Rightime
Family of Funds
[RIGHTIME LOGO]
The Rightime Fund
The Rightime Blue Chip Fund
The Rightime MidCap Fund
The Rightime Social Awareness Fund
Prospectus
March 1, 1999
As with all mutual funds, the U.S. Securities and Exchange Commission
has not approved or disapproved these securities and has not determined
the accuracy or completeness of this Prospectus. It is a criminal
offense to state otherwise.
Table of Contents
Summary of the Funds
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Carefully review this very important section, which summarizes
each Fund's investment strategies, risks, performance and fees.
Overall Investment Philosophy 2
The Rightime Fund 2
The Rightime Blue Chip Fund 3
The Rightime MidCap Fund 3
The Rightime Social Awareness Fund 4
Performance Information 5
Fees and Expenses 7
Investment Objectives, Strategies and Risks
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Review this section for more detailed information on each Fund's
investment objectives, strategies and risks.
The Rightime Fund 8
The Rightime Blue Chip Fund 9
The Rightime MidCap Fund 10
The Rightime Social Awareness Fund 11
Additional Investment Policies 12
Management of the Funds
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This section describes the management of the Funds.
Board of Directors 13
Investment Advisor 13
Administrator, Transfer Agent and Custodian 13
Shareholder Account Information
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This section explains how to open and maintain your account
with us, including how to buy, sell and exchange shares of the Funds.
Distribution of Shares 14
Pricing of Fund Shares 14
Purchasing Shares 14
Selling Shares 16
Dividends, Distributions and Taxes 17
Other Information About the Funds
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Shareholder Inquiries 18
Year 2000 18
Financial Highlights 18
Rightime
Family of Funds
[RIGHTIME LOGO] Summary of the Funds
OVERALL INVESTMENT PHILOSOPHY
The Rightime Family of Funds is made up of four separate mutual funds
managed according to a common investment philosophy. The Funds pursue
their objectives by investing in varying portfolios of securities. The
investment advisor for each Fund, Rightime Econometrics, Inc., uses
analytical techniques which seek to anticipate and identify major market
trends which the Advisor believes can affect securities markets over
periods of time.
Each Fund will establish an "aggressive" portfolio strategy during
periods when the Advisor anticipates a generally rising trend in the
securities markets, by investing in securities that the Advisor believes
will benefit from such a rising trend. During such times, each Fund's
pursuit of a high return is tempered by an attempt to limit the Fund to
a reasonable level of risk.
Each Fund will establish a "conservative" portfolio strategy during
periods when the Advisor anticipates a generally declining trend in
securities markets, by investing in a manner that emphasizes dividend or
interest income over gains, and seeks to maintain stability of
principal. During such times, the Funds utilize investment strategies
which the Advisor believes offer greater protection from risk and more
conservative expectations.
THE RIGHTIME FUND
INVESTMENT
OBJECTIVE
- - The objective of the Fund is to achieve high total return consistent
with reasonable risk.
PRINCIPAL
INVESTMENT STRATEGIES
- - The Fund concentrates its investments in shares of other investment
companies (mutual funds) and can also make other investments consistent
with its objective. When using an aggressive strategy, the Advisor
selects funds and other investments that it believes will perform well
during a rising trend in securities markets. The Fund uses a flexible
approach when selecting fund investments that is not limited by the
underlying fund's investment style (such as Growth, Value, or Balanced)
or by any specific market capitalization range. When the Advisor
anticipates a declining trend, the Fund will adopt a conservative
strategy to invest in cash equivalents, money market funds and other
investments such as bonds and debt obligations which are intended to
preserve capital and control risk. In utilizing both the aggressive and
conservative strategies, the Fund may use options or futures on
securities or indexes as hedging techniques to assist the Advisor in
restructuring the Fund's portfolio.
PRINCIPAL RISKS
- - The Fund may invest in common stocks or in funds that invest primarily
in common stocks. Since common stock prices fluctuate in response to
market, economic and business conditions, and can decline over short or
even extended periods, the value of an investment in the Fund may go up
or down and you could lose money.
- - By investing in shares of investment companies, the Fund indirectly
pays a portion of the operating, management and other expenses of each
investment company. Therefore, 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 may be affected by losses of the underlying investment
companies and the level of risk arising from the investment practices of
such companies. The Fund has no control over the risks taken by such
investment companies.
- - The Advisor uses analytical techniques to anticipate and identify
major market trends in order to restructure the Fund's portfolio under
an aggressive or conservative strategy. If the Advisor incorrectly
judges turns in the market, the Fund may lose opportunities for gains or
it may experience losses.
- - The Fund's investments in bonds or debt obligations respond to changes
in interest rates and to perceptions of creditworthiness of individual
issuers. Generally, fixed income securities decrease in value as
interest rates rise and vice versa.
- - The use of hedging techniques by the Fund carries additional risks.
For example, since the Fund invests in other investment companies, an
unexpected restructuring of the portfolio of an underlying investment
company could have an unexpected, and possibly adverse, effect on the
hedging efforts of the Advisor. In addition, the success of any hedging
position depends on the ability of the Advisor to predict stock and
interest rate movements.
THE RIGHTIME
BLUE CHIP FUND
INVESTMENT
OBJECTIVE
- - The objective of the Fund is to achieve high total return consistent
with reasonable risk.
PRINCIPAL
INVESTMENT STRATEGIES
- - The Fund seeks to achieve its objective by investing primarily in blue
chip securities ("Blue Chips") and in instruments such as options or
futures that are based on Blue Chips. Blue Chips include common stocks
of companies which have: large market capitalizations ($5 billion or
more); an established history of earnings and dividends; a large number
of public shareholders; and are traded on major stock exchanges. At
least 65% of the Fund's assets will be invested in Blue Chips and
related instruments, and up to 100% may be so invested. When using an
aggressive strategy, the Fund will invest in Blue Chip securities and
related instruments which it believes will benefit from a rising trend
in securities markets. When using a conservative strategy, the Fund may
invest up to 35% of its assets in securities other than Blue Chips, such
as cash, cash equivalents, bonds and other debt obligations in an effort
to control risk. In utilizing both the aggressive and conservative
strategies, the Fund may use options or futures on securities or indexes
as hedging techniques to assist the Advisor in restructuring the
portfolio.
PRINCIPAL RISKS
- - Common stock prices fluctuate in response to market, economic and
business conditions and can decline over short or even extended periods.
Therefore, the value of your investment may go up or down and you could
lose money.
- - The Advisor uses analytical techniques to anticipate and identify
major market trends in order to restructure the Fund's portfolio under
an aggressive or conservative strategy. If the Advisor incorrectly
judges turns in the market, the Fund may lose opportunities for gains or
it may experience losses.
- - The Fund's investments in bonds or debt obligations respond to changes
in interest rates and to perceptions of creditworthiness of individual
issuers. Generally, fixed income securities decrease in value as
interest rates rise and vice versa.
- - The use of hedging techniques carries additional risks. The success or
failure of any hedging position depends on the ability of the Fund's
Advisor to predict stock and interest rate movements.
THE RIGHTIME
MIDCAP FUND
INVESTMENT
OBJECTIVE
- - The objective of the Fund is to achieve high total return consistent
with reasonable risk.
PRINCIPAL
INVESTMENT STRATEGIES
- - The Fund seeks to achieve its objective by investing primarily in
securities of companies with medium-size market capitalizations
("MidCaps") between $200 million and $5 billion, and in instruments such
as options or futures that are based on MidCaps. At least 65% of the
Fund's assets will be invested in MidCaps and related instruments, and
up to 100% may be so invested. When using an aggressive strategy, the
Fund will invest in MidCaps and related instruments which it believes
will benefit from a rising trend in securities markets. When using a
conservative strategy, the Fund may invest up to 35% of its assets in
securities other than MidCaps, such as cash, cash equivalents, bonds and
other debt obligations in an effort to control risk. In utilizing both
the aggressive and conservative strategies, the Fund may use options or
futures on securities or indexes as hedging techniques to assist in
restructuring the portfolio.
PRINCIPAL RISKS
- - Common stock prices fluctuate in response to market, economic and
business conditions and can decline over short or even extended periods.
Therefore, the value of your investment may go up or down and you could
lose money.
- - Since MidCaps are not as broadly traded as securities of larger
capitalized companies, they are often subject to wider and more abrupt
fluctuations in market prices. In addition, these securities may not be
as widely researched in the market.
- - The Advisor uses analytical techniques to anticipate and identify
major market trends in order to restructure the Fund's portfolio under
an aggressive or conservative strategy. If the Advisor incorrectly
judges turns in the market, the Fund may lose opportunities for gains or
it may experience losses.
- - The Fund's investments in bonds or debt obligations respond to changes
in interest rates and to perceptions of creditworthiness of individual
issuers. Generally, fixed income securities decrease in value as
interest rates rise and vice versa.
- - The use of hedging techniques carries additional risks. The success or
failure of any hedging position depends on the ability of the Fund's
Advisor to predict stock and interest rate movements.
THE RIGHTIME
SOCIAL AWARENESS FUND
INVESTMENT
OBJECTIVES
- - The Fund's primary objective is to achieve growth of capital
and its secondary objective is current income, consistent with
reasonable risk.
PRINCIPAL
INVESTMENT STRATEGIES
- - The Fund seeks to achieve its objectives by investing in securities of
companies with prospects for above-average capital growth and which also
show evidence in the conduct of their business, 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
demonstrated commitment to certain social issues or enterprises that
make a significant contribution to society through their products and
services. The Advisor evaluates growth prospects based on an analysis of
economic factors, industries, trends, sales, earnings, products or
services, or new technologies or markets. At least 65% of the Fund's
assets will be invested in securities of companies that satisfy the
financial and social criteria described. The Fund will invest primarily
in common stocks, but it may also invest in securities convertible into
common stocks, preferred stocks and other securities including options
and futures on securities or indexes. When using an aggressive strategy,
the Fund will invest in growth stocks and related securities which it
believes will benefit from a rising trend in securities markets. When
using a conservative strategy, the Fund may invest in cash, cash
equivalents, bonds and other debt obligations in an effort to control
risk. In using both the aggressive and conservative strategies, the Fund
may use options or futures on securities or indexes as hedging
techniques to assist in the restructuring of the portfolio.
PRINCIPAL RISKS
- - Common stock prices fluctuate in response to market, economic and
business conditions and can decline over short or even extended periods.
Therefore, the value of your investment may go up or down and you could
lose money.
- - The Fund may invest in smaller, less well-known companies which may
involve greater risk than investing in securities of more established
companies.
- - The Fund's social criteria may limit the availability of investment
opportunities. Also, the Fund's Advisor may change the social criteria
used to rate social performance of an issuer without notice to or
approval by the Fund's shareholders.
- - The Advisor uses analytical techniques to anticipate and identify
major market trends in order to restructure the Fund's portfolio under
an aggressive or conservative strategy. If the Advisor incorrectly
judges turns in the market, the Fund may lose opportunities for gains or
it may experience losses.
- - The Fund's investments in bonds or debt obligations respond to changes
in interest rates and to perceptions of creditworthiness of individual
issuers. Generally, fixed income securities decrease in value as
interest rates rise and vice versa.
- - The use of hedging techniques carries additional risks. The success or
failure of any hedging position depends on the ability of the Fund's
Advisor to predict stock and interest rate movements.
The Funds may not achieve their respective investment goals and they are
not intended to serve as a complete investment program. Investments in
the Funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation (FDIC) or any other government
agency.
PERFORMANCE INFORMATION
YEAR BY YEAR TOTAL RETURNS
The charts and tables that follow help to show the returns and risks of
investing in the various Funds. The bar charts show changes in each
Fund's yearly performance over the life of the Fund and the tables
that follow compare each Fund's average annual total returns with those of
relevant indexes for the past one, five, and ten-year periods, and for the
life of the Fund. You should keep in mind that the Fund's past performance is
not necessarily an indication of the Fund's future performance. The bar chart
do not reflect the impact of any applicable sales charges. If these charges
were reflected, returns would be less than those shown.
[GRAPHIC OMITTED: THE RIGHTIME FUND vertical bar chart]
THE RIGHTIME FUND
1989 11.82%
1990 1.20%
1991 30.14%
1992 3.65%
1993 8.06%
1994 0.83%
1995 26.89%
1996 8.59%
1997 (2.18%)
1998 30.44%
Best Quarter: Q4 1998 18.25%
Worst Quarter: Q3 1986 (12.53%)
[GRAPHIC OMITTED: THE RIGHTIME BLUE CHIP FUND vertical bar chart]
THE RIGHTIME BLUE CHIP FUND
1989 19.56%
1990 1.32%
1991 23.12%
1992 4.10%
1993 7.35%
1994 2.22%
1995 28.98%
1996 10.87%
1997 4.09%
1998 33.91%
Best Quarter: Q4 1998 15.58%
Worst Quarter: Q3 1998 (14.45%)
[GRAPHIC OMITTED: THE RIGHTIME MIDCAP FUND vertical bar chart]
THE RIGHTIME MIDCAP FUND
1991 5.44%
1992 11.52%
1993 5.81%
1994 1.90%
1995 23.99%
1996 10.75%
1997 5.44%
1998 37.16%
Best Quarter: Q4 1998 21.24%
Worst Quarter: Q2 1992 (3.36%)
[GRAPHIC OMITTED: THE RIGHTIME SOCIAL AWARENESS FUND vertical bar chart]
THE RIGHTIME SOCIAL AWARENESS FUND
1990 (7.03%)
1991 23.39%
1992 12.59%
1993 (2.27%)
1994 1.55%
1995 28.65%
1996 12.82%
1997 9.70%
1998 36.34%
Best Quarter: Q4 1998 19.34%
Worst Quarter: Q3 1990 (5.18%)
AVERAGE ANNUAL TOTAL RETURNS (Net of Sales Charges for the periods
ending December 31, 1998)
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Past Past Past Since
One Year Five Years Ten Years Inception
September 17,
1985
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The Rightime Fund 30.44% 12.13% 11.32% 11.79%
Standard and Poor's
MidCap 400 Index(1) 19.11% 18.88% 19.34% 18.46%
Lipper Balanced Fund
Index(2) 15.09% 13.88% 13.31% 13.65%
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Past Past Past Since
One Year Five Years Ten Years Inception
July 22, 1987
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The Rightime Blue
Chip Fund 27.54% 14.17% 12.45% 11.08%
Standard and
Poor's 500 Stock
Index(3) 28.04% 23.93% 19.20% 15.96%
Lipper Balanced
Fund Index(2) 15.09% 13.88% 13.31% 11.30%
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Past Past Past Since
One Year Five Years Ten Years Inception
November 11,
1991
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The Rightime MidCap
Fund 30.64% 15.12% N/A 13.04%
Standard and Poor's
MidCap 400 Index(1) 19.11% 18.88% N/A 17.92%
Lipper Balanced
Fund Index(2) 15.09% 13.88% N/A 13.14%
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Past Past Past Since
One Year Five Years Ten Years Inception
March 1, 1990
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The Rightime
Social
Awareness Fund 29.85% 16.00% N/A 11.66%
Standard and
Poor's 500
Stock Index(3) 28.04% 23.93% N/A 19.06%
Lipper Balanced
Fund Index(2) 15.09% 13.88% N/A 13.35%
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(1) Standard & Poor's MidCap 400 Index is an unmanaged index composed of
400 domestic and Canadian stocks which measures the mid-range sector of
the U.S. stock market. The index assumes reinvestment of all dividends/
distributions and does not reflect any asset-based charges for
investment manager or other expenses.
(2) Lipper Balanced Fund Index is an equally-weighted performance index,
adjusted for capital gains distributions and income dividends of the
largest qualifying mutual funds with a balanced objective. Lipper
defines a balanced fund as a fund whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of both
stocks and bonds. The Balanced Fund Index is presented for comparison
because it reflects a risk level that is most equivalent to the risk
level undertaken by the Funds in the Rightime Family of Funds. The
Rightime Family of Funds utilize a model approach to investing which
attempts to control risk by emphasizing income and stability of
principal during periods in which the market appears to be in a
declining trend. This approach, over full market cycles, tends to invest
in equity securities approximately half of the time.
(3) Standard & Poor's 500 Stock Index is an unmanaged index composed of
400 industrial stocks, 40 financial stocks, 40 utility stocks and 20
transportation stocks. The index assumes reinvestment of all
dividends/distributions and does not reflect any asset-based charges for
investment manager or other expenses.
FEES AND EXPENSES
The following tables describe the fees and expenses that you may pay if
you buy and hold shares of the Funds.
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The
Shareholder The Rightime
Transaction Fees The The Rightime Rightime Social
(Fees paid directly Rightime Blue Chip MidCap Awareness
from your investment) Fund Fund Fund Fund
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Maximum Sales Charge
(load) on Purchases
(as a percentage of
offering price) None 4.75% 4.75% 4.75%
Sales Charge on
Reinvested Dividends None None None None
Redemption Fees None None None None
Exchange Fees None None None None
Maximum Account Fee None None None None
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Annual Fund
Operating Expenses
(Expenses that are
deducted from Fund
assets)
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Advisory Fee 0.50% 0.50% 0.50% 0.50%
Distribution and
Service (12b-1)
Fees 0.75% 0.50% 0.50% 0.50%
Other Expenses 1.28% 1.15% 1.25% 1.35%
Total Fund ------ ------ ------ ------
Operating
Expenses 2.53% 2.15% 2.25% 2.35%
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The following Expense Example shows the expenses that you could pay over
time and will help you to compare the cost of investing in the Funds
with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in each Fund and that you earn a 5% annual
return, with no change in Fund expense levels. The $10,000 and 5%
figures are required by SEC rules to aid in comparisons between funds.
This Example is for comparison only. Actual fees and expenses will be
different.
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The
The Rightime
The The Rightime Rightime Social
Rightime Blue Chip MidCap Awareness
Expense Example Fund Fund Fund Fund
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1 Year $ 256 $ 684 $ 693 $ 703
3 Years $ 789 $1,118 $1,147 $1,175
5 Years $1,348 $1,577 $1,626 $1,674
10 Years $2,872 $2,848 $2,945 $3,041
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Rightime
Family of Funds Investment Objectives,
[RIGHTIME LOGO] Strategies and Risks
The Rightime Family of Funds is made up of four separate mutual funds
managed according to a common investment philosophy. Although the Funds'
investment objectives are similar, the Funds differ with respect to the
types of securities that they will normally hold in their portfolios.
The Funds use a variety of investment techniques in an effort to balance
portfolio risks and to hedge market risks. The investments of each Fund
are managed by Rightime Econometrics, Inc., which serves as investment
advisor.
The Advisor uses detailed analytical techniques in an effort to
anticipate and identify major market trends which the Advisor believes
can affect securities markets over periods of time. The Advisor uses
this approach to periodically restructure each Fund's portfolio of
investments to increase gains or income, or to avoid losses.
Each Fund establishes an "aggressive" strategy when the Advisor
anticipates a generally rising trend in the securities markets, by
investing in securities that the Advisor believes will benefit from the
rising trend. Each Fund establishes a "conservative" strategy when the
Advisor anticipates a generally declining trend in the securities
markets. In that case, the Advisor restructures the Funds' portfolios,
emphasizing income over gains and the maintenance of stability of
principal.
In addition, when the Advisor anticipates volatile or abnormal market
conditions, each Fund may adopt a temporary defensive position to
protect the value of its portfolio assets by investing up to 100% of its
assets in cash or cash equivalent investments such as U.S. Government or
money market securities. A temporary defensive position reduces a Fund's
ability to pursue its investment objective.
THE RIGHTIME FUND
The Rightime Fund's objective is to achieve a high total return
consistent with reasonable risk. The Fund seeks to achieve this
objective by using either an aggressive or conservative strategy
depending on market conditions, and by concentrating its investments in
shares of other registered investment companies. The Fund may also make
other investments that are consistent with its objective and policies.
The Fund will use a variety of investment techniques in an effort to
generate a high total return, which is made up of the net appreciation
in the value of its portfolio of investments, together with the interest
and dividend income generated by such investments. 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.
The Fund concentrates its investments in shares of other registered
investment companies (mutual funds), which means that the Fund invests
more than 25% of its assets in other mutual funds, and may invest up to
100% of its assets in such funds. In order to provide for the Fund's
cash flow needs or when the Fund is otherwise pursuing total return, the
Fund may invest up to 75% of its assets in other types of investments
such as common or preferred stocks, cash equivalents (such as U.S.
government securities, repurchase agreements or certificates of
deposit), bonds and other debt obligations, stock options, stock index
options, or financial futures or options on such futures.
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 fund shares or other
investments which the Advisor believes will benefit from the rising
trend. When selecting mutual funds for investment, the Advisor uses a
risk adjusted analysis (which considers the relative volatility of
various investments) to evaluate each fund's performance under various
market conditions and to consider each fund's potential rewards and
risks. In addition to a fund's past and projected performance, the
Advisor considers other factors such as the fund's investment objective,
investment techniques and portfolio structure, as well as its size and
operational policies. The Advisor uses a flexible approach when
selecting funds for investment that is not limited to any particular
investment style or market capitalization range. As a result, the
Advisor may select a mix of funds that are growth-oriented, value-
oriented or balanced in nature. In addition, the Fund may use stock
options, stock index options, financial futures or options on such
futures to hedge the value of its uninvested cash or cash equivalent
investments. This technique is designed to enable the Fund to quickly
become more fully invested during a rising market, while the Advisor
seeks appropriate new investments.
When the Advisor anticipates a generally declining trend in the
securities markets, it will establish a conservative strategy to seek to
achieve the Fund's objective by investing in shares of money market
funds or other investment companies, or by investing up to 75% of its
assets in cash, cash equivalent investments, bonds or similar
investments. When applying the conservative strategy to securities
selection, the Advisor places a greater emphasis on controlling risk,
consistent with the objective of the Fund. In addition, the Fund may
also seek to achieve its objective during such a period without
disturbing or restructuring the portfolio established during an
aggressive period by using cash, cash equivalents, proceeds of maturing
securities and net assets to purchase or sell other investments such as
stocks, bonds and other debt obligations, stock options, stock index
options, or financial futures and options on such futures. Stock
options, stock index options, financial futures and options thereon are
utilized to "hedge" the risks of securities selected during an
aggressive strategy, including the risks that exist during the period
when the Advisor is selecting suitable investments to restructure the
portfolio, and are not entered into for speculative purposes.
Although the investment companies in which The Rightime Fund invests
generally will 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. The Advisor 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.
The Fund must 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 the purchase 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.
The Fund can 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 RIGHTIME
BLUE CHIP FUND
The Fund's objective is to achieve high total return consistent with
reasonable risk. It seeks to achieve this objective by investing
primarily in Blue Chips. Blue Chips include common stocks that are
included in the S&P 500 Index, a stock index of 500 common stocks that
is a widely recognized index of stock market performance; stocks that
are included in the Dow Jones Industrial Average Index of 30 common
stocks, a widely recognized index of general stock market movement; or
stocks of other issuers of similar size or market depth (such as the
largest 100 stocks on the Nasdaq National Market System). Such Blue Chip
securities generally have the following characteristics: (i) large
capitalization (greater than $5 billion); (ii) an established history of
earnings and dividends; and (iii) large number of publicly held shares
and high trading volume, resulting in a high degree of liquidity. 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. The Fund may also invest in Blue
Chip instruments, which include options, stock index options, financial
futures or options on such futures, all of which are based on Blue
Chips. At least 65% of the Fund's assets, except when maintaining a
temporary defensive position, will be invested in Blue Chips or Blue
Chip instruments, and up to 100% may be so invested.
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 and Blue Chip instruments. 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. In addition, the Fund may use stock options, stock index
options, financial futures or options on such futures to hedge the value
of its uninvested cash or cash equivalent investments. This technique is
designed to enable the Fund to quickly become more fully invested during
a rising market, while the Advisor seeks appropriate new investments.
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 controlling risk, consistent with the objective of
the Fund. In addition, the Fund may also seek to achieve its objective
during such a period without disturbing or restructuring the portfolio
established during an aggressive period by using cash, cash equivalents,
proceeds of maturing securities and net assets to purchase or sell other
investments such as stocks, bonds and other debt obligations, stock
options, stock index options, or financial futures and options on such
futures. Stock options, stock index options, financial futures and
options thereon are utilized to "hedge" the risks of securities selected
during an aggressive strategy, including the risks that exist during the
period when the Advisor is selecting suitable investments to restructure
the portfolio, and are not entered into for speculative purposes.
THE RIGHTIME
MIDCAP FUND
The Fund's objective is to achieve 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"). 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 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. 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.
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. 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. In addition, the Fund may use stock options, stock index
options, financial futures or options on such futures to hedge the value
of its uninvested cash or cash equivalent investments. This technique is
designed to enable the Fund to quickly become more fully invested during
a rising market, while the Advisor seeks appropriate new investments.
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 controlling risk, consistent with the objective of
the Fund. In addition, 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, and new assets to purchase
or sell other investments such as stocks, bonds and other debt
obligations, stock options, stock index options, or financial futures
and options on such futures. Stock options, stock index options,
financial futures and options thereon are utilized to "hedge" the risks
of securities selected during an aggressive strategy, including the
risks that exist during the period when the Advisor is selecting
suitable investments to restructure the portfolio, and are not entered
into for speculative purposes.
THE RIGHTIME
SOCIAL AWARENESS FUND
The Fund's primary objective is to achieve growth of capital and its
secondary objective is current income, consistent with reasonable risk.
The Fund will attempt to invest in companies which, in the opinion of
the Advisor, have prospects for above-average growth, and 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, as well as
through the way they do business.
The Fund generally seeks to invest in securities that the Advisor has
determined are 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. The Fund will invest primarily
in common stocks, but may also invest in securities convertible into
common stocks, preferred stocks and other securities, including bonds
and other debt obligations, cash equivalents (such as certificates of
deposit or repurchase agreements), and stock options, stock index
options, financial futures and options on such futures. These securities
are 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's investments 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 risks than are inherent in
securities of more established companies.
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. 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. In
addition, the Fund may use stock options, stock index options, financial
futures or options on such futures to hedge the value of its uninvested
cash or cash equivalent investments. This technique is designed to
enable the Fund to quickly become more fully invested during a rising
market, while the Advisor seeks appropriate new investments.
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 controlling
risk, consistent with the objective of the Fund. In addition, the Fund
may also seek to achieve its objective during such a period without
disturbing or restructuring the portfolio established during an
aggressive period by using cash, cash equivalents, proceeds of maturing
securities and net assets to purchase or sell other investments such as
stocks, bonds and other debt obligations, stock options, stock index
options, or financial futures and options on such futures. Stock
options, stock index options, financial futures and options thereon are
utilized to "hedge" the risks of securities selected during an
aggressive strategy, including the risks that exist during the period
when the Advisor is selecting suitable investments to restructure the
portfolio, and are not entered into for speculative purposes.
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. In its ratings, 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.
and its Domini Social Index (the "DSI 400"). The DSI 400 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 S&P 500 Index, approximately 100 of the largest companies not
included in the S&P 500 Index or companies providing industry
representation, and 50 companies with particularly strong social
characteristics. Although the Advisor may select companies listed in the
DSI 400 for investment, it is not limited to the selection of such
companies.
ADDITIONAL
INVESTMENT POLICIES
DERIVATIVES
AND ASSOCIATED RISKS
The Funds may engage in a variety of transactions using "derivatives,"
such as financial futures and options. Financial futures include stock
index futures and futures on other types of securities or indexes. The
Funds may also invest in options on securities or indexes. Derivatives
are financial instruments whose value depends upon, or is derived from,
the underlying investment, pool of investments, index or currency. The
Funds intends to invest in such instruments that are traded on U.S.
exchanges, or in individually negotiated transactions with other parties
(also known as "over-the-counter").
The Funds will engage in such transactions in an effort to enhance its
objective by receiving premiums for writing covered call and put
options, to protect itself against increases in the prices of securities
it may ultimately want to buy, and also to protect itself against
declines in market value of its common stocks and/or investment company
holdings. The selection of the foregoing techniques or any combination
of them to be used at any particular time will depend upon an assessment
by the Fund's Advisor as to the relative implementation costs and the
liquidity of the particular secondary market in which such derivatives
are traded.
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 generally will 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. The success of any hedging position
depends on the ability of the Advisor to predict stock and interest rate
movement.
In connection with futures and options, the Funds will maintain certain
collateral in special accounts established by Futures Commission
Merchants in the care of the Funds' custodian bank. While the Funds do
not engage in futures for speculative purposes, there are risks which
result from the use of futures. Such risks are described in this
Prospectus and the Statement of Additional Information. The Funds are
not registered as commodity pool operators and the Advisor is not
registered as a commodities trading advisor, in reliance upon various
exemptive rules.
PORTFOLIO TURNOVER
The Funds expect a portfolio turnover rate higher than that of other
funds with similar objectives. Each Fund presently estimates that its
annualized portfolio turnover rate generally will not exceed 300%.
Depending on market conditions, deviation may be substantial. Higher
portfolio turnover rates may result in increased brokerage costs as well
as greater realization of gains and losses for tax purposes.
Rightime
Family of Funds
[RIGHTIME LOGO] Management of the Funds
BOARD OF
DIRECTORS
The management of the business and affairs of the Funds is the
responsibility of the Board of Directors of The Rightime Fund, Inc. (the
"Company"). Each Fund is a series of the Company. The Board elects
officers to manage the day-to-day affairs of the Funds. The Board is
also responsible for selecting the Funds' Advisor and other service
providers.
INVESTMENT
ADVISOR
The investments of each Fund are managed by Rightime Econometrics, Inc.,
1095 Rydal Road, Rydal, PA 19046-1711. The Advisor has provided
investment management services to the Funds and to separately managed
accounts since 1979 and currently has approximately $2 billion
(including the Funds) in assets under management.
Pursuant to the Advisory Agreement for each Fund, the Advisor, subject
to the supervision of the Company's Board of Directors, manages the
assets of each Fund in accordance with the stated objective, policies
and restrictions of the Fund. 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.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of 0.50% 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.
Portfolio Manager -- 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 nineteen years.
ADMINISTRATOR,
TRANSFER AGENT
AND CUSTODIAN
The Company has selected Rightime Administrators, Inc. to serve as the
administrator of the Funds and to administer the Fund's affairs subject
to the supervision of the Company's Board of Directors. Rightime
Administrators, Inc. furnishes each Fund with office facilities, and with
any ordinary clerical and bookkeeping services not furnished by the Fund's
transfer agent or custodian. Rightime Administrators, Inc. has also
retained Lincoln Investment Planning, Inc. to provide certain accounting
and shareholder services for each Fund and to serve as transfer agent,
dividend disbursing agent and redemption agent for the Funds. First Union
National Bank acts as the custodian of the securities and cash of each Fund.
Rightime
Family of Funds
[RIGHTIME LOGO] Shareholder Account Information
DISTRIBUTION
OF SHARES
Lincoln Investment Planning, Inc. promotes the distribution of the
shares of Funds in accordance with Distribution Agreements with the
Company for each Fund. Lincoln 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 is
also the owner of RTE Securities, Inc., as well as a consultant for
Lincoln. 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
Lincoln. Mr. Rights and Mr. Forst are considered to be "affiliated
persons" of the Funds under the Investment Company Act.
As compensation for its services, Lincoln receives fees under each
Fund's Rule 12b-1 Distribution Plan, computed daily and payable monthly,
at an annualized rate of each Fund's average daily net assets of 0.75%
for The Rightime Fund, and 0.50% for The Rightime Blue Chip Fund, The
Rightime MidCap Fund, and The Rightime Social Awareness Fund. The
Distribution Plans provide that each Fund's costs may not exceed the
annual rates listed above for payments to Lincoln, 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 Funds and
for the printing of prospectuses sent to prospective investors. Because
these fees are paid out of the Funds' assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges. The Funds will not
bear any distribution expenses in excess of their payments to Lincoln
under the Plans at the rates set forth above.
PRICING
OF FUND SHARES
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 net asset value ("NAV") of shares of each Fund equals the total
value of its assets, less its liabilities, divided by the number of its
outstanding shares. Expenses of the Funds, including the fees of the
Advisor, the administrator, and the distributor, are accrued each day.
The public offering price consists of the NAV per share next calculated
plus any applicable sales charge. Shares are valued as of the close of
regular trading on the New York Stock Exchange ("NYSE") each day that
the NYSE is open for trading. Expenses and fees of each Fund are accrued
daily and taken into account for the purpose of determining the NAV.
The Rightime Fund will value redeemable securities issued by open-end
investment companies using their respective NAV 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. Options and financial futures traded on national
security or commodities exchanges are valued as of the close of trading
of the underlying securities on such exchanges. 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.
PURCHASING
SHARES
- - The minimum investment amount is $1,000. Each Fund may waive the
minimum investment amounts for qualified tax- sheltered retirement
plans.
- - You can purchase shares of any Fund by contacting the Fund's
Distributor or by purchasing through a dealer or financial institution
that has a dealer agreement with the Distributor.
- - Shares may be purchased initially by completing the enclosed
application and mailing it, together with your check made payable to
"The Rightime Fund, Inc." to either address:
Rightime Fund Quick Mail The Rightime Family of Funds
P.O. Box 13813 218 Glenside Avenue
Philadelphia, PA 19101-3813 Wyncote, PA 19095-1595
(regular mail) (express delivery)
- - Orders for purchases are effected at the offering price next
calculated by each Fund.
- - Subsequent investments to existing accounts must be at least $25.
Investments may be made at any time. Please include the "Invest By Mail"
stub from your previous confirmation statement. It is important to
include your account number with all subsequent purchases or
correspondence.
- - Sales charges may be reduced or waived for certain groups. Each
Fund must be notified at the time of purchase that the purchase of
shares would qualify for the reduced sales load. Consult the Funds'
Statement of Additional Information, your financial advisor or the Funds
for further details.
- - The Company reserves the right in its sole discretion to:
(i) suspend the offering of its shares; (ii) reject purchase orders when
it is in the best interest of a Fund; and (iii) reduce or waive the
minimum for initial and subsequent investments.
- - A Fund may charge a $15 annual maintenance fee to accounts which
have no new purchases during a calendar year (excluding reinvestments of
dividends and capital gains), and which have balances that remain below
$1,000 during the last six months of that calendar year. The Fund will
provide a 90-day notice to the shareholder, during which period the
shareholder may increase their account balance to $1,000 in order to
avoid any fee. The Fund will not charge a fee if the account balance
declines below $1,000 solely as a result of a market decline or sales
charge, or if the account is actively participating in a systematic
withdrawal plan.
- - For information on how to purchase shares by wire and the issuance of
stock certificates, please contact the Fund at
1-800-866-9393.
There are no sales charges for purchasing shares of The Rightime Fund.
Shares of The Rightime Blue Chip Fund, The Rightime MidCap Fund and The
Rightime Social Awareness Fund are purchased at the offering price which
reflects a maximum sales charge of 4.75%. Lower sales charges apply for
larger purchases as follows:
- -----------------------------------------------------------------------
Sales Load as % of
------------------------------------
Offering Amount Dealer's
Amount of Purchase Price Invested Concession*
- -----------------------------------------------------------------------
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
For amounts of $2 million or more there is no sales load.
- -----------------------------------------------------------------------
* In some circumstances, Lincoln may allow a larger percentage of the
sales charge to dealers. Such dealers may have additional responsibilities
under the federal securities laws.
SELLING
SHARES
- - Shareholders can sell (redeem) their shares any day the NYSE is open,
either through their financial advisor or directly to the Fund.
Redemptions will be effected at the NAV next determined after the
receipt of a redemption request.
- - The Funds normally send redemption proceeds on the next business day
but, in no event later than seven days, or earlier if required under
applicable law. 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 has completed
collection of the funds. This may take up to 15 days.
- - Any redemption proceeds may be reinvested in the Fund without any
sales charges within 90 days of the redemption date.
- - By mail -- Redemption requests may be made in writing. The writing
must:
(bullet) include the identity of the shareholder's fund and account
number,
(bullet) state the dollar amount or number of shares to be redeemed, and
(bullet) include the signatures of all registered owners exactly as the
account is registered.
- - The following redemption requests must be accompanied by a signature
guarantee: amounts in excess of $25,000; if the proceeds are to be made
payable to someone other than the registered owner(s); or if the
proceeds are to be sent elsewhere than the address of record. A
signature guarantee verifies the authenticity of the shareholder's
signature and may be obtained from an acceptable financial institution
such as a bank, savings and loan association, trust company, credit
union, broker/dealer, registered securities association or clearing
agency. A notarized signature is not acceptable.
- - By telephone -- Redemptions by shareholders and their dealer
representatives may be made by telephone by calling
1-800-866-9393. Telephone redemptions must be paid to the registered
owner(s) and mailed to the address of record or wired to the bank
account designated on record at the Fund. Telephone redemptions may not
exceed $25,000 in any 15-day period. There are some additional
restrictions on telephone redemptions. Please call the Fund for further
information.
- - The Fund's transfer agent will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine. These calls are
recorded for your protection. For the protection of the shareholder and
the Fund, a transaction may be delayed or not implemented when the
transfer agent is not reasonably satisfied that the telephone
instructions are genuine. If such procedures are followed to ensure
against unauthorized transactions, neither the Fund nor its transfer
agent will be responsible for any losses.
- - 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. If shares are redeemed in kind, the redeeming shareholder may
incur brokerage costs for converting the assets into cash.
- - Each Fund reserves the right to redeem a shareholder's account where
the account has fallen below $1,000. The Fund will advise the
shareholder of its intention to redeem in writing at least 90 days prior
to effecting such redemption. After the shareholder receives this
notice, he or she may purchase additional shares in any amount necessary
to bring the account back to $1,000. The Fund will not redeem an account
that is worth less than $1,000 solely as a result of 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.
- - If the shares to be redeemed were issued in certificate form, the
certificates must be endorsed and must be submitted with the redemption
request.
- - Under unusual or extreme circumstances, the Board of Directors may
suspend the right of redemption or postpone the date of payment for
seven days or more.
AUTOMATIC
INVESTING PLAN
- - Shareholders who want to invest regularly may participate in the
Automatic Investing Plan. This plan allows you the opportunity to
purchase shares through pre-authorized withdrawals from your bank
account. The minimum investment amount is $25. These investments are
made on the 15th day of each month or the next business day thereafter.
EXCHANGE
OF SHARES
- - The exchange privilege allows shareholders of a Fund to exchange all
or part of their shares into any other Fund without paying an additional
sales charge. No transaction fees are charged for exchanges, except that
exchanges from the Rightime Fund (which has no front-end sales charge)
into another Fund in the Rightime family, will be subject to the sales
charge of the other Fund. Exchanges will be effected at the net asset
price or public offering price next determined after the receipt of the
exchange request.
- - To complete an exchange of Fund shares you may:
(bullet) Make a telephone exchange request by calling the Fund at
1-800-866-9393. Shareholders automatically receive this privilege,
unless the shareholder waives it on the application or by notifying the
Fund. Proper identification is needed at the time of the exchange.
Shares issued in certificate form may not be exchanged by telephone.
or
(bullet) Write the Fund notifying us of your request to exchange shares
of the Fund. Write to The Rightime Fund, Inc., P.O. Box 13813,
Philadelphia, PA 19101-3813.
- - 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 may be changed or eliminated at any time
without notice to shareholders.
SYSTEMATIC WITHDRAWAL PLAN
- - Shareholders with at least $5,000 in a Fund account can establish a
Systematic Withdrawal Plan. Amounts of at least $25 can be withdrawn on
a monthly, quarterly, semiannual or annual basis. If you are interested,
please contact the Fund for instructions on how to establish this plan.
DIVIDENDS,
DISTRIBUTIONS
AND TAXES
Each 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 and will distribute gains, if any, once a
year. 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 elected to receive the dividends
and/or distributions in cash. An election may be changed at any time by
notifying the Fund.
In general, distributions from each Fund are taxable to you as either
ordinary income or capital gains. This is true whether you reinvest your
distributions in additional shares of a Fund or receive them in cash.
Any long-term capital gains distributed by a Fund are taxable to you as
long-term capital gains no matter how long you have owned your shares.
Every January, you will receive a statement that shows the tax status of
distributions you received for the previous year. Distributions declared
in December but paid in January are taxable as if they were paid in
December. Distributions taxed as capital gains may be taxable at
different rates depending on how long the Fund holds its assets.
When you sell your shares of a Fund, you may have a capital gain or
loss. For tax purposes, an exchange of your shares of a Fund for shares
of a different Rightime Fund is the same as a sale. The tax rate on any
gain from the sale or exchange of your shares depends on how long you
have held your shares. Fund distributions and gains from the sale or
exchange of your shares will generally be subject to state and local
income tax. Non-U.S. investors may be subject to U.S. withholding and
estate tax. You should consult your tax professional about federal,
state, local or foreign tax consequences.
By law, a Fund must withhold 31% of your distributions and proceeds if
you do not provide your correct taxpayer identification number ("TIN")
or certify that your TIN is correct, or if the IRS instructs a Fund to
do so.
Rightime
Family of Funds
[RIGHTIME LOGO] Other Information About the Funds
SHAREHOLDER INQUIRIES
Please direct any questions or requests that you may have concerning the
Funds by calling 1-800-866-9393 or by writing to The Rightime Fund,
Inc., P.O. Box 13813, Philadelphia, PA 19101-3813.
YEAR 2000
Like other mutual funds, as well as other financial and business
organizations worldwide, the Funds could be adversely affected if the
computer systems used by the Funds or its service providers in
performing their investment or administrative functions do not properly
process and calculate date-related information and data as of and after
January 1, 2000. This is commonly referred to as the "Year 2000 Issue."
The Company is taking steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to computer systems that it
uses and to obtain reasonable assurances that comparable steps are being
taken by the Company's other major service providers. In addition, the
Year 2000 Issue may adversely affect the companies in which the Funds
invest. For example, these companies may incur substantial costs to
correct any problems and may suffer losses caused by data processing
errors. At this time there can be no assurance that the remedies
addressing the Year 2000 Issue will be sufficient to avoid any adverse
impact to the Funds. The Funds will continue to monitor developments
relating to this issue, including the development of contingency plans
for providing back-up computer services in the event of a systems
failure.
FINANCIAL HIGHLIGHTS
The financial highlights tables on the following pages are intended to help
shareholders understand the Funds' recent financial performance during the
past five fiscal years ended October 31. The Funds' financial highlights
for each of the periods presented have been audited by Tait, Weller & Baker,
independent auditors. Total returns represent the rate that an investor
would have earned or lost on an investment in the Fund, assuming
reinvestment of all dividends and distributions. The Funds' financial
statements, notes to financial statements and report of independent
accountants are included in the Statement of Additional Information as
well as in the Funds' Annual Report to Shareholders, which are available
upon request.
<TABLE>
<CAPTION>
Rightime Financial
Family of Funds Highlights
[RIGHTIME LOGO] (For a Share Outstanding Throughout Each Year Ended October 31)
The Rightime Fund 1998 1997 1996 1995 1994
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $29.95 $32.09 $37.55 $35.50 $37.42
Net Investment Income (Loss) 0.43 0.43 1.14 (0.10) 0.29
Net Realized and Unrealized Gains
(Losses) on Investments 5.16 (1.24) 2.11 7.21 (0.49)
Total from Operations 5.59 (0.81) 3.25 7.11 (0.20)
Distributions from Net Investment Income (0.41) (0.42) (0.77) (0.30) --
Distributions from Realized Capital Gains -- (0.91) (7.94) (4.76) (1.72)
Total Distributions (0.41) (1.33) (8.71) (5.06) (1.72)
Net Asset Value, End of Year $35.13 $29.95 $32.09 $37.55 $35.50
Total Return(1) 18.86% (2.77)% 8.96% 23.38% (0.48)%
Net Assets, End of Year $110,598,723 $126,001,807 $166,490,280 $158,966,039 $149,207,566
Ratio of Expenses to Average Net Assets 2.53% 2.45% 2.45% 2.47% 2.51%
Ratio of Net Investment Income (Loss) to
Average Net Assets 1.12% 1.16% 3.11% (0.27)% 0.78%
Portfolio Turnover 117.73% 62.01% 15.40% 9.45% 11.50%
The Rightime Blue Chip Fund 1998 1997 1996 1995 1994
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Net Asset Value, Beginning of Year $32.27 $31.88 $32.84 $33.08 $33.14
Net Investment Income (Loss) (0.10) 0.03 0.40 0.35 0.39
Net Realized and Unrealized Gains
(Losses) on Investments 8.83 0.83 3.52 5.66 (0.04)
Total from Operations 8.73 0.86 3.92 6.01 0.35
Distributions from Net Investment Income (0.02) (0.40) (0.28) (0.46) (0.23)
Distributions from Realized Capital Gains -- (0.07) (4.60) (5.79) (0.18)
Total Distributions (0.02) (0.47) (4.88) (6.25) (0.41)
Net Asset Value, End of Year $40.98 $32.27 $31.88 $32.84 $33.08
Total Return(1) 27.06% 2.63% 12.26% 22.31% 1.06%
Net Assets, End of Year $271,415,783 $254,386,954 $277,639,033 $249,619,271 $221,681,939
Ratio of Expenses to Average Net Assets 2.15% 2.09% 2.08% 2.17% 2.22%
Ratio of Net Investment Income (Loss) to
Average Net Assets (0.25)% 0.05% 1.25% 1.13% 1.16%
Portfolio Turnover 7.97% 39.27% 1.30% 17.52% 0.98%
(1) Excludes sales charge
</TABLE>
<TABLE>
<CAPTION>
Financial
Highlights
(For a Share Outstanding Throughout Each Year Ended October 31)
The Rightime MidCap Fund 1998 1997 1996 1995 1994
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $29.12 $29.02 $32.95 $28.44 $31.07
Net Investment Income (Loss) (0.16) 0.27 0.49 0.26 0.32
Net Realized and Unrealized Gains
(Losses) on Investments 7.13 1.33 2.56 5.25 (0.78)
Total from Operations 6.97 1.60 3.05 5.51 (0.46)
Distributions from Net Investment Income (0.24) (0.54) (0.14) (0.45) --
Distributions from Realized Capital Gains (0.66) (0.96) (6.84) (0.55) (2.17)
Total Distributions (0.90) (1.50) (6.98) (1.00) (2.17)
Net Asset Value, End of Year $35.19 $29.31 $29.02 $32.95 $28.44
Total Return(1) 24.53% 5.55% 9.65% 20.07% (1.38)%
Net Assets, End of Year $67,492,574 $69,295,196 $80,303,960 $75,086,295 $65,252,084
Ratio of Expenses to Average Net Assets 2.25% 2.15% 2.19% 2.19% 2.28%
Ratio of Net Investment Income (Loss) to
Average Net Assets (0.46)% 0.82% 1.72% 0.84% 1.14%
Portfolio Turnover -- 107.08% 3.59% 24.67% 0.75%
The Rightime Social Awareness Fund 1998 1997 1996 1995 1994
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Net Asset Value, Beginning of Year $29.31 $29.09 $32.37 $28.44 $31.07
Net Investment Income (Loss) 0.27 0.17 0.41 0.08 0.33
Net Realized and Unrealized Gains
(Losses) on Investments 7.55 1.52 3.88 5.91 (0.72)
Total from Operations 8.73 0.86 3.92 6.01 0.35
Distributions from Net Investment Income (0.15) (0.43) -- (0.46) --
Distributions from Realized Capital Gains (1.02) (1.04) (7.57) -- (1.84)
Total Distributions (1.17) (1.47) (7.57) (0.46) (1.84)
Net Asset Value, End of Year $35.96 $29.31 $29.09 $32.37 $26.84
Total Return(1) 27.37% 5.77% 13.62% 22.70% (1.27)%
Net Assets, End of Year $13,889,339 $11,467,788 $8,694,248 $7,378,063 $7,221,772
Ratio of Expenses to Average Net Assets 2.35% 2.35% 2.42% 2.75% 2.56%
Ratio of Net Investment Income (Loss) to
Average Net Assets 0.81% 0.55% 1.51% 0.32% 1.04%
Portfolio Turnover 142.15% 107.98% 46.57% 36.49% 54.85%
(1) Excludes sales charge
</TABLE>
Rightime
Family of Funds For More Information About the
[RIGHTIME LOGO] Rightime Family of Funds
The Rightime Family of Funds
218 Glenside Ave.
Wyncote, PA 19095-1594
Client Services Department
1-800-866-9393
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
First Union National Bank
530 Walnut Street
Philadelphia, PA 19106
Transfer Agent
Lincoln Investment Planning, Inc.
218 Glenside Ave.
Wyncote, PA 19095-1595
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP.
2600 One Commerce Square
Philadelphia, PA 19103
Auditors
Tait, Weller & Baker
Eight Penn Center, Suite 800
Philadelphia, PA 19103
STATEMENT
OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about the Funds and is
incorporated by reference into this Prospectus. You may receive a free
copy of the SAI by contacting us at 1-800-866-9393. You may also review
and copy information about the Fund, including the SAI, at the SEC's
public reference room in Washington, D.C. You can receive text-only
copies:
(bullet) For a fee, by writing the Public Reference Section of the SEC,
Washington, D.C. 20549-6009 or by calling 1-800-SEC-0330.
(bullet) Free from the SEC's Internet Website at http://www.sec.gov.
ANNUAL &
SEMIANNUAL REPORTS
Additional information about each Funds' investments is available in the
Funds' annual and semiannual reports to shareholders. In each combined
annual report you will find a discussion of the market conditions and
investment strategies that affected the Funds' performance during the
last fiscal year. You may receive free copies of these materials and
request other information by contacting the Funds at 1-800-866-9393.
Investment Company Act File No.811-4231
THE RIGHTIME FUND, INC.
218 GLENSIDE AVENUE
WYNCOTE, PA 19095-1594
(800) 866-9393
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 1, 1999
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 ("SAI") relates to: The Rightime Fund, The
Rightime Blue Chip Fund, The Rightime MidCap Fund, and The Rightime
Social Awareness Fund. A copy of the Fund's Prospectus is available
without charge and may be obtained by writing or calling the Fund at the
address and number shown above.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD
BE READ IN CONNECTION WITH THE FUND'S PROSPECTUS DATED MARCH 1, 1999.
PLEASE RETAIN THIS SAI FOR FUTURE REFERENCE.
TABLE OF CONTENTS
Page
Information About the Fund 3
Investment Objectives and Policies 3
The Rightime Fund 3
The Rightime Blue Chip Fund and The Rightime MidCap Fund 5
The Rightime Social Awareness Fund 7
Options & Futures 10
Money Market Securities 13
Convertible Securities 14
Other Information 14
Portfolio Turnover 15
Hedging 15
Temporary Defensive Investment Policies 15
Investment Restrictions 16
Investment Advisor 18
Distributor 19
Distribution Plan 20
Allocation of Portfolio Brokerage 21
Administrator 22
Custodian 22
Transfer Agent 22
General Operations 23
Purchases of Shares 23
Distributions and Taxes 27
Capital Stock 29
Officers and Directors of the Fund 30
General Information 31
Performance 31
Financial Statements 35
INFORMATION ABOUT THE FUND
The Rightime Fund, Inc. (the "Company") is an open-end diversified
investment company which offers multiple series of shares (each, a
"Fund" and collectively, the "Funds"). The Company is a corporation
incorporated under the laws of the State of Maryland on November 15,
1984.
INVESTMENT OBJECTIVES AND POLICIES
The following information supplements the discussion of the Funds'
investment objectives and policies contained in the Prospectus. No
material change in a Fund's investment objective will be made without
obtaining shareholder approval. Unless otherwise specified, the
investment policies and restrictions and the operating policies of the
Funds are not fundamental policies and are subject to change by the
Board of Trustees of the Company (the "Trustees") without shareholder
approval. See "Investment Restrictions" in this SAI for further
information regarding the investment restrictions of the Funds.
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
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 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 anticipated 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 favorable 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, financial futures or 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.)
Market Timing Approach
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 is 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.
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
Fund's 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). 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. 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.)
Market Timing Approach
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.
Growth of Capital and Income
The Fund's primary objective is growth of capital and its secondary
objective is current income. 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 invest 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.)
Social Criteria
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 (the "S&P 500"), 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.
Market Timing Approach
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 Funds 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.
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 or futures may be large.) This limitation
could, however, change if regulatory provisions applicable to the Fund's
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 not exceed 5% of the Fund's
market value when such investments are made; (3) the Fund establish and
maintain funds in FCM Accounts in its Custodian Bank as described in the
Exemptive Order; and (4) the Fund withdraw excess variation margin from
such FCM Accounts are described in the Exemptive Order.
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.
CONVERTIBLE SECURITIES
Traditional convertible securities include corporate bonds, notes and
preferred stocks that may be converted into or exchanged for common
stock, and other securities that also provide an opportunity for equity
participation. These securities are generally convertible either at a
stated price or a stated rate (that is, for a specific number of shares
of common stock or other security). As with other fixed income
securities, the price of a convertible security to some extent varies
inversely with interest rates. While providing a fixed-income stream
(generally higher in yield than the income derivable from a common stock
but lower than that afforded by a non-convertible debt security), a
convertible security also affords the investor an opportunity, through
its conversion feature, to participate in the capital appreciation of
the common stock into which it is convertible. As the market price of
the underlying common stock declines, convertible securities tend to
trade increasing on a yield basis and so may not experience market value
declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the price of a
convertible security tends to rise as a reflection of the value of the
underlying common stock. To obtain such a higher yield, the Funds may
be required to pay for a convertible security an amount in excess of the
value of the underlying common stock. Common stock acquired by the Fund
upon conversion of a convertible security will generally be held for so
long as the Advisor anticipates such stock will provide the Fund with
opportunities which are consistent with the Fund's investment objective
and policies.
OTHER INFORMATION
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. Debt securities (such as bonds or
other obligations, including money market securities), will be selected
after considered factors such as the interest rate and the soundness of
the issuer. In selecting preferred stocks or debt securities, 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 Funds 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 Ratings Group 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.
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.)
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 the 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.
TEMPORARY DEFENSIVE INVESTMENT POLICIES
Each Fund reserves the right to protect the value of its investments 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, 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 RESTRICTIONS
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.
For All Funds - The Funds will not:
(1) 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);
(2) 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);
(3) purchase or sell commodities or commodity futures contracts, other
than those financial futures outlined in the Fund's current Prospectus,
and as described in this SAI;
(4) make loans of money or securities, except (a) by the purchase of
fixed income obligations in which the Fund may invest consistent with
its investment objective and policies; or (b) by investment in
repurchase agreements;
(5) 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 0.5% of the outstanding securities of such company and such
officers and directors (who own more than 0.5%) in the aggregate own
more than 5% of the outstanding securities of such company;
(6) borrow money, except the Fund may borrow from banks: (a) for
temporary or emergency purposes in an amount not exceeding 5% of the
Fund's assets; or (b) 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;
(7) 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;
(8) 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 (a) in
securities that are subject to legal or contractual restrictions on
resale ("restricted securities"), (b) in securities for which there are
no readily available market quotations, or (c) in repurchase agreements
maturing in more than seven days;
(9) 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;"
(10) 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;
(11) 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;
(12) invest for the purpose of exercising control or management of
another company;
(13) 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;
(14) 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
(15) sell securities short;
In addition to the above restrictions, The Rightime Fund is also subject
to the following restrictions that it may not:
(16) concentrate its investments in any industry other than registered
investment companies;
(17) invest in any investment company if, at the time of investment, 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
(18) invest in any investment company which itself does not qualify as a
diversified investment company under the Internal Revenue Code.
In addition restrictions 1 through 15, The Rightime Blue Chip Fund, The
Rightime MidCap Fund and The Rightime Social Awareness Fund are also
subject to the following restriction that it may not:
(19) concentrate its investments in any industry.
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: (1) (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. (2) (All Funds) The
Funds may also acquire securities of other investment companies beyond
such limits pursuant to a merger, consolidation or reorganization.
INVESTMENT ADVISOR
The investments of each Fund are managed by Rightime Econometrics, Inc.
(the "Advisor"), 1095 Rydal Road, Rydal, Pennsylvania, 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; and The Rightime Social Awareness Fund,
on March 1, 1990. 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
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of 0.50% of the
average daily net assets of each The Rightime Fund, The Rightime Blue
Chip Fund, The Rightime MidCap Fund and The Rightime Social Awareness
Fund.
The following table shows the fees paid by each series pursuant to its
Advisory Agreement, during the three most recent fiscal years:
1998 1997 1996
----------- ----------- -----------
The Rightime Fund $562,069 $778,525 $830,865
The Rightime Government
Securities Fund+ $20,412 $33,110 $57,725
The Rightime Blue Chip Fund $1,322,530 $1,432,253 $1,360,520
The Rightime Social
Awareness Fund $65,411 $53,093 $40,814
The Rightime MidCap Fund $336,885 $394,749 $396,405
+ On June 26, 1998, The Rightime Government Securities Fund was merged
into The Rightime Blue Chip Fund.
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 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 as the "Independent Directors"),
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., provides
consulting and wholesaling services 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.
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 Boards of Directors, including a majority of
the Independent 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 Independent Directors, or by the vote of a majority of the
outstanding voting securities of the Fund.
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 0.75% for The Rightime Fund, and 0.50% for
The Rightime Blue Chip Fund, The Rightime MidCap Fund, and The Rightime
Social Awareness Fund. The Plans provide that each Fund's costs may not
exceed the annual rates listed above, for payments to the Distributor,
sales representative or third parties who render promotional and
distribution services, for items such as advertising expenses, selling
expenses, commission or travel reasonably intended to result in sales of
shares of the Fund and for the printing or 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 received under
each Distribution Agreement. The Distributor will advance such amounts
from its own resources, and while the Distributor 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 a shareholder vote.
Commissions for distribution of Fund shares and other compensation
received by Lincoln Investment Planning during the Fund's fiscal years
ended October 31, 1996, 1997 and 1998:
<TABLE>
<CAPTION>
Net Distributor
Total Underwriting Compensation
Underwriting Commissions to on Redemption Brokerage Other
Commissions Distributor and Repurchases Commissions Compensation
<S> <C> <C> <C> <C> <C>
1998 $ 628,172* $ 628,172 -0- -0- -0-
1997 $1,148,636* $1,148,636 -0- -0- -0-
1996 $1,236,367* $1,236,367 -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: 0.50% per annum of The Rightime
Fund's net assets and 0.25% 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 0.25% 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 $562,069 The Rightime
Government Securities Fund $0*; The Rightime Blue Chip Fund $661,265;
The Rightime Social Awareness Fund $32,705; and The Rightime MidCap Fund
$168,443. The shareholder servicing expenses paid by the Series of the
Fund were as follows: The Rightime Fund $281,035; The Rightime
Government Securities Fund $12,758*; The Rightime Blue Chip Fund
$661,265; The Rightime Social Awareness Fund $32,705; and The Rightime
MidCap Fund $168,443.
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, 1998. 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.
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. Lincoln does, however, assist the Rightime Fund in purchasing
investment company shares and, while Lincoln does not accept any front
or back end sales charges in connection with such transactions, it may
receive distribution fees.
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.
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 Fund's 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 0.95% for The Rightime Fund, and 0.85% for
each The Rightime Blue Chip Fund, The Rightime MidCap Fund, and The
Rightime Social Awareness Fund. The Administrator will pay the fees of
the Distributor for the accounting and shareholder services referred to
in the previous paragraph.
CUSTODIAN
First Union National Bank, 530 Walnut Street, Pennsylvania 19106,
serves as the Custodian of the securities and cash for each Fund.
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.
The Transfer Agent received compensation for its services for the fiscal
years ended in 1996, 1997 and 1998, respectively, $704,111; $694,812 and
$721,419.
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.
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 NYSE is scheduled to be
open Monday through Friday throughout the year except for New Year's
Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
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 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.
Sales Load as % of Sales Load as % of Dealer
Amount of Purchase Offering Price Amount Invested Concession*
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%
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.
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.
Letter of Intent: Shareholders of The Rightime Blue Chip Fund, The
Rightime MidCap Fund and The Rightime Social Awareness Fund may reduce
their sales loads by signing a Letter of Intent that permits purchases
over a 13-month period. 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).
Waiver of Sales Loads: The sales load will not apply to purchases of
The Rightime Blue Chip Fund, The Rightime MidCap Fund and The Rightime
Social Awareness 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 certain 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.
Retirement Investing
Shares of the Funds are available to all types of tax-deferred
retirement plans including custodial accounts described in Section
403(b) of the Internal Revenue Code. 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 by calling the Fund. The following is a brief description
of the retirement investing options.
Individual Retirement Accounts (IRAs) - Individuals, who are not active
participants 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. The
Fund also makes its shares available to be held within special IRA
programs called SEP-IRAs (Simplified Employee Pension-IRA) and SIMPLE-
IRAs (Savings Incentive Match Plan for Employees-IRA). These programs
allow employees to 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.
Roth IRA - In a Roth IRA, amounts contributed to the IRA are not tax
deductible at the time of the contribution. Amounts invested are
permitted to grow tax-free and distributions from the IRA are not
subject to tax if you have held the IRA for more than five years 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. Taxpayers with adjusted gross incomes of less than
$100,000 can convert assets in traditional IRAs to a Roth IRA without
paying the 10% early withdrawal tax. The deemed distribution of IRA
assets will be included in income. However, if the assets are rolled
over before January 1, 1999, the amount required to be included in gross
income will be spread ratably over the four-tax-year period beginning
with the tax year in which the distribution is made.
Education IRA - In an Education IRA, 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 including a
6% excise tax on total contributions in excess of $500 per child per
year. The 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.
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.
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. FirstUnion National Bank 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.
DISTRIBUTION AND TAXES
Distributions
Distributions of Net Investment Income. Each Fund receives income
generally in the form of dividends and interest on its investments.
This income, less expenses incurred in the operation of a Fund,
constitute its net investment income from which dividends may be paid to
you. Any distributions by a Fund from such income will be taxable to
you as ordinary income, whether you take them in cash or in additional
shares.
Distributions of Capital Gains. Each Fund may derive capital gains and
losses in connection with sales or other dispositions of its portfolio
securities. Distributions derived from the excess of net short-term
capital gain over net long-term capital loss will be taxable to you as
ordinary income. Distributions paid from long-term capital gains
realized by a Fund will be taxable to you as long-term capital gain,
regardless of how long you have held your shares in the Fund. Any net
short-term or long-term capital gains realized by a Fund (net of any
capital loss carryovers) generally will be distributed once each year,
and may be distributed more frequently, if necessary, in order to reduce
or eliminate federal excise or income taxes on a Fund.
Information on the Tax Character of Distributions. Each Fund will
inform you of the amount and character of your distributions at the time
they are paid, and will advise you of the tax status for federal income
tax purposes of such distributions shortly after the close of each
calendar year. If you have not held Fund shares for a full year, you
may have designated and distributed to you as ordinary income or capital
gain a percentage of income that is not equal to the actual amount of
such income earned during the period of your investment in a Fund.
Taxes
Election to be Taxed as a Regulated Investment Company. Each Fund has
elected to be treated as a regulated investment company under Subchapter
M of the Code, has qualified as such for its most recent fiscal year,
and intends to so qualify during the current fiscal year. As a
regulated investment company, each Fund generally pays no federal income
tax on the income and gains it distributes to you. The Board reserves
the right not to maintain the qualification of a Fund as a regulated
investment company if it determines such course of action to be
beneficial to you. In such case, a Fund will be subject to federal, and
possibly state, corporate taxes on its taxable income and gains, and
distributions to you will be taxed as ordinary dividend income to the
extent of a Fund's available earnings and profits.
Excise Tax Distribution Requirements. The Code requires each Fund to
distribute at least 98% of its taxable ordinary income earned during the
calendar year and 98% of its capital gain net income earned during the
twelve month period ending October 31 (in addition to undistributed
amounts from the prior year) to you by December 31 of each year in order
to avoid federal excise taxes. Each Fund intends to declare and pay
sufficient dividends in December (or in January that are treated by you
as received in December) but does not guarantee and can give no
assurances that its distributions will be sufficient to eliminate all
such taxes.
Redemption of Fund Shares. Redemptions and exchanges of Fund shares are
taxable transactions for federal and state income tax purposes that
cause you to recognize a gain or loss. If you hold your shares as a
capital asset, the gain or loss that you realize will be capital gain or
loss. 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 you by a Fund
on those shares.
All or a portion of any loss that you realize upon the redemption of
your Fund shares will be disallowed to the extent that you purchase
other shares in the Fund (through reinvestment of dividends or
otherwise) within 30 days before or after your share redemption. Any
loss disallowed under these rules will be added to your tax basis in the
new shares you purchase.
Deferral of Basis. All or a portion of the sales charge that you paid
for your shares in a Fund will be excluded from your tax basis in any of
the shares sold within 90 days of their purchase (for the purpose of
determining gain or loss upon the sale of such shares) if you reinvest
the sales proceeds in the same Fund or in another of the Rightime Funds,
and the sales charge that would otherwise apply to your reinvestment is
reduced or eliminated. The portion of the sales charge excluded from
your tax basis in the shares sold will equal the amount that the sales
charge is reduced on your reinvestment. Any portion of the sales charge
excluded from your tax basis in the shares sold will be added to the tax
basis of the shares you acquire from your reinvestment.
U.S. Government Obligations. Many states grant tax-free status to
dividends paid to you from interest earned on direct obligations of the
U.S. government, subject in some states to minimum investment
requirements that must be met by a 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. The rules on exclusion of this income
are different for corporations.
Dividends-Received Deduction for Corporations. Distributions from the
Funds will generally qualify in part for the 70% dividends-received
deduction for corporations. The portion of the dividends so qualified
depends on the aggregate taxable qualifying dividend income received by
the Funds from domestic (U.S.) sources. The Funds will send to
shareholders statements each year advising the amount of the dividend
income which qualifies for such treatment. All dividends, including
those which qualify for the dividends-received deduction, must be
included in your alternative minimum taxable income calculation.
Investment in Complex Securities. A Fund may invest in complex
securities. Such investments may be subject to numerous special and
complicated tax rules. These rules could affect whether gains and
losses recognized by a Fund are treated as ordinary income or capital
gain and/or accelerate the recognition of income to a Fund or defer a
Fund's ability to recognize losses. In turn, these rules may affect the
amount, timing or character of the income distributed to you by a Fund.
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 have been allocated to each of the remaining funds. 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 or 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.
<TABLE>
<CAPTION>
OFFICERS AND DIRECTORS OF THE FUND
Principal Occupation During the Past
Name, Address & Age Position & Office with the Fund Five Years
<S> <C> <C>
David J. Rights Chairman of the Board, President, President of Rightime Econometrics, Inc., a registered
1095 Rydal Road and Treasurer investment advisor; and Consultant to Lincoln Investment
Rydal, PA 19046 Planning, Inc., a registered investment advisor and broker
Age 53 dealer.
Edward S. Forst, Sr. Director, Vice President, Chairman of the Board, Lincoln Investment Planning Inc., a
218 Glenside Avenue and Secretary registered investment advisor and broker dealer.
Wyncote, PA 19095
Age 72
Francis X. Barrett Director Vice Chairman of the Board, Member of the Finance, Investment,
1706 Belleair Forest and Executive Committee, Sacred Heart Hospital; formerly,
Drive, #312 Executive Director, National Catholic Education Association;
Belleair, FL 33756 and Pastor Emeritus, Church of Holy Guardian Angels, Reading, PA.
Age 73
Dr. Winifred L.
Tillery Director Education Consultant; formerly, Superintendent of Schools,
744 Amsterdam Road Camden County, New Jersey; Assistant Commissioner of Education,
Mt. Laurel, NJ 08054 State of New Jersey formerly, Director, Division of Direct Services,
Age 66 New Jersey Department of Education; and Executive Director for
Special Education for the Philadelphia School District,
Philadelphia, PA.
Dr. Carol A. Wacker Director Education Consultant; Formerly, Assistant Superintendent for
1659 Landquist Drive Senior High Schools, the Philadelphia School District,
Encinitas, CA 92024 Philadelphia, PA.
Age 65
</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.
As of December 23, 1998, the officers and directors of The Rightime
Fund, Inc. as a group, beneficially owned 1.18% of the Funds.
<TABLE>
<CAPTION>
(3) (5)
Pension or (4) Total
(2) Retirement Estimated Compensation
Aggregate Benefits Annual From Registrant
Compensation Accrued As Benefits and Fund
(1) from Part of Fund Upon Complex Paid
Name of Person, Position Registrant Expenses Retirement to Directors
- --------------------------------- ----------- ------------ ---------- ----------------
<S> <C> <C> <C> <C>
David J. Rights, Director* None None None None
Edward S. Forst, Sr., Director* None 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 "1940 Act."
</TABLE>
GENERAL INFORMATION
Audits and Reports
The accounts of The Rightime Fund, Inc., are audited each year by Tait,
Weller & Baker independent certified public accountants located at Eight
Penn Center Plaza, Philadelphia, PA, 19103. Shareholders receive
semiannual and annual reports of the Fund including the annual audited
financial statements and a list of securities owned.
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:
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:
6
Yield = 2 [( a-b + 1) -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.
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:
One Year Five Year Ten Year Since Fund's
Fund Name Period Period Period Inception
--------- -------- ---------- -------- ------------
The Rightime Fund 18.86% 9.10% 9.47% 10.88%
The Rightime Blue
Chip Fund 21.02% 11.50% 10.72% 10.15%
The Rightime Social
Awareness Fund 21.33% 12.05% -- 9.99%
The Rightime MidCap
Fund 18.63% 10.20% -- 11.06%
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:
P(1+T)n = 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) IBC 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, 1998, 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
FirstUnion National Bank
530 Walnut Street
Philadelphia, PA 19106
TRANSFER AGENT
Lincoln Investment Planning, Inc.
218 Glenside Avenue
Wyncote, PA 19095-1594
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza
Philadelphia, PA 19103-2108
MAILING ADDRESS:
Rightime Fund Quick Mail
P.O. Box 13813
Philadelphia, PA 19101-3813
