the Portfolios generally will be able
to reinvest such amounts in securities with a higher yield. For certain
types of ARMS, the rate of amortization of principal, as well as interest
payments, can and does change in accordance with movements in a
particular, pre-specified, published interest rate index. The amount of
interest due to an ARMS holder is calculated by adding a specified
additional amount, the "margin," to the index, subject to limitations or
"caps" on the maximum or minimum interest that is charged to the
mortgagor during the life of the mortgage or to maximum and minimum
changes in the interest rate during a given period. As a result, the
Mortgage Securities Portfolios will not benefit from increases in
interest rates to the extent that interest rates rise to the point where
they cause the current coupon of adjustable rate mortgages held as
investments to exceed the maximum allowable annual (usually 100 to 200
basis points) or lifetime reset limits (or "cap rates") for a particular
mortgage. Fluctuations in interest rates above these levels could cause
such mortgage securities to behave more like long-term, fixed-rate debt
securities. Moreover, a Portfolio's net asset value could vary to the
extent that current yields on mortgage-backed securities are different
than market yields during interim periods between coupon reset dates.
Thus, investors could suffer some principal loss if they sold their
shares of the Portfolio before the interest rates on the underlying
mortgages were adjusted to reflect current market rates.
All mortgage-backed securities carry the risk that interest rate declines
may result in accelerated prepayment of mortgages and the proceeds from
such prepayment of mortgages may be reinvested at lower prevailing
interest rates. During periods of declining interest rates, the coupon
rates for ARMS may readjust downward, resulting in lower yields to the
Mortgage Securities Portfolios. Further, because of this feature, ARMS
may have less potential for capital appreciation than fixed-rate
instruments of comparable maturities during periods of declining interest
rates. Therefore, ARMS may be less effective than fixed-rate securities
as a means of "locking in" long-term interest rates.
If mortgage securities are purchased at a premium, mortgage foreclosures
and unscheduled principal prepayments may result in some loss of the
holders' principal investment to the extent of the premium paid. On the
other hand, if mortgage securities are purchased at a discount, both a
scheduled payment of principal and an unscheduled repayment of principal
will increase current and total returns.
Collateralized Mortgage Obligations
Mortgage-Related Securities also include debt obligations collateralized
by the cash flows from mortgage loans, pools of mortgage loans or
mortgage pass-through securities (often referred to as collateralized
mortgage obligations or
18
<PAGE> 22
"CMOs"). CMOs may be issued or guaranteed by GNMA, FNMA or FHLMC, or they
may be issued by private entities such as financial institutions,
investment bankers, mortgage bankers and single-purpose stand-alone
finance subsidiaries or trusts of such institutions. The CMOs and a form
of them known as a real estate mortgage investment conduit ("REMIC")
typically have a multi-class structure ("Multi-Class Mortgage-Related
Securities"). Multi-Class Mortgage-Related Securities issued by private
issuers may be collateralized by pass-through securities guaranteed by
GNMA or issued by FNMA or FHLMC, or they may be collateralized by whole
loans or pass-through mortgage-related securities of private issuers.
Each class has a specified maturity or final distribution date. In one
structure, payments of principal, including any principal prepayments, on
the collateral are applied to the classes in the order of their
respective stated maturities or final distribution dates, so that no
payment of principal will be made on any class until all classes having
an earlier stated maturity or final distribution date have been paid in
full. In other structures, certain classes may pay concurrently, or one
or more classes may have a priority with respect to payments on the
underlying collateral up to a specified amount. The Mortgage Securities
Portfolios will not invest in any class with residual characteristics. In
addition, each Portfolio limits its purchase of CMOs and REMICs issued by
private entities to those that are rated in one of the two highest rating
categories by at least one nationally recognized statistical ratings
organization, and all CMOs and REMICs must pass the "high risk" tests
applicable to the investments of federal savings associations, national
banks and federal credit unions.
When-Issued and Delayed Delivery Securities
The Mortgage Securities Portfolios may purchase securities on a
when-issued or delayed delivery basis, i.e., for delivery and payment at
a future date. The purchase price and the interest rate payable on the
securities are fixed on the transaction date. At the time of its
delivery, a when-issued or delayed delivery security may be valued at
less than the purchase price. Each Portfolio will make commitments for
such transactions only when it has the intention of actually acquiring
the securities. If a Portfolio chooses to dispose of the right to acquire
a when-issued or delayed delivery security prior to its acquisition, it
could, as with the disposition of any other portfolio investment, incur a
gain or loss due to market fluctuation. When securities are purchased on
a when-issued or delayed delivery basis, the Portfolio must set aside
funds in a segregated account to pay for the purchase, and until
acquisition, the Portfolio will not earn any interest on the security.
Each Portfolio may not enter into when-issued commitments exceeding in
the aggregate 15% of the value of the Portfolio's total assets, less
liabilities other than the obligations created by when-issued
commitments.
19
<PAGE> 23
Variable and Floating Rate Securities
The Portfolios may purchase U.S. Government securities that have variable
or floating rates of interest ("Variable Rate Securities"). These
securities pay interest at rates that are adjusted periodically according
to a specified formula, usually with reference to some interest rate
index or market interest rate. The interest paid on Variable Rate
Securities is a function primarily of the index or market rate upon which
the interest rate adjustments are based. Similar to fixed rate debt
instruments, variable and floating rate instruments are subject to
changes in value based on changes in market interest rates, but because
of the interest reset provision, the potential for capital appreciation
or depreciation is generally less than for fixed rate obligations. Each
Portfolio determines the maturity of Variable Rate Securities in
accordance with Securities and Exchange Commission rules which allow the
Portfolio to consider certain of such instruments as having maturities
shorter than the maturity date on the face of the instrument.
Repurchase Agreements
The Portfolios may enter into repurchase agreements under which each may
acquire securities in which the particular Portfolio may invest for a
relatively short period (usually not more than 30 days) subject to an
obligation of the seller to repurchase and the Portfolio to resell the
instrument at a fixed price and time, thereby determining the yield
during the Portfolio's holding period. If the seller defaults in its
obligation to repurchase from the Portfolio the underlying collateral,
the Portfolio may incur a loss. Each Portfolio will make payment for such
instruments only upon their physical delivery to or evidence of their
book entry transfer to the account of the Portfolio's custodian. No
Portfolio will enter into any repurchase agreements maturing in more than
60 days.
Year 2000
Like other mutual funds and business organizations worldwide, the Fund's
service providers (among them, the Adviser, Distributor, administrator,
custodian and transfer agent) must ensure that their computer systems are
adjusted to properly process and calculate date-related information from
and after January 1, 2000. Many software programs and, to a lesser
extent, the computer hardware in use today cannot distinguish the year
2000 from the year 1900. Such a design flaw could have a negative impact
in the handling of securities trades, pricing and accounting services.
The Fund and its service providers are actively working on necessary
changes to computer systems to deal with the year 2000 issue and believe
that their systems will be year 2000 compliant when required, but there
can be no assurance that they will be successful. In addition there can
be no assurance that the year 2000 issue will not have an adverse effect
on the issuers whose securities are held by a Portfolio or on markets or
on the economy in general.
20
<PAGE> 24
Investment Limitations
- --------------------------------------------------------------------------------
Each Portfolio may not borrow except that it may borrow from banks for
temporary or emergency purposes in an aggregate amount not exceeding 10%
of the value of its net assets and may pledge up to 20% of its net assets
to secure such borrowings. All borrowings of the Intermediate Mortgage
Securities Portfolio may not exceed in the aggregate one-third of the
value of that Portfolio's total assets, less liabilities other than such
borrowings. To the extent that borrowings exceed 5% of a Portfolio's net
assets, such borrowings will be repaid before any investments are made.
The Money Market Portfolio and the Short U.S. Government Securities
Portfolio will not purchase any securities maturing in more than seven
days for which market quotations are not readily available and will not
enter into any repurchase agreements maturing in more than seven days if,
as a result, more than 10% of the market value of their respective total
assets would be invested in such illiquid securities together with such
repurchase agreements maturing in more than seven days.
The Money Market Portfolio and the Short U.S. Government Securities
Portfolio will not invest more than 25% of their respective total assets
in the securities of issuers in any single industry, provided that there
shall be no such limitation on the purchase of obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
or time deposits (including certificates of deposit), savings deposits
and bankers' acceptances of United States branches of United States
banks.
The Adjustable Rate Mortgage (ARM) Portfolio will not purchase any
securities maturing in more than seven days for which market quotations
are not readily available, or purchase interest rate caps and floors, or
enter into any repurchase agreements maturing in more than seven days if,
as a result, more than 10% of the market value of its total assets would
be invested in such illiquid securities.
The Intermediate Mortgage Securities Portfolio will not purchase any
securities maturing in more than seven days for which market quotations
are not readily available and will not enter into any repurchase
agreements maturing in more than seven days if, as a result, more than
15% of the market value of its total assets would be invested in such
illiquid securities together with repurchase agreements maturing in more
than seven days. To the extent Rule 144A securities are deemed by the
Adviser, subject to the supervision of the Board of Directors, to be
illiquid, they will be subject to the foregoing 15% limitation on
illiquid securities.
The U.S. Government Mortgage Securities Portfolio will not purchase any
Mortgage-Related Securities or other securities maturing in more than
seven days for which market quotations are not readily available and will
not enter into any repurchase agreements maturing in more than seven days
if, as a result, more than 10% of the market value of its total assets
would be invested in such illiquid securities together with such
repurchase agreements maturing in more than seven days.
21
<PAGE> 25
The Mortgage Securities Portfolios will not invest more than 25% of their
respective total assets in the securities of issuers in any single
industry, provided that there shall be no limitation on investments in
the mortgage and mortgage finance industry (in which more than 25% of the
value of each Portfolio's total assets will, except for temporary
defensive purposes, be invested) or on obligations issued or guaranteed
by the U.S. Government or its agencies or instrumentalities.
FUND AND PORTFOLIO INFORMATION
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
Investment decisions for the Portfolios are made by Shay Assets
Management, Inc. ("Adviser"), a company controlled by Rodger D. Shay. The
Adviser, which is located at 230 West Monroe Street, Chicago, Illinois
60606, is registered under the Investment Advisers Act of 1940 and
manages approximately $1.5 billion in assets. Prior to December 8, 1997,
Shay Assets Management Co. ("SAMC"), a company half of which was
controlled by Rodger D. Shay and half owned by an indirect wholly owned
subsidiary of America's Community Bankers, served as the Fund's
investment adviser. The Adviser is responsible for placing purchase and
sale orders for portfolio instruments.
Advisory Fee Expenses
The Portfolios pay an annual advisory fee based upon a percentage of
average daily net assets. During the period from November 1, 1997 through
December 7, 1997, the advisory fee was paid to SAMC and from December 8,
1997 through October 31, 1998, the advisory fee was paid to the Adviser
as follows:
<TABLE>
<S> <C>
Money Market Portfolio.............................. 0.00%*
Short U.S. Government Securities Portfolio.......... 0.25%
Adjustable Rate Mortgage (ARM) Portfolio............ 0.25%*
Intermediate Mortgage Securities Portfolio.......... 0.25%*
U.S. Government Mortgage Securities Portfolio....... 0.25%
</TABLE>
- ---------------
* The investment advisers voluntarily waived all advisory fees with respect to
the Money Market Portfolio. Without such waivers, the fee would have been
0.15%. The investment advisers voluntarily waived a portion of the advisory
fees with respect to the Adjustable Rate Mortgage (ARM) Portfolio and the
Intermediate Mortgage Securities Portfolio. Without such waivers, the fees
would have been 0.45% and 0.35%, respectively.
Each voluntary waiver may be terminated at any time by the Adviser.
Portfolio Managers
The Portfolio Managers of the Adviser manage the Fund's investments as a
team under the day-to-day direction of Edward E. Sammons, Jr., President
of the Adviser. Mr. Sammons has served as President of the Fund since
1998 and was Vice President of the Fund from 1985 through 1997. Mr.
Sammons assumed primary responsibility for the Fund's investments in
1985.
22
<PAGE> 26
Distributor
- --------------------------------------------------------------------------------
Effective December 8, 1997, the Distributor, Shay Financial Services,
Inc., succeeded to the broker-dealer business of Shay Financial Services
Co. ("SFSC"). Pursuant to the Distribution Agreement, the Distributor, as
the principal distributor of the Fund's shares, directly and through
other firms advertises and promotes the Fund. For its distribution
services, the Distributor receives an annual fee from the Fund in
accordance with the distribution plan adopted by the Fund pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "12b-1 Plan").
Because these fees are paid out of a Portfolio's assets on an on-going
basis over time, these fees will increase the cost of your investment.
This charge theoretically could cost you more over time than you would
pay through some other types of sales charges; however, the Fund's Rule
12b-1 fees are so low that the Fund is classified as a "no-load" fund.
NET ASSET VALUE
For all Portfolios other than the Money Market Portfolio, the net asset
value per share fluctuates daily. It is determined by dividing the value
of all securities and all other assets, less liabilities, by the number
of shares outstanding. Portfolio assets are valued at market value using
market quotations or prices obtained from an independent pricing service
based upon prices provided by market makers or estimates of market values
obtained from yield data relating to instruments or securities with
similar characteristics. For certain mortgage related securities the
Board of Directors has approved the use of a matrix developed by the
Adviser which the Board believes reflects the fair value of such
securities. Short-term instruments maturing within 60 days may be valued
at amortized cost, provided that the Board of Directors determines that
amortized cost represents fair value.
The Money Market Portfolio's net asset value per share is determined by
dividing the value of all securities and all other assets, less
liabilities, by the number of shares outstanding. The Portfolio's
investments are valued in accordance with Rule 2a-7 under the Investment
Company Act of 1940 based on their amortized cost, which does not take
into account unrealized appreciation or depreciation. The Fund's Board of
Directors has established procedures reasonably designed to stabilize the
net asset value per share at $1.00, although there is no assurance that
the Portfolio will be able to do so.
23
<PAGE> 27
INVESTING IN THE FUND
Share Purchases
- --------------------------------------------------------------------------------
To purchase shares of the Portfolios, investors may open an account by
calling the Distributor at (800) 527-3713 and obtaining an application
form. After a completed application form has been received and processed,
orders to purchase shares of the Portfolios may be made by telephoning
the Distributor.
Purchase orders are accepted on each Business Day and become effective
upon receipt and acceptance by the Fund. (As used in this Prospectus, the
term "Business Day" means any day on which the Adviser and PFPC Trust
Company are both open for business.) Payment must be in the form of
federal funds. Wire transfer instructions for federal funds should be as
follows: PFPC Trust Company, Philadelphia, PA, ABA 031 000 053; BNF
Mutual Funds Services / 8529992181; For purchase of Asset Management
Fund, (Name of Portfolio); From: (Name of Investor); Account Number
(Investor's account number with the Fund); $(Amount to be invested).
For an investor's purchase to be eligible for same day settlement, the
purchase order must be received on a Business Day before 12:00 Noon, New
York City time (or 1:00 P.M., New York City time, for Pacific time zone
investors as determined by their addresses in the Fund's records), and
payment for the purchase order must be received by PFPC Trust Company by
4:00 P.M., New York City time, of that day. For investors seeking next
day settlement, the purchase order must be received on a Business Day
before 4:00 P.M., New York City time, and payment must be received by
PFPC Trust Company by 4:00 P.M., New York City time, on the next Business
Day after the purchase order was received. An investor must indicate to
the Fund at the time the order is placed whether same day or next day
settlement is sought. Payment must be received by PFPC Trust Company by
4:00 P.M., New York City time, on the Business Day designated for
settlement or the order will be cancelled.
A purchase order is considered binding upon the investor. Should it be
necessary to cancel an order because payment was not timely received, the
Fund will hold the investor responsible for the difference between the
price of the shares when ordered and the price of the shares when the
order was cancelled. If the investor is already a shareholder of the
Fund, the Fund may redeem shares from the investor's account in an amount
equal to such difference. In addition, the Fund may prohibit or restrict
the investor from making future purchases of the Fund's shares.
Any federal funds received in respect of a cancelled order will be
returned upon instructions from the sender without any liability of the
Fund, the Adviser or PFPC Trust Company. If it is not possible to return
such federal funds the same day, the sender will not have the use of such
funds until the next day on which it is possible to effect such return.
The Fund reserves the right to reject any purchase order.
24
<PAGE> 28
Minimum Investment Required
- --------------------------------------------------------------------------------
The minimum initial investment in each Portfolio is $10,000. There is no
minimum balance. Subsequent purchases may be made in any amount.
What Shares Cost
- --------------------------------------------------------------------------------
Shares of the Portfolios are sold at their net asset value next
determined after the purchase order becomes effective. The Money Market
Portfolio seeks to maintain a net asset value of $1.00 per share. (See
"Net Asset Value.") There is no sales charge imposed by the Portfolios.
For all Portfolios other than the Money Market Portfolio, the net asset
value is determined each Business Day at 4:00 P.M., New York City time.
For the Money Market Portfolio, net asset value is determined twice on
each Business Day, at 1:00 P.M. and at 4:00 P.M., New York City time. Net
asset value for purposes of pricing redemption orders is determined at
4:00 P.M., New York City time, on any day redemptions are permitted and a
proper redemption request is received (see "Redeeming Shares").
Confirmations
- --------------------------------------------------------------------------------
As transfer and dividend agent for the Fund, PFPC maintains a share
account for each stockholder. Detailed confirmations of each purchase or
redemption are sent to each stockholder. Monthly confirmations are sent
to report dividends paid during the month.
Dividends
- --------------------------------------------------------------------------------
Dividends are declared daily and paid monthly. Such dividends are
declared immediately prior to 4:00 P.M., New York City time, and are
automatically reinvested in additional shares of the respective
Portfolios unless the stockholder requests cash payments by contacting
the Distributor.
For all Portfolios other than the Money Market Portfolio, an investor
will receive the dividend declared on both the day its purchase order is
settled and the day its redemption order is effected, including any next
succeeding non-Business Day or Days, since proceeds are normally wired
the next Business Day. For the Money Market Portfolio, an investor will
receive the dividend declared on the day its purchase order is settled
but will not receive the dividend declared on the day its redemption
order is effected.
Capital Gains
- --------------------------------------------------------------------------------
Net capital gains, if any, realized by a Portfolio are declared and paid
once each year and reinvested in shares or, at the stockholder's option,
paid in cash.
25
<PAGE> 29
REDEEMING SHARES
The Portfolios redeem shares at their respective net asset values next
determined after the Distributor receives the redemption request.
Redemptions may be made on Business Days when the U.S. Government and
agency securities market is open. Redemption requests must be received in
proper form and can be made by telephone or in writing.
Telephone Redemption
- --------------------------------------------------------------------------------
- For all Portfolios other than the Money Market Portfolio:
Stockholders may redeem their shares by telephoning the Distributor on
a Business Day. Call (800) 527-3713. The time the redemption request is
received determines when proceeds are sent and the accrual of
dividends. Redemptions received prior to 12:00 Noon, New York City time
(1:00 P.M., New York City time, for investors in the Pacific time
zone), on a Business Day or other day redemptions are permitted, are
effected on the same day, immediately after 4:00 P.M., New York City
time. This means that proceeds will normally be wired in federal funds
to the stockholder's bank or other account shown on the Fund's records
the next Business Day, but in no case later than seven days. A
stockholder will receive dividends declared only through the day its
redemption is effected and any next succeeding non-Business Day or
Days. All redemptions received between 12:00 Noon and 4:00 P.M., New
York City time, on a Business Day or other day redemptions are
permitted, are effected on the same day, immediately after 4:00 P.M.,
New York City time; however, the proceeds will normally be sent the
second following Business Day. The stockholder will receive dividends
declared only through the day its redemption is effected, including any
next succeeding non-Business Day or Days, but will not be entitled to
dividends for the following Business Day. The Fund recommends that all
redemption requests be placed so as to be received prior to 12:00 Noon,
New York City time, because of the advantage in having proceeds sent
the next Business Day.
- For the Money Market Portfolio:
Stockholders may redeem their shares by telephoning the Distributor on
a Business Day. Call (800) 527-3713. If the request is received before
12:00 Noon, New York City time (1:00 P.M., New York City time, for
investors in the Pacific time zone), on a Business Day, the redemption
will be effected as of 1:00 P.M., New York City time, and the proceeds
will normally be wired the same day in federal funds to the
stockholder's bank or other account shown on the Fund's records, but in
no case later than seven days. If the request is received before 4:00
P.M., New York City time, on a Business Day or other day redemptions
are permitted, the redemption will be effected as of 4:00 P.M., New
York City time, and the proceeds will normally be wired the next
Business Day.
26
<PAGE> 30
Since a stockholder will not receive any dividend declared on the day its
redemption request is effected, the Fund recommends that all redemption requests
be placed so as to be received prior to 12:00 Noon, New York City time.
WRITTEN REQUESTS
- --------------------------------------------------------------------------------
Portfolio shares may also be redeemed by sending a written request to the
Distributor, 230 W. Monroe Street, Chicago, Illinois 60606; Attention:
Asset Management Fund, Inc. If share certificates have been issued, they
must be properly endorsed and guaranteed and be received by PFPC before
the redemption will be effected.
Signatures
Signatures on written redemption requests and share certificates must be
guaranteed by:
- a Federal Home Loan Bank; or
- a savings association or a savings bank; or
- a trust company or a commercial bank; or
- a member firm of a domestic securities exchange or a registered
securities association; or
- a credit union or other eligible guarantor institution.
In certain instances, the transfer and dividend agent may request
additional documentation believed necessary to insure proper
authorization. Stockholders with questions concerning documentation
should call the Distributor at (800) 527-3713.
Receiving Payment
Proceeds of written redemption requests are sent at the same time and in
the same manner as for telephone redemptions, based on the time of the
receipt in proper form.
EXCHANGES
Stockholders may exchange shares of a Portfolio with shares in another
Portfolio of the Fund by telephoning the Distributor on a Business Day.
Call (800) 527-3713. Exchanges may also be made by written request as
previously described under "Written Requests." Exchanges will be effected
at the relative net asset values next determined after receipt of an
exchange request in proper form. Stockholders will receive dividends in
the Portfolio through the date the exchange is effected and will begin
receiving dividends in the other Portfolio the next Business Day.
27
<PAGE> 31
An exchange between Portfolios will normally involve realization of a
capital gain or loss, since for federal income tax purposes an exchange
is treated as a sale of the shares from which the exchange is made and a
purchase of the shares into which the exchange is made.
The Fund reserves the right to amend or terminate this privilege with
notice to stockholders.
STOCKHOLDER INFORMATION
Voting Rights
- --------------------------------------------------------------------------------
The Fund has five Portfolios: the Money Market Portfolio, the Short U.S.
Government Securities Portfolio, the Adjustable Rate Mortgage (ARM)
Portfolio, the Intermediate Mortgage Securities Portfolio and the U.S.
Government Mortgage Securities Portfolio, and five classes of shares,
representing interests only in the corresponding Portfolio and having
equal voting rights within each class. The Fund's charter provides that
on any matter submitted to a vote of stockholders, all shares,
irrespective of class, shall be voted in the aggregate and not by class,
except that (i) as to any matter with respect to which a separate vote of
any class is required by the Investment Company Act of 1940 or the
Maryland General Corporation Law, such requirements as to a separate vote
by that class shall apply in lieu of the aggregate voting as described
above, and (ii) as to any matter which does not affect the interest of a
particular class, only stockholders of the affected class shall be
entitled to vote thereon. The Bylaws of the Fund require that a special
meeting of stockholders be held upon the written request of stockholders
holding not less than 10% of the issued and outstanding shares of the
Fund.
Tax Information
- --------------------------------------------------------------------------------
Each of the Portfolios has not been required to pay federal income taxes
because it has taken all necessary action to qualify as a regulated
investment company under the Internal Revenue Code. Each Portfolio
intends to remain so qualified for its future taxable years so long as
such qualification is in the best interests of stockholders.
The Fund intends to distribute all of the net income and any gains of the
Portfolios to stockholders. Unless otherwise exempt, stockholders are
required to pay federal income tax on any dividends and other
distributions received. This applies whether dividends are received in
cash or as additional shares. Dividends declared in December to
stockholders of record as of a date in that month and paid during the
following January are treated as if received on December 31 of the
calendar year declared.
Information on the tax status of dividends and distributions is provided
annually.
28
<PAGE> 32
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the
Fund's financial performance for the past 5 years. Certain information
reflects financial results for a single Portfolio share outstanding
throughout each year. The total returns in the tables represent the rate
that an investor would have earned on an investment in a particular
portfolio (assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, whose
report, along with each Portfolio's financial statements, is included in
the Statement of Additional Information, which is available upon request.
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income........... .0523 .0513 .0516 .0547 .0346
Net realized and unrealized gain
(loss) on investments.......... -0- -0- -0- -0- -0-
-------- -------- -------- -------- --------
Total from investment
operations..................... .0523 .0513 .0516 .0547 .0346
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends paid to stockholders
from net investment income..... (.0523) (.0513) (.0516) (.0547) (.0346)
-------- -------- -------- -------- --------
Net asset value, end of year..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return..................... 5.35% 5.25% 5.29% 5.60% 3.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
000's)......................... $ 58,445 $ 48,104 $ 69,484 $ 36,869 $ 82,969
Ratio of expenses to average net
assets......................... 0.25%(1) 0.26%(1) 0.24%(1) 0.24%(1) 0.40%(1)
Ratio of net investment income
to average net assets.......... 5.22% 5.14% 5.15% 5.40% 3.34%
</TABLE>
- --------------------------------------------------------------------------------
(1) Without fees waivers for the years ended October 31, 1998, 1997, 1996, 1995
and 1994, the ratios of expenses to average net assets would have been .40%,
.41%, .39%, .39% and .42%, respectively.
29
<PAGE> 33
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year.............................. $ 10.55 $ 10.56 $ 10.68 $ 10.45 $ 10.89
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............. .6144 .6273 .6370 .6746 .5396
Net realized and unrealized gain
(loss) on investments............ .1100 (.0100) (.1200) .2300 (.4400)
-------- -------- -------- -------- --------
Total from investment
operations....................... .7244 .6173 .5170 .9046 .0996
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends paid to stockholders
from net investment income....... (.6144) (.6273) (.6370) (.6746) (.5396)
-------- -------- -------- -------- --------
Net asset value, end of year....... $ 10.66 $ 10.55 $ 10.56 $ 10.68 $ 10.45
======== ======== ======== ======== ========
Total return....................... 7.08% 6.04% 4.99% 8.94% 0.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
000's)........................... $114,240 $112,304 $176,892 $167,343 $179,740
Ratio of expenses to average net
assets........................... 0.50% 0.50% 0.48% 0.49% 0.47%
Ratio of net investment income to
average net assets............... 5.83% 5.97% 6.02% 6.42% 5.04%
Portfolio turnover rate........... 84% 75% 69% 112% 195%
</TABLE>
- --------------------------------------------------------------------------------
30
<PAGE> 34
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year......................... $ 9.99 $ 9.95 $ 9.94 $ 9.78 $ 10.02
-------- -------- -------- -------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income........ .5676 .6036 .5958 .6035 .4396
Net realized and unrealized
gain (loss) on
investments............... (.0800) .0400 .0100 .1600 (.2400)
-------- -------- -------- -------- ----------
Total from investment
operations................ .4876 .6436 .6058 .7635 .1996
-------- -------- -------- -------- ----------
LESS DISTRIBUTIONS:
Dividends paid to
stockholders
from net investment
income.................. (.5676) (.6036) (.5958) (.6035) (.4396)
-------- -------- -------- -------- ----------
Net asset value, end of year... $ 9.91 $ 9.99 $ 9.95 $ 9.94 $ 9.78
======== ======== ======== ======== ==========
Total return................... 5.00% 6.65% 6.27% 8.02% 2.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
000's).................... $895,550 $751,334 $796,016 $891,538 $1,045,914
Ratio of expenses to average
net assets................ 0.49%(1) 0.49%(1) 0.47%(1) 0.48%(1) 0.47%(1)
Ratio of net investment
income to average net
assets.................... 5.70% 6.07% 6.01% 6.12% 4.40%
Portfolio turnover rate...... 53% 74% 60% 68% 65%
</TABLE>
- --------------------------------------------------------------------------------
(1) Without fee waivers for the years ended October 31, 1998, 1997, 1996, 1995
and 1994, the ratios of expenses to average net assets would have been .79%,
.79%, .77%, .78% and .76%, respectively.
31
<PAGE> 35
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year.............................. $ 9.62 $ 9.52 $ 9.68 $ 9.34 $ 10.00
------- ------- ------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............. .5932 .6245 .6101 .6211 .5407
Net realized and unrealized gain
(loss) on investments.......... .0761 .1000 (.1600) .3400 (.6600)
------- ------- ------- -------- --------
Total from investment
operations..................... .6693 .7245 .4501 .9611 (.1193)
------- ------- ------- -------- --------
LESS DISTRIBUTIONS:
Dividends paid to stockholders:
From net investment income........ (.5932) (.6245) (.6101) (.6211) (.5407)
In excess of net investment
income......................... (.0361) -0- -0- -0- -0-
------- ------- ------- -------- --------
Total distributions to
stockholders................... (.6293) (.6245) (.6101) (.6211) (.5407)
------- ------- ------- -------- --------
Net asset value, end of year........ $ 9.66 $ 9.62 $ 9.52 $ 9.68 $ 9.34
======= ======= ======= ======== ========
Total return........................ 7.18% 7.90% 4.82% 10.63% (1.18%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in
000's)......................... $99,438 $77,982 $92,289 $187,087 $213,427
Ratio of expenses to average net
assets......................... 0.49%(1) 0.49%(1) 0.44%(1) 0.38%(1) 0.39%(1)
Ratio of net investment income to
average net assets............. 6.17% 6.58% 6.38% 6.55% 5.61%
Portfolio turnover rate........... 69% 120% 133% 133% 358%
</TABLE>
- --------------------------------------------------------------------------------
(1) Without fee waivers for the years ended October 31, 1998, 1997, 1996, 1995
and 1994, the ratios of expenses to average net assets would have been .59%,
.59%, .58%, .58% and .59%, respectively.
32
<PAGE> 36
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year......... $ 10.67 $ 10.51 $ 10.68 $ 10.23 $ 11.28
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... .6947 .7344 .7479 .7703 .7296
Net realized and unrealized gain (loss) on
investments.............................. .0877 .1600 (.1700) .4500 (.9300)
------- ------- ------- ------- -------
Total from investment operations.......... .7824 .8944 .5779 1.2203 (.2004)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends paid to stockholders:
From net investment income................ (.6947) (.7344) (.7479) (.7703) (.7296)
In excess of net investment income........ (.0277) -0- -0- -0- -0-
From net realized gains................... -0- -0- -0- -0- (.1200)
------- ------- ------- ------- -------
Total distributions to stockholders....... (.7224) (.7344) (.7479) (.7703) (.8496)
------- ------- ------- ------- -------
Net asset value, end of year.............. $ 10.73 $ 10.67 $ 10.51 $ 10.68 $ 10.23
======= ======= ======= ======= =======
Total return.............................. 7.58% 8.87% 5.63% 12.37% (1.82%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's)........ $80,174 $53,572 $57,267 $62,258 $60,613
Ratio of expenses to average net assets... 0.53% 0.53% 0.52% 0.53% 0.51%
Ratio of net investment income to average
net assets............................... 6.48% 7.01% 7.10% 7.39% 6.81%
Portfolio turnover rate................... 93% 135% 165% 177% 376%
</TABLE>
- --------------------------------------------------------------------------------
33
<PAGE> 37
-------------------------------------------------------------------------------
NEW ACCOUNT APPLICATION
ASSET MANAGEMENT FUND, INC. (AMF)
I. HOW TO OPEN YOUR AMF ACCOUNT AND PURCHASE SHARES
- Please complete the requested information. You may call toll free to open
a temporary account, 1-800-527-3713, or fax your completed application to
(312) 214-1424. Mail the original completed application to the Fund's
distributor, Shay Financial Services, Inc., 230 W. Monroe Street, Chicago,
IL 60606. Your new AMF account number will be assigned.
TO PLACE YOUR ORDER
- Call toll free 1-800-527-3713 to place your order and confirm wire
instructions.
- Wire funds to:
PFPC Trust Company, ABA 031 000 053
BNF Mutual Fund Services / 8529992181
Portfolio Name (Money Market Portfolio, Short U.S. Government Securities
Portfolio,
Adjustable Rate Mortgage (ARM) Portfolio, Intermediate Mortgage
Securities
Portfolio or U.S. Government Mortgage Securities Portfolio)
Customer Name
Account Number
- Written confirmations and monthly statements of your AMF transactions will
be mailed to you.
II. ACCOUNT REGISTRATION
Name of Institution
-----------------------------------------------------------------------------
Attention
-----------------------------------------------------------------------------
E-Mail Address
-----------------------------------------------------------------------------
Mailing Address
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Phone Number
-----------------------------------------------------------------------------
Fax Number
-----------------------------------------------------------------------------
Tax Identification Number
-----------------------------------------------------------------------------
<PAGE> 38
-------------------------------------------------------------------------------
III. REDEMPTION
Please provide complete instructions for wiring of redemption proceeds in
Federal funds to your account with a bank or trust company.
Name of Bank
or Trust Company
-----------------------------------------------------------------------------
Street Address
-----------------------------------------------------------------------------
City, State, Zip
-----------------------------------------------------------------------------
ABA Number
-----------------------------------------------------------------------------
Account Name
-----------------------------------------------------------------------------
Account Number
-----------------------------------------------------------------------------
IV. DIVIDENDS
Please select "Cash" or "Reinvest" for your dividend distributions. [
] Cash [ ] Reinvest
V. PHONE ORDER AUTHORIZATIONS
Please list individuals (up to three) who are authorized to make purchases
and redemptions by phone:
- Name
-----------------------------------------------------------------------------
Phone
-----------------------------------------------------------------------------
- Name
-----------------------------------------------------------------------------
Phone
-----------------------------------------------------------------------------
- Name
-----------------------------------------------------------------------------
Phone
-----------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- --------------------------------------------------------------------------------
Name (print or type)
- --------------------------------------------------------------------------------
Title
- --------------------------------------------------------------------------------
Phone Number
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
<PAGE> 39
SHAREHOLDER REFERENCE INFORMATION
- --------------------------------------------------------------------------------
DISTRIBUTOR
Shay Financial Services, Inc.
230 West Monroe Street
Chicago, Illinois 60606
Investment Adviser
Shay Assets Management, Inc.
230 West Monroe Street
Chicago, Illinois 60606
ADMINISTRATOR AND TRANSFER AND
DIVIDEND AGENT
PFPC Inc.
103 Bellevue Parkway
Wilmington, Delaware 19809
LEGAL COUNSEL
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601
Custodian
PFPC Trust Company
17th & Chestnut Streets
Philadelphia, Pennsylvania 19101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
DIRECTORS AND OFFICERS
Richard M. Amis
Director
Arthur G. De Russo
Director
David F. Holland
Director
Gerald J. Levy
Director and Vice Chairman
Rodger D. Shay
Director and Chairman
Edward E. Sammons, Jr.
President and Treasurer
Robert T. Podraza
Vice President and Assistant Treasurer
Daniel K. Ellenwood
Secretary
Doris J. Pavel
Assistant Secretary
Additional information about the Portfolios' may be found in the Statement of
Additional Information. The Statement of Additional Information contains more
detailed information on fund investments and operations. The semiannual and
annual shareholder reports contain a discussion of the market conditions and the
investment strategies that significantly affected the Portfolios' performance
during the last fiscal year, as well as a listing of portfolio holdings and
financial statements. These documents may be obtained without charge from the
following sources:
By Phone:
1-800-527-3713
By Mail:
Shay Financial Services, Inc.
Attn: Asset Management Fund, Inc.
230 West Monroe Street
Chicago, IL 60606
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
(a duplication fee is charged)
In Person:
Public Reference Room
Securities and Exchange Commission,
Washington, D.C.
(Call 1-800-SEC-0330 for more information)
By Internet:
http://www.amffunds.com
http://www.sec.gov
The Statement of Additional Information is incorporated by reference into this
prospectus (is legally a part of this prospectus).
Investment Company Act file number: Asset Management Fund, Inc. 811-3541
<PAGE> 40
[ASSET MANAGEMENT FUND, INC. LOGO]
230 West Monroe Street, Chicago, IL 60606 - 1-800-527-3713
