P R O F I L E
February 25, 2000
THE MURPHY NEW WORLD FUNDS
The Murphy New World Funds are three no load mutual funds in the Monterey Mutual
Fund family.
The Murphy New World Funds are:
Murphy New World Technology Fund
Murphy New World Biotechnology Fund
Murphy New World Technology Convertibles Fund
This Profile summarizes key information about the
Funds that is included in the Funds' prospectus. The
Funds' prospectus includes additional information
about the Funds including a more detailed description
of the risks associated with investing in the Funds
that you may want to consider before you invest. You
may obtain the prospectus and other information about
the Funds at no cost by calling (800) 669-1156.
The Murphy New World Funds are distributed by Syndicated Capital, Inc.
QUESTIONS EVERY INVESTOR SHOULD ASK BEFORE
INVESTING IN THE MURPHY NEW WORLD FUNDS
1. WHAT ARE THE FUNDS' GOALS?
MURPHY NEW WORLD TECHNOLOGY FUND
The Technology Fund seeks 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
technology.
MURPHY NEW WORLD BIOTECHNOLOGY FUND
The Biotechnology Fund seeks 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.
MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES FUND
The Convertibles Fund seeks to maximize total return through a combination
of capital appreciation and income. The Convertibles Fund invests primarily in
convertible securities of companies that its investment adviser believes can
produce products or services that provide or benefit from advances in
technology.
2. WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
Each of the Murphy New World Funds invests in securities of companies that
its investment adviser considers to be "technology" companies. The investment
adviser broadly defines "technology" to include but not be limited to:
o semiconductors and electronic components
o computers, computer services, computer peripherals and software,
multimedia
o consumer electronics, electronic games, cable television, internet
o pharmaceuticals, biotechnology, medical devices and instruments
o superconductivity, alternative energy and specialty materials
The Biotechnology Fund differs from the Technology Fund and the Convertibles
Fund in that it "concentrates" its investments in the biotechnology sector.
This means at least 25% of its assets will be invested in securities of
companies in the biotechnology sector. The investment adviser broadly defines
"biotechnology" to include but not be limited to:
o drug development, production, delivery and distribution
o agricultural and industrial biotechnology
o genetic sequencing and mapping
o biotechnology-based services and other advances resulting from research
and development programs in the medical, animal and life sciences.
The Biotechnology Fund and the Technology Fund invest primarily in common
stocks. The Convertibles Fund invests primarily in securities convertible into
common stocks, such as convertible bonds, debentures and preferred stocks. The
Convertibles Fund may invest without limitation in lower quality, high risk,
high yielding debt securities, commonly referred to as "junk bonds."
The investment adviser bases investment decisions for each of the Murphy New
World Funds on company specific factors, not general economic conditions. In
selecting investments for the Technology Fund and the Biotechnology Fund, the
investment adviser looks for companies that are growing faster than the general
market. In selecting investments for the Convertibles Fund, the investment
adviser focuses more on a company's ability to meet its debt service obligations
than on its growth projection. At any time the Murphy New World Funds may hold
both "growth" investments and "value" investments. Each Fund's annual portfolio
turnover rate may exceed 100%.
You may learn more about the Murphy New World Funds' investments by reading
the Murphy New World Funds' annual and semi-annual reports to shareholders. The
annual report includes a discussion of the market conditions and investment
strategies that significantly affected the performance of the Murphy New World
Funds during their last fiscal year. You may obtain either or both of these
reports, without charge, simply by calling 1-800-669-1156.
3. WHAT ARE THE PRINCIPAL RISKS IN INVESTING IN THE FUNDS?
Investors in the Murphy New World Funds may lose money. There are risks
associated with investments in the types of securities in which the Funds
invest. These risks include:
o MARKET RISK: The prices of the securities, particularly the common
stocks, in which the Funds invest may decline for a number of reasons. The
price declines of common stocks, in particular, may be steep, sudden and/or
prolonged.
o INTEREST RATE RISK: In general, the value of debt securities, including
convertible securities, falls when interest rates rise. Longer term obligations
are usually more sensitive to interest rate changes than shorter term
obligations. There have been extended periods of increases in interest rates
that have caused significant declines in the prices of debt securities.
o CREDIT RISK: The issuers of debt securities held by the Funds may not be
able to make interest or principal payments. Even if these issuers are able to
make interest or principal payments, they may suffer adverse changes in
financial condition that would lower the credit quality of the security, leading
to greater volatility in the price of the security.
o SMALLER CAPITALIZATION COMPANIES RISK: Many of the technology companies
in which the Funds invest are smaller capitalization companies (i.e., companies
with a market capitalization of $2 billion or less). Smaller capitalization
companies typically have relatively lower revenues, limited product lines, lack
of management depth and a smaller share of the market for their products or
services than larger capitalization companies. The stocks of smaller
capitalization companies tend to have less trading volume than stocks of larger
capitalization companies. Less trading volume may make it more difficult for
the investment adviser to sell securities of smaller capitalization companies at
quoted market prices. Finally there are periods when investing in smaller
capitalization stocks falls out of favor with investors and the stocks of
smaller capitalization companies underperform.
o TECHNOLOGY COMPANIES RISK: Companies in the technology sectors have
unpredictable earnings. Products offered by companies in the technology sectors
are subject to risks of obsolescence and intense competition. Many technology
companies are subject to extensive government regulation and may be affected by
the enforcement of patent, trademark and other intellectual property laws.
Securities of technology companies exhibit greater volatility than the overall
market.
o NON-DIVERSIFICATION RISK: Each of the Murphy New World Funds is a non-
diversified investment company. As such they will invest in fewer securities
than diversified investment companies and their performance may be more
volatile. If the securities in which the Funds invest perform poorly, the Funds
could incur greater losses than they would have had they invested in a greater
number of securities.
o CONVERTIBLE SECURITIES RISK: Convertible securities are subject to the
market risks of common stocks, while also subject to interest rate and credit
risks.
o "JUNK BOND" RISK: "Junk Bonds" or high yield securities are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. The market for high
yield securities is generally thinner and less active than the market for higher
quality securities. This may limit the ability of the Convertibles Fund to sell
a high yield security at the price at which it is being valued for purposes of
calculating net asset value.
o HIGH PORTFOLIO TURNOVER RISK: High portfolio turnover necessarily
results in correspondingly greater transaction costs (such as brokerage
commissions or markups or markdowns) which the Murphy New World Funds must pay
and increased realized gains (or losses) to investors. Distributions to
shareholders of short-term gains are taxed as ordinary income under federal
income tax laws.
Because of these risks the Fund is a suitable investment only for those
investors who have long-term investment goals. Prospective investors who are
uncomfortable with an investment that will fluctuate in value should not invest
in any of the Murphy New World Funds.
4. HOW HAVE THE FUNDS PERFORMED?
The bar charts and tables that follow provide some indication of the risks
of investing in the Murphy New World Funds by showing changes in each Fund's
performance from year to year and how its average annual returns over various
periods compare to the performance of the Standard & Poor's Composite Index of
500 Stocks. Please remember that each Fund's past performance is not
necessarily an indication of its future performance. It may perform better or
worse in the future.
MURPHY NEW WORLD TECHNOLOGY FUND
(TOTAL RETURN PER CALENDAR YEAR)
1994 (2.90%)
1995 42.36%
1996 13.72%
1997 (17.30%)
1998 (8.02%)
1999 97.32%
Note: During the six year period shown on the bar chart, the Fund's
highest total return for a quarter was 47.18% (quarter ended
December 31, 1999) and the lowest total return for a quarter was -27.01%
(quarter ended December 31, 1997).
AVERAGE ANNUAL TOTAL RETURNS SINCE THE INCEPTION
(FOR THE PERIODS ENDING DATE OF THE FUND
DECEMBER 31, 1999) PAST YEAR PAST 5 YEARS (OCTOBER 21, 1993)
- ------------------ --------- ------------ -----------------
Murphy New World Technology Fund 97.32% 19.45% 14.67%
S&P 500*<F1> 21.04% 28.51% 22.83%
*<F1> The S&P 500 is the Standard & Poor's Composite Index of 500 Stocks,
a widely recognized unmanaged index of common stock prices.
MURPHY NEW WORLD BIOTECHNOLOGY FUND
(TOTAL RETURN PER CALENDAR YEAR)
1997 0.95%
1998 (12.60%)
1999 20.86%
Note: During the three year period shown on the bar chart, the Fund's
highest total return for a quarter was 25.55% (quarter ended
September 30, 1997) and the lowest total return for a quarter was -
17.93% (quarter ended December 31, 1997).
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING
DECEMBER 31, 1999) PAST YEAR SINCE DECEMBER 20, 1996*<F2>
- ------------------ --------- ----------------------------
Murphy New World Biotechnology Fund 20.86% 3.74%
S&P 500 21.04% 26.75%
*<F2> The Fund's investment adviser, Murphy Investment Management, Inc.,
became investment adviser on this date.
MURPHY NEW WORLD TECHNOLOGY CONVERTIBLES FUND
(TOTAL RETURN PER CALENDAR YEAR)
1997 1.04%
1998 (12.78%)
1999 45.11%
Note: During the three year period shown on the bar chart, the Fund's
highest total return for a quarter was 22.94% (quarter ended
December 31, 1999) and the lowest total return for a quarter was -
11.20% (quarter ended September 30, 1998).
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING
DECEMBER 31, 1999) PAST YEAR SINCE JANUARY 1, 1997*<F3>
- ------------------ --------- --------------------------
Murphy New World Technology
Convertibles Fund 45.11% 8.30%
S&P 500 21.04% 27.34%
*<F3> The Fund's investment adviser, Murphy Investment Management, Inc.,
became investment adviser on this date.
5. WHAT ARE THE FUNDS' FEES AND EXPENSES?
The table below describes the fees and expenses that you may pay if you buy
and hold shares of the Murphy New World Funds.
<TABLE>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
TECHNOLOGY FUND BIOTECHNOLOGY FUND CONVERTIBLES FUND
---------------- ------------------- -----------------
<S> <C> <C> <C>
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) No Sales Charge No Sales Charge No Sales Charge
Maximum Deferred Sales Charge (Load) No Deferred No Deferred No Deferred
Sales Charge Sales Charge Sales Charge
Maximum Sales Charge (Load)
Imposed on Reinvested Dividends
And Distributions No Sales Charge No Sales Charge No Sales Charge
Redemption Fee None None None
Exchange Fee None None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 1.00% 1.00% 0.63%
Distribution and/or Service (12b-1) Fees 0.25% 0.25% 0.25%
Other Expenses 4.85% 2.02% 6.03%
Total Annual Fund Operating Expenses 6.10%*<F4> 3.27%*<F4> 6.91%*<F4>
</TABLE>
*<F4> Each of the Murphy New World Funds had actual Total Fund Operating
Expenses for the most recent fiscal year that were less than the
amounts shown. The investment adviser, Murphy Investment
Management, Inc., reimbursed each Fund to the extent necessary to
insure that Total Annual Fund Operating Expenses did not exceed
1.99%. Murphy Investment Management, Inc. may discontinue
reimbursing the Murphy New World Funds at any time but will not do
so prior to November 30, 2000.
EXAMPLE
This Example is intended to help you compare the cost of investing in the
Murphy New World Funds with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of these periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Technology Fund $607 $1,800 $2,967 $5,775
Biotechnology Fund $330 $1,007 $1,707 $3,567
Convertibles Fund $684 $2,014 $3,294 $6,285
6. WHO IS THE FUNDS' INVESTMENT ADVISER?
Murphy Investment Management, Inc. (the "Adviser") is the investment adviser
to each of the Murphy New World Funds. The Adviser's address is:
2830 North Cabrillo Highway
P.O. Box 308
Half Moon Bay, CA 94019
John Michael Murphy is primarily responsible for the day-to-day management
of the portfolios of the Technology Fund and the Convertibles Fund; he is the
portfolio manager for these Funds. Mr. Murphy has been President of the Adviser
since its organization in 1989. He has also been a portfolio manager since
1973, a securities analyst since 1970 and the president of an investment
newsletter publisher since 1981. Gaye Elizabeth Morgenthaler is primarily
responsible for the day-to-day management of the Biotechnology Fund's portfolio;
she is the portfolio manager for this Fund. She has been an analyst with the
Adviser since 1985.
7. HOW DO I PURCHASE SHARES?
Complete the Account Application accompanying this Profile and mail it and
your check to the address shown on the Account Application. The minimum initial
purchase is $1,000 ($100 for Individual Retirement Accounts). The minimum
subsequent investment is $50. You can also open an account by bank wire (call
1-800-628-9403 for instructions), by exchanging from another Monterey Mutual
Fund or through broker-dealers, financial institutions or other service
providers that have entered into agreements with the Funds.
8. HOW DO I REDEEM SHARES?
You may redeem (or sell) any portion of your account on any business day.
Simply write to us or call our transfer agent at 1-800-628-9403.
9. WHEN ARE DISTRIBUTIONS MADE AND HOW ARE THEY TAXED?
Each Fund distributes substantially all of its net investment income and
substantially all of its capital gains annually. You have two distribution
options:
o AUTOMATIC REINVESTMENT OPTION: Both dividend and capital gains
distributions will be reinvested in additional Fund Shares.
o ALL CASH OPTION: Both dividend and capital gains distributions will be
paid in cash.
Each Fund's distributions, whether received in cash or additional shares of
the Fund, may be subject to federal and state income tax. These distributions
may be taxed as ordinary income and capital gains (which may be taxed at
different rates depending on the length of time the Fund holds the assets
generating the capital gains).
10.WHAT SERVICES ARE AVAILABLE TO INVESTORS IN THE FUNDS?
o Traditional and Roth IRAs
o Automatic Investing
o Exchange Privileges
o Systematic Withdrawal Plan
ACCOUNT APPLICATION: MONTEREY MUTUAL FUND
Mail to: MONTEREY MUTUAL FUND
P.O. Box 640284
Cincinnati, OH 45264-0284
For individual, custodial, trust, profit-sharing or pension plan accounts.
Do not use this form for IRA's - a special form is available from the Fund.
For information call 1-800-251-1970.
ACCOUNT REGISTRATION
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Name of Owner(s) (Institutional, Individual, Joint, Custodian or Trustee)
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Mailing Address
----------------------------------------------------(---)------------------
City State Zip Daytime Telephone Number
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Social Security Number or Taxpayer Identification Number
Citizen of o United States
o Other (specify)--------------------------------
INVESTMENT
Please indicate the amount you wish to invest ($1,000 minimum)
BY CHECK(S) made payable to:
o Murphy New World Biotechnology Fund $------------
o Murphy New World Technology Fund $------------
o Murphy New World Technology
Convertibles Fund $------------
Multiple investments require separate checks.
o BY WIRE, (Please call 1-800-628-9403
for instructions)
(Indicate date and amount of wire: Date-------------------)
Multiple investments may be done with a single wire
transfer. Enter separate amounts above, total wire
amount here. $-------------
DISTRIBUTIONS
Distributions will be reinvested in additional shares unless one of the
following boxes is checked.
o Send me a check for all distributions
o Send me a check for dividends but reinvest capital gain distributions
PROSPECTUS AVAILABILITY
Investors have the option of purchasing shares of the Murphy New World
Funds after reviewing the information in the accompanying Profile or after
requesting and reviewing the Funds' prospectus (and other information)
before making an investment decision in the Funds.
SIGNATURES AND CERTIFICATION
I (we) understand that certificates for the shares purchased hereby will be
issued only upon request. I represent that I am of legal age and have legal
capacity to make this purchase and have received and read a current Profile
of the Fund. I certify under penalty of perjury that:
1. The social security or other tax identification number stated above is
correct.
2. I am not subject to backup withholding because #
o A. The IRS has not informed me that I am subject to backup
withholding.
o B. The IRS has notified me that I am no longer subject to backup
withholding.
# Check the appropriate box. If this statement is not true and you are
subject to backup withholding strike out section 2.
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Signature of Owner, Trustee or Custodian Date
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Signature of Joint Owner, Trustee or Custodian Date
THE MURPHY NEW WORLD FUNDS
SYSTEMATIC WITHDRAWAL PLAN
A. Withdrawal Plan amount ($100 minimum for each withdrawal)
I would like to withdraw the following amount for each systematic
payment: $----------------
B. Withdrawal Plan frequency (check one)
o Monthly beginning with the following date:---------------
o Quarterly beginning with the following date:---------------
Note: Systematic Withdrawal Plan payments are made on or about the 25th
business day of each month. Requests for any changes must be submitted in
writing to American Data Services, Inc. prior to the 10th of the month
preceding the next payment date.
C. Please complete this section if payments are to be sent to a different
name and/or address from that stated in the account registration:
-------------------------------------------------------
Name of Payee or Name of Bank
PROVISIONS: The Monterey Mutual Fund Systematic Withdrawal Plan is
available for any shareholder account worth at least $10,000. By completing
this form, you are appointing the Fund as your agent to redeem shares in
your account to make periodic payments. A $100 minimum applies to each
withdrawal payment. If share certificates are held for your account, you
must return them to the Fund before the Plan can be put into effect.
Payments will be made by redeeming the appropriate number in the account at
the current net asset value. Redemption's will be made on the 25th business
day of the month or on the next business day if the 25th is a holiday.
Payments are normally mailed within two business days after the redemption.
Withdrawal payments should not be regarded as income or yield on your
investment, since a part of each payment will normally consist of a return
of capital. Depending on size and frequency of your payments and the
fluctuation in value of the Fund's portfolio, using the Plan may reduce or
even exhaust your account.
TELEPHONE EXCHANGE AUTHORIZATION
o By checking this box, the investor elects this privilege.
PROVISIONS: The investor authorizes the transfer agent to effect exchanges
for the account based on telephone instructions from the investor or his
dealer and to register shares of the Fund to be acquired exactly the same
as those in the investor's existing account. The investor agrees that the
transfer agent, the Distributor and the Fund will not be liable for any
loss, liability, cost or expense for acting on the instructions believed by
them to be genuine and will not be responsible for the authenticity of any
telephone instructions. The investor understands that telephone calls may
be recorded on tape. Authorizing an exchange constitutes an acknowledgment
that the investor has received and read the current prospectus of the Fund
being acquired.
REDEMPTION AUTHORIZATION
o By checking this box, the investor elects this privilege. If this box
is not checked, all required documents must be in proper form as stated
in the prospectus.
PROVISIONS: The investor authorizes the transfer agent to accept
instructions by telephone or in writing without a signature guarantee to
redeem shares. The investor agrees that the transfer agent, Star Bank,
Monterey Mutual Fund, its affiliated companies and their officers or
employees shall not be required to examine the genuineness of any signature
or oral instructions to redeem, or the authority or competency of the
person(s) giving such instructions and agrees to indemnify the transfer
agent, Star Bank, Monterey Mutual Fund and other such persons against, and
hold harmless from, all losses, claims, expenses and liabilities that may
be based upon such matters and upon the failure to make such examination.
DEALER INFORMATION
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Dealer Name Representative's Name
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Branch Address Phone No. AE#
Send duplicate statements to
branch office? o YES o NO
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City State Zip
