As filed with the Securities and Exchange Commission on
December 15, 1995
Registration No. 33-7190
Investment Company Act File No. 811-4750
____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | X |
Post-Effective Amendment No. 16 | X |
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | X |
Amendment No. 19 | X |
FENIMORE ASSET MANAGEMENT TRUST
(Exact Name of Registrant as Specified in Charter)
111 North Grand Street, P.O. Box 399, Cobleskill, N.Y. 12043
(Address of Principal Executive Offices)
Registrant's Telephone Number: (800) 453-4392
Allan S. Mostoff, Esq.
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
(Name and Address of Agent for Service)
Copies to:
Thomas O. Putnam
118 North Grand Street
Cobleskill, N.Y. 12043
It is proposed that this filing will become effective seventy-five days
after filing pursuant to paragraph (a)(2) of Rule 485.
__________________
* Registrant has elected to register an indefinite number of shares
of beneficial interest under the Securities Act of 1933 pursuant to Rule
24f-2 under the Investment Company Act of 1940. Registrant filed the
notice required by Rule 24f-2 with respect to its fiscal year ended
December 31, 1994 on February 3, 1995.
<PAGE>
CROSS REFERENCE SHEET
REQUIRED BY RULE 495 UNDER THE
SECURITIES ACT OF 1933
FENIMORE ASSET MANAGEMENT TRUST
This filing relates solely to FAM Equity Income Fund (the "Equity
Income Fund") a separate investment series of Fenimore Asset Management Trust
(the "Trust") and contains the Prospectus and Statement of Additional
Information relating solely to the Equity Income Fund. The Prospectus
and Statement of Additional Information relating to FAM Value Fund (the
"Value Fund") are not included in this filing.
Items Required by Form N-1A
Item Number in Part A Prospectus Caption
- --------------------- __________________
1. Cover Page.............. Cover Page
2. Synopsis................ Fund Expenses
3. Condensed Financial
Information........... To be included by amendment
4. General Description of
Registrant............ General Information and
Capital; Investment Objective
and Investment Policies
5. Management of the Fund.... General Information and
Capital; Investment Objective
and Investment Policies;
Investment Advisor
5A. Management's Discussion of
Fund Performance.......... Information will be included
in the Annual Report of the
Registrant
6. Capital Stock and Other
Securities.............. How to Purchase Shares;
Redemption of Shares; Federal
Income Tax Status of Fund
7. Purchase of Securities
Being Offered........... How to Purchase Shares;
Purchases Through Selected
Dealers
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8. Redemption or Repurchase.. Redemption of Shares
9. Pending Legal Proceedings. Inapplicable
Statement of Additional
Item Number in Part B Information Caption
_____________________ _______________________
10. Cover Page................ Cover Page
11. Table of Contents......... Table of Contents
12. General Information and
History................. Investment Objective and
Policies
13. Investment Objectives and
Policies................ Investment Objective and
Policies
14. Management of the Fund.... History and Background of
Investment Advisor
15. Control Persons and Principal
Holders of Securities... Board of Trustees and Officers
16. Investment Advisory and other
Services................ History and Background of
Investment Advisor
17. Brokerage Allocation...... Brokerage Allocations
18. Capital Stock and Other
Securities.............. See Prospectus - General
Information and Capital
19. Purchase, Redemption and
Pricing of Securities
Being Offered........... Purchase of Shares; Redemption
of Shares
20. Tax Status................ Federal Tax Status
21. Underwriters.............. Inapplicable
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22. Calculations of Performance
Data.................... Performance Information
23. Financial Statements...... Financial Statements
<PAGE>
SUBJECT TO COMPLETION - DATED ____________
________________________________________________________________________
FAM EQUITY INCOME FUND
________________________________________________________________________
111 North Grand Street, P.O. Box 399, Cobleskill, New York 12043
Telephone Number (800) 932-3271 or (518) 234-7462
Auto-Access Line (800) 453-4392
A NO-LOAD MUTUAL FUND
P r o s p e c t u s
_____________, 1996
FAM EQUITY INCOME FUND is a diversified open end, no-load mutual fund
that continuously offers its shares for sale to the public. As a
no-load fund, shares purchased directly from the Fund are not subject to
sales charges, commissions, or any deferred sales charges, and there are
no 12b-1 service or distribution fees. The Fund is a separate
investment series of Fenimore Asset Management Trust.
The investment objective of the Fund is to provide reasonable current
income as well as long term capital appreciation for its shareholders by
investing primarily in income-producing equity securities. The Fund
employs a "value approach" to common stock selection and under normal
market conditions, will be fully invested in common stocks, preferred
stocks and securities that are convertible into common stocks. The
Fund's investment manager is Fenimore Asset Management, Inc.
This Prospectus has been designed to provide you with concise
information that an investor should know about the Fund before
investing. Please read the information carefully and retain this
document for future reference.
A Statement of Additional Information for the Fund, dated this same
date, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. A copy is available without charge at
the address and telephone numbers shown above.
Shares of the Fund are not deposits or obligations of, or insured,
guaranteed, or endorsed by, any bank, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency, entity or
person. The purchase of Fund shares involves investment risks,
including the possible loss of principal.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be
sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such State.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________________________________________________________________
Investment Advisor:
Fenimore Asset Management, Inc.
118 North Grand Street
Cobleskill, New York 12043
<PAGE>
TABLE OF CONTENTS Page
Fund Expenses
Investment Objective
Investment Philosophy
Investment Advisor
Investment Policies
Risk Factors and Special Considerations
How to Purchase Shares
Account Minimums
Fund Purchases and Trade Date
Net Asset Value
Wire Instructions
IRA and Retirement Accounts
Purchases Through Selected Dealers
Redemption of Shares
Shareholder Services
FAMVest Automatic Investment Plan
Toll-Free Telephone Numbers and Auto-Access Line
Fund Statements and Reports
Systematic Withdrawal Plan
Fund Policies
Signature Guarantees
Address Changes
Dividends and Capital Gains
Distribution Options
Transferring Ownership of Shares
Backup Withholding Instructions
Performance Information
Federal Income Tax Status of Fund
General Information and Capital
Fund Auditors
Distributor and Transfer Agent
Shareholder Servicing Agent
Broker Allocations
<PAGE>
FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on
Reinvestment of Dividends None
Exchange Fees None
Redemption Fees* None
Deferred Sales Load None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees 1.0%
12b-1 Fees None
Other Expenses** 0.50%
Total Fund Operating Expenses 1.50%
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear
directly or indirectly.
* The Fund's custodian bank imposes an $8 wire redemption fee on
shareholders who request a wire redemption from the Fund.
** "Other Expenses" are based on estimated amounts for the Fund's
current fiscal year.
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming
(1)5% annual return and (2) redemption at the end of each time period.
1 Year 3 Years
------ -------
$15 $47
This example should not be considered a representation of past or future
expenses or performance. Actual expenses and performance may be greater
or lesser than those shown.
<PAGE>
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide reasonable current
income as well as long term capital appreciation for its shareholders by
investing primarily in income-producing equity securities. The Fund
seeks to achieve its objective through a "value approach" to common
stock selection. Under normal market conditions the Fund is expected to
be fully invested in common stocks, preferred stocks and securities that
are convertible into common stocks that the Advisor believes have long
term growth possibilities with the ability to sustain dividend payments.
The Fund's investment manager is Fenimore Asset Management, Inc.
INVESTMENT PHILOSOPHY
FAM's investment philosophy is to seek out well-managed, financially
sound companies that it considers to be undervalued in the marketplace.
Utilizing basic Graham and Dodd investment principles, FAM is
categorized as a bottom-up value manager and strives to select companies
that have reasonable long term growth expectations.
FAM's investment philosophy is based upon the five following tenets:
I. UNDERVALUED OPPORTUNITIES
FAM employs a "value approach" in making its common stock selections
when it manages the Fund's assets. This approach is based upon FAM's
belief that at any given point in time the securities of some companies
sell at a discount from their true business worth. Factors considered
include the company's current earnings and FAM's opinion as to its
future earnings potential. After identifying a company whose
securities are determined by FAM to have a favorable price-to-value
relationship, FAM plans to invest the Fund's assets in such securities
and to hold them until their intrinsic value becomes fully reflected
in the market price of such securities.
II. DIVIDEND YIELD AND STABILITY
Recognizing that current income is important to shareholders, the Fund
seeks out common stocks, preferred stocks, or other investments
convertible into common stock, that provide reasonable income. FAM
analyzes the historical dividend payout ratios of such securities, the
growth of such ratios, and future potential dividends.
Over time, dividend income has proven to be an important component of
total return. Also, dividend income tends to be a more stable source of
total return than capital appreciation. While the price of a company's
common stock can be significantly affected by market fluctuations and
other short term factors, its dividend payments usually have greater
<PAGE>
stability. For this reason, securities which pay a high level of
dividend income are generally less volatile in price than securities
which pay a low level of dividend income.
III. FINANCIALLY STRONG COMPANIES
FAM uses many criteria to determine the true business worth of a
company, including cash flow and balance sheet analysis. Specifically,
FAM will be seeking to invest Fund assets in companies that may have
some or all of the following characteristics: high returns on capital,
low debt structures, strong working capital positions, and a high level
of insider ownership.
IV. GOOD BUSINESSES
FAM searches for businesses that are understandable, highly profitable,
and are part of industry groups that can be fairly evaluated.
V. ABLE MANAGEMENT TEAMS
Some of the securities in which FAM invests are issued by companies
which may not be well known to the general public or have strong
institutional ownership or recognition. Before purchasing these
securities FAM places considerable emphasis upon evaluating management's
ability through personal conversations and/or meetings with corporate
officers. Such conversations and/or meetings are extensive and continue
throughout FAM's interest in the company and its securities. FAM also
examines the amount of stock owned by insiders, including members of
management.
Although the objective is to select stocks with these characteristics,
FAM is aware that it is unrealistic to assume that each selection will
have all or even several of the above characteristics.
FAM's investment approach requires patience on the part of the investor
due to its investment philosophy which is long term in nature. The Fund
is not an appropriate investment for those whose goal is to capitalize
on short term market fluctuations or if short term market corrections
would cause you to sell your shares.
INVESTMENT ADVISOR
The Fund retains Fenimore Asset Management, Inc. ("FAM"), a New York
corporation majority-owned by Mr. Thomas O. Putnam, as its Investment
Advisor under an annual contract. FAM has been continuously offering
investment advisory and consulting services under contract since 1975 to
individuals, pension, profit sharing, IRA and Keogh plans, corporations,
<PAGE>
and non-profit organizations generally located in a service area that
includes the continental United States. Mr. Putnam, FAM's principal
investment professional, was born in 1944, has been actively employed as
an investment advisor since 1975, and holds responsibilities for FAM's
investment management and research activities. Mr. Putnam is the sole
shareholder of FAM Shareholder Services, Inc., the Fund's shareholder
servicing agent. Paul C. Hogan, CFA, Fund co-manager, is employed by
FAM, the Fund's advisor, as Investment Research Analyst. He has been
actively involved in investment research activities since 1991. FAM
employs a staff of experienced investment professionals to manage assets
for other corporate and individual clients.
Mr. Putnam, as principal officer of FAM, serves as President and
Chairman of the Board of Trustees of Fenimore Asset Management Trust.
Under the terms of the investment advisory contract, FAM receives a
monthly fee from the Fund equal to 1% per annum of the average daily
market value of its net assets. The rate is consistent with that being
charged by FAM to manage its other client accounts, but is higher than
the fee charged by most investment companies. The fee has also been
established in recognition that the advisor has agreed to assume certain
expenses, including all distribution expenses of the Fund.
The Fund and the Advisor have jointly adopted a Code of Ethics which
places certain express restrictions on the personal trading practices of
personnel of both the Fund and the Advisor. This Code of Ethics
complies in all material respects with the recommendations set forth in
the 1994 Report of the Advisory Group on Personal Investing of the
Investment Company Institute. The Fund and the Advisor have also
developed procedures that provide for the administration and enforcement
of the Code through the continuous monitoring of personal trading
practices.
INVESTMENT POLICIES
Under normal market conditions the Fund will attempt to remain fully
invested in common stocks and securities that are convertible into
common stocks, such as convertible bonds and convertible preferred
stocks. To the extent the Fund invests in convertible securities, it
will only acquire convertible issues having an S&P rating of A or
better. For temporary defensive purposes, the Fund may also invest all
of its assets in fixed-income securities. Generally, the Fund only
intends to invest in fixed-income securities when, in the opinion of
FAM, common stocks are deemed to have higher risks than are commensurate
with the potential rewards and fixed-income securities present a viable
alternative. Such fixed-income securities may include some or all of
the following:
(1) U.S. Treasury notes, bonds or bills, which carry the full faith and
credit of the U.S. government;
<PAGE>
(2) securities issued by any of the agencies of the U.S. Government, such as
the Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation;
(3) deposits in or certificates issued by any member bank of the Federal
Reserve System; and
(4) corporate bonds or notes of issuing companies that FAM has analyzed
and believes to be financially sound, with such issues being either
high-grade (i.e., ranked within the top three rating categories by one
or more of the recognized credit rating agencies), or non-rated and
issued by companies the FAM has analyzed and believes to be equivalent.
Among the types of common stocks that the Fund may invest in are the
common stocks of real estate investment trusts. Real estate investment
trusts may include equity real estate investment trusts, which generally
invest in commercial real estate properties, and mortgage real estate
investment trusts, which generally invest in real estate related loans.
Equity real estate investment trusts may be affected by changes in the
value of the underlying property owned by the trust, while mortgage real
estate investment trusts may be affected by the quality of credit
extended.
The Fund may also invest in the shares of other investment companies,
including closed-end investment companies. Purchases of the shares of
other investment companies will be limited to 10% of the Fund's total
assets, with investment in any single fund not to exceed 5% of Fund
assets at any one time. As a result of the Fund investing in other
investment companies, shareholders of the Fund will bear not only their
proportionate share of the operating and investment advisory expenses of
the Fund, but they will also indirectly bear similar expenses of the
underlying investment companies during the period while the Fund is
invested in such investment companies.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Under normal market conditions, the Fund is expected to be fully
invested in common stocks and securities that are convertible into
common stocks. Accordingly, an investment in the Fund is subject to the
type of market risk that is generally associated with equity
investments. The value of the Fund's investments may be affected by
changes in the value of the overall stock market such that the value of
your investment upon redemption may be more or less than the initial
amount invested. In addition, investors should be aware that there can
be no assurance that the Fund will fulfill its investment objective.
<PAGE>
HOW TO PURCHASE SHARES
ACCOUNT MINIMUMS
The initial minimum investment in the Fund is $10,000. The Fund offers
regular investment accounts, Individual Retirement Accounts, SEP-IRAs,
403(b)(7) accounts, and Uniform Gift/Transfer to Minors accounts.
FUND PURCHASES AND TRADE DATE
To establish your account, complete and sign the appropriate application
and mail it, along with your check made payable to FAM EQUITY INCOME
FUND, to: P.O. Box 399, Cobleskill, NY 12043. Please be sure to
provide your Social Security or taxpayer identification number. Cash
will not be accepted. To establish an account through a wire transfer
please see "Wire Instructions". Any applications received not following
the specific guidelines will be returned.
The date on which your purchase is credited is your trade date. For
purchases made by check or Federal Funds wire and received by the close
of regular trading on the New York Stock Exchange (generally 4:00 p.m.
Eastern time) the trade date is the date of receipt. For purchases
received after the close of regular trading on the Exchange the trade
date is the next business day. Shares are purchased at the Net Asset
Value ("NAV") determined on your trade date.
The Fund reserves the right to reject purchase applications or to
terminate the offering of shares made by this Prospectus if, in the
opinion of the Board of Trustees, such termination and/or rejection
would be in the best interest of existing shareholders. In the event
that your check does not clear, your order(s) will be cancelled and you
may be liable for losses or fees incurred, or both. The FAM EQUITY
INCOME FUND has a policy of waiving the minimum initial investment for
Fund trustees and employees and affiliated persons (including family
members) of the Advisor.
All applications to purchase Fund shares are subject to acceptance by
the Fund and are not binding until so accepted. The Fund does not
accept telephone orders for the purchase of shares, and it reserves the
right to reject applications in whole or in part.
NET ASSET VALUE
The Net Asset Value ("NAV") is calculated each day at the close of
regular trading on the New York Stock Exchange and on such other days as
there is sufficient trading in the Funds' portfolio of securities to
materially affect its NAV per share. Securities in the Fund's portfolio
will ordinarily be valued based upon market quotes. If quotations are
<PAGE>
not available, securities or other assets will be valued by a method
which the Board of Trustees believes most accurately reflects fair
value. The NAV per share is determined at each calculation by dividing
the total market value of all assets, cash and securities held, less
liabilities, if any, by the total number of shares outstanding that day.
WIRE INSTRUCTIONS
If you wish to wire funds to a new account with FAM EQUITY INCOME FUND,
please use the following instructions. Investors establishing new
accounts by wire should first forward their completed Account
Application to the Fund stating that the account will be established by
wire transfer and the expected date and amount of the transfer. Further
information regarding wire transfers is available by calling (800)
932-3271. FAM EQUITY INCOME FUND must have receipt of a wire transfer
no later than 4:00 P.M. in order for the purchase to be made that same
business day.
Key Bank of New York
ABA #021300077
For further credit to account #32531 000 6565
FAM EQUITY INCOME FUND
Fund Investment for: (Name and/or Account Number)
If you wish to wire funds to an existing account with the FAM EQUITY
INCOME FUND, please use the same instructions listed above.
IRA AND RETIREMENT ACCOUNTS
An individual having earned income and her or his spouse may each have
one or more Individual Retirement Accounts, or "IRAs", the number and
amounts limited only by the maximum allowed contribution per year.
Existing IRA accounts may be rolled over or transferred at any time into
a new IRA account, which may be invested in Fund shares. Chase
Manhattan Bank, N.A. is empowered and agrees to act as custodian of
shares purchased. Monies deposited into an IRA account may be invested
in shares of the Fund upon the filing of the appropriate forms. Forms
establishing IRAs, SEP IRAs, and 403(b)(7) plans are available by
calling the Fund at (800) 932-3271. The annual maintenance fee for
IRAs and other retirement accounts is $15. Investors are urged to
consult with a tax advisor in connection with the establishment of
retirement plans.
Monies or deposits into other types of retirement plans and/or Keogh
accounts may also be invested in Fund shares. However, the
qualification and certification of such plans must first be prearranged
by the investor's own tax specialists who would assist and oversee all
plan compliance requirements. Although the Fund will endeavor to
provide assistance to those investors interested in such plans, it
neither offers nor possesses the necessary professional skills or
<PAGE>
knowledge regarding the establishment or compliance maintenance of
retirement plans. Therefore, it is recommended that professional
counsel be retained by the investor before investing such monies in
shares of the Fund.
No signature guarantee is required if a shareholder elects to transfer
an IRA, SEP IRA, or 403(b)(7) plan to another custodian or in the event
of a mandatory distribution.
PURCHASES THROUGH SELECTED DEALERS
Certain Selected Dealers may effect transactions of the Fund. The Fund
may accept orders from broker-dealers who have been previously approved
by the Fund. It is the responsibility of such broker-dealers to
promptly forward purchase or redemption orders to the Fund. Although
there is no sales charge levied directly by the Fund, broker-dealers may
charge the investor a transaction-based fee for their services at either
the time of purchase or the time of redemption. Such charges may vary
amongst broker-dealers but in all cases will be retained by the
broker-dealer and not remitted to the Fund or the Advisor. The Advisor
may make payments to such companies out of its own resources to
compensate these companies for certain administrative services provided
in connection with the Fund. Shareholders who wish to transact through
a broker-dealer should contact the Fund at (800) 932-3271 for further
information.
REDEMPTION OF SHARES
Shareholders wishing to redeem shares may tender them to the Fund any
business day by executing a written request for redemption, in good
order as described below, and delivering the request by mail or by hand
to the Fund, 111 North Grand Street, P.O. Box 399, Cobleskill, NY
12043. The Fund does not offer telephone redemptions.
Definition of Good Order: Good order means that the written redemption
request must include the following:
1. The Fund account number, name, and social security or tax i.d.
number.
2. The amount of the transaction (specified in dollars or shares).
3. Signatures of all owners exactly as they are registered on the
account.
4. Signature guarantees are required if the value of shares being
redeemed exceeds $10,000; or if payment is to be sent to an address
other than the address of record; or if payment is to be made
payable to a payee other than the shareholder; or if there has been
a change of address within 30 days of the request for redemption.
5. Certificates, if any are held, signed and containing a proper
signature guarantee.
6. Other supporting legal documentation that might be required, in the
case of retirement plans, corporations, trusts, estates and certain
other accounts.
<PAGE>
Shareholders may sell all or any portion of their shares on any such
business day that NAV is calculated. Such shares will be redeemed by
the Fund at the next such calculation after such redemption request is
received and accepted by the Fund. When a redemption occurs shortly
after a recent purchase made by check, FAM EQUITY INCOME FUND may hold
the redemption proceeds beyond 7 days but only until the purchase check
clears, which may take up to 15 days or more. If you anticipate
redemptions soon after you purchase your shares, you are advised to wire
funds to avoid delay.
The Fund reserves the right, however, to withhold payment up to seven
(7) days if necessary to protect the interests and assets of the Fund
and its shareholders. In the event the New York Stock Exchange is
closed for any reason other than normal weekend or holiday closing of if
trading on that exchange is restricted for any reason, or in the event
of any emergency circumstances as determined by the Securities and
Exchange Commission, the Board of Trustees shall have the authority and
may suspend redemptions or postpone payment dates accordingly.
Redemption of shares, whether it be a normal voluntary redemption or an
involuntary redemption, may result in the shareholder realizing a
taxable capital gain or loss. A $8 wire fee is charged by the Fund's
custodian bank to shareholders who wish to have the proceeds of their
redemption wired to them.
SHAREHOLDER SERVICES
FAMVEST
AUTOMATIC INVESTMENT PLAN
The Fund offers FAMVest, an automatic investment plan whereby the Fund
is authorized and instructed to charge the regular bank checking account
of a shareholder on a regular basis to provide systematic additions to
the Fund account of the shareholder. There is a minimum of $50 a month
required to participate in FAMVEST. In addition, the bank at which the
shareholder checking account is maintained must be a member of the
Automated Clearing House (ACH). While there is no charge to
shareholders for this service, a charge of $10.00 may be deducted from a
shareholder's Fund account in case of returned items. NOTE: Individual
Retirement Account ("IRA") contributions made through FAMVest are
assumed to be current year contributions. A shareholder's FAMVest may
be terminated at any time without charge or penalty by the shareholder
or the Fund.
<PAGE>
TOLL-FREE TELEPHONE NUMBERS
AND AUTO-ACCESS LINE
For your convenience, FAM EQUITY INCOME FUND offers two toll-free
numbers.
Live Line (800) 932-3271
For shareholders who prefer the "human" touch, our live line is answered
personally by an associate ready to assist you with your call. Our
hours of operation are Monday
through Friday 8:30 a.m. to 5:00 p.m. Eastern Standard time.
Auto-Access Line (800) 453-4392
For shareholders who prefer the convenience of automation, our
Auto-Access line offers:
*24-hour a day availability
*latest closing price
*automatic access to individual account balances and
transactions
NOTE: FAM EQUITY INCOME FUND does not allow telephone purchases or
redemptions.
FUND STATEMENTS AND REPORTS
The Fund will mail an updated account statement anytime there is a
transaction in your account. Additionally, account statements are
mailed to all shareholders on a quarterly basis. Financial reports of
the Fund are mailed to all shareholders twice a year as of June 30 and
December 31.
SYSTEMATIC WITHDRAWAL PLAN
For your convenience you may elect to have automatic periodic
redemptions from your account. Shareholders who wish to participate in
the systematic withdrawal plan must complete the appropriate form and
return to the fund 30 days prior to the first scheduled redemption.
<PAGE>
FUND POLICIES
SIGNATURE GUARANTEES
For our mutual protection, signature guarantees may be required on
certain written transaction requests. A signature guarantee verifies
the authenticity of your signature and may be obtained from "eligible
guarantor institutions".
Eligible guarantor institutions include (1) national or state banks,
savings associations, savings and loan associations, trust companies,
savings banks, industrial loan companies and credit unions; (2) national
securities exchanges, registered securities associations and clearing
agencies; (3) securities broker-dealers which are members of a national
securities exchange or a clearing agency or which have minimum net
capital of $100,000; or (4) institutions that participate in the
Securities Transfer Agent Medallion Program ("STAMP") or other
recognized signature medallion program.
A signature guarantee cannot be provided by a notary public.
Signature guarantees will be required under the following circumstances:
1. Redemption of Shares IF:
* the value of shares being redeemed exceeds $10,000
* payment is requested payable to a payee other than
the shareholder of record
* payment is to be sent to an address other than the
address of record
* an address change accompanies the redemption request
or there has been a change of address on the account
during the last 30 days
* the shares are represented by a negotiable stock
certificate
2. Transferring of Ownership and/or Account Name Changes
ADDRESS CHANGES
You may notify FAM EQUITY INCOME FUND of changes in your address of
record either by writing us or calling our Shareholder Services Line.
Because your address of record impacts every piece of information we
send you, please notify us promptly. To protect you and FAM EQUITY
INCOME FUND, all requests to redeem shares, the proceeds of which are to
be paid by check, made within 30 days of our receipt of an address
change (including redemption requests that are accompanied by an address
<PAGE>
change) must be made in writing, signed by each person in whose name the
shares are owned, and all signatures must be guaranteed.
DIVIDENDS AND CAPITAL GAINS
Net income dividends will be distributed on a quarterly basis normally
in March, June, September, and December. Capital gains dividends, if
any, are distributed in December.
DISTRIBUTION OPTIONS
For the convenience of our shareholders, all distributions will be
automatically invested in additional shares unless indicated otherwise.
Investors who want dividend and/or capital gains distributions sent to
them in cash rather than reinvested must request so either on the
account application at the time of the original purchase or in writing
at least 7 business days prior to distribution. The written request
must include the account number, name, social security or tax i.d.
number, and the signature of all owners exactly as they are registered
on the account.
TRANSFERRING OWNERSHIP OF SHARES
You may transfer ownership of your shares to another person or
organization by written instructions to FAM EQUITY INCOME FUND, signed
by all owners and with signature guaranteed. If the shares are
represented by a negotiable stock certificate, the certificate must be
returned with your transfer instructions.
BACKUP WITHHOLDING INSTRUCTIONS
Shareholders are required by law to provide the Fund with their correct
Social Security or other Taxpayer Identification Number ("TIN"),
regardless of whether they file tax returns. Failure to do so may
subject a shareholder to penalties. Failure to provide a correct TIN or
to check the appropriate boxes on the Account Application and to sign
the shareholder's name could result in backup withholding by the Fund of
an amount of income tax equal to 31% of distributions, redemptions,
exchanges and other payments made to a shareholder's account. Any tax
withheld may be credited against taxes owed on a shareholder's federal
income tax return.
If a shareholder does not have a TIN, the shareholder should apply for
one immediately by contacting the local office of the Social Security
Administration or the IRS. Backup withholding could apply to payments
made to a shareholder's account while awaiting receipt of a TIN.
Special rules apply for certain entities. For example, for an account
established under the Uniform Gift to Minors Act, the TIN of the minor
should be furnished.
<PAGE>
If a shareholder has been notified by the IRS that the shareholder is
subject to backup withholding because the shareholder failed to report
all interest and dividend income on his, her or its return, and the
shareholder has not been notified by the IRS that such withholding
should cease, the shareholder should complete the Account Application
accordingly.
If a shareholder is exempt from backup withholding, the shareholder
should provide proof of such exemption in a form acceptable to the Fund.
Exempt recipients include: certain corporations, certain tax-exempt
entities, certain tax-exempt pension plans and IRAs, governmental
agencies, financial institutions, registered securities and commodities
dealers and others.
Payments reported by FAM EQUITY INCOME FUND that omit your Social
Security or Tax Identification Number will subject FAM EQUITY INCOME
FUND to a penalty of $50. This $50 charge will be deducted from your
account if you fail to provide the certification by the time the report
is filed. The penalty charge is not refundable.
PERFORMANCE INFORMATION
The Fund may include its yield and total return in advertisements or
reports to shareholders or prospective investors. Quotations of average
annual total returns will be expressed in terms of average annual
compounded rate of return on a hypothetical investment in the Fund over
periods of one, five and ten years (up to the life of the Fund), and
will assume that all dividends and distributions are reinvested when
paid. Total return may be expressed in terms of the cumulative value of
an investment in the Fund at the end of a defined period of time.
Quotations of yield for the Fund will be based on the investment income
per share during a particular 30-day (or one month) period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment
income by the maximum public offering price per share on the last day of
the period.
FEDERAL INCOME TAX STATUS OF FUND
It is intended that the Fund will qualify for and elect the special tax
treatment afforded a "regulated investment company" under Subchapter M
of the Internal Revenue Code. To qualify the Fund generally must, among
other things: (1) distribute to its shareholders at least 90% of its
investment company taxable income at least annually; (2) invest and
reinvest so that less than 30% of its gross income is derived from sales
of securities held less than three months; and (3) invest its portfolio
so that, at the end of each fiscal quarter, certain asset
diversifications tests are satisfied.
<PAGE>
In general, when all or a portion of the Fund's income and gains are
paid out to shareholders such distributions are construed to be
dividends in the hands of shareholders, taxable in most instances as
ordinary income. Such distributions are taxable to shareholders whether
received as cash or as additional shares. Dividends designated as
capital gain dividends are taxed to shareholders as long term capital
gains, whether received as cash or as additional shares. Certain
dividends declared in October, November, or December of a calendar year
and payable to shareholders of record in such a month are taxable to
shareholders as though received on December 31st of that year if paid to
shareholders during January of the following calendar year. The
information you will require in order to correctly report the amount and
type of dividends and distributions on your tax return will be provided
by the Fund early each calendar year, sufficiently in advance of the
date for filing your tax return.
For additional information relating to taxes, see "Federal Tax Status"
in the Statement of Additional Information.
GENERAL INFORMATION AND CAPITAL
The FAM EQUITY INCOME FUND is a series of Fenimore Asset Management
Trust, which was organized as a Massachusetts business trust under the
laws of the Commonwealth of Massachusetts on June 18, 1986. The
capitalization of Fenimore Asset Management Trust consists of an
unlimited number of shares of beneficial interest. When issued, each
share or fraction thereof is fully paid, non-assessable, transferable
without restriction, and redeemable. As a Massachusetts business trust,
the Fund is not required to hold annual meetings of shareholders.
Trustees, however, will hold special meetings as required or as deemed
desirable for the election of trustees or the possible change of
fundamental policies. Under the provisions of the Fund's Declaration of
Trust all shares are of the same class, and each full share has one
vote. All shareholder inquiries should be directed to FAM EQUITY INCOME
FUND, at the address and telephone number listed on the cover of this
Prospectus.
FUND AUDITORS
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, NY 10017 has been
appointed as the independent certified public accountant and auditor for
the Fund.
DISTRIBUTOR AND TRANSFER AGENT
Fenimore Asset Management Trust, 111 North Grand Street, P.O. Box 399,
Cobleskill, NY 12043, telephone number (800) 932-3271, acts as
distributor of all shares issued and acts as Transfer Agent for all
shares outstanding of the Fund.
<PAGE>
SHAREHOLDER SERVICING AGENT
FAM Shareholder Services, Inc. serves as the Fund's shareholder
servicing agent and, as such, provides various services in connection
with the establishment and maintenance of shareholder accounts. For its
services, FAM Shareholder Services, Inc. receives a monthly fee of $1.75
per shareholder account.
BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio
securities will be made under the control of the Advisor of the Fund,
subject to the overall supervision of the Board of Trustees. All orders
are placed at the best price and best execution obtainable, except that
the Fund shall be permitted to select brokers who provide economic,
corporate and investment research services if in the opinion of the
Fund's management and Board of Trustees, such placement serves the best
interests of the Fund and its shareholders. Commissions paid to firms
supplying such research may include the cost of such services. It is
the policy of Fenimore Asset Management Trust, as approved by the Board
of Trustees, to combine orders of the Fund with those of the Advisor's
clients, where possible and in a manner designed to be equitable to each
party.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
FAM EQUITY INCOME FUND
111 North Grand Street, P.O. Box 399, Cobleskill, NY 12043
Telephone Number (800) 932-3271.
A NO-LOAD MUTUAL FUND
________________, 1996
FAM EQUITY INCOME FUND (the "Fund"), is an open-end diversified, no-load
management investment company and a series of Fenimore Asset Management
Trust, a Massachusetts Business Trust.
This Statement of Additional Information is not a Prospectus but rather
should be read in conjunction with the Prospectus dated the same date.
A copy may be obtained without charge from the Fund by calling or
writing its corporate offices at the address and telephone number noted
above.
Table of Contents
Investment Objective and Policies 2
Investment Restrictions 3
History and Background of Investment Advisor 5
Board of Trustees and Officers 7
Brokerage Allocations 8
Net Asset Value Calculation 8
Purchase of Shares 9
Redemption of Shares 10
Performance Information 10
Financial Statements 10
Federal Tax Status 11
____________
Custodian:
Chase Manhattan, N.A.
New York, NY
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
It is the intention of the Fund to attempt to provide reasonable current
income as well as long term capital appreciation for its shareholders
by investing primarily in income-producing equities or equivalents.
Normally investments will be concentrated in common stocks, preferred
stocks, and securities that are convertible into common stocks unless
the stock market environment has risen to a point where the advisor to
the Fund, Fenimore Asset Management, Inc., ("FAM"), can no longer find
securities that have been determined by FAM to be undervalued. During
such periods, for temporary defensive purposes, investments will be made
in fixed-income investments until such time as more attractive
investments can be found for purchase.
It is the opinion of FAM that reasonable current income and long term
capital appreciation is achievable when common stocks, preferred stocks,
and securities that are convertible into common stocks can be purchased
near to, or at, a discount from their true business worth.
Specifically, FAM will be seeking to invest Fund assets in companies
that may have some or all of the following characteristics: (a) low
price-to-earnings multiples relative to the market as a whole, based upon
current and/or potential future earnings of the company; (b) high total
returns on capital and with low debt structures; and (c) sell at a
market price per share that is near or at a discount to the per share
book value -- an accounting measure of economic worth. Although the
objective is to select stocks with these characteristics, FAM is aware
that it is unrealistic to assume that each selection will have all or
even several of the above characteristics.
FAM believes that the success of a stock that has some of the above
characteristics is dependent upon and invariably a reflection of the
quality of management. Therefore, FAM spends time in an attempt to
assess management's ability prior to making a commitment to its shares
with Fund assets. The assessment may include an analysis of historical
financial achievements of the company, direct discussions with
management by telephone or in person, visitations to the company,
conversations with security analysts who actively follow the company for
investment brokerage firms, and discussions with competitors, suppliers,
and customers of the company. While FAM feels this assessment technique
to be clearly instrumental to the success of the investment, it should
be recognized that judgments made by FAM are purely subjective in
nature. Therefore, there can be no assurance that FAM will be
successful in achieving the investment objectives for the Fund.
It is FAM's belief that the objective of reasonable current income and
long term capital appreciation for its shareholders can only be achieved
consistently over a long investment horizon. Typically, this will mean
that a stock may be held for a three-to-five year period or longer if FAM,
by its own determination, feels that the recognition of true business
worth has not yet been attained in the stock's current market quotation.
Thus, the Fund serves little purpose for investors who wish to take
advantage of short term fluctuations in its net asset value per share.
FAM recognizes that while the Fund remains small in size FAM may have
greater flexibility in achieving its objective of providing reasonable
<PAGE>
current income as well as long term capital appreciation. As the Fund
grows in size, it may become more difficult for FAM to find securities
to invest in that meet the objectives of the Fund. This may also occur
during periods when the stock market in general has been rising for a
long period of time. Therefore, the Fund has reserved unto itself the
right to limit its asset size by discontinuing sales of its shares at
any time. The Board of Trustees of the Fund may suspend sales whenever
in its collective wisdom it believes it necessary in order for the Fund
to continue to adhere to its stated objective, or that for other reasons
it would be in the best interests of Fund shareholders to do so. While
sales are suspended, existing shareholders will be able to continue to
reinvest their dividends and will be able to continue to redeem their
shares.
It should be clear to investors in Fund shares that FAM believes income
is important in acheiving its investment objective. The Fund's advisor
is aware that annual distributions of capital gains and
dividend/interest income earned on shares may result in a shareholder
paying additional federal, state and/or local income taxes. (See
Federal Tax Status on Page 15). Fund shareholders should understand
that when FAM makes investment decisions, such tax considerations will
be secondary to its objective. This policy is partly based upon a belief
by FAM that such taxes and tax rates have little or no bearing on an
individual company's attractiveness as an investment. It is also
founded on FAM's belief that tax rates in general, are, or should be,
of declining importance to the investment decision-making process, viewed
in its widest sense. Tax deferred portfolios, like IRA and pension
monies, are ideally suited for investment in shares of the Fund for
these reasons.
At the present time the Fund has no authority to write, buy or sell
options or futures against its share positions and any change in this
investment approach must first be obtained from shareholders by consent
of a majority of the votes cast. It has no plans at this time to deal
in the options markets or to seek authorization from shareholders to do
so.
INVESTMENT RESTRICTIONS
Under the terms of its By-laws, the Fund has adopted certain investment
restrictions which cannot be changed or amended unless approved by the
vote of a majority of its outstanding shares as set forth in its By-laws
and in accordance with requirements under the Investment Company Act of
1940. Accordingly, the Fund will not:
(A) Invest in the purchase and sale of real estate.
(B) Invest in commodities or commodity contracts, restricted
securities, mortgages, or in oil, gas, mineral or other exploration
or development programs.
(C) 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.
<PAGE>
(D) Invest more of its assets than is permitted under regulations in
securities of other registered investment companies, which restricts
such investments to a limit of 5% of the Fund's assets in any one
registered investment company, and 10% overall in all registered
investment companies, in no event to exceed 3% of the outstanding
shares of any single registered investment company.
(E) 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
continuous operation less than 3 years, including the operations of
any predecessor.
(F) Invest or deal in securities which do not have quoted markets.
(G) Own more than 10% of the outstanding voting securities of any one
issuer or company, nor will it, with at least 75% of its total assets,
invest more than 5% of its assets 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.
(H) Invest more than 25% of its assets valued at the time of purchase
in any one industry or similar group of companies, except U.S.
government securities.
(I) Maintain margin accounts, purchase its investments on credit or
margin, or leverage its investments, except for normal transaction
obligations during settlement periods.
(J) Make any investment for the purpose of obtaining, exercising or
for planning to exercise voting control of subject company.
(K) Sell securities short.
(L) Underwrite or deal in offerings of securities of other issuers as
a sponsor or underwriter in any way. (Note: The Fund may be deemed an
underwriter of securities when it serves as distributor of its own
shares for sale to or purchase from its shareholders.)
(M) Make loans to others or issue senior securities. For these
purposes the purchase of publicly distributed indebtedness of any kind
is excluded and not considered to be making a loan.
In regard to the restriction marked as item (D) above, the Fund may
invest in registered investment companies, including those organized as
closed-end investment companies. In any case, the Fund shall not so
invest a greater percentage of its assets than is permitted by
regulation, which is presently 5% of its total assets in any single fund
nor more than 10% of its total assets in funds overall.
<PAGE>
HISTORY AND BACKGROUND OF INVESTMENT ADVISOR
The investment advisor to the Fund is Fenimore Asset Management, Inc.,
("FAM"). The company is a New York corporation presently in business
and practicing as an "Investment Advisor" and registered under the
Investment Advisors Act of 1940 with the Securities and Exchange
Commission and with the New York State Attorney General. FAM is
majority owned by Mr. Thomas O. Putnam, its principal officer, who is
also the principal officer and a trustee of the Fund. FAM was
incorporated November 20, 1974, and has been continuously offering
investment advisory services since the date of its formation under the
direction and control of Mr. Putnam. The principal activity of FAM
since 1974 has been to provide investment advisory and consulting
services under contract to individuals, pension, profit-sharing, IRA and
Keogh retirement plans, corporations, and non-profit organizations
generally located in the service area that includes the continental U.S.
Mr. Thomas O. Putnam, FAM's principal investment professional, has been
employed or active as an investment advisor since 1974, managing
investment accounts for clients. He has held responsibilities as
President and Director of FAM's investment management and research
activities. Mr. Putnam completed his undergraduate studies at the
University of Rochester, Rochester, NY, from which he earned a Bachelor
of Arts Degree in Economics in 1966. He completed graduate work at
Tulane University, New Orleans, Louisiana, from which he received an
MBA in 1968. Paul C. Hogan, CFA, Fund co-manager, is employed by FAM,
the Fund's advisor, as Investment Research Analyst. Mr. Hogan has a
B.B.A. from St. Bonaventure University and an M.B.A. from SUNY
Binghamton. He has been actively involved in investment research
activities since 1991. FAM employs a staff of experienced investment
professionals to manage assets for other corporate and individual
clients.
Since 1974, FAM, under the control and supervision of Mr. Putnam, has
utilized a value investment approach for each client and/or each
account. In the opinion of Mr. Putnam, reasonable current income and
long term capital appreciation from investments will result if companies
can be purchased at a significant discount from what he views as their
true business worth. In this regard a company is researched almost as
if the entire company could be purchased at current stock market prices.
Although it will never be the intention of the Fund to purchase
controlling interests in any such company, it is Mr. Putnam's belief
that this fundamental valuation approach removes emotionality from the
investment decision-making process and minimizes the long term risk of
the investment. Fundamental to this approach is the seeking of
securities of companies that have: (1) demonstrated records of above-
average growth of sales and earnings over the past 5 to 10 year span and
are selling at a price which in the view of Mr. Putnam is at a discount
from the true business worth of the company; (2) become severely
depressed in the market because of adverse publicity and are thus
selling at a deep discount to the perceived future potential value of
the company; (3) the capability of achieving accelerated growth of
earnings and the current price understates this potential. Future
<PAGE>
values may be 100% or more of the current price of the stock and
recognition of these values may take three to five years or longer to be
realized in the stock market.
It is the intention of Mr. Putnam to advise the Fund to attempt to
follow a similar, though not exactly identical, approach. The primary
difference is expected to be that the Fund will be freer to sell shares
of issues that have achieved price targets and intends to do so,
regardless of tax implications. Investment portfolios for individuals
tend to be more constrained by such tax considerations under existing
tax laws, thus turnover is most often at a rate that is well below
published investment industry averages.
FAM will not invest assets of any other managed account in shares of the
Fund except as directed in writing by a person unaffiliated to the Fund
or to FAM, having authority to make such direction. Furthermore, FAM,
its officers, directors and affiliated persons, will refrain from
expressing any opinion to any other person or persons over whose assets
FAM has investment advisory responsibilities and for which services it
receives compensation. FAM, as investment advisor to the Fund, renders
such services under contract that provides for payment to FAM of a fee,
calculated daily and paid monthly, at the rate of 1% per annum of the
Fund's assets, which rate is consistent with that being charged by FAM
to manage its other client accounts but which is higher than the fee
charged by most other investment companies. This contract is subject to
the approval annually by the Fund's Board of Trustees and is terminable
upon 30 days written notice, one party to the other.
The Fund is responsible for the fees of independent accountants,
brokerage fees and the cost of a surety bond, as required by the
Investment Company Act of 1940. Expenses of "interested" trustees shall
always remain the responsibility of the investment advisor. The Fund is
responsible for the cost of its operation, including routine
administrative expenses of mailing proxies and shareholder
notices/reports, computer services and for record-keeping the shareholder
ledgers and books. All employees of the investment advisor who perform
duties for the Fund shall remain employees of the investment advisor,
who shall bear all employment costs of such staff. If FAM ceases to
operate for any reason or assigns the contract, such contract is
automatically terminated. It is anticipated that total costs of
operation will be restricted by regulations in those states in which the
Fund anticipates it will seek to be registered. At present this maximum
fee restriction is believed to be 2 1/2% on the first $30 million of
average net assets of the company, 2% of the next $70 million, and 1
1/2% of the remaining average net assets of the company.
BOARD OF TRUSTEES AND OFFICERS
The names of Board of Trustees of the Fund, and their respective duties
and affiliations are as follows:
<PAGE>
Primary Occupation;
Name, Address, and Age Business Affiliations Position with the Fund
- ----------------------------------------------------------------------------
Thomas O. Putnam* Chairman, Treasurer Chairman of Board
P. O. Box 310 FAM President
Cobleskill, NY 12043
Age: 50
Diane C. Van Buren* Investment Management Secretary
P. O. Box 310 Associate, FAM Trustee
Cobleskill, NY 12043
Age: 37
John W. Krueger, CLU* General Agent, Trustee
P.O. Box 389 Krueger Ross Agency:
Albany, NY 12201 Director, FAM
Age: 56
Bernard H. Zais, CLU President, Zais Group Trustee
PO Box 630
Colchester, VT 05446
Age: 79
Roger A. Hannay President, Trustee
2440 Airport Road Hannay Reels, Inc.
Westerlo, NY 12193
Age: 52
- -----------
*Interested persons as defined under the 1940 Act.
Officers and Trustees of the Fund own less than 1% of the Fund's shares
outstanding.
Trustees of the Fund not affiliated with FAM receive from the Trust a fee
of $500 for each Board of Trustees meeting, $1,000 annual retainer, $200
for each committee meeting, and are reimbursed for all out-of-pocket
expenses relating to attendance at such meetings. Trustees who are
affiliated with FAM do not receive compensation from the Fund.
For the fiscal year ended December 31, 1994, the Trustees
received the following compensation from the Trust and from certain other
investment companies (as applicable) that have the same investment advisor
as the Fund or an investment advisor that is an affiliated person of the
Fund's investment advisor:
<PAGE>
Pension or Estimated
Retirement Annual
Aggregate Benefits Accrued Benefits Total Compensation
Name of Compensation from as Part of Trust Upon from Registrant
Trustee the Trust Expense Retirement and Fund Complex
- -------------------------------------------------------------------------------
Thomas O.
Putnam $0 $0 $0 $0
John W.
Krueger $3,500 $0 $0 $3,500
Bernard H.
Zais $3,600 $0 $0 $3,600
Roger A.
Hannay $3,600 $0 $0 $3,600
Diane C.
Van Buren $0 $0 $0 $0
BROKERAGE ALLOCATIONS
It is the Fund's policy to allocate brokerage business to the best
advantage and benefit of its shareholders. The President of the Fund
and FAM shall be responsible for directing all transactions through
brokerage firms of its choice. Further to that policy, all securities
transactions are made so as to obtain the most efficient execution at
the lowest transaction cost. Nothing in this policy, however, is to be
construed to prohibit the Fund or FAM from allocating transactions to
firms whose brokerage charges may include the cost of providing
investment advisory or research or other legally permitted services
which the Fund and FAM deem to be necessary and/or valuable to the
successful management of its assets. Each buy or sell order will be
placed according to the type, size and kind of order involved and as
each condition may demand, so as to attempt to secure the best result
for the Fund and its shareholders, all factors considered.
NET ASSET VALUE CALCULATION
The net asset value per share is computed by dividing the aggregate
market value of Fund assets daily, less its liabilities, by the number
of portfolio shares outstanding. Portfolio securities are valued and
net asset value per share is determined as of the close of business on
the New York Stock Exchange ("NYSE"), which currently is 4:00 p.m. (New
York City time), on each day the New York Stock Exchange is open and on
any other day in which there is a sufficient degree of trading in Fund
portfolio securities that the current net asset value per share might be
materially affected by changes in portfolio securities values. NYSE
trading is closed weekends and holidays, which are listed as New Years
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving, and Christmas.
<PAGE>
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 are not readily available or have not
traded are valued at fair value as determined by procedures established
by the Board of Trustees. Notwithstanding the above, bonds and other
fixed-income securities may be valued on the basis of prices determined
by procedures established by the Board of Trustees if it is the belief
of the Board of Trustees that such price determination more fairly
reflects the fair value of such securities. Money market instruments
are valued at amortized cost which approximates market value unless the
Board of Trustees determines that such is not a fair value.
The sale of shares of the Fund 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 may be suspended by
the Board of Trustees whenever in its sole judgment it believes it is in
the best interest of shareholders to do so.
PURCHASE OF SHARES
The initial minimum investment in the Fund is $10,000. The Fund offers
regular investment accounts, Individual Retirement Accounts, SEP-IRAs,
403(b)(7) accounts, and Uniform Gift/Transfer to Minors accounts.
To begin an investment in the Fund complete the application form and
sign it correctly, then deliver it by mail or in person to the Fund's
principal office in Cobleskill, New York. A copy of the application
form is available to prospective investors upon request to Fenimore
Asset Management Trust, which is the sole distributor of Fund shares.
The offering price of such purchases will be at the net asset value per
share next determined after receipt by the Fund of a valid purchase
order. The date on which the application is accepted by the Fund and
the net asset value determination at the close of business on that date
shall determine the purchase price and shall normally be the purchase
date for shares. Payment for shares purchased shall be by check or
receipt of good funds by the Fund, which reserves the right to withhold
or reject requests for purchases for any reason, including uncollectible
funds. Cash will not be accepted. In the event of a cancellation of
any purchase due to uncollectible funds, the purchaser shall be liable
for all administrative costs incurred and for all other losses or
charges for such invalid transfer and/or purchase.
Subsequent Purchases: Purchases of shares made subsequent to an initial
purchase may be made by mail to the Fund at its current address. All
subsequent purchases must be made in amounts of no less than $50, and
such amounts shall be due and payable in good funds to the Fund on the
purchase date.
<PAGE>
Reinvestment: The Fund will automatically reinvest all dividend
distributions to shareholders in additional shares of the Fund at net
asset value as next determined as of the close of business on the
payment date of such dividend distribution, unless otherwise instructed
by the shareholder in writing prior to the record date for such
distributions. Pursuant to the Prospectus, net income dividends will be
distributed on a quarterly basis normally in March, June, September, and
December. Capital gains dividends, if any, are distributed in December.
Fractional Shares: When share purchases or redemptions are made or when
cash is requested by a shareholder, shares will be issued or redeemed
respectively, in fractions of a share, calculated to the third decimal
place. (Example: $2,000 invested in shares at a net asset value of
$11.76 per share will purchase 170.068 shares.)
Issuance of Share Certificates: Because of the added costs involved the
Fund does not issue share certificates to shareholders. All shares are
held in an account maintained by the Fund itself, as is the custom
within the mutual fund industry.
REDEMPTION OF SHARES
Shareholders may sell all or a portion of their shares to the Fund on
any day that NAV is calculated and such redemptions will be made in the
manner as described in detail in the Fund's Prospectus. All redemptions
are subject to the terms and conditions as set forth therein.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its yield and total return in
advertisements or reports to Shareholders or prospective investors.
Quotations of average annual total return for the Fund will be expressed
in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of one, five and ten
years (up to the life of the Fund) calculated pursuant to the following
formula: P(1 + T)n = ERV (where P = a hypothetical initial payment of
$1,000, T = the average annual total return, n = the number of years,
and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period). All total return figures reflect
the deduction of a proportional share of Fund expenses on an annual
basis, and assume that all dividends and distributions are reinvested
when paid.
<PAGE>
Quotations of yield for the Fund will be computed by dividing the net
investment income per share earned by the Fund during a 30-day period by
the maximum offering price per share on the last day of the period,
according to the following formula:
Yield = 2 [( a-b + 1)6 - 1]
-----
cd
Where: a = dividends and interest earned during
the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of Shares
outstanding during the period that were
entitled to receive dividends.
d = maximum offering price per Share on the
last day of the period.
Performance information for the Fund may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index,
the Dow Jones Industrial Average, or other unmanaged indices so that
investors may compare the Fund's results with those of a group of
unmanaged securities widely regarded by investors as representative of
the securities market in general; (ii) other groups of mutual funds
tracked by Lipper Analytical Services, a widely used independent
research firm which ranks mutual funds by overall performance,
investment objectives and assets, or tracked by other services,
companies, publications, or persons who rank mutual funds on overall
performance or other criteria; and (iii) the Consumer Price Index
(measure for inflation) to assess the real rate of return from an
investment in the Fund. Unmanaged indices may assume the reinvestment
of dividends but generally do not reflect deductions for administrative
and management costs and expenses.
Performance information for the Fund reflects only the performance of a
hypothetical investment in the Fund during the particular time period on
which the calculation is based. Performance information should be
considered in light of the Fund's investment objective and policies,
characteristics and quality of the portfolio and the market conditions
during the given time period, and should not be considered as a
representation of what may be achieved in the future.
<PAGE>
FINANCIAL STATEMENTS
Copies of any and all Financial Statements may be obtained upon request
and without charge from the Fund at the address and telephone provided
on the cover of this Statement of Additional Information.
FEDERAL TAX STATUS
It is intended that the Fund will qualify for and elect the special
treatment afforded a "regulated investment company" under Subchapter M
of the Internal Revenue Code. In any fiscal year in which the Fund so
qualifies, the Fund (but not its shareholders) will be generally
relieved of paying Federal income taxes on its income and gains it pays
as dividends to shareholders. In order to avoid a 4% Federal excise
tax, the Fund intends to distribute each calendar year substantially
all of its income and gains. Dividends paid to shareholders by the Fund
are in effect distributions of income and gains. Capital gains realized
by the Fund that are distributed as dividends to shareholders are
likewise taxable to shareholders, and all dividends received by
shareholders, regardless of whether a shareholder chooses to take them
in cash or as additional shares, are normally subject to tax.
Distributions by the Fund to its shareholders of its net capital gain
(the excess of net long-term capital gain over net short-term capital
loss), if any, that are designated as capital gains dividends are
taxable as long-term capital gains whether distributed to shareholders
in cash or whether distributed in additional shares.
From the standpoint of the shareholder who sells shares back to the Fund
as a redemption, the tax treatment will depend upon whether or not the
investment is considered a capital asset in the hands of the
shareholder. In most cases this would be true, and in that event, a
sale by a shareholder of shares will be treated as a capital gain or
loss for tax purposes. Advice from shareholder's own tax counsel is
recommended regarding the taxability of distributions and redemptions.
For tax purposes the Fund shall endeavor to notify all shareholders near
the beginning of each calendar year of all amounts and types of
dividends and distributions paid out during the prior calendar year.
The preceding discussion relates only to Federal income taxes.
Distributions may also be subject to additional state, local and foreign
taxes depending on each shareholder's particular situation. Non-U.S.
shareholders may be subject to U.S. tax rules that differ significantly
from those summarized above. This discussion does not purport to deal
with all of the tax consequences applicable to the Fund or shareholders.
Shareholders are advised to consult their own tax advisers with respect
to the particular tax consequences to them of an investment in the Fund.
<PAGE>
PART C
------
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Part A:
Selected Financial Information: to be filed
by amendment
(2) Part B:
Financial Statements: to be filed by
amendment
(b) Exhibits
(1) Declaration of Trust. Copies previously
filed.
1
(2) By-Laws
(3) Not Applicable
1
(4) Specimen Share Certificate
2
(5) Investment Advisory Agreement.
(6) Not Applicable
(7) Not Applicable
2
(8) Custodian Agreement
2
(9) Shareholder Services Agreement
2
(10) Opinion and consent of Counsel
2
(11) Consent of Independent Auditors
- ----------------
1. Copies previously filed.
2. To be filed by amendment.
<PAGE>
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
2
(16) Computation of Performance
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Record Holders
As of the date of this Registration Statement, there are no
shareholders of record of the Fund's shares.
Item 27. Indemnification
Reference is made to Article IV, Section 4.3, of the
Registrant's Declaration of Trust.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that in the opinion of the Securities
and Exchange Commission, such indemnification is against
public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, officers
or controlling persons of the Registrant in connection with
the successful defense of any act, suit or proceeding) is
asserted by such trustees, officers or controlling persons in
connection with the shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issues.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Fenimore Asset Management, Inc. serves as the investment
adviser for the Registrant. The business and other connections
of Fenimore Asset Management, Inc. are set forth in the
Uniform Application for Investment Adviser Registration
("Form ADV") of Fenimore Asset Management, Inc. as currently
filed with the SEC which is incorporated by reference herein.
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
The accounts, books, and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the
Investment Company Act of 1940 and rules promulgated
thereunder are in the possession of Fenimore Asset Management,
Inc., 118 North Grand Street, Cobleskill, New York 12043.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(b) Registrant undertakes to file a post-effective
amendment, using financial statements which need not
be certified, within four to six months from the
effective date of Registrant's Registration Statement
under the Securities Act of 1933 or the date on which
Registrant first sells its shares.
(c) Registrant undertakes to furnish each person to whom
a prospectus is delivered a copy of the Registrant's
latest annual report to shareholders, upon request
and without charge, in the event that the information
called for by Item 5A of Form N-1A has been presented
in the Registrant's latest annual report to
shareholders.
(d) Registrant undertakes to call a meeting of Shareholders
for the purpose of voting upon the question of removal
of a Trustee or Trustees when requested to do so by
the holders of at least 10% of the Registrant's
outstanding shares of beneficial interest and in
connection with such meeting to comply with the share-
holders communications provisions of Section 16(c) of
the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Post-
Effective Amendment No. 16 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Washington in the District of Columbia on the 15th day of December, 1995.
FENIMORE ASSET MANAGEMENT TRUST
By: /s/Thomas O. Putnam
Thomas O. Putnam, President*
*By: /s/Patrick W.D. Turley
Patrick W.D. Turley, as attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
- --------- ----- ----
/s/Thomas O. Putnam President and December 15, 1995
Thomas O. Putnam* Chairman of the
Board of Trustees
(Principal Executive
Officer)
/s/John W. Krueger Trustee December 15, 1995
John W. Krueger*
/s/Bernard H. Zais Trustee December 15, 1995
Bernard H. Zais*
/s/Roger A. Hannay Trustee December 15, 1995
Roger A. Hannay*
<PAGE>
/s/Diane C. Van Buren Trustee and Treasurer December 15, 1995
Diane C. Van Buren* (Principal Financial
and Accounting Officer)
*By: /s/Patrick W.D. Turley
Patrick W.D. Turley
as attorney-in-fact
* Pursuant to power of attorney filed with Post-Effective Amendment
No. 12 as filed on April 29, 1994.
<PAGE>
DECHERT PRICE & RHOADS
1500 K Street, N.W.
Washington, D.C. 20005
(202) 626-3300
December 15, 1995
VIA ELECTRONIC TRANSMISSION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Fenimore Asset Management Trust (File No. 33-7190)
Dear Sir or Madam:
Enclosed for filing on behalf of Fenimore Asset Management Trust
(the "Trust"), in electronic format, is one copy of Post-Effective Amendment
No. 16 to the Registration Statement on Form N-1A for the Trust, which has
been marked to indicate changes effected in the Registration Statement by
this amendment.
The purpose of this filing is to add the following one new series of
shares to the Trust: FAM Equity Income Fund.
On behalf of the Trust, we would like to suggest that the Staff may
wish to engage in the selective review of this filing for the reasons set
forth below. The Trust previously filed Post-Effective Amendment No. 14 on
September 18, 1995 which contained a revised Prospectus and SAI for the Trust's
one current series, the FAM Value Fund. That filing was submitted for the
sole purpose of establishing a new and "simplified" Prospectus and SAI for
the Trust's current and future series. After responding to the Staff's
comments on Post-Effective Amendment No. 14, the Trust then filed Post-Effective
Amendment No. 15 on December 1, 1995 which contained the revised Prospectus
and SAI for FAM Value Fund in final form. The Prospectus and SAI contained
in the enclosed filing for FAM Equity Income Fund is directly modeled upon
the form of Prospectus and SAI approved for use by FAM Value Fund and contained
in Post-Effective Amendment No. 15. The disclosure in the enclosed Prospectus
and SAI differs from that contained in the Prospectus and SAI for FAM Value
Fund only in connection with the description of the investment objectives and
investment techniques of each respective fund. In all other respects, the
disclosure contained in each respective filing is substantially identical in
all material respects.
If you have any questions or comments concerning this filing, please call
the undersigned at (202) 626-3364 or Allan S. Mostoff at (202) 626-3310.
Very truly yours,
Patrick W.D. Turley
Enclosures
