SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 23 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 25 [X]
(Check appropriate box or boxes.)
C/Funds Group, Inc.
(Exact Name of Registrant as Specified in Charter)
P. O. Box 622, Venice, FL 34284-0622
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 800-338-9477
Roland G. Caldwell, Jr., 250 Tampa Ave. W., Venice, FL 34285
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective (check
appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
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
decrease of a total of (80,705) shares through December 31, 1999,
for a total consideration, net of redemptions, of ($312,233), on
which registration fees were not required, 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, 1999.
[graphic representation of "Prospectus"]
C/Funds Group, Inc.
February 28, 2000
The Series Funds
C/Fund
C/Growth Stock Fund
C/Government Fund
C/Community Association Reserve Fund
C/Funds Group, Inc. (the "Company") is a
diversified, open-end, regulated investment
company, incorporated in Florida and registered
under the Securities Act of 1933 and the
Investment Company Act of 1940. It offers four
series Funds (the "Funds"), each with its own
purpose, investment objectives, and associated
risks as described in this Prospectus.
This Prospectus contains information, which you
should know about The Company and its Funds before
you invest. Please keep it for future reference.
Neither the securities exchange
commission nor any state securities
commission has approved or disapproved
of these securities or passed upon the
adequacy or accuracy of the prospectus.
Any representation to the contrary is a
criminal offense.
C/Funds Group, Inc.
P. O. Box 622
Venice, Florida 34282-0622
Voice: 941-488-6772 Toll-Free: 800-338-9477 Fax: 941-496-4661
A No-Load Fund Group
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Table of Contents
C/Fund 1
Investment Objective, Strategies, and Risks 1
Fees and Expenses 2
Financial Highlights 3
C/Growth Stock Fund 5
Investment Objective, Strategies, and Risks 5
Fees and Expenses 6
Financial Highlights 7
C/Government Fund 9
Investment Objective, Strategies, and Risks 9
Fees and Expenses 10
Financial Highlights 11
C/Community Association Reserve Fund 13
Investment Objective, Strategies, and Risks 13
Fees and Expenses 14
Financial Highlights 15
Fund Performance Discussion 17
Management and Capital Structure 17
Investment Advisor 17
Capital Structure 18
Shareholder Information 18
Introduction 18
Pricing of Fund Shares 18
Purchasing Shares 19
Redeeming Shares 19
Dividends, Distributions, and Tax Consequences 20
IRA and Retirement Accounts 20
Financial Information 21
Highlights 21
Shareholder Reports 21
Custodian, Auditor, and Distributor 21
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C/Fund
Investment Objective
Seek to maximize shareholder's total returns by investing in
securities that offer the potential for capital gains, both realized
and unrealized, and that produce dividend and/or interest income.
When gains and income are added together, the total can be calculated
as a percentage of the amount invested, producing a "total" return in
percentage terms. This percentage then allows investors to fairly
compare the performance of C/Fund with investment sectors, funds or
securities having similar risk and financial traits.
Principal Investment Strategies
The C/Fund portfolio invests in stocks and fixed-income securities in
proportions designed to meet its investment objectives while
minimizing the risk of net asset value decline. The mix between
stocks and fixed investments changes at times in response to market
conditions while maintaining some balance within these two major
categories most of the time.
While equity markets appear favorable, the Fund buys and holds a
reasonably balanced percentage of its assets in:
o Regularly traded common stocks,
o convertible preferred stocks, and
o investment grade convertible bonds issued by listed public
companies
The Fund's primary policy is to invest most often in issues such as
those traded on the New York Stock Exchange and NASDAQ. However, to
take advantage of investment opportunities, it may still invest in
equities that may trade over the counter. The Fund is registered and
managed as a diversified mutual fund.
When the market experiences major weakness, the Fund reduces equity
investments in favor of fixed-income investments to protect asset
value. At such times, it would most often invest in the fixed-income
investments, such as short term investment grade securities. These
investments include:
o U.S. Government issues, or
o Money market investments.
For additional restrictions that the Fund has imposed upon itself,
please see the appropriate section in the Fund's Statement of
Additional Information. It is on file with the Securities and
Exchange Commission and is available to you free at your request
placed to the telephone number or address shown on the cover of this
Prospectus.
Principal Investment Risks
Investor Profile
A conservative investor who wants a fair current income plus potential
for appreciation.
Risks
As with all marketable securities, risk of price declines of Fund
securities is unavoidable. During times when the Fund is
substantially invested in securities, its value can be adversely
affected by a market decline. While shifted to fixed income
investments, the fund is subject to interest rate risks associated
with investment maturities. In its efforts to match or exceed returns
produced by the popular market averages such as the Dow Jones
Industrial Average and the Standard and Poor's 500 Average the Fund
attempts to minimize the risk of asset value declines. It seeks to do
this by being less exposed to equities during periods when the general
market is weak and being more exposed to equity risk when the general
market is strong. Even though that is a Fund objective, there is no
assurance that it can be achieved. Correct timing of movement from
one type of investment to another is critical but difficult to
accomplish successfully at all times.
C/Fund (continued)
Principal Investment Risks (continued)
Risk/Return Bar Chart and Table
The following bar chart and table provide an indication of the risks
of investing in C/Fund. The bar chart shows changes in the Fund's
performance from year to year over a 10-year period. The table shows
how the Fund's average annual returns for one, five, and ten years
compare to those of a broad-based securities market index. Remember
that how the Fund has performed in the past is not necessarily an
indication of how it will perform in the future.
[bar chart graphic]
During the period shown in the following bar chart, the highest return
for a quarter was 17.1% (quarter ending December 31, 1998) and the
lowest return for a quarter was -9.7% (quarter ending September 30,
1990).
Average Annual Total Returns Past Past Past
(for the periods ending December 31) 1 Year 5 Years 10 Years
C/Fund 10.7% 19.0% 13.3%
S&P 500* 19.5% 26.2% 15.3%
* This is the Standard & Poor's Composite Index of 500 Stocks, a wide-
ly recognized, unmanaged index of common stock prices.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares in the Fund.
Shareholder Transaction Expenses Annual Fund Operating Expenses
(fees paid directly (expenses that are de-
from your investment) ducted from Fund assets)
Sales Commissions to None Investment Advisor's Fee 1.00%
Purchase Shares 12b-1 Fees None
Commissions to Reinvest None Other Operating Expenses .75%
Dividends Total Operating Expenses 1.75%
Redemption Fees None
C/Fund (continued)
Fees and Expenses of the Fund (continued)
Examples:
This example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of
those periods. This example also assumes that your investment has a
5% return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 year 3 years 5 years 10 years
$178 $551 $949 $2,062
Expenses shown in these examples do not represent
actual past or future expenses. Actual expenses may be
more or less than those shown. The assumed 5% return
is hypothetical, and is not a representation or
prediction of past or future returns, which may be more
or less than 5%.
Financial Highlights
This financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Gregory, Sharer and Stuart, whose report, along with
the Fund's financial statements, are included in the Company's Annual
Report, which is available upon request.
1995 1996 1997 1998 1999
Net Asset Value Beginning of $13.95 $16.83 $17.71 $20.61 $23.79
Period
Net Investment Income (Loss) .21 .19 .24 .28 .19
Net Realized and Unrealized Gain 3.42 2.56 3.50 4.12 2.35
(Loss) on Investments
Total Income (Loss) From Invest- 3.63 2.75 3.74 4.40 2.54
ment Income
Dividends From Net Investment (.21) (.19) (.26) (.72) (.19)
Income
Distributions from Net Realized (.54) (1.58) (.58) (.50) (1.52)
Capital Gains
Returns of Capital -- (.10) -- -- --
Total Distributions (.75) (1.87) (.84) (1.22) (1.71)
Net Asset Value at End of Period 16.83 17.71 20.61 23.79 24.62
Total Return(1) 26.18% 16.15% 20.95% 21.39% 10.66%
Net Assets at End of Period $4,352 $5,423 $7,137 $8,860 $9,788
(000s)
Ratio of Expenses to Average 1.85% 1.90% 1.79% 1.68% 1.75%
Net Assets
Ratio of Net Income to Average 1.36% 1.05% 1.24% 1.27% .77%
Net Assets
Portfolio Turnover Rate 5.46% 11.38% 10.28% 17.58% 39.65%
(1) Computed based on audited figures.
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C/Growth Stock Fund
Investment Objective
Maximum principal appreciation with dividend income a secondary
consideration while investing substantially all of the Fund's assets
in stocks at all times.
Principal Investment Strategies
The C/Growth Stock Fund portfolio invests substantially all of its
assets, regardless of market conditions, in the common stocks or
equivalents (such as convertible preferreds or bonds) of more rapidly
growing companies. Some Fund assets are invested in large
capitalization companies, but a major portion may be invested in
medium to small capitalization companies having a total capital value
of $1billion or less. The advisor makes investment selections by
identifying companies that have above average growth prospects,
regardless of capitalization or annual sales volume. Substantially
all of its assets are invested all of the time in stocks. Liquid
assets in the Fund that are awaiting investment in stocks are held in
short term money market accounts or in short term U.S. government
securities having maturities of less than one year.
Stock selections are made using a variety of research sources,
including proprietary analytical methodology that produces
quantitative, computer-generated analyses of corporate financial
information. These sources and analyses help identify companies whose
management appears to understand how to build shareholder wealth
regularly and systematically, and manages to that end. The advisor's
research indicates that understanding the importance of regularly
maintaining or increasing corporate returns on invested capital
ultimately creates a positive impact on the market value of the
targeted company's outstanding shares. The advisor believes this is
largely due to the company earning a return on invested capital that
is consistently higher than the "cost" of its invested capital. When
this takes place, shareholder wealth increases as a result of the rise
in share price.
Principal Investment Risks
Investor Profile
The investor who wants potentially rapid principal value appreciation
and who is willing to assume a higher degree of risk and more net
asset value volatility.
Risks
The characteristics of securities selected for this Fund include the
possibility for rapid growth and appreciation. However, they also
commonly possess greater risk of price declines and in some rare
cases, even corporate insolvency when less seasoned companies and
management teams are unable to compete successfully in their
respective businesses. The aggressive approach taken in this Fund can
result in greater price volatility with attendant above average
fluctuations in net asset value per Fund share, including a loss in
value during periods when shares of stock of smaller companies lose
favor with investors.
The advisor does not consider portfolio turnover a constraint when
deciding to take profits or losses or to re-employ assets in
investments better suited to meeting Fund objectives. Accordingly,
the Fund can have higher turnover compared to funds with longer term
orientations. This can cause the Fund to frequently realize capital
gains or losses, which it distributes to shareholders annually for
inclusion in their personal income tax return. (See the "Federal
Income Tax Status" section on page 20 for more information about
capital gains tax status.)
Risk/Return Bar Chart and Table
The following bar chart and table provide an indication of the risks
of investing in C/Growth Stock Fund. The bar chart shows changes in
the Fund's performance from year to year since its first full year of
operation. The table shows how the Fund's average annual returns for
one and five years and since inception compare to those of a broad-
based securities market index. Remember that how the Fund has
performed in the past is not necessarily an indication of how it will
perform in the future.
C/Growth Stock Fund (continued)
Risk/Return Bar Chart and Table (continued)
[bar chart graphic]
During the period shown in the bar chart, the highest return for a
quarter was 25.7% (quarter ending December 31, 1998) and the lowest
return for a quarter was -11.9% (quarter ending September 30, 1998).
Since
Average Annual Total Returns Past Past Inception
(for the periods ending December 31) 1 Year 5 Years (07/12/92)
C/Growth Stock Fund 34.3% 24.7% 15.2%
S & P 500* 19.5% 26.2% 18.4%
* This is the Standard & Poor's Composite Index of 500 Stocks, a wide-
ly recognized, unmanaged index of common stock prices.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares in the Fund.
Shareholder Transaction Expenses Annual Fund Operating Expenses
(fees paid directly (expenses that are de-
from your investment) ducted from Fund assets)
Sales Commissions to None Investment Advisor's Fee 1.00%
Purchase Shares 12b-1 Fees None
Commissions to Reinvest None Other Operating Expenses .74%
Dividends Total Operating Expenses 1.74%
Redemption Fees None
Examples
This example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of
those periods. This example also assumes that your investment has a
5% return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 year 3 years 5 years 10 years
$177 $548 $944 $2,052
Expenses shown in these examples do not represent
actual past or future expenses. Actual expenses may be
more or less than those shown. The assumed 5% return
in hypothetical, and is not a representation or
prediction of past or future returns, which may be more
or less than 5%.
C/Growth Stock Fund (continued)
Financial Highlights
This financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Gregory, Sharer and Stuart, whose report, along with
the Fund's financial statements, are included in the Company's Annual
Report, which is available upon request.
1995 1996 1997 1998 1999
Net Asset Value Beginning of $9.34 $11.28 $12.38 $13.65 $15.84
Period
Net Investment Income (Loss) .02 (.05) (.10) (.06) (.13)
Net Realized and Unrealized Gain 2.13 2.24 3.20 2.96 5.49
(Loss) on Investments
Total Income (Loss) From Invest- 2.15 2.19 3.10 2.90 5.36
ment Income
Dividends From Net Investment (.02) -- (.15) -- --
Income
Distributions from Net Realized (.19) (1.08) (1.68) (.71) (3.91)
Capital Gains
Returns of Capital -- (.01) -- -- --
Total Distributions (.21) (1.09) (1.83) (.71) (3.91)
Net Asset Value at End of Period 11.28 12.38 13.65 15.84 17.29
Total Return(1) 22.81% 20.30% 25.48% 21.25% 34.25%
Net Assets at End of Period $2,080 $2,212 $2,541 $3,082 $3,647
(000s)
Ratio of Expenses to Average Net 1.85% 1.90% 1.81% 1.68% 1.74%
Assets
Ratio of Net Income to Average .20% (.45%) (.68%) (.45%) (.78%)
Net Assets
Portfolio Turnover Rate 16.46% 4.26%% 51.11% 88.47% 118.73%
(1) Computed based on audited figures.
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C/Government Fund
Investment Objective
Seek to earn and pay out to shareholders a regular income return above
that produced by money market portfolios while also minimizing net
asset value volatility and credit risk.
Principal Investment Strategies
This Fund invests substantially all of its assets in obligations of
the U.S. government or one or more of its agencies which offers the
opportunity to minimize price change and uses yield curve timing and
maturity step-laddering. It only seeks the higher yields available on
issues with maturities longer than a year when the attendant net asset
value fluctuations appear to be at a minimum due to a lower
probability that interest rates in general will rise.
The Fund buys seasoned issues below or above par or face value and
step-ladders the portfolio so that issues usually mature at regular
intervals, creating reinvestment opportunities in varying interest
rate environments. While there are no restrictions on maturities or
terms of purchased issues, the advisor typically invests in issues
with under 10 year maturities. Maturities may change from time to
time according to the Fund advisor's views on future interest rate
trends. Volatility of the Fund's share NAV is minimized if the
manager is successful in shortening the duration of its bond
portfolios when rates appear to be likely to rise, and lengthening
duration or the average maturity of the Fund's securities when
inflationary influences and expectations appear to be on the wane,
thus increasing the probability that interest rates will hold near
current levels or even decline during periods ahead.
Typically, all available monies are invested in government issues to
the extent practical, economical, and warranted by the then-existing
interest rate climate as it relates to the Fund's objectives. When
any monies are uninvested, they are automatically swept overnight into
a short term money market which the advisor considers a permanent
portfolio investment class or sector.
Principal Investment Risks
Investor Profile
The investor who wants income and principal safety with minimum net
asset value volatility, but who also seeks a higher return than that
which is available through money market or bank savings accounts.
Risks
The advisor tries to minimize net asset value changes by adjusting the
portfolio from time to time, and to reduce share price risk through
various portfolio management techniques. But, shareholders should
know that fluctuations will likely occur in line with any changes in
the government issues held. Longer maturities afford higher yields
but contribute to price fluctuation. This risk of price decline is
always present and investors in Fund shares should be aware that the
Fund will not always be able to achieve its objective of minimum
price fluctuations.
Risk/Return Bar Chart and Table
The following bar chart and table provide an indication of the risks
of investing in C/Government Fund. The bar chart shows changes in the
Fund's performance from year to year its first full year of operation.
The table shows how the Fund's average annual returns for one and five
years and since inception compare to those of a broad-based securities
market index. Remember that how the Fund has performed in the past is
not necessarily an indication of how it will perform in the future.
C/Government Fund (continued)
Risk/Return Bar Chart and Table (continued)
[bar chart graphic]
During the period shown in the bar chart, the highest return for a
quarter was 5.1% (quarter ending September 30, 1998) and the lowest
return for a quarter was -0.5% (quarter ending March 31, 1997).
Since
Past Past Inception
Average Annual Total Returns 1 Year 5 Years (07/12/92)
(for the periods ending December 31)
C/Government Fund 0.6% 6.4% 5.6%
Merrill Lynch 1-10 Year Treasury 0.6% 7.0% 6.0%
Index*
* This is a widely recognized index of U.S. Government securities
with maturities of 1 to 10 years.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares in the Fund.
Shareholder Transaction Expenses Annual Fund Operating Expenses
(fees paid directly (expenses that are de-
from your investment) ducted from Fund assets)
Sales Commissions to None Investment Advisor's Fee .50%
Purchase Shares 12b-1 Fees None
Commissions to Reinvest None Other Operating Expenses .49%
Dividends Total Operating Expenses .99%
Redemption Fees None
Examples
This example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of
those periods. This example also assumes that your investment has a
5% return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 year 3 years 5 years 10 years
$101 $315 $547 $1,213
Expenses shown in these examples do not represent
actual past or future expenses. Actual expenses may be
more or less than those shown. The assumed 5% return
in hypothetical, and is not a representation or
prediction of past or future returns, which may be more
or less than 5%.
C/Government Fund (continued)
Financial Highlights
This financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Gregory, Sharer and Stuart, whose report, along with
the Fund's financial statements, are included in the Company's Annual
Report, which is available upon request.
1995 1996 1997 1998 1999
Net Asset Value Beginning of $9.44 $10.02 $9.87 $10.01 $10.23
Period
Net Investment Income (Loss) .54 .56 .57 .54 .50
Net Realized and Unrealized Gain .58 (.15) .14 .22 (.44)
(Loss) on Investments
Total Income (Loss) From Invest- 1.12 .41 .71 .76 .06
ment Income
Dividends From Net Investment (.54) (.56) (.57) (.54) (.50)
Income
Distributions from Net Realized -- -- -- -- --
Capital Gains
Returns of Capital -- -- -- -- --
Total Distributions (.54) (.56) (.57) (.54) (.50)
Net Asset Value at End of Period 10.02 9.87 10.01 10.23 9.79
Total Return (1) 12.34% 4.12% 7.35% 7.89% 0.55%
Net Assets at End of Period $3,972 $4,737 $4,543 $9,983 $8,944
(000s)
Ratio of Expenses to Average .99% 1.02% 1.01% .96% .99%
Net Assets
Ratio of Net Income to Average 5.54% 5.60% 5.74% 5.55% 5.00%
Net Assets
Portfolio Turnover Rate 124.70% 59.95% 22.05% 0.00% 99.20%
(1) Computed based on audited figures.
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C/Community Association Reserve Fund
Investment Objective
Seek to earn a regular income return that is greater than can be
earned on a money market type investment while minimizing fluctuations
in the Fund's NAV.
Principal Investment Strategies
This specialty Fund is specifically designed and managed as a
repository for reserve funds of Florida "Community Associations" with
the goals of:
o A higher return than is available from other forms of eligible
investments, and
o Net asset value safety and stability.
The Fund qualifies as an eligible investment for association reserve
funds under Florida law and invests solely in obligations of the U.S.
government or its agencies. It invests in short to intermediate term
issues, most often having an average maturity of under 5 years. While
fluctuations may be greater with maturities greater than one year, the
Fund advisor manages the portfolio to meet its objectives while
seeking to minimize share price volatility.
Mathematical comparison of price risk potential to intermediate
duration yields information that the advisor uses to assess whether
investing in higher interest paying issues of longer maturity is
profitable enough to justify or offset the added risk of price
fluctuations. The advisor also uses portfolio management techniques,
which may include, among others, yield-curve timing and portfolio
maturity step-laddering to achieve Fund goals. Lengthening the Fund
portfolio's average maturity or duration during periods of easing
inflation and interest rates and shortening during periods of rising
inflation fears, helps the Fund achieve its objectives.
Principal Investment Risks
Investor Profile
"Community Associations" that want to invest reserve funds safely
while earning a higher return than is available on bank deposits or
money market accounts with minimum net asset value fluctuation. This
Fund is solely for Florida "Community Associations" which are
registered and operating under the regulation of the State of Florida
Bureau of Condominiums.
Risks
The advisor tries to minimize net asset value changes by adjusting the
portfolio from time to time, and to reduce share price risk through
various portfolio management techniques. However, associations
investing reserve funds in this Fund should be aware that it is
unlikely that the Fund will be successful in every instance when it
seeks to minimize volatility or price declines in the Fund's NAV. The
longer the maturity of issues held the larger the percentage of price
change when interest rates change, both up and down. The Fund seeks
to minimize price declines by shortening maturities of issues held
prior to an actual rise in interest rates rather than waiting until an
actual rise takes place. This tends to reduce returns to shareholders
when an incorrect assessment has been made about interest rates but
reduces the volatility of Fund shares due to the smaller price changes
inherent with shorter term maturity issues.
Risk/Return Bar Chart and Table
The following bar chart and table provide an indication of the risks
of investing in C/Community Association Reserve Fund. The bar chart
shows changes in the Fund's performance from year to year since its
first full year of operation. The table shows how the Fund's average
annual returns for one and five years and since inception compare to
those of a broad-based securities market index. Remember that how the
Fund has performed in the past is not necessarily an indication of how
it will perform in the future.
C/Community Association Reserve Fund (continued)
Risk/Return Bar Chart and Table (continued)
[bar chart graphic]
During the period shown in the bar chart, the highest return for a
quarter was 2.6% (quarter ending December 31, 1997) and the lowest
return for a quarter was 0.5% (quarter ending September 30, 1997).
Since
Average Annual Total Returns Past Past Inception
(for the periods ending Decemer 31) 1 Year 5 Years (07/12/92)
C/Community Association Reserve Fund 3.2% 5.4% 5.4%
Merrill Lynch 1-10 Year Treasury 0.6% 7.0% 6.0%
Index*
* This is a widely recognized index of U.S. Government securities
with maturities of 1 to 10 years.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy
and hold shares in the Fund.
Shareholder Transaction Expenses Annual Fund Operating Expenses
(fees paid directly (expenses that are de-
from your investment) ducted from Fund assets)
Sales Commissions to None Investment Advisor's Fee .50%
Purchase Shares 12b-1 Fees None
Commissions to Reinvest None Other Operating Expenses .52%
Dividends Total Operating Expenses 1.02%
Redemption Fees None
Examples:
This example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all of your shares at the end of
those periods. This example also assumes that your investment has a
5% return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 year 3 years 5 years 10 years
$104 $325 $563 $1,248
Expenses shown in these examples do not represent
actual past or future expenses. Actual expenses may be
more or less than those shown. The assumed 5% return
in hypothetical, and is not a representation or
prediction of past or future returns, which may be more
or less than 5%.
C/Community Association Reserve Fund (continued)
Financial Highlights
This financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years. Certain
information reflects financial results for a single Fund share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Gregory, Sharer and Stuart, whose report, along with
the Fund's financial statements, are included in the Company's Annual
Report, which is available upon request.
1995 1996 1997 1998 1999
Net Asset Value Beginning of $10.00 $10.00 $10.00 $10.00 $10.03
Period
Net Investment Income (Loss) .60 .58 .56 .52 .50
Net Realized and Unrealized Gain -- -- .04 .03 (.18)
(Loss) on Investments
Total Income (Loss) From Invest- .60 .58 .60 .55 .32
ment Income
Dividends From Net Investment (.60) (.58) (.60) (.52) (.50)
Income
Distributions from Net Realized -- -- -- -- --
Capital Gains
Returns of Capital -- -- -- -- --
Total Distributions (.60) (.58) (.60) (.52) (.50)
Net Asset Value at End of Period 10.00 10.00 10.00 10.03 9.85
Total Return(1) 6.29% 5.95% 6.08% 5.70% 3.18%
Net Assets at End of Period $430 $548 $854 $724 $811
(000s)
Ratio of Expenses to Average (2)-- (2)-- .14% .96% 1.02%
Net Assets
Ratio of Net Income to Average 5.96% 5.83% 6.21% 5.28% 4.99%
Net Assets
Portfolio Turnover Rate 41.35% 9.61% 52.64% 14.20% 70.99%
(1) Computed based on audited figures.
(2) Expenses and fees were absorbed by the Advisor.
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Fund Performance Discussion
Management's discussion of Fund performance is contained in the
Company's Annual Report and in the Investment Letters produced monthly
by its Custodian, Caldwell Trust Company and mailed to all
shareholders. Both the Annual Report and these Investment Letters are
made a part of this Prospectus by reference. To receive a free copy
of the Annual Report, call or write the Company at the telephone
number or address shown on both the front and back covers of this
Prospectus. To review or print the Annual Report and Investment
Letters via the internet, go to http://www.ctrust.com.
Management and Capital Structure
Investment Advisor
Omnivest Research Corporation
250 Tampa Ave. West
Venice, FL 34285
Voice: (941) 493-4295
Toll-Free: (800) 338-9477
Fax: (941) 496-4660
The Company's Funds retain Omnivest Research Corporation ("ORC") as
investment Advisor under annual contracts with each Fund. ORC is
registered under the Investment Advisors Act of 1940 and with the
Florida Division of Securities, Tallahassee, Florida. As such, it
periodically files reports with both agencies, which are available for
public inspection.
ORC is a Florida corporation wholly owned by Trust Companies of
America, Inc., a holding company controlled by Roland G. Caldwell and
his family. It has provided services to, and has had experience with,
the management of investment companies since 1984. Its investment
management history, and that of its principal, Roland G. Caldwell,
includes serving as portfolio manager and/or investment advisor to
corporations, individuals, retirement accounts, charitable
foundations, and insurance companies. 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.
Roland G. Caldwell and Roland G. Caldwell, Jr. are the primary
investment professionals and Fund managers within ORC. The senior Mr.
Caldwell has been active without interruption since 1958 in the field
of investment research and portfolio management, both privately and as
an officer of large domestic and foreign trust and banking
institutions. Mr. Caldwell, Jr., who is President of ORC, has worked
in the financial services industry since 1988 in trust account
administration for individual investors as well as investment company
and investment advisor management.
As Advisor to all Fund series, ORC receives the following fees:
o 1% per annum of the average daily market value of the net assets of
C/Fund and C/Growth Stock Fund, and
o .5% per annum of the average daily market value of C/Government Fund
and C/Community Association Reserve Fund.
Although 1% of assets may be higher than fees paid by some other
equity mutual funds, the Advisor believes it to be comparable to those
charged by other advisors to funds with similar objectives. The fee
also takes into account that the Advisor pays costs of administering
the Company's Fund series portfolios, including accounting record
maintenance and shareholder ledgers.
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. If actual expenses ever exceed the 2%
limitation, the Advisor reimburses the Fund for such excess expenses
and fully discloses to Fund shareholders in financial statements in
accordance with generally accepted accounting practices.
Management and Capital Structure (continued)
Investment Advisor (continued)
ORC has its registered offices at 250 Tampa Avenue West, Venice,
Florida, 34285. C/Funds Group, Inc., shares facilities, space and
staff with both its custodian and with ORC.
Presently, the Company leases mutual fund software from C/Data Systems
which is wholly-owned by Trust Companies of America, Inc. (For
additional details, please refer to the Investment Advisory and Other
Services section in the Statement of Additional Information).
Capital Structure
Organized October 24, 1984, the Company and its entire capitalization
consists solely of 5 million shares of authorized common stock with a
par value of $.001 each. When issued, each full or fractional share
is fully paid, non-assessable, transferable and redeemable.
Shareholder Information
Introduction
As a shareholder, you vote your Fund series shares at each annual or
special meeting on any matters on which you are entitled to vote by
law or under provisions of the Company's articles of incorporation.
All shares are of the same class, and each full share has one vote.
Fractional shares (issued to three decimal places) have no voting
rights.
You also vote to elect corporate directors and on other matters that
affect all Fund series. As a holder of a particular Fund series, you
vote on matters that exclusively affect that Fund series. For
example, you would vote on an investment advisory agreement or
investment restriction relating to your Fund series alone.
As holders of a particular Fund series, you have distinctive rights
regarding dividends and redemption, which are more fully described,
later in this Prospectus and in the Statement of Additional
Information. The Board of Directors, at its discretion, declares
dividends for each Fund series as often as is required for the Company
to maintain qualification under Sub-Chapter M of the IRS code.
Direct all shareholder inquiries to the Company at the address and
telephone number listed on the cover page of this Prospectus.
Pricing of Fund Shares
The Company calculates the Net Asset Value ("NAV") 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. It ordinarily
values its portfolio of securities based on market quotes. If
quotations are not available, it values securities or other assets by
a method which the Board of Directors believes most accurately
reflects fair value.
The formula for calculating the NAV per share is:
Total market value of all assets, cash and securities held, minus
Any liabilities, divided by
The total number of shares outstanding that day.
Shareholder Information (continued)
Purchasing Shares
The Company requires no minimum to open an account or to make
subsequent investments. After opening an account, you can make
purchases in person or by mail. To open an account:
o Complete and sign the application enclosed with each Prospectus,
o Return it personally or by mail to the Company at P. O. Box 622,
Venice, FL 34282-0622, along with a check payable to the name of
the Fund in which you are investing.
Your check for an initial or subsequent investment does not have to be
certified. If your check does not clear, the Company will cancel your
order(s) and you may be liable for losses or fees incurred, or both.
On the business day the Company receives your completed application
and check, the Company purchases shares for your account at the NAV
per share of the Fund you selected, as calculated that same day.
The Company opens a separate account for you for each Fund you
purchase. It credits each account with, and holds in it, all shares
that you purchase or that are issued to you, such as automatic
dividend reinvestments and capital gains distributions. The Company
allocates fractional shares for purchases (and redemptions), including
reinvested distributions. For example, if you purchase $1,000 at a
NAV of $11.76 per share, the Company will credit your account with
85.034 shares. Remember that for voting purposes, fractional shares
are disregarded.
If you want dividend or capital gains distributions in cash rather
than additional shares, or want share certificate issued, you can make
a written request containing all documentation that the Company
requires. Call the Company at 1-800-338-9477 or write to the address
shown on the front cover of this Prospectus to find out about the
documentation the company requires for such requests.
To accommodate IRA investments and IRA rollovers, which are often odd
amounts, the Company allows all IRA participants to invest or rollover
such IRA monies in Fund shares in any amount that is eligible or
allowed under current Internal Revenue Service rules.
The Company reserves the right to reject new account applications or
additional purchases for an existing account. It also reserves the
right to terminate the offering of shares made by this Prospectus if
the Board of Directors determines that such action is in the interest
of shareholders.
Redeeming Shares
The Company will redeem, with no redemption fee, all or any portion of
your shares in any Fund on any day that a NAV is calculated for that
Fund. The price paid to you will be the NAV per share next determined
after the Company receives your redemption request.
To redeem shares, you and any other owner of the affected account must
sign a written request in the exact same way that the shares are
registered as shown on the original application you submitted which
the Company holds in its records.
If you hold a share certificate, to redeem it you must deposit it with
the Company along with all necessary legal documentation. That
documentation includes, but is not necessarily limited to, a written
and signed redemption request with the signature guaranteed by an
official of a commercial bank, trust company, or member firm of the
New York Stock Exchange.
The Company normally pays for redeemed shares on the next business day
immediately following the redemption date. The Company reserves the
right, however, to withhold payment for up to seven (7) calendar days
if necessary to protect the interests of the Company or its
shareholders. Redemption proceeds are mailed to the shareholder's
current mailing address.
If you purchase shares and then request redemption within 15 days, you
are not eligible to receive payment until the Company determines to
its satisfaction that the funds you used to make the purchase have
cleared and are available for payout.
Shareholder Information (continued
Redeeming Shares (continued)
No minimum amount is necessary to keep an account open, except that
the Company reserves the right to request that small accounts be
redeemed and closed if the cost of activity in the accounts is
unjustified. The Company will provide prior notice of not less than
60 days to shareholders before 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 invested.
The Company reserves the right to refuse or discontinue share sales to
any investor who, in its opinion, is or may disrupt normal Company
operations or adversely affect the interests of the Company or Fund
shareholders by engaging in frequent or short-term purchase and
redemption practices or by other actions.
Share redemptions, whether voluntary or involuntary, may result in
your realizing a taxable capital gain or loss.
Dividends, Distributions, and Tax Consequences
The Company intends to remain a qualified "regulated investment
company" under Sub-Chapter M of the Internal Revenue Code and qualify
for the special tax treatment available by adhering to strict, self-
imposed restrictions.
Distributions to you as a shareholder of a particular Fund come from
interest and dividends that the Fund receives and net capital gains
realized during the tax year. Whether received in cash or as
additional shares, distributions of interest, dividends, and short-
term capital gains are normally considered as taxable in most
instances as ordinary income when received. Distributions of long-
term capital gains are taxable at the appropriate rate. Under tax
rules, individual taxpayers must report 100% of all income earned on
shares owned with no deduction allowed for certain fees and expenses
incurred. In short, all distributions of dividends, interest, and
capital gains realized are normally subject to tax.
Early each calendar year, the Company will give you the information
you need to correctly report the amount and type of dividends and
distributions on your tax return. To avoid the Company having to
withhold a portion of your dividends, you must provide needed
information, including a valid, correct Social Security or Tax
Identification Number.
IRA and Retirement Accounts
If you are eligible to open and/or make deposits to an Individual
Retirement Account ("IRA") including a Roth IRA, or Self-Employed IRA
("SEP-IRA"), you can use the Company as custodian to hold Fund shares,
but no other form of investments, securities, or assets. You must use
a trust company or other eligible custodian to hold any non-Fund
related securities or investments. Caldwell Trust Company, the Fund's
custodian, is eligible to serve as custodian for such purposes. It can
and will serve as custodian for any Fund shares on request. (For more
information regarding such services and fees, please call or write
Caldwell Trust Company directly or the Company at the address and
telephone number shown on the front page of this Prospectus).
If you have or open an IRA or SEP-IRA account and want to invest all
or portion of your deposits in shares of any Fund series, you can do
so by opening a "Self-Directed" IRA or SEP-IRA account with the
Company. To obtain copies of the forms needed to open an account,
write or call the Company. Retirement plans 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.
You can also invest funds deposited into other types of profit-
sharing, pension or retirement plans, including Keogh accounts 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
help you establish 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 you retain professional counsel
for such purposes
Financial Information
Highlights
Financial highlights for each Fund for the past five years, or since
inception if less, are included in the discussions of each Fund. This
information has been audited by Gregory, Sharer & Stuart whose report,
along with the Fund's financial statement, are available upon request.
To review this information for:
o C/Fund, go to page 3.
o C/Growth Stock Fund, go to page 7.
o C/Government Fund, go to page 11.
o C/Community Association Reserve Fund, go to page 15.
Shareholder Reports
The Company's latest annual financial statement is a part this
Prospectus by reference. If an interim financial statement with a
later date is available, it is incorporated by reference also. These
reports include:
o Statement of Assets and Liabilities,
o Statement of Operations,
o Statement of Changes in Net Assets,
o Schedule of Fund Investments,
o Per Share Tables,
o Notes to financial statements, and
o Any applicable supplementary information.
You receive the most recent annual statement and interim statement if
applicable, along with this Prospectus. Existing shareholders are the
exception, because they receive their statements earlier. You can
request a free copy of the most recent financial reports by contacting
the Company at the address on the cover of this Prospectus.
Custodian, Auditor, and Distributor
Custodian
Caldwell Trust Company, 201 Center Road, Suite Two, Venice, FL, 34292,
serves as custodian of the Funds' assets. Under an agreement as agent
for the Company, it is empowered to:
o Hold all assets, securities and cash for each separate series. It
may do so in the trust company's name or in its nominee name (or
names). It accounts to each Fund regularly for these holdings.
o Accept instructions for the purchase, sale or reinvestment of all
Fund assets from the Company's president or from the Funds' invest-
ment advisors.
o Disburse funds for authorized shareholder redemptions.
Auditor
Gregory, Sharer & Stuart, CPAs, 100 2nd Ave. S., Suite 600, St.
Petersburg, FL 33701, Certified Public Accountants, serves 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 Funds.
Distributor
The Company acts as distributor of all shares of its Funds and
maintains its own shareholder register by Fund, acting as transfer
agent for all common shares outstanding.
The Statement of Additional Information for
C/Funds Group, Inc. contains more information
about the Company and its Funds. The Company's
Annual Report and its Semi-Annual Report if
applicable (which are incorporated into this
Prospectus by reference) also provide additional
information. In the Annual Report, you will find
a discussion of the Funds' performance during its
last fiscal year.
The Statement of Additional Information, Annual
Report, and Semi-Annual Report if applicable are
available to shareholders without charge. To
request a copy of any of these documents, call or
write C/Funds Group, Inc. at the telephone number
or address shown below.
Information about the Company and its Funds can be
reviewed and copied at the Securities and Exchange
Commission Public Reference Room in Washington,
DC. Information on the operation of the Public
Reference Room can be obtained by calling the
Commission at 1-202-942-8090. Reports and other
information about the Company and its Funds are
available from the EDGAR Database on the
Commission's internet site at http://www.sec.gov
and copies of this information may be obtained, on
payment of a duplicating fee, by electronic
request at [email protected] or by writing the
Commission's Public Reference Section, Washington,
DC 20549-0102.
C/Funds Group, Inc.
Investment Company Act File Number 811-04246
P. O. Box 622 Venice, Florida 34284-0622 941-488-6772 800-338-9477
http://www.ctrust.com/cfunds.htm
[graphic representation of "Statement of Additional Information"]
C/FUNDS GROUP, INC.
P. O. Box 622
Venice, Florida, 34284-0622
Voice: 941-488-6772 Toll-Free: 800-338-9477 Fax: 941-496-4661
February 28, 2000
C/FUNDS GROUP, INC. ("the Company") is an open-end diversified
investment management company that operates a series of funds
in four portfolios ("the Funds") under the names C/FUND,
C/GROWTH STOCK FUND, C/GOVERNMENT FUND, AND C/COMMUNITY
ASSOCIATION RESERVE FUND.
This Statement of Additional Information is not a Prospectus.
You should read it in conjunction with the Prospectus dated the
same date. To receive a free copy of the Prospectus, write or
call the Company at the address or telephone numbers shown
above.
Table of Contents
Fund History 1
Date and Form of Organization 1
The Fund and Its Strategies and Risks 1
Classification 1
Investment Strategies and Risks 1
Fund Policies 5
Temporary Defensive Position 6
Portfolio Turnover 6
Management of the Fund 7
Board of Directors 7
Compensation 7
Control Persons and Principal Holders 8
Control Persons 8
Principal Holders 8
Management Ownership 9
Investment Advisory and Other Services 9
Investment Advisor 9
Services Provided by Advisor and Fund Expenses Paid 9
Service Agreements 10
Other Service Providers 10
Brokerage Allocation and Other Practices 10
Brokerage Transactions and Commissions 10
Brokerage Selection 11
Capital Stock 11
Purchase, Redemption, and Pricing of Shares 11
Purchase of Shares 11
Redemption of Shares 12
Pricing of Shares 13
Taxation of the Fund 13
Performance Calculation 14
Financial Information 14
Apppendix 15
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Fund History
Date and Form of Organization
C/Funds Group, Inc. was incorporated in the State of Florida on
October 24, 1984 under its original name, Caldwell Fund, Inc. In
1992, the corporation changed its name to C/Funds Group, Inc.
The Fund and Its Strategies and Risks
Classification
C/Funds Group, Inc. is a diversified, open-end, regulated investment
company registered under the Securities Acts of 1933 and 1934 and the
Investment Company Act of 1940.
Investment Strategies and Risks
Overview of the Funds and Their Objectives
Each Fund series has its own investment objective as briefly described
below.
o C/Fund is a "total return" fund that seeks growth and income. It
buys and owns both common stocks or equivalents, and fixed-income
obligations in any proportion that its Adviser deems appropriate at
any given time.
o C/Growth Stock Fund invests substantially all of its assets in
common stocks or equivalents at all times as it seeks maximum growth
of net asset value with only minor concern for volatility.
o 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.
o C/Community Association Reserve Fund is a specialized fund offered
only to qualified community associations in the State of Florida for
investment of association reserve funds. It invests in U.S. Govern-
ment or Agency obligations for safety and income.
Total Return Concept
The Adviser believes that the "total return" concept is an all-
important, though not well understood, factor affecting all investors
and asset managers in contemporary times. The goal of maximizing
portfolio returns with a minimum of risk is now a universal maxim
within the investment community. The Adviser further believes that
most, if not all, asset managers either knowingly or unknowingly use
the concept in their attempts to maximize returns, regardless of the
type of investment used.
The risks of value loss due to price change or to a deterioration in
the issuer's financial health are vitally important influences in
selecting investment types and specific securities within each type.
Accordingly, the Adviser invests or reinvests fund assets in varying
proportions in either fixed investments or equity investments
according to the Adviser's view of the immediate outlook for each
category.
The Company's original fund, then called the Caldwell Fund, now called
C/Fund, was established with "total return" as its investment
objective. The basic outline of that strategy applies in some
respects to each Fund series, constrained mainly by the types of
investments each series is permitted to acquire and hold. An edited
and updated version of the original description for C/Fund is provided
here for reference and information.
The Fund and Its Strategies and Risks (continued)
Investment Strategies and Risks (continued)
Total Return Concept (continued)
"The Fund and its Adviser think that high total returns are
mathematically achievable over time if a portfolio can:
o Minimize decline in investment value during periods of
sustained stock price weakness by reinvesting largely in
fixed-income investments; and
o Achieve average or better stock appreciation (as measured
against such popular market averages as the Dow-Jones
Industrial and Standard and Poor's 500 averages) during
periods of rising prices.
There is, of course, no assurance that the Adviser can
achieve this objective.
When investment appreciation is the goal, the Adviser
invests most fund assets in securities of widely-held, well-
known companies. Such investments are mostly common stocks
and other securities, whose prices tend to rise or fall
similarly to stocks, that are equivalent to or convertible
into an equity investment. When asset value protection is
most important, the Adviser most often invests in highest
quality investments with maturities selected to achieve its
goals in such a market environment. Such investments would
include Treasury or Government Agency issues, money market
investments, and other investments of similar quality.
With fixed-income securities, market prices fluctuate with
changes in interest rates, generally the longer the maturity
the greater the percentage change. As such, investing in
fixed-income securities provides an opportunity to make
capital gains. To maximize total return, from time to time
the Adviser may also invest in fixed-income securities,
doing so for appreciation from capital gains rather than for
value protection or current income maximization. The
Adviser would confine its fixed-income investment purchases
to bonds rated A or better by Standard & Poors (see
Appendix).
Flexibility is key to achieving "total return" in a
portfolio. Smaller investment companies have the advantage
of being able to add or remove total positions without
substantially or adversely influencing the market value of
individual issues traded. In today's markets, the share
position size that can be traded without disrupting the
market for the issues involved 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. Its Board of Directors
could decide to do so at any time if they feel it would be
in the best interests of the Company and/or Fund
shareholders to maintain adherence to its objective which
requires that it be able to sell and buy total security
positions.
The Adviser deems the most important portions of a
portfolio's total returns to be income from interest and
dividends and appreciation in share value. Appreciation is
viewed as a form of repayment for the risks of price change
that cannot be avoided when owning securities such as common
stocks whose prices constantly change.
Recognizing that interest and dividends are important in
enhancing returns sometimes results in shareholders
incurring federal, state and/or local income taxes on a
significant portion of their annual distributions.
Shareholders should understand that such tax considerations
are secondary to maximizing the Fund's total returns when
the Adviser makes investment decisions.
The Fund and Its Strategies and Risks (continued)
Investment Strategies and Risks (continued)
Total Return Concept (continued)
This policy is partly based on the Adviser's belief 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 believes 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 Individual Retirement
Accounts, Keogh and other pension plans, are ideally suited
for investing in one or more Fund series of the Company for
these and other reasons."
Common Stocks or Equivalents
These investments, "equities," represent either a residual share
ownership interest in a publicly-traded for-profit enterprise, or are
preferred shares or fixed-income obligations of an issuer that can be
converted into its common stock. In broad terms, the Adviser
categorizes for-profit enterprises into two basic groups: seasoned
large capitalization entities; and, newer smaller capitalization
entities. The features that help determine which category best fits
any given enterprise are:
o Annual sales volume and the rate of growth being experienced in
sales;
o Market value of all shares outstanding;
o Amount of debt owed;
o Profitability of the enterprise;
o Length of time it has been successfully in business; and,
o Kind of business in which it specializes or is seeking to parti-
cipate.
Usually the applicable category for an enterprise is obvious. General
Motors, AT&T, IBM, General Electric, and American Home Products are
large, seasoned, widely-held enterprises with long records to analyze.
Conversely, an enterprise that has been in business only three to five
years when it first offers its shares publicly is clearly an
unseasoned enterprise, probably with relatively small annual sales
volumes and small market capitalization. Less obviously, companies
that have been in business for many years, yet still have relatively
small market capitalizations and annual sales volumes, may owe
considerable debt as a percentage of total capital, or have unseasoned
management, or offer a less well-defined or understood product or
service.
Because equities normally are not required to pay a dividend unless
declared, and have no maturity date when repayment in full of an
initial investment is due, their market price tends to fluctuate with
the issuer's changing prospects and market conditions. This open-
ended nature makes equity investments more risky by definition and
accordingly inappropriate for some investment purposes.
Similarly, because common stocks have no fixed-income component
(convertible preferreds and fixed obligations excluded from this
definition because of their hybrid nature), investment value can
either advance or decline depending on the issuer's success. This
potential can attract those who are prepared to accept the risks in
exchange for the prospect of investment price appreciation and/or
dividend stream, as compared to other types of investments.
The Adviser believes equities or equivalents are the most attractive
type of investment available based on a superior long term equity
performance record, today's marketplace liquidity, and the favorable
longer term prospects for most enterprises in the current economic
environment. Accordingly, for those investors who can afford the
risk of price fluctuation or total investment loss in the most extreme
case, the Adviser expects that common stocks and equivalents will
continue to be the primary form of investment in Fund portfolios
allowing such investments.
The Fund and Its Strategies and Risks (continued)
Investment Strategies and Risks (continued)
Common Stocks or Equivalents (continued)
In making investment decisions, the Adviser considers all of these
criteria as well as commonly accepted financial data like per share
figures, return rates on capital, etc. Further, the Adviser uses
computer-generated data which provides information that helps to
determine whether the management team of an enterprise, regardless of
size, understands the need to add to shareholder wealth and knows how
to do it on a regular and sustained basis. This computerized analysis
uses inputs that are proprietary to the Adviser and its sources,
including an enterprise's "cost of capital" and its rate of return on
invested capital. The Adviser believes that shareholder wealth is
created when return on investment exceeds cost of capital. Both
current and past experience are important indicators of whether an
enterprise is succeeding on this basis, which in turn the Adviser sees
as evidence of its management's capabilities in this important regard.
Fixed-Income Obligations
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 has unique characteristics and terms which are complex and
awkward to describe in detail individually. Before making a fixed-
income investment purchase, the Adviser examines all known relevant
data regarding term, rate of interest, call features, conditions of
repayment, collateral, guarantees, etc.
In the current environment, U. S. Government obligations dominate the
fixed-income market and interest rates on most fixed-income
obligations are related or pegged in some way to rates on similar
government obligations. In such an environment, the Adviser believes
there is less need to invest in non-government related fixed-income
investments.
Further, investors in general have become more risk-averse in recent
years creating a favor for fixed-income investments that have some
form of insurance or government guarantee or backing. Because the
borrowing needs of the U. S. Treasury and other U. S. Government
Agencies have created substantial growth in the size of the government-
related securities market, interest rates being paid on such issues
are no longer significantly lower than the rates on high quality
privately-issued fixed-income obligations.
Strategies in Practice in the Funds
Generally, the Investment Adviser to the Company's Funds invests
C/Fund assets mostly in shares of larger, more seasoned enterprises
and C/Growth Stock Fund mostly in shares of smaller, less seasoned
enterprises. When the Adviser believes an enterprise is an
appropriate investment for a Fund, it makes a purchase decision
regardless of how others in the investment field might categorize the
enterprise as a particular class size by capitalization. In general,
however, the Adviser adheres to a practice of favoring seasoned issues
in the more conservative funds, and issues that appear to have faster
growth prospects, regardless of size, in the more aggressive funds.
Because of the factors discussed above at "Fixed-Income Obligations"
and for other reasons, the Adviser favors purchasing government-
related obligations, mostly Notes and Bonds, for all Funds, most
particularly those in which principal safety and income are primary
objectives such as C/Government Fund and C/Community Association
Reserve Fund. Although acquiring corporate fixed-income obligations
in C/Fund as part of its fixed-income component from time to time is
not prohibited, the Adviser favors and intends to continue to favor
government-related issues, which are more marketable than all other
forms of fixed-income securities. (See the Appendix for a further
definition of quality as defined by a major fixed-income rating
agency.)
The Fund and Its Strategies and Risks (continued)
Investment Strategies and Risks (continued)
Fund Policies
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. These restrictions
can only be fundamentally changed or amended 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, all Fund of the Company will not:
A. Invest in the direct purchase and sale of real estate.
B. Invest in options, futures, commodities or commodity contracts,
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 acquisition,
except for issues widely traded on exchanges or in markets domi-
ciled in the U.S., which may be held in any amount permitted regis-
tered 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 re-
stricts such investments to a limit of 5% of the Company's assets
in any one r egistered 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 purchase in
securities of companies that have been in business or been in con-
tinuous 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 marketable.
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 securities, which are per-
mitted to constitute 100% of the assets of any Fund of the Company
at any time.
I. Invest 25% or more of its total assets in a single industry or sim-
ilar group of industries, 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 issuers 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.)
The Fund and Its Strategies and Risks (continued)
Fund Policies (continued)
N. Purchase or retain any securities issued by an issuer, if any offi-
cer, director, or interested party of the Company or its Investment
Adviser 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.
Regarding Item E above, the Company uses computerized cash management
sweep services offered by custodians. These services presently
include reinvesting overnight and short term cash balances in shares
of a money market whose primary objective is principal safety and
maximum current income from holding highly liquid, short-term, fixed
investments, principally U. S. Government and Agency issues. The
Company only invests in such funds temporarily for convenience and
efficiency as it tries to keep short term monies invested at interest
only until it can make more permanent reinvestments in the ordinary
course of business.
Further, Item N above does not apply to C/Growth Stock Fund which is
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. C/Growth Stock Fund
has ever purchased such shares nor does it intend to do so in the
foreseeable future.
Temporary Defensive Position
Each fund series seeks to achieve its objectives by adhering to its
investment approach as outlined in the Prospectus. When equities are
the principal investment sector, each fund manager maintains short
term money market balances in order to earn interest on all cash
balances until stocks are selected and purchased. Likewise, fixed
income funds retain all cash in short term money market balances until
security selections are determined. In view of the modern investment
environment of low inflation and low interest rates, all fund managers
now consider money market balances as a permanent investment sector
when avoidance of price change on fixed investments is considered
consistent with fund objectives. As a total return fund, carrying
large money market balances at any given time for any length of time
is fully consistent with the objective of the C/Fund series.
Portfolio Turnover
The Company's policy is to limit each Fund's portfolio turnover to
transactions necessary to carry out its investment policies and/or to
obtain cash for share redemptions. Portfolio turnover rates, which
vary from period to period depending on market conditions, are
computed as:
The lesser of either total purchases or total sales, on an
annualized basis, divided by
The average total market value of the assets held.
For equity Funds, the portfolio turnover rate tends to be higher than
normal during formative years. Afterward, 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 Fund's investment
objectives. For government securities purchases and sales, turnover
is calculated if the securities mature beyond one (1) year from date
of purchase. This tends to increase the portfolio turnover
percentages, which are reported for each Fund series in the financial
statements incorporated into this Statement of Additional Information
by reference.
Turnover rate differences from 1998 to 1999 were not significant for
C/Fund and C/Growth Stock Fund given their investment objectives and
market conditions during the period. Increases in turnover rate in
the C/Government Fund and C/Community Association Reserve Fund reflect
response to rising market interest rates and are not abnormal for bond
funds with similar maturities. It is anticipated that in the upcoming
year changes in turnover rates for the various Funds will fluctuate
driven by the same investment objectives as they are pursued in the
market environment that occurs.
Management of the Fund
Board of Directors
Under the By-Laws of the Company, the Board of Directors have control
and management of the business of the Company. Also, subject to the
laws of the State of Florida and the Company's Certificate of
Incorporation, they may do all those things and exercise all those
powers that are not required by law or by the Certificate of
Incorporation to be done or exercised by the shareholders.
The members of the Board of Directors have the power to appoint and
remove officers or employees, determine their duties, fix and change
their compensation, and, in an officer's absence, to grant his or her
powers to another officer. They may also fix and change any
compensation paid to members of the Board. By resolution, they may
designate committees that can exercise the powers of the Board in
management of the business and affairs of the Company.
Officers and Board of Directors
Following are the names, duties, and affiliations of the Officers of
the Company and the members of the Company's Board of Directors, as
elected by shareholders at the latest Annual Meeting of Shareholders.
Position Past Five Year Business
Name and with Affiliations Age
Address the Company and Primary Occupation
32
Roland G. Director President, Trust Companies
Caldwell, Jr.* and of America, Inc.; Vice
3320 Hardee President President, Secretary and
Drive Trust Officer, Caldwell
Venice, FL Trust Company; President,
34292 Omnivest Research Corp.
William L. Chairman, Retired. Investments & Real 79
Donovan Board of Estate. Former VP Gately
627 Padget Directors Shops, Inc., Grosse Pointe,
Court MI.
Venice, FL
34293
D. Bruce Vice Industrial Engineer, 65
Chittock Chairman, Equipment for Industry,
19625 Cats Den Board of Inc., Cleveland, OH.
Road Directors
Chagrin Falls,
OH 44023
Emmett V. Weber Director Capt.(ret.) USAir, 68
3411 Bayou Pittsburgh, PA; Real Estate.
Sound
Longboat Key,
FL 34228
Deborah C. Director VP CareVu Corporation; 43
Pecheux* and Sister Former Sr. Project Engineer
1911 Oakhurst of Ferranti, Intl., Houston,
Parkway President TX.
Sugarland, TX
77479
Lyn B. Braswell Secretary C/Funds Group, Inc.; Former 48
542 Silk Oak and Fund commercial banking
Venice, FL Administrat professional.
34293-4311 or
* Interested persons as defined under the 1940 Act.
Compensation
All persons who hold positions with the Company and perform duties for
the Funds are employees of Trust Companies of America, Inc. ("TCA")
and are compensated by TCA. Expenses of "interested" directors are
and will always remain the responsibility of the Investment Adviser to
the Company and its Funds, Omnivest Research Corporation ("ORC").
The non-interested directors of the Company are the only persons
receiving compensation from the Company which has no retirement plan.
Compensation paid by the Company to non-interested directors as of
fiscal year end 1999 is as follows:
Management of the Fund (continued)
Compensation (continued)
Aggregate Compensation From Each
Fund
Total
C/Comm Compensa
unity tion From
Assoc Company
Name of C/Growth C/Govern iation Adams and Funds
Non-Interested Stock ment Reserve Equity Paid to
Director C/Fund Fund Fund Fund Fund Directors
William L. Donovan $2,981.09 $907.33 $1,219.85 $91.76 $99.97 $5,300.00
D. Bruce Chittock $2,981.09 $907.33 $1,219.85 $91.76 $99.97 $5,300.00
Emmett V. Weber $2,981.09 $907.33 $1,219.85 $91.76 $99.97 $5,300.00
(1) Fund closed November 29, 1999.
Code of Ethics
The Company and the Investment Advisor have adopted a Code of Ethics
under which covered persons and members of their immediate family may
not purchase or sell a security within prescribed periods before or
after the purchase or sale of the same portfolio security by the Fund.
Nor, within the prescribed periods, may such persons purchase or sell
any security into which a portfolio security is convertible or with
respect to which a portfolio security gives its owner an option to
purchase or sell the security.
Control Persons and Principal Holders
Control Persons
Omnivest Research Corporation ("ORC"), the Investment Advisor to the
Company and its Funds, is a wholly owned subsidiary of Trust Companies
of America, Inc. ("TCA"). Shares of TCA, a corporation registered in
the State of Florida, are owned by approximately 140 shareholders.
Voting control of TCA is held by the Caldwell family.
Neither ORC nor TCA has control over the voting rights of Fund series
shareholders. No shareholder holds a controlling interest (more than
25%) of the total assets of the Funds.
Principal Holders
No individual shareholder either directly or beneficially owns 5% or
more of the shares of C/Fund. Following is principal holder
information for C/Growth Stock Fund, C/Government Fund, and
C/Community Association Reserve Fund.
C/Growth Stock Fund:
Account Holder Address Percentage
Jean L. Docster 4601 Las Brisas Ln., 5.16%
Sarasota, FL 34238
Wilson-Wood Foundation, Inc. 7188 Beneva Rd., S., 11.95%
Sarasota, FL 34238
The Cumberland Companies, Inc. 6300 S. Syracuse Way, 14.82%
Englewood, CO 80111
C/Government Fund:
Account Holder Address Percentage
E. V. Babcock, III 1510 S. Tuttle Ave., 5.26%
Sarasota, FL 34239
C/Community Association Reserve Fund:
Account Holder Address Percentage
Terra Cove Homeowners Assn. 250 Tampa Ave., W., 5.90%
Venice, FL 34285 (1)
South Creek Owners Assn., Inc. 250 Tampa Ave., W., 6.79%
Venice, FL 34285 (1)
Beach Manor Villas South, Inc. 250 Tampa Ave., W., 8.30%
Venice, FL 34285 (1)
Fiddler's Green 250 Tampa Ave., W., 14.76%
Venice, FL 34285 (1)
Holiday Travel Park 250 Tampa Ave., W., 16.58%
Venice, FL 34285 (1)
Mission Lakes of Venice Condo 250 Tampa Ave., W., 23.99%
Assn. Venice, FL 34285 (1)
(1) Each of these community associations uses their association
management company's address as their mailing address.
Control Persons and Principal Holders (continued)
Management Ownership (continued)
The officers and directors as a group own less than 1% of the total
assets of the Funds. Ownership percentage in C/Fund is 1.4%, and in
C/Growth Stock Fund an C/Government Fund is less than 1%.
Investment Advisory and Other Services
Investment Advisors
The Investment Adviser 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. ("TCA"), a privately held company whose majority
ownership is controlled by the Roland G. Caldwell family. TCA was
formed mid-1995 to serve as parent to all operating subsidiaries and
divisions, each of which provides a specific trust or financial
service to the general public under its own identity.
ORC was incorporated October, 1969, and has been continuously offering
investment advisory services since the date of its formation. Until
1995, ORC's principal activity was to provide investment advisory
services, primarily under contract to the Company, to banks and other
financial 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. In July, 1997, Roland G. Caldwell, Jr., who
is President of the Company, was elected President of ORC.
Roland G. Caldwell serves as director of ORC and its principal
investment professional. He has been actively employed and/or in
practice as a securities analyst, portfolio manager and Investment
Adviser since 1958, mainly managing trusteed accounts and similar
types of client portfolios for bank trust clients. 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 University, 1958, holding a
Bachelor of Science Degree in Business Administration/Accounting.
ORC provides services to the Company and all its Funds under contracts
which are non-assignable by ORC. Those contracts provide for payment
of a fee, calculated daily and paid monthly, at the rate specified in
each contract and based on the daily market value of the Fund's net
assets. For C/Fund and C/Growth Stock Fund, that rate is 1%. For
the C/Government Fund and C/Community Association Reserve Fund, that
rate is .5%. These contracts, which shareholders and the Board of
Directors approve as required, are terminable upon 30 days written
notice, one party to the other.
Management fees paid to ORC by the Company for the last three fiscal
years are shown below.
Year Amount
Ended
1999 $179,947
1998 $176,602
1997 $139,453
Services Provided by Advisor and Fund Expenses Paid
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. Expenses in
excess of this 2% limitation are the responsibility of ORC under the
terms of the investment contract with the Company. 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 calculating the
2% limitation.
Investment Advisory and Other Services (continued)
Services Provided by Advisor and Fund Expenses Paid (continued)
During its fiscal year ended December 31, 1999, 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. The Company does not expect the expenses of any Fund
series to exceed 2% of net asset value in any fiscal year.
Expenses of "interested" directors and losses incurred by the Company
as a direct result of any purchase fails shall always remain the
responsibility of the Investment Adviser. ORC and its parent company
TCA have been providing administrative and shareholder services to the
Company since inception.
No part of the expenses of the Company or its Funds is paid by any
other party.
Service Agreements
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 G. Caldwell.
As of the date of this Statement of Additional Information, 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 cancelable by the Company on 30-
days written notice.
Other Service Providers
Transfer agent
C/Funds Group, Inc. serves as its own Transfer Agent under the
Securities Act of 1934 and as its own dividend paying agent. The
Company makes no charge to any of the Fund series for these services.
Custodian
The custodian for the Company and all its Fund series is Caldwell
Trust Company, 201 Center Road, Venice, Florida 34292. Caldwell Trust
Company ("CTC") is an independent trust company chartered in the state
of Florida and is a wholly-owned subsidiary of Trust Companies of
America, Inc. ("TCA"). TCA is a privately held company whose majority
ownership is controlled by the Roland G. Caldwell family.
The custodian performs customary custodial services under its Custody
Agreement with each of the Company's Funds. Among those services are
handling the purchase and sale of investments and managing securities
deliveries through the custodian's relationship with the Depository
Trust Company. The custodian also collects income on the property it
holds under its custodial agreements, pays expenses and remittances,
and reinvests income as instructed by the Company. The Company
compensates the custodian as they mutually agree from time to time.
Currently the fee paid to CTC by the Funds is calculated as .3% of the
market value per year for each fund.
Accountant
The independent accountants for the Company and all its Fund series is
Gregory, Sharer & Stuart, 100 Second Avenue South, St. Petersburg,
Florida 33701-4383.
Brokerage Allocation and Other Practices
Brokerage Transactions and Commissions
Orders to purchase and sell portfolio securities are 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 with the best execution obtainable. Buy and sell orders
are placed according to the type, size, and kind of order involved and
as each condition may demand, to secure the best result for the
Company and its shareholders, all factors considered.
Brokerage Allocation and Other Practices (continued)
Brokerage Transactions and Commissions (continued)
The Company is permitted to use broker-dealer firms that: (1) charge
low commission rates; (2) have demonstrated superior execution
capabilities; and (3) provide economic, corporate and investment
research services. In the opinion of the Advisor, the Company, and
its Board of Directors, selections based on such criteria serve the
best interests of the Company and Fund shareholders.
Following are the aggregate commissions paid to these firms during the
last three fiscal years. The changes from year to year are normal and
consistent with normal Fund growth and portfolio turnover.
Fund
C/Com
munity
(1)Adams C/Govern Assoc.
Year C/Fund C/Growth Equity ment Reserve Total
1999 5,637 16,664 7,662 283 417 30,663
1998 2,190 18,442 6,804 1,008 167 40,957
1997 2,554 7,982 9,077 281 680 22,140
(1) Fund closed November 29, 1999.
Brokerage Selection
The Company's policy is to allocate brokerage business to the best
advantage 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. All securities
transactions are made so as to obtain the most efficient execution at
the lowest transaction cost.
From 1986 to the end of 1999, the Company made all securities
transactions through large, non-retail brokerage firms specializing in
providing financial institutions and others with low cost security
transactions, third-party generated research services, and certain
specialized services for the direct benefit of shareholders of
regulated investment companies. At the end of 1999, the Company began
using a direct electronic link to an institutional broker that
charges $.03 per shre for most trades and that does not provide the
Company with research services.
Capital Stock
The only securities authorized by the Company are 5,000,000 capital
shares at $.01 par value.
Purchase, Redemption, and Pricing of Shares
Purchase of Shares
Initial Purchases
Investors can purchase common shares of the Company with no required
minimum investment and no sales charge by filling out an application
form, signing it correctly, and delivering it by mail or in person to
the Company's principal office in Venice, Florida. A copy of the
application is inserted as a part of the Prospectus and is available
by request to the Company, which is the sole distributor of Fund
shares.
The purchase price will be at the next net asset value per share that
the Company determines after receiving a valid purchase order. The
date on which the Company accepts the application and the net asset
value that is calculated at the close of business on that date
determines the purchase price and will normally be the purchase date
for shares. Payment for shares purchased must be by check, which need
not be a certified check, or receipt of good funds by the Company.
The Company reserves the right to withhold or reject requests for
purchases for any reason, including uncollectable funds. If a
purchase is canceled due to uncollectable funds, the purchaser is
liable for all administrative costs incurred and for all other losses
or charges for the invalid transfer and/or purchase.
IRA accounts and other pension accounts can purchase shares of the
Company at any time for any eligible amount.
Purchase, Redemption, and Pricing of Shares (continued)
Subsequent Purchases
Subsequent purchases of shares by a registered shareholder can be made
by mail to the Company at its current address and/or telephone number.
All subsequent individual and other non-IRA purchases can be made in
any amount with no minimum required and with no sales charge. Such
amounts are due and payable to the Company in good funds on the
purchase date.
Reinvestments
The Company automatically reinvests all dividend distributions to
shareholders in additional shares of the Company at the net asset
value determined as of the close of business on the dividend
distribution payment date, unless the shareholder instructs otherwise
in writing before the distribution record date.
Fractional Shares
When share purchases or redemptions are made or when a shareholder
requests cash, 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 purchase 85.034 shares.)
Issuance of Share Certificates
The Company does not issue share certificates to registered
shareholders unless they specifically request issuance in writing to
the Company. All such requests must be signed exactly as the share
registration appears on the shareholder register kept by the Company
as its own Registrar and Transfer Agent. However, due to the
additional work involved with issuing certificates and the added
costs, 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.
Redemption of Shares
Shareholders can sell back all or a portion of their shares to the
Company on any day that the Fund's net asset value ("NAV") is
calculated. Such share redemptions will be made as described in
detail in the Prospectus dated this same date and are subject to the
terms and conditions stated in this document. The Company makes
redemptions at the next NAV calculation after it receives and accepts
the redemption request. Although the Company can withhold payment for
redeemed shares until it is reasonably satisfied that all funds for
any purchases have been collected, payment will normally be made the
next business day immediately following redemption date. However, the
Company reserves the right to hold payment up to seven (7) calendar
days if necessary to protect the interests of the Company and its
shareholders.
If the New York Stock Exchange is closed for any reason other than
normal weekend or holiday closings, if trading is halted or restricted
for any reason, or if any emergency circumstances are determined by
the Securities and Exchange Commission, the Company's Board of
Directors of have the authority and may suspend redemptions or
postpone payment dates.
Under circumstances the Board of Directors may determine, they may,
like with most other mutual funds, elect to make payments in
securities or other Company assets rather than in cash, if they deem
at the time that such payment method 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 Company reserves the right to request that small accounts be
redeemed and closed if the cost of activity in the accounts is
unjustified. The Company will provide prior notice of not less than
60 days to shareholders before 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 invested. 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.
Purchase, Redemption, and Pricing of Shares (continued)
Redemption of Shares (continued)
Shareholders who hold share certificates and want to redeem their
shares must deliver those certificates to the Company in person or by
mail in good form for transfer before redemption can occur.
Signatures on all certificates to be redeemed must be guaranteed by an
officer of a national or state bank, a trust company, federal savings
and loan association; and/or a member firm of the New York, American,
Boston, Mid-West, or Pacific Stock Exchanges. Any such guarantee must
be acceptable to the Company and its transfer agent before any
redemption request will be honored. The Company will not accept
signatures guaranteed by a Notary Public.
The Company has 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.
Pricing of Shares
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
liabilities if any, by the number of that Fund's shares outstanding.
Portfolio securities 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 NYSE is open, and on any other day in which enough
trading in portfolio securities occurs so that value changes might
materially affect the current net asset value. NYSE trading is closed
weekends and holidays, which are listed as New Year's Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving, 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 actively trade will 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 determination 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.
Taxation of the Fund
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 qualifies and
distributes substantially all of its taxable net investment income
(NII), the Company (but not its shareholders) is required to pay
Federal income taxes only on that portion of its investment income
that is undistributed. Otherwise, the Company would be taxed at
ordinary corporate federal and state income tax rates on any NII not
distributed to shareholders at least annually.
The Company intends to remain qualified under Sub-Chapter M of the
Internal Revenue Code by:
o Distributing to each shareholder at least 90% of the aggregate NII
of each Fund at least annually,
o Investing and reinvesting so that no more than 30% of aggregate Fund
NII is derived from gains on the sale of securities held less than
three months; and
o Investing its portfolios so that 50% or more of Fund assets are
invested in stock issues, no one of which exceeds 5% of the value of
Fund aggregate assets at purchase price.
Dividends paid to shareholders are in effect distributions of the
Company's NII which are normally taxable to shareholders when received
whether in cash or as additional shares. Distributions to
shareholders of any realized capital gains are also taxable under
existing tax laws at ordinary income tax rates, whether distributed in
cash or as additional shares.
Taxation of the Fund (continued)
For a shareholder who sells shares back to the Company as a
redemption, the tax treatment will depend on 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 of shares will be treated as a capital transaction to be taxed
depending upon the tax treatment afforded such transactions 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 will 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.
Changes or interpretations of rules made from time to time by the
Internal Revenue Service 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 companies and their
shareholders to be certain as to all interpretations at all times.
Performance Calculation
The Company may advertise fund performance in terms of average annual
total return for 1, 5, and 10 year periods, or for such lesser periods
as a fund has been in existence. For funds that invest primarily in
bonds, the Company may quote 30-day yields. Total return is computed
as of the close of business on the last business day of the year.
Yields are computed as of the close of business on the last business
day of the month. The calculation formulas are show below.
Total Return
P(1+T)(n) = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5, or 10 year periods at the end
of the year or period
30-Day Yield
Yield = 2[((a-b)/(cd)+1) 6 -1]
Where:
a = Dividends and interest earned during the period
b = Expenses accrued for the period (net of reimbursements)
c = The average daily number of shares outstanding during the period
that were entitled to receive dividends
d = The maximum offering price per share on the last day of the
period
Financial Information
The Company's audited Annual Report, and its Semi-Annual Report if
applicable, are incorporated into this Statement of Additional
Information by reference. Investors may request a free copy by
calling or writing the Company at the telephone number or address
shown on the cover page of this document.
For financial highlights for each Fund series, see the section of the
Prospectus describing each Fund. For information regarding the
compensation of Company officers and directors, see the "Compensation"
topic in this Statement of Additional information on page 8.
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
obligation. 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
suitability 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
occasion, rely on unaudited financial information. The ratings
may be changed, suspended or withdrawn as a result of changes in, or
availability 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 accor-
dance 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
degree.
A. Debt rated A has a strong capacity to pay interest and repay princi-
pal 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
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing cir-
cumstances 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 pro-
tective 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."
PART C
RE: REGISTRATION OF C/FUNDS GROUP, INC.
February 28, 2000
Item 23. Exhibits
(a) Articles of Incorporation
Enclosed with Prior Filing Dated April 30, 1992
(b) By-Laws (including Indemnification Clause)
Enclosed with Prior Filing Dated April 30, 1992
(c) Instruments Defining Rights of Security Holders
(Included in Prospectus and By-Laws)
By-Laws Enclosed with Prior Filing Dated April 30, 1992
Prospectus Filed Herewith
(d) Investment Advisory Contract Extension Addenda
Enclosed Herewith.
(e) Underwriting Contracts
Not Applicable.
(f )Bonus or Profit Sharing Contracts
Not Applicable.
(g) Custodian Agreement Extension Addenda
Enclosed Herewith.
(h) Other Material Contracts
Not Applicable.
(i) Legal Opinion
Enclosed Herewith.
(j) Other Opinions:
1. Auditors Consent To Publish Financial Statements
Enclosed Herewith.
2. Auditors Internal Control Letter
Enclosed Herewith.
(k) Financial Statements
Enclosed Herewith.
(l) Initial Capital Agreements (Specimen Subscription Form
and List of Original Investor Subscribers to Shares in
the Fund).
Enclosed with Prior Filing Dated June 12, 1985.
(m) Rule 12b-1 Plan
Not Applicable.
(n) Rule 18f-3 Plan
Not Applicable.
(o) Code of Ethics
Enclosed with Prior Filing Dated October 15, 1995.
(p) Other
1. Updated Charter of Incorporation, State of Florida
Enclosed with Prior Filing Dated February 28, 1994.
2. Specimen Share Certificate
Enclosed with Prior Filing Dated September 15, 1997.
3. IRA Specimen Custody Account Opening Form
Enclosed with Prior Filing Dated April 30, 1992.
Item 24. Persons Controlled by or Under Common Control with the Fund
Trust Companies of America, Inc. ("TCA"), a private
Florida corporation, is controlled by Roland G. Caldwell
and other family members. TCA owns 100% of Omnivest
Research Corporation ("ORC"), the Registrant's Investment
Advisor. TCA also owns 100% of 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 G. Caldwell, Jr. is President of
Registrant and serves as President of ORC.
Item 25. Indemnification (By-Laws Article XI, Indemnification of
Officers and Directors)
Included by reference to Registration Statement filed
February 28, 1985, as thereafter amended.
Item 26. Business and Other Connections of Investment Advisor
Trust Companies of America, Inc. ("TCA"), a private
Florida corporation, is controlled by Roland G. Caldwell
and other family members. TCA owns 100% of Omnivest
Research Corporation ("ORC"), the Registrant's Investment
Advisor. TCA also owns 100% of 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 G. Caldwell, Jr., President of
Registrant, serves as President of ORC.
Item 27. Principal Underwriters.
Not Applicable
Item 28. 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, FL 34292
Records Used and Kept By: Roland G.Caldwell, Jr.,
President
Item 29. 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. 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 Registrant on 30 days
written notice to lessor.
Item 30. Undertakings.
None.
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, 2000.
Registrant:
C/FUNDS GROUP, INC.
By: By:
/signature/ /signature/
____________________________ ____________________________
Roland G. Caldwell, Jr. William L. Donovan
Director/President Director
By: By:
/signature/ /signature/
____________________________ ____________________________
Deborah C. Pecheux Lyn B. Braswell
Director Secretary
Law Offices
ANDREW J. BRITTON, P.A.
Suite A
245 N. Tamiami Trail
Venice, Florida 34285
February 10, 2000
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 opinion, 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
documents submitted as copies. I have also assumed the
genuineness of the signatures of persons signing all
documents in connection with which this opinion is rendered
and the authority of such persons signing. Further, I have
assumed that no originals or copies submitted to me have
been amended or modified since the date they were submitted
to me.
It is my opinion that 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,
/signature/
Andrew J. Britton
AJB/bk
a:misc.lt\cfunds.lt
[100% NO-LOAD COUNCIL LOGO]
C/Funds Group, Inc.
[C/FUNDS LOGO]
C/Fund
C/Growth Stock Fund
C/Government Fund
C/Community Association Reserve Fund
1999 Annual Report
Table of Contents
Letter to Shareholders 1
Comparative Performance 2
Portfolios of Investments 4
Audited Financial Statements 9
Notes to Financial Statements 12
Report of Independent Certified
Public Accountants 14
LETTER TO SHAREHOLDERS
Once again, the stock markets performed above average for the
calendar year 1999, with the 30 stocks in the Dow Jones Industrial
Average providing investors a total return of 24%. The S&P 500
Index also earned a commendable 18% for the same period, while the
stocks making up the NASDAQ index made up lost ground after many
years of under-performance by turning in an astounding 86% total
return. This was due to a breathtaking initial public offering
craze for small internet startups, which we believe is very
unlikely to continue.
By comparison with these performance indices, the C/Growth
Stock Fund total return was a pleasing 34%+ for 1999, mainly due
to the inclusion in its portfolio of a high percentage of many
smaller, rapidly-growing NASDAQ companies. The objective of this
fund is to be invested substantially all the time in these kinds
of growth stocks. The C/Fund, on the other hand, which has a
lower percentage of its assets invested in stocks and which
emphasizes higher-yielding, more mature company issues, earned a
total return of approximately 11% for the year. This reflected
the inclusion of many higher-yielding stock issues in the
portfolio, which as a market sector generally under-performed most
other sectors last year.
It is a pleasure to report that the C/Government Fund, which
invests in government fixed income securities, was ranked highly
by major rating agencies for its excellent performance during a
year in which bond prices were weak as interest rates continued to
climb. Fund maturities were held fairly short for much of the
year in an attempt to protect the fund's Net Asset Value per
share, while continuing to earn as high an interest rate yield as
possible. The total performance of this fund for the year was
just narrowly positive, which compares favorably with the
generally negative returns reported by most other government bond
funds having similar objectives.
One area of services that we would like to bring to the
attention of all fund series shareholders is CFI's continued
commitment to using as much technology as possible in the
operations of its funds. Your managers believe that these
productivity advances will allow CFI to continue offering smaller
investors a cost effective way to invest and that it will be able
to continue to maintain a no-minimum investment policy, as in the
past. In the last year or so, we have started offering direct
automatic deductions from investor checking or savings accounts
(ACH) for those who wish to avail themselves of this regular
savings and investing kind of discipline. In addition, we
anticipate allowing secure, confidential monitoring of accounts
directly by clients via the Internet. This is expected to be
announced sometime in 2000. With these advances, it will become
even easier for investors to decide when and where they want to
invest and to track directly from their own computers their
investments in C/Fund portfolios 24 hours a day.
During the past year, the Board voted to cease offering and
to close the Adams Equity Fund, due to its inability to reach the
size necessary to make it economical to operate as a separate
series fund. The C/Funds Group now consists of four fund series,
including the C/Community Association Reserve Fund, a specialty
fund of government securities that is managed for and offered
exclusively to Florida community associations.
As always, we wish to thank all staff members, shareholders,
directors and officers for their contribution to the company's
success this past year.
Respectfully Submitted:
R. G. "Kelly" Caldwell, Jr.
President
February 23, 2000
C/Fund
Illustration of a $10,000 Investment
[graphic]
C/Growth Stock Fund
Illustration of a $10,000 Investment
[graphic]
C/Government Fund
Illustration of a $10,000 Investment
[graphic]
C/Community Association Reserve Fund
Illustration of a $10,000 Investment
[graphic]
Performance Summary
As of December 31, 1998
Since
1 Year 5 Year 10 Year Inception
C/Fund 10.66% 18.95% 13.28% 13.42%
C/Growth Stock Fund 34.25% 24.72% n/a 15.22%
C/Government Fund 0.55% 6.40% n/a 5.56%
C/C.A.R. Fund 3.18% 5.44% n/a 5.40%
C/FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
EQUITIES (86.2%) Shares Value
Building Materials & Garden Supplies (3.2%) $309,375
Home Depot, Inc. 4,500 309,375
Business Services (6.8%) 665,000
Microsoft Corp. 2,000 233,500
International Business Machines Corp. 4,000 431,500
Chemicals & Allied Products (14.2%) 1,387,063
Dow Chemical Co. 1,000 133,625
Abbott Labs 1,000 36,313
American Home Products Corp. 4,000 157,000
Bristol Myers Squibb Co. 2,000 128,375
Merck & Co., Inc. 2,000 134,375
Johnson & Johnson 2,000 186,500
Colgate Palmolive Co. 4,000 260,000
Proctor & Gamble Co. 2,000 219,125
E.I. Dupont De Nemours & Co. 2,000 131,750
Communication (2.0%) 199,125
AT&T Corp. 2,000 101,625
SBC Communications, Inc. 2,000 97,500
Depository Institutions (2.6%) 253,250
J. P. Morgan & Co, Inc. Com 2,000 253,250
Eating & Drinking Places (0.8%) 80,625
McDonald's Restaurants 2,000 80,625
Electric, Gas, & Sanitary Services (2.2%) 213,625
FPL Group, Inc. 2,000 85,625
American Water Works, Inc. 3,000 63,750
American Electric Power Com 2,000 64,250
Electronic & Other Electric Equipment (7.2%) 699,125
General Electric Co. 2,000 309,500
Lucent 3,000 225,000
Intel Corp. 2,000 164,625
Fabricated Metal Products (2.8%) 277,501
Parker Hannifin Corp. 3,000 153,938
Gillette Co. 3,000 123,563
Food & Kindred Products (4.3%) 423,125
Pepsico, Inc. 4,000 141,000
Coca-Cola Co. 2,000 116,500
Lancaster Colony Corp. 5,000 165,625
Food Stores (1.0%) 96,750
Albertsons, Inc. 3,000 96,750
General Merchandise Stores (4.2%) 414,750
Wal-Mart Stores 6,000 414,750
Holding & Other Investment Offices (0.8%) 79,062
New Plan Excel Realty Trust, Inc. 5,000 $79,062
C/FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
Shares Value
Industrial Machinery & Equipment (4.9%) $478,375
Hewlett Packard Co. 2,000 227,500
Black & Decker Manufacturing 3,000 156,750
Caterpillar 2,000 94,125
Instruments & Related Products (2.6%) 247,250
Emerson Electric Co. 2,000 114,750
Eastman Kodak Co. 2,000 132,500
Motion Pictures (0.8%) 76,780
Walt Disney Co. 2,625 76,780
Nondepository Institutions (4.5%) 443,875
Citigroup, Inc. 2,000 111,375
American Express Co. 2,000 332,500
Paper & Allied Products (4.5%) 439,500
International Paper Co. 2,000 112,875
Kimberly Clark Corp. 2,000 130,875
Minnesota Mining & Manufacturing 2,000 195,750
Petroleum & Coal Products (4.9%) 479,191
Exxon Mobil Corp. 4,000 322,250
BP Amoco PLC ADS 2,646 156,941
Primary Metal Industries (1.7%) 166,000
Alcoa, Inc. 2,000 166,000
Railroad Transportation (1.7%) 162,438
CSX Corp. 1,000 31,375
Union Pacific Corp. 3,000 131,063
Tobacco Products (1.2%) 115,000
Philip Morris Cos. 5,000 115,000
Transportation Equipment (5.9%) 580,250
United Technologies Corp. 2,000 130,000
Boeing Co. 2,000 82,875
General Motors Corp. 2,000 145,375
Honeywell International, Inc. 2,000 115,375
Ford Motor Co. 2,000 106,625
Transportation Services (1.4%) 135,000
GATX Corp. 4,000 135,000
TOTAL EQUITIES (86.2%) 8,422,035
GOVERNMENTS (10.2%) 995,469
U.S. Treasury Notes 5.375% due 07/31/00 500,000 498,750
U.S. Treasury Notes 5.875% due 11/30/01 500,000 496,719
CASH AND EQUIVALENTS (3.6%) 351,488
TOTAL INVESTMENTS (100%) $9,768,992
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
EQUITIES (96.9%) Shares Value
Building Materials & Garden Supplies (6.5%) $237,188
Home Depot, Inc. 3,450 237,188
Business Services (19.8%) 722,843
Robert Half International, Inc. 1,500 42,844
Interpublic Group Cos. 1,100 63,456
Inktomi 1,000 88,750
International Business Machines Corp. 750 80,906
Healtheon /WebMD Corporation 900 33,750
Doubleclick, Inc. 200 50,612
Check Point Software 550 109,312
Microsoft Corp. 1,200 140,100
America Online 700 53,113
Omnicom Group, Inc. 600 60,000
Chemicals & Allied Products (4.8%) 173,622
Merck & Co., Inc. 550 36,953
Medco Research 1,900 57,119
Biogen 500 42,250
Johnson & Johnson 400 37,300
Communication (7.9%) 288,041
Alltel Corp. 1,150 95,091
U. S. Cellular 550 55,516
AT&T Corp. 1,060 53,861
MCI Worldcom, Inc. 1,575 83,573
Depository Institutions (1.9%) 68,900
Northern Trust Corp. 1,300 68,900
Electric, Gas, & Sanitary Services (1.9%) 70,400
Calpine Corp. 1,100 70,400
Electronic & Other Electric Equipment (9.9%) 360,170
General Electric Co. 450 69,638
Salton, Inc. 1,800 60,187
Lucent 1,600 120,000
Solectron Corp. Com 1,160 110,345
Food & Kindred Products (1.0%) 36,375
Starbucks Corp. 1,500 36,375
Footwear (0.8%) 29,738
Nike 600 29,738
Furniture & Home Furnishings Stores (1.0%) 36,800
Williams Sonoma, Inc. 800 36,800
General Merchandise Stores (4.0%) 147,000
Kohls Corp. 600 43,312
Wal-Mart Stores 1,500 103,688
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
Shares Value
Industrial Machinery & Equipment (18.4%) $669,600
Lexmark International 500 45,250
Cisco Systems 2,300 246,388
EMC Corp. 1,800 196,650
Sun Microsystems 1,400 108,412
Cybex Computer Products Corp. 1,800 72,900
Instruments & Related Products (2.0%) 73,125
Guidant Corporation 500 23,500
Sybron International Corp. Wisconsin 1,200 29,625
Colorado Medtech, Inc. 2,500 20,000
Insurance Agents, Brokers, & Service (1.6%) 57,412
Marsh & McLennan Cos., Inc. 600 57,412
Insurance Carriers (3.0%) 110,828
American International Group 1,025 110,828
Lumber & Wood Products (1.4%) 49,481
MASCO Corp. 1,950 49,481
Nondepository Institutions (2.1%) 77,963
Citigroup, Inc. 1,400 77,963
Paper & Allied Products (1.3%) 46,438
Williamette Industries 1,000 46,438
Petroleum & Coal Products (1.2%) 43,250
Imperial Oil LTD 2,000 43,250
Transportation By Air (2.8%) 103,453
Southwest Airlines 3,750 60,469
FDX Corp. 1,050 42,984
Transportation Equipment (2.3%) 84,978
Gentex Corp. 1,100 30,525
Harley Davidson 850 54,453
Water Transportation (1.3%) 47,812
Carnival Cruise CLA 1,000 47,812
TOTAL EQUITIES (96.9%) 3,535,417
CASH & EQUIVALENTS (3.1%) 111,510
TOTAL INVESTMENTS (100%) $3,646,927
C/GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
GOVERNMENTS (95.4%) Par Value Value
U.S. Treasury Notes 5.625% due 05/15/01 1,000,000 $992,500
U.S. Treasury Notes 5.875% due 11/30/01 1,500,000 1,490,156
U.S. Treasury Notes 6.250% due 08/31/02 1,000,000 999,063
U.S. Treasury Notes 5.750% due 11/30/02 1,000,000 985,000
U.S. Treasury Notes 6.250% due 02/15/03 1,000,000 997,188
U.S. Treasury Notes 5.750% due 08/15/03 1,000,000 979,375
U.S. Treasury Notes 5.875% due 02/15/04 1,000,000 983,125
U.S. Treasury Notes 6.000% due 08/15/04 1,000,000 984,375
TOTAL GOVERNMENTS (95.4%) 8,410,782
CASH AND EQUIVALENTS (4.6%) 404,576
TOTAL INVESTMENTS (100%) $8,815,358
C/COMMUNITY ASSOCIATION RESERVE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
GOVERNMENTS (86.9%) Par Value Value
U.S. Treasury Notes 6.875% due 03/31/00 200,000 $200,625
U.S. Treasury Notes 5.375% due 07/31/00 100,000 99,750
U.S. Treasury Notes 6.250% due 04/30/01 100,000 100,094
U.S. Treasury Notes 5.625% due 05/15/01 100,000 99,250
U.S. Treasury Notes 5.875% due 11/30/01 100,000 99,344
U.S. Treasury Notes 5.750% due 11/30/02 100,000 98,500
TOTAL GOVERNMENTS (86.9%) 697,563
CASH AND EQUIVALENTS (13.1%) 105,186
TOTAL INVESTMENTS (100%) $802,749
C/FUNDS GROUP, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
Securities at Cost $6,239,031 $2,436,553 $8,926,322 $808,662
ASSETS
Securities value $9,768,992 $3,646,927 $8,815,358 $802,749
Dividends and interest
receivable 24,333 1,869 132,422 8,982
9,793,325 3,648,796 8,947,780 811,731
LIABILITES
Advisor fee and other payables 5,749 2,133 3,785 248
5,749 2,133 3,785 248
NET ASSETS APPLICABLE TO $9,787,576 $3,646,663 $8,943,995 $811,483
OUTSTANDING SHARES
CAPITAL SHARES 397,584 210,914 913,173 82,369
NET ASSET VALUE PER SHARE $24.62 $17.29 $9.79 $9.85
C/FUNDS GROUP, INC.
STATEMENTS OF OPERATIONS
For the Year Ending December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INVESTMENT INCOME
Dividends $127,902 $16,404 $0 $0
Interest 105,441 11,521 640,830 47,875
233,343 27,925 640,830 47,875
OPERATING EXPENSES
Investment advisory fee 92,946 28,836 54,201 3,964
Professional fees 26,193 8,503 9,767 969
Registration fees 388 126 150 11
Custodian fees 31,294 10,149 37,720 2,808
Directors fees 8,943 2,722 3,659 275
Miscellaneous 2,179 554 807 86
161,943 50,890 106,304 8,113
NET INVESTMENT INCOME (LOSS) 71,400 (22,965) 534,526 39,762
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Change in unrealized appreciation
(depreciation) in value of
investments for the year 283,540 177,958 (386,899) (9,608)
Net realized gain (loss) on
investments 600,162 711,038 (61,490) (4,988)
NET GAIN (LOSS) ON INVESTMENTS 883,702 888,996 (448,389) (14,596)
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $955,102 $866,031 $86,137 $25,166
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss) $71,400 ($22,965) $534,526 $39,762
Net realized gain (loss) on
investments 600,162 711,038 (61,490) (4,988)
Unrealized appreciation
(depreciation) in value of
investments for the year 283,540 177,958 (386,899) (9,608)
Net increase in net assets from
operations 955,102 866,031 86,137 25,166
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (71,400) 0 (534,526) (39,762)
Net realized gain on
investments (566,009) (683,816) 0 0
(637,409) (683,816) (534,526) (39,762)
CAPITAL SHARE TRANSACTIONS
Shares sold 1,515,650 958,890 3,913,054 350,362
Reinvested distributions 607,188 672,321 413,407 39,691
Shares redeemed (1,513,025) (1,248,493) (4,916,632) (288,206)
609,813 382,718 (590,171) 101,847
Net increase (decrease) in net
assets 927,506 564,933 (1,038,560) 87,251
NET ASSETS
Beginning of year 8,860,070 3,081,730 9,982,555 724,232
End of year $9,787,576 $3,646,663 $8,943,995 $811,483
UNDISTRIBUTED INVESTMENT GAIN
(LOSS) $37,616 $4,256 ($225,402) ($4,988)
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1998
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss) $100,713 ($12,228) $417,201 $43,208
Net realized gain on
investments 335,753 132,755 0 437
Unrealized appreciation
(depreciation) in value of
investments for the year 1,108,922 414,834 222,195 (354)
Net increase in net assets
from operations 1,545,388 535,361 639,396 43,291
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (99,926) 0 (417,200) (43,207)
Net realized gain on
investments (334,943) (132,387) 0 0
(434,869) (132,387) (417,200) (43,207)
CAPITAL SHARE TRANSACTIONS
Shares sold 1,814,668 328,020 8,532,493 475,625
Reinvested distributions 416,606 127,950 363,296 43,207
Shares redeemed (1,619,121) (318,564) (3,678,135) (648,518)
612,153 137,406 5,217,654 (129,686)
Net increase (decrease) in
net assets 1,722,672 540,380 5,439,850 (129,602)
NET ASSETS
Beginning of year 7,137,398 2,541,350 4,542,705 853,834
End of year $8,860,070 $3,081,730 $9,982,555 $724,232
UNDISTRIBUTED INVESTMENT
GAIN (LOSS) $2,755 $358 ($163,912) $180
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND, AND C/COMMUNITY ASSOCIATION
RESERVE FUND
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Years Ended December 31, 1999, 1998, 1997, 1996, and 1995
Net Dis
Rea tribu
lised tions
Dis and from Net
tribu Unrea Net Dis Asset
tions lized Rea tribu Value Net
Net from Gain lized tions at Asset
Opera Invest Net (Loss) Gains from Begin Value
Invest ting ment Invest on on Return Total ning End
ment Expe Income ment Invest Invest of Cap Net of of
Income nses (Loss) Income ments ments ital Change Period Period
C/Fund
1999 .62 (.43) .19 (.19) 2.35 (1.52) .00 .83 $23.79 $24.62
1998 .66 (.38) .28 (.72) 4.12 (.50) .00 3.18 20.61 23.79
1997 .60 (.36) .24 (.26) 3.50 (.58) .00 2.90 17.71 20.61
1996 .53 (.34) .19 (.19) 2.56 (1.58) (2)(.10) .88 16.83 17.71
1995 .50 (.29) .21 (.21) 3.42 (.54) .00 2.88 13.95 16.83
C/Growth Stock Fund
1999 .16 (.29) (.13) .00 5.49 (3.91) .00 1.45 $15.84 $17.29
1998 .18 (.24) (.06) .00 2.96 (.71) .00 2.19 13.65 15.84
1997 .16 (.26) (.10) (.15) 3.20 (1.68) .00 1.27 12.38 13.65
1996 .18 (.23) (.05) .00 2.24 (1.08) (2)(.01) 1.10 11.28 12.38
1995 .22 (.20) .02 (.02) 2.13 (.19) .00 1.94 9.34 11.28
C/Government Fund
1999 .60 (.10) .50 (.50) (.44) .00 .00 (.44) $10.23 $9.79
1998 .64 (.10) .54 (.54) .22 .00 .00 .22 10.01 10.23
1997 .67 (.10) .57 (.57) .14 .00 .00 .14 9.87 10.01
1996 .66 (.10) .56 (.56) (.15) .00 .00 (.15) 10.02 9.87
1995 .64 (.10) .54 (.54) .58 .00 .00 .58 9.44 10.02
C/Community Association Reserve Fund
1999 .60 (.10) .50 (.50) (.18) .00 .00 (.18) $10.03 $9.85
1998 .62 (.10) .52 (.52) .03 .00 .00 .03 10.00 10.03
1997 .61 (.05) .56 (.60) .04 .00 .00 .00 10.00 10.00
1996 .58 .00 .58 (.58) .00 .00 .00 .00 10.00 10.00
1995 .60 .00 .60 (.60) .00 .00 .00 .00 10.00 10.00
Net
Operating Investment Shares
Expenses Income to Portfolio Outstanding
to Average Average Turnover at End of
Net ASsets Net Assets Rate Period
C/Fund
1999 1.75% .77% 39.65% 397,584
1998 1.68% 1.27% 17.58% 372,377
1997 1.79% 1.24% 10.28% 346,376
1996 1.90% 1.05% 11.38% 306,141
1995 1.85% 1.36% 5.46% 258,646
C/Growth Stock Fund
1999 1.74% (.78%) 118.73% 210,914
1998 1.68% (.45%) 88.47% 194,538
1997 1.81% (.68%) 51.11% 186,130
1996 1.90% (.45%) 4.26% 178,680
1995 1.85% .20% 16.46% 184,398
C/Government Fund
1999 .99% 5.00% 99.20% 913,173
1998 .96% 5.55% .00% 975,821
1997 1.01% 5.74% 22.05% 453,930
1996 1.02% 5.60% 59.95% 479,954
1995 .99% 5.54% 124.70% 396,280
C/Community Association Reserve Fund
1999 1.02% 4.99% 70.99% 82,369
1998 .96% 5.28% 14.20% 72,179
1997 .14% 6.21% 52.64% 85,402
1996 .00% 5.83% 9.61% 54,820
1995 .00% 5.96% 41.35% 42,960
(1) Selected data for a share of capital stock
outstanding throughout the year.
(2) Fund paid dividend by return of principal.
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
AND C/COMMUNITY ASSOCIATION RESERVE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE A - ORGANIZATION
C/Funds Group, Inc. (the Company), is registered as an open-end diversified
investment company under the Investment Company Act of 1940. Effective July
2, 1985, the Company's shares were registered under Section 8(a) of the
Securities Act of 1933. Currently, the Company offers the following four
funds:
FUNDS PRIMARY INVESTMENTS
C/Fund Stocks and Fixed Income Securities
C/Growth Stock Fund Common Stocks or Equivalents
C/Government Fund Obligations of the U.S. Government
C/Community Association Reserve Fund Obligations of the U.S. Government
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 national
exchange are stated at the last reported sales price on the day of
valuation; other securities traded in over-the-counter markets and listed
securities for which no sale was reported on that date are stated at the
last quoted bid price.
Investment Income - Dividend income is recorded as of the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and premiums
on securities purchased are not amortized over the life of the respective
security. 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.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
NOTE C - INVESTMENT ADVISORY AGREEMENT
Each fund has a written agreement (the "Agreements") for management and
investment advisory services with Omnivest Research Corporation (the
"Advisor") which is owned 100% by Trust Companies of America, Inc. (TCA),
which is controlled by the Company's 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 Fund's total expenses
cannot exceed 2% of the Fund's average daily net asset value in any one
year. Expenses in excess of 2% shall be paid by the Advisor. Annual
percentage rates provided by the Agreements in computing investment
advisory fees and the fees incurred in 1999 are as follows:
ANNUAL INVESTMENT
FUND % RATE ADVISORY FEES
C/Fund 1.0 $92,946
C/Growth Stock Fund 1.0 28,836
C/Government Fund .5 54,201
C/Community Association Reserve Fund .5 3,964
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
AND C/COMMUNITY ASSOCIATION RESERVE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE D - FUND SHARE TRANSACTONS AND DISTRIBUTIONS
As of December 31, 1999 and 1998 there were 5,000,000 shares of $.01 par
value capital shares authorized. Transactions of the Funds were as follows:
C/Community
C/Growth Association
Stock C/Government Reserve
C/Fund Fund Fund Fund
Year ended December 31, 1999
Shares sold 60,871 54,178 393,028 35,224
Reinvested distributions 24,606 38,885 41,584 3,998
Shares redeemed (60,271) (76,686) (497,261) (29,032)
Net increase (decrease) 25,206 16,377 (62,649) 10,190
Year ended December 31, 1998
Shares sold 80,660 22,220 849,231 47,089
Reinvested distributions 17,565 8,078 35,803 4,304
Shares redeemed (72,224) (21,890) (363,143) (64,616)
Net increase (decrease) 26,001 8,408 521,891 (13,223)
NOTE E - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities and the accumulated unrealized
gain (loss) of the funds were as follows for 1999:
C/Community
C/Growth Association
Stock C/Government Reserve
C/Fund Fund Fund Fund
Common Stocks
Purchases $2,456,441 $3,199,480 $0 $0
Sales 2,301,181 3,162,450 0 0
U.S. Government Obligations
Purchases 1,001,797 0 8,983,365 600,910
Sales 1,251,744 0 9,229,663 554,017
Unrealized appreciation (depreciation)
of securities $3,529,959 $1,210,365 ($110,965) ($5,913)
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 subsidiaries for services other than
investment advising aggregated approximately $87,800 for 1999.
The number of shares held by the President of the Company, employees of the
Advisor, and other affiliated persons at December 31, 1999 are as follows:
SHARES VALUE
C/Fund 41,211 $1,014,626
C/Growth Stock Fund 78,255 1,353,028
C/Government Fund 87,509 856,710
C/Community Association Reserve Fund 62,863 619,201
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 1999 financial statements. The Fund does not
hold any collateral on the marketable securities. This exposure to risk is
customary for all entities 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. In the fourth quarter of 1999, the
Company discontinued use of investment research services supplied by
brokers whose commissions included the cost of such services. The value of
such services, for the Company, aggregated $30,663 for the year ended
December 31, 1999.
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,
including the portfolio of investments, of the C/Fund, C/Growth
Stock Fund, C/Government Fund, and C/Community Association
Reserve Fund (four of the portfolios constituting the C/FUNDS
Group, Inc.) as of December 31, 1999, 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 five
years in the period then ended. These financial statements and
per share data and ratios are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and per share data and ratios based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits 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, 1999, 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 the C/Fund, C/Growth Stock
Fund, C/Government Fund, and C/Community Association Reserve Fund
(portfolios of the C/FUNDS Group, Inc.) as of December 31, 1999,
the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the
period then ended, and the selected per share data and ratios for
each of the five years in the period then ended, in conformity
with generally accepted accounting principles.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 21, 2000
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 493-4295
Custodian
Caldwell Trust Company
201 Center Road, Suite Two
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South, Suite 600
St. Petersburg, FL 33701-4383
(727) 821-6161
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.
[100% NO-LOAD COUNCIL LOGO]
C/FUNDS GROUP, INC.
Fund Closed in 1999
Adams Equity Fund
Final Accounting
November 29, 1999
Table of Contents
Letter to Shareholders 2
Audited Financial Statements 3
Notes to Financial Statements 6
Report of Independent Certified
Public Accountants 8
LETTER TO SHAREHOLDERS
Once again, the stock markets performed above average for the
calendar year 1999, with the 30 stocks in the Dow Jones Industrial
Average providing investors a total return of 24%. The S&P 500
Index also earned a commendable 18% for the same period, while the
stocks making up the NASDAQ index made up lost ground after many
years of under-performance by turning in an astounding 86% total
return. This was due to a breathtaking initial public offering
craze for small internet startups, which we believe is very
unlikely to continue.
By comparison with these performance indices, the C/Growth
Stock Fund total return was a pleasing 34%+ for 1999, mainly due
to the inclusion in its portfolio of a high percentage of many
smaller, rapidly-growing NASDAQ companies. The objective of this
fund is to be invested substantially all the time in these kinds
of growth stocks. The C/Fund, on the other hand, which has a
lower percentage of its assets invested in stocks and which
emphasizes higher-yielding, more mature company issues, earned a
total return of approximately 11% for the year. This reflected
the inclusion of many higher-yielding stock issues in the
portfolio, which as a market sector generally under-performed most
other sectors last year.
It is a pleasure to report that the C/Government Fund, which
invests in government fixed income securities, was ranked highly
by major rating agencies for its excellent performance during a
year in which bond prices were weak as interest rates continued to
climb. Fund maturities were held fairly short for much of the
year in an attempt to protect the fund's Net Asset Value per
share, while continuing to earn as high an interest rate yield as
possible. The total performance of this fund for the year was
just narrowly positive, which compares favorably with the
generally negative returns reported by most other government bond
funds having similar objectives.
One area of services that we would like to bring to the
attention of all fund series shareholders is CFI's continued
commitment to using as much technology as possible in the
operations of its funds. Your managers believe that these
productivity advances will allow CFI to continue offering smaller
investors a cost effective way to invest and that it will be able
to continue to maintain a no-minimum investment policy, as in the
past. In the last year or so, we have started offering direct
automatic deductions from investor checking or savings accounts
(ACH) for those who wish to avail themselves of this regular
savings and investing kind of discipline. In addition, we
anticipate allowing secure, confidential monitoring of accounts
directly by clients via the Internet. This is expected to be
announced sometime in 2000. With these advances, it will become
even easier for investors to decide when and where they want to
invest and to track directly from their own computers their
investments in C/Fund portfolios 24 hours a day.
During the past year, the Board voted to cease offering and
to close the Adams Equity Fund, due to its inability to reach the
size necessary to make it economical to operate as a separate
series fund. The C/Funds Group now consists of four fund series,
including the C/Community Association Reserve Fund, a specialty
fund of government securities that is managed for and offered
exclusively to Florida community associations.
As always, we wish to thank all staff members, shareholders,
directors and officers for their contribution to the company's
success this past year.
Respectfully Submitted:
R. G. "Kelly" Caldwell, Jr.
President
February 23, 2000
C/FUNDS GROUP, INC.
STATEMENT OF ASSETS & LIABILITIES
November 29, 1999
Adams Equity Fund
Securities at Cost $0
ASSETS
Securities value $0
Receivables
Dividends & interest 0
Investment 0
securities sold
0
LIABILITES
Advisor fee & other payables 0
Investment securities purchased 0
NET ASSETS APPLICABLE
TO OUTSTANDING SHARES $0
CAPITAL SHARES 0
NET ASSET VALUE PER SHARE $0.00
C/FUNDS GROUP, INC.
STATEMENT OF OPERATIONS
For the Period
January 1, 1999
through
November 29, 1999
Adams Equity Fund
INVESTMENT INCOME
Dividends $1,957
Interest 1,856
3,813
OPERATING EXPENSES
Investment advisory fee 3,724
Professional fees 1,430
Registration fees 16
Custodian fees 1,097
Directors fees 300
Miscellaneous 148
6,715
NET INVESTMENT LOSS (2,902)
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Change in unrealized depreciation in
value of investments for the period (46,423)
Net realized loss on investments (23,793)
NET LOSS ON INVESTMENTS (70,216)
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ($73,118)
C/FUNDS GROUP, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Period
January 1, 1999
through
November 29, 1999
Adams Equity Fund
DECREASE IN NET ASSETS
From Operations:
Net investment loss ($2,902)
Net realized loss on investments (23,793)
Unrealized depreciation in value
of investments for the period (46,423)
Net decrease in net assets from
operations (73,118)
CAPITAL SHARE TRANSACTIONS
Shares sold 13,516
Shares redeemed (829,956)
(816,440)
Net decrease in net assets (889,558)
NET ASSETS
Beginning of period 889,558
End of period $0
C/FUNDS GROUP, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ending
December 31, 1998
Adams Equity Fund
DECREASE IN NET ASSETS
From Operations:
Net investment loss ($9,497)
Net realized loss on investments (12,064)
Unrealized depreciation in value
of investments for the year (144,540)
Net decrease in net assets from
operations (166,101)
CAPITAL SHARE TRANSACTIONS
Shares sold 164,405
Shares redeemed (385,388)
(220,983)
Net decrease in net assets (387,084)
NET ASSETS
Beginning of year 1,276,642
End of year $889,558
UNDISTRIBUTED INVESTMENT LOSS ($16,601)
C/FUNDS GROUP, INC.
ADAMS EQUITY FUND
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Periods Ended November 29, 1999 and December 31, 1998, 1997, 1996,
and 1995
Net Dis
Rea tribu
lised tions
Dis and from Net
tribu Unrea Net Dis Asset
tions lized Rea tribu Value Net
Net from Gain lized tions at Asset
Opera Invest Net (Loss) Gains from Begin Value
Invest ting ment Invest on on Return Total ning End
ment Expe Income ment Invest Invest of Cap Net of of
Income nses (Loss) Income ments ments ital Change Period Period
Adams Equity Fund(2)
1999 .11 (.19) (.08) .00 (1.98) .00 (10.68) (12.74) $12.74 $0.00
1998 .12 (.23) (.11) .00 (1.05) .00 .00 (1.16) 13.90 12.74
1997 .13 (.23) (.10) .00 2.18 .00 .00 2.08 11.82 13.90
1996 .17 (.15) .02 .00 2.62 (.64) .00 2.00 9.82 11.82
1995(3)(4).06(.03) .03 (.02) (.19) .00 .00 (.18) 10.00 9.82
Net
Operating Investment Shares
Expenses Income to Portfolio Outstanding
to Average Average Turnover at End of
Net ASsets Net Assets Rate Period
Adams Equity Fund
1999 1.60% (.69%) 143.31% 0
1998 1.70% (.79%) 70.86% 69,830
1997 1.74% (.75%) 48.17% 91,852
1996 1.36% .18% 65.00% 21,468
1995(3)(4) 1.16% .32% .00% 14,935
(1) Selected data for a share of capital stock outstanding throughout the
year.
(2) Fund was closed in November, 1999.
(3) Inception of fund was October, 1995.
(4) Ratio of operating expenses to average net assets has been annualized.
C/FUNDS GROUP, INC.
ADAMS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
November 29, 1999
NOTE A - ORGANIZATION
C/Funds Group, Inc. (the Company), is registered as an open-end diversified
investment company under the Investment Company Act of 1940. Effective July
2, 1985, the Company's shares were registered under Section 8(a) of the
Securities Act of 1933. The Adams Equity Fund, with its primary
investments being stocks, was originally offered in October, 1995 and
subsequently closed in November, 1999.
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 national
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.
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.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
NOTE C - INVESTMENT ADVISORY AGREEMENT
The Adams Equity Fund had a written agreement (the "Agreement") for
management and investment advisory services with Omnivest Research
Corporation (the "Advisor") which is owned 100% by Trust Companies of
America, Inc. (TCA), which is controlled by the Company's President and his
family. The Agreement provided for advisor fees to be computed on the
average daily net asset value. The annual percentage rate provided by the
Agreement was 1% in computing investment advisory fees, and the fees
incurred during 1999 were $3,724.
NOTE D - FUND SHARE TANSACTONS AND DISTRIBUTIONS
As of December 31, 1999 and 1998 there were 5,000,000 shares of $.01 par
value capital shares authorized for the Company. Transactions of the Adams
Equity Fund were as follows:
For the Period
January 1, 1999
through
November29, 1999
Adams Equity Fund
Shares sold 1,174
Shares redeemed (71,004)
Net decrease (69,830)
For the Year Ending
December 31, 1998
Adams Equity Fund
Shares sold 11,757
Shares redeemed (33,779)
Net decrease (22,022)
NOTE E - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities of the funds were as follows
for 1999.
Adams Equity Fund
Common Stocks
Purchases $479,078
Sales $1,276,657
C/FUNDS GROUP, INC.
ADAMS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
November 29, 1999
NOTE F - TRANSACTIONS WITH AFFILIATES
In addition to the investment advisory fees discussed in NOTE C, the Fund
paid 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 subsidiaries for services other than
investment advising aggregated approximately $1,200 during 1999.
NOTE G - 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. In the fourth quarter of 1999, the
Company discontinued use of investment research services supplied by
brokers whose commissions included the cost of such services. The value of
such services, for the Company, aggregated $30,663 for the year ended
December 31, 1999.
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To The Shareholders and Board of Directors
C/FUNDS Group, Inc.
Venice, Florida
We have audited the statement of assets and liabilities,
including the portfolio of investments, of the Adams Equity Fund
portfolio (one of the portfolios constituting the C/FUNDS Group,
Inc.) as of November 29, 1999 (date fund closed), and the related
statement of operations for the period then ended, the statements
of changes in net assets for each of the two periods in the
period then ended, and the selected per share data and ratios for
each of the five periods in the period then ended. These
financial statements and per share data and ratios are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and per
share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits 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 November 29, 1999, by correspondence with
the custodian. 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 the Adams Equity Fund
portfolio of the C/FUNDS Group, Inc. as of November 29, 1999, the
results of their operations for the period then ended, the
changes in their net assets for each of the two periods in the
period then ended, and the selected per share data and ratios for
each of the five periods in the period then ended, in conformity
with generally accepted accounting principles.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 21, 2000
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 493-4295
Custodian
Caldwell Trust Company
201 Center Road, Suite Two
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South, Suite 600
St. Petersburg, FL 33701-4383
(727) 821-6161
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.
CONSENT OF INDEPENDENT AUDITORS
Mr. Roland G. Caldwell, Jr.
C/Funds Group, Inc.
250 Tampa Avenue West
Venice, Florida 34285
Dear Mr. Caldwell:
We hereby consent to the use of our reports dated January 21,
2000 on the financial statements of the C/Fund, C/Growth Stock
Fund, C/Government Fund, C/Community Association Reserve Fund,
and of the Adams Equity Fund (five of the portfolios constituting
the C/FUNDS Group, Inc.) as of December 31, 1999 and November 29,
1999, respectively, and for the periods then ended. Such reports
are being included with the unaudited financial 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
February 25, 2000
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
the C/Fund, C/Growth Stock Fund, C/Government Fund, and
C/Community Association Reserve Fund (four of the portfolios
constituting the C/FUNDS Group, Inc.) for the year ended December
31, 1999, we considered its internal control, including control
activities for safeguarding securities, in order to determine our
auditing procedures 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 internal control.
The management of C/FUNDS Group, Inc. is responsible for
establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those
controls include the safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in internal control, error or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control 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 internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud 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 matters involving
internal control, including controls for safeguarding securities,
that we consider to be material weaknesses as defined above as of
December 31, 1999.
This report is intended solely for the information and use of
management, the board of directors of C/FUNDS Group, Inc., and
the Securities and Exchange Commission.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 21, 2000
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 the Adams Equity Fund (one of the portfolios constituting the
C/FUNDS Group, Inc.) for the period ended November 29, 1999, we
considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing
procedures 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 internal control.
The management of C/FUNDS Group, Inc. is responsible for
establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those
controls include the safeguarding of assets against unauthorized
acquisition, use, or disposition.
Because of inherent limitations in internal control, error or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control 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 internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a
condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud 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 matters involving
internal control, including controls for safeguarding securities,
that we consider to be material weaknesses as defined above as of
November 29, 1999.
This report is intended solely for the information and use of
management, the board of directors of C/FUNDS Group, Inc., and
the Securities and Exchange Commission.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 21, 2000
ADDENDUM TO CONTRACT
Investment Advisory Contract
Contract dated November 1, 1993, between the C/Fund
Series of C/Funds Group, Inc. and Omnivest Research Company
setting forth the terms under which Omnivest will serve as
Investment Advisor for the Series.
It is agreed that the contract shall be extended until
May 1st, 2000. All other terms and conditions of the
original contract shall remain the same.
AGREED:
C/Funds Group, Inc. Omnivest Research Corporation
C/Fund Series
/signature/ /signature/
By: Roland G. Caldwell, Jr Roland G. Caldwell
President Investment Principal
ADDENDUM TO CONTRACT
Investment Advisory Contract
Contract dated November 1, 1993, between the C/Growth
Stock Fund Series of C/Funds Group, Inc. and Omnivest
Research Company setting forth the terms under which
Omnivest will serve as Investment Advisor for the Series.
It is agreed that the contract shall be extended until
May 1st, 2000. All other terms and conditions of the
original contract shall remain the same.
AGREED:
C/Funds Group, Inc. Omnivest Research Corporation
C/Growth Stock Fund Series
/signature/ /signature/
By: Roland G. Caldwell, Jr Roland G. Caldwell
President Investment Principal
ADDENDUM TO CONTRACT
Investment Advisory Contract
Contract dated November 1, 1993, between the
C/Government Fund Series of C/Funds Group, Inc. and Omnivest
Research Company setting forth the terms under which
Omnivest will serve as Investment Advisor for the Series.
It is agreed that the contract shall be extended until
May 1st, 2000. All other terms and conditions of the
original contract shall remain the same.
AGREED:
C/Funds Group, Inc. Omnivest Research Corporation
C/Government Fund Series
/signature/ /signature/
By: Roland G. Caldwell, Jr Roland G. Caldwell
President Investment Principal
ADDENDUM TO CONTRACT
Investment Advisory Contract
Contract dated November 1, 1993, between the
C/Community Association Reserve Fund Series of C/Funds
Group, Inc. and Omnivest Research Company setting forth the
terms under which Omnivest will serve as Investment Advisor
for the Series.
It is agreed that the contract shall be extended until
May 1st, 2000. All other terms and conditions of the
original contract shall remain the same.
AGREED:
C/Funds Group, Inc. Omnivest Research Corporation
C/Community Association
Reserve Fund Series
/signature/ /signature/
By: Roland G. Caldwell, Jr Roland G. Caldwell
President Investment Principal
Caldwell Trust Company
Venice, Florida 34292
Custody Agreement
for
C/Funds Group, Inc.
C/Fund Fund Series
Custody Agreement
THIS AGREEMENT is made between the parties named below:
CUSTOMER: C/Fund Fund Series
of C/Funds Group, Inc.
CUSTODIAN: Caldwell Trust Company
201 Center Road, Venice, FL 34292
Section 1 - Designation and Appointment of Custodian
The CUSTODIAN has been duly designated and appointed by the Board
of Directors of the CUSTOMER as the safekeeping agent for the
CUSTOMER's securities and similar investments. Therefore, the
CUSTOMER hereby appoints the CUSTODIAN to provide custodial and
related services to CUSTOMER.
Section 2 - Delivery and Ownership of Property
The CUSTOMER will deliver from time to time property acceptable
to CUSTODIAN to be held in accordance with the terms of this
agreement. The CUSTOMER is the owner of all property held
hereunder and CUSTODIAN is acting solely as an agent of the
CUSTOMER for the purposes set forth herein.
Section 3 - Authorized Access Persons
Two officers of the CUSTOMER, named in the "Corporate Resolution"
attached to this Agreement, are duly authorized and permitted by
the Board of Directors of the CUSTOMER to have access to property
of the CUSTOMER deposited with the CUSTODIAN. Access to property
so deposited shall be had only by two or more of such persons
jointly.
Section 4 - Investments
The CUSTODIAN is hereby empowered to invest, sell and/or reinvest
CUSTOMER's assets, securities or properties and to take delivery
or to deliver or to arrange for deliveries and receipts of such
assets securities or properties in the normal course of
performing all necessary duties hereunder, only upon instructions
from authorized representatives or agents of OMNIVEST RESEARCH
CORPORATION as the investment advisor to this fund series.
Instructions from authorized representatives or agents of the
CUSTOMER's investment advisor in regard to purchase, sale or
delivery of assets, securities or properties may, but need not
be, in writing and CUSTOMER assumes all risks resulting from
action taken by CUSTODIAN in good faith as a result of having
taken such instructions. CUSTODIAN shall not be required to
comply with any direction to purchase securities unless or until
there is sufficient cash or equivalents available for such
purpose, or with any direction to sell securities unless such
securities are held in or to the order of the Account at the time
in a form satisfactory to CUSTODIAN. Expenses incurred in
effecting any of the foregoing transactions shall be charged to
the Account unless the CUSTOMER makes provisions or gives
instructions otherwise. CUSTODIAN shall undertake the collection
of any item held as the same matures.
Section 5 - Income
The CUSTODIAN shall collect income on the property held
hereunder, pay expenses and make remittances as directed,
authorized or agreed, and/or reinvest income as CUSTOMER
instructs.
Section 6 - Statements
Periodically as mutually agreed, CUSTODIAN shall furnish to
CUSTOMER or to CUSTOMER's Investment Advisor, daily cash
balances, statements of assets and statements of all receipts and
disbursements and shall furnish annually data for the preceding
year to assist the CUSTOMER in preparing returns for income tax
purposes on the property held hereunder.
Section 7 - Nominee
CUSTODIAN may register all or any part of the property either in
the name of CUSTODIAN, or in any name or nominee, or may retain
them unregistered and in bearer form.
Section 8 - Payment of Taxes
The CUSTOMER is responsible for the payment of all taxes assessed
on or with respect to any property held hereunder and income
collected thereon and agrees to hold CUSTODIAN harmless therefor.
Section 9 - Compensation
The compensation of the Agent shall be at the Current Rate
Structure attached to this Agreement as Schedule A. Such
compensation of Agent shall be as mutually agreed from time to
time between Agent and CUSTOMER.
Section 10 - Withdrawal of Property and Termination of Agreement
The CUSTOMER may withdraw any and all property held hereunder
only upon presentation to CUSTODIAN of documentation satisfactory
to CUSTODIAN, authorizing such withdrawal or termination, it
being clearly established herein that it is the intent of this
provision to mean that any such withdrawal of assets, securities
or properties by CUSTOMER in kind or in cash is to made by
CUSTOMER's authorized officer or agent only upon presentation of
a resolution of CUSTOMER's Board of Directors, signed by all
directors of the CUSTOMER, with signatures attested to by the
Secretary of C/Funds Group, Inc., and signed under seal, with the
language in the resolution to explicitly authorize such specific
withdrawal or termination. The final withdrawal of all property
held hereunder shall terminate this agreement. CUSTODIAN shall
have the right to terminate this agreement at any time upon
giving the CUSTOMER written notice. CUSTODIAN shall deliver the
property as soon as practicable upon either a withdrawal or
termination, but prior to delivery may require re-registration of
any property held in its nominee form.
Section 11 - Authority of CUSTOMER
The CUSTOMER certifies that it has legal authority to enter into
this agreement. A certified copy of a resolution designating and
appointing the CUSTODIAN and stating the names of the officers
duly authorized to act on behalf of CUSTOMER, along with specimen
signatures of said officers, is attached hereto, and Agent shall
be authorized to accept instructions, as may be permitted in this
Agreement, from such named person or persons until receipt by it
of a certified copy of a new resolution conferring authority upon
another person or persons to act similarly.
Section 12 - Law Governing
The laws of the State of Florida shall govern the interpretation
of this agreement.
Section 13 - General
The CUSTOMER's tax identification number is: 59-2464979.
This agreement shall bind the respective successors and assigns
of the parties hereto for the period of January 1, 2000 through
December 31, 2000.
IN WITNESS WHEREOF, the CUSTOMER and CUSTODIAN have executed
this agreement in duplicate on the 22nd day of November, 1999.
Customer:
Attest: C/Fund Fund Series
C/Funds Group, Inc.
/signature/
By
Roland G. Caldwell, Jr.
President
Custodian:
Attest: Caldwell Trust Company
/signature/
By
Roland G. Caldwell
Chief Executive Officer
Schedule A
Custodian Compensation
November 22, 1999
Date
The current rate of compensation is .3% of portfolio market
value. This rate may be changed from time to time as mutually
agreed between the COMPANY and the CUSTODIAN.
Custody Agreement
for
C/Funds Group, Inc.
C/Growth Stock Fund Series
Custody Agreement
THIS AGREEMENT is made between the parties named below:
CUSTOMER: C/Growth Stock Fund Series
of C/Funds Group, Inc.
CUSTODIAN: Caldwell Trust Company
201 Center Road, Venice, FL 34292
Section 1 - Designation and Appointment of Custodian
The CUSTODIAN has been duly designated and appointed by the Board
of Directors of the CUSTOMER as the safekeeping agent for the
CUSTOMER's securities and similar investments. Therefore, the
CUSTOMER hereby appoints the CUSTODIAN to provide custodial and
related services to CUSTOMER.
Section 2 - Delivery and Ownership of Property
The CUSTOMER will deliver from time to time property acceptable
to CUSTODIAN to be held in accordance with the terms of this
agreement. The CUSTOMER is the owner of all property held
hereunder and CUSTODIAN is acting solely as an agent of the
CUSTOMER for the purposes set forth herein.
Section 3 - Authorized Access Persons
Two officers of the CUSTOMER, named in the "Corporate Resolution"
attached to this Agreement, are duly authorized and permitted by
the Board of Directors of the CUSTOMER to have access to property
of the CUSTOMER deposited with the CUSTODIAN. Access to property
so deposited shall be had only by two or more of such persons
jointly.
Section 4 - Investments
The CUSTODIAN is hereby empowered to invest, sell and/or reinvest
CUSTOMER's assets, securities or properties and to take delivery
or to deliver or to arrange for deliveries and receipts of such
assets securities or properties in the normal course of
performing all necessary duties hereunder, only upon instructions
from authorized representatives or agents of OMNIVEST RESEARCH
CORPORATION as the investment advisor to this fund series.
Instructions from authorized representatives or agents of the
CUSTOMER's investment advisor in regard to purchase, sale or
delivery of assets, securities or properties may, but need not
be, in writing and CUSTOMER assumes all risks resulting from
action taken by CUSTODIAN in good faith as a result of having
taken such instructions. CUSTODIAN shall not be required to
comply with any direction to purchase securities unless or until
there is sufficient cash or equivalents available for such
purpose, or with any direction to sell securities unless such
securities are held in or to the order of the Account at the time
in a form satisfactory to CUSTODIAN. Expenses incurred in
effecting any of the foregoing transactions shall be charged to
the Account unless the CUSTOMER makes provisions or gives
instructions otherwise. CUSTODIAN shall undertake the collection
of any item held as the same matures.
Section 5 - Income
The CUSTODIAN shall collect income on the property held
hereunder, pay expenses and make remittances as directed,
authorized or agreed, and/or reinvest income as CUSTOMER
instructs.
Section 6 - Statements
Periodically as mutually agreed, CUSTODIAN shall furnish to
CUSTOMER or to CUSTOMER's Investment Advisor, daily cash
balances, statements of assets and statements of all receipts and
disbursements and shall furnish annually data for the preceding
year to assist the CUSTOMER in preparing returns for income tax
purposes on the property held hereunder.
Section 7 - Nominee
CUSTODIAN may register all or any part of the property either in
the name of CUSTODIAN, or in any name or nominee, or may retain
them unregistered and in bearer form.
Section 8 - Payment of Taxes
The CUSTOMER is responsible for the payment of all taxes assessed
on or with respect to any property held hereunder and income
collected thereon and agrees to hold CUSTODIAN harmless therefor.
Section 9 - Compensation
The compensation of the Agent shall be at the Current Rate
Structure attached to this Agreement as Schedule A. Such
compensation of Agent shall be as mutually agreed from time to
time between Agent and CUSTOMER.
Section 10 - Withdrawal of Property and Termination of Agreement
The CUSTOMER may withdraw any and all property held hereunder
only upon presentation to CUSTODIAN of documentation satisfactory
to CUSTODIAN, authorizing such withdrawal or termination, it
being clearly established herein that it is the intent of this
provision to mean that any such withdrawal of assets, securities
or properties by CUSTOMER in kind or in cash is to made by
CUSTOMER's authorized officer or agent only upon presentation of
a resolution of CUSTOMER's Board of Directors, signed by all
directors of the CUSTOMER, with signatures attested to by the
Secretary of C/Funds Group, Inc., and signed under seal, with the
language in the resolution to explicitly authorize such specific
withdrawal or termination. The final withdrawal of all property
held hereunder shall terminate this agreement. CUSTODIAN shall
have the right to terminate this agreement at any time upon
giving the CUSTOMER written notice. CUSTODIAN shall deliver the
property as soon as practicable upon either a withdrawal or
termination, but prior to delivery may require re-registration of
any property held in its nominee form.
Section 11 - Authority of CUSTOMER
The CUSTOMER certifies that it has legal authority to enter into
this agreement. A certified copy of a resolution designating and
appointing the CUSTODIAN and stating the names of the officers
duly authorized to act on behalf of CUSTOMER, along with specimen
signatures of said officers, is attached hereto, and Agent shall
be authorized to accept instructions, as may be permitted in this
Agreement, from such named person or persons until receipt by it
of a certified copy of a new resolution conferring authority upon
another person or persons to act similarly.
Section 12 - Law Governing
The laws of the State of Florida shall govern the interpretation
of this agreement.
Section 13 - General
The CUSTOMER's tax identification number is: 59-3127655.
This agreement shall bind the respective successors and assigns
of the parties hereto for the period of January 1, 2000 through
December 31, 2000.
IN WITNESS WHEREOF, the CUSTOMER and CUSTODIAN have executed
this agreement in duplicate on the 22nd day of November, 1999.
Customer:
Attest: C/Growth Stock Fund Series
C/Funds Group, Inc.
/signature/
By
Roland G. Caldwell, Jr.
President
Custodian:
Attest: Caldwell Trust Company
/signature/
By
Roland G. Caldwell
Chief Executive Officer
Schedule A
Custodian Compensation
November 22, 1999
Date
The current rate of compensation is .3% of portfolio market
value. This rate may be changed from time to time as mutually
agreed between the COMPANY and the CUSTODIAN.
Custody Agreement
for
C/Funds Group, Inc.
C/Government Fund Series
Custody Agreement
THIS AGREEMENT is made between the parties named below:
CUSTOMER: C/Government Fund Series
of C/Funds Group, Inc.
CUSTODIAN: Caldwell Trust Company
201 Center Road, Venice, FL 34292
Section 1 - Designation and Appointment of Custodian
The CUSTODIAN has been duly designated and appointed by the Board
of Directors of the CUSTOMER as the safekeeping agent for the
CUSTOMER's securities and similar investments. Therefore, the
CUSTOMER hereby appoints the CUSTODIAN to provide custodial and
related services to CUSTOMER.
Section 2 - Delivery and Ownership of Property
The CUSTOMER will deliver from time to time property acceptable
to CUSTODIAN to be held in accordance with the terms of this
agreement. The CUSTOMER is the owner of all property held
hereunder and CUSTODIAN is acting solely as an agent of the
CUSTOMER for the purposes set forth herein.
Section 3 - Authorized Access Persons
Two officers of the CUSTOMER, named in the "Corporate Resolution"
attached to this Agreement, are duly authorized and permitted by
the Board of Directors of the CUSTOMER to have access to property
of the CUSTOMER deposited with the CUSTODIAN. Access to property
so deposited shall be had only by two or more of such persons
jointly.
Section 4 - Investments
The CUSTODIAN is hereby empowered to invest, sell and/or reinvest
CUSTOMER's assets, securities or properties and to take delivery
or to deliver or to arrange for deliveries and receipts of such
assets securities or properties in the normal course of
performing all necessary duties hereunder, only upon instructions
from authorized representatives or agents of OMNIVEST RESEARCH
CORPORATION as the investment advisor to this fund series.
Instructions from authorized representatives or agents of the
CUSTOMER's investment advisor in regard to purchase, sale or
delivery of assets, securities or properties may, but need not
be, in writing and CUSTOMER assumes all risks resulting from
action taken by CUSTODIAN in good faith as a result of having
taken such instructions. CUSTODIAN shall not be required to
comply with any direction to purchase securities unless or until
there is sufficient cash or equivalents available for such
purpose, or with any direction to sell securities unless such
securities are held in or to the order of the Account at the time
in a form satisfactory to CUSTODIAN. Expenses incurred in
effecting any of the foregoing transactions shall be charged to
the Account unless the CUSTOMER makes provisions or gives
instructions otherwise. CUSTODIAN shall undertake the collection
of any item held as the same matures.
Section 5 - Income
The CUSTODIAN shall collect income on the property held
hereunder, pay expenses and make remittances as directed,
authorized or agreed, and/or reinvest income as CUSTOMER
instructs.
Section 6 - Statements
Periodically as mutually agreed, CUSTODIAN shall furnish to
CUSTOMER or to CUSTOMER's Investment Advisor, daily cash
balances, statements of assets and statements of all receipts and
disbursements and shall furnish annually data for the preceding
year to assist the CUSTOMER in preparing returns for income tax
purposes on the property held hereunder.
Section 7 - Nominee
CUSTODIAN may register all or any part of the property either in
the name of CUSTODIAN, or in any name or nominee, or may retain
them unregistered and in bearer form.
Section 8 - Payment of Taxes
The CUSTOMER is responsible for the payment of all taxes assessed
on or with respect to any property held hereunder and income
collected thereon and agrees to hold CUSTODIAN harmless therefor.
Section 9 - Compensation
The compensation of the Agent shall be at the Current Rate
Structure attached to this Agreement as Schedule A. Such
compensation of Agent shall be as mutually agreed from time to
time between Agent and CUSTOMER.
Section 10 - Withdrawal of Property and Termination of Agreement
The CUSTOMER may withdraw any and all property held hereunder
only upon presentation to CUSTODIAN of documentation satisfactory
to CUSTODIAN, authorizing such withdrawal or termination, it
being clearly established herein that it is the intent of this
provision to mean that any such withdrawal of assets, securities
or properties by CUSTOMER in kind or in cash is to made by
CUSTOMER's authorized officer or agent only upon presentation of
a resolution of CUSTOMER's Board of Directors, signed by all
directors of the CUSTOMER, with signatures attested to by the
Secretary of C/Funds Group, Inc., and signed under seal, with the
language in the resolution to explicitly authorize such specific
withdrawal or termination. The final withdrawal of all property
held hereunder shall terminate this agreement. CUSTODIAN shall
have the right to terminate this agreement at any time upon
giving the CUSTOMER written notice. CUSTODIAN shall deliver the
property as soon as practicable upon either a withdrawal or
termination, but prior to delivery may require re-registration of
any property held in its nominee form.
Section 11 - Authority of CUSTOMER
The CUSTOMER certifies that it has legal authority to enter into
this agreement. A certified copy of a resolution designating and
appointing the CUSTODIAN and stating the names of the officers
duly authorized to act on behalf of CUSTOMER, along with specimen
signatures of said officers, is attached hereto, and Agent shall
be authorized to accept instructions, as may be permitted in this
Agreement, from such named person or persons until receipt by it
of a certified copy of a new resolution conferring authority upon
another person or persons to act similarly.
Section 12 - Law Governing
The laws of the State of Florida shall govern the interpretation
of this agreement.
Section 13 - General
The CUSTOMER's tax identification number is: 59-3127652.
This agreement shall bind the respective successors and assigns
of the parties hereto for the period of January 1, 2000 through
December 31, 2000.
IN WITNESS WHEREOF, the CUSTOMER and CUSTODIAN have executed
this agreement in duplicate on the 22nd day of November, 1999.
Customer:
Attest: C/Government Fund Series
C/Funds Group, Inc.
/signature/
By
Roland G. Caldwell, Jr.
President
Custodian:
Attest: Caldwell Trust Company
/signature/
By
Roland G. Caldwell
Chief Executive Officer
Schedule A
Custodian Compensation
November 22, 1999
Date
The current rate of compensation is .3% of portfolio market
value. This rate may be changed from time to time as mutually
agreed between the COMPANY and the CUSTODIAN.
Custody Agreement
for
C/Funds Group, Inc.
C/Community Association Reserve Fund Series
Custody Agreement
THIS AGREEMENT is made between the parties named below:
CUSTOMER: C/Community Association Reserve Fund Series
of C/Funds Group, Inc.
CUSTODIAN: Caldwell Trust Company
201 Center Road, Venice, FL 34292
Section 1 - Designation and Appointment of Custodian
The CUSTODIAN has been duly designated and appointed by the Board
of Directors of the CUSTOMER as the safekeeping agent for the
CUSTOMER's securities and similar investments. Therefore, the
CUSTOMER hereby appoints the CUSTODIAN to provide custodial and
related services to CUSTOMER.
Section 2 - Delivery and Ownership of Property
The CUSTOMER will deliver from time to time property acceptable
to CUSTODIAN to be held in accordance with the terms of this
agreement. The CUSTOMER is the owner of all property held
hereunder and CUSTODIAN is acting solely as an agent of the
CUSTOMER for the purposes set forth herein.
Section 3 - Authorized Access Persons
Two officers of the CUSTOMER, named in the "Corporate Resolution"
attached to this Agreement, are duly authorized and permitted by
the Board of Directors of the CUSTOMER to have access to property
of the CUSTOMER deposited with the CUSTODIAN. Access to property
so deposited shall be had only by two or more of such persons
jointly.
Section 4 - Investments
The CUSTODIAN is hereby empowered to invest, sell and/or reinvest
CUSTOMER's assets, securities or properties and to take delivery
or to deliver or to arrange for deliveries and receipts of such
assets securities or properties in the normal course of
performing all necessary duties hereunder, only upon instructions
from authorized representatives or agents of OMNIVEST RESEARCH
CORPORATION as the investment advisor to this fund series.
Instructions from authorized representatives or agents of the
CUSTOMER's investment advisor in regard to purchase, sale or
delivery of assets, securities or properties may, but need not
be, in writing and CUSTOMER assumes all risks resulting from
action taken by CUSTODIAN in good faith as a result of having
taken such instructions. CUSTODIAN shall not be required to
comply with any direction to purchase securities unless or until
there is sufficient cash or equivalents available for such
purpose, or with any direction to sell securities unless such
securities are held in or to the order of the Account at the time
in a form satisfactory to CUSTODIAN. Expenses incurred in
effecting any of the foregoing transactions shall be charged to
the Account unless the CUSTOMER makes provisions or gives
instructions otherwise. CUSTODIAN shall undertake the collection
of any item held as the same matures.
Section 5 - Income
The CUSTODIAN shall collect income on the property held
hereunder, pay expenses and make remittances as directed,
authorized or agreed, and/or reinvest income as CUSTOMER
instructs.
Section 6 - Statements
Periodically as mutually agreed, CUSTODIAN shall furnish to
CUSTOMER or to CUSTOMER's Investment Advisor, daily cash
balances, statements of assets and statements of all receipts and
disbursements and shall furnish annually data for the preceding
year to assist the CUSTOMER in preparing returns for income tax
purposes on the property held hereunder.
Section 7 - Nominee
CUSTODIAN may register all or any part of the property either in
the name of CUSTODIAN, or in any name or nominee, or may retain
them unregistered and in bearer form.
Section 8 - Payment of Taxes
The CUSTOMER is responsible for the payment of all taxes assessed
on or with respect to any property held hereunder and income
collected thereon and agrees to hold CUSTODIAN harmless therefor.
Section 9 - Compensation
The compensation of the Agent shall be at the Current Rate
Structure attached to this Agreement as Schedule A. Such
compensation of Agent shall be as mutually agreed from time to
time between Agent and CUSTOMER.
Section 10 - Withdrawal of Property and Termination of Agreement
The CUSTOMER may withdraw any and all property held hereunder
only upon presentation to CUSTODIAN of documentation satisfactory
to CUSTODIAN, authorizing such withdrawal or termination, it
being clearly established herein that it is the intent of this
provision to mean that any such withdrawal of assets, securities
or properties by CUSTOMER in kind or in cash is to made by
CUSTOMER's authorized officer or agent only upon presentation of
a resolution of CUSTOMER's Board of Directors, signed by all
directors of the CUSTOMER, with signatures attested to by the
Secretary of C/Funds Group, Inc., and signed under seal, with the
language in the resolution to explicitly authorize such specific
withdrawal or termination. The final withdrawal of all property
held hereunder shall terminate this agreement. CUSTODIAN shall
have the right to terminate this agreement at any time upon
giving the CUSTOMER written notice. CUSTODIAN shall deliver the
property as soon as practicable upon either a withdrawal or
termination, but prior to delivery may require re-registration of
any property held in its nominee form.
Section 11 - Authority of CUSTOMER
The CUSTOMER certifies that it has legal authority to enter into
this agreement. A certified copy of a resolution designating and
appointing the CUSTODIAN and stating the names of the officers
duly authorized to act on behalf of CUSTOMER, along with specimen
signatures of said officers, is attached hereto, and Agent shall
be authorized to accept instructions, as may be permitted in this
Agreement, from such named person or persons until receipt by it
of a certified copy of a new resolution conferring authority upon
another person or persons to act similarly.
Section 12 - Law Governing
The laws of the State of Florida shall govern the interpretation
of this agreement.
Section 13 - General
The CUSTOMER's tax identification number is: 59-3127651.
This agreement shall bind the respective successors and assigns
of the parties hereto for the period of January 1, 2000 through
December 31, 2000.
IN WITNESS WHEREOF, the CUSTOMER and CUSTODIAN have executed
this agreement in duplicate on the 22nd day of November, 1999.
Customer:
Attest: C/Community Association Reserve
Fund Series
C/Funds Group, Inc.
/signature/
By
Roland G. Caldwell, Jr.
President
Custodian:
Attest: Caldwell Trust Company
/signature/
By
Roland G. Caldwell
Chief Executive Officer
Schedule A
Custodian Compensation
November 22, 1999
Date
The current rate of compensation is .3% of portfolio market
value. This rate may be changed from time to time as mutually
agreed between the COMPANY and the CUSTODIAN.