SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MONITREND MUTUAL FUND
(Name of Registrant as Specified in its Charter)
MONITREND MUTUAL FUND
(Name of person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box): (Not Applicable)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
4) Proposed maximum aggregate value of transaction:
_______________
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
IMPORTANT NOTICE - PLEASE READ IMMEDIATELY
MONITREND MUTUAL FUND
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER __, 1996
_________________________
TO THE SHAREHOLDERS OF MONITREND MUTUAL FUND:
The purpose of this Notice is to tell you that a Special Meeting
of Shareholders of MONITREND MUTUAL FUND (the "Trust") will be:
Place: held at 1299 Ocean Avenue, Suite 210, Santa Monica,
California.
Time: on Friday, the __ day of November, 1996, at 8:30 A.M. local
time.
Purposes: for the following purposes:
1. With respect to the shareholders of all of the
Monitrend Mutual Funds (i.e. the PIA Adjustable Rate Fund, the
Gaming & Leisure Fund, the Growth & Income Fund, the Government
Income Fund, the Gold Fund, the Technology Fund and the Growth
Fund), to elect five (5) trustees to serve an indefinite term
until their respective successors are chosen and have qualified
(Proposal No. 1);
2.(a) With respect to the shareholders of the PIA
Adjustable Rate Fund, to consider and act upon proposals to
approve:
(i) a change in the investment objective of the PIA
Adjustable Rate Fund (Proposal No. 2(a)(i));
(ii) a change in the investment restrictions of the
PIA Adjustable Rate Fund to permit it to purchase and sell
futures contracts on debt securities and purchase and write
put and call options on debt securities and futures
contracts on debt securities (Proposal No. 2(a)(ii));
2.(b) With respect to the shareholders of the Gaming &
Leisure Fund, to consider and act upon proposals to approve:
(i) a change in the investment objective of the
Gaming & Leisure Fund and related change in its investment
restrictions to permit it to concentrate its investments
(Proposal No. 2(b)(i));
(ii) a change in the investment restrictions of the
Gaming & Leisure Fund to permit it to effect short sales
(Proposal No. 2(b)(ii));
(iii) a change in the investment restrictions of
the Gaming & Leisure Fund to permit it to purchase
restricted securities (Proposal No. 2(b)(iii));
(iv) a change in the investment restrictions of the
Gaming & Leisure Fund to permit it to purchase foreign
securities and currencies (Proposal No. 2(b)(iv));
(v) a change in the investment restrictions of the
Gaming & Leisure Fund to permit it to lend its portfolio
securities (Proposal No. 2(b)(v));
2.(c) With respect to the shareholders of the Growth &
Income Fund, to consider and act upon proposals to approve:
(i) a change in the investment restrictions of the
Growth & Income Fund to permit it to effect short sales
(Proposal No. 2(c)(i));
(ii) a change in the investment restrictions of the
Growth & Income Fund to permit it to purchase restricted
securities (Proposal No. 2(c)(ii));
(iii) a change in the investment restrictions of
the Growth & Income Fund to permit it to purchase and write
put and call options and purchase and sell futures
contracts on stock indices and debt securities (Proposal
No. 2(c)(iii));
(iv) a change in the subclassification of the Growth &
Income Fund from that of a "diversified company" to that of
a "non-diversified company" (Proposal No. 2(c)(iv));
2.(d) With respect to the shareholders of the
Government Income Fund to consider and act upon a proposal to
approve a change in the investment restrictions of the
Government Income Fund to permit it to purchase foreign
securities and currencies (Proposal No. 2(d));
2.(e) With respect to the shareholders of the Gold
Fund, to consider and act upon proposals to approve:
(i) a change in the investment restrictions of the
Gold Fund to permit it to purchase restricted securities
(Proposal No. 2(e)(i));
(ii) a change in the investment restrictions of the
Gold Fund to permit it to purchase gold, silver, platinum
and palladium (Proposal No. 2(e)(ii));
3. With respect to the shareholders of each of the PIA
Adjustable Rate Fund, the Gaming & Leisure Fund, the Growth &
Income Fund, the Government Income Fund, the Gold Fund, the
Technology Fund and the Growth Fund to act upon a proposal to
approve new Investment Advisory Agreements between the Trust and
the respective proposed investment advisers of the Monitrend
Mutual Funds (i.e. the PIA Adjustable Rate Fund - Pacific Income
Advisers, Inc., the Gaming & Leisure Fund - Murphy Investment
Management, Inc., the Growth & Income Fund - Murphy Investment
Management, Inc., the Government Income Fund - Pacific Income
Advisers, Inc., the Gold Fund - Orrell and Company, Inc., the
Technology Fund - Murphy Investment Management, Inc. and the
Growth Fund - Pacific Income Advisers, Inc.) applicable to the
respective Monitrend Mutual Funds (Proposal Nos. 3(a), 3(b),
3(c), 3(d), 3(e), 3(f) and 3(g));
4. With respect to the shareholders of the Government
Income Fund to act upon a proposal to approve a new Sub-Advisory
Agreement between PIA and Camborne Advisers, Inc. applicable
only to the Government Income Fund (Proposal No. 4).
5. To transact such other business as may properly come
before the meeting or any adjournments thereof.
Who Can Only shareholders of record of the Trust at the close of
Vote: business on September 17, 1996, the record date for this
meeting, shall be entitled to notice of and to vote at the
meeting or any adjournments thereof. The number of shares of
each Fund of the Trust held by you on our records on the record
date determines the number of shares you may vote at the meeting
with respect to matters to be voted on by a particular Fund.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, WE URGE YOU TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
STAMPED ENVELOPE. SENDING IN YOUR PROXY WILL NOT PREVENT YOU FROM
PERSONALLY VOTING YOUR SHARES AT THE MEETING SINCE YOU MAY REVOKE YOUR
PROXY BY ADVISING THE SECRETARY OF THE TRUST IN WRITING (BY SUBSEQUENT
PROXY OR OTHERWISE) OF SUCH REVOCATION AT ANY TIME BEFORE IT IS VOTED.
TO AVOID UNNECESSARY EXPENSE TO THE TRUST, WE ASK YOUR COOPERATION IN
RETURNING YOUR PROXY NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
By Order of the Board of Trustees
Santa Monica, California KATHIE HILTON
October __, 1996 Secretary
MONITREND MUTUAL FUND
1299 Ocean Avenue, Suite 210
Santa Monica, California 90401
________________________
PROXY STATEMENT
INTRODUCTION
The enclosed proxy is being solicited by and on behalf of the
Board of Trustees of Monitrend Mutual Fund (the "Trust") for use at the
Special Meeting of Shareholders to be held at 1299 Ocean Avenue, Suite
210, Santa Monica, California, on Friday the __ day of November, 1996 at
8:30 A.M. and at any adjournments thereof (the "Meeting"), for the
purposes set forth in the Notice of Special Meeting of Shareholders (the
first page of this document). The Meeting could be adjourned if a quorum
does not exist or the Meeting is disrupted by fire or other emergency.
For purposes of any adjournment, proxies will be voted "FOR" adjournment
unless otherwise directed. A shareholder may otherwise direct by writing
anywhere on the enclosed proxy that the shareholder will vote against any
adjournments. The purpose of this Proxy Statement (the remainder of this
document) is to provide you with information on which you may base the
choices,if any, you make on the enclosed proxy.
Whether you expect to be personally present at the Meeting or
not, please complete, sign, date and return the accompanying form of
proxy, which authorizes the persons named (or their substitutes) to vote
your shares. Timely executed proxies will be voted as you instruct. If
no choice is indicated, proxies will be voted for the nominees set forth
in this Proxy Statement and for the proposals set forth in the Notice of
Special Meeting of Shareholders. Any shareholder giving a proxy has the
power to revoke it at any time before it is exercised by giving notice
thereof to the Trust in writing (by subsequent proxy or otherwise), but if
not so revoked, the shares represented by the proxy will be voted at the
Meeting. Presence at the Meeting of a shareholder who has signed a proxy
does not in itself revoke a proxy.
Proxies will be solicited by mail; they may also be solicited by
telephone, telegraph and personal interviews. The cost of solicitation,
including preparing, assembling and mailing the proxy material will be
borne by the Trust. Brokerage firms, banks and others may be requested to
forward this Notice and Proxy Statement to the beneficial owners of the
Trust's shares so that the owners may authorize the voting of these
shares. The Trust will pay these firms for their out-of-pocket expenses
for doing so.
The Notice of Special Meeting of Shareholders, this Proxy
Statement and the accompanying form of proxy are first being mailed to
shareholders of the Trust beginning on or about October __, 1996.
The Trust has seven separate portfolios (the "Funds"), each of
which has its own objective or objectives, assets, liabilities and net
asset value per share. The Funds are (a) the PIA Adjustable Rate
Government Securities Series (the "PIA Adjustable Rate Fund"); (b) the
Gaming & Leisure Series (the "Gaming & Leisure Fund"); (c) the Growth &
Income Series (the "Growth & Income Fund"); (d) the PIA-Monitrend
Government Income Series (the "Government Income Fund"); (e) the Gold
Series (the "Gold Fund"); (f) the Technology Series (the "Technology
Fund"); and (g) the Growth Series (the "Growth Fund").
The following proposals will be presented to the shareholders at
the Meeting:
Proposal No. 1 Election of Trustees
Proposal No. 2(a)(i) Approval of Change of Investment Objective of
the PIA Adjustable Rate Fund
Proposal No. 2(a)(ii) Approval of Change of Investment Restrictions of
the PIA Adjustable Rate Fund to Permit it to
Purchase and Sell Futures Contracts on Debt
Securities and Purchase and Write Put and Call
Options on Debt Securities and Futures Contracts
on Debt Securities
Proposal No. 2(b)(i) Approval of Change of Investment Objective of
the Gaming & Leisure Fund and Related Change in
its Investment Restrictions to Permit it to
Concentrate its Investments
Proposal No. 2(b)(ii) Approval of Change of Investment Restrictions of
the Gaming & Leisure Fund to Permit it to Effect
Short Sales
Proposal No. 2(b)(iii) Approval of Change of Investment Restrictions of
Gaming & Leisure Fund to Permit it to Purchase
Restricted Securities
Proposal No. 2(b)(iv) Approval of Change of Investment Restrictions of
Gaming & Leisure Fund to Permit it to Invest in
Foreign Securities and Currencies
Proposal No. 2(b)(v) Approval of Change of Investment Restrictions of
the Gaming & Leisure Fund to Permit it to Lend
its Portfolio Securities
Proposal No. 2(c)(i) Approval of Change of Investment Restrictions of
the Growth & Income Fund to Permit it to Effect
Short Sales
Proposal No. 2(c)(ii) Approval of Change of Investment Restrictions of
the Growth & Income Fund to Permit it to
Purchase Restricted Securities
Proposal No. 2(c)(iii) Approval of Change of Investment Restrictions of
the Growth & Income Fund to Permit it to
Purchase and Write Put and Call Options and
Purchase and Sell Futures Contracts on Stock
Indices and Debt Securities
Proposal No. 2(c)(iv) Approval of a Change in the Subclassification of
the Growth & Income Fund from that of a
"Diversified Company" to that of a "Non-
diversified Company"
Proposal No. 2(d) Approval of Change of Investment Restrictions of
the Government Income Fund to Permit it to
Purchase Foreign Securities and Currencies
Proposal No. 2(e)(i) Approval of Change of Investment Restrictions of
the Gold Fund to Permit it to Purchase
Restricted Securities
Proposal No. 2(e)(ii) Approval of Change of Investment Restrictions of
the Gold Fund to Permit it to Purchase Gold,
Silver, Platinum and Palladium
Proposal No. 3(a) Approval of Investment Advisory Agreement for
PIA Adjustable Rate Fund
Proposal No. 3(b) Approval of Investment Advisory Agreement for
Gaming & Leisure Fund
Proposal No. 3(c) Approval of Investment Advisory Agreement for
Growth & Income Fund
Proposal No. 3(d) Approval of Investment Advisory Agreement for
Government Income Fund
Proposal No. 3(e) Approval of Investment Advisory Agreement for
Gold Fund
Proposal No. 3(f) Approval of Investment Advisory Agreement for
Technology Fund
Proposal No. 3(g) Approval of Investment Advisory Agreement for
Growth Fund
Proposal No. 4 Approval of Sub-Advisory Agreement for
Government Income Fund
As to each proposal, the record holder of each outstanding share of a Fund
is entitled to one vote on all matters submitted to shareholders of that
Fund. The table below sets forth the Proposals for which shareholders of
each Fund are being solicited:
<TABLE>
<CAPTION>
PIA Gaming & Growth & Government
Proposal Adjustable Leisure Income Income Gold Technology Growth
No. Rate Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
1 Yes Yes Yes Yes Yes Yes Yes
2(a)(i) Yes No No No No No No
2(a)(ii) Yes No No No No No No
2(b)(i) No Yes No No No No No
2(b)(ii) No Yes No No No No No
2(b)(iii) No Yes No No No No No
2(b)(iv) No Yes No No No No No
2(b)(v) No Yes No No No No No
2(c)(i) No No Yes No No No No
2(c)(ii) No No Yes No No No No
2(c)(iii) No No Yes No No No No
2(c)(iv) No No Yes No No No No
2(d) No No No Yes No No No
2(e)(i) No No No No Yes No No
2(e)(ii) No No No No Yes No No
3(a) Yes No No No No No No
3(b) No Yes No No No No No
3(c) No No Yes No No No No
3(d) No No No Yes No No No
3(e) No No No No Yes No No
3(f) No No No No No Yes No
3(g) No No No No No No Yes
4 No No No Yes No No No
</TABLE>
See "Vote Required" under each Proposal for information as to the required
vote on each Proposal.
Only shareholders of record of the Funds at the close of
business on September 17, 1996 will be entitled to notice of and to vote
at the Meeting. On that date, there were 422,029 issued and outstanding
shares of the PIA Adjustable Rate Fund, 42,277 issued and outstanding
shares of the Gaming & Leisure Fund, 71,900 issued and outstanding shares
of the Growth & Income Fund, 99,073 issued and outstanding shares of the
Government Income Fund, 171,994 issued and outstanding shares of the Gold
Fund, 40,790 issued and outstanding shares of the Technology Fund and
37,247 issued and outstanding shares of the Growth Fund.
THE TRUST WILL FURNISH, WITHOUT CHARGE, ITS ANNUAL REPORT FOR
THE FISCAL YEAR ENDED NOVEMBER 30, 1995 AND SEMI-ANNUAL REPORT FOR THE SIX
MONTHS ENDED MAY 31, 1996 TO ANY SHAREHOLDER UPON REQUEST. REQUESTS FOR
SUCH REPORTS SHOULD BE DIRECTED TO KATHIE HILTON AT 1299 OCEAN AVENUE,
SUITE 210, SANTA MONICA, CA 90401 OR BY CALLING 1-800-251-1970.
At September 17, 1996, the persons owning of record or
beneficially 5% or more of the outstanding securities of any Fund were:
<TABLE>
<CAPTION>
Amount of
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
<S> <C> <C> <C>
PIA Adjustable Rate Ahmet O. Alfi 105,032 24.88%
Fund 11 West Del Mar Blvd. shares
Pasadena, CA 91105
Imperial Trust Company, Custodian 86,488 shares 20.49%
Hunsaker & Associates Retirement Trust
201 North Figueroa Street, #610
Los Angeles, CA 90012
Pacific Income Advisers, Inc. 55,568 shares 13.17%
1299 Ocean Avenue #210
Santa Monica, CA 90401
The Aldeen Charitable Remainder 44,029 shares 10.43%
Unitrust No. 1
2042 Ashington Drive
Glendale, CA 91206
The Aldeen Charitable Remainder 44,029 shares 10.43%
Unitrust No. 2
2042 Ashington Drive
Glendale, CA 91206
Donaldson, Lufkin & Jenrette* 26,487 6.28%
Securities Corporation shares*
P. O. Box 2052
Jersey City, NJ 07303
Gaming & Leisure Fund John Michael Murphy 7,041 shares 16.66%
P. O. Box 308
Half Moon Bay, CA 94019
Growth & Income Fund Donaldson, Lufkin & Jenrette* 12,935 17.99%
Securities Corporation shares*
P. O. Box 2052
Jersey City, NJ 07303
Government Income Fund Pacific Income Advisers, Inc. 33,870 shares 34.19%
1299 Ocean Avenue #210
Santa Monica, CA 90401
Dora Elena Walker, Trustee of the 15,660 shares 15.81%
Hortense Daniel Living Trust dated
October 1, 1988
9431 Friendly Woods Lane
Whittier, CA 90605
Donaldson, Lufkin & Jenrette* 6,067 shares* 6.12%
Securities Corporation
P. O. Box 2052
Jersey City, NJ 070303
Richard K. Moore and 5,566 shares 5.62%
Dorothy A. Moore
8 Lorraine Avenue
Binghamton, NY 13905
Gold Fund Donaldson, Lufkin & Jenrette* 41,055 23.87%
Securities Corporation shares*
P. O. Box 2052
Jersey City, NJ 07303
Zyrel Fox 31,461 shares 18.30%
240 Greenwich Avenue
Greenwich, CT 06830
Technology Fund Everett A. Turner 4,841 shares 11.87%
114 Quail Hollow
Martinez, CA 94553
Alain B. Schreiber, M.D. 2,620 shares 6.42%
P. O. Box 5005-26
Rancho Santa Fe, CA 92067
Timothy J. Brosz 2,435 shares 5.97%
2525 N. Sheffield #1D
Chicago, IL 60614
Franklin C. Geiger, Trustee 2,189 shares 5.34%
Franklin C. Geiger Revocable Trust
28 Moloaa Street
Honolulu, HA 98625
Growth Fund Pacific Income Advisers, Inc. 8,082 shares 21.70%
1299 Ocean Avenue #210
Santa Monica, CA 90401
Angelo Alberici and Rosemarie Alberici 2,859 shares 7.68%
4138 Maider Road
Clay, NY 13041
Pershing Securities Division * 2,300 shares* 6.17%
of Donaldson, Lufkin & Jenrette
Securities Corporation
One Pershing Plaza
Jersey City, NJ 07399
_____________________
*The shares owned by Donaldson, Lufkin & Jenrette Securities
Corporation and the Pershing Securities Division of Donaldson, Lufkin &
Jenrette Securities Corporation are owned of record only.
</TABLE>
No other person owns of record or beneficially 5% or more of the
outstanding securities of any Fund. By virtue of its stock ownership,
Pacific Income Advisers, Inc. is deemed to "control" the Government Income
Fund, as that term is defined in the 1940 Act. (Pacific Income Advisers,
Inc. is controlled by Joseph Lloyd McAdams, Jr. and Heather U. Baines.)
Pacific Income Advisers, Inc. does not control the Trust.
The nominees for trustee and the officers of the Trust
beneficially own the following securities of the Funds:
<TABLE>
<CAPTION>
Amount of Beneficial Percent
Title of Class Name of Beneficial Owner Ownership of Class
<S> <C> <C> <C>
PIA Adjustable Rate Fund Heather U. Baines (1) 63,023 shares (1) 14.93% (1)
Joseph Lloyd McAdams, Jr. (1) 60,568 shares (1) 14.35% (1)
Ann Louise Marinaccio 994 shares *
Gaming & Leisure Fund John Michael Murphy 7,041 shares 16.66%
Government Income Fund Joseph Lloyd McAdams, Jr. (2) 34,952 shares (2) 35.28% (2)
Heather U. Baines (2) 33,870 shares (2) 34.19% (2)
_________________________
* Less than 1%
(1) Includes 55,568 shares owned by Pacific Income Advisers, Inc.,
which is controlled by Joseph Lloyd McAdams, Jr. and Heather U.
Baines. Mr. McAdams and Ms. Baines are deemed to beneficially
own the same 55,568 shares.
(2) Includes 33,870 shares owned by Pacific Income Advisers, Inc.,
which is controlled by Joseph Lloyd McAdams, Jr. and Heather U.
Baines. Mr. McAdams and Ms. Baines are deemed to beneficially
own the same 33,870 shares.
</TABLE>
1. PROPOSAL TO ELECT FIVE TRUSTEES
Five Trustees are to be elected at the Meeting to serve an
indefinite term until their respective successors are chosen and
qualified. The table set forth below identifies the five nominees for
election as trustees of the Trust and provides information given as of
September 17, 1996 as to the age, principal occupation and background for
the last five years. Of the nominees only Mr. McAdams and Ms. Felix are
members of the present Board of Trustees. They became trustees in 1996.
Each nominee has consented to being named in this Proxy
Statement and to serve if elected. We have no reason to believe that any
of the nominees will be unable to serve as trustee. However in such
event, the persons named as proxies will have discretionary authority to
select and vote for substituted nominees. It is the intention of the
persons named in the enclosed proxy to vote the shares represented by the
proxies FOR the election of the nominees named below, unless shareholders
specify that their vote be withheld as to all nominees or individual
nominees. Our Board of Trustees recommends a vote FOR all nominees.
Trustees will be elected by a plurality of the votes of the
shareholders of all of the funds cast at the Meeting (assuming a quorum is
present). "Plurality" means that the individuals receiving the largest
number of votes are elected as trustees, up to the maximum number of
trustees to be chosen at the Meeting. Consequently, any shares not voted
at the Meeting, whether due to abstentions, broker non-votes or otherwise,
will have no impact on the election of trustees.
Position with Principal Occupation
Name of Nominee and Age Fund During Past 5 Years
Joseph Lloyd McAdams, Jr.* Chairman and Chairman of Pacific Income
51 Trustee Advisers, Inc.; Chairman,
Chief Executive Officer and
President of Syndicated
Capital, Inc.
Beatrice P. Felix Trustee Real estate sales agent for
37 Roland Lane Realty since
1994; real estate sales
agent for Prudential Realty
from 1991-1994.
Ann Louise Marinaccio Nominee for Sales associate for Saks
57 Trustee Fifth Avenue, Short Hills,
New Jersey.
John Michael Murphy* Nominee for President of Murphy
54 Trustee Investment Management, Inc.;
President of Murenove, Inc.,
a newsletter publisher.
Robert I. Weisberg Nominee for President of Fremont Medical
50 Trustee Financial Services, Inc. and
Executive Vice President of
Fremont Financial
Corporation, Santa Monica,
California since January 1,
1996; President of Pro-Care
Financial Group, Inc.,
Larkspur, California from
1994-1995; President of
Towers Financial
Corporation, New York, New
York, 1993-1994; President
of Fleet Credit Corporation,
Providence, Rhode Island,
1985-1993.
____________________
*Interested person as defined in Investment Company Act of 1940.
Mr. McAdams is deemed to be an "interested person" of the Trust
because he is an officer of the Trust, Pacific Income Advisers, Inc., the
current investment adviser to the PIA Adjustable Rate Fund and to the
Government Income Fund, and Syndicated Capital, Inc., the principal
underwriter of shares of the Funds. Mr. Murphy is deemed to be an
"interested person" of the Trust because he is an officer of Murphy
Investment Management, Inc., the current sub-adviser to the Technology
Fund.
None of the nominees serve as directors of public companies,
except for Mr. McAdams and Ms. Felix who serve as trustees of the Trust
and Mr. Weisberg who is a director of Environmental Power Company,
Portsmouth, New Hampshire.
The officers of the Trust are Joseph Lloyd McAdams, Jr., Heather
U. Baines, 54, President and Treasurer, and Kathie Hilton, 49, Secretary.
All of such persons serve for an indefinite term and became officers in
1996. For the last five years, Ms. Baines has been President and Chief
Executive Officer of Pacific Income Advisers, Inc. Since 1994 Kathie
Hilton has been an administrative assistant for Pacific Income Advisers,
Inc. Prior to that time, she was the owner of Grizzly Products, a seafood
distributor.
The Trust does not compensate any of its officers or trustees
for their services to the Trust, except those trustees who are not
"interested persons" of the Trust. The Trust's standard method of
compensating the trustees who are not "interested persons" of the Trust is
to pay each such trustee an annual retainer of $2,000 and a fee of $500
for each meeting of the Board of Trustees attended. Total fees paid by
the Trust to such persons were $8,000 for the fiscal year ended November
30, 1995. None of the nominees served as trustees during the fiscal year
ended November 30, 1995. The Trust does not provide pension or retirement
benefits to its trustees and officers.
The Board of Trustees met four times during the fiscal year
ended November 30, 1995. None of the nominees served as trustees during
such fiscal year. The Board of Trustees has no audit, nominating or
similar committees.
2.(a)(i) PROPOSAL TO CHANGE THE INVESTMENT OBJECTIVE OF THE PIA
ADJUSTABLE RATE FUND
Our Board of Trustees has approved a change of the investment
objective of the PIA Adjustable Rate Fund to that of providing investors
with a high level of current income, consistent with low volatility of
principal through investing in short-term, adjustable rate and floating
rate U.S. Government securities. The current investment objective of the
PIA Adjustable Rate Fund is to provide investors with a high level of
current income, consistent with low volatility of principal through
investing in adjustable rate and floating rate U.S. Government securities.
The PIA Adjustable Rate Fund will continue to invest at least 65% of its
total assets in U.S. Government securities. However whereas presently 65%
of the PIA Adjustable Rate Fund's portfolio will under normal
circumstances consist of adjustable rate and floating rate U.S. Government
securities, in the future at least 65% of the PIA Adjustable Rate Fund's
portfolio under normal circumstances would consist of short-term U.S.
Government securities or adjustable rate and floating rate U.S. Government
Securities. The proposed change of investment objective will not change
any of the investment restrictions of the PIA Adjustable Rate Fund or add
to or subtract from the permitted investments of the PIA Adjustable Rate
Fund. If the change of investment objective is approved, the name of the
PIA Adjustable Rate Fund will be changed from the "PIA Adjustable Rate
Government Securities Fund" to the "PIA Short-Term Government Securities
Fund."
Our Board of Trustees believes that the proposed change of
investment objective will provide the PIA Adjustable Rate Fund's
investment adviser greater flexibility in selecting investments that
provide a high level of current income, consistent with low volatility of
principal. Short-term securities have a remaining term to maturity of
three years or less. Such investments have the potential to be somewhat
more volatile than adjustable rate or floating rate securities. When
interest rates rise, the value of fixed rate obligations can be expected
to decline. In contrast as interest rates on adjustable or floating rate
obligations reset, yields on adjustable or floating rate obligations will
gradually align themselves to reflect changes in market interest rates,
causing their market value to fluctuate less dramatically than fixed rate
obligations. Conversely when interest rates decline, the value of fixed
rate obligations can be expected to increase more than the value of
adjustable rate or fixed rate obligations.
Substantially all of the adjustable rate and floating rate U.S.
Government securities in which the PIA Adjustable Rate Fund has invested
are securities that represent an interest in or are collateralized by
mortgages (i.e. Mortgage-Backed Securities). By increasing the percentage
of its portfolio that can be invested in short-term U.S. Government
securities, the PIA Adjustable Rate Fund will be able to invest
substantially more of its assets in securities that have more predictable
principal and interest payments than Mortgage-Backed Securities. By doing
so the PIA Adjustable Rate Fund will be less exposed to prepayment risk.
Prepayment risk is the likelihood that, during periods of falling interest
rates, securities will be prepaid requiring the PIA Adjustable Rate Fund
to invest the proceeds at generally lower interest rates.
2.(a)(ii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE PIA
ADJUSTABLE RATE FUND TO PERMIT IT TO PURCHASE AND SELL FUTURES
CONTRACTS ON DEBT SECURITIES AND PURCHASE AND WRITE PUT AND CALL
OPTIONS ON DEBT SECURITIES AND FUTURES CONTRACTS ON DEBT
SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the PIA Adjustable Rate Fund to permit it to purchase and
sell futures contracts on debt securities ("Debt Futures") and purchase
and write put and call options on debt securities and Debt Futures.
Currently the PIA Adjustable Rate Fund is prohibited from doing so. If
the proposed change is approved, the PIA Adjustable Rate Fund would
utilize such instruments for hedging and not for speculative purposes.
Hedging may involve an attempt to protect against declines or possible
declines in the market value of the PIA Adjustable Rate Fund's portfolio
or may involve an attempt to establish a position in the securities market
as a substitute for purchase of individual securities. In the latter
situation, the PIA Adjustable Rate Fund would, in the normal course,
purchase securities and terminate the hedging position, although under
unusual market conditions, such hedging positions may be terminated
without a corresponding purchase of securities.
A Debt Future obligates the seller to deliver (and the purchaser
to take delivery of) a specific type of debt security at a specific future
date for a fixed price. When the PIA Adjustable Rate Fund purchases or
sells a Debt Future, it will cover its position. To cover its position,
it will maintain in a segregated account cash or other liquid securities
in an amount that when added to any amounts deposited with the future
commission merchant as margin, will be equal to the market value of the
Debt Future.
A put option gives the purchaser of the option the right to
sell, and the writer of the option the obligation to buy, the underlying
debt security or Debt Future at any time during the option period. A call
option gives the purchaser of the option the right to buy, and the writer
of the option the obligation to sell, the underlying debt security or Debt
Future at any time during the option period. The purchaser of a put or
call option pays a premium to the writer. If price movements in the
underlying debt security or Debt Future are such that exercise of an
option would not be profitable for the PIA Adjustable Rate Fund, loss of
the premium paid may be offset by an increase in the value of the PIA
Adjustable Rate Fund's securities or a decrease in the cost of acquisition
of securities by the PIA Adjustable Rate Fund.
The writer of an option will receive a premium for writing the
option, which, with respect to a covered call option, increases the return
on the underlying debt security or Debt Future if the option expires
unexercised or is closed out at a profit. By writing a call option, the
writer limits its opportunity to profit from any increase in the market
value of the underlying security or Debt Future above the exercise price
of the option, but continues to bear the risk of a decline in the value of
the underlying debt security or Debt Future. The PIA Adjustable Rate Fund
will not write put options except in closing transactions. All call
options written by the PIA Adjustable Rate Fund will be "covered." For a
call to be covered either the PIA Adjustable Rate Fund (i) owns the
underlying debt security or Debt Future or has an absolute and immediate
right to acquire the debt security or Debt Future without payment of
additional cash consideration, or for an additional consideration as set
forth in (ii), upon conversion or exchange of other securities held in its
portfolio; or (ii) maintains in a segregated account cash or other liquid
securities adequate to purchase the debt security or Debt Future, in each
case until the PIA Adjustable Rate Fund enters into a closing purchase
transaction.
When the PIA Adjustable Rate Fund wishes to terminate its
obligation with respect to a Debt Future, it will enter into an offsetting
contract position. Similarly when the PIA Adjustable Rate Fund wishes to
terminate its obligation with respect to an option it has written, it may
effect a "closing purchase transaction." It accomplishes this by buying
an option of the same series as the option previously written by it. When
the PIA Adjustable Rate Fund is the holder of an option, it may liquidate
its position by effecting a "closing sale transaction." It accomplishes
this by selling an option of the same series as the option previously
purchased by it. There is no guarantee that either a closing purchase or
a closing sale transaction can be effected. If any call or put option is
not exercised or sold, the option will become worthless on its expiration
date.
Participation in the options or futures markets by the PIA
Adjustable Rate Fund involves investment risks and transactions costs to
which it would not be subject absent the use of these hedging instruments.
Risks inherent in the use of hedging instruments include: (i) adverse
changes in the value of such instruments; (ii) imperfect correlation
between the price of options and Debt Futures and movement in the price of
the underlying debt securities or Debt Futures; (iii) the fact that the
skills needed to use these strategies are different from those needed to
select portfolio securities; (iv) the possible absence of a liquid
secondary market for any particular instrument at any time; and (v)
possible need to defer closing out certain positions to avoid adverse tax
consequences. Our Board of Trustees believes that although the use of
hedging instruments involves risk, use of such hedging instruments can be
of assistance in achieving the PIA Adjustable Rate Fund's investment
objective.
Vote Required
Only shareholders of the PIA Adjustable Rate Fund may vote on
the proposals to change the PIA Adjustable Rate Fund's investment
objective and investment restrictions. Shareholders will vote separately
on each proposal (i.e. they may vote in favor of one or both proposals and
against or abstain with respect to one or both proposals). The
affirmative vote of the holders of a "majority" (as defined in the 1940
Act) of the outstanding shares of the PIA Adjustable Rate Fund is required
for the approval of each proposal. Under the 1940 Act, the vote of the
holders of a "majority" of the outstanding shares of the PIA Adjustable
Rate Fund means the vote of the holders of the lesser of (a) 67% or more
of its shares present at the Meeting or represented by proxy if the
holders of more than 50% of its shares are so present or represented; or
(b) more than 50% of its outstanding shares. Abstention and broker non-
votes will not be counted for or against either proposal but will be
counted as votes present for purposes of determining whether or not more
than 50% of the outstanding shares are present or represented at the
Meeting. Abstentions and broker non-votes have the same effect as a vote
against a proposal. If one or both proposals are approved, the changes
will go into effect on the effective date of the next Post-Effective
Amendment to the Trust's Registration Statement under the 1933 Act and the
1940 Act incorporating the changes. If one or both of the changes are not
approved at the Meeting, the changes not approved will not be implemented.
2.(b)(i) PROPOSAL TO CHANGE THE INVESTMENT OBJECTIVE OF THE GAMING &
LEISURE FUND AND ITS INVESTMENT RESTRICTIONS TO PERMIT IT TO
CONCENTRATE ITS INVESTMENTS
Our Board of Trustees has approved a change of the investment
objective of the Gaming & Leisure Fund to that of providing investors with
long-term growth of capital through investing primarily in equity
securities of companies that its investment adviser believes can produce
products or services that provide or benefit from advances in
biotechnology. In connection with the approval of the change of
investment objective, our Board of Trustees has approved a change of the
investment restrictions of the Gaming & Leisure Fund to permit it to
concentrate its investments in the group of industries constituting the
biotechnology sector. The term "biotechnology" includes drug development,
production and distribution; agricultural and industrial biotechnology;
genetic sequencing and mapping; drug delivery; biotechnology-based
services and other advances resulting from research and development
programs in the medical, animal and life sciences. If the change of
investment objective and investment restriction is approved, under normal
circumstances at least 65% of the Gaming & Leisure Fund's assets will be
invested in equity securities of companies engaged in activities related
to the biotechnology sector. Additionally if the change of investment
objective and investment restriction is approved, the name of the Gaming &
Leisure Fund will be changed to the "Murphy Biotechnology Fund."
The current investment objective of the Gaming & Leisure Fund is
that of providing investors long-term growth of capital through investing
primarily in equity securities of companies engaged in activities related
to the gaming and leisure industries. Presently 65% of the Gaming &
Leisure Fund's assets under normal circumstances are invested in equity
securities of companies engaged in activities related to the gaming and
leisure sector.
Our Board of Trustees believes that the proposed change of
investment objective will make it easier for the Gaming & Leisure Fund's
investment adviser to provide the Fund's investors with long-term
appreciation. Our Board of Trustees believes that the biotechnology
sector has greater potential for growth, in the long-term, than the gaming
and leisure sector. However securities of companies in both sectors have
unpredictable earnings. Products offered by the companies in both sectors
are subject to risks of obsolescence and intense competition. Companies
in both sectors are subject to extensive government regulation.
Additionally companies in the biotechnology sector are affected by the
enforcement of patent, trademark and other intellectual property laws.
Securities of companies in both sectors generally exhibit greater
volatility than the overall market. Finally companies in both sectors may
be of small or medium capitalization. Securities of such companies may be
subject to more abrupt or erratic market movements than those of larger,
more established companies and may be subject to liquidity risk.
The proposed change of investment objective will not change any
of the investment restrictions of the Gaming & Leisure Fund (other than
the investment restriction concerning concentration of investments) or add
to or subtract from the permitted investments of the Gaming & Leisure
Fund. However our Board of Trustees separately has approved three changes
to the investment restrictions of the Gaming & Leisure Fund which are
described below.
2.(b)(ii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GAMING &
LEISURE FUND TO PERMIT IT TO EFFECT SHORT SALES
Our Board of Trustees has approved a change of the investment
restrictions of the Gaming & Leisure Fund to permit it to effect short
sales of securities. The Gaming & Leisure Fund currently is prohibited
from effecting short sales of securities, other than short sales which are
"against the box." (Short sales against the box are a method of locking
in unrealized capital gains without current recognition of such gains for
tax purposes.) The proposed change would permit the Gaming & Leisure Fund
to effect short sales which are not against the box.
A "short sale" is made by selling a security the Gaming &
Leisure Fund does not own. Whenever the Gaming & Leisure Fund effects a
short sale, it will put in a segregated account cash or other liquid
assets equal to the difference between (a) the market value of the
securities sold short and (b) any cash or United States government
securities required to be deposited as collateral with the broker in
connection with the short sale (but not including the proceeds of the
short sale). Until the Gaming & Leisure Fund replaces the security it
borrowed to effect the short sale, it must maintain daily the segregated
account at such a level that the amount deposited in it plus the amount
deposited with the broker as collateral will equal the current market
value of the securities sold short. Initially no more than 25% of the
value of the Gaming & Leisure Fund's net assets will be, when added
together, (a) deposited as collateral for the obligation to replace
securities borrowed to effect short sales, and (b) allocated to segregated
accounts in connection with short sales. However this limitation may be
increased without shareholder approval.
Our Board of Trustees believes that the proposed change in the
investment restrictions of the Gaming & Leisure Fund will provide the
Gaming & Leisure Fund's investment adviser the potential to achieve the
investment objective of the Gaming & Leisure Fund in declining equity
markets as well as in rising equity markets and the potential to profit
from the volatility of the securities in which the Gaming & Leisure Fund
may invest. The investment performance of the Gaming & Leisure Fund will
suffer if a stock for which the Gaming & Leisure Fund has effected a short
sale appreciates in value. Additionally the Gaming & Leisure Fund may be
required to close out a short position earlier than it had intended if the
securities lender requires it to deliver the securities it borrowed at the
commencement of the short sale and the Gaming & Leisure Fund is unable to
borrow such securities from other securities lenders.
2.(b)(iii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE
GAMING & LEISURE FUND TO PERMIT IT TO PURCHASE RESTRICTED
SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the Gaming & Leisure Fund to permit it to purchase
restricted securities. The Gaming & Leisure Fund is currently prohibited
from purchasing such securities. Restricted securities may only be sold
in privately negotiated or other transactions exempt from registration
under the Securities Act of 1933 or in a public offering with respect to
which a registration statement is in effect under the Securities Act.
Restricted securities may be considered to be illiquid securities. When
registration is required, the Gaming & Leisure Fund may be obligated to
pay all or part of the registration expenses and considerable time may
elapse between the decision to sell and the sale date. If during such
period, adverse market conditions were to develop, the Gaming & Leisure
Fund might obtain a less favorable price than that which prevailed when it
decided to sell. Our Board of Trustees believes that although investing
in restricted securities involves risk as described above, investing in
such securities has the potential to yield capital appreciation.
2.(b)(iv) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GAMING &
LEISURE FUND TO PERMIT IT TO PURCHASE FOREIGN SECURITIES AND
CURRENCIES
Our Board of Trustees has approved a change of the investment
restrictions of the Gaming & Leisure Fund to permit it to purchase foreign
securities and currencies. The Gaming & Leisure Fund currently is
prohibited from purchasing such securities and currencies. Our Board of
Trustees believes that changing this investment restriction will provide
greater investment opportunities for the Gaming & Leisure Fund.
There are risks in investing in foreign securities. Foreign
economies may differ from the U.S. economy; individual foreign companies
may differ from domestic companies in the same industry; foreign
currencies may be stronger or weaker than the U.S. dollar. An investment
in foreign securities may be affected by changes in currency rates and in
exchange control regulations. For example, securities denominated in
foreign currencies can be expected to increase in value when the U.S.
dollar is decreasing in value against such currencies. Conversely such
securities can be expected to decline in value when the U.S. dollar is
increasing in value against such currencies. The Gaming & Leisure Fund
may incur transaction costs in exchanging currencies.
Foreign companies are frequently not subject to accounting and
financial reporting standards applicable to domestic companies and there
may be less information available about foreign issuers. Foreign stock
markets have substantially less volume than the New York Stock Exchange
and securities of foreign issuers are generally less liquid and more
volatile than those of comparable domestic issuers. There is frequently
less government regulation of exchanges, broker-dealers and issuers than
in the United States. In addition, investments in foreign countries are
subject to the possibility of expropriation, confiscatory taxation,
political or social instability or diplomatic developments that could
adversely affect the value of those investments.
2.(b)(v) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GAMING &
LEISURE FUND TO PERMIT IT TO LEND ITS PORTFOLIO SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the Gaming & Leisure Fund to permit it to lend its
portfolio securities. The Gaming & Leisure Fund currently is prohibited
from lending its portfolio securities. Our Board of Trustees believes
that changing this investment restriction will permit the Gaming & Leisure
Fund to increase its income.
All such loans, which may be on a short or long-term basis, must
be to brokers, dealers and financial institutions. All such loans must be
collateralized in accordance with applicable regulatory guidelines (the
"Guidelines") and after any loan, the value of the securities loaned may
not exceed 25% of the value of the Gaming & Leisure Fund's total assets.
Under the present Guidelines (which are subject to change) the loan
collateral must be, on each business day, at least equal to the value of
the loaned securities and must consist of cash, bank letters of credit or
U.S. Government securities. To be acceptable as collateral, a letter of
credit must obligate a bank to pay amounts demanded by the Gaming &
Leisure Fund if the demand meets the terms of the letter. Such terms and
the issuing bank would have to be satisfactory to the Gaming & Leisure
Fund. Any loan might be secured by any one or more of the three types of
collateral.
The Gaming & Leisure Fund receives amounts equal to the interest
or other distributions on loaned securities and also receives one or more
of the negotiated loan fees, interest on securities used as collateral or
interest on the securities purchased with such collateral, either of which
type interest may be shared with the borrower. The Gaming & Leisure Fund
may also pay reasonable finder's, custodian's and administrative fees but
only to persons not affiliated with the Trust. The terms of the loans
will permit the Gaming & Leisure Fund to terminate the loan and reacquire
the loaned securities on three days' notice.
Vote Required
Only shareholders of the Gaming & Leisure Fund may vote on the
proposals to change the Gaming & Leisure Fund's investment objective and
investment restrictions. Shareholders will vote separately on each
proposal (i.e. they may vote in favor of one or more proposals and against
or abstain with respect to one or more proposals). The affirmative vote
of the holders of a "majority" (as defined in the 1940 Act) of the
outstanding shares of the Gaming & Leisure Fund is required for the
approval of each proposal. Under the 1940 Act, the vote of the holders of
a "majority" of the outstanding shares of the Gaming & Leisure Fund means
the vote of the holders of the lesser of (a) 67% or more of its shares
present at the Meeting or represented by proxy if the holders of more than
50% of its shares are so present or represented; or (b) more than 50% of
its outstanding shares. Abstention and broker non-votes will not be
counted for or against any proposal but will be counted as votes present
for purposes of determining whether or not more than 50% of the
outstanding shares are present or represented at the Meeting. Abstentions
and broker non-votes have the same effect as a vote against a proposal.
If one or more proposals are approved, the changes will go into effect on
the effective date of the next Post-Effective Amendment to the Trust's
Registration Statement under the 1933 Act and the 1940 Act incorporating
the changes. If one or more of the changes are not approved at the
Meeting, the changes not approved will not be implemented.
2.(c)(i) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE
GROWTH & INCOME FUND TO PERMIT IT TO EFFECT SHORT SALES
Our Board of Trustees has approved a change of the investment
restrictions of the Growth & Income Fund to permit it to effect short
sales of securities. The Growth & Income Fund currently is prohibited
from effecting short sales of securities, other than short sales which are
"against the box." See Proposal 2.(b)(ii) for a discussion of the
characteristics of, and risks associated with, short sales.
The investment objective of the Growth & Income Fund is to
maximize total return through a combination of capital appreciation and
income. Currently the investment adviser to the Growth & Income Fund
attempts to achieve the investment objective by primarily investing in
stocks comprising the S&P 500 Index. As discussed later in Proposal
3.(c), the shareholders of the Growth & Income Fund are being asked to
approve a new investment advisory agreement with Murphy Investment
Management, Inc. If such investment advisory agreement is approved by the
shareholders of the Growth & Income Fund, Murphy Investment Management,
Inc. will become the investment adviser to the Growth & Income Fund.
Murphy Investment Management, Inc. intends to attempt to achieve the
investment objective of the Growth & Income Fund by investing, under
normal circumstances, at least 65% of the Growth & Income Fund's assets in
convertible securities of issuers that Murphy Investment Management, Inc.
believes can produce products or services that provide or benefit from
advances in technology. See Proposal 3.(c) for a discussion of the risks
associated with investing in such securities.
Our Board of Trustees believes that the proposed change in this
investment restriction of the Growth & Income Fund will provide the Growth
& Income Fund's investment adviser the potential to achieve the investment
objective of the Growth & Income Fund in declining equity markets as well
as in rising equity markets and the potential to profit from the
volatility of the securities in which the Growth & Income Fund will
invest.
2.(c)(ii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GROWTH &
INCOME FUND TO PERMIT IT TO PURCHASE RESTRICTED SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the Growth & Income Fund to permit it to purchase
restricted securities. The Growth & Income Fund currently is prohibited
from purchasing restricted securities. See Proposal 2.(b)(iii) for a
discussion of the characteristics of, and risks associated with,
restricted securities. Our Board of Trustees believes that although
investing in restricted securities involves risk, investing in such
securities has the potential to yield capital appreciation.
2.(c)(iii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE
GROWTH & INCOME FUND TO PERMIT IT TO PURCHASE AND WRITE PUT
AND CALL OPTIONS AND PURCHASE AND SELL FUTURES CONTRACTS ON
STOCK INDICES AND DEBT SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the Growth & Income Fund to permit it to purchase and
write put and call options and purchase and sell futures contracts on
stock indices and debt securities. Currently the Growth & Income Fund is
prohibited from doing so. If the proposed change is approved, the Growth
& Income Fund would utilize such instruments for hedging and not for
speculative purposes. Hedging may involve an attempt to protect against
declines or possible declines in the market value of the Growth & Income
Fund's portfolio or may involve an attempt to establish a position in the
securities market as a substitute for purchase of individual securities.
In the latter situation, the Growth & Income Fund would, in the normal
course, purchase securities and terminate the hedging position, although
under unusual market conditions, such hedging positions may be terminated
without a corresponding purchase of securities.
A stock index futures contract obligates the seller to deliver
(and the purchaser to take delivery of) an amount of cash equal to a
specific dollar amount times the difference between the value of a
specific stock index at the closing of the last trading day of the
contract and the price at which the agreement is made. When the Growth &
Income Fund purchases or sells a stock index futures contract, it will
cover its position. To cover its position, it will maintain in a
segregated account cash or other liquid securities in an amount that when
added to any amounts deposited with the futures commission merchant as
margin, will be equal to the market value of the stock index futures
contract. See Proposal 2.(a)(ii) for a discussion of the characteristics
of, and risks associated with, futures contracts on debt securities ("Debt
Futures").
A put option gives the purchaser of the option the right to
sell, and the writer of the option the obligation to buy, the underlying
security, stock index or stock index futures contract at any time during
the option period. A call option gives the purchaser of the option the
right to buy, and the writer of the option the obligation to sell, the
underlying security, stock index or stock index futures contract at any
time during the option period. The purchaser of a put or call option pays
a premium to the writer. If price movements in the underlying security,
stock index or stock index futures contract are such that exercise of an
option would not be profitable for the Growth & Income Fund, loss of the
premium paid may be offset by an increase in the value of the Growth &
Income Fund's securities or a decrease in the cost of acquisition of
securities by the Growth & Income Fund.
The writer of an option will receive a premium for writing the
option, which, with respect to a covered call option, increases the return
on the underlying security, stock index or stock index futures contract if
the option expires unexercised or is closed out at a profit. By writing a
call option, the writer limits its opportunity to profit from any increase
in the market value of the underlying security, stock index or stock index
futures contract above the exercise price of the option, but continues to
bear the risk of a decline in the value of the underlying security, stock
index or stock index futures contract. The Growth & Income Fund will not
write put options except in closing transactions. All call options
written by the Growth & Income Fund will be "covered." For a call to be
covered either the Growth & Income Fund (i) owns the underlying security
or stock index futures contract or has an absolute and immediate right to
acquire the security or stock index futures contract without payment of
additional cash consideration, or for an additional consideration as set
forth in (ii), upon conversion or exchange of other securities held in its
portfolio; or (ii) maintains in a segregated account cash or other liquid
securities adequate to purchase the security or stock index futures
contract, in each case until the Growth & Income Fund enters into a
closing purchase transaction.
Options on stock indexes gives the holder the right to receive
an amount of cash upon exercise of the option. Receipt of this cash
amount will depend upon the closing level of the stock index upon which
the option is based being greater than (in the case of a call) or less
than (in the case of a put) the exercise price of the option. The amount
of cash received, if any, will be the difference between the closing price
of the index and the exercise price of the option, multiplied by a
specified dollar multiple. The writer (seller) of the option is
obligated, in return for the premiums received from the purchaser of the
option, to make delivery of this amount to the purchaser. Unlike the
options on securities but like stock index futures, all settlements of
index options transactions are in cash.
When the Growth & Income Fund wishes to terminate its obligation
with respect to a Debt Future or stock index futures contract, it will
enter into an offsetting contract position. Similarly when the Growth &
Income Fund wishes to terminate its obligation with respect to an option
it has written, it may effect a "closing purchase transaction." It
accomplishes this by buying an option of the same series as the option
previously written by it. When the Growth & Income Fund is the holder of
an option, it may liquidate its position by effecting a "closing sale
transaction." It accomplishes this by selling an option of the same
series as the option previously purchased by it. There is no guarantee
that either a closing purchase or a closing sale transaction can be
effected. If any call or put option is not exercised or sold, the option
will become worthless on its expiration date.
Participation in the options or futures markets by the Growth &
Income Fund involves investment risks and transactions costs to which it
would not be subject absent the use of these hedging instruments. Risks
inherent in the use of hedging instruments include: (i) adverse changes
in the value of such instruments; (ii) imperfect correlation between the
price of options, stock index futures and Debt Futures and movement in the
price of the underlying securities, index, stock index futures or Debt
Futures; (iii) the fact that the skills needed to use these strategies are
different from those needed to select portfolio securities; (iv) the
possible absence of a liquid secondary market for any particular
instrument at any time; and (v) possible need to defer closing out certain
positions to avoid adverse tax consequences. Our Board of Trustees
believes that although the use of hedging instruments involves risk, use
of such hedging instruments can be of assistance in achieving the Growth &
Income Fund's investment objective.
2.(c)(iv) PROPOSAL TO CHANGE THE SUBCLASSIFICATION OF THE GROWTH & INCOME
FUND FROM THAT OF A "DIVERSIFIED COMPANY" TO THAT OF A "NON-
DIVERSIFIED COMPANY".
Our Board of Trustees has approved a change of the
subclassification of the Growth & Income Fund from that of a "diversified
company" to that of a "non-diversified company" under the 1940 Act. Under
the 1940 Act, a "diversified company" must have at least 75% of its total
assets represented by cash and cash items (including receivables),
Government securities, securities of other investment companies, and other
securities for the purposes of the diversification calculation limited in
respect of any one issuer to an amount not greater in value than 5% of the
total assets of the investment company and to not more than 10% of the
outstanding voting securities of such issuer.
Although as a "non-diversified company", the Growth & Income
Fund would not be required to satisfy such standard, the Growth & Income
Fund would still be required to meet a similar diversification test under
the Internal Revenue Code of 1986 (the "Code"). This diversification test
is similar to that described in the preceding paragraph except the test
applies to 50% rather than 75% of the Growth & Income Fund's assets.
Notwithstanding the change in subclassification, the Growth & Income Fund
will not purchase more than 10% of the outstanding voting securities of
any issuer as the Growth & Income Fund is precluded from doing so by its
investment restrictions. A "non-diversified" portfolio may be more
volatile than a diversified portfolio.
Vote Required
Only shareholders of the Growth & Income Fund may vote on the
proposals to change the Growth & Income Fund's investment restrictions and
subclassification. Shareholders will vote separately on each proposal
(i.e. they may vote in favor of one or more proposals and against or
abstain with respect to one or more proposals). The affirmative vote of
the holders of a "majority" (as defined in the 1940 Act) of the
outstanding shares of the Growth & Income Fund is required for the
approval of each proposal. Under the 1940 Act, the vote of the holders of
a "majority" of the outstanding shares of the Growth & Income Fund means
the vote of the holders of the lesser of (a) 67% or more of its shares
present at the Meeting or represented by proxy if the holders of more than
50% of its shares are so present or represented; or (b) more than 50% of
its outstanding shares. Abstention and broker non-votes will not be
counted for or against any proposal but will be counted as votes present
for purposes of determining whether or not more than 50% of the
outstanding shares are present or represented at the Meeting. Abstentions
and broker non-votes have the same effect as a vote against a proposal.
If one or more proposals are approved, the changes will go into effect on
the effective date of the next Post-Effective Amendment to the Trust's
Registration Statement under the 1933 Act and the 1940 Act incorporating
the changes. If one or more of the changes are not approved at the
Meeting, the changes not approved will not be implemented.
2.(d) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE
GOVERNMENT INCOME FUND TO PERMIT IT TO PURCHASE FOREIGN
SECURITIES AND CURRENCIES
Our Board of Trustees has approved a change of the investment
restrictions of the Government Income to permit it to purchase foreign
securities and currencies. The Government Income Fund currently is
prohibited from purchasing such securities and currencies. See Proposal
2.(b)(iv) for a discussion of the characteristics of, and risks associated
with, investing in foreign securities. Our Board of Trustees believes
that although investing in foreign securities involves risk, investing in
such securities can be of assistance in achieving the Government Income
Fund's investment objective.
If this change is approved, the Government Income Fund will
continue to invest 65% of its total assets in securities of any maturity
which are issued or guaranteed by the U.S. Government or by any of its
agencies or instrumentalities, including U.S. Government-sponsored
corporations (which may be subject to repurchase agreements).
Additionally, as in the case with other non-U.S. Government securities
purchased by the Government Income Fund, any foreign securities must be
rated A or better by S&P or Moody's. The Government Income Fund currently
intends to invest in securities issued by foreign governments or by any of
their agencies or instrumentalities and not in securities issued by
foreign corporations. However at a later date the Government Income Fund
may invest in securities of foreign corporations.
Vote Required
Only shareholders of the Government Income Fund may vote on the
proposals to change the Government Income Fund's investment restrictions.
The affirmative vote of the holders of a "majority" (as defined in the
1940 Act) of the outstanding shares of the Government Income Fund is
required for approval of the Proposal. Under the 1940 Act, the vote of
the holders of a "majority" of the outstanding shares of the Government
Income Fund means the vote of the holders of the lesser of (a) 67% or more
of its shares present at the Meeting or represented by proxy if the
holders of more than 50% of its shares are so present or represented; or
(b) more than 50% of its outstanding shares. Abstention and broker non-
votes will not be counted for or against the proposal but will be counted
as votes present or represented at the Meeting. Abstentions and broker
non-votes have the same effect as a vote against the proposal. If so
approved, the change in the Government Income Fund's investment
restrictions will go into effect on the effective date of the next Post-
Effective Amendment to the Trust's Registration Statement under the 1933
Act and the 1940 Act incorporating the change in investment restrictions.
If the proposal is not approved at the Meeting, the change in investment
restrictions will not be implemented.
2.(e)(i) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GOLD
FUND TO PERMIT IT TO PURCHASE RESTRICTED SECURITIES
Our Board of Trustees has approved a change of the investment
restrictions of the Gold Fund to permit it to purchase restricted
securities. The Gold Fund currently is prohibited from purchasing
restricted securities. See Proposal 2.(b)(iii) for a discussion of the
characteristics of, and risks associated with, restricted securities. Our
Board of Trustees believes that although investing in restricted
securities involves risk, investing in such securities has the potential
to yield capital appreciation.
2.(e)(ii) PROPOSAL TO CHANGE THE INVESTMENT RESTRICTIONS OF THE GOLD FUND
TO PERMIT IT TO PURCHASE GOLD, SILVER, PLATINUM AND PALLADIUM
Our Board of Trustees has approved a change of the investment
restrictions of the Gold Fund to permit it to purchase gold, silver,
platinum and palladium. The Gold Fund is currently prohibited from
purchasing any commodities or commodity contracts. If the change in
investment restrictions is approved, the Gold Fund may purchase gold,
sliver, platinum and palladium bullion. The Gold Fund may also purchase
such metals in the form of coins, if there is an actively quoted market
for the coins. Coins will only be purchased for their metallic value and
not for their currency or numismatic value. Our Board of Trustees
believes that although investing in gold, silver, platinum and palladium
involves risk as described below, investing in such assets has the
potential to yield capital appreciation.
Investments in gold, silver, platinum and palladium bullion do
not generate income and will subject the Gold Fund to taxes and insurance,
and shipping and storage costs. The sole source of return to the Gold
Fund from such investments would be gains realized on sales, and a
negative return would be realized if such investments are sold at a loss.
The Gold Fund intends to qualify as a regulated investment company under
the Internal Revenue Code of 1986 (the "Code") so that the Gold Fund will
not be subject to Federal income taxes on its taxable income to the extent
distributed to shareholders. The Gold Fund's investment in gold, silver,
platinum and palladium bullion may result in its failure to meet certain
of the income or asset tests prescribed by the Code. To reduce this risk,
the Gold Fund's investment adviser will endeavor to manage the Gold Fund's
portfolio so that (i) less than 10% of the Gold Fund's gross income each
year will be derived from its investments in gold, silver, platinum and
palladium bullion and (ii) less than 50% of the value of the Gold Fund's
assets, at the end of each quarter, will be invested in gold, silver,
platinum and palladium bullion.
Vote Required
Only shareholders of the Gold Fund may vote on the proposals to
change the Gold Fund's investment restrictions. Shareholders will vote
separately on each proposal (i.e. they may vote in favor of one or both
proposals and against or abstain with respect to one or both proposals).
The affirmative vote of the holders of a "majority" (as defined in the
1940 Act) of the outstanding shares of the Gold Fund is required for the
approval of each proposal. Under the 1940 Act, the vote of the holders of
a "majority" of the outstanding shares of the Gold Fund means the vote of
the holders of the lesser of (a) 67% or more of its shares present at the
Meeting or represented by proxy if the holders of more than 50% of its
share are so present or represented; or (b) more than 50% of its
outstanding shares. Abstention and broker non-votes will not be counted
for or against either proposal but will be counted as votes present for
purposes of determining whether or not more than 50% of the outstanding
shares are present at the Meeting. Abstentions and broker non-votes have
the same effect as a vote against a proposal. If one or both proposals
are approved, the changes will go into effect on the effective date of the
next Post-Effective Amendment to the Trust's Registration Statement under
the 1933 Act and the 1940 Act incorporating the changes. If one or both
of the changes are not approved at the Meeting, the changes not approved
will not be implemented.
3. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENTS
Introduction
The Trust presently has investment advisory, sub-advisory and/or
management agreements applicable to each of the Funds pursuant to which
investment advisory and management services are provided to the Funds.
These agreements vary among the Funds as to the services provided by the
various service providers and as to the various service providers.
However with respect to each Fund, the combined services provided are
similar. In an effort to simplify the Trust's investment advisory and
management structure, our Board of Trustees has approved new investment
advisory agreements applicable to each Fund. Each of the new investment
advisory agreements has substantially similar terms except for the
investment advisory fee payable pursuant to the agreement. Our Board of
Trustees has approved one sub-advisory agreement applicable only to the
Government Income Fund. However the Government Income Fund is not a party
to such agreement and pays no fees to the sub-adviser thereto. The Trust
will not enter into any management agreements. The fees paid by each Fund
under the new investment advisory agreements will be equal to, or less
than, the fees paid by that Fund under the investment advisory, sub-
advisory and/or management agreements currently in effect.
The Board of Trustees on September 17, 1996 voted to terminate
the Trust's investment advisory, sub-advisory and management agreements
with Monitrend Investment Management, Inc. Such termination will take
effect when the new investment advisory agreements become effective.
Currently Monitrend Investment Management, Inc. has entered into
investment advisory agreements with the Trust applicable to the Gaming &
Leisure Fund, Gold Fund, Technology Fund and Growth Fund, a sub-advisory
agreement applicable to the Growth & Income Fund and management agreements
applicable to the PIA Adjustable Rate Fund and the Government Income Fund.
The Board of Trustees terminated such agreements because Monitrend
Investment Management, Inc. was unable to fulfill its obligations to
reimburse the Funds to the extent necessary to permit the Funds to
maintain the expense limitations set forth in the Trust's current
prospectus. (The obligations of Monitrend Investment Management, Inc.
with respect to (i) the Gaming & Leisure Fund, the Growth & Income Fund
and the Technology Fund were subsequently paid by Murphy Investment
Management, Inc.; (ii) with respect to the Government Income Fund and the
Growth Fund by Pacific Income Advisers, Inc.; and (iii) with respect to
the Gold Fund by Orrell and Company, Inc. Monitrend Investment
Management, Inc. had no such obligation with respect to the PIA Adjustable
Rate Fund.)
The terms of the new investment advisory agreements are
discussed below and the terms of the new sub-advisory agreement are
discussed in the discussion under the caption "PROPOSAL TO APPROVE NEW
SUB-ADVISORY AGREEMENT FOR GOVERNMENT INCOME FUND". The Trust will not
enter into any investment advisory agreement applicable to a Fund until it
has been approved by that Fund's shareholders. See "Vote Required".
Consequently the approval of each new investment advisory agreement
constitutes a separate proposal. The differences between the current
agreements and the new agreements are also discussed below.
Description of the New Investment Advisory Agreement
Duties of Investment Adviser. Under the new investment advisory
agreements, the investment adviser thereto is responsible for decisions to
buy and sell securities, broker-dealer selection and negotiation of
brokerage commission rates. Their activities are subject to the control of
our Board of Trustees.
Compensation of the Investment Adviser. Under the new
investment advisory agreements, the investment adviser thereto is paid a
fee computed daily and payable monthly, at an annual rate expressed as a
percentage of the applicable Fund's average daily net assets. The
applicable fee rates are as follows:
Fund Fee Rate Average Daily Net Assets
PIA Adjustable Rate Fund 0.20% All asset levels
Gaming & Leisure Fund* 1.00% All asset levels
Growth & Income Fund 0.625% 0 to $150 million
0.50% $150 million to $250 million
0.375% Over $250 million
Government Income Fund 0.40% All asset levels
Gold Fund* 1.00% 0 to $50 million
0.875% $50 million to $75 million
0.75% $75 million to $100 million
0.625% $100 million to $150 million
0.50% $150 million to $250 million
0.375% Over $250 million
Technology Fund* 1.00% All asset levels
Growth Fund* 1.00% 0 to $50 million
0.875% $50 million to $75 million
0.75% $75 million to $100 million
0.625% $100 million to $150 million
0.50% $150 million to $250 million
0.375% Over $250 million
_________
*The investment advisory fees payable to the Gaming & Leisure Fund, Gold
Fund, Technology Fund and Growth Fund are higher than that paid by most
other investment companies.
Under the new investment advisory agreements, the investment
adviser thereto is responsible for reimbursing the applicable Fund to the
extent necessary to permit the Fund to maintain the expense limitations
set forth in the Trust's current prospectus. The applicable expense
limitations are as follows:
Fund Expense Limitation
PIA Adjustable Rate Fund 0.30%
Gaming & Leisure Fund 2.44%
Growth & Income Fund 2.44%
Government Income Fund 1.10%
Gold Fund 2.44%
Technology Fund 2.44%
Growth Fund 2.44%
Brokerage Allocation. Under the new investment advisory
agreements, the investment adviser's primary consideration in effecting a
securities transaction is execution at the most favorable securities
price. In selecting a broker-dealer to execute each particular
transaction, the investment adviser will take the following into
consideration: the best net price available; the reliability, integrity
and financial condition of the broker-dealer; the size of and difficulty
in executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a continuing
basis. Accordingly, the price to a Fund in any transaction may be less
favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine, the investment adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by the new investment
advisory agreement or otherwise solely by reason of its having caused a
Fund to pay a broker or dealer that provides brokerage or research
services to the investment adviser an amount of commission for effecting a
portfolio transaction in excess of the amount of commission another broker
or dealer would have charged for effecting that transaction, if the
investment adviser determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the investment adviser's overall
responsibilities with respect to the Trust or other accounts for which the
investment adviser has investment discretion. The investment adviser is
authorized to consider sales of shares of the Trust as a factor in the
selection of brokers or dealers to execute portfolio transactions, subject
to the requirements of best execution, i.e., that such brokers or dealers
are able to execute the order promptly and at the best obtainable
securities price. The terms "broker" and "broker-dealer" include futures
commission merchants. The research services discussed above may be in
written form or through direct contact with individuals and may include
information as to particular companies and securities as well as market,
economic or institutional areas and information assisting the Trust in the
valuation of its investments.
The investment adviser may allocate brokerage transactions to
Syndicated Capital, Inc., an affiliate of Pacific Income Advisers that is
wholly-owned by Joseph Lloyd McAdams, Jr., but only if it reasonably
believes the commissions and transaction quality are comparable to that
available from other qualified brokers. The Trust will not deal with
Syndicated Capital, Inc. as principal.
Duration and Termination. The new investment advisory agreement
will continue from year to year, unless terminated as discussed below, but
only so long as such continuance is specifically approved at least
annually by the Board of Trustees, including the vote of a majority of the
Trustees, who are not parties to the investment advisory agreement or
"interested persons" (as defined in the 1940 Act) of any such party (the
"disinterested Trustees") cast in person at a meeting called for the
purpose of voting on such approval, or by a vote of a majority of our
disinterested Trustees and the vote of the holders of a "majority" (as
defined in the 1940 Act) of the applicable Fund's shareholders.
The new investment advisory agreements may be terminated by the
investment adviser thereto at any time without penalty upon giving the
Trust sixty days' written notice (which notice may be waived by the Trust)
and may be terminated by the Trust at any time without penalty upon giving
the investment adviser thereto sixty days' written notice (which notice
may be waived by the investment adviser), provided that such termination
by the Trust shall be approved by the vote of a majority of all of the
Trustees in office at the time or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the voting securities of the
applicable Fund at the time outstanding and entitled to vote. The new
investment advisory agreements automatically terminate in the event of its
"assignment" (as defined in the 1940 Act).
Description of Investment Advisers
The proposed investment advisers to the Funds are as follows:
Fund Investment Adviser
PIA Adjustable Rate Fund Pacific Income Advisers, Inc.
Gaming & Leisure Fund Murphy Investment Management,
Inc.
Growth & Income Fund Murphy Investment Management,
Inc.
Government Income Fund Pacific Income Advisers, Inc.
Gold Fund Orrell and Company, Inc.
Technology Fund Murphy Investment Management,
Inc.
Growth Fund Pacific Income Advisers, Inc.
Pacific Income Advisers, Inc. ("PIA") is currently the
investment adviser to the PIA Adjustable Rate Fund and the Government
Income Fund. Joseph Lloyd McAdams, Jr., the Chairman and a trustee of the
Trust, is Chairman and Chief Investment Officer of PIA. Ms. Heather
Baines, the President of the Trust, is President and Chief Executive
Officer of PIA. Together Mr. McAdams and Ms. Baines own all of the
outstanding stock of PIA. PIA presently manages approximately $2.5
billion for institutional and individual clients. The address of PIA is
1299 Ocean Avenue, Suite 210, Santa Monica, CA 90401.
Murphy Investment Management, Inc. ("Murphy") (formerly known as
Negative Beta Associates, Inc.) is currently the sub-adviser to the
Technology Fund. John Michael Murphy, a nominee for the Board of Trustees,
is the President of Murphy. Together Mr. Murphy and Ms. Gaye Elizabeth
Morgenthaler own all of the outstanding stock of Murphy. Murphy presently
manages approximately $6 million for institutional and individual clients.
The address of Murphy is 2830 North Carbillo Highway, Half Moon Bay, CA
94019.
Orrell and Company, Inc. ("Orrell") currently is not an
investment adviser to an investment company and has no prior experience in
managing the investment portfolio of a registered investment company.
Gregory M. Orrell is the President and sole shareholder of Orrell. Orrell
presently manages on a nondiscretionary basis approximately $25 million
for institutional and individual clients. The address of Orrell is 120
Montgomery Street, Suite 1230, San Francisco, CA 94104.
a. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT (PIA
ADJUSTABLE RATE FUND)
There are no material differences between the current investment
advisory agreement between the Trust and PIA with respect to the PIA
Adjustable Rate Fund and the new investment advisory agreement. Currently
there is in effect a management agreement between PIA and Monitrend
Investment Management, Inc. with respect to the PIA Adjustable Rate Fund.
Pursuant to this management agreement Monitrend Investment Management,
Inc. provides PIA with statistical and other factual information, advice
regarding economic factors and trends, and advice as to occasional
transactions in specific securities but does not generally furnish advice
and/or make recommendations regarding the purchase or sale of securities.
Additionally Monitrend Investment Management, Inc. provides the PIA
Adjustable Rate Fund with transaction processing and portfolio monitoring
services. Pursuant to this management agreement, Monitrend Investment
Management, Inc. is compensated by PIA and not the PIA Adjustable Rate
Fund.
Our Board of Trustees in recommending that the shareholders of
the PIA Adjustable Rate Fund approve the new investment advisory agreement
with PIA considered the following factors:
1. As investment adviser to the PIA Adjustable Rate Fund
has achieved the stated investment objective of the PIA
Adjustable Rate Fund.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory agreement.
3. PIA has demonstrated the capacity to serve as
investment adviser to the PIA Adjustable Rate Fund without the
assistance of Monitrend Investment Management, Inc.
b. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT (GAMING &
LEISURE FUND)
There are no material differences between the current investment
advisory agreement between the Trust and Monitrend Investment Management,
Inc. with respect to the Gaming & Leisure Fund and the new investment
advisory agreement. Our Board of Trustees in recommending that the
shareholders of the Gaming & Leisure Fund approve the new investment
advisory agreement with Murphy considered the following factors:
1. Murphy's financial condition is such that it could
fulfill its commitments to the Gaming & Leisure Fund under the
new investment advisory agreement.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory agreement.
3. Murphy has demonstrated its abilities as investment
adviser while serving as sub-adviser to the Technology Fund.
c. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT (GROWTH &
INCOME FUND)
There currently is an investment advisory agreement between the
Trust and MidCap Associates, Inc. with respect to the Growth & Income Fund
and a sub-advisory agreement between the Trust and Monitrend Investment
Management, Inc. with respect to the Growth & Income Fund. The combined
services provided by MidCap Associates, Inc. and Monitrend Investment
Management, Inc. under these agreements is substantially identical to
those to be provided by Murphy under the new investment advisory
agreement. Similarly the combined fees paid to MidCap Associates, Inc.
and Monitrend Investment Management, Inc. under these agreements are
identical to those to be paid to Murphy under the new investment advisory
agreement. The expense reimbursement commitment of Monitrend Investment
Management, Inc. under the sub-advisory agreement is identical to that of
Murphy under the new investment advisory agreement. (MidCap Associates,
Inc. made no expense reimbursement commitment.) The duration and
termination provisions of the agreements with MidCap Associates, Inc. and
Monitrend Investment Management, Inc. are identical to those in the new
investment advisory agreement with Murphy.
As indicated in the discussion under Proposal 2.(c)(i) Murphy
intends to achieve the investment objective of the Growth & Income Fund by
investing, under normal circumstances, at least 65% of the Growth & Income
Fund's assets in convertible securities of issuers that Murphy believes
can produce products or services that provide a benefit from advances in
technology. In connection therewith the name of the Growth & Income Fund
would be changed to "Murphy New World Convertibles Fund."
Convertible securities include corporate bonds, debentures,
notes or preferred stocks that can be converted into (that is, exchanged
for) common stock or other equity securities of the same or a different
issuer, and other securities, such as warrants, that also provide an
opportunity for equity participation. These securities are generally
convertible at either a stated price or a stated rate (that is,for a
specific number of shares of common stock or of another security).
Because of this conversion feature, the price of the convertible security
will normally vary in some proportion to changes in the price of the
underlying common stock. A convertible security will normally also
provide a higher yield than the underlying common stock. This higher
yield may tend to cushion the convertible security against declines in the
price of the underlying common stock.
In seeking to achieve the Growth & Income Fund's investment
objective, Murphy may invest in convertible securities rated as low as C
by Standard & Poor's Corporation ("S&P") or Moody's Investors Service,
Inc. ("Moody's"). Securities rated less than BBB by S&P and Baa by
Moody's are considered to be predominantly speculative and may be in
default. Such ratings reflect a greater possibility that adverse changes
in the financial condition of the issuer, or in general economic
conditions, or both, or an unanticipated rise in interest rates, may
impair the ability of the issuer to make payments of interest and
principal. The inability (or perceived inability) of issuers to make
timely payments of interest and principal would likely made the values of
securities held by the Growth & Income Fund more volatile and could limit
the Growth & Income Fund's ability to sell its securities at prices
approximating the values the Growth & Income Fund had placed on such
securities. In the absence of a liquid trading market for securities held
by it, the Growth & Income Fund at times may be unable to establish the
fair value of such securities. Finally the rating assigned to a security
by Moody's or S&P does not reflect an assessment of the volatility of the
security's market value or of the liquidity of an investment in the
security.
Murphy will seek to minimize the risks of investing in lower-
rated securities through careful investment analysis. When the Growth &
Income Fund invests in securities in the lower rating categories, the
achievement of its investment objective is more dependent on Murphy's
investment analysis than would be the case if the Growth & Income Fund
were investing in securities in the higher rating categories.
Our Board of Trustees in recommending that the shareholders of
the Growth & Income Fund approve the new investment advisory agreement
with Murphy considered the following factors:
1. Murphy's financial condition is such that it could
fulfill its commitments to the Growth & Income Fund under the
new investment advisory agreement.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory/sub-advisory agreements.
3. Murphy has demonstrated its abilities as investment
adviser while serving as sub-adviser to the Technology Fund.
d. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT
(GOVERNMENT INCOME FUND)
There currently is an investment advisory agreement between the
Trust and PIA with respect to the Government Income Fund and a management
agreement between the Trust and Monitrend Investment Management, Inc. with
respect to the Government Income Fund. The combined services provided by
PIA and Monitrend Investment Management, Inc. under these agreements is
substantially identical to those to be provided by PIA under the new
investment advisory agreement. Similarly the combined fees paid to PIA
and Monitrend Investment Management, Inc. under these agreements are
identical to those to be paid to PIA under the new investment advisory
agreement. The expense reimbursement commitment of Monitrend Investment
Management, Inc. under the management agreement is identical to that of
PIA under the new investment advisory agreement. (PIA made no expense
reimbursement commitment under the current investment advisory agreement.)
The duration and termination provisions of the agreements with PIA and
Monitrend Investment Management, Inc. are identical to those in the new
investment advisory agreement with PIA.
As discussed later in Proposal 4, PIA intends to retain Camborne
Advisers, Inc. ("Camborne") pursuant to a sub-advisory agreement to assist
it in providing investment advisory services to the Government Income
Fund. Although this sub-advisory agreement is subject to the approval of
the shareholders of the Government Income Fund, the sub-advisory agreement
is between PIA and Camborne. This sub-advisory agreement does not relieve
PIA of any of its obligations to the Government Income Fund or impose any
obligations on the Government Income Fund that are in addition to those
provided for in the new investment advisory agreement.
Our Board of Trustees in recommending that the shareholders of
the Government Income Fund approve the new investment advisory agreement
with PIA considered the following factors:
1. PIA's financial condition is such that it could
fulfill its commitments to the Government Income Fund under the
new investment advisory agreement.
2, There were no material differences between the new
investment advisory agreement and the current investment
advisory/management agreements.
3. PIA as investment adviser to the Government Income
Fund has achieved the stated investment objective of the
Government Income Fund.
e. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT (GOLD
FUND)
There are no material differences between the current investment
advisory agreement between the Trust and Monitrend Investment Management,
Inc. with respect to the Gold Fund and the new investment advisory
agreement. Our Board of Trustees in recommending that the shareholders of
the Gold Fund approve the new investment advisory agreement with Orrell
considered the following factors:
1. Orrell's financial condition is such that it could
fulfill its commitment to the Gold Fund under the new investment
advisory agreement.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory agreement.
3. Orrell had demonstrated its abilities as investment
adviser in managing assets for individual and institutional
clients.
f. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT
(TECHNOLOGY FUND)
There are no material differences between the current investment
advisory agreement between the Trust and Monitrend Investment Management,
Inc. with respect to the Technology Fund and the new investment advisory
agreement. Currently there is a sub-advisory agreement between Monitrend
Investment Management, Inc. and Murphy pursuant to which Murphy provides
portfolio management services to the Technology Fund and is compensated by
Monitrend Investment Management, Inc. for doing so. Murphy will provide
these services to the Technology Fund pursuant to the new investment
advisory agreement. Our Board of Trustees in recommending that the
shareholders of the Technology Fund approve the new investment advisory
agreement with Murphy considered the following factors:
1. Murphy's financial condition is such that it could
fulfill its commitments to the Technology Fund under the new
investment advisory agreement.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory agreement.
3. Murphy has demonstrated its abilities as investment
adviser while serving as sub-adviser to the Technology Fund.
g. PROPOSAL TO APPROVE NEW INVESTMENT ADVISORY AGREEMENT (GROWTH
FUND)
There are no material differences between the current investment
advisory agreement between the Trust and Monitrend Investment Management,
Inc. with respect to the Growth Fund and the new investment advisory
agreement. Currently there is a sub-advisory agreement between Monitrend
Investment Management, Inc. and Robert L. Bender, Inc. pursuant to which
Robert L. Bender, Inc. provides portfolio management services to the
Growth Fund and is compensated by Monitrend Investment Management, Inc.
for doing so. The services currently being provided by Robert L. Bender,
Inc. will be provided by PIA pursuant to the new investment advisory
agreement.
Our Board of Trustees in recommending that the shareholders of
the Growth Fund approve the new investment advisory agreement with PIA
considered the following factors:
1. PIA's financial condition is such that it could
fulfill its commitments to the Growth Fund under the new
investment advisory agreement.
2. There were no material differences between the new
investment advisory agreement and the current investment
advisory agreement.
3. PIA has demonstrated its abilities as an investment
adviser in managing equity accounts aggregating $300 million for
individual and institutional clients.
Vote Required
The favorable vote of the holders of a "majority" (as defined in
the 1940 Act) of the outstanding shares of each Fund is required for
approval of the new investment advisory agreement applicable to that Fund.
Under the 1940 Act, the vote of the holders of a "majority" of the
outstanding shares of a Fund means the vote of the holders of the lesser
of (a) 67% or more of its shares present at the Meeting or represented by
proxy if the holders of 50% or more of its shares are so present or
represented; or (b) more than 50% of its outstanding shares. Abstentions
and broker non-votes will not be counted for or against the Proposal but
will be counted as votes present for purposes of determining whether or
not more than 50% of the outstanding shares are present or represented at
the Meeting. Abstentions and broker non-votes have the same effect as a
vote against the Proposal. If new investment advisory agreements are not
approved at the Meeting, the Board of Trustees will consider the
submission of the same or a revised agreement to the shareholders of the
Fund not approving the agreement.
4. PROPOSAL TO APPROVE SUB-ADVISORY AGREEMENT FOR GOVERNMENT INCOME FUND
Introduction
Our Board of Trustees on September 17, 1996 approved a sub-
advisory agreement between PIA and Camborne with respect to the Government
Income Fund. The Trust is not a party to such agreement. This sub-
advisory agreement does not relieve PIA of any of its obligations to the
Government Income Fund or impose any obligations on the Government Income
Fund that are in addition to those provided in the new investment advisory
agreement with PIA discussed above.
Description of the Sub-Advisory Agreement
Duties of Camborne. Pursuant to the sub-advisory agreement,
Camborne will furnish regular advice to PIA regarding those economic and
market factors which influence the decision of PIA as to the securities
and hedging instruments to be purchased and sold for the Government Income
Fund. Camborne will also from time to time provide advice as to
transactions in specific securities. Although Camborne will provide
investment advice to PIA, PIA will make the final decision as to the
securities and hedging instruments to be purchased and sold for the
Government Income Fund.
Compensation of Camborne. Pursuant to the sub-advisory
agreement, PIA will pay Camborne a fee computed daily and payable monthly
at an annual rate of 0.20% of the Government Income Fund's average daily
net assets.
As indicated in the discussion under "Description of the New
Investment Advisory Agreement", PIA is responsible for reimbursing the
Government Income Fund to the extent necessary to permit the Government
Income Fund to maintain the expense limitation of the Government Income
Fund set forth in the Trust's current prospectus (1.10%). Pursuant to the
sub-advisory agreement Camborne will reimburse PIA to the extent PIA is
required to make reimbursements to the Government Income Fund.
Duration and Termination. The sub-advisory agreement will
continue from year to year, unless terminated as discussed below, but only
so long as such continuance is specifically approved at least annually by
the Board of Trustees, including the vote of a majority of the
disinterested Trustees cast in person at a meeting called for the purpose
of voting on such approval, or by a vote of a majority of our
disinterested Trustees and the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Government Income Fund's shareholders.
The sub-advisory agreement may be terminated by each of
Camborne, PIA and the Trust at any time without penalty upon giving 60
days' written notice (which notice may be waived) provided that such
termination by the Trust shall be approved by the vote of a majority of
all of the Trustees in office at the time or by the vote of the holders of
a "majority" (as defined in the 1940 Act) of the voting securities of the
Government Income Fund at the time outstanding and entitled to vote. The
sub-advisory agreement automatically terminates in the event of its
"assignment" (as defined in the 1940 Act).
Description of Camborne
Camborne is a privately held Nevada corporation which is wholly-
owned by Camborne Investment Corporation. John S. Stricklin, 3878 Oak
Lawn, Suite 200, Dallas, Texas 75231, Ronald F. Bruce, 10670 N. Central
Expressway, Suite 410, Dallas, Texas 75231, and Ronald F. Akin, 10670 N.
Central Expressway, Suite 405, Dallas, Texas 75231, each own 10% or more
of the voting securities of Camborne Investment Corporation. Camborne is
a newly formed investment advisory firm with no prior experience in
managing the investment portfolio of a registered investment company. The
address of Camborne is 10670 N. Central Expressway, Suite 501, Dallas,
Texas 75231.
Our Board of Trustees in recommending that the shareholders of
the Government Income Fund approve the sub-advisory agreement based its
recommendation on the fact that the Government Income Fund would receive
indirectly the benefits of the investment advice provided by Camborne
without having to make any payments therefor.
Vote Required
The favorable vote of the holders of a "majority" (as defined in
the 1940 Act) of the outstanding shares of the Government Income Fund is
required for the approval of the sub-advisory agreement. Under the 1940
Act, the vote of the holders of a "majority" of the outstanding shares of
the Government Income Fund means the vote of the holders of the lesser of
(a) 67% or more of its shares present at the Meeting or represented by
proxy if the holders of 50% or more of its shares are so present or
represented; or (b) more than 50% of its outstanding shares. Abstentions
and broker non-votes will not be counted for or against the Proposal but
will be counted as votes present for purposes of determining whether or
not more than 50% of the outstanding shares are present or represented at
the Meeting. Abstentions and broker non-votes have the same effect as a
vote against the Proposal. If the sub-advisory agreements are not
approved at the Meeting, Camborne will not be retained by PIA as
investment adviser.
PRINCIPAL UNDERWRITER AND ADMINISTRATOR
The Trust's principal underwriter is Syndicated Capital, Inc.,
1299 Ocean Avenue, Suite 210, Santa Monica, CA 90401. The Trust's
administrator is American Data Services, Inc., 24 West Carver Street,
Huntington, NY 11743.
RECEIPT OF SHAREHOLDER PROPOSALS
Under the proxy rules of the Securities and Exchange Commission,
shareholder proposals meeting tests contained in those rules may, under
certain conditions, be included in the Trust's proxy materials for a
particular meeting of shareholders. One of these conditions relates to
the timely receipt by the Trust of any such proposal. Since the Trust
does not have regular annual meetings of shareholders, under these rules,
proposals submitted for inclusion in the proxy materials for a particular
meeting must be received by the Trust a reasonable time before the
solicitation of proxies for the meeting is made. The fact that the Trust
receives a shareholder proposal in a timely manner does not insure its
inclusion in the Trust's proxy materials since there are other
requirements in the proxy rules relating to such inclusion.
OTHER MATTERS
We do not know of any other matters that may come before the
Meeting. If any other matters properly come before the Meeting, it is the
intention of the persons acting pursuant to the enclosed form of proxy to
vote the shares represented by said proxies in accordance with their best
judgment with respect to such matters. By signing and returning your
proxy card,you give the persons named to vote your shares discretionary
authority as to any such matter or matters.
By Order of the Board of Trustees
KATHIE HILTON
Secretary
Santa Monica, California
__________________, 1996
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (Gaming & Leisure Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the Gaming & Leisure Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of Monitrend
Mutual Fund to be held at 1299 Ocean Avenue, Suite 210, Santa Monica,
California 90401, on Friday the ___ day of November, 1996 at 8:30 A.M.,
local time, and at any adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2(b)(i). Proposal to approve a change in the investment objective of
the Gaming & Leisure Fund and related change in its
investment restrictions to permit it to concentrate its
investments.
[_] FOR [_] AGAINST [_] ABSTAIN
2(b)(ii). Proposal to approve a change in the investment restrictions
of the Gaming & Leisure Fund to permit it to effect short
sales.
[_] FOR [_] AGAINST [_] ABSTAIN
2(b)(iii). Proposal to approve a change in the investment restrictions
of the Gaming & Leisure Fund to permit it to purchase
restricted securities.
[_] FOR [_] AGAINST [_] ABSTAIN
2(b)(iv). Proposal to approve a change in the investment restrictions
of the Gaming & Leisure Fund to permit it to purchase
foreign securities and currencies.
[_] FOR [_] AGAINST [_] ABSTAIN
2(b)(v). Proposal to approve a change in the investment restrictions
of the Gaming & Leisure Fund to permit it to lend its
portfolio securities.
[_] FOR [_] AGAINST [_] ABSTAIN
3(b). Proposal to approve a new investment advisory agreement
between Monitrend Mutual Fund and Murphy Investment
Management, Inc. with respect to the Gaming & Leisure Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1, 2(b)(i),
2(b)(ii), 2(b)(iii), 2(b)(iv), 2(b)(v) and 3(b).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2(b)(i), 2(b)(ii), 2(b)(iii), 2(b)(iv),
2(b)(v) and 3(b).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: _______________________________, 1996
Signed: ____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (Growth Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the Growth Fund that the undersigned is entitled to
vote at the Special Meeting of Shareholders of Monitrend Mutual Fund to be
held at 1299 Ocean Avenue, Suite 210, Santa Monica, California 90401, on
Friday the ___ day of November, 1996 at 8:30 A.M., local time, and at any
adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2. Not Applicable.
3(g) Proposal to approve a new investment advisory agreement between
Monitrend Mutual Fund and Pacific Income Advisers, Inc. with respect
to the Growth Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1 and 3(g).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1 and 3(g).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: _____________________________, 1996
Signed: ____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (Technology Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the Technology Fund that the undersigned is entitled
to vote at the Special Meeting of Shareholders of Monitrend Mutual Fund to
be held at 1299 Ocean Avenue, Suite 210, Santa Monica, California 90401,
on Friday the ___ day of November, 1996 at 8:30 A.M., local time, and at
any adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2. Not Applicable.
3(f) Proposal to approve a new investment advisory agreement between
Monitrend Mutual Fund and Murphy Investment Management, Inc. with
respect to the Technology Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1 and 3(f).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1 and 3(f).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: ______________________________, 1996
Signed:_____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (Gold Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the Gold Fund that the undersigned is entitled to
vote at the Special Meeting of Shareholders of Monitrend Mutual Fund to be
held at 1299 Ocean Avenue, Suite 210, Santa Monica, California 90401, on
Friday the ___ day of November, 1996 at 8:30 A.M., local time, and at any
adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert E. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2(e)(i). Proposal to approve a change in the investment restrictions
of the Gold Fund to permit it to purchase restricted
securities.
[_] FOR [_] AGAINST [_] ABSTAIN
2(e)(ii). Proposal to approve a change in the investment restrictions
of the Gold Fund to permit it to purchase gold, silver,
platinum and palladium.
[_] FOR [_] AGAINST [_] ABSTAIN
3(e). Proposal to approve a new investment advisory agreement
between Monitrend Mutual Fund and Orrell and Company, Inc.
with respect to the Gold Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1, 2(e)(i),
2(e)(ii) and 3(e).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2(e)(i), 2(e)(ii) and 3(e).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: ______________________________, 1996
Signed:_____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (PIA-Monitrend Government Income Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the PIA-Monitrend Government Income Fund that the
undersigned is entitled to vote at the Special Meeting of Shareholders of
Monitrend Mutual Fund to be held at 1299 Ocean Avenue, Suite 210, Santa
Monica, California 90401, on Friday the ___ day of November, 1996 at 8:30
A.M., local time, and at any adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2(d) Proposal to approve a change in the investment restrictions of
the PIA-Monitrend Government Income Fund to permit it to
purchase foreign securities and currencies.
[_] FOR [_] AGAINST [_] ABSTAIN
3(d). Proposal to approve a new investment advisory agreement between
Monitrend Mutual Fund and Pacific Income Advisers, Inc. with
respect to the PIA-Monitrend Government Income Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1, 2(d) and 3(d).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2(d) and 3(d).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: ______________________________, 1996
Signed:_____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (PIA Adjustable Rate Government
Securities Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the PIA Adjustable Rate Government Securities Fund
that the undersigned is entitled to vote at the Special Meeting of
Shareholders of Monitrend Mutual Fund to be held at 1299 Ocean Avenue,
Suite 210, Santa Monica, California 90401, on Friday the ___ day of
November, 1996 at 8:30 A.M., local time, and at any adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2(a)(i) Proposal to approve a change in the investment objective of the
PIA Adjustable Rate Government Securities Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
2(a)(ii) Proposal to approve a change in the investment restrictions of
the PIA Adjustable Rate Fund to permit it to purchase and sell
futures contracts on debt securities and purchase and write put
and call options on debt securities and futures contracts on
debt securities.
[_] FOR [_] AGAINST [_] ABSTAIN
3(a). Proposal to approve a new investment advisory agreement between
Monitrend Mutual Fund and Pacific Income Advisers, Inc. with
respect to the PIA Adjustable Rate Government Securities Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1, 2(a)(i),
2(a)(ii) and 3(a).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2(a)(i), 2(a)(ii) and 3(a).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: _______________________________, 1996
Signed:_____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
<PAGE>
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER __, 1996
MONITREND MUTUAL FUND (Growth & Income Fund Shares)
The undersigned constitutes and appoints Joseph Lloyd McAdams, Jr.
and Heather U. Baines, and each of them, each with full power to act
without the other, and each with full power of substitution, the true and
lawful proxies of the undersigned, to represent and vote, as designated
below, all shares of the Growth & Income Fund that the undersigned is
entitled to vote at the Special Meeting of Shareholders of Monitrend
Mutual Fund to be held at 1299 Ocean Avenue, Suite 210, Santa Monica,
California 90401, on Friday the ___ day of November, 1996 at 8:30 A.M.,
local time, and at any adjournments thereof.
1. Election of Trustees
[_] FOR all nominees listed [_] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
Joseph Lloyd McAdams, Jr., Beatrice Felix, Ann Louise Marinaccio,
John Michael Murphy, Robert I. Weisberg
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2(c)(i). Proposal to approve a change in the investment restrictions
of the Growth & Income Fund to permit it to effect short
sales.
[_] FOR [_] AGAINST [_] ABSTAIN
2(c)(ii). Proposal to approve a change in the investment restrictions
of the Growth & Income Fund to permit it to purchase
restricted securities.
[_] FOR [_] AGAINST [_] ABSTAIN
2(c)(iii). Proposal to approve a change in the investment restrictions
of the Growth & Income Fund to permit it to purchase and
write put and call options and purchase and sell futures
contracts on stock indices and debt securities.
[_] FOR [_] AGAINST [_] ABSTAIN
2(c)(iv) Proposal to approve a change in the subclassification of
the Growth & Income Fund from that of a "Diversified
Company" to that of a "Non-diversified Company."
[_] FOR [_] AGAINST [_] ABSTAIN
3(c). Proposal to approve a new investment advisory agreement
between Monitrend Mutual Fund and Murphy Investment
Management, Inc. with respect to the Growth & Income Fund.
[_] FOR [_] AGAINST [_] ABSTAIN
4. Not Applicable
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The Board of Trustees recommends a vote FOR proposals, 1, 2(c)(i),
2(c)(ii), 2(c)(iii), 2(c)(iv) and 3(c).
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2(c)(i), 2(c)(ii), 2(c)(iii), 2(c)(iv)
and 3(c).
The undersigned acknowledges receipt of the
Notice of said Special Meeting and the
accompanying Proxy Statement.
Dated: ______________________________, 1996
Signed:_____________________________________
____________________________________________
(Please print name)
NOTE: Please sign exactly as your name
appears on your account. Joint owners
should sign personally. When signing as
attorney, executor, administrator, trustee
or guardian, give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF
TRUSTEES OF MONITREND MUTUAL FUND.
