File No. 2-95943; 811-4231
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 23
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 23
The Rightime Fund, Inc.
(Exact Name of Registrant as Specified in Chapter)
218 Glenside Avenue, Wyncote, PA 19095-1594
(Address of Principal Executive Office)(Zip Code)
Registrant's Telephone Number, Including Area Code (800) 866-9393
David J. Rights, President; The Rightime Fund, Inc.;
218 Glenside Avenue, Wyncote, PA 19095-1594
(Name and Address of Agent for Service)
Please send copies of all communications to:
Steven M. Felsenstein, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public Offering: Upon effectiveness
of this amendment.
It is proposed that this filing will become effective
(check appropriate box)
immediately upon filing pursuant to paragraph (b.)
X on February 1, 1998 pursuant to paragraph (b.)
60 days after filing pursuant to paragraph (a)(1.)
___ on ____ pursuant to paragraph (a)(1.)
___ 75 days after filing pursuant to paragraph (a)(2.)
___ on ____ pursuant to paragraph (a)(2) of Rule 485.
Title of Securities Being Registered:
Common Stock, $0.01 par value.
TABLE OF CONTENTS
TO FORM N-1A
The Facing Page
1 - Cross-Reference Sheet
2 - Part A - Prospectus
3 - Part B - Statement of Additional
Information
4 - Part C - Other Information
5 - Signature Page
Exhibits
CROSS REFERENCE SHEET
N-1A
Item No. Caption or Location in Prospectus
Part A
1 Cover
2 Highlights; Expense Table
3 Financial Highlights; Performance
4 Prospectus Cover; Investment Objectives and Policies of each
Fund; Investment Restrictions
5 Board of Directors; Investment Advisor; Administrator;
Distribution of Shares; Transfer and Dividend
Disbursing Agent; Custodian; General Operations
6 Capital Stock; Dividends, Distributions and Taxes
7 Determination of Net Asset Value and Public Offering Price;
How to Purchase Shares
8 Redemption of Shares
9 N/A
Part B
10 Cover
11 Table of Contents
12 N/A
13 Cover; The Fund's Investments; Investment Restrictions
14 Distributor; Transfer and Dividend Disbursing Agent; Officers
and Directors of the Fund
15 General Information
16 Investment Advisor
17 Allocation of Portfolio Brokerage
18 N/A
19 Purchase of Shares; Exchange of Shares; Determination of Net
Asset Value; Public Offering Price
20 N/A
21 Distributor
22 Performance
23 Financial Statements
Part C
Items 24 through 32 have been answered in order in Part C.
[Graphic omitted: Rightime Logo]
Prospectus
February 1, 1998
(bullet) The Rightime Fund
(bullet) The Rightime
Blue Chip Fund
(bullet) The Rightime
MidCap Fund
(bullet) The Rightime
Social Awareness Fund
(bullet) The Rightime
Government Securities Fund
Printed on recycled paper
[Graphic omitted: Rightime Logo]
PROSPECTUS
February 1, 1998
218 Glenside Ave.
Wyncote, PA 19095
(800) 866-9393
The Rightime Fund, Inc. (the "Company"), is an open-end diversified
management investment company. It was organized as a series Maryland
Corporation on November 15, 1984 and currently offers shares of multiple
Series (hereinafter a "Fund" or "Series"), each of which has a specific
investment objective. Each Fund's investment objective is summarized
below with more information in "Investment Objectives and Policies."
The Rightime Fund. The objective of the Fund is to achieve for its
investors a high total return consistent with reasonable risk. The Fund
uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by concentrating in shares of registered investment companies
and by making other investments selected in accordance with the Fund's
investment policies and restrictions.
The Rightime Blue Chip Fund. The objective of the Fund is to achieve for
its investors a high total return consistent with reasonable risk. The
Fund uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by investing in securities of well known and established
companies ("Blue Chips") and by making other investments selected in
accordance with the Fund's investment policies and restrictions.
The Rightime MidCap Fund. The objective of the Fund is to achieve for
its investors a high total return consistent with reasonable risk. The
Fund uses a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The Fund seeks to achieve its
objective by investing in securities of companies with medium-size
market capitalization ("MidCaps") and by making other investments
selected in accordance with the Fund's investment policies and
restrictions.
The Rightime Social Awareness Fund. The objective of the Fund is to
achieve for its investors growth of capital and its secondary objective
is current income, consistent with reasonable risk. The Fund uses a
variety of investment techniques in an effort to balance portfolio risks
and to hedge market risks. The Fund seeks to achieve its objective by
investing in securities of companies with prospects for above-average
capital growth which, in the opinion of the Fund's Advisor, show
evidence in the conduct of their business, relative to other companies
in the same industry, of contributing to the enhancement of the quality
of human life, and by making other investments selected in accordance
with the Fund's investment policies and restrictions and social
criteria.
The Rightime Government Securities Fund. The objective of the Fund is to
achieve for its investors a high current income consistent with safety
and liquidity of principal. The Fund seeks to achieve this objective by
investing in securities that are issued or guaranteed as to principal
and interest by the U.S. Government, its agencies, authorities or
instrumentalities or secured by such securities, and by making other
investments selected in accordance with the Fund's investment policies
and restrictions.
- ----------------------------------------------------------------------
This Prospectus sets forth concisely the information about the Funds
that a prospective investor ought to know before investing. Investors
should read and retain this Prospectus for future reference. More
information about the Funds has been filed with the Securities and
Exchange Commission, and is contained in the "Statement of Additional
Information," dated February 1, 1998, which is available at no charge by
calling or writing the Fund. The Fund's Statement of Additional
Information is incorporated herein by reference.
- ----------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------------------------------------------------------------------
Investment Policies
The Rightime Fund, The Rightime Blue Chip Fund, and The Rightime MidCap
Fund will vary their investment strategies, including their hedging
activities, in an effort to generate a high total return, and The
Rightime Social Awareness Fund will vary its investment strategies,
including hedging activities, in an effort to achieve growth of capital
and other returns, consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
respective Fund's portfolio of securities, cash and cash equivalents,
and options and futures thereon. The Funds are unable to predict what
portion of their total return will consist of income, short-term capital
gains or long-term capital gains. Each Fund will take advantage of
opportunities to achieve its objective by establishing an "aggressive"
portfolio strategy during periods when the Advisor anticipates a
generally rising trend in securities markets which will produce income
or gains contributing to the Fund's return. Each Fund will seek to take
advantage of opportunities for dividend or interest income and stability
of principal by establishing a "conservative" portfolio strategy during
periods of time when the Advisor anticipates a generally declining trend
in securities markets, emphasizing protection of gains and income over
gains. While each Fund will continue to seek its objective, it will do
so by using investment strategies which the Advisor believes offer
protection from risk and offer more conservative expectations. In
addition, when the Advisor anticipates volatile or abnormal market
conditions, each Fund may adopt a temporary "defensive" posture which
accords a priority to protecting the inherent value of the Fund's
capital. (See "Investment Objectives and Policies" and "Investment
Restrictions.")
The Rightime Government Securities Fund will invest its assets primarily
in U.S. Government Securities, including such securities purchased on a
delayed delivery basis, or repurchase agreements secured by such
securities. The Fund may write covered call and put options and purchase
call and put options on U.S. Government Securities in an effort to
increase current income and to reduce fluctuations in net asset value.
The Fund may protect against anticipated declines in the value of
securities held or increases in the cost of securities to be acquired by
hedging through purchase and sale of futures contracts on U.S.
Government Securities and related options. The Fund may temporarily take
a defensive position by investing a greater portion of its assets in
cash, short-term U.S. Government Securities and related repurchase
agreements or otherwise reducing the general maturity of its portfolio.
(See "Investment Objectives and Policies" and "Investment
Restrictions.")
Special Considerations and Risk Factors
Prospective investors should consider a number of factors:
1. Each Fund may invest in repurchase agreements which involves risk of
loss if a seller defaults on its obligations under an agreement. (See
"Investment Objectives and Policies.")
2. Each Fund has a right to engage in futures transactions, including
index futures, for hedging purposes, to attempt to balance portfolio
volatility, and in connection therewith will maintain certain collateral
in special accounts established by our Futures Commission Merchants in
the care of our Custodian Bank. While the Fund does not engage in
futures for speculative purposes, there are risks which result from the
use of futures which are described in this Prospectus and the Statement
of Additional Information. The Fund is not registered as a commodity
pool operator nor the Advisor as a commodities trading Advisor, in
reliance upon various exemptive rules. (See "Hedging.")
3. The Rightime Fund invests in the shares of other registered
investment companies, is affected by their performance, and contributes
to the expenses of operating those companies. (See "Investment
Objectives and Policies"). The Fund has the right to investment in
investment companies which impose a sales load or sales charges. While
the Fund will seek to minimize such charges, they can reduce the Fund's
investment results.
4. The Funds expect a portfolio turnover rate higher than that of other
funds with similar objectives. The Advisor applies a market timing
approach in making investments on behalf of the Funds. (See "Investment
Objectives and Policies.")
Investment Advisor
Rightime Econometrics, Inc. (the "Advisor") serves as investment advisor
to each Fund (managing the assets and allocating portfolio
transactions). For these services, the Advisor is paid an advisory fee
by each Fund, based on its average net assets. (See "Investment
Advisor.")
How to Purchase Shares
Shares of each Fund are distributed by Lincoln Investment Planning,
Inc., the Funds' Distributor, and selected dealers. The minimum initial
investment is $1,000 and subsequent purchases must be at least $25. The
Funds have a maximum sales load of 4.75%, except for The Rightime Fund,
which has no sales load. The Funds each allow waivers of the sales load
under certain circumstances. Accounts worth less than $1,000 may be
subject to an annual maintenance fee. All the Funds bear a portion of
the costs of distributing their shares. (See "How to Purchase Shares"
and "Distribution of Shares.")
How to Redeem Shares (Sell Shares)
Shares may be redeemed by each Fund (sold by a shareholder) at any time
at the net asset value next determined after receipt of the request by
the Fund at no charge. A shareholder may submit written instructions to
the Fund, or the shareholder and/or their dealer representative may make
telephone redemptions. Each Fund has the right to redeem accounts that
are less than the minimum initial investment, currently $1,000, when the
account is not brought up to the minimum after 90 days prior notice to
the shareholder. The Fund also offers exchange privileges for
shareholders and their dealer representatives. (See "How to Redeem
Shares" and "How to Exchange Shares.")
<TABLE>
<CAPTION>
EXPENSE TABLE
The The The
Rightime Rightime Rightime The
The Government Blue Social Rightime
Rightime Securities Chip Awareness MidCap
Fund Fund Fund Fund Fund
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
A. Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) None 4.75% 4.75% 4.75% 4.75%
B. Annual Fund Operating Expenses
(as a percentage of average net assets)
Advisory Fees 0.50% 0.40% 0.50% 0.50% 0.50%
12b-1 Fees (including Distribution Fees and
0.25% Shareholder Servicing Fees) 0.75% 0.25% 0.50% 0.50% 0.50%
Other Expenses (including Administration
Fees Paid to Affiliates) 1.20% 1.64% 1.09% 1.35% 1.15%
------ ------ ------ ------ ------
Total Fund Operating Expenses 2.45% 2.29% 2.09% 2.35% 2.15%
C. Example:
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual
return; and (2) redemption at end of time period
1 Year $ 25 $ 70 $ 68 $ 70 $ 68
3 Years $ 76 $116 $110 $118 $112
5 Years $131 $164 $155 $167 $158
10 Years $279 $298 $279 $304 $285
</TABLE>
The purpose of this table is to assist in understanding the various
costs and expenses that an investor in the Funds will bear directly or
indirectly. 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 fees incurred by The Rightime Social Awareness Fund and
The Rightime MidCap Fund may be higher than those incurred by similar
type funds. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the NASD.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (For a Share Outstanding Throughout the Period)
The following information for each of the periods, as indicated below, during the five year
period ended October 31, 1997 has been examined by Tait, Weller & Baker, independent certified
public accountants, whose report thereon appears in the Funds' Annual Report to shareholders for
the period ended October 31, 1997 and is incorporated by reference in this Prospectus.
Net Net Realized Distributions
Year Net Asset Investment and Unrealized Total from Net
Ended Value Income Gain (Loss) from Investment
October 31 Beg. of Period (Loss)(a) on Investments Operations Income)
- ---------- -------------- ------------ -------------- ---------- --------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1997 $32.09 $ .43 $(1.24) $(0.81) $(0.42)
1996 37.55 1.14 2.11 3.25 (0.77)
1995 35.50 (0.10) 7.21 7.11 (0.30)
1994 37.42 0.29 (0.49) (0.20) --
1993 34.70 (0.32) 5.47 5.15 (0.05)
1992 37.33 0.06 2.16 2.22 (0.17)
1991 31.82 0.16 7.43 7.59 (0.61)
1990 32.52 0.95 (1.30) (0.36) (0.35)
1989 31.86 0.05* 1.53 1.58 (0.04)
1988 34.35 0.25 1.90 2.15 (0.39)
The Rightime Government Securities Fund
1997 $12.65 $ 0.53 $(0.81) $(0.28) $(0.49)
1996 13.06 0.52 (0.32) 0.20 (0.61)
1995 12.93 0.68 0.08 0.76 (0.63)
1994 14.31 0.61 (1.34) (0.73) (0.65)
1993 13.16 0.66 1.21 1.87 (0.72)
1992 12.86 0.71 0.19 0.90 (0.60)
1991 12.63 0.82 0.17 0.99 (0.76)
1990 14.97 0.85 (1.85) (1.00) (0.88)
1989 13.61 0.95 1.10 2.05 (0.89)
1988 13.49 0.93 0.41 1.34 (1.02)
The Rightime Blue Chip Fund
1997 $31.88 $ 0.03 $ 0.83 $ 0.86 $(0.40)
1996 32.84 0.40 3.52 3.92 (0.28)
1995 33.08 0.35 5.66 6.01 (0.46)
1994 33.14 0.39 (0.04) 0.35 (0.23)
1993 29.70 0.26 3.41 3.67 (0.23)
1992 28.22 0.25 1.55 1.80 (0.32)
1991 26.23 0.32 4.53 4.85 (0.55)
1990 27.24 0.44 0.34 0.78 (0.47)
1989 26.81 0.45 1.59 2.04 (1.61)
1988 25.28 1.66 (0.02) 1.66 (0.13)
The Rightime Social Awareness Fund
1997 $29.09 $ 0.17 $ 1.52 $ 1.69 $(0.43)
1996 32.37 0.41 3.88 4.29 --
1995 26.84 0.08 5.91 5.99 (0.46)
1994 29.07 0.33 (0.72) (0.39) --
1993 29.64 (0.02) 1.76 1.74 (0.04)
1992 25.56 0.12 4.30 4.42 (0.23)
1991 22.29 0.16 3.51 3.67 (0.40)
1990(1) 25.00 0.32 (3.03) (2.71) --
The Rightime MidCap Fund
1997 $29.02 $ 0.27 $ 1.33 $ 1.60 $(0.54)
1996 32.95 0.49 2.56 3.05 (0.14)
1995 28.44 0.26 5.25 5.51 (0.45)
1994 31.07 0.32 (0.78) (0.46) --
1993 27.08 (0.03) 4.80 4.77 (0.05)
1992(2) 25.00 0.03 2.07 2.10 (0.02)
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Distributions Distributions
Year from from Net Asset
Ended Realized Paid-in Total Value Total
October 31 Capital Gains Capital(b) Distributions End of Period Return(c)
- ---------- ------------ ------------ -------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1997 $(0.91) $ -- $(1.33) $29.95 (2.77)%
1996 (7.94) -- (8.71) 32.09 8.96
1995 (4.76) -- (5.06) 37.55 23.38
1994 (1.72) -- (1.72) 35.50 (0.48)
1993 (2.38) -- (2.43) 37.42 15.49
1992 (4.68) -- (4.85) 34.70 6.15
1991 (1.47) -- (2.08) 37.33 25.21
1990 -- -- (0.35) 31.82 (1.10)
1989 (0.78) (0.10) (0.92) 32.52 5.25
1988 (3.97) (0.28) (4.64) 31.86 6.37
The Rightime Government Securities Fund
1997 $ -- $ -- $(0.49) $11.88 (2.10)%
1996 -- -- (0.61) 12.65 1.48
1995 -- -- (0.63) 13.06 6.00
1994 -- -- (0.65) 12.93 (5.15)
1993 -- -- (0.72) 14.31 14.60
1992 -- -- (0.60) 13.16 7.20
1991 -- -- (0.76) 12.86 8.14
1990 (0.46) -- (1.34) 12.63 (7.13)
1989 -- -- (0.89) 14.97 15.38
1988 -- -- (1.02) 13.81 10.32
The Rightime Blue Chip Fund
1997 $(0.07) $ -- $(0.47) $32.27 2.63%
1996 (4.60) -- (4.88) 31.88 12.26
1995 (5.79) -- (6.25) 32.84 22.31
1994 (0.18) -- (0.41) 33.08 1.06
1993 -- -- (0.23) 33.14 12.41
1992 -- -- (0.32) 29.70 6.41
1991 (2.31) -- (2.86) 28.22 20.27
1990 (1.32) -- (1.79) 26.23 2.68
1989 -- -- (1.61) 27.24 8.42
1988 -- -- (0.13) 26.81 6.50
The Rightime Social Awareness Fund
1997 $(1.04) $ -- $(1.47) $29.31 5.77%
1996 (7.57) -- (7.57) 29.09 13.62
1995 -- -- (0.46) 32.37 22.70
1994 (1.84) -- (1.84) 26.84 (1.27)
1993 (2.27) -- (2.31) 29.07 5.82
1992 (0.11) -- (0.34) 29.64 17.43
1991 -- -- (0.40) 25.56 16.69
1990(1) -- -- 0.00 22.29 (10.84)
The Rightime MidCap Fund
1997 $(0.96) $ -- $(1.50) $29.12 5.55%
1996 (6.84) -- (6.98) 29.02 9.65
1995 (0.55) -- (1.00) 32.95 20.07
1994 (2.17) -- (2.17) 28.44 (1.38)
1993 (0.73) -- (0.78) 31.07 17.93
1992(2) -- -- (0.02) 27.08 8.40
(a) The Advisor reimbursed the respective Funds for a portion of
the Funds' expenses during certain periods.
(b) Distributions from Paid-in Capital result from required
distributions for federal excise tax purposes in excess of book
income. The Rightime Fund's statement of changes in net assets
and selected per share data for the year ended October 31, 1988
have been restated to reflect a reclass of the distribution
from net investment income to a distribution from paid-in
capital for the reason explained above.
(c) Excludes sales charge.
* Based on average monthly shares.
(1) Inception of Fund was March 1, 1990.
(2) Inception of Fund was November 11, 1991.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
Expenses to Average Net Investment Income (Loss)
Net Assets to Average Net Assets
------------------------------- -------------------------------
Average
Net Assets at the Before After Before After Portfolio Commission
RATIOS End of Period Reimbursement Reimbursement Reimbursement Reimbursement Turnover Rate Paid (#)
- ------ -------------- ------------- ------------- ------------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Rightime Fund
1997 $126,001,807 2.45% 2.45% 1.16% 1.16% 62.01% --
1996 166,490,280 2.45 2.45 3.11 3.11 15.40 --
1995 158,966,039 2.47 2.47 (0.27) (0.27) 9.45 --
1994 149,207,566 2.51 2.51 0.78 0.78 11.50 --
1993 172,178,587 2.52 2.52 (0.83) (0.83) 1.86 --
1992 170,955,840 2.56 2.56 0.15 0.15 72.63 --
1991 162,972,329 2.67 2.67 0.45 0.45 136.19 --
1990 134,295,952 2.67 2.67 1.52 1.52 383.38 --
1989 166,638,724 2.58 2.58 0.14 0.14 168.23 --
1988 284,923,878 2.58 2.58 0.53 0.53 187.25 --
The Rightime Government Securities Fund
1997 $ 8,132,287 2.29% 2.29% 4.42% 4.42% 52.14% --
1996 10,712,611 2.15 2.15 4.08 4.08 109.47 --
1995 18,632,859 1.90 1.90 5.29 5.29 77.98 --
1994 25,746,377 1.90 1.90 4.62 4.62 216.70 --
1993 33,934,808 1.98 1.98 4.72 4.72 120.80 --
1992 30,312,806 2.03 2.03 5.53 5.53 126.25 --
1991 42,234,866 1.82 1.82 5.55 5.55 309.57 --
1990 49,625,703 1.85 1.85 6.32 6.32 420.13 --
1989 35,476,441 1.99 1.99 6.63 6.63 451.57 --
1988 14,152,947 2.07 1.60 6.11 6.58 476.12 --
The Rightime Blue Chip Fund
1997 $254,386,954 2.09% 2.09% 0.05% 0.05% 39.27% $0.0294
1996 277,639,083 2.08 2.08 1.25 1.25 1.30 0.0304
1995 249,619,271 2.17 2.17 1.13 1.13 17.52 --
1994 221,681,939 2.22 2.22 1.16 1.16 0.98 --
1993 223,687,834 2.16 2.16 0.72 0.72 1.97 --
1992 211,481,090 2.25 2.25 0.87 0.87 -- --
1991 187,307,234 2.27 2.27 1.30 1.30 34.07 --
1990 128,771,363 2.35 2.35 4.36 4.36 257.91 --
1989 94,493,124 2.38 2.38 2.32 2.32 232.92 --
1988 70,136,312 2.66 2.56 9.61 9.71 1,314.65 --
The Rightime Social Awareness Fund
1997 $ 11,467,788 2.35% 2.35% 0.55% 0.55% 107.98% $0.0282
1996 8,694,248 2.42 2.42 1.51 1.51 46.57 0.0500
1995 7,378,063 2.75 2.75 0.32 0.32 36.49 --
1994 7,221,772 2.56 2.56 1.04 1.04 54.85 --
1993 10,556,506 2.40 2.40 (0.19) (0.19) 238.52 --
1992 6,525,545 2.49 2.49 0.45 0.45 276.62 --
1991 5,770,249 2.88 2.88 0.63 0.63 247.22 --
1990(1) 5,491,349 2.85* 2.85* 2.36* 2.36* 734.44 --
The Rightime MidCap Fund
1997 $ 69,295,196 2.15% 2.15% 0.82% 0.82% 107.08% $0.0360
1996 80,303,960 2.19 2.19 1.72 1.72 3.59 0.0211
1995 75,086,295 2.19 2.19 0.84 0.84 24.67 --
1994 65,252,084 2.28 2.28 1.14 1.14 0.75 --
1993 62,124,470 2.28 2.28 (0.19) (0.19) 38.79 --
1992(2) 31,311,779 2.34* 2.34* 0.17* 0.17* 35.10 --
- -------------
* Annualized
(#) Average Commission Rate Paid shows the
average cost per share paid by a Fund for
trades of equity securities for which a
commission was charged.
(1) Inception of Fund was March 1, 1990.
(2) Inception of Fund was November 11, 1991.
</TABLE>
PERFORMANCE
Total return data may from time to time be included in advertisements
about the Funds. "Total return" of a Fund refers to the average annual
compounded rates of return over certain periods that would equate an
initial amount invested at the beginning of a stated period from which
the maximum sales load is deducted to the ending redeemable value of the
investment. The Fund will provide total return for one, five and ten
year periods, as well as from inception. Non-standardized total return
quotations may also be presented for other periods, or to reflect
voluntary expense limitations in effect for the Fund in question during
the relevant period, or to reflect investment at reduced sales charge
levels or net asset value. Any quotation of total return not reflecting
the maximum sales charge, or which reflects any voluntary expense
limitations, would be reduced if the maximum sales charge were used or
Fund expenses were not voluntarily limited.
Each Fund may also include its yield, accompanied by its total return,
in advertising and other written material. Yield will be computed by
dividing the net investment income per share earned during a recent one-
month period by the maximum offering price per share of the Fund
(reduced by any undeclared earned income expected to be paid shortly as
a dividend) on the last day of the period.
The Funds may also compare their investment performance to appropriate
market indexes such as the Standard & Poor's 500 Stock Index or the
Standard & Poor's MidCap 400 Stock Index and to appropriate mutual fund
indexes such as the Lipper Growth Fund Index or the Lipper Flexible
Portfolio Fund Index. The Funds may also advertise their ranking
compared to other similar mutual funds as reported by industry analysts
such as Lipper Analytical Services, Inc.
All data is based on each Fund's past investment results and does not
predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of
the Fund's portfolio and the Fund's operating expenses. Investment
performance also often reflects the risks associated with the Fund's
investment objective and policies. These factors should be considered
when comparing the Fund to other funds and other investment vehicles.
Additional information concerning performance of the Funds is contained
in the Funds' Annual Report to shareholders and the Statement of
Additional Information which may be obtained without charge.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Fund are described below.
The investment objective of a Fund may not be changed without the
approval of a majority of the Funds' outstanding voting securities. There
can be no assurance that a Fund will achieve its objective.
The Rightime Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
concentrating (investing more than 25% of the value of its assets) in
shares of other registered investment companies and by making other
investments selected in accordance with the Fund's investment
restrictions and policies. The Fund generally seeks to invest in
securities that the Advisor has determined are consistent with
reasonable risk. The Fund will use a variety of investment techniques in
an effort to generate a high total return consisting of the sum of
interest, dividend and other income and net realized and unrealized
appreciation in the value of the Fund's portfolio of investment
companies (including money market mutual funds), cash equivalents (such
as repurchase agreements), cash, stocks, bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon. The Fund is unable to predict what portion of its total
return will consist of income, short-term capital gains or long-term
capital gains. The Fund's pursuit of high total return is tempered by an
attempt to limit the Fund to a reasonable level of risk in either
strategy.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to concentrate in a portfolio of
shares which the Advisor believes will benefit from such a trend. The
Advisor will use a risk adjusted analysis (which considers the relative
volatility of its various investments) to evaluate the investment
companies performance under various market conditions and to consider
the potential reward and potential risk. The Advisor will not select
such investment companies based solely upon their previous performance.
It is expected that such investment companies will generally invest more
than 50% of their assets in common and/or preferred stocks. In order to
make allowance for cash flow needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio the Fund may invest up
to 75% of its asset value in other investment vehicles such as common or
preferred stocks of companies which are not investment companies,
investment companies which are money market funds, cash equivalents, may
make use of various hedging techniques or may hold its assets as cash.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
the Fund's objective by investing in the shares of money market funds
and other types of investment companies, and investing up to 75% in cash
equivalents and by retaining cash. In applying the conservative strategy
to securities selection, a greater emphasis is placed in avoiding risk,
consistent with the objective of the Fund. The Fund may also seek to
achieve a high total return during such a period without disturbing or
restructuring the portfolio established by the Fund during an Aggressive
Period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
stocks, stock options, stock index options, stock index futures or
options on such futures. Stock options, stock index futures and options
thereon are utilized to "hedge" risks arising from the Fund's
investments originally selected under its "Aggressive Portfolio
Strategy," including those risks arising while the Fund is selecting
suitable investments for its assets, and are not entered into for
speculative purposes. Their use may impose a limit on the amount of
gains the Fund can achieve from the investments which are so "hedged."
(See "Hedging" and "Options and Futures.")
The Fund, by investing in shares of investment companies, indirectly
pays a portion of the operating expenses, management expenses and
brokerage costs of such companies as well as the expense of operating
the fund. Thus, the Fund's investors may indirectly pay higher total
operating expenses and other costs than they might pay by owning the
underlying investment companies directly. The Fund attempts to identify
investment companies that have demonstrated superior management in the
past, thus possibly offsetting these factors by producing better results
and/or lower costs and expenses than other investment companies. There
can be no assurance that this result will be achieved.
The Fund must also structure its investments in other investment company
shares to comply with certain provisions of federal securities laws. The
presently applicable provisions impose limits on the amount of the
investment of the Fund's assets, and those of its affiliates, in any
investment company (3% of the total outstanding stock of any such
company) and these laws and regulations also may adversely affect the
operations of the Fund with respect to purchases or redemption of shares
issued by an investment company. (The underlying investment company may
be allowed to delay redemption of its shares held by an investment
company, such as the Fund, in excess of 1% of its total assets per
month.) Consequently, when the Fund is more heavily concentrated in
small investment companies, it may not be able to readily dispose of
such investment company shares and may be forced to redeem Fund shares
in kind to redeeming shareholders by delivering shares of investment
companies that are held in the Fund's portfolio. Although the Fund may
be restricted in its ability to redeem, Fund shareholders who receive
shares upon redemption are not so restricted. Applicable fundamental
policies are reflected in the Fund's investment restrictions.
The Fund expects that it will select the investment companies in which
it will invest based, in part, upon an analysis of the past and
projected performance and investment structure of the investment
companies. However, the Fund must consider other factors in the
selection of the investment companies. These other factors include, but
are not limited to, the investment company's size, shareholder services,
liquidity, investment objective and investment techniques, etc. The Fund
may be affected by the losses of such underlying investment companies,
and the level of risk arising from the investment practices of such
investment companies (such as repurchase agreements, quality standards,
or lending of securities) and has no control over the risks taken by
such investment companies. The Fund can also elect to redeem (subject to
the 1% limitation discussed above) its investment in an underlying
investment company (or sell it if the company is a closed-end one) if
that action is considered necessary or appropriate.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Blue Chip Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
investing primarily in Blue Chip securities ("Blue Chips"). Blue Chips
include common stocks that are included in the Standard & Poor's 500
Stock Index (the "S & P 500"), a stock index of 500 common stocks that
is a widely recognized index of stock market performance, and/or that is
included in the Dow Jones Industrial Average Index of 30 common stocks
(the "DJIA"), a widely recognized index of general stock market movement
and options, stock index options, stock index futures and options on
stock index futures, based on Blue Chip common stocks. At least 65% of
the Fund's assets will usually, except when maintaining a temporary
defensive position, be invested in Blue Chips, and up to 100% may be so
invested. Such securities generally have the following characteristics:
(i) large capitalization (greater than $100 million); (ii) history of
earnings and dividends; and (iii) large number of publicly held shares
and high trading volume, resulting in a high degree of liquidity.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate a
high total return consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
Fund's portfolio of Blue Chips, cash equivalents (such as repurchase
agreements), cash, stocks, bonds and other debt obligations, stock
options, stock index options, stock index futures and options thereon.
The Fund is unable to predict what portion of its total return will
consist of income, short-term capital gains or long-term capital gains.
The Fund's pursuit of high total return is tempered by an attempt to
limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend. In
order to make allowance for cash needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio, the Fund may also
invest up to 35% of its asset value in investment vehicles which are not
Blue Chips.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing up to 35% in securities other than Blue
Chips, such as cash, cash equivalents, bonds and other debt obligations.
In applying the conservative strategy to securities selection, a greater
emphasis is placed on avoiding risk, consistent with the objective of
the Fund. The Fund may also seek to achieve its objective during such a
period without disturbing or restructuring the portfolio established by
the Fund during an Aggressive Period by using cash, cash equivalents,
proceeds of maturing securities, new assets, etc. to purchase or sell
other investment vehicles such as bonds and other debt obligations,
stock options, stock index options, stock index futures or options on
such futures. Stock options, stock index futures and options thereon are
utilized to "hedge" risks arising from the Fund's investments originally
selected under its "Aggressive Portfolio Strategy," including those
risks arising while the Fund is selecting suitable investments for its
assets, and are not entered into for speculative purposes. Their use may
reduce or impose a limit on the amount of gains the Fund can achieve
from the investments which are so "hedged." (See "Hedging" and "Options
and Futures.")
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime MidCap Fund
The Fund's objective is to achieve for its investors a high total return
consistent with reasonable risk. It seeks to achieve this objective by
investing primarily in securities of companies with medium-size market
capitalization ("MidCaps"). The Fund generally considers a medium-size
market capitalization to be between $200 million and $5 billion. Market
capitalization means the total market value of a company's outstanding
common stock. MidCaps include common stocks that are included in the
Standard & Poor's MidCap 400 Stock Index, an index of stock market
performance of 400 stocks, and options, stock index options, stock
index futures and options on stock index futures, based on MidCap
common stocks. At least 65% of the Fund's assets will usually,
except when maintaining a temporary defensive position, be invested
in MidCaps, and up to 100% may be so invested. The securities of
companies with medium-size market capitalization are traded on the
New York Stock Exchange and the American Stock Exchange and in the
over-the-counter market. Market capitalization does not necessarily
bear any correlation to other financial attributes used to describe
the size of the company, such as levels of assets, revenues or income.
Investments in MidCaps are generally considered to offer greater
opportunity for appreciation and to involve greater risk of
depreciation than securities of companies with larger market
capitalization. Since MidCaps are not broadly traded as the securities
of larger capitalized companies, they are often subject to wider and
more abrupt fluctuations in market price. Moreover, these securities
might not be as widely researched in the market. There have been
prolonged periods when these securities have substantially
underperformed or outperformed the securities of the larger
capitalization companies included in the popular stock market indices
such as the Dow Jones Industrial Average and the S & P 500.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate a
high total return consisting of the sum of interest, dividend and other
income and net realized and unrealized appreciation in the value of the
Fund's portfolio of MidCap securities, cash equivalents (such as
repurchase agreements), cash, stocks, bonds and other debt obligations,
stock options, stock index options, stock index futures and options
thereon. The Fund is unable to predict what portion of its total return
will consist of income, short-term capital gains or long-term capital
gains. The Fund's pursuit of high total return is tempered by an attempt
to limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend. In
order to make allowance for cash needs of the Fund or when the Fund is
otherwise pursuing appreciation in its portfolio, the Fund may also
invest up to 35% of its asset value in investment vehicles which are not
MidCaps.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing up to 35% in securities other than MidCaps,
such as cash, cash equivalents, bonds and other debt obligations. In
applying the conservative strategy to securities selection, a greater
emphasis is placed on avoiding risk, consistent with the objective of
the Fund. The Fund may also seek to achieve its objective during such a
period without disturbing or restructuring the portfolio established by
the Fund during an Aggressive Period by using cash, cash equivalents,
proceeds of maturing securities, new assets, etc. to purchase or sell
other investment vehicles such as bonds and other debt obligations,
stock options, stock index options, stock index futures or options on
such futures. Stock options, stock index futures and options thereon are
utilized to "hedge" risks arising from the Fund's investments originally
selected under its "Aggressive Portfolio Strategy," including those
risks arising while the Fund is selecting suitable investments for its
assets, and are not entered into for speculative purposes. Their use may
reduce or impose a limit on the amount of gains the Fund can achieve
from the investments which are so "hedged." (See "Hedging" and "Options
and Futures.")
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Social Awareness Fund
The Fund's objective is to achieve for its investors growth of capital
and its secondary objective is current income, consistent with
reasonable risk. It seeks to achieve its objective by investing in
securities of companies with prospects for above-average capital growth,
companies which the Advisor believes demonstrate the ability to exceed
the average of companies in the S & P 500. The Fund will attempt to
invest in companies which, in the opinion of the Advisor, not only meet
the Fund's investment standards, but also show evidence in the conduct
of their business, relative to other companies in the same industry, of
contributing to the enhancement of the quality of human life. This may
include companies which conduct their business in a socially responsible
manner with a demonstrable commitment to certain social issues or
enterprises that make a significant contribution to society through
their products and services and through the way they do business. The
Fund generally seeks to invest in securities that the Advisor has
determined are investments consistent with reasonable risk and offer
prospects for above-average capital growth. The Fund will normally
invest at least 65% of its total assets in securities of companies which
satisfy the financial and social criteria described herein. The Fund
will invest primarily in common stocks, but may also invest in
securities convertible into common stocks, preferred stocks and other
securities (as described below) selected by the Advisor generally on the
basis of industry analysis, including analysis of underlying economic
factors, financial characteristics and trends, securities prices and
trends, sales, earnings, products or services, new technology and
markets. The Fund generally invests in United States equity securities
that are listed on securities exchanges or traded in the over-the-
counter market. The Fund will invest in common stocks which offer
prospects for growth and which may or may not pay current dividends. The
Fund will invest in securities of well-known and established companies
as well as smaller, less well-known companies that it believes have
prospects for above-average capital growth. The Fund's investments in
smaller, less well-known companies may involve greater risk than is
inherent in securities of more established companies.
The Fund also seeks to achieve its objective by making other investments
selected in accordance with the Fund's investment restrictions and
policies. The Fund generally seeks to invest in securities that the
Advisor has determined are consistent with reasonable risk. The Fund
will use a variety of investment techniques in an effort to generate
growth of capital and other returns consisting of the sum of interest,
dividend and other income and net realized and unrealized appreciation
in the value of the Fund's portfolio of stocks, cash equivalents (such
as repurchase agreements), cash, stocks, bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon. The Fund is unable to predict what portion of its total
return will consist of income, short-term capital gains or long-term
capital gains. The Fund's pursuit of growth of capital is tempered by an
attempt to limit the Fund to a reasonable level of risk at all times.
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's objective by
establishing an "aggressive strategy" to invest in a portfolio of
securities which the Advisor believes will benefit from such a trend.
When the Advisor anticipates a generally declining trend in securities
markets, it will establish a "conservative strategy" to seek to achieve
its objective by investing in securities such as cash, cash equivalents,
bonds and other debt obligations. In applying the conservative strategy
to securities selection, a greater emphasis is placed on avoiding risk,
consistent with the objective of the Fund. The Fund may also seek to
achieve its objective during such a period without disturbing or
restructuring the portfolio established by the Fund during an Aggressive
Period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
bonds and other debt obligations, stock options, stock index options,
stock index futures or options on such futures. Stock options, stock
index futures and options thereon are utilized to "hedge" risks arising
from the Fund's investments originally selected under its "Aggressive
Portfolio Strategy," including those risks arising while the Fund is
selecting suitable investments for its assets, and are not entered into
for speculative purposes. Their use may reduce or impose a limit on the
amount of gains the Fund can achieve from the investments which are so
"hedged." (See "Hedging" and "Options and Futures.")
After determining that a prospective investment meets the financial
criteria described above, the Advisor will seek to select securities for
the Fund based upon an analysis of the relative social performance of
the issuer. The Advisor will numerically rate the social performance of
each issuer regarding specific social issues and rate the overall social
performance of each issuer between 1 and 10, with 1 indicating the
highest rating and 10 indicating the lowest. The Advisor considers
information provided by various sources, including the issuers of
securities, publicly disclosed corporate documents filed with federal
agencies, and information provided by Kinder, Lydenberg, Domini & Co.
("KLD") and its Domini Social Index (the "DSI"). The DSI is a market
capitalization-weighted common stock index which monitors the
performance of 400 corporations that pass multiple, broad-based social
screens. The DSI 400 consists of approximately 250 companies included in
the Standard & Poor's 500 Stock Index, approximately 100 of the largest
companies not included in the S & P 500 or companies providing industry
representation, and 50 companies with particularly strong social
characteristics. The Advisor may select companies listed in the DSI for
investment, but is not limited to the selection of such companies.
The DSI was created to fill two primary needs:
(bullet) To create a diversified benchmark against which social
investors can measure the investment performance of
socially screened portfolios. The DSI is constructed to
represent the broad market available to the social
investor.
(bullet) To provide a resource for social investors wishing a broad
index of companies in a variety of industries that pass
commonly applied social screens.
The DSI uses a combination of exclusionary and qualitative social
screens:
Exclusionary screens:
(bullet) Eliminate companies that derive two percent or more of
sales from military weapons systems; derive any revenues
from the manufacture of alcoholic or tobacco products; or
derive any revenues from the providing of gaming products
or services; and
(bullet) Eliminate electric utilities that own interests in nuclear
power plants or derive electricity from nuclear power
plants in which they have an interest.
Qualitative screens:
(bullet) Evaluate companies' records in areas such as diversity,
employee relations, the environment, and product. KLD makes
an effort to include companies with a positive record in
these areas.
Investors should be aware that the Fund's social criteria may limit the
availability of investment opportunities more than is customary with
other investment companies. The Advisor may change the social criteria
used to rate social performance of an issuer without prior notice or
shareholder approval.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap Fund
and The Rightime Social Awareness Fund
The Advisor will select securities for each Fund based upon an analysis
of the expected contribution of the security to the Fund's investment
objective. Equity securities (such as common and preferred stock) will
be selected based upon the expected appreciation potential, income,
and/or liquidity of the security. In selecting preferred stock, the
Advisor does not rely upon published ratings of issuers, but may
consider such ratings in making its recommendations. Debt securities
(such as bonds or other obligations, including money market securities),
will be selected after considering factors such as the interest rate and
the soundness of the issuer. The Advisor does not rely upon published
ratings of such issuers, but may consider such ratings in making its
recommendations. Preferred stocks and debt securities in which the Fund
may invest will be rated at the time of purchase Baa or higher by
Moody's Investor Service, Inc., or BBB or higher by Standard & Poor's
Corporation, or in the opinion of the Advisor will be of comparable
quality. Baa and BBB rated securities are considered to have speculative
characteristics. Adverse economic conditions and changing circumstances
are more likely to lead to a weakened capacity to pay principal and
interest. In the event the rating on an issue held in a Fund's portfolio
is changed by the ratings service, such change will be considered by the
Fund in its evaluation of the overall investment merits of that
security.
The Funds also seek to protect the value of their investments in the
Fund by temporarily foregoing the Fund's objective for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated by the Advisor (as indicated by rapidly accelerating
inflation or interest rates, sharply declining stock markets, increasing
deterioration in the banking situation and/or increasing threats to
national or world security.) This will involve the selection of high
proportions, up to 100%, of temporary defensive investments such as U.S.
Government securities or other money market securities (see "Money
Market Securities"), the use of very short portfolio maturities of 60
days or less, other investments which protect the value of the Fund, and
similar techniques such as holding cash.
The Advisor will attempt to minimize market risk by the use of "market
timing" concepts and procedures. Market timing involves the use of
analytical techniques which seek to anticipate major market trends
which, in the opinion of the Advisor, affect securities markets over
periods of time, so an investor (such as the Fund) may restructure its
portfolio of investments to increase gains or income, or avoid losses.
There can be no assurance the Advisor will achieve timing consistently.
If the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
The Rightime Government Securities Fund
The Fund's objective is to achieve for its investors a high current
income consistent with safety and liquidity of principal. The Fund seeks
to achieve this objective by investing in securities that are issued or
guaranteed as to principal and interest by the U.S. Government, its
agencies, authorities or instrumentalities ("Government Securities"),
investing in securities secured by Government Securities (such as
repurchase agreements), and by engaging in transactions involving
related options, futures and options on futures. The shares of the Fund
are not issued by the U.S. Government, nor is the Fund's net asset value
guaranteed by the U.S. Government.
Under normal circumstances at least 65% of the Fund's assets will be
invested at all times in Government Securities, including such
securities purchased on a delayed delivery basis, or repurchase
agreements secured by such securities. Government Securities include:
(1) U.S. Treasury obligations, which differ only on their interest
rates, maturities and times of issuance: U.S. Treasury bills (maturity
of one year or less), U.S. Treasury notes (maturities of one to ten
years), and U.S. Treasury bonds (generally maturities of greater than
ten years), and separated or divided U.S. Treasury securities (stripped
by the U.S. Treasury) whose payments of principal and interest are all
backed by the full faith and credit of the United States; and (2)
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, some of which are backed by the full faith and credit
of the U.S. Treasury, e.g., direct pass-through certificates of the
Government National Mortgage Association (generally referred to as
"GNMA"); some of which are supported by the right of the issuer to
borrow from the U.S. Government, e.g., obligations of Federal Home Loan
Banks; and some of which are backed only by the credit of the issuer
itself, e.g., obligations of the Student Loan Marketing Association.
Generally, GNMA's are inversely affected by changes in interest rates,
i.e., as interest rates decline, market value increases and as interest
rates rise, market value declines. Consequently, GNMA's are subject to
the risk of market price fluctuations. The Fund cannot "lock-in" long-
term interest rates by purchasing such securities because the average
life of the underlying mortgage instrument is likely to be substantially
less than the original maturity. As a result of the need to reinvest
prepayment of principal generally and the possibility of significant
unscheduled prepayments resulting from decline in mortgage interest
rates, the Fund may have to invest such assets at current rates which
may be less favorable.
The Fund may also purchase U.S. Treasury securities that have been
separated or divided by financial institutions and also receipts or
certificates representing interests in such stripped debt obligations
and coupons. Separated U.S. Treasury securities are sold under different
names including: Certificate of Accrual on Treasury Securities, Treasury
Receipts, Separated Trading of Registered Interest and Principal of
Securities and Treasury Investment Growth Receipts.
The Fund may write covered call and put options and purchase call and
put options on Government Securities in an effort to increase current
income and to reduce fluctuations in net asset value. Consistent with
the investment objective of recognizing safety and liquidity of
principal, the Fund may protect against anticipated declines in the
value of securities held or increases in the cost of securities to be
acquired by hedging through purchase or sale of futures contracts on
Government Securities and related options.
Depending on market conditions, the Fund may temporarily take a
defensive position by investing a greater portion of its assets in cash,
short-term Government Securities and related repurchase agreements or by
otherwise reducing the general maturity of its portfolio.
Government Securities do not generally involve the credit risks
associated with other types of interest bearing securities, although, as
a result, the yields available from Government Securities are generally
lower than the yields available from corporate interest-bearing
securities. To the extent the Fund purchases U.S. Treasury obligations
of medium term (maturities of one to ten years) or longer, the Fund's
net asset value will vary inversely with changes in market interest
rates. Consequently, investors in the Fund may be subject to more risk
than other funds which do not purchase investments of medium term or
longer. However, on an historical basis, securities issued or
guaranteed by the U.S. Government or its agencies and instrumentalities
have involved minimal risk of loss of principal or interest.
The Fund presently estimates that its annualized portfolio turnover rate
will generally not exceed 300%. See "Financial Highlights" for the
actual rate. Depending on market conditions, the deviation may be
material. In recent years, reduced volatility in the market place, and
the availability of hedging instruments have enabled the Fund to operate
with lower portfolio turnover rates, resulting in additional economic
benefits. In the event of higher portfolio turnover, the Fund may incur
higher brokerage costs and such portfolio turnover may result in greater
realization of gains and losses for tax purposes.
OTHER INVESTMENT POLICIES
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund
Hedging
Under certain conditions, each Fund may choose to restructure its
investments in anticipation of market movement. This could involve the
sale of investments owned by the Fund to secure gains or to avoid losses
before an expected decline in the market reduces the market value of
such securities.
In place of or to supplement such restructuring, each Fund may seek to
protect itself from anticipated market action by using "hedging"
techniques that the Fund expects will generate gains which would offset
losses on other securities owned by the Fund. These hedging techniques
could involve combinations of various techniques, such as the purchase
or sale of stocks or the use of stock options, stock index options,
stock index futures and options thereon to seek to achieve increases in
the values of such options and futures which offset decreases in the
values of other securities owned by the Fund. The Advisor would select
the specific technique(s) based upon analysis of the Fund's portfolio,
market conditions, relative costs and risks, tax effects and other
factors. There can be variations between the relative movements of
investments and hedge selected with respect to that investment. This may
increase or decrease the gains or losses each Fund achieves by its
hedging relative to its losses or gains on the hedged investments.
While the investment companies in which The Rightime Fund invests will
generally not perform in exactly the same proportions as the indexes on
which options or futures are available, the Advisor believes it can
identify certain ratios reflecting relationships between the previous
performance by such companies and the indexes on which the Fund will
engage in options or futures transactions, and will attempt to allow for
such differences in selecting its "hedging" investments. Because the
Fund does not control the underlying investment company, an unexpected
and unprecedented restructuring of the portfolio of an underlying
investment company could have an unexpected, and possibly adverse,
effect on the hedging efforts of the Advisor. If the Fund invested
directly in a portfolio of operating companies its hedging efforts
usually would not involve the risk of such an intervening level of
hedging or defensive investments. This risk is present when the Fund
invests in other investment companies, because each is separately
managed by Advisors or officers who may also hedge simultaneously or
take action which may render the Advisor's action ineffective or
unsuccessful; the Fund benefits, in this respect, from the study of the
prior records of, and the restrictions and limitations applicable to
such companies, but is dependent upon the success or failure in these
efforts of the Advisor.
Options and Futures
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund may use stock options,
stock index futures and options on such futures to "hedge" their
portfolio investments. The following descriptions illustrate some of the
techniques and risks involved in such hedging. Further information
appears in the Statement of Additional Information.
Options: Each Fund intends to purchase and/or write call and put
options that are traded on U.S. securities exchanges or over-the-
counter. Each Fund seeks to enhance its objective by receiving premiums
for writing covered call and put options. Although each Fund receives
premium income from these techniques, any appreciation realized will be
limited by the terms of the option. Each Fund may purchase call options
to protect against an increase in the price of securities that it
ultimately wants to buy. It may purchase put options to protect its
portfolio securities against a decline in market value.
Stock Index Futures: Each Fund intends to purchase and sell stock
index futures contracts. A Fund may sell stock index futures contracts
in anticipation of, or during a market decline to attempt to offset the
decrease in market value of its common stocks and/or investment company
holdings that might otherwise result; and it may purchase such contracts
in order to offset increases in the cost of common stocks and/or
investment company holdings that it intends to purchase.
Options on Stock Indexes and Stock Index Futures: Each Fund intends to
purchase and/or write call and put options on Stock Indexes which are
traded on U.S. exchanges. The Funds also intend to purchase and/or write
call and put options on stock index futures which are traded on U.S.
exchanges. Options on stock index futures are similar to options on
stocks or options on stock indexes.
The selection of the foregoing techniques or any combination of them to
be used at any particular time will depend upon an assessment of the
relative implementation costs and the liquidity of the particular
secondary market in which such options, stock index futures, and options
on stock indexes and stock index futures are traded.
Risks of Transactions in Stock Options, Stock Index Options and Options
on Stock Index Futures: An option position may be closed out only on
an exchange or with a dealer who provides a secondary market for an
option of the same series. Although the Funds will generally purchase or
write only those options for which the Advisor believes there is an
active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option. In such
event, it might not be possible to effect closing transactions in
particular options, with the result that the Fund would have to exercise
its options in order to realize any profit or allow the option to
expire. The inability to close-out these options may result in a loss to
the Fund. If exercised, the Fund would incur brokerage commissions upon
the subsequent disposition of underlying securities acquired. It is the
position of the Staff of the Securities and Exchange Commission that
over-the-counter options are illiquid. An imperfect correlation exists
between the options and securities being hedged. The success of any
hedging position depends on the ability of the Advisor to predict stock
and interest rate movement.
While the Funds have not adopted fundamental limitations on their
futures or options activities, they must comply with certain
requirements of the U.S. Securities and Exchange Commission ("SEC") and
the Commodities Futures Trading Commission. For example, these
provisions require that each Fund shall not purchase or sell any
futures or puts or calls on futures if immediately thereafter the sum
of the amount of the Fund's margin deposits (both initial and
variation deposits) and premiums paid for outstanding puts and/or
calls on futures would exceed 5% of the value of its total assets.
(While the amount represented by such premiums or margin may be small,
the value of the assets affected by options of futures may be large.)
This limitation (or the others described below) could, however, change
if regulatory provisions applicable to the Funds were to be changed.
The conditions with which each Fund will comply under the terms of an
Exemptive Order granted by the SEC to Rightime Fund, Inc.include
requirements that: (1) the Fund maintain liquid assets in the
segregated custody of its Custodian Bank equal to the combined
value of its additional obligations for futures and certain other
investments; (2) the sum of specified premiums and margins will not
exceed 5% of the Fund's market value when such investments are made;
(3) the Fund will establish and maintain funds in FCM Accounts in its
Custodian Bank as described in the Exemptive Order; and (4) the Fund
will withdraw excess variation margin from such FCM Accounts as
described in the Exemptive Order.
Money Market Securities
The Funds may invest in money market securities, which include:
marketable securities issued or guaranteed as to principal and interest
by the government of the United States or by its agencies or
instrumentalities; domestic bank certificates of deposit; bankers'
acceptances; prime commercial paper rated in the two highest categories
by Moody's and Standard & Poor's Corp.; and repurchase agreements
(secured by U.S. Treasury or agency obligations).
Under a repurchase agreement the Fund acquires a debt instrument for a
relatively short period (usually not more than one week) subject to the
obligations of the seller to repurchase and of the Fund to resell such
instrument at a fixed price. The use of repurchase agreements involves
certain risks. For example, if the seller of the agreement defaults on
its obligation to repurchase the underlying securities at a time when
the value of these securities has declined, the Fund may incur a loss
upon disposition of them. If the seller of the agreement becomes
insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, a bankruptcy court may determine that the
underlying securities are collateral not within the control of the Fund
and therefore subject to sale by the trustee in bankruptcy. Finally, it
is possible that the Fund may not be able to substantiate its interest
in the underlying securities. While management of the Funds acknowledges
these risks, it is expected that they can be controlled through
stringent security selection and careful monitoring procedures.
The Funds will select money market securities for investment when such
securities offer a current market rate of return which the Advisor
considers reasonable in relation to the risk of the investment, and the
issuer can satisfy suitable standards of creditworthiness set by the
Advisor and described in the Statement of Additional Information.
The Rightime Government Securities Fund
Futures Contracts and Options on Futures Contracts
The Fund may enter into contracts for the purchase or sale for future
delivery of fixed income securities ("Futures Contracts") and may
purchase and write options to buy or sell Futures Contracts ("Options on
Futures Contracts"). These investment techniques will only be used by
the Fund to hedge against anticipated future changes in interest rates
which otherwise might either adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of Government
Securities which the Fund intends to purchase at a later date. Should
interest rates move in an unexpected manner, the Fund may not achieve
the anticipated benefits of Futures Contracts or Options on Futures
Contracts or may realize a loss.
Options
The Fund may write (sell) "covered" put and call options on optionable
Government Securities. Call options written by the Fund give the holder
the right to buy the underlying securities from the Fund during the term
of the option at a stated exercise price; put options give the holder
the right to sell the underlying security to the Fund during the term of
the option at a stated exercise price. Call options are "covered" when
the Fund owns the underlying securities and put options are "covered"
when the Fund has established a segregated account of cash and
Government Securities which can be liquidated promptly to satisfy any
obligation of the Fund to purchase the underlying securities. The Fund
may also write straddles (combinations of puts and calls on the same
underlying security) in exchange for a combined premium on the two
writing transactions. (See "Dividends, Distributions and Taxes" in the
Statement of Additional Information for a discussion of the tax
consequences of Straddle Writing.)
The Fund will receive a premium from writing a put or call option, which
increases the Fund's gross income in the event the option expires
unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the
remaining term of the option. By writing a call option, the Fund limits
its opportunity to profit from any increase in the market value of the
underlying security above the exercise price of the option. By writing a
put option, the Fund assumes the risk that it may be required to
purchase the underlying for an exercise price higher than its then
current market value, resulting in a potential capital loss unless the
security subsequently appreciates in value.
The Fund may terminate an option that it has written prior to its
expiration by entering into a closing purchase transaction in which it
purchases an option having the same terms as the option written. It is
possible, however, that illiquidity in the options markets may make it
difficult from time to time for the Fund to close out its written option
positions. Also, the securities exchanges have established limitations
on the number of options that may be written by an investor or group of
investors acting in concert. It is possible in the future that the Fund
and other investment companies or series of this company might be
considered to be such a group. It is not contemplated that these
position limits will have any adverse impact on the Fund's portfolio
strategies.
The Fund may also purchase listed or over-the-counter put or call
options in anticipation of changes in interest rates which may adversely
affect the value of its portfolio or the prices of Government Securities
that the Fund wants to purchase at a later date. The premium paid for a
put or call option plus any transaction costs will reduce the benefit,
if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security changes sufficiently, the option
may expire without value to the Fund. The Fund intends to treat options
in respect of specific securities that are not traded on a national
securities exchange as not readily marketable and therefore subject to
the limitations set forth under "Investment Restrictions" below.
When-Issued Securities
When securities are offered on a "when-issued" basis, the price is fixed
at the time the commitment to purchase is made, but delivery and payment
for the when-issued securities takes place at a later date, normally
within one month. The Fund will establish a segregated account with the
Custodian in which it will maintain cash and marketable securities equal
in value to commitments for when-issued securities. Such segregated
securities either will mature, be replaced with cash or other comparable
securities or, if necessary, be sold on or before the settlement date.
The Fund intends to purchase when-issued securities with the purpose of
actually acquiring them, although they may be sold prior to the
settlement date if a sale appears desirable for investment reasons.
Securities purchased on a when-issued basis are subject to changes in
value based upon the public's perception of the creditworthiness of the
issuer and changes, real and anticipated, in the level of interest
rates. Securities purchased on a when-issued basis may expose the Fund
to additional risks because they may experience such fluctuations prior
to their actual delivery. Purchasing securities on a when-issued basis
can involve a risk that the yields available in the market when the
delivery takes place actually may be higher than those obtained in the
transaction itself.
Lending of Securities and Short-Sales
The Fund may make loans of Government Securities in its portfolio to
broker/dealers under contracts calling for collateral that will consist
of either Government Securities (which may have different maturities) or
cash. The Fund will continue to collect interest on the securities
loaned and will also receive either interest (through investment of cash
collateral) or a fee (if the collateral is Government Securities). The
Fund may pay fees in connection with securities loans. There may be
risks of delay in receiving additional collateral, or risks of delay in
recovery of the securities or even loss of rights of the collateral,
should the borrower of the securities fail financially. However, loans
are made only to borrowers deemed by the Advisor to be of good standing,
and when, in the judgement of the Advisor, the fee which can be earned
from such securities loan justifies the attendant risk. The Fund may
also make short sales involving either securities held in the Fund's
portfolio or securities which the Fund has the right to acquire without
paying additional consideration, generally referred to as "short sales
against the box." Such short sales involve the risk that if the Fund
holds a right to acquire a security it sells short, it may have to go
into the market to acquire the security for delivery if that security is
not received pursuant to the right to acquire. The continued obligation
to hold a security for delivery under the short sale can also cause the
Fund's assets to be tied up in the security for the intervening period,
when the Fund might otherwise determine not to use its assets in such
fashion. It is the present intention of management to make such sales
only for the purpose of deferring realization of gain or loss for
federal income tax purposes. (See "Dividends, Distributions and Taxes"
in the Statement of Additional Information.)
INVESTMENT RESTRICTIONS
The investment restrictions set forth below have been adopted by the
respective Funds to limit certain risks that may result from investment
in specific types of securities or from engaging in certain kinds of
transactions addressed by such restrictions. They may not be changed
without the affirmative vote of a majority of the outstanding voting
securities of the particular Fund. Certain of these policies are
detailed below, while other policies are set forth in the Statement of
Additional Information. Changes in values of a particular Fund's assets
or the assets of the Company as a whole will not cause a violation of
the investment restrictions so long as percentage restrictions are
observed by the Fund at the time it purchases any security.
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund
Each Fund's investment restrictions specifically provide that the Fund
will not:
(a) as to 75% of the Fund's total assets, invest more than 5% of its
total assets in the securities of any one issuer. (This limitation does
not apply to cash and cash items, obligations issued or guaranteed by
the United States government, its agencies or instrumentalities, or
securities of other investment companies);
(b) purchase more than 10% of the voting securities or more than 10% of
any class of securities of any issuer. (For purposes of this
restriction, all outstanding fixed income securities of an issuer are
considered as one class);
(c) purchase or sell commodities or commodity futures contracts, other
than those related to stock indexes as previously outlined in the
section entitled "Investment Objectives and Policies";
(d) make loans of money or securities, except (1) by the purchase of
fixed income obligations in which the Fund may invest consistent with
its investment objective and policies; or (2) by investment in
repurchase agreements (see "Investment Objectives and Policies");
(e) invest in securities of any company if, to the knowledge of the
Fund, any officer or director of the Company or the Advisor owns more
than .5% of the outstanding securities of such company and such officers
and directors (who own more than .5%) in the aggregate own more than 5%
of the outstanding securities of such company;
(f) borrow money, except the Fund may borrow from banks: (1) for
temporary or emergency purposes in an amount not exceeding 5% of the
Fund's assets; or (2) to meet redemption requests that might otherwise
require the untimely disposition of portfolio securities in an amount up
to 33-1/3% of the value of the Fund's total assets (including the amount
borrowed) valued at market less liabilities (not including the amount
borrowed) at the time the borrowing was made. While borrowings exceed 5%
of the value of the Fund's total assets, the Fund will not make
additional investments. Interest paid on borrowings will reduce net
income;
(g) pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 33-1/3% of the value of its net assets but
only to secure borrowings for temporary or emergency purposes, such as
to effect redemptions; and,
(h) purchase the securities of any issuer if, as a result, more than
10% of the value of the Fund's net assets would be invested (1) in
securities that are subject to legal or contractual restrictions on
resale ("restricted securities"), (2) in securities for which there are
no readily available market quotations, or (3) in repurchase agreements
maturing in more than seven days.
The Rightime Fund
The Fund has also adopted these two additional investment restrictions.
The Fund will not:
(i) invest in any investment company if a purchase of its shares would
result in the Fund and its affiliates owning more than 3% of the total
outstanding stock of such investment company; and,
(j) invest in any investment company which itself does not qualify as a
diversified investment company under the Internal Revenue Code.
The Rightime Government Securities Fund
The Statement of Additional Information provides a listing of investment
restrictions which govern the Fund's investment policies and a
description of strategies which may be used by the Fund in managing its
portfolio. Among other restrictions set forth therein, the Fund will not
borrow money or pledge its assets except as a temporary measure for
extraordinary or emergency purposes and not in excess of 33-1/3% of the
value of the total assets of the Fund taken at lower of their market
value or cost. If borrowings exceed 5% of the Fund's assets, the Fund
will not purchase securities.
CAPITAL STOCK
The authorized capital stock of the Company consists of 500,000,000
shares of Common Stock with a par value of $0.01 each. At the present
time 50,000,000 shares have been allocated to The Rightime Fund, and
20,000,000 shares of stock have been allocated to each of The Rightime
Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social Awareness
Fund, and The Rightime Government Securities Fund. Each share has equal
dividend, voting, liquidation and redemption rights. There are no
conversion or preemptive rights. Shares, when issued, will be fully paid
and nonassessable. Fractional shares have proportional voting rights.
Shares of the Funds do not have cumulative voting rights which means
that the holders of more than 50% of the shares voting for the election
of directors can elect all of the directors if they choose to do so and,
in such event, the holders of the remaining shares will not be able to
elect any person to the Board of Directors. The Funds' shareholders will
vote together to elect directors and on other matters affecting the
entire corporation, but will vote separately on matters affecting
separate series. The Funds do not intend to hold annual meetings of
shareholders. The Company will call a meeting of Shareholders, if
requested to do so by the holders of at least 10% of the Company's
outstanding shares, for the purpose of voting upon the question of
removal of a director or directors and will assist in communications
with other shareholders as required by Section 16(c) of the Investment
Company Act of 1940, as amended (the "Investment Company Act.")
BOARD OF DIRECTORS
The Board of Directors of the Company are fiduciaries for the Funds'
shareholders and are governed by the law of the State of Maryland in
this regard. They establish policy for the operation of the Funds, and
appoint the Officers who conduct the daily business of the Funds.
INVESTMENT ADVISOR
The investments of each Fund are managed by Rightime Econometrics, Inc.
(previously defined as the "Advisor"), 1095 Rydal Road, Rydal, PA 19046-
1711, under an investment advisory agreement (the "Advisory Agreement")
which became effective as to the Funds on the following dates: The
Rightime Fund, March 26, 1985; The Rightime Blue Chip Fund, July 1,
1987; The Rightime MidCap Fund, November 10, 1991; The Rightime Social
Awareness Fund, March 1, 1990; and The Rightime Government Securities
Fund, December 24, 1986. The Advisor has been providing investment
management services to the Funds and to separately managed accounts
since 1979 and currently has over $2 billion (including the Funds) in
assets under management.
Pursuant to each Advisory Agreement, the Advisor will manage the assets
of each Fund in accordance with the stated objective, policies and
restrictions of the Fund (subject to the supervision of the Fund's Board
of Directors and the Fund's officers.) The Advisor is responsible for
selecting brokers and dealers (including, when appropriate, Lincoln
Investment Planning, Inc. or other affiliated broker/dealers) to execute
transactions for each Fund. The Board has also authorized the Advisor
and the Company's officers to consider sales of Fund shares when
allocating brokerage, subject to the policy of obtaining best price and
execution of such transactions. The Advisor will also keep certain books
and records in connection with its services to each Fund. The Advisor
has also authorized any of its directors, officers and employees who
have been elected as directors or officers of the Company to serve in
the capacities in which they have been elected. Services furnished by
the Advisor under each Advisory Agreement may be furnished through the
medium of any such directors and officers.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of .50% of the average
daily net assets of each of The Rightime Fund, The Rightime Blue Chip
Fund, The Rightime MidCap Fund, and The Rightime Social Awareness Fund,
and .40% of the average daily net assets of The Rightime Government
Securities Fund.
David J. Rights, the Chairman of the Board, President, and Treasurer of
The Rightime Fund, Inc., has been the Portfolio Manager of each Fund
since its inception. Mr. Rights is the President and owner of all of the
voting common stock of the Advisor and has provided Lincoln Investment
Planning, Inc. with investment research and related consulting services
for over fourteen years directly or through a predecessor entity of the
same name that merged into the Advisor.
ADMINISTRATOR
Each Fund has selected Rightime Administrators, Inc. (the
"Administrator") to serve as the Administrator of the Fund. The
Administrator, which is affiliated with the Advisor, is located at 218
Glenside Avenue, Wyncote, PA 19095-1595. The Administrator serves under
an agreement (the "Administration Agreement") with the Company on behalf
of each Fund, dated the same date as the respective Fund's Advisory
Agreement. Each Administration Agreement provides that the Administrator
will administer the Fund's affairs subject to the supervision of the
Company's Board of Directors and, in connection therewith, furnish each
Fund with office facilities, and with any ordinary clerical and
bookkeeping services not furnished by the Funds' Transfer Agent or
Custodian. The Administrator has authorized any of its directors,
officers or employees who are elected as directors or officers of the
Company, including a majority of the directors who are not "interested
persons," as defined in the Investment Company Act of 1940, as amended,
with respect to each Fund. The Administrator has retained Lincoln
Investment Planning, Inc., the distributor and transfer agent for each
Fund, to provide certain accounting services and shareholder services
for each Fund.
As compensation for its services, the Administrator receives a fee,
computed daily and payable monthly, at an annualized rate of each Fund's
average daily net assets of .95% for The Rightime Fund, .85% for each of
The Rightime Blue Chip Fund, The Rightime MidCap Fund, and The Rightime
Social Awareness Fund, and .75% for The Rightime Government Securities
Fund. The Administrator will pay the fees of the Distributor for the
accounting and shareholder services referred to in the previous
paragraph.
DISTRIBUTION OF SHARES
Lincoln Investment Planning, Inc. (the "Distributor") is each Fund's
distributor under a distribution agreement ("Distribution Agreement")
dated the same as the respective Fund's Advisory and Administration
Agreements. The Distributor promotes the distribution of the shares of
Funds in accordance with the Distribution Agreements and terms of the
distribution plan of each Fund (the "Plan") adopted pursuant to Rule
12b-1 under the Investment Company Act. The Distributor has retained RTE
Securities, Inc., a separate broker/dealer firm, to provide consulting
services and to assist with wholesaling activities for the Funds. David
J. Rights who is the Chairman of the Board, President and Treasurer of
the Company is also the owner of RTE Securities, Inc., as well as a
consultant for the Distributor. Edward S. Forst, Sr. who is a Director
and the Vice-President and Secretary of the Company is also the Chairman
of the Board of the Distributor, and is considered an "affiliated
person" of the Funds under the Investment Company Act. The Distributor's
offices are at 218 Glenside Avenue, Wyncote, PA 19095-1595.
The Plans provide for the use of Fund assets to pay expenses of
distributing Fund shares. The Distribution Agreements and the Plans were
each approved by the Board of Directors, including a majority of the
directors who are not "interested persons" of the Fund as defined in the
1940 Act (and each of whom has no direct or indirect financial interest
in the Plan or any agreement related thereto, referred to herein as the
"12b-1 Directors"). Each Fund's Plan and the agreements under each Plan
may be different from, and will operate independently of, any plan
adopted by any other series of the Company. Each Plan may be terminated
at any time by the vote of the Company's Board of Directors or the 12b-1
Directors, or by the vote of a majority of the outstanding voting
securities of the Fund. While a Plan continues in effect, the selection
of the 12b-1 Directors is committed to the discretion of such persons
then in office.
As compensation for its services, the Distributor receives a fee,
computed daily and payable monthly, at an annualized rate of each Fund's
average daily net assets of .75% for The Rightime Fund, .50% for The
Rightime Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social
Awareness Fund, and .25% for The Rightime Government Securities Fund.
The Plans provide that each Fund's costs may not exceed the annual rates
listed above, for payments to the Distributor, sales representatives or
third parties who render promotional and distribution services, for
items such as advertising expenses, selling expenses, commissions or
travel reasonably intended to result in sales of shares of the Fund and
for the printing of prospectuses sent to prospective investors. The
Funds will not bear any distribution expenses in excess of their
payments to the Distributor under the Plans at the rates set forth
above.
The Plans do not limit the amounts paid to the Distributor by each Fund
to amounts actually expended by the Distributor, and it is therefore
possible for payments to the Distributor to exceed its expenses in a
particular year. At the present time, however, the budgeted expenses of
the Distributor, including commissions to its representatives and those
of other dealers, will substantially exceed the payments under each
Distribution Agreement. The Distributor will advance such amounts from
its own resources. While the Distributor has advised the Funds it hopes
to recover such "excess" payments through its normal fees in later
years, the Funds are not legally obligated to repay such excess amounts
or to continue the Plans or the Distribution Agreements for such
purpose. Although the Plans may be amended by the Board of Directors,
any change in a Plan that would materially increase the amounts
authorized to be paid under the Plan must be approved by shareholders.
The total amounts paid by the Funds under the foregoing arrangements may
not exceed the maximum Plan limit specified above, and the amounts and
purposes of expenditures under the Plan must be reported to the 12b-1
Directors quarterly. The amounts allowable under the Plan for each of
the Funds is limited by provisions complying with certain rules of the
National Association of Securities Dealers. The 12b-1 Directors may
require or approve changes in the implementation or operation of the
Plans and may also require the total expenditures by each Fund under its
Plan be kept within limits lower than the maximum amount permitted by
the Plan as stated above. The 12b-1 Directors may terminate the
Distribution Agreement in accordance with its terms on thirty days'
notice.
CUSTODIAN
CoreStates Bank, NA, Philadelphia, Pennsylvania acts as the Custodian of
the securities and cash of each Fund.
TRANSFER AND DIVIDEND DISBURSING AGENT
The Company has selected Lincoln Investment Planning, Inc. to serve as
its transfer agent, dividend disbursing agent, and as redemption agent.
In the opinion of the Board of Directors, the fees charged by Lincoln
Investment Planning, Inc. for these services are comparable to those
charged by others for comparable services. The transfer agent's expenses
will be monitored for reasonableness by the Board of Directors.
GENERAL OPERATIONS
Except as indicated above, each Fund is responsible for the payment of
its expenses, including: (a) the fees payable to the Advisor,
Administrator, and the Distributor; (b) the fees and expenses of
Directors who are not affiliated with the Advisor, the Administrator, or
the Distributor; (c) the fees and certain expenses of the Fund's
Custodian and Transfer Agent; (d) the charges and expenses of the
Company's legal counsel and independent accountants; (e) brokers'
commissions and any issue or transfer taxes in connection with its
securities transactions; (f) all taxes and corporate fees payable to
governmental agencies; (g) the fees of any trade association of which
each Fund is a member; (h) the cost of stock certificates representing
shares of each Fund; (i) reimbursements of the organization expenses of
each Fund; (j) the fees and expenses involved in registering and
maintaining registration of the Company and the shares of each Fund with
the U.S. Securities and Exchange Commission, paying notice filing fees
to states in which Fund shares are sold, and the preparation and
printing of the Company's registration statements and prospectuses; for
such purposes; (k) allocable communication expenses with respect to
investor services and all expenses of shareholders and directors
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders; and (l) litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of each
Fund's business. Expenses which are identifiable to a specific Fund are
charged to the appropriate Fund and general corporate expenses are
allocated proportionately to each Fund based on relative net assets.
DIVIDENDS, DISTRIBUTIONS AND TAXES
On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Internal Revenue Code. Because many of these changes are complex
they are discussed in the Statement of Additional Information.
The Rightime Fund, The Rightime Blue Chip Fund, The Rightime MidCap
Fund, and The Rightime Social Awareness Fund will declare and pay annual
dividends to shareholders of substantially all of its net investment
income, if any, earned during the year from investments. The Rightime
Government Securities Fund will declare and pay monthly dividends to its
shareholders of substantially all of its net investment income, if any,
earned during the year from its investments. All Funds will distribute
net realized gains, if any, once each year.
Expenses of the Funds, including the fees of the Advisor, the
Administrator, and the Distributor, are accrued each day. Reinvestments
of dividends and distributions in additional shares of the Fund will be
made at the net asset value determined on the payable date, unless the
shareholder has elected to receive the dividends and/or distributions in
cash. An election may be changed at any time by notifying the Fund.
Each of the Funds is qualified as a "regulated investment company"
under the Internal Revenue Code of 1986 (the "Code") and intends to
continue such qualification in the future. Such qualification removes
each Fund from any liability for federal income taxes upon the portion
of its net investment income and net capital gains distributed to
shareholders and makes federal income tax upon such distributed income
and capital gains the sole responsibility of the shareholders. Continued
qualification requires each Fund to distribute to its shareholders each
year substantially all of its income and capital gains. The Code imposes
a nondeductible, 4% excise tax on regulated investment companies that do
not distribute to shareholders in each calendar year, an amount equal
to: (i) 98% of its calendar year net investment income; (ii) 98% of its
net capital gains for the one-year period ending October 31; and (iii)
100% of any undistributed net investment income or net capital gains
from the prior year. Each Fund intends to declare and pay dividends and
capital gain distributions in a manner to avoid imposition of the excise
tax. Each Fund also proposes to comply with other requirements, such as:
(a) appropriate diversification of its portfolio of investments; and (b)
realization of 90% of annual gross income from dividends, interest,
gains from sale of securities, or other "qualifying income."
The Company is a series corporation. Each series of the Company (each
Fund) is treated as a separate entity for federal tax purposes. Any net
capital gains recognized by a Fund will be distributed to its investors
without need to offset (for federal tax purposes) such gains against any
net capital losses of another series.
The sale of shares of a Fund is a taxable event and may result in a
capital gain or loss. A capital gain or loss may be realized from a
redemption or exchange of shares among the Funds. In calculating any
gain or loss on a share exchange, investors should recognize that they
must hold their shares within The Rightime Blue Chip Fund, The Rightime
MidCap Fund, The Rightime Social Awareness Fund, and The Rightime
Government Securities Fund for more than 90 days in order to take into
account the sales load incurred on such shares (to the extent the
otherwise applicable sales load on the shares received in the exchange
is reduced or waived). Any amount of sales load not so taken into
account is added to the tax basis of the shares received in the
exchange. Any loss incurred on the redemption or exchange of shares held
for six months or less will be treated as a long-term capital loss to
the extent of any long-term capital gains distributed to a shareholder
by a Fund on those shares. All or a portion of any loss realized by a
shareholder upon the redemption of Fund shares will be disallowed to the
extent such a shareholder purchases other shares in the Fund (through
reinvestment of dividends or otherwise) within 30 days before or after
the share redemption. Any loss disallowed under these rules will be
added to the tax basis in the new shares purchased by such shareholder.
Any dividend or distribution to a shareholder shortly after the purchase
of a Fund's shares will have the effect of reducing the net asset value
per share of such shares by the amount of the dividend or distribution.
While such payment (whether made in cash or reinvested in shares) is in
effect a return of capital, it may be subject to income taxes.
Regardless of the length of time Fund shares have been owned by
shareholders who are subject to federal income taxes, distributions from
long-term capital gains are taxable as such.
The dividends paid by The Rightime Fund, The Rightime Blue Chip Fund,
The Rightime MidCap Fund, and The Rightime Social Awareness Fund may
qualify, in part, for the 70% dividends received deduction. Under the
1997 Act, the amount that the Fund may designate as eligible for the
dividends-received deduction will be reduced or eliminated if the shares
on which the dividends were earned by the Fund were debt-financed or
held by the Fund for less than a 46 day period during a 90 day period
beginning 45 days before the ex-dividend date of the corporate stock.
Similarly, if your Fund shares are debt-financed or held by you for less
than this same 46 day period, then the dividends-received deduction may
also be reduced or eliminated. Even if designated as dividends eligible
for the dividends-received deduction, all dividends (including the
deducted portion) must be included in your alternative minimum taxable
income calculation. The dividends paid by The Rightime Government
Securities Fund will not qualify for such deduction. Each Fund will
provide an information return to shareholders describing the Federal
tax status of the dividends paid by the Fund during the preceding
calendar year within 60 days after the end of each year as required
by present tax law. Many states grant tax-free status to dividends
paid to a shareholder from interest earned on direct obligations of
the U.S. Government, subject in some states to minimum investment
requirements that must be met by the Fund. Investments in GNMA/FNMA
securities, bankers' acceptances, commercial paper and repurchase
agreements collateralized by U.S. Government securities do not
generally qualify for tax-free treatment. Shareholders should consult
their tax Advisors concerning the state and local taxation of such
dividends, and the federal, state and local taxation of capital gain
distributions. Dividends declared in October, November or December of
any year to investors of record on any date in such month will be
deemed to have been received by the investors and paid by the series on
the earlier of: (1) the date of payment; or (2) if paid after
December 31, on December 31, provided such dividends are paid before
February 1 of the following year.
In accordance with the Code, each Fund may be required
to withhold a portion of dividends or redemptions or capital gains paid
to a shareholder and remit such amount to the Internal Revenue Service,
if the shareholder fails to furnish the Fund with a correct taxpayer
identification number, if the shareholder fails to supply the Fund with
a taxpayer identification number altogether, if the shareholder fails to
make a required certification, or if the Internal Revenue Service
notifies the Fund to withhold a portion of such distributions from an
investor's account. Certain entities, such as certain types of trusts,
may be exempt from this withholding provided they file an appropriate
exemption certificate with the Fund.
DETERMINATION OF NET ASSET VALUE AND PUBLIC OFFERING PRICE
Orders for purchases are effected at the offering price next calculated
by each Fund after receipt of the order by the Fund's Transfer Agent.
The public offering price consists of the net asset value per share next
calculated plus any applicable sales load. The offering price and the
net asset value of a Fund share are determined as of the close of
regular trading on each day the New York Stock Exchange (the "NYSE") is
open. The net asset value is determined by dividing the value of each
Fund's securities, plus any cash and other assets, less liabilities, by
the number of shares outstanding. Expenses and fees of each Fund are
accrued daily and taken into account for the purpose of determining the
net asset value.
The Rightime Fund will value redeemable securities issued by open-end
investment companies using their respective net asset values determined
at the close of the NYSE. All Funds will value a portfolio security
listed on a securities exchange at the last sales price on the
security's principal exchange on that day. Listed securities not traded
on an exchange that day, and other securities which are traded in the
over-the-counter market will be valued at the last reported bid price in
the market on that day, if any. Stock options, stock index options or
options on stock index futures traded on national security exchanges are
valued at the close of option trading on such exchanges. Stock index
futures which are traded on commodities exchanges are valued at the last
transaction price as of the close of regular trading of the particular
exchange on each day that exchange is open. The value of assets held in
The Rightime Government Securities Fund may be determined on the basis
of market values or valuations furnished by a pricing service, as
described in the Statement of Additional Information. Securities for
which market quotations are not readily available and all other assets
will be valued at their respective fair market value as determined in
good faith by, or under procedures established by the Board of
Directors.
Money market securities with less than 60 days remaining to maturity
when acquired by a Fund will be valued on an amortized cost basis by the
Fund, excluding unrealized gains or losses thereon from the valuation.
This is accomplished by valuing the security at cost and then assuming a
constant amortization to maturity of any premium or discount. If the
Fund acquires a money market security with more than 60 days remaining
to maturity, it may be valued at current market value until the 60th day
prior to maturity, and will then be valued on an amortized cost basis
based upon the value on such a date.
HOW TO PURCHASE SHARES
Each Fund offers its shares for sale to the public through its
Distributor or through any dealer or financial institution ("dealers")
that has a dealers' agreement with the Distributor. The minimum initial
investment for each Fund is $1,000 and each subsequent investment must
be not less than $25. Each Fund may waive these minimums for qualified
tax-sheltered retirement plans. Orders for purchases are effected at the
offering price next calculated by each Fund after receipt of the order
by the Fund's Distributor. (See "Determination of Net Asset Value and
Public Offering Price.") Shares of The Rightime Fund are purchased at
the net asset value without any sales charge. Shares of The Rightime
Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social Awareness
Fund, and The Rightime Government Securities Fund are purchased at the
offering price which reflects a maximum sales load of 4.75%. Lower sales
loads apply for larger purchases. See table below.
<TABLE>
<CAPTION>
Sales Load as % of
Offering Amount Dealer's
Amount of Purchase Price Invested Concession*
- ---------------------------- -------------- -------------- ----------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 3.75 3.90 3.35
$100,000 but under $500,000 2.75 2.83 2.45
$500,000 but under $1,000,000 1.75 1.80 1.55
$1,000,000 but under $2,000,000 0.75 0.76 0.65
</TABLE>
For amounts of $2 million or more there is no sales load.
* In some circumstances, the Distributor may allow a larger percentage
of the sales load to dealers. Such dealers may have additional
responsibilities under the federal securities laws.
- --------------------------------------------
Each Fund must be notified when a sale takes place that would qualify
for the reduced sales load on the basis of previous purchases and
current purchases. The reduced sales load will be granted upon
confirmation of the shareholder's holdings by the Fund.
Shareholders of The Rightime Blue Chip Fund, The Rightime MidCap Fund,
The Rightime Social Awareness Fund, and The Rightime Government
Securities Fund may reduce their sales load by signing a Letter of
Intent, that permits purchases over a 13-month period to obtain a
reduced sales load. They may also combine shares in their Rightime Blue
Chip Fund, Rightime MidCap Fund, Rightime Social Awareness Fund, and/or
Rightime Government Securities Fund accounts for Rights of Accumulation
to provide a reduced sales load on new purchases. Rights of Accumulation
are applicable to purchases made at one time by an individual; or an
individual, his or her spouse and their children under the age of 21; or
a trustee or other fiduciary of a single trust estate or a single
fiduciary account (including an employee benefit plan qualified under
Section 401 of the Internal Revenue Code.)
Shares may be purchased initially by completing the application
accompanying this Prospectus and mailing it, together with a check
payable to The Rightime Fund, Inc. to:
Rightime Fund Quick Mail The Rightime Family of Funds
P.O. Box 13813 OR 218 Glenside Avenue
Philadelphia, PA 19101-3813 Wyncote, PA 19095-1595
(Regular Mail) (Overnight Mail)
Subsequent investments to existing accounts may be made at any time
using the address above. Mail orders should include, when possible, the
"Invest By Mail" stub from your previous confirmation statement. It is
important that your account number be referenced with all subsequent
purchases or correspondence.
Shareholders who want to invest regularly may participate in the
Automatic Investing Plan. This plan allows you to buy shares ($25
minimum) through pre-authorized withdrawals from your bank account.
These investments are made on the 15th day of each month or the next
business day thereafter.
For information on purchasing shares by wire and the issuance of stock
certificates, please contact the Fund at (800) 866-9393.
The Company reserves the right in its sole discretion: (i) to suspend
the offering of its shares; (ii) to reject purchase orders when in the
best interest of the Fund; and, (iii) to reduce or waive the minimum for
initial and subsequent investments as set forth above.
The Company reserves the right to charge a $15 annual maintenance fee to
accounts which have no new purchase during a calendar year (excluding
reinvestment of dividends and capital gains), and which have balances
that remain below $1,000 during the last six months of such calendar
year. Prior to deducting the fee, the Fund will provide 90 days notice
to the shareholder, during which the shareholder may increase their
account balance to $1,000 to avoid any fee. The Fund will not charge a
fee if an account balance is worth less than $1,000 solely as a result
of a market decline or sales load or if the account is actively
participating in a systematic withdrawal plan.
Waiver of Sales Loads
The sales loads will not apply to purchases of The Rightime Blue Chip
Fund, The Rightime MidCap Fund, The Rightime Social Awareness Fund, and
The Rightime Government Securities Fund in the following circumstances
provided that the Funds are notified at the time of purchase:
(bullet) shares acquired through dividend or capital gain
reinvestment from any series of The Rightime Fund, Inc.;
(bullet) shares acquired by the officers, directors and employees of
Rightime Econometrics, Inc., Lincoln Investment
Planning, Inc., and The Rightime Fund, Inc.;
(bullet) shares acquired by any pension, profit-sharing or qualified
retirement plan of Rightime Econometrics, Inc. and
Lincoln Investment Planning, Inc.;
(bullet) shares acquired by registered representatives of dealers
who have entered into dealers' agreements with the
Distributor;
(bullet) shares acquired by certain family members of any such
individual and their spouses identified above and cer-
tain trusts, pension, profit-sharing or qualified
retirement plan for the sole benefit of such persons;
(bullet) shares acquired and paid for with the proceeds from a
Teacher's Insurance Annuity Association (TIAA) or
College Retirement Equity Fund (CREF) account, and ongoing
retirement plan investments after a TIAA-CREF
transfer is received;
(bullet) shares acquired and paid for with the proceeds from
accounts of employees of organizations who have or had a
contract or agreement with TIAA or CREF, and ongoing
retirement plan investments after the transfer is received;
(bullet) shares acquired and paid for with the proceeds of a
redemption of an account in an unaffiliated mutual fund
when the assets were managed by an outside investment
advisor or market timer for a minimum of one year;
and
(bullet) shares acquired and paid for with the proceeds of a
redemption of an account in an unaffiliated mutual fund or
insurance company which had previously incurred an initial
sales charge or contingent deferred sales charge
provided the assets maintain dealer or registered
representative continuity. To qualify for this waiver the
Fund may require evidence of the previously incurred
charges.
HOW TO REDEEM SHARES
Shareholders may redeem their shares of the Funds without charge on any
day that the Funds calculate their net asset values. (See "Determination
of Net Asset Value and Public Offering Price.") Redemptions will be
effected at the net asset value per share next determined after the
receipt of a redemption request meeting the requirements described
below. The Funds normally send redemption proceeds on the next business
day, but in any event redemption proceeds are sent within seven days of
receipt of a redemption request in proper form or within such earlier
period as required under applicable law. Any redemption proceeds may be
reinvested in the Fund at net asset value without any sales charges
within 90 days of the redemption date.
A written redemption request to the Fund must: (i) identify the
shareholder's Fund and account number; (ii) state the dollar amount or
number of shares to be redeemed; and (iii) include the signatures of all
registered owners exactly as the account is registered. If the shares to
be redeemed were issued in certificate form, the certificates must be
endorsed for transfer (or be accompanied by an endorsed stock power) and
must be submitted to the Fund together with the redemption request. A
redemption request must be accompanied by a signature guarantee for the
following:
(bullet) amounts in excess of $25,000;
(bullet) if the proceeds are to be made payable to other than the
registered owner(s); or
(bullet) if the proceeds are to be sent elsewhere than the address
of record.
A signature guarantee verifies the authenticity of the shareholder's
signature(s) and may be obtained from an acceptable financial
institution such as a bank, savings and loan association, trust company,
credit union, broker or dealer, registered securities association or
clearing agency. A notarized signature is not sufficient.
The Fund may require additional supporting documents for redemptions
made by corporations, executors, administrators, trustees and guardians.
A redemption request will not be deemed to be properly received until
the Fund receives all required documents in proper form.
Delivery of the proceeds of a redemption of shares purchased and paid
for by check or shares purchased by the automatic investing plan shortly
before the receipt of the redemption request may be delayed until the
Fund determines that its Custodian Bank has completed collection of the
funds. This may take up to 15 days. The Board of Directors may suspend
the right of redemption or postpone the date of payment for more than
seven days during any period when: (i) trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange
Commission (the "Commission") or such Exchange is closed for other than
weekends and holidays; (ii) the Commission has by order permitted such
suspension; or (iii) an emergency, as defined by rules of the
Commission, exists during which time the sale of portfolio securities or
valuation of securities held by the Fund are not reasonably practicable.
Shareholders and their dealer representatives are permitted to redeem
shares by telephone. Shareholders who establish new accounts subsequent
to the date of this prospectus by completing and returning a signed
application will automatically receive telephone redemption privileges
for themselves and their dealer representatives listed on the Fund's
records, unless the shareholder waives telephone redemption privileges
for their dealer representative or entirely by checking the appropriate
box on the application. Existing shareholders will have their accounts
converted to this telephone redemption privilege on the date of this
prospectus and must notify the Fund in writing or by telephone if they
wish to waive any portion of this privilege.
To redeem shares of your account by telephone, please call the Fund at
(800) 866-9393. Telephone redemptions:
(bullet) are not available on certain retirement accounts, such as
403(b)(7) accounts;
(bullet) are not available within 15 days of changing the address of
record on an account;
(bullet) may not exceed $25,000 in any 15-day period;
(bullet) must be payable to the registered owner(s) and mailed to
the address of record or wired to the bank account
designated on record at the Fund;
(bullet) may not be available on shares purchased by check or
automatic investing plan within 15 days of the telephone
redemption request; and
(bullet) are not available on outstanding shares issued in
certificate form.
The Funds' Transfer Agent will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. These
procedures include requiring the shareholder and/or their dealer
representative to provide personal or other identifying information.
These calls will also be recorded. For the protection of the shareholder
and the Fund, a transaction may be delayed or not implemented if the
Funds' Transfer Agent is not reasonably satisfied that the telephone
instructions are genuine. Neither a Fund nor its Transfer Agent will be
responsible for any loss, liability, cost or expense for following
instructions received by telephone that it reasonably believes to be
genuine. The Fund and the Transfer Agent may cancel the telephone
redemption privilege at any time without prior notice.
If the Board of Directors determines that it would be detrimental to the
best interest of the remaining shareholders of a Fund to make payment in
cash, the Fund may pay the redemption price in whole or in part by
distribution in kind of securities from the portfolio of the Fund. Such
securities will be valued on the basis of the procedures used to
determine the net asset value at the time of the redemption. If shares
are redeemed in kind, the redeeming shareholder may incur brokerage
costs in converting the assets into cash.
Each Fund reserves the right to redeem a shareholder's account where the
account is worth less than the minimum initial investment required when
the account is established, presently $1,000. (Any redemption of shares
from an inactive account established with a minimum investment may
reduce the account below the minimum initial investment, and could
subject the account to such redemption.) The Fund will advise the
shareholder of such intention in writing at least 90 days prior to
effecting such redemption, during which time the shareholder may
purchase additional shares in any amount necessary to bring the account
back to $1,000. The Fund will not redeem a shareholder's account that is
worth less than $1,000 solely as a result of a market decline, or if the
account is actively participating in a systematic withdrawal plan. The
Fund will not redeem a shareholder's account that has been charged an
annual maintenance fee within the current calendar year. (See "How To
Purchase Shares.")
Shareholders of a Fund worth at least $5,000 can open a Systematic
Withdrawal Plan. They can arrange to withdraw a specific dollar amount
(at least $25) on a monthly, quarterly, semiannual, or annual basis.
Interested shareholders may contact the Fund for instructions on how to
establish a systematic withdrawal plan.
HOW TO EXCHANGE SHARES
Shareholders of a Fund that has a sales load are permitted to exchange
all or part of their shares into any Fund in the Rightime Family of
Funds at net asset value, in states where shares of the Fund being
acquired can be sold. Shareholders of a Fund that does not have a sales
load, who previously incurred a sales load in connection with the
purchase of shares, which were subsequently exchanged into the Fund with
no sales load, may exchange a dollar amount equal to the current value
of such shares into another Fund at net asset value. No fees are charged
for the exchange privilege. Exchanges will be effected at the net asset
price or public offering price next determined after the receipt of the
exchange request. Exchange instructions may be in writing or by
telephone. Written exchange requests should be mailed to the Fund's
address listed in "How to Purchase Shares."
Telephone exchange requests may be made by calling the Fund at (800)
866-9393. Shareholders and their dealer representatives automatically
receive the telephone exchange privilege, unless the shareholder waives
the privilege for their dealer representative or entirely by checking
the appropriate box on the application or by calling the Fund at the
above telephone number. Telephone exchanges will be processed for
authorized accounts as long as proper identification is given by the
shareholder or dealer representative at the time of the exchange. Shares
issued in certificate form may not be exchanged by telephone.
Shareholders of a Fund may exchange their shares into and from a
designated money market portfolio organized and managed independently of
the Funds.
An exchange, for tax purposes, constitutes the sale of one fund and the
purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes. See "Dividends,
Distributions and Taxes."
The exchange privilege is subject to termination and its terms are
subject to change without notice to shareholders.
SPECIAL PLANS
Each Fund also offers its shares for use in certain Tax-Sheltered Plans
(such as IRA and 403(b)(7) plans) and Withdrawal Plans. Information on
these Plans is available from the Fund's Distributor or by reviewing the
Statement of Additional Information.
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THE RIGHTIME FUND, INC.
ADMINISTRATOR
Rightime Administrators, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
INVESTMENT ADVISOR
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
DISTRIBUTOR
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
CUSTODIAN
CoreStates Bank, NA
Broad & Chestnut Sts.
Philadelphia, PA 19101-7618
TRANSFER AGENT
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
Mailing Address
Rightime Fund Quick Mail
P.O. Box 13813
Philadelphia, PA 19101-3813
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Eight Penn Center, Suite 800
Philadelphia, PA 19103-2108
Table of Contents
Expense Table 3
Financial Highlights 4
Performance 6
Investment Objectives
and Policies 6
Other Investment Policies 13
Investment Restrictions 17
Capital Stock 18
Board of Directors 18
Investment Advisor 18
Administrator 19
Distribution of Shares 19
Custodian 20
Transfer and Dividend Disbursing
Agent 20
General Operations 21
Dividends, Distributions and Taxes 21
Determination of Net Asset Value
and Public Offering Price 22
How to Purchase Shares 23
How to Redeem Shares 25
How to Exchange Shares 26
Special Plans 27
*****************************************************
STATEMENT OF ADDITIONAL INFORMATION
THE RIGHTIME FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION DATED FEBRUARY 1, 1998
218 GLENSIDE AVENUE
WYNCOTE, PA 19095-1594
The Fund may be telephoned at (800) 866-9393.
The Rightime Fund, Inc. is an open-end diversified investment
company which offers multiple series of shares (each, a "Fund"). This
Statement of Additional Information relates to: The Rightime Fund, The
Rightime Blue Chip Fund, The Rightime MidCap Fund, The Rightime Social
Awareness Fund, and The Rightime Government Securities Fund. The shares
of each Fund may be purchased or redeemed at any time. Purchases will
be effected at the public offering price and redemptions will be
effected at net asset value next computed after the receipt of the
investor's request. A copy of the Fund's Prospectus is available
without charge upon request to the Fund.
The Rightime Fund
The Rightime Blue Chip Fund
The Rightime MidCap Fund
The objective of each of the above Funds is to achieve for its
investors a high total return consistent with reasonable risk. Each
Fund will use a variety of investment strategies in an effort to balance
portfolio risks and to hedge market risks. There is no assurance that
the objective of a Fund will be achieved.
The Rightime Social Awareness Fund
The objective of the above Fund is to achieve for its
investors growth of capital and its secondary objective is current
income, consistent with reasonable risk. The Fund uses a variety of
investment strategies in an effort to balance portfolio risks and to
hedge market risks. There is no assurance that the objective of the
Fund will be achieved.
The Rightime Government Securities Fund
The objective of the above Fund is to achieve for its
investors high current income consistent with safety and liquidity of
principal. The Fund seeks to achieve this objective by investing in
securities that are issued or guaranteed as to principal and interest by
the U.S. Government, its agencies, authorities or instrumentalities or
secured by such securities, and by investing in and by earning premiums
from transactions involving related options, futures and options on
futures. There is no assurance the objective will be achieved.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD
BE READ IN CONNECTION WITH THE FUND'S PROSPECTUS DATED FEBRUARY 1, 1998.
RETAIN THIS STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE.
TABLE OF CONTENTS
Page
Investment Objectives and Policies 1
The Rightime Fund 1
The Rightime Blue Chip Fund and
The Rightime MidCap Fund 4
The Rightime Social Awareness Fund 6
Options and Futures 8
Money Market Securities 11
The Rightime Government Securities Fund 12
Portfolio Turnover 21
Investment Restrictions 21
Investment Advisor 24
Distributor 25
Distribution Plan 26
Allocation of Portfolio Brokerage 28
Transfer Agent 28
Purchase of Shares 29
Dividends, Distribution and Taxes 32
Officers and Directors of the Fund 36
General Information 38
Performance 38
Financial Statements
INVESTMENT OBJECTIVES AND POLICIES
THE RIGHTIME FUND
The investment objective of the Fund is to achieve a high total
return consistent with reasonable risk. It seeks to achieve this
objective by concentrating in shares of investment companies and by
making other investments selected in accordance with the Fund's
investment restrictions and policies. The Fund will vary its investment
strategy as described in the Fund's Prospectus to seek to achieve its
objective. This Statement of Additional Information contains further
information concerning the techniques and operations of the Fund, the
securities in which it will invest, and the policies it will follow.
High Total Return
The Fund seeks to achieve a high total return for its shareholders.
It seeks to achieve this goal by a combination of capital appreciation
on investments (which may be emphasized during periods when a generally
rising trend in securities markets is anticipated by the Fund's
investment advisor, Rightime Econometrics, Inc. (the "Advisor") and high
income (which may be emphasized during periods when the Advisor
anticipates that income producing securities will provide performance
superior to the appreciation the Fund might otherwise achieve). The
Fund also seeks to achieve a high total return by avoiding the full
impact of periods of market decline by either shifting its investments
or by hedging its investments. The Fund does not seek the "maximum
total return" sought by some funds, because the Fund attempts to limit
to a reasonable level the risk which it will bear in the selection of
its investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by concentrating in a portfolio of shares of investment
companies which the Advisor believes will benefit from such a trend.
The Advisor will use a risk adjusted analysis (which considers the
relative volatility of its various investments) to evaluate the
investment companies' performance under various market conditions and to
consider the potential reward and potential risk. The Advisor will not
select such investment companies based solely upon their previous
performance. It is expected that such investment companies will
generally invest more than 50% of their assets in common and/or
preferred stocks. In order to make allowance for cash flow needs of the
Fund or when the Fund is otherwise pursuing appreciation in its
portfolio the Fund may also invest up to 75% of its asset value in other
investment vehicles such as common or preferred stocks of companies
which are not investment companies, investment companies which are money
market funds, cash equivalents, may make use of various hedging
techniques, or may hold its assets as cash. Though not required by its
policies to do so, the Fund may make such investments, if necessary, to
qualify as a "regulated investment company" under the Internal Revenue
Code (the "IRC"). (See "Dividends, Distributions and Taxes" in the
Prospectus for a discussion of qualification under Subchapter M of the
IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the Fund's investment
objective by investing in the shares of money market funds and other
types of investment companies, and investing up to 75% in cash
equivalents and by retaining cash. The Fund may also seek to achieve a
high total return during such a period without disturbing or
restructuring the portfolio established by the Fund during an aggressive
period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
stocks, stock options, stock index options, stock index futures or
options on such futures. (The Fund may also use such techniques to
accommodate cash needs or to avoid impairing the Fund's status as a
regulated investment company under the IRC.)
To this end, the Fund may, as to 75% or less of its asset value buy
or sell stock, stock options, stock index options, stock index futures
and options thereon to seek to counter-balance portfolio volatility
and/or market risk consistent with the intention of the investment
objective to limit investments to those which involve a reasonable risk.
Stock options, stock index futures and options thereon are utilized to
"hedge" risks arising from the Fund's investments originally selected
under its "Aggressive Portfolio Strategy," including those risks arising
while the Fund is selecting suitable investments for its assets, and are
not entered into for speculative purposes. Unlike funds which seek
"maximum" total return without limitation on the degree of risk the fund
will bear, when such option and futures techniques are used to reduce
the risk of loss (or secure investment gains) for this Fund, their use
will generally reduce or impose a limit on the amount of gains the Fund
can achieve from the investments which are so "hedged." (See "Hedging"
in the Prospectus and "Options and Futures" below.)
Other Factors
The Fund seeks to provide its shareholders with a high total return
consistent with reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for the Fund. This involves the use of "market timing"
concepts and procedures which have been developed and applied by the
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
Advisor affect securities markets over periods of time, so an investor
(such as the Fund) may restructure its portfolio of investments to
increase gains or income, or avoid losses. The Fund's Advisor will
apply such analytical techniques to the Fund's investments, including
the investment companies in which the Fund invests. It should be noted
that some members of the investment community believe that market timing
cannot be achieved successfully on a consistent basis and there can be
no assurance the Advisor will achieve such a level of consistency. If
the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, the Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stocks, stock
options, stock index options, stock index futures or options on such
futures to avoid untimely portfolio transactions, costly restructuring
of the portfolio, or adverse market effects while the Fund is investing
its assets. These techniques and securities are generally considered to
be speculative and to involve higher risks or costs to an investor. The
Fund will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by the Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
The Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing high total return for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
Investment Company Securities
The other investment companies in which the Fund invests will be
diversified investment companies managed by a number of investment
advisors and portfolio managers. This will offer the Fund an
opportunity to benefit from a variety of diversified portfolios.
Each such company will be a registered investment company, and will
operate subject to a variety of regulatory constraints. While such
regulation does not guarantee the investment success of an investment
company, or assure that it will not suffer investment losses, the
Advisor believes that such investment companies provide a sound
foundation upon which to base an investment portfolio. By investing in
a broad spectrum of such companies the Fund hopes to benefit from the
collective research and analysis of many experienced investment
personnel.
There are many types of investment companies. All maintain
portfolios which are generally liquid, but can be composed of different
kinds of securities and involve different objectives. Such companies
may seek only income, only appreciation, or various combinations of
these. They may invest in money market securities, short or long term
bonds, dividend producing stocks, tax-exempt municipal securities, or a
variety of other instruments. They may seek speculative or conservative
investments ranging from securities issued by new companies to
securities issued by "blue-chip" companies. An investment company which
has a policy of holding 80% of its assets in debt securities maturing in
thirteen months or less, or which holds itself out as a "money market
fund" will be treated as a money market fund by the Fund.
The Advisor be responsible for monitoring and evaluating these
kinds of factors to select investment company fund securities for the
Fund's portfolio in accordance with the policies and techniques
described in the Prospectus.
THE RIGHTIME BLUE CHIP FUND AND THE RIGHTIME MIDCAP FUND
The investment objective of each Fund is to achieve a high total
return consistent with reasonable risk. The Rightime Blue Chip Fund
seeks to achieve this objective by investing in shares of blue chip
securities ("Blue Chips") and by making other investments selected in
accordance with the Fund's investment restrictions and policies. The
Rightime MidCap Fund seeks to achieve this objective by investing
primarily in securities of companies with medium-size market
capitalizations ("MidCaps") and by making other investments selected in
accordance with the Fund's investment restrictions and policies. Each
Fund will vary its investment strategy as described in the Fund's
Prospectus to seek to achieve its objective. This Statement of
Additional Information contains further information concerning the
techniques and operations of each Fund, the securities in which it will
invest, and the policies it will follow.
High Total Return
Each Fund seeks to achieve a high total return for its
shareholders. Each Fund seeks to achieve this goal by a combination of
capital appreciation on investments (which may be emphasized during
periods when a generally rising trend in securities markets is
anticipated by the Advisor Fund's) and high income (which may be
emphasized during periods when the Advisor anticipates that income
producing securities will provide performance superior to the
appreciation the Fund might otherwise achieve). Each Fund also seeks to
achieve a high total return by avoiding the full impact of periods of
market decline by either shifting its investments or by hedging its
investments. The Funds do not seek the "maximum total return" sought by
some funds, because each Fund attempts to limit to a reasonable level
the risk which it will bear in the selection of its investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by investing in a portfolio of Blue Chips for The Rightime
Blue Chip Fund and MidCaps for The Rightime MidCap Fund, which the
advisor believes will benefit from such a trend. In order to make
allowance for cash flow needs of a Fund or when a Fund is otherwise
pursuing appreciation in its portfolio, the respective Fund may also
invest up to 35% of its asset value in other investment vehicles which
are not classified as such. Though not required by its policies to do
so, the Fund may make such investments, if necessary, to qualify as a
"regulated investment company" under the Internal Revenue Code (the
"IRC"). (See "Dividends, Distributions and Taxes" in the Prospectus for
a discussion of qualification under Subchapter M of the IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the respective Fund's
investment objective by investing up to 35% in securities other than
Blue Chips or MidCaps. Each Fund may also seek to achieve a high total
return during such a period without disturbing or restructuring the
portfolio established by the Fund during an aggressive period by using
cash, cash equivalents, proceeds of maturing securities, new assets,
etc. to purchase or sell other investment vehicles such as bonds and
other debt obligations, stock options, stock index options, stock index
futures or options on such futures. (Each Fund may also use such
techniques to accommodate cash needs or to avoid impairing the Fund's
status as a regulated investment company under the IRC.)
To this end, each Fund may, as to 35% or less of its asset value
buy or sell bonds and other debt obligations, stock options, stock index
options, stock index futures and options thereon to seek to counter-
balance portfolio volatility and/or market risk consistent with the
intention of the investment objective to limit investments to those
which involve a reasonable risk. Stock options, stock index futures and
options thereon are utilized to "hedge" risks arising from a Fund's
investments originally selected under its "Aggressive Portfolio
Strategy", including those risks arising while the Fund is selecting
suitable investments for its assets, and are not entered into for
speculative purposes. Unlike funds which seek "maximum" total return
without limitation on the degree of risk the fund will bear, when such
option and futures techniques are used to reduce the risk of loss (or
secure investment gains) for a Fund, their use will generally reduce or
impose a limit on the amount of gains a Fund can achieve from the
investments which are so "hedged." (See "Hedging" in the Prospectus and
"Options and Futures" below.)
Other Factors
Each Fund seeks to provide its shareholders with a high total
return consistent with reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for each Fund. This involves the use of "market timing"
concepts and procedures which have been developed and applied by the
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
investment advisor affect securities markets over periods of time, so an
investor (such as the Fund) may restructure its portfolio of investments
to increase gains or income, or avoid losses. The Advisor will apply
such analytical techniques to each Fund's investments, including the
Blue Chips in which The Rightime Blue Chip Fund invests and the MidCaps
in which The Rightime MidCap Fund invests. It should be noted that some
members of the investment community believe that market timing cannot be
achieved successfully on a consistent basis and there can be no
assurance the Advisor will achieve such a level of consistency. If the
Advisor incorrectly judges turns in the market, a Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, each Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stock options,
stock index options, stock index futures or options on such futures to
avoid untimely portfolio transactions, costly restructuring of the
portfolio, or adverse market effects while the Fund is investing its
assets. These techniques and securities are generally considered to be
speculative and to involve higher risks or costs to an investor. The
Funds will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by each Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
Each Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing high total return for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
THE RIGHTIME SOCIAL AWARENESS FUND
The investment objective of the Fund is to achieve for its
investors growth of capital and its secondary objective is current
income, consistent with reasonable risk. The Fund seeks to achieve this
objective by investing in securities of well known and established
companies, as well as smaller, less well known companies, with prospects
for above average capital growth and by making other investments
selected in accordance with the Fund's investment restrictions and
policies. As described in the Prospectus, the Fund also imposes certain
social criteria prior to selecting investments for the Fund. The Fund
will vary its investment strategy as described in the Fund's Prospectus
to seek to achieve its objective. This Statement of Additional
Information contains further information concerning the techniques and
operations of the Fund, the securities in which it will invest, and the
policies it will follow.
Growth of Capital and Income
The Fund seeks to achieve primarily growth of capital and
secondarily current income for its shareholders. The Fund seeks to
achieve this goal by a combination of capital appreciation on
investments (which may be emphasized during periods when a generally
rising trend in securities markets is anticipated by the Advisor) and
high income (which may be emphasized during periods when the investment
advisor anticipates that income producing securities will provide
performance superior to the appreciation the Fund might otherwise
achieve, consistent with maintaining the Fund's objective). The Fund
also seeks to achieve a return on its investments by avoiding the full
impact of periods of market decline by either shifting its investments
or by hedging its investments. The Fund attempts to limit to a
reasonable level the risk which it will bear in the selection of its
investments.
Aggressive Portfolio Strategy
During periods when the Advisor anticipates a rising trend in the
securities markets, it will seek to achieve the Fund's investment
objective by investing in a portfolio of securities, primarily common
stocks, which the advisor believes will benefit from such a trend. In
order to make allowance for cash flow needs of the Fund or when the Fund
is otherwise pursuing appreciation in its portfolio, the Fund may also
invest its assets in other investment vehicles. Though not required by
its policies to do so, the Fund may make such investments, if necessary,
to qualify as a "regulated investment company" under the Internal
Revenue Code (the "IRC"). (See "Dividends, Distributions and Taxes" in
the Prospectus for a discussion of qualification under Subchapter M of
the IRC.)
Conservative Portfolio Strategy
When the Advisor anticipates a generally declining trend in
securities markets, it may seek to achieve the Fund's investment
objective by investing in securities other than common stocks,
consistent with maintaining the Fund's objective. The Fund may also
seek to achieve its objective during such a period without disturbing or
restructuring the portfolio established by the Fund during an aggressive
period by using cash, cash equivalents, proceeds of maturing securities,
new assets, etc. to purchase or sell other investment vehicles such as
bonds and other debt obligations, stock options, stock index options,
stock index futures or options on such futures. (The Fund may also use
such techniques to accommodate cash needs or to avoid impairing the
Fund's status as a regulated investment company under the IRC.)
To this end, the Fund may buy or sell bonds and other debt
obligations, stock options, stock index options, stock index futures and
options thereon to seek to counter-balance portfolio volatility and/or
market risk consistent with the intention of the investment objective to
limit investments to those which involve a reasonable risk. Stock
options, stock index futures and options thereon are utilized to "hedge"
risks arising from the Fund's investments originally selected under its
"Aggressive Portfolio Strategy," including those risks arising while the
Fund is selecting suitable investments for its assets, and are not
entered into for speculative purposes. When such option and futures
techniques are used to reduce the risk of loss (or secure investment
gains) for the Fund, their use will generally reduce or impose a limit
on the amount of gains the Fund can achieve from the investments which
are so "hedged." (See "Hedging" in the Prospectus and "Options and
Futures" below.)
Other Factors
The Fund seeks to provide its shareholders with growth of capital
and with current income as a secondary objective, consistent with
reasonable risk. This involves two key concepts:
First, the Advisor will attempt to minimize market risk by
monitoring and responding to factors (such as various monetary, or
market momentum indicators) which the Advisor expects will assist it in
determining an investment posture including whether to restructure the
portfolio for a Fund. This involves the use of "market timing" concepts
and procedures which have been developed and applied by the Fund's
Advisor. Market timing involves the use of analytical techniques which
seek to anticipate major market trends which in the opinion of the
Advisor affect securities markets over periods of time, so an investor
(such as the Fund) may restructure its portfolio of investments to
increase gains or income, or avoid losses. The Advisor will apply such
analytical techniques to the Fund's investments. It should be noted
that some members of the investment community believe that market timing
cannot be achieved successfully on a consistent basis and there can be
no assurance the Advisor will achieve such a level of consistency. If
the Advisor incorrectly judges turns in the market, the Fund may lose
opportunities for gains or incur losses.
Second, when appropriate to achieve the objective and strategies
described above, the Fund intends to use investment techniques under
which it would buy or sell portfolio securities such as stock options,
stock index options, stock index futures or options on such futures to
avoid untimely portfolio transactions, costly restructuring of the
portfolio, or adverse market effects while the Fund is investing its
assets. These techniques and securities are generally considered to be
speculative and to involve higher risks or costs to an investor. The
Fund will not, however, use stock index futures and options thereon for
speculative purposes. These techniques will be used by the Fund when
appropriate to "hedge" the usual investment risks attendant upon its
investments, and the Fund believes it will therefore avoid the risks of
such speculative use of these techniques.
The Fund also seeks to protect the value of an investment in the
Fund by temporarily foregoing growth of capital for protection and
stability of its assets when volatile or abnormal market conditions are
anticipated (as indicated by rapidly accelerating inflation or interest
rates, sharply declining stock markets, increasing deterioration in the
banking situation and/or increasing threats to national or world
security). This will involve the selection of high proportions, up to
100%, of temporary defensive investments such as U.S. Government
securities or other money market securities (see "Money Market
Securities"), the use of very short portfolio maturities of 60 days or
less, other investments which protect the value of the Fund, and similar
techniques such as holding cash.
OPTIONS AND FUTURES
The following descriptions of stock options, stock index options,
stock index futures and options on such futures are summaries of the
vehicles The Rightime Fund, The Rightime Blue Chip Fund, The Rightime
MidCap Fund and The Rightime Social Awareness Fund may use to "hedge"
their respective investments, and illustrate techniques each Fund can
select to achieve such hedging.
Option Characteristics and Transactions: The Fund intends to
purchase and/or write put and call options that are traded on United
States securities exchanges and over-the-counter. A call option is a
short-term contract (having a duration of nine months or less) pursuant
to which the purchaser of the call option, in return for a premium paid,
has the right to buy the security underlying the option at a specified
exercise price at any time during the term of the option. The writer of
the call option, who receives the premium, has the obligation, upon
exercise of the option, to deliver the underlying security against
payment of the exercise price during the option period. A put option is
a similar contract which gives the purchaser of the put option, in
return for a premium, the right to sell the underlying security at a
specified price during the term of the option. The writer of the put,
who receives the premium, has the obligation to buy the underlying
security, upon exercise, at the exercise price during the option period.
A call option is "covered" if the Fund owns the underlying security
(or equivalent in the case of stock index options) covered by the call
or has an absolute and immediate right to acquire that security without
additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of
other securities held in its portfolio. A call option is also covered
if the Fund holds on share-for-share basis a call on the same security
as the call written where the exercise price of the call held is equal
to or less than the exercise price of the call written or greater than
the exercise price of the call written if the difference is maintained
by the Fund in cash, Treasury bills or other high grade short-term
obligations in a segregated account with its custodian. A put option is
"covered" if the Fund maintains cash, Treasury bills or other high grade
short-term obligations with a value equal to the exercise price in a
segregated account with its custodian, or else holds on a share-for-
share basis a put on the same security as the put written where the
exercise price of the put held is equal to or greater than the exercise
price of the put written. The premium paid by the purchaser of an
option will reflect, among other things, the relationship of the
exercise price to the market price and volatility of the underlying
security, the remaining term of the option, supply and demand and
interest rates.
If the Fund as the writer of an option wishes to terminate its
obligation, the Fund may effect a "closing purchase transaction." This
is accomplished by buying an option of the same series as the option
previously written. The effect of the purchase is that the writer's
position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after it has been
notified of the exercise of an option. Likewise, an investor (such as
the Fund) who is the holder of an option may liquidate his position by
effecting a "closing sale transaction." This is accomplished by selling
an option of the same series as the option previously purchased. There
is no guarantee that either a closing purchase or a closing sale
transaction can be effected.
Effecting a closing transaction in the case of a written call
option will permit the Fund to write another call option on the
underlying security with either a different exercise price or expiration
date, or both, or in the case of a written put option will permit the
Fund to write another put option to the extent that the exercise price
thereof is secured by deposited cash or short-term securities. Also,
effecting a closing transaction will permit the cash or proceeds from
the concurrent sale of any securities subject to the option to be used
for other Fund investments.
The Fund will realize a profit from a closing purchase transaction
if the price of the transaction is less than the premium received from
writing the option or in the case of a closing sale transaction, the
price received on the transaction is more than the premium paid to
purchase the option; the Fund will realize a loss from a closing
purchase transaction if the price of the transaction is more than the
premium received from writing the option or in the case of a closing
sale transaction, the price received on the transaction is less than the
premium paid to purchase the option. Because increases in the market
price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from the closing
purchase transaction of a call option is likely to be offset in whole or
in part by appreciation of the underlying security if it is owned by the
Fund.
Stock Index Futures Characteristics: The Fund intends to purchase
and sell stock index futures contracts as a hedge against changes in
market conditions in accordance with the portfolio strategies described
in the Prospectus. A stock index assigns relative values to the common
stocks included in the index, and the index fluctuates with the changes
in the market values of the common stocks so included. A stock index
futures contract is a bilateral agreement pursuant to which two parties
agree to take, or make delivery of, an amount of cash equal to a
specified dollar amount times the difference between the stock index
value at the close of the last trading day of the contract and the price
at which the futures contract is originally struck. No physical
delivery of the underlying stocks in the index is made.
Characteristics of Options on Stock Index Futures: The Fund
intends to purchase and/or write put and call options on stock index
futures which are traded on a U.S. exchange or Board of Trade. Options
on stock index futures are similar to options on stocks except that an
option on a stock index future gives the purchaser the right, in return
for the premiums paid, to assume a position in a stock index futures
contract (a purchase if the option is a call and a sale if the option is
a put), rather than to purchase or sell stock, at a specified exercise
price at any time during the period of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the option
to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the stock index
futures contract, at exercise, exceeds, in the case of a call, or is
less than, in the case of a put, the exercise price of the option on the
stock index future. If an option is exercised on the last trading day
prior to the expiration date of the option, the settlement will be made
entirely in cash equal to the difference between the exercise price of
the option and the closing level of the index on which the future is
based on the expiration date.
Risks of Transactions in Stock Options: An option position may be
closed out only on an exchange which provides a secondary market for an
option of the same series. Although the Fund will generally purchase or
write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option, or at any
particular time, and for some options no secondary market on an exchange
may exist. In such event it might not be possible to effect closing
transactions in particular options, with the result that the Fund would
have to exercise its options in order to realize any profit and would
incur brokerage commissions upon the exercise of call options and upon
the subsequent disposition of underlying securities acquired through the
exercise of call options or upon the purchase of underlying securities
for the exercise of put options. If the Fund as a covered call option
writer is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange
could include the following: l) there may be insufficient trading
interest in certain options; 2) restrictions may be imposed by an
exchange on opening transactions or closing transactions or both; 3)
trading-halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying
securities; 4) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; 5) the facilities of an exchange or a
clearing corporation may not at all times be adequate to handle current
trading volume; or 6) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in
which event the secondary market on that exchange (or in the class or
series of options) would cease to exist, although outstanding options on
that exchange that had been issued by a clearing corporation as a result
of trades on that exchange would continue to be exercisable in
accordance with their terms. There is no assurance that higher than
anticipated trading activity or other unforeseen events might not, at
times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an
exchange of special procedures which may interfere with the timely
execution of customers' orders. However, the Options Clearing
Corporation, based on forecasts provided by the U.S. exchanges, believes
that its facilities are adequate to handle the volume of reasonably
anticipated options transactions, and such exchanges have advised such
clearing corporation that they believe their facilities will also be
adequate to handle reasonably anticipated volume.
When the Fund enters into a futures transaction, it must
deliver to the Futures Commission Merchant (the "FCM") selected by the
Fund an amount referred to as "initial margin." This amount is
maintained by the FCM in an account at the Fund's Custodian Bank.
Thereafter "variation margin" may be paid by the Fund to, or drawn by
the Fund from, such account in accordance with the controls set for such
account. These controls, including the requirement that the Fund draw
out amounts in excess of $50,000 in any one such account, are intended
to protect the Fund from misappropriation of such "margin." The Fund
will carefully monitor such accounts to seek to minimize the risk
attendant upon such accounts.
The Fund will also request that the Custodian Bank segregate
other securities of the Fund equal in value to the Fund's potential
liability under such transactions in excess of any amount held by the
FCM, so that the Fund will always have the necessary assets to fulfill
its obligation. The segregated account procedures will comply with
Investment Company Act Release Number 10666 so the Fund will not be
deemed to be engaged in the issuance of senior securities.
MONEY MARKET SECURITIES
Although The Rightime Fund intends to concentrate its investments
in investment company securities and The Rightime Blue Chip Fund, The
Rightime MidCap Fund, and The Rightime Social Awareness Fund intend to
invest their assets primarily in common stocks, each Fund may invest its
assets directly in money market securities whenever deemed appropriate
by the Advisor to achieve the Fund's investment objective. It may
invest without limitation in such securities on a temporary basis for
defensive purposes.
Securities issued or guaranteed as to principal and interest by the
United States government ("Government Securities") include a variety of
Treasury securities, which differ in their interest rates, maturities
and date of issue. Treasury bills have a maturity of one year or less;
Treasury notes have maturities of one to ten years; Treasury bonds
generally have a maturity of greater than five years. Each Fund will
only acquire Government Securities which are supported by the "full
faith and credit" of the United States. Securities which are backed by
the full faith and credit of the United States include Treasury bills,
Treasury notes, Treasury bonds, and obligations of the Government
National Mortgage Association, the Farmers Home Administration, and the
Export-Import Bank. The Fund's direct investments in money market
securities will generally favor securities with shorter maturities
(maturities of less than 60 days) which are less affected by price
fluctuations than those with longer maturities.
Certificates of deposit are certificates issued against funds
deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return. Bankers'
acceptances are negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specific merchandise, which are
"accepted" by a bank, meaning, in effect, that the bank unconditionally
agrees to pay the face value of the instrument on maturity. Investments
in bank certificates of deposit and bankers' acceptances are limited to
domestic banks and savings and loan associations that are members of the
Federal Deposit Insurance Corporation having total assets in excess of
five hundred million dollars ("Domestic Banks").
Investments in prime commercial paper may be made in notes, drafts,
or similar instruments payable on demand or having a maturity at the
time of issuance not exceeding nine months, exclusive of days of grace,
or any renewal thereof payable on demand or having a maturity likewise
limited.
Under a repurchase agreement the Fund acquires a debt instrument
for a relatively short period (usually not more than one week) subject
to the obligation of the seller to repurchase and the Fund to resell
such debt instrument at a fixed price. The Fund will enter into
repurchase agreements only with banks which are members of the Federal
Reserve System, or securities dealers who are members of a national
securities exchange or are market makers in government securities and in
either case, only where the debt instrument collateralizing the
repurchase agreement is a U.S. Treasury or agency obligation supported
by the full faith and credit of the U.S. A repurchase agreement may
also be viewed as the loan of money by the Fund to the seller. The
resale price specified is normally in excess of the purchase price,
reflecting an agreed upon interest rate. The rate is effective for the
period of time the Fund is invested in the agreement and may not be
related to the coupon rate on the underlying security. The term of
these repurchase agreements will usually be short (from overnight to one
week) and at no time will the Fund invest in repurchase agreements of
more than sixty days. The securities which are collateral for the
repurchase agreements, however, may have maturity dates in excess of
sixty days from the effective date of the repurchase agreement. The
Fund will always receive, as collateral, securities whose market value,
including accrued interest, will be at least equal to 100% of the dollar
amount to be paid to the Fund under each agreement at its maturity, and
the Fund will make payment for such securities only upon physical
delivery or evidence of book entry transfer to the account of the
Custodian. If the seller defaults, the Fund might incur a loss if the
value of the collateral securing the repurchase agreement declines, and
might incur disposition costs in connection with liquidation of the
collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the security, collection of the collateral by
the Fund may be delayed or limited. The Fund may not enter into a
repurchase agreement with more than seven days to maturity if, as a
result, more than 10% of the market value of the Fund's net assets would
be invested in such repurchase agreements together with any other
illiquid assets.
THE RIGHTIME GOVERNMENT SECURITIES FUND
The objective of the Fund is to achieve for its investors a high
current income, consistent with safety and liquidity of principal.
The Fund seeks to achieve its investment objective by investing in
securities that are issued or guaranteed as to principal and interest by
the U.S. Government, its agencies, authorities or instrumentalities
("Government Securities") or securities secured by such securities, and
by engaging in transactions involving related options, futures and
options on futures.
This Statement of Additional Information contains further
information concerning the techniques and operations of the Fund, the
securities in which it will invest, and the policies it will follow.
Government Securities include: (1) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance:
U.S. Treasury bills (maturity of one year or less), U.S. Treasury notes
(maturities of one to 10 years), and U.S. Treasury bonds (generally
maturities of greater than 10 years) all of which are backed by the full
faith and credit of the United States; and (2) obligations issued or
guaranteed by U.S. Government agencies or instrumentalities, some of
which are backed by the full faith and credit of the U.S. Treasury,
e.g., direct pass-through certificates of the Government National
Mortgage Association, some of which are supported by the right of the
issuer to borrow from the U.S. Government, e.g., obligations of Federal
Home Loan Banks, and some of which are backed only by the credit of the
issuer itself, e.g., obligations of the Student Loan Marketing
Association.
The Fund may also purchase separated or divided U.S. Treasury
securities. Separated or Divided U.S. Treasury securities is the term
used by the Fund to describe U.S. Treasury bills, notes and bonds which
have been stripped of their unmatured interest coupons. These
securities are often referred to as zero coupon Treasury Securities or
Treasury Receipts. The term also describes the stripped coupons
themselves and receipts or certificates representing interest in the
stripped obligations and coupons. Like a Treasury bill, a zero-coupon
security pays no interest to its holder during its life. Its value to
an investor consists of the difference between its face value at the
time of maturity and the price for which it was acquired, which is
generally an amount substantially less than its face value (sometimes
referred to as a "deep discount" price).
Currently the only U.S. Treasury security issued without coupons is
the Treasury bill. However, in the last few years a number of banks and
brokerage firms have separated ("stripped") the principal portions
("corpus") from the coupon portions of the U.S. Treasury bonds and notes
and sold them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments
are generally held by a bank in a custodial or trust account). The
timely payment of interest and principal on the stripped securities
remains guaranteed by the "full, faith and credit" of the U.S.
Government. The receipts and certificates are sold at a discount from
face value. Their prices may exhibit greater volatility than ordinary
debt securities because of the manner in which their principal and
interest is returned to the investor. The investor's yield is computed
by amortizing the difference between the discounted purchase price and
the face value at the purchase price and the face value at the maturity
date over the life of the security, rather than interim interest
payments. More recently, the U.S. Treasury Department has facilitated
the stripping of Treasury notes and bonds by permitting the separated
corpus and coupons to be transferred directly through the Federal
Reserve Banks' book-entry system. This program, which eliminates the
need for custodial or trust accounts to hold the Treasury securities, is
called "Separate Trading of Registered Interest and Principal of
Securities". Each such stripped instrument (or receipt) entitles the
holder to a fixed amount of money from the Treasury at a single,
specified future date. The U.S. Treasury redeems zero coupon securities
consisting of the corpus for the face value thereof at maturity and
those consisting of stripped coupons for the amount of interest, and at
the date, stated thereon.
Separated or divided U.S. Treasury Securities represent a single
interest, or principal, payment on a U.S. Treasury bond which has been
separated from all the other interest coupons as well as the bond
itself. When the Fund purchases such an instrument, it purchases the
right to receive a single payment of a set sum at a known date in the
future. The interest rate on such an instrument is determined by the
difference between the price the Fund pays for the instrument when it
purchases the instrument at a discount and what the instrument entitles
the Fund to receive when the instrument matures. That difference is
amortized and accrued each day during the time the security is held.
The amount of the discount the Fund will receive will depend upon the
length of time to maturity of the separated U.S. Treasury security and
prevailing market interest rates when the separated U.S. Treasury
security is purchased. Separated U.S. Treasury securities can be
considered a zero coupon investment because no payment is made to the
Fund until maturity. These investments' market values are much more
susceptible to changes in market interest rates than income-producing
securities. These securities are purchased with original issue discount
and such discount is includable as gross income to a Fund shareholder
over the life of the security. The Fund does not intend to hold such
securities to maturity for the purpose of achieving potential capital
gains, unless current yields on these securities remain attractive.
The Fund may temporarily take a defensive position by investing a
greater portion of its assets in cash, short term Government Securities
and related repurchase agreements or by reducing the average weighted
maturity of its portfolio. The Fund may enter into repurchase
agreements (a purchase of and simultaneous commitment to resell a
security at an agreed upon price on an agreed upon date) from a seller,
usually a bank or brokerage firm, and only for Government Securities.
The value of the securities held by the custodian pursuant to the
repurchase agreement will at all times be greater than or equal to the
resale price. The resale price is in excess of the purchase price and
reflects an agreed upon market rate unrelated to the coupon rate on the
purchased security. Such transactions afford the Fund the opportunity
to earn a return on temporarily available cash at minimal market rise.
While the underlying security may be a bill, certificate of
indebtedness, note or bond issued by an agency, authority or
instrumentality of the United States Government, the obligation of the
seller is not guaranteed by the United States Government. If the vendor
fails to pay the sum agreed to on the agreed upon delivery date, the
Fund would have the right to sell the Government Securities, but might
incur a loss in so doing and in certain cases may not be permitted to
sell the Government Securities. For additional information concerning
repurchase agreements, see "Investment Restrictions" in this Statement
of Additional Information.
Government Securities do not generally involve the credit risks
associated with other types of interest bearing securities, although, as
a result, the yields available from Government Securities are generally
lower than the yields available from corporate interest bearing
securities. To the extent the Fund purchases U.S. Obligations of medium
term or longer, the Fund's net asset value will vary inversely with
changes in market interest rates. Consequently, investors in the Fund
may be subject to more risk than other funds which do not purchase
investments of medium term or longer. However, on an historical basis,
securities issued or guaranteed by the U.S. Government or its agencies
and instrumentalities have involved minimal risk of loss of principal or
interest.
Changes in the value of the Fund's portfolio securities subsequent
to their acquisition are reflected in the net asset value of shares of
the Fund. Such changes do not affect the income received by the Fund
from such securities. However since available yields vary over time, no
specific level of income can ever be assured. The dividends paid by the
Fund will increase or decrease in relation to the income received by the
Fund from its investments, which will in any case be reduced by the
Fund's expenses before being distributed to the Fund's shareholders.
When Issued and Delayed Delivery Transactions: The Fund may
purchase and sell securities on a "when issued" and "delayed delivery"
basis, that is, obligate itself to purchase or sell securities with
delivery and payment to occur at a later date in order to secure what is
considered to be an advantageous price and yield to the Fund at the time
of entering into the obligation. When the Fund engages in "when issued"
and "delayed delivery" transactions, the Fund relies on the buyer or
seller, as the case may be, to consummate the sale. Failure to do so
may result in the Fund missing the opportunity of obtaining a price or
yield considered to be advantageous. No interest accrues to the Fund
with respect to securities purchased on a "when issued" or "delayed
delivery" basis until delivery and payment take place. Such securities
are subject to market fluctuation; the value at delivery may be less
than the purchase price. "When issued" and "delayed delivery"
transactions may be expected to occur a month or more before delivery is
due. No payment or delivery, however, is made by the Fund until it
receives delivery or payment from the other party to the transaction.
The Fund will maintain in a segregated account with its custodian, cash,
Treasury bills, or other U.S. Government securities having an aggregate
value equal to the amount of such purchase commitments until payment is
made. To the extent the Fund engages in "when issued" and "delayed
delivery" transactions, it will do so for the purpose of acquiring
securities for the Fund's portfolio consistent with the Fund's
investment objective and policies and not for the purpose of investment
leverage.
Futures Contracts and Options on Futures Contracts: The Fund may
enter into contracts for the purchase or sale for future delivery of
fixed income securities ("Futures Contracts"). This investment
technique is designed to hedge (i.e., protect) against anticipated
changes in interest rates which otherwise might either adversely affect
the value of the Fund's portfolio securities or adversely affect the
prices of Government Securities which the Fund intends to purchase at a
later date.
When a Futures Contract is sold, the Fund incurs a contractual
obligation to deliver the securities underlying the contract at a
specified price on a specified date during a specified future month. A
"purchase" of a Futures Contract means the acquisition of a contractual
right to obtain delivery to the Fund of the securities called for by the
contract at a specified price during a specific future month.
Futures Contracts have been designed by exchanges which have been
designated "contract markets" by the Commodity Futures Trading
Commission ("CFTC"), and must be executed through a futures commission
merchant, or brokerage firm, which is a member of the relevant contract
market. Futures Contracts trade on these markets, and the exchanges,
through their clearing organizations, guarantee that the contracts
between the clearing members of the exchange will be performed. The
Fund will only enter into Futures contracts which are based on
Government Securities, including any index of government securities.
While Futures Contracts based on debt securities provide for the
delivery of securities, deliveries usually do not occur. Contracts are
generally terminated by entering into an off-setting transaction. The
Fund will incur brokerage fees when it purchases or sells Futures
Contracts. At the same time such a purchase or sale is made, the Fund
must provide cash or securities as a deposit ("initial deposit") known
as "margin." It is expected that the initial deposit would be
approximately 4% of the contract's face value. Daily thereafter, the
Futures Contract is valued and the payment of "variation margin" may be
required since each day the Fund may provide or receive cash that
reflects the decline or increase in the value of the contract. At the
time of delivery of securities pursuant to such a contract, adjustments
are made to recognize differences in value arising from the delivery of
securities with different interest rate than the specific security that
provides the standard for the contract. In some (but not many) cases,
securities called for by a Futures Contract may not have been issued
when the contract was written.
The purpose of the purchase or sale of a Futures Contract, in the
case of a portfolio such as the Fund's portfolio, which holds or intends
to acquire Government Securities, is to protect the Fund against the
adverse effects of fluctuations in interest rates without actually
buying or selling such securities. For example, if the Fund owns
Government Securities, and if interest rates were expected to increase,
the Fund might enter into Futures Contracts for the sale of such
securities. Such a sale would have much the same economic effect as
selling an equivalent value of the Government Securities the Fund owns.
If interest rates did increase, the value of the securities in the
portfolio would decline, but the value of the Fund Futures Contracts
would increase at approximately the same rate thereby keeping the net
asset value of the Fund from declining, or declining as much as it
otherwise would have.
Similarly, when it is expected that interest rates may decline,
Futures Contracts may be purchased to hedge in anticipation of
subsequent purchases of Government Securities at higher prices. The
Fund could take advantage of the anticipated rise in the value of such
securities without actually buying them until the necessary cash became
available or the market had stabilized. At that time, the Futures
Contracts could be liquidated and the Fund could buy the Government
Securities on the cash market. Due to changing market conditions,
however, and interest rate forecasts, a futures position may be
terminated without a corresponding purchase of securities. The Fund
could accomplish similar results by selling Government Securities with
long maturities and investing in Government Securities with short
maturities when interest rates are expected to increase. However, when
the futures market is more liquid than the cash market, the use of
Futures Contracts as a hedging technique allows the Fund to maintain a
defensive position without having to sell its portfolio securities. To
the extent the Fund enters into Futures Contracts for these purposes, it
will maintain a segregated asset account consisting of cash or high
grade Government Securities in an amount equal to the difference between
the fluctuating market value of such Futures Contracts and the aggregate
value of the initial deposit and variation margin payments made by the
Fund with respect to such Futures Contracts.
The ordinary spreads between prices in the cash and futures
markets, due to differences in the natures of those markets, are subject
to distortions. First, all participants in the futures market are
subject to initial deposit and variation margin requirements. Rather
than meeting additional variation margin requirements, investors may
close Futures Contracts through offsetting transactions which could
distort the normal relationship between the cash and futures markets.
Second, the liquidity of the futures market depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing
distortion. Third, from the point of view of speculators, the margin
deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore increased
participation by speculators in the futures market may cause temporary
price distortions. Due to the possibility of such distortion, a correct
forecast of general interest rate trends by the Advisor may still not
result in a successful transaction.
The liquidity of a market in a futures contract may also be
adversely affected by "daily price fluctuation limits" established by
commodity exchanges which limit the amount of fluctuation in a futures
contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price
beyond the limit, thus preventing the liquidation of open futures
positions. Prices have in the past exceeded the daily limit on a number
of consecutive trading days. On any day or days when the price
fluctuation limits have been reached, the Fund may be unable to
liquidate existing futures positions or to implement a hedging strategy
through the purchase or sale of particular futures.
The Fund will not maintain open short positions in futures
contracts if, in the aggregate, the value of its open positions (marked
to market) exceeds the current market value of its securities portfolio
plus or minus the unrealized gain or loss on such open positions,
adjusted for historical volatility relationship between the portfolio
and futures contracts.
Investments in Futures Contracts entail the risk that if the
Advisor's investment judgment about the general direction of interest
rates is incorrect the Fund's overall performance may be poorer than if
it had not entered into any such contract. For example, if the Fund has
hedged against the possibility of an increase in interest rates which
would adversely affect the price of Government Securities held in its
portfolio and interest rates decrease instead, the Fund will lose part
or all of the benefit of the increased value of its Government
Securities which it has because it will have offsetting losses in its
futures position. In addition, in such situations, if the Fund had
insufficient cash, it may have to sell Government Securities from its
portfolio to meet daily variation margin requirements. Such sale of
Government Securities may be, but will not necessarily be, at increased
prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.
The Fund intends to purchase and sell options on Futures Contracts
for hedging purposes. The purchase of a call option on a futures
contract is similar in some respects to the purchase of a call option on
an individual security. Depending on the pricing of the option compared
to either the price of the futures contract upon which it is based or
the price of the underlying security, it may or may not be less risky
than ownership of the futures contract or underlying security. As with
the purchase of futures contracts, when the Fund is not fully invested
it may purchase a call option on a futures contract to hedge against a
market advance due to declining interest rates.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price
at expiration of the option is below the exercise price, the Fund will
retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in the portfolio
holdings. The writing of a put option on a futures contract constitutes
a partial hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price
at expiration of the option is higher than the exercise price, the Fund
will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of Government Securities
which the Fund intends to purchase. If a put or call option the Fund
has written is exercised, the Fund will incur a loss which will be
reduced by the amount of the premium it receives. Depending on the
degree of correlation between changes in the value of its portfolio
securities and changes in the value of its futures positions, the Fund's
losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.
The purchase of put options on a futures contract is similar in
some respects to the purchase of protective put options on portfolio
securities. The Fund will purchase a put option on a futures contract
to hedge the Fund's portfolio against the risk of rising interest rates.
The amount of risk the Fund assumes when it purchases an option on
a futures contract is the premium paid for the option plus related
transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that changes in
the value of the underlying futures contract will not be fully reflected
in the value of the option purchased.
The Fund's ability to engage in the options and futures strategies
described above will depend on the availability of a liquid market in
such instruments. Markets in options and futures with respect to
Government Securities are relatively new and still developing. It is
impossible to predict the amount of trading interest that may exist in
various types of options or futures. Therefore no assurance can be
given that the Fund will be able to utilize these instruments
effectively for the purposes set forth above. Furthermore, the Fund's
ability to engage in options and futures transactions may be limited by
tax considerations.
Options: The Fund intends to write covered put and call options
and purchase put and call options on Government Securities and options
on other optionable Government Securities.
Call options written by the Fund give the holder the right to buy
the underlying securities from the Fund at a stated exercise price; put
options written by the Fund give the holder the right to sell the
underlying security to the Fund at a stated exercise price. A call
option written by the Fund is "covered" if the Fund owns the underlying
security covered by the call or has an absolute and immediate right to
acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also covered if the Fund holds a call on
the same security and in the same principal amount as the call written
where the exercise price of the call held: (a) is equal to or less than
the exercise price of the call written; or (b) is greater than the
exercise price of the call written if the difference is maintained by
the Fund in cash and Government Securities in a segregated account with
its custodian. A put option written by the Fund is "covered" if the
Fund maintains cash and Government Securities with a value equal to the
exercise price in a segregated account with its custodian, or else holds
a put on the same security and in the same principal amount as the put
written where the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by the
purchaser of an option will reflect, among other things, the
relationship of the exercise price to the market price and volatility of
the underlying security, the remaining term of the option, supply and
demand and interest rates.
The writer of an option has no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in
the case of a put option, since the writer may be assigned an exercise
notice at any time prior to the termination of the obligation. If an
option expires unexercised, the writer retains the amount of the
premium. This amount, of course, may, in the case of a covered call
option, be offset by a decline in the market value of the underlying
security during the option period. If a call option is exercised, the
writer experiences a profit or loss from the sale of the underlying
security. If a put option is exercised, the writer must fulfill the
obligation to purchase the underlying security at the exercise price,
which will usually exceed the then market value of the underlying
security.
The writer of an option that wishes to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by buying
an option of the same series as the option previously written. The
effect of the purchase is that the writer's position will be canceled by
the clearing corporation. However, a writer may not effect a closing
purchase transaction after being notified of the exercise of an option.
Likewise, an investor who is the holder of an option may liquidate its
position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option
previously purchased. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call
option will permit the Fund to write another call option on the
underlying security with either a different exercise price or expiration
date or both, or in the case of a written put option will permit the
Fund to write another put option to the extent that the exercise price
thereof is secured by deposited cash or Government Securities. Also,
effecting a closing transaction will permit the cash or proceeds from
the concurrent sale of any securities subject to the option to be used
for other Fund investments. If the Fund desires to sell a particular
security from its portfolio on which it has written a call option, it
will effect a closing transaction prior to or concurrent with the sale
of the security.
The Fund will realize a profit from a closing transaction if the
price of the transaction is less than the premium received from writing
the option or is more than the premium paid to purchase the option; the
Fund will realize a loss from a closing transaction if the price of the
transaction is more than the premium received from writing the option or
is less than the premium paid to purchase the option. Because increases
in the market price of a call option will generally reflect increases in
the market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists a
secondary market for an option of the same series. If a secondary
market does not exist, it might not be possible to effect closing
transactions in particular options with the result that the Fund would
have to exercise the options in order to realize any profit. If the
Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market include the
following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by a national securities
exchange ("Exchange") on opening transactions or closing transactions or
both; (iii) trading halts, suspensions or other restrictions may be
imposed with respect to particular classes or series of options or
underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an Exchange; (v) the facilities of an
Exchange or the Options Clearing Corporation may not at all times be
adequate to handle current trading volume, or (vi) one or more Exchanges
could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class
or series of options), in which event that secondary market on that
Exchange (or in that class or series of options) would cease to exist,
although outstanding options on that Exchange that had been issued by
the Options Clearing Corporation as a result of trades on that Exchange
would continue to be exercisable in accordance with their terms.
The Fund may write options in connection with buy-and-write
transactions; that is the Fund may purchase a security and then, either
simultaneously or in a separate transaction, write a call option against
the security. The exercise price of the call the Fund determines to
write will depend upon the expected price movement of the underlying
security. The exercise price of a call option may be below ("in-the-
money"), equal to ("at-the-money") or above ("out-of-the-money") the
current value of the underlying security at the time the option is
written. Buy-and-write transactions using in-the-money call options may
be used when it is expected that the price of the underlying security
will remain flat or decline moderately during the option period. Buy-
and-write transactions using at-the-money call options may be used when
it is expected that the price of the underlying security will remain
fixed or advance moderately during the option period. Buy-and-write
transactions using out-of-the-money call options may be used when it is
expected that the premiums received from writing the call option plus
the appreciation in the market price of the underlying security up to
the exercise price will be greater than the appreciation in the price of
the underlying security alone. If the call options are exercised in
such transactions, the Fund's maximum gain will be the premium received
by it for writing the option, adjusted upwards or downwards by the
difference between the Fund's purchase price of the security and the
exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be offset
in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of
risk/return characteristics to buy-and-write transactions. If the
market price of the underlying security rises or otherwise is above the
exercise price, the put option will expire worthless and the Fund's gain
will be limited to the premium received. If the market price of the
underlying security declines or otherwise is below the exercise price,
the Fund may elect to close the position or take delivery of the
security at the exercise price and the Fund's return will be the premium
received from the put option minus the amount by which the market price
of the security is below the exercise price. Out-of-the-money, at-the-
money and in-the-money put options may be used by the Fund in the same
market environments that call options are used in equivalent buy-and-
write transactions.
The Fund may purchase put options to hedge against a decline in the
value of its portfolio. By using put options in this way, the Fund will
reduce any profit it might otherwise have realized in the underlying
security by the amount of the premium paid for the put option and by
transaction costs.
The Fund may purchase call options to hedge against an increase in
the price of Government Securities that the Fund anticipates purchasing
in the future. The premium paid for the call option plus any
transaction costs will reduce the benefit, if any, realized by the Fund
upon exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to the
Fund.
The Fund will not purchase put and call options if as a result more
than 5% of its total assets would be invested in such options.
Lending of Portfolio Securities: The Fund may seek to increase its
income by lending portfolio securities. Under present regulatory
policies, including those of the Board of Governors of the Federal
Reserve System and the Securities and Exchange Commission, such loans
may be made only to member firms of the New York Stock Exchange, and
would be required to be secured continuously by collateral in cash, cash
equivalents or high quality Government Securities maintained on a
current basis at an amount at least equal to the market value of the
securities loaned. The Fund would have the right to call a loan and
obtain the securities loaned at any time on twenty-four hours' notice.
During the existence of a loan, the Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the
securities loaned and would also receive compensation based on
investment of the collateral. As with other extensions of credit, there
are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the
loans would be made only to firms deemed by the Advisor to be of good
standing, and when, in the judgment of the Advisor the consideration
which could be earned currently from securities loans of this type
justifies the attendant risk. The Fund pays various fees in connection
with such loans including shipping fees and reasonable custodian and
placement fees approved by the Advisor in accordance with instructions
of the Board of Directors of the Fund or designated officers of the
Fund. If the Advisor determines to make securities loans, it is not
intended that the value of the securities loaned would exceed 30% of the
value of the Fund's total assets.
Portfolio Management: The Fund intends to fully manage its
portfolio by buying and selling Government Securities or holding
selected Government Securities to maturity, by purchasing securities
secured by such securities, and by engaging in transactions involving
related Options, Futures and Options on Futures. In managing its
portfolio the Fund seeks a high current income consistent with liquidity
and safety of principal by taking advantage of market developments and
yield disparities, which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in
anticipation of a rise in interest rates so as to reduce the potential
for depreciation of principal;
(2) lengthening the average maturity of its portfolio in
anticipation of a decline in interest rates so as to increase the
potential for appreciation of principal;
(3) selling one type of Government Security (e.g., Treasury
bonds) and buying another (e.g., GNMA direct pass-through certificates)
when disparities arise in the relative values of each; and
(4) changing from one U.S. Government obligation to an
essentially similar U.S. Government obligation when their respective
yields are distorted due to market factors.
The Fund will also use the techniques described above under "When-
Issued Securities," "Futures Contracts and Options on Futures Contracts"
and "Options" to manage its portfolio.
These strategies may result in increases or decreases in the Fund's
current income available for distribution to the Fund's shareholders and
in the holding by the Fund of obligations which sell at moderate to
substantial premiums or discounts from face value. Moreover, if the
Fund's expectations of changes in interest rates or its evaluation of
the normal yield relationship between two obligations proves to be
incorrect, the Fund's income, net asset value per share and potential
capital gain may be decreased or its potential capital loss may be
increased.
PORTFOLIO TURNOVER
It is not the policy of any of the Funds to purchase or sell
securities for short-term trading purposes, but each Fund may sell
securities to recognize gains or avoid potential for loss. Each Fund
will, however, sell any portfolio security (without regard to the time
it has been held) when the Advisor believes that market conditions,
credit-worthiness factors or general economic conditions warrant such a
step. Each Fund may seek to avoid untimely portfolio transactions by
utilizing hedging techniques which reduce the necessity to restructure
portions of each Fund's portfolio. Each Fund presently estimates that
its annualized portfolio turnover rate will generally not exceed 300%.
High portfolio turnover might involve additional transaction costs (such
as brokerage commissions or sales charges) which are borne by the
Fund,or adverse tax effects. (See "Dividends, Distributions and Taxes"
in the Prospectus.)
INVESTMENT RESTRICTIONS
In addition to those set forth in The Rightime Fund, Inc.'s current
Prospectus, each Fund has adopted the Investment Restrictions set forth
below, which cannot be changed without the approval of a majority of the
outstanding voting securities of the Fund. As provided in the
Investment Company Act of 1940 a "vote of a majority of the outstanding
voting securities" of the Fund means the affirmative vote of the lesser
of: (i) more than 50% of the outstanding shares of the Fund; or (ii)
67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy.
So long as percentage restrictions are observed by a Fund at the time it
purchases any security, changes in values of particular Fund assets or
the assets of the Fund as a whole will not cause a violation of any of
the following restrictions. These investment restrictions provide that
the Funds will not:
The Rightime Fund, The Rightime Blue Chip Fund,
The Rightime MidCap Fund, and The Rightime Social Awareness Fund
(1) issue senior securities, except to the extent that an
investment technique described in the Fund's prospectus (such as the use
of stock index futures) may be deemed to involve a "senior security;"
(2) engage in the underwriting of securities except insofar as
the Fund may be deemed an underwriter under the Securities Act of 1933
in disposing of a portfolio security;
(3) purchase or sell real estate or interests therein, although
it may purchase securities of issuers which engage in real estate
operations and securities which are secured by real estate or interests
therein;
(4) invest for the purpose of exercising control or management
of another company;
(5) purchase oil, gas or other mineral leases, rights or
royalty contracts or exploration or development programs, except that
the Fund may invest in the securities of companies which invest in or
sponsor such programs;
(6) make purchases of securities on "margin" (though the Fund
will comply with applicable requirements of the Commodities Futures
Trading Commission with respect to futures); or
(7) sell securities short;
The Rightime Fund
(8) concentrate its investments in any industry other than
registered investment companies;
The Rightime Blue Chip Fund, The Rightime MidCap Fund,
and The Rightime Social Awareness Fund
(9) concentrate its investments in any industry;
The Rightime Government Securities Fund
(10) borrow money or pledge its assets except as a temporary
measure for extraordinary or emergency purposes and not in excess of 33
1/3% of the value of the total assets of the Fund taken at the lower of
their market value or cost (the Fund intends to borrow money only from
banks and only to accommodate requests for the redemption of shares of
the Fund while effecting an orderly liquidation of portfolio securities)
(for the purpose of this restriction, collateral arrangements with
respect to options, futures contracts, options on futures contracts and
collateral arrangements with respect to initial and variation margins
are not considered a pledge of assets);
(11) purchase any security or evidence of interest therein on
margin, except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities and
except that the Fund may make deposits on margin in connection with
futures contracts and related options;
(12) write, purchase or sell any put or call option or any
combination, provided that this shall not prevent the writing,
purchasing and selling of puts, calls or combinations thereof with
respect to Government Securities and with respect to futures contracts
or the purchase, ownership, holding or sale of contracts for the future
delivery of fixed income securities; etc. as described in "Investment
Objective and Policies";
(13) underwrite securities issued by other persons except
insofar as the Fund may technically be deemed an underwriter under the
Securities Act of 1933 in selling a portfolio security;
(14) purchase or sell commodities or commodity contracts,
except that the Fund may purchase and sell financial futures contracts
and related options as described in "Investment Objective and Policies";
(15) make short sales of securities or maintain a short
position, unless at all times when a short position is open it owns an
equal amount of such securities or securities convertible into or
exchangeable for, without payment of any further consideration,
securities of the same issue as, and equal in amount to, the securities
sold short, and unless not more than 10% of the Fund's net assets (taken
at market value) is held as collateral for such sales at any one time
(It is the present intention of management to make such sales only for
the purpose of deferring realization of gain or loss for Federal income
tax purposes; such sales would not be made of securities subject to
outstanding options);
(16) make loans to other persons except through the lending of
its portfolio securities not in excess of 30% of its total assets (taken
at market value) and except through the use of repurchase agreements
maturing in less than seven days (for these purposes the purchase of all
or a portion of an issue of debt securities in accordance with the
Fund's investment objective and policies shall not be considered the
making of a loan);
(17) knowingly invest in securities which are restricted
securities (including repurchase agreements maturing in more than seven
days) under the Securities Act of 1933 if, as a result thereof, more
than 10% of the Fund's net assets (taken at market value) would be so
invested (the Fund currently does not intend to invest in restricted
securities if such investments would equal 5% of the Fund's net assets);
(18) purchase securities of any issuer if such purchase at the
time thereof would cause more than 10% of the voting securities of such
issuer to be held by the Fund;
(19) purchase securities of any issuer if such purchase at the
time thereof would cause more than 5% of the Fund's assets (taken at
market value) to be invested in the securities of such issuer (other
than securities or obligations issued or guaranteed by the United
States, any state or political subdivision thereof, or any political
subdivision of any such state, or any agency or instrumentality of the
United States or of any state or of any political subdivision of any
state or the United States); or
(20) issue any senior security (as that term is defined in the
Investment Company Act of 1940 (the "1940 Act")), if such issuance is
specifically prohibited by the 1940 Act or the rules and regulations
promulgated thereunder (for the purpose of this restriction, collateral
arrangements with respect to options, futures contracts and collateral
arrangements with respect to initial and variation margin are not deemed
to be the issuance of a senior security).
Other Restrictions: (The Rightime Government Securities Fund) In
addition to the restrictions noted above, the Fund will not, as a matter
of operating policy: (i) invest more than 5% of its total assets at the
time of investment in companies which, including predecessors, have a
record of less than three years' continuous operation; or (ii) invest
for the purpose of exercising control or management.
Non-Fundamental Restrictions
In addition to the restrictions outlined above, the Funds (as
indicated below) will also be subject, as a matter of operating policy,
to the restrictions noted below: (i) (All Funds) the Funds may only
invest in other investment companies within limits set by the Investment
Company Act of 1940. With respect to all Funds other than The Rightime
Fund, this would allow a Fund to invest up to 10% of its total assets in
other investment companies, although not more than 5% of the Fund's
total assets may be invested in any one investment company and the
Fund's investment in another investment company may not represent more
than 3% of the securities of any one investment company. All Funds may
also acquire securities of other investment companies beyond such limits
pursuant to a merger, consolidation or reorganization; (ii) (Government
Securities Fund only) the Fund may not invest more than 5% of its total
assets at the time of investment in companies which, including
predecessors, have a record of less than three years' continuous
operation; and (iii) (Government Securities Fund only) the Fund may not
invest for the purpose of exercising control or management.
INVESTMENT ADVISOR
The Rightime Fund, Inc. has entered into investment advisory
agreements with the Advisor on behalf of each series of the Fund, as of
the following dates: The Rightime Fund, March 26, 1985; The Rightime
Government Securities Fund, December 24, 1986; The Rightime Blue Chip
Fund, July 1, 1987; The Rightime Social Awareness Fund, March 1, 1990;
The Rightime MidCap Fund, November 10, 1991. Each Agreement was
initially approved by the Board of Directors for a term of two years
from its effective date, subject to shareholder ratification. Each
Agreement will continue in effect from year to year thereafter only if
such continuance is approved annually by either the Fund's Board of
Directors or by a vote of a majority of the outstanding voting
securities of the Fund and in either case by the vote of a majority of
the directors who are not parties to the Agreement or interested persons
(as such term is defined in the Investment Company Act of 1940, as
amended) of any party to the Agreement, voting in person at a meeting
called for the purpose of voting on such approval. Each Agreement may
be terminated at any time without penalty by the Fund's Board of
Directors or by a majority vote of the outstanding shares of the Fund,
or by the Investment Advisor, in each instance on not less than 60 days'
written notice and shall automatically terminate in the event of its
assignment. Each Agreement also identifies the right of the Advisor to
control the use of the name "Rightime", and each Fund may be required to
change its name if the Advisor ceases to act as advisor to the Fund.
The following table shows the fees paid by each series pursuant to its
Advisory Agreement, during the three most recent fiscal years:
1997 1996 1995
The Rightime Fund $ 778,525 $ 830,865 $ 747,548
The Rightime Government Securities
Fund 33,110 57,725 91,578
The Rightime Blue Chip Fund 1,432,253 1,360,520 1,163,294
The Rightime Social Awareness Fund 53,093 40,814 35,179
The Rightime MidCap Fund 394,749 396,405 354,183
The sole officer, director and shareholder of the Advisor is David
J. Rights. Mr. Rights is also the Chairman of the Board, President and
Treasurer of the Fund and the President and Treasurer of Rightime
Administrators, Inc., the Fund's administrator. Mr. Rights is the owner
of RTE Securities, Inc., a broker-dealer firm which has been retained by
Lincoln Investment Planning, Inc. the Fund's distributor and transfer
agent, to provide consulting and wholesaling services with respect to
the distribution of the Fund's shares. The Advisor presently serves as
advisor to other clients and may do so in the future.
DISTRIBUTOR
Pursuant to the Distribution Agreement for each Fund, the expenses
of printing all sales literature, including prospectuses, are to be
borne by Lincoln Investment Planning, Inc. (the "Distributor"). Each
Distribution Agreement provides that it will continue in effect from
year to year only so long as such continuance is specifically approved
at least annually by either the Fund's Board of Directors or by a vote
of a majority of the outstanding voting securities of the Fund and in
either case by the vote of a majority of the directors who are 12b-1
Directors as that term is defined in the prospectus, voting in person at
a meeting called for the purpose of voting on such approval. Each
agreement will terminate automatically in the event of its assignment.
Under each Distribution Agreement, the Distributor is the exclusive
agent for the Fund's shares, and has the right to select selling dealers
to offer the shares to investors.
Edward S. Forst, Sr., the Vice-President and Secretary of The
Rightime Fund, Inc., is the Chairman of the Distributor; he is also Vice
President and Secretary of Rightime Administrators, Inc., each Fund's
Administrator. David J. Rights, through RTE Securities, Inc., acts as a
consultant to the Distributor, and holds other positions with Fund
affiliates as described above under "Investment Advisor."
The services provided by the Distributor under each Distribution
Agreement relate to the sale of the Fund's shares. These services are
separate from those provided by the Distributor in its capacity as sub-
administrator to Rightime Administrators, Inc., such as receiving and
responding to shareholder inquiries, assisting each Fund with tax
returns, proxy statements, and other services not undertaken to
distribute shares.
Commissions for distribution of Fund shares and other compensation
received by Lincoln Investment Planning during the Fund's fiscal years
ended October 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
Distributor
Net Underwriting Compensation
Total Underwriting Commissions to on Redemption
Commissions Distributor and Repurchases Brokerage Commissions Other Compensation
<S> <C> <C> <C> <C> <C>
1995 1,091,389* 1,091,389 -0- -0- -0-
1996 1,236,367* 1,236,367 -0- -0- -0-
1997 1,148,636 1,148,636 -0- -0- -0-
* Does not include nominal amounts paid to Lincoln Investment
Planning by investment companies whose shares are purchased by The
Rightime Fund to compensate Lincoln Investment Planning for shareholder
servicing and/or distribution activities on behalf of such companies.
</TABLE>
DISTRIBUTION PLAN
Pursuant to each Fund's 12b-1 Distribution Plan, each Fund may
incur distribution costs which may not exceed: .50% per annum of The
Rightime Fund's net assets and .25% per annum for each of The Rightime
Blue Chip Fund's, The Rightime Social Awareness Fund's and The Rightime
MidCap Fund's net assets for payments to the Distributor or others for
items such as advertising expenses, selling expenses, commissions or
travel reasonably intended to result in sales of shares of the Fund.
The 12b-1 Distribution Plan for each Fund also provides that each Fund
may incur a shareholder servicing fee of .25% per annum of the Fund's
net assets which is paid to the Distributor or others for ongoing
servicing and/or maintenance of shareholder accounts.
During the most recent fiscal year, the distribution expenses paid
by the Funds were as follows: The Rightime Fund $778,525; The Rightime
Government Securities Fund $0; The Rightime Blue Chip Fund $716,126; The
Rightime Social Awareness Fund $26,547; and The Rightime MidCap Fund
$197,374. The shareholder servicing expenses paid by the Series of the
Fund were as follows: The Rightime Fund $389,263; The Rightime
Government Securities Fund $20,694; The Rightime Blue Chip Fund
$716,127; The Rightime Social Awareness Fund $26,547; and The Rightime
MidCap Fund $197,375.
The following table sets forth the distribution and shareholder
servicing expenses paid on behalf of each series by the Distributor
during the most recent fiscal year ended October 31. The excess costs
incurred over payments received from the Funds pursuant to each Fund's
12b-1 Distribution Plan were paid by the Distributor from its own
resources and will not be reimbursed by the Fund.
1997
The Rightime Fund
Commissions to Salesmen $704,019
Administration Staff 60,704
Advertising & Printing 23,971
Miscellaneous Selling Expenses 64,519
Office Expenses 77,790
Professional Services 16,754
The Rightime Government Securities Fund
Commissions to Salesmen $ 40,375
Administration Staff 3,481
Advertising & Printing 1,375
Miscellaneous Selling Expenses 3,700
Office Expenses 4,461
Professional Services 961
The Rightime Blue Chip Fund
Commissions to Salesmen $1,268,541
Administration Staff 109,381
Advertising & Printing 43,192
Miscellaneous Selling Expenses 116,254
Office Expenses 140,166
Professional Services 30,189
The Rightime Social Awareness Fund
Commissions to Salesmen $47,870
Administration Staff 4,128
Advertising & Printing 1,630
Miscellaneous Selling Expenses 4,387
Office Expenses 5,289
Professional Services 1,139
The Rightime MidCap Fund
Commissions to Salesmen $356,845
Administration Staff 30,769
Advertising & Printing 12,150
Miscellaneous Selling Expense 32,703
Office Expense 39,429
Professional Services 8,492
ALLOCATION OF PORTFOLIO BROKERAGE
The Advisor, in effecting the purchases and sales of portfolio
securities for the account of each Fund, will seek execution of trades
either: (i) at the most favorable and competitive rate of commission
charged by any broker, dealer or member of an exchange; or (ii) at a
higher rate of commission charges if reasonable in relation to brokerage
and research services provided to the Fund or the Advisor by such
member, broker, or dealer. Such services may include, but are not
limited to, any one or more of the following: Information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments. The Advisor may use
research and services provided to it by brokers and dealers in servicing
all its clients, however, not all such services will be used by the
Advisor in connection with the Fund. Portfolio orders may be placed
with affiliated broker-dealers, and in such case, the affiliated broker-
dealers will receive brokerage commissions. However, portfolio orders
will be placed with the affiliated broker-dealers only where the price
being charged and the services being provided compare favorably with
those which would be charged to the Fund by non-affiliated broker-
dealers, and with those charged by the affiliated broker to other
unaffiliated customers, on transactions of a like size and nature.
Brokerage may also be allocated to dealers in consideration of Fund
share distribution but only when execution and price are comparable to
that offered by other brokers. The Fund follows the standards of SEC
Rule 17e-1 under the Investment Company Act of 1940 which requires that
the commission paid to the Distributor must be reasonable and fair
compared to the commissions, fees or other remuneration received or to
be received by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time.
For the Fund's last three fiscal years ended October 31, none of
the Fund's aggregate brokerage commissions were paid to Lincoln
Investment Planning, Inc. and for the same periods, none of the Fund's
aggregate amount of portfolio transactions (purchases and sales) were
effected by Lincoln Investment Planning, Inc.
The Advisor is responsible for making the Fund's portfolio
decisions subject to instructions described in the prospectus. The
Board of Directors may however impose limitations on the allocation of
portfolio brokerage.
The Fund expects that purchases and sales of portfolio money market
securities will be principal transactions. Such securities are normally
purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage
commissions paid by the Fund for such purchases. Purchases from the
underwriters will include the underwriter commission or concession and
purchases from dealers serving as market makers will include the spread
between the bid and asked price.
TRANSFER AGENT
Lincoln Investment Planning, Inc. serves as transfer agent,
dividend disbursing agent and redemption agent for redemptions pursuant
to a Transfer and Dividend Disbursing Agency Agreement approved by the
shareholders of The Rightime Fund, Inc. at a meeting held for such
purpose on October 23, 1986. The agreement is subject to annual renewal
by the Board of Directors of the Fund, including the directors who are
not interested persons of the Fund or of the Transfer Agent. Pursuant
to the agreement, as amended and approved by the Board of Directors, the
Transfer Agent receives a fee calculated at an annual rate of $15.00 per
shareholder account and will be reimbursed out-of-pocket expenses
incurred on the Fund's behalf.
The Transfer Agent acts as paying agent for all Fund expenses and
provides all the necessary facilities, equipment and personnel to
perform the usual or ordinary services of Transfer and Dividend Paying
Agent, including: receiving and processing orders and payments for
purchases of shares, opening stockholder accounts, preparing annual
stockholder meeting lists, mailing proxy material, receiving and
tabulating proxies, mailing stockholder reports and prospectuses,
withholding certain taxes on nonresident alien accounts, disbursing
income dividends and capital distributions, preparing and filing U.S.
Treasury Department Form 1099 (or equivalent) for all stockholders,
preparing and mailing confirmation forms to stockholders for all
purposes and redemption of the Fund's shares and all other confirmable
transactions in stockholders' accounts, recording reinvestment of
dividends and distributions of the Fund's shares and causing redemption
of shares for and disbursements of proceeds to withdrawal plan
stockholders. The Transfer Agent may contract with other parties to
provide services under the agreement. Pursuant to this authority, the
Transfer Agent has entered into an agreement under which DST Systems
Inc. and its subsidiaries provide computer services and the printing and
distribution of confirmations and tax forms.
PURCHASE OF SHARES
The shares of the Fund are continuously offered by the Distributor.
Orders for the purchase of shares of the Fund received by the
Distributor prior to the close of regular trading on any day the New
York Stock Exchange ("NYSE") is open for trading will be confirmed at
the offering price next determined (based upon the sales charges and
valuation procedures described in the Prospectus) as of the close of
regular trading of the NYSE on that day. The New York Stock Exchange is
scheduled to be open Monday through Friday throughout the year except
for New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. Orders
received by the Distributor after the close of regular trading of the
NYSE will be confirmed at the next day's price. It is the
responsibility of dealers to transmit orders received by them promptly
to the Distributor.
Purchases of The Rightime Government Securities Fund, The Rightime
Blue Chip Fund, The Rightime Social Awareness Fund, and The Rightime
MidCap Fund of $50,000 or more at offering price carry reduced sales
loads as shown in the table below and may include a series of purchases
over a 13-month period under a Letter of Intention signed by a
purchaser. The sales loads set forth below are applicable to purchases
made at one time by an individual; or an individual, his or her spouse
and their children under the age of 21; or a trustee or other fiduciary
of a single trust estate or single fiduciary account (including an
employee benefit plan qualified under Section 401 of the Internal
Revenue Code). For purchases of $2 million or more, there is no sales
charge.
<TABLE>
<CAPTION>
Sales Load
as % of
Offering Amount Dealer's
Amount of Purchase Price Invested Concession*
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 3.75 3.90 3.35
$100,000 but under $500,000 2.75 2.83 2.45
$500,000 but under $1,000,000 1.75 1.80 1.55
$1,000,000 but under $2,000,000 .75 .76 .65
For purchases of $2 million or more there is no sales load.
*In some circumstances, the Distributor may allow a larger percentage of
the sales load to dealers. Such dealers may have additional
responsibilities under the federal securities laws
</TABLE>
The Fund must be notified when a sale takes place which
would qualify for the reduced sales charge on the basis of previous
purchases and current purchases. The reduced sales charge will be
granted upon confirmation of the shareholder's holdings by the Fund.
Officers, directors and employees, and any pension, profit-sharing
or qualified retirement plan of The Rightime Fund, Inc., Rightime
Econometrics, Inc. and Lincoln Investment Planning, Inc., and registered
representatives of dealers who have entered into dealers agreements with
the Distributor, may purchase shares of the Funds at the net asset value
per share. Certain family members of any such individual and their
spouses identified above, and certain trusts, pension, profit-sharing or
qualified retirement plan for the sole benefit of such persons may
purchase shares of the Fund at the net asset value per share. (See
"Waivers of Sales Loads" within "How to Purchase Shares" of the
Prospectus.)
Letter of Intent: The above table is also applicable to the
aggregate amount of purchases made by any such purchaser previously
enumerated within a 13-month period pursuant to a written Letter of
Intent provided by the Distributor, and not legally binding on the
signer or the Fund, which includes provisions for a price adjustment,
depending upon the actual amount purchased within such period, and which
provides for the holding in escrow by the Distributor of 5% of the total
amount intended to be purchased until such purchase is completed within
the 13-month period. If the intended investment is not completed, the
purchaser will be asked to pay an amount equal to the difference between
the sales load on the shares purchased at the reduced rate and the sales
load otherwise applicable to the total shares purchased. If such
payment is not made within 20 days following the expiration of the 13-
month period, the Distributor will surrender an appropriate number of
the escrowed shares for redemption in order to realize the difference.
Such purchasers may include the value (at offering price at the level
designated in their Letter of Intent) of all their shares of the Fund
previously purchased and still held as of the date of their Letter of
Intent toward the completion of such Letter.
Right of Accumulation: The reduced sales load is applicable to any
subsequent purchases of shares of the Fund, by any such purchaser where
the aggregate investment in the Funds by such purchaser is $50,000 or
more. The Right of Accumulation is applicable to purchases made at any
one time by an individual; or an individual, his or her spouse and their
children under the age of 21; or a trustee or other fiduciary of a
single trust estate or single fiduciary account (including an employee
benefit plan qualified under Section 401 of the IRC).
Tax-Sheltered Retirement Plans
Shares of the Funds are available to all types of tax-deferred
retirement plans including custodial accounts described in Section
403(b)(7) of the IRC. Qualified investors benefit
from the tax-free compounding of income dividends and capital gains
distributions. You can transfer an existing plan into the Fund or set
up a new plan in the manner described below.
Individual Retirement Accounts (IRA) -- Individuals, who are not
active participants (and, when a joint return is filed, who do not have
a spouse who is an active participant) in an employer maintained
retirement plan are eligible to contribute on a deductible basis to an
IRA account. The IRA deduction is also available for individual
taxpayers and married couples with adjusted gross incomes not in excess
of certain specified limits. All individuals may make nondeductible IRA
contributions to a separate account to the extent that they are not
eligible for a deductible contribution. Income earned by an IRA account
is tax deferred. Special IRA programs called SEP-IRAs (Simplified
Employee Pension-IRA) and SIMPLE-IRAs (Savings Incentive Match Plan for
Employees-IRA) are also available under which employees may set up IRA
accounts, into which employers can make contributions in lieu of
establishing retirement plans for such employees. SEP-IRAs and SIMPLE-
IRAs can free employers of many of the recordkeeping requirements of
establishing and maintaining a retirement plan trust.
If you have received a lump sum distribution from another qualified
retirement plan, you may rollover all or part of that distribution into
an IRA. Your rollover contribution is not subject to the limits on
annual IRA contributions. By acting within applicable time limits of
the lump sum distribution you can continue to defer Federal income taxes
on your lump sum contribution and on any income that is earned on that
contribution.
KEOGH Plans for Self-Employed -- If you are a self-employed
individual, you may establish a Self-Employed Retirement (KEOGH) Plan
and contribute up to the maximum amounts permitted for your plan under
current tax laws. Under a Defined Benefit KEOGH Plan, you may establish
a program with a specific amount of retirement income as your objective.
The annual contributions needed to achieve this goal are calculated
actuarially and can sometimes exceed the tax-deductible contributions
allowed under a regular KEOGH Plan.
Tax-Sheltered Custodial Accounts -- If you are an employee of a
public school, state college or university, or an employee of a
non-profit organization exempt from tax under Section 501(c)(3) of the
IRC, you may be eligible to make contributions into a custodial account
(pursuant to section 403(b)(7) of the IRC) which invests in Fund shares.
Such contributions, to the extent that they do not exceed certain
limits, are excludable from the gross income of the employee for federal
income tax purposes.
Tax Treatment of Individual Retirement Accounts under the Taxpayer
Relief Act of 1997 (the "1997 Act") -- The 1997 Act also contains
several new or expanded Individual Retirement Accounts which will be
available to the Fund's investors beginning on January 1, 1998.
The 1997 Act creates a new "Roth IRA" which will permit tax free
distributions of account balances if the assets have been invested for
five years or more, and the distributions meet certain qualifying
restrictions. Investors filing as single taxpayers who have adjusted
gross incomes of $95,000 or more, and investors filing as joint
taxpayers with adjusted gross incomes of $150,000 or more may find their
participation in this IRA to be restricted.
The 1997 Act also creates a new education IRA to help parents fund
their children's post-secondary school education. Parents or others may
contribute up to $500 annually to an education IRA on behalf of any
child under age 18. This IRA is subject to the same AGI limits as the
Roth IRA above, and there are other contribution restrictions that may
apply. The education IRA earnings accumulate tax free, and assets that
have accumulated in the IRA may be distributed tax free when used to pay
qualified higher education expenses.
Other Retirement, Savings, and Deferred Compensation Plans -- Our
Investment Advisor and Distributor make available, through their
affiliates, a full range of consulting and plan administrative services,
on a fee basis. Information is available to explain and assist you with
the establishment of various types of corporate retirement plans,
education and charitable organizations deferred compensation plans,
thrift and savings plans. Also available are automated recordkeeping
and actuarial services for tax-sheltered plan sponsors which fulfill all
appropriate accounting and recordkeeping requirements. These services
can also accommodate so called "split-funding" options where plan assets
may be invested in various investments in addition to the Fund.
How to establish Retirement Accounts -- All the foregoing
retirement plan options require special applications or plan documents.
Please call us to obtain information regarding the establishing of
retirement plan accounts. CoreStates Bank NA acts as the plan custodian
for retirement plan accounts with the Fund, and charges nominal fees in
connection with plan establishment and maintenance. These fees are
detailed in the plan documents. You may wish to consult with your
attorney or other tax advisor for specific advice prior to establishing
a plan.
Systematic Withdrawal Plan
You can arrange to make systematic cash withdrawals from your
account monthly, quarterly or annually. Your account, initially, must
be at least $5,000 in order to establish this service, although the
withdrawals may continue even though your account subsequently drops
below $5,000. Each payment must be for an amount not less than $25. If
the periodic amount you elect to withdraw is more than the increase in
the value of any income or gains in your account, the withdrawals can
deplete the value of your account. If the withdrawals are to be sent to
someone who is not a registered owner of the shares, a signature
guarantee is required on your application for this service. The Fund
bears the cost of providing this plan at the present time. Please
contact the Fund to obtain information about establishing a systematic
withdrawal plan.
In-Kind Redemptions
To comply with certain state securities regulations, the Fund has
undertaken that any portfolio securities issued in an in-kind redemption
will be readily marketable securities.
DIVIDENDS, DISTRIBUTION AND TAXES
The Funds' investments in options and futures contracts are subject
to many complex and special tax rules. For example, over-the-counter
options on debt and equity securities will generally produce a long-term
or short-term capital gain or loss upon exercise, lapse, or closing out
of the option or sale of the underlying stock or security. By contrast,
the Fund's positions in put or call options (including options it has
written as well as options it has purchased) which are "listed" (traded
on or subject to the rules of a qualified board of Exchange) and which
include non-equity options, regulated futures contracts and options on
futures contracts will be required to be "marked to market" at the end
of the Fund's fiscal year -- that is, treated as closed out or sold at
their fair market value -- for Federal income tax purposes. This means
that the unrealized appreciation or depreciation in such positions will
be treated as having been realized on that date. Sixty percent of such
gain or loss and sixty percent of any gain or loss from the actual
closing out or exercise of such positions, will be treated as long-term
capital gain or loss and the remainder will be treated as short-term
capital gain or loss. In addition, on the stipulated expiration date
sixty percent of any gain realized on the expiration of a listed option
which the Fund has written and sixty percent of any loss realized on the
expiration of such an option it has purchased will also be treated as
long-term capital gain or loss, as the case may be, and the balance as
short-term capital gain or loss. Under legislation pending in technical
corrections to the 1997 Act, the 60% long-term capital gain portion will
qualify as 20% rate gain and will be subject to tax to individual
investors at a maximum rate of 20% for investors in the 28% or higher
federal income tax brackets, or at a maximum rate of 10% for investors
in the 15% federal income tax bracket.
Section 1092 of the Code may affect the taxation of options on
securities, futures contracts and options on futures contracts. Section
1092 defines a "straddle" as offsetting positions with respect to
personal property. A position in personal property is generally defined
as any interest, including an option, in personal property. A position
in personal property, therefore, includes a debt security and an option
written on, or a futures contract to sell, a debt security. Section
1092 generally provides that in the case of a straddle, any loss from
the disposition of a position in the straddle can be deducted only to
the extent that the loss exceeds the unrealized gains on any offsetting
straddle position. For example, if the Fund enters into a straddle
consisting of a U.S. Treasury bond and a purchased put with respect to
such bond, any loss realized from a closing purchase transaction with
respect to the put can be recognized only to the extent that such loss
exceeds any unrealized gain on the underlying bond. Section 1092 also
provides that "wash sale" rules are applicable to transactions where a
position is sold at a loss and a new offsetting position is acquired
within a prescribed period as are "short sale" rules which could (i)
eliminate or stop the Fund's holding period in a security, and (ii)
convert losses arising from the disposition of an option or futures
position from short-term to long-term when a hypothetical sale of the
underlying security on the date of entry into the option or futures
position would have given rise to a long-term capital gain. Management
will manage the Fund so as to take into account Section 1092 and IRS
regulations thereunder. However, the Fund's ability to obtain a high
current income may, under certain circumstances, be adversely affected.
If such a put or call option or futures contract is part of a
"mixed straddle," as defined in the IRC, however, the Fund may be able
to make an election under Section 1256(d) of the IRC under which the
mark to market and 60/40 rules and the straddle rules of Section 1092
will be inapplicable in whole or in part to positions within the
straddle. If a Section 1256(d) election is made and a call or put
option the Fund has written lapses, the Fund will recognize a short-term
capital gain for Federal income tax purposes. If a call option the Fund
has written is exercised and the Fund makes such an election, the Fund
will realize a capital gain or loss (long-term or short-term, depending
on the Fund's holding period in the underlying security) from the sale
of the underlying security and the proceeds from such sale will be
increased by the premium originally received. Also, in such case, if a
put option which the Fund has written is exercised, the amount of the
premium originally received will reduce the cost of the security which
the Fund purchases upon exercise of the option. If the Fund terminates
its obligation under an option it has written by entering a closing
purchase transaction and it makes such an election it will recognize a
short-term gain or loss measured by the difference between the price it
has to pay to close the option position and the premium it received for
writing the option. This election would also apply to options purchased
and futures contracts entered into by the Fund. A Section 1256(d)
election could result in an increase in distributions or ordinary income
(relative to long-term capital gains) to shareholders.
In the case of another election the Fund may make, the Fund may set
up one or more mixed straddle accounts comprising all or some positions
held by the Fund that are required to be "marked to market" as described
above (called "Section 1256 contracts"), and all positions offsetting
such positions. In such a case, the Fund will mark each such position
to market on a daily basis, compute the net Section 1256 contract gain
or loss and net non-Section 1256 contract gain or loss for the account,
and the "daily account net gain or loss" for each account. Any daily
account net gain or loss attributable to a net non-Section 1256 gain or
loss will be treated as short-term and any daily account net gain or
loss attributable to net Section 1256 contract gain or loss will be
treated as sixty percent long-term capital gain or loss, and forty
percent short-term capital gain or loss, with corresponding basis
adjustments. Such daily account net gains and losses will be netted on
an annual basis as will the annual account net gains and losses for all
mixed straddle accounts; however, no more than fifty percent of the
total annual account net gain for a taxable year shall be treated as
long-term capital gain, and no more than forty percent of the total
annual account net loss for a taxable year shall be treated as short-
term capital loss.
Yet a third election the Fund may make would enable it to identify
separately those mixed straddles with respect to which it chooses to
offset gains and losses before applying "60/40 treatment" to the net
amount of any gains or losses attributable to Section 1256 contracts.
Section 1233 of the IRC provides generally for the gain and loss
consequences of short sales. Such gains and losses are capital gains
and losses to the extent the property used to close the short sale
constitutes a capital asset of the Fund (which will always be the case
under the Fund's method of investment). Section 1233 establishes those
rules for determining holding period of securities involved in short
sales and whether the capital gain or loss on short sales is long term
and short term. Under Rule one, if at the time of a short sale, the
Fund has not held short term securities "substantially identical" to the
securities sold short [for a period longer than the short time holding
period], then any gain realized on the closing on the short sale is
short term regardless of the length of time the sale was open or the
period for which the securities used to close the sale were held. Rule
two provides that the holding period of any securities "substantially
identical" to the securities sold short, which were held short term at
the time of the short sale or required thereafter and before its
closing, begins on the earlier of: (a) the date the short sale is
closed; and (b) the date such other acquired securities are sold or
otherwise disposed of. Rule one applies only to the extent gain is
realized; Rule two applies in gain or loss situations. Rule three
provides that when at the time of a short sale the Fund holds securities
long term which are "substantially identical" to those sold short, any
loss resulting from the closing of the short sale is a long term loss
regardless of the holding period of the securities used to close the
short sale. Rules one and three apply only to the extent the securities
used to close the transaction are not in excess of the substantially
identical securities in the order of acquisition and only to the extent
they do not exceed the quantity sold short. The term "substantially
identical" in the case of securities has the same meaning as in Section
1091 of the IRC dealing with "wash sales".
A holder of a zero coupon Treasury security will receive no cash
payment of interest prior to maturity; it will
be required for federal income taxes purposes to include an
imputed amount of interest income on its investment income calculations
each year a particular zero coupon Treasury security is held. In
general, this income computation will be based upon the "effective
interest" method of calculation. This method results in the reporting
of income in increasing amounts each year and in reduced net investment
income on a present value basis when compared to the (former) "straight-
line" method. The straight-line computation of interest simply
allocates the total discount equally over all periods during which the
obligation will exist.
The 1997 Act has also added new provisions for dealing with
transactions that are generally called "Constructive Sale Transactions."
Under these rules, the Fund must recognize gain (but not loss) on any
constructive sale of an appreciated financial position in stock, a
partnership interest or certain debt instruments. The Fund will
generally be treated as making a constructive sale when it: 1) enters
into a short sale on the same property, 2) enters into an offsetting
notional principal contact, or 3) enters into a futures or forward
contract to deliver the same or substantially similar property. Other
transactions (including certain financial instruments called collars)
will be treated as constructive sales as providing in Treasury
regulations to be published. There are also certain expectations that
apply for transactions that are closed before the end of the 30th day
after the close of the taxable year.
Distributions paid to shareholders by the Fund of ordinary income
and short-term capital gains arising from the Fund's investments,
including investments in options, forwards, and futures contracts, will
be taxable as ordinary income. The Fund will monitor its transactions
in such options and contracts and may make certain other tax elections
in order to mitigate the effect of the above rules.
Since it is the Fund's policy to meet the requirements of
Subchapter M of the IRC of 1986, and accordingly
distribute to its shareholders at least 90% of the income, the Fund may
be required to pay out as a dividend each year an amount which is
greater than the total amount of cash interest the Fund actually
received. Such distributions will be made from the cash assets of the
Fund or by liquidation of portfolio securities, if necessary. If a
distribution of cash necessitates the liquidation of portfolio
securities, the Investment Advisor will select which securities to sell.
The Fund may realize a gain or loss from such sales. In the event the
Fund realizes net capital gain from such transactions, its shareholders
may receive a larger capital gain distribution, if any, than they would
in the absence of such transactions.
Under the 1997 Act, the Fund is required to report the capital gain
of portfolio securities using the following categories:
"28% rate gains": gains resulting from securities sold by the
Fund after July 28, 1997 that were held for more than one year but not
more than 18 months, and securities sold by the Fund before May 7, 1997
that were held for more than one year. These gains will be taxable to
individual investors at a maximum rate of 28%.
"20% rate gains": gains resulting from securities sold by the Fund
after July 28, 1997 that were held for more than 18 months, and under a
transitional rule, securities sold by the Fund between May 7 and July
28, 1997 (inclusive) that were held for more than one year. These gains
will be taxable to individual investors at a maximum rate of 20% for
individual investors in the 28% or higher federal income tax brackets,
and at a maximum rate of 10% for investors in the 15% federal income tax
bracket.
The Act also provides for a new maximum rate of tax on capital
gains of 18% for individuals in the 28% or higher federal income tax
brackets and 8% for individuals in the 15% federal income tax bracket
for "qualified 5-year gains." For individuals in the 15% bracket,
qualified 5-year gains are net gains on securities held for more than 5
years which are sold after December 31, 2000. For individuals who are
subject to tax at higher rates, qualified 5-year gains are net gains on
securities which are purchased after December 31, 2000 and are held for
more than 5 years. Taxpayers subject to tax at the higher rates may
also make an election for shares held on January 1, 2001 to recognize
gain on their shares in order to qualify such shares as qualified 5-year
property.
<TABLE>
<CAPTION>
OFFICERS AND DIRECTORS OF THE FUND
<S> <C> <C>
Position and Office Principal Occupation
Name, Address and Age with the Fund During Past Five Years
David J. Rights* Chairman of the Board, President of Rightime, Econometrics, Inc.
1095 Rydal Road President, and a registered investment advisor; President
Rydal, PA 19046 Treasurer and Treasurer of Rightime Administrators;
Age 52 President of RTE Securities, Inc. a
registered broker-dealer; and Consultant
to Lincoln Investment Planning, Inc.,
a registered investment advisor and
broker dealer.
Edward S. Forst Sr. Director, Vice- Chairman of the Board, Lincoln Investment
218 Glenside Avenue President and Planning Inc., a registered investment
Wyncote, PA 19095-1595 Secretary advisor and broker dealer; Vice President
Age 71 and Secretary of Rightime Administrators.
Francis X. Barrett Director Director and Member of the Finance and
3121 Kutztown Road Pension Committee, Sacred Heart Hospital;
Reading, PA 19605 Formerly, Executive Director, National
Age 72 Catholic Education Association; and Pastor,
Church of Holy Guardian Angels, Reading, PA
Dr. Winifred L. Tillery Director Education Consultant to the NJ State Dept.
744 Amsterdam Road of Education; Superintendent of Schools, Camden
Mt. Laurel, NJ 08054 County, New Jersey. Formerly, Director, Division
Age 65 of Direct Services, NJ Dept. of Education; and
Executive Director for Special Education for
the Philadelphia School District
Dr. Carol A. Wacker Director Formerly, Assistant Superintendent for
1659 Landquist Dr. Senior High Schools, the Philadelphia School
Encinitas, CA 92024 District.
Age 64
</TABLE>
The officers conduct and supervise the daily business operations of the
Fund, while the directors, in addition to functions set forth under
"Advisor," "Administrator" and "Distributor" review such actions and
decide on general policy. Compensation to officers and directors of the
Fund who are affiliated with the Administrator, the Investment Advisor
or the Distributor is paid by the Administrator, the Investment Advisor
or the Distributor, respectively, and not by the Fund. Directors
receive a $7,000 annual retainer and $1,250 per board of directors
meeting attended and are reimbursed for expenses incurred in connection
with attendance at such meetings. Directors who are members of the
audit committee receive $1,250 per audit committee meeting if such
meeting is held separately from a board meeting. During the most recent
fiscal year, there were four meetings of the board of directors, and two
separate meetings of the audit committee. The Fund has adopted a Code
of Ethics which governs when and how securities investment personnel may
engage in personal securities transactions.
The officers and directors of The Rightime Fund, Inc. do not,
individually or as a group, beneficially own more than 1% of any of the
Funds.
<TABLE>
<CAPTION>
(5)
(3) Total
Pension or Compensation
Retirement (4) From
(2) Benefits Estimated Registrant
Aggregate Accrued As Annual and Fund
Compensation Part of Benefits Complex
(1) from Fund Upon Paid to
Name of Person, Position Registrant Expenses Retirement Directors
<S> <C> <C> <C> <C>
David J. Rights, Director* $0 None None None
Edward S. Forst, Sr., Director* $0 None None None
Francis X. Barrett, Director $14,500 None None $14,500
Dr. Winifred L. Tillery, Director $14,500 None None $14,500
Dr. Carol A. Wacker, Director $14,500 None None $14,500
* "Interested" person as defined in the Investment Company Act of 1940 (the "1940 Act").
</TABLE>
GENERAL INFORMATION
Audits and Reports
The accounts of The Rightime Fund, Inc., are audited each year by
Tait, Weller & Baker of Philadelphia, PA, independent certified public
accountants. Shareholders receive semiannual and annual reports of the
Fund including the annual audited financial statements and a list of
securities owned.
Custodian
The Fund has retained CoreStates Bank, NA, Philadelphia,
Pennsylvania to act as custodian of the securities and cash of each
series of the Fund.
PERFORMANCE
Current yield and total return may be quoted in advertisements,
shareholder reports or other communications to shareholders.
Occasionally, the Fund may include its distribution rate in sales
literature. Yield is the ratio of income per share derived from the
Fund's portfolio investments to a current maximum offering price
expressed in terms of percent. The yield is quoted on the basis of
earnings after expenses have been deducted. Total return is the total
of all income and capital gains paid to shareholders, assuming
reinvestment of all distributions, plus (or minus) the change in the
value of the original investment, expressed as a percentage of the
purchase price. The distribution rate is the amount of distributions
per share made by the Fund over a twelve-month period divided by the
current maximum offering price.
Securities and Exchange Commission rules require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by the Fund be accompanied
by certain standardized performance information computed as required by
the Commission. Current yield and total return quotations used by the
Fund are based on the standardized methods of computing performance
mandated by the Commission. An explanation of those and other methods
used by the Fund to compute or express performance follows:
The yield for The Rightime Government Securities Fund for the 30-
day period ended on the date of the audited financial statements
contained herein was 3.91%.
As indicated below, current yield is determined by dividing the net
investment income per share earned during the period by the maximum
offering price per share on the last day of the period and analyzing the
result. Expenses accrued for the period include any fees charged to all
shareholders during the 30-day base period. According to the SEC
formula:
Yield = 2 [( a-b + 1)6-1]
cd
where
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the
period.
<TABLE>
<CAPTION>
The average annual total return for each Fund for the
indicated period ended on the date of the balance sheet contained herein
is as follows:
<S> <C> <C> <C> <C>
One Year Five Year Ten Year Since Fund's
Fund Name Period Period Period Inception
The Rightime Fund (2.77)% 8.48% 8.26% 10.24%
The Rightime Government
Securities Fund (6.75)% 1.75% 4.59% 3.80%
The Rightime Blue
Chip Fund (2.24)% 8.80% 8.76% 8.63%
The Rightime Social
Awareness Fund 0.75% 7.97% -- 7.91%
The Rightime MidCap
Fund 0.53% 9.00% -- 8.95%
</TABLE>
As the following formula indicates, the average annual total
return is determined by multiplying a hypothetical initial purchase
order of $1,000 by the average annual compound rate of return (including
capital appreciation/depreciation and dividends and distributions paid
and reinvested) for the stated period less any fees charged to all
shareholder accounts and analyzing the result. The calculation assumes
the maximum sales load is deducted from the initial $1,000 purchase
order and that all dividends and distributions are reinvested at the net
asset value on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each one, five
and ten year period or since inception and the deduction of all
applicable charges and fees. According to the SEC formula:
n
P(1+T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1, 5, or 10 year periods at the
end of the 1, 5, or 10 year periods (or fractional portion
thereof).
Sales literature pertaining to the Fund may quote a
distribution rate in addition to the yield or total return. The
distribution rate is the amount of distributions per share made by the
Fund over a twelve-month period divided by the current maximum offering
price. The distribution rate differs from the yield because it measures
what the Fund paid to shareholders rather than what the Fund earned from
investments. It also differs from the yield because it may include
dividends paid from premium income from option writing, if applicable,
and short-term capital gains in addition to dividends from investment
income. Under certain circumstances, such as when there has been a
change in the amount of dividend payout, or a fundamental change in
investment policies, it might be appropriate to annualize the
distributions paid over the period such policies were in effect, rather
than using the distributions paid during the past twelve months.
With respect to those categories of investors who are
permitted to purchase shares of the Fund at net asset value, sales
literature pertaining to the Fund may quote a "Current Return for Net
Asset Value Investments." This rate is computed by adding the income
dividends paid by the Fund during the last twelve months and dividing
that sum by a current net asset value. Figures for compound yield,
total return and other measures of performance for Net Asset Value
Investments may also be quoted. These will be derived as described
elsewhere in this Statement with the substitution of net asset value for
public offering price.
Sales literature referring to the use of the Fund(s) as a
potential investment for Individual Retirement Accounts (IRAs), and
other tax-advantaged retirement plans may quote a total return based
upon compounding of dividends on which it is presumed no federal income
tax applies.
Regardless of the method used, past performance is not
necessarily indicative of future results, but is an indication of the
return to shareholders only for the limited historical period used.
Comparisons and Advertisements
To help investors better evaluate how an investment in the
Fund(s) might satisfy their investment objective, advertisements
regarding the Fund(s) may discuss yield or total return for the Fund(s)
as reported by various financial publications. Advertisements may also
compare yield or total return to yield or total return as reported by
other investments, indices, and averages. The following publications,
indices, and averages may be used:
a) Dow Jones Composite Average or its component averages - an
unmanaged index composed of 30 blue-chip industrial corporation stocks
(Dow Jones Industrial Average), 15 utilities company stocks (Dow Jones
Utilities Average), and 20 transportation company stocks. Comparisons
of performance assume reinvestment of dividends.
b) Standard & Poor's 500 Stock Index or its component indices
- - an unmanaged index composed of 400 industrial stocks, 40 financial
stocks, 40 utilities stocks, and 20 transportation stocks. Comparisons
of performance assume reinvestment of dividends.
c) Standard & Poor's MidCap 400 Index - an unmanaged index
composed of 400 domestic and Canadian stocks which measures the mid-
range sector of the U.S. stock market.
d) The New York Stock Exchange composite or component indices
- - unmanaged indices of all industrial, utilities, transportation, and
finance stocks listed on the New York Stock Exchange.
e) Lipper - Mutual Fund Performance Analysis, Lipper Fixed
Income Analysis, and Lipper Mutual Fund Indices - measures total return
and average current yield for the mutual fund industry. Ranks
individual mutual fund performance over specified time periods assuming
reinvestment of all distributions, exclusive of sales charges.
f) The Ryan composite or component indices - unmanaged
indices of U.S. government securities as published in Barron's and other
publications.
g) Donoghue money market fund indices - unmanaged indices of
money market funds as published in Barron's and other publications.
h) CDA Mutual Fund Report, published by CDA Investment
Technologies, Inc. - analyzes price, current yields, risk, total return,
and average rate of return (average annual compounded growth rate) over
specified time periods for the mutual fund industry.
i) Weisenberger - Mutual Funds Panorama, Weisenberger
Investment Companies, published by Warren, Gorham & Lamont, Inc. - Lists
distributions, price and fund privileges; measures performance over
varying time period, calculates yield and lists expense ratios.
j) Mutual Fund Values and Mutual Fund Source Book, published
by Morningstar, Inc. - Lists fund assets, portfolio composition, annual
total return, portfolio statistics, income and expense ratios, risk
statistics and ranks funds by objective. Provides statistics on the
mutual fund industry.
k) Financial publications such as Business Week, Changing
Times, Financial World, Forbes, Fortune, Money Magazine, Wall Street
Journal, Barron's et al. which rate fund performance over various time
periods.
l) Consumer Price Index (or Cost of Living Index), published
by the U.S. Bureau of Labor Statistics - a statistical measure of
change, over time, in the price of goods and services, in major
expenditure groups.
In assessing such comparisons of yield, return, or volatility,
an investor should keep in mind that the composition of the investments
in the reported indices and averages is not identical to the Fund's
portfolio, that the averages are generally unmanaged, and that the items
included in the calculations of such averages may not be identical to
the formula used by the Fund to calculate its figures. In addition
there can be no assurance that the Fund will continue this performance
as compared to such other averages.
FINANCIAL STATEMENTS
The Rightime Fund Inc.'s financial statements are contained in its
annual report to shareholders dated October 31, 1997, which is available
without charge upon request, and is incorporated herein by reference.
ADMINISTRATOR
Rightime Administrators Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
INVESTMENT ADVISOR
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
DISTRIBUTOR
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
CUSTODIAN
CoreStates Bank, NA
Broad and Chestnuts Streets
Philadelphia, PA 19101-7618
TRANSFER AGENT
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
MAILING ADDRESS:
Rightime Fund Quick Mail
P.O. Box 13813
Philadelphia, PA 19101-3813
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Eight Penn Center, Suite 800
Philadelphia, PA 19103-2108
**********************************************
PART C
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements for the Rightime Fund, Inc.:
(1) Statement of Net Assets - October 31, 1997
(2) Statement of Operations for the year ended
October31, 1997
(3) Statement of Charges in Net Assets for the year
ended October 31, 1997
(4) Financial Highlights for the period ending
October31, 1997.
(5) Report of Independent Accountants dated
November 26, 1997.
(6) Notes to Financial Statements.
All Financial Statements referred to above are contained
in the Registrant's Annual Report to Shareholders,
which is incorporated by reference in the Statement
of Additional Information.
(b) Exhibits:
(1) (a) Articles of Incorporation of
Registrant (Exhibit to Form N-1A filed
2/19/85; filed herewith;
(b) Articles Supplementary establishing The Rightime
Government Securities Fund
(Exhibit to Post-effective Amendment No. 4 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(c) Articles Supplementary establishing The Rightime
Blue Chip Fund (Exhibit to Post-effective
Amendment No. 7 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(d) Articles Supplementary establishing The Rightime
Growth Fund (Exhibit to Post-effective
Amendment No. 11 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(e) Articles Supplementary establishing The Rightime
Social Awareness Fund
(Exhibit to Post-effective Amendment No. 13 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(f) Articles Supplementary establishing The Rightime
MidCap Fund
(Exhibit to Post-effective Amendment No. 16 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97):*
(2) Bylaws of Registrant
(Exhibit to Form N-1A filed 2-19-85; filed via EDGAR in
PE#22 on 3/1/97);*
(3) Not applicable;
(4) (a) Specimen of capital stock
certificate of The Rightime Series of
Registrant (Exhibit to Post-effective
Amendment No. 2 to Form N-1A);
(b) Specimen of capital stock certificate of The
Rightime Government Securities Series
(Exhibit to Post-effective Amendment No.
4 to Form N-1A);
(c) Specimen of capital stock certificate of The
Rightime Blue Chip Fund Series (Exhibit
to Post-effective Amendment No. 7 to Form
N-1A);
(d) Specimen of capital stock certificate of The
Rightime Growth Fund Series (Exhibit to
Post-effective Amendment No. 11 to Form
N-1A);
(e) Specimen of capital stock certificate of The
Rightime Social Awareness Fund (Exhibit
to Post-effective Amendment No. 13 to
Form N-1A);
(f) Specimen of capital stock certificate of The
Rightime MidCap Fund (Exhibit to Post-
effective Amendment No. 16 to Form N-1A);
(5) (a) Investment Advisory Agreement
between the Registrant and Rightime
Econometrics, Inc. on behalf of The
Rightime Series (Exhibit to Form N-1A
filed 2/19/85; filed via EDGAR in PE#22
on 3/1/97);*
(b) Investment Advisory Agreement between the
Registrant and Rightime Econometrics,
Inc. on behalf of The Rightime Government
Securities Series (Exhibit to
Post-effective Amendment No. 4 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(c) Investment Advisory Agreement between the
Registrant and Rightime Econometrics,
Inc. on behalf of The Rightime Blue Chip
Fund Series (Exhibit to Post-effective
Amendment No. 7 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(d) Investment Advisory Agreement between the
Registrant and Rightime Econometrics,
Inc. on behalf of The Rightime Growth
Fund Series (Exhibit to Post-effective
Amendment No. 11 to Form N-1A);
(e) Investment Advisory Agreement between the
Registrant and Rightime Econometrics,
Inc. on behalf of The Rightime Social
Awareness Fund (Exhibit to Post-effective
Amendment No. 13 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(f) Investment Advisory Agreement between the
Registrant and Rightime Econometrics,
Inc. on behalf of The Rightime MidCap
Fund (Exhibit to Post-effective Amendment
No. 16 to Form N-1A; filed via EDGAR in
PE#22 on 3/1/97);*
(6) (a) Distribution Agreement between
Registrant and Lincoln Investment
Planning, Inc. on behalf of The Rightime
Series (Exhibit to Pre-effective
Amendment No. 1 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(b) (i) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on
behalf of The Rightime Government
Securities Series (Exhibit to
Post-effective Amendment No. 4 to
Form N-1A; filed via EDGAR in PE#22
on 3/1/97);
(ii) Form of Amended Distribution Agreement between
Registrant and Lincoln Investment
Planning, Inc. for the Rightime
Government Securities Series
(Exhibit to Post-effective Amendment
No. 9 to Form N-1A; filed herewith);
(c) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on
behalf of The Rightime Blue Chip Fund
Series (Exhibit to Post-effective
Amendment No. 7 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(d) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on
behalf of The Rightime Growth Fund
(Exhibit to Post-effective Amendment No.
11 to Form N-1A);
(e) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on
behalf of The Rightime Social Awareness
Fund (Exhibit to Post-effective Amendment
No. 13 to Form N-1A; filed via EDGAR in
PE#22 on 3/1/97);*
(f) Distribution Agreement between Registrant and
Lincoln Investment Planning, Inc. on
behalf of The Rightime MidCap Fund
(Exhibit to Post-effective Amendment No.
16 to Form N-1A; filed via EDGAR in PE#22
on 3/1/97);*
(7) Not applicable;
(8) (a) Custody Agreement between the
Registrant and First Pennsylvania Bank,
N.A. on behalf of The Rightime Series.
(Exhibit to Form N-1A filed 2/19/85).
(b) Custody Agreement between the Registrant and
Investors Fiduciary Trust Company on
behalf of The Rightime Government
Securities Series. (Exhibit to
Post-effective Amendment No. 4 to Form
N-1A).
(c) Custody Agreement between the Registrant and First
Pennsylvania Bank, N.A. on behalf of The
Rightime Blue Chip Fund Series (Exhibit
to Post-effective Amendment No. 7 to Form
N-1A).
(d) Custody Agreement between Registrant and
Philadelphia National Bank for custodial
services (Exhibit to Post-effective
Amendment No. 11 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97.)*
(e) Amendment to Custodian Agreement (Exhibit to
Post-effective Amendment No. 13 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(f) Amendment to Custodian Agreement (Exhibit to Post-
effective Amendment No. 16 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);*
(9) (a) (i) Transfer Agency Agreement between the
Registrant and First Pennsylvania
Bank, N.A. on behalf of The Rightime
Series. (Exhibit to Form N-1A filed
2/19/85);
(ii) Amendment to the Transfer Agency Agreement
(Exhibit to Post-effective Amendment
No. 2 to Form N-1A);
(b) Transfer and Dividend Disbursing Agency Agreement
between the Registrant and Lincoln
Investment Planning (Exhibit to Post-
Effective Amendment No. 4 to Form N-1A;
filed via EDGAR in PE#22 on 3/1/97);*
(c) (i) Administration Agreement between Registrant
and Rightime Administrators, Inc. on
behalf of The Rightime Fund series
(Exhibit to Pre-effective Amendment
No. 1 to Form N-1A filed via EDGAR
in PE#22 on 3/1/97);
(ii) Proposed Form of Amended and Restated
Administration Agreement between
Registrant and Rightime
Administrators, Inc. on behalf of
The Rightime Fund series (filed
herewith).
(d) (i) Administration Agreement between Registrant
and Rightime Administrators, Inc. on
behalf of The Rightime Government
Securities Fund series (Exhibit to
Post-effective Amendment No. 4 to
Form N-1A filed via EDGAR in PE#22
on 3/1/97);
(ii) Proposed form of Amended and Restated
Administration Agreement between
Registrant and Rightime
Administrators, Inc. on behalf of
The Rightime Government Securities
Fund series (filed herewith).
(e) (i) Administration Agreement between Registrant
and Rightime Administrators, Inc. on
behalf of The Rightime Blue Chip
Fund series (Exhibit to
Post-effective Amendment No. 7 to
Form N-1A filed via EDGAR in PE#22
on 3/1/97);
(ii) Proposed form of Amended and Restated
Administration Agreement between
Registrant and Rightime
Administrators, Inc. on behalf of
The Rightime Blue Chip Fund series
(filed herewith).
(f) Administration Agreement between Registrant and
Rightime Administrators, Inc. on behalf
of The Rightime Growth Fund (Exhibit to
Post-effective Amendment No. 11 to Form
N-1A);
(g) (i) Administration Agreement between Registrant
and Rightime Administrators, Inc. on
behalf of The Rightime Social
Awareness Fund series (Exhibit to
Post-effective Amendment No. 13 to
Form N-1A filed via EDGAR in PE#22
on 3/1/97);
(ii) Amended and Restated Administration Agreement
dated as of December 12, 1997
between Registrant and Rightime
Administrators, Inc. on behalf of
The Rightime Social Awareness Fund
series (filed herewith).
(h) (i) Administration Agreement between Registrant
and Rightime Administrators, Inc. on
behalf of The Rightime MidCap Fund
series (Exhibit to Post-effective
Amendment No. 16 to Form N-1A filed
via EDGAR in PE#22 on 3/1/97);
(ii) Amended and Restated Administration Agreement
dated September 19, 1997 between the
Registrant and Rightime
Administrators, Inc. on behalf of
The Rightime MidCap Fund series
(filed herewith).
(i) Services Agreement dated March 26, 1985 between
Rightime Administrators, Inc. and Lincoln
Investment Planning, Inc. (Exhibit to
Form N-1A filed 2/19/85; filed herewith);
(j) Accounting Services Agreement between Rightime
Administrators, Inc. and First
Pennsylvania Bank, N.A. (Exhibit to
Post-effective Amendment No. 2 to Form
N-1A);
(k) Amendment of the Accounting Services Agreement
(Exhibit to Post-effective Amendment No.
2 to Form N-1A);
(l) Accounting Services Agreement dated December1,
1986 between the Registrant and Lincoln
Investment Planning, Inc., together with
Amendment No. 1 thereto (filed herewith).
(10) Opinion of Stradley, Ronon, Stevens & Young, LLP
(filed herewith);
(11) Consent of the Auditors (filed herewith);
(12) Not applicable;
(13) Undertaking of the initial shareholders
(Exhibit to Pre-effective Amendment No. 1 to Form
N-1A);
(14) Not Applicable;
(15) (a) 12b-1 Plan regarding: The Rightime Series
(Exhibit to Form N-1A filed 2/19/85;
filed; via EDGAR in PE#22 on 3/1/97);*
(b) Amendment No. 1 to 12b-1 Plan
(Exhibit to Post-effective Amendment No. 15 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(c) 12b-1 Plan regarding: The Rightime Government
Securities Fund series (Exhibit to
Post-effective Amendment No. 4 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(d) Amendment No. 1 to 12b-1 Plan
(Exhibit to Post-effective Amendment No. 15 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(e) 12b-1 Plan regarding: The Rightime Blue Chip Fund
Series (Exhibit to Post-effective
Amendment No. 7 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(f) Amendment No. 1 to 12b-1 Plan
(Exhibit to Post-effective Amendment No. 15 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(g) 12b-1 Plan regarding: The Rightime Growth Fund
Series (Exhibit to Post-Effective
Amendment No.11 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);
(h) Amendment No. 1
(Exhibit to Post-effective Amendment No. 15 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);
(i) 12b-1 Plan regarding: The Rightime Social
Awareness Fund Series (Exhibit to
Post-effective Amendment No. 13 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(j) Amendment No. 1 to 12b-1 Plan
(Exhibit to Post-effective Amendment No. 15 to Form
N-1A; filed via EDGAR in PE#22 on
3/1/97);*
(k) 12b-1 Plan regarding: The Rightime MidCap Fund
Series (Exhibit to Post-effective
Amendment No. 16 to Form N-1A; filed via
EDGAR in PE#22 on 3/1/97);*
(16) Schedule for computation of performance quotations
for:
(a) The Rightime Series;
(b) The Rightime Government Securities Series;
(c) The Rightime Blue Chip Fund Series;
(d) The Rightime Social Awareness Fund Series; and
(f) The Rightime MidCap Fund Series.
(17) Financial data schedules for:
(a) The Rightime Series;
(b) The Rightime Government Securities Series;
(c) The Rightime Blue Chip Fund Series;
(d) The Rightime Social Awareness Fund Series; and
(e) The Rightime MidCap Fund Series.
*Previously filed and incorporated herein by reference.
ITEM 25. Persons Controlled By or Under Common Control of
the Registrant
NONE
ITEM 26. Number of Holders of Securities
The number of record holders of each class of securities
of the Registrant as of January 2, 1998 is as follows:
(1) (2)
Number of Record Holders at
Title of Class at January 2, 1998
------------------------------ ---------------------------
Common stock $.01 par value:
The Rightime Fund 9,766
The Rightime Blue Chip Fund 19,054
The Rightime Social Awareness Fund 1,261
The Rightime MidCap Fund 6,094
The Rightime Government Securities Fund 2,109
ITEM 27. Indemnification
The Articles and Bylaws of the Registrant, and other
instruments by which the Registrant is administered, do not
contain any provisions or references to indemnification. The
Board of Directors has been advised of the provisions of
Sections 17(h) and (i) of the Act, ICA Release Number 11330
and relevant portions of ICA Release number 7221.
Reference is hereby made to the Maryland Corporations and
Associations Annotated Code, Section 2-418 (1983), which
contains various provisions authorizing Maryland Corporations
to indemnify various persons.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Registrant pursuant to
the foregoing provisions, the Registrant has been informed
that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
ITEM 28. Business and Other Connections of Investment
Advisor
The principal business of Rightime Econometrics, Inc. is
to provide investment counsel and advice to individual and
institutional investors.
ITEM 29. Principal Underwriters
(a) Lincoln Investment Planning, Inc., the only
principal underwriter of the Registrant, does
not act as principal underwriter, depositor or
investment advisor to any other investment
company.
(b) Herewith is the information required by the
following table with respect to each director,
officer or partner of the only underwriter
named in answer to Item 21 of Part B:
Position and Position and
Name and Principal Officers with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
Edward S. Forst, Sr. Director Vice President
Lincoln Investment and Secretary
Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095-1595
Edward S. Forst, Jr. President/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
Karen O'Neill Secretary/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
Thomas Forst Vice President/Director Assistant
Lincoln Investment Secretary
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1595
Harry S. Forst Treasurer/Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
Mariellen Forst-Paulus Director N/A
Lincoln Investment
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
Paul S. Mendelson Chief Oper. N/A
Lincoln Investment Officer
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
James M. Frank Chief Legal N/A
Lincoln Investment Officer
Planning, Inc.
218 Glenside Avenue
Wyncote, PA 29095-1595
(c) Not applicable.
ITEM 30. Location of Accounts and Records
Each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17
CFR 270.31a-1 to 31a-3) promulgated thereunder is in the
physical possession of:
Advisor
Rightime Econometrics, Inc.
1095 Rydal Road
Rydal, PA 19046-1711
Underwriter and Transfer Agent
Lincoln Investment Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095-1595
Custodian
CoreStates Bank, NA
Broad & Chestnut Sts.
Philadelphia, PA 19101
ITEM 31. Management Services
All management services are covered in the management
agreement between the Registrant and Rightime Econometrics,
Inc., as discussed in Parts A and B.
ITEM 32. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant
certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused
this amended Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Wyncote, Pennsylvania, on the 5th day of January,
1998.
THE RIGHTIME FUND, INC.
/S/DAVID J. RIGHTS
----------------------
By: David J. Rights
President
Pursuant to the requirements of the Securities Act of
1933, this Post-Effective Amendment No. 23 to its
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
Director, Presi-
dent (Principal
Executive Offi-
cer), and Trea-
surer (Principal
Financial and
/S/DAVID J. RIGHTS Accounting Officer) 1/5/98
- ------------------------ -------------
David J. Rights
/S/EDWARD S. FORST, SR. Director 1/6/98
- ------------------------ -------------
Edward S. Forst, Sr.
/S/FRANCIS X. BARRETT Director 1/8/98
- ------------------------ -------------
Francis X. Barrett
/S/WINIFRED L. TILLERY Director 1/8/98
- ------------------------ -------------
Winifred L. Tillery
/S/CAROL A. WACKER Director 1/8/98
- ------------------------ -------------
Carol A. Wacker
EXHIBITS
Item No.
EX27.(b)(17)(a) Financial data schedule for The Rightime
Fund series
EX27.(b)(17)(b) Financial data schedule for The Rightime
Government Securities Fund series
EX27.(b)(17)(c) Financial data schedule for The Rightime
Blue Chip Fund series
EX27.(b)(17)(d) Financial data schedule for The Rightime
Social Awareness Fund series
EX27.(b)(17)(e) Financial data schedule for The Rightime
MidCap Fund series
EX99.(b)(1)(a) Articles of Incorporation of Registrant
EX99.(b)(6)(b)(ii) Form of Amended Distribution Agreement
between Registrant and Lincoln Investment
Planning, Inc. on behalf of The Rightime
Government Securities Series (Doc no.
238269.1)
EX99.(b)(9)(c)(ii) Form of Amended and Restated
Administration Agreement between
Registrant and Rightime Administrators,
Inc. on behalf of The Rightime Fund
series (Doc no. 199419.3)
EX99.(b)(9)(d)(ii) Form of Administration Agreement between
Registrant and Rightime Administrators,
Inc. on behalf of The Rightime Government
Securities Fund series (Doc no.
234065.3).
EX99.(b)(9)(e)(ii) Form of Administration Agreement between
Registrant and Rightime Administrators,
Inc. on behalf of The Rightime Blue Chip
Fund series (Doc no. 199421.3).
EX99.(b)(9)(g)(ii) Amended and Restated Administration
Agreement dated December 12, 1997 between
Registrant and Rightime Administrators,
Inc. on behalf of The Rightime Social
Awareness Fund series (Doc no. 199426.3).
EX99.(b)(9)(h) Amended and Restated Administration
Agreement dated September 19, 1997
between Registrant and Rightime
Administrators, Inc. on behalf of The
Rightime MidCap Fund series (Doc no.
199427.3).
EX99.(b)(9)(i) Services Agreement dated March 26, 1985
between Rightime Administrators, Inc. and
Lincoln Investment Planning, Inc. (Doc
no. 238268.1).
EX99.(b)(9)(l) Accounting Services Agreement dated
December 1, 1986 between the Registrant
and Lincoln Investment Planning, Inc.,
together with Amendment No. 1 thereto
(Doc. no. 238266.1).
EX99.(b)(10) Securities Opinion of Stradley, Ronon,
Stevens & Young, LLP dated January 15, 1998
(filed herewith)
EX99.(b)(11) Consent of the Auditors
EX99.(b)(16) Schedule for computation of performance
quotations
EX99.(b)(19) Annual Report to Shareholders dated 10/31/97
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNS EXHIBIT 27 - FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> RIGHTIME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 111,300,159
<INVESTMENTS-AT-VALUE> 126,373,541
<RECEIVABLES> 438,730
<ASSETS-OTHER> 38,106
<OTHER-ITEMS-ASSETS> 73,491
<TOTAL-ASSETS> 126,923,868
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 922,061
<TOTAL-LIABILITIES> 922,061
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 126,178,366
<SHARES-COMMON-STOCK> 4,207,224
<SHARES-COMMON-PRIOR> 5,188,887
<ACCUMULATED-NII-CURRENT> 1,586,565
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16,340,256)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,577,132
<NET-ASSETS> 126,001,807
<DIVIDEND-INCOME> 3,896,533
<INTEREST-INCOME> 1,715,621
<OTHER-INCOME> 0
<EXPENSES-NET> (3,814,774)
<NET-INVESTMENT-INCOME> 1,797,380
<REALIZED-GAINS-CURRENT> (17,451,257)
<APPREC-INCREASE-CURRENT> 11,937,055
<NET-CHANGE-FROM-OPS> (3,716,822)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,141,411)
<DISTRIBUTIONS-OF-GAINS> (4,673,075)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 213,105
<NUMBER-OF-SHARES-REDEEMED> (1,695,912)
<SHARES-REINVESTED> 501,144
<NET-CHANGE-IN-ASSETS> (40,488,473)
<ACCUMULATED-NII-PRIOR> 1,930,596
<ACCUMULATED-GAINS-PRIOR> 5,784,076
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 778,525
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 778,525
<AVERAGE-NET-ASSETS> 155,596,183
<PER-SHARE-NAV-BEGIN> 32.09
<PER-SHARE-NII> 0.43
<PER-SHARE-GAIN-APPREC> (1.29)
<PER-SHARE-DIVIDEND> 0.42
<PER-SHARE-DISTRIBUTIONS> 0.91
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.90
<EXPENSE-RATIO> 2.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> RIGHTIME GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 7,544,813
<INVESTMENTS-AT-VALUE> 8,052,313
<RECEIVABLES> 97,376
<ASSETS-OTHER> 3,127
<OTHER-ITEMS-ASSETS> 931
<TOTAL-ASSETS> 8,153,747
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,460
<TOTAL-LIABILITIES> 21,460
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,313,026
<SHARES-COMMON-STOCK> 684,505
<SHARES-COMMON-PRIOR> 847,040
<ACCUMULATED-NII-CURRENT> 24,101
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6,771,371)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 566,531
<NET-ASSETS> 8,132,287
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 555,322
<OTHER-INCOME> 0
<EXPENSES-NET> (189,574)
<NET-INVESTMENT-INCOME> 365,748
<REALIZED-GAINS-CURRENT> (1,257,826)
<APPREC-INCREASE-CURRENT> 639,200
<NET-CHANGE-FROM-OPS> (252,878)
<EQUALIZATION> (2,805)
<DISTRIBUTIONS-OF-INCOME> (340,930)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 162,567
<NUMBER-OF-SHARES-REDEEMED> (352,560)
<SHARES-REINVESTED> 27,458
<NET-CHANGE-IN-ASSETS> (2,580,324)
<ACCUMULATED-NII-PRIOR> 2,088
<ACCUMULATED-GAINS-PRIOR> (5,513,545)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 33,110
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 33,110
<AVERAGE-NET-ASSETS> 8,270,388
<PER-SHARE-NAV-BEGIN> 12.65
<PER-SHARE-NII> 0.53
<PER-SHARE-GAIN-APPREC> (0.81)
<PER-SHARE-DIVIDEND> 0.49
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.88
<EXPENSE-RATIO> 2.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> RIGHTIME BLUE CHIP FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 186,443,544
<INVESTMENTS-AT-VALUE> 254,732,422
<RECEIVABLES> 658,558
<ASSETS-OTHER> 61,899
<OTHER-ITEMS-ASSETS> 81,575
<TOTAL-ASSETS> 255,534,454
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,147,500
<TOTAL-LIABILITIES> 1,147,500
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 204,064,296
<SHARES-COMMON-STOCK> 7,883,113
<SHARES-COMMON-PRIOR> 8,707,798
<ACCUMULATED-NII-CURRENT> 130,214
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (17,660,834)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 67,853,278
<NET-ASSETS> 254,386,954
<DIVIDEND-INCOME> 5,084,864
<INTEREST-INCOME> 1,025,958
<OTHER-INCOME> 0
<EXPENSES-NET> (5,981,351)
<NET-INVESTMENT-INCOME> 129,471
<REALIZED-GAINS-CURRENT> (24,794,958)
<APPREC-INCREASE-CURRENT> 32,788,354
<NET-CHANGE-FROM-OPS> 8,122,867
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,389,952)
<DISTRIBUTIONS-OF-GAINS> (640,796)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 988,116
<NUMBER-OF-SHARES-REDEEMED> (1,932,293)
<SHARES-REINVESTED> 119,492
<NET-CHANGE-IN-ASSETS> (23,252,129)
<ACCUMULATED-NII-PRIOR> 3,408,045
<ACCUMULATED-GAINS-PRIOR> 7,757,570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,432,253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,432,253
<AVERAGE-NET-ASSETS> 286,387,608
<PER-SHARE-NAV-BEGIN> 31.88
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.83
<PER-SHARE-DIVIDEND> 0.40
<PER-SHARE-DISTRIBUTIONS> 0.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 32.27
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> RIGHTIME SOCIAL AWARENESS FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,492,152
<INVESTMENTS-AT-VALUE> 11,462,843
<RECEIVABLES> 22,093
<ASSETS-OTHER> 1,812
<OTHER-ITEMS-ASSETS> 3,429
<TOTAL-ASSETS> 11,490,177
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,389
<TOTAL-LIABILITIES> 22,389
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,045,516
<SHARES-COMMON-STOCK> 391,194
<SHARES-COMMON-PRIOR> 298,882
<ACCUMULATED-NII-CURRENT> 57,049
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 404,457
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (39,234)
<NET-ASSETS> 11,467,788
<DIVIDEND-INCOME> 101,931
<INTEREST-INCOME> 206,006
<OTHER-INCOME> 0
<EXPENSES-NET> (249,539)
<NET-INVESTMENT-INCOME> 58,398
<REALIZED-GAINS-CURRENT> 403,901
<APPREC-INCREASE-CURRENT> (39,234)
<NET-CHANGE-FROM-OPS> 423,065
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (124,793)
<DISTRIBUTIONS-OF-GAINS> (296,922)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 162,214
<NUMBER-OF-SHARES-REDEEMED> (83,817)
<SHARES-REINVESTED> 13,915
<NET-CHANGE-IN-ASSETS> 2,773,540
<ACCUMULATED-NII-PRIOR> 123,444
<ACCUMULATED-GAINS-PRIOR> 297,478
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 53,093
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 53,093
<AVERAGE-NET-ASSETS> 10,626,282
<PER-SHARE-NAV-BEGIN> 29.09
<PER-SHARE-NII> 0.17
<PER-SHARE-GAIN-APPREC> 1.52
<PER-SHARE-DIVIDEND> 0.43
<PER-SHARE-DISTRIBUTIONS> 1.04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.31
<EXPENSE-RATIO> 2.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE RIGHTIME FAMILY OF FUNDS EXHIBIT 27 - FINANCIAL DATA SCHEDULE.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANNUAL REPORT TO SHAREHOLDERS DATED OCTOBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> RIGHTIME MIDCAP FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 66,742,921
<INVESTMENTS-AT-VALUE> 68,993,344
<RECEIVABLES> 446,149
<ASSETS-OTHER> 18,003
<OTHER-ITEMS-ASSETS> 14,465
<TOTAL-ASSETS> 69,471,961
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 176,755
<TOTAL-LIABILITIES> 176,755
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 65,026,422
<SHARES-COMMON-STOCK> 2,379,488
<SHARES-COMMON-PRIOR> 2,766,945
<ACCUMULATED-NII-CURRENT> 511,594
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,601,647
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,155,173
<NET-ASSETS> 69,295,196
<DIVIDEND-INCOME> 760,378
<INTEREST-INCOME> 1,582,723
<OTHER-INCOME> 0
<EXPENSES-NET> (1,697,978)
<NET-INVESTMENT-INCOME> 645,123
<REALIZED-GAINS-CURRENT> 1,591,305
<APPREC-INCREASE-CURRENT> 2,155,173
<NET-CHANGE-FROM-OPS> 4,391,601
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,467,850)
<DISTRIBUTIONS-OF-GAINS> 2,647,618
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 248,536
<NUMBER-OF-SHARES-REDEEMED> (777,511)
<SHARES-REINVESTED> 141,518
<NET-CHANGE-IN-ASSETS> (11,008,764)
<ACCUMULATED-NII-PRIOR> 1,334,681
<ACCUMULATED-GAINS-PRIOR> 2,657,960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 394,749
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 394,749
<AVERAGE-NET-ASSETS> 78,918,344
<PER-SHARE-NAV-BEGIN> 29.02
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 1.33
<PER-SHARE-DIVIDEND> 0.54
<PER-SHARE-DISTRIBUTIONS> .096
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.12
<EXPENSE-RATIO> 2.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
ARTICLES OF INCORPORATION
OF
THE RIGHTIME FUND, INC.
FIRST: The undersigned, Steven M. Felsenstein whose post office
address is c/o Stradley, Ronon, Stevens & Young, 1100 One Franklin
Plaza, Philadelphia, Pennsylvania 19102, and being at least eighteen
years of age, does hereby cause to be filed these Articles of
Incorporation for the purpose of forming a corporation under the General
Corporation Law of the State of Maryland.
SECOND: The name of the corporation is The Rightime Fund, Inc.
THIRD: The purpose for which the corporation is formed is to
operate as an investment company and to exercise all of the powers and
to do any and all of the things as fully and to the same extent as any
other corporation incorporated under the laws of the State of Maryland,
now or hereinafter in force, including, without limitation, the
following:
1. To purchase, hold, invest and reinvest in, sell,
exchange, transfer, mortgage, and otherwise acquire and dispose of
securities of every kind, character and description.
2. To exercise all rights, powers and privileges with
reference to or incident to ownership, use and enjoyment of any of such
securities, including, but without limitation, the right, power and
privilege to own, vote, hold, purchase, sell, negotiate, assign,
exchange, transfer, mortgage, pledge or otherwise deal with, dispose of,
use, exercise or enjoy any rights, title, interest, powers or privileges
under or with reference to any of such securities; and to do any and all
acts and things for the preservation, protection, improvement and
enhancement in value of any of such securities.
3. To purchase or otherwise acquire, own, hold, sell,
exchange, assign, transfer, mortgage, pledge or otherwise dispose of,
property of all kinds.
4. To buy, sell, mortgage, encumber hold, own, exchange,
rent or otherwise acquire and dispose of, and to develop, improve,
manage, subdivide, and generally to deal and trade in real property,
improved and unimproved, and wheresoever situate; and to build, erect,
construct, alter and maintain buildings, structures, and other
improvements on real property.
5. To borrow or raise moneys for any of the purposes of
the corporation, and to mortgage or pledge the whole or any part of the
property and franchises of the corporation, real, personal, and mixed,
tangible or intangible, and wheresoever situate.
6. To enter into, make and perform contracts and
undertakings of every kind for any lawful purpose, without limit as to
amount.
7. To issue, purchase, sell and transfer, reacquire, hold,
trade and deal in, to the extent permitted under the General Corporation
Law of the State of Maryland, capital stock, bonds, debentures and other
securities of the corporation, from time to time, to such extent as the
Board of Directors shall, consistent with the provisions of these
Articles of Incorporation, determine; and to repurchase, re-acquire and
redeem, to the extent permitted under the General Corporation Law of the
State of Maryland, from time to time, the shares of its own capital
stock, bonds, debentures and other securities.
The foregoing clauses shall each be construed as
purposes, objects and powers, and it is hereby expressly provided that
the foregoing enumeration of specific purposes, objects and powers shall
not be held to limit or restrict in any manner the powers of the
corporation, and that they are in furtherance of, and in addition to,
and not in limitation of, the general powers conferred upon the
corporation by the laws of the State of Maryland or otherwise; nor shall
the enumeration of one thing be deemed to exclude another, although it
be of like nature, not expressed.
FOURTH: The post office address of the principal office of the
corporation in the State of Maryland is:
c/o United States Corporation Company 1300 Merchantile
Bank and Trust Building
Two Hopkins Plaza
Baltimore Maryland 21201
The name and post office address of the initial resident
agent of the corporation in the State of Maryland is:
United States Corporation Company
1300 Merchantile Bank and Trust Building
Two Hopkins Plaza
Baltimore Maryland 21201
FIFTH: The total number of shares of stock which the
corporation shall have authority to issue is One Hundred Million
(100,000,000) shares of stock, with a par value of One Cent ($.01) per
share, to be known and designated as Common Stock, such shares of Common
Stock having an aggregate par value of one Million Dollars ($1,000,000).
Subject to the provisions of these Articles of Incorporation,
the Board of Directors shall have the power to issue shares of Common
Stock of the corporation from time to time, at prices not less than the
net asset value or par value thereof, whichever is greater, for such
consideration as may be fixed from time to time pursuant to the
direction of the Board of Directors.
Pursuant to Section 2-105 of the Maryland General Corporation
Law, the Board of Directors of the corporation shall have the power to
designate one or more series of shares of Common Stock and such series
(subject to any applicable rule, regulation or order of the Securities
and Exchange Commission or other applicable law or regulation) shall
have such preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other characteristics as the Board-may
determine in the absence of contrary determination set forth herein.
Subject to further action of the Board of Directors, a series of shares
will be deemed initially to have been designated as the Rightime Fund
and Fifty Million (50,000,000) shares of common stock shall be deemed to
have been classified and allocated to such series. At any time when
there are no shares outstanding or subscribed for a particular series
previously established and designated herein or by the Board of
Directors, the series may be liquidated by similar means. Each share of
a series shall have equal rights with each other share of that series
with respect to the assets of the corporation pertaining to that series.
The dividends payable to the holders of any series (subject to any
applicable rule, regulation or order of the Securities and Exchange
Commission or any other applicable law or regulation) shall be
determined by the Board and need not be individually declared, but may
be declared and paid in accordance with a formula adopted by the Board.
Except as otherwise provided herein, all references in these Articles
of Incorporation to Common Stock or series of stock shall apply without
discrimination to the shares of each series of stock.
The holder of each share of stock of the corporation shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share of stock, irrespective of the series then standing in
his or her name in the books of the corporation. On any matter
submitted to a vote of shareholders, all shares of the corporation then
issued and outstanding and entitled to vote, irrespective of the series,
shall be voted in the aggregate and not by series except (1) when
otherwise expressly provided by the Maryland General Corporation Law, or
(2) when required by the Investment Company Act of 1940, as amended,
shares shall be voted by individual series; and (3) when the matter does
not affect any interest of a particular series, then only shareholders
of affected series shall be entitled to vote thereon. Holders of shares
of stock of the corporation shall not be entitled to cumulative voting
in the election of directors or on any other matter.
Each series of stock of the corporation shall have the
following powers, preferences and participating, voting, or other
special rights and the qualifications, restrictions, and limitations
thereof shall be as follows:
1. All consideration received by the corporation for the
issue or sale of stock of each series, together with all income,
earnings, profits, and proceeds thereof including any proceeds derived
from the sale, exchange or liquidation thereof, and any funds or
payments derived from any reinvestment of such proceeds in whatever form
the same may be, shall irrevocably belong to the series of shares of
stock with respect to which such assets, payments or funds were received
by the corporation for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the
corporation. Such assets, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof and any assets derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as
"assets belonging to" such series.
2. The Board of Directors may from time to time declare
and pay dividends or distributions, in stock or in cash, on any or all
series of stock; provided, such dividends or distributions on shares of
any series of stock shall be paid only out of earnings, surplus, or
other lawfully available assets belonging to such series.
3. The Board of Directors shall have the power in its
discretion to distribute in any fiscal year as dividends, including
dividends designated in whole or in part as capital gain distributions,
amounts sufficient, in the opinion of the Board of Directors, to enable
the corporation to qualify as a "regulated investment company" under the
Internal Revenue Code of 1954, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and
to avoid liability for the corporation for Federal income tax in respect
of that year and to make other appropriate adjustments in connection
therewith. In furtherance, and not in limitation of the foregoing, in
the event that a series of shares has a net capital loss for a fiscal
year, and to the extent that the net capital loss offsets net capital
gains from another series, the amounts to be deemed available for
distribution to the series with the net capital gain shall be reduced by
the amount of offset. The shareholders of the series with the net
capital gain shall be entitled to a full distribution of the net income
and the net capital gain to the extent earned or realized. If the net
capital loss of a series exceeds the net capital gain from another
series, the excess loss shall not reduce the net investment income
available for distribution to the series with the loss, but shall be
carried forward.
4. In the event of the liquidation or dissolution of the
corporation, shareholders of each series shall be entitled to receive,
as a series, out of the assets of the corporation available for
distribution to shareholders, but other than general assets not
belonging to any particular series of stock, the assets belonging to
such series, and the assets so distributable to the shareholders of any
series shall be distributed among such shareholders in proportion to the
number of shares of such series held by them and recorded on the books
of the corporation. In the event that there are any general assets not
belonging to any particular series of stock and available for
distribution, such distribution shall be made to the holders of stock of
all series in proportion to the net asset value of the respective series
determined as hereinafter provided.
5. The assets belonging to any series of stock shall be
charged with the liabilities in respect to such series, and shall also
be charged with its share of the general liabilities of the corporation,
in proportion to the net asset value of the respective series determined
as hereinafter provided. The determination of the Board of Directors
shall be conclusive as to the amount of liabilities, including accrued
expenses and reserves, as to the allocation of the same as to a given
series, and as to whether the same or general assets of the corporation
are allocable to one or more series.
The Board of Directors may provide for a holder of any
series of stock of the corporation, who surrenders his certificate in
good form for transfer to the corporation or, if the shares in question
are not represented by certificates, who delivers to the corporation a
written request in good order signed by the shareholder, to convert the
shares in question on such basis as the Board may provide, into shares
of stock of any other series of the corporation.
The net asset value per share of a series of the
corporation's common stock shall be determined in accordance with the
Investment Company Act of 1940, as amended, and with generally accepted
accounting principles, by adding the market or appraised value of all
securities, cash and other assets of the corporation pertaining to that
series, subtracting the liabilities determined by the Board of Directors
to be applicable to that series, allocating any general assets and
general liabilities to that series, and dividing the net result by the
number of shares of that series outstanding. Securities and other
investments and assets will be valued at the current market value, and
in the absence of a readily available market value, will be valued at
fair value as determined in good faith by the Board of Directors.
The holders of the shares of Common Stock or other
securities of the corporation shall have no preemptive rights to
subscribe to new or additional shares of its Common Stock or other
securities.
SIXTH: The number of directors of the Corporation shall be such
number as may from time to time be fixed by the By-Laws of the
corporation or pursuant to authorization contained in such By-Laws;
provided, the board of directors shall initially consist of five
directors until such time as the number of directors is changed as
stated above. The name of each director who shall act as such until a
successor is duly chosen and qualified is:
David J. Rights Jeanette W. Brewer
Edward S. Forst, Sr. Carol A. Wacker
Howard R. Amos
SEVENTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of the
corporation:
1. The Board of Directors shall have power to fix an
initial offering price which shall yield to the corporation not less
than the par value thereof, at which the shares of the Common Stock of
the corporation shall be offered for sale, and to determine from time to
time thereafter the offering price which shall yield to the corporation
not less than the par value thereof, of the shares of its Common Stock;
provided, however, that no shares of the Common Stock of the corporation
shall be issued or sold for a consideration which shall yield to the
corporation less than the net asset value of such shares, determined as
hereinafter provided, as of the close of business on the business day on
which such shares are sold, or at such other times set by the Board of
Directors, except in the case of shares of such Common Stock issued in
payment of a dividend properly declared and payable.
The net asset value of the property and assets of the
corporation shall be determined as of the close of business on each
business day, and at such other times as the Board of Directors may
direct, by deducting from the total appraised value of all of the
property and assets of the corporation, determined in the manner
hereinafter provided, all debts, obligations and liabilities of the
corporation (including, but without limitation of the generality of any
of the foregoing, any or all debts, obligations, liabilities or claims
of any and every kind and nature, whether fixed, accrued, or unmatured,
and any reserves or charges, determined in accordance with generally
accepted accounting principles, for any or all thereof, whether for
taxes, including estimated taxes or unrealized book profits, expenses,
contingencies or otherwise).
In determining the total appraised value of all the
property and assets of the corporation:
(a) Securities owned shall be valued at market value
or, in the absence of readily available market quotations, at fair value
as determined in good faith by or as directed by the Board of Directors
in accordance with applicable statutes and regulations.
(b) Dividends declared but not yet received, or
rights, in respect of securities which are quoted ex-dividend or ex-
rights, shall be accounted for as determined by or pursuant to the
direction of the Board of Directors as deemed necessary by the Board of
Directors in connection with the calculation of anticipated daily
distributable income of the corporation and with such others matters as
the Board of Directors shall determine to be proper.
(c) The value of any other assets of the corporation
(and any of the assets mentioned in paragraphs (a) or (b), in the
discretion of the Board of Directors in the event of a national
financial emergency, as hereinafter defined) shall be determined in such
manner as may be approved from time to time by or pursuant to the
direction of the Board of Directors.
The net asset value of each share of the Common
Stock of the corporation shall be determined by dividing the total
market value of the property and assets of the corporation by the total
number of shares of its Common Stock then issued and outstanding,
including any shares sold by the corporation up to and including the
date as of which such net asset value is to be determined whether or not
certificates therefor have actually been issued. In case the net asset
value of each share so determined shall include a fraction of one cent,
such net asset value of each share shall be adjusted to the nearest full
cent.
For the purposes of these Articles of Incorporation,
a "national financial emergency" is defined as the whole or any part of
any period (i) during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, (ii) during which trading
on the New York Stock Exchange is restricted, (iii) during which an
emergency exists as a result of which disposal by the corporation of
securities owned by such series is not reasonably practicable or it is
not reasonably practicable for the corporation fairly to determine the
value of the net assets of such series, or (iv) during any other period
when the Securities and Exchange Commission (or any succeeding govern-
mental authority) may for the protection of security holders of the
corporation by order permit suspension of the right of redemption or
postponement of the date of payment on redemption; provided that
applicable rules and regulations of the Securities and Exchange
Commission (or any succeeding governmental authority) shall govern as to
whether the conditions prescribed in (ii), (iii), or (iv) exist. The
Board of Directors may, in its discretion, declare the suspension
described in (iv) above at an end, and such other suspension relating to
a natural financial emergency shall terminate as the case may be on the
first business day on which said Stock Exchange shall have reopened or
the period specified in (ii) or (iii) shall have expired (as to which in
the absence of an official ruling by said Commission or succeeding
authority, the determination of the Board of Directors shall be
conclusive)
2. To the extent permitted by law, and except in the case
of a national financial emergency, the-corporation shall redeem shares
of its Common Stock from its stockholders upon request of the holder
thereof received by the corporation or its designated agent during
business hours of any business day, provided that such-request must be
accompanied by surrender of outstanding certificate or certificates for
such shares in form for transfer, together with such proof of the
authenticity of signatures as may reasonably be required on such shares
(or, on such request in the event no certificate is outstanding) by, or
pursuant to the direction of the Board of Directors of the corporation,
and accompanied by proper stock transfer stamps. Shares redeemed upon
any such request shall be purchased by the corporation at the net asset
value of such shares determined in the manner provided in Paragraph (1)
of this Article Seventh, as of the close of business on the business day
during which such request was received in good order by the corporation.
Payments for shares of its Common Stock so redeemed by
the corporation shall be made in cash, except payment for such shares
may, at the option of the Board of Directors, or such officer or
officers as they may duly authorize for the purpose in their complete
discretion, be made from the assets of that series in kind or partially
in cash and partially in kind. In case of any payment in kind the Board
of Directors, or their delegate, shall have absolute discretion as to
what security or securities of such series shall be distributed in kind
and the amount of the same; and the securities shall be valued for pur-
poses of distribution at the value at which they were appraised in
computing the current net asset value of the series of the Fund's
shares, provided that any stockholder who cannot legally acquire
securities so distributed in kind by reason of the prohibitions of the
Investment Company Act of 1940 shall receive cash.
Payment for shares of its Common Stock so redeemed by the
corporation shall be made by the corporation as provided above within
seven days after the date which such shares are deposited; provided,
however, that if payment shall be made by delivery of assets of the
corporation, as provided above, any securities to be delivered as part
of such payment shall be delivered as promptly as any necessary
transfers of such securities on the books of the several corporations
whose securities are to be delivered may be made, but not necessarily
within such seven day period.
The right of any holder of shares of the Common Stock of
the corporation to receive dividends thereon and all other rights of
such stockholder with respect to the shares so redeemed by the
corporation shall cease and determine from and after the time as of
which the purchase price of such shares shall be fixed, as provided
above, except the right of such stockholder to receive payment for such
shares as provided for herein.
3. The Board of Directors, may from time to time, without
the vote or consent of stockholders, establish uniform standards with
respect to the minimum net asset value of a stockholder account or a
minimum investment which may be made by a stockholder. The Board of
Directors may authorize the closing of those stockholder accounts not
meeting the specified minimum standards of net asset value by redeeming
all of the shares in such accounts, provided there is mailed to each
affected stockholder account, at least thirty (30) days prior to the
planned redemption date, a notice setting forth the minimum account size
requirement and the date on which the account will be closed if the
minimum size requirement is not met prior to said closing date.
EIGHTH: The holders of a majority of the shares of capital stock
present in person or by proxy at a meeting thereof at which a quorum is
present shall have the power to approve any matter properly before the
meeting; provided, if any provision of the Maryland General Corporation
Law requires a greater percentage of shares to approve a matter, the
holders of the majority of the shares of capital stock of the
corporation issued and outstanding and entitled to vote at the meeting
shall have the power to approve such matter. In addition to the
foregoing, when required under the Investment Company Act of 1940, as
amended, holders of a majority of the outstanding voting securities of
the corporation or any series thereof shall be required to approve such
matter.
NINTH: The corporation expressly reserves the right to amend,
alter, change or repeal any provision contained in these Articles of
Incorporation, and all rights, contract and otherwise, conferred herein
upon the stockholders are granted subject to such reservation.
IN WITNESS WHEREOF, the undersigned incorporator of The Rightime
Fund, Inc. who executed the foregoing Articles of Incorporation hereby
acknowledges the same to be his act and further acknowledges that, to
the best of his knowledge the matters and facts set forth therein are
true in all material respects under the penalties of perjury.
Dated the 13th day of November, 1984.
/s/Steven M. Felsenstein
--------------------------
Steven M. Felsenstein, Esq.
AMENDED
DISTRIBUTION AGREEMENT
BETWEEN
THE RIGHTIME FUND, INC.
AND
LINCOLN INVESTMENT PLANNING INC.
THIS AGREEMENT entered into the day of December, 1987, by and
between THE RIGHTIME FUND, INC., a Maryland corporation with an office
located at The Benson East Office Plaza, Jenkintown, Pennsylvania 19046
(the "Corporation") for the Rightime Government Securities Series (the
"Fund"), and LINCOLN INVESTMENT PLANNING INC., a Pennsylvania
corporation, with its principal office located at Dept. F, Suite 1000,
Benson East Office Plaza, Jenkintown, PA 19046 (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements of the
parties hereto, the parties intending to be bound, mutually covenant and
agree with each other as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Distributor as agent of the Fund to effect the sale and public
distribution of shares of the capital stock of the Fund. This
appointment is made by the Corporation for the Fund and accepted by the
Distributor upon the understanding that the distribution of shares of
the Fund to the public be effected by the Distributor or through various
securities dealers, either individuals or organizations, but that it
shall be done in such manner that the Fund shall be under no
responsibility or liability to any person whatsoever on account of the
acts and statements of any such individual or organization. The
Distributor shall have the sole right to select the security dealers to
whom shares will be offered by it and, subject to express provisions of
this Agreement, applicable securities laws, the Corporation's Articles
of Incorporation and the By-Laws and the then current Prospectus of the
Fund, to determine the terms and prices in any contract for the sale of
shares to any dealer made by it as such agent for the Fund.
2. The Distributor shall be the exclusive agent for the Fund
for the sale of its shares and the Fund agrees that it will not sell any
shares to any person except to fill orders for the shares received
through the Distributor; provided, however, that the foregoing exclusive
right shall not apply: (a) to shares issued or sold in connection with
the merger or consolidation of any other investment company with the
Fund or the acquisition by purchase or otherwise of all or substantially
all the assets of any investment company or substantially all the
outstanding shares of any such company by the Fund; (b) to shares which
may be offered by the Fund to its stockholders for reinvestment of cash
distributed from capital gains or net investment income of the Fund; or
(c) to shares which may be issued to shareholders of other Funds who
exercise any exchange privilege set forth in the Fund's Prospectus.
3. The Distributor shall have the right to sell the shares of
the Fund's capital stock to dealers, as needed (making reasonable
allowance for clerical errors and errors of transmission), but not more
than the shares needed to fill unconditional orders for shares placed
with the Distributor by dealers. In every case the Distributor shall
charge the public offering price and the Fund shall receive the net
asset value for the shares sold, determined as provided in Paragraph 4
hereof. The Distributor shall notify the Fund at the close of each
business day (normally 5:00 p.m., New York City time), of the number of
shares sold during each day. Notwithstanding the foregoing, the Fund
may sell its shares to certain affiliated persons at net asset value, as
described in the prospectus.
4. The public offering price consists of the net asset value
per share plus a maximum sales charge of: 4.75% for purchases under
$50,000; 3.75% for purchases of $50,000 but less than $100,000; 2.75%
for purchases of $100,000 but less than $500,000; 1.75% for purchases of
$500,000 but less than $100,000; .75% for purchases of $100,000 but less
than $300,000; and no sales charges for purchases of $3,000,000 or more;
unless otherwise stated in the Fund's currently effective Prospectus.
The net asset value of shares of the Fund shall be determined by the
Fund or the Fund's custodian, or such officer or officers or other
persons as the Board of Directors of the Corporation may designate. The
determination shall be made once each day on which the New York Stock
Exchange is open for a full business day and in accordance with the
method set out in the Bylaws of the Corporation and the current
Prospectus of the Fund.
5. The Distributor agrees that it will not sell any shares of
the Fund to any officer, director, or partner of either the Distributor
or of the Corporation or any firm or corporation which may be employed
by the Fund or by the Distributor except for investment purposes only
and where the purchaser agrees not to resell the securities to anyone
except the Fund. The Distributor further agrees that it will promptly
advise the Secretary of the Corporation of all sales of shares of the
Fund to, or purchase of shares of the Fund from, any such person.
6. The Distributor agrees that it will not for its own account
purchase any shares of the Fund except for investment purposes and that
it will not for its own account sell any such shares excepting only
those shares which it may own at the time of executing this Agreement
and any shares resulting from the reinvestment of dividends paid on
those shares, and the Distributor will not sell other shares except by
redemption of such shares by the Fund.
7. (a) On behalf of the Fund the Corporation appoints and
designates the Distributor as agent of the Fund and the Distributor
accepts such appointment as such agent, to repurchase shares of the Fund
in accordance with the provisions of the Articles of Incorporation and
By-Laws of the Corporation.
(a) In connection with such redemptions or repurchases
the Corporation authorizes and designates the Distributor to take any
action, to make any adjustments in net asset value, and to make any
arrangements for the payment of the redemption or repurchase price
authorized or permitted to be taken or made in accordance with the
Investment Company Act of 1940 and as set forth in the Corporation's By-
Laws and then current Prospectus of the Fund.
(b) The authority of the Distributor under this
Paragraph 7 may, with the consent of the Corporation, be redelegated in
whole or in part to another person or firm.
(c) The authority granted in this Paragraph 7 may be
suspended by the Corporation at any time or from time to time pursuant
to the provisions of its Articles of Incorporation until further notice
to the Distributor. The President or any Vice President of the
Corporation shall have the power granted by said provisions. After any
such suspension the authority granted to the Distributor by this
Paragraph 7 shall be reinstated only by a written instrument executed on
behalf of the Fund by the Corporation's President or any Vice President.
8. The Fund agrees that it will cooperate with the Distributor
to prepare, execute and file applications for registration and
qualification of its shares for sale under the laws of the United States
and the provisions and regulations of the U.S. Securities and Exchange
Commission and under the Securities Acts of such States and in such
amounts as the Fund may determine, and shall pay registration fees in
connection therewith. The Distributor shall bear all expenses incident
to the sale of shares of the Fund, including without limitation, the
cost of any sales material or literature, the cost of copies of the
prospectus used as sales material (except those being sent to existing
shareholders) and the cost of any reports or proxy material prepared for
the Fund's stockholders to the extent that such material is used in
connection with the sale of shares of the Fund except to the extent that
the Fund is obligated to bear such costs under a distribution plan
adopted by the Fund.
9. For its services under this Agreement, the Distributor
shall be entitled to receive the maximum amount of the payment called
for under the Fund's Distribution Plan (the "Plan") adopted pursuant to
the Investment Company Act of 1940 Rule 12b-1 (the "Rule"). The
Distributor may make payments to others from such amounts in accordance
with the Plan or any agreement in effect under such Plan. The
Distributor agrees to comply with the Rule and the Plan in connection
with receipt and disbursement of funds under the Plan.
10. Notwithstanding anything contained herein to the contrary,
shares of the Fund may be offered for sale at a price other than their
current net asset value or regular public offering price, if such
reduction or elimination is authorized by an order of the Securities and
Exchange Commission, or the Investment Company Act of 1940 or the rules
and regulations promulgated thereunder provide for such variation.
Furthermore, such shares may be offered and sold directly by the Fund
rather than by the Distributor as otherwise provided in this Agreement.
11. This Agreement shall become effective March 1, 1988 and
shall continue in effect for a period of more than one year from its
effective date only as long as such continuance is approved, at least
annually, by the Board of Directors of the Corporation, including a
majority of those Directors who are not "interested persons" of any
party to this Agreement voting in person at a meeting called for the
purpose of voting on such approval. If payments hereunder are made
pursuant to provisions of a plan adopted by the Fund pursuant to
Investment Company Act of 1940 Rule 12b-1 then renewals hereof shall
also be made in accordance with the requirements of such rule. This
Agreement may be terminated by either party hereto upon thirty (30)
days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment by the
Distributor (as the term "assignment" is defined by the Investment
Company Act of 1940, as amended) unless the United States Securities and
Exchange Commission has issued an order exempting the Fund and the
Distributor from the provisions of the Investment Company Act of 1940,
as amended, which would otherwise have effected the termination of this
Agreement.
12. No amendment to this Agreement shall be executed or become
effective unless its terms have been approved (a) by a majority of the
directors of the Corporation or by the vote of a majority of the
outstanding voting securities of the Fund, and (b) by a majority of
those directors who are not interested persons of the Fund or of any
party to this Agreement.
13. The Corporation, on behalf of the Fund, and the
Distributor hereby each agree that all literature and publicity issued
by either of them referring directly or indirectly to the Fund or to the
Distributor shall be submitted to and receive the approval of the Fund
and the Distributor before the same may be used by either party.
14. (a) The Distributor agrees to use its best efforts in
effecting the sale and public distribution of the shares of the Fund
through dealers and to perform its duties in redeeming and repurchasing
the shares of the Fund, but nothing contained in this Agreement shall
make the Distributor or any of its officers and directors or
shareholders liable for any loss sustained by the Fund or any of the
Corporation's officers, directors or shareholders, or by any other
person on account of any act done or omitted to be done by the
Distributor under this Agreement provided that nothing herein contained
shall protect the Distributor against any liability to the Fund or to
any of its shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties as Distributor or by reason of its
reckless disregard of its obligations or duties as Distributor under
this Agreement. Nothing in this Agreement shall protect the Distributor
from any liabilities which it may have under the Securities Act of 1933
or the Investment Company Act of 1940.
(a) The Distributor may, from time to time, enter into
agreements with security dealers and other qualified entities selected
by it and may make assistance payments to such dealers in such amounts
as it deems appropriate, provided that such payments are permitted by
the then current distribution plan adopted by the Fund in accordance
with Rule 12b-1 of the Investment Company Act of 1940, as amended.
15. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect.
IN WITNESS WHEREOF, THE RIGHTIME FUND, INC., for the Rightime
Government Securities Series, and LINCOLN INVESTMENT PLANNING, INC. have
caused this Agreement to be signed by their duly authorized officers and
their corporate seals to be hereunto duly affixed all on the day and
year above written.
Attest: THE RIGHTIME FUND, INC.
Edward S. Forst, Sr., David J. Rights, President
Secretary
Attest: LINCOLN INVESTMENT PLANNING, INC.
Thomas Forst, Edward S. Forst, Sr., President
Assistant Secretary
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AGREEMENT dated _________________ amends and
restates the ADMINISTRATION AGREEMENT made by and between The
Rightime Fund, Inc., a Maryland corporation (the
"Corporation") for The Rightime Fund Series (the "Fund"), and
Rightime Administrators, Inc., a Pennsylvania corporation
(the "Administrator").
BACKGROUND
The Fund is a diversified open-end management investment
company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"). The Fund has been organized for
the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund
desires to avail itself of the facilities available to the
Administrator with respect to the administration of its day-
to-day affairs, and the Administrator is willing to furnish
such administrative services on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. The Fund hereby appoints the Administrator to
administer its affairs, subject to the overall supervision of
the Board of Directors of the Fund, for the period and on the
terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to
render the services herein described and to assume the
obligations set forth herein, for the compensation herein
provided.
2. Subject to the supervision of the Board of
Directors of the Fund, the Administrator shall administer the
Fund's affairs and, in connection therewith, shall furnish
the Fund with office facilities, and shall be responsible for
(i) maintaining the Fund's books and records (other than
financial or accounting books and records or those being
maintained by the Fund's custodian, transfer agent,
distributor, or accounting services agents); (ii) overseeing
the Fund's insurance relationships; (iii) preparing for the
Fund (or assisting counsel and/or auditors in the preparation
of) all required tax returns, proxy statements and reports to
the Fund's shareholders and Directors and reports to and
other filings with the Securities and Exchange Commission and
any other governmental agency (the Fund agreeing to supply or
to cause to be supplied to the Administrator any necessary
financial and other information in connection with the
foregoing); (iv) preparing such applications and reports as
may be necessary to register or maintain the Fund's
registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund
agreeing to pay all filing fees or other similar fees in
connection therewith); (v) responding to all inquiries or
other communications of shareholders and broker-dealers, if
any, which are directed to the Administrator, or, if any such
inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or
accounting services agents, overseeing their response
thereto; (vi) overseeing all relationships between the Fund
and its custodian, transfer agent, distributor, and
accounting services agents, including the negotiation of
agreements in relation thereto and the supervision of the
performance of such agreements; and (vii) authorizing and
directing any of the Administrator's directors, officers and
employees who may be elected as directors or officers of the
Fund to serve in the capacities in which they are elected.
All services to be furnished by the Administrator under this
Agreement may be furnished through the medium of any such
directors, officers or employees of the Administrator. The
Fund authorizes the Administrator to appoint and contract
with other parties to perform certain of the services to be
furnished by the Administrator under this Agreement, subject
to ratification by the Officers of the Fund, and any such
contract shall be countersigned by the Fund to confirm such
ratification. The Fund represents that it will cooperate
with the Administrator and any other parties retained by the
Administrator under this Agreement in the performance of
services to be rendered by the Administrator or any other
parties retained by the Administrator. The Fund further
represents that it will indemnify and hold the Administrator
harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund
to so cooperate with the Administrator and other parties
retained by the Administrator to perform services under this
Agreement, or arising from any error, omission, inaccuracy or
other deficiency in information provided by the Fund, or the
failure of the Fund to provide any portion of such or any
information needed by the Administrator or any parties
retained by the Administrator to perform the services to be
rendered under this Agreement.
In connection with the services rendered by the
Administrator under this Agreement, the Administrator will
bear all of the following expenses:
(i) The salaries and expenses of all
personnel of the Fund and the Administrator except the fees
of directors who are not affiliated persons of the
Administrator or the Fund's investment advisor.
(ii) All expenses incurred by the
Administrator or by the Fund in connection with administering
the ordinary course of the Fund's business other than those
assumed by the Fund herein.
(iii) The fees of any party with whom the
Administrator may contract to perform certain of the services
to be furnished by the Administrator under this Agreement.
The Fund assumes and will pay the expenses
described below:
(a) The fees and expenses of any
investment advisor or expenses otherwise incurred by the Fund
in connection with the management of the investment and
reinvestment of the Fund's assets;
(b) The fees and expenses of the
distributor;
(c) The fees and expenses of directors who
are not affiliated persons of the Administrator, the
investment advisor or the distributor;
(d) The fees and expenses of the
custodian, which relate to (i) the custodial function and the
recordkeeping connected therewith, (ii) the maintenance of
the required accounting records of the Fund not being
maintained by the Administrator, (iii) the pricing of the
shares of the Fund, including the cost of any pricing service
or services which may be retained pursuant to the
authorization of the Board of Directors of the Fund, and (iv)
for both mail and wire orders, the cashiering function in
connection with the issuance and redemption of the Fund's
securities and (v) all other expenses related to the
performance of duties by the custodian for the Fund;
(e) The fees and expenses of the Fund's
transfer and dividend disbursing agent, which may be the
custodian, which relate to the maintenance of each
shareholder account;
(f) The charges and expenses of legal
counsel and independent accountants for the Fund;
(g) Brokers' commissions and any issue or
transfer taxes chargeable to the Fund in connection with its
securities transactions;
(h) All taxes and corporate fees payable
by the Fund to federal, state or other governmental agencies;
(i) The fees of any trade association of
which the Fund may be a member;
(j) The cost of stock certificates
representing and non-negotiable share deposit receipts
evidencing shares of the Fund, if any;
(k) The fees and expenses involved in
registering and maintaining registrations of the Fund and its
shares with the Securities and Exchange Commission,
registering the Fund as a broker-dealer and qualifying its
shares for sale under state securities laws, including the
preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and
state securities laws for such purposes;
(l) Allocable communications expenses with
respect to investor services and-all expenses of
shareholders' and directors' meetings and of preparing,
printing and mailing prospectuses and reports to shareholders
in the amount necessary for distribution to the shareholders;
and
(m) Litigation and indemnification
expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business.
3. The Administrator hereby agrees to pay the
organization expenses of, and the expenses incurred in
connection with the initial offering or distribution of
shares by, the Fund, except that the Fund shall reimburse the
Administrator for such organization expenses, amortized and
paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed
and the facilities furnished by the Administrator, the Fund
shall pay the Administrator a fee at the annualized rate of
0.95 of one percent (0.95%) of the first five-hundred million
dollars of the Fund's average daily net assets and 0.90 of
one percent (0.90%) of the Fund's average daily net assets in
excess of five-hundred million dollars. This fee will be
computed daily and shall be payable twice monthly according
to such schedule as is set forth from time to time by the
parties to this Agreement and approved by the Board of
Directors of the Fund. This fee shall be prorated for any
fraction of a month at the commencement or termination of
this Agreement.
In the event the expenses of the Fund for any
fiscal year (including the fees payable to the Administrator
and the Fund's investment advisor, but excluding interest,
taxes, brokerage commissions, distribution fees, litigation
and indemnification expenses and other extraordinary expenses
not incurred in the ordinary course of the Fund's business)
exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to
the Administrator will be reduced by eighty percent (80%) of
the amount of such excess. If for any month such expenses
exceed such limitation after giving effect to the above
reduction of the fees payable to the Administrator and the
Fund's investment advisor, the payment to the Administrator
for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under
this expense limitation. Any such reductions or payments are
subject to readjustment during the year, and the
Administrator's obligation hereunder will be limited to the
amount of its fee paid or accrued with respect to such fiscal
year.
5. The Administrator assumes no responsibility under
this Agreement other than to render the services called for
hereunder, and specifically assumes no responsibilities for
investment advice or the investment or reinvestment of the
Fund's assets or the sale of its shares.
6. The Administrator shall not be liable for any
error of judgment or mistake of,law for any loss suffered by
the Fund in connection with the matters to which this
Agreement relates, whether incurred by the Administrator or
by any other parties retained by the Administrator to perform
services under this Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from
reckless disregard by the Administrator of its obligations
and duties under this Agreement. The Fund agrees to
indemnify and hold the Administrator harmless from any and
all loss, liability, and expense, including any legal
expenses, arising out of the Administrator's performance, or
status, or any act or omission of the Administrator, or that
of any party retained by the Administrator to perform
services under this Agreement, unless such loss, liability,
or expense is due to the willful misfeasance, bad faith or
gross negligence of the Administrator. The Fund further
agrees to indemnify and hold any party retained by the
Administrator to perform services under this Agreement
harmless from any and all loss, liability, and expense,
including any legal expenses arising out of such party Is
performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party.
Any person employed by the Administrator, who may be or
become an employee of and paid by any other entity affiliated
with the Fund, such as the investment advisor, distributor,
or custodian for the Fund, shall be deemed, when acting
within the scope of his employment by such other affiliated
entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or
agent.
7. This Agreement shall continue in effect for a
period of more than two (2) years from the date hereof only
so long as such continuance is-specifically approved at least
annually by the Board of Directors of the Fund provided,
however, that this Agreement may be terminated by:the Fund at
any time, without the payment of any penalty, by the Board of
Directors of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of
the-Fund, or by the Administrator at any time, without the
payment of any penalty, on not more than sixty (60) days' nor
less than thirty (30) days' written notice to the other
party. This Agreement shall terminate automatically in the
event of its assignment (as defined in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of the
Administrator who may also be a director, officer or employee
of the Fund to engage in any other business or to devote his
time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature,
nor limit or restrict the right of the Administrator to
engage in any other business or to render services of any
kind to any other corporation, firm, individual or
association.
9. During the term of this Agreement, the Fund
agrees to furnish the Administrator at its principal office
all prospectuses, proxy statements, reports to stockholders,
sales literature or other material provided for distribution
to stockholders of the Fund or the public, which refer in any
way to the Administrator, prior to use thereof and not to use
such material if the Administrator reasonably objects in
writing within five (5) business days (or such other time as
may be mutually agreed) after receipt thereof. In the event
of termination of this Agreement, the Fund will continue to
furnish to the Administrator copies of any of the above-
mentioned materials which refer in any way to the
Administrator. The Fund shall furnish or otherwise make
available to the Administrator such other information
relating to the business affairs of the Fund as the
Administrator at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
10. This Agreement may be amended by mutual written
consent.
11. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the panties hereto have caused this
instrument to be executed by their officers designated below
as -of the day and year first above written
THE RIGHTIME FUND, INC.
By:___________________________
President
[Corporate Seal] Attest:_______________________
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:___________________________
President
[Corporate Seal] Attest:
Secretary
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AGREEMENT dated ________________ amends and restates the
ADMINISTRATION AGREEMENT made by and between The Rightime Fund, Inc., a
Maryland corporation (the "Corporation") for The Rightime Government
Securities Fund Series (the "Fund"), and Rightime Administrators, Inc.,
a Pennsylvania corporation (the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker-dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. On behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of
the Fund and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by
the Fund in connection with administering the ordinary course of the
Fund's business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator
may contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment
advisor or expenses otherwise incurred by the Fund in connection with
the management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are
not affiliated persons of the Administrator, the investment advisor or
the distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer
and dividend disbursing agent, which may be the custodian, which relate
to the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the
Fund to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing
and non-negotiable share deposit receipts evidencing shares of the Fund,
if any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders, and directors,
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of 0.75 of one percent
(0.75%) of the first five-hundred million dollars of the Fund's average
daily net assets and 0.70 of one percent (0.70%) of the Fund's average
daily net assets in excess of five-hundred million dollars. This fee
will be computed daily and shall be payable twice monthly according to
such schedule as is set forth from time to time by the parties to this
Agreement and approved by the Board of Directors of the Fund. This fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. on behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of
more than two (2) years from the date hereof only so long as such
continuance is specifically approved at least annually by the Board of
Directors of the Corporation provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Administrator at any time, without the
payment of any penalty, on not more than sixty (60) days' nor less than
thirty (30) days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment (as defined
in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to
furnish the Administrator at its principal office all prospectuses,
proxy statements, reports to shareholders, sales literature, or other
material provided for distribution to stockholders of the Fund or the
public, which refer in any way to the Administrator, prior to use
thereof, and not to use such material if the Administrator reasonably
objects in writing within five (5) business days (or such other time as
may be mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
President
[Corporate Seal] Attest:
Secretary
RIGHTIME ADMINISTRATORS, INC.
President
[Corporate Seal] Attest:
Secretary
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AGREEMENT dated ________________ amends and restates the
ADMINISTRATION AGREEMENT made by and between The Rightime Fund, Inc., a
Maryland corporation (the "Corporation") for the Rightime Blue Chip Fund
Series (the "Fund"), and Rightime Administrators, Inc., a Pennsylvania
corporation (the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker-dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
Officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. on behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of
the Fund and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by
the Fund in connection with administering the ordinary course of the
Fund's business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator
may contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment
advisor or expenses otherwise incurred by the Fund in connection with
the management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (i.ii) the pricing
of the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer
and dividend disbursing agent, which may be the custodian, which relate
to the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the
Fund to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing
and non-negotiable share deposit receipts evidencing shares of the Fund,
if any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of 0.85 of one percent
(0.85%) of the first five-hundred million dollars of the Fund's average
daily net assets and 0.80 of one percent (0.80%) of the Fund's average
daily net assets in excess of five-hundred million dollars. This fee
will be computed daily and shall be payable twice monthly according to
such schedule as is set forth from time to time by the parties to this
Agreement and approved by the Board of Directors of the Fund. This fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. On behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of
more than two (2) years from the date hereof only so long as such
continuance is specifically approved at least annually by the Board of
Directors of the Corporation provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Administrator at any time, without the
payment of any penalty, on not more than sixty (60) days' nor less than
thirty (30) days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment (as defined
in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to
furnish the Administrator at its principal office all prospectuses,
proxy statements, reports to shareholders, sales literature, or other
material provided for distribution to stockholders of the Fund or the
public, which refer in any way to the Administrator, prior to use
thereof, and not to use such material if the Administrator reasonably
objects in writing within five (5) business days (or such other time as
may be mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:
President
[Corporate Seal] Attest:
Secretary
RIGHTIME ADMINISTRATORS, INC.
President
[Corporate Seal] Attest:
Secretary
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AGREEMENT dated as of December 12, 1997, amends and restates
the ADMINISTRATION AGREEMENT made by and between The Rightime Fund,
Inc., a Maryland corporation (the "Corporation") for The Rightime Social
Awareness Fund Series (the "Fund"), and Rightime Administrators, Inc., a
Pennsylvania corporation (the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange Commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of shareholders
and broker-dealers, if any, which are directed to the Administrator, or,
if any such inquiry or communication is more properly to be responded to
by the Fund's transfer agent, custodian, distributor, or accounting
services agents, overseeing their response thereto; (vi) overseeing all
relationships between the Fund and its custodian, transfer agent,
distributor, and accounting services agents, including the negotiation
of agreements in relation thereto and the supervision of the performance
of such agreements; and (vii) authorizing and directing any of the
Administrator's directors, officers and employees who may be elected as
directors or officers of the Corporation to serve in the capacities in
which they are elected. All services to be furnished by the
Administrator under this Agreement may be furnished through the medium
of any such directors, officers or employees of the Administrator. The
Corporation authorizes the Administrator to appoint and contract with
other parties to perform certain of the services to be furnished by the
Administrator under this Agreement, subject to ratification by the
officers of the Corporation and any such contract shall be countersigned
by the Fund to confirm such ratification. The Corporation, on behalf of
the Fund, represents that it will cooperate with the Administrator and
any other parties retained by the Administrator under this Agreement in
the performance of services to be rendered by the Administrator or any
other parties retained by the Administrator. On behalf of the Fund, the
Corporation further represents that it will indemnify and hold the
Administrator harmless from and against any loss, liability and expense,
including any legal expenses arising from failure of the Fund to so
cooperate with the Administrator and other parties retained by the
Administrator to perform services under this Agreement, or arising from
any error, omission, inaccuracy or other deficiency in information
provided by the Fund, or the failure of the Fund to provide any portion
of such or any information needed by the Administrator or any parties
retained by the Administrator to perform the services to be rendered
under this Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of
the Fund and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or by
the Fund in connection with administering the ordinary course of the
Fund's business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator
may contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment
advisor or expenses otherwise incurred by the Fund in connection with
the management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are
not affiliated persons of the Administrator, the investment advisor or
the distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) the fees and expenses of the Fund's transfer
and dividend disbursing agent, which may be the custodian, which relate
to the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the
Fund to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing
and non-negotiable share deposit receipts evidencing shares of the Fund,
if any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders, and directors,
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of 0.85 of one percent
(0.85%) of the first five-hundred million dollars of the Fund's average
daily net assets and 0.80 of one percent (0.80%) of the Fund's average
daily net assets in excess of five-hundred million dollars. This fee
will be computed daily and shall be payable twice monthly according to
such schedule as is set forth from time to time by the parties to this
Agreement and approved by the Board of Directors of the Fund. This fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. on behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of
more than two (2) years from the date hereof only so long as such
continuance is specifically approved at least annually by the Board of
Directors of the Corporation provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Administrator at any time, without the
payment of any penalty, on not more than sixty (60) days' nor less than
thirty (30) days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment (as defined
in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to
furnish the Administrator at its principal office all prospectuses,
proxy statements, reports to shareholders, sales literature, or other
material provided for distribution to stockholders of the Fund or the
public, which refer in any way to the Administrator, prior to use
thereof, and not to use such material if the Administrator reasonably
objects in writing within five (5) business days (or such other time as
may be mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:David J. Rights
President
[Corporate Seal] Attest:Curtis Hartranft
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:David J. Rights
President
[Corporate Seal] Attest:Curtis Hartranft
Secretary
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
This AGREEMENT dated as of September 19, 1997, amends and restates
the ADMINISTRATION AGREEMENT made by and between The Rightime Fund,
Inc., a Maryland corporation (the "Corporation") for The Rightime Mid-
Cap Fund Series (the "Fund"), and Rightime Administrators, Inc., a
Pennsylvania corporation (the "Administrator").
BACKGROUND
The Corporation is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Fund is a series of the Corporation and has been
organized for the purpose of investing its funds in securities and has
retained an investment advisor for this purpose. The Fund desires to
avail itself of the facilities available to the Administrator with
respect to the administration of its day-to-day affairs, and the
Administrator is willing to furnish such administrative services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation, on behalf of the Fund, hereby appoints the
Administrator to administer the Fund's affairs, subject to the overall
supervision of the Board of Directors of the Corporation, for the period
and on the terms set forth in this Agreement. The Administrator hereby
accepts such appointment and agrees during such period to render the
services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the
Corporation, the Administrator shall administer the Fund's affairs and,
in connection therewith, shall furnish the Fund with office facilities,
and shall be responsible for (i) maintaining the Fund's books and
records (other than financial or accounting books and records or those
being mentioned by the Fund's custodian, transfer agent, distributor, or
accounting services agents); (ii) overseeing the Fund's insurance
relationships; (iii) preparing for the Fund (or assisting counsel and/or
auditors in the preparation of) all required tax returns, proxy
statements and reports to the Fund's shareholders and Directors and
reports to and other filings with the Securities and Exchange commission
and any other governmental agency (the Fund agreeing to supply or to
cause to be supplied to the Administrator any necessary financial and
other information in connection with the foregoing); (iv) preparing such
applications and reports as may be necessary to register or maintain the
Fund's registration and/or the registration of its shares under the
securities or "blue-sky" laws of the various states (the Fund agreeing
to pay all filing fees or other similar fees in connection therewith);
(v) responding to all inquiries or other communications of
shareholders and broker-dealers, if any, which are directed to the
Administrator, or, if any such inquiry or communication is more properly
to be responded to by the Fund's transfer agent, custodian, distributor,
or accounting services agents, overseeing their response thereto; (vi)
overseeing all relationships between the Fund and its custodian,
transfer agent, distributor, and accounting services agents, including
the negotiation of agreements in relation thereto and the supervision of
the performance of such agreements; and (vii) authorizing and directing
any of the Administrator's directors, officers and employees who may be
elected as directors or officers of the Corporation to serve in the
capacities in which they are elected. All services to be furnished by
the Administrator under this Agreement may be furnished through the
medium of any such directors, officers or employees of the
Administrator. The Corporation authorizes the Administrator to appoint
and contract with other parties to perform certain of the services to be
furnished by the Administrator under this Agreement, subject to
ratification by the Officers of the Corporation and any such contract
shall be countersigned by the Fund to confirm such ratification. The
Corporation, on behalf of the Fund, represents that it will cooperate
with the Administrator and any other parties retained by the
Administrator under this Agreement in the performance of services to be
rendered by the Administrator or any other parties retained by the
Administrator. On behalf of the Fund, the Corporation further
represents that it will indemnify and hold the Administrator harmless
from and against any loss, liability and expense, including any legal
expenses arising from failure of the Fund to so cooperate with the
Administrator and other parties retained by the Administrator to perform
services under this Agreement, or arising from any error, omission,
inaccuracy or other deficiency in information provided by the Fund, or
the failure of the Fund to provide any portion of such or any
information needed by the Administrator or any parties retained by the
Administrator to perform the services to be rendered under this
Agreement.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator will bear all of the following
expenses:
(i) The salaries and expenses of all personnel of the
Fund and the Administrator, except the fees of directors who are not
affiliated persons of the Administrator or the Fund's investment
advisor.
(ii) All expenses incurred by the Administrator or
by the Fund in connection with administering the ordinary course of the
Fund's business other than those assumed by the Fund herein.
(iii) The fees of any party with whom the Administrator
may contract to perform certain of the services to be furnished by the
Administrator under this Agreement.
The Fund assumes and will pay the expenses described below:
(a) The fees and expenses of any investment
advisor or expenses otherwise incurred by the Fund in connection with
the management of the investment and reinvestment of the Fund's assets;
(b) The fees and expenses of the distributor;
(c) The fees and expenses of directors who are not
affiliated persons of the Administrator, the investment advisor or the
distributor;
(d) The fees and expenses of the custodian, which
relate to (i) the custodial function and the recordkeeping connected
therewith, (ii) the maintenance of the required accounting records of
the Fund not being maintained by the Administrator, (iii) the pricing of
the shares of the Fund, including the cost of any pricing service or
services which may be retained pursuant to the authorization of the
Board of Directors of the Corporation, and (iv) for both mail and wire
orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities and (v) all other expenses related
to the performance of duties by the custodian for the Fund;
(e) The fees and expenses of the Fund's transfer
and dividend disbursing agent, which may be the custodian, which relate
to the maintenance of each shareholder account;
(f) The charges and expenses of legal counsel and
independent accountants for the Fund;
(g) Brokers' commissions and any issue or transfer
taxes chargeable to the Fund in connection with its securities
transactions;
(h) All taxes and corporate fees payable by the
Fund to federal, state or other governmental agencies;
(i) The fees of any trade association of which the
Fund may be a member;
(j) The cost of stock certificates representing
and non-negotiable share deposit receipts evidencing shares of the Fund,
if any;
(k) The fees and expenses involved in registering
and maintaining registrations of the Fund and its shares with the
Securities and Exchange Commission, registering the Fund as a broker-
dealer and qualifying its shares for sale under state securities laws,
including the preparation and printing of the Fund's registration
statements and prospectuses for filing under federal and state
securities laws for such purposes;
(l) Allocable communications expenses with respect
to investor services and all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing prospectuses and reports
to shareholders in the amount necessary for distribution to the
shareholders; and
(m) Litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the
Fund's business.
3. The Administrator hereby agrees to pay the organization
expenses of, and the expenses incurred in connection with the initial
offering or distribution of shares by, the Fund, except that the Fund
shall reimburse the Administrator for such organization expenses,
amortized and paid over 60 months, commencing from the date the Fund
becomes effective.
4. As full compensation for the services performed and the
facilities furnished by the Administrator, the Fund shall pay the
Administrator a fee at the annualized rate of 0.85 of one percent
(0.85%) of the first five-hundred million dollars of the Fund's average
daily net assets and 0.80 of one percent (0.80%) of the Fund's average
daily net assets in excess of five-hundred million dollars. This fee
will be computed daily and shall be payable twice monthly according to
such schedule as is set forth from time to time by the parties to this
Agreement and approved by the Board of Directors of the Fund. This fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.
In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator and the Fund's
investment advisor, but excluding interest, taxes, brokerage commission,
distribution fees, litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the limits set by applicable regulation of state
securities commissions, if any, the compensation payable to the
Administrator will be reduced by eighty percent (80%) of the amount of
such excess. If for any month such expenses exceed such limitation
after giving effect to the above reduction of the fees payable to the
Administrator and the Fund's investment advisor, the payment to the
Administrator for that month will be reduced or postponed so that at no
time will there be any accrued but unpaid liability under this expense
limitation. Any such reductions or payments are subject to readjustment
during the year, and the Administrator's obligation hereunder will be
limited to the amount of its fee paid or accrued with respect to such
fiscal year.
5. The Administrator assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of the Fund's assets or the sale of its
shares.
6. The Administrator shall not be liable for any error of
judgment or mistake of law for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, whether
incurred by the Administrator or by any other parties retained by the
Administrator to perform services under this Agreement, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Administrator's part in the performance of its duties or from reckless
disregard by the Administrator of its obligations and duties under this
Agreement. on behalf of the Fund, the Corporation agrees to indemnify
and hold the Administrator harmless from any and all loss, liability,
and expense, including any legal expenses, arising out of the
Administrator's performance, or status, or any act or omission of the
Administrator, or that of any party retained by the Administrator to
perform services under this Agreement, unless such loss, liability, or
expense is due to the willful misfeasance, bad faith or gross negligence
of the Administrator. The Corporation, on behalf of the Fund, further
agrees to indemnify and hold any party retained by the Administrator to
perform services under this Agreement harmless from any and all loss,
liability, and expense, including any legal expenses arising out of such
party's performance, or status, or any act or omission of such party,
unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of such party. Any person
employed by the Administrator, who may be or become an employee of and
paid by any other entity affiliated with the Fund, such as the
investment advisor, distributor, or custodian for the Fund, shall be
deemed, when acting within the scope of his employment by such other
affiliated entity, to be acting in such employment solely for such other
affiliated entity and not as the Administrator's employee or agent.
7. This Agreement shall continue in effect for a period of
more than two (2) years from the date hereof only so long as such
continuance is specifically approved at least annually by the Board of
Directors of the Corporation provided, however, that this Agreement may
be terminated by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of the Fund, or by the Administrator at any time, without the
payment of any penalty, on not more than sixty (60) days' nor less than
thirty (30) days' written notice to the other party. This Agreement
shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
8. Nothing in this Agreement shall limit or restrict the right
of any director, officer or employee of the Administrator who may also
be a director, officer or employee of the Corporation to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature, nor limit or restrict the right of the Administrator
to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. During the term of this Agreement, the Fund agrees to
furnish the Administrator at its principal office all prospectuses,
proxy statements, reports to shareholders, sales literature, or other
material provided for distribution to stockholders of the Fund or the
public, which refer in any way to the Administrator, prior to use
thereof, and not to use such material if the Administrator reasonably
objects in writing within five (5) business days (or such other time as
may be mutually agreed upon) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials which refer
in any way to the Administrator. The Fund shall furnish or otherwise
make available to the Administrator such other information relating to
the business affairs of the Fund as the Administrator at any time, or
from time to time, reasonably requests in order to discharge its
obligations hereunder.
10. This Agreement may be amended by mutual written consent.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
THE RIGHTIME FUND, INC.
By:David J. Rights
President
[Corporate Seal] Attest:Curtis Hartranft
Secretary
RIGHTIME ADMINISTRATORS, INC.
By:David J. Rights
President
[Corporate Seal] Attest:Curtis Hartranft
Secretary
SERVICES AGREEMENT
SERVICES AGREEMENT made this 26th day of March, 1985 between
RIGHTIME ADMINISTRATORS, INC. (the "Administrator"), a Pennsylvania
corporation and LINCOLN INVESTMENT PLANNING, INC. ("Lincoln"), a
Pennsylvania corporation.
W I T N E S S E T H
WHEREAS, the Administrator has been organized to provide
administrative services with regard to the day-to-day affairs of The
Rightime Fund, Inc. (the "Fund"), a diversified open-end management
investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act") and has been appointed by the Fund to
provide such services; and
WHEREAS, the Administrator desires to avail itself of the
facilities available to Lincoln with respect to certain of these
administrative services and to appoint Lincoln as its agent to perform
these services; and
WHEREAS, Lincoln is willing to furnish such administrative
services on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Administrator hereby appoints Lincoln to
administer certain of the affairs of the Fund for the period and on the
terms set forth in this Agreement. Lincoln hereby accepts such
appointment and agrees during such period to render the services herein
described and to assume the obligations set forth herein, for the
compensation herein provided.
2. Lincoln shall provide the following services:
(a) Prepare for the Fund (or assist counsel and/or
auditors in the preparation of) all required tax returns.
(b) Prepare for the Fund (or assist counsel and/or
auditors in the preparation of) all proxy statements and reports to Fund
shareholders and directors.
(c) Respond to all inquiries or other
communications of shareholders and broker-dealers, if any, or, if any
such inquiry or communication is more properly to be responded to by the
Fund's transfer agent, custodian or accounting services agent, oversee
their response thereto.
(d) Assist the Administrator in overseeing all
relationships between the Fund and its custodian, transfer agent and
accounting services agent, including the negotiation of agreements in
relation thereto and the supervision of the performance of such
agreements, as directed by the Administrator.
(e) Perform all other functions which the
Administrator may from time to time request it to perform. The
Administrator will provide Lincoln on Lincoln's request with any
document, report, information, and certificate necessary to fulfill
these responsibilities. The Administrator shall indemnify and hold
Lincoln harmless from and against any and all loss, liability, and
expense, including any legal expenses, arising from any error, omission,
inaccuracy or other deficiency in any document, report, information, and
certificate necessary to fulfill these responsibilities and provided by
the Administrator, or in the failure of the Administrator to provide any
portion of such or any such document, report, information or
certificate.
3. The Administrator shall pay Lincoln a fee as shall be
mutually agreed to by the parties pursuant to the attached Schedule of
Fees.
4. Lincoln assumes no responsibility under this
Agreement other than to render the services called for hereunder, and
specifically assumes no responsibilities for investment advice or the
investment or reinvestment of mutual fund assets.
5. Lincoln shall not be liable for any error of judgment
or mistake of law for any loss suffered by the Administrator in
connection with the matters to which this Agreement relates, except a
loss resulting from willful malfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. Any person,
even though also employed by Lincoln, who may be or become an employee
of and paid by the Administrator shall be deemed, when acting within the
scope of his employment by Lincoln, to be acting in such employment
solely for Lincoln and not as the Administrator's employee or agent.
6. The Administrator represents to Lincoln that it has
been appointed by the Fund to perform the services called for hereunder
by an Administration Agreement dated _____________, 1985, and that such
Agreement empowers the Administrator to retain Lincoln, among others, to
furnish such services. The Administrator further represents that under
the Administration Agreement the Fund: (1) agrees to cooperate with
others in the performance of such services; (2) agrees to indemnify
others for liabilities incurred in providing such services which are not
the result of such person's gross negligence, bad faith, or willful
malfeasance; (3) authorizes the Administrator to select such persons as
it deems qualified to provide such services subject to the ratification
of the officers of the Fund; and (4) agrees to countersign each
Agreement made by the Administrator to confirm that it is ratified in
accordance with and is not inconsistent with the Administration
Agreement.
7. The Administrator represents that the Fund has agreed
to indemnify and hold the Administrator and Lincoln harmless from any
and all loss, liability and expense, including any legal expenses,
arising out of Lincoln's performance, or status, or any act or omission
of Lincoln, unless such loss, liability or expense is due to the willful
misfeasance, bad faith or gross negligence of Lincoln.
8. This Agreement shall continue in effect unless
terminated by either party on not more than sixty (60) days nor less
than thirty (30) days written notice to the other party.
9. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of Lincoln who may also be a
director, officer or employee of the Administrator to engage in any
other business or to devote his time and attention in part to the
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the right of Lincoln to engage
in any other business or to render services of any other kind to any
other corporation, firm, individual or association.
10. This Agreement may be amended by mutual written
consent.
11. This Agreement shall be governed by and considered
in accordance with the laws of the Commonwealth of Pennsylvania.
12. During the term of this Agreement, the Administrator
agrees to furnish to Lincoln at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature, or other
material provided for distribution which refer in any way to Lincoln,
prior to use thereof and not to use such material if Lincoln reasonably
objects in writing within five (5) business days (or such other time as
may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Administrator will continue to
furnish to Lincoln copies of the above-mentioned materials which refer
in any way to Lincoln. The Administrator shall furnish or otherwise
make available to Lincoln such other information relating to the
business affairs of the Administrator as Lincoln at any time, or from
time to time, reasonably requests in order to discharge its obligations
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by this officers designated below as of the day and year
first above written.
RIGHTIME ADMINISTRATORS, INC.
BY:David J. Rights
President
[Corporate Seal] ATTEST:Thomas Forst
Secretary
LINCOLN INVESTMENT PLANNING, INC.
BY:Edward Forst, Jr. VP
President
[Corporate Seal] ATTEST:Rosemarie Way
Secretary
COUNTERSIGNED:
THE RIGHTIME FUND, INC.
BY:David J. Rights
President
[Corporate Seal] ATTEST:Thomas Forst
Secretary
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT, dated as of the 1st day of December, 1986,
made by and between THE RIGHTIME FUND, INC. (the "Fund"), a corporation
operating as an open-end investment company, duly organized and existing
under the laws of the State of Maryland, and LINCOLN INVESTMENT PLANNING
("Lincoln"), a corporation duly organized and existing under the laws of
the Commonwealth of Pennsylvania:
WITNESSETH THAT:
WHEREAS, the Fund desires to retain Lincoln to maintain and
keep current the books, accounts, records, journals or other records of
original entry relating to the business of the Fund as set forth in
Section 2 of this Agreement (the "Accounts and Records") and to perform
certain other functions in connection with such Accounts and Records;
and
WHEREAS, Lincoln is willing to perform such functions upon the
terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. The Fund shall promptly turn over to Lincoln such of the
Accounts and Records of the Fund as are necessary for Lincoln to perform
its functions under this Agreement. The Fund authorizes Lincoln to rely
on such Accounts and Records turned over to it and hereby indemnifies
and holds Lincoln, its successors and assigns, harmless of and from any
and all expenses, damages, claims, suits, liabilities, actions, demands
and losses whatsoever arising out of or in connection with any error,
omission, inaccuracy or other deficiency of such Accounts and Records or
in the failure of the Fund to provide any portion of such or to provide
any information needed by Lincoln to knowledgeably perform its
functions.
2. To the extent it receives the necessary information from
the Fund or its agents by Written or Oral Instructions, Lincoln shall
maintain and keep current the following Accounts and Records relating to
the business of the Fund, in such form as may be mutually agreed to
between the Fund and Lincoln:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid Record
(d) Purchase and Sales Journals - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers
(g) Broker Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and collateral therefor
(l) Daily Trial Balance
(m) Investment Income Journal
Unless necessary information to perform the above functions isfurnished
by Written or Oral Instructions to Lincoln daily prior to 4:00 PM
Eastern time (the close of trading on the New York Stock Exchange),
including information necessary to calculate the Fund's net asset value
as provided below, Lincoln shall incur no liability, and the Fund shall
indemnify and hold harmless Lincoln from and against any liability
arising from any failure to provide complete information or from any
discrepancy between the information received by Lincoln from the Fund or
its agents and used in such calculations and any subsequent corrected
information received concerning the Fund.
Section 2. Lincoln shall perform the ministerial calcu-
lations necessary to calculate the Fund's net asset value daily, in
accordance with the Fund's current prospectus and utilizing the
information described in this Section. The valuation of Portfolio items
for which market quotations are available by Lincoln's use of a
financial information service of Lincoln's selection shall be based on
the closing prices of such financial information service, except where
the Fund has given or caused to be given specific Written or Oral
Instructions requiring Lincoln or its agents to utilize a different
value. The valuation of portfolio items to be valued by Lincoln for
which market valuations may not be available by Lincoln's use of a
financial information service, including but not limited to options,
stock index futures, and options on stock index futures shall be based
on sources mutually agreed to by Lincoln and the Fund. The Fund shall
assume all responsibility for computation of "amortized cost," valuation
of all foreign securities, restricted securities and other securities
whose valuation is not the responsibility of Lincoln and which require
valuation not readily ascertainable solely by mechanical procedures.
Lincoln shall have no responsibility or liability for the accuracy of
prices quoted by such financial information service; for the accuracy of
the information supplied by the Fund; or for any loss, liability, damage
or cost arising out of any inaccuracy of such data, unless the loss,
liability, damage or cost is due to Lincoln's gross negligence or
willful misconduct. Lincoln shall have no responsibility or duty to
include information or valuations to be provided by the Fund in any
computation unless and until it is timely supplied to Lincoln in usable
form. Unless the necessary information to calculate the net asset value
daily is furnished by Written or Oral Instructions from the Fund (or its
agents) Lincoln shall occur no liability, and the Fund shall indemnify
and hold harmless Lincoln from and against any liability arising from
any failure by the Fund to provide complete information or from any
discrepancy between the information received by Lincoln and used in such
calculation and any subsequent information received from the Fund or any
of its designated agents, unless such liability is due to gross
negligence of or willful misconduct by Lincoln.
Section 3. For all purposes under this Agreement, Lincoln
is authorized to act upon receipt of the first of any Written or Oral
Instruction it receives from the Fund or its agents on behalf of the
Fund. In cases where the First Instruction is an Oral Instruction that
is not in the form of a document or written record, a confirmatory
Written Instruction or Oral Instruction in the form of a document or
written record shall be delivered, and in cases where Lincoln receives
an Instruction, whether Written or Oral, to enter a portfolio
transaction on the records, the Fund represents that it has agreed to
cause the Broker-Dealer or Futures Commission Merchant to send a written
confirmation to Lincoln. Lincoln shall be entitled to rely on the first
Instruction received, and for any act or omission undertaken in
compliance therewith shall be free of liability and fully indemnified
and held harmless by the Fund, provided however, that in the event a
Written or Oral Instruction received by Lincoln is countermanded by a
timely later Written or Oral Instruction received by Lincoln prior to
acting upon such countermanded Instruction, Lincoln shall act upon such
later Written or Oral Instruction. The obligation of Lincoln with
respect to any follow-up or confirmatory Written Instruction, Oral
Instruction in documentary or written form, or Broker-Dealer written
confirmation shall be to make reasonable efforts to detect any
discrepancy between the original Instruction and such confirmation and
to report such discrepancy to the Fund. Lincoln shall also be
responsible for taking any action necessary with respect to any timely
follow-up Written or Oral Instruction which countermands or modifies a
Written or Oral Instruction. The Fund shall be responsible for the
costs of any action taken by Lincoln, including any reprocessing,
necessary to correct any discrepancy or error resulting from the Fund's
mistake or delay. If any such action requires Lincoln to act, the Fund
shall give Lincoln specific Written Instruction as to the action
required.
Section 4. The Fund shall, at the end of each month, cause
the Fund Custodian (First Pennsylvania Bank N.A.), to forward to Lincoln
a monthly statement of cash and portfolio transactions, which will be
reconciled with Lincoln's Accounts and Records maintained for the Fund
under this Agreement. Lincoln will report any discrepancies to the
Custodian, and report any unreconciled items to the Fund.
Section 5. Lincoln shall promptly supply daily and periodic
reports of the Fund as requested by the Fund and agreed upon by Lincoln.
Section 6.
Section 6. The Fund will provide or require each of its
agents (including without limitation its Transfer Agent and its
Custodian) to provide Lincoln as of the close of each business day, or
on such other schedule as the Fund determines is necessary, with Written
or Oral Instructions (to be delivered to Lincoln by 10:00 AM the next
following business day) containing all data and information necessary
for Lincoln to maintain the Fund's Accounts and Records and Lincoln may
conclusively assume that the information it receives by Written or Oral
Instructions is complete and accurate. The Fund shall be responsible to
provide or cause to be provided to Lincoln reports of Share purchases,
redemptions, and total shares outstanding on the next business day after
each net asset valuation.
Section 7.
Section 7. The Accounts and Records, in the agreed upon
format, maintained by Lincoln shall be the property of the Fund, and
shall be made available to the Fund promptly upon request and shall be
maintained for the periods prescribed in Rule 31a-2 under the Investment
Company Act of 1940, as amended. All Accounts and Records of the Fund
shall be considered confidential and will not be released to any party,
other than any regulatory body or pursuant to any valid court order or
judicial decree, without prior written authorization of the Fund.
Lincoln shall assist the Fund's independent auditors, upon approval of
the Fund, or any regulatory body, upon demand, in any requested review
of the Fund's Accounts and Records but shall be reimbursed for all
expenses and employee time invested in any such review of the Fund's
Accounts and Records outside of routine and normal periodic reviews.
Employee time shall be reimbursed at the rate of the employee's
customary hourly wage rate. Lincoln shall provide the Fund with
immediate notice of any request for review of the Fund's Accounts and
Records by any party, including any regulatory body or pursuant to any
valid court order or judicial decree, and no party will be allowed
access to such Accounts and Records unless such prior notice has been
given to the Fund. Upon receipt from the Fund of necessary information,
Lincoln shall supply the necessary data for the Fund or to complete of
any necessary tax returns, questionnaires, periodic reports to
shareholders and such other reports and information requests as the Fund
and Lincoln shall agree upon from time to time.
Section 8. Lincoln, with the concurrence of the Fund, may
from time to time adopt such procedures as they agree upon in writing,
and Lincoln may conclusively assume that any procedure approved by the
Fund or directed by the Fund, does not conflict with or violate any
requirements of its Prospectus, Articles of Incorporation, By-Laws, or
any rule or regulation of any regulatory body or governmental agency.
The Fund shall be responsible for notifying Lincoln of any changes in
regulations or rules which might necessitate changes in Lincoln's
procedures, and for working out such changes with Lincoln.
Section 9.
Section 9. Lincoln, in performing under the terms and
conditions of this Agreement, shall incur no liability for its status
hereunder or for any reasonable actions taken or omitted in good faith
reliance upon any authorized Written or Oral Instruction, any certified
copy of any resolution of the Board of Directors of the Fund filed with
Lincoln or any other document reasonably believed by Lincoln to be
genuine and to have been executed or signed by the proper person or
persons, and the Fund agrees to indemnify and hold Lincoln harmless from
any and all loss, liability and expense, including any legal expenses,
arising out of Lincoln's performance, or status, or any act or omission
of Lincoln, under this Agreement, where such loss, liability and expense
is caused by Lincoln's action or failure to act due to its good faith
reliance on the authenticity of such Written or Oral Instruction,
resolution, or document and not due to gross negligence or willful
misconduct of Lincoln. Without limitation of the foregoing:
(a) Lincoln may rely upon the advice of the Fund
or of counsel, who may be counsel for the Fund or counsel for Lincoln
and upon statements of accountants, brokers and other persons reasonably
believed by it in good faith to be expert in the matters upon which they
are consulted and for any actions taken in good faith upon such
statements, Lincoln shall not be liable to anyone.
(b) Lincoln may act upon any Oral Instruction
which it receives and which it reasonably believes in good faith was
transmitted by the person or persons authorized by resolution of the
Board of Directors of the Fund to give such Oral Instruction. Lincoln
shall have no duty or obligation to make any inquiry or effort of
certification of such Oral Instruction.
(c) Lincoln shall not be liable for any action
taken in good faith reliance upon any Written Instruction or certified
copy of any resolution of the Board of Directors of the Fund, and
Lincoln may rely upon the genuineness of any such document or copy
thereof reasonably believed in good faith by Lincoln to have been
validly executed.
(d) Lincoln may rely and shall be protected in
acting upon any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the Fund or other
proper party or parties, provided however, in the case of a Written or
Oral Instruction, subparagraph (b) and (c) above shall apply.
(e)
Section 10. All financial data provided to, processed by,
and reported by Lincoln under this Agreement shall be stated in United
States dollars or currency. Lincoln shall have no obligation to convert
to, equate, or deal in foreign currencies or values, and expressly
assumes no liability for any currency conversion or equation
computations relating to the affairs of the Fund.
Section 11. Lincoln's compensation shall be as set forth in
Schedule A hereto attached, or as shall be set forth in amendments to
such Schedule approved in writing by the Fund and Lincoln.
Section 12. Nothing contained in this Agreement is intended
to or shall require Lincoln, in any capacity hereunder, to perform any
functions or duties on any holiday, day of special observance or any
other day on which Lincoln or the New York Stock Exchange is closed
unless so required by law, and functions or duties normally scheduled to
be performed on such days shall be performed on, and as of, the next
succeeding business day on which both the New York Stock Exchange and
Lincoln are open. Notwithstanding the foregoing, Lincoln shall compute
the net asset value of the Fund on each day required pursuant to Rule
22c-1 promulgated under the Investment Company Act of 1940.
Section 13. This Agreement may be executed in two or more
counterparts, each of which, when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and
the same instrument.
Section 14. The Fund or Lincoln may give written notice to
the other of the termination of this Agreement, such termination to take
effect at the time specified in the notice not less than sixty (60) days
after the giving of the notice. Upon the effective termination date,
subject to payment to Lincoln by the Fund of all amounts due to Lincoln
as of said date, Lincoln shall make available to the Fund or the Fund's
designated record keeping successor, all of the records of the Fund
maintained under this Agreement then in Lincoln's possession.
Section 15. Any notice or other communication required by
or permitted to be given in connection with this Agreement shall be in
writing, and shall be delivered in person or sent by first class mail,
postage prepaid to each person as follows:
If to the Fund:
The Rightime Fund, Inc.
The Benson East Office Plaza
Jenkintown, PA 19046
Attention: David J. Rights
If to Lincoln:
Lincoln Investment Planning, Inc.
Suite 1000
The Benson East Office Plaza
Jenkintown, PA 19046
Attention: Thomas Forst
Copy to:
Edward S. Forst
c/o Lincoln Investment Planning
Suite 1000
The Benson East Office Plaza
Jenkintown, PA 19046
Section 1. This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable
by any party without the written consent of the other, authorized or
approved in each case by a resolution of its Board of Directors.
Section 2. This Agreement may be amended from time to time
by supplemental agreement executed by the Fund and Lincoln.
Section 3. This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers and their
corporate seals hereunto duly affixed and attested, as of the day and
year first above written.
THE RIGHTIME FUND, INC.
ByDavid J. Rights (SEAL)
Title
Attest:Gwendolynne F. Stoudt
LINCOLN INVESTMENT PLANNING, INC.
By:Edward Forst, President (SEAL)
Title
Attest:Thomas Forst
AMENDMENT NUMBER 1
to the
ACCOUNTING SERVICES
AGREEMENT OF
THE RIGHTIME FAMILY OF FUNDS
WHEREAS, the Rightime Fund, Inc. (the "Fund") has entered into an
agreement dated December 1, 1986 with Lincoln Investment Planning Inc.
("Lincoln") wherein Lincoln agreed to perform certain accounting and
other bookkeeping services relating to the business of the Fund (the
"Agreement"); and
WHEREAS, Section 12 and Schedule A of the Agreement provide for the
monthly payment by the Fund to Lincoln of certain fees described in
Schedule A of the Agreement; and
WHEREAS, the Board of Directors of the Fund has determined that it
is fair and beneficial to the Fund and its shareholders to amend
Schedule A of the Agreement to provide for twice monthly payment by the
Fund to Lincoln of a proportionate part of the fees described in
Schedule A of the Agreement;
NOW THEREFORE, the Fund and Lincoln hereby amend Schedule A of the
Agreement to authorize twice-monthly payments of a proportionate part of
the fees payable by the Fund to Lincoln under the Agreement, such
payments to be made according to such schedule as is set forth from time
to time by the parties to this Agreement, such approval to be made on
behalf of the Fund by the Board of Directors of the Fund.
IN WITNESS WHEREOF, intending to be legally bound, the parties
hereto have caused this Agreement to be signed by their duly authorized
officers and their corporate seals hereto affixed and attested, as of
the _______ day of _______________, 1993.
THE RIGHTIME FUND, INC.
By:David J. Rights
(SEAL)
Attest:
LINCOLN INVESTMENT PLANNING, INC.
By:Thomas Forst
(SEAL)
Attest:
SCHEDULE A
Attached to and part of
Accounting Services Agreement
dated December 1, 1986
between The Rightime Fund, Inc.
and Lincoln Investment Planning, Inc.
PORTFOLIO ACCOUNTING
CURRENT SCHEDULE OF FEES
I. PORTFOLIO ACCOUNTING SERVICE FEE:
First $30 million in net assets $25,000.00
Next $20 million in net assets 10,000.00
Each additional $25 million in net assets to $75 million 5,000.00
Each additional $25 million in net assets to $100 million 5,000.00
Each additional $25 million in net assets to $125 million 5,000.00
Each additional $25 million in net assets to $150 million 5,000.00
Each additional $50 million in net assets to $200 million 5,000.00
Each additional $50 million in net assets to $250 million 5,000.00
Each additional $50 million in net assets to $300 million 5,000.00
II. PORTFOLIO ACCOUNTING TRADE FEE:
Number of Long-Term Equity Trades @ $2.50 per Trade for Rightime
Fund, Rightime Government Securities Fund, Rightime Blue Chip
Fund, Rightime Growth Fund, Rightime Social Awareness Fund, and
Rightime MidCap Fund.
III. FULL ACCOUNTING:
The Fund will reimburse Lincoln monthly for all out-of-pocket
expenses including, but not limited to, postage, stationery,
insurance, retention of records, conversion from a prior pricing
agent and other expenses as mutually agreed to by the parties.
* Compute net asset value daily
* Maintain investment ledgers
* Maintain general ledgers
* Prepare the following financial reports:
Daily Trial Balances
Statement of Assets and Liabilities
Schedule of Purchases and Sales of Securities
SCHEDULE B
Attached to and Part of
Accounting Services Agreement
dated December 1, 1986
between The Rightime Fund, Inc.
and Lincoln Investment Planning, Inc.
Periodic Reports Supplied to Client
Under Our
Portfolio Pricing & General Ledger Accounting Services
DAILY
1. Daily trial balance with a computation of net asset value
2. Daily performance
3. Daily cash available
4. Daily reconcilement of Fund's shares
5. Daily interest calculations
6. Daily portfolio calculation with comparison to previous day
PERIODICALLY
1. Statement of assets and liabilities
2. Statement of operations
3. Statement of changes in net assets
4. Schedule of purchases and sales of securities
5. Security ledger
6. Schedule of Fund's shares sold and repurchased and the
outstanding shares registered with the SEC
7. Interest evaluation
Dividend schedule
SEMI-ANNUALLY
1. Prepare answers to applicable items on Form NSAR.
OTHER
1. To follow up on all fail items, within two business days after
settlement day
2. Prepare the unaudited reports that are required either quarterly
or semi-annually
3. Prepare the basis work papers for the independent auditor and to
assist them in the audit
Law Offices
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8074
January 15, 1998
The Rightime Fund, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
Re: The Rightime Fund, Inc.
Gentlemen:
We have examined the Articles of Incorporation of The Rightime
Fund, Inc. (the "Fund"), a series corporation organized under Maryland
law, the By-Laws of the Fund, the resolutions adopted by the Fund's
Board of Directors organizing the business of the Fund, and its proposed
form of Share Certificates, all as amended to date, and the various
pertinent corporate proceedings we deem material. We have also examined
the Notification of Registration and the Registration Statements filed
under the Investment Company Act of 1940 (the "Investment Company Act")
and the Securities Act of 1933 (the "Securities Act"), all as amended to
date, as well as other items we deem material to this opinion.
The Fund is authorized by the Articles of Incorporation to
issue one hundred million (100,000,000) shares of common stock at a par
value of $.01. In addition to its Rightime Fund shares, the Fund issues
shares of The Rightime Fund Series, the Rightime Government Securities
Series, the Rightime Blue Chip Fund Series, The Rightime Growth Fund
Series, The Rightime Social Awareness Fund Series, and The Rightime
Mid-Cap Series. The Articles of Incorporation also empower the Board to
designate any additional series or classes and allocate shares to such
series or classes.
The Fund has filed with the U.S. Securities and Exchange
Commission, a registration statement under the Securities Act, which
registration statement registered an indefinite number of shares of the
Fund pursuant to the provisions of Rule 24f-2 under the Investment
Company Act. You have advised us that each year hereafter the Fund will
timely file a Notice pursuant to Rule 24f-2 perfecting the registration
of the shares sold by the Fund during each fiscal year during which such
registration of an indefinite number of shares remains in effect.
You have also informed us that the shares of the Fund will be
sold in accordance with the Fund's usual method of distributing its
registered shares, under which prospectuses are made available for
delivery to offerees and purchasers of such shares in accordance with
Section 5(b) of the Securities Act.
Based upon the foregoing information and examination, so long
as the Fund remains a valid and subsisting corporation under the laws of
the State of Maryland, and the registration of an indefinite number of
shares of the Fund remains effective, the authorized shares of the Fund
when issued for the consideration set by the Board of Directors pursuant
to the Articles of Incorporation, and subject to compliance with Rule
24f-2, will be legally outstanding, fully-paid, and non-assessable
shares, and the holders of such shares will have all the rights provided
for with respect to such holding by the Articles of Incorporation and
the laws of the State of Maryland.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement of the Fund, covering the registration of the
shares of the Fund under the Securities Act and the applications,
registration statements or notice filings, and amendments thereto, filed
in accordance with the securities laws of the several states in which
shares of the Fund are offered, and we further consent to reference in
the Prospectus of the Fund to the fact that this opinion concerning the
legality of the issue has been rendered by us.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
/s/ BY: Steven M. Felsenstein
--------------------------------
Steven M. Felsenstein, a partner
SMF/nlk
The Rightime Fund, Inc.
January 15, 1998
Page 2
Consent of Independent Certified Public Accountants
We consent to the use of our report dated November 26, 1997 on the
financial statements and financial highlights for the periods indicated
thereon of the Rightime Government Securities Fund, The Rightime Blue
Chip Fund, The Rightime Social Awareness Fund, and The Rightime MidCap
Fund, each a series of shares of The Rightime Fund, Inc. Such financial
statements and financial highlights appear in the 1997 Annual Report to
Shareholders which is included in the Statement of Additional
Information filed in Post-Effective Amendment Number 23 to the
Registration Statement of Form N-1A of The Rightime Fund, Inc. We also
consent to the references to our Firm in such Registration Statement and
Prospectus.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 13, 1998
COMPUTATION OF PERFORMANCE QUOTATIONS
Schedule for Computation of Performance Quotations
The Rightime Government Securities Fund
Yield Calculation of 3.91%
a = 41,337.59
b = 16,092.69
c = 626,727.654
d = 12.47
Average Annual Total Return for each Series:
One Year Five Year Ten Year Inception
The Rightime Fund
P 1000 1000 1000 1000
T (2.77)% 8.26% 10.24% 10.24%
n 1 5 10 12.12
ERV $972.30 $1,502.47 $2,211.78 $3,260.48
The Rightime Government Securities Fund
P 1000 1000 1000 1000
T (6.75)% 1.75% 4.59% 3.80%
n 1 5 10 10.82
ERV $932.46 $1,090.64 $1,566.24 $1,497.79
The Rightime Blue Chip Fund
P 1000 1000 1000 1000
T (2.24)% 8.80% 8.76% 8.63%
n 1 5 10 10.28
ERV $977.56 $1,524.79 $2,315.47 $2,341.06
The Rightime Social Awareness Fund
P 1000 1000 N/A 1000
T 0.75% 7.97% N/A 7.91%
n 1 5 N/A 7.67
ERV $1,007.47 $1,467.32 N/A $1,792.57
The Rightime MidCap Fund
P 1000 1000 N/A 1000
T 0.53% 9.00 N/A 8.95%
n 1 5 N/A 5.97%
ERV $1,005.25 $1,538.79 N/A $1,668.49
[RIGHTIME LOGO]
Rightime
Family Of Funds
The Rightime Fund
The Rightime Government Securities Fund
The Rightime Blue Chip Fund
The Rightime Social Awareness Fund
The Rightime MidCap Fund
Annual Report
October 31, 1997
[RIGHTIME LOGO]
Rightime
Family of Funds
Table of Contents
Letter to Shareholders 3
Portfolios
The Rightime Fund 5
The Rightime Government Securities Fund 7
The Rightime Blue Chip Fund 8
The Rightime Social Awareness Fund 18
The Rightime MidCap Fund 20
Financial Statements
Statement of Assets & Liabilities 28
Statement of Operations 30
Statement of Changes in Net Assets 32
Financial Highlights 34
Notes to Financial Statements
Notes & Schedules 36
Report of Independent Certified Public Accountants 41
Performance Comparisons
The Rightime Fund 42
The Rightime Government Securities Fund 44
The Rightime Blue Chip Fund 46
The Rightime Social Awareness Fund 48
The Rightime MidCap Fund 50
Officers and Directors 52
[RIGHTIME LOGO] 1997
Rightime Annual Report
Family of Funds THE RIGHTIME FUND, INC.
Dear Shareholder:
"Goldilocks and the Three Bears" is a story we all remember fondly.
And like all childhood fairy tales it has a happy ending. Many people
are calling the U.S. economy a "Goldilocks" economy. The data is
interpreted to mean that things are neither "too hot" nor "too cold."
In the end, this is used to rationalize paying a higher price for
stocks and then expecting that price to climb even higher. Throughout
much of the last seven years this has held true. However, let's not
overlook the likelihood that the people of Thailand and Malaysia,
probably also felt confident right up to the point where their
currencies and stock markets dropped in value by 40% each.
Of course, it's not prudent to compare the U.S. economy to that of the
"Asian Tigers." The factors underlying the Asian problems -- poor
banking, bad current account balances, etc. -- do not affect the U.S.
economy the same way. However, it is important to realize that the
investment world has very real risks. In fact, the more investors
disregard such risk, the more they are likely to be affected by it. We
at Rightime believe that the need for risk management is greatest when
it is perceived to be the least needed.
A look at the state of the U.S. stock market and economy throughout
1997 would seem to confirm investors euphoria. Unemployment is at
4.6%; a level not seen since the Nixon presidency. From an inflation
perspective, unemployment is at a level that most economists would
have found alarming until recently. However, Federal Reserve Chairman
Alan Greenspan has been reluctant to raise rates because of the lack
of inflationary pressures within the economy despite the tight job
market and upward pressures on wages. Productivity increases seem to
be countering the inflationary pressures.
Because the market perceives that a rise in the Federal Reserve Rate
is unlikely, bond yields have been declining since early April and
have traded below the 6% level on the 30-year Treasury. The low and
declining long rates have helped justify the P/E ratio of the S&P 500
of 23. As a result, the S&P 500 is at record levels as of early
December after climbing nearly 32% in a year. Additionally, the Lipper
Growth Fund Index is up over 25%.
Why is it that the Rightime Funds have trailed the market throughout
1997? Part of the answer is that much of the gains were achieved in a
relatively short period during the year. From April 15 through July
23, the S&P rose over 24%. In fact, the second quarter happened to be
the best performing quarter since 1991 for many mutual funds. Throughout
the time period of April 15 through July 23, Rightime maintained a
conservative position and did not participate in the upswing.
Why was Rightime bearish at a time when the market was going up? A
look at how Rightime manages money and how we strive to achieve our
risk reduction may be helpful. We have constructed a model that has
four general type of indicators:
[bullet] Fundamental (inflation & relative value indicators)
[bullet] Monetary (interest rate movement & liquidity measures)
[bullet] Market sentiment (emotions of investors)
[bullet] Market momentum
We have blended these indicators to form a model that when followed
since inception has provided market-like returns at half the risk
measured by beta.
The order in which the indicators are listed is typically the order in
which the market changes tend to occur. For example, fundamentals are
the first to show signs of a change. They are then followed by
monetary and then sentiment indicators. Lastly, the market loses
momentum. Our sell signal in April was triggered primarily by a quick
deterioration in market momentum. While the fundamentals and monetary
indicators were declining, they did not turn until later and did not
improve for some time. We did not re-enter the market until July 23 as
a result, and unfortunately missed much of the 1997 upswing. This type
of activity will tend to occur in riskier, potentially overvalued
markets. That is, the marketplace believes the fundamentals will
improve and buys stocks. Stock prices rally in response, before the
fundamentals support the move. This time the fundamentals finally
turned and improved. Our risk-averse nature kept us out of stocks and
behind the market for the year.
The year will be remembered for two other important events. The
technology sector was battered during the first months of the year.
This occurred while the large capitalization stocks of the S&P
retained their value. Since that time, technology stock prices have
oscillated based on investor sentiment and earnings. What has affected
investor sentiment and earnings has been this year's "Asian Flu." The
problems with much of Southeast Asia has caused concern for the
earnings prospects for large multi-nationals and technology stocks
which are dependent on exporting to that part of the world.
Additionally, the potential for these problems to leave Asia and
impact other marketplaces has caused some trepidation among investors.
This goes a long way to explaining what occurred on October 27, when
the Dow Jones Industrial Average dropped over 500 points only to
recover much of these losses in the next few days.
Where does all this leave us? As 1997 winds down, it will be
remembered as a disappointment in terms of missed opportunities.
However, we have preserved principal and that is our main goal. The
marketplace is still favorable but not without its dangers. At this
time, things do look positive and we remain fully invested in the
stock market. In a similar fashion we remain fully committed to our
modeling process and believe that the basic principles which have
worked since 1979 still work in 1997. That investing in a disciplined
manner over time, as we do, will lead to long-term success. Just as
"Goldilocks" and other bedtime stories helped you sleep well as a
child, our goal at Rightime is to help you rest easier while you
invest.
David J. Rights
President, Rightime Econometrics, Inc.
<TABLE>
<CAPTION>
[RIGHTIME LOGO]
October 31, 1997
Rightime
Family of Funds The Rightime Fund
Portfolio of Investments
Value
Shares (Note 1)
- ------------ ---------------
<S> <C> <C>
EQUITY FUNDS: (80.94%)
174,028 Acorn Fund $ 3,153,396
21 Alliance Quasar Fund 607
413,974 American Century Value Fund 3,249,696
73,978 Babson Value Fund 3,383,772
70,443 Baron Asset Fund 3,266,460
74,019 Brandywine Fund 2,470,023
15,245 Clipper Fund 1,269,880
123,504 Columbia Special Fund 2,739,307
67,982 Dreyfus Appreciation Fund 2,103,358
51,682 Dreyfus New Leaders Fund 2,512,249
47,111 Federated Growth Strategies Fund 1,485,884
49,588 Fidelity Fund 1,455,412
24,009 Fidelity Value Fund 1,458,308
50,726 IDS Growth "A" Fund 1,654,171
198,410 IDS New Dimension Fund "A" Fund 4,876,924
19,597 Janus Twenty Fund 688,820
8,643 Janus Venture Fund 508,563
59,296 Kemper Blue Chip "A" Fund 1,048,351
42,590 Kemper Dreman High Return "A"
Fund 1,369,699
14,484 Kemper Dreman Small Cap "A" Fund 317,913
93,732 Lexington Corporate Leaders Fund 1,472,529
16,768 Lindner Growth Fund 467,652
7,332 Mairs and Power Growth Fund 625,399
346,032 MAS Value Fund 6,681,869
77,154 MFS MIT "A" Fund 1,363,319
167,028 MFS Research "A" Fund 3,597,772
54,377 Mutual Beacon Class Z Fund 826,530
82,922 Neuberger & Berman Genesis Fund 1,380,648
46,231 Neuberger & Berman Guardian Fund 1,394,799
125,808 New England Value Fund 1,285,759
25,366 Nicholas II Fund 1,025,043
40,492 Nicholas Limited Edition Fund 1,107,037
45,562 Parkstone Small Cap "A" Fund 1,286,224
160,324 Pennsylvania Mutual Fund 1,418,871
149,427 Putnam Fund for Growth
& Income "A" Fund 3,120,041
285,319 Putnam Investors "A" Fund 3,341,091
169,241 Putnam OTC "A" Fund 2,702,776
116,018 Putnam Vista "A" Fund 1,417,743
357,095 Putnam Voyager "A" Fund 6,938,350
45,663 Seligman Capital Fund "A" Fund 885,867
101,149 Seligman Frontier "A" Fund 1,695,258
108,449 Stein Roe Capital Opportunities Fund 3,034,396
56,675 T. Rowe Price Equity Income Fund 1,487,147
52,452 T. Rowe Price MidCap Growth Fund 1,441,901
32,159 T. Rowe Price New America Fund 1,438,162
74,254 T. Rowe Price Small Cap Stock Fund 1,681,114
111,781 Vanguard US Growth Fund 3,151,117
115,818 Vanguard Windsor II Fund 3,400,418
161,373 William Blair Growth Fund 2,478,690
31,695 WPG Tudor Fund 828,827
------------
Total Equity Funds
(cost $86,915,760) 101,989,142
------------
MONEY MARKET FUNDS: (16.49%)
309,519 AIM Money Market Fund 309,519
143,977 Delaware Group Cash Reserve Fund 143,977
2,868,292 Fidelity U.S. Government
Reserves Fund 2,868,292
6,395,790 IDS Cash Management Prime Fund 6,395,790
2,303,586 Kemper Government Money
Market Fund 2,303,586
531,558 MAS Cash Reserve Fund 531,558
4,090,122 MFS Money Market Fund 4,090,122
1,022,667 New England Money Market Fund 1,022,667
1,334,634 Oppenheimer Money Market Fund 1,334,634
1,116,576 T. Rowe Price Prime Reserve Fund 1,116,576
657,094 Steinroe Cash Reserves Fund 657,094
2,000 Value Line Cash Fund 2,000
------------
Total Money Market Funds
(cost $20,775,815) 20,775,815
------------
<CAPTION>
Principal Value
Amount (Note 1)
- ------------ ---------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.86%)
Repurchase Agreement (1.29%)(b)
$ 1,632,000 Smith Barney Inc.
5.66%; 11/3/97 (cost $1,632,000;
maturity value $1,632,770) $ 1,632,000
------------
United States Treasury Bill (1.57%)(c)
2,000,000 5.13%; 1/22/98 (cost $1,976,584) 1,976,584
------------
Total Short-term Investments
(cost $3,608,584) 3,608,584
------------
Total Investments
(cost $111,300,159)(100.29%)(a) 126,373,541
Liabilities Less Other Assets (-0.29%) (371,734)
------------
Net Assets (100%) $126,001,807
============
(a) Aggregate cost for federal income tax purposes is $111,300,159.
At October 31, 1997 unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 15,371,601
Gross unrealized depreciation (298,219)
------------
Net unrealized appreciation $ 15,073,382
============
(b) The Repurchase Agreement is collateralized by obligations of the
United States government and its agencies with a market value
of $1,665,841 which exceeds the value of the repurchase agreement.
It is the Fund's policy to always receive, as collateral, securities
whose value, including accrued interest, will be at least equal to 102%
of the dollar amount to be paid to the Fund under each agreement at its
maturity. The value of the securities are monitored daily. If the value
falls below 101% of the amount to be paid at maturity, additional
collateral is obtained. The Fund makes payment for such securities only
upon physical delivery or evidence of book entry transferred to the
account of its custodian.
(c) At October 31, 1997, the market value of $1,976,584 of the U.S.
Treasury Bills were pledged to cover margin requirements for
futures contracts.
Futures contracts at October 31, 1997:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
S&P 500 Stock Index:
50/December/Buy $(496,250)
============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime
Family of Funds Government Securities Fund
Portfolio of Investments
Principal Value
Amount (Note 1)
- ------------ ---------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (82.42%)
$4,000,000 U.S. Treasury Bond 6.875%; 8/15/25 $ 4,341,320
1,000,000 U.S. Treasury Bond 9.25%; 2/15/16 1,331,380
1,000,000 U.S. Treasury Bond 6.375%; 8/15/27 1,029,800
------------
Total U.S. Government Obligations
(cost $6,195,000) 6,702,500
------------
SHORT-TERM INVESTMENTS (16.60%)
Repurchase Agreement (10.51%)(b)
855,000 Smith Barney
5.66%; 11/03/97 (cost $855,000;
maturity value $855,403) 855,000
------------
United States Treasury Bill (6.09%)(c)
500,000 5.09%; 1/15/98 (cost $494,813) 494,813
------------
Total Short-term Investments
(cost $1,349,813) 1,349,813
------------
Total Investments
(cost $7,544,813)(99.02%)(a) 8,052,313
Other Assets Less Liabilities (0.98%) 79,974
------------
Net Assets (100%) $ 8,132,287
============
(a) Aggregate cost for federal income tax purposes is $7,484,813. At
October 31, 1997 unrealized appreciation (depreciation) of securities
for federal income tax purposes is as follows:
Gross unrealized appreciation $ 507,500
Gross unrealized depreciation 0
------------
Net unrealized appreciation $ 507,500
============
(b) The Repurchase Agreement is collateralized by obligations of the
United States government and its agencies with a market value of
$872,729 which exceeds the value of the repurchase agreement.
It is the Fund's policy to always receive, as collateral,
securities whose value, including accrued interest, will be at
least equal to 102% of the dollar amount to be paid to the Fund
under each agreement at its maturity. The value of the securities
are monitored daily. If the value falls below 101% of the amount
to be paid at maturity, additional collateral is obtained. The Fund
makes payment for such securities only upon physical delivery or
evidence of book entry transferred to the account of its custodian.
(c) At October 31, 1997, the market value of $494,813 of the U.S.
Treasury Bills were pledged to cover margin requirements for futures
contracts.
Futures contracts at October 31, 1997:
(Contracts-$1000 times premium/delivery
month/commitment)
Unrealized
Appreciation
-------------
U.S. Treasury Bonds:
13/December/Buy $ 59,031
============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime Blue Chip Fund
Family of Funds Portfolio of Investments
Value
Shares (Note 1)
- --------- ---------------
<S> <C> <C>
COMMON STOCK (91.90%)
INDUSTRIALS (69.13%)
Aerospace/Defense (1.60%)
34,319 Boeing Co. $ 1,643,022
2,278 General Dynamics Corp. 184,945
6,980 Lockheed Martin Corp. 663,536
1,902 Northrop Grumman Corp. 207,794
8,392 Raytheon Co. 455,266
6,520 Rockwell International Corp. 319,480
8,365 United Technologies Corp. 585,550
------------
4,059,593
------------
Aluminum (0.27%)
6,888 Alcan Aluminium Ltd. 196,738
5,304 Aluminum Co. of America 387,192
1,718 Reynolds Metals Co. 104,691
------------
688,621
------------
Automobiles (1.66%)
26,029 Chrysler Corp. 917,522
37,622 Ford Motor Co. 1,643,611
25,722 General Motors Corp. 1,651,031
------------
4,212,164
------------
Auto Parts After Market (0.27%)
3,102 Cooper Tire & Rubber Co. 65,723
1,949 Echlin, Inc. 63,830
6,624 Genuine Parts Co. 207,414
5,595 Goodyear Tire & Rubber Co. 350,387
------------
687,354
------------
Beverages (Alcoholic) (0.55%)
1,471 Adolph Coors Co. Class B 51,945
16,949 Anheuser-Busch Co., Inc. 676,901
3,094 Brown-Forman Corp. Class B 152,186
15,203 Seagram Co. Ltd. 512,151
------------
1,393,183
------------
Beverages (Soft Drinks) (2.65%)
84,315 Coca-Cola Co. 4,763,797
53,676 PepsiCo, Inc. 1,975,948
------------
6,739,745
------------
Broadcast Media (0.29%)
7,560 Comcast Corp. Class A Special 207,900
3,254 TCI Satellite Entertainment* 23,591
22,102 Tele-Communications, Inc.
Class A* 506,965
------------
738,456
------------
Building Materials (0.18%)
5,079 Masco Corp. 222,841
1,772 Owens Corning 60,691
6,394 Sherwin-Williams Co. 177,434
------------
460,966
------------
Chemicals (2.12%)
11,030 Applied Materials, Inc.* 368,126
4,429 Air Products & Chemicals, Inc. 336,604
9,883 Dow Chemical Co. 896,882
35,240 E.I. du Pont de Nemours & Co. 2,004,275
2,303 Goodrich (B.F.) Co. 102,627
3,420 Hercules, Inc. 156,892
19,900 Monsanto Co. 850,726
4,859 Praxair, Inc. 211,670
1,944 Rohm & Haas Co. 161,960
4,400 Solutia Inc.* 97,350
4,641 Union Carbide Corp. 212,036
------------
5,399,148
------------
Chemicals (Diversified) (0.35%)
3,817 Avery Dennison Corp. 151,964
5,081 Engelhard Corp. 88,282
1,469 FMC Corp.* 118,714
3,096 Mallinckrodt Inc. 116,100
7,165 PPG Industries, Inc. 405,718
------------
880,778
------------
Chemicals (Specialty) (0.27%)
2,502 Fresenious Medical Care-ADR 58,953
3,301 Grace (W.R.) & Co. 224,468
2,359 Great Lakes Chemical Corp. 110,873
5,658 Morton Int'l Inc. 186,714
2,339 Nalco Chemical Co. 93,560
------------
674,568
------------
Commercial Services (0.09%)
1,992 Ecolab, Inc. 94,744
1,740 National Service Industries, Inc. 76,995
1,206 Ogden Corp. 30,452
1,431 Safety-Kleen Corp. 31,661
------------
233,852
------------
Communication (Equipment/
Manufacturers) (1.32%)
3,023 Andrew Corp.* 70,096
6,573 Bay Networks 207,871
4,569 Cabletron Systems, Inc.* 132,501
19,370 Cisco Systems, Inc.* 1,588,946
3,910 DSC Communications Corp.* 95,306
4,694 Nextlevel Systems Inc.* 63,369
9,362 Northern Telecom Ltd. 839,654
2,484 Scientific-Atlanta, Inc. 46,109
5,702 Tellabs, Inc.* 307,908
------------
3,351,760
------------
Computer Software & Services (3.61%)
4,647 3 Com Corp.* 192,560
7,660 ALLTEL Corp. 270,972
1,526 Autodesk, Inc. 56,462
9,827 Automatic Data Processing, Inc. 502,405
12,183 Computer Associates
International, Inc. 908,395
1,952 Computer Sciences Corp.* 138,470
9,712 First Data Corp. 282,255
41,559 Microsoft Corp.* 5,402,670
12,421 Novell, Inc.* 104,802
33,139 Oracle Corp.* 1,185,755
860 Shared Medical Systems Corp. 47,085
5,524 Silicon Graphics, Inc.* 81,134
------------
9,172,965
------------
Computer Systems (2.65%)
4,043 Apple Computer, Inc. 68,857
24,543 COMPAQ Computer Corp. 1,564,611
1,732 Ceridian Corp.* 67,656
1,162 Data General Corp.* 22,369
4,152 Dell Computer* 332,679
5,135 Digital Equipment Corp.* 257,071
2,292 EMC Corp.* 128,352
1,653 Intergraph Corp.* 17,770
37,735 International Business
Machines Corp. 3,700,388
4,226 LSI Logic Corp. 92,180
1,992 Seagate Technology* 54,033
10,379 Sun Microsystems, Inc.* 355,481
6,271 Unisys Corp.* 83,483
------------
6,744,930
------------
Conglomerates (0.55%)
3,984 Allegheny Teledyne Inc. 104,829
6,812 Fortune Brands 225,222
3,443 ITT Industries, Inc. 108,669
3,800 ITT Hartford Group Inc. 307,800
6,578 Tenneco Inc. 295,599
6,294 Textron, Inc. 363,872
------------
1,405,991
------------
Containers (Metal & Glass) (0.08%)
1,077 Ball Corp. 37,695
3,478 Crown Cork & Seal Co., Inc.* 156,727
------------
194,422
------------
Containers (Paper) (0.09%)
1,913 Bemis Co., Inc. 72,933
3,345 Stone Container Corp.* 40,349
2,056 Temple-Inland Inc. 117,963
------------
231,245
------------
Cosmetics (0.71%)
2,290 Alberto-Culver Co. Class B 69,129
4,527 Avon Products, Inc. 296,518
13,997 Gillette Co. 1,246,608
4,076 International Flavors &
Fragrances, Inc. 197,177
------------
1,809,432
------------
Electrical Equipment (3.72%)
8,661 AMP, Inc. 389,745
1,564 Commscope Inc.* 17,204
15,134 Emerson Electric Co. 793,589
112,691 General Electric Co. 7,275,613
1,913 Grainger (W.W.), Inc. 167,268
4,224 Honeywell, Inc. 287,496
1,380 Raychem Corp. 124,976
1,442 Thomas & Betts Corp. 71,739
12,661 Westinghouse Electric Corp. 334,725
------------
9,462,355
------------
Electronics (Defense) (0.05%)
1,745 EG & G, Inc. 36,100
4,460 Loral Space &
Communications Ltd.* 93,660
------------
129,760
------------
Electronics (Instrumentation) (0.91%)
34,871 Hewlett-Packard Co. 2,151,105
1,465 Perkin-Elmer Corp. 91,563
1,331 Tektronix, Inc. 78,695
------------
2,321,363
------------
Electronics (Semiconductors) (2.65%)
3,929 Advanced Micro Devices, Inc.* 90,367
1,173 General Semiconductor Inc.* 13,343
56,142 Intel Corp. 4,322,934
7,082 Micron Technology Inc. 189,886
20,181 Motorola, Inc. 1,246,177
4,553 National Semiconductor Corp.* 163,908
6,605 Texas Instruments, Inc. 704,671
------------
6,731,286
------------
Engineering & Construction (0.07%)
3,164 Fluor Corp. 130,119
1,478 Foster Wheeler Corp. 48,497
------------
178,616
------------
Entertainment (0.72%)
1,156 King World Productions, Inc.* 54,621
21,453 Walt Disney Co. 1,764,509
------------
1,819,130
------------
Foods (2.21%)
24,028 Archer-Daniels-Midland Co. 534,629
5,164 CPC International, Inc. 511,236
6,799 Campbell Soup Co. 350,573
16,456 ConAgra, Inc. 495,737
5,573 Darden Restaurants Inc.* 63,393
5,727 General Mills, Inc. 377,982
12,734 H.J. Heinz Co. 591,335
5,643 Hershey Foods Corp. 311,776
14,854 Kellogg Co. 639,650
5,545 Quaker Oats Co. 265,467
3,587 Ralston-Purina Group 321,933
16,415 Sara Lee Corp. 839,217
4,253 Wrigley, (Wm.) Jr. Co. 307,811
------------
5,610,739
------------
Food Wholesalers (0.15%)
1,452 Fleming Cos., Inc. 24,503
2,508 SuperValu Inc. 91,855
6,634 Sysco Corp. 265,360
------------
381,718
------------
Gold Mining (0.33%)
12,354 Barrick Gold Corp. 254,029
7,049 Battle Mountain Gold Co. 43,175
4,194 Echo Bay Mines Ltd. 17,038
6,368 Freeport-McMoran 152,036
4,928 Homestake Mining Co. 60,984
5,048 Newmont Mining Corp. 176,680
8,020 Placer Dome Group, Inc. 124,310
------------
828,252
------------
Hardware & Tools (0.14%)
3,256 Black & Decker Corp.* 123,932
2,488 Snap-On Inc. 106,984
3,081 Stanley Works 130,172
------------
361,088
------------
Health Care (Diversified) (4.07%)
26,606 Abbott Laboratories, Inc. 1,631,280
22,072 American Home Products Corp. 1,636,087
33,750 Bristol-Myers Squibb Co. 2,961,562
44,192 Johnson & Johnson 2,535,516
6,053 United Healthcare Corp. 280,330
9,109 Warner-Lambert Co. 1,304,295
------------
10,349,070
------------
Health Care (Drugs) (4.29%)
136 Crescendo Pharm. 1,542
36,524 Lilly (Eli) & Co. 2,442,543
41,438 Merck & Co., Inc. 3,698,341
42,180 Pfizer, Inc. 2,984,235
10,814 Pharmacia & Upjohn, Inc. 343,344
25,727 Schering-Plough Corp. 1,442,320
------------
10,912,325
------------
Health Care (Miscellaneous) (0.16%)
2,727 ALZA Corp.* 71,073
2,634 Beverly Enterprises Inc.* 39,345
9,052 HEALTHSOUTH Corp.* 231,392
1,728 Manor Care Inc. 59,292
------------
401,102
------------
Heavy Duty Trucks & Parts (0.26%)
1,322 Cummins Engine Co., Inc. 80,559
3,170 Dana Corp. 148,396
2,778 Eaton Corp. 268,424
2,490 Navistar International Corp.* 57,737
2,478 PACCAR, Inc. 111,665
------------
666,781
------------
Hospital Management Companies (0.35%)
22,571 Columbia/HCA Healthcare Corp. 637,631
1,776 Humana, Inc.* 37,296
7,050 Tenet Healthcare Corp.* 215,465
------------
890,392
------------
Homebuilding (0.05%)
1,082 Centex Corp. 63,297
1,195 Kaufman & Broad Home Corp. 25,468
986 Pulte Corp. 36,852
------------
125,617
------------
Hotel/Motel (0.24%)
1,154 Choice Hotels Hldgs Inc.* 20,267
3,581 Harrah's Entertainment, Inc. 70,501
6,872 Hilton Hotels Corp. 211,744
4,183 Marriott International 291,764
385 Sunburst Hospitality* 3,895
------------
598,171
------------
Household Furnishings & Appliances (0.13%)
999 Armstrong World Industries, Inc. 66,496
3,556 Maytag Corp. 118,681
2,425 Whirlpool Corp. 147,016
------------
332,193
------------
Household Products (2.12%)
4,370 Clorox Co. 305,900
10,274 Colgate-Palmolive Co. 665,241
47,226 Procter & Gamble Co. 3,211,368
22,824 Unilever NV ADR 1,218,231
------------
5,400,740
------------
Housewares (0.20%)
6,443 Newell Co. 247,250
2,044 Premark International, Inc. 55,316
5,917 Rubbermaid, Inc. 142,378
2,518 Tupperware Corp. 63,107
------------
508,051
------------
Machinery (Diversified) (0.71%)
1,211 Briggs & Stratton Corp. 60,247
15,144 Caterpillar, Inc. 776,130
3,326 Cooper Industries, Inc. 173,368
8,886 Deere & Co. 467,626
1,526 Harnischfeger Industries Inc. 60,086
5,983 Ingersoll-Rand Co. 232,944
1,138 LucasVarity PLC-ADS 38,834
------------
1,809,235
------------
Manufacturing (Diversified Industries) (0.70%)
1,082 Aeroquip Vickers Inc. 56,332
2,035 Case Corp. 121,718
1,565 Crane Co. 65,045
3,620 Dover Corp. 244,350
487 Fleetwood Enterprises, Inc. 14,762
6,712 Illinois Tool Works, Inc. 330,146
3,252 Johnson Controls, Inc. 145,934
1,459 Millipore Corp. 57,083
332 NACCO Industries, Inc. Class A 34,196
4,202 Pall Corp. 86,929
3,377 Parker Hannifin Corp. 141,201
2,444 Timken Co. 81,874
10,512 Tyco Intl Ltd. 396,828
------------
1,776,398
------------
Medical Products & Supplies (0.81%)
1,443 Allegiance Corp. 40,043
2,049 Bard (C.R.), Inc. 56,860
2,334 Bausch & Lomb, Inc. 91,609
9,397 Baxter International, Inc. 434,611
4,716 Becton, Dickinson & Co. 217,231
4,731 Biomet, Inc.* 117,979
4,655 Boston Scientific Corp.* 211,803
15,816 Medtronic, Inc. 687,996
2,602 St. Jude Medical, Inc.* 78,873
3,609 Sigma Aldrich Corp. 126,766
------------
2,063,771
------------
Metals Miscellaneous (0.13%)
1,384 ASARCO, Inc. 37,887
2,941 Cyprus Amax Minerals Co. 61,577
4,197 Inco Ltd. 86,563
2,061 Phelps Dodge Corp. 153,287
------------
339,314
------------
Miscellaneous (3.60%)
1,578 A.C. Nielson* 36,097
2,510 Allergan, Inc. 82,673
19,082 AlliedSignal Inc. 686,952
2,283 American Greetings Corp. Class A 79,192
9,094 Amgen, Inc.* 447,880
2,478 Autoliv Inc. 97,726
3,245 Brunswick Corp. 109,519
1,078 Cincinnati Milacron, Inc. 29,915
6,113 Cognizant Corp. 239,553
8,372 Corning, Inc. 377,787
3,005 Covance Inc.* 53,151
10,342 CUC International, Inc.* 305,089
3,151 Deluxe Corp. 103,195
3,108 Dial Corp. 52,448
5,595 Donnelley (R.R.) & Sons Co. 182,537
487 Eastern Enterprises 19,084
2,709 Eastman Chemical 161,524
11,672 Eastman Kodak Co. 698,861
1,507 General Signal Corp. 60,468
6,000 HBO & Co. 261,000
4,271 H & R Block, Inc. 158,027
933 HFS Inc.* 65,776
2,417 Harcourt General, Inc. 121,001
1,272 Harland (John H.)Co. 28,541
2,250 Harris Corp. 98,156
4,490 Ikon Office Solutions Inc. 127,123
934 Imation Corp. 19,964
4,258 Interpublic Group 202,255
1,238 Jostens Inc. 28,861
1,517 Kerr-McGee Corp. 102,492
4,455 Loews Corp. 497,568
5,240 Marsh & McLennan Cos., Inc. 372,040
2,173 Meritor Automotive Inc. 48,488
13,113 Minnesota Mining &
Manufacturing Co. 1,199,839
4,908 NCR Corporation* 148,774
1,880 Newport News Shipbuilding 40,420
2,931 Pioneer Hi Bred International 268,553
1,379 Polaroid Corp. 61,969
1,502 Quest Diagnostics* 25,065
7,271 Service Corp. International 221,311
598 Springs Industries Inc. Class A 27,732
4,516 TRW, Inc. 258,541
3,300 Unisource Worldwide Inc. 53,831
1,812 United States Surgical Corp. 48,811
13,369 Viacom International Class B* 404,412
3,108 Viad Corp. 56,721
4,671 Whitman Corp. 122,614
5,199 Williams Cos., Inc. 264,824
------------
9,158,360
------------
Office Equipment & Supplies (0.61%)
3,264 Moore Corp. Ltd. 52,836
6,017 Pitney Bowes, Inc. 477,223
12,789 Xerox Corp. 1,014,328
------------
1,544,387
------------
Oil & Gas Drilling (0.07%)
736 Helmerich & Payne, Inc. 59,386
3,315 Rowan Cos., Inc.* 128,871
------------
188,257
------------
Oil (Exploration & Production) (0.27%)
3,630 Burlington Resources, Inc. 177,643
1,325 Monterey Resources 26,417
3,862 Oryx Energy Co.* 106,446
3,006 Santa Fe Energy Resources, Inc.* 39,266
1,826 Western Atlas Inc.* 157,379
7,305 Union Pacific Resources
Group, Inc. 179,886
------------
687,037
------------
Oil (Domestic Integrated) (1.20%)
3,834 Amerada Hess Corp. 235,551
1,732 Ashland Inc. 82,595
11,889 Atlantic Richfield Co. 978,613
11,715 Occidental Petroleum Corp. 326,556
1,339 Pennzoil Co. 99,086
9,711 Phillips Petroleum Co. 469,770
2,771 Sun Co., Inc. 111,013
10,791 USX-Marathon Group 385,778
9,091 Unocal Corp. 375,004
------------
3,063,966
------------
Oil (International Integrated) (5.89%)
14,986 Amoco Corp. 1,374,029
21,741 Chevron Corp. 1,803,144
83,163 Exxon Corp. 5,109,327
26,168 Mobil Corp. 1,905,357
71,864 Royal Dutch Petroleum Co. ADR 3,781,843
17,590 Texaco Inc. 1,001,531
------------
14,975,231
------------
Oil Well Equipment & Services (0.97%)
5,335 Baker Hughes, Inc. 245,077
6,683 Dresser Industries, Inc. 281,521
8,828 Halliburton Co. 526,370
1,898 McDermott International, Inc. 68,921
15,362 Schlumberger Ltd. 1,344,175
------------
2,466,064
------------
Paper & Forest Products (1.16%)
1,626 Boise Cascade Corp. 56,300
2,653 Champion International Corp. 146,412
2,793 Fort James Corp. 110,847
3,079 Georgia-Pacific Corp. 261,138
9,649 International Paper Co. 434,205
20,578 Kimberly-Clark Corp. 1,068,770
2,999 Louisiana-Pacific Corp. 62,979
1,620 Mead Corp. 98,010
1,149 Potlatch Corp. 57,306
2,065 Union Camp Corp. 111,897
3,170 Westvaco Corp. 104,016
6,873 Weyerhaeuser Co. 328,186
3,674 Willamette Industries, Inc. 121,472
------------
2,961,538
------------
Pollution Control (0.32%)
6,742 Browning-Ferris Industries, Inc. 219,115
9,030 Laidlaw, Inc. Class B 127,549
20,113 Waste Management Inc. 470,141
------------
816,805
------------
Publishing (0.56%)
5,513 Dun & Bradstreet Corp. 157,465
3,765 McGraw-Hill Cos. 246,137
2,352 Meredith Corp. 80,115
16,361 Time Warner, Inc. 943,825
------------
1,427,542
------------
Publishing (Newspapers) (0.63%)
3,476 Dow Jones & Co., Inc. 161,634
11,710 Gannett Co., Inc. 615,507
3,725 Knight-Ridder, Inc. 194,631
3,070 New York Times Co. Class A 168,083
3,897 Times Mirror Co. Class A 210,925
4,690 Tribune Co. 258,536
------------
1,609,316
------------
Restaurants (0.54%)
1,241 Luby's Cafeterias, Inc. 24,742
23,996 McDonald's Corp. 1,075,321
2,609 Ryan's Family Steak Houses, Inc.* 22,503
2,309 Shoney's Inc.* 10,824
5,368 Tricon Global Restaurants 162,705
3,466 Wendy's International, Inc. 72,786
------------
1,368,881
------------
Retail Stores (Department) (0.74%)
7,526 Dayton-Hudson Corp. 472,727
3,808 Dillard's Inc. 146,132
2,305 Federated Department Stores 101,420
8,678 May Department Stores Co. 467,527
1,143 Mercantile Stores Co., Inc. 67,366
3,009 Nordstrom, Inc. 184,301
7,593 J.C. Penney Co. 445,614
------------
1,885,087
------------
Retail Stores (Drugs) (0.25%)
2,532 Rite Aid Corp. 150,338
17,210 Walgreen Co. 484,031
------------
634,369
------------
Retail Stores (Food Chains) (0.48%)
9,513 Albertson's, Inc. 350,792
11,140 American Stores Co. 286,159
2,285 Giant Food, Inc. Class A 69,978
1,385 Great Atlantic &
Pacific Tea Co., Inc. 42,502
8,162 Kroger Co.* 266,285
5,668 Winn Dixie Stores, Inc. 210,425
------------
1,226,141
------------
Retail Stores (General Merchandise) (1.39%)
17,402 Kmart Corp. 229,489
13,186 Sears, Roebuck & Co. 552,164
78,472 Wal-Mart Stores, Inc. 2,756,329
------------
3,537,982
------------
Retail Stores (Specialty) (1.15%)
3,298 Circuit City Stores, Inc. 131,508
6,689 Costco Companies* 257,526
3,348 CVS Corporation 205,274
769 Footstar Inc.* 20,907
24,547 Home Depot, Inc. 1,365,427
1,440 Longs Drug Stores, Inc. 36,090
6,085 Lowes Cos., Inc. 253,288
1,037 Payless Shoesource Inc.* 57,813
2,202 Pep Boys (Manny, Moe & Jack) 55,463
4,378 Tandy Corp. 150,494
9,307 Toys R Us, Inc.* 317,019
4,451 Woolworth Corp.* 84,569
------------
2,935,378
------------
Retail Stores (Specialty-Apparel) (0.35%)
3,661 Charming Shoppes, Inc. 18,991
10,822 Gap (The), Inc. 575,595
7,007 Limited, Inc. 165,103
4,788 TJX Cos., Inc. 141,845
------------
901,534
------------
Shoes (0.20%)
10,120 Nike, Inc. Class B 475,640
674 Reebok International Ltd. 24,854
1,461 Stride Rite Corp. 17,167
------------
517,661
------------
Steel (0.16%)
4,045 Armco, Inc.* 23,259
3,277 Bethlehem Steel Corp.* 32,770
1,406 Inland Steel Industries, Inc.* 27,593
3,248 Nucor Corp. 169,708
2,544 USX-U.S. Steel Group 86,496
2,785 Worthington Industries, Inc. 57,614
------------
397,440
------------
Telecommunications (Long Distance) (2.31%)
52,876 AT&T Corp. 2,587,619
18,394 Lucent Technologies Inc. 1,516,355
22,674 MCI Communications Corp. 804,927
12,805 Sprint Corp. 665,860
9,151 WorldCom, Inc. 307,703
------------
5,882,464
------------
Textile (Apparel Manufacturers) (0.15%)
2,371 Fruit of the Loom, Inc. Class A* 61,794
2,085 Liz Claiborne, Inc. 105,684
1,385 Russell Corp. 40,684
2,077 V.F. Corp. 185,632
------------
393,794
------------
Tobacco (1.46%)
8,136 Gallaher Group ADS 156,110
83,610 Philip Morris Cos., Inc. 3,313,046
8,112 UST Inc. 242,853
------------
3,712,009
------------
Toys (0.19%)
4,979 Hasbro, Inc. 144,391
9,036 Mattel, Inc. 351,275
------------
495,666
------------
Total Industrials 175,863,549
------------
TRANSPORTATION (1.24%)
Airlines (0.31%)
2,806 AMR Corp.* 326,724
1,958 Delta Air Lines, Inc. 197,268
5,045 Southwest Airlines Co. 164,593
1,900 USAir Group, Inc.* 89,063
------------
777,648
------------
Railroads (0.72%)
4,944 Burlington Northern
Santa Fe Corp. 469,680
7,797 CSX Corp. 426,398
13,752 Norfolk Southern Corp. 441,783
8,111 Union Pacific Corp. 496,799
------------
1,834,660
------------
Truckers (0.08%)
1,328 Caliber System Inc. 69,222
2,150 CNF Transportation 95,944
1,075 Consolidated Freightways Corp. 15,184
662 Yellow Corp. 18,164
------------
198,514
------------
Transportation (Miscellaneous) (0.13%)
3,467 Federal Express Corp.* 231,422
2,990 Ryder System, Inc. 104,650
------------
336,072
------------
Total Transportation 3,146,894
------------
UTILITIES (6.72%)
Electric Companies (2.32%)
6,957 American Electric Power Co., Inc. 328,718
5,438 Baltimore Gas & Electric Co. 149,205
5,137 Carolina Power & Light Co. 183,648
6,688 Central & South West Corp. 144,210
5,690 CINergy Corp. 187,770
6,271 Consolidated Edison Co.
of New York, Inc. 214,782
5,134 DTE Energy Co. 157,870
5,798 Dominion Resources, Inc. 215,613
12,080 Duke Power Co. 582,860
15,016 Edison International 384,785
8,153 Entergy Corp. 199,239
6,657 FPL Group, Inc. 344,084
3,972 GPU Inc. 143,737
9,620 Houston Industries, Inc. 209,235
5,673 Niagara Mohawk Power Corp. 54,957
2,333 Northern States Power Co. 117,525
5,143 Ohio Edison Co. 127,289
7,485 PECO Energy Corp. 169,816
1,776 PP&L Resources Inc. 38,406
9,861 PacifiCorp 213,860
14,248 PG & E Corporation 364,215
8,311 Public Service Enterprise
Group Inc. 215,567
22,291 Southern Co. 511,300
8,037 Texas Utilities Co. 288,327
7,180 Unicom Corp. 201,040
3,724 Union Electric Co. 140,348
------------
5,888,406
------------
Natural Gas (0.51%)
4,194 Coastal Corp. 252,164
2,074 Columbia Gas Systems, Inc.* 149,847
2,232 Consolidated Natural Gas Co. 120,668
874 El Paso Natural Gas 52,385
8,737 Enron Corp. 332,006
3,114 ENSERCH Exploration Inc. 28,026
1,458 NICOR, Inc. 56,224
998 ONEOK, Inc. 34,244
2,869 Pacific Enterprises 93,780
1,349 Peoples Energy Corp. 48,227
2,863 Sonat, Inc. 131,519
------------
1,299,090
------------
Telephone (3.89%)
16,578 AirTouch Communications* 640,325
18,338 Ameritech Corp. 1,191,970
25,814 Bell Atlantic Corp. 2,061,893
35,019 BellSouth Corp. 1,656,837
32,403 GTE Corp. 1,375,102
30,626 SBC Communications Inc. 1,948,579
15,643 U S West Media Group 394,986
15,905 U S West Communication Group 633,218
------------
9,902,910
------------
Total Utilities 17,090,406
------------
FINANCIAL (14.81%)
Financial Miscellaneous (3.07%)
16,688 American Express Co. 1,301,664
9,042 American General Corp. 461,142
24,810 Federal Home Loan
Mortgage Corp. 939,679
37,033 Federal National Mortgage Assn. 1,793,786
4,766 Green Tree Financial Corp. 200,768
17,355 MBNA Corp. 456,653
14,253 Merrill Lynch & Co., Inc. 963,859
22,747 Morgan Stanley, Dean Witter
Discover 1,114,603
3,648 Salomon, Inc. 283,404
2,994 Transamerica Corp. 302,207
------------
7,817,765
------------
Life Insurance (0.38%)
1,726 Aon Corp. 93,096
2,018 Aegon NV 160,431
2,386 Jefferson-Pilot Corp. 184,468
3,411 Lincoln National Corp. 234,506
3,867 Providian Financial Corp. 143,079
3,816 Torchmark Corp. 152,163
------------
967,743
------------
Major Regional Banks (4.21%)
15,950 Banc One Corp. 831,394
13,822 Bank of New York Co., Inc. 650,498
7,115 Barnett Banks, Inc. 490,935
1,403 Comerica , Inc. 110,925
6,573 CoreStates Financial Corp. 478,186
6,016 Fifth Third Bancorp 385,776
13,850 First Union Corp. 679,515
9,445 Fleet Financial Group, Inc. 607,431
8,197 KeyCorp 501,554
6,237 National City Corp. 372,661
18,109 NationsBank, Inc. 1,084,277
26,806 Norwest Corp. 859,468
9,408 PNC Bank Corp. 446,880
8,285 SunTrust Banks, Inc. 536,971
8,723 U.S. Bancorp 887,020
6,895 Wachovia Corp. 519,279
4,333 Wells Fargo & Co. 1,262,528
------------
10,705,298
------------
Money Center Banks (2.38%)
3,296 Bankers Trust New York Corp. 388,928
15,935 Chase Manhattan Corp. 1,838,501
16,467 Citicorp 2,059,404
11,675 First Chicago NBD Corp. 849,356
6,795 Morgan (J.P.) & Co., Inc. 745,751
1,641 Republic New York Corp. 173,639
------------
6,055,579
------------
Multi-Line Insurance (2.46%)
5,141 Aetna Inc. 365,332
14,606 Allstate Corp. 1,211,385
24,822 American International
Group, Inc. 2,533,345
2,380 CIGNA Corp. 369,495
22,078 Travelers Group Inc. 1,545,460
4,661 UNUM Corp. 227,224
------------
6,252,241
------------
Other Major Banks (1.13%)
27,854 BankAmerica Corp. 1,991,561
4,224 BankBoston Corp. 342,408
10,688 Mellon Bank Corp. 551,100
------------
2,885,069
------------
Personal Loans (0.23%)
2,358 Beneficial Corp. 180,829
3,522 Household International, Inc. 398,867
------------
579,696
------------
Property-Casualty Insurance (0.67%)
5,724 Chubb Corp. 379,215
2,856 General Re Corp. 563,167
3,746 MGIC Investment Corp. 225,931
4,152 SAFECO Corp. 197,739
3,026 St. Paul Cos., Inc. 241,891
4,081 USF&G Corp. 82,640
------------
1,690,583
------------
Savings & Loans Companies (0.28%)
4,013 Ahmanson (H.F.) & Co. 236,767
2,023 Golden West Financial Corp. 175,495
4,376 Washington Mutual Inc. 299,483
------------
711,745
------------
Total Financial 37,665,719
------------
Total Common Stock (cost $165,477,690) 233,766,568
------------
<CAPTION>
Principal
Amount
- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (8.24%)
Repurchase Agreement, (6.30%)(b)
$16,017,000 Smith Barney Inc.
5.66%; 11/3/97 (cost $16,017,000;
maturity value $16,024,555) 16,017,000
United States Treasury Bills (1.94%)(c)
5,000,000 4.98%; 1/15/98 (cost $4,948,854) 4,948,854
------------
Total Short-term Investments
(cost $20,965,854) 20,965,854
------------
Total Investments (cost $186,443,544)
(100.14%)(a) 254,732,422
Liabilities Less Other Assets (-0.14%) (345,468)
------------
Net Assets (100%) $254,386,954
============
* Non-income producing security.
(a) Aggregate cost for federal income tax purposes is $186,443,544. At
October 31, 1997 unrealized appreciation (depreciation) of securities
for federal income tax purposes is as follows:
Gross unrealized appreciation $70,249,320
Gross unrealized depreciation (1,960,442)
------------
Net unrealized appreciation $68,288,878
============
(b) The Repurchase Agreement is collateralized by obligations of the
United States government and its agencies with a market value of
$16,349,126 which exceeds the value of the repurchase agreement. It
is the Fund's policy to always receive, as collateral, securities
whose value, including accrued interest, will be at least equal to
102% of the dollar amount to be paid to the Fund under each agreement
at its maturity. The value of the securities are monitored daily. If
the value falls below 101% of the amount to be paid at maturity,
additional collateral is obtained. The Fund makes payment for such
securities only upon physical delivery or evidence of book entry
transferred to the account of its custodian.
(c) At October 31, 1997, the market value of $4,948,854 of the U.S.
Treasury Bills were pledged to cover margin requirements for futures
contracts.
Futures contracts at October 31, 1997:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
S&P 500 Stock Index:
44/Dec/Buy $ (435,600)
============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime
Family of Funds Social Awareness Fund
Portfolio of Investments
Value
Shares (Note 1)
- ------------ -----------
<S> <C> <C>
COMMON STOCK (95.63%)
Chemicals & Materials (1.62%)
2,100 Praxair Inc. $ 91,481
2,700 Sigma-Aldrich Corp. 94,838
------------
186,319
------------
Computer Software & Services (3.40%)
3,100 Automatic Data Processing Corp. 158,487
3,100 Computer Associates Int'l. 231,144
------------
389,631
------------
Computer Manufacturers (7.42%)
5,250 Compaq Computers Corp. 334,687
6,200 Hewlett-Packard Co. 382,463
3,900 Sun Microsystems Corp. * 133,575
------------
850,725
------------
Electrical (Components) (1.67%)
2,800 Baldor Electric 81,900
2,800 Solectron Corp. 109,900
------------
191,800
------------
Electronics (Semi-Conductors) (2.95%)
4,400 Intel Corp. 338,800
------------
Financial (Miscellaneous) (5.33%)
3,300 American Express Co. 257,400
5,500 Federal Home Loan Mortgage 208,312
5,550 MBNA Corporation 146,034
------------
611,746
------------
Food Wholesaler (1.05%)
3,000 Sysco 120,000
------------
Heavy Duty Trucks & Parts (1.06%)
2,600 Dana Corp. 121,712
------------
Insurance (0.93%)
1,500 Marsh & McLennan 106,500
------------
Banks (9.95%)
2,900 Bank America 207,350
1,300 Bankers Trust N.Y. Corp. 153,400
2,500 Barnett Bank Inc. 172,500
1,400 Fifth Third Bancorp 89,775
6,200 Norwest Corp. 198,788
3,400 PNC Bank Corp. 161,500
2,100 Wachovia Corp. 158,156
------------
1,141,469
------------
Medical Equipment & Supplies (8.13%)
2,100 Becton, Dickinson & Co. 96,731
4,900 Biomet Inc. 122,194
7,500 Johnson & Johnson 430,313
4,200 Medtronic Inc. 182,700
2,700 Stryker Corp. 100,406
------------
932,344
------------
Miscellaneous (19.33%)
3,000 Bergen Brunswig 'A' 120,187
2,900 Brady (W.H) 92,800
2,100 Cooper Industries Inc. 109,462
2,600 Deere & Co. 136,825
3,000 Energen Corp. 108,562
1,800 Fastenal Co. 88,200
1,500 GATX Corp. 96,844
2,000 Harman International Ind. 108,000
500 Ionics Inc. 19,156
4,200 Kimberly Clark Corp. 218,138
1,400 Oxford Health Plan 36,138
9,700 Ryan's Family Steakhouse 83,663
3,500 Service Corp. 106,531
2,300 Snap On Inc. 98,900
2,200 Tellabs 118,800
8,200 Walt Disney Company 674,450
------------
2,216,656
------------
Oil & Gas Drilling (4.65%)
3,200 Amoco Corp. 293,400
6,300 Enron Corp. 239,400
------------
532,800
------------
Pharmaceuticals (5.87%)
5,400 Merck & Co. Inc. 481,950
3,400 Schering-Plough Corp. 190,613
------------
672,563
------------
Property-Casualty Insurance (3.85%)
1,400 St. Paul Companies, Inc. 111,913
1,000 General Re Corp. 197,187
2,000 Chubb Corp. 132,500
------------
441,600
------------
Retail Stores (General Merchandise) (4.27%)
3,300 Sears Roebuck & Co. 138,188
10,000 Wal Mart Stores Inc. 351,250
------------
489,438
------------
Retail Stores (Specialty) (4.34%)
4,800 Claire's Stores 106,200
3,400 Home Depot, Inc. 189,125
4,800 Lillian Vernon Corporation 77,400
3,000 Lowe's Companies Inc. 124,875
------------
497,600
------------
Shoes (0.90%)
2,200 Nike Inc. Cl B. 103,400
------------
Steel (0.82%)
1,800 Nucor Corp. 94,050
------------
Transportation Airlines (3.35%)
2,600 Delta Air Lines Inc. 261,950
1,400 UAL Corp. 122,675
------------
384,625
------------
Utilities (Telephone) (4.74%)
3,700 Ameritech 240,500
6,400 Bellsouth Corp. 302,800
------------
543,300
------------
Total Common Stock (cost $10,996,387) 10,967,078
------------
<CAPTION>
Principal
Amount
- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (4.33%)
Repurchase Agreement (4.15%)(b)
$476,000 Smith Barney;
5.66%; 11/3/97 (cost $476,000;
maturity value $476,225) 476,000
United States Treasury Bill (0.18%)(c)
20,000 5.13%; 1/22/98 (cost $19,765) 19,765
------------
Total Short-term Investments
(cost $495,765) 495,765
------------
Total Investments (cost $11,492,152)
(99.96%)(a) 11,462,843
Other Assets Less Liabilities (0.04%) 4,945
------------
Net Assets (100%) $11,467,788
============
* Non-income producing security.
(a) Aggregate cost for federal income tax purposes is $11,492,152. At
October 31, 1997 unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 572,145
Gross unrealized depreciation (601,454)
------------
Net unrealized depreciation $ (29,309)
============
(b) The Repurchase Agreement is collateralized by obligations of the
United States government and its agencies with a market value of
$485,870, which exceeds the value of the repurchase agreement. It is
the Fund's policy to always receive, as collateral, securities whose
value, including accrued interest, will be at least equal to 102% of
the dollar amount to be paid to the Fund under each agreement at its
maturity. The value of the securities are monitored daily. If the
value falls below 101% of the amount to be paid at maturity,
additional collateral is obtained. The Fund makes payment for such
securities only upon physical delivery or evidence of book entry
transferred to the account of its custodian.
(c) At October 31, 1997, the market value of $19,765 of the U.S. Treasury
Bill was pledged to cover margin requirements for futures contracts.
Futures contracts at October 31, 1997:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
S&P 500 Stock Index:
1/December/Buy $ (9,925)
============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime MidCap Fund
Family of Funds Portfolio of Investments
Value
Shares (Note 1)
- ------------ -----------
<S> <C> <C>
COMMON STOCK (94.36%)
INDUSTRIALS (66.97%)
Aerospace/Defense (1.24%)
1,800 OEA, Inc. $ 72,450
2,100 Precision Castparts Corp. 123,506
2,200 Rohr, Inc.* 66,687
800 Sequa Corp. Class A* 45,900
5,200 Sundstrand Corp. 282,750
1,600 Thiokol Corp. 146,500
3,000 Universal Corp. 115,313
------------
853,106
------------
Auto Parts & Equipment (0.65%)
2,200 Arvin Industries, Inc. 82,362
2,000 Borg-Warner Automotive, Inc. 109,000
3,000 Federal-Mogul Corp. 126,938
5,700 Meritor Automotive Inc. 127,181
------------
445,481
------------
Biotechnology (1.25%)
6,400 Biogen, Inc.* 214,400
5,600 Centocor, Inc.* 246,400
11,700 Chiron Corp.* 225,225
6,600 Genzyme Corp.* 180,675
------------
866,700
------------
Broadcast Media (0.34%)
2,800 Chris-Craft Industries, Inc.* 144,725
2,200 TCA Cable Television, Inc. 90,750
------------
235,475
------------
Building Materials (0.27%)
2,000 Calmat Co. 50,375
1,600 Granite Construction Co. 33,800
1,800 Southdown, Inc.* 99,675
------------
183,850
------------
Cellular Communications (1.04%)
20,000 Nextel Communications* 525,000
8,000 360 Communications Co. 169,000
2,100 Vanguard Cellular Systems, Inc.
Class A* 29,006
------------
723,006
------------
Chemicals & Materials (3.59%)
6,000 Airgas, Inc.* 93,375
4,000 Albemarle Corp. 97,000
2,300 A. Schulman Inc. 51,750
2,500 Betz Laboratories, Inc. 160,312
4,500 Cabot Corp. 110,531
3,400 Calgon Carbon Corp. 40,163
6,400 Crompton & Knowles Corp. 161,600
4,000 Cytec Industries, Inc.* 195,000
2,000 Dexter Corp. 78,500
6,300 Ethyl Corp. 54,337
2,200 Ferro Corp. 82,363
1,200 Fuller (H.B.) Co. 56,700
3,000 Georgia Gulf Corp. 90,000
5,600 IMC Global Inc. 188,650
1,100 Lawter International Inc. 12,306
4,600 Lubrizol Corp. 177,100
7,000 Lyondell Petrochemical Co. 179,375
4,400 M.A. Hanna Co. 113,300
4,400 Olin Corp. 199,925
6,800 RPM Inc. (Ohio) 127,500
5,000 Witco Chemical Corp. 217,500
------------
2,487,287
------------
Commercial Services (Advertising) (0.65%)
2,100 Information Resources, Inc.* 34,650
5,900 Omnicom Group Inc. 416,687
------------
451,337
------------
Commercial Services (Specialized) (0.61%)
2,500 Banta Corp. 65,312
4,300 Comsat Corp. 98,363
3,100 Fiserv, Inc.* 138,725
2,200 Jacobs Engineering Group Inc.* 59,400
3,000 Rollins, Inc. 64,125
------------
425,925
------------
Computer Hardware (2.02%)
2,000 Exabyte Corp.* 21,125
6,400 Lexmark Intl. 195,600
5,700 Mentor Graphics Corp.* 62,344
9,200 Quantum Corp.* 290,950
3,000 Sequent Computer Systems, Inc.* 62,812
9,600 Solectron Corp.* 376,800
5,400 Storage Technology Corp.* 316,913
2,000 Stratus Computer, Inc.* 70,750
------------
1,397,294
------------
Computer Software & Services (4.22%)
7,700 America Online, Inc.* 592,900
7,600 BMC Software, Inc.* 458,850
8,600 Cadence Design Systems, Inc.* 457,950
6,400 Comdisco, Inc. 202,000
5,800 Compuware Corp.* 383,525
13,300 Informix Corp.* 90,606
3,000 Micro Warehouse Inc.* 45,000
1,600 Policy Management Systems Corp.* 98,000
7,800 Sterling Commerce 258,863
2,800 Structural Dynamics
Research Corp.* 53,550
7,600 SunGard Data Systems* 179,550
4,800 Symantec Corp.* 105,000
------------
2,925,794
------------
Consumer Products (0.47%)
1,700 Church and Dwight, Inc. 48,981
8,400 Dial Corp. 141,750
3,600 First Brands Corp. 91,800
1,600 Stanhome, Inc. 44,700
------------
327,231
------------
Electrical Components & Other Equipment (6.06%)
7,700 Altera Corp.* 341,688
12,500 Analog Devices, Inc.* 382,031
8,800 Arrow Electronics, Inc.* 249,700
6,700 Atmel Corp.* 173,363
3,600 Avnet, Inc. 226,575
3,800 Best Buy, Inc.* 106,162
5,800 Cirrus Logic* 87,725
7,700 Cypress Semiconductor Corp.* 86,625
5,800 Hubbell Inc. Class B 255,563
3,700 Imation Corp. 79,088
6,600 Linear Technology Corp. 414,975
2,200 Magnatek* 44,687
4,800 Maxim Integrated Products, Inc.* 318,000
10,900 Molex, Inc. 408,750
6,400 Sensormatic Electronics Corp. 95,600
3,400 Symbol Technologies, Inc.* 135,150
5,100 Teradyne, Inc.* 190,931
4,000 UCAR International, Inc.* 150,000
2,600 Varian Associates, Inc. 152,100
5,600 Vishay Intertechnology, Inc.* 134,050
4,800 Xilinx, Inc.* 163,800
------------
4,196,563
------------
Electrical Equipment (0.45%)
7,000 Integrated Device Technology Inc.* 80,937
5,200 SCI Systems, Inc.* 228,800
------------
309,737
------------
Food & Beverages (4.18%)
3,800 Bob Evans Farms, Inc. 71,963
29,500 Coca-Cola Enterprises, Inc. 829,687
3,500 Dean Foods Corp. 165,594
5,200 Dole Food Co. 230,425
1,100 Dreyer's Grand Ice Cream, Inc. 45,512
7,700 Flowers Industries, Inc. 146,300
3,700 Hannaford Brothers Co. 139,906
4,800 Hormel Foods Corp. 144,300
8,000 IBP, Inc. 185,500
1,600 International Multifoods Corp. 47,200
3,200 Interstate Bakeries 204,400
2,600 J.M. Smucker Co. Class A 70,688
2,600 Lance, Inc. 55,575
3,300 Lone Star Steakhouse & Saloon* 76,312
4,000 McCormick & Co., Inc. 100,000
15,600 Tyson Foods, Inc. 294,450
2,200 Universal Foods Corp. 86,762
------------
2,894,574
------------
Health Care Products (Distribution) (0.49%)
4,400 Bergen Brunswig Corp. Class A 176,275
4,100 Sybron Corp.* 164,512
------------
340,787
------------
Health Care Services (2.28%)
4,500 Apria Healthcare* 68,344
7,700 Foundation Health Systems "A" 221,375
14,100 Health Management Associates
Class A* 343,688
2,800 HealthCare Compare Corp.* 150,500
3,900 Healthcare & Retirement Corp.* 147,469
10,700 Laboratory Corp. of America* 25,412
5,300 NovaCare, Inc.* 69,231
6,800 Oxford Health Plan* 175,525
3,300 Pacificare Health System "B" 213,675
6,000 Vencor, Inc.* 162,000
------------
1,577,219
------------
Iron & Steel (0.16%)
1,000 Cleveland-Cliffs Iron Co. 43,437
1,300 Lukens, Inc. 23,400
2,200 Oregon Steel Mills, Inc. 46,338
------------
113,175
------------
Leisure Time (Products) (1.31%)
6,400 Callaway Golf Co. 206,400
4,700 Electronic Arts* 159,212
11,800 Harley-Davidson, Inc. 327,450
8,400 International Game Technology 214,725
------------
907,787
------------
Leisure Time (Services) (0.50%)
8,600 Circus Circus Enterprises Inc.* 191,350
8,400 Viad Corp. 153,300
------------
344,650
------------
Manufacturing (Diversified Industries) (2.01%)
5,400 AGCO Corp. 156,600
2,600 Ametek Inc. 61,263
5,400 Burlington Industries* 80,662
1,800 Carlisle Co., Inc. 77,850
5,200 Danaher Corp. 285,025
3,600 GenCorp, Inc. 87,975
4,300 Harsco Corp. 178,450
8,100 NCR Corporation 245,531
3,200 Pentair, Inc. 123,600
1,900 Tecumseh Products Co. Class A 98,563
------------
1,395,519
------------
Manufacturing (Specialized Industries) (3.01%)
2,200 Albany International Corp. 53,625
6,900 American Power Conversion Corp.* 188,025
273 Culligan Water Technologies* 11,637
4,800 Dentsply International 136,200
1,700 Donaldson Co., Inc. 86,062
4,000 Federal Signal Corp. 96,750
2,800 Flowserve Corp. 83,300
2,800 Kaydon Corp. 85,050
2,200 Kennametal, Inc. 106,700
900 Lawson Products, Inc. 24,919
8,100 Leggett & Platt, Inc. 338,175
2,600 Modine Manufacturing Co. 88,562
600 NCH Corp. 40,200
900 Nordson Corp. 44,662
2,000 R. P. Scherer Corp.* 117,750
2,900 Stewart & Stevenson Services, Inc. 63,075
3,200 Teleflex Inc. 119,200
3,800 Trinity Industries, Inc. 170,050
2,400 Watts Industries Class A 60,900
3,800 York International Corp. 173,376
------------
2,088,218
------------
Medical Products & Supplies (1.01%)
2,600 Acuson Corp.* 48,750
5,000 Allegiance Corp. 138,750
1,200 ATL Ultrasound Inc. 51,600
2,500 Beckman Instruments 98,437
1,200 Datascope Corp.* 28,950
800 Diagnostic Products Corp. 23,400
8,400 Stryker Corp. 312,375
------------
702,262
------------
Metals (Specialty) (0.39%)
4,800 Alumax, Inc.* 156,000
1,400 Brush Wellman, Inc. 33,688
1,700 Carpenter Technology Corp. 82,237
------------
271,925
------------
Miscellaneous (7.09%)
5,000 A.C. Nielson 114,375
11,400 ADC Telecommunications, Inc.* 377,625
2,400 AK Steel Holding Corp. 101,100
6,100 American Water Works Co., Inc. 138,013
1,800 APL Ltd. 59,175
2,500 Cintas Corp. 180,625
9,300 Clayton Homes Inc. 152,869
6,000 Diebold, Inc. 264,375
3,800 Gtech Holdings Corp.* 122,550
4,900 Hillenbrand Industries, Inc. 209,475
3,400 Kelly Services, Inc. Class A 120,700
2,600 Lancaster Colony Corp. 128,700
6,800 LCI International, Inc.* 175,950
4,000 Litton Industries, Inc.* 203,000
7,200 Manpower Inc. 276,300
5,600 Mark IV Industries, Inc. 135,800
800 Maxxam Inc.* 42,100
3,300 McKesson Corp. 354,131
6,300 Medaphis Corp.* 38,194
1,800 Minerals Technologies, Inc. 74,475
3,000 Newport News Shipbuilding 64,500
4,400 Ogden Corp. 111,100
7,100 Olsten Corp. 108,275
9,500 Paychex, Inc. 362,187
4,500 Promus Hotel Corp.* 176,625
7,800 Robert Half International, Inc.* 319,312
4,000 Ruddick Corp. 62,500
3,700 Sealed Air Corp.* 190,781
4,900 Sotheby's Holdings Class A 91,875
3,700 Stewart Enterprises, Inc. Class A 153,550
------------
4,910,237
------------
Office Equipment & Supplies (2.16%)
2,600 Hon Industries, Inc. 134,225
2,500 Miller (Herman), Inc. 122,188
13,700 Office Depot, Inc.* 282,563
10,800 Officemax Inc.* 144,450
7,100 Reynolds & Reynolds Class A 121,588
14,200 Staples, Inc.* 372,750
1,400 The Standard Register Co. 45,325
7,300 Viking Office Products* 174,744
2,600 Wallace Computer Services, Inc. 99,937
------------
1,497,770
------------
Oil & Gas (3.31%)
5,200 El Paso Natural Gas 311,675
2,000 Indiana Energy, Inc. 57,125
3,400 Keyspan Energy Corp. 105,613
4,800 Mapco Inc. 158,400
3,900 Murphy Oil Corp. 225,956
5,000 Noble Affiliates, Inc. 205,312
3,000 Pioneer Natural Resources 120,188
3,000 Quaker State Corp. 46,500
8,600 Ranger Oil Ltd. 74,175
5,600 Seagull Energy Corp.* 136,850
10,700 Tosco Corp. 353,100
6,500 Ultramar Diamond Shamrock 200,687
4,300 Valero Energy 129,538
2,800 Varco International, Inc.* 170,625
------------
2,295,744
------------
Oil & Gas Drilling (4.89%)
3,400 BJ Services Co.* 288,150
12,400 ENSCO International, Inc.* 521,575
14,900 Global Marine, Inc.* 463,763
8,400 Nabors Industries, Inc.* 345,450
11,600 Noble Drilling Corp.* 412,525
6,600 Parker Drilling Co.* 97,763
3,500 Smith International, Inc.* 266,875
4,300 Tidewater, Inc. 282,456
8,800 Transocean Offshore 475,200
4,600 Weatherford Enterra Inc.* 234,887
------------
3,388,644
------------
Paper/Forest Products/Containers (1.99%)
3,400 Bowater, Inc. 142,163
2,000 Chesapeake Corp. of Virginia 63,375
3,900 Consolidated Papers 202,556
1,400 Gibson Greetings, Inc.* 34,475
4,500 Longview Fiber Co. 71,437
3,700 P.H. Glatfelter Co. 73,075
2,600 Rayonier Inc. 113,587
7,900 Sonoco Products 254,281
5,800 Unisource Worlwide Inc. 94,613
3,000 Vulcan Materials Co. 266,438
3,200 Wausau Paper Mills Co. 64,600
------------
1,380,600
------------
Pharmaceuticals (1.19%)
4,000 Carter-Wallace, Inc. 62,750
2,700 Covance Inc. 47,756
3,600 Forest Laboratories, Inc.* 166,500
9,500 IVAX Corp. 71,844
10,700 Mylan Laboratories, Inc. 234,731
7,600 Watson Pharmaceuticals, Inc.* 241,300
------------
824,881
------------
Pollution Control (0.89%)
6,400 U.S. Filter Corp.* 256,800
9,700 USA Waste Service* 358,900
------------
615,700
Publishing (Books) (0.22%)
2,600 Houghton Mifflin Co. 92,300
1,400 Scholastic Corp.* 56,700
------------
149,000
------------
Publishing (Newspapers) (1.18%)
3,800 A. H. Belo Corp. Class A 179,550
4,000 Lee Enterprises, Inc. 106,250
2,400 Media General, Inc. Class A 97,800
1,000 Washington Post Co. Class B 434,000
------------
817,600
------------
Restaurants (0.59%)
6,800 Brinker International, Inc.* 95,200
2,500 Buffets Inc.* 26,250
3,200 Cracker Barrel Old Country
Stores, Inc. 94,400
2,000 International Dairy Queen, Inc.
Class A* 53,000
4,200 Outback Steakhouse* 113,663
1,000 Sbarro, Inc. 26,437
------------
408,950
------------
Retail Stores (General Merchandise) (0.83%)
7,300 Consolidated Stores, Inc.* 291,088
3,300 Fastenal Co. 161,700
4,400 Fred Meyer Inc. 125,675
------------
578,463
------------
Retail Stores (Specialty) (4.17%)
2,200 AnnTaylor Stores Corp.* 31,487
6,000 Bed Bath & Beyond, Inc.* 190,500
2,800 BJ's Wholesale Club 80,850
4,200 Claire's Stores, Inc. 92,925
10,000 Dollar General Corp. 330,625
7,500 Family Dollar Stores, Inc. 176,250
4,000 Fingerhut Co. 88,500
4,600 Heilig-Meyers Co. 61,525
4,600 Jones Apparel Group, Inc.* 234,025
6,400 Kohls Corp.* 429,600
2,800 Lands' End, Inc.* 88,375
2,200 MacFrugal's Bargains
Close-Outs, Inc.* 74,800
3,200 Nine West Group, Inc.* 113,000
2,300 Payless Shoesource Inc. 128,225
6,700 Perrigo Co.* 103,013
8,400 Service Merchandise Co., Inc.* 34,125
8,100 Shaw Industries, Inc. 98,212
6,800 Starbucks Corp.* 224,400
2,400 Superior Industries
International, Inc. 64,050
3,000 Tiffany & Co. 118,500
4,500 Warnaco Group 127,125
------------
2,890,112
------------
Textile Specialty (0.26%)
3,200 Unifi, Inc. 123,000
2,800 Wellman, Inc. 56,875
------------
179,875
------------
Total Industrials 46,402,478
------------
TRANSPORTATION (1.87%)
Airfreight (0.35%)
1,800 Airborne Freight Corp. 114,075
3,500 Pittston Services Group 126,437
------------
240,512
------------
Airlines (0.12%)
1,200 Alaska Air Group, Inc.* 40,050
1,500 ASA Holdings Inc. 41,813
------------
81,863
------------
Railroads (0.81%)
5,400 Illinois Central Corp. 192,375
2,200 GATX Corp. 142,038
7,500 Kansas City Southern
Industries, Inc. 228,750
------------
563,163
------------
Shipping (0.20%)
3,000 Alexander & Baldwin, Inc. 82,500
2,300 Overseas Shipholding Group Inc. 56,925
------------
139,425
------------
Truckers (0.39%)
2,300 Arnold Industries, Inc. 48,875
4,000 CNF Transportation Inc. 178,500
2,900 J.B. Hunt Transport Services, Inc. 44,587
------------
271,962
------------
Total Transportation 1,296,925
------------
UTILITIES (10.27%)
Electric Utilities (8.20%)
13,000 AES Corp.* 515,125
10,700 Allegheny Energy Inc. 302,275
4,600 Atlantic Energy, Inc. 84,812
1,200 Black Hills Corp. 36,150
8,300 CMS Energy Corp. 302,950
5,600 Calenergy 191,800
2,000 Central Louisiana Electric Co. 52,625
2,800 Central Maine Power Co. 37,100
5,300 Delmarva Power & Light Co. 105,006
4,600 Florida Progress Corp. 149,788
2,700 Hawaiian Electric Industries Inc. 102,094
2,900 Idaho Power Co. 92,437
6,300 Illinova Corp. 140,175
3,600 Ipalco Enterprises, Inc. 126,000
5,400 Kansas City Power & Light Co. 158,287
5,800 LG&E Energy Corp. 123,250
8,800 Midamerican Energy Hldgs. 157,300
2,800 Minnesota Power & Light Co. 101,850
4,800 Montana Power Co. 121,500
1,700 NIPSCO Industries, Inc. 74,694
4,000 Nevada Power Co. 86,000
9,120 New Century Energies 380,760
5,600 New England Electric System 219,450
3,600 New York State Electric & Gas Corp. 96,075
11,200 Northeast Utilities 128,800
3,600 OGE Energy Corp. 174,375
2,382 PG & E Corporation 60,890
6,400 Pinnacle West Capital Corp. 222,800
9,300 Potomac Electric Power Co. 208,669
3,600 Public Service Co. of New Mexico 69,975
7,400 Puget Sound Power & Light Co. 197,025
9,300 SCANA Corp. 234,825
11,300 TECO Energy, Inc. 269,787
4,700 Utilicorp United, Inc. 148,344
1,800 WPL Holdings, Inc. 52,538
6,100 Wisconsin Energy Corp. 154,406
------------
5,679,937
------------
Gas Utilities (1.01%)
4,400 AGL Resources Inc. 79,750
6,700 MCN Corp. 231,987
3,400 National Fuel & Gas Co. 150,025
3,600 Questar Corp. 139,050
3,800 Washington Gas Light Corp. 97,613
------------
698,425
------------
Telephone Companies (Local) (1.06%)
3,200 Aliant Communication 82,000
5,200 Century Telephone Enterprises, Inc. 220,675
5,800 Southern New England
Telecommunications Corp. 248,675
4,400 Telephone & Data Systems, Inc. 187,000
------------
738,350
------------
Total Utilities 7,116,712
------------
FINANCIAL (15.25%)
Banks (9.18%)
3,700 Central Fidelity Banks, Inc. 172,050
3,780 Charter One Financial 219,713
4,000 City National Corp. 120,250
9,600 Crestar Financial Corp. 454,200
7,100 First American Bank Corp. 395,825
9,800 First Security Corp. 284,200
5,100 First Tennessee National Corp. 293,888
4,650 First Virginia Banks, Inc. 215,934
12,600 Firstar Corp. 455,175
11,300 Hibernia Corp. Class A 201,281
6,200 Marshall & Ilsley Corp. 321,625
9,750 Mercantile Bancorp, Inc. 473,484
6,200 Mercantile Bankshares Corp. 220,875
9,700 Northern Trust Corp. 567,450
3,600 Pacific Century Financial Corp. 181,350
11,600 Regions Financial Corp. 426,300
8,600 SouthTrust Corp. 412,800
11,850 Summit Bancorp 505,847
5,700 Union Planters Corp. 338,081
1,800 Wilmington Trust Corp. 100,350
------------
6,360,678
------------
Brokerage (1.51%)
10,500 Bear Stearns Co., Inc. 416,719
8,400 A.G. Edwards & Sons, Inc. 275,625
8,000 PaineWebber Group, Inc. 353,500
------------
1,045,844
------------
Financial Miscellaneous (0.88%)
5,800 Capital One Financial Corp. 264,625
3,800 Finova Group, Inc. 166,963
3,000 The PMI Group Inc. 181,313
------------
612,901
------------
Insurance (2.16%)
10,500 AFLAC, Inc. 534,188
3,600 AMBAC, Inc. 152,100
5,400 American Financial Group, Inc. 205,538
1,800 HSB Group Inc. 93,938
9,200 Provident Cos., Inc.* 307,050
3,000 Transatlantic Holdings 207,563
------------
1,500,377
------------
Investment Management (1.52%)
8,000 Franklin Resources Corp. 719,000
5,000 T. Rowe Price 331,250
------------
1,050,250
------------
Total Financial 10,570,050
------------
Total Common Stock (cost $63,135,742) 65,386,165
------------
<CAPTION>
Principal
Amount
- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (5.20%)
Repurchase Agreement (2.33%)(b)
$ 1,620,000 Smith Barney Inc.
5.66%; 11/3/97 (cost $1,620,000;
maturity value $1,620,764) 1,620,000
------------
United States Treasury Bills (2.87%)(c)
2,000,000 4.92%; 12/18/97 (cost $1,987,179) 1,987,179
------------
Total Short-term Investments
(cost $3,607,179) 3,607,179
------------
Total Investments (cost $66,742,921)
(99.56%)(a) 68,993,344
Other Assets Less Liabilities (0.44%) 301,852
------------
Net Assets (100%) $ 69,295,196
============
* Non-income producing security.
(a) Aggregate cost for federal income tax purposes is $66,742,921. At
October 31, 1997 unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 4,804,479
Gross unrealized depreciation (2,554,056)
------------
Net unrealized appreciation $ 2,250,423
============
(b) The Repurchase Agreement is collateralized by obligations of the
United States government and its agencies with a market value of
$1,653,592 which exceeds the value of the repurchase agreement.
It is the Fund's policy to always receive, as collateral,
securities whose value, including accrued interest, will be at
least equal to 102% of the dollar amount to be paid to the Fund
under each agreement at its maturity. The value of the
securities are monitored daily. If the value falls below 101%
of the amount to be paid at maturity, additional collateral is
obtained. The Fund makes payment for such securities only upon
physical delivery or evidence of book entry transferred to the
account of its custodian.
(c) At October 31, 1997, the market value of $1,987,179 of the U.S.
Treasury Bills were pledged to cover margin requirements for
futures contracts.
Futures contracts at October 31, 1997:
(Contracts-$500 times premium/delivery
month/commitment)
Unrealized
Depreciation
------------
S&P MidCap 400 Stock Index:
22/December/Buy $ (95,250)
============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Statement of
[LOGO] Assets and Liabilities
- ------------------------------------------------------------------------------------------------------------------
The Rightime
Government The Rightime
The Rightime Securities Blue Chip
Fund Fund Fund
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value
(Identified cost $111,300,159, $7,544,813
and $186,443,544, respectively) (Note 1) $126,373,541 $8,052,313 $254,732,422
Cash 73,491 931 81,575
Receivables:
Dividends and interest 109,077 91,541 288,803
Fund shares sold 4,893 1,773 77,705
Variation margin 324,760 4,062 292,050
Prepaid expenses and other assets 38,106 3,127 61,899
------------- ------------- -------------
Total assets 126,923,868 8,153,747 255,534,454
------------- ------------- -------------
LIABILITIES
Payable for fund shares repurchased 884,685 13,782 1,085,660
Accrued expenses 31,595 6,499 53,296
Other liabilities 5,781 1,179 8,544
------------- ------------- -------------
Total liabilities 922,061 21,460 1,147,500
------------- ------------- -------------
NET ASSETS (applicable to 4,207,224; 684,505; and 7,883,113
outstanding shares, respectively) (Note 4) $126,001,807 $8,132,287 $254,386,954
============= ============= =============
Net asset value and redemption price per share $29.95 $11.88 $32.27
====== ====== ======
Maximum offering price per share $29.95 $12.47(1) $33.88(1)
====== ====== ======
NET ASSETS
At October 31, 1997 net assets consisted of:
Paid-in capital $126,178,366 $14,313,026 $204,064,296
Undistributed net investment income 1,586,565 24,101 130,214
Accumulated net realized losses on investments (16,340,256) (6,771,371) (17,660,834)
Net unrealized appreciation of investments 15,073,382 507,500 68,288,878
Net unrealized appreciation (depreciation) of futures contracts (496,250) 59,031 (435,600)
------------- ------------- -------------
$126,001,807 $8,132,287 $254,386,954
============= ============= =============
(1) Net asset value, plus 4.99% of net asset value or 4.75% of offering price.
See accompanying notes to financial statements
<CAPTION>
October 31, 1997
- ---------------------------------------------------------------------------------------------------
The Rightime
Social The Rightime
Awareness MidCap
Fund Fund
------------ ------------
<S> <C> <C>
ASSETS
Investments in securities, at market value
(Identified cost $11,492,152 and $66,742,921, respectively) (Note 1) $11,462,843 $68,993,344
Cash 3,429 14,455
Receivables:
Dividends and interest 7,880 64,014
Fund shares sold 8,338 207,918
Investment securities sold -- 88,967
Variation margin 5,875 85,250
Prepaid expenses and other assets 1,812 18,003
------------ ------------
Total assets 11,490,177 69,471,951
------------ ------------
LIABILITIES
Payable for fund shares repurchased 12,936 164,628
Accrued expenses 9,185 10,524
Other liabilities 268 1,603
------------ ------------
Total liabilities 22,389 176,755
------------ ------------
NET ASSETS (applicable to 391,194 and 2,379,488 outstanding shares,
respectively) (Note 4) $11,467,788 $69,295,196
============ ============
Net asset value and redemption price per share $29.31 $29.12
======= =======
Maximum offering price per share $30.77(1) $30.57(1)
======= =======
NET ASSETS
At October 31, 1997 net assets consisted of:
Paid-in capital $11,045,516 $65,026,422
Undistributed net investment income 57,049 511,954
Undistributed net realized gains on investments 404,457 1,601,647
Net unrealized appreciation (depreciation) of investments (29,309) 2,250,423
Net unrealized depreciation of futures contracts (9,925) (95,250)
------------ ------------
$11,467,788 $69,295,196
============ ============
(1) Net asset value, plus 4.99% of net asset value or 4.75% of offering price.
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of
[LOGO] Operations
- ------------------------------------------------------------------------------------------------------------------
The Rightime
Government The Rightime
The Rightime Securities Blue Chip
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income
Dividends $3,896,533 $-- $5,084,864
Interest 1,715,621 555,322 1,025,958
------------ ------------ ------------
Total income 5,612,154 555,322 6,110,822
------------ ------------ ------------
EXPENSES
Administrative services (Note 2) 1,479,198 62,081 2,434,829
Investment advisory fees (Note 2) 778,525 33,110 1,432,253
Distribution costs -- 12b-1 (Notes 2 and 3) 778,525 -- 716,126
Distribution costs -- service charge (Notes 2 and 3) 389,263 20,694 716,127
Transfer agent fees (Note 2) 185,276 30,270 355,726
Accounting services (Note 2) 58,383 17,028 78,615
Legal and audit fees 38,721 8,196 64,059
Insurance 15,330 922 29,622
Reports to shareholders 21,753 1,178 41,362
Custody fees 20,835 4,034 48,552
Registration fees 22,439 9,889 21,670
Directors fees 14,369 795 26,612
Miscellaneous 12,157 1,377 15,798
------------ ------------ ------------
Total expenses 3,814,774 189,574 5,981,351
------------ ------------ ------------
Net investment income 1,797,380 365,748 129,471
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security transactions (3,854,154) (72,031) 42,321,971
Capital gain distribution from regulated investment companies 7,369,199 -- --
Net realized loss on futures contracts (20,966,302) (1,185,795) (67,116,929)
Increase in unrealized appreciation of investments 11,322,305 247,075 26,089,829
Increase in unrealized appreciation of futures contracts 614,750 392,125 6,698,525
------------ ------------ ------------
Net gain (loss) on investments (5,514,202) (618,626) 7,993,396
------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ($3,716,822) ($252,878) $8,122,867
============ ============ ============
See accompanying notes to financial statements
<CAPTION>
For The Year Ended October 31, 1997
- ---------------------------------------------------------------------------------------------------
The Rightime The Rightime
Social Awarenes MidCap
Fund Fund
------------ ------------
<S> <C> <C>
INVESTMENT INCOME
Income
Dividends $101,931 $760,378
Interest 206,006 1,582,723
------------ ------------
Total income 307,937 2,343,101
------------ ------------
EXPENSES
Administrative services (Note 2) 90,259 671,073
Investment advisory fees (Note 2) 53,093 394,749
Distribution costs -- 12b-1 (Notes 2 and 3) 26,547 197,374
Distribution costs -- service charge (Notes 2 and 3) 26,547 197,375
Transfer agent fees (Note 2) 11,717 111,823
Accounting services (Note 2) 12,811 47,460
Legal and audit fees 7,107 19,977
Insurance 1,281 8,043
Reports to shareholders 1,635 11,007
Custody fees 4,853 19,369
Registration fees 9,401 12,018
Directors fees 994 7,153
Organization costs -- 557
Miscellaneous 3,294 --
------------ ------------
Total expenses 249,539 1,697,978
------------ ------------
Net investment income 58,398 645,123
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain from security transactions 371,641 1,365,900
Net realized gain on futures contracts 32,260 225,405
Increase (decrease) in unrealized appreciation of investments (29,309) 2,250,423
Decrease in unrealized appreciation of futures contracts (9,925) (95,250)
------------ ------------
Net gain on investments 364,667 3,746,478
------------ ------------
Net increase in net assets resulting from operations $423,065 $4,391,601
============ ============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of
[LOGO] Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------------
The Rightime
The Rightime Government
Fund Securities Fund
----------------------------------------------------------------------------
For Year For Year For Year For Year
Ended Ended Ended Ended
October 31, 1997 October 31, 1996 October 31, 1997 October 31, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $1,797,380 $5,175,810 $365,748 $588,199
Net realized gain (loss) from security
transactions (3,854,154) 28,372,193 (72,031) 169,582
Capital gain distributions from
regulated investment companies 7,369,199 7,461,168 -- --
Net realized gain (loss) on
futures contracts (20,966,302) 61,593 (1,185,795) 593,236
Net increase (decrease) in unrealized
appreciation of investments 11,322,305 (25,822,507) 247,075 (769,653)
Net increase (decrease) in unrealized
appreciation of futures contracts 614,750 (1,181,000) 392,125 (344,438)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations (3,716,822) 14,067,257 (252,878) 236,926
Undistributed investment income
included in price of shares sold
and repurchased -- -- (2,805) (18,607)
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized
gains on investments (4,673,075) (34,013,909) -- --
Distributions from net investment
income (2,141,411) (3,245,214) (340,930) (694,855)
CAPITAL SHARE TRANSACTIONS
Increase (decrease) in net assets resulting
from capital share transactions
(Note 4) (29,957,165) 30,716,107 (1,983,711) (7,443,712)
------------- ------------- ------------- -------------
Total increase (decrease) (40,488,473) 7,524,241 (2,580,324) (7,920,248)
NET ASSETS
Beginning of year 166,490,280 158,966,039 10,712,611 18,632,859
------------- ------------- ------------- -------------
End of year * $126,001,807 $166,490,280 $8,132,287 $10,712,611
============= ============= ============= =============
* Including undistributed net
investment income of: $1,586,565 $1,930,596 $24,101 $2,088
============= ============= ============= =============
<CAPTION> Statement of
Changes in Net Assets
(Continued)
- ----------------------------------------------------------------------------------
The Rightime
Blue
Chip Fund
--------------------------------------
For Year For Year
Ended Ended
October 31, 1997 October 31, 1996
------------- -------------
<S> <C> <C>
OPERATIONS
Net investment income $129,471 $3,390,694
Net realized gain (loss) from security
transactions 42,321,971 37,947,305
Capital gain distributions from
regulated investment companies -- --
Net realized gain (loss) on
futures contracts (67,116,929) (1,450,289)
Net increase (decrease) in unrealized
appreciation of investments 26,089,829 (2,218,293)
Net increase (decrease) in unrealized
appreciation of futures contracts 6,698,525 (7,174,125)
------------- -------------
Net increase (decrease) in net assets
resulting from operations 8,122,867 30,495,292
Undistributed investment income
included in price of shares sold
and repurchased -- --
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized
gains on investments (640,796) (35,771,172)
Distributions from net investment
income (3,389,952) (2,047,018)
CAPITAL SHARE TRANSACTIONS
Increase (decrease) in net assets resulting
from capital share transactions
(Note 4) (27,344,248) 35,342,710
------------- -------------
Total increase (decrease) (23,252,129) 28,019,812
NET ASSETS
Beginning of year 277,639,083 249,619,271
------------- -------------
End of year * $254,386,954 $277,639,083
============= =============
* Including undistributed net
investment income of: $130,214 $3,408,045
============= =============
See accompanying notes to financial statements
<CAPTION> The Rightime
Social
Awareness Fund
--------------------------------------
For Year For Year
Ended Ended
October 31, 1997 October 31, 1996
------------- -------------
<S> <C> <C>
OPERATIONS
Net investment income $58,398 $123,444
Net realized gain from security transactions 371,641 1,911,874
Net realized gain on futures contracts 32,260 57,305
Net increase (decrease) in unrealized appreciation of investments (29,309) (1,099,843)
Net increase (decrease) in unrealized appreciation of futures contracts (9,925) (375)
------------- -------------
Net increase in net assets resulting from operations 423,065 992,405
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gains on investments (296,922) (1,799,322)
Distributions from net investment income (124,793) --
CAPITAL SHARE TRANSACTIONS
Increase (decrease) in net assets resulting from
capital share transactions (Note 4) 2,772,190 2,123,102
------------- -------------
Total increase (decrease) 2,773,540 1,316,185
NET ASSETS
Beginning of year 8,694,248 7,378,063
------------- -------------
End of year * $11,467,788 $8,694,248
============= =============
* Including undistributed net investment income of: $57,049 $123,444
============= =============
<CAPTION>
The Rightime
MidCap Fund
--------------------------------------
For Year For Year
Ended Ended
October 31, 1997 October 31, 1996
------------- -------------
<S> <C> <C>
OPERATIONS
Net investment income $645,123 $1,367,373
Net realized gain from security transactions 1,365,900 15,611,628
Net realized gain on futures contracts 225,405 181,498
Net increase (decrease) in unrealized appreciation of investments 2,250,423 (10,246,725)
Net increase (decrease) in unrealized appreciation of futures contracts (95,250) 270,000
------------- -------------
Net increase in net assets resulting from operations 4,391,601 7,183,774
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gains on investments (2,647,618) (15,773,543)
Distributions from net investment income (1,467,850) (328,544)
CAPITAL SHARE TRANSACTIONS
Increase (decrease) in net assets resulting from
capital share transactions (Note 4) (11,284,897) 14,135,978
------------- -------------
Total increase (decrease) (11,008,764) 5,217,665
NET ASSETS
Beginning of year 80,303,960 75,086,295
------------- -------------
End of year * $69,295,196 $80,303,960
============= =============
* Including undistributed net investment income of: $511,954 $1,334,681
============= =============
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial
Highlights
[RIGHTIME LOGO] (For a Share Outstanding Throughout Each Year)
- -----------------------------------------------------------------------------------------
Net
Realized
Net and Distributions
Asset Net Unrealized from
Value Investment Gain Total Net
Beginning Income (Loss) on From Investment
of Year (Loss) Investments Operations Income
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1997 $32.09 $0.43 ($1.24) ($0.81) ($0.42)
1996 37.55 1.14 2.11 3.25 (0.77)
1995 35.50 (0.10) 7.21 7.11 (0.30)
1994 37.42 0.29 (0.49) (0.20) --
1993 34.70 (0.32) 5.47 5.15 (0.05)
- -----------------------------------------------------------------------------------------
The Rightime Government Securities Fund
1997 $12.65 $0.53 ($0.81) ($0.28) ($0.49)
1996 13.06 0.52 (0.32) 0.20 (0.61)
1995 12.93 0.68 0.08 0.76 (0.63)
1994 14.31 0.61 (1.34) (0.73) (0.65)
1993 13.16 0.66 1.21 1.87 (0.72)
- -----------------------------------------------------------------------------------------
The Rightime Blue Chip Fund
1997 $31.88 $0.03 $0.83 $0.86 ($0.40)
1996 32.84 0.40 3.52 3.92 (0.28)
1995 33.08 0.35 5.66 6.01 (0.46)
1994 33.14 0.39 (0.04) 0.35 (0.23)
1993 29.70 0.26 3.41 3.67 (0.23)
- -----------------------------------------------------------------------------------------
The Rightime Social Awareness Fund
1997 $29.09 $0.17 $1.52 $1.69 ($0.43)
1996 32.37 0.41 3.88 4.29 --
1995 26.84 0.08 5.91 5.99 (0.46)
1994 29.07 0.33 (0.72) (0.39) --
1993 29.64 (0.02) 1.76 1.74 (0.04)
- -----------------------------------------------------------------------------------------
The Rightime MidCap Fund
1997 $29.02 $0.27 $1.33 $1.60 ($0.54)
1996 32.95 0.49 2.56 3.05 (0.14)
1995 28.44 0.26 5.25 5.51 (0.45)
1994 31.07 0.32 (0.78) (0.46) --
1993 27.08 (0.03) 4.80 4.77 (0.05)
<CAPTION>
- ----------------------------------------------------------------------------
Distributions Net
from Asset
Realized Value
Capital Total End Total
Gains Distributions of Year Return (1)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Rightime Fund
1997 ($0.91) ($1.33) $29.95 (2.77%)
1996 (7.94) (8.71) 32.09 8.96
1995 (4.76) (5.06) 37.55 23.38
1994 (1.72) (1.72) 35.50 (0.48)
1993 (2.38) (2.43) 37.42 15.49
- ----------------------------------------------------------------------------
The Rightime Government Securities Fund
1997 $-- ($0.49) $11.88 (2.10%)
1996 -- (0.61) 12.65 1.48
1995 -- (0.63) 13.06 6.00
1994 -- (0.65) 12.93 (5.15)
1993 -- (0.72) 14.31 14.60
- ----------------------------------------------------------------------------
The Rightime Blue Chip Fund
1997 ($0.07) ($0.47) $32.27 2.63%
1996 (4.60) (4.88) 31.88 12.26
1995 (5.79) (6.25) 32.84 22.31
1994 (0.18) (0.41) 33.08 1.06
1993 -- (0.23) 33.14 12.41
- ----------------------------------------------------------------------------
The Rightime Social Awareness Fund
1997 ($1.04) ($1.47) $29.31 5.77%
1996 (7.57) (7.57) 29.09 13.62
1995 -- (0.46) 32.37 22.70
1994 (1.84) (1.84) 26.84 (1.27)
1993 (2.27) (2.31) 29.07 5.82
- ----------------------------------------------------------------------------
The Rightime MidCap Fund
1997 ($0.96) ($1.50) $29.12 5.55%
1996 (6.84) (6.98) 29.02 9.65
1995 (0.55) (1.00) 32.95 20.07
1994 (2.17) (2.17) 28.44 (1.38)
1993 (0.73) (0.78) 31.07 17.93
(1) Excludes sales charge
See accompanying notes to financial statements
<CAPTION>
October 31, 1997
- -----------------------------------------------------------------------------------------
RATIOS
-----------------------------------------------------------------
Net
Investment
Net Assets Expenses to Income (Loss) Average
At The Average To Average Portfolio Commission
End of Year Net Assets Net Assets Turnover Rate Paid
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Rightime Fund
1997 $126,001,807 2.45% 1.16% 62.01% --
1996 166,490,280 2.45 3.11 15.40 --
1995 158,966,039 2.47 (0.27) 9.45 --
1994 149,207,566 2.51 0.78 11.50 --
1993 172,178,587 2.52 (0.83) 1.86 --
- -----------------------------------------------------------------------------------------
The Rightime Government Securities Fund
1997 $8,132,287 2.29% 4.42% 52.14% --
1996 10,712,611 2.15 4.08 109.47 --
1995 18,632,859 1.90 5.29 77.98 --
1994 25,746,377 1.90 4.62 216.70 --
1993 33,934,808 1.98 4.72 120.80 --
- -----------------------------------------------------------------------------------------
The Rightime Blue Chip Fund
1997 $254,386,954 2.09% 0.05% 39.27% $0.0294
1996 277,639,083 2.08 1.25 1.30 0.0304
1995 249,619,271 2.17 1.13 17.52 --
1994 221,681,939 2.22 1.16 0.98 --
1993 223,687,834 2.16 0.72 1.97 --
- -----------------------------------------------------------------------------------------
The Rightime Social Awareness Fund
1997 $11,467,788 2.35% 0.55% 107.98% $0.0282
1996 8,694,248 2.42 1.51 46.57 0.0500
1995 7,378,063 2.75 0.32 36.49 --
1994 7,221,772 2.56 1.04 54.85 --
1993 10,556,506 2.40 (0.19) 238.52 --
- -----------------------------------------------------------------------------------------
The Rightime MidCap Fund
1997 $69,295,196 2.15% 0.82% 107.08% $0.0360
1996 80,303,960 2.19 1.72 3.59 0.0211
1995 75,086,295 2.19 0.84 24.67 --
1994 65,252,084 2.28 1.14 0.75 --
1993 62,124,470 2.28 (0.19) 38.79 --
See accompanying notes to financial statements
</TABLE>
October 31, 1997
[RIGHTIME LOGO]
Rightime Notes to Financial Statements
Family of Funds
NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The Rightime Fund, The Rightime Government Securities Fund, The
Rightime Blue Chip Fund, The Rightime Social Awareness Fund, and The
Rightime MidCap Fund (the "Funds") are each a series of shares of
common stock of The Rightime Fund Inc., which is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end
management company. The company was incorporated in the state of
Maryland on November 15, 1984.
The investment objective of the Rightime Fund, the Rightime Blue Chip
Fund and the Rightime MidCap Fund is to achieve high total return
consistent with reasonable risk. The Rightime Fund seeks to achieve
this objective by concentrating in shares of registered investment
companies. The Rightime Blue Chip Fund seeks to achieve this objective
by investing in securities of well known and established companies
("Blue Chips"). The Rightime MidCap Fund seeks to achieve this
objective by investing in securities of companies with medium-size
market capitalization ("MidCaps").
The investment objective of the Rightime Social Awareness Fund is to
achieve growth of capital and its second objective is current income,
consistent with reasonable risk. The Rightime Social Awareness Fund
seeks to achieve its objective by investing in securities of companies
with prospect for above-average capital growth which, in the opinion
of the fund's advisor, show evidence in the conduct of their business,
relative to other companies in the same industry, of contributing to
the enhancement of the qualitiy of human life.
The investment objective of the Rightime Government Securities Fund is
to achieve high current income consistent with safety and liquidity of
principal. The fund seeks to achieve this objective by investing in
securities that are issued or guaranteed as to principal and interest
by the U.S. government, its agencies, authorities or instrumentalities
or secured by such securities.
The following is a summary of significant accounting policies followed
by the Funds.
SECURITY VALUATION
The Funds' investments in securities are carried at market value.
Securities listed on an exchange or quoted on a national market
system are valued at the last sales price. Other securities are valued
at the most recent bid price. Investments in regulated investment
companies are valued at the net asset value per share as quoted by the
National Association of Securities Dealers on the last business day of
the fiscal period. Investments in money market funds are valued at
cost which approximates market value. Short-term investments are
valued at amortized cost which approximates market value.
FUTURES CONTRACTS
Initial margin deposits required upon entering into futures contracts
are satisfied by the segregation of specific securities or cash,
and/or by securing a standby letter of credit from a major commercial
bank, as collateral, for the account of the broker (the Fund's agent
in acquiring the futures position). During the period the futures
contract is open, changes in the value of the contract are recognized
as unrealized gains or losses by "marking to market" on a daily basis
to reflect the market value of the contract at the end of each day's
trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contract is
closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract.
The Rightime Government Securities Fund may purchase or sell future
contracts which are based on government securities, including any
index of government securities in order to protect itself against the
adverse effects of fluctuations in interest rates. Risks of entering
into these future contracts include the possibility that there may be
an illiquid market and that if the advisor's investment judgement
about the general direction of interest rates is incorrect the fund's
overall performance may be poorer than if it had not entered into any
such contracts. The other four Rightime Funds may purchase or sell
stock index future contracts as a hedge against changes in market
conditions. Risk include the possibility of an illiquid market and
that a change in the value of the contract may not correlate with
changes in the securities being hedged.
FEDERAL INCOME TAXES
No provision has been made for federal income taxes since it is the
policy of the Fund to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and to make
sufficient distributions of taxable income to relieve it from all
federal income taxes.
At October 31, 1997, the funds listed below have capital loss
carryovers available to offset future capital gains if any. The detail
for each fund is as follows:
Capital Loss
Carryover Expire
------------ -------
The Rightime Fund $16,836,508 2005
The Rightime Government Securities Fund $ 6,712,341 1998-2005
The Rightime Blue Chip Fund $18,096,434 2005
SECURITY TRANSACTIONS, INVESTMENT
INCOME AND OTHER
Security transactions are recorded on the trade date. Interest income
is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences
are primarily due to differing treatments for wash sales and futures
transactions.
DEFERRED ORGANIZATION EXPENSE
All of the Funds' expenses in connection with its organization and the
public offering of its shares of common stock have been paid by the
Funds. Such expenses were deferred and were amortized as charges
against net investment income over a period of five years.
EQUALIZATION
The Rightime Government Securities Fund follows the accounting
practice of "equalization" whereby part of the proceeds from the
capital share transactions, equivalent to a proportionate share of the
distributable investment income on the date of the transaction, is
transferred to or from the undistributed net investment income
account. Undistributed net investment income is therefore unaffected
by capital share transactions.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with generally
accepted accounting principals, management makes estimates and
assumptions that effect the reported amounts of assets and liabilities
at the date of the financial statements, as well as the reported
amounts of income and expenses during the period. Actual results may
differ from the estimates.
NOTE 2 - INVESTMENT ADVISORY FEE AND
OTHER TRANSACTIONS WITH AFFILIATES
The Investment Advisor, Rightime Econometrics, Inc., is paid a monthly
fee based on an annual rate (summarized below) of the Funds' average
daily net assets.
The Funds' Administrator, Rightime Administrators, Inc., is paid a
monthly fee based on an annual rate (summarized below) of the Funds'
average daily net assets for providing office facilities and certain
administrative services.
The Funds' Distributor, Lincoln Investment Planning, Inc., is paid a
monthly fee based on an annual rate (summarized below) of the Funds'
average daily net assets for costs incurred in connection with the
sale of the Funds' capital stock (see Note 3).
A summary of annual fee rates applied to average daily net assets are
as follows:
Advisory Administration Distribution
Fee Fee Costs
-------- -------------- ------------
The Rightime Fund .50% .95% .75%
The Rightime
Government
Securities Fund .40% .75% .25%
The Rightime
Blue Chip Fund .50% .85% .50%
The Rightime
Social Awareness Fund .50% .85% .50%
The Rightime
MidCap Fund .50% .85% .50%
During the year ended October 31, 1997, the Distributor received
commissions as an underwriter and a retail dealer of Fund shares as
follows:
The Rightime Government Securities Fund $ 24,025
The Rightime Blue Chip Fund $872,031
The Rightime Social Awareness Fund $ 71,916
The Rightime MidCap Fund $180,663
Lincoln Investment Planning, Inc., also provides the Funds with
transfer agent and accounting and recordkeeping services. Aggregate
transfer agent and accounting services fees received by Lincoln
Investment Planning, Inc. were $565,484 and $214,297, respectively.
During the year ended October 31, 1997, Lincoln Investment Planning,
Inc. voluntarily waived fees of $8,977 and $12,811, respectively, for
transfer agent and accounting services provided to the Rightime Social
Awareness Fund. During the year ended October 31, 1997, Lincoln
Investment Planning, Inc. voluntarily waived fees of $11,488 and
$8,767, respectively, for transfer agent and accounting services
provided to the Rightime Government Securities Fund.
Certain officers and directors of the company are also officers and/or
directors of the Advisor, Administrator, Transfer Agent and/or
Distributor.
NOTE 3 - DISTRIBUTION COSTS
The Fund's Board of Directors, including a majority of the Directors
who are not "interested persons" of the Funds as defined in the
Investment Company Act of 1940, have adopted a distribution plan
pursuant to Rule 12b-1 of the Act. The Plan regulates the manner in
which a regulated investment company may assume costs of distributing
and promoting the sales of its shares.
The Plan provides that the Funds may incur certain costs which may not
exceed the rates detailed above per annum of the Funds' average daily
net assets for payments to the Distributor for items such as
advertising expenses, selling expenses, commissions or travel
reasonably intended to result in sales of shares of the Funds and for
commissions for Fund shares sold by representatives of the Distributor
or other broker/dealers. The distribution costs include a service
charge based on an annual rate of .25% of the Funds' average daily net
assets.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
NOTE 4 - CAPITAL SHARES
The Rightime Fund, Inc. has 500,000,000 shares of $.01 par value stock authorized which may
be allocated to any series. Currently, 50,000,000 shares have been allocated to the Rightime
Fund and 20,000,000 shares to each of the other four Funds. Transactions in capital stock
were as follows:
The Rightime Fund
---------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Shares Value Shares Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold 501,144 $15,711,129 468,508 $16,805,846
Shares issued in reinvestment
of distributions 213,105 6,783,154 1,129,061 37,071,501
------------ ------------ ------------ ------------
714,249 22,494,283 1,597,569 53,877,347
Shares redeemed (1,695,912) (52,451,448) (641,747) (23,161,240)
------------ ------------ ------------ ------------
Net increase (decrease) (981,663) ($29,957,165) 955,822 $30,716,107
============ ============ ============ ============
<CAPTION>
The Rightime Government Securities Fund
---------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Shares Value Shares Value
------------ ------------ ------------ ------------
<C> <C> <C> <C>
Shares sold 162,567 $1,889,088 70,161 $905,052
Shares issued in reinvestment
of distributions 27,458 324,160 50,386 655,134
------------ ------------ ------------ ------------
190,025 2,213,248 120,547 1,560,186
Shares redeemed (352,560) (4,196,959) (699,840) (9,003,898)
------------ ------------ ------------ ------------
Net increase (decrease) (162,535) ($1,983,711) (579,293) ($7,443,712)
============ ============ ============ ============
<CAPTION>
The Rightime Blue Chip Fund
---------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Shares Value Shares Value
------------ ------------ ------------ ------------
Shares sold 988,116 $33,214,473 891,634 $30,005,701
Shares issued in reinvestment
of distributions 119,492 4,003,675 1,175,013 37,609,632
------------ ------------ ------------ ------------
1,107,608 37,218,148 2,066,647 67,615,333
Shares redeemed (1,932,293) (64,562,396) (959,181) (32,272,623)
------------ ------------ ------------ ------------
Net increase (decrease) (824,685) ($27,344,248) 1,107,466 $35,342,710
============ ============ ============ ============
<CAPTION>
The Rightime Social Awareness Fund
---------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Shares Value Shares Value
------------ ------------ ------------ ------------
Shares sold 162,214 $4,900,176 43,737 $1,472,939
Shares issued in reinvestment
of distributions 13,915 411,036 60,687 1,764,746
------------ ------------ ------------ ------------
176,129 5,311,212 104,424 3,237,685
Shares redeemed (83,817) (2,539,022) (33,480) (1,114,583)
------------ ------------ ------------ ------------
Net increase (decrease) 92,312 $2,772,190 70,944 $2,123,102
============ ============ ============ ============
<CAPTION>
The Rightime MidCap Fund
---------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Shares Value Shares Value
------------ ------------ ------------ ------------
Shares sold 248,536 $7,262,137 261,155 $8,362,050
Shares issued in reinvestment
of distributions 141,518 4,094,113 547,119 16,052,380
------------ ------------ ------------ ------------
390,054 11,356,250 808,274 24,414,430
Shares redeemed (777,511) (22,641,147) (320,085) (10,278,452)
------------ ------------ ------------ ------------
Net increase (decrease) (387,457) ($11,284,897) 488,189 $14,135,978
============ ============ ============ ============
</TABLE>
NOTE 5 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities other than short-term investments
during the year ended October 31, 1997 were as follows:
Purchases Sales
------------- -------------
The Rightime Fund $149,372,229 $ 71,234,171
The Rightime Government
Securities Fund $ 4,925,000 $ 3,511,094
The Rightime Blue Chip Fund $131,085,427 $101,477,007
The Rightime Social
Awareness Fund $ 21,179,077 $ 10,554,331
The Rightime MidCap Fund $137,651,848 $ 75,882,007
[RIGHTIME LOGO]
Rightime Report of Independent
Family of Funds Certified Public Accountants
To the Shareholders
and Board of Directors
of The Rightime Fund, Inc.
We have audited the accompanying statement of assets and liabilities
of The Rightime Fund, The Rightime Government Securities Fund, The
Rightime Blue Chip Fund, The Rightime Social Awareness Fund and The
Rightime MidCap Fund, each a series of shares of common stock of The
Rightime Fund, Inc., including the portfolios of investments, as of
October 31, 1997 and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each
of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of The Rightime Fund, The Rightime Government
Securities Fund, The Rightime Blue Chip Fund, The Rightime Social
Awareness Fund and The Rightime MidCap Fund as of October 31, 1997,
the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting
principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 26, 1997
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime Fund
Family of Funds Performance Comparison
The fiscal year ending October 31, 1997 was the third straight year of
excellent returns for equity investors. Although there have been
turbulent months, investors have been rewarded for their perseverance.
Most broad stock indices performed strongly. Large capitalization
stocks and technology issues were strongest over the previous twelve
month period. However, as October wound down, economic upheaval in
Southeast Asia made investing in multi-national stocks and technology
companies riskier.
Unfortunately, the Rightime Fund missed a good portion of 1997 gains.
February and March were difficult months in the market. Smaller
capitalization stocks and technology issues were declining rapidly. By
March even the S&P 500 had given back much of its year-to-date
returns. Our model, the Rightime Market Model (RTMM(registered
trademark)), turned negative in April and we limited our exposure to
equities. Our model did not tell us to buy equities until July.
Typically, we would expect to see improvement in fundamental
indicators, followed by monetary indicators, then improved sentiment,
and finally the market building momentum changes. These market
indicators reversed their normal course of action in the spring of
1997. Investors were willing to believe that the fundamentals would
improve eventually. This drove stocks higher. RTE's risk-averse nature
kept us out of the market until the fundamentals supported the rise.
The bulk of the gains which were registered by investors this year
took place during those twelve weeks.
Since April we have seen a downward trend in long-term interest rates.
Earnings have remained strong although not as strong as in 1996.
Unemployment is at near-record levels and yet there has been limited
data to indicate that the economy is so strong that inflation may
become a problem. Since July, we have remained invested in equities in
accordance with the Rightime Market Model (RTMM(registered trademark))
and have been rewarded with moderate gains.
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Fund's
performance against the Lipper Growth Fund Index, a broad based index.
The "Risk Adjusted Performance Comparison" more closely reflects the
fund's performance as compared to a consistent risk level.
The Rightime Fund utilizes a modeled approach to investing which
attempts to minimize risk by moving assets to money market equivalent
investments during periods in which the market appears to be
overvalued. This approach, over full market cycles, tends to invest in
low risk, or money market-like securities approximately half of the
time. In order to provide an equivalent risk level this comparison
assumes that assets are invested half in the Lipper Growth Fund Index
and half in a money market fund index. This balanced index approaches
the risk level of each fund that has been in existence for at least
one full market cycle and therefore provides a more meaningful
performance comparison.
The performance shown represents past performance and is not a
guarantee of future results. A mutual fund's share price and
investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be more or less than the original
cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends.
Average Annual Total Return
Since Inception
1 Year 5 Years 10 Years Sept. 17, 1985
- -2.77% 8.48% 8.26% 10.24%
Performance Comparison
Rightime Fund
Lipper Growth Fund Index
Money Market Fund Index
Comparison of change in
value of $10,000 investment
in the Rightime Fund,
Lipper Growth Fund Index
and Money Market Fund
Index.
Risk-adjusted Performance Comparison
Rightime Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
Risk-adjusted
comparison of change in
value of $10,000 investment
in the Rightime Fund,
Balanced Reference Index
(50% Lipper/50% Money
Market), and Money
Market Fund Index.
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime Government Securities Fund
Family of Funds Performance Comparison
The fiscal year ending October 31, 1997 has been a good environment
for investors in the fixed-income arena. Declining interest rates over
the last six months of the fiscal year provided investors with
excellent returns. Fixed-income securities with long durations and/or
below investment grade quality were the top performing securities over
the fiscal year.
The fiscal year began with the fund holding shorter-maturity
securities and their equivalent until the beginning of December.
During this time, the inactivity of the Federal Reserve and the
continued perception of inactivity caused a decline in bond yields.
When the Rightime Government Securities Fund did expose itself to the
market in December it coincided with the statement of Federal Reserve
Chairman Alan Greenspan that investors had "irrational exuberance."
After some turbulence, the market remained flat. We built a more
conservative position again in April and extended maturities in July.
April was the beginning of what has been a long trend downward for
bond yields resulting in rising bond prices. The equity markets may
have received much of the press concerning the troubled Asian economy
but there has been a marked effect within the fixed-income world. Most
notably, there has been a perceived reduction in the likelihood of the
Federal Reserve raising rates to combat inflation. This has powered
bond prices even higher. The Rightime Government Securities Fund
adheres to the allocation determined by the Rightime Market Model
which has been positive on fixed-income securities since July.
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Government
Securities Fund's performance against the Shearson Lehman Hutton U.S.
Treasury Intermediate Index, a broad based fixed income index.
The performance shown represents past performance and is not a
guarantee of future results. A mutual fund's share price and
investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be more or less than the original
cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends reflecting the 4.75% sales charge.
(At inception, the Government Securities Fund was no load.)
Average Annual Total Return
Since Inception
1 Year 5 Years 10 Years Jan. 2, 1987
- -6.75% 1.75% 4.59% 3.80%
Performance Comparison
Rightime Government Securities Fund
Shearson Lehman Hutton U.S. Treasury Intermediate Index
Money Market Fund Index
Comparison of change in
value of $10,000 investment
in the Rightime Government Securities
Fund, Shearson Lehman
Hutton U.S. Treasury
Intermediate Index and
Money Market Fund Index.
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime Blue Chip Fund
Family of Funds Performance Comparison
The fiscal year ending October 31, 1997 was the straight year of
excellent returns for equity investors. Although there have been
turbulent months, investors have been rewarded for their perseverance.
Most broad stock indices performed strongly. Large capitalization
stocks and technology issues were strongest over the previous twelve
month period. However, as October wound down, economic upheaval in
Southeast Asia made investing in multi-national stocks and technology
companies riskier.
Unfortunately, the Rightime Blue Chip Fund missed much of these gains.
February and March were difficult months in the market. Smaller
capitalization stocks and technology issues were declining rapidly. By
March even the S&P 500 had given back much of its year-to-date
returns. Our model, the Rightime Market Model (RTMM(registered
trademark)), turned negative in April and we limited our exposure to
equities. Our model did not tell us to buy equities until July.
Typically, we would expect to see improvement in fundamental
indicators, followed by monetary indicators, then improved sentiment,
and finally the market building momentum changes. These market
indicators reversed their normal course of action in the spring of
1997. Investors were willing to believe that the fundamentals would
improve eventually. This drove stocks higher. RTE's risk-averse nature
kept us out of the market until the fundamentals supported the rise.
The bulk of the gains which were registered by investors this year
took place during those twelve weeks.
Since April we have seen a downward trend in long-term interest rates.
Earnings have remained strong although not as strong as in 1996.
Unemployment is at near-record levels and yet there has been limited
data to indicate that the economy is so strong that inflation may
become a problem. Since July, we have remained invested in equities in
accordance with the Rightime Market Model (RTMM(registered trademark))
and have been rewarded with moderate gains.
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Blue Chip
Fund's performance against the S&P 500 Index, an unmanaged index of
common stock prices. The "Risk Adjusted Performance Comparison" more
closely reflects the fund's performance as compared to a consistent
risk level.
The Rightime Blue Chip Fund utilizes a modeled approach to investing
which attempts to minimize risk by moving assets to money market
equivalent investments during periods in which the market appears to
be overvalued. This approach, over full market cycles, tends to invest
in low risk, or money market-like securities approximately half of the
time. In order to provide an equivalent risk level this comparison
assumes that assets are invested half in the S&P 500 Index and half in
a money market fund index. This balanced index approaches the risk
level of each fund that has been in existence for at least one full
market cycle and therefore provides a more meaningful performance
comparison.
The performance shown represents past performance and is not a
guarantee of future results. A mutual fund's share price and
investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be more or less than the original
cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Average Annual Total Return
Since Inception
1 Year 5 Years 10 Years July 22, 1987
- -2.24% 8.80% 8.76% 8.63%
Performance Comparison
Rightime Blue Chip Fund
S&P 500 Index
Money Market Fund Index
Comparison of change in
value of $10,000 investment
in the Rightime Blue
Chip Fund, S&P 500 Index
and Money Market Fund
Index.
Risk-adjusted Performance Comparison
Rightime Blue Chip Fund
Balanced Reference Index (50% S&P 500/50% Money Market)
Money Market Fund Index
Risk-adjusted
comparison of change in
value of $10,000 investment
in the Rightime Blue
Chip Fund, Balanced
Reference Index (50%
S&P/50% Money Market),
and Money Market Fund
Index.
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime
Family of Funds Social Awareness Fund
Performance Comparison
The fiscal year ending October 31, 1997 was the third straight year of
excellent returns for equity investors. Although there have been
turbulent months, investors have been rewarded for their perseverance.
Most broad stock indices performed strongly. Large capitalization
stocks and technology issues were strongest over the previous twelve
month period. However, as October wound down, economic upheaval in
Southeast Asia made investing in multi-national stocks and technology
companies riskier.
Unfortunately, the Rightime Social Awareness Fund missed much of these
gains. February and March were difficult months in the market. Smaller
capitalization stocks and technology issues were declining rapidly. By
March even the S&P 500 had given back much of its year-to-date
returns. Our model, the Rightime Market Model (RTMM(registered
trademark)), turned negative in April and we limited our exposure to
equities. Our model did not tell us to buy equities until July.
Typically, we would expect to see improvement in fundamental
indicators, followed by monetary indicators, then improved sentiment,
and finally the market building momentum changes. These market
indicators reversed their normal course of action in the spring of
1997. Investors were willing to believe that the fundamentals would
improve eventually. This drove stocks higher. RTE's risk-averse nature
kept us out of the market until the fundamentals supported the rise.
The bulk of the gains which were registered by investors this year
took place during those twelve weeks.
Since April we have seen a downward trend in long-term interest rates.
Earnings have remained strong although not as strong as in 1996.
Unemployment is at near-record levels and yet there has been limited
data to indicate that the economy is so strong that inflation may
become a problem. Since July, we have remained invested in equities in
accordance with the Rightime Market Model (RTMM(registered trademark))
and have been rewarded with moderate gains.
Performance Comparison
The "Performance Comparison" chart assesses the Rightime Social
Awareness Fund's performance against the Lipper Growth Fund Index, a
broad based index. The "Risk Adjusted Performance Comparison" more
closely reflects the fund's performance as compared to a consistent
risk level.
The Social Awareness Fund utilizes a modeled approach to investing
which attempts to minimize risk by moving assets to money market
equivalent investments during periods in which the market appears to
be overvalued. This approach, over full market cycles, tends to invest
in low risk, or money market-like securities approximately half of the
time. In order to provide an equivalent risk level this comparison
assumes that assets are invested half in the Lipper Growth Fund Index
and half in a money market fund index. This balanced index approaches
the risk level of each fund that has been in existence for at least
one full market cycle and therefore provides a more meaningful
performance comparison.
The performance shown represents past performance and is not a
guarantee of future results. A mutual fund's share price and
investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be more or less than the original
cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Average Annual Total Return
Since Inception
1 Year 5 Years March 1, 1990
.75% 7.97% 7.91%
Performance Comparison
Rightime Social Awareness Fund
Lipper Growth Fund Index
Money Market Fund Index
Comparison of change in
value of $10,000 investment
in the Rightime Social
Awareness Fund, Lipper
Growth Fund Index and
Money Market Fund Index.
Risk-adjusted Performance Comparison
Rightime Social Awareness Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
Risk-adjusted
comparison of change in
value of $10,000 investment
in the Rightime Social
Awareness Fund, Balanced
Reference Index (50%
Lipper/50% Money Market), and Money
Market Fund Index.
[RIGHTIME LOGO]
October 31, 1997
Rightime The Rightime MidCap Fund
Family of Funds Performance Comparison
The fiscal year ending October 31, 1997 was the third straight year of
excellent returns for equity investors. Although there have been
turbulent months, investors have been rewarded for their perseverance.
Most broad stock indices performed strongly. Large capitalization
stocks and technology issues were strongest over the previous twelve
month period. The Standard & Poor's MidCap 400 Index had returns of
just under the market leaders with less volatility. However, as
October wound down, economic upheaval in Southeast Asia made investing
in multi-national stocks and technology companies riskier.
Unfortunately, the Rightime MidCap Fund missed much of these gains.
February and March were difficult months in the market. Smaller
capitalization stocks and technology issues were declining rapidly. By
March even the S&P 500 had given back much of its year-to-date
returns. Our model, the Rightime Market Model (RTMM(registered
trademark)), turned negative in April and we limited our exposure
to equities. Our model did not tell us to buy equities until July.
Typically, we would expect to see improvement in fundamental
indicators, followed by monetary indicators, then improved sentiment,
and finally the market building momentum changes. These market
indicators reversed their normal course of action in the spring of
1997. Investors were willing to believe that the fundamentals would
improve eventually. This drove stocks higher. RTE's risk-averse nature
kept us out of the market until the fundamentals supported the rise.
The bulk of the gains which were registered by investors this year
took place during those twelve weeks.
Since April we have seen a downward trend in long-term interest rates.
Earnings have remained strong although not as strong as in 1996.
Unemployment is at near-record levels and yet there has been limited
data to indicate that the economy is so strong that inflation may
become a problem. Since July, we have remained invested in equities in
accordance with the Rightime Market Model (RTMM(registered trademark))
and have been rewarded with moderate gains.
Performance Comparison
The "Performance Comparison" chart assesses the Rightime MidCap Fund's
performance against the Lipper Growth Fund Index, a broad based index.
The "Risk Adjusted Performance Comparison" more closely reflects the
fund's performance as compared to a consistent risk level.
The MidCap Fund utilizes a modeled approach to investing which
attempts to minimize risk by moving assets to money market equivalent
investments during periods in which the market appears to be
overvalued. This approach, over full market cycles, tends to invest in
low risk, or money market-like securities approximately half of the
time. In order to provide an equivalent risk level this comparison
assumes that assets are invested half in the Lipper Growth Fund Index
and half in a money market fund index. This balanced index approaches
the risk level of each fund that has been in existence for at least
one full market cycle and therefore provides a more meaningful
performance comparison.
The performance shown represents past performance and is not a
guarantee of future results. A mutual fund's share price and
investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be more or less than the original
cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends and reflecting the 4.75% sales
charge.
Average Annual Total Return
Since Inception
1 Year 5 Years Nov. 11, 1991
.53% 9% 8.95%
Performance Comparison
Rightime MidCap Fund
Lipper Growth Fund Index
Money Market Fund Index
Comparison of change in
value of $10,000 investment
in the Rightime
MidCap Fund, Lipper
Growth Fund Index and
Money Market Fund Index.
Risk-adjusted Performance Comparison
Rightime MidCap Fund
Balanced Reference Index (50% Lipper/50% Money Market)
Money Market Fund Index
Risk-adjusted
comparison of change in
value of $10,000 investment
in the Rightime
MidCap Fund, Balanced
Reference Index (50%
Lipper/50% Money
Market), and Money
Market Fund Index.
<TABLE>
<CAPTION>
[RIGHTIME LOGO] Officers and Directors
of The Rightime Fund, Inc.
- -------------------------------------------------------------------------------------------------------
Name Principal Occupation
and Address Position and Office during the past five years
- ---------------------------- ---------------------- ----------------------------------------
<S> <C> <C>
David J. Rights* Chairman of the Board, President of Rightime Econometrics, Inc., a
1095 Rydal Road President, and registered investment advisor. Consultant
Rydal, PA 19046 Treasurer to and registered representative of Lincoln
Investment Planning, Inc., a registered
investment advisor and broker dealer.
Edward S. Forst Sr.* Director, Vice-President Chairman of the Board,
The Forst Pavilion and Secretary Lincoln Investment Planning
218 Glenside Avenue Inc., a registered investment advisor
Wyncote, PA 19095 and broker dealer.
Francis X. Barrett Director Director and Member of the Finance and
Reading, PA 19805 Pension Committee, Sacred Heart
Hospital, Formerly, Executive Director,
National Catholic Education Association,
Pastor, Church of Holy Guardian Angels,
Reading, PA.
Dr. Winifred L. Tillery Director Superintendent of Schools,
Mt. Laurel, NJ 08054 Camden County, New Jersey.
Dr. Carol A. Wacker Director Former Assistant Superintendent for Senior
Encinitas, CA 92024 High Schools, the Philadelphia School
District.
- ------------
* "Interested" director as defined
in the Investment Company Act
of 1940 (the "1940 ACT").
See accompanying notes to financial statements
</TABLE>
The Rightime Family of Funds
218 Glenside Ave.
Wyncote, PA 19095-1594
Client Services Department
800-866-9393
Administrator
Rightime Administrators Inc.
218 Glenside Ave.
Wyncote, PA 19095-1594
Investment Advisor
Rightime Econometrics Inc.
1095 Rydal Road
Rydal, PA 19046
Distributor
Lincoln Investment Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095-1595
Custodian
CoreStates Bank N.A.
Broad & Chestnut Streets
Philadelphia, PA 19101
Transfer Agent
Lincoln Investment Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095-1595
Legal Counsel
Stradley, Ronon, Stevens & Young
2600 One Commerce Square
Philadelphia, PA 19103
Auditors
Tait, Weller & Baker
Eight Penn Center, Suite 800
Philadelphia, PA 19103
See accompanying notes to financial statements
Printed on recycled paper
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[LOGO]
Rightime
Family of Funds
218 Glenside Ave.
Wyncote, PA 19095-1594
BULK RATE
U.S. POSTAGE
PAID
LANCASTER, PA
PERMIT NO. 1793
