Rule 497(e)
Registration No. 002-95077
PROSPECTUS SUPPLEMENT
Dated November 24, 1997
__________
to the Prospectus dated
April 16, 1997
__________
PINNACLE FUND
Acquisition of Heartland Capital Management, Inc. By Fifth
Third Bancorp. On November 24, 1997, Fifth Third Bancorp ("Fifth
Third") acquired by a merger all of the outstanding capital stock
of Heartland Capital Management, Inc. (the "Adviser"), the
investment adviser to Pinnacle Fund (the "Fund"). As a result of
the merger:
* The Adviser and the Fund entered into a new investment
advisory agreement on the same terms as the investment
advisory agreement described in the Fund's prospectus
dated April 16, 1997; and
* Barry F. Ebert, Robert D. Markley and Thomas F. Maurath
continue to be the employees of the Adviser responsible
for the management of the Fund.
Fifth Third is a bank holding company with over $20 billion in
assets and headquartered in Cincinnati, Ohio. It has banking
operations in Ohio, Indiana, Kentucky, and Florida. Fifth Third is
one of the largest money managers in the Midwest. Fifth Third Bank
has $110 billion in assets under care, of which Fifth Third
Investment Advisors, a division of the Bank, manages $13 billion
for personal, institutional and not for profit clients, including
Fountain Square Funds, a family of 13 mutual funds with total net
assets of $2.9 billion.
Reorganization with Fountain Square Funds. The Board of
Trustees of the Fund has approved execution of an Agreement and
Plan of Reorganization and Liquidation (the "Reorganization Plan")
between Fountain Square Funds and the Fund.
Pursuant to the proposed Reorganization Plan:
* Each outstanding share of the Fund will be exchanged for
one Investment A Share (the "New Shares") of Fountain
Square Pinnacle Fund, a newly formed series portfolio of
Fountain Square Funds;
* Each New Share will have the same net asset value
immediately after the exchange that a Fund share has
before the exchange; and
* The Adviser will manage the assets of Fountain Square
Pinnacle Fund after the consummation of the
Reorganization Plan.
The Trustees expect that following the consummation of the
Reorganization Plan the Fund's ratio of expenses to net assets will
increase, at least initially, as a result of compensation that
would be paid by the Fund for new and additional services,
including services to current shareholders. These new and
additional services will be services deemed by the Trustees as
necessary or desirable for the Fund's successful operations. This
should, in turn, result in an increase in the Fund's total net
assets over the longer term and a corresponding decrease in the
Fund's expense ratio.
Consummation of the Reorganization Plan is conditioned upon,
among other things, the following:
* Execution of the definitive Reorganization Plan;
* Effectiveness of a Registration Statement filed with the
SEC by Fountain Square Funds registering the New Shares;
and
* Approval of the Reorganization Plan by the shareholders
of the Fund.
A proxy statement/prospectus containing more information
regarding the Reorganization Plan will be provided to shareholders
of the Fund. The Trustees expect that the Reorganization Plan will
be consummated in February 1998.
PROSPECTUS April 16, 1997
PINNACLE FUND
Indianapolis, Indiana
Pinnacle Fund (the "Fund") is a no-load, open-end, diversified
investment company seeking long-term capital growth by investing
primarily in common stocks.
You may buy or redeem shares of beneficial interest in the Fund at
net asset value without any sales charge, commission or redemption
fee. The minimum initial investment is $1,000 and the minimum
amount which may be added to an account is $100.
This prospectus contains information you should know before
investing in the Fund. Please read it and retain it for future
reference. A Statement of Additional Information has been filed
with the Securities and Exchange Commission and contains further
information about the Fund. You may obtain a copy without charge by
writing the Fund at 36 South Pennsylvania Street, Suite 610,
Indianapolis, Indiana 46204. The Statement of Additional
Information is dated the same date as this prospectus and is
incorporated herein by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
CONSOLIDATED EXPENSE DATA. . . . . . . . . . . . . . . . . . . .1
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . .2
1996 REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . .4
QUESTIONS AND ANSWERS ABOUT THE FUND . . . . . . . . . . . . . .4
What is the Fund? . . . . . . . . . . . . . . . . . . .4
What are the Fund's Investment Objectives and Policies?4
Who Manages the Fund? . . . . . . . . . . . . . . . . .5
How to Buy Fund Shares. . . . . . . . . . . . . . . . .6
Automatic Investment Plan . . . . . . . . . . . . . . .7
How to Redeem Fund Shares . . . . . . . . . . . . . . .7
How Is Net Asset Value Determined?. . . . . . . . . . .8
How Will the Fund and its Shareholders be Taxed?. . . .9
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . .9
The Fund. . . . . . . . . . . . . . . . . . . . . . . .9
Description of the Shares . . . . . . . . . . . . . . 10
Reports to Shareholders . . . . . . . . . . . . . . . 10
Retirement Plans. . . . . . . . . . . . . . . . . . . 10
Shareholder Inquiries . . . . . . . . . . . . . . . . 11
Custodian, Transfer and Disbursing Agent. . . . . . . 11
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . 11
FUND PERFORMANCE GRAPH . . . . . . . . . . . . . . . . . . . . 12
CONSOLIDATED EXPENSE DATA
The following table sets forth certain information regarding
the operating expenses incurred by the Fund in 1996.
Management Fees* . . . . . . . . . . . . . . . . . .80%
Other Expenses*. . . . . . . . . . . . . . . . . . .36%
Total Fund Operating Expenses* . . . . . . . . . .1.16%
*Expressed as a percentage of average net assets.
Example 1 Year 3 Years 5 Years 10 Years
You would pay the
following expenses on
a $1,000 investment,
assuming (1) 5% annual
return and (2) redemption
at the end of each time
period: $11.82 $36.35 $63.83 $140.90
This Example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than
those shown.
The table set forth above is intended to assist you in
understanding the various expenses which the Shareholders of the
Fund will directly or indirectly bear. The Advisor has agreed to
reimburse the Fund to the extent the Fund's total operating
expenses exceed 2% of its net assets.
See "Who Manages the Fund? above for an explanation of the
investment advisory agreement between the Fund and the Advisor.
<TABLE>
FINANCIAL HIGHLIGHTS
The following table reflects the results of the Fund's operations for a Share of the Fund outstanding January 1, 1987
through December 31, 1996. The data in the table have been derived from, and should only be read in conjunction with, the
Fund's financial statements, which for 1996 have been examined by Geo. S. Olive & Co. LLC, certified public accountants,
and are included in the Statement of Additional Information. For further information regarding the Fund's performance, see
"Fund Performance Graph."
<CAPTION>
Per Share Income and Capital Changes
(for a Share outstanding from January 1, 1987
through December 31, 1996)
(Adjusted for 2-for-1 share split effective September 8, 1989)
Year Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Selected data for each share
outstanding throughout the
period is as follows:
Net asset value, beginning of
period $22.47 $18.83 $21.15 $21.83 $22.14 $16.87 $18.23 $14.53 $14.02 $12.85
------- ------ ------ ------ ------ ----- ------ ------ ------ ------
Income from Investment
Operations
Net investment income .05 .11 .09 .10 .13 .25 .36 .25 .22 .18
Net gains or losses on
securities (both realized
and unrealized) 5.04 6.54 (.34) .62 (.29) 6.48 (.94) 4.25 .74 1.78
Total from investment
operations 5.09 6.65 (.25) .72 (.16) 6.73 (.58) 4.50 .96 1.96
Dividends (from net
investment income) (.05) (.11) (.09) (.10) (.13) (.25) (.35) (.25) (.22) (.23)
Distributions (from
capital gains) 3.55 (2.90) (1.98) (1.30) (.02) (1.21) (.43) (.55) (.23) (.56)
Net Asset Value, End of Period $23.96 $22.47 $18.83 $21.15 $21.83 $22.14 $16.87 $18.23 $14.53 $14.02
Total Return 22.5% 35.4% (1.1%) 3.3% (0.7%) 39.9% (3.1%) 31.0% 6.7% 15.2%
Ratios/Supplemental Data
(in thousands)
Net assets, end of period $16,491 $14,673 $13,014 $15,135 $14,721 $12,116 $7,338 $6,337 $4,656 $3,308
======= ====== ======= ======= ======= ======= ======= ====== ======
Ratio of expenses to
average net assets 1.16% 1.14% 1.15% 1.17% 1.18% 1.27% 1.40% 1.50% 1.54% 1.63%
====== ====== ====== ====== ====== ======= ======= ====== =======
Ratio of net income to
average net assets .18% .44% .41% .46% .67% 1.33% 2.05% 1.52% 1.61% 1.34%
====== ======= ======= ======= ====== ======= ======== ======= =====
Portfolio turnover rate 44.07% 68.48 91.01% 85.35% 33.26% 55.00% 53.15% 44.93% 43.16% 86.06%
====== ======= ======= ======= ======= ======= ====== ======= =======
Average commission rate
paid $ .0606 $.0590
======== ========
</TABLE>
See notes to financial statements.
1996 REVIEW
The Pinnacle Fund had another excellent year rising 22.5% in 1996.
The Fund's return easily out paced the nation's inflation rate of 3.3%
and exceeded the 19.5% gain for the average stock mutual fund as
reported by Lipper Analytical.
The strong performance was due, in part, to the returns of several
stocks that had significant gains during the year. High on the list
were Microsoft (+88%), Cardinal Health (+60%), and Monsanto (+59%).
Just as important to the Fund was maintaining a moderate risk level.
Many smaller, more volatile stocks performed very poorly during the
summer and did not recover by year end. The Fund continues to invest in
high quality companies with established market positions and strong
earnings growth. These types of companies performed well during this
uncertain market environment.
QUESTIONS AND ANSWERS ABOUT THE FUND
What is the Fund?
Pinnacle Fund is a diversified, open-end management investment company
or "mutual fund" organized as a business trust under the laws of the
State of Indiana. A mutual fund allows you to pool your money with that
of other investors in order to obtain professional management of your
investments. A diversified mutual fund also makes it possible for you
to obtain greater diversification of your investments than you might
otherwise be able to accomplish alone and to simplify your investment
recordkeeping.
The Fund charges no sales commissions when you purchase or redeem its
shares of beneficial interest (the "Shares") and, therefore, is called
a "no-load" fund. The Fund is called "open-end" because it continuously
sells and redeems its Shares. The Fund is "diversified" because it
invests in securities of a number of issuers. The Fund's investments
are managed by Heartland Capital Management, Inc., of Indianapolis,
Indiana (the "Advisor").
What are the Fund's Investment Objectives and Policies?
The Fund's investment objective is long-term capital appreciation.
To achieve this objective, the Fund will invest primarily in common
stocks which, in the opinion of the Advisor, offer opportunities for
long-term capital appreciation. However, during periods when market or
economic conditions dictate a temporary defensive position, the Fund may
invest in the following money market and fixed income investments: U.S.
Treasury bills, notes and bonds; U.S. agency securities; commercial
paper rated Prime-1 by Moody's Investors Services, Inc. and repurchase
agreements which are fully collateralized by a U.S. Treasury or agency
security. Subject to the investment restrictions discussed below, the
Fund may invest in common stocks and securities convertible into common
stock, such as convertible debentures and convertible preferred stock,
and may invest in exchange-listed or over-the-counter securities, in
small or large companies, and in well-established or unseasoned
companies.
No investment is suitable for all investors and all investments
involve some degree of risk. The Fund is not intended to be a current
income producing investment and will not purchase securities with a view
toward short-term profits. Although the Fund's turnover rate cannot be
predicted, it is not expected to exceed 100%. Accordingly, the Fund is
suitable for investors who can accept the fluctuations in portfolio
value and other risks associated with seeking long-term capital growth
through investments in common stocks and other equity-type securities as
discussed above. In addition, investment risks will be increased to the
extent the Fund invests in small or unseasoned companies, whose
securities tend to be more thinly traded and subject to more abrupt or
erratic price movements than larger, well-established companies.
The Fund may not, without the approval of holders of a majority of its
Shares: (1) invest more than 5% of its total net assets in securities
of companies having a record of less than three years of continuous
operations (including the record of any predecessor); (2) borrow money,
except for temporary borrowings for emergency or extraordinary purposes
(but not for the purchase of investments) which shall not in any event
exceed 5% of the lower of cost or market value of the Fund's total net
assets; (3) pledge or mortgage its assets, except for temporary or
emergency purposes not to exceed 10% of the Fund's total net assets; and
(4) enter into repurchase agreements if, as a result, more than 5% of
the Fund's total net assets at the time of the transaction would be
subject to repurchase agreements maturing in more than seven days. All
of the Fund's investment restrictions are set forth in the Statement of
Additional Information.
Who Manages the Fund?
Under an investment advisory agreement with the Fund, the Advisor,
Heartland Capital Management, Inc., 36 South Pennsylvania Street, Suite
610, Indianapolis, Indiana 46204 provides the Fund continuous investment
and management services, subject to the control and direction of the
trustees of the Fund. The Fund pays the Advisor a fee, computed daily
and paid monthly, at the annual rate of 8/10 of 1% of the Fund's average
daily net assets. This fee is higher than that paid by most investment
companies.
Pursuant to the investment advisory agreement, the Advisor, at its own
expense and without any reimbursement from the Fund, furnishes office
space, facilities and equipment; executive, administrative and clerical
personnel; and bears all sales and promotional expenses of the Fund.
The Fund will pay all of its operating expenses, including without
limitation the Advisor's fee, the costs of preparing and printing its
registration statement required by the Securities Act of 1933 and the
Investment Company Act of 1940, shareholder servicing costs, directors'
fees and expenses, legal, accounting and auditing fees, custodian fees
and expenses, taxes and registration fees.
The Advisor, a registered investment advisor, also acts as investment
advisor for institutional and individual portfolios with assets of
approximately $738 million.
The employees of the Advisor who are primarily responsible for the
day-to-day management of the Fund's portfolio are: Mr. Barry F. Ebert,
President of the Advisor; Mr. Robert D. Markley, Vice President of the
Advisor; and Mr. Thomas F. Maurath, an employee of the Advisor. Each of
Messrs. Ebert, Markley and Maurath has been primarily responsible for
the Fund since the inception of the Fund on March 6, 1985, and has held
his present position with the Advisor for more than five years.
How to Buy Fund Shares
Shares of the Fund may be purchased at the net asset value next
determined after the receipt of an order. (See "How is Net Asset Value
Determined".) There is no sales charge or front-end fees of any kind.
As set by the trustees of the Fund, the minimum initial investment in
the Fund is $1,000 and subsequent purchases must be at least $100.
To make an initial purchase of Shares, please complete and sign the
Application at the back of this prospectus and mail it to the Pinnacle
Fund, c/o Firstar Trust Company, 615 East Michigan, 3rd Floor,
Milwaukee, Wisconsin 53202 together with a check made payable to
Pinnacle Fund. You may then make subsequent investments by check
accompanied by either the order stubs attached to any Fund confirmation
you receive, or a brief note indicating the amount of the purchase, your
account number and the name in which your account is registered. Your
check must be collectible at full face value and must be drawn in U.S.
dollars on a U.S. bank. There is a $10.00 fee for processing
uncollectible funds. Subsequent investments may be made by wire
transfer by following the instructions set forth on the Application.
Investors should always call Firstar Trust Company at (414) 765-4124
before wiring funds. There is a fee of $12.00 for wired funds.
The Fund will not issue any certificates evidencing Shares unless you
specifically request them in writing and will not mail you a certificate
for Shares purchased by check until 30 days after the date of purchase.
The Fund also will not issue a certificate for a fractional Share.
All purchase orders are subject to acceptance or rejection by authorized
officers of the Fund in Indianapolis, Indiana and entry of the order on
the Fund's record of Shareholder accounts and are not binding until
accepted and entered. Once your purchase order has been accepted by the
Fund you may not cancel or revoke it, although you may redeem the Shares
at any time. The Fund reserves the right to reject any purchase order
that it determines is not in its or its Shareholders' best interests.
The Fund also reserves the right to waive or lower the investment
minimums for any reason.
Automatic Investment Plan
An Automatic Investment Plan may be established at any time. By
participating in the Automatic Investment plan, shareholders may
automatically make purchases of shares of the Fund on a regular
convenient basis ($50 minimum). Under the Automatic Investment Plan,
shareholders' banks or other financial institutions debit pre-authorized
amounts drawn on their accounts and apply such amounts to the purchase
of Shares of the Fund. The Automatic Investment Plan can be implemented
with any financial institution that is a member of the Automatic
Clearing House. No service fee is charged to shareholders for
participating in the Automatic Investment Plan. Shares purchased
through the Automatic Investment Plan for an IRA account may not be
applied to IRA contributions for a prior year. An application to
establish the Automatic Investment Plan may be obtained from the Fund.
The Fund reserves the right to suspend, modify or terminate the
Automatic Investment Plan, without notice.
How to Redeem Fund Shares
The Fund will redeem all or part of your Shares whenever you request.
The price at which your Shares will be redeemed is the net asset value
per Share next determined after proper redemption instructions are
received and is the same as the purchase price of Shares purchased at
that time. See "How to Buy Fund Shares". Because the redemption price
received depends upon the value of the Fund's investments at the time of
redemption, it may be more or less than the price originally paid for
the Shares and may result in a realized capital gain or loss. See "How
Is Net Asset Value Determined?"
You should follow these procedures whenever you redeem Shares in the
Fund:
Send a redemption request to Pinnacle Fund, c/o Firstar Trust Company,
615 East Michigan, 3rd Floor, Milwaukee, Wisconsin 53202, specifying the
number of Shares or dollar amount to be redeemed, your name, your
account number, and the additional requirements listed below that apply
to your particular account. The Fund does not consider the U.S. Postal
Service or other independent delivery services to be its agents.
Therefore, deposit in the mail or with such other services, or receipt
at Firstar Trust Company's Post Office Box of redemption requests does
not constitute receipt by Firstar Trust Company or the Fund. DO NOT
mail letters by overnight courier to the Post Office Box address.
Correspondence mailed by overnight courier should be sent to Firstar
Trust Company at the address above. (Redemption cannot be accomplished
by telephoning or telegraphing the Fund or Firstar.)
Type of Registration Requirements
-------------------- -------------
Individual, Joint Tenants, Letter of instruction signed by all
Sole Proprietorship, person(s) required to sign for the
Custodial (Uniform Gift to account exactly as it is registered
Minors Act), General Partners Signatures on redemption requests,
whether or not the shares are
represented by certificates, must be
guaranteed by a commercial bank, a
federally chartered savings and loan
association, trust company or a member
firm of a national securities exchange,
unless the redemption is for shares with
an aggregate net asset value of $5,000
or less and the proceeds are to be sent
to registered owner(s) at the current
address for such owner(s) as reflected
on the Fund's records.
Corporations, Associations Letter of instruction and a corporate
resolution, signed by person(s) required
to sign for the account, accompanied by
signature guarantee(s).
Trusts Letter of instruction signed by the
trustee(s) with a signature guarantee.
(If the trustee's name is not registered
on the account, a copy of the trust
document certified within the last 60
days is required as well.)
If you had previously requested that certificates be issued to you for
your Shares the certificates must either be properly endorsed or
accompanied by a stock assignment properly endorsed exactly as the
Shares are registered. The signatures on the certificates (or
accompanying stock assignment) must be guaranteed by a U.S. commercial
bank (not a savings bank or savings and loan association) or trust
company or by a member of a recognized stock exchange.
Shareholders who have an IRA or other retirement plan must indicate
on their redemption requests whether or not to withhold federal income
tax. Redemption requests not indicating an election not to have federal
income tax withheld will be subject to withholding.
You may not cancel or revoke your redemption request and the Fund
cannot accept redemption requests which specify a particular date for
redemption or which contain any special conditions. Please contact the
Fund's transfer agent, Firstar Trust Company (telephone number
414-765-4124, TDD (Telecommunication Device for the Deaf) telephone
number 800-684-3416), before you redeem if you have any questions.
The Fund will generally mail payment for Shares redeemed in cash
within seven days after it receives proper instructions for redemption.
There is no redemption charge of any kind. If you attempt to redeem
shares within several days after they have been purchased by check, the
Fund may delay payment of the redemption proceeds to you for up to
fifteen days until the Fund can verify that payment of the purchase
price of those Shares has been (or will be) collected. The Fund
reserves the right to require a properly completed application before it
makes payment for Shares redeemed.
The Fund reserves the right to suspend or postpone redemptions during
any period when:
(a) trading on the New York Stock Exchange is restricted, as determined
by the Securities and Exchange Commission, or that Exchange is closed
for other than customary weekend and holiday closings; (b) the
Securities and Exchange Commission has by order permitted such
suspension; or (c) an emergency, as determined by the Securities and
Exchange Commission, exists, making disposal of portfolio securities or
valuation of net assets of the Fund not reasonably practicable.
How Is Net Asset Value Determined?
The net asset value of a Share of the Fund is determined as of the
close of trading on the New York Stock Exchange and on any other day in
which a significant degree of trading in the Fund's portfolio securities
materially affects the net asset value of a Share of the Fund. The net
asset value of each Share is computed by dividing the difference between
the value of the Fund's assets and liabilities by the number of Shares
outstanding. Each security traded on a national stock exchange is
valued on the basis of its last sale price on the date of valuation or,
if there are no sales that day, at the closing bid quotation. All other
securities for which reliable quotations are available are valued at the
latest bid quotation. Other assets and securities are valued at a fair
value determined in good faith by the trustees of the Fund.
How Will the Fund and its Shareholders be Taxed?
The Fund intends to distribute to its Shareholders substantially all
of its net income and realized capital gains. As a result, the Fund
intends to qualify as a "regulated investment company" under Subchapter
M of the Internal Revenue Code. Such qualification generally relieves
the Fund of any liability for federal income taxes to the extent its
earnings are timely distributed to its Shareholders in accordance with
certain provisions of the Internal Revenue Code. Such distributions may
either be paid in cash or reinvested in additional Shares at net asset
value. Whether received in cash or reinvested in additional Shares,
distributed net investment income and net short-term capital gains are
taxable as ordinary income to the Shareholder. Such distributions may
be eligible in whole or in part for the corporate dividends received
deduction, which in this case is generally 70%. Distributed long-term
capital gains designated as capital gain dividends are taxable as
long-term capital gains to the Shareholder, whether received in cash or
reinvested in additional Shares, and regardless of the period of time
Shares have been held by the Shareholder. Distributions designated by
the Fund as capital gains dividends are not eligible for the dividends
received deduction.
Distributions of the Fund's net investment income will normally be
made by the end of January. Capital gains distributions, if any, will
ordinarily also be made by the end of January. It is possible that the
Fund will declare a dividend in October, November or December payable to
Shareholders as of a specified date in such months, and will actually
pay the dividend in January of the following year. In that case,
Shareholders will be required to report the amount of the dividend as
income in the year in which the dividend is declared even though the
dividend is not received until the following January. The Fund will
inform each Shareholder in writing of the tax status of such
distributions. You may choose the manner in which you desire to receive
such distributions by checking the appropriate box on the application.
Changes in these instructions may be made by writing the Fund and will
apply to the next record date.
GENERAL INFORMATION
The Fund
The Fund was established under Indiana law as a business trust by a
Declaration of Trust dated December 19, 1984. The Declaration of Trust
provides that no trustee, officer, employee or agent of the Fund is
liable to the Fund or to any Shareholder, nor is any trustee, officer,
employee or agent liable to any third persons in connection with the
affairs of the Fund, except as such liability may arise from his own bad
faith, willful misfeasance, gross negligence or reckless disregard of
his duties. It also provides that all third persons shall look solely
to the Fund property for satisfaction of claims arising in connection
with the affairs of the Fund. with the exceptions stated above, the
Declaration of Trust provides that the trustees, officers, and employees
are entitled to be indemnified against all liability in connection with
the affairs of the Fund.
Description of the Shares
The Declaration of Trust permits the Trustees to issue an unlimited
number of Shares. Each Share represents an equal proportionate
beneficial interest in the Fund with each other Share. Upon any
liquidation of the Fund, Shareholders are entitled to share pro rata in
the net assets of the Fund available for distribution to Shareholders.
Shares are fully paid and non-assessable by the Fund and have no
pre-emptive or conversion rights.
Shareholders are entitled to one vote for each full Share held and
fractional votes for fractional Shares held and are entitled to cast
their votes in the election of trustees and on other matters submitted
to the vote of Shareholders at annual Shareholders' meetings. Voting
rights are not cumulative. The Fund may not change its investment
objective or other fundamental policy without the affirmative vote of
the holders of a majority of the outstanding voting Shares.
Reports to Shareholders
Each Shareholder will receive a confirmation statement reflecting each
purchase and redemption of Shares which the Shareholder makes as well as
periodic statements detailing distributions made by the Fund. In
addition, each Shareholder will receive an annual report containing
audited financial statements and a semi-annual report containing
unaudited financial statements.
Retirement Plans
The Fund offers an IRA and Rollover IRA plan to provide investors the
opportunity for tax sheltered retirement savings. The money you deposit
into your IRA with the Fund is invested in Shares of the Fund with all
dividends and capital gains distributions automatically reinvested.
Purchases and redemptions of Shares of the Fund in IRA accounts are
treated as any other account. The initial contribution must be $1,000
or more, but subsequent payments may be as little as $100.
Firstar Trust Company will serve as Custodian as set forth in the
Individual Retirement Custodial Account Agreement (Form 5305A) and the
Individual Retirement Account Disclosure Brochure, which sets out all
applicable fees. These documents are available by contacting the Fund
and should be read carefully. The Fund recommends consultation with an
attorney or tax advisor regarding any IRA plan.
Shareholder Inquiries
Shareholders who wish information concerning the Fund's investments
should contact Pinnacle Fund, 36 South Pennsylvania, Suite 610,
Indianapolis, Indiana 46204; telephone number (317) 633-4080.
Share applications, redemption letters, inquiries, or notifications
concerning a Shareholder's account should be directed to the Fund, c/o
Firstar Trust Company, 615 East Michigan, 3rd Floor, Milwaukee,
Wisconsin 53202; telephone number (414) 765-4124; TDD (Telecommunication
Device for the Deaf) telephone number (800) 684-3416.
Custodian, Transfer and Disbursing Agent
Firstar Trust Company of Milwaukee, Wisconsin, a bank incorporated
under the laws of the State of Wisconsin, acts as custodian for the
Fund's assets and the transfer and disbursing agent for the Fund.
PERFORMANCE INFORMATION
From time to time the Fund may advertise its total return. Total
return represents the change, over a specified period of time, in the
value of an investment in the Fund after reinvesting all income and
capital gains distributions. It is calculated by dividing that change
by the initial investment and is expressed as a percentage.
FUND PERFORMANCE GRAPH
The graph below compares the performance of the Fund from January 1,
1986 to December 31, 1996 to the performance of the Standard & Poor's
500 Index, the Barra S&P 500 Growth Index and the Consumer Price Index
(CPI).
Pinnacle S&P 500 Barra Growth CPI
12/31/85 10,000.00 10,000.00 10,000.00 10,000.00
12/31/86 11,742.75 11,850.00 11,450.00 10,070.00
12/31/87 13,532.27 12,466.20 12,194.25 10,523.15
12/31/88 14,444.35 14,560.52 13,651.46 10,986.17
12/31/89 18,918.15 19,147.08 18,620.60 11,480.55
12/31/90 18,323.95 18,534.38 18,657.84 12,180.86
12/31/91 25,629.28 24,205.90 25,816.84 12,521.92
12/31/92 25,443.05 26,069.76 27,123.18 12,885.06
12/31/93 26,285.84 28,650.66 27,554.44 13,232.95
12/31/94 25,993.07 29,023.12 28,409.63 13,590.25
12/31/95 35,195.32 39,790.69 39,240.84 13,943.59
12/31/96 43,079.07 48,942.55 48,658.64 14,403.73
PINNACLE
FUND
PROSPECTUS
_______________________________________________________________________
Investment Advisor
HEARTLAND CAPITAL MANAGEMENT, INC.
Indianapolis 317/633-4080
Custodian, Transfer Agent and
Disbursing Agent
FIRSTAR TRUST COMPANY
Milwaukee 414/765-4124
Auditors
GEO. S. OLIVE & CO. LLC
Indianapolis
Counsel
SOMMER & BARNARD, PC
Indianapolis
