<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 4, 1999
1933 ACT REGISTRATION NO. 2-78808
1940 ACT REGISTRATION NO. 811-3541
- --------------------------------------------------------------------------------
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. 31 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 32 [X]
(Check appropriate box or boxes)
--------------
ASSET MANAGEMENT FUND, INC.
(Exact name of Registrant as specified in Charter)
230 WEST MONROE STREET, CHICAGO, ILLINOIS 60606
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including Area Code: 312-644-3100
EDWARD E. SAMMONS, JR. with a copy to:
PRESIDENT AND TREASURER CATHY G. O'KELLY, ESQ.
ASSET MANAGEMENT FUND, INC. VEDDER, PRICE, KAUFMAN & KAMMHOLZ
230 WEST MONROE STREET 222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60606 CHICAGO, ILLINOIS 60601
(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); or
[ ] on (date) pursuant to paragraph (b); or
[X] 60 days after filing pursuant to paragraph (a)(1); or
[ ] on (date) pursuant to paragraph (a)(1); or
[ ] 75 days after filing pursuant to paragraph (a)(2); or
[ ] 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.
- --------------------------------------------------------------------------------
<PAGE> 2
ASSET MANAGEMENT FUND
Money Market Portfolio
D Shares
Prospectus ,1999
----------
<PAGE> 3
PROVIDING INVESTMENT
OPPORTUNITIES COVERING THE
COMPLETE MATURITY RANGE OF
FIXED INCOME SECURITIES
, 1999
- -----------
- -------------------------------------------------------------------------------
PROSPECTUS
- -------------------------------------------------------------------------------
[AMF LOGO]
- -------------------------------------------------------------------------------
ASSET MANAGEMENT FUND
MONEY MARKET PORTFOLIO
D SHARES
This Fund:
- is not federally insured
- has no bank or government guarantees
- is 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> 4
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Summary ..............................................1
Money Market Portfolio ...............................1
Summary ..............................................1
Investment Information ...............................3
Investment Objectives and Principal Investment
Strategies......................................3
Description of Securities and Related Risks .......4
Variable and Floating Rate Securities ..........4
Repurchase Agreements ..........................4
Year 2000 ......................................4
Fund and Portfolio Information .......................4
Advisory Fee Expenses ..........................4
Portfolio Managers .............................5
Distributor .......................................5
Net Asset Value ......................................5
Investing in the Fund ................................5
Purchases and Redemptions .........................5
Minimum Investment Required .......................7
Dividends .........................................7
Capital Gains .....................................7
Redeeming Shares .....................................7
Telephone Redemption ..............................8
Signatures .....................................8
Receiving Payment ..............................8
Shareholder Information ..............................8
Voting Rights .....................................8
Tax Information ...................................9
<PAGE> 5
MONEY MARKET PORTFOLIO SUMMARY
- -------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Money Market Portfolio (the "Portfolio"), a portfolio of the Asset
Management Fund (the "Fund"), seeks to achieve as high a level of current
income as is consistent with the preservation of capital and the
maintenance of liquidity.
In pursuing this objective, the Portfolio will limit its investments and
investment techniques so as to qualify for investment by national banks,
federal savings associations, and federal credit unions.
MAIN INVESTMENT STRATEGIES
The 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.
MAIN RISKS OF INVESTING
Since the 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.
PORTFOLIO PERFORMANCE HISTORY
The following bar chart provides an illustration of how the performance of
the Portfolio has varied over time and it depicts the change in the
Portfolio's performance from year-to-year during the period indicated. The
information below reflects the actual performance of the Class I Shares of
the Portfolio. The Class D Shares of the Portfolio is a new Class for the
Fund for which performance is not yet available. The Class I Shares of the
Fund are offered in a separate Prospectus. The returns for the Class D
Shares will be substantially similar to those of the Class I Shares shown
in the chart below because all shares of the Fund are invested in the same
portfolio of securities. The annual returns of the different Classes of
shares will differ only to the extent that the expenses of the Classes
differ. A Portfolio's past performance does not necessarily indicate how it
will perform in the future.
Annual Returns for the Years Ended December 31
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
- -------------------
* 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.
1
<PAGE> 6
AVERAGE ANNUAL TOTAL RETURNS (years ended December 31, 1998)
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
Money Market Portfolio, Class D Shares ........ 5.25% 5.07% 5.44%
FEES AND EXPENSES:
SHAREHOLDER FEES. The Portfolio does not 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,
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 PORTFOLIO
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.
MONEY MARKET PORTFOLIO
CLASS D SHARES
----------------------
SHAREHOLDER FEES
Maximum Sales Charge Imposed on Purchases ..... None
Maximum Sales Charge Imposed on Reinvested
Dividends ................................. None
Redemption Fees ............................... None
Exchange Fees ................................. None
Maximum Account Fee ........................... None
ANNUAL PORTFOLIO OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET ASSETS)
Advisory Fee .................................. 0.15%
12b-1 Fees .................................... 0.60%*
Other Expenses ................................ 0.10%
----
Total Fund Operating Expenses ................. 0.85%
====
- ----------------
* This table and the following example have been prepared to illustrate annual
Fund Operating Expenses assuming no fee waivers. The Distributor has
voluntarily waived .10% of its 12b-1 fees during the 1998 fiscal year. Due
to the Distributor waiving fees, the actual expenses for the Class D Shares
of the Money Market Portfolio would have been .75% for 1998.
EXAMPLE
This example is intended to help you compare the cost of investing in Class D
Shares of the Money Market Portfolio with the cost of investing in other mutual
funds. The example assumes that you invest $ 10,000 in Class D Shares 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:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market Portfolio, Class D Shares ....... [$85] [$250] [$450] [$900]
2
<PAGE> 7
INVESTMENT INFORMATION
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
- -------------------------------------------------------------------------------
The investment objective of the Portfolio is to achieve as high a level
of current income as is consistent with the preservation of capital and
the maintenance of liquidity. The Portfolio pursues this investment
objective by investing in the securities described below. While there
is no assurance that the portfolio will achieve its investment
objective, it endeavors to do so by following the investment policies
and limitations described below. The Portfolio will limit its
investments and investment techniques so as to qualify for investment
by national banks, federal savings associations and federal credit
unions. The Portfolio's investment objective and this policy cannot be
changed as to the Portfolio without approval of the Portfolio's
shareholders.
The 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 will maintain
a stable net asset value of $1.00 per share and will use the amortized
cost method of valuation, pursuant to Rule 2a-7.
Permissible investments for the 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 governinent 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.
The 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
Trustees has adopted operating policies to further restrict certain
investments (see the Statement of Additional Information for the
Portfolio).
3
<PAGE> 8
DESCRIPTION OF SECURITIES AND RELATED RISKS
- -------------------------------------------------------------------------------
Variable and Floating Rate Securities
The Portfolio 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. The 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 Portfolio may enter into repurchase agreements under which it may
acquire securities in which the 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. The 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. The Portfolio
will not 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 the Portfolio or on markets or on the economy in general.
FUND AND PORTFOLIO INFORMATION
INVESTMENT ADVISER
- -------------------------------------------------------------------------------
Investment decisions for the Portfolio 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 Portfolio pays 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:
Money Market Portfolio ...........................0.00%*
- -----------------
4
<PAGE> 9
* The investment advisers voluntarily waived all advisory fees for the
Portfolio. Without such waivers, the fee would have been 0.15%.
Voluntary waivers may be terminated at any time by the Adviser.
PORTFOLIO MANAGERS
The Portfolio Managers of the Adviser manage the Portfolio'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.
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 Class D Shares,
directly and through other firms advertises and promotes the Fund. In
addition, the Distributor retains BISYS Fund Services Ohio, Inc. and
various financial institutions to administer and operate, respectively,
sweep programs through which investors may invest in the Class D
Shares. 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 the Class's assets on an on-going basis over time, these fees
will increase the cost of your investment. This charge could cost you
more over time than you would pay through some other types of sales
charges.
NET ASSET VALUE
The 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 Trustees
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.
INVESTING IN THE FUND
PURCHASES AND REDEMPTIONS
- -------------------------------------------------------------------------------
Automatic Investments
Investors may establish accounts with their financial institution to
have cash accumulations automatically invested in the Trust. The
investments may be made on predetermined dates or when the investor's
account reaches a certain level. Participating financial institutions
are responsible for prompt transmission of orders relating to the
program, and they may charge for their services. Investors should read
this prospectus along with the financial institution's agreement or
literature describing these services and fees.
Purchases
Shares of the Portfolio may be purchased by institutions that have
entered into service agreements with the Distributor and opened
accounts with the Trust. Call 1-800- for information. Establishment
of an account requires that certain documents and applications be
signed before the investment can be processed. Fees in addition to
those described herein may be charged by some institutions which
establish accounts on behalf of their customers.
The minimum initial investment in the Portfolio is $10,000.00.
Institutions may satisfy the minimum investment by aggregating their
fiduciary accounts. Subsequent investments may be in any amount.
Investors will be notified if the minimum balance is not being
maintained and will be allowed 30 days to make additional investments
before the account is closed. Any involuntary redemptions will be
effected at the price at 3:00 p.m. (Eastern time).
5
<PAGE> 10
Purchase orders must be transmitted to the Portfolio's transfer agent,
BISYS Fund Services Ohio, Inc. (the "Transfer Agent"). The Portfolio
requires advance notification of all wire purchases. Purchases may be
made only by wire.
A purchase order for shares in the Portfolio received by the Transfer
Agent by 2:00 p.m. (Eastern time) on a day the New York Stock Exchange
("NYSE") and both the Boston and New York Federal Reserve Banks are
open ("Business Day") will be executed at the net asset value per share
next determined after receipt of the order and will receive the
dividend declared on the day of purchase, provided that the Trust's
custodian, The Bank of New York (the "Custodian"), receives the wire by
the close of the Federal Reserve wire system on that Business Day.
The Portfolio reserves the right to reject any purchase order. Purchase
orders may be refused if, for example, they are of a size that could
disrupt management of the Portfolio. Purchases by exchange are not
permitted.
Redemptions
Shareholders may redeem all or a portion of their shares on any
Business Day. Shares will be redeemed at the net asset value next
calculated after the Transfer Agent has received the redemption
request. If an account is closed, any accrued dividends will be paid
within 10 days of the beginning of the following month.
Shares may be redeemed, and the redemption proceeds wired, on the same
day if telephone redemption instructions are received by the Transfer
Agent by 12:00 p.m. (Eastern time) on the day of redemption for the
Portfolio. Shares redeemed and wired on the same day will not receive
the dividend declared on the day of redemption. A shareholder whose
redemption instructions are received by the Transfer Agent after 12:00
p.m. (Eastern time) will receive the dividend declared on the day on
which the redemption instructions were received and will receive wired
redemption proceeds on the next Business Day. Shareholders may change
the bank account designated to receive an amount redeemed at any time
by sending a letter of instruction with a signature guarantee to the
Transfer Agent, BISYS Fund Services Ohio, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219.
If making immediate payment of redemption proceeds could adversely
affect the Portfolio, shareholders may be paid up to seven days after
receipt of the redemption request. Also, when the NYSE or either the
Boston or New York Federal Reserve Bank is closed (or when trading is
restricted) for any reason other than its respective customary weekend
or holiday closing, or under any emergency circumstances as determined
by the Securities and Exchange Commission ("SEC") to merit such action,
redemption or payment may be suspended or postponed.
Shares also may be redeemed by mail by submitting an order addressed
to: Asset Management Fund, 230 West Monroe, Chicago, Illinois 60606. If
transactions by telephone cannot be executed (e.g., during times of
unusual market activity), orders should be placed by mail. In case of
suspension of the right of redemption, a shareholder may either
withdraw its request for redemption or receive payment based on the net
asset value next determined after the termination of the suspension.
The Trust reserves the right to refuse a wire or telephone redemption
if the Manager of the Transfer Agent believes it is advisable to do so.
Upon 60 days' prior notice to existing shareholders, procedures for
redeeming shares by wire or telephone may be modified or terminated at
any time by the Trust or the Transfer Agent.
ADDITIONAL INFORMATION
Shareholder Services
Shareholders should verify the accuracy of all transactions immediately
upon receipt of their confederation statements. Neither the Trust nor
the Transfer Agent will be liable for following instructions
communicated by telephone that it reasonably believes to be genuine.
The privilege to initiate transactions by telephone is made available
to shareholders automatically. The Trust will employ reasonable
procedures to confirm that instructions communicated by telephone are
genuine, including: requiring some form of personal identification
prior to acting upon instructions received by telephone, providing
written confirmation of such transactions or tape recording of
telephone instructions. If it does not employ
6
<PAGE> 11
reasonable procedures to confirm that telephone instructions are
genuine, the Trust or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent instructions.
To allow the Portfolio to be managed effectively, shareholders are
urged to initiate all trades (investments and redemptions of shares) as
early in the day as possible and to notify the Trust by calling the
Transfer Agent at least one day in advance of trades in excess of
$10,000,000. In making trade requests, the name of the shareholder and
the account number(s) must be supplied.
Statements and Reports
Shareholders will receive a monthly statement and a confirmation after
every transaction that affects the share balance or the account
registration. A statement with tax information will be mailed by
January 31st following each tax year and also will be filed with the
Internal Revenue Service. At least twice a year, shareholders will
receive the Portfolio's financial statements.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Portfolio is $ 10,000. There is
no minimum balance. Subsequent purchases may be made in any amount.
WHAT SHARES COST
D Shares are sold at their net asset value next determined after the
purchase order becomes effective. The 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 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. For purposes of pricing redemption orders, net asset value
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, BISYS Fund Services Ohio,
Inc. ("BISYS") maintains a share account for each shareholder of
record. Detailed confirmations of each purchase or redemption are sent
to each shareholder of record. Monthly confirmations are sent to report
dividends paid during the month. Investors who hold their shares
through financial institutions may receive their confirmations from
their financial institution.
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 Portfolio unless
the shareholder requests cash payments by contacting its financial
institution.
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 the Portfolio are declared and
paid once each year and reinvested in shares or, at the shareholder's
option, paid in cash.
REDEEMING SHARES
The Portfolio redeems shares at its net asset value 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.
7
<PAGE> 12
TELEPHONE REDEMPTION
Shareholders may redeem their shares by telephoning their financial
institution on a Business Day. 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 shareholder'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.
Since a shareholder 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
Shares may also be redeemed by financial institutions by sending a
written request to the Distributor, 230 W. Monroe Street, Chicago,
Illinois 60606; Attention: Asset Management Fund. If share certificates
have been issued, they must be properly endorsed and guaranteed and be
received by BISYS 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 Fund 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. Shareholders 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.
SHAREHOLDER INFORMATION
VOTING RIGHTS
Besides the Money Market Portfolio, the Fund has four other portfolios:
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; shares
of each Portfolio represent interests only in the corresponding
Portfolio and having equal voting rights within that Portfolio. The
Money Market Portfolio is the only portfolio of the Fund that has two
classes of shares, the D Shares and the I Shares; shares of each class
have equal voting rights within each class and within the Money Market
Portfolio. The Fund's Declaration of Trust provides that on any matter
submitted to a vote of shareholders, all shares, irrespective of
portfolio or class, shall be voted in the aggregate and not by
portfolio or class, except that (i) as to any matter with respect to
which a separate vote of any portfolio or class is required by
8
<PAGE> 13
the Investment Company Act of 1940, such requirements as to a separate
vote by that portfolio or 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 portfolio or class, only
shareholders of the affected portfolio or class shall be entitled to
vote thereon. The Bylaws of the Fund require that a special meeting of
shareholders be held upon the written request of shareholders holding
not less than 10% of the issued and outstanding shares of the Fund (or
the Portfolio or Classes thereof).
TAX INFORMATION
The Portfolio 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. The Portfolio intends to
remain so qualified for its future taxable years so long as such
qualification is in the best interests of shareholders.
The Fund intends to distribute all of the net income and any gains of
the Portfolio to shareholders. Unless otherwise exempt, shareholders
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
shareholders 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.
9
<PAGE> 14
SHAREHOLDER REFERENCE INFORMATION
<TABLE>
<S> <C>
DISTRIBUTOR TRUSTEES AND OFFICERS
Shay Financial Services, Inc. Richard M. Amis
230 West Monroe Street Trustee
Chicago, Illinois 60606
Arthur G. De Russo
INVESTMENT ADVISER Trustee
Shay Assets Management, Inc.
230 West Monroe Street David F. Holland
Chicago, Illinois 60606 Trustee
ADMINISTRATOR AND TRANSFER AND Gerald J. Levy
DIVIDEND AGENT Trustee and Vice Chairman
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road Rodger D. Shay
Columbus, Ohio 43219 Trustee and Chairman
LEGAL COUNSEL Edward E. Sammons, Jr.
Vedder, Price, Kaufman & Kammholz President
222 North LaSalle Street
Chicago, Illinois 60601 Robert T. Podraza
Vice President and Assistant Treasurer
CUSTODIAN
The Bank of New York Steve Pierce
One Wall Street Treasurer
New York, New York 10286
Daniel K. Ellenwood
INDEPENDENT ACCOUNTANTS Secretary
PricewaterhouseCoopers LLP
2400 Eleven Penn Center Chris Cwik
Philadelphia, Pennsylvania 19103 Assistant Secretary
</TABLE>
Additional information about the Portfolio may be found in the Statement of
Additional Information. The Statement of Additional Information contains more
detailed information on the Fund's investments and operations. The semiannual
and annual shareholder reports contain a discussion of the market conditions and
the investment strategies that significantly affected the Portfolio's
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:
<TABLE>
<S> <C>
By Phone: In Person:
1-800-527-3713
Public Reference Room
By Mail: Securities and Exchange Commission,
Shay Financial Services, Inc. Washington, D.C.
Attn: Asset Management Fund (Call 1-800-SEC-0330 for more information)
230 West Monroe Street
Chicago, IL 60606 By Internet:
Public Reference Section http://www.amffunds.com
Securities and Exchange Commission http://www.sec.gov
Washington, D.C. 20549-6009
(a duplication fee is charged)
</TABLE>
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 811-3541
<PAGE> 15
STATEMENT OF ADDITIONAL INFORMATION
____________________ ,1999
MONEY MARKET PORTFOLIO
ASSET MANAGEMENT FUND
230 WEST MONROE STREET, CHICAGO, ILLINOIS 60606
The Money Market Portfolio (the "Portfolio") is a portfolio of Asset
Management Fund (the "Fund"), a professionally managed, diversified, open-end
management investment company. The Portfolio is represented by two classes of
shares separate from those of the Fund's other portfolios.
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Portfolio's Prospectus, dated _, 1999 (the
"Prospectus"), a copy of which may be obtained from the Fund at the address
noted above.
The financial statements pertaining to this portfolio which appears in
the Fund's 1998 Annual Report to Shareholders are incorporated herein by
reference.
<PAGE> 16
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
FUND HISTORY .............................................................B-1
THE PORTFOLIO'S OBJECTIVE AND ITS INVESTMENT POLICIES ....................B-1
PURCHASE AND REDEMPTION OF SHARES ........................................B-2
DIVIDENDS, DISTRIBUTIONS, YIELD AND TOTAL RETURN QUOTATIONS ..............B-2
MANAGEMENT OF THE FUND ...................................................B-3
INVESTMENT ADVISER AND ADMINISTRATOR .....................................B-7
DISTRIBUTOR .............................................................B-10
ADMINISTRATOR AND TRANSFER AND DIVIDEND AGENT ...........................B-11
CUSTODIAN ...............................................................B-12
DETERMINATION OF NET ASSET VALUE ........................................B-12
TAXES ...................................................................B-13
PORTFOLIO TRANSACTIONS ..................................................B-13
INVESTMENT RESTRICTIONS .................................................B-14
ORGANIZATION AND DESCRIPTION OF FUND SHARES .............................B-16
COUNSEL AND INDEPENDENT ACCOUNTANTS .....................................B-16
GENERAL INFORMATION .....................................................B-16
FINANCIAL STATEMENTS ....................................................B-17
</TABLE>
<PAGE> 17
Capitalized terms not defined in this Statement of Additional
Information and defined in the Prospectus shall have the meanings defined in the
Prospectus.
FUND HISTORY
Asset Management Fund (the "Fund") is a Delaware business trust
organized under an Agreement and Declaration of Trust ("Declaration of Trust")
dated ___________ 1999. The Fund was formerly a Maryland corporation, which
commenced operations on November 9, 1982. In September 1994, the Fund changed
its name from Asset Management Fund for Financial Institutions, Inc. to Asset
Management Fund, Inc. and in September __, 1999, as part of the reorganization
into a Delaware business trust, changed its name to Asset Management Fund.
THE PORTFOLIO'S OBJECTIVE AND ITS INVESTMENT POLICIES
Under the policies adopted by the Board of Trustees of the Fund,
permissible investments for the Portfolio include those described in the
Prospectus, together with the following, as long as principal and interest on
such investments are not in default:
Time deposits (negotiable and non-negotiable) in a Federal Home Loan
Bank, the Bank for Savings and Loan Associations, Chicago, Illinois or the
Savings Banks Trust Company, New York, New York.
Repurchase Agreements. If the seller defaults in its obligation to
repurchase from the Portfolio the underlying instrument, which in effect
constitutes collateral for the seller's obligation, at the price and time fixed
in the repurchase agreement, the Portfolio might incur a loss if the value of
the collateral declines and might incur disposition costs in connection with
liquidating the collateral. In addition, if bankruptcy proceedings are commenced
with respect to the seller, realization upon the collateral by the Portfolio may
be delayed or limited. The Portfolio will always receive as collateral
instruments whose market value, including accrued interest, will be at least
equal to 100% of the dollar amount invested by the Portfolio in each agreement.
The Portfolio enters into repurchase agreements with primary government
securities dealers.
Certificates of Deposit. The Portfolio may invest in certificates of
deposit issued by and other time deposits in foreign branches of FDIC insured
banks. Investment in such deposits may involve somewhat different investment
risks from those affecting deposits in United States branches of such banks.
These risks, which might adversely affect the payment of principal and interest
on such deposits, include the possibility that a foreign jurisdiction might
impose withholding taxes on interest income payable on such deposits, the
possible seizure or nationalization of foreign deposits or the possible adoption
of foreign governmental restrictions, such as exchange controls.
FDIC Insured Institutions. Although the Portfolio's investment in
savings accounts and in certificates of deposit and other time deposits in an
FDIC Insured Institution is insured to the extent of $100,000 by the Federal
Deposit Insurance Corporation, the Portfolio may invest more than $100,000 with
a single Institution, and any such excess and any interest on the investment
would not be so insured. Deposits in foreign branches of FDIC insured banks are
not insured by the Federal Deposit Insurance Corporation.
The Portfolio will invest in securities issued by an FDIC Insured
Institution only if such Institution or a security issued by such Institution
(i) has a short-term debt obligation rating in the highest category by at least
two nationally recognized statistical rating organizations ("NRSROs"), or (ii)
if rated by two NRSROs in the second-highest category for short-term debt
obligations, are purchased only in the amounts prescribed for "Second Tier
Securities" by Rule 2a-7 under the Investment Company Act of 1940, as amended,
or (iii) if rated only by one NRSRO (with such rating in the highest category),
the investment is submitted to the Board of Trustees for approval or
ratification, or (iv) if no such ratings are available, is of comparable
quality in the opinion of the Adviser and, except in the case of a government
security, the investment is submitted to the Board of Trustees of the Fund for
approval or ratification.
The Portfolio does not invest in securities with a remaining maturity
of greater than 397 calendar days.
<PAGE> 18
Other Current Policies. Under current policies of the Board of
Trustees, the Fund has adopted certain voluntary restrictions with respect to
the Portfolio's investments. These restrictions:
(1) prohibit the purchase of obligations of Federal Land Banks,
Federal Intermediate Credit Banks, the Export-Import Bank of the United States,
the Commodity Credit Corporation, the National Credit Union Administration and
the Tennessee Valley Authority;
(2) limit the use of repurchase agreements to repurchase agreements
involving obligations of the U.S. Government, including zero coupon Treasury
securities that have been stripped of either principal or interest by the U.S.
Government so long as the maturity of these securities does not exceed ten
years, and obligations of the Federal Home Loan Banks, Fannie Mae, the
Government National Mortgage Association, the Federal Farm Credit Banks, the
Federal Financing Bank, the Student Loan Marketing Association and Freddie Mac;
(3) prohibit investments in reverse repurchase agreements until such
time as federal credit unions may invest in them without limitation;
(4) limit the maturities of bankers' acceptances to six months and
prohibit investments in bankers' acceptances of Edge Act corporations guaranteed
by their FDIC-insured parent banks until such time as the appropriateness of
these latter investments for federal credit unions is clarified; and
(5) prohibit loans of federal funds until such time as investors are
limited to institutions meeting the requirements of Regulation D of the Board of
Governors of the Federal Reserve System.
Although these restrictions are not fundamental policies of the Fund
and may be changed without shareholder vote, the Fund will not alter these
restrictions without notice to shareholders.
See "Investment Restrictions" in this Statement of Additional
Information for a description of additional investment restrictions of the
Portfolio.
PURCHASE AND REDEMPTION OF SHARES
The Fund believes that shares of the Portfolio are eligible for
purchase without limitation by federal thrifts, national banks and federal
credit unions.
Investors may be charged a fee if they effect transactions through a
broker or agent. Brokers and intermediaries are authorized to accept orders on
the Fund's behalf.
The Fund reserves the right to suspend the right of redemption and to
postpone the date of payment upon redemption (1) for any period during which the
New York Stock Exchange (the "Exchange") is closed, other than customary weekend
and holiday closings, or during which trading on the Exchange is restricted, or
(2) for any period during which an emergency, as defined by the rules of the
Securities and Exchange Commission, exists as a result of which (i) disposal by
the Fund of securities held by the Portfolio is not reasonably practicable, or
(ii) it is not reasonably practicable for the Fund to determine the value of the
Portfolio's net assets, or (3) for such other periods as the Securities and
Exchange Commission, or any successor governmental authority, may by order
permit for the protection of shareholders of the Portfolio.
DIVIDENDS, DISTRIBUTIONS, YIELD AND TOTAL RETURN QUOTATIONS
Dividends on shares of each class of the Portfolio are paid monthly on
the first Business Day of each month.
The Fund seeks to maintain for the Portfolio a net asset value of
$1.00 per share for purchases and redemptions. In order to effectuate this
policy, the Fund may, under certain circumstances, withhold dividends or make
distributions from capital or capital gains.
Net income of each Class of the Portfolio for dividend purposes (from
the time of the immediately preceding determination thereof) will consist of (i)
interest accrued and discount earned (including both original issue and market
B-2
<PAGE> 19
discount) less amortization of any premium, (ii) plus all realized net
short-term and long-term gains, if any, on portfolio securities, (iii) less the
accrued expenses attributable to the Portfolio and the relevant Class and the
general expenses of the Fund prorated on the basis of relative net assets of the
Portfolio and the Class in relation to the net assets of the Fund's other
portfolios applicable to that period.
From time to time each Class of the Portfolio advertises its "yield" and
"effective yield." Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of the Class refers to
the income generated by an investment in the Class over a seven-day period
(which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Class
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment. Any
agreement by the Adviser and Distributor to reduce or waive their fees under
certain circumstances may cause the Class's yields to be higher than they
otherwise would be.
The seven-day yield and seven-day effective yield of the Class I Shares
for the period ended October 31, 1998, were 4.60% and 4.71%, respectively.
Without fee waivers, the seven-day yield would have been 4.45%, and the
seven-day effective yield would have been 4.56%. The seven-day yield was
calculated by dividing the aggregate net income per share for dividend purposes
(excluding, however, any realized gains or losses) for the seven-day period by
the average net asset value per share for such period and multiplying this
return by 365/7. The seven-day effective yield was calculated similarly, but,
when annualized, all income earned over the seven-day period was assumed to be
reinvested.
From time to time in sales literature, the Portfolio may quote a yield
for a period either less than or greater than seven days. Any quotation of yield
for a period of either less than or greater than seven days will identify the
length of and the date of the last day in the base period used in computing that
quotation. Any such quotation will also include the seven-day yield and
effective yields of the same day.
From time to time the Portfolio may also compare its performance with
various indices and investments, other performance measures or rankings, or
other mutual funds, or indices or averages of other mutual funds.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES
The Fund is managed by a Board of Trustees. The Trustees are responsible
for managing the Fund's business affairs and for exercising all the Fund's
powers except those reserved for the shareholders. The Trustees'
responsibilities include reviewing the actions of the Fund's investment adviser,
distributor and administrator.
TRUSTEES AND OFFICERS
Trustees and Officers of the Fund, together with information as to their
principal business occupations during the last five years, are shown below. Each
trustee who is an "interested person" of the Fund, as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), is indicated by an asterisk.
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS Age HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- -----------------------
<S> <C> <C> <C>
Richard M. Amis 48 Trustee President, First Federal Savings & Loan Association
630 Clarksville Street since 1984; Director, First Financial Trust Company;
Paris, TX 75460 formerly Chairman, Texas Savings and Community
Bankers Association.
</TABLE>
B-3
<PAGE> 20
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS Age HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- -----------------------
<S> <C> <C> <C>
Arthur G. De Russo 78 Trustee Chief Executive Officer, Eastern Financial Federal
5397 S.E. Major Way Credit Union from 1974 to 1992; Chairman and
Stuart, FL 34997 Director, First Credit Union Trust Co., Inc. from
1988 to 1992; President of the Airline Credit
Union Conference in 1991; Director, Honor
ATM Network, Florida from 1985 to 1990.
David F. Holland 57 Trustee Chairman of the Board since 1989 and Chief
17 New England Executive Park Executive Officer since 1986 of Boston Federal
Burlington, MA 01803 Savings Bank; Director of Fund from 1988 to 1989
and since 1993; Director of Federal Home
Loan Bank of Boston; until December 1997
Chairman of America's Community Banking
Partners, Inc. and Director of ACB Investment
Services, Inc.; Director of M.S.B. Fund,
Inc. since 1997; Director and Chairman since
December 1995 of Center for Financial Studies;
Director of NYCE Corporation since 1995;
Director from 1990 to 1995 and Chairman
1993-1994 of America's Community Bankers;
member from 1995 to 1997 and President since
1997 of Thrift Institutions Advisory Council.
Gerald J. Levy 67 Vice Chairman Chairman and Chief Executive Officer, Guaranty
4000 W. Brown Deer Road of the Board and Bank, S.S.B. since 1984 (from 1959 to 1984, he held
Milwaukee, WI 53209 Trustee a series of officer's positions, including President).
Chairman, 1986, United States League of Savings
Institutions; Director of Flserv, Inc. since 1986;
Director since 1995 of the Republic Mortgage Insurance
Company; Director of the Federal Asset Disposition
Association from 1986 to 1989; and, previously
Director and Vice Chairman, Federal Home Loan Bank of
Chicago and member of Advisory Committee of the
Federal Home Loan Mortgage Corporation and Federal
National Mortgage Corporation.
</TABLE>
B-4
<PAGE> 21
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS Age HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- -----------------------
<S> <C> <C> <C>
Rodger D. Shay 62 Chairman of the Chairman and Director of Shay Assets Management,
1000 Brickell Avenue Board and Trustee Inc. since August 1997 (previously President and
Miami, FL 33131 Director from 1990 to August 1997); Chairman and
Director of Shay Financial Services, Inc. since
August 1997 (previously President and Director
from 1990 to August 1997); President, Chief Executive
Officer and member of the Managing Board of Shay
Assets Management Co. from 1990 to December 1997;
President, Chief Executive Officer and member of the
Managing Board of Shay Financial Services Co.
from 1990 to December 1997; [Director from
1986 to 1991 and President from 1986 to 1992, U.S.
League Securities, Inc.; Vice President since 1995 of
Institutional Investors Capital Appreciation
Fund, Inc. and M.S. Fund, Inc.; Director, First Home
Savings Bank, L.A. since 1990; previously Director, Asset
Management Fund, from 1985 to 1990; President of
Bolton Shay and Company and Director and officer of its
affiliates from 1981 to 1985; Previously, employed by
certain subsidiaries of Merrill Lynch & Co. from 1955
to 1981, where he served in various executive positions
including Chairman of the Board of Merrill Lynch
Government Securities, Inc., Chairman of the Board of
Merrill Lynch Money Market Securities, Inc. and
Managing Director of the Debt Trading Division of
Merrill Lynch, Pierce, Fenner & Smith Inc.
Edward E. Sammons, Jr. 59 President President of Shay Assets Management, Inc. since
230 West Monroe Street August 1997 (previously Executive Vice President
Chicago, IL 60606 from 1990 to August 1997); Executive Vice
President and member of the Managing Board of
Shay Assets Management Co. from 1990 to
December 1997. Executive Vice President and
member of the Managing Board of Shay Financial
Services Co. from 1990 to December 1997 and
Executive Vice President of Shay Financial Services,
Inc., from 1990 to August 1997; Vice President and
Secretary since 1995 of Institutional Investors
Capital Appreciation Fund, Inc. and M.S.B. Fund, Inc.
Robert T. Podraza 54 Vice President Vice President of Shay Investment Services, Inc.
230 West Monroe Street and Assistant since 1990; Vice President since 1990 and Chief
Chicago, IL 60606 Treasurer Compliance Officer since 1997 of Shay Financial
Services, Inc.; Vice President since 1990 and Chief
Compliance Officer since 1997 of Shay Assets
Management, Inc.; Chief Compliance Officer of
Shay Financial Services Co. and Shay Assets
Management Co. from 1989 to 1997; Director of the
National Society of Compliance Professionals since 1996.
</TABLE>
B-5
<PAGE> 22
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS Age HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- -----------------------
<S> <C> <C> <C>
Steve Pierce - Treasurer
3435 Stelzer Road
Columbus, OH 43219
Daniel K. Ellenwood 29 Secretary Secretary of the Fund since April 1998; Operations
230 West Monroe Street Analyst, Shay Assets Management, Inc. since
Chicago, IL 60606 November 1997; Compliance Analyst, Shay
Financial Services, Inc. since October 1996.
Chris Cwik - Assistant Secretary
230 West Monroe Street
Chicago, IL 60606
</TABLE>
The following table sets forth the compensation earned by trustees from
the Fund for the fiscal year ended October 31, 1998:
<TABLE>
<CAPTION>
PENSION OR
Aggregate RETIREMENT BENEFITS ESTIMATED ANNUAL
COMPENSATION ACCRUED AS PART BENEFLTS TOTAL
TRUSTEE FROM THE FUND OF FUND EXPENSES UPON RETIREMENT COMPENSATION
- ------- ------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C>
Richard M. Amis $14,500 0 0 $14,500
Arthur G. DeRusso 13,500 0 0 13,500
David F. Holland 14,500 0 0 14,500
Leon T. Kendall(l) 3,375 0 0 3,375
Gerald J. Levy 13,000 0 0 13,000
Rodger D. Shay 0 0 0 0
- ----------------
(1) Retired December 6, 1997.
</TABLE>
B-6
<PAGE> 23
The following table provides certain information at November 30, 1998 as
to the Portfolio with respect to persons known to the Fund to be beneficial (and
record) owners (having sole voting and dispositive power) of 5% or more of the
shares of the Portfolio:
<TABLE>
<CAPTION>
NUMBER PERCENT OF PORTFOLIO'S
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OUTSTANDING COMMON SHARES
------------------------------------ --------- -------------------------
<S> <C> <C>
First Federal Savings and Loan of Westchester 6,778,829 10.44%
221 Mannheim Road
Westchester, IL 60154
Anchor Bank, FSB 5,500,000 8.47%
P.O. Box 7933
Madison, WI 53707
Windsor Federal Savings Bank 5,023,180 7.73%
250 Broad Street
Windsor, CT 06095
Liberty Federal Savings Bank 3,461,372 5.33%
P.O. Box 1028
Enid, OK 73702
Winter Hill Federal Savings Bank 3,358,221 5.17%
342 Broadway
Sommerville, MA 02145
</TABLE>
As of November 30, 1998, one of the trustees had, through the
institutions he serves as an officer, shared voting and investment power over
433,683 shares (0.67%) of the Portfolio.
INVESTMENT ADVISER AND ADMINISTRATOR
The investment adviser of the Fund since December 8, 1997 is Shay Assets
Management, Inc. (the "Adviser"), a Florida corporation, with its principal
office at 230 West Monroe Street, Chicago, Illinois 60606. The Adviser is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and is a wholly owned subsidiary of Shay Investment Services, Inc.,
a closely held corporation controlled by Rodger D. Shay, the President of the
Fund.
Effective December 8, 1997, the Adviser succeeded to the investment
adviser business of Shay Assets Management Co. ("SAMC"), which had been the
Fund's investment adviser since 1990. SAMC was a general partnership that
consisted of two general partners, Shay Assets Management, Inc., the Fund's
current adviser, and ACB Assets Management, Inc. ("ACBAM"), each of which held a
fifty percent interest in the partnership. Shay Assets Management, Inc. is
controlled by Rodger D. Shay and ACBAM is an indirect wholly owned subsidiary of
America's Community Bankers ("ACB"). On December 8, 1997, Shay Assets
Management, Inc. purchased ACBAM's 50% interest in SAMC and the investment
adviser operations were transferred to the Adviser.
The initial term of the Investment Advisory Agreement between the Fund
and the Adviser (the "Advisory Agreement"), was completed as to the Portfolio on
March 1, 1999, and now continues from year to year thereafter, subject to
termination by the Fund or the Adviser as hereinafter provided, if such
continuance is approved at least annually by a majority of the outstanding
shares (as defined under "General Information" in this Statement of Additional
Information) of the Portfolio or by the Fund's Board of Trustees. The Advisory
Agreement must also be approved annually by the vote of a majority of the
trustees of the Fund who are not parties to the Advisory Agreement or
"interested persons" of any party thereto. All trustees' votes must be cast in
person at a meeting called for the purpose of voting on such approval.
B-7
<PAGE> 24
As compensation for the services rendered by the Adviser under the
Advisory Agreement, the Fund pays the Adviser a fee, payable monthly, computed
as follows with respect to the Portfolio: 0.15% per annum of the average daily
net assets of the Portfolio up to and including $500 million; 0.125% per annum
of the next $500 million of such net assets; and 0.10% per annum of such net
assets over $1 billion. The Adviser may supplementally waive advisory fees in an
amount up to but not to exceed 0.15% of the average daily net assets of the
Portfolio. This supplemental waiver agreement may be terminated at any time by
the Adviser. For the Fund's fiscal year ended October 31, 1998 (for the period
beginning December 8, 1997), the Adviser was paid $0 (net of fee waivers of
$80,505) with respect to the Portfolio. For the Fund's fiscal years ended
October 31, 1998 (through December 7, 1997), 1997 and 1996, the Fund paid SAMC
fees of $0 (net of fee waivers of $7,695), $0 (net of fee waivers of $83,068),
and $0 (net of fee waivers of $101,717), respectively, with respect to the
Portfolio.
The Adviser may from time to time enter into arrangements with entities
such as trade associations and affinity groups ("Organizations") whereby the
Adviser agrees to pay such an organization a portion of the management fees
received by the Adviser with respect to assets invested in the Fund by members
of the organization for certain services or products (such as use of logos or
membership lists, bundling with or placement of articles in newsletters or other
organization publications, directory listings, and space at trade shows)
provided by the organization.
The Advisory Agreement provides that the Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by any
portfolio of the Fund in connection with the matters to which the Advisory
Agreement relates, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the 1940 Act) or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under the Advisory
Agreement.
The Advisory Agreement will terminate automatically upon its assignment
and is terminable with respect to the Portfolio at any time without penalty by
the Board of Trustees of the Fund or by a vote of a majority of the outstanding
shares (as defined under "General Information" in this Statement of Additional
Information) of the Portfolio on 60 days' written notice to the Adviser, or by
the Adviser on 90 days' written notice to the Fund.
The Portfolio Managers of the Adviser responsible for making investment
decisions concerning the Fund's investments are Edward E. Sammons, Jr., Rodger
D. Shay, Richard Blackburn, Rodger D. Shay, Jr. and Gregory J. Wisniewski. For
information as to the principal occupations during the past five years of
Messrs. Sammons and Shay, who are also officers of the Fund, see "Management of
the Fund" in this Statement of Additional Information. The principal business
occupations during the past five years and professional backgrounds of the
Portfolio Managers who are not also officers of the Fund are shown below
following each of their names and business addresses.
RICHARD BLACKBURN
230 West Monroe Street
Chicago, IL 60606
Portfolio Manager of the Adviser and SAMC, the Fund's former adviser,
since 1991. With approximately twenty-five years of experience in the securities
industry, his previous employers also include Harris Trust & Savings Bank,
Merrill Lynch, Pierce, Fenner & Smith Inc. and the First National Bank of
Chicago. Mr. Blackburn's primary expertise is in the mortgage securities
markets, particularly in the area of floating and/or adjustable rate securities.
B-8
<PAGE> 25
RODGER D. SHAY, JR.
1000 Brickell Avenue
Miami, FL 33131
Portfolio Manager of the Adviser and SAMC, the Fund's former adviser,
since 1991. President of Shay Financial Services, Inc., since August, 1997,
previously Senior Vice President from 1994 to August, 1997, and Vice President
from 1991 to 1993. He was previously employed by Merrill Lynch, Pierce, Fenner
and Smith Inc. where he served as a senior trader and manager of collateralized
mortgage obligation trading. Mr. Shay's primary expertise is in the mortgage
securities market, particularly in the area of collateralized mortgage
obligations.
GREGORY J. WISNIEWSKI
230 West Monroe Street
Chicago, Illinois 60606
Portfolio Manager of the Adviser and SAMC, the Fund's former adviser,
since 1994. From 1990 to 1994, Vice President of Shay Financial Services, Inc.
and of an affiliate, Shay Government Securities, Inc., and from 1985 to 1990, an
account executive of predecessors of these firms. His previous employers also
include The Chicago Corporation, where he served as an account executive and
financial futures trader, and Harris Trust and Savings Bank, where he served
variously as a manager of the portfolios of correspondent banks and as the
manager of the commercial paper portfolio of Harris Bankcorp.
The Fund's current administrative agent (the "Administrator") with
respect to the Portfolio is BISYS Fund Services Ohio, Inc. ("BISYS"). As of
______________, 1999 PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PNC Bank
Corp., was the Fund's former administrative agent. Pursuant to the terms of the
Administration Agreement (the "Administration Agreement" dated as of __________,
1999, as amended, between the Fund and the Administrator, the Administrator
performs various administrative services for the Fund, including (i) assisting
in supervising all aspects of the Portfolio operations other than those assumed
by the Adviser, the Distributor, the custodian or the transfer and dividend
agent, (ii) providing the Portfolio with the services of persons competent to
perform such administrative and clerical functions as are necessary in order to
provide effective administration of the Portfolio, (iii) maintenance of the
Portfolio's books and records, (iv) preparation of various filings, reports,
statements and returns filed with governmental authorities or distributed to
shareholders of the Portfolio, (v) computation of the Portfolio's net asset
value for purposes of the sale and redemption of its shares, and (vi)
computation of the Portfolio's daily dividend. Certain functions relating to
state "blue sky" qualification services in any of the states where the Portfolio
is registered are subject to additional charges by the Administrator that are
not included in the fee rates and minimum annual fee described below.
As compensation for the services rendered by the Administrator under the
Administration Agreement, the Fund pays the Administrator a fee, computed daily
and payable monthly, with respect to the Portfolio at the rate of 0.03% per
annum of the Portfolio's net assets up to and including $1 billion; 0.02% per
annum of the next $1 billion of net assets; and 0.01% per annum of the
Portfolio's net assets over $2 billion, with a minimum annual fee of $393,200
for all the Fund's five portfolios taken together. If applicable, the minimum
fee is allocated among the Fund's five portfolios based on relative average net
assets. For the fiscal years ended October 31, 1998, 1997 and 1996, the Fund
paid PFPC, the former Administrator, fees pursuant to the Administration
Agreement of $20,308, $20,809, and $20,328, respectively, for the Portfolio.
The Fund is responsible for the payment of its expenses. Such expenses
include, without limitation, the fees payable to the Adviser, the Administrator
and the Distributor (see "Distributor" below) with respect to the Portfolio, the
fees and expenses of the Fund's custodian and transfer and dividend agent with
respect
B-9
<PAGE> 26
to the Portfolio, any brokerage fees and commissions of the Portfolio, any
portfolio losses of the Portfolio, filing fees for the registration or
qualification of the Portfolio's shares under Federal or state securities laws,
the Portfolio's pro rata share of taxes, interest, costs of liability insurance,
fidelity bonds or indemnification, any costs, expenses or losses arising out of
any liability of, or claim for damages or other relief asserted against, the
Fund with respect to the Portfolio for violation of any law, the portfolio's pro
rata share of legal and auditing fees and expenses, expenses of preparing and
setting in type prospectuses, proxy material, reports and notices and the
printing and distributing of the same to the shareholders of the Portfolio and
regulatory authorities, the Portfolio's pro rata share of compensation and
expenses of the Fund's trustees and officers who are not affiliated with the
Adviser, the Administrator, the Distributor, or the transfer and dividend agent,
and extraordinary expenses incurred by the Fund with respect to the Portfolio.
DISTRIBUTOR
Shay Financial Services, Inc. is a registered broker-dealer and the
Fund's principal distributor (the "Distributor"). The Distributor, a Florida
corporation, is a wholly owned subsidiary of Shay Investment Services, Inc.,
which is a closely held corporation controlled by Rodger D. Shay.
From September 18, 1996 until December 8, 1997, Shay Financial Services
Co. ("SFSC") had been the Fund's principal distributor. Prior to September 18,
1996, SFSC had acted as the Fund's sponsor of its shares. SFSC was a general
partnership that consisted of two general partners, Shay Financial Services,
Inc., the Fund's current distributor, and ACB Securities, Inc. ("ACBS"), each of
which held a fifty percent interest in the partnership. Shay Financial Services,
Inc. is controlled by Rodger D. Shay and ACBS is an indirect wholly-owned
subsidiary of ACB. On December 8, 1997, Shay Financial Services, Inc. purchased
ACBS' 50% interest in SFSC and the broker-dealer operations and distribution
activities were transferred to the Distributor.
As compensation for distribution services with regard to the Class I
Shares of the Portfolio, the Fund pays the Distributor a fee, payable monthly,
with respect to the Class I Shares at the rate of 0.15% per annum of the
combined average daily net assets of the Class I Shares up to and including $500
million; plus 0.125% per annum. of the next $500 million of such combined net
assets; plus 0.10% per annum of the next $1 billion of such combined net assets;
plus 0.075% per annum of such combined net assets over $2 billion. As
compensation for distribution services with regard to the Class D Shares of the
Portfolio, the Fund pays the Distributor a fee, payable monthly, with respect to
the Class D Shares at the rate of 0.60% per annum. of the daily net assets of
the Class D Shares.
For the fiscal year ended October 31, 1998 (for the period beginning
December 8, 1997), the Fund paid the Distributor fees of $85,505 with respect to
the Portfolio. For the fiscal years ended October 31, 1998 (through December 7,
1997), 1997 and 1996, the Fund paid SFSC fees pursuant to the Rule l2b-1 plan,
as in effect, of $7,695 (through December 7, 1997), $83,068, and $101,717,
respectively, with respect to the Portfolio.
The Distributor is obligated under the Distribution Agreement to bear the
costs and expenses of printing and distributing copies of prospectuses and
annual and interim reports of the Fund (after such items have been prepared and
set in type) that are used in connection with the offering of shares of the Fund
to investors, and the costs and expenses of preparing, printing and distributing
any other literature used by the Distributor in connection with the offering of
the shares of the Portfolio for sale to investors.
B-10
<PAGE> 27
The Fund has been informed by the Distributor that during its fiscal year
ended October 31, 1998, of the $595,550 fee received in the aggregate by SFSC
and the Distributor from the Fund with respect to the Portfolio, the following
expenditures were made:
Advertising ............................ $ 11,609
Printing ............................... 8,777
Employee compensation and costs ........ 342,474
Staff travel and expense ............... 25,433
Other administrative expense ........... 48,482
---------
Total............................... $ 436,775
=========
Shay Financial Services, Inc., the Fund's Distributor, and its affiliated
persons, including Rodger D. Shay, who is a Trustee and the Chairman of the
Board of the Fund, Edward E. Sammons Jr., who is President and Treasurer of the
Fund, Robert T. Podraza, who is Vice President and Assistant Treasurer of the
Fund, and Daniel K. Ellenwood, who is the Secretary of the Fund, have a direct
or indirect financial interest in the operation of the Fund's Rule 12b-1 Plan
and related Distribution Agreement. None of the Trustees who are not interested
persons of the Fund have any direct or indirect financial interest in the
operation of the Fund's Rule 12b-1 Plan and related Distribution Agreement.
The Fund has appointed the Distributor to act as the principal
distributor of the Fund's shares pursuant to the Distribution Agreement dated
December 8, 1997 between the Fund and the Distributor (the "Distribution
Agreement"). The initial term of the Distribution Agreement was completed as of
March 1, 1999 and now continues in effect from year to year thereafter, subject
to termination by the Fund or the Distributor as hereinafter provided, if
approved at least annually by the Fund's Board of Trustees and by a majority of
the trustees who are not "interested persons" of the Fund and have no direct or
indirect financial interest in the arrangements contemplated by the agreement.
The Fund's Rule l2b-1 Plan requires the Fund's Board of Trustees to make a
quarterly review of the amount expended under the Rule 12b-1 Plan and the
purposes for which such expenditures were made. The Rule 12b-1 Plan may not be
amended to increase materially the amount paid by the Fund thereunder without
shareholder approval. All material amendments to the Rule 12b-1 Plan must be
approved by the Fund's Board of Trustees and by the "disinterested" trustees
referred to above. The Rule 12b-1 Plan will terminate automatically upon its
assignment and is terminable at any time without penalty by a majority of the
Fund's trustees who are "disinterested" as described above or by a vote of a
majority of the outstanding shares (as defined under "General Information" in
this Statement of Additional Information) of the Portfolio affected thereby on
60 days' written notice to the Distributor, or by the Distributor on 90 days'
written notice to the Fund. Although the Distributor's fee is calculable
separately with respect to the Portfolio of the Fund and the Distributor reports
expense information to the Fund on a portfolio-by-portfolio basis, any 12b-1
fee received by the Distributor in excess of expenses for a given Portfolio may
be used for any purpose, including payment of otherwise unreimbursed expenses
incurred in distributing shares of another Portfolio or to compensate another
dealer for distribution assistance. The 12b-1 Plan does not permit a Portfolio
to be charged for interest, carrying, or other financing charges on any such
unreimbursed carryover amounts, but it does provide for reimbursement for a
portion of the Distributor's overhead expenses.
ADMINISTRATOR AND TRANSFER AND DIVIDEND AGENT
As of , 1999, BISYS Fund Services Ohio, Inc. ("BISYS"), 3435 Stelzer
Road, Columbus, Ohio 43219, an Ohio corporation, performs various administrative
services for the Fund with respect to the Portfolio. These services include
maintenance of books and records, preparation of governmental filings and
shareholder reports, and computation of net asset values and daily dividends.
BISYS is also the transfer and dividend agent for the Portfolio's shares. For
the Fund's fiscal year ended October 31, 1998, the Fund paid
B-11
<PAGE> 28
the former administrator, PFPC Inc., a fee of 0.03% of the Portfolio's average
net assets for administrative services.
CUSTODIAN
As of ___________, 1999, the Bank of New York is the custodian of the
Portfolio's investments. PFPC Trust Company, an affiliate of PNC BankCorp,
served as the Fund's former custodian.
DETERMINATION OF NET ASSET VALUE
The Fund relies on an exemptive rule (Rule 2a-7) promulgated by the
Securities and Exchange Commission permitting the Fund to use the amortized cost
procedure in valuing the Money Market Portfolio's investments. This involves
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price the
Fund would receive if it sold the instrument. The Board of Trustees of the Fund
has determined that, absent unusual circumstances, the amortized cost method of
valuation will fairly reflect the value of each shareholder's interest in the
Portfolio. As a condition to the use of the amortized cost method of valuation
pursuant to such exemptive rule, the Portfolio is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase
instruments having remaining maturities of thirteen months or less only, and
invest only in securities determined by the Board of Trustees to be of eligible
quality with minimal credit risks. (See rating requirements under "FDIC Insured
Institutions" in this Statement of Additional Information.) An instrument which
has a variable or floating rate of interest may be deemed under certain
circumstances to have a maturity equal to the longer of the period remaining
until the next readjustment of the interest rate or the period remaining until
the principal amount can be recovered through demand.
The Board of Trustees has established procedures reasonably designed,
taking into account current market conditions and the Portfolio's investment
objective, to stabilize the price per share of shares of the Portfolio as
computed for the purpose of distribution and redemption at $1.00. Such
procedures include review by the Board of Trustees, as it may deem appropriate
and at such intervals as are reasonable in light of current market conditions,
of the deviation between the net asset value per share calculated by using
available indications of market value and the net asset value per share using
amortized cost values. The Portfolio's investment adviser has been delegated the
authority to determine the market values of the securities held by the Portfolio
through use of its matrix pricing system, provided that any changes in the
methods used to determine market values are reported to and reviewed by the
Board of Trustees.
The extent of any deviation between the net asset value per share of the
Portfolio based upon available market quotations or market equivalents and $1.00
per share based on amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will promptly consider
what action, if any, will be initiated. In the event the Board of Trustees
determines that a deviation exists that may result in material dilution or other
unfair results to investors or existing shareholders, it shall take such
corrective action as it deems appropriate to eliminate or reduce to the extent
reasonably practicable such dilution or unfair results, including the sale of
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity, withholding dividends or payment of
distributions from capital or capital gains, redemptions of shares in kind, or
establishing a net asset value per share by using available market quotations.
B-12
<PAGE> 29
TAXES
The Portfolio is treated as a separate entity for accounting and federal
income tax purposes, and thus the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), applicable to regulated
investment companies are applied to the Portfolio separately, rather than to the
Fund as a whole. In addition, net long-term and short-term capital gains and
losses, net investment income, and operating expenses are determined separately
for each portfolio.
The Portfolio qualifies as a regulated investment company under
Subchapter M of the Code. In order to so qualify the Portfolio must, among other
things: (a) diversify its holdings so that, at the end of each fiscal quarter,
(i) at least 50% of the total value of its total assets is represented by cash
or cash items, government securities and other securities, including loans of
federal funds for the Portfolio only, with such other securities limited, in
respect of any one issuer, to an amount not greater than 5% of the value of the
Portfolio's assets or not more than 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the total value of its total assets
is invested in the securities of any one issuer (other than government
securities) and (b) derive at least 90% of its gross income from dividends,
interest, proceeds from loans of share and securities, gains from the sale or
other disposition of stock or securities, and other income derived with respect
to its business of investing in stock or securities. If the Portfolio qualifies
as a regulated investment company, it will not be subject to federal income tax
on its income and gains distributed to shareholders, provided at least 90% of
its investment company taxable income earned in the taxable year (computed
without regard to the deduction for dividends paid) is so distributed.
Dividends of the Portfolio's net investment income (which generally
includes income net of operating expenses), and distributions of net short-term
capital gains are taxable to shareholders as ordinary income whether reinvested
in shares or paid in cash.
Because none of the Portfolio's income will consist of dividends from
domestic corporations, dividends of net investment income as well as
distributions of net long-term and short-term capital gains will not qualify for
the dividends received deduction available to corporate shareholders.
The Portfolio generally will be subject to a 4% nondeductible excise tax
to the extent the Portfolio does not meet certain minimum distribution
requirements by the end of each calendar year. To avoid the imposition of the 4%
excise tax, it may be necessary for a dividend to be declared in December and
actually paid in January of the following year, which will be treated as having
been received by shareholders on December 31 of the calendar year in which
declared. Under this rule, therefore, a shareholder may be taxed in one year on
dividends or distributions actually received in January of the following year.
Dividends and distributions may be subject to state and local taxes.
The foregoing discussion is not intended to be a full discussion of
income tax laws and their effect on shareholders. Investors should consult their
own tax advisors as to the tax consequences of ownership of shares.
PORTFOLIO TRANSACTIONS
Purchases and sales of securities for the Portfolio usually are principal
transactions. Portfolio securities normally are purchased directly from the
issuer or from an underwriter or market maker for the securities. There usually,
but not always, are no brokerage commissions paid by the Fund for such
purchases, and during the fiscal year ended October 31, 1998, the Fund paid no
brokerage commissions for the Portfolio. Purchases from dealers serving as
market makers may include the spread between the bid and asked prices. The
Adviser attempts to obtain the best price and execution for portfolio
transactions.
B-13
<PAGE> 30
The Portfolio will not purchase securities from, sell securities to, or
enter into repurchase or reverse repurchase agreements with, the Adviser or any
of its affiliates.
Allocation of transactions, including their frequency, to various dealers
is determined by the Adviser in its best judgment under the general supervision
of the Board of Trustees of the Fund and in a manner deemed fair and reasonable
to shareholders. The primary consideration is prompt execution of orders in an
effective manner at the best price. On occasion the Adviser on behalf of the
Portfolio may effect securities transactions on an agency basis with
broker-dealers providing research services and/or research-related products for
the Fund. Research services or research-related products may include information
in the form of written reports, reports accessed by computers or terminals,
statistical collations and appraisals and analysis relating to companies or
industries. However, in selecting such broker-dealers, the Adviser adheres to
the primary consideration of best price and execution.
Investment decisions for the Portfolio of the Fund are made independently
from those for the other portfolios or other clients advised by the Adviser. It
may happen, on occasion, that the same security is held in one portfolio of the
Fund and the other portfolios of one or more of such other clients. Simultaneous
transactions are likely when several portfolios and clients are advised by the
same investment adviser, particularly when a security is suitable for the
investment objectives of more than one of such portfolios or clients. When two
or more portfolios or other clients advised by the Adviser are simultaneously
engaged in the purchase or sale of the same security, the transactions are
allocated to the respective portfolios or clients, both as to amount and price,
in accordance with a method deemed equitable to each portfolio or client. In
some cases this system may adversely affect the price paid or received by a
portfolio of the Fund or the size of the security position obtainable for such
portfolio.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions for the
Portfolio, none of which may be changed without the approval of a majority of
the outstanding shares of the Portfolio, as defined under "General Information"
in this Statement of Additional Information. Accordingly, the Portfolio may not:
(1) Invest more than 5% of its total assets in the securities of any
one issuer, other than securities issued or guaranteed by the
United States Government or its agencies or instrumentalities,
except that up to 25% of the value of the Portfolio's total assets
may be invested without regard to this 5% limitation.
(2) Enter into repurchase agreements or purchase any other investments
for which market quotations are not readily available, in each
case maturing in more than 7 days if, as a result, more than 10%
of the market value of its total assets would be invested in such
repurchase agreements and such other illiquid investments.
(3) Enter into reverse repurchase agreements exceeding in the
aggregate one-third of the market value of its total assets, less
liabilities other than the obligations created by reverse
repurchase agreements.
(4) Borrow money except from banks for temporary or emergency purposes
and in an amount not exceeding 10% of the value of its net assets,
or mortgage, pledge or hypothecate its assets except in connection
with any such borrowing and in amounts not in excess of 20% of the
value of its net assets. This borrowing provision is not for
investment leverage, but solely to facilitate management of the
Portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio securities is considered to be
disadvantageous. The Portfolio's net income will be reduced if the
interest expense of borrowings incurred
B-14
<PAGE> 31
to meet redemption requests and avoid liquidation of portfolio
securities exceeds the interest income of those securities. To the
extent that borrowings exceed 5% of the value of the Portfolio's
net assets, such borrowings will be repaid before any investments
are made. The Portfolio's ability to enter into reverse repurchase
agreements is not restricted by this paragraph (4).
(5) Invest more than 25% of its 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 United States 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.
(6) Act as an underwriter of securities, except to the extent that the
Fund may be deemed to be an "underwriter" in connection with the
purchase of securities for the Portfolio directly from an issuer
or an underwriter thereof.
(7) Lend any of its assets, except portfolio securities. This shall
not prevent the Portfolio from purchasing or holding debt
obligations, entering into repurchase agreements, and loaning
Federal funds and other day(s) funds to FDIC Insurance
Institutions (as defined in the Prospectus), in each case to the
extent permitted by the Portfolio's investment objective and
management policies.
(8) Purchase securities on margin or make short sales of securities;
write or purchase put or call options or combinations thereof; or
purchase or sell real estate, real estate mortgage loans, real
estate investment trust securities, commodities or commodity
contracts, or oil and gas interests.
For purposes of investment restrictions (1) and (5) above as applicable
to the Money Market Portfolio, the Fund considers loans of federal funds to be
cash equivalents and not securities for purposes of diversification.
The Fund has also adopted certain investment restrictions which are
non-fundamental policies. Unlike fundamental policies, which may only be changed
with the approval of a majority of the outstanding shares of the Portfolio,
nonfundamental policies may be changed by the Fund's Trustees without
shareholder approval. However, in the event the Fund's Trustees agree to change
a non-fundamental policy, shareholders will be notified in advance of such
change. Accordingly, the Portfolio has adopted the following non-fundamental
policies:
(1) The 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."
(2) The Portfolio will not invest more than 10% of its net assets in
illiquid securities, including repurchase agreement maturing in
more than seven days.
B-15
<PAGE> 32
ORGANIZATION AND DESCRIPTION OF FUND SHARES
The authorized capital shares of the Fund consists of six classes of
common shares, par value $.001 per share, as follows: (i) Money Market
Portfolio---4.0 billion shares, (ii) Class _____ of the Money Market Portfolio--
_____shares, (iii) Short Government Portfolio--500 million shares, (iv) U.S.
Government Mortgage Securities Portfolio--500 million shares, (v) Intermediate
Mortgage Securities Portfolio--500 million shares, and (vi) Adjustable Rate
Mortgage (ARM) Portfolio--500 million shares. The shares of each class represent
interests only in the corresponding portfolio. When issued and paid for in
accordance with the terms of offering, each share is fully paid and
nonassessable. All shares of common shares of the same class have equal
dividend, distribution, liquidation and voting rights and are redeemable at net
asset value, at the option of the shareholder. In addition, the shares have no
preemptive, subscription or conversion rights and are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of such Act or applicable state law, or otherwise,
to the holders of the outstanding voting securities of an investment company
such as the Fund shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares (as defined
under "General Information" in this Statement of Additional Information) of each
class affected by such matter. Rule 18f-2 further provides that a class shall be
deemed to be affected by a matter unless it is clear that the interests of each
class in the matter are identical or that the matter does not affect any
interest of such class. However, the Rule exempts the selection of independent
accountants and the election of trustees from the separate voting requirements
of the Rule.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Vedder, Price, Kaufman & Kammholz are legal counsel to the Fund and pass
upon the validity of the shares offered by the Prospectus.
PricewaterhouseCoopers LLP have been selected as the Fund's independent
accountants. The financial statements of the Portfolio incorporated in this
Statement of Additional Information by reference to the Fund's Annual Report to
Shareholders for the year ended October 31, 1998 (see "Financial Statements"
below) have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, given on the authority of such firm as experts in
accounting and auditing.
GENERAL INFORMATION
The Fund sends to all of the shareholders of the Portfolio semi-annual
reports and annual reports, including a list of investment securities held by
the Portfolio, and, for annual reports, audited financial statements of the
Portfolio.
As used in the Prospectus and this Statement of Additional Information,
the term "majority," when referring to the approvals to be obtained from
shareholders, means the vote of the lesser of (1) 67% of the Fund's shares of
each class or of the class entitled to a separate vote present at a meeting if
the holders of more than 50% of the outstanding shares of all classes or of the
class entitled to a separate vote are present in person or by proxy, or (2) more
than 50% of the Fund's outstanding shares of all classes or of the class
entitled to a separate vote. The Bylaws of the Fund provide that an annual
meeting of shareholders is not required to be held in any year in which none of
the following is required to be acted on by shareholders pursuant to the 1940
Act: election of trustees; approval of the investment advisory agreement;
ratification of the selection of independent public accountants; and approval of
a distribution agreement.
B-16
<PAGE> 33
The Prospectus and this Statement of Additional Information do not
contain all the information included in the registration statement filed with
the Securities and Exchange Commission under the Securities Act of 1933 with
respect to the securities offered hereby, certain portions of which have been
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. The registration statement, including the exhibits filed therewith,
may be examined at the office of the Securities and Exchange Commission in
Washington, D.C.
Statements contained in the Prospectus and this Statement of Additional
Information as to the contents of any contract or other document referred to are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the registration
statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.
FINANCIAL STATEMENTS
The financial statements required to be included in this Statement of
Additional Information are incorporated herein by reference to the Fund's Annual
Report to Shareholders for the year ended October 31, 1998 (the "Annual
Report"). The Fund will provide the Annual Report without charge to each person
to whom this Statement of Additional Information is delivered.
B-17
<PAGE> 34
ASSET MANAGEMENT FUND, INC
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) (1) Articles of Amendment and Restatement of Articles of
Incorporation of Registrant dated November 9, 1982. (1)/
(2) Articles Supplementary to Articles of Amendment and
Restatement of Articles of Incorporation of Registrant
dated November 1, 1983. (1)/
(3) Form of Articles of Amendment of Articles of Incorporation
of Registrant. (1)/
(4) Articles Supplementary to Articles of Amendment and
Restatement of Articles of Incorporation of Registrant
dated August 16, 1986. (1)/
(5) Articles of Amendment of Articles of Incorporation dated
May 4,1989. (1)/
(6) Articles of Amendment of Articles of Incorporation dated
February 23, 1990. (1)/
(7) Articles Supplementary to Articles of Amendment and
Restatement of Articles of Incorporation of Registrant
dated June 28, 1991. (1)/
(8) Form of Articles of Amendment of Articles of Incorporation.
(1)/
(9) Articles of Amendment of Articles of Incorporation dated
September 26, 1994. (1)/
(b) By-Laws as restated as of September 20, 1991. (1)/
(c) Not applicable.
(d) (1) Investment Advisory Agreement, dated September 1, 1990,
between Registrant and Shay Assets Management Co. with respect
to the Short-Term Liquidity Portfolio, the Intermediate-Term
Liquidity Portfolio, the Mortgage Securities Performance
Portfolio and the Corporate Bond Portfolio. (1)/
(2) Form of Amendment to the Investment Advisory Agreement with
respect to the Adjustable Rate Mortgage (ARM) Portfolio.
(1)/
(3) Amendment to the Investment Advisory Agreement, dated
November 30, 1992, with respect to the Adjustable Rate
Mortgage (ARM) Portfolio. (1)/
(4) Investment Advisory Agreement dated December 8, 1997
between Registrant and Shay Assets Management, Inc. (3)/
<PAGE> 35
(e) (1) Distribution Agreement. (2)/
(2) Distribution Agreement dated December 8, 1997 between
Registrant and Shay Financial Services, Inc. (3)/
(f) Not applicable.
(g) (1) Restated Custodian Agreement between Registrant and
Provident National Bank dated March 1, 1991. (1)/
(2) Amendment No. 1 to Restated Custodian Agreement dated June
28, 1991. (1)/
(3) Amendment No. 2 to Restated Custodian Agreement dated June
29, 1991. (1)/
(h) (1) (A) Restated Transfer Agency Agreement between Registrant
and Provident Financial Processing Corporation dated
March 1, 1991. (1)/
(1) (B) Amendment No. 1 to Restated Transfer Agency Agreement
dated June 28, 1991. (1)/
(2) (A) Restated Administration Agreement between Registrant
and Provident Financial Processing Corporation dated
March 1, 1991. (1)/
(2) (B) Amendment No. 1 to Restated Administration Agreement
dated June 28, 1991. (1)/
(2) (C) Amendment No. 2 to Restated Administration Agreement
dated September 20, 1991. (1)/
(i) (1) Opinion and Consent of Vedder, Price, Kaufman & Kammholz
with respect to the Short-Term Liquidity Portfolio, the
Intermediate-Term Liquidity Portfolio, the Mortgage
Securities Performance Portfolio and the Corporate Bond
Portfolio dated December 28, 1990. (1)/
(2) Opinion and Consent of Vedder, Price, Kaufman & Kammholz
with respect to the Adjustable Rate Mortgage (ARM)
Portfolio dated July 2, 1991. (1)/
(i) Not applicable.
(k) None.
(l) (1) Form of Purchase Agreement between Registrant and initial
investors with respect to the Short-Term Liquidity
Portfolio. (1)/
(2) Form of Purchase Agreement between Registrant and initial
investors with respect to the Mortgage Securities
Performance Portfolio dated November 2, 1983. (1)/
(m) (1) Plan and Agreement Pursuant to Rule 12b-1 between
Registrant and Shay Financial Services Co. dated September
1, 1990. (1)/
2
<PAGE> 36
(2) Form of Amendment to Plan and Agreement Pursuant to Rule
12b-1 with respect to the Adjustable Rate Mortgage (ARM)
Portfolio. (1)/
(3) Amendment to Plan and Agreement Pursuant to Rule 12b-1 with
respect to the Adjustable Rate Mortgage (ARM) Portfolio
dated June 28, 1991. (1)/
(4) Amendment to Plan and Agreement Pursuant to Rule 12b-1
dated September 18, 1996. (2)/
(5) Amended and Restated Rule 12b-1 Plan. (3)/
(n) Not applicable.
(1)/ Previously filed with Post-Effective Amendment No. 26 on or about
February 29, 1996 and incorporated herein by reference.
(2)/ Previously filed with Post-Effective Amendment No. 27 on or about
December 30, 1996 and incorporated herein by reference.
(3)/ Previously filed with Post-Effective Amendment No. 28 on or about
December 21, 1997.
Item 24. Persons Controlled By or Under Common Control with Registrant
None.
Item 25. Indemnification.
Section 6 of the Registrant's Articles of Incorporation (as amended by the
Articles of Amendment filed as Exhibit (a)(5)) provides that a director or
officer of the Registrant shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer, except to the extent such exemption from liability or limitation
thereof is not permitted by law (including the Investment Company Act of 1940)
as currently in effect or as the same may hereafter be amended.
Article VII as of the Registrant's Bylaws (as amended by the Resolution filed as
Exhibit (b)) provides that the Registrant shall indemnify to the fullest extent
permitted by law (including the Investment Company Act of 1940) as currently in
effect or as the same may hereafter be amended, any person made or threatened to
be made a party to any action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that such person or such
person's testator or intestate is or was a director, officer, employee or agent.
To the fullest extent permitted by law (including the Investment Company Act of
1940) as currently in effect or as the same may hereafter be amended, expenses
incurred by any such person in defending any such action, suit or proceeding
shall be paid or reimbursed by the Registrant promptly upon receipt by it of an
undertaking of such person to repay such expenses if it shall ultimately be
determined that such person is not entitled to be indemnified by the Registrant.
Paragraph 17 of the Distribution Agreement between the Registrant and Shay
Financial Services, Inc. (filed as Exhibit (e)(2)) provides for indemnification
of Shay Financial Services, Inc. by the Registrant under certain circumstances.
3
<PAGE> 37
The foregoing indemnification arrangements are subject to the provisions of
Sections 17(h) and (i) of the Investment Company Act of 1940.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant maintains an insurance policy which insures its directors and
officers against certain civil liabilities.
Item 26. Business and Other Connections of Investment Adviser.
Incorporated herein by reference from the Statements of Additional Information
relating to the Portfolios are the following: the description of the business of
Shay Assets Management, Inc. (the "Adviser") contained in the Section entitled
"Investment Adviser and Administrator"; the information concerning the
organization of ShayFinancial Services, Inc. (the "Distributor") contained in
the Section entitled "Distributor" and the biographical information pertaining
to Messrs. Shay, Sammons, Podraza and Ellenwood contained in the Section
entitled "Management of the Fund."
Effective December 8, 1997, the Adviser was appointed the investment adviser to
three registered investment companies:
Institutional Investors Capital Appreciation Fund, Inc., Asset Management Fund,
Inc. and M.S.B. Fund, Inc. In addition, the Adviser serves as the investment
adviser to several savings banks located in New York on a non-discretionary
basis. To service the foregoing funds and accounts, the Adviser maintains an
office in New York City.
The Adviser is located at 230 West Monroe Street, Chicago, Illinois 60606 and at
1000 Brickell Avenue, Miami, Florida 33131 and also has an office at 200 Park
Ave, New York, New York 10017. The Adviser is a wholly owned subsidiary of Shay
Investment Services, Inc. ("SISI"), which is a closely held corporation
controlled by Rodger D. Shay. Shay Financial Services, Inc., the Distributor of
the Fund, is also a closely held corporation of SISI.
4
<PAGE> 38
Item 27. Principal Underwriters.
(a) The Distributor serves as the principal distributor for
Institutional Investors Capital Appreciation Fund, Inc.,
and M.S.B. Fund, Inc.
<TABLE>
<CAPTION>
(b) Name and Principal Positions and Offices with the
Business Address Underwriter Positions and Offices with Fund
------------------ ------------------------------ -------------------------------
<S> <C> <C>
Rodger D. Shay Chairman and Director Chairman of the Board and Director
Rodger D. Shay, Jr. President Portfolio Manager
Robert T. Podraza Vice President and Chief Vice President and Assistant Treasurer
Compliance Officer
</TABLE>
Item 28. Location of Accounts and Records.
Books and other documents required to be maintained pursuant to Rule 31a-1(b)(4)
and (b)(10) are in the physical possession of the Fund's Secretary, 230 West
Monroe Street, Chicago, Illinois 60606; accounts, books and other documents
required by Rule 31a-1(b)(5) through (7) and (b)(11) and Rule 31a-1(f) are in
the physical possession of Shay Assets Management, Inc., 230 West Monroe Street,
Chicago, Illinois 60606; all other books, accounts and other documents required
to be maintained under Section 31(a) of the Investment Company Act of 1940 and
the Rules promulgated thereunder are in the physical possession of PFPC Inc.,
103 Bellevue Parkway, Wilmington, Delaware 19809.
Item 29. Management Services
Not Applicable.
Item 30. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a
prospectus is delivered a copy of registrant's latest annual
report to shareholders upon request and without charge.
5
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Chicago and State of
Illinois on the 4th day of August, 1999.
ASSET MANAGEMENT FUND, INC.
By: /s/ Edward E. Sammons, Jr.
---------------------------------
Edward E. Sammons, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below on
August 4, 1999 by the following persons in the capacities indicated.
SIGNATURE TITLE
/s/ Rodger D. Shay Director and Chairman of the Board
- ----------------------------
Rodger D. Shay
/s/ Edward E. Sammons, Jr. President (principal executive officer) and
- ---------------------------- Treasurer (principal financial and accounting
Edward E. Sammons, Jr. officer)
/s/ Richard M. Amis Director
- ----------------------------
Richard M. Amis
/s/ Arthur G. De Russo Director
- ----------------------------
Arthur G. De Russo
/s/ David F. Holland Director
- ----------------------------
David F. Holland
/s/ Gerald J. Levy Director
- ----------------------------
Gerald J. Levy
<PAGE> 40
EXHIBIT INDEX
Exhibit No. Description
