SAND HILL PORTFOLIO MANAGER FUND
A "SERIES" OF THE WORLD FUNDS, INC.
1500 Forest Avenue
Suite 223
Richmond, Virginia 23229
1-800-527-9500 (Toll Free)
Prospectus Dated May 2, 1996
This Prospectus offers shares of the Sand Hill Portfolio Manager
Fund (the "Fund"), a no-load diversified series of The World Funds,
Inc. ("TWF"), an open-end management investment company commonly
known as a "mutual fund." TWF is currently composed of five
series, each of which is offered to investors through its own
prospectus. TWF offers investors a choice of investment
objectives, with each series having its own separate and distinct
portfolio of investments and operating much like a separate mutual
fund.
The Fund seeks to maximize total return (consisting of realized and
unrealized appreciation plus income) consistent with allocating its
investments among equity securities (i.e., stocks), debt securities
(i.e., bonds) and short term investments.
This Prospectus sets forth concisely the information about the Fund
which a prospective investor should know before investing. It
should be read and retained for future reference. More information
about the Fund has been filed with the Securities and Exchange
Commission and is contained in the "Statement of Additional
Information," dated May 2, 1996, which is available at no charge
upon written request to the Fund. The Fund's Statement of
Additional Information is incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY
ESTIMATED FUND EXPENSES
THE WORLD FUNDS, INC.
INVESTMENT OBJECTIVE
WHY INVEST IN THE FUND?
ASSET ALLOCATION POLICIES
ADDITIONAL INFORMATION ON INVESTMENTS, POLICIES AND RISKS
PERFORMANCE
THE FUND'S MANAGEMENT
HOW TO INVEST
HOW TO REDEEM SHARES
HOW TO TRANSFER SHARES
ACCOUNT STATEMENTS AND SHAREHOLDER REPORTS
SPECIAL SHAREHOLDER SERVICES
HOW NET ASSET VALUE IS DETERMINED
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
TAXES
GENERAL INFORMATION ABOUT THE FUND
MORE INFORMATION
<PAGE>
SAND HILL PORTFOLIO MANAGER FUND
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing in the body of this Prospectus.
Investment Objective: The investment objective of the Sand Hill
Portfolio Manager Fund (the "Fund") is to seek to maximize total
return (consisting of realized and unrealized appreciation plus
income) consistent with allocating its investments among equity
securities (i.e., stocks), debt securities (i.e., bonds) and short
term investments. As with any mutual fund, there is no assurance
that the Fund will achieve its objective. See "Investment
Objective" on Page ___ .
Investment Advisor: Sand Hill Advisors, Inc. is the Investment
Advisor of the Fund. See "The Fund's Management" on Page___ .
Distributions/Dividends: Paid annually from available capital
gains and income. See "Dividends and Capital Gains Distributions"
on Page___.
Reinvestment: Distributions may be reinvested automatically
without a sales charge. See "Dividends and Capital Gains
Distributions" on Page ___.
Initial Purchase: $25,000 minimum. See "How to Invest" on Page
___.
Subsequent Purchases: $50 minimum. See "How to Invest" on
Page___.
Net Asset Value: The net asset value per share of the Fund is
calculated on each day that the New York Stock Exchange is open for
trading. You may obtain the net asset value per share of the Fund
by calling 1-800-527-9500. See "How the Net Asset Value is
Determined" on Page___ .
No Sales Charge or Redemption Fees: The Fund's shares are sold at
their net asset value per share, with no sales charges, Rule 12b-1
fees, redemption fees or exchange fees.
Principal Risk Factors: The Fund invests in different types of
securities issued in the United States or abroad. Its performance
will be influenced by various factors, including market and
economic conditions, company-specific developments and the skill of
the Investment Advisor in allocating investments among stocks,
bonds and other investments. See "Asset Allocation Policies" on
page _______. The Fund may invest in foreign securities, and
therefore may be affected by changes in exchange rates between
foreign currencies and the U.S. dollar, adverse social or political
developments and other factors. See "Foreign Securities and
Depositary Receipts" on page _______________.
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ESTIMATED FUND EXPENSES
Shareholder Transaction Expenses
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Redemption Fees None*
Exchange Fees None
*A shareholder placing a telephone redemption request will be
charged $10.
Annual Fund Operating Expenses (as % of average net assets)
Management Fee 0.00%
12b-1 Fees None
Other Operating Expenses 3.03%**
Total Fund Operating Expenses 3.03%**
**The Investment Advisor has undertaken to reduce its advisory fee
of 1.0% or reimburse the Fund so that total operating expenses
during the first three years of the Investment Advisory Agreement
do not exceed 1.90% of average net assets. Other Operating
Expenses have been increased by 1.13% to reflect additional
custodian fees which were offset by custodian fee credits. Taking
into account such credits, total Fund Operating expenses on a net
basis were 1.905 in 1995.
The purpose of this table is to assist investors in
understanding the various costs and expenses that they will bear
directly or indirectly. "Other Operating Expenses" are based on
estimated amounts for the Fund's current fiscal year. Management
expects that as the Fund increases in size its other operating
expenses will reflect economies of scale.
The following example illustrates the expenses that an investor
would pay on a $1,000 investment over various time periods assuming
(1) a 5% annual rate of return, and (2) redemption at the end of
each time period. As noted in the table above, the Fund charges no
redemption fees of any kind.
1 Year 3 Years 5 years 10 years
$31 $94 $159 $335
These examples should not be considered a representation of
past or future expenses or performance. Actual expenses may be
greater or lesser than those shown.
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FOR A SHARE OUTSTANDING DURING THE PERIOD INDICATED: The Financial
Highlights for the periods indicated below have been examined by
Tait, Weller and Baker, independent certified public accountants,
whose report thereon appears in the Annual report to Shareholders
of the Sand Hill Portfolio Manager Fund for the year ended December
31, 1995 and is incorporated by reference in this Prospectus.
Financial Highlights
For a Share Outstanding Throughout Each Period
January 2, 1995*
to
December 31, 1995
Per Share Operating Performance
Net asset value, beginning of period $10.00
Income from investment operations-
Net investment income .06
Net realized and unrealized gain on investments 1.10
Total from investment operations 1.16
Less distributions-
Distributions from net investment income (.05)
Total distributions (.05)
Net asset value, end of period $11.11
Total Return 11.60%
Ratios/Supplemental Data
Net assets, end of period (000's) $4,025
Ratio to average net assets-(A)
Expenses (B) 3.03%
Expense ratio-net (C) 1.90%
Net investment income (B) (.61%)
Portfolio turnover rate 40.96%
* Commencement of operations
(A) Management fee waivers reduced the expense ratios and
increased the net investment income ratio by 1.00%.
(B) Expense ratio has been increased and net investment
income has been reduced to include custodian fees which
were offset by custodian credits.
(C) Expense ratio-net reflects the effect of the custodian
fee credits the fund received.
See Notes to Financial Statements
<PAGE>
1995 PERFORMANCE
The Sand Hill Portfolio Manager Fund gained 11.60% for the year
versus the returns of the following relevant indices:
S&P 37.53%
MSCI EAFE (foreign share index) 9.49%
Salomon Bond Index 18.30%
U.S. Treasury Bills 6.20%
During 1995, investors emphasized domestic technology and
financial issues, and these sectors tended to drive performance
in the U.S. stock market. Since the Portfolio Manager Fund aims
for a more diversified mix of securities, as reflected by the
foreign (ADR's), bond and Treasury Bill components of the
portfolio, performance appropriately displays the results of the
mixture of these ingredients. While the index results shown
above cover all of 1995, it should be noted that the Portfolio
Manager Fund's first investor assets were not available for
investment until January 16. By that point, the S&P 500 had
already achieved three percentage points of its total 1995 gain.
By year-end, the Fund has positioned itself broadly throughout
a variety of asset classes or sectors, the most prominent of
which were domestic consumer products companies, technology
firms, diversified foreign equities, and intermediate term U.S.
bonds.
THE WORLD FUNDS, INC.
The Sand Hill Portfolio Manager Fund (the "Fund") is a no-load
series of The World Funds, Inc. ("TWF"), an open-end diversified
management investment company incorporated in Maryland in 1983.
The Fund currently consists of five series, and the Board of
Directors of the Fund may elect to add more series in the
future. A minimum initial investment of $25,000 is required to
open a shareholder account in the Fund, and each subsequent
investment must be $50 or more.
INVESTMENT OBJECTIVE
The Fund seeks to maximize total return (consisting of realized
and unrealized appreciation plus income) consistent with
allocating its investments among equity securities (i.e.,
stocks), debt securities (i.e., bonds) and short term
investments. By allocating investments across broad asset
classes, the Investment Advisor seeks to achieve over time a
high total return, yet experience lower price volatility than
might be inherent in a more limited asset mix.
The investment objective of the Fund may not be changed without
the approval of shareholders. Unless specifically stated
otherwise, each of the Fund's other investment policies may be
changed by the Board of Directors, without shareholder approval.
There is no assurance that the investment objective can be
achieved.
Because the value of the securities in which the Fund may invest
may fluctuate from day-to-day, the value of an investment in the
Fund will vary based upon the Fund's investment performance.
When you sell your shares of the Fund, they may be worth more or
less than their cost to you.
WHY INVEST IN THE FUND?
The Fund is designed for investors seeking maximum total return
through a professionally managed portfolio which provides a mix
of domestic and foreign stocks, bonds and short term
investments. The purpose of an investment in the Fund should be
to seek representation in a wide selection of asset classes and
markets with specific allocations and securities selections set
by an experienced portfolio management organization.
The Fund provides an easy, efficient and low cost way of
investing in a carefully selected, continuously managed and
diversified portfolio of equity securities, debt securities and
short term investments. (See "Equity Securities, Debt
Securities and Short Term Investments" on Page __.)
ASSET ALLOCATION POLICIES
The Fund seeks to take advantage of investment opportunities
using a mix of asset classes and markets throughout the world.
Investments will be selected not only based upon the Investment
Advisor's evaluation of the merits of the particular investment,
but also based upon the Investment Advisor's evaluation of the
investment's relationship to other investments in the portfolio.
National economies and their investment markets change at
varying rates and not necessarily in tandem with one another.
Many foreign markets do not have the maturity, depth, or
liquidity of the U.S. market; therefore, the opportunity to
take advantage of their growth normally means acceptance of
higher price volatility than is usual in the U.S. The
Investment Advisor believes that by allocating investments among
equity, debt and short term asset classes in different markets,
the Fund can seek to benefit from the faster growth of several
of them. In addition, investing assets in a number of markets
may provide less portfolio volatility than might otherwise
result from investment in a single market.
The Fund's investments are allocated among equity securities,
debt securities and short term investments, according to the
Investment Advisor's anticipation of risks and returns for each
asset class. There are no limitations on the amount of the
Fund's assets which may be allocated to each of these three
asset classes. The Investment Advisor believes that, over time,
common stocks produce the greatest return among these asset
classes. Therefore, common stocks will normally comprise a
large percentage of the invested assets. Bonds, or other
evidences of indebtedness, will be used to generate income, to
seek capital gains and to dampen portfolio volatility. While
representation in markets and asset classes is the purpose of
the Fund, the Investment Advisor intends to retain the
flexibility necessary to move among asset classes and markets as
changing conditions of the United States and foreign economies
warrant. Asset classes will be considered both for their total
return potential as well as for the defensive or strategic
aspects they offer the portfolio. In that sense, interest-
earning short term investments will, in varying degrees, be a
component of the overall asset allocation.
Because the Fund invests in different types of securities in
proportions which will vary over time, investors should not
expect the Fund to exhibit stable asset allocations. Investors
should also realize that the Fund's performance will depend upon
the skill of the Investment Advisor to anticipate the relative
risks and return of stocks, bonds and other securities and to
adjust the portfolio accordingly.
Equity Securities, Debt Securities and Short-Term Investments
The three major asset classes in which the Fund will invest, as
defined by the Investment Advisor, are equity securities, debt
securities and short term investments. Short term investments
are debt securities with less than three years to maturity, and
are viewed as comprising a different type of investment risk
than longer term debt securities, involving less risk of
interest rate volatility.
Within each of these asset classes, the Fund may invest in
foreign or domestic securities.
Equity Securities consist of common stocks as well as warrants,
rights, and securities which are convertible into common stocks,
such as convertible bonds.
The Investment Advisor uses valuation screens for the Fund's
equity holdings primarily involving an analysis of a company's
cash flow return on investment. Specifically, the Investment
Advisor determines the cash flow of a company and then applies a
market derived discount rate to the cash flows. Next the
Investment Advisor determines the free cash flow that can be
reinvested into the company and applies the same market derived
discount rate. The Investment Advisor also identifies industries
which are positioned to participate in strong demographic, societal
or economic trends and looks for companies within those industries
which have a particular competitive advantage or niche.
Stocks and other equity securities are subject to the risk that
specific stocks or the prices of equity securities in general
will decline in value over short or even extended periods of
time.
Debt Securities consist of the following bonds and other
obligations of indebtedness denominated in U.S. or foreign
currencies which are issued by governments, companies or other
issuers to borrow money from investors:
* obligations issued or guaranteed by the U.S. Government
or a foreign national government or the agencies,
instrumentalities or political subdivisions of the U.S.
Government or of a foreign government;
* obligations issued or guaranteed by supranational
organizations (e.g., European Investment Bank, Inter-
American Development Bank, the World Bank and other
organizations);
* obligations of foreign or domestic corporations;
* long term debt securities issued by banks or bank
holding companies;
* other debt securities whose purchase is consistent with
the investment objective of the Fund.
Debt securities may pay fixed or variable rates of interest, may
have varying maturity dates at which the issuers must repay
their debt, and have varying degrees of risk. The market values
of debt securities are influenced primarily by credit risk (the
risk that the issuer of the security will not maintain the
financial strength needed to pay principal and interest on its
debt securities) and interest rate risk, which is the risk that
changes in prevailing interest rates will increase or decrease
the prices of outstanding debt securities. Generally, the
market values of fixed-income debt securities vary inversely
with changes in prevailing interest rates. When interest rates
rise, fixed-rate debt securities fall in value. Conversely,
when interest rates fall, fixed-rate debt securities increase in
value.
There is no limit on the maturities of the debt securities
that the Investment Advisor will select. Rather, the Investment
Advisor will select debt securities for the Fund on the basis
of, among other things, credit quality, yield, potential for
capital gains and its fundamental outlook for currency and
interest rate trends around the world.
The Fund will invest in investment grade debt instruments that
bear the rating BBB or higher by Standard & Poor's Corporation
("S&P") or Baa or higher by Moody's Investors Service, Inc.
("Moody's") or unrated securities which the Investment Advisor
deems to be of comparable quality. However, the Fund reserves
the right to invest its assets in lower quality debt securities,
which are commonly known as "junk bonds". It will do so to
avail itself of the higher yields available with these
securities or to seek to realize capital gains. The Fund does
not currently intend to invest more than 5% of its assets in
securities rated below investment grade or which are unrated but
are of comparable quality as determined by the Investment
Advisor. If that policy should change, the Fund will revise its
prospectus and advise the Fund's shareholders.
After its purchase by the Fund, a debt security may cease to be
rated or its rating may be reduced. Neither event would require
the elimination of the debt security from the portfolio.
Short Term Investments are obligations denominated in U.S. or
foreign currencies consisting of bank deposits, bankers
acceptances, certificates of deposit, commercial paper, short-
term government, government agency, supranational agency and
corporate obligations, and repurchase agreements. Depending on
the Investment Advisor's assessment of the prospects for the
various asset classes, all or a portion of the Fund's assets may
be invested in high quality short-term investments to protect
against adverse movements of interest rates or to provide
liquidity.
ADDITIONAL INFORMATION ON INVESTMENTS, POLICIES AND RISKS
The Fund may invest in the securities, and engage in the
investment practices described below, each of which may involve
the specific risks which are described. The Fund may not buy
all of these securities or engage in all of these investment
practices at any one point in time or even over an extended
period of time. See the Statement of Additional Information for
more detailed information about these securities and investment
practices, including limitations designed to reduce related
risks.
Foreign Securities and Depositary Receipts
Investing in foreign securities may involve special risks, such
as:
Social or Political Risk. Social or political instability,
limitations on the removal of funds from foreign countries,
expropriation, repudiation by a foreign government of its
debt, or confiscatory taxes could adversely affect the value
of the Fund's foreign investments.
Currency Risk. The U.S. dollar value of a foreign security
could decrease when the value of the U.S. dollar rises
against the foreign currency in which the security is
denominated, and could increase when the U.S. dollar falls
against that currency.
Market Risk. Foreign securities may be less liquid and show
greater price volatility than domestic securities.
Regulatory Risk. Foreign issuers of securities are not
generally subject to the regulatory controls or the
accounting and financial reporting standards imposed on U.S.
issuers. There is generally less publicly available
information about foreign securities than about domestic
securities. Also, judgments may be more difficult to
enforce abroad.
The foreign securities the Fund purchases may be bought directly
in their principal markets abroad or they may be acquired
through the use of depositary receipts. The Fund may invest in
both sponsored and unsponsored American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs") and other
similar depositary receipts. ADRs are issued by an American
bank or trust company and evidence ownership of underlying
securities of a foreign company. EDRs are receipts issued in
Europe, usually by foreign banks, that evidence ownership of
either foreign or domestic underlying securities. Unsponsored
ADRs and EDRs are organized without the participation of the
issuer of the underlying securities. As a result, information
concerning the issuer may not be as current as for sponsored
ADRs and EDRs.
Convertible Securities
The Fund may invest in convertible securities. A convertible
security is a fixed-income security (a bond or preferred stock)
that may be converted at a stated price within a specified
period of time into a certain quantity of the common stock of
the same or a different issuer. Through their conversion
feature, convertible securities provide an opportunity to
participate in capital appreciation resulting from an increase
in the value of a convertible security's underlying common
stock. The value of a convertible security is influenced by the
market value of the underlying common stock and tends to
increase as the market value of the underlying stock rises, and
tends to decrease as the market value of the underlying stock
declines. For purposes of considering convertible securities
for purchase by the Fund, the Investment Advisor evaluates
convertible securities by standards applicable to equity
securities and not by debt instrument ratings.
Investment Companies
The Fund may invest up to 10% of its total assets in shares of
closed-end investment companies. Because of restrictions on
direct investment by U.S. entities in certain countries,
investment in other investment companies may be the most
practical or only manner in which the Fund can invest in the
securities markets of those countries. Investment in the shares
of other investment companies may involve duplicative investment
advisory and administrative expenses and is subject to
limitations under the Investment Company Act of 1940. See The
Statement of Additional Information for a description of these
limitations.
Zero Coupon Securities
The Fund may purchase zero coupon securities which pay no
cash income and are sold at substantial discounts from their
value at maturity. When held to maturity, their entire income,
which consists of accretion of discount, comes from the
difference between the issue price and their value at maturity.
This accretion of discount will constitute additional taxable
income to the Fund which it is required to distribute at least
annually in order to comply with the Internal Revenue Code,
notwithstanding that it will not have received cash attributable
to such income until maturity or until the instrument is sold.
Zero coupon securities are subject to greater market value
fluctuations from changing interest rates than debt obligations
of comparable maturities which make current cash distributions
of interest.
Repurchase Agreements
As a means of earning income for periods as short as overnight,
the Fund may, without limit, enter into repurchase agreements,
which are collateralized by U.S. government securities, with
selected banks and broker/dealers. Under a repurchase
agreement, a fund acquires securities, subject to the seller's
agreement to repurchase at a specified time and price. The Fund
requires the party obligated to repurchase the securities to
provide it with collateral for that obligation.
If the seller under a repurchase agreement becomes insolvent,
the Fund's right to dispose of the securities may be restricted.
In the event of bankruptcy proceedings with respect to the
seller of the securities, before repurchase of the securities
under a repurchase agreement, the Fund may encounter delay and
incur costs before being able to sell the securities. Also, the
value of such securities may decline before it is able to
dispose of them.
When-Issued Securities
The Fund may purchase securities on a when-issued or forward
delivery basis, for payment and delivery at a later date. The
price and yield are generally fixed on the date of commitment to
purchase. During the period between purchase and settlement, no
interest accrues to the Fund. At the time of settlement, the
market value of the security may be more or less than the
purchase price. The Fund's net asset value reflects gains or
losses on such commitments each day, and the Fund segregates
assets each day sufficient to meet the Fund's obligations to pay
for the securities.
Illiquid Securities
Normally, the Fund will not invest more than 5% of its net
assets in securities which are illiquid or not readily
marketable; however, the Fund is permitted to invest up to 15%
of its net assets in illiquid securities.
Strategic Transactions
The Fund may, but is not required to, utilize various other
investment strategies, including the use of derivatives, as
described below to hedge various market risks (such as changes
in security prices, interest rates and currency exchange rates),
or to enhance potential gain. Such strategies are generally
accepted as modern portfolio management techniques and are
regularly utilized by many mutual funds and other institutional
investors. Techniques and instruments may change over time as
new instruments and strategies are developed or regulatory
changes occur.
In the course of pursuing these investment strategies, the Fund
may purchase and sell exchange-listed put and call options on
securities and securities indices, and enter into various
currency transactions such as currency forward contracts, and
options on currencies (collectively, all of the above are called
"Strategic Transactions").
Strategic Transactions involving derivatives may be used to
attempt to protect against possible changes in the market value
of securities held in or to be purchased for the Fund's
portfolio resulting from securities markets or currency exchange
rate fluctuations, to protect its unrealized gains in the value
of its portfolio securities, to facilitate the sale of such
securities for investment purposes, to establish a position in
the options markets as a temporary substitute for purchasing or
selling particular securities, or as a means to efficiently
change country and/or currency allocation.
The ability of the Fund to utilize these Strategic Transactions
successfully will depend on the Investment Advisor's ability to
predict pertinent market movements, which cannot be assured.
The Fund will comply with applicable regulatory requirements
when implementing these strategies, techniques and instruments.
Strategic Transactions have risks associated with them including
possible default by the other party to the transaction,
illiquidity and, to the extent the Investment Advisor's view as
to certain market movements is incorrect, the risk that the use
of such Strategic Transactions could result in losses greater
than if they had not been used. Use of put and call options may
result in losses to the Fund, force the sale or purchase of
portfolio securities at inopportune times or for prices higher
than or lower than current market values, limit the amount of
appreciation it can realize on its investments or cause it to
hold a security it might otherwise sell. In addition, options
markets may not be liquid in all circumstances. As a result, in
certain markets, the Fund might not be able to close out a
transaction without incurring substantial losses, if at all.
Although the use of options transactions for hedging should tend
to minimize the risk of loss due to a decline in the value of
the hedged position, at the same time it tends to limit any
potential gain which might result from an increase in value of
such position. The use of currency transactions can result in
the Fund incurring losses as a result of a number of factors,
including the imposition of exchange controls, suspension of
settlements, or the inability to deliver or receive a specified
currency. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income,
and such losses can be greater than if the Strategic
Transactions had not been utilized. The Strategic Transactions
that the Fund may use and the risks of these techniques are
described more fully in the Statement of Additional Information.
Other Securities
The Fund may also invest in other types of securities which will
not constitute the Fund's principal portfolio emphasis, such as,
mortgage-backed securities, asset-backed securities, indexed
securities and warrants. Each of these types of securities
will, if used, comprise less than 5% of the Fund's total assets.
Please see the Statement of Additional Information for further
details.
Fundamental Limitations
The Fund has adopted certain fundamental limitations which may
not be changed without a shareholder vote and which are designed
to reduce its investment risk. Some of these limitations are
that the Fund may not:
* as to 75% of its assets, purchase the securities of any
issuer (other than obligations issued or guaranteed as to
principal and interest by the Government of the United
States or any agency or instrumentality thereof) if, as a
result of such purchase, more than 5% of its total assets
would be invested in the securities of such issuer;
* purchase stock or securities of an issuer (other than
obligations issued or guaranteed as to principal and
interest by the Government of the United States or any
agency or instrumentality thereof) if such purchase would
cause the Fund to own more than 10% of any class of the
outstanding stock or securities or more than 10% of any
class of voting securities of such issuer;
* borrow money, except through reverse repurchase agreements
or from banks for temporary or emergency purposes, and then
only in an amount not in excess of 20% of the value of the
Fund's net assets at the time the borrowing is made; or
* purchase the securities of any issuer (other than
obligations issued or guaranteed by the Government of the
United States or any agency or instrumentality thereof) if,
as a result of such purchase, more than 25% of the Fund's
total assets would be invested in any one industry.
These limitations apply at the time the Fund purchases
securities for the portfolio. See the Statement of Additional
Information for other investment limitations applicable to the
Fund.
PERFORMANCE
From time to time the Fund may advertise information regarding
its performance. All performance figures are historical, show
the performance of a hypothetical investment and are not
intended to indicate future performance. Advertising may
include the following performance measurements.
"Yield" is the ratio of income per share derived from the
portfolio investments to the current maximum offering price
expressed in terms of a percentage.
"Total return" is the total of all income and capital gains paid
to shareholders, assuming reinvestment of all distributions,
plus (or minus) the change in the value of the original
investment, expressed as a percentage of the purchase price.
"Average annual total return" refers to the average annual
compound rate of return of an investment in the Fund assuming
that the investment has been held for one year and the life of
the Fund.
"Cumulative total return" represents the cumulative change in
value of an investment in the Fund for various periods. These
calculations assume that dividends and capital gains
distributions were reinvested.
"Capital change" measures return from capital, including
reinvestment of any capital gains distributions but not
reinvestment of dividends.
Performance will vary based upon, among other things, changes in
market conditions and the level of the Fund's expenses. Please
refer to the Statement of Additional Information for more
information on performance.
THE FUND'S MANAGEMENT
The Fund's Board of Directors is responsible for the supervision
of the general business of the Fund. The Directors act as
fiduciaries for shareholders under the laws of the State of
Maryland. The Board appointed John Pasco, III to serve as
President of TWF and appointed Jane H. Williams to serve as
President of the Fund. The Fund employs the following persons
to provide it with investment advice and to conduct its on-going
business:
Investment Advisor
Sand Hill Advisors, Inc. (the "Investment Advisor"), a
registered investment adviser, manages the investments of the
Fund pursuant to an Investment Advisory Agreement (the "Advisory
Agreement" ), dated December 29, 1994. The Advisory Agreement
is effective for an initial term of two years and thereafter may
be renewed annually by the Board of Directors of the Fund.
The Investment Advisor is a privately held corporation. In
addition to the assets of the Fund, the Investment Advisor
manages other assets of approximately $200 million as of the
date of this Prospectus. Although the Investment Advisor has no
prior experience managing a mutual fund portfolio, it has
approximately 12 years of experience managing investment
portfolios for private clients.
Ms. Jane H. Williams has been the manager of the Fund since its
inception in January of 1995. Ms. Williams is also the President
of the Fund, Vice President of The World Funds, Inc., and Executive
Vice President and a Director of the Investment Advisor which was
founded in September of 1982 by Ms. Williams. Ms. Williams owns
35.46% of the stock of the Investment Advisor.
Effective June 1, 1996 David W. Cost, Jr. will assist Ms. Williams
in the day-to-day management of the Fund. Mr. Cost joined the
Investment Advisor in 1993 as a Research Analyst. He holds a BA
from Dartmouth College and an MBA from the University of California
at Los Angeles. He received his CFA designation in 1995.
Pursuant to the Advisory Agreement, the Investment Advisor
provides the Fund with investment management services, subject
to the supervision of the Fund's Board of Directors, and with
office space, and pays the ordinary and necessary office and
clerical expenses relating to investment research, statistical
analysis, supervision of its portfolio and certain other costs.
The Investment Advisor also bears the cost of fees, salaries and
other remuneration of the Fund's directors, officers or
employees who are officers, directors, or employees of the
Investment Advisor. The Fund is responsible for all other costs
and expenses, such as, but not limited to, brokerage fees and
commissions in connection with the purchase and sale of
securities, legal, auditing, bookkeeping and record keeping
services, custodian and transfer agency fees and other costs and
fees of registration of its shares for sale under various state
and Federal securities laws.
Under the Advisory Agreement the monthly compensation paid to
the Investment Advisor is accrued daily at a rate equal to a fee
at the annual rate of 1% of the net assets of the Fund. This
fee is higher than that paid by most investment companies. If
the assets of the Fund exceed $100,000,000, the fee for such
assets will be computed at the annual rate of .75 of 1% on such
excess. The fee is paid monthly, within five (5) business days
after the end of the month. The Advisory Agreement provides
that the fee paid by the Fund will be reduced to the extent
necessary to comply with any applicable state expense limitation
provision to which the Fund may be subject. All expenses not
specifically assumed by the Investment Advisor are assumed by
the Fund. The address of the Investment Advisor is 3000 Sand
Hill Road, Building 3, Suite 150, Menlo Park, California 94025.
The Advisory Agreement contemplates the authority of the
Investment Advisor to place orders pursuant to its investment
determinations for the Fund either directly with the issuer or
with any broker or dealer. In placing orders with brokers or
dealers, the Investment Advisor will attempt to obtain the best
net price and the most favorable execution of its orders. The
Investment Advisor may purchase and sell securities to and from
brokers and dealers who provide research or investment
information which benefits the Fund, the Investment Advisor, or
the Investment Advisor's other clients, or who provide other
services to the Fund or sell its shares.
Administrator
Commonwealth Shareholder Services, Inc. ("CSS"), serves as
Administrator to the Fund pursuant to an Administrative Services
Agreement. CSS provides certain recordkeeping, administrative
and shareholder servicing functions required of registered
investment companies. CSS may furnish personnel to act as the
Fund's officers to conduct the Fund's business subject to the
supervision and instructions of the Board of Directors of the
Fund.
The Administrative Services Agreement provides that CSS will be
paid a monthly fee: (1) of $30 per hour for shareholder
servicing and blue sky matters; (2) the greater of .20% of the
average daily net assets of the Fund or $15,000 per year for
administration (which includes regulatory matters, backup of the
pricing of the Fund, administrative duties in connection with
the execution of portfolio trades, and certain services in
connection with fund accounting. The minimum fee for 1996 will
be $15,000.); and (3) certain out-of-pocket expenses. The
address of CSS is 1500 Forest Avenue, Suite 223, Richmond, VA
23229.
Custodian and Accounting Services Agent
Brown Brothers Harriman & Co. ("BBH") is currently the Fund's
Custodian and Accounting Services Agent. Effective August 1, 1996
Star Bank in Cincinnati, Ohio will be the Custodian and Accounting
Services Agent for the Fund. The Custodian collects income when
due and holds all of the Fund's portfolio securities and cash.
(BBH, with the Fund's consent, has designated The Depository Trust
Company of New York, as its agent to secure some of the assets
of the Fund.) The Custodian is authorized to appoint other
entities to act as sub-custodian to provide for the custody of
foreign securities which may be acquired and held by the Fund
outside the U.S. Such appointments are subject to appropriate
review by TWF's Board of Directors.
The Custodian, as the Accounting Service Agent, maintains and keeps
current the books, accounts, records, journals or other records
of original entry relating to the Fund's business. The address
of BBH is 40 Water Street, Boston, Massachusetts 02109 and the
address of Star Bank is 425 Walnut Street, P.O. Box 1118,
Cincinnati, Ohio 45201-1118.
Transfer and Dividend Disbursing Agent
Fund Services, Inc. ("FSI") is the Fund's Transfer and Dividend
Disbursing Agent. John Pasco, III, Chairman of the Board of the
Fund owns one third of the stock of FSI, and, therefore, FSI
may be deemed to be an affiliate of the Fund. FSI provides all
the necessary facilities, equipment and personnel to perform the
usual and ordinary services of Transfer and Dividend Disbursing
Agent, including: receiving and processing orders and payments
for purchases of the Fund's shares, opening shareholder
accounts, preparing shareholder meeting lists, mailing proxy
material, receiving and tabulating proxies, mailing shareholder
reports and prospectuses, withholding certain taxes on
non-resident alien accounts, disbursing income dividends and
capital distributions, preparing and filing U.S. Treasury
Department Form 1099 (or equivalent) for all shareholders,
preparing and mailing confirmation forms to shareholders for all
purchases and redemptions of shares and all other confirmable
transactions in shareholders' accounts, and recording
reinvestment of dividends and distributions of TWF's shares.
Under an Agreement between TWF and FSI, as in effect on May 2,
1991, FSI is compensated pursuant to a schedule of services and
out-of-pocket expenses. The schedule calls for a minimum
payment of $16,500 per year. During the fiscal year ended
December 31, 1995 the Sand Hill Portfolio Manager Fund paid FSI
$12,579. The address of the Transfer and Dividend Disbursing
Agent is P.O. Box 26305, Richmond, VA 23260.
Principal Underwriter/Distributor
First Dominion Capital Corp. (the "Distributor") acts as the
Principal Underwriter for TWF pursuant to an agreement dated
January 1, 1994. Mr. John Pasco, III, who is President,
Director and Treasurer of the Distributor, owns 100% of the
stock of the Distributor. The address of the Distributor is
1500 Forest Avenue, Suite 223, Richmond, VA 23229.
HOW TO INVEST
Purchases of the Fund's shares are made at the net asset value
per share. A minimum initial investment of $25,000 is required
to open a shareholder account, and each subsequent investment
must be $50 or more. Under certain circumstances the Fund may
waive the minimum initial investment for purchases by officers,
directors and employees of TWF and its affiliated entities and
for certain related advisory accounts and retirement accounts.
The offering price per share is equal to the net asset value per
share next determined after the receipt of a purchase order.
To facilitate the handling of transactions with shareholders,
TWF uses an open account plan. The Transfer Agent will
automatically establish and maintain an open account for the
Fund's shareholders. Under the open account plan, your shares
are reflected in your open account. This service facilitates
the purchase, redemption or transfer of shares, and eliminates
the need to safeguard certificates and reduces time delays in
executing transactions.
Purchase by Mail
For initial purchases, the Account Application form which
accompanies this prospectus should be completed, signed, and
mailed to the Transfer Agent, together with your check or other
negotiable bank draft drawn on and payable by a U.S. Bank
payable to the Portfolio Manager Fund. For subsequent
purchases, include with your check the tear-off stub from a
prior purchase confirmation, or otherwise identify the name(s)
of the registered owner(s) and the social security number(s).
Investing by Wire
You may purchase shares by requesting your bank to transmit
"Federal Funds" by wire directly to the Transfer Agent. To
invest by wire please call the Transfer Agent for instructions,
then notify the Distributor by calling 800-527-9500. Your bank
may charge you a small fee for this service. The Account
Application which accompanies this Prospectus should be
completed and promptly forwarded to the Transfer Agent. This
application is required to complete the Fund's records in order
to allow you access to your shares. Once your account is opened
by mail or by wire, additional investments may be made at any
time through the wire procedure described above. Be sure to
include your name and account number in the wire instructions
you provide your bank.
Stock Certificates
Certificates for full shares will be issued by the Transfer
Agent upon written request but only after payment for the shares
is collected by the Transfer Agent.
HOW TO REDEEM SHARES
Shares may be redeemed at any time by mail or telephone. For
your protection, the Transfer Agent will not redeem your shares
until it has received all information and documents necessary
for your request to be in "proper order." (See "Signature
Guarantees.") You will be notified promptly by the Transfer
Agent if your redemption request is not in proper order.
The Fund's procedure is to redeem shares at the net asset value
next determined after receipt by the Transfer Agent of the
redemption request in proper order as described herein. Payment
will be made promptly, but no later than the seventh day
following receipt of the request in proper order. Please note
that the Transfer Agent cannot accept redemption requests which
specify a particular date for redemption, or which specify any
special conditions. If the shares you are redeeming were
purchased by you less than fifteen (15) days prior to the
receipt of your redemption request, the Transfer Agent must
ascertain that your check in payment of the shares you are
redeeming has cleared prior to disbursing the redemption
proceeds. If you anticipate the need to redeem before fifteen
(15) days, you should make your purchase by Federal Funds wire,
or by a certified, treasurer's or cashier's check.
The Fund may suspend the right to redeem shares for any period
during which the New York Stock Exchange is closed or the
Securities and Exchange Commission determines that there is an
emergency. In such circumstances you may withdraw your
redemption request or permit your request to be held for
processing at the net asset value per share next computed after
the suspension is terminated.
Redemption by Mail
To redeem shares by mail, send the following information to the
Transfer Agent: (1) a written request for redemption signed by
the registered owner(s) of the shares, exactly as the account is
registered; (2) the stock certificates for the shares you are
redeeming, if any were issued; (3) any required signature
guarantees (See "Signature Guarantees"); and (4) any additional
documents which might be required for redemption by
corporations, executors, administrators, trustees, guardians,
etc. The Transfer Agent will mail the proceeds to your
currently registered address, payable to the registered owner(s)
unless you specify otherwise in your redemption request. There
is no charge to shareholders for redemptions by mail.
Redemption by Telephone
You may redeem your shares by telephone if you request this
service at the time you complete your initial Account
Application. If you do not request this service at that time,
you must request approval of telephone redemption privileges in
writing (sent to the Fund's Transfer Agent) with a signature
guarantee before you can redeem shares by telephone. There is
no charge for establishing this service, but the Transfer Agent
will charge your account a $10.00 service fee each time you make
a telephone redemption. Once your telephone authorization is in
effect, you may redeem shares by calling the Transfer Agent at
(800) 628-4077. By establishing this service, you authorize the
Transfer Agent to act upon any telephone instructions it
believes to be genuine, to (1) redeem shares from your account
and (2) mail or wire redemption proceeds. There is a
$10.00 service fee for making a telephone redemption. The
amount of these service charges may be changed at any time,
without notice, by the Transfer Agent.
You cannot redeem shares by telephone if you hold a stock
certificate representing the shares you are redeeming or if you
paid for the shares with a personal, corporate, or government
check and your payment has been on the books of the Fund for
less than 15 days.
If it should become difficult to reach the Transfer Agent by
telephone during periods when market or economic conditions lead
to an unusually large volume of telephone requests, a
shareholder may send a redemption request to the Transfer Agent
by overnight mail.
The Fund employs procedures reasonably designed to confirm the
authenticity of your instructions communicated by telephone and,
if it does not, it may be liable for any losses due to the
unauthorized or fraudulent transactions; however, a shareholder
authorizing telephone redemption bears the risk of loss which
may result from unauthorized or fraudulent transactions which
the Fund believes to be genuine. When you request a telephone
redemption or transfer, you will be asked to respond to certain
questions designed to confirm your identity as a shareholder of
record. Your cooperation with these procedures will protect
your account and the Fund from unauthorized transactions.
Signature Guarantees
To protect you and the Fund (and its agents) from fraud,
signature guarantees are required for: (1) all redemptions
ordered by mail if you require that the check be payable to
another person or that the check be mailed to an address other
than the one indicated on the account registration; (2) all
requests to transfer the registration of shares to another
owner; and (3) all authorizations to establish or change
telephone redemption service, other than through your initial
account application.
In the case of redemption by mail, signature guarantees must
appear either: (a) on the written request for redemption; or (b)
on a separate instrument of assignment (usually referred to as
a "stock power") specifying the total number of shares being
redeemed. If shares held by the Transfer Agent are being
redeemed, the signature guarantee must be on the written request
or stock power. The Fund may waive these requirements in
certain instances.
The following institutions are acceptable guarantors: (a)
participants in good standing of the Securities Transfer Agents
Medallion Program ("STAMP"); (b) commercial banks which are
members of the Federal Deposit Insurance Corporation
("F.D.I.C."); (c) trust companies; (d) firms which are members
of a domestic stock exchange; (e) eligible guarantor
institutions qualifying under Rule 17Ad-15 of the Securities
Exchange Act of 1934 that are authorized by charter to provide
signature guarantees; and (f) foreign branches of any of the
above. In addition, the Fund will guarantee your signature if
you personally visit its offices at 1500 Forest Avenue, Suite
223, Richmond, VA 23229. The Transfer Agent cannot honor
guarantees from notaries public, savings and loan associations,
or savings banks.
Small Accounts
Due to the relatively higher cost of maintaining small accounts,
the Fund may deduct $10 (payable to the Transfer Agent) from
accounts valued at less than $1,000 unless the account value has
dropped below $1,000 solely as a result of share value
depreciation. Shareholders will receive 60 days written notice
to increase the account value before the fee is deducted.
HOW TO TRANSFER SHARES
If you wish to transfer shares to another owner, send a written
request to the Transfer Agent. Your request should include: (1)
the name of the fund and existing account registration; (2)
signature(s) of the registered owner(s); (3) the new account
registration, address, Social Security Number or taxpayer
identification number and how dividends and capital gains are to
be distributed; (4) any stock certificates which have been
issued for the shares being transferred; (5) signature
guarantees (see "Signature Guarantees"); and (6) any additional
documents which are required for transfer by corporations,
administrators, executors, trustees, guardians, etc. If you
have any questions about transferring shares, call the Transfer
Agent at (800) 628-4077.
ACCOUNT STATEMENTS AND SHAREHOLDER REPORTS
Each time you purchase, redeem or transfer shares of the Fund,
you will receive a written confirmation. You will also receive
a year-end statement of your account if any dividends or capital
gains have been distributed, and the Fund's annual and
semi-annual reports to shareholders.
SPECIAL SHAREHOLDER SERVICES
The Fund offers the following four services for its
shareholders: Regular Account - allows shareholders to make
voluntary additions and withdrawals to and from their account as
often as they wish; Invest-A-Matic - permits automatic monthly
investments into the Fund from your checking account on a fixed
or flexible schedule; Individual Retirement Accounts (IRA's);
and Exchange Privileges - allows the shareholder to exchange his
or her shares for shares of certain other funds having a
different investment objective from the Fund. More information
on any of these services is available upon written request to
the Fund.
HOW NET ASSET VALUE IS DETERMINED
The Fund's Net Asset Value ("NAV") is determined as of the close
of trading of the New York Stock Exchange (currently 4:00 P.M.,
Eastern Time) on each business day from Monday to Friday or on
each day (other than a day during which no security was tendered
for redemption and no order to purchase or sell such security
was received by the Fund) in which there is a sufficient degree
of trading in the portfolio securities of the Fund that the
current NAV of the shares might be materially affected by
changes in the value of such portfolio security. The Fund's NAV
is calculated at the 4:00 p.m. time set by the Board of
Directors based upon its determination that this is the most
appropriate time to price the securities.
NAV per share is determined by dividing the total value of the
assets, less its liabilities, by the total number of shares then
outstanding. Generally, securities owned by the Fund are valued
at market value.
The Fund's management may compute the NAV per share more
frequently in order to protect shareholders' interests.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
Dividends from net investment income are declared annually.
The Fund intends to distribute annually realized net capital
gains, after utilization of capital loss carryforwards, if any,
to prevent application of a federal excise tax. However, it may
make an additional tax distribution any time prior to the due
date, including extensions, of filing its tax return, if
necessary to accomplish this result. Any dividends or capital
gains distributed pursuant to a dividend declaration declared in
October, November or December with a record date in such a month
and paid during the following January will be treated by
shareholders for federal income tax purposes as if received on
December 31 of the calendar year declared. According to
preference, shareholders may receive distributions in cash or
have them reinvested in additional shares. Shareholders will be
subject to tax on all dividends declared or reinvested. If an
investment is in the form of a retirement plan, all dividends
and capital gains distributions must be reinvested into an
account.
Generally, dividends from net investment income are taxable to
investors as ordinary income. Certain gains or losses on the
sale or retirement of international securities held by the Fund,
to the extent attributable to fluctuations in currency exchange
rates, as well as certain other gains or losses attributable to
exchange rate fluctuations, must be treated as ordinary income
or loss. Such income or loss may increase or decrease (or
possibly eliminate) the income available for distribution to
shareholders. If, under the rules governing the tax treatment
of foreign currency gains and losses, the income available for
distribution is decreased or eliminated, all or a portion of the
dividends declared by the Fund may be treated for federal income
tax purposes as a return of capital, or in some circumstances,
as capital gain. Generally, a shareholder's tax basis in
his/her Fund shares will be reduced to the extent that an amount
distributed to the shareholder is treated as a return of
capital.
Long-term capital gains distributions, if any, are taxable as
net long-term capital gains when distributed regardless of the
length of time shareholders have owned their shares. Net short-
term capital gains and any other taxable income distributions
are taxable as ordinary income.
The Fund sends detailed tax information about the amount and
type of its distributions to its shareholders by January 31 of
the following year.
TAXES
The Fund will be treated as a separate corporation and will seek
to qualify and maintain its qualification as a regulated
investment company under Subchapter M of the Internal Revenue
Code of 1986 (the "Code"). Provided it maintains its
qualification as a regulated investment company under the Code,
the Fund will not be liable for federal income taxes on income
distributed as dividends to its shareholders or on net capital
gains which are distributed to its shareholders or imputed to
them under the Code, or for any excise tax, to the extent its
earnings are distributed as provided in the Code, and assuming
it meets the tax diversification test, 90% gross income test and
30% gross income test as required by the Code.
In order to meet the tax diversification test, at the close of
each quarter of its fiscal year, at least 50% of the value of
the Fund's total assets must be represented by cash and cash
items including receivables (for these purposes, currency and
demand deposits denominated in a currency other than the U.S.
dollar will not be considered cash, a cash item or a
receivable), U.S. Government securities, and securities of other
regulated investment companies, and other securities limited in
respect of any one issuer to an amount not greater than 5% of
the value of its total assets, and to not more than 10% of the
outstanding voting securities of such issuer, and, not more than
25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. Government
securities and the securities of other regulated investment
companies.)
The Fund will meet the 90% of gross income test if 90% of its
gross income is derived from dividends, interest, payments with
respect to certain securities loans, and gain from the sale or
disposition of stock or securities or foreign currencies, or
other income (including but not limited to gains from options,
futures, or forward contracts) derived with respect to its
business of investing in such stock, securities, or currencies.
The Fund will meet the 30% of gross income test provided less
than 30% of its gross income for the fiscal year is derived from
the sale or disposition of any of the following held for less
than 3 months: stock or securities, options, futures, or
forward contracts (other than such contracts on foreign
currencies), and foreign currencies (or options, futures, or
forward contracts on foreign currencies ("hedging instruments"))
but only if such currencies (and hedging instruments) are not
directly related to the Fund's principal business of investing
in stock or securities (or options and futures with respect to
stock or securities.)
The Fund will act and invest so as to comply with the
requirements of Subchapter M outlined above. This may mean, for
example, that a series will be required to hold an investment
longer than it otherwise would, or not engage in a hedging
transaction which it otherwise would, in order to avoid
violating one of the tests outlined above.
The distribution to shareholders each year of investment income
and capital gains will represent taxable income to the
shareholders.
The Fund may be subject to foreign withholding taxes on income
from certain of its foreign securities. If more than 50% of the
value of its assets at the close of its taxable year consists of
stock or securities in foreign corporations, it may elect to
pass through to its shareholders the amount of foreign
withholding taxes it paid. If this election is made,
shareholders will be (i) required to include in their gross
income their pro rata share of foreign source income (including
any foreign taxes paid by the Fund), and (ii) entitled to either
deduct (as an itemized deduction in the case of individuals)
their share of such foreign taxes in computing their taxable
income or to claim a credit for such taxes against their U.S.
income tax, subject to certain limitations under the Code. The
Fund will notify its shareholders of such election within 60
days of the close of its tax year. Shareholders may decide
whether to utilize such flow through amount as either a
deduction or a tax credit; individual shareholders will usually
find that the credit is more favorable. Tax exempt investors,
such as pension plans and individual retirement accounts, will
not benefit from this pass through, and therefore this Fund may
not be a suitable investment for such investors.
GENERAL INFORMATION ABOUT THE FUND
TWF is authorized to issue up to 500,000,000 shares of $0.01 par
value common stock, of which it has presently allocated
50,000,000 shares to the Fund, 50,000,000 to the Vontobel
EuroPacific Fund series, 50,000,000 to the Vontobel U.S. Value
Fund, 50,000,000 to the Vontobel International Bond Fund series
and 50,000,000 to the Vontobel Eastern European Equity Fund
series. The Board of Directors can allocate the remaining
authorized but unissued shares to any series of TWF or may
create additional series and allocate shares to such series. A
share of the Fund has priority in the assets of the Fund in the
event of a liquidation. The shares of the Fund will be fully
paid and non-assessable, will have no preference over other
shares of the Fund as to conversion, dividends, or retirement,
and will have no preemptive rights. Shares of the Fund will be
redeemable from the assets of the Fund at any time.
Each outstanding share of TWF is entitled to one vote for each
full share of stock and a fractional vote for fractional shares
of stock. All shareholders vote on matters which concern the
corporation as a whole. TWF is not required to hold a meeting
of shareholders each year, and may elect not to hold a meeting
in years when no meeting is necessary. The Fund shall vote
separately on matters which affect only the interest of the
Fund. TWF's shares do not have cumulative voting rights, which
means that the holders of more than 50% of the shares voting for
the election of directors can elect all of the directors if they
choose to do so. Shareholders have the right to call a meeting
to consider the removal of one or more of the Directors and will
be assisted in shareholder communications in such matter.
Limitation on Use of Name - The Advisory Agreement for the Fund
authorizes TWF to utilize the name "Sand Hill." TWF agrees
that if the Advisory Agreement is terminated it will promptly
redesignate the name of the Sand Hill Portfolio Manager Fund to
eliminate any reference to the name "Sand Hill" or any
derivation thereof unless the Investment Advisor waives this
requirement in writing.
<PAGE>
MORE INFORMATION
For further information on the Sand Hill Portfolio Manager Fund,
please contact Commonwealth Shareholder Services, Inc., P.O. Box
8687, Richmond, VA 23226, telephone: (800) 527-9500. Additional
information may also be obtained by requesting a copy of the
Fund's Statement of Additional Information.
Investment Advisor:
Sand Hill Advisors, Inc.
3000 Sand Hill Road
Building 3, Suite 150
Menlo Park, CA 94025
Distributor:
First Dominion Capital Corp.
1500 Forest Avenue
Suite 223
Richmond, VA 23229
Independent Auditors:
Tait, Weller & Baker
2 Penn Center
Suite 700
Philadelphia, PA 19102
Marketing Services: For general information on the Fund and
Marketing Services, call the Distributor at (800) 527-9500 Toll
Free.
Transfer Agent: For account information, wire purchases or
redemptions, call or write to the Fund's Transfer Agent:
Fund Services, Inc.
P.O. Box 26305
Richmond, VA 23260
(800) 628-4077 Toll Free
More Information: For 24 hour, 7 days a week price information,
call 1-800-527-9500.
For information on any series of The World Funds, Inc.
investment plans, or other shareholder services, call 1-800-527-
9500 during normal business hours, or write The World Funds at
1500 Forest Avenue, Suite 223, Richmond, VA 23229.
