Form N-1A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 16
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18
Registrant:
C/FUNDS GROUP, INC.
(formerly CALDWELL FUND, INC.)
P.O. Box 622, Venice, FL 34284-0622
(800) 338-9477
Agent for Service:
Roland G. Caldwell
250 Tampa Ave. W., Venice, FL 34285
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box):
X immediately upon filing pursuant to rule 485(b)
__ on October 15, 1995 pursuant to rule 485(b)
__ 60 days after filing pursuant to rule 485(a)
__ on (date) pursuant to rule 485(a)
_____________________________________________________________________________
_____________________________________________________________________________
Registrant has elected, under Rules 24(f)2, or Rule 24(f)1 if appropriate, to
register an indefinite number of shares and thereunder declares that, in
addition to the registration and issuance of a total of (89,728) shares
through December 31, 1995, for a total consideration, net of redemptions, of
($794,562), on which registration fees are fully paid, is added an indefinite
number of shares. A Rule 24(f)2 Notice has been filed declaring shares sold
for the calendar year ended December 31, 1995.
Re: File #2-96218d, 1933 Act re registration of C/FUNDS GROUP, INC.
File #811-4246, 1940 Act re registration of C/FUNDS GROUP, INC.
A No-Load Fund Group
C/FUNDS GROUP, INC.
P.O. Box 622, Venice, Florida 34284-0622
Voice: 1(941) 488-6772 TollFree: 1(800) 338-9477 Fax: (941) 496-4661
PROSPECTUS
February 28, 1996
C/Funds Group, Inc., "the Company", is a Florida corporation registered and
operating as a diversified open-end regulated investment company that continu-
ously offers its shares to the general public in six portfolio series (the
"Funds"), each of which has a different purpose and specific investment objec-
tives. Funds currently being offered by the Company to the public are as
follows:
1. C/FUND
2. C/GROWTH STOCK FUND
3. ADAMS EQUITY FUND
4. C/GOVERNMENT FUND
5. C/TAX-FREE FUND
6. C/COMMUNITY ASSOCIATION RESERVE FUND
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Table of Contents Page
A Brief Description of the Funds .................................. 2
Financial Information ............................................. 3
Capitalization and History ........................................ 3
Performance and Expense Information ............................... 4
Custodian, Auditor and Distributor ................................ 6
Advisory Board .................................................... 6
Investment Objectives - C/FUND .................................... 7
- C/GROWTH STOCK FUND ....................... 9
- ADAMS EQUITY FUND ......................... 10
- C/GOVERNMENT FUND ......................... 10
- C/TAX-FREE FUND ........................... 11
- C/COMMUNITY ASSOCIATION RESERVE FD ........ 12
Investment Advisor ................................................ 13
How to Buy Shares ............................................... 14
How to Redeem Shares .............................................. 15
Portfolio Transactions ............................................ 16
Broker Allocations ............................................... 16
Federal Income Tax Status ........................................ 16
IRA and Retirement Accounts ...................................... 17
Application Blank ................................................ Insert
Custodian: Investment Advisor:
Caldwell Trust Company Omnivest Research Corporation
201 Center Road, Suite 2 250 Tampa Avenue West
Venice, FL 34292 Venice, FL 34285
Voice: 1(941) 493-3600 Voice: 1(941) 485-0654
Toll-Free: 1(800) 338-9476 Toll-Free: 1(800) 338-9477
Fax: 1(941) 496-4660 Fax: 1(941) 496-4660
A BRIEF DESCRIPTION OF THE FUNDS
C/FUND. This "total return" Fund is managed so as to seek to attract conser-
vative investors seeking a fair current income plus some potential for appre-
ciation. It invests in both stocks and fixed-income securities in proportions
as it deems appropriate to achieving its primary objectives while attempting
to minimize risk of a decline in net asset value. The mix between stocks and
fixed investments changes from time to time in response to changing market
conditions with some balance maintained most of the time within these two
major categories.
C/GROWTH STOCK FUND. This aggressively managed fund is managed primarily so
as to appeal to investors seeking the potential of rapid appreciation in
principal value. This requires Fund investors to assume a higher degree of
risk and more volatility of net asset value. The Fund invests and maintains
substantially all of its assets in common stocks or equivalents issued by more
rapidly growing companies, both large and small. Its portfolio will stay
fully invested in equities most of the time regardless of general market
conditions, as it seeks rapid appreciation in net asset value as its primary
investment objective. Stock selections are made using a variety of research
sources, including proprietary analytical methodology to identify companies
having management that appears to understand how to, and is, managing actively
and vigorously, to add to its company's shareholder wealth on a regular and
systematic basis.
ADAMS EQUITY FUND. The investment objective of this Fund series is to seek to
achieve high total returns for shareholders by investing primarily in selected
common stocks. The selection method used to identify issues to purchase is a
proprietary process developed by Mr. William Adams, sub-advisor to this Fund's
portfolio. The process he developed involves a variety of inputs, including
trading price momentum for target company shares. Assets of the Fund series
that are not invested in stocks at any moment in time will be held in short
term interest-bearing investments until such time as stock issues are identi-
fied for and selected for purchase. Only rarely will any other fixed-income
investments be acquired, which if purchased, are most likely to be equity
related by being convertible or exchangeable into a common stock of the issu-
ing company. Current income and capital gains tax considerations are of
secondary significance to the investment strategy being followed in managing
this portfolio.
C/GOVERNMENT FUND. This Fund is mainly for investors seeking income and
safety of principal. It invests substantially all of its assets in obliga-
tions of the U.S. government or one or more of its Agencies as it seeks to
achieve the Fund's primary objectives with a minimum of volatility in its net
asset value. Investing solely in governments offers the adviser the opportu-
nity to reduce the risk of price changes in its portfolio of securities by
employing portfolio strategies that include yield curve timing and portfolio
maturity step-laddering to assist achieve the Fund's primary investment objec-
tives.
C/TAX-FREE FUND. This Fund is mostly for investors who are seeking to enhance
net spendable income after federal income taxes. It invests substantially all
assets in investment grade municipal securities, mostly of 12 years maturity
or less, that pay interest that is federally tax exempt in the United States.
Its primary objective is to earn as high an income as possible consistent with
management's desire to minimize fluctuation of net asset value.
C/COMMUNITY ASSOCIATION RESERVE FUND. This is a "specialty" fund that is not
offered to or available for purchase by the general public. It is open to and
intended as a repository exclusively for "Community Associations" located in
Florida and registered and operating under the regulation of the State of
Florida Bureau of Condominiums, that desire to invest association reserve
funds safely while earning an income on funds higher than is available on bank
deposits and other similar money market accounts. The Fund invests substan-
tially all of its assets in obligations of the U.S. government and/or its
Agencies. Its primary investment objective is to earn a high income on asso-
ciation reserve funds with a minimum of fluctuation in the Fund's daily net
asset value so as to preserve the desired safety and stability of statutory,
voluntarily-created reserve funds of association owners.
A fuller expression of the investment objectives of each Fund is spelled out
herein as well as in a companion statement of additional information. This
Prospectus is designed to provide investors with concise information that an
investor should know about the Company and its Funds before investing. You
should retain this document for future reference. A Statement of Additional
Information for the Company and its Funds dated this same date, has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference, copies of which are available without charge at the address and
telephone numbers shown above.
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FINANCIAL INFORMATION
The Company's latest Interim and/or Annual Financial Statements for its Funds,
including the Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets, Schedule of Fund Investments, Per Share
Tables, Notes to financial statements, and other supplementary information if
applicable, are incorporated by reference as an integral part of this Prospec-
tus. Financial statements are provided to all as part of this Prospectus,
except to existing shareholders who have already received it. The most re-
cently published financial reports will be furnished without charge upon
request at the address on the cover of this Prospectus.
--------------------------------
CAPITALIZATION AND HISTORY
The Company was organized October 24, 1984, and its entire capitalization
consists solely of 5 million shares of authorized common stock with a par
value of $.001 each. When issued, each share or fraction thereof is fully
paid, non-assessable, transferable and redeemable. Fractional shares are
issued to three decimal places, but do not carry voting rights. Shareholders
have the right to vote for the election of directors of the corporation and
all have equal rights with respect to voting except that the holders of shares
of a particular series will have the exclusive right to vote on matters af-
fecting only the rights of the holders of such series. For example, holders
of a particular series will have the exclusive right to vote on any investment
advisory agreement or investment restriction that relates only to such series.
The holders of each series have distinctive rights with respect to dividends
and redemption which are more fully described in this Prospectus and the
statement of additional information. Dividends are declared at the discretion
of the Board of Directors for each Fund, no less often than required for the
corporation to maintain qualification under SubChapter M of the IRS code. In
event of liquidation or dissolution, holders of each series will receive pro-
rata, subject to certain rights of creditors, (a) the proceeds of the sale of
the assets held in the respective portfolio to which the shares of the series
relate, less (b) the liabilities of the series attributable to the respectable
portfolio. General corporate liabilities and assets, if any, will be fairly
allocated between the portfolios based on the respective liquidation value of
each portfolio upon liquidation of the Company. Shareholders may vote their
respective series shares at each annual or special meeting and on any and all
other matters on which they are entitled to vote by law or under provisions of
the corporation's articles of incorporation. All shares are of the same
class, and each full share has one vote. The Company is incorporated in the
State of Florida. All shareholder inquiries should be directed to the Company
at the address and telephone number listed on the cover page of this Prospec-
tus.
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PERFORMANCE AND EXPENSE INFORMATION
PERFORMANCE: Performance history for the six (6) series portfolio's for the
calendar year 1995 is included in the Company's Annual Report to Shareholder
and is incorporated in this Prospectus by reference. A discussion by Manage-
ment of the factors and strategies that affect the performance of each Fund
series throughout the year is likewise enclosed by reference in the Investment
Letters that are mailed to all shareholders monthly. Financial statements are
provided to all as part of this Prospectus and are furnished without charge
upon request.
EXPENSE: The following information is designed to help you compare the fees
and expenses charged by each Fund with those of other mutual funds. As you
know, all series funds in C/FUNDS GROUP, INC. are "NO LOAD" funds, which means
that you pay no sales commissions to buy shares, nor does any Fund charge for
redeeming shares, nor does it have other deferred, hidden or other charges.
As a result all monies invested go to work 100% for you the investor, immedi-
ately. Examples of each Fund's expenses are presented as follows:
CFI STK AEF GOV TAX CAR
1.Shareholder Transaction Expenses:
Sales Commissions to Purchase Shares None None None None None None
Commissions to Reinvest Dividends None None None None None None
Redemption Fees None None None None None None
2. Annual Fund Operating Expenses
(Expenses paid out by the Company
before it distributes its net
investment income, as a
percentage of each respective
Fund's average net assets
for the last year ended):
Investment Advisor's Fee 1.0% 1.0% 1.0% .5% .5% .0%**
12b-1 Fee None None None None None None
Other Operating Expenses .85% .85% .16%* .49% .51 -***
Total Fund Expenses 1.85% 1.85% 1.16% 0.99% 1.01% -****
* Ratio is annualized since inception of the Fund was October 1995.
** Absent Waiver, Advisor Expense Would Have Been 0.50%
*** Absent Waiver, Other Operating Expense Estimated to be .85%
**** Absent Waiver, Total Expense Estimated to be 1.15%
C/FUND Example:
If you bought shares of C/FUND on January 1, for which you paid $1,000, and
if we assume a 5% annual return, and that all shares were redeemed December
31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
$19 $57 $99 $214
C/GROWTH STOCK FUND Example:
If you bought shares of C/GROWTH STOCK FUND on January 1, for which you paid
$1,000, and if we assume a 5% annual return, and that all shares were redeemed
December 31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
$19 $57 $99 $214
ADAMS EQUITY FUND Example:
If you had bought shares of ADAMS EQUITY FUND on January 1, for which you paid
$1,000, and if you assume a 5% annual return, and that all shares were re-
deemed December 31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
$11 $36 n/a n/a
C/GOVERNMENT FUND Example:
If you bought shares of C/GOVERNMENT FUND on January 1, for which you paid
$1,000, and if we assume a 5% annual return, and that all shares were redeemed
December 31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
$10 $31 $54 $119
C/TAX-FREE FUND Example:
If you bought shares of C/TAX FREE FUND on January 1, for which you paid
$1,000, and if we assume a 5% annual return, and that all shares were redeemed
December 31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
$10 $32 $55 $121
C/C.A.R. FUND Example:
If you bought shares of C/CAR FUND on January 1, for which you paid $1,000,
and if we assume a 5% annual return, and that all shares were redeemed Decem-
ber 31st, you would pay the following expenses over:
1 year 3 years 5 years 10 years
n/a n/a n/a n/a
This expense information is designed to help you understand the various costs
and expenses customarily charged by mutual funds. The example, however,
should not be considered as representative of past or future expenses or
returns of the Funds. Actual expenses and returns vary from year to year and
may be higher or lower than those shown. The advisor paid all the expenses of
C/CAR FUND and waived the advisors fee, Therefore the Fund does not have an
expense ratio.
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CUSTODIAN, AUDITOR AND DISTRIBUTOR
Custodian: Caldwell Trust Company, 201 Center Road, Venice, FL, 34292, serves
as custodian of the assets of the Funds. As custodian, the trust company is
empowered under an agreement as agent for the corporation: (1) to hold all
assets, securities and cash for each separate series fund of the Company in
the name of the trust company or in its nominee name or names and account to
each Fund regularly therefore; (2) to accept instructions for the purchase,
sale or reinvestment of all Fund assets from the president of the Company or
from the Fund's investment advisers; and (3) to disburse funds for authorized
shareholder redemptions.
Auditor: Gregory, Sharer & Stuart, CPAs, 100 2nd Ave S, St Petersburg, FL
33701, Certified Public Accountants, has been appointed as the independent
public accountant and auditor for the Company and its Funds. Neither the firm
nor any of its principals or staff holds any financial interest directly or
indirectly in the Company or in any of its Fund series.
Distributor: The Company acts as distributor of all shares of its Fund
series and maintains its own shareholder register by series, acting as trans-
fer agent for all common shares outstanding.
ADVISORY BOARD
Under the terms of Article XIII of the Company's By-Laws, the President with
the approval of the Board of Directors, may appoint up to 15 individuals to
assist the President and Directors to define and set overall investment
strategies in an attempt to reach the investment objective of each fund series
as stated. The following persons have been appointed to the Company's Adviso-
ry Board to serve until a successor shall have been appointed by the Presi-
dent. A brief description of their respective backgrounds and affiliations is
noted:
Name and Address Affiliations and Occupations
Arthur B. Laffer,PhD Former Distinguished Professor Pepperdine
Regents Square 1 University, California. Credited as one of
4275 Executive Sq. the architects of "supply-side" economics.
Suite 330 Professor Laffer was the Chas. B. Thornton
La Jolla, CA 92037 Professor of Business at the University of
Southern California. He is Chairman and Chief
Executive Officer, A.B. Laffer, Canto Associates,
Lomita, CA., and was a Member of the President
Reagan's Economic Policy Advisory Board, Wash., D.C
Jude Wanniski Political/Economic consultant and President
86 Maple Avenue and Chief Executive Officer, Polyconomics,
Morristown, NJ 07960 Inc., Morristown, N.J. Author of the book
"The Way the World Works", a major work on the
"supply-side" theory of economics, he is
considered as one of its leading exponents
and spokesmen. Advisor to President Bush, he is
formerly Associate Editor of the Wall Street
Journal, New York, N.Y.
Alan Reynolds Head of Economic Research, Hudson Institute
P.O. Box 26-919 Indianapolis, Indiana; former OMB Transition
Indianapolis,IN 46226 Member, Reagan Administration, Washington, DC
Alvin Moscow Writer and author of numerous books,
3249 Manor Ridge including "Collision Course", "The
Gainesville, GA 30506 Rockefeller Inheritance", and others. Co-
author or consultant on "Six Crises" by
Richard Nixon, "Managing" by Harold S.
Geneen, "As It Happened" by William Paley,
and "Every Secret Thing" by Patricia Hearst.
He is a former journalist, NYC.
Ted C. Van Antwerp Philanthropist. Vice President and Director
988 Blvd of Arts Asolo State Theatre (FLA); Trustee, New College;
Sarasota, FL 33577 President, MVA, Inc.
Willett J. Worthy Jr. Vigneron, President and founder , Grand
5758 Madison Road River Wine Company, Madison, Ohio. Former
Madison, OH 44057 member on the investment staff at the Cleveland
Trust Company, Cleveland, OH.
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FUND INVESTMENT OBJECTIVES
C/FUND. A description of the investment objective and policies of this Fund
is best embodied in the statement that its investment advisor pursues invest-
ment practices that seek to maximize "total" investment returns to its share-
holders. Total return is defined herein to include both enhancement of the
value of its investment holdings by capital gains, realized and unrealized,
plus investment income from dividends and interest. The Fund shall attempt
to maximize total returns primarily by investing a portion of its assets in
shares of common stocks or equivalents that would most commonly be traded on
the New York Stock Exchange or on Nasdaq. It intends to acquire mostly equity
investments when the advisor believes market conditions indicate that proba-
bilities for maximum total returns will derive from such equity investments,
and mostly fixed-income investments when, in the opinion of the investment
advisor, probabilities are believed greater that such returns will be garnered
from owning investments having less risk of price decline. The Fund may and
intends to invest and reinvest some or all of its assets accordingly so as to
try to limit an erosion of and enhance the stability of the value of the Fund
's net asset value. Simply stated, the Fund intends to buy and hold a rea-
sonably balanced percentage of its assets in common stocks or equivalents
while equity markets appear favorable, but may and is prepared to restructure
the portfolio to be more heavily invested in fixed-income investments whenever
it is believed by its investment advisor that it would be appropriate to do
so.
While the Fund intends to acquire regularly traded common stocks, convertible
preferred stocks and convertible bonds as its primary form of equity invest-
ments, and intends to hold most of its asset value in such investments most of
the time, it reserves unto itself the right to acquire other investments such
as government or A-rated or better corporate fixed-income securities as it
deems appropriate when and as it chooses. In the case of non-rated fixed-
income issues, the Fund may purchase those issues that are deemed by the
advisor to be of comparable quality. There is no plan nor is it intended that
the Fund will buy, sell, hold or deal in options or warrants in the ordinary
course of business. It will seek to acquire and hold securities that hold
promise for appreciation in value and that pay dividends at payout rates that
are deemed by the advisor to be commensurate with the type of business in-
volved. The Fund believes this investment approach may maximize or exceed
total average returns over time as measured against the returns produced by
the popular market averages, such as the Dow-Jones Industrial Average and the
Standard and Poor's 500 Average. However, because total returns earned from a
portfolio of equity investments can be significantly and adversely affected by
an investment strategy that retains positions in equity issues during periods
of major market weakness (often for reasons that may be unavoidable for larger
mutual funds due to the size of the position held relative to the smaller size
positions the Fund will hold), the Fund's investment advisor plans to strive
to reduce the scope and frequency of such declines in its asset value by
reducing, even to total elimination if necessary, the risk from equity invest-
ments in favor of fixed-income investments during periods when protection of
asset values is deemed of paramount importance. During such periods, the Fund
will most often acquire highest quality fixed-income investments, such as U.S.
Government issues, money market investments, and other investments of similar
quality, each having a duration until maturity that has been selected to
achieve the Fund's then-existing goals in that market environment. It is
intended that some portion of Fund assets will always be invested in fixed
investments like U.S. Government notes or bonds. If the Fund can be success-
ful in: (1) reducing risk of decline in equity prices during periods of market
weakness; and (2) earning average or better total returns on its investments
during periods of general market strength, it would be arithmetically true
that growth in the value of the assets would exceed the average return earned
in the general market as measured against the returns produced by the popular
market averages. While it is the intention of the Fund to seek to achieve
this objective, there can be no assurance to an investor that it will be able
to do so. An important element of this investment approach requires that
movement of monies from one kind of investment to another be correctly timed
by the advisor, which will not always be possible. Investors in the Fund
shares should also be aware that risk is inherent when investing in common
stocks, such risks include the senior right of lenders ahead of claims of
common shareholders upon liquidation of the issuing company, as well as the
risk that dividends may not be earned, declared or paid by its directors,
which may in turn cause significant fluctuations in a common stock's market
price. Although it is a policy of the Fund that it will invest in issues of
the type that are traded most commonly on the New York Stock Exchange, this is
not meant to preclude the Fund from acquiring some shares of companies or
other business entities, some of which may trade over the counter or are less
well-known. This general policy is believed by the Fund 's advisor to be
desirable because it will allow flexibility as necessary to take advantage of
investment opportunities while adhering to a primary policy of investing its
assets in higher quality issues, primarily securities listed on the major
share exchanges or traded in the over-the-counter market.
Diversification of investments as to type and as to the industry or field of
endeavor of the company involved is widely acknowledged as one method to
reduce risk of loss from holding only a few issues. The Fund 's advisor, too,
believes diversification to be a worthy goal for reducing risks and intends to
follow such a policy most of the time. However, because the Fund believes
any severe restriction of investment flexibility could at times prove a detri-
ment to the best interests of its shareholders, it retains the right to invest
and reinvest assets from time to time in issues only as necessary to be in
conformance with the Investment Company Act of 1940, and to qualify itself
under Subchapter M of the Internal Revenue Code. (Please refer to Federal
Income Tax section of this Prospectus on page 13 for further details.) For
additional restrictions that the Fund has imposed upon itself please refer to
the appropriate section in the Fund 's "Statement of Additional Information"
on file with the Securities and Exchange Commission and which is available to
shareholders upon request and without cost from the Fund by telephoning or
writing the company at the phone number/address shown on the front cover of
this Prospectus.
C/GROWTH STOCK FUND. The investment objective of this Fund is maximum poten-
tial to shareholders for appreciation in principal. The Fund purchases pri-
marily common stocks or equivalents, such as convertible preferreds or bonds,
with substantially all of the assets of the Fund all of the time. Although
some stock issues purchased will include shares issued by companies having
large capitalizations, a major portion of Fund assets will be committed to
owning shares of companies that are deemed by the investment advisor to pos-
sess above average growth prospects, regardless of the capitalization size of
the company or its annual sales volume. It is anticipated that in seeking to
meet these aggressive objectives shareholders in this Fund should be aware
that this may involve a higher degree of price volatility. Accordingly, the
net asset value per Fund share is expected to experience above average fluctu-
ations. Portfolio turnover is not considered as a constraining factor by the
investment advisor, if and when decisions are deemed by the advisor necessary
in order to either take profits or losses, or when advisor is seeking to
reemploy Fund assets into securities or investment positions the adviser
believes have greater prospects for meeting Fund objectives. Accordingly
shareholders should expect the Fund to have higher turnover than for other
funds having longer term orientations. This investment approach may give rise
to frequent realizations of capital gains or losses by the Fund, which are
distributable annually to shareholders for inclusion in their personal income
tax return. (For further information about capital gains tax status, see
"Federal Income Tax Status" section on page 13). Portfolio income from divi-
dends and interest is of secondary consideration to this Fund's primary objec-
tive of principal growth. Selection of companies in which to make equity
investments will be carried out under a disciplined approach that will employ
as one of its primary tools a quantitative, computer-generated analysis of
corporate financial information that produces data that will be used to assist
the investment advisor determine whether management of a targeted company
appears to understand the importance to its shareholders of the need to add to
shareholder wealth, which the adviser's research indicates ultimately creates
a positive impact on the market value of a company's outstanding shares. The
Fund's investment advisor believes this to be due importantly to an enter-
prise's having earned a return on invested capital that is consistently higher
than its "cost" of invested capital. When this can be ascertained to be
taking place within a company, shareholder wealth is increased and the pros-
pects become higher that the quoted price of its shares will at some point
reflect the wealth effect that has been generated. This approach is deemed by
the advisor to be an important ingredient that will contribute to the Fund's
ultimate success toward meeting its objective of maximum growth of net asset
value.
ADAMS EQUITY FUND. The investment objective of this Fund series is to seek to
outperform other similar mutual funds that also invest a minimum of 65% of
total assets in equities (commonly referred to as common stocks). Equities
represent a residual share ownership interest in a for-profit enterprise, or
are preferred shares or fixed-income obligations of an issuer that are con-
vertible at some point in time at some price into common stock of that same
issuer. The Fund may invest in shares of small, medium and large capitaliza-
tion companies without regard to size. The methodology that will be used to
manage this portfolio employs a valuation process in which a companies earn-
ings and earnings growth rate are compared with the aid of a proprietary
formula, to the rate of return on long government bonds. This produces a
present value for the targetted company's shares within a dynamic process,
wherein long government bond returns and company earnings and growth rates
fluctuate. This value is then compared with the current market for shares to
determine if the shares are over or under valued. Investments will be select-
ed from among those companies having an undervaluation in order to achieve the
Fund's investment objectives, often necessitating buy and sell signals, which
may or may not be acted upon, depending upon many other factors at the time,
such as the condition of the general economy, the level of inflation then
existing or projected, and all other financial information about any given
company that the advisor believes to be of importance to the decision making.
Funds awaiting investment, either from new cash received or from sale of
investments, will be temporarily invested in short term government securities
or other money market type fixed investments as are commonly purchased for
such purposes. Income from dividends and interest are of secondary importance
to this Fund, which seeks high total returns as its primary goal for Fund
shareholders. Portfolio turnover is not considered as a constraining factor by
the investment advisor, if and when decisions are deemed by the advisor neces-
sary in order to either take profits or losses, or when advisor is seeking to
reemploy Fund assets into securities or investment positions the adviser
believes have greater prospects for meeting Fund objectives. This invest-
ment approach may give rise to frequent realizations of capital gains or
losses by the Fund, which are distributable annually to shareholders for
inclusion in their personal income tax return. (For further information about
capital gains tax status, see "Federal Income Tax Status" section on page 13).
Generally, shareholders should expect the Fund's turnover not to exceed 150%.
C/GOVERNMENT FUND. The investment objective of this Fund series shall be to
seek to earn higher interest rate returns than are available from government-
only money market mutual funds in turn for accepting fluctuations in the
Fund's net asset value. Substantially all assets of the Fund will be invest-
ed in U.S. Treasury issues or in obligations issued by the various Agencies of
the U.S. government. The maturities of the issues acquired may change from
time to time in accordance with the views of the investment advisor in re-
sponse to his expectations as to the future trend of interest rates. The
investment advisor will seek to minimize changes in the Fund's net asset value
per share by making portfolio adjustments from time to time. Notwithstanding
this objective, shareholders should be aware that shares of this Fund will be
subjected to price fluctuations similar to those encountered when buying and
holding government issues directly. The reduction of price risk is a major
item of importance to the Fund's investment advisor, it being an expressed
goal of the Fund to provide a safe investment vehicle for investors seeking to
earn the higher income yields available on government issues having maturities
longer than one year's duration. Although there can be no assurance this
objective can be achieved, various management practices will be undertaken
from time to time toward the goal of reducing or minimizing net asset value
volatility. The investment advisor to the Fund intends to seek to hold the
net asset value per share as close as possible to its original issue price per
share by using several portfolio management techniques. One will be to buy
seasoned issues below or above par or face value. Another will to step-ladder
the portfolio so as to have issues maturing in every year. There shall be no
restrictions on the investment advisor in respect to maturities or terms of
the actual government issues bought as investments in the portfolio. However,
it is planned and has long been the inclination and practice of the Fund's
manager to buy and own government issues having maturities within the 2 to 10
year term range. Monies of the Fund that are of necessity temporarily unin-
vested from time to time will be automatically "swept" overnight by computer
into a short term, government-only money market fund as maintained and offered
client's by the Fund's custodian bank trust department. These type funds,
though technically classed as mutual funds, will be used by the Fund: (a)
because of the convenience they offer to earn interest for short periods on
funds in transit or on small balances that are otherwise impractical to invest
effectively; and (b) because for all practical purposes they are unavoidable
in the modern world of bank custodianship. It is the intention of the Fund to
invest all available monies directly in government issues to the extent prac-
tical, economical, and warranted by the then-existing interest rate climate as
it relates to the Fund's investment objectives.
C/TAX-FREE FUND. This Fund invests substantially all its assets in securities
issued by states, municipalities and other governmental jurisdictions, mainly
in the State of Florida, that possess the legal capacity to borrow money by
the issuance of bonded indebtedness, on which the interest has been declared
by law to be exempt from Federal income tax to a lending investor. The pri-
mary objective of the Fund is to earn its shareholder investors a high after-
tax current income while attempting to minimize volatility of the Fund's net
asset value. The investment adviser's management approach is to attempt to
maintain stability of the value of the Fund's investment portfolio by acquir-
ing and holding a combination of issues, most of which qualify as investment
grade of varying maturities, usually 12 years duration or less. Further to
this goal, issues may be purchased that are seasoned and pay a rate of inter-
est that may be higher or lower than the market rate generally existing at the
time on similar newly issued tax-free obligations of like duration and quali-
ty. In those cases, the prices paid on such issues would be more or less than
par or face value, which would give rise to either a gain or loss to the Fund
if held to maturity. The investment adviser believes by managing a portfolio
in this manner wherein a diversified list of various issues are held and
managed it will be possible to reduce overall portfolio net asset value vola-
tility over a period of time. The Fund is actively managed by adjusting
holdings to reflect expected interest rate changes in general, shortening
average maturities when rates are rising and lengthening maturities when rates
are declining or expected to decline. The combination of these two techniques
should, in the opinion of the investment adviser, allow the Fund to maintain
more stability in its net asset value than would be true if securities of
various maturities were acquired and held to maturity without regard to inter-
est rate fluctuations in the market or without regard for anticipating the
trend of future interest rates. There can be no assurance that management
will be able to select issues of the type, quality and term that will respond
exactly as necessary to guarantee stability of the Fund's net asset value, and
accordingly investors should be aware that some fluctuation in the Fund's
share price will occur. Obligations issued by the State of Florida carry a
"AA" S&P rating, with each municipality rated in accordance with the financial
condition of that particular municipality or taxing district. Florida is now
the fourth most populous of the 50 United States, is generally well regarded
by debt rating agencies because of its low debt default history and the very
strong financial condition of the State Treasury, tends to be more oriented to
tourism and retirees, is more rapidly growing because of its climatic and
geographic attractions, and has a generally favorable tax structure for indi-
viduals and business, with no individual income tax.
C/COMMUNITY ASSOCIATION RESERVE FUND. This specialty Fund is offered exclu-
sively to Florida-based "Community Associations" that are registered with and
are regulated by the Florida Bureau of Condominiums and is not available for
purchase by the general public. Laws and regulations currently in place
narrowly restrict the investment of association "reserve" funds, to safeguard
these funds to ensure availability in the future to pay for designated capital
expenditures made by association officers and directors on behalf of unit
owners. It is common for association reserve funds to be deposited in insured
banks and savings and loan accounts, which presents a problem when reserve
account balances of many large associations exceed insurance limits, as often
happens. This Fund is specifically designed and managed to serve as a reposi-
tory for such reserve funds, and accordingly has set as its primary objective
the safety and stability of its net asset value while seeking an income return
higher than is available from other forms of eligible investments. The Fund's
objectives and limitations qualifies it as an eligible investment for such
Association reserve funds under Florida law by virtue of its limited invest-
ment universe, namely obligations of the U.S. government or its Agencies.
Issues purchased and held by the Fund are of short to intermediate duration
most often having an average maturity of under 5 years in order to minimize
the fluctuation in the value of Association reserve account balances. The
primary objective of the Fund is to seek to earn a rate of return on invested
balances that is higher than that being offered on insured deposit accounts
and banks and other eligible savings institutions. The investment adviser
manages the Fund's portfolio of government obligations so as to seek to
achieve the Fund's objectives while confronting the conflicting problem creat-
ed by increased price volatility that is attendant to investing in issues
having longer than one-year's maturity. The degree of exposure to price
uncertainty can be closely ascertained mathematically for intermediate term
fixed obligations. When the price risk is compared against duration in such a
manner a high probability can be achieved that the return rate from investing
in higher interest paying issues of longer maturity can be decided on the
basis of whether it is profitable enough to more than justify and/or totally
offset the added risk of loss from price change. With this in mind, the
adviser believes Fund objectives are achievable and associations can earn
higher returns on reserve fund balances. Such balances are usually held for
longer term purposes, thus a better matching of risks and rewards is achieved
than that offered by the mis-match of maturities that occurs when limiting
investment of such long-term monies balances to short-term non-fluctuating
deposit accounts in financial institutions. This Fund's goals will be sought
by also using portfolio management techniques which may include, among others,
yield-curve timing and portfolio maturity step-laddering.
----------------------------------------------
INVESTMENT ADVISOR
The Company and its series of Funds retains Omnivest Research Corporation
("ORC"), (formerly Caldwell & Co)., a Florida corporation wholly owned by
Trust Companies of America, Inc. which is controlled by Roland G. Caldwell and
his family, as investment advisor under annual contracts with each Fund ser-
ies. ORC has its registered offices at 250 Tampa Avenue West, Venice, Flori-
da, 34285. The Company shares facilities, space and staff with both its
custodian and with ORC. ORC is registered under the Investment Advisors Act
of 1940 and with the Florida Division of Securities, Tallahassee, Florida, and
as such periodically files reports with both agencies, which are available for
public inspection. The advisor has been providing services to and has had
experience with the management of investment companies since 1984. Mr. Wil-
liam Adams, an officer of ORC, serves as sub-advisor with responsibilities to
assist with the analysis and selection of specific investments for the Adams
Equity Fund series. Mr. Adams has been employed in the securities industry
since 1975, primarily as an account executive with several leading brokerage
firms where he assisted in the management of client portfolios, both fixed and
equity, for individual investors. Although Mr. Adams has been active in such
capacity continuously during this period using his proprietary model to make
stock selections, he has had no previous experience in the management of a
mutual fund portfolio.
Mr. Roland G. Caldwell is a principal officer and the primary investment
professional of ORC. He serves as President and a director of both ORC and
the Company. ORC, as advisor to all fund series, receives a fee from C/Fund,
C/Growth Stock Fund, and Adams Equity Fund series at the rate of 1% per annum
of the average daily market value of its net assets, and at the rate of .5%
per annum of the average daily market value of C/Government Fund, C/Tax-Free
Fund and C/Community Association Reserve Fund. Although 1% of assets is
higher than fees paid by some other equity mutual funds, it is generally
believed by the advisor to be in line with that charged by other advisors to
funds having similar objectives. The fee has also been established in recog-
nition that the advisor pays some costs of the administration of the Company's
fund series portfolios, including maintenance of accounting records and share-
holder ledgers, and that advisor has foregone receiving any reimbursement of
organizational expenses. Under terms of the contract with the Company, the
advisor is responsible for payments to Advisory Board members, if any, and to
Directors of the Company who are affiliated as employees or staff of the
advisor. At present the Company leases mutual fund software from C/Data
Systems. C/Data is wholly-owned by Trust Companies of America, Inc., a closed
corporation the majority interest of which is controlled by Roland Caldwell
and other family members. (For additional details, please refer to the History
of Investment Advisor section in the Statement of Additional Information).
Under terms of the advisory agreement total expenses of each Fund series have
been voluntarily limited to no more than 2% of Fund net assets in any one
year. Should actual expenses incurred ever exceed the 2% limitation, such
excess expenses are reimbursed by the advisor to the Fund and fully disclosed
to Fund shareholders in financial statements in accordance with generally
accepted accounting practices. The investment management history of ORC and
its principal, Roland G. Caldwell, includes serving as portfolio manager
and/or investment advisor to corporations, individuals, retirement accounts,
charitable foundations, and insurance companies. Mr. Caldwell has been active
without interruption since 1958 in the field of investment research and/or
portfolio management, both privately and as an officer of large domestic and
foreign trust/banking institutions. As of the date of this Prospectus the
sole business and activity of ORC is to provide investment management and
advice under contract to the Company's fund series.
---------------------------------------
HOW TO BUY SHARES
Investors may begin an investment in shares of any one or more Fund series
with no minimum, simply by completing an application blank (form enclosed),
signing it, then returning it to the Company either in person or by mail,
along with their check made payable to the respective Fund name, (e.g.,
"C/Fund"), to P.O. Box 622, Venice, FL., 34284-0622. Certified checks are not
necessary. All purchases will be made on the business day your completed
application and check are in the Company's possession and your order has been
accepted.
Purchase of shares for your account are made on the day of acceptance at the
Net Asset Value ("NAV") per share of each Fund as calculated that same day.
The NAV is calculated each day at the last known trade price on or after 4:00
p.m. NY time, and on such other days as there is sufficient trading in the
Company's portfolio of securities to materially affect its NAV per share.
Securities in the Company's portfolio will ordinarily be valued based upon
market quotes. If quotations are not available, securities or other assets
will be valued by a method which the Board of Directors believes most accu-
rately reflects fair value. The NAV per share is determined at each calcula-
tion by dividing the total market value of all assets, cash and securities
held, less liabilities if any, by the total number of shares outstanding that
day. The Company reserves the right to reject purchase applications or to
terminate the offering of shares made by this Prospectus if in the opinion of
the Board of Directors such termination and/or rejection would be in the
interest of shareholders. In the event your check does not clear, your
order(s) will be canceled and you may be liable for losses or fees incurred,
or both. There is no minimum investment required for any purchase of shares.
Purchases may be made in person, by mail or by telephone, providing mutually
satisfactory telephone arrangements have been made with the Company before-
hand. The Company cannot be held responsible for having acted on telephone
instructions it believed were being received in good faith. In order to
accommodate IRA investments and IRA rollovers, which are often odd amounts,
the Company offers to all IRA participants the right to invest or rollover
such IRA monies in the Company shares in any amount that is eligible or al-
lowed under current Internal Revenue Service rules.
All shares purchased will be held in an account that is opened for each share-
holder and maintained by the Company for each Fund and no share certificates
will be issued unless specifically requested in writing by the purchasing
shareholder. Each shareholder account will be credited with and will hold all
shares purchased and issued, including shares issued on payment date as a
result of the automatic reinvestment of dividends and/or capital gain distri-
butions. Those investors desiring distributions in cash rather than in addi-
tional shares or who wish share certificates to be issued may do so by making
a request in writing, providing all necessary documentation to the complete
satisfaction of the Company. Purchasers may telephone the Company at 1(800)
338-9477 or write to the address shown on the front cover of this Prospectus
to obtain information as to the documentation that would be required by the
Company before it will issue share certificates. Fractional shares will be
allocated to each share account for all purchases and redemptions, including
reinvested distributions. For example, if a purchase of $1,000 is made at a
NAV of $11.76 per share, a total of 85.034 shares will be credited to your
share account on the purchase date. Fractional shares will be disregarded for
all voting purposes.
---------------------------------------------
HOW TO REDEEM SHARES
As an "Open-End" fund, the Company offers to stand ready to redeem all or any
portion of your shares of any Fund series on any day that a NAV is calculated
for that Fund and the price paid to you will be the NAV per share next deter-
mined after the Company receives your request for redemption. Unless prior
telephone arrangements have been made with the Company, redemption requests
must be in writing, signed by the owner(s) in the exact same way as the shares
are registered shown on the original application form in the corporate re-
cords. In the case of stock powers deposited beforehand by those desiring
telephone redemption privileges, the signature(s) must be guaranteed by an
official of a commercial bank, trust company, or member firm on the New York
Stock Exchange. If a share certificate was issued, it must be deposited with
the Company before a redemption can be completed, along with all necessary
legal documentation, including but not necessarily limited to, a written
redemption request that has been signed and the signature guaranteed as above
indicated. Shareholders wishing to expedite redemption requests by telephone
may do so, providing they have deposited a validly signed and guaranteed stock
power beforehand with the Company and providing no share certificates have
been issued. Payment for redeemed shares will normally be made by the Company
the next business day immediately following the redemption date. The Company
reserves the right, however, to withhold payment up to 5 business days if
necessary to protect the interests of the Company or its shareholders. Re-
demption requests from shareholders who have purchased shares within 15 days
prior to such redemption request shall not be eligible to receive payment for
such shares until such time as the Company has ascertained, to its satisfac-
tion, that funds originally invested have cleared and are available for pay-
out. A shareholder who makes a small initial investment will be subject to a
mandatory redemption if such shareholder redeems a portion of the investment,
such that the remaining investment is deemed by the Company to be too small to
justify the costs of maintaining an open account.
Although the Company makes no redemption charge for shares redeemed, regard-
less of the date of purchase, it reserves the right to refuse or discontinue
sale of shares to any investor who, in the opinion of the Company, is or may,
by frequent or short-term purchase and redemption request practices or by
other actions, disrupt normal Company operations or who otherwise, by carrying
out such practices, could adversely affect the interests of the Company or
Fund shareholders. Redemption of shares, whether it be a normal voluntary
redemption or an involuntary redemption, may result in the shareholder realiz-
ing a taxable capital gain or loss. Proceeds from redemptions will be mailed
to shareholders at the address to which the account is registered by the
Company.
-------------------------------------------
PORTFOLIO TRANSACTIONS
The policy of the Company is to limit each Fund's portfolio turnover to trans-
actions necessary to carry out the respective investment policies of each Fund
and/or to obtain cash for each series, as necessary, for redemptions of its
shares. Portfolio turnover rates, which are the lesser of the total purchases
or sales on an annualized basis, divided by the average total market value of
the assets held, will vary from period to period depending upon market condi-
tions. The turnover rate for equity portfolios tends to be higher than normal
during formative years, after which it is the advisor's goal to minimize
turnover by buying and holding rather than trading securities to the extent
that it remains consistent with the objectives of the respective fund series
portfolio. Turnover is calculated for government securities purchases and
sales if maturing beyond 1 year from date of purchase. This tends to increase
the portfolio turnover percentages, which percentages are reported for each
respective fund series in the financial statements incorporated herein by
reference.
------------------------------------------
BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio securities will
be made under the control of the President of the Company, subject to the
overall supervision of the Board of Directors. All orders are placed at the
best price and best execution obtainable, except that the Company shall be
permitted to and does select broker-dealer firms that charge low commission
rates, have demonstrated superior execution capabilities, and which provide
economic, corporate and investment research services. In the opinion of the
adviser, the Company, and its Board of Directors, selections based upon such
criteria serve the best interests of the Company and Fund shareholders.
Commissions paid to firms supplying such research include the cost of such
services.
-----------------------------------------------
FEDERAL INCOME TAX STATUS
The Company intends to keep qualified all Funds for, and elect the special tax
treatment afforded, a qualifying "regulated investment company" under SubChap-
ter M of the Internal Revenue Code. To qualify the Company must: (1) distrib-
ute to each shareholder at least 90% of aggregate taxable net income of each
Fund at least annually; (2) invest and reinvest so that no more than 30% of
aggregate Fund profits are derived from gains on the sale of securities held
less than three months; and (3) invest its portfolios so that 50% or more of
Fund assets are invested in security issues, no one of which exceeds 5% of the
value of Fund aggregate assets at purchase price. The Company should and
intends to qualify for such special tax treatment due to stricter, self-im-
posed restrictions. Distributions to the Fund shareholders are derived from
interest and dividends received in each Fund and from net long term capital
gains that each Fund realized during the tax year.
All distributions are normally construed to be dividends to Fund shareholders
subject to taxation, and with the exception of dividends paid by the Tax-Free
Fund, are taxable in most instances as ordinary income when received, whether
received as cash or as additional shares. The information you will require
in order to correctly report the amount and type of dividends and distribu-
tions on your tax return will be provided by the Company early each calendar
year, sufficiently in advance of the date for filing the return. To avoid the
Company having to withhold a portion of your dividends, it is necessary that
you supply the Company with needed information, including a valid, correct
Social Security or Tax Identification Number.
Because federal tax laws, as amended by Congress in 1986, require regulated
investment companies to distribute substantially all income earned and gains
realized during the year to avoid paying an added excise tax on undistributed
income, management intends to do so and report to Fund shareholders according-
ly and to reflect changes made by Congress, if any, regarding the deductibili-
ty of certain fund expenses by shareholders of mutual funds. Tax rules make
it mandatory that most individual shareholders report 100% of all income
earned on shares owned with no deduction allowed for certain fees and expenses
incurred, i.e., all distributions of dividends, interest, and capital gains
realized are normally subject to tax. It is the intention of the Company, to
the best of its ability, to report all required information to Fund sharehold-
ers on a timely basis after the close of each year-end. Further changes or
interpretations of rules made from time to time by the Internal Revenue Serv-
ice may serve to temporarily or permanently alter existing tax treatment of
Fund distributions to shareholders. The Company makes every effort, with the
assistance of its tax advisors and independent public accountants, to act in
the best interest of its Fund shareholders at all times. Such changes and/or
delays in IRS rules make it difficult for regulated investment company's and
its shareholders to be certain as to all interpretations at all times. The
Company disclaims any direct responsibility for timely shareholder tax filings
or payments.
-------------------------------------------
IRA AND RETIREMENT ACCOUNTS
Those eligible to open and/or make deposits to an Individual Retirement Ac-
count ("IRA"), or Self-Employed IRA ("SEP-IRA"), may use the Company as custo-
dian to hold shares of all Fund series only, but not to hold any other form of
investments, securities or assets. A trust company or other eligible custodi-
an must be used to hold non-Fund related securities or investments. Caldwell
Trust Company, the Fund's custodian, is eligible to serve as custodian for
such purposes, and can and will serve as custodian for shares of any Fund
series upon request. (For more information regarding such services and fees,
please call or write Caldwell Trust Company direct or the Company at the
address and phone number shown on the front page of this Prospectus). For
those who have or open an IRA or SEP-IRA account, and wish to invest all or
portion of their deposits in shares of any Fund series may do so by opening a
"Self-Directed" IRA or SEP-IRA account with the Company. Copies of the appro-
priate forms to open an account may be obtained by writing or calling the
Company. Retirement plan and other "rollovers" are eligible to be rolled into
an IRA or SEP-IRA account with the Company, as are rollovers from most other
types of qualified retirement accounts. The Company makes no charge of any
kind to open, maintain or close an IRA account invested 100% in shares of any
Fund series. Monies deposited into other types of profit-sharing, pension or
retirement plans, including Keogh accounts, may also be invested in shares of
any Fund series. However, the qualification and certification of such "Plans"
must first be prearranged with a pension or tax specialist who is qualified to
assist and oversee plan compliance requirements. Although the Company retains
an expert to assist investors in establishing such plans, it neither offers
nor possesses the necessary professional skills or knowledge regarding the
establishment, compliance or maintenance of IRS-qualified retirement plans.
The Company recommends that professional counsel be retained by the investor
for such purposes. (Note: Shares issued by the Tax-Free Fund are not appro-
priate for purchase in IRAs and other retirement plans, which are already
exempt from paying Federal income tax on income received).
APPLICATION
PURCHASE REQUEST: Date _________________________________
I authorize C/Funds Group, Inc. to open a New Account for purchase of shares
of the Fund series checked below in accordance with these instructions and all
applicable provisions of this Application as outlined in the current Prospec-
tus which I have received.
Account Registration
If two or more co-applicants, all must sign, and Account will be registered
"JTWROS" (joint tenants with right of survivorship) unless otherwise speci-
fied. Shareholder signature(s) required. For telephone instructions, names
and addresses must agree exactly with current registration:
_____________________________________________ Type of Account
(Circle please)
(Print Name of Applicant) IN Individual
IRA IRA/SEP Account
_____________________________________________ JT Joint Tenants WROS
(Print Name of Co-Applicant, if any) CU Custodian/Agent
CO Corporation
_____________________________________________ GDN Guardian
Street or Mailing Address of Applicant(s)) TR Trustee
UGM Uniform Gift/Minors Act
_____________________________________________ Other________________________
(City) (State) (Zip)
_____________________________
_____________________________________________
(Print Social Security or Tax ID of Applicant) ____________________________
Legal Description of Account (optional)
_____________________________________________
(Date of Birth)
_____________________________________________
(Telephone Number)
Check One or More:
___ Request To Open a New Account For:
___ Check Enclosed for $ _________ made payable to "C/FUND"
___ Check Enclosed for $ _________ made payable to "C/GROWTH STOCK FUND"
___ Check Enclosed for $ _________ made payable to "ADAMS EQUITY FUND"
___ Check Enclosed for $ _________ made payable to "C/GOVERNMENT FUND"
___ Check Enclosed for $ _________ made payable to "C/TAX FREE FUND"
___ Check Enclosed for $ _________ made payable to "C/COMMUNITY
ASSOCIATION RESERVE FUND"
Under penalties of perjury, I certify (1) that the number shown on this form
is my correct taxpayer identification number and (2) that I am not subject to
backup withholding because (a) I have not been notified that I am subject to
backup withholding as a result of failure to report all interest and divi-
dends, or (b) the Internal Revenue Service has notified me that I am no longer
subject to backup withholding.
X___________________________________ X___________________________________
(Signature of Applicant) (Signature of Co-Applicant, if any)
OPTIONAL AUTHORIZATION TO REDEEM BY PHONE
I hereby supply C/Funds Group, Inc. with a validly signed stock power and
authorize the Company to redeem shares from my Account pursuant to my tele-
phone instructions, and agree and understand that I do not and cannot hold the
corporation, its officers or directors, nor any of its agents responsible for
the authenticity of telephone instructions.
Signed:__________________________
X________________________________
Insert
All Applications Are Accepted in State of Florida And Purchases Made Under
Florida Law And Were Not Solicited, Registered Nor Accepted Under Any Other
Jurisdiction.
STATEMENT OF ADDITIONAL INFORMATION
for
C/FUNDS GROUP, INC.
February 28, 1996
C/FUNDS GROUP, INC., ("the Company"), is an open-end diversified management
investment company that operates a series of funds in six portfolios ("the
Funds") under the names: C/FUND, C/GROWTH STOCK FUND, ADAMS EQUITY FUND,
C/GOVERNMENT FUND, C/TAX-FREE FUND, AND C/COMMUNITY ASSOCIATION RESERVE FUND.
This Statement of Additional Information is not a Prospectus but rather should
be read in conjunction with the Prospectus dated the same date, a copy of
which may be obtained without charge from the Company by calling or writing
its corporate offices at the address and telephone numbers herein noted.
Table of Contents Page
Investment Policies and Objectives ............................... 2
Investment Restrictions .......................................... 6
History and Background of Investment Advisor ..................... 8
Board of Directors ................................................ 9
Director's Compensation Table ..................................... 9
Advisory Board .................................................... 9
Brokerage Allocations ............................................ 10
Net Asset Value Calculation ...................................... 10
Purchase of Shares ............................................... 11
Redemption of Shares ............................................. 12
Federal Income Tax Status ......................................... 13
Appendix ......................................................... 14
Financials .................................................. Attached
Custodian Investment Advisor
Caldwell Trust Company Omnivest Research Corporation
201 Center Road, Suite 2 250 Tampa Ave West
Venice, FL 34292 Venice, FL 34285
Voice: 1(941) 493-3600 Voice: 1(941) 485-0654
Toll-Free: 1(800) 338-9476 Toll-Free: 1(800) 338-9477
Fax: 1(941) 496-4660 Fax: 1(941) 496-4660
Investment Objective and Policies
Each Fund series portfolio has its own individual investment objective, essen-
tially coinciding with the implications of its name, i.e.,
C/Fund is a "total return" fund that buys and owns both common
stocks or equivalents, and fixed-income obligations in any propor-
tion as deemed appropriate at any given time by its adviser,
seeking growth and income;
C/Growth Stock Fund is substantially all invested in common stocks
or equivalents all of the time as it seeks maximum growth of net
asset value with only minor concern for volatility;
Adams Equity Fund buys and holds equities (common stocks or secu-
rities convertible into common stocks) as its primary investment,
its objective being to seek growth in shareholder value with
current income yield of secondary importance.
C/Government Fund invests substantially all of its assets in
fixed-income obligations issued by the U.S. Government or one or
more of its Agencies for safety of principal and income;
C/Tax-Free Fund invests substantially all its assets in fixed-
income obligations of municipalities or government bodies, mainly
in the State of Florida, authorized to issue such obligations on
which the interest paid is granted tax-exempt status when paid to
individual taxpayers, for safety of principal and tax-free income;
and,
C/Community Association Reserve Fund, which is a specialized fund
offered only to qualified community associations in the State of
Florida that wish to invest association reserve funds for the
safety and income offered by an investment in this Fund's portfo-
lio of U.S. Government or Agency obligations.
Inasmuch as each Fund's specific objectives are described in the accompanying
Prospectus, the remainder of this explanation shall attempt to outline in more
detail some of the investment characteristics and approaches that the invest-
ment adviser believes are relevant to the adviser's style of investing in
respect to the types of securities and investments the Company's Fund portfo-
lios will be making as each seeks to meet its respective investment objective,
as follows:
Common Stocks or Equivalents -- Often referred to herein as "equities", these
kinds of investments either represent a residual share ownership interest in a
for-profit enterprise, or are preferred shares or fixed-income obligations of
an issuer that are convertible at some point in time at some price into common
stock of that same issuer. Because equities normally possess no fixed re-
quirement to pay a dividend in any pre-agreed contractual amount unless de-
clared, and have no maturity date when an investor can receive repayment in
full of an initial investment, the market price for such securities tends to
fluctuate up or down in reflection of the changing prospects for the issuing
enterprise and in reflection of changing market conditions generally. Such
open-endedness makes equity investments definitionally more risky and thus
inappropriate for some investment purposes.
Likewise, because there is no fixed-income component to common stocks (exclud-
ing convertible preferreds and fixed obligations from this definition because
of their hybrid nature), owners of equities are in a position to either bene-
fit or lose value depending upon the success of the underlying enterprise,
which potential provides attraction to investors who are prepared to accept
such risks in exchange for the prospect that their investment might appreciate
in price and/or pay a lucrative stream of dividends by comparison with alter-
native types of investments.
The investment advisor to the Company's Fund portfolios believes equities or
equivalents are the singular most attractive investment type available to
investors in the modern world, which view is based upon a superior long term
record of equity performance, the liquidity afforded by today's marketplace,
and the favorable prospects longer term for most underlying enterprises in the
economic environment presently existing. Accordingly, for those investors
able to afford such risk of price fluctuation, even the potential of a total
loss of investment in the most extreme of cases, common stocks and equivalents
are expected to continue to be the primary form of investment in Fund portfo-
lios in which such investments are authorized.
In broad terms the investment advisor categorizes for-profit enterprises into
two basic groups: (1) seasoned large capitalization entities; and (2) newer
smaller capitalization entities. The features that help determine which
category best fits any given enterprise are: annual sales volume and the rate
of growth being experienced in sales; the market value of all shares outstand-
ing; the amount of debt owed; the profitability of the enterprise; the length
of time it has been successfully in business; and, the kind of business in
which it specializes or is seeking to participate. In most instances, the
category applicable to a given enterprise will be obvious, as for instance,
with companies like General Motors, AT&T, IBM, General Electric, and American
Home Products, which are seasoned, large for-profit, widely-held enterprises
that have long records to analyze. On the other hand an enterprise that
offers its shares into the public market for the first time that has been in
business only 3-5 years or so, is clearly an unseasoned enterprise that in all
likelihood has a relatively small annual sales volume and a small market
capitalization value.
There are also many less obvious examples. These include companies that have
been in business for many years, yet still have relatively small market capi-
talizations and annual sales volumes, may owe considerable debt as a percent-
age of total capital, have unseasoned management, or offer a product or serv-
ice that is less well-defined or well understood. The investment adviser
makes decisions using all of the above criteria as well as commonly accepted
financial data like per share figures, return rates on capital, etc.
Further and in addition to the customary kinds and sources of financial infor-
mation, the investment adviser also utilizes computer generated data that
provides useful information to the adviser for determining if a subject enter-
prise, regardless of size, is being managed by a team that appears to under-
stand how to, and the need to, add to shareholder wealth on a regular and
sustained basis. The inputs required to produce the necessary data are pro-
prietary to the investment adviser and its sources. Among other factors,
these inputs include an enterprise's "cost of capital" and its rate of return
on invested capital. Shareholder wealth is believed by the adviser to be
created when the return on investment is exceeding its cost of capital. Both
current and past experience are important determinants of whether an enter-
prise is succeeding on this basis, which in turn is evidence to the adviser as
to the management's capabilities in this important regard.
On a general basis, the adviser invests C/Fund assets mostly in shares of
larger, more seasoned enterprises, C/Growth Stock Fund mostly in shares of
smaller, less seasoned enterprises, and Adams Equity Fund in stocks of compa-
nies of all sizes, large, medium and small. When the adviser believes an
enterprise is appropriate for investment in a Fund a purchase decision will be
made regardless that such enterprise may be categorized by others in the
investment field as being of any particular class size by capitalization. In
general, however, the adviser adheres to a practice of favoring seasoned
issues in the more conservative Fund, and issues that appear to possess faster
growth prospects, regardless of size, in the more aggressive Funds.
In the Adams Equity Fund, the manager relies heavily upon a proprietary valua-
tion process. This process is dynamic and considers a company's growth rates
and rate of return on assets in concert with the changing interest rate levels
on long term U.S. government bonds. Using this dynamic process, under and
over valued securities are determined, which in turn generates buy and sell
signals that the manager may choose to act upon. General market and economic
conditions are also given consideration when making final purchase or sale
decisions in this portfolio. During periods when sales proceeds are not
immediately reinvested in other equities the funds will be held in high quali-
ty, short-term interest-bearing investments until such time as equity candi-
dates are found for investment.
Fixed-Income Obligations (Taxable) -- The U.S. Treasury, federally authorized
Agencies and other governmental bodies, public enterprises, and state, local
and municipal authorities all issue many kinds of fixed obligations, including
Bills, Notes, Bonds, Indentures, First Mortgage Obligations, Participation
Certificates, and others. Each of these kinds of obligations have character-
istics and terms unique to each issue, which are complex and awkward to de-
scribe in detail individually. The investment adviser, when seeking to make
fixed-income investments with Fund monies, examines all relevant data known to
the advisor as to term, rate of interest, call features, conditions of repay-
ment, collateral, guarantees, etc., before making a purchase selection.
In the current environment, wherein U.S. government obligations have come to
dominate the fixed-income market, and wherein rates of interest on most fixed-
income obligations issued are related or pegged in some way off rates on
similar government obligations, the advisor believes there is less need to
seek or invest in fixed-income investments that are non-government related.
Further, investors in general have become more risk-averse in recent years,
thus giving rise to a favor for fixed-income investments that have some form
of insurance or government guarantee or backing. With the substantial growth
in the size of the government-related securities market due to the borrowing
needs of the U.S. Treasury and other Agencies of the U.S. government, rates of
interest being paid on such issues are no longer significantly lower than
rates being paid on privately-issued fixed-income obligations of high quality.
For these and other reasons the investment adviser to the Company and its Fund
portfolios favors the purchase of government-related type obligations, mostly
Notes and Bonds, for all Funds, most particularly those Funds where safety of
principal and income are primary objectives. Although there is no prohibition
against acquiring corporate fixed-income obligations in C/Fund as part of its
fixed-income component from time to time, the adviser favors and intends to
continue to favor government-related issues, which possess superior marketa-
bility to all other forms of fixed-income securities. (Please refer to the
Appendix to the this statement of additional information for a further defini-
tion of quality as defined by a major fixed-income rating agency).
Fixed-Income Obligations (Non-Taxable) -- Tax-free fixed-income obligations
are issued in many different types and forms by a variety of qualified issuing
jurisdictions in the U.S. States, cities, counties, taxing districts, and
other similar jurisdictions each have features and enabling laws that allow
them to offer fixed-income obligations, the interest on which is exempt from
federal income taxes when paid to a purchasing investor. Again, there are far
too many individual features to describe each in full detail herein. The
investment advisor intends to purchase issues in the C/Tax-Free Fund that
adviser believes possess those features and characteristics that make them
attractive and appropriate to the objectives of that Fund. Like all fixed-
income investments, length of time to maturity, the quality of the issuer as
determined by its apparent ability to pay interest and repay its obligations
on a timely manner, and the general interest rate environment greatly influ-
ence the market price of fixed-income obligations. Accordingly, in keeping
with the adviser's desire and this Fund's objectives, close attention is paid
to issue quality, term until maturity, and the overall interest rate outlook
when making individual selections for purchase. Although some non-rated
issues may be acquired if and when the adviser believes such issues would be
rated high if they were rated, it is the custom and a long-standing style of
the adviser to invest in and hold mostly investment grade issues of medium to
intermediate term maturities. The adviser believes that whether an issue is
seasoned or newly issued is of less importance, except to the extent this may
affect an issue's liquidity, which the adviser views as highly important. It
is the intention, though not an obligation, to seek to make the Tax-Free Fund
exempt from the Intangibles Tax in Florida.
Total Return Concept -- It is the view of the investment advisor to Company
Funds that the concept of "total return" is an all-important, though not well
understood, factor affecting all investors and asset managers in contemporary
times. The adviser further believes that most if not all managers of assets
either knowingly or unknowingly utilize the concept while seeking to maximize
returns for their respective clients, regardless of type of investment used.
The risk of loss of value due to price change or the risk of loss of value due
to a deterioration in the financial health of the issuer are both taken into
consideration as elements that are vitally importantly influences over the
selection of investment types and specific securities within each type. The
goal of maximizing portfolio returns with a minimum of risk taking is a uni-
versal maxim within the investment community today. Accordingly, the invest-
ment advisor formed and registered Caldwell Fund in 1985 (now C/Fund) with an
express goal of seeking to maximize total returns to its shareholders by
adhering to a concept of investing and reinvesting fund assets in varying
proportions in either fixed investments or equity investments according to the
adviser's view in respect to the immediate outlook for each category ahead.
The basic outline of that strategy is contained in the following paragraphs,
and has some applicability to each Fund series in some respects, constrained
mainly by the limits of each Fund as to the types of investments it is permit-
ted to acquire and hold. An edited and updated version of the original de-
scription for C/Fund is provided here for reference and information.
"The Fund and its adviser are of the opinion that over time high
total returns are mathematically achievable if: (1) a portfolio is
able to minimize declines in the market value of its investments
during periods of sustained weakness in stock prices (which prices
inherently fluctuate in value) by reinvesting a large percentage
of its investable assets and monies in fixed-income investments
during such periods; and (2) if it is able to achieve average or
better appreciation (as measured against the popular market
averages such as the Dow-Jones Industrial Average and the Standard
and Poor's 500 Average), from a portfolio of common stocks during
periods when prices are rising. There is, of course, no assurance
that the investment advisor will be able to achieve this objec-
tive.
"During periods when a portfolio is seeking appreciation in the
value of its investments versus when it is seeking to protect
asset value, it intends to acquire securities of widely-held,
well-known companies with most of its assets, such securities to
consist primarily of shares of common stocks and other securities
that tend to increase or decrease in price in reflection of their
underlying value as a security that is equivalent to or converti-
ble into an equity investment. During periods when protection of
asset values is deemed of paramount importance, the investment
advisor will most often acquire highest quality investments, such
as Treasury or Government Agency issues, money market investments,
and other investments of similar quality, each having a duration
until maturity that has been selected to achieve then-existing
goals in that market environment. Because market prices on fixed-
income securities fluctuate with changes in interest rates, with
the percentage change in market price being generally the greatest
the longer the maturity of the issue, opportunities exist for
investors to seek to make capital gains by investing in fixed-
income securities. Consistent with an investment objective to
seek to maximize total return to shareholders, the investment
advisor from time to time may also choose to invest assets in
fixed-income securities in an attempt to achieve appreciation in
net asset value from capital gains rather than primarily for the
usual purposes of seeking protection of asset values or to maxi-
mize current income. If the investment advisor decides to acquire
fixed income investments it will confine its purchases to bonds
rated A or better by Standard & Poors (see Appendix).
"Flexibility is a key requirement to achieving a "total return"
portfolio`s investment objective. One of the advantages available
to smaller investment companies is being able to remove or add
total positions in the markets as it tries to achieve its goal,
without substantially or adversely influencing the market value of
individual issues being traded. In modern day markets, the share
position size that can be bought or sold without disruptive conse-
quences to the market for such issues appears to be expanding.
Should this trend continue, as anticipated, constraints that might
today limit the size of the Fund's portfolio because of its desire
to retain trading flexibility, will become less a factor. The
Fund, like all registered investment companies, reserves the right
to limit the size of its assets by discontinuing sales of Fund
shares at any time, which its Board of Directors could decide to
do at any time if in their opinion they feel it would be in the
best interests of the Company and/or Fund shareholders to do so in
order to continue to adhere to its stated objective, which re-
quires that it have an ability to sell and buy total security
positions.
"Interest and dividend income is deemed by the investment advisor
to constitute a very important portion of the total returns being
sought from Fund investments. Appreciation in share value consti-
tutes the other primary source of return that is sought, and it is
this portion of the return that is viewed as a form of repayment
for the risks of price change that cannot be avoided when owning
securities, like common stocks, which constantly change in price.
The total return concept is mindful of the important role that
interest and dividends must play if returns are to be enhanced.
Such recognition may at times require that shareholders incur
federal, state and/or local income taxes on a significant portion
of the annual distributions made to them. It should be clear to
shareholders that such tax considerations will be secondary to its
objective of attempting to maximize total returns when the invest-
ment advisor makes investment decisions. This policy is partly
based upon a belief by the investment advisor that such taxes and
tax rates have only an indirect bearing on any single company's
attractiveness as an investment and partly because the adviser is
of the belief that tax rates in general are, and should be, of
declining importance to the investment decision-making process,
viewed in a widest sense. Non-taxed portfolios, such as Individu-
al Retirement Accounts, Keough and other pension plans, are ideal-
ly suited for investing in one or more Fund series of the Company
for these and other reasons."
Investment Restrictions
Under the terms of the By-laws of the Company and its Registration Statement
pursuant to the Investment Company Act of 1940, the following investment
restrictions were adopted which cannot be fundamentally changed or amended
except by majority approval by vote of all outstanding shares of all Funds,
both individually and of the Company in total, as set forth in Company By-laws
and the Investment Company Act of 1940. Accordingly, no Fund of the Company
will:
[A] Invest in the direct purchase and sale of real estate.
[B] Invest in options, futures, commodities or commodity con-
tracts, restricted securities, mortgages, or in oil, gas, mineral
or other exploration or development programs;
[C] Invest in foreign-based issuers that would exceed 10% of the
value of its net assets at market value at the time of acquisi-
tion, except for issues widely traded on exchanges or in markets
domiciled in the U.S., which may be held in any amount permitted
registered investment companies;
[D] Borrow money, except for temporary purposes, and then only in
amounts not to exceed in the aggregate 5% of the market value of
its total assets taken at the time of such borrowing.
[E] Invest more of its assets than is permitted under regulations
in securities of other registered investment companies, which
restricts such investments to a limit of 5% of the Company's
assets in any one registered investment company, and 10% overall
in all registered investment companies, in no event to exceed 3%
of the outstanding shares of any single registered investment
company.
[F] Invest more than 5% of its total assets at the time of pur-
chase in securities of companies that have been in business or
been in continuous operation less than 3 years, including the
operations of any predecessor, except for direct investments made
in custodian banking entities serving one or more of the Company's
Fund series;
[G] Invest or deal in securities which are not readily marketa-
ble.
[H] Own more than 10% of the outstanding voting securities of any
one issuer or company, nor will it, with at least 75% of any
Fund's total assets, invest more than 5% in any single issue,
valued at the time of purchase. This restriction shall not be
applicable for investments in U.S. government or agency securi-
ties, which are permitted to constitute 100% of the assets of any
Fund of the Company at any time.
[I] Invest more than 25% of any Fund's net assets at the time of
purchase in any one industry or similar group of companies, except
U.S. government securities.
[J] Maintain a margin account, nor purchase investments on credit
or margin, or leverage its investments, except for normal transac-
tion obligations during settlement periods.
[K] Make any investment for the purpose of obtaining, exercising
or for planning to exercise voting control of subject company.
[L] Sell securities short.
[M] Underwrite or deal in offerings of securities of other issu-
ers as a sponsor or underwriter in any way. (Note: The Company
may be deemed an underwriter of securities in some jurisdictions
when it serves as distributor of its own shares for sale to or
purchase from its shareholders.)
[N] Purchase or retain any securities issued by an issuer, if any
officer, director, or interested party of the Company or its
investment advisor is in any way affiliated with, controls or owns
more than 1% of any class of shares of such issuer, or if any such
described persons as a class beneficially own or control more than
5% of any class of securities of such issuer.
[O] Make loans to others or issue senior securities. For these
purposes the purchase of publicly distributed indebtedness of any
kind is excluded and not considered to be making a loan.
In regard to the restriction marked as item [E] above, the Company utilizes
modern computerized cash management sweep services offered by custodians,
which services presently include reinvesting overnight and short term cash
balances in shares of other registered investment companies, better known as
"money market funds", whose primary objective is safety of principal and
maximum current income from holding highly liquid, short term, fixed invest-
ments, principally U.S. government and agency issues. The Company will not be
acquiring such shares as permanent investments but rather will be utilizing
such services solely for convenience and efficiency as it tries to keep short
term monies invested at interest only until such time as more permanent rein-
vestments can practically be made in the ordinary course of business. In any
case, the Company shall not so invest a greater percentage of any Fund's
assets than is permitted by regulation, which is presently 5% of its total
assets in any single non-government-only money market fund nor more than 10%
of its total assets in non-government-only money market funds overall. All
percentages listed above are calculated at the time of purchase, excluding the
borrowing policy.
Further, restriction [N] above does not apply to C/Growth Stock Fund or Adams
Equity Fund, which shall be free to buy and invest in permitted percentages in
shares of companies in which a significant or majority ownership is owned or
held by or for the beneficial interest of an officer, director or interested
person of the Company or any of its Fund series. Neither C/Growth Stock Fund
nor the Adams Equity Fund has ever purchased such shares nor do they intend to
do so in the foreseeable future.
History and Background of Investment Advisor
The investment advisor to the Company and its Funds is Omnivest Research
Corporation ("ORC"), (formerly Caldwell & Co). ORC is a Florida corporation,
presently registered and practicing as an "Investment Advisor" under the
Investment Advisors Act of 1940 with the Securities and Exchange Commission
and with the Florida Division of Securities. ORC is a wholly-owned subsidiary
of Trust Companies of America, Inc., a privately held company the majority
ownership of which is controlled by Mr. Roland G. Caldwell and other family
members. He is its principal officer and principal officer and a director of
the Company. ORC was incorporated October, 1969, and has been continuously
offering investment advisory services since the date of its formation and
since October, 1975, under the direction and control of Mr. Caldwell. The
principal activity of ORC until 1995 was to provide investment advisory serv-
ices, primarily under contract to the Company, to banks and to other finan-
cial institutions and to individual clients generally located in the service
area in and around Sarasota County, Florida. In mid-1995, ORC ceased all
advisory activities except to the Company, which is now its sole advisory
client. Roland G. Caldwell, ORC's principal investment professional, has
been actively employed and/or in practice as a securities analyst, portfolio
manager and investment advisor since 1958, mainly managing trusteed accounts
and similar type client portfolios. He has held key managerial investment
responsibilities at trust/banking companies with assets under administration
at each ranging in size from approximately $80 million to over $1 billion.
These trust/banking companies were located in both the U.S. and abroad. Mr.
Caldwell was born November 10, 1933, and is a graduate of Kent State Universi-
ty, 1958, holding a Bachelor of Science Degree in Business
Administration/Accounting.
ORC, as investment advisor to all Fund series of the Company, provides such
services under contracts that provide for payment to ORC of a fee, calculated
daily and paid monthly, at the rate specified in each contract, and which is
based upon the daily market value of the Fund's net assets. These contracts
are approved by shareholders as required and by the Board of Directors and are
terminable upon 30 days written notice, one party to the other. For the calen-
dar year ended December 31, 1995, management fees paid to ORC by the Company
totaled $91,609.
Under the terms of the investment contract with the Company, ORC voluntarily
agreed to reimburse the Company for any expenses incurred in excess of 2% of
net asset value. In compliance with standard accounting practices and rules
and laws governing regulated investment companies, investment research costs
and/or allowed expenses of the Company are included for purposes of calculat-
ing the 2% limitation. Expenses of the Company did not exceed 2% of net
assets of the Company, and no reimbursements were required or made by ORC to
the Company for any Fund series during its fiscal year ended December 31,
1995.
Expenses of "interested" directors and Advisory Board members and losses
incurred by the Company as a direct result of any purchase fails shall always
remain the responsibility of the investment advisor. ORC has been providing
all administrative and shareholder services to the Company since inception.
Since 1987, the Company became responsible for lease payments for software to
operate the Company's fund series. Software lease payments were paid to
C/Data Systems (formerly C/Data Systems, Inc.), a division of Trust Companies
of America, Inc. ("TCA"), to lease "C/MFAS", a mutual fund accounting system
trademarked and owned by C/Data Systems. TCA is controlled by the family of
Roland Caldwell. As of the date of this Prospectus, lease payments being paid
to C/Data Systems are at the rate of $500 per month under a contract approved
by the Board of Directors of the Company and of TCA, which contract is can-
celable by the Company on 30-days written notice.
All persons who perform duties for the Company are employees of ORC and not of
the Company, which has no paid employees. The investment advisory contracts
between ORC and each Fund series are non-assignable by ORC. Total direct
operating costs of the Company are voluntarily restricted to 2% of net assets
of each Fund, primarily because this is the maximum permissible percentage
permitted by some states in which the Company may choose, but to date has not
chosen, to register Fund shares. Expenses in excess of this 2% limitation are
the responsibility of ORC.
Board of Directors
The names of Board of Directors of the Company, as elected by shareholders at
the latest Annual Meeting of Shareholders, and their respective duties and
affiliations are as follows:
Past Five Year
Position with Business Affiliations
Name and Address the Company and Primary Occupation
Roland G. Caldwell(*) Director and Chm/CEO, Trust Companies of
4910 Lemon Bay Dr President America, Inc., and Caldwell,
Venice, FL 34293 Trust Company; and Pres.
Omnivest Research Corp.
William L. Donovan Chm,Board of Retired. Investments &
736 Brightside Crescent Director Real Estate. Former VP
Venice, FL 34293 Gately Shops, Inc.,
Grosse Pointe, MI.
Keith W. Hallman Director Retail Marketing Consultant
752 Brightside Crescent Pharmacist/Former Owner,
Venice, FL 34293 Hallman Apothecary, Clarkston
MI
Emmett Weber Director Capt.(ret.) USAir
3411 Bayou Sound Pittsburgh, PA
Longboat Key, FL 34228 Real Estate
Deborah C. Pecheux(*) Director and V.P., Care Vue Corporation
1911 Oakhurst Parkway Daughter of Pres.Former Sr. Project Engineer
Houston, TX 77479 Ferranti, Intl, Houston, TX
(*) Interested persons as defined under the 1940 Act
Director's Compensation Table
The non-interested Directors of the Company are the only person receiving
compensation from the Company. The Company does not have any retirement plan
and the compensation paid is as follows:
Aggregate Total
Compensation
Compensation From Registrant
and Fund
Director From Registrant * Complex Paid to
Directors
William L. Donovan 4,300.00 4,300.00
Keith W. Hallman 4,300.00 4,300.00
Emmett Weber 4,200.00 4,200.00
Roland G. Caldwell 0.00 0.00
Deborah C. Pecheux 0.00 0.00
(*) Amount Shown is for an Entire Fiscal Year.
Investment Advisory Board
The By-laws of the Company permit the appointment by the President of up to 15
persons to serve until replaced on an Advisory Board to assist, if and as
requested by Directors and officers of the Company, to formulate overall
investment policies. Members of this advisory board will either be individu-
als of prominence or persons who, in the judgment of the President of the
Company, may be important to its success and growth. The duties of members of
the Advisory Board shall be totally external to the daily operation of the
Company itself and such members shall serve totally at the pleasure of the
President. They will have no direct, active contact with the Company, they
will have no knowledge of its daily operations nor are they to be considered
control or access persons as defined in the 1933 or 1940 Acts. They possess
only advisory responsibilities that will be sought by the President, the
Directors and by the Company from time to time as they alone deem necessary or
desirable.
It is intended, though not a contractual obligation or duty, that one or more
members of this Advisory Board will attend and address the Annual Meeting of
Shareholders, as arranged and that each will be available to the President and
to its Investment Advisor from time to time by phone communication, to render
advice and counsel, in hopes that such advice and counsel will lead to a more
successful investment performance for the Company and its shareholders. One
or more members of the Advisory Board are known presently to have clearly
defined views on economic and related matters that have come to be known as
and referred to as "supply-side" economics.
This is intentional and, in the view of the Company's investment advisor, of
considerable value to its shareholders, due to the fact that their insights
and advice have proven to the satisfaction of the Company's investment advisor
to have been more accurately predictive in recent years than have insights
derived from other economic experts who either do not espouse, understand,
and/or comprehend the "supply-side" thesis. The names of present advisory
board members are contained in the prospectus dated this same date.
Brokerage Allocations
It is policy of the Company to allocate brokerage business to the best advan-
tage and benefit of its shareholders. The President of the Company and its
Investment Advisor are responsible for directing all transactions through
brokerage firms of its choice. Further to that policy, all securities trans-
actions are made so as to obtain the most efficient execution at the lowest
transaction cost. Nothing in this policy, however, is to be construed to
prohibit the Company or its Investment Advisor from allocating transactions to
firms whose brokerage charges may include the cost of providing investment or
economic research or other lawfully allowed services which the Company and its
Investment Advisor deem to be necessary and/or valuable to the successful
management of Company assets. Each buy or sell order will be placed accord-
ing to the type, size and kind of order involved and as each condition may
demand, so as to attempt to secure the best result for the Company and its
shareholders, all factors considered. Since 1986 the Company has made all
securities transactions through large, non-retail brokerage firms specializing
in providing financial institutions and others with: (1) low cost security
transactions; (2) third-party generated research services; and (3) certain
specialized services that are for the direct benefit of shareholders of regu-
lated investment companies. Aggregate commissions paid during the last fiscal
year to these firms approximated $15,305. Transactions costs as a percentage
of the value of the securities bought or sold were believed to be lower than
would have been incurred if the trades had been placed through normal retail
brokerage firm offices, or through other brokerage firms which provide similar
low-cost brokerage services at commission rates that include the cost of those
research services subscribed to and which are desired by and deemed useful to
the Company and its shareholders. Placing transactions through these firms is
not an obligation or contractual arrangement but rather a practice that man-
agement of the Company believes is in the best interests of all shareholders.
An important aspect and advantageous feature available is superior execution
capabilities. These firms have undertaken extensive studies and kept transac-
tion comparisons in support of the contention that value to clients is both
due to its low commissions and its ability to execute trades on all exchanges
in all markets at prices that are consistently at or below like trades by
other firms at the same moment in time. The investment advisor believes from
experience that this claim is valid and offers Company and Fund shareholders
values beyond just low cost commissions.
Net Asset Value Calculation
The net asset value per share is computed by dividing the aggregate market
value of the net assets of each Fund of the Company, less that Fund's liabili-
ties if any, by the number of that Fund's shares outstanding. Portfolio secu-
rities are valued and net asset value per share is determined as of the last
known trade price on or after the 4:00 p.m. close (NY time) of business on the
New York Stock Exchange ("NYSE"), on each day the New York Stock Exchange is
open and on any other day in which there is a sufficient degree of trading in
portfolio securities that the current net asset value per share might be
materially affected by changes in portfolio securities values. NYSE trading
is closed weekends and holidays, which are listed as New Year's Day, Presi-
dent's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiv-
ing, and Christmas. Portfolio securities listed on an organized exchange are
valued on the basis of the last sale on the date the valuation is made.
Securities that are not traded on that day, and for which market quotations
are otherwise readily available, and over-the-counter securities for which
market quotations are readily available, are valued on the basis of the bid
price at the close of business on that date. Securities and other assets for
which market quotations may not be readily available or which might not ac-
tively trade shall be valued at fair value as determined by procedures that
will be established by the Board of Directors. It is the belief of the Board
that such procedures result in price determinations that more closely reflect
the fair value of such securities, particularly for tax-exempt fixed income
securities, which often have only limited trading activity. Money market
instruments are valued at cost which approximates market value unless the
Board of Directors determines that such is not a fair value. The sale of
common shares of the Company will be suspended during periods when the deter-
mination of its net asset value is suspended pursuant to rules or orders of
the Securities and Exchange Commission, or when the Board of Directors in its
sole judgment believes it is in the best interest of shareholders to do so.
Purchase of Shares
Initial Purchases: All those wishing to purchase common shares of the Company
for the first time may do so with no minimum investment required, by filling
out an application form and signing it correctly, then delivering it by mail
or in person to the Company's principal office in Venice, Florida. A sample
copy of the application form is inserted as a part of the Prospectus and is
available to prospective investors upon request to the Company, which is the
sole distributor of Fund shares. The offering price of such purchases will be
at the Fund's net asset value per share next determined after receipt by the
Company of a valid purchase order. The date on which the application is ac-
cepted by the Company and the net asset value determination at the close of
business on that date shall determine the purchase price and shall normally be
the purchase date for shares. Payment for shares purchased shall be by check
or receipt of good funds by the Company, which reserves the right to withhold
or reject requests for purchases for any reason, including uncollectible
funds. In the event of a cancellation of any purchase due to uncollectible
funds, purchaser shall be liable for all administrative costs incurred and for
all other losses or charges for such invalid transfer and/or purchase. Certi-
fied checks are not necessary to purchase Fund shares. There shall be no
sales charge for purchase of shares of common stock of the Company. IRA
accounts and other pension accounts may purchase shares of the Company at any
time for any eligible amount.
Subsequent Purchases: Purchases of shares made subsequent to an initial
purchase or purchases by a registered shareholder may be made by mail or
telephone to the Company at its current address and/or telephone number. All
subsequent individual and other non-IRA purchases may be made in any amount
with no minimum required. Such amounts shall be due and payable in good funds
to the Company on the purchase date. No sales charge shall be made for subse-
quent purchases. Purchasers should be aware that telephone orders to purchase
shares may be recorded to protect both the Company and the purchasers but the
Company will not and cannot be held liable for the authenticity of purchaser's
telephone instructions.
Reinvestments: the Company will automatically reinvest all dividend distribu-
tions to shareholders in additional shares of the Company at net asset value
as next determined as of the close of business on the payment date of such
dividend distribution, unless otherwise instructed by the shareholder in
writing prior to the record date for such distributions.
Fractional Shares: When share purchases or redemptions are made or when cash
is requested by a shareholder, shares will be issued or redeemed accordingly,
in fractions of a share, calculated to the third decimal place. (Example:
$1,000 invested in shares at a net asset value of $11.76 per share will pur-
chase 85.034 shares.)
Issuance of Share Certificates: No share certificates will be issued to
shareholders unless specifically requested in writing by the registered share-
holder. All written requests to have share certificates issued must be signed
in the exact same way as the share registration appears on the shareholder
register kept by the Company as its own Registrar and Transfer Agent. Signa-
tures on all share certificates to be redeemed must contain a valid signature
guarantee endorsed by an officer of a national or state bank, a trust compa-
ny, federal savings and loan association; and/or a member firm of the New
York, American, Boston, Mid-West, or Pacific Stock Exchanges. Any such guar-
antee must be acceptable to the Company and its transfer agent before any such
request will be honored. Signatures guaranteed by a Notary Public shall not
be accepted by the Company.
Redemption of Shares
Shareholders may sell back all or a portion of their shares to the Company on
any day the Fund's NAV is calculated and such redemptions will be made in the
manner as described in detail in the Prospectus dated this same date. All
share redemptions are subject to the terms and conditions as set forth therein
and are made by the Company at the next calculation of the net asset value per
share after which such redemption request is received and accepted by the
Company. Although the Company may withhold payment for shares redeemed until
it is reasonably satisfied that all funds for purchases, if any, have been
collected, payment for shares redeemed will normally be made the next business
day immediately following redemption date. The Company reserves the right
however, to hold payment up to 5 business days if necessary to protect the
interests of the Company and its shareholders.
In the event the New York Stock Exchange is closed for any reason other than
normal weekend or holiday closings or if trading is halted or restricted for
any reason, or in the event of any emergency circumstances determined by the
Securities and Exchange Commission, the Board of Directors of the Company
shall have the authority and may suspend redemptions or postpone payment
dates.
Under circumstances as determined by the Board of Directors it may, like most
other mutual funds, elect to make payments in securities or other assets of
the Company rather than in cash, if they deem at the time that such method of
payment would be in the best interest of the shareholders of the Company.
Such payment in kind, if ever necessary, would involve payment of brokerage
commissions by the shareholder if and when securities so received are ever
sold.
No minimum amount is necessary to keep an account open, except that the Compa-
ny reserves the right to request small accounts be redeemed and closed if
activity in the accounts is unjustified costwise. The Company will provide
notice beforehand of not less than 60 days to shareholders prior to closing an
account as an opportunity for additional funds to be invested. No automatic
redemptions will be made in accounts solely due to the amount of money invest-
ed. IRA and pension accounts may retain a balance in their accounts without
regard to any minimums.
All share redemptions, regardless of the reason, give rise to a "completed
sale" for tax purposes when made and shareholders will normally realize a gain
or loss at that time. Such gain or loss is customarily determined by, and is
usually equal to, the difference between the original purchase price of
redeemed shares compared to the dollar amount received upon redemption of the
same shares.
Shareholders are entitled to have share certificates issued, if desired. Due
to the additional work involved with issuing certificates and the added costs,
however, shareholders are encouraged to have all shares held in an account
maintained by the Company itself, as is rapidly becoming the custom within the
mutual fund industry. If share certificates are issued, however, and are held
by a shareholder wishing to sell shares, it is required that such share cer-
tificates first be delivered in person or by mail to the Company in good form
for transfer, signed and containing a proper signature guarantee by an offi-
cial of a commercial bank or a New York Stock Exchange member firm, before
redemption can take place or payment made to any redeeming shareholder. The
Company shall have the right to refuse payment to any registered shareholder
until all legal documentation necessary for a complete and lawful transfer is
in its or its agent's possession, to the complete satisfaction of the Company
and its Board of Directors. Because of the requirement that share certifi-
cates, if issued, be in the possession of the Company before redemption can
occur, no telephone redemptions can be made to shareholders who have been
certificated.
Federal Tax Status
The Company has qualified for and has elected the special treatment afforded a
"regulated investment" company under Subchapter M of the Internal Revenue
Code. In any year in which it so qualifies and distributes substantially all
of its taxable net income, the Company (but not its shareholders) is required
to pay Federal income taxes only on that portion of its investment income that
is undistributed. Dividends paid to its shareholders are in effect distribu-
tions of its net investment income which are taxable to shareholders when
received, and all dividends received by shareholders, regardless of whether a
shareholder receives them in cash or as additional shares, are normally sub-
ject to tax. Distributions by the Company to its shareholders of capital
gains realized, if any, are also presently taxable under existing tax laws at
ordinary income tax rates whether distributed to shareholders in cash or
whether distributed in additional shares. From the standpoint of the share-
holder who sells shares back to the Company as a redemption, the tax treatment
will depend upon whether or not the investment is considered a capital asset
in the hands of the shareholder. In most cases this would be true, and in
that event, a sale by a shareholder of shares will be treated as a capital
transaction to be taxed depending upon the tax treatment afforded such trans-
actions by tax laws existing at the time of sale. Advice from shareholder's
own tax counsel is recommended regarding the taxability of distributions. For
tax purposes the Company shall endeavor to notify all shareholders as soon as
practicable after the close of the calendar year of all amounts and types of
dividends and distributions paid out during the year just ended, generally in
accordance with tax laws in place at the time of payment.
APPENDIX
Bond Rating Categories as Defined by Standard & Poor's are quoted in part and
inserted herein for the information of potential investors in the Company as a
reference as follows:
A S&P's corporate or municipal debt rating is a current assessment of
the creditworthiness of an obligor with respect to a specific obliga-
tion. This assessment may take into consideration obligors such as
guarantors, insurers or lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or suitabil-
ity for a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by S&P's from other sources it considers reliable. S&P's does
not perform any audit in connection with any rating and may, on occa-
sion, rely on unaudited financial information. The ratings may be
changed, suspended or withdrawn as a result of changes in, or availabil-
ity of, such information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligation;
II. Nature of and provisions of the obligor;
III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws
of bankruptcy and other laws affecting creditors rights.
AAA. Debt rated AAA has the highest rating assigned by S&P's. Capacity to
pay interest and repay principal is extremely strong.
AA. Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small de-
gree.
A. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.
BBB. Debt rated BBB is regarded as having an adequate capacity to pay inter-
est and repay principal. Whereas it normally exhibits adequate protec-
tion parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.
BB,B,CCC,CC,C. Debt rated BB,B,CCC,CC, and C is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protec-
tive characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.
CI. The rating is reserved for income bonds on which no interest is being
paid.
D. Debt rated D is in default, and repayment of interest and/or repayment
of principal are in arrears.
NR. Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy."
C/FUNDS GROUP, INC.
C/Fund
C/Growth Stock Fund
C/Government Fund
C/Tax-Free Fund
C/C.A.R. Fund
Adams Equity Fund
1995 Annual Report
Table of Contents Page No.
Letter to Shareholders 1
Comparative Performance 2
Portfolios of Investments 4
Audited Financial Statements 11
Notes to Financial Statements 15
Report of Independent Certified Public Accountants 18
LETTER TO SHAREHOLDERS
The year 1995, in our opinion, will go down as a major turning
point in all securities markets that saw conventional price-
setting methods replaced with new, more rational, computer-de-
rived valuations. This is quite a mouthful, we realize, and let
us be the first to point out that exactitude is neither likely or
necessary in the business of stock pricing.
It is very relevant and important, however, that investors under-
stand that financial results achieved by any public corporate
enterprise now have a powerful influence over the price of its
outstanding stock. Every investment manager worth his fee has
computer-access to newly published financial results instantane-
ously, which he/she then uses to update their own "model". With
everyone having this information all at once, there is very
little else they need to know other than what inflation and tax
rates are going to be in future periods and if the company is
likely to continue its rate of growth and profitability.
Today financial results are fairly accurately estimated in ad-
vance by savvy analysts who follow the company closely, sometimes
more closely than the company's management itself. These esti-
mates of profits are now widely available with unexpected changes
up and down getting most of the media attention. In fact, such
information is often misused by less-scrupulous market traders
seeking to trade on information prior to its becoming available
to the general public. Because this has always been "illegal"
under U.S. securities laws, and because it is now less a factor
due to the quick availability of the information, short term
advantages are withering away. As this happens, only the two
factors that most affect "net returns" to shareholders -- infla-
tion and tax rates -- are left as the factors most influential
over share prices in general. In short, the "stock-picker"
managers are losing to the "index" manager. The results of the
past two years are abundant evidence that this is now so.
What this all means to shareholders of our funds is that we want
you to know that we know this is going on - in fact we predicted
it - and are responding to it accordingly. We recently added
more large-cap stocks to C/Fund for this very reason. Although
we intend to continue to try to select stocks of other companies
that we feel, or detect by using our model, can out-perform the
popular averages, we readily acknowledge that this may be in-
creasingly difficult to do.
We would also like to reassure shareholders that it has long been
our investment philosophy to buy and hold stock positions in
sound companies rather than trade stocks actively. The newer
wrinkle is simply that we will be doing this in a more organized
fashion, in hopes that we can at least match, possibly out-per-
form the market averages over a reasonable time period. Most
managers are now shown to be unable to do this on any sustained
basis.
Once again this year, we remind all shareholders that we have
provided you with our general views on the Economy, Interest
Rates and Stock Markets each month in our Funds Newsletter, thus
its omission in this Annual Report.
Finally, we remain very optimistic about the investment future;
are pleased with the results being achieved in all Fund series;
and, we once again thank all shareholders, directors, and staff
who have helped produce C/Fund Group's continuing success.
Respectfully submitted:
Roland G. Caldwell
C/Fund
Illustration of a $10,000 Investment (Graph)
C/Growth Stock Fund
Illustration of a $10,000 Investment (Graph)
Performance Summary
As of December 31, 1995
Since
1 Year 5 Year 10 Year Inception
C/Fund 26.18% 13.38% 11.33% 12.06%
C/Growth Stock Fund 22.81% NA NA 4.73%
C/Government Fund 12.34% NA NA 6.26%
C/Tax-Free Fund 10.47% NA NA 4.06%
C/C.A.R. Fund 6.29% NA NA 5.61%
Adams Equity Fund(1) NA NA NA -5.63%
(1) Fund inception October 1995. Graph comparison omitted
C/Government Fund
Illustration of a $10,000 Investment
<Graph>
C/Tax-Free Fund
Illustration of a $10,000 Investment
<Graph>
C/Community Association Reserve Fund
Illustration of a $10,000 Investment
<Graph>
C/FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Shares Value
EQUITIES (78.0%)
FOOD PRODUCTS 11.4%
Archer Daniels Midland Company 9,028 162,504
Lancaster Colony 1,000 37,250
PepsiCo 2,000 111,500
Philip Morris 2,000 180,750
TEXTILE MILL PRODUCTS 1.7%
Shaw Industries 5,000 73,125
LUMBER & WOOD PRODUCTS 3.3%
Plum Creek Timber LP, Inc. 6,000 143,250
PAPER PRODUCTS 1.9%
Kimberly-Clark 1,000 82,625
CHEMICAL PRODUCTS 11.6%
American Home Products 1,000 97,000
Bristol-Meyers Squibb 2,000 170,750
Colgate-Palmolive 1,500 105,187
Merck & Co. 2,000 131,250
PETROLEUM & COAL PRODUCTS 5.4%
Amoco Corp. 1,000 71,750
Exxon Corp 2,000 161,250
DIVERSIFIED MANUFACTURING 3.0%
Minnesota Mining & Manufacturing 2,000 131,500
INDUSTRIAL MACHINERY & EQUIPMENT 2.4%
Black & Decker 3,000 105,750
AUTOMOTIVE 2.2%
Ford Motor Company 2,000 57,750
ITT Industries 1,500 35,812
INSTRUMENTS & RELATED PRODUCTS 5.0%
Eastman Kodak 2,000 134,250
Emerson Electric 1,000 81,375
RAILROAD TRANSPORTATION 4.1%
CSX Corp 1,000 45,500
Union Pacific 2,000 133,250
PIPELINES 6.5%
Buckeye Partners LP 4,000 136,500
TRANSPORTATION SERVICES 2.2%
GATX Corp. 2,000 97,000
COMMUNICATION 3.0%
AT&T 2,000 129,500
UTILITIES 1.3%
Central & South West 2,000 55,500
BUILDING SUPPLIES 1.1%
Home Depot 1,000 47,875
RETAILING 1.8%
Sears, Roebuck 2,000 77,750
FOOD STORES 1.5%
Albertson's Inc. 2,000 65,750
INSURANCE 1.7%
ITT Hartford Group 1,500 72,375
REAL ESTATE 4.0%
New Plan Realty TR SBI 8,000 174,000
LEISURE/ENTERTAINMENT 1.8%
ITT Corp 1,500 79,313
COMPUTER/OFFICE EQUIPMENT
International Business Machines 1.0% 500 45,438
FIXED INCOME (22.0%)
U.S. Treasury Notes 8.00% Due 5/15 2.6% 100,000 111,938
Cash & Equivalents 19.4% 838,396
TOTAL 100.0% 4,331,213
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Shares Value
EQUITIES (83.8%)
HEAVY CONSTRUCTION 3.3%
Foster Wheeler 1,000 42,000
Mastec Inc. 2,000 26,960
FOOD PRODUCTS 2.7%
Lancaster Colony Corp 1,500 55,875
TEXTILE MILL PRODUCTS 2.1%
Shaw Industries 3,000 43,875
LUMBER & WOOD PRODUCTS 1.1%
Plum Creek Timber LP 1,000 23,875
FURNITURE & FIXTURES 2.4%
Hillenbrand Industries 1,500 50,625
CHEMICALS & ALLIED PRODUCTS 5.2%
Great Lakes Chemical 500 35,875
Mylan Laboratories 1,800 42,075
Nalco Chemical 1,000 30,000
RUBBER & MISC PLASTICS 2.4%
Cooper Tire & Rubber 1,000 24,375
Rubbermaid, Inc. 1,000 25,375
FABRICATED METAL PRODUCTS 2.5%
Newell Co. 2,000 51,500
INDUSTRIAL MACHINERY 3.4%
Black & Decker 2,000 70,500
COMPUTER/OFFICE EQUIPMENT 3.3%
COMPAQ Computers 500 24,000
International Business Machines 500 45,438
ELECTRONICS 4.7%
American Power Conversion Corp. 6,000 57,000
Teleflex Inc 1,000 41,250
AUTOMOTIVE 6.3%
PACCAR, Inc. 800 34,000
Superior Industries International 2,250 58,781
Autozone, Inc. 1,000 28,875
Safety-Kleen Corp. 700 10,850
INSTRUMENTS 8.5%
Bard (C.R.) 1,000 30,500
Respironics 2,000 41,500
Stryker Corp. 2,000 105,000
LEISURE/ENTERTAINMENT 1.2%
Carnival Corp Class 'A' 1,000 24,125
AIR TRANSPORTATION 5.2%
Atlantic Southeast Airline 5,000 107,800
COMMUNICATION 3.7%
ALLTEL Corp. 2,000 58,750
Hong Kong Telephone 1,000 17,625
BUILDING MATERIALS 8.7%
Home Depot 2,000 95,750
Fastenal 2,000 85,250
FOOD STORES 1.4%
Food Lion 5,000 28,450
EATING & DRINKING PLACES 2.9%
Cracker Barrel Old Country Stores, Inc. 1,000 17,250
Brinker International, Inc. 1,000 15,125
Buffets Inc. 2,000 28,000
FINANCIAL 1.0%
Countrywide Credit 1,000 21,630
INSURANCE 7.2%
American International Group 450 41,456
AFLAC, Inc. 2,500 108,750
REAL ESTATE 1.7%
First Union REIT 5,000 35,000
SOFTWARE 3.2%
Parametric Technology 1,000 66,500
MISCELLANEOUS 0.1%
Eagle-Picher 20,000 1,200
FIXED INCOME (16.2%)
Cash & Equivalents 16.2% 338,014
TOTAL 100.0% 2,090,779
ADAMS EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Shares Value
EQUITIES (92.7%)
NONMETALLIC MINERALS 4.9%
Vulcan Materials Co. 130 7,442
FOOD PRODUCTS 4.5%
Dole Foods 195 6,825
PAPER PRODUCTS 13.4%
International Paper Co. 200 7,575
Shorwood Packaging Co. 430 6,127
Williamette Industries, Inc. 120 6,705
CHEMICAL PRODUCTS 10.0%
Cabot Corp. 150 8,100
Wellman, Inc. 310 7,091
PRIMARY METAL INDUSTRIES 10.1%
Allegheny Ludlow 430 7,955
Kuhlman Corporation 600 7,500
FABRICATED METAL PRODUCTS 4.8%
Amcast Industrial Corporation 400 7,350
INDUSTRIAL MACHINERY & EQUIPMENT 4.9%
Gleason Corporation 230 7,475
COMPUTER/ELECTRONIC EQUIPMENT 8.6%
Cypress Semiconductor 500 6,312
International Business Machines 75 6,816
TRANSPORTATION SERVICES 4.8%
GATX Corp. 150 7,275
WHOLESALE TRADE - DURABLE GOODS 9.4%
Arrow Electronics, Inc. 150 6,450
Bell Industries 350 7,875
FURNITURE & HOMEFURNISHING STORES 3.7%
Best Buy Company, Inc. 350 5,688
FINANCIAL 8.4%
Federal National Mortgage 50 6,200
Green Tree Financial 250 6,563
BUSINESS SERVICES 4.6%
Manpower Inc. 250 7,031
MISCELLANEOUS 0.7%
Castle Cooke 65 1,089
FIXED INCOME (7.3%)
Cash & Equivalents 7.3% 11,127
TOTAL 100.0% 152,571
C/GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Par Value Value
GOVERNMENT 91.6%
U.S. Treasury Notes 6.5% Due 11/30/1996 500,000 505,625
U.S. Treasury Notes 6.5% Due 5/15/1997 500,000 508,438
U.S. Treasury Notes 6.375% Due 6/30/1997 500,000 508,437
U.S. Treasury Notes 6.5% Due 4/30/1997 500,000 508,125
U.S. Treasury Notes 6.5% Due 9/30/1996 500,000 504,375
U.S. Treasury Notes 7.375% Due 5/15/1996 500,000 503,750
U.S. Treasury Notes 7.625% Due 2/15/2007 500,000 549,375
Cash & Equivalents 8.4% 328,215
TOTAL 3,916,340
C/COMMUNITY ASSOCIATION RESERVE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Par Value Value
GOVERNMENT 89.0%
U.S. Treasury Notes 6.00% Due 12/31/1997 25,000 25,383
U.S. Tresaury Notes 6.00% Due 6/30/1996 25,000 25,086
U.S. Treasury Notes 7.125% Due 10/15/1998 25,000 26,203
U.S. Treasury Notes 7% Due 4/15/1999 25,000 26,266
U.S. Treasuty Notes 6.5% Due 11/30/1996 25,000 25,281
U.S. Treasury Notes 5.875% Due 3/31/1999 50,000 50,875
U.S. Treasury Notes 5.875% Due 7/31/1997 50,000 50,500
U.S. Treasury Notes 5.875% Due 8/15/1998 50,000 50,781
U.S. Treasury Notes 6% Due 10/15/1999 50,000 51,203
U.S. Treasury Notes 6.125% Due 5/15/1998 50,000 50,985
Cash & Equivalents 11.0% 47,222
TOTAL 429,785
C/TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
Par Value Value
MUNICIPAL BONDS 97.5%
1ST FLORIDA GOV FIN COM 6.2% DUE 7/1/03 25,000 27,438
BROWARD CNTY FL S.O. 5.5% DUE 1/1/05 100,000 105,000
BROWARD CTY SCHOOL DIST GO 5.7% 2/15/08 100,000 106,000
CAPE CORAL SPC OB 5.85% 6/1/01 25,000 26,750
DUVAL CTY FL SCH DIST 6.125% 8/04-02 100,000 108,750
ESCAMBIA CTY FL 5.75% DUE 4/01/04 100,000 104,250
FL BD OF EDUCATION 5.75% 5/1/1997 25,000 25,625
FL DIV OF BOND FINANCE 5.8% 7/1/01 50,000 53,500
FL ST MUNI PWR AGY 6.5% PR 10/1/02 @102 100,000 112,500
FLORIDA BOARD OF REGENTS 6.7% 7/1/2006 20,000 22,950
FLORIDA G.O. 5.90% 10/1/04 100,000 101,500
FT LAUDERDALE FL W & S 6.1% 9/1/2000 50,000 53,750
GREATER ORLANDO AVIATION AU 5.6 10/01/02 50,000 53,250
HILLSBOROUGH CAP IMP 6% 7/1/2001 35,000 37,713
HILLSBOROUGH CNTY CAP 6% 7/1/98 100,000 104,500
HILLSBOROUGH, FL SD 7.20% DUE 8/15/05 25,000 29,438
JACKSONVILLE FL ELEC 6.375% DUE 10/1/99 75,000 80,625
JACKSONVILLE FL PORT AUTH 7.625 11/1/97 100,000 106,500
JACKSONVILLE FL HEALTH 11.5% 10/1/12 65,000 106,762
JACKSONVILLE FL PORT 7.625% 11/1/03 25,000 29,812
KEY WEST FL UTIL REV 6.75% 10/01/13 100,000 112,500
LAKE COUNTY FL 5.25% DUE 12/1/99 60,000 62,400
MANATEE CO, FL PUB UTIL 6.2% DUE 10/1/01 25,000 27,375
MANATEE CTY FL PUB UTIL 6% 10/1/06 100,000 108,750
MARION CTY HOSP DIST 6.60% 10/1/98 25,000 26,500
OKALOSSA CTY FL 7.6% PR 7/1/99 @102 75,000 84,562
ORANGE CTY FL TOURIST TAX 6.20% 10/01/03 30,000 33,150
ORANGE CTY FL WASTE WTR 6.00% 4/1/06-04 100,000 108,500
ORLANDO & ORANGE CTY FL 5.375 7/1/06 100,000 104,000
ORLANDO & ORANGE FL 6.50% PR 7/1/00 @102 25,000 27,625
ORLANDO FL UTIL COM 8% DUE 4/1/02 100,000 118,750
PALM BCH CTY SCHL DIST 5.875% 8/1/04-02 100,000 107,750
PALM BEACH CTY, FL 6.7% DUE 6/1/98 25,000 26,500
PASCO CNTY FL WASTE PR 6.95% DUE 4/1/98 95,000 101,650
PASCO COUNTY FL W & S 5.8% DUE 10/1/07 100,000 107,750
PINELLAS CNTY, FL SEWER 5.2% DUE 10/1/04 100,000 104,250
PUERTO RICO COMWLTH 5.4% DUE 7/1/2007 100,000 101,750
ST PETERSBURG PUB UT 6.55% DUE 10/1/02 150,000 167,625
VERO BEACH ELEC 6.2% PR 12/1/99 @102 25,000 27,250
VOLUSIA CTY, FL G.O. 5.7% DUE 7/1/01 100,000 106,500
Cash & Equivalents 2.5% 79,270
TOTAL 3,141,020
C/FUNDS GROUP, INC.
STATEMENTS OF ASSETS & LIABILITIES
December 31, 1995
C/Growt C/Gover C/Tax C/Commu Adams
C/Fund h Stock nment Free nity Equity
Securities at Cost 3330113 1894165 3897824 3089863 422286 155483
ASSETS
Securities Value 4331213 2090779 3916340 3141020 429785 152571
Receivables
Dividends & Inte 22335 6011 56117 54190 6724 299
Investment Secur 0 167680 0 0 0 0
Other 0 0 20 77 0 0
4353548 2264470 3972477 3195287 436509 152870
LIABILITES
Advisor Fee & Other 1657 786 709 614 6890 55
Investment Securiti 0 184060 0 0 0 6148
1657 184846 709 614 6890 6203
NET ASSETS APPLICABLE
TO OUTSTANDING SHAR 4351891 2079624 3971768 3194673 429619 146667
CAPITAL SHARES 258646 184398 396280 322401 42,960 14,935
NET ASSET VALUE PER $16.83 $11.28 $10.02 $9.91 $10.00 $9.82
C/FUNDS GROUP, INC.
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995
C/Growt C/Gover C/Tax C/Commu Adams
C/Fund h Stock nment Free nity Equity
INVESTMENT INCOME
Dividends 110539 25582 0 0 0 486
Interest 15855 9384 264474 164924 14783 416
126394 34966 264474 164924 14783 902
OPERATING EXPENSES
Investment advisory 39401 17459 19822 14814 0 113
Professional fees 12238 4925 5587 4261 0 16
Registration fees 1126 483 459 432 0 0
Custodian fees 10590 4257 10404 7593 0 250
Directors fees 5735 2572 2178 1627 0 0
Computer lease 2670 1142 1115 896 0 6
Miscellaneous 1120 696 468 397 0 43
72880 31534 40033 30020 0 428
NET INVESTMENT INCO 53,514 3,432 224441 134904 14,783 474
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Unrealized appreciation (depreciation) in
value of inve 735703 218114 205870 167845 10489 -2911
Net realized gain ( 126793 108311 13719 -10167 -373 0
NET GAIN (LOSS) ON 862496 326425 219589 157678 10116 -2911
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPE 916010 329857 444030 292582 24899 -2437
(1) Period from inception of fund on October 15, 1995 to December 31, 1995
STATEMENTS OF CHANGES IN NET ASSETS
For the year ended December 31, 1994
C/Grow C/Gove C/Tax C/Comm Adams
C/Fund th rnment Free unity Equity
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment incom 91587 -2227 222666 93589 3065 -
Net realized gain (l 129227 -77989 -74767 -1909 - -
Unrealized (deprecia -280912 -61422 -141328 -122041 -2497 -
Net increase (decrea -60098 -141638 6571 -30361 568 -
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - -96817 -2298 222666 -92557 -3246 -
Net realized gain/lo 129227 - - - - -
Return of capital -15046 -809 -8417 -4767 - -
241090 -3107 231083 -97324 -3246 -
CAPITAL SHARE TRANSACTIONS
Shares sold 657528 136920 4551508 3361765 19836 -
Reinvested distribut 241090 3107 231083 97324 3246 -
Shares redeemed -718521 -264596-5332509 -865540 -6354 -
180097 -269314 -774430 2465864 16728 -
Net increase (decrea -121091 -269314 -774430 2465864 14050 -
NET ASSETS
Beginning of year 3926817 1648612 6003983 622220 44703 -
End of year 3805726 1379298 5229553 3088084 58753 -
UNDISTRIBUTED INVEST - -77989 -74767 -5526 - -
(1) Period from inception of fund on October 15, 1995 to Decem-
ber 31, 1995
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS(1)
For the Periods Ended December 31, 1995, 1994, 1993, 1992, and 1991
Net Net
Asset Asset
value Dist Dist Value
at Inv Opera Dist Unrl from from at end
beg of Inc ting from Gain real ret of
per Expen NII NII Loss gains cap period
C/Fund
1995 13.95 0.50 -0.29 0.21 -0.21 3.42 -0.54 - 16.83
1994 15.07 0.59 -0.25 0.34 -0.36 -.55 -0.49 -.06 13.95
1993 14.19 0.56 -0.28 0.28 -0.27 1.34 -0.47 - 15.07
1992 13.14 0.53 -0.23 0.30 -0.30 1.05 0.00 - 14.19
1991 11.31 0.39 -0.19 0.20 -0.17 2.36 -0.56 - 13.14
C/Growth Stock Fund
1995 9.34 0.22 -0.20 0.02 -0.02 2.13 -0.19 - 11.28
1994(5) 10.27 0.18 -0.19 -.01 -0.01 -.90 - -.01 9.34
1993(5) 10.14 0.16 -0.16 - - 0.28 -0.15 - 10.27
1992(2,4) 10.00 0.09 -0.05 0.04 -0.04 0.19 -0.05 - 10.14
C/Government Fund
1995 9.44 0.64 -0.10 0.54 -0.54 0.58 - - 10.02
1994 9.93 0.53 -0.09 0.44 -0.44 -.47 - -.02 9.44
1993 9.89 0.71 -0.09 0.61 -0.61 0.26 -0.22 - 9.93
1992(2,4) 10.00 0.29 -0.03 0.26 -0.26 -.11 - - 9.89
C/Tax-Free Fund
1995 9.39 0.54 -0.10 0.44 -0.44 0.52 - - 9.91
1994 9.96 0.47 -0.09 0.38 -0.37 -.56 - -.02 9.39
1993 9.99 0.51 -0.09 0.43 -0.44 -.02 - - 9.96
1992(2,4) 10.00 0.22 -0.03 0.19 -0.19 -.01 - - 9.99
C/Community Association
Reserve Fund
1995 10.00 0.60 - 0.60 -0.60 - - - 10.00
1994 10.00 0.59 - 0.59 -0.59 - - - 10.00
1993 10.00 0.50 - 0.50 -0.50 - - - 10.00
1992(2,4) 10.00 0.21 - 0.21 -0.21 - - - 10.00
Adams Equity Fund
1995(3,4) 10.00 0.06 -0.03 0.03 -0.02 -.19 - - 9.82
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS(1)
For the Periods Ended December 31, 1995, 1994, 1993, 1992, and 1991
Operating Net Shares
Expenses to Investment Portfolio Outstanding
Average Net Income to Turnover At end of
Assets Average Net Rate the Period
C/Fund
1995 1.85% 1.36% 5.46% 258,646
1994 1.83% 2.53% 23.84% 272,891
1993 1.89% 1.88% 52.19% 260,630
1992 1.69% 2.16% 92.84% 209,418
1991 1.55% 1.56% 41.80% 186,896
C/Growth Stock Fund
1995 1.85% .20% 16.46% 184,398
1994(5) 1.87% (.16%) 37.23% 147,699
1993(5) 1.70% (.04%) 20.26% 160,548
1992(2)(4 1.06% .41% 13.07% 135,158
C/Government Fund
1995 .99% 5.54% 124.70% 396,280
1994 1.15% 5.75% 122.48% 554,009
1993 .93% 6.10% 123.98% 604,654
1992(2)(4 .64% 2.63% 79.17% 346,557
C/Tax-Free Fund
1995 1.01% 4.53% 22.91% 322,401
1994 1.15% 4.70% 2.76% 328,872
1993 .88% 4.24% 86.14% 62,444
1992(2)(4 .68% 1.87% - 94,541
C/Community Association
Reserve Fund
1995 - 5.96% 41.35% 42,960
1994 - 8.76% - 5,875
1993 - 4.98% 58.29% 4,470
1992(2)(4 - 2.09% - 2,362
Adams Equity Fund
1995(3)(4 1.16% .32% - 14,935
1)Selected data for a share of capital stock outstanding throughout the year.
2)Inception of fund is July, 1992
3)Inception of Fund is October, 1995
4)Ratio of operating expensed to average net assets has been annualized.
5)Adjusted to reflect elimination of expense reimbursement from the advisor.
C/FUNDS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE A - ORGANIZATION
C/FUNDS Group, Inc. (the Company), formerly Caldwell Fund, Inc.,
is registered under the Investment Company Act of 1940, as amend-
ed, as an open-end diversified investment company. Effective July
2, 1985, C/FUND Group, Inc., shares were registered under Section
8(a) of the Securities Act of 1933. The Caldwell Fund was the
only fund offered by the Company through June, 1992. Effective
July, 1992, four new funds were made available and the Caldwell
Fund was renamed C/Fund. Effective October, 1995, an additional
fund, the Adams Equity Fund, was made available. The primary
investments of the six funds are listed as follows:
FUNDS PRIMARY INVESTMENTS
C/Fund Stocks and Fixed
formerly Caldwell Fund Income Securities
C/Growth Stock Fund Common Stocks
formerly Caldwell Growth Stock Fund or Equivalents
C/Government Fund Obligations of
formerly Caldwell Government Fund U.S. Government
C/Tax-Free Fund Investment Grade
formerly Caldwell Tax-Free Fund Municipal Securities
C/Community Association Reserve Fund Obligations of
formerly Caldwell Community Association U.S. Government
Reserve Fund
Adams Equity Fund Stocks
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in accordance
with accounting policies generally accepted in the investment
company industry.
Security Valuation - Investments in securities traded on a na-
tional exchange are stated at the last reported sales price on
the day of valuation; other securities traded in over-the-counter
market and listed securities for which no sale was reported on
that date are stated at the last quoted bid price. Restricted
securities and other securities for which quotations are not
readily available are valued at fair value as determined by the
Board of Directors.
Investment Income - Dividend income is recorded as of the ex-
dividend date. Interest income is recognized on the accrual
basis. Realized gains and losses are determined on the identified
cost basis.
Distributions to shareholders - Dividends to shareholders are
recorded on the ex-dividend date.
Income Tax Status - No provision for income taxes is included in
the accompanying financial statements as the Company regularly
distributes to shareholders its taxable investment income and
realized gains under provision of the Internal Revenue Code
applicable to regulated investment companies.
Security Transactions - The Company follows industry practice and
records security transactions on the trade date.
NOTE C - INVESTMENT ADVISORY AGREEMENT
Each fund has a written agreement (the Agreements) for management
and investment advisory services with Omnivest Research Corpora-
tion (the Advisor) which is owned 100% by Trust Companies of
America, Inc. (TCA), which is controlled by its President and his
family. The Agreements provide for advisor fees to be computed on
the average daily net asset value. Under terms of the agreements,
each Funds total expenses cannot exceed 2% of the Funds average
daily net asset value in any one year. Expenses in excess of 2%
shall be paid by the Advisor. The Advisor waived the advisory
fees for C/Community Association Reserve Fund since inception.
Annual percentage rates provided by the Agreements in computing
investment advisory fees and the fees incurred in 1995 are as
follows:
FUND ANNUAL % RATE INVESTMENT ADVISORY FEES
C/Fund 1.0 $39,401
C/Growth Stock Fund 1.0 17,459
C/Government Fund .5 19,822
C/Tax-Free Fund .5 14,814
C/Community Association
Reserve Fund .5 0
Adams Equity Fund 1.0 113(1)
(1) For the period from inception of the fund on October 15, 1995
to December 31, 1995
C/FUNDS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE F - TRANSACTIONS WITH AFFILIATES
In addition to the investment advisory fees discussed in NOTE C,
the Funds pay fees to other related entities, all of which are
100% owned by TCA, primarily for custodianship of assets and
computer processing and programming. Total fees paid to TCA for
services other than investment advising aggregated approximately
$39,000.
The number of shares held by the President of the Company, em-
ployees of the Advisor, and other affiliated persons at December
31, 1995 are as follows:
Shares Net Asset Value
C/Fund 17,472 $294,053
C/Growth Stock Fund 8,473 $95,756
C/Government Fund 12,080 $121,043
C/Tax-Free Fund 7,779 $77,087
Adams Equity Fund 50 $494
NOTE G - MARKET RISK
The Fund is exposed to credit risk on the amount invested in
marketable securities. The maximum amount of loss the Fund would
incur is limited to the amount recorded in the 1995 financial
statements. The Fund does not hold any collateral on the marketa-
ble securities. This exposure to risk is customary for all enti-
ties which have invested in financial instruments.
NOTE H - BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio
securities is made under the control of the Advisor, subject to
the overall supervision of the Board of Directors. The Advisor is
permitted to and does select broker-dealer firms, which provide
economic, corporate, and investment research service. Commissions
paid to firms supplying such research include the cost of such
services. The value of such services aggregated $15,305 for the
year ended December 31, 1995.
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
C/FUNDS Group, Inc.
Venice, Florida
We have audited the statements of assets and liabilities, includ-
ing the portfolio of investments, of C/FUNDS Group, Inc. (com-
prising, respectively, the C/Fund, C/Growth Stock Fund, C/Govern-
ment Fund, C/Tax Free Fund, C/Community Association Reserve Fund
Portfolios, and Adams Equity Fund) as of December 31, 1995, and
the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in
the period then ended, and the selected per share data and ratios
for each of the four years in the period then ended. These finan-
cial statements, and per share data and ratios are the responsi-
bility of the Company's management. Our responsibility is to
express an opinion on these financial state ments, and per share
data and ratios based on our audits. The per share data and
ratios for the year ended December 31, 1991 is from financial
statements that were audited by other auditors whose report dated
January 17, 1992 expressed an unqualified opinion.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and per share data and ratios are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1995 by correspondence with
the custodian, and examination of supporting documentation for
unsettled security purchases. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and selected per share
data and ratios referred to above present fairly, in all material
respects, the financial position of each of the respective port
folios constituting C/FUNDS Group, Inc. as of December 31, 1995,
the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the
eperiod then ended, and the selected per share data and ratios
for each of the four years in the period then ended, in conformi-
ty with generally accepted accounting principles.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 12, 1996
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 485-0654
Custodian
Caldwell Trust Company
201 Center Road Suite 2
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South
St. Petersburg, FL 33701-4383
(813) 821-6161
Investment Advisory Board
Arthur B. Laffer, Ph.D. Economist
Jude Wanniski, Journalist
Alan Reynolds, Economist
Alvin Moscow, Author
Ted C. Van Antwerp, Philanthropist
Willet J. Worthy, Jr., Vintner
This report has been prepared for the information of shareholders
of the Funds and is not authorized for distribution to Investors
unless preceded or accompanied by an effective Prospectus which
includes information regarding the Funds objectives, policies,
management, records, and other information.
PART C
RE REGISTRATION OF C/FUNDS GROUP, INC.
February 28, 1996
____________________________________________________________________________
Item 24. (a) Financial Statements Included in Part B
1. Audited Financial Statements and Accompanying
Notes, Fiscal Year Ended 12/31/95, Including:
-- Letter to Shareholders
-- Statement of Assets and Liabilities
-- Statement of Operations
-- Statement of Changes in Net Assets
-- Notes to Financial Statements
-- Schedule of Investments
-- Per Share Tables
(b) Exhibits.
*1. Code of Ethics
***2. Charter of Incorporation, State of Florida
***3. Corp Articles of Incorporation
***4. Corp By-Laws, incl Indemnification Clause
****5. Specimen Share Certificate
*6. Investment Advisory Contract
*7. Custody Agreement with Custodian
8. Legal Opinion re Corp In Good Standing
*****9. Specimen Subscription Form and List of
Original Investor Subscribers To Shares In The Fund
***10. IRA Specimen Custody Account Opening Form
11. Auditors Consent To Publish Financial Statements
12. Auditors Internal Control Letter
Note:
* Enclosed with Prior Filing Dated October 15, 1995.
** Enclosed with Prior Filing Dated February 28, 1995.
*** Enclosed with Prior Filing Dated April 30, 1992.
**** Enclosed with Prior Filing Dated July 11, 1995.
***** Enclosed with Prior Filing Dated June 12, 1985.
Item 25. Persons Controlled by or Under Common Control with Registrant.
Trust Companies of America, Inc. ("TCA"), a private Florida corpo-
ration is controlled by Roland G. Caldwell and other family mem-
bers. TCA owns 100% of Omnivest Research Corporation ("ORC"), the
Registrant's Investment Advisor and owns 100% in Caldwell Trust
Company ("CTC"), the Registrant's Custodian. CTC is a Florida
Chartered Trust Company Regulated By The Florida Department Of
Banking And Finance and Was Chartered November 1, 1993. Roland
Caldwell, President of Registrant, serves as Chairman and Chief
Executive Officer of ORC and CTC.
Item 26. Number of Holders of Securities at September 30, 1995:
Title of Class Number of Record Holders
Common Stock
- C/Fund Series 404
- C/Growth Stock Series 186
- C/Government Series 93
- C/Tax-Free Series 61
- C/C.A.R. Series 13
- Adams Equity Fund 21
TOTAL ALL SERIES 778
Item 27. By-Laws Article XI, Indemnification of Officers and Directors:
(Included by Reference to Registration Statement Filed February
28, 1985, As Thereafter Amended
Item 28. Business and Other Connections of Investment Advisor.
Trust Companies of America, Inc. ("TCA"), a private Florida corpo-
ration is controlled by Roland G. Caldwell and other family mem-
bers. TCA owns 100% of Omnivest Research Corporation ("ORC"), the
Registrant's Investment Advisor and owns 100% in Caldwell Trust
Company ("CTC"), the Registrant's Custodian. CTC is a Florida
Chartered Trust Company Regulated By The Florida Department Of
Banking And Finance and Was Chartered November 1, 1993. Roland
Caldwell, President of Registrant, serves as Chairman and Chief
Executive Officer of ORC and CTC.
Item 29. Principal Underwriters.
None. Not Applicable
Item 30. Location of Accounts and Records.
Registered Office of Registrant: 250 Tampa Avenue West
Venice, FL 34285
Books & Records Also Maintained At: 201 Center Road, Suite 2
Venice, Florida 34292
Records Used and Kept By:
Roland G. Caldwell, Jr. Secretary
Item 31. Management Services.
Registrant's books and financial ledgers are kept on "C/MFAS", a
computer program leased from C/Data Systems, a division of TCA,
which is controlled by Roland
Caldwell and other family members, including the Secretary of the
registrant. C/MFAS is leased to Registrant under terms that call
for the payment by registrant, as lessee, of a monthly fee of $500
to C/Data Systems. The lease is cancelable at any time by Regis-
trant on 30 days written notice to lessor.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) Additional Undertaking: Registrant hereby undertakes to
furnish each person to whom a prospectus is delivered with a copy
of the Registrant's latest annual report to shareholders, upon re
quest and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant, C/Funds Group, Inc., certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Venice, and the State of Florida, on
this the 28th day of February, 1996.
Registrant:
C/FUNDS GROUP, INC.
Roland G. Caldwell William Donovan
Director/President Director
Keith Hallman Roland G. Caldwell, Jr.
Director Secretary
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<APPREC-INCREASE-CURRENT> 205870
<NET-CHANGE-FROM-OPS> 444030
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 224441
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 246209
<NUMBER-OF-SHARES-REDEEMED> 426820
<SHARES-REINVESTED> 22882
<NET-CHANGE-IN-ASSETS> (1257785)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (74767)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 19822
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40033
<AVERAGE-NET-ASSETS> 4052757
<PER-SHARE-NAV-BEGIN> 9.44
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> .58
<PER-SHARE-DIVIDEND> .54
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.02
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> C/TAX FREE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3089863
<INVESTMENTS-AT-VALUE> 3141020
<RECEIVABLES> 54190
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 77
<TOTAL-ASSETS> 3195287
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 614
<TOTAL-LIABILITIES> 614
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 322401
<SHARES-COMMON-PRIOR> 328872
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15693)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3194673
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 164924
<OTHER-INCOME> 0
<EXPENSES-NET> 30020
<NET-INVESTMENT-INCOME> 134904
<REALIZED-GAINS-CURRENT> (10167)
<APPREC-INCREASE-CURRENT> 167845
<NET-CHANGE-FROM-OPS> 292582
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 134904
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 142371
<NUMBER-OF-SHARES-REDEEMED> 162702
<SHARES-REINVESTED> 13859
<NET-CHANGE-IN-ASSETS> 106589
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (5526)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14814
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 30020
<AVERAGE-NET-ASSETS> 2975730
<PER-SHARE-NAV-BEGIN> 9.39
<PER-SHARE-NII> .44
<PER-SHARE-GAIN-APPREC> .52
<PER-SHARE-DIVIDEND> .44
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> C/COMMUNITY ASSOC RESERVE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 422286
<INVESTMENTS-AT-VALUE> 429785
<RECEIVABLES> 6724
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 436509
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6890
<TOTAL-LIABILITIES> 6890
<SENIOR-EQUITY> 429619
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 42960
<SHARES-COMMON-PRIOR> 5875
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (373)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 429619
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14783
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 14783
<REALIZED-GAINS-CURRENT> (373)
<APPREC-INCREASE-CURRENT> 10489
<NET-CHANGE-FROM-OPS> 24899
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14783
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 42824
<NUMBER-OF-SHARES-REDEEMED> 7217
<SHARES-REINVESTED> 1478
<NET-CHANGE-IN-ASSETS> 370866
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 247858
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> .6
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .6
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> ADAMS EQUITY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> OCT-15-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 155483
<INVESTMENTS-AT-VALUE> 152571
<RECEIVABLES> 299
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 152870
<PAYABLE-FOR-SECURITIES> 6148
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55
<TOTAL-LIABILITIES> 6203
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 14935
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 27
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 146667
<DIVIDEND-INCOME> 486
<INTEREST-INCOME> 410
<OTHER-INCOME> 0
<EXPENSES-NET> 428
<NET-INVESTMENT-INCOME> 474
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (2911)
<NET-CHANGE-FROM-OPS> (2437)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 447
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14889
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 45
<NET-CHANGE-IN-ASSETS> 146667
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 113
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 428
<AVERAGE-NET-ASSETS> 148386
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> (.19)
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.82
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
ANDREW J. BRITTON, P.A.
Suite A
245 N. Tamiami Trail
Venice, Florida 34285
(941) 484-7102
February 1, 1996
Mr. Roland Caldwell
C/Funds Group, Inc.
250 W. Tampa Avenue
Venice, Florida 34285
RE: C/Funds Group, Inc. Registration
Dear Roland:
Pursuant to your request, I am furnishing you with the following legal opin-
ion, based on copies of documents and information provided to me from you.
I have assumed the authenticity and completeness of all documents submitted as
originals, the conformity to the originals of all documents submitted as
copies, and the authenticity and completeness of the originals of all docu-
ments submitted as copies. I have also assumed the genuineness of the signa-
tures of persons signing all documents in connection with which this opinion
is rendered and the authority of such persons signing. Further, I have as-
sumed that no originals or copies submitted to me have been amended or modi-
fied since the date they were submitted to me.
It is my opinion tha the C/Funds Group, Inc. is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Florida
and that its Articles of Incorporation provide that when its shares of common
stock are sold, they will be legally issued, fully paid and non-assessable.
No opinion is being rendered with respect to laws of any other state or of the
federal government.
Very truly yours,
Andrew J. Britton
AJB/bk
February 29, 1996
Mr. Roland Caldwell
C/FUNDS Group, Inc.
250 Tampa Avenue West
Venice, Florida 34285
Dear Mr. Caldwell:
We hereby consent to the use of our report dated January 12, 1996
on the financial statements of C/FUNDS Group, Inc. (comprising,
respectively, the C/Fund, C/Growth Stock Fund, C/Government Fund,
C/Tax Free Fund, C/Community Association Reserve Fund, and Adams
Equity Fund Portfolios) as of December 31, 1995 and for the year
then ended. Such report is being included with unaudited finan-
cial information prepared by management in documents filed by
C/FUNDS Group, Inc. as required by the Securities and Exchange
Commission.
GREGORY, SHARER & STUART
St. Petersburg, Florida
REPORT ON INTERNAL ACCOUNTING CONTROL
To the Board of Directors
C/FUNDS Group, Inc.
Venice, Florida
In planning and performing our audit of the financial statements
of C/FUNDS Group, Inc. (comprising, respectively, the C/Fund,
C/Growth Stock Fund, C/Government Fund, C/Tax Free Fund and
C/Community Association Reserve Fund, and Adams Equity Fund
Portfolios) for the year ended December 31, 1995, we considered
its internal control structure, including procedures for safe-
guarding securities, in order to determine our auditing proce-
dures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of C/FUNDS Group, Inc. is responsible for estab-
lishing and maintaining an internal control structure. In ful-
filling this responsibility, estimates and judgments by manage-
ment are required to assess the expected benefits and related
costs of internal control structure policies and procedures. Two
of the objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or
disposition, and transactions are executed in accordance with
management's authorization and recorded properly to permit prepa-
ration of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control struc-
ture, errors or irregularities may occur and may not be detected.
Also, projection of any evaluation of the structure to future
periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control struc-
ture that might be material weaknesses under standards estab-
lished by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or opera-
tion of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregu-
larities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no mat-
ters involving the internal control structure, including proce-
dures for safeguarding securities, that we consider to be materi-
al weaknesses as defined above as of December 31, 1995.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 12, 1996
