As filed with the Securities and Exchange Commission on October 1, 1996
Registration No. 33-7190
Investment Company Act File No. 811-4750
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | X |
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Post-Effective Amendment No. 21 | X |
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and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 | X |
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Amendment No. 24 | 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 immediately upon filing
pursuant to paragraph (b) of Rule 485.
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* 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, 1995 on February 26, 1996.
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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 included in Post-Effective Amendment No. 20 filed on April 30, 1996.
Items Required by Form N-1A
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<S> <C>
Item Number in Part A Prospectus Caption
1. Cover Page.............................. Cover Page
2. Synopsis................................ Fund Expenses
3. Condensed Financial
Information........................... Selected Financial Information
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 Policies; Investment Advisor
5A. Management's Discussion of
Fund Performance...................... Information will be included in the Annual Report of
the Equity Income Fund
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
8. Redemption or Repurchase................ Redemption of Shares
9. Pending Legal Proceedings............... Inapplicable
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Item Number in Part B Statement of Additional 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
22. Calculations of Performance
Data.................................. Performance Information
23. Financial Statements.................... Financial Statements
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FAM EQUITY-INCOME FUND
Supplement dated October 1, 1996
to Prospectus dated April 1, 1996
The following table of selected financial information is added to the
Prospectus immediately following the section titled "Fund Expenses":
SELECTED FINANCIAL INFORMATION
Set forth below is unaudited "Selected Financial Information" of the
Fund for a share outstanding during the period April 1, 1996 (commencement of
operations) to June 30, 1996.
Net asset value, beginning of period........................... $10.00
------
Income from investment operations:
Net investment income.......................................... 0.06
Net realized and unrealized gain (loss)
on investments.............................................. 0.16
------
Total from investment operations................................ 0.22
------
Less distributions:
Dividends from net investment income............................ 0.06
Change in net asset value for the period........................ 0.16
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Net asset value, end of period.................................. $10.16
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Total Return.................................................... 8.96%*
Ratios/supplemental data
Net assets, end of period (000)................................. $1,372
Ratios to average net assets of:
Expenses, total........................................ 5.51%*
Expenses, net of deferred
reimbursement........................................ 1.50%*+
Net investment income.................................. 3.44%
Portfolio turnover rate......................................... 150%
Average commission rate paid
(per share)............................................ $0.0469
* Annualized.
+ During the period investment advisory fees were voluntarily reduced by
the Fund's investment adviser in order to limit the Fund's total
operating expenses to 1.50% of its average daily net assets. If such
voluntary fee reduction had not occurred, the expense ratio would have
been as indicated.
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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
PROSPECTUS
The date of this prospectus is April 1, 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 current income as well as
long term capital appreciation for its shareholders by investing primarily (at
least 65% of total assets) in income-producing equity securities. The Fund
employs a "value approach" to common stock selection and under normal market
conditions, will attempt to 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.
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
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TABLE OF CONTENTS
Page
FUND EXPENSES.............................................................. 5
INVESTMENT OBJECTIVE....................................................... 7
INVESTMENT PHILOSOPHY...................................................... 7
INVESTMENT ADVISOR......................................................... 9
INVESTMENT POLICIES........................................................ 9
RISK FACTORS AND SPECIAL CONSIDERATIONS.................................... 10
HOW TO PURCHASE SHARES..................................................... 11
Account Minimums......................................................... 11
Fund Purchases and Trade Date............................................ 11
Net Asset Value.......................................................... 12
Wire Instructions........................................................ 12
IRA and Retirement Accounts.............................................. 12
Purchases Through Selected Dealers....................................... 13
Exchange Privilege....................................................... 13
REDEMPTION OF SHARES....................................................... 14
SHAREHOLDER SERVICES....................................................... 15
FAMVEST Automatic Investment Plan........................................ 15
Toll-Free Telephone Numbers and Auto-Access Line......................... 15
Fund Statements and Reports.............................................. 16
Systematic Withdrawal Plan............................................... 16
FUND POLICIES.............................................................. 16
Signature Guarantees..................................................... 16
Address Changes.......................................................... 17
Dividends and Capital Gains.............................................. 17
Distribution Options..................................................... 17
Transferring Ownership of Shares......................................... 18
BACKUP WITHHOLDING INSTRUCTIONS............................................ 18
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PERFORMANCE INFORMATION.................................................... 19
FEDERAL INCOME TAX STATUS OF FUND.......................................... 19
GENERAL INFORMATION AND CAPITAL............................................ 20
FUND AUDITORS.............................................................. 20
DISTRIBUTOR AND TRANSFER AGENT............................................. 20
SHAREHOLDER SERVICING AGENT................................................ 20
BROKER ALLOCATIONS......................................................... 20
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FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on
Reinvestment of Dividends None
Exchange Fees None
Redemption Fees1 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 Expenses2 0.50%
Total Fund Operating Expenses3 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.
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1 The Fund's custodian bank imposes an $8 wire redemption fee on
shareholders who request a wire redemption from the Fund.
2 "Other Expenses" are based on estimated amounts for the Fund's current
fiscal year.
3 The Fund's investment advisor has voluntarily agreed to temporarily
limit the total operating expenses of the Fund to 1.50% of its average
daily net assets for its current fiscal year. After December 31, 1996,
this expense limitation may be terminated, continued, or modified by
the Advisor in its sole discretion.
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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.
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INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income as well as
long term capital appreciation for its shareholders by investing primarily (at
least 65% of its total assets) 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 will attempt 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. The Fund's investment objective is a fundamental policy and, as
such, it may not be changed without a vote of majority of the Fund's
shareholders. 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.
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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
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.
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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, 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
In seeking to carry out its investment objective, the Fund will invest primarily
(at least 65% of its total assets) in income-producing common stocks and
securities that are convertible into common stocks, such as convertible bonds
and convertible preferred stocks. Under normal market conditions, the Fund will
attempt to remain fully invested in such securities. To the extent the Fund
invests in convertible securities, it will only
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acquire convertible issues having an S&P rating of A or better. The Fund may
also invest up to 35% of its total assets in fixed-income securities. (For
temporary defensive purposes, the Fund may invest all of its assets in
fixed-income securities). 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;
(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
Bank Board;
(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
investment 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
financially sound.
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 trust,
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 the 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
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<PAGE>
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.
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. For subsequent
investments in the Fund the minimum is $50.
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 canceled 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.
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<PAGE>
The Fund cannot be held responsible for having acted on instructions it believed
were being made in good faith and will not cancel any trade (purchase or
redemption) received in writing which is believed to be authentic.
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 Fund's 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 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.
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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 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.
Exchange Privilege
You may exchange all or a portion of your shares into any other available FAM
Fund. An exchange is treated as a redemption and a purchase; therefore, you
could realize a taxable gain or loss on the transaction. There are no fees
charged in connection with such an exchange. Exchange requests are required to
be made in writing and are accepted only if the registrations and the tax
identification numbers of the two accounts
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<PAGE>
are identical. Minimum investment requirements must be met when opening a new
account by exchange. If the shares you are exchanging are held in certificate
form, you must return the certificate to your Fund prior to making any
exchanges. Be sure that you read the prospectus for the Fund into which you are
exchanging prior to making any exchanges. Please call FAM Shareholder Services
to request a Fund prospectus.
The exchange privilege is not designed to afford shareholders a way to play
short term swings in the market. FAM Funds are not suitable for that purpose.
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.
Shareholders may sell all or any portion of their shares on any such business
day that the 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.
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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 may result in the shareholder realizing a taxable capital
gain or loss. A $10 wire fee is charged 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.
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:
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<PAGE>
*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.
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:
- 15 -
<PAGE>
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 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 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.
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<PAGE>
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.
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.
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<PAGE>
PERFORMANCE INFORMATION
The Fund may include its yield and total return in advertisements or reports to
shareholders or prospective investors. Quotations of average 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.
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, weather 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 shareholder 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.
- 18 -
<PAGE>
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.
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
- 19 -
<PAGE>
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.
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.
- 20 -
<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
April 1, 1996
(as supplemented October 1, 1996)
FAM EQUITY INCOME (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 herein noted.
Table of Contents
Investment Objective and Policies 2
Investment Restrictions 4
History and Background of Investment Advisor 6
Board of Trustees and Officers 8
Brokerage Allocations 9
Net Asset Value Calculation 9
Purchase of Shares 10
Redemption of Shares 11
Performance Information 11
Principal Shareholders 12
Financial Statements 13
Federal Tax Status 13
Appendix 15
Custodian:
Chase Manhattan, N.A.
New York, NY
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
It is the intention of the Fund to attempt to provide current income as well as
long term capital appreciation for its shareholders by investing primarily (at
least 65% of total assets) 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 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 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
- 2 -
<PAGE>
serves little purpose for investors who wish to take advantage of short term
fluctuations in its net asset value per share.
Consistent with FAM's objective of providing current income as well as long term
capital appreciation for Fund shareholders, FAM, from time to time, may also
choose to invest up to 35% of its assets in fixed-income investments of the
types more fully described in the Fund's Prospectus dated this same date. Such
investments will be purchased and held during periods when FAM is unable to find
stocks that it believes have return expectations commensurate with the risks
that must be assumed by their continued retention. (More detailed information
regarding certain types of fixed investment restrictions is contained in the
Fund's Prospectus on page 4 under the section entitled "Investment
Restrictions").
FAM recognizes that while the Fund remains small in size FAM may have greater
flexibility in achieving its objective of providing reasonable 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. During such times as previously
described, existing shareholders will not be prohibited from redeeming their
shares or purchasing additional shares by exercising their right to reinvest any
dividends which may be distributed by the Fund.
It should be clear to investors in Fund shares that FAM believes income is
important in achieving 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.
- 3 -
<PAGE>
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 the By-laws of the Fund on file in its Registration Statement
under the Investment Company Act of 1940, 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.
(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.
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<PAGE>
(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, and the Fund also plans to utilize computerized cash
management services offered by its custodian, which services presently include
reinvesting overnight and short term cash balances in shares of other registered
investment companies, better known as "money market funds", whose primary
objective is safety of principal and maximum current income from holding highly
liquid, short term, fixed investments, principally U.S. government and agency
issues. The Fund will not be acquiring such shares as permanent investments but
rather will be utilizing such services solely for convenience and efficiency as
it tries to keep short term monies invested at interest only until such time as
more permanent reinvestment can practically be made in the ordinary course of
business. 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. 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.
- 5 -
<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
- 6 -
<PAGE>
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
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.
- 7 -
<PAGE>
BOARD OF TRUSTEES
The names of Board of Trustees of the Fund, and their respective duties and
affiliations are as follows:
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: 51
Diane C. Van Buren* Investment Management Secretary
P.O. Box 310 Associate, FAM Trustee
Cobleskill, NY 12043
Age: 38
John W. Krueger, CLU* General Agent, Trustee
P.O. Box 389 Krueger Ross Agency:
Albany, NY 12201 Director, FAM
Age: 57
Bernard H. Zais, CLU President, Zais Group Trustee
P.O. Box 630
Colchester, VT 05446
Age: 80
Roger A. Hannay President, Trustee
2440 Airport Road Hannay Reels, Inc.
Westerlo, NY 12193
Age: 53
*Interested persons as defined under the 1940 Act.
Officers and Trustees of the FAM Value Fund own less than 1% of the Fund's
shares outstanding. Trustees of the Fund not affiliated with FAM receive from
the Fund a fee of $800 for each Board of Trustees meeting, $2,000 annual
retainer, $300 for each committee meeting, and are reimbursed for all
out-of-pocket expenses relating to
- 8 -
<PAGE>
attendance at such meetings. Trustees who are affiliated with FAM do not receive
compensation from the Fund.
For the fiscal year ended December 31, 1995, the Trustees received the following
compensation from the Fund* and from certain other investment companies (if
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:
<TABLE>
================================================================================================================================
<S> <C> <C> <C> <C> <C>
Pension or
Retirement
Aggregate Benefits Accrued Estimated Total Compensation
Name of Compensation from as Part of Trust Annual Benefits from Registrant
Trustee the Fund* Expense Upon Retirement and Fund Complex
- --------------------------------------------------------------------------------------------------------------------------------
Thomas O. Putnam $0 $0 $0 $0
- --------------------------------------------------------------------------------------------------------------------------------
John W. Krueger $0 $0 $0 $3,500
- --------------------------------------------------------------------------------------------------------------------------------
Bernard H. Zais $0 $0 $0 $3,600
- --------------------------------------------------------------------------------------------------------------------------------
Roger A. Hannay $0 $0 $0 $3,600
- --------------------------------------------------------------------------------------------------------------------------------
Diane C. Van Buren $0 $0 $0 $0
================================================================================================================================
* The Fund did not commence operations until April 1, 1996.
</TABLE>
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.
- 9 -
<PAGE>
(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.
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
- 10 -
<PAGE>
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.
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 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
- 11 -
<PAGE>
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. Based upon the period beginning with the Fund's commencement of
operations (April 1, 1996) through June 30, 1996, the aggregate total return for
the Fund was 8.96%.
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. For the 30-day period
ended June 30, 1996, the yield for the Fund was 6.73%.
During any given 30-day period, the Adviser may voluntarily waive all or a
portion of its fees with respect to the Fund. Such waiver would cause the yield
for the Fund to be higher than it would otherwise be in the absence of such a
waiver.
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.
PRINCIPAL SHAREHOLDERS
As of September 26, 1996, the following persons or entities owned beneficially
or of record 5% or more of the Fund's shares, as follows: (1) Fenimore Asset
Management, Inc., 118 North Grand Street, Cobleskill, New York 12043 owned
beneficially or of
- 12 -
<PAGE>
record 14.5% of the Fund's shares and (2) Frances Plummer, RD #1 Box 352,
Delanson, New York 12053 owned beneficially or of record 10.1% of the Fund's
shares.
FINANCIAL STATEMENTS
The financial statements of the Fund appearing in the Fund's Semi-Annual Report
to Shareholders for the period ended June 30, 1996, (which are unaudited) are
incorporated by reference herein. Copies of any and all Financial Statements may
be obtained upon request and without charge from the Fund at the address and
telephone number 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.
- 13 -
<PAGE>
APPENDIX
Bond Rating Categories as Defined by Standard & Poor's (S & P) are quoted in
part and inserted herein for the information of potential investors in the Fund
as a reference as follows:
An S&P 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 obligers 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 from other sources it considers reliable. S&P 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
accordance with the terms of the obligation;
II. Nature of and provisions of the obligor;
III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws
of bankruptcy and other laws affecting creditors rights.
AAA - Debt rated AAA has the highest rating assigned by S&P. 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
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
- 15 -
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Part A:
Selected Financial Information
(2) Part B:
Unaudited Financial Statements for the Period Ended June
30, 1996 are incorporated by reference therein from the
Semi-Annual Report to Shareholders
(b) Exhibits
(1) Declaration of Trust1
(2) By-Laws1
(3) Not Applicable
(4) Specimen Share Certificate1
(5) Investment Advisory Agreement1
(6) Not Applicable
(7) Not Applicable
(8) Custodian Agreement1
(9) (a) Shareholder Services Agreement1
(b) Fund Accounting Agreement1
(10) Opinion and Consent of Counsel1
(11) Consent of Independent Auditors1
(12) Not Applicable
- --------
1 Copies previously filed.
<PAGE>
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Computation of Performance
(27) Financial Data Schedule
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Record Holders
As of September 26, 1996, there were 105 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.
- 2 -
<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., and FAM Shareholder Services, Inc., 118 North
Grand Street, Cobleskill, New York 12043.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings.
(a) 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.
(b) 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 shareholders communications provisions of
Section 16(c) of the Investment Company Act of 1940.
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 21 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 1st day of October, 1996.
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 October 1, 1996
- ----------------------------------
Thomas O. Putnam* Chairman of the
Board of Trustees
(Principal Executive
Officer)
/s/ John W. Krueger Trustee October 1, 1996
- -----------------------------------
John W. Krueger*
/s/ Bernard H. Zais Trustee October 1, 1996
Bernard H. Zais*
<PAGE>
/s/ Roger A. Hannay Trustee October 1, 1996
Roger A. Hannay*
/s/ Diane C. Van Buren Trustee and Treasurer October 1, 1996
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.
- 2 -
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
FILED
WITH
POST-EFFECTIVE AMENDMENT NO. 21
TO THE
REGISTRATION STATEMENT
OF
FENIMORE ASSET MANAGEMENT TRUST
- 3 -
<PAGE>
INDEX TO EXHIBITS
(for Post-Effective Amendment No. 21)
Exhibit No.
Under Part C
of Form N-1A Name of Exhibit
16 Schedule for Computation of Performance
27 Financial Data Schedule
<PAGE>
EXHIBIT 16
COMPUTATION OF PERFORMANCE QUOTATIONS
AS OF JUNE 30, 1996
FOR FAM EQUITY-INCOME FUND
1. Total Return Calculation
P(1 + T)N = ERV
1,000(1 + T)1 = 1.02163
(1 + T) = 1.08962
T = .08962
T = 8.96%
Where: P = A hypothetical initial payment of $1000
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 period;
2. Yield Calculation
a - b
YIELD = 2 [( + 1)6 - 1]
_______
cd
Yield = 6.73%
Where: a = Dividends and interest earned during the
period
b = Expenses accrued for the period (net of
reimbursements)
c = The average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = The maximum offering price per share on
the last day of the period
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000797136
<NAME> FENIMORE ASSET MANAGEMENT TRUST
<SERIES>
<NUMBER> 2
<NAME> FAM EQUITY-INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1,283,295
<INVESTMENTS-AT-VALUE> 1,309,976
<RECEIVABLES> 6,259
<ASSETS-OTHER> 84,747
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,400,982
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,491
<TOTAL-LIABILITIES> 28,491
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,345,779
<SHARES-COMMON-STOCK> 135,093
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 31
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26,681
<NET-ASSETS> 1,372,491
<DIVIDEND-INCOME> 5,219
<INTEREST-INCOME> 5,532
<OTHER-INCOME> 0
<EXPENSES-NET> (3,204)
<NET-INVESTMENT-INCOME> 7,547
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 26,681
<NET-CHANGE-FROM-OPS> 34,228
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,516)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 135,389
<NUMBER-OF-SHARES-REDEEMED> 973
<SHARES-REINVESTED> 677
<NET-CHANGE-IN-ASSETS> 1,372,491
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,136
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,351
<AVERAGE-NET-ASSETS> 1,077
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .16
<PER-SHARE-DIVIDEND> (.06)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
