As filed with the Securities and Exchange Commission on December 13, 1996
Registration Nos. 33-7647 and 811-4782
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 41
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 42
Republic Funds
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219-3035
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(614) 470-8000
George O. Martinez
3435 Stelzer Road, Columbus, Ohio 43219-3035
(Name and Address of Agent for Service)
Copy to:
Allan S. Mostoff, Esq.
Dechert Price & Rhoads, 1500 K Street, N.W., Washington, DC 20005
It is proposed that this filing will become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has previously registered an indefinite number of its shares
under the Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. The Registrant has filed Rule 24f-2
notices with respect to its series as follows: Republic U.S. Government Money
Market Fund (for its fiscal year ended September 30, 1996) on November 26, 1996;
Republic New York Tax Free Money Market Fund, Republic New York Tax Free Bond
Fund, Republic Equity Fund, Republic Fixed Income Fund and Republic
International Equity Fund for their fiscal years ended October 31, 1995 on
December 28, 1995. The Registrant expects to file a Rule 24f-2 notice with
respect to Republic Bond Fund, Republic Overseas Equity Fund, and Republic
Opportunity Fund for their fiscal years ending October 31, 1996 on or before
December 30, 1996.
Republic Portfolios has also executed this Registration Statement.
<PAGE>
CROSS REFERENCE SHEET
PART A; INFORMATION REQUIRED IN PROSPECTUS
ITEM NUMBER PROSPECTUS CAPTION
Item 1. Cover Page Cover Page
Item 2. Synopsis Highlights
Item 3. Condensed Financial Financial Highlights
Information
Item 4. General Description of Investment Objective
Registrant and Policies; Additional
Risk Factors and Policies
Item 5. Management of the Fund Management of the Fund
Item 5A. Management's Discussion Not Applicable
of Fund Performance
Item 6. Capital Stock and Other Dividends and
Securities Distributions; Tax Matters;
Description of
Shares, Voting Rights and
Liabilities
Item 7. Purchase of Securities Purchase of Shares;
Being Offered Determination of Net
Asset Value
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Legal Proceedings Not Applicable
PART B; INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
Statement of Additional
ITEM NUMBER INFORMATION CAPTION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and Not Applicable
History
Item 13. Investment Objectives and Investment Objective,
Policies Policies and Restrictions
Item 14. Management of the Registrant Management of the Fund;
Management of the Trust
Item 15. Control Persons and Other Information
Principal Holders of
Securities
Item 16. Investment Advisory and Management of the Fund;
Other Services Management of the Trust
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Other Information
Securities
<PAGE>
Item 19. Purchase, Redemption and Prospectus - Purchase of
Pricing of Securities Being Shares; Prospectus -
Offered Redemption of Shares;
Prospectus - Determination
of Net Asset Value
Item 20. Tax Status Taxation
Item 21. Underwriters Management of the Fund -
Distributor and Sponsor;
Management of the Trust
Item 22. Calculation of Performance Performance Information
Data
Item 23. Financial Statements Financial Statements
PART C
Information required to be included in Part C is set forth under the
appropriate items, so numbered, in Part C of this Registration Statement.
<PAGE>
EXPLANATORY NOTE
This post-effective amendment no. 41 (the "Amendment") to the Registrant's
registration statement on Form N-1A (File no. 33-7647) (the "Registration
Statement") is being filed to amend the Registrant's disclosure with respect to
the Republic Equity Fund, a series of shares of the Registrant. The Amendment
does not affect any of the Registrant's currently effective prospectuses or
statements of additional information, each of which is hereby incorporated
herein by reference as most recently filed pursuant to Rule 497 under the
Securities Act of 1933, as amended.
<PAGE>
REPUBLIC EQUITY FUND
CLASS Y SHARES / ADVISER CLASS
3435 STELZER ROAD, COLUMBUS, OHIO 43219-3035
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ACCOUNT AND GENERAL INFORMATION: (888) 525-5757 (TOLL FREE)
Republic Equity Fund (the "Fund") is a diversified separate series
(portfolio) of the Republic Funds (the "Trust"), an open-end, management
investment company which currently consists of six portfolios, each of which has
different and distinct investment objectives and policies. Class Y shares of the
Fund are being offered by this Prospectus. The Trust offers one other class of
shares of the Fund pursuant to a separate prospectus. Republic National Bank of
New York ("Republic" or the "Manager") is the investment manager of the Fund.
Alliance Capital Management L.P. ("Alliance" or a "Sub-Adviser") and Brinson
Partners, Inc. ("Brinson" or a "Sub-Adviser") continuously manage the investment
portfolio of the Fund.
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, REPUBLIC OR ANY OTHER BANK, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUND IS SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
Shares of the Fund are continuously offered for sale at net asset value
with no sales charge by BISYS Fund Services ("BISYS" or the "Distributor") to
customers of a financial institution, such as a federal or state-chartered bank,
trust company or savings and loan association, that has entered into a
shareholder servicing agreement with the Trust (each a "Shareholder Servicing
Agent").
AN INVESTOR SHOULD OBTAIN FROM HIS SHAREHOLDER SERVICING AGENT, AND SHOULD
READ IN CONJUNCTION WITH THIS PROSPECTUS, THE MATERIALS PROVIDED BY THE
SHAREHOLDER SERVICING AGENT DESCRIBING THE PROCEDURES UNDER WHICH SHARES OF THE
FUND MAY BE PURCHASED AND REDEEMED THROUGH SUCH SHAREHOLDER SERVICING AGENT.
This Prospectus sets forth concisely the information concerning the Fund
that a prospective investor ought to know before investing. The Trust has
filed with the Securities and Exchange Commission a Statement of Additional
Information, dated February __, 1997 with respect to the Fund, containing
additional and more detailed information about the Fund, which is hereby
incorporated by reference into this Prospectus. An investor may obtain a copy
of this Statement of Additional Information without charge by contacting the
Distributor or his Shareholder Servicing Agent (see back cover for addresses and
phone numbers).
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Investors should read this Prospectus and retain it for future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1997
<PAGE>
HIGHLIGHTS
THE FUND PAGE __
Republic Equity Fund (the "Fund") is a separate series (portfolio) of the
Republic Funds (the "Trust"), a Massachusetts business trust organized on April
22, 1987, which currently consists of seven funds, each of which has different
and distinct investment objectives and policies.
INVESTMENT OBJECTIVE, RISKS AND POLICIES PAGE __
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved.
MANAGEMENT OF THE TRUST PAGE __
Republic acts as investment manager to the Fund pursuant to an Investment
Management Agreement with the Trust. For its services, the Manager is paid a fee
by the Fund, computed daily and based on the Fund's average daily net assets,
equal on an annual basis to 0.175% of net assets. Each Sub-Adviser continuously
manages a portion of the investment portfolio of the Fund pursuant to a
Sub-Advisory Agreement with the Manager. The Manager determines the allocation
of the Fund's assets between the Sub-Advisers. For its services, each
Sub-Adviser is paid a fee by the Fund, computed daily and based on the Fund's
average daily net assets, equal on an annual basis to 0.325% of the average
daily net assets of the Fund allocated to the Sub-Adviser for management,
subject to certain breakpoints on assets allocated to the Sub-Adviser in excess
of $50 million.
BISYS acts as administrator and sponsor of the Fund. BISYS provides certain
management and administrative services to the Fund for which it receives from
the Fund a fee at the annual rate of up to 0.10% of the Fund's average daily net
assets, subject to certain breakpoints on assets in excess of $1 billion. See
"Management of the Trust."
PURCHASES AND REDEMPTIONS PAGES __ AND __
Shares of the Fund (the "Shares") are continuously offered for sale by the
Distributor at net asset value with no sales charge to customers of a financial
institution such as a federal or state-chartered bank, trust company or savings
and loan association, that has entered into a shareholder servicing agreement
with the Trust (each a "Shareholder Servicing Agent"). At present, the only
Shareholder Servicing Agents are Republic and its affiliates. The minimum
initial investment is $1,000 and the minimum subsequent investment is $100. The
Trust offers to buy back (redeem) Shares from shareholders of the Fund at any
time at net asset value. See "Purchase of Shares" and "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS PAGE __
The Trust intends to distribute all the Fund's net investment income as a
dividend to Fund shareholders quarterly and net realized capital gains, if any,
annually. See "Dividends and Distributions."
<PAGE>
FEE TABLE
The following table provides (i) a summary of estimated expenses relating
to purchases and sales of Fund Shares, and the aggregate annual operating
expenses of the Fund, as a percentage of average daily net assets of the Fund,
and (ii) an example illustrating the dollar cost of such estimated expenses on a
$1,000 investment in Fund Shares.
Shareholder Transaction Expenses ............................... None
Annual Fund Operating Expenses
Investment Management Fee after waiver* .................... 0.10%
Investment Subadvisory Fee ................................. 0.32%
Distribution Fees (Rule 12b-1 fees) ........................ None
Other Expenses .............. .............................. 0.63%
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-- Administrative Services Fee ............................. 0.10%
-- Other Operating Expenses ................................ 0.53%
Total Fund Operating Expenses after fee waiver** ............. 1.05%
=====
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*Investment Management Fee is shown net of waiver. Without such waiver, such
fee in the aggregate would be equal on an annual basis to 0.175% of the
Fund's average net assets.
**Total Fund Operating Expenses are shown net of fee waiver. Without such fee
waiver, the Total Fund Operating Expenses would be equal on an annual basis
to 1.125% of the Fund's average net assets. There can be no assurance that
expenses will be reimbursed or waived in the future.
EXAMPLE
A shareholder of the Fund would pay the following expenses on a $1,000
investment in Fund Shares, assuming (1) 5% annual return and (2) redemption at
the end of:
1 year ................................................ $ 11
3 years ............................................... $ 33
5 years ............................................... $ 58
10 years .............................................. $128
The purpose of the expense table provided above is to assist investors in
understanding the various costs and expenses that a shareholder will bear
directly or indirectly. The information is based on the expenses the Fund
expects to incur with respect to the Shares for the current fiscal year.* The
expense table shows the expected investment management fee, investment
subadvisory fee and administrative services fee. For a more detailed discussion
on the costs and expenses of investing in the Fund, see "Management of the
Trust."
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*Assuming average daily net assets of $30 million in the Fund.
Some Shareholder Servicing Agents may impose certain conditions on their
customers, subject to the terms of this Prospectus, in addition to or different
from those imposed by the Trust, such as requiring a minimum initial investment
or charging their customers a direct fee for their services. The effect of any
such fees will be to reduce the net return on the investment of customers of
that Shareholder Servicing Agent. Each Shareholder Servicing Agent has agreed to
transmit to shareholders who are its customers appropriate written disclosure of
any transaction fees that it may charge them directly at least 30 days before
the imposition of any such charge.
THE EXAMPLE SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES OF THE FUND; ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial data shown below is to assist investors in evaluating the
performance of the Shares since commencement of operations through October 31,
1996. The information shown in the following schedule has been audited by
____________________, independent auditors, whose report on the Fund's financial
statements is incorporated by reference into the Statement of Additional
Information from the Fund's Annual Report dated October 31, 1996. The Annual
Report also includes management's discussion of Fund performance, and may be
obtained without charge upon request. This information should be read in
conjunction with the financial statements.
SELECTED DATA FOR A CLASS Y SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD:
REPUBLIC EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
_________, 1996
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1996
-----------------
Net asset value, beginning of period .................... $
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................
Net realized and unrealized gain on investments .......
------
Total from investment operations ......................
------
Less dividends:
From net investment income ............................
------
Total from dividends.................................
------
Net asset value, end of period .......................... $
======
Total return ............................................ %(a)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................. $
Ratio of expenses to average net assets (b)............ %(c)
Ratio of net investment income to average net assets (b) %(c)
Portfolio turnover rate ............................... ___%
Average commission rate paid........................... ___%
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(a) Not annualized.
(b) Reflects a voluntary expense limitation and waiver of fees by
affiliated parties of the Fund. If this limitation and waiver had not
been in effect, the annualized ratios of expenses and net investment
income to average net assets for the period from ___________, 1996
(commencement of operations) to October 31, 1996 would have been
_____% and _____%, respectively.
(c) Annualized.
INVESTMENT OBJECTIVE, RISKS AND POLICIES
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek long-term growth of capital
and income without excessive fluctuations in market value. The Fund will
normally invest in equity securities of seasoned companies in sound financial
condition with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved. The investment objective of the Fund may
be changed without approval by the Fund's shareholders. If there is a change in
the investment objective of the Fund, shareholders should consider whether the
Fund remains an appropriate investment in light of their then-current financial
position and needs. Shareholders of the Fund shall receive 30 days' prior
written notice of any change in the investment objective of the Fund.
INVESTMENT POLICIES
The Fund will normally invest at least 65% of its total assets in equity
securities of seasoned companies in sound financial condition with large or
intermediate capitalization which are expected to show above-average price
appreciation. The Fund may invest in a broad range of equity securities,
including common and preferred stocks, debt securities convertible into or
exchangeable for common stock and securities such as warrants or rights that are
convertible into common stock.
The Manager will allocate the Fund's assets between the Sub-Advisers. While
the Manager maintains complete discretion regarding the allocation of the Fund's
assets, the Manager anticipates that it typically will allocate the Fund's
assets evenly between the Sub-Advisers, each of which pursues the Fund's
investment objective in the manner described below.
ALLIANCE
Alliance seeks the Fund's investment objective by pursuing a "growth" style
of investing in marketable equity securities, primarily of U.S. companies.
However, the Fund may purchase foreign, as well as domestic, equity securities.
Alliance normally will invest substantially all of the Fund's assets allocated
to it in common stocks which Alliance believes will appreciate in value.
Alliance generally seeks to invest the Fund's assets in financially secure
firms with established operating histories that are proven leaders in their
industry or market sector. Such companies may demonstrate characteristics such
as participation in expanding markets, increasing unit sales volume, growth in
revenues and earnings per share, and increasing return on investments. However,
Alliance may invest the Fund's assets in companies that do not demonstrate such
characteristics if it expects such companies to undergo an acceleration in
growth of earnings because of special factors such as new management, new
products, changes in consumer demand or basic changes in the economic
environment.
Alliance analyzes each company considered for investment, using internal
fundamental research analysts, to determine its source of earnings, competitive
edge, management strength, and level of industry dominance as measured by market
share. At the same time, Alliance conducts an analysis of the financial
condition of each company and selects those prospects that demonstrate the
greatest potential for above-average capital appreciation and growth in
earnings. Alliance's philosophy is to seek the best available combination of
relative earnings growth and attractive valuation.
BRINSON
Brinson seeks the Fund's investment objective by pursuing a "value" style
of investment management. Brinson's approach to investing for the Fund is to
invest in the equity securities of U.S. companies believed to be undervalued
based upon internal research and proprietary valuation systems. Investment
decisions are based on fundamental research, internally developed valuation
systems and seasoned judgment. Brinson's research focuses on several levels of
analysis; first, on understanding wealth shifts that occur within the equity
market, and second, on individual company research. At the company level,
Brinson quantifies expectations of a company's ability to generate profit and to
grow business into the future.
For each stock under analysis, Brinson discounts to the present all of the
future cash flows that it believes will accrue to the Fund from the investment
in order to calculate a present or intrinsic value. This value estimate
generated by Brinson's proprietary valuation model is compared to observed
market price and ranked against other stocks accordingly. The rankings, in
combination with Brinson's investment judgment, determine which securities are
included in the portfolio.
Brinson monitors and assesses the degree to which the portfolio becomes
concentrated in industry or common types of stocks, and adjusts the portfolio to
balance the price/value opportunities with their concentrations. Brinson imposes
limits on the degree of concentration, as the Fund does not intend to
concentrate its investments in a particular industry.
GENERAL
The Fund also may (a) invest in options on securities, securities indices
or foreign currencies, (b) invest in futures contracts and options on futures
contracts, (c) enter into forward foreign currency exchange contracts, (d)
invest up to 10% of its net assets (at the time of investment) in debt and
equity securities which are traded in developed foreign countries, and (e)
invest up to 35% in bonds and other debt securities, including lower rated,
high-yield bonds, commonly referred to as "junk bonds." The Fund does not intend
to write covered call options with respect to securities with an aggregate
market value of more than 10% of its total assets at the time an option is
written. The Fund will not invest more than 5% of its net assets (at the time of
investment) in lower rated (BB/Ba or lower), high-yield bonds. The Fund may
retain any bond whose rating drops below investment grade if it is in the best
interest of the Fund's shareholders. Securities rated BB/Ba by a nationally
recognized statistical rating organization are considered to have speculative
characteristics.
The Fund may lend its portfolio securities. These loans may not exceed 30%
of the value of the Fund's total assets.
The Fund will not purchase securities for trading purposes. Pending
investment in equity and debt and also for temporary defensive purposes, the
Fund may invest without limit in short-term debt and other high-quality,
fixed-income securities and cash equivalents, which may include, but are not
limited to: (i) short-term obligations of the U.S. and foreign sovereign
governments and their agencies and instrumentalities, (ii) interest bearing
savings deposits, certificates of deposit and bankers' acceptances of U.S. and
foreign banks, (iii) high-quality rated commercial paper of U.S. or foreign
issuers, and (iv) repurchase agreements related to the foregoing. The Fund may
invest up to 15% of its net assets in illiquid securities.
ADDITIONAL RISK FACTORS AND POLICIES
FOREIGN SECURITIES
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject to
the disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or foreign withholding and other taxation, limitation on the
removal of cash or other assets of the Fund, political or financial instability,
or diplomatic and other developments which could affect such investments.
Further, economics of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Changes in
foreign exchange rates will affect the value of securities denominated or quoted
in currencies other than the U.S. dollar. Foreign securities often trade with
less frequency and volume than domestic securities and therefore may exhibit
greater price volatility. Additional costs associated with an investment in
foreign securities may include higher custodial fees than apply to domestic
custodial arrangements, and transaction costs of foreign currency conversions.
CONVERTIBLE SECURITIES
Although the Fund's equity investments consist primarily of common and
preferred stocks, the Fund may buy securities convertible into common stock if,
for example, a Sub-Adviser believes that a company's convertible securities
are undervalued in the market. Convertible securities eligible for purchase by
the Fund consist of convertible bonds, convertible preferred stocks, warrants
and rights. See "Additional Risk Factors and Policies -- Warrants" below and the
Statement of Additional Information for a discussion of these instruments.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in securities that are
illiquid by virtue of the absence of a readily available market, or because of
legal of contractual restrictions on resale, excluding securities eligible for
resale to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as described below. There may be delays in selling these
securities and sales may be made at less favorable prices.
A Sub-Adviser may determine that a particular Rule 144A security is liquid
and thus not subject to the Fund's limits on investment in illiquid securities,
pursuant to guidelines adopted by the Board of Trustees. Factors that a
Sub-Adviser must consider in determining whether a particular Rule 144A security
is liquid include the frequency of trades and quotes for the security, the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers, dealer undertakings to make a market in the
security, and the nature of the security and the nature of the market for the
security (i.e., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Investing in Rule 144A
securities could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutions might become, for a time,
uninterested in purchasing these securities.
WARRANTS
The Fund may invest up to 10% of its net assets in warrants, except that
this limitation does not apply to warrants acquired in units or attached to
securities. A warrant is an instrument issued by a corporation which gives the
holder the right to subscribe to a specific amount of the corporation's capital
stock at a set price for a specified period of time. Warrants do not represent
ownership of the securities, but only the right to buy the securities. The
prices of warrants do not necessarily move parallel to the prices of underlying
securities. Warrants may be considered speculative in that they have no voting
rights, pay no dividends, and have no rights with respect to the assets of the
corporation issuing them.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend its securities to qualified brokers, dealers, banks and
other financial institutions for the purpose of realizing additional income.
Loans of securities will be collateralized by cash, letters of credit, or
securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities. In addition, the Fund will not lend its portfolio securities to the
extent that greater than 30% of its total assets, at fair market value, would be
committed to loans at that time.
FORWARD CONTRACTS
The Fund may enter into forward foreign currency exchange contracts for the
purchase and sale of a fixed quantity of a foreign currency at a future date
("Forward Contracts"). The Fund may enter into Forward Contracts for hedging
purposes as well as for non- hedging purposes. By entering into transactions in
Forward Contracts, however, the Fund may be required to forego the benefits of
advantageous changes in exchange rates and, in the case of Forward Contracts
entered into for non-hedging purposes, the Fund may sustain losses which will
reduce its gross income. Forward Contracts are traded over-the-counter and not
on organized commodities or securities exchanges. As a result, such contracts
operate in a manner distinct from exchange-traded instruments and their use
involves certain risks beyond those associated with transactions in futures
contracts or options traded on exchanges. The Fund may also enter into a Forward
Contract on one currency in order to hedge against risk of loss arising from
fluctuations in the value of a second currency (referred to as a "cross hedge")
if, in the judgment of a Sub-Adviser, a reasonable degree of correlation can be
expected between movements in the values of the two currencies. The Fund has
established procedures consistent with statements of the Securities and Exchange
Commission and its staff regarding the use of Forward Contracts by registered
investment companies, which requires use of segregated assets or "cover" in
connection with the purchase and sale of such contracts.
OPTIONS
The Fund may write (sell) covered call and put options and purchase call
and put options on domestic or foreign securities indices, securities, and
foreign currencies. The Fund may write such options for the purpose of
increasing its current income and/or to protect its portfolio against declines
in value. When the Fund writes an option and the value of the underlying index,
security, or currency moves adversely to the holder's position, the option will
not be exercised, and the Fund will either close out the option at a profit or
allow it to expire unexercised. The Fund will thereby retain the amount of the
premium, less related transaction costs, which will increase its gross income
and offset part of the reduced value of portfolio securities or the increased
cost of securities to be acquired. Such transactions, however, will constitute
only partial hedges against adverse price fluctuations, since any such
fluctuations will be offset only to the extent of the premium received by the
Fund for the writing of the option, less related transaction costs. In addition,
if the value of an underlying index, security, or currency moves adversely to
the Fund's option position, the option may be exercised, and the Fund will
experience a loss which may only be partially offset by the amount of the
premium received. The Fund may also write combinations of put and call options
on the same security or index, known as "straddles." Such transactions can
generate additional premium income but also present increased risk.
The Fund may also purchase put or call options in order, respectively, to
hedge its investments against a decline in value or to attempt to reduce the
risk of missing a market or industry segment advance. The Fund's possible loss
in either case will be limited to the premium paid for the option, plus related
transaction costs.
FUTURES CONTRACTS
The Fund may enter into futures contracts for the purchase or sale for
future delivery of securities or foreign currencies or contracts based on
indices of securities as such instruments become available for trading. Such
transactions will be entered into for hedging purposes, in order to protect the
Fund's current or intended investments from the effects of changes in interest
or exchange rates, or for non-hedging purposes, to the extent permitted by
applicable law. For example, in the event that an anticipated decrease in the
value of portfolio securities occurs as a result of a general increase in
interest rates or a decline in the dollar value of foreign currencies in which
portfolio securities are denominated, the adverse effects of such changes may be
offset, in whole or part, by gains on futures contracts sold by the Fund.
Conversely, the adverse effects of an increase in the cost of portfolio
securities to be acquired, occurring as a result of a decline in interest rates
or a rise in the dollar value of securities denominated in foreign currencies,
may be offset, in whole or in part, by gains on futures contracts purchased by
the Fund. The Fund will incur brokerage fees when it purchases and sells futures
contracts, and will be required to maintain margin deposits. In addition,
futures contracts entail risks. Although the Fund believes that use of such
contracts will benefit the Fund, if a Sub-Adviser's investment judgment about
the general direction of interest or exchange rates is incorrect, the Fund's
overall performance may be poorer than if it had not entered into any such
contract and the Fund may realize a loss. Transactions entered into for
non-hedging purposes involve greater risk, including the risk of losses which
are not offset by gains on other portfolio assets. The Fund will not enter into
any futures contract if immediately thereafter the value of securities and other
obligations underlying all such futures contracts would exceed 50% of the value
of its total assets.
OPTIONS ON FUTURES CONTRACTS
The Fund may purchase and write options on futures contracts for the
purpose of protecting against declines in the value of portfolio securities or
against increases in the costs of securities to be acquired, or for non-hedging
purposes, to the extent permitted by applicable law. Purchases of options on
futures contracts may present less risk in hedging the portfolio of the Fund
than the purchase or sale of the underlying futures contracts, since the
potential loss is limited to the amount of the premium paid for the option, plus
related transaction costs. The writing of such options, however, does not
present less risk than the trading of futures contracts, and will constitute
only a partial hedge, up to the amount of the premium received, less related
transaction costs. In addition, if an option is exercised, the Fund may suffer a
loss on the transaction. Transactions entered into for non-hedging purposes
involve greater risk, including the risk of losses which are not offset by gains
on other Fund assets.
PORTFOLIO TURNOVER
The Sub-Advisers will manage the Fund generally without regard to
restrictions on portfolio turnover, except those imposed by provisions of the
federal tax laws regarding short-term trading. In general, the Fund will not
trade for short-term profits, but when circumstances warrant, investments may be
sold without regard to the length of time held. It is expected that the annual
turnover rate for the Fund will not exceed 100%.
Prior to January 1, 1997, the Fund was managed by a different subadviser.
Following the assumption of portfolio management duties by Alliance and Brinson,
significant portfolio turnover occurred in connection with a restructuring of
the Fund's portfolio to reflect the management styles of the Sub-Advisers. Such
restructuring may result in increased transaction costs and realization of
capital gains and losses in the Fund's current fiscal year. See "Portfolio
Transactions" and "Tax Matters" below.
--------------------
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of its investable assets in a no-load, open-end
management investment company having substantially the same investment objective
as the Fund. In such event, the Fund's Investment Management Contract would be
terminated. Such investment would be made only if the Trustees of the Trust
believe that the aggregate per share expenses of the Fund and such other
investment company will be less than or approximately equal to the expenses
which the Fund would incur if the Trust were to continue to retain the services
of an investment adviser for the Fund and the assets of the Fund were to
continue to be invested directly in portfolio securities.
MANAGEMENT OF THE TRUST
The business and affairs of the Fund are managed under the direction of
the Board of Trustees of the Trust. The Trustees are Frederick C. Chen, Alan
S. Parsow, Larry M. Robbins and Michael Seely. Additional information about
the Trustees, as well as the Trust's executive officers, may be found in the
Statement of Additional Information under the caption "Management of the Trust
- -- Trustees and Officers."
INVESTMENT MANAGER
Republic, whose address is 452 Fifth Avenue, New York, New York 10018,
serves as investment manager to the Fund pursuant to an Investment Management
Contract with the Trust. For its services, the Manager is paid a fee by the
Fund, computed daily and based on the Fund's average daily net assets, equal on
an annual basis to 0.175% of net assets.
Republic is a wholly-owned subsidiary of Republic New York Corporation, a
registered bank holding company. As of December 31, 1996, Republic was the ___
largest bank holding company in the United States measured by assets and the
___ largest commercial bank measured by shareholder equity. Republic or an
affiliate of Republic serves as investment adviser to the other series of the
Trust. Republic currently provides investment advisory services for individuals,
trusts, estates and institutions.
Republic and its affiliates may have deposit, loan and other commercial
banking relationships with the issuers of obligations purchased for the Fund,
including outstanding loans to such issuers which may be repaid in whole or in
part with the proceeds of obligations so purchased. Republic has informed the
Trust that, in making its investment decisions, it does not obtain or use
material inside information in the possession of any division or department of
Republic or in the possession of any affiliate of Republic.
Based upon the advice of counsel, Republic believes that the performance of
investment advisory and other services for the Fund will not violate the
Glass-Steagall Act or other applicable banking laws or regulations. However,
future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, could prevent Republic from continuing to perform such services for
the Fund. If Republic were prohibited from acting as investment manager to the
Fund, it is expected that the Board of Trustees would recommend to Fund
shareholders approval of a new investment advisory agreement with another
qualified investment adviser selected by the Board or that the Board would
recommend other appropriate action. If Republic were prohibited from acting as a
Shareholder Servicing Agent for the Fund, the Trust would seek alternative means
of providing such services.
SUB-ADVISERS
Each Sub-Adviser continuously manages a portion of the investment portfolio
of the Fund, subject to the supervision and direction of the Manager, pursuant
to a Sub-Advisory Agreement with the Manager. The Manager determines the
allocation of the Fund's assets betwen the Sub-Advisers. For its services, each
Sub-Adviser is paid a fee by the Fund, computed daily and based on the Fund's
average daily net assets allocated to such Sub-Adviser for management, equal on
an annual basis to 0.325% of net assets up to $50 million, 0.25% of net assets
over $50 million up to $100 million, 0.20% of net assets over $100 million up to
$200 million, and 0.15% of net assets over $200 million. It is the
responsibility of each Sub-Adviser not only to make investment decisions for the
Fund, but also to place purchase and sale orders for the portfolio transactions
of the Fund. See "Portfolio Turnover."
Alliance
Alliance, a Delaware limited partnership with principal offices at 1345
Avenue of the Americas, New York, New York 10105, is a leading international
investment manager supervising client accounts with assets as of September
30,1996 totalling approximately $173.7 billion. Alliance has six offices in the
United States, and subsidiaries of Alliance operate out of offices in Bahrain,
Istanbul, London, Luxembourg, Mumbai(Bombay), Paris, Singapore, Sao Paulo,
Sydney, Tokyo and Toronto. Alliance and its subsidiaries employ over 1,300
persons worldwide.
Alliance's clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies, foundations and
endowment funds. The 51 registered investment companies managed by Alliance
comprising 110 separate investment portfolios currently have over two million
shareholders. There are 20 other non-U.S. investment companies comprising 20
separate investment portfolios also managed by Alliance. As of September 30,
1996, Alliance was retained as an investment manager of employee benefit fund
assets for 33 of the Fortune 100 companies.
Alliance Capital Management Corporation ("ACMC") is the general partner of
Alliance and conducts no other active business. Units representing assignment of
beneficial ownership of limited partnership interests of Alliance are publicly
traded on the New York Stock Exchange. As of September 30, 1996, The Equitable
Life Assurance Society of the United States ("Equitable"), ACMC, Inc. and
Equitable Capital Management Corporation ("ECMC") were the beneficial owners of
approximately 57.4% of the outstanding units of Alliance. ACMC, ECMC, and ACMC,
Inc. are wholly owned subsidiaries of Equitable. Equitable, a New York life
insurance company, had total assets as of June 30, 1996 of over $70.9 billion.
Equitable is a wholly owned subsidiary of The Equitable Companies Incorporated,
a Delaware corporation ("ECI"), whose shares are publicly traded on the New York
Stock Exchange. As of March 1, 1996, AXA, a French insurance holding company,
owned 63.9% of the issued and outstanding shares of the common stock of ECI.
John L. Blundin, a Senior Vice President and Portfolio Manager, and Paul J.
Denoon, a Vice President and Fixed Income Portfolio Manager, have primary
portfolio management responsibility for the Fund's assets allocated to Alliance.
Mr. Blundin has 32 years of investment experience, including 24 years of
experience as a portfolio manager at Alliance. Mr. Denoon has 12 years of
investment experience, including four years of experience as a portfolio manager
at Alliance. Prior to joining Alliance in 1992, Mr. Denoon was Vice President in
the Investment Portfolio Group at Manufacturers Hanover Trust, which managed
mortgage-backed securities and related products for that bank.
Brinson
Brinson, a Delaware corporation, is an investment management firm managing,
as of June 30, 1996, approximately $58 billion, primarily for pension and profit
sharing institutional accounts. Brinson was organized in 1989 when it acquired
the institutional asset management business of The First National Bank of
Chicago and First Chicago Investment Advisors, N.A. Brinson and its predecessor
entities have managed domestic and international investment assets since 1974
and global investment assets since 1982. Brinson has offices in Basel, London,
Melbourne, New York, Paris, Singapore, Sydney and Tokyo, in addition to its
principal office at 209 South LaSalle Street, Chicago, IL 60604-1295. Brinson is
an indirect wholly owned subsidiary of Swiss Bank Corporation ("Swiss Bank").
Swiss Bank, with headquarters in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Brinson also serves as the investment advisor to seven other
investment companies.
Jeffrey J. Diermeier, Managing Partner-U.S. Equities at Brinson, has
primary portfolio management responsibility for the Fund's assets allocated to
Brinson. Mr. Diermeier has 21 years of investment experience at Brinson.
DISTRIBUTOR AND SPONSOR
BISYS, whose address is 3435 Stelzer Road, Columbus, Ohio 43219-3035, acts
as sponsor and distributor to the Fund under a Distribution Contract. BISYS and
its affiliates also serve as administrator or distributor to other investment
companies. BISYS is a wholly owned subsidiary of BISYS Group, Inc.
ADMINISTRATOR
Pursuant to an Administration Agreement, BISYS provides the Trust with
general office facilities and supervises the overall administration of the Trust
and the Fund, including, among other responsibilities, the negotiation of
contracts and fees with, and the monitoring of performance and billings of, the
independent contractors and agents of the Trust; the payment of the
non-transaction based fees of the custodian; the preparation and filing of all
documents required for compliance by the Trust with applicable laws and
regulations; and arranging for the maintenance of books and records of the Trust
and the Fund. BISYS provides persons satisfactory to the Board of Trustees of
the Trust to serve as Trustees and officers of the Trust. Such officers, as well
as certain other employees and Trustees of the Trust, may be directors, officers
or employees of BISYS or its affiliates. For these services and facilities,
BISYS receives from the Fund fees payable monthly at an annual rate equal to
0.10% of the first $1 billion of the Fund's average daily net assets; 0.08% of
the next $1 billion of such assets; and 0.07% of such assets in excess of $2
billion.
TRANSFER AGENT AND CUSTODIAN
The Trust has entered into a Transfer Agency Agreement with Investors Bank &
Trust Company ("IBT"), pursuant to which IBT acts as transfer agent for the Fund
(the "Transfer Agent"). The Transfer Agent maintains an account for each
shareholder of the Fund (unless such account is maintained by the shareholder's
Shareholder Servicing Agent), performs other transfer agency functions, and acts
as dividend disbursing agent for the Fund. Pursuant to a Custodian Agreement,
IBT also acts as the custodian of the Fund's assets (the "Custodian"). The
Custodian's responsibilities include safeguarding and controlling the Fund's
cash and securities, handling the receipt and delivery of securities,
determining income and collecting interest on the Fund's investments,
maintaining books of original entry for portfolio and fund accounting and other
required books and accounts, and calculating the daily net asset value of shares
of the Fund. Securities held for the Fund may be deposited into the Federal
Reserve-Treasury Department Book Entry System or the Depositary Trust Company.
The Custodian does not determine the investment policies of the Fund or decide
which securities will be purchased or sold for the Fund. Assets of the Fund may,
however, be invested in securities of the Custodian, and the Trust may deal with
the Custodian as principal in securities transactions for the Fund. For its
services, IBT receives such compensation as may from time to time be agreed upon
by it and the Trust.
SHAREHOLDER SERVICING AGENTS
The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") with each Shareholder Servicing Agent pursuant to which a
Shareholder Servicing Agent, as agent for its customers, among other things:
answers customer inquiries regarding account status and history, the manner in
which purchases and redemptions of Shares may be effected and certain other
matters pertaining to the Fund; assists shareholders in designating and changing
dividend options, account designations and addresses; provides necessary
personnel and facilities to establish and maintain shareholder accounts and
records; assists in processing purchase and redemption transactions; arranges
for the wiring of funds; transmits and receives funds in connection with
customer orders to purchase or redeem Shares; verifies and guarantees
shareholder signatures in connection with redemption orders and transfers and
changes in shareholder-designated accounts; furnishes (either separately or on
an integrated basis with other reports sent to a shareholder by a Shareholder
Servicing Agent) monthly and year-end statements and confirmations of purchases
and redemptions; transmits, on behalf of the Trust, proxy statements, annual
reports, updated prospectuses and other communications from the Trust to the
Fund's shareholders; receives, tabulates and transmits to the Trust proxies
executed by shareholders with respect to meetings of shareholders of the Fund or
the Trust; and provides such other related services as the Trust or a
shareholder may request.
The Trust understands that some Shareholder Servicing Agents also may impose
certain conditions on their customers, subject to the terms of this Prospectus,
in addition to or different from those imposed by the Trust, such as requiring a
different minimum initial or subsequent investment, account fees (a fixed amount
per transaction processed), compensating balance requirements (a minimum dollar
amount a customer must maintain in order to obtain the services offered), or
account maintenance fees (a periodic charge based on a percentage of the assets
in the account or of the dividends paid on those assets). Each Shareholder
Servicing Agent has agreed to transmit to its customers who are holders of
Shares appropriate prior written disclosure of any fees that it may charge them
directly and to provide written notice at least 30 days prior to the imposition
of any transaction fees.
The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting securities of open-end investment
companies, such as shares of the Fund. The Trust engages banks as Shareholder
Servicing Agents on behalf of the Fund only to perform administrative and
shareholder servicing functions as described above. The Trust believes that the
Glass-Steagall Act should not preclude a bank from acting as a Shareholder
Servicing Agent. There is presently no controlling precedent regarding the
performance of shareholder servicing activities by banks. Future changes in
either federal statutes or regulations relating to the permissible activities of
banks, as well as future judicial or administrative decisions and
interpretations of present and future statutes and regulations, could prevent a
bank from continuing to perform all or part of its servicing activities. If a
bank were prohibited from so acting, its shareholder customers would be
permitted to remain Fund shareholders, and alternative means for continuing the
servicing of such shareholders would be sought. In such event, changes in the
operation of the Fund might occur and a shareholder serviced by such bank might
no longer be able to avail himself of any automatic investment or other services
then being provided by such bank. The Trustees of the Trust do not expect that
shareholders of the Fund would suffer any adverse financial consequences as a
result of these occurrences.
OTHER EXPENSES
The Fund bears all costs of its operations other than expenses specifically
assumed by the Distributor, Manager or the Sub-Advisers. See "Management of the
Trust -- Expenses and Expense Limits" in the Statement of Additional
Information. Expenses attributable to the Shares shall be allocated to the
Shares only. In the event a particular expense is not reasonably allocable by
class or to a particular class, it shall be treated as a Fund expense or a Trust
expense. Trust expenses directly attributable to the Fund are charged to the
Fund; other expenses are allocated proportionately among all the portfolios in
the Trust in relation to the net assets of each portfolio. For the period from
_________, 1996 (commencement of operations) through October 31, 1996, the
Fund's operating expenses equaled on an annual basis ____ of its average daily
net assets.
PORTFOLIO TRANSACTIONS
The Fund may dispose of a portfolio security whenever a Sub-Adviser
believes it is appropriate to do so without regard to the length of time the
particular asset may have been held. A high turnover rate involves greater
expenses to the Fund. The Fund engages in portfolio trading if it believes a
transaction net of costs (including custodian charges) will help in achieving
its investment objective. Transaction costs incurred by the Fund and the
realized capital gains and losses of the Fund may be greater than that of a fund
with a lesser portfolio turnover rate.
The primary consideration in placing portfolio security transactions with
broker-dealers for execution is to obtain, and maintain the availability of,
execution at the most favorable prices and in the most effective manner
possible. Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and such other policies as the Trustees of the Trust
may determine, and subject to seeking the most favorable price and execution
available, a Sub-Adviser may consider sales of shares of the Fund or other funds
managed by the Sub-Adviser as a factor in the selection of broker-dealers to
execute portfolio transactions for the Fund. The Fund may pay brokerage
commissions on portfolio security transactions to affiliated broker-dealers. For
a further discussion of portfolio transactions, see "Investment Objective,
Policies Risks, and Restrictions -- Fund Transactions" in the Statement of
Additional Information.
CLASSES OF SHARES
In addition to the Shares, the Trust currently offers one other class of
shares of the Fund, the Class C shares, pursuant to a separate prospectus. Other
classes of shares may have different class expenses, which may affect
performance. Investors may obtain information concerning other classes of shares
of the Fund directly from their Shareholder Servicing Agent or by calling
1-888-525-5757.
DETERMINATION OF NET ASSET VALUE
The net asset value of each of the Shares is determined on each day on
which the New York Stock Exchange is open for trading ("Fund Business Day").
This determination is made once during each Fund Business Day as of 4:00 p.m.,
New York time, by dividing the value of the Fund's net assets (i.e., the value
of its assets less its liabilities, including expenses payable or accrued) by
the number of Shares outstanding at the time the determination is made. Values
of assets in the Fund's portfolio are determined on the basis of their market or
other fair value, as described in the Statement of Additional Information.
PURCHASE OF SHARES
Shares may be purchased without a sales load at their net asset value next
determined after an order is received by a Shareholder Servicing Agent if it is
transmitted to and accepted by the Distributor. Purchases are therefore effected
on the same day the purchase order is received by the Distributor provided such
order is received prior to 4:00 p.m., New York time, on any Fund Business Day.
The Trust intends the Fund to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets. Accordingly,
in order to make investments which will immediately generate income, the Trust
must have federal funds available for the Fund (i.e., monies credited by a
Federal Reserve Bank to the account of the Fund with the Fund's custodian bank).
Each Shareholder Servicing Agent has agreed to provide federal funds for each
purchase at the time it transmits the order for such purchase to the
Distributor, and the Distributor has agreed to provide the Fund with federal
funds for each purchase, including those made directly through the Distributor.
Therefore, each shareholder and prospective investor should be aware that if he
does not have sufficient funds on deposit with, or otherwise immediately
available to, his Shareholder Servicing Agent, there may be a delay in
transmitting and effecting the purchase order since his check, bank draft, money
order or similar negotiable instrument will have to be converted into federal
funds. If such a delay is necessary, it is expected that in most cases it would
not be longer than two business days.
All purchase payments are invested in full and fractional Shares. The Trust
reserves the right to cease offering Shares for sale at any time or to reject
any order for the purchase of Shares.
An investor may purchase Shares by authorizing his Shareholder Servicing
Agent to purchase such Shares on his behalf through the Distributor.
Exchange Privilege. By contacting his Shareholder Servicing Agent, a
shareholder may exchange some or all of his Shares for shares of an identical
class of one or more of the following investment companies at net asset value
without a sales charge: Republic U.S. Government Money Market Fund, Republic New
York Tax Free Money Market Fund, Republic New York Tax Free Bond Fund, Republic
Bond Fund, Republic Overseas Equity Fund, Republic Opportunity Fund, and such
other Republic Funds or other registered investment companies for which Republic
serves as investment adviser as Republic may determine. An exchange may result
in a change in the number of Shares held, but not in the value of such Shares
immediately after the exchange. Each exchange involves the redemption of the
Shares to be exchanged and the purchase of the shares of the other Republic Fund
which may produce a gain or loss for tax purposes.
The exchange privilege (or any aspect of it) may be changed or discontinued
upon 60 days' written notice to shareholders and is available only to
shareholders in states in which such exchanges legally may be made. A
shareholder considering an exchange should obtain and read the prospectus of the
other Republic Fund and consider the differences in investment objectives and
policies before making any exchange.
THROUGH A SHAREHOLDER SERVICING AGENT
Shares are being offered only to customers of Shareholder Servicing Agents.
Shareholder Servicing Agents may offer services to their customers, including
specialized procedures for the purchase and redemption of Shares, such as
pre-authorized or automatic purchase and redemption programs. Each Shareholder
Servicing Agent may establish its own terms, conditions and charges, including
limitations on the amounts of transactions, with respect to such services.
Charges for these services may include fixed annual fees, account maintenance
fees and minimum account balance requirements. The effect of any such fees will
be to reduce the net return on the investment of customers of that Shareholder
Servicing Agent. Conversely, certain Shareholder Servicing Agents may (although
they are not required by the Trust to do so) credit to the accounts of their
customers from whom they are already receiving other fees amounts not exceeding
such other fees or the fees received by the Shareholder Servicing Agent from the
Fund, which will have the effect of increasing the net return on the investment
of such customers of those Shareholder Servicing Agents.
Shareholder Servicing Agents may transmit purchase payments on behalf of
their customers by wire directly to the Fund's custodian bank by following the
procedures described above.
For further information on how to direct a Shareholder Servicing Agent to
purchase Shares, an investor should contact his Shareholder Servicing Agent (see
back cover for address and phone number).
RETIREMENT PLANS
Shares are offered in connection with tax-deferred retirement plans.
Application forms and further information about these plans, including
applicable fees, are available from the Trust or the Sponsor upon request.
Recently enacted federal tax legislation has substantially affected the tax
treatment of contributions to certain retirement plans. Before investing in the
Fund through one or more of these plans, an investor should consult his or her
tax adviser.
INDIVIDUAL RETIREMENT ACCOUNTS
Shares may be used as a funding medium for an IRA. An Internal Revenue
Service-approved IRA plan may be available from an investor's Shareholder
Servicing Agent. In any event, such a plan is available from the Sponsor naming
IBT, as custodian. The minimum initial investment for an IRA is $250; the
minimum subsequent investment is $100. IRAs are available to individuals who
receive compensation or earned income and their spouses whether or not they are
active participants in a tax-qualified or Government-approved retirement plan.
An IRA contribution by an individual who participates, or whose spouse
participates, in a tax-qualified or Government-approved retirement plan may not
be deductible depending upon the individual's income. Individuals also may
establish an IRA to receive a "rollover" contribution of distributions from
another IRA or a qualified plan. Tax advice should be obtained before planning a
rollover.
DEFINED CONTRIBUTION PLANS
Investors who are self-employed may purchase Shares for retirement plans
for self-employed persons which are known as Defined Contribution Plans
(formerly Keogh or H.R. 10 Plans). Republic offers a prototype plan for Money
Purchase and Profit Sharing Plans.
SECTION 457 PLAN, 401(K) PLAN, 403(B) PLAN
The Fund may be used as a vehicle for certain deferred compensation plans
provided for by Section 457 of the Internal Revenue Code of 1986, as amended
(the "Code"), with respect to service for state governments, local governments,
rural electric cooperatives and political subdivisions, agencies,
instrumentalities and certain affiliates of such entities. The Fund may also be
used as a vehicle for both 401(k) plans and 403 (b) plans.
REDEMPTION OF SHARES
A shareholder may redeem all or any portion of the Shares in his account at
any time at the net asset value next determined after a redemption order in
proper form is furnished by the shareholder to his Shareholder Servicing Agent,
and is transmitted to and received by the Transfer Agent. Redemptions are
effected on the same day the redemption order is received by the Transfer Agent
provided such order is received prior to 4:00 p.m., New York time, on any Fund
Business Day. Shares redeemed earn dividends up to and including the Fund
Business Day prior to the day the redemption is effected.
The proceeds of a redemption are normally paid from the Fund in federal
funds on the next Fund Business Day following the date on which the redemption
is effected, but in any event within seven days. The right of any shareholder to
receive payment with respect to any redemption may be suspended or the payment
of the redemption proceeds postponed during any period in which the New York
Stock Exchange is closed (other than weekends or holidays) or trading on such
Exchange is restricted or, to the extent otherwise permitted by the 1940 Act, if
an emergency exists. To be in a position to eliminate excessive expenses, the
Trust reserves the right to redeem upon not less than 30 days' notice all Shares
in an account which has a value below $50. However, a shareholder will be
allowed to make additional investments prior to the date fixed for redemption to
avoid liquidation of the account.
A shareholder may redeem Shares only by authorizing his Shareholder
Servicing Agent to redeem such Shares on his behalf (since the account and
records of such a shareholder are established and maintained by his Shareholder
Servicing Agent). For further information as to how to direct a Shareholder
Servicing Agent to redeem Shares, a shareholder should contact his Shareholder
Servicing Agent (see back cover for address and phone number).
DIVIDENDS AND DISTRIBUTIONS
Dividends substantially equal to all of the Fund's net investment income
earned are distributed quarterly to Fund shareholders of record. Generally, the
Fund's net investment income consists of the interest and dividend income it
earns, less expenses. In computing interest income, premiums are not amortized,
nor are discounts accrued on long-term debt securities in the Fund's portfolio,
except as required for federal income tax purposes.
The Fund's net realized short-term and long-term capital gains, if any, are
distributed to shareholders annually. Additional distributions are also made to
the Fund's shareholders to the extent necessary to avoid application of the 4%
non-deductible federal excise tax on certain undistributed income and net
capital gains of mutual funds.
Unless a shareholder elects to receive dividends in cash (subject to the
policies of the shareholder's Shareholder Servicing Agent or securities broker),
dividends are distributed in the form of additional Shares (purchased at their
net asset value without a sales charge).
TAX MATTERS
This discussion is intended for general information only. An investor should
consult with his own tax advisor as to the tax consequences of an investment in
the Fund, including the status of dividends and distributions from the Fund
under applicable state or local law.
Each year, the Trust intends to qualify the Fund and elect that the Fund be
treated as a separate "regulated investment company" under Subchapter M of the
Code. To so qualify, the Fund must meet certain income, distribution and
diversification requirements. Provided such requirements are met and all
investment company taxable income and net realized capital gains of the Fund are
distributed to shareholders in accordance with the timing requirements imposed
by the Code, generally no federal income or excise taxes will be paid by the
Fund on amounts so distributed.
Dividends and capital gains distributions, if any, paid to shareholders are
treated in the same manner for federal income tax purposes whether received in
cash or reinvested in additional shares of the Fund. Shareholders must treat
dividends, but not long-term capital gain distributions, as ordinary income.
Dividends paid to corporate shareholders, to the extent such dividends are
attributable to dividends received from U.S. corporations, may qualify for the
dividends-received deduction. However, the alternative minimum tax applicable to
corporations may reduce the value of the dividends-received deduction.
Distributions designated by the Fund as capital gain dividends are taxable to
shareholders as long-term capital gain regardless of the length of time the
shares of the Fund have been held by the shareholders and such distributions are
not eligible for the dividends-received deduction. Certain dividends declared in
October, November, or December of a calendar year to shareholders of record on a
date in such a month are taxable to shareholders (who otherwise are subject to
tax on dividends) as though received on December 31 of that year if paid to
shareholders during January of the following calendar year.
Tax Withholding. Income received by the Fund from sources within foreign
countries may be subject to withholding and other income or similar taxes
imposed by such countries.
The Fund generally will be required to withhold federal income tax at a
rate of 31% ("backup withholding") from dividends paid, capital gain
distributions, and redemption proceeds to shareholders if (1) the shareholder
fails to furnish the Fund with the shareholder's correct taxpayer identification
number ("TIN") or social security number and to make such certifications as the
Fund may require, (2) the Internal Revenue Service notifies the shareholder or
the Fund that the shareholder has failed to report properly certain interest and
dividend income to the Internal Revenue Service and to respond to notices to
that effect, or (3) when required to do so, the shareholder fails to certify
that he is not subject to backup withholding. Backup withholding is not an
additional tax and any amounts withheld may be credited against the
shareholder's federal income tax liability. Dividends from the Fund attributable
to the Fund's net investment income and short-term capital gains generally will
be subject to U.S. withholding tax when paid to shareholders treated under U.S.
tax law as nonresident alien individuals or foreign corporations, estates,
partnerships or trusts.
The Trust is organized as a Massachusetts business trust and, under current
law, is not liable for any income or franchise tax in the Commonwealth of
Massachusetts as long as each series of the Trust (including the Fund) qualifies
as a "regulated investment company" under the Code.
For additional information relating to taxes, see "Taxation" in the
Statement of Additional Information.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (par value $0.001
per share) and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
Trust. The shares of each series participate equally in the earnings, dividends
and assets of the particular series. Currently, the Trust has six series of
shares, each of which constitutes a separately managed fund. The Trust reserves
the right to create additional series of shares. The Trust may authorize the
creation of multiple classes of shares of separate series of the Trust.
Currently, the Fund is divided into two classes of shares.
Each share of each class of the Fund represents an equal proportionate
interest in the Fund with each other share of that class. Shares have no
preference, pre-emptive, conversion or similar rights. Shares when issued are
fully paid and non-assessable, except as set forth below. Shareholders are
entitled to one vote for each share held on matters on which they are entitled
to vote. Each Shareholder Servicing Agent has agreed to transmit all proxies and
voting materials from the Trust to their customers who are beneficial owners of
the Fund and such Shareholder Servicing Agents have agreed to vote as instructed
by such customers. The Trust is not required and has no current intention to
hold annual meetings of shareholders, although the Trust will hold special
meetings of Fund shareholders when in the judgment of the Trustees of the Trust
it is necessary or desirable to submit matters for a shareholder vote.
Shareholders of each series generally vote separately, for example, to approve
investment advisory agreements or changes in fundamental investment policies or
restrictions, but shareholders of all series may vote together to the extent
required under the 1940 Act, such as in the election or selection of Trustees,
principal underwriters and accountants for the Trust. Shares of each class of a
series represent an equal pro rata interest in such series and, generally, have
identical voting, dividend, liquidation, and other rights, preferences, powers,
terms and conditions, except that: (a) each class shall have a different
designation; (b) each class of shares shall bear any class expenses; and (c)
each class shall have exclusive voting rights on any matter submitted to
shareholders that relate solely to its distribution arrangement, and each class
shall have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of any other class.
Shareholders of the Fund have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified number of shareholders) the right to communicate with other
shareholders of the Trust in connection with requesting a meeting of
shareholders of the Trust for the purpose of removing one or more Trustees.
Shareholders of the Trust have the right to remove one or more Trustees without
a meeting by a declaration in writing subscribed to by a specified number of
shareholders, however, the Trustees will call such a meeting upon the written
request of shareholders holding at least 10% of the Trust's outstanding shares.
Upon liquidation or dissolution of the Fund, shareholders of the Fund would be
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Fund or the Trust, a Shareholder Servicing Agent may vote
any shares as to which such Shareholder Servicing Agent is the agent of record
and which are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
PERFORMANCE INFORMATION
Yield and total return data for the Fund may from time to time be included
in advertisements about the Trust. "Total return" is expressed in terms of the
average annual compounded rate of return of a hypothetical investment in the
Fund over periods of 1, 5 and 10 years. 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. "Yield"
refers to the net income generated by an investment in the Fund over a stated
30-day period. This income is then annualized -- i.e., the amount of income
generated by the investment during the 30-day period is assumed to be generated
each 30-day period for twelve periods and is shown as a percentage of the
investment. The income earned on the investment is also assumed to be reinvested
at the end of the sixth 30-day period.
Since these total return and yield quotations are based on historical
earnings and since the Fund's total return and yield fluctuate from day to day,
these quotations should not be considered as an indication or representation of
the Fund's total return or yield in the future. Any performance information
should be considered in light of the Fund's investment objective and policies,
characteristics and quality of the Fund's portfolio and the market conditions
during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. From time to time the
Trust may also use comparative performance information in such advertisements,
including the performance of unmanaged indices, the performance of the Consumer
Price Index (as a measure for inflation), and data from Lipper Analytical
Services, Inc. and other industry publications.
A Shareholder Servicing Agent may charge its customers direct fees in
connection with an investment in the Fund, which will have the effect of
reducing the net return on the investment of customers of that Shareholder
Servicing Agent. Conversely, the Trust has been advised that certain Shareholder
Servicing Agents may credit to the accounts of their customers from whom they
are already receiving other fees amounts not exceeding such other fees or the
fees received by the Shareholder Servicing Agent from the Fund, which will have
the effect of increasing the net return on the investment of such customers of
those Shareholder Servicing Agents. Such customers may be able to obtain through
their Shareholder Servicing Agent quotations reflecting such decreased return.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to the Trust, 3435 Stelzer
Road, Columbus, Ohio 43219-3035.
GENERAL AND ACCOUNT INFORMATION (888) 525-5757 (TOLL FREE)
--------------------
The Trust's Statement of Additional Information, dated February __, 1997,
with respect to the Fund contains more detailed information about the Fund,
including information related to (i) the Fund's investment restrictions, (ii)
the Trustees and officers of the Trust and the Manager, Sub-Adviser and Sponsor
of the Fund, (iii) portfolio transactions, (iv) the Fund's shares, including
rights and liabilities of shareholders, and (v) additional yield information,
including the method used to calculate the total return and yield of the Fund.
<PAGE>
REPUBLIC
EQUITY
FUND
INVESTMENT MANAGER
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
SUB-ADVISERS
Alliance Capital Management L.P.
1345 Avenue of the Americas, 38th Floor
New York, NY 10105
Brinson Partners, Inc.
209 South LaSalle Street
Chicago, IL 60604-1295
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
BISYS Fund Services
3435 Stelzer Road
Columubs, Ohio 43219-3035
(614) 470-8000
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
SHAREHOLDER SERVICING AGENTS:
Republic National Bank of New York
Republic Bank For Savings
452 Fifth Avenue
New York, NY 10018
(800) 782-8183
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
REPUBLIC EQUITY FUND
PROSPECTUS
February __, 1997
<PAGE>
REPUBLIC EQUITY FUND
CLASS C SHARES/RETAIL CLASS
3435 STELZER ROAD, COLUMBUS, OHIO 43219-3035
- ------------------------------------------------------------------------------
ACCOUNT AND GENERAL INFORMATION: (888) 525-5757 (TOLL FREE)
Republic Equity Fund (the "Fund") is a diversified separate series
(portfolio) of the Republic Funds (the "Trust"), an open-end, management
investment company which currently consists of six portfolios, each of which has
different and distinct investment objectives and policies. Class C shares of the
Fund are being offered by this Prospectus. The Trust offers one other class of
shares of the Fund pursuant to a separate prospectus. Republic National Bank of
New York ("Republic" or the "Manager") is the investment manager of the Fund.
Alliance Capital Management L.P. ("Alliance" or a "Sub-Adviser") and Brinson
Partners, Inc. ("Brinson" or a "Sub-Adviser") continuously manage the investment
portfolio of the Fund.
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, REPUBLIC OR ANY OTHER BANK, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUND IS SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
Shares of the Fund are continuously offered for sale at net asset value
with no sales charge by BISYS Fund Services ("BISYS" or the "Distributor") (i)
directly to the public, (ii) to customers of a financial institution, such as a
federal or state-chartered bank, trust company or savings and loan association
that has entered into a shareholder servicing agreement with the Trust
(collectively, "Shareholder Servicing Agents"), and (iii) to customers of a
securities broker that has entered into a dealer agreement with the Distributor.
AN INVESTOR WHO IS NOT PURCHASING DIRECTLY FROM THE DISTRIBUTOR SHOULD
OBTAIN FROM HIS SECURITIES BROKER OR SHAREHOLDER SERVICING AGENT, AND SHOULD
READ IN CONJUNCTION WITH THIS PROSPECTUS, THE MATERIALS PROVIDED BY THE
SECURITIES BROKER OR SHAREHOLDER SERVICING AGENT DESCRIBING THE PROCEDURES UNDER
WHICH SHARES OF THE FUND MAY BE PURCHASED AND REDEEMED THROUGH SUCH SECURITIES
BROKER OR SHAREHOLDER SERVICING AGENT.
This Prospectus sets forth concisely the information concerning the Fund
that a prospective investor ought to know before investing. The Trust has filed
with the Securities and Exchange Commission a Statement of Additional
Information, dated February __, 1997, with respect to the Fund, containing
additional and more detailed information about the Fund, which is hereby
incorporated by reference into this Prospectus. An investor may obtain a copy of
this Statement of Additional Information without charge by contacting the
Distributor or his Shareholder Servicing Agent (see back cover for addresses and
phone numbers).
--------------------
Investors should read this Prospectus and retain it for future reference.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1997
<PAGE>
HIGHLIGHTS
THE FUND PAGE __
Republic Equity Fund (the "Fund") is a separate series (portfolio) of the
Republic Funds (the "Trust"), a Massachusetts business trust organized on April
22, 1987, which currently consists of seven funds, each of which has different
and distinct investment objectives and policies.
INVESTMENT OBJECTIVE, RISKS AND POLICIES PAGE __
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved.
MANAGEMENT OF THE TRUST PAGE __
Republic acts as investment manager to the Fund pursuant to an Investment
Management Agreement with the Trust. For its services, the Manager is paid a fee
by the Fund, computed daily and based on the Fund's average daily net assets,
equal on an annual basis to 0.175% of net assets. Each Sub-Adviser continuously
manages a portion of the investment portfolio of the Fund pursuant to a Sub-
Advisory Agreement with the Manager. The Manager determines the allocation of
the Fund's assets between the Sub-Advisers. For its services, each Sub-Adviser
is paid a fee by the Fund, computed daily and based on the Fund's average daily
net assets, equal on an annual basis to 0.325% of the average daily net assets
of the Fund allocated to the Sub-Adviser for management, subject to certain
breakpoints on assets allocated to the Sub-Adviser in excess of $50 million. See
"Management of the Trust."
BISYS acts as administrator and sponsor of the Fund. BISYS provides certain
management and administrative services to the Fund for which it receives from
the Fund a fee at the annual rate of up to 0.10% of the Fund's average daily net
assets, subject to certain breakpoints on assets in excess of $1 billion.
The Trust also has retained BISYS to distribute Class C shares of the Fund
(the "Shares") pursuant to a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"). Pursuant to the
terms of the Distribution Plan, the Distributor is reimbursed from the Fund for
marketing costs and payments to other organizations for services rendered in
distributing the Shares. This fee may not exceed 0.25% of the average daily net
assets of the Fund represented by Shares outstanding and is expected to be
limited to an amount such that the aggregate fees paid to the Distributor
pursuant to the Distribution Plan and to the Shareholder Servicing Agents
pursuant to the Administrative Services Plan do not exceed 0.25% of such assets.
See "Management of the Trust."
PURCHASES AND REDEMPTIONS PAGES __ AND __
Shares are continuously offered for sale by the Distributor at net asset
value with no sales charge (i) directly to the public, (ii) to customers of a
financial institution, such as a federal or state-chartered bank, trust company
or savings and loan association, that has entered into a shareholder servicing
agreement with the Trust (collectively, "Shareholder Servicing Agents"), and
(iii) to customers of a securities broker that has entered into a dealer
agreement with the Distributor. For investors who purchase Shares directly from
the Distributor, the minimum initial investment is $1,000 and the minimum
subsequent investment is $100. The Trust offers to buy back (redeem) Shares from
shareholders of the Fund at any time at net asset value. See "Purchase of
Shares" and "Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS PAGE __
The Trust intends to distribute all the Fund's net investment income as a
dividend to Fund shareholders quarterly and net realized capital gains, if any,
annually. See "Dividends and Distributions."
<PAGE>
FEE TABLE
The following table provides (i) a summary of estimated expenses relating
to purchases and sales of Fund Shares, and the aggregate annual operating
expenses of the Fund, as a percentage of average daily net assets of the Fund,
and (ii) an example illustrating the dollar cost of such estimated expenses on a
$1,000 investment in Fund Shares.
Shareholder Transaction Expenses .......................................... None
Annual Fund Operating Expenses
Investment Management Fee after waiver* ................................ 0.10%
Investment Subadvisory Fee ............................................. 0.32%
Distribution Fees (Rule 12b-1 fees) .................................... 0.15%
Other Expenses ......................................................... 0.73%
------
-- Shareholder Servicing Fee .............................. 0.10%
-- Administrative Services Fee ............................ 0.10%
-- Other Operating Expenses ............................... 0.53%
Total Fund Operating Expenses after fee waiver** ..................... 1.30%
======
- ------------
*Investment Management Fee is shown net of waiver. Without such waiver, such
fee in the aggregate would be equal on an annual basis to 0.175% of the
Fund's average net assets.
**Total Fund Operating Expenses are shown net of fee waivers. Without such fee
waivers, the Total Fund Operating Expenses would be equal on an annual basis
to 1.375% of the Fund's average net assets. There can be no assurance that
expenses will be reimbursed or waived in the future.
EXAMPLE
A shareholder of the Fund would pay the following expenses on a $1,000
investment in Fund Shares, assuming (1) 5% annual return and (2) redemption at
the end of:
1 year .................................................. $ 13
3 years ................................................. $ 41
5 years ................................................. $ 71
10 years ................................................ $157
The purpose of the expense table provided above is to assist investors in
understanding the various costs and expenses that a shareholder will bear
directly or indirectly. The information is based on the expenses the Fund
expects to incur with respect to the Shares for the current fiscal year.* The
expense table shows the expected investment management fee, investment
subadvisory fee, distribution (Rule 12b-1) fee, administrative services fee and
shareholder servicing fee. For a more detailed discussion on the costs and
expenses of investing in the Fund, see "Management of the Trust."
- ----------
*Assuming average daily net assets of $30 million in the Fund.
The fees paid from the Fund to each Shareholder Servicing Agent are
determined by a formula based upon the number of accounts serviced by such
Shareholder Servicing Agent during the period for which payment is being made,
the level of activity in such accounts during such period, and the expenses
incurred by such Shareholder Servicing Agent. Similarly, the fee from the Fund
to the Distributor is in anticipation of, or as reimbursement for, expenses
incurred by the Distributor in connection with the sale of Fund Shares. The
aggregate fees paid to the Distributor pursuant to the Distribution Plan and to
the Shareholder Servicing Agent pursuant to the Administrative Services Plan may
not exceed 0.25% of the average daily net assets of the Fund represented by
Shares outstanding during the period for which payment is being made. Long-term
shareholders may pay more than the economic equivalent of the maximum
distribution charges permitted by the National Association of Securities
Dealers, Inc.
Some Shareholder Servicing Agents and securities brokers may impose certain
conditions on their customers, subject to the terms of this Prospectus, in
addition to or different from those imposed by the Trust, such as requiring a
minimum initial investment or charging their customers a direct fee for their
services. The effect of any such fees will be to reduce the net return on the
investment of customers of that Shareholder Servicing Agent or securities
broker. Each Shareholder Servicing Agent and securities broker has agreed to
transmit to shareholders who are its customers appropriate written disclosure of
any transaction fees that it may charge them directly at least 30 days before
the imposition of any such charge.
THE EXAMPLE SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES OF THE FUND; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN.
FINANCIAL HIGHLIGHTS
The financial data shown below is to assist investors in evaluating the
performance of the Shares since commencement of operations through October 31,
1996. The information shown in the following schedule has been audited by
___________________, independent auditors, whose report on the Fund's financial
statements is incorporated by reference into the Statement of Additional
Information from the Fund's Annual Report dated October 31, 1996. Information
for the period ended October 31, 1995 has been audited by the Fund's former
independent auditors. The Annual Report also includes management's discussion of
Fund performance, and may be obtained without charge upon request. This
information should be read in conjunction with the financial statements.
SELECTED DATA FOR A CLASS C SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD:
REPUBLIC EQUITY FUND -- FINANCIAL HIGHLIGHTS
<TABLE>
<S> <C> <C>
FOR THE PERIOD
AUGUST 1, 1995
FOR THE FISCAL (COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
OCTOBER 31, 1996 OCTOBER 31, 1995
---------------- ----------------
Net asset value, beginning of period ....................... $____ $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................... ____ 0.04
Net realized and unrealized gain on investments .......... ____ 0.24
------ ------
Total from investment operations ....................... ____ 0.28
------ ------
Less dividends:
From net investment income ............................... ____ (0.04)
------ ------
Total from dividends ................................... ____ (0.04)
------ ------
Net asset value, end of period ............................. $____ $10.24
----- ------
Total return ............................................... ___% 2.75%(a)
Ratios/supplemental data:
Net assets, end of period (in 000's) ..................... $____ $22,092
Ratio of expenses to average net assets (b) .............. ___% 1.47%(c)
Ratio of net investment income to average net assets (b) . ___% 1.59%(c)
Portfolio turnover rate .................................. ___% 2%
Average commission rate paid.............................. ___% ___%
- ------------------------------------------------------------------------------
(a) Not annualized.
(b) Reflects a voluntary expense limitation and waivers of fees by affiliated
parties of the Fund. If this limitation and waivers had not been in effect,
the annualized ratios of expenses and net investment income to average net
assets for the fiscal year ended October 31, 1996 and for the period from
August 1, 1995 (commencement of operations) to October 31, 1995 would have
been:
Ratio of expenses to average net assets............... ___% 2.44%(c)
Ratio of net investment income to average net assets.. ___% 0.62%(c)
(c) Annualized.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE, RISKS AND POLICIES
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek long-term growth of capital
and income without excessive fluctuations in market value. The Fund will
normally invest in equity securities of seasoned companies in sound financial
condition with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved. The investment objective of the Fund may
be changed without approval by the Fund's shareholders. If there is a change in
the investment objective of the Fund, shareholders should consider whether the
Fund remains an appropriate investment in light of their then-current financial
position and needs. Shareholders of the Fund shall receive 30 days' prior
written notice of any change in the investment objective of the Fund.
INVESTMENT POLICIES
The Fund will normally invest at least 65% of its total assets in equity
securities of seasoned companies in sound financial condition with large or
intermediate capitalization which are expected to show above-average price
appreciation. The Fund may invest in a broad range of equity securities,
including common and preferred stocks, debt securities convertible into or
exchangeable for common stock and securities such as warrants or rights that are
convertible into common stock.
The Manager will allocate the Fund's assets between the Sub-Advisers. While
the Manager maintains complete discretion regarding the allocation of the Fund's
assets, the Manager anticipates that it typically will allocate the Fund's
assets evenly between the Sub-Advisers, each of which pursues the Fund's
investment objective in the manner described below.
ALLIANCE
Alliance seeks the Fund's investment objective by pursuing a "growth" style
of investing in marketable equity securities, primarily of U.S. companies.
However, the Fund may purchase foreign, as well as domestic, equity securities.
Alliance normally will invest substantially all of the Fund's assets allocated
to it in common stocks which Alliance believes will appreciate in value.
Alliance generally seeks to invest the Fund's assets in financially secure
firms with established operating histories that are proven leaders in their
industry or market sector. Such companies may demonstrate characteristics such
as participation in expanding markets, increasing unit sales volume, growth in
revenues and earnings per share, and increasing return on investments. However,
Alliance may invest the Fund's assets in companies that do not demonstrate such
characteristics if it expects such companies to undergo an acceleration in
growth of earnings because of special factors such as new management, new
products, changes in consumer demand or basic changes in the economic
environment.
Alliance analyzes each company considered for investment, using internal
fundamental research analysts, to determine its source of earnings, competitive
edge, management strength, and level of industry dominance as measured by market
share. At the same time, Alliance conducts an analysis of the financial
condition of each company and selects those prospects that demonstrate the
greatest potential for above-average capital appreciation and growth in
earnings. Alliance's philosophy is to seek the best available combination of
relative earnings growth and attractive valuation.
BRINSON
Brinson seeks the Fund's investment objective by pursuing a "value" style
of investment management. Brinson's approach to investing for the Fund is to
invest in the equity securities of U.S. companies believed to be undervalued
based upon internal research and proprietary valuation systems. Investment
decisions are based on fundamental research, internally developed valuation
systems and seasoned judgment. Brinson's research focuses on several levels of
analysis; first, on understanding wealth shifts that occur within the equity
market, and second, on individual company research. At the company level,
Brinson quantifies expectations of a company's ability to generate profit and to
grow business into the future.
For each stock under analysis, Brinson discounts to the present all of the
future cash flows that it believes will accrue to the Fund from the investment
in order to calculate a present or intrinsic value. This value estimate
generated by Brinson's proprietary valuation model is compared to observed
market price and ranked against other stocks accordingly. The rankings, in
combination with Brinson's investment judgment, determine which securities are
included in the portfolio.
Brinson monitors and assesses the degree to which the portfolio becomes
concentrated in industry or common types of stocks, and adjusts the portfolio to
balance the price/value opportunities with their concentrations. Brinson imposes
limits on the degree of concentration, as the Fund does not intend to
concentrate its investments in a particular industry.
GENERAL
The Fund also may (a) invest in options on securities, securities indices
or foreign currencies, (b) invest in futures contracts and options on futures
contracts, (c) enter into forward foreign currency exchange contracts, (d)
invest up to 10% of its net assets (at the time of investment) in debt and
equity securities which are traded in developed foreign countries, and (e)
invest up to 35% in bonds and other debt securities, including lower rated,
high-yield bonds, commonly referred to as "junk bonds." The Fund does not intend
to write covered call options with respect to securities with an aggregate
market value of more than 10% of its total assets at the time an option is
written. The Fund will not invest more than 5% of its net assets (at the time of
investment) in lower rated (BB/Ba or lower), high-yield bonds. The Fund may
retain any bond whose rating drops below investment grade if it is in the best
interest of the Fund's shareholders. Securities rated BB/Ba by a nationally
recognized statistical rating organization are considered to have speculative
characteristics.
The Fund may lend its portfolio securities. These loans may not exceed 30%
of the value of the Fund's total assets.
The Fund will not purchase securities for trading purposes. Pending
investment in equity and debt and also for temporary defensive purposes, the
Fund may invest without limit in short-term debt and other high-quality,
fixes-income securities and cash equivalents, which may include, but are not
limited to: (i) short-term obligations of the U.S. and foreign sovereign
governments and their agencies and instrumentalities, (ii) interest bearing
savings deposits, certificates of deposit and bankers' acceptances of U.S. and
foreign banks, (iii) high-quality rated commercial paper of U.S. or foreign
issuers, and (iv) repurchase agreements related to the foregoing. The Fund may
invest up to 15% of its net assets in illiquid securities.
ADDITIONAL RISK FACTORS AND POLICIES
FOREIGN SECURITIES
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject to
the disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or foreign withholding and other taxation, limitation on the
removal of cash or other assets of the Fund, political or financial instability,
or diplomatic and other developments which could affect such investments.
Further, economics of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Changes in
foreign exchange rates will affect the value of securities denominated or quoted
in currencies other than the U.S. dollar. Foreign securities often trade with
less frequency and volume than domestic securities and therefore may exhibit
greater price volatility. Additional costs associated with an investment in
foreign securities may include higher custodial fees than apply to domestic
custodial arrangements, and transaction costs of foreign currency conversions.
CONVERTIBLE SECURITIES
Although the Fund's equity investments consist primarily of common and
preferred stocks, the Fund may buy securities convertible into common stock if,
for example, a Sub-Adviser believes that a company's convertible securities are
undervalued in the market. Convertible securities eligible for purchase by the
Fund consist of convertible bonds, convertible preferred stocks, warrants and
rights. See "Additional Risk Factors and Policies -- Warrants" below and the
Statement of Additional Information for a discussion of these instruments.
ILLIQUID INVESTMENTS
The Fund may invest up to 15% of its net assets in securities that are
illiquid by virtue of the absence of a readily available market, or because of
legal of contractual restrictions on resale, excluding securities eligible for
resale to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as described below. There may be delays in selling these
securities and sales may be made at less favorable prices.
A Sub-Adviser may determine that a particular Rule 144A security is liquid
and thus not subject to the Fund's limits on investment in illiquid securities,
pursuant to guidelines adopted by the Board of Trustees. Factors that a
Sub-Adviser must consider in determining whether a particular Rule 144A security
is liquid include the frequency of trades and quotes for the security, the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers, dealer undertakings to make a market in the
security, and the nature of the security and the nature of the market for the
security (i.e., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). Investing in Rule 144A
securities could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutions might become, for a time,
uninterested in purchasing these securities.
WARRANTS
The Fund may invest up to 10% of its net assets in warrants, except that
this limitation does not apply to warrants acquired in units or attached to
securities. A warrant is an instrument issued by a corporation which gives the
holder the right to subscribe to a specific amount of the corporation's capital
stock at a set price for a specified period of time. Warrants do not represent
ownership of the securities, but only the right to buy the securities. The
prices of warrants do not necessarily move parallel to the prices of underlying
securities. Warrants may be considered speculative in that they have no voting
rights, pay no dividends, and have no rights with respect to the assets of the
corporation issuing them.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend its securities to qualified brokers, dealers, banks and
other financial institutions for the purpose of realizing additional income.
Loans of securities will be collateralized by cash, letters of credit, or
securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities. In addition, the Fund will not lend its portfolio securities to the
extent that greater than 30% of its total assets, at fair market value, would be
committed to loans at that time.
FORWARD CONTRACTS
The Fund may enter into forward foreign currency exchange contracts for the
purchase and sale of a fixed quantity of a foreign currency at a future date
("Forward Contracts"). The Fund may enter into Forward Contracts for hedging
purposes as well as for non- hedging purposes. By entering into transactions in
Forward Contracts, however, the Fund may be required to forego the benefits of
advantageous changes in exchange rates and, in the case of Forward Contracts
entered into for non-hedging purposes, the Fund may sustain losses which will
reduce its gross income. Forward Contracts are traded over-the-counter and not
on organized commodities or securities exchanges. As a result, such contracts
operate in a manner distinct from exchange-traded instruments and their use
involves certain risks beyond those associated with transactions in futures
contracts or options traded on exchanges. The Fund may also enter into a Forward
Contract on one currency in order to hedge against risk of loss arising from
fluctuations in the value of a second currency (referred to as a "cross hedge")
if, in the judgment of a Sub-Adviser, a reasonable degree of correlation can be
expected between movements in the values of the two currencies. The Fund has
established procedures consistent with statements of the Securities and Exchange
Commission and its staff regarding the use of Forward Contracts by registered
investment companies, which requires use of segregated assets or "cover" in
connection with the purchase and sale of such contracts.
OPTIONS
The Fund may write (sell) covered call and put options and purchase call
and put options on domestic or foreign securities indices, securities, and
foreign currencies. The Fund may write such options for the purpose of
increasing its current income and/or to protect its portfolio against declines
in value. When the Fund writes an option and the value of the underlying index,
security, or currency moves adversely to the holder's position, the option will
not be exercised, and the Fund will either close out the option at a profit or
allow it to expire unexercised. The Fund will thereby retain the amount of the
premium, less related transaction costs, which will increase its gross income
and offset part of the reduced value of portfolio securities or the increased
cost of securities to be acquired. Such transactions, however, will constitute
only partial hedges against adverse price fluctuations, since any such
fluctuations will be offset only to the extent of the premium received by the
Fund for the writing of the option, less related transaction costs. In addition,
if the value of an underlying index, security, or currency moves adversely to
the Fund's option position, the option may be exercised, and the Fund will
experience a loss which may only be partially offset by the amount of the
premium received. The Fund may also write combinations of put and call options
on the same security or index, known as "straddles." Such transactions can
generate additional premium income but also present increased risk.
The Fund may also purchase put or call options in order, respectively, to
hedge its investments against a decline in value or to attempt to reduce the
risk of missing a market or industry segment advance. The Fund's possible loss
in either case will be limited to the premium paid for the option, plus related
transaction costs.
FUTURES CONTRACTS
The Fund may enter into futures contracts for the purchase or sale for
future delivery of securities or foreign currencies or contracts based on
indices of securities as such instruments become available for trading. Such
transactions will be entered into for hedging purposes, in order to protect the
Fund's current or intended investments from the effects of changes in interest
or exchange rates, or for non-hedging purposes, to the extent permitted by
applicable law. For example, in the event that an anticipated decrease in the
value of portfolio securities occurs as a result of a general increase in
interest rates or a decline in the dollar value of foreign currencies in which
portfolio securities are denominated, the adverse effects of such changes may be
offset, in whole or part, by gains on futures contracts sold by the Fund.
Conversely, the adverse effects of an increase in the cost of portfolio
securities to be acquired, occurring as a result of a decline in interest rates
or a rise in the dollar value of securities denominated in foreign currencies,
may be offset, in whole or in part, by gains on futures ontracts purchased by
the Fund. The Fund will incur brokerage fees when it purchases and sells futures
contracts, and will be required to maintain margin deposits. In addition,
futures contracts entail risks. Although the Fund believes that use of such
contracts will benefit the Fund, if a Sub-Adviser's investment judgment about
the general direction of interest or exchange rates is incorrect, the Fund's
overall performance may be poorer than if it had not entered into any such
contract and the Fund may realize a loss. Transactions entered into for
non-hedging purposes involve greater risk, including the risk of losses which
are not offset by gains on other portfolio assets. The Fund will not enter into
any futures contract if immediately thereafter the value of securities and other
obligations underlying all such futures contracts would exceed 50% of the value
of its total assets.
OPTIONS ON FUTURES CONTRACTS
The Fund may purchase and write options on futures contracts for the
purpose of protecting against declines in the value of portfolio securities or
against increases in the costs of securities to be acquired, or for non-hedging
purposes, to the extent permitted by applicable law. Purchases of options on
futures contracts may present less risk in hedging the portfolio of the Fund
than the purchase or sale of the underlying futures contracts, since the
potential loss is limited to the amount of the premium paid for the option, plus
related transaction costs. The writing of such options, however, does not
present less risk than the trading of futures contracts, and will constitute
only a partial hedge, up to the amount of the premium received, less related
transaction costs. In addition, if an option is exercised, the Fund may suffer a
loss on the transaction. Transactions entered into for non-hedging purposes
involve greater risk, including the risk of losses which are not offset by gains
on other Fund assets.
PORTFOLIO TURNOVER
The Sub-Advisers will manage the Fund generally without regard to
restrictions on portfolio turnover, except those imposed by provisions of the
federal tax laws regarding short-term trading. In general, the Fund will not
trade for short-term profits, but when circumstances warrant, investments may be
sold without regard to the length of time held. It is expected that the annual
turnover rate for the Fund will not exceed 100%.
Prior to January 1, 1997, the Fund was managed by a different sub-adviser.
Following the assumption of portfolio management duties by Alliance and Brinson,
significant portfolio turnover occurred in connection with a restructuring of
the Fund's portfolio to reflect the management styles of the Sub-Advisers. Such
restructuring may result in increased transaction costs and realization of
capital gains and losses in the Fund's current fiscal year. See "Portfolio
Transactions" and "Tax Matters" below.
--------------------
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of its investable assets in a no-load, open-end
management investment company having substantially the same investment objective
as the Fund. In such event, the Fund's Investment Management Contract would be
terminated. Such investment would be made only if the Trustees of the Trust
believe that the aggregate per share expenses of the Fund and such other
investment company will be less than or approximately equal to the expenses
which the Fund would incur if the Trust were to continue to retain the services
of an investment adviser for the Fund and the assets of the Fund were to
continue to be invested directly in portfolio securities.
MANAGEMENT OF THE TRUST
The business and affairs of the Fund are managed under the direction of the
Board of Trustees of the Trust. The Trustees are Frederick C. Chen, Alan S.
Parsow, Larry M. Robbins and Michael Seely. Additional information about the
Trustees, as well as the Trust's executive officers, may be found in the
Statement of Additional Information under the caption "Management of the Trust
- -- Trustees and Officers."
INVESTMENT MANAGER
Republic, whose address is 452 Fifth Avenue, New York, New York 10018,
serves as investment manager to the Fund pursuant to an Investment Management
Contract with the Trust. For its services, the Manager is paid a fee by the
Fund, computed daily and based on the Fund's average daily net assets, equal on
an annual basis to 0.175% of net assets.
Republic is a wholly-owned subsidiary of Republic New York Corporation, a
registered bank holding company. As of December 31, 1996, Republic was the ____
largest bank holding company in the United States measured by assets and the
____ largest commercial bank measured by shareholder equity. Republic or an
affiliate of Republic serves as investment adviser to the other series of the
Trust. Republic currently provides investment advisory services for individuals,
trusts, estates and institutions.
Republic and its affiliates may have deposit, loan and other commercial
banking relationships with the issuers of obligations purchased for the Fund,
including outstanding loans to such issuers which may be repaid in whole or in
part with the proceeds of obligations so purchased. Republic has informed the
Trust that, in making its investment decisions, it does not obtain or use
material inside information in the possession of any division or department of
Republic or in the possession of any affiliate of Republic.
Based upon the advice of counsel, Republic believes that the performance of
investment advisory and other services for the Fund will not violate the
Glass-Steagall Act or other applicable banking laws or regulations. However,
future statutory or regulatory changes, as well as future judicial or
administrative decisions and interpretations of present and future statutes and
regulations, could prevent Republic from continuing to perform such services for
the Fund. If Republic were prohibited from acting as investment manager to the
Fund, it is expected that the Board of Trustees would recommend to Fund
shareholders approval of a new investment advisory agreement with another
qualified investment adviser selected by the Board or that the Board would
recommend other appropriate action. If Republic were prohibited from acting as a
Shareholder Servicing Agent for the Fund, the Trust would seek alternative means
of providing such services.
SUB-ADVISERS
Each Sub-Adviser continuously manages a portion of the investment portfolio
of the Fund, subject to the supervision and direction of the Manager, pursuant
to a Sub- Advisory Agreement with the Manager. The Manager determines the
allocation of the Fund's assets between the Sub-Advisers. For its services, each
Sub-Adviser is paid a fee by the Fund, computed daily and based on the Fund's
average daily net assets allocated to such Sub-Adviser for management, equal on
an annual basis to 0.325% of net assets up to $50 million, 0.25% of net assets
over $50 million up to $100 million, 0.20% of net assets over $100 million up to
$200 million, and 0.15% of net assets over $200 million. It is the
responsibility of each Sub-Adviser not only to make investment decisions for the
Fund, but also to place purchase and sale orders for the portfolio transactions
of the Fund. See "Portfolio Turnover."
Alliance
Alliance, a Delaware limited partnership with principal offices at 1345
Avenue of the Americas, New York, New York 10105, is a leading international
investment manager supervising client accounts with assets as of September
30,1996 totalling approximately $173.7 billion. Alliance has six offices in the
United States, and subsidiaries of Alliance operate out of offices in Bahrain,
Istanbul, London, Luxembourg, Mumbai(Bombay), Paris, Singapore, Sao Paulo,
Sydney, Tokyo and Toronto. Alliance and its subsidiaries employ over 1,300
persons worldwide.
Alliance's clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies, foundations and
endowment funds. The 51 registered investment companies managed by Alliance
comprising 110 separate investment portfolios currently have over two million
shareholders. There are 20 other non-U.S. investment companies comprising 20
separate investment portfolios also managed by Alliance. As of September 30,
1996, Alliance was retained as an investment manager of employee benefit fund
assets for 33 of the Fortune 100 companies.
Alliance Capital Management Corporation ("ACMC") is the general partner of
Alliance and conducts no other active business. Units representing assignment of
beneficial ownership of limited partnership interests of Alliance are publicly
traded on the New York Stock Exchange. As of September 30, 1996, The Equitable
Life Assurance Society of the United States ("Equitable"), ACMC, Inc.and
Equitable Capital Management Corporation ("ECMC") were the beneficial owners of
approximately 57.4% of the outstanding units of Alliance. ACMC, ECMC, and ACMC,
Inc. are wholly owned subsidiaries of Equitable. Equitable, a New York life
insurance company, had total assets as of June 30, 1996 of over $70.9 billion.
Equitable is a wholly owned subsidiary of The Equitable Companies Incorporated,
a Delaware corporation ("ECI"), whose shares are publicly traded on the New York
Stock Exchange. As of March 1, 1996, AXA, a French insurance holding company,
owned 63.9% of the issued and outstanding shares of the common stock of ECI.
John L. Blundin, a Senior Vice President and Portfolio Manager, and Paul J.
Denoon, a Vice President and Fixed Income Portfolio Manager, have primary
portfolio management responsibility for the Fund's assets allocated to Alliance.
Mr. Blundin has 32 years of investment experience, including 24 years of
experience as a portfolio manager at Alliance. Mr. Denoon has 12 years of
investment experience, including four years of experience as a portfolio manager
at Alliance. Prior to joining Alliance in 1992, Mr. Denoon was Vice President in
the Investment Portfolio Group at Manufacturers Hanover Trust, which managed
mortgage-backed securities and related products for that bank.
Brinson
Brinson, a Delaware corporation, is an investment management firm managing,
as of June 30, 1996, approximately $58 billion, primarily for pension and profit
sharing institutional accounts. Brinson was organized in 1989 when it acquired
the institutional asset management business of The First National Bank of
Chicago and First Chicago Investment Advisors, N.A. Brinson and its predecessor
entities have managed domestic and international investment assets since 1974
and global investment assets since 1982. Brinson has offices in Basel, London,
Melbourne, New York, Paris, Singapore, Sydney and Tokyo, in addition to its
principal office at 209 South LaSalle Street, Chicago, IL 60604-1295. Brinson is
an indirect wholly owned subsidiary of Swiss Bank Corporation ("Swiss Bank").
Swiss Bank, with headquarters in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Brinson also serves as the investment advisor to seven other
investment companies.
Jeffrey J. Diermeier, Managing Partner-U.S. Equities at Brinson, has
primary portfolio management responsibility for the Fund's assets allocated to
Brinson. Mr. Diermeier has 21 years of investment experience at Brinson.
DISTRIBUTOR AND SPONSOR
BISYS, whose address is 3435 Stelzer Road, Columbus, Ohio 43219-3035, acts
as sponsor and distributor to the Fund under a Distribution Contract. The
Distributor may, out of its own resources, make payments to broker-dealers for
their services in distributing Shares. BISYS and its affiliates also serve
as administrator or distributor to other investment companies. Signature is a
wholly owned subsidiary of BISYS Group, Inc.
Pursuant to a Distribution Plan adopted by the Trust (the "Plan"), the
Distributor is reimbursed from the Fund monthly for costs and expenses incurred
by the Distributor in connection with the distribution of Fund Shares and for
the provision of certain shareholder services with respect to Shares. The amount
of this reimbursement may not exceed on an annual basis 0.25% of the average
daily net assets of the Fund represented by Shares outstanding during the period
for which payment is being made. Payments to the Distributor are for various
types of activities, including: (1) payments to broker-dealers who advise
shareholders regarding the purchase, sale or retention of Fund Shares and who
provide shareholders with personal services and account maintenance services
("service fees"), (2) payments to employees of the Distributor, and (3) printing
and advertising expenses. It is currently intended that the aggregate fees paid
to the Distributor pursuant to the Plan and to Shareholder Servicing Agents
pursuant to the Administrative Services Plan will not exceed on an annual basis
0.25% of the Fund's average daily net assets represented by Shares outstanding
during the period for which payment is being made. Salary expense of Signature
personnel who are responsible for marketing shares of the various portfolios of
the Trust may be allocated to such portfolios on the basis of average net
assets; travel expense is allocated to, or divided among, the particular
portfolios for which it is incurred.
Any payment by the Distributor or reimbursement of the Distributor from the
Fund made pursuant to the Plan is contingent upon the Board of Trustees'
approval. The Fund is not liable for distribution and shareholder servicing
expenditures made by the Distributor in any given year in excess of the maximum
amount (0.25% per annum of the Fund's average daily net assets represented by
Shares outstanding) payable under the Plan in that year.
ADMINISTRATIVE SERVICES PLAN
The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") with respect to Fund Shares which provides that the Trust may
obtain the services of an administrator, transfer agent, custodian and one or
more Shareholder Servicing Agents, and may enter into agreements providing for
the payment of fees for such services.
ADMINISTRATOR
Pursuant to an Administration Agreement, BISYS provides the Trust with
general office facilities and supervises the overall administration of the Trust
and the Fund, including, among other responsibilities, the negotiation of
contracts and fees with, and the monitoring of performance and billings of, the
independent contractors and agents of the Trust; the payment of the
non-transaction based fees of the custodian; the preparation and filing of all
documents required for compliance by the Trust with applicable laws and
regulations; and arranging for the maintenance of books and records of the Trust
and the Fund. BISYS provides persons satisfactory to the Board of Trustees of
the Trust to serve as Trustees and officers of the Trust. Such officers, as well
as certain other employees and Trustees of the Trust, may be directors, officers
or employees of Signature or its affiliates. For these services and facilities,
BISYS receives from the Fund fees payable monthly at an annual rate equal to
0.10% of the first $1 billion of the Fund's average daily net assets; 0.08% of
the next $1 billion of such assets; and 0.07% of such assets in excess of $2
billion.
TRANSFER AGENT AND CUSTODIAN
The Trust has entered into a Transfer Agency Agreement with Investors Bank
& Trust Company ("IBT"), pursuant to which IBT acts as transfer agent for the
Fund (the "Transfer Agent"). The Transfer Agent maintains an account for each
shareholder of the Fund (unless such account is maintained by the shareholder's
Shareholder Servicing Agent), performs other transfer agency functions, and acts
as dividend disbursing agent for the Fund. Pursuant to a Custodian Agreement,
IBT also acts as the custodian of the Fund's assets (the "Custodian"). The
Custodian's responsibilities include safeguarding and controlling the Fund's
cash and securities, handling the receipt and delivery of securities,
determining income and collecting interest on the Fund's investments,
maintaining books of original entry for portfolio and fund accounting and other
required books and accounts, and calculating the daily net asset value of shares
of the Fund. Securities held for the Fund may be deposited into the Federal
Reserve-Treasury Department Book Entry System or the Depositary Trust Company.
The Custodian does not determine the investment policies of the Fund or decide
which securities will be purchased or sold for the Fund. Assets of the Fund may,
however, be invested in securities of the Custodian, and the Trust may deal with
the Custodian as principal in securities transactions for the Fund. For its
services, IBT receives such compensation as may from time to time be agreed upon
by it and the Trust.
SHAREHOLDER SERVICING AGENTS
The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") with each Shareholder Servicing Agent, including Republic, pursuant
to which a Shareholder Servicing Agent, as agent for its customers, among other
things: answers customer inquiries regarding account status and history, the
manner in which purchases and redemptions of Shares may be effected and certain
other matters pertaining to the Fund; assists shareholders in designating and
changing dividend options, account designations and addresses; provides
necessary personnel and facilities to establish and maintain shareholder
accounts and records; assists in processing purchase and redemption
transactions; arranges for the wiring of funds; transmits and receives funds in
connection with customer orders to purchase or redeem Shares; verifies and
guarantees shareholder signatures in connection with redemption orders and
transfers and changes in shareholder-designated accounts; furnishes (either
separately or on an integrated basis with other reports sent to a shareholder by
a Shareholder Servicing Agent) monthly and year-end statements and confirmations
of purchases and redemptions; transmits, on behalf of the Trust, proxy
statements, annual reports, updated prospectuses and other communications from
the Trust to the Fund's shareholders; receives, tabulates and transmits to the
Trust proxies executed by shareholders with respect to meetings of shareholders
of the Fund or the Trust; and provides such other related services as the Trust
or a shareholder may request. For these services, each Shareholder Servicing
Agent receives a fee from the Fund, which may be paid periodically, determined
by a formula based upon the number of accounts serviced by such Shareholder
Servicing Agent during the period for which payment is being made, the level of
activity in accounts serviced by such Shareholder Servicing Agent during such
period, and the expenses incurred by such Shareholder Servicing Agent. It is
currently intended that the aggregate fees paid to the Distributor pursuant to
the Plan and to Shareholder Servicing Agents pursuant to the Administrative
Services Plan will not exceed on an annual basis 0.25% of the Fund's average
daily net assets represented by Shares outstanding during the period for which
payment is being made.
The Trust understands that some Shareholder Servicing Agents also may
impose certain conditions on their customers, subject to the terms of this
Prospectus, in addition to or different from those imposed by the Trust, such as
requiring a different minimum initial or subsequent investment, account fees (a
fixed amount per transaction processed), compensating balance requirements (a
minimum dollar amount a customer must maintain in order to obtain the services
offered), or account maintenance fees (a periodic charge based on a percentage
of the assets in the account or of the dividends paid on those assets). Each
Shareholder Servicing Agent has agreed to transmit to its customers who are
holders of Shares appropriate prior written disclosure of any fees that it may
charge them directly and to provide written notice at least 30 days prior to the
imposition of any transaction fees.
The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting securities of open-end investment
companies, such as shares of the Fund. The Trust engages banks as Shareholder
Servicing Agents on behalf of the Fund only to perform administrative and
shareholder servicing functions as described above. The Trust believes that the
Glass-Steagall Act should not preclude a bank from acting as a Shareholder
Servicing Agent. There is presently no controlling precedent regarding the
performance of shareholder servicing activities by banks. Future changes in
either federal statutes or regulations relating to the permissible activities of
banks, as well as future judicial or administrative decisions and
interpretations of present and future statutes and regulations, could prevent a
bank from continuing to perform all or part of its servicing activities. If a
bank were prohibited from so acting, its shareholder customers would be
permitted to remain Fund shareholders, and alternative means for continuing the
servicing of such shareholders would be sought. In such event, changes in the
operation of the Fund might occur and a shareholder serviced by such bank might
no longer be able to avail himself of any automatic investment or other services
then being provided by such bank. The Trustees of the Trust do not expect that
shareholders of the Fund would suffer any adverse financial consequences as a
result of these occurrences.
OTHER EXPENSES
The Fund bears all costs of its operations other than expenses specifically
assumed by the Distributor, Manager or the Sub-Advisers. See "Management of the
Trust -- Expenses and Expense Limits" in the Statement of Additional
Information. Expenses attributable to the Shares shall be allocated to the
Shares only. Class expenses must include payments made pursuant to the Plan and
shareholder servicing fees paid pursuant to the Administrative Services Plan. In
the event a particular expense is not reasonably allocable by class or to a
particular class, it shall be treated as a Fund expense or a Trust expense.
Trust expenses directly attributable to the Fund are charged to the Fund; other
expenses are allocated proportionately among all the portfolios in the Trust in
relation to the net assets of each portfolio. For the fiscal year ended October
31, 1996 the Fund's operating expenses equaled on an annual basis _____& of its
average daily net assets.
PORTFOLIO TRANSACTIONS
The Fund may dispose of a portfolio security whenever a Sub-Adviser
believes it is appropriate to do so without regard to the length of time the
particular asset may have been held. A high turnover rate involves greater
expenses to the Fund. The Fund engages in portfolio trading if it believes a
transaction net of costs (including custodian chargres) will help in achieving
its investment objective.
The primary consideration in placing portfolio security transactions with
broker-dealers for execution is to obtain, and maintain the availability of,
execution at the most favorable prices and in the most effective manner
possible. Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and such other policies as the Trustees of the Trust
may determine, and subject to seeking the most favorable price and execution
available, a Sub-Adviser may consider sales of shares of the Fund or other funds
managed by the Sub-Adviser as a factor in the selection of broker-dealers to
execute portfolio transactions for the Fund. The Fund may pay brokerage
commissions on portfolio security transactions to affiliated broker-dealers. For
a further discussion of portfolio transactions, see "Investment Objective,
Policies Risks, and Restrictions -- Fund Transactions" in the Statement of
Additional Information.
CLASSES OF SHARES
In addition to the Shares, the Trust currently offers one other class of
shares of the Fund, the Class Y shares, pursuant to a separate prospectus. Other
classes of shares may have different class expenses, which may affect
performance. Investors may obtain information concerning other classes of shares
of the Fund directly from their Shareholder Servicing Agent or securities
broker, or by calling 1-888-525-5757.
The Shares have exclusive voting rights with respect to the Plan and the
Shareholder Servicing Agent fees paid pursuant to the Administrative Services
Plan.
DETERMINATION OF NET ASSET VALUE
The net asset value of each of the Shares is determined on each day on
which the New York Stock Exchange is open for trading ("Fund Business Day").
This determination is made once during each Fund Business Day as of 4:00 p.m.,
New York time, by dividing the value of the Fund's net assets (i.e., the value
of its assets less its liabilities, including expenses payable or accrued) by
the number of Shares outstanding at the time the determination is made. Values
of assets in the Fund's portfolio are determined on the basis of their market or
other fair value, as described in the Statement of Additional Information.
PURCHASE OF SHARES
Shares may be purchased without a sales load at their net asset value next
determined after an order is transmitted to and accepted by the Distributor or
is received by a Shareholder Servicing Agent or a securities broker if it is
transmitted to and accepted by the Distributor. Purchases are therefore effected
on the same day the purchase order is received by the Distributor provided such
order is received prior to 4:00 p.m., New York time, on any Fund Business Day.
The Trust intends the Fund to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets. Accordingly,
in order to make investments which will immediately generate income, the Trust
must have federal funds available for the Fund (i.e., monies credited by a
Federal Reserve Bank to the account of the Fund with the Fund's custodian bank).
Each Shareholder Servicing Agent and securities broker has agreed to provide
federal funds for each purchase at the time it transmits the order for such
purchase to the Distributor, and the Distributor has agreed to provide the Fund
with federal funds for each purchase, including those made directly through the
Distributor. Therefore, each shareholder and prospective investor should be
aware that if he does not have sufficient funds on deposit with, or otherwise
immediately available to, the Distributor, his Shareholder Servicing Agent or
his securities broker, there may be a delay in transmitting and effecting the
purchase order since his check, bank draft, money order or similar negotiable
instrument will have to be converted into federal funds. If such a delay is
necessary, it is expected that in most cases it would not be longer than two
business days.
While there is no sales load on purchases of Shares, the Distributor may
receive fees from the Fund. See "Management of the Trust -- Distributor and
Sponsor." Other funds which have investment objectives similar to those of the
Fund but which do not pay some or all of such fees from their assets may offer a
higher yield.
All purchase payments are invested in full and fractional Shares. The Trust
reserves the right to cease offering Shares for sale at any time or to reject
any order for the purchase of Shares.
An investor may purchase Shares through the Distributor directly or by
authorizing his Shareholder Servicing Agent or his securities broker to purchase
such Shares on his behalf through the Distributor.
Exchange Privilege. By contacting the Transfer Agent or his Shareholder
Servicing Agent or his securities broker, a shareholder may exchange some or all
of his Shares for shares of an identical class of one or more of the following
investment companies at net asset value without a sales charge: Republic U.S.
Government Money Market Fund, Republic New York Tax Free Money Market Fund,
Republic New York Tax Free Bond Fund, Republic Bond Fund, Republic Overseas
Equity Fund, Republic Opportunity Fund, and such other Republic Funds or other
registered investment companies for which Republic serves as investment adviser
as Republic may determine. An exchange may result in a change in the number of
Shares held, but not in the value of such Shares immediately after the exchange.
Each exchange involves the redemption of the Shares to be exchanged and the
purchase of the shares of the other Republic Fund which may produce a gain or
loss for tax purposes.
The exchange privilege (or any aspect of it) may be changed or discontinued
upon 60 days' written notice to shareholders and is available only to
shareholders in states in which such exchanges legally may be made. A
shareholder considering an exchange should obtain and read the prospectus of the
other Republic Fund and consider the differences in investment objectives and
policies before making any exchange.
DIRECTLY THROUGH THE DISTRIBUTOR
For each shareholder who purchases Shares directly through the Distributor,
the Trust, as the shareholder's agent, establishes an open account to which all
Shares purchased are credited together with any dividends and capital gains
distributions which are paid in additional Shares. See "Dividends and
Distributions." The minimum initial investment is $1,000, except the minimum
initial investment for an Individual Retirement Account is $250. The minimum
subsequent investment is $100. Initial and subsequent purchases may be made by
writing a check (in U.S. dollars) payable to the Republic Funds -- Equity Fund
and mailing it to:
Republic Funds
c/o Investors Bank & Trust Company
P.O. Box 1537 MFD23
Boston, Massachusetts 02205-1537
In the case of an initial purchase, the check must be accompanied by a
completed Purchase Application.
In the case of subsequent purchases, a shareholder may transmit purchase
payments by wire directly to the Fund's custodian bank at the following address:
Investors Bank & Trust Company
Boston, Massachusetts
Attn: Transfer Agent
ABA # 011001438
Acct. # 5999-99451
For further credit to the Republic Funds (Equity Fund Retail Class,
account name, account #)
The wire order must specify the Fund, the account name, number,
confirmation number, address, amount to be wired, name of the wiring bank and
name and telephone number of the person to be contacted in connection with the
order.
Automatic Investment Plan. The Trust offers a plan for regularly investing
specified dollar amounts ($25.00 minimum in monthly, quarterly, semi-annual or
annual intervals) in the Fund. If an Automatic Investment Plan is selected,
subsequent investments will be automatic and will continue until such time as
the Trust and the investor's bank are notified in writing to discontinue further
investments. Due to the varying procedures to prepare, process and forward the
bank withdrawal information to the Trust, there may be a delay between the time
of bank withdrawal and the time the money reaches the Fund. The investment in
the Fund will be made at the net asset value per share determined on the Fund
Business Day that both the check and the bank withdrawal data are received in
required form by the Transfer Agent. Further information about the plan may be
obtained from IBT at the telephone number listed on the back cover.
For further information on how to purchase Shares from the Distributor, an
investor should contact the Distributor directly (see back cover for address and
phone number).
THROUGH A SHAREHOLDER SERVICING AGENT OR A SECURITIES BROKER
Shares are being offered to the public, to customers of a Shareholder
Servicing Agent and to customers of a securities broker that has entered into a
dealer agreement with the Distributor. Shareholder Servicing Agents and
securities brokers may offer services to their customers, including specialized
procedures for the purchase and redemption of Shares, such as pre-authorized or
automatic purchase and redemption programs. Each Shareholder Servicing Agent and
securities broker may establish its own terms, conditions and charges, including
limitations on the amounts of transactions, with respect to such services.
Charges for these services may include fixed annual fees, account maintenance
fees and minimum account balance requirements. The effect of any such fees will
be to reduce the net return on the investment of customers of that Shareholder
Servicing Agent or securities broker. Conversely, certain Shareholder Servicing
Agents may (although they are not required by the Trust to do so) credit to the
accounts of their customers from whom they are already receiving other fees
amounts not exceeding such other fees or the fees received by the Shareholder
Servicing Agent from the Fund, which will have the effect of increasing the net
return on the investment of such customers of those Shareholder Servicing
Agents.
Shareholder Servicing Agents and securities brokers may transmit purchase
payments on behalf of their customers by wire directly to the Fund's custodian
bank by following the procedures described above.
For further information on how to direct a securities broker or a
Shareholder Servicing Agent to purchase Shares, an investor should contact his
securities broker or his Shareholder Servicing Agent (see back cover for address
and phone number).
RETIREMENT PLANS
Shares are offered in connection with tax-deferred retirement plans.
Application forms and further information about these plans, including
applicable fees, are available from the Trust or the Sponsor upon request.
Recently enacted federal tax legislation has substantially affected the tax
treatment of contributions to certain retirement plans. Before investing in the
Fund through one or more of these plans, an investor should consult his or her
tax adviser.
INDIVIDUAL RETIREMENT ACCOUNTS
Shares may be used as a funding medium for an IRA. An Internal Revenue
Service-approved IRA plan may be available from an investor's Shareholder
Servicing Agent. In any event, such a plan is available from the Sponsor naming
IBT, as custodian. The minimum initial investment for an IRA is $250; the
minimum subsequent investment is $100. IRAs are available to individuals who
receive compensation or earned income and their spouses whether or not they are
active participants in a tax-qualified or Government-approved retirement plan.
An IRA contribution by an individual who participates, or whose spouse
participates, in a tax-qualified or Government-approved retirement plan may not
be deductible depending upon the individual's income. Individuals also may
establish an IRA to receive a "rollover" contribution of distributions from
another IRA or a qualified plan. Tax advice should be obtained before planning a
rollover.
DEFINED CONTRIBUTION PLANS
Investors who are self-employed may purchase Shares for retirement plans
for self-employed persons which are known as Defined Contribution Plans
(formerly Keogh or H.R. 10 Plans). Republic offers a prototype plan for Money
Purchase and Profit Sharing Plans.
SECTION 457 PLAN, 401(K) PLAN, 403(B) PLAN
The Fund may be used as a vehicle for certain deferred compensation plans
provided for by Section 457 of the Internal Revenue Code of 1986, as amended
(the "Code"), with respect to service for state governments, local governments,
rural electric cooperatives and political subdivisions, agencies,
instrumentalities and certain affiliates of such entities. The Fund may also be
used as a vehicle for both 401(k) plans and 403 (b) plans.
REDEMPTION OF SHARES
A shareholder may redeem all or any portion of the Shares in his account at
any time at the net asset value next determined after a redemption order in
proper form is furnished by the shareholder to the Transfer Agent, with respect
to Shares purchased directly through the Distributor, or to his securities
broker or his Shareholder Servicing Agent, and is transmitted to and received by
the Transfer Agent. Redemptions are effected on the same day the redemption
order is received by the Transfer Agent provided such order is received prior to
4:00 p.m., New York time, on any Fund Business Day. Shares redeemed earn
dividends up to and including the Fund Business Day prior to the day the
redemption is effected.
The proceeds of a redemption are normally paid from the Fund in federal
funds on the next Fund Business Day following the date on which the redemption
is effected, but in any event within seven days. The right of any shareholder to
receive payment with respect to any redemption may be suspended or the payment
of the redemption proceeds postponed during any period in which the New York
Stock Exchange is closed (other than weekends or holidays) or trading on such
Exchange is restricted or, to the extent otherwise permitted by the 1940 Act, if
an emergency exists. To be in a position to eliminate excessive expenses, the
Trust reserves the right to redeem upon not less than 30 days' notice all Shares
in an account which has a value below $50. However, a shareholder will be
allowed to make additional investments prior to the date fixed for redemption to
avoid liquidation of the account.
Unless Shares have been purchased directly from the Distributor, a
shareholder may redeem Shares only by authorizing his securities broker or his
Shareholder Servicing Agent to redeem such Shares on his behalf (since the
account and records of such a shareholder are established and maintained by his
securities broker or his Shareholder Servicing Agent). For further information
as to how to direct a securities broker or a Shareholder Servicing Agent to
redeem Shares, a shareholder should contact his securities broker or his
Shareholder Servicing Agent (see back cover for address and phone number).
REDEMPTION OF SHARES PURCHASED DIRECTLY THROUGH THE DISTRIBUTOR
Redemption by Letter. Redemptions may be made by letter to the Transfer
Agent specifying the dollar amount or number of Shares to be redeemed, account
number and the Fund. The letter must be signed in exactly the same way the
account is registered (if there is more than one owner of the Shares all must
sign). In connection with a written redemption request, all signatures of all
registered owners or authorized parties must be guaranteed by an Eligible
Guarantor Institution, which includes a domestic bank, broker, dealer, credit
union, national securities exchange, registered securities association, clearing
agency or savings association. The Fund's transfer agent, however, may reject
redemption instructions if the guarantor is neither a member or not a
participant in a signature guarantee program (currently known as "STAMP",
"SEMP", or "NYSE MPS"). Corporations, partnerships, trusts or other legal
entities may be required to submit additional documentation.
An investor may redeem Shares in any amount by written request mailed to the
Transfer Agent at the following address:
The Republic Funds
c/o Investors Bank & Trust Company
P.O. Box 1537 MFD23
Boston, Massachusetts 02205-1537
Checks for redemption proceeds normally will be mailed within seven days,
but will not be mailed until all checks in payment for the purchase of the
Shares to be redeemed have been cleared, which may take up to 15 days or more.
Unless other instructions are given in proper form, a check for the proceeds of
a redemption will be sent to the shareholder's address of record.
Redemption by Wire or Telephone. An investor may redeem Shares by wire or
by telephone if he has checked the appropriate box on the Purchase Application
or has filed a Telephone Authorization Form with the Trust. These redemptions
may be paid from the Fund by wire or by check. The Trust reserves the right to
refuse telephone and wire redemptions and may limit the amount involved or the
number of telephone redemptions. The telephone redemption procedure may be
modified or discontinued at any time by the Trust. Instructions for wire
redemptions are set forth in the Purchase Application. The Trust employs
reasonable procedures to confirm that instructions communicated by telephone are
genuine. For instance, the following information must be verified by the
shareholder or securities broker at the time a request for a telephone
redemption is effected: (1) shareholder's account number; (2) shareholder's
social security number; and (3) name and account number of shareholder's
designated securities dealer or bank. If the Trust fails to follow these or
other established procedures, it may be liable for any losses due to
unauthorized or fraudulent instructions.
DIVIDENDS AND DISTRIBUTIONS
Dividends substantially equal to all of the Fund's net investment income
earned are distributed quarterly to Fund shareholders of record. Generally, the
Fund's net investment income consists of the interest and dividend income it
earns, less expenses. In computing interest income, premiums are not amortized,
nor are discounts accrued on long-term debt securities in the Fund's portfolio,
except as required for federal income tax purposes.
The Fund's net realized short-term and long-term capital gains, if any, are
distributed to shareholders annually. Additional distributions are also made to
the Fund's shareholders to the extent necessary to avoid application of the 4%
non-deductible federal excise tax on certain undistributed income and net
capital gains of mutual funds.
Unless a shareholder elects to receive dividends in cash (subject to the
policies of the shareholder's Shareholder Servicing Agent or securities broker),
dividends are distributed in the form of additional Shares (purchased at their
net asset value without a sales charge).
TAX MATTERS
This discussion is intended for general information only. An investor
should consult with his own tax advisor as to the tax consequences of an
investment in the Fund, including the status of dividends and distributions from
the Fund under applicable state or local law.
Each year, the Trust intends to qualify the Fund and elect that the Fund be
treated as a separate "regulated investment company" under Subchapter M of the
Code. To so qualify, the Fund must meet certain income, distribution and
diversification requirements. Provided such requirements are met and all
investment company taxable income and net realized capital gains of the Fund are
distributed to shareholders in accordance with the timing requirements imposed
by the Code, generally no federal income or excise taxes will be paid by the
Fund on amounts so distributed.
Dividends and capital gains distributions, if any, paid to shareholders are
treated in the same manner for federal income tax purposes whether received in
cash or reinvested in additional shares of the Fund. Shareholders must treat
dividends, but not long-term capital gain distributions, as ordinary income.
Dividends paid to corporate shareholders, to the extent such dividends are
attributable to dividends received from U.S. corporations, may qualify for the
dividends-received deduction. However, the alternative minimum tax applicable to
corporations may reduce the value of the dividends-received deduction.
Distributions designated by the Fund as capital gain dividends are taxable to
shareholders as long-term capital gain regardless of the length of time the
shares of the Fund have been held by the shareholders and such distributions are
not eligible for the dividends-received deduction. Certain dividends declared in
October, November, or December of a calendar year to shareholders of record on a
date in such a month are taxable to shareholders (who otherwise are subject to
tax on dividends) as though received on December 31 of that year if paid to
shareholders during January of the following calendar year.
Tax Withholding. Income received by the Fund from sources within foreign
countries may be subject to withholding and other income or similar taxes
imposed by such countries.
The Fund generally will be required to withhold federal income tax at a
rate of 31% ("backup withholding") from dividends paid, capital gain
distributions, and redemption proceeds to shareholders if (1) the shareholder
fails to furnish the Fund with the shareholder's correct taxpayer identification
number ("TIN") or social security number and to make such certifications as the
Fund may require, (2) the Internal Revenue Service notifies the shareholder or
the Fund that the shareholder has failed to report properly certain interest and
dividend income to the Internal Revenue Service and to respond to notices to
that effect, or (3) when required to do so, the shareholder fails to certify
that he is not subject to backup withholding. Backup withholding is not an
additional tax and any amounts withheld may be credited against the
shareholder's federal income tax liability. Dividends from the Fund attributable
to the Fund's net investment income and short-term capital gains generally will
be subject to U.S. withholding tax when paid to shareholders treated under U.S.
tax law as nonresident alien individuals or foreign corporations, estates,
partnerships or trusts.
The Trust is organized as a Massachusetts business trust and, under current
law, is not liable for any income or franchise tax in the Commonwealth of
Massachusetts as long as each series of the Trust (including the Fund) qualifies
as a "regulated investment company" under the Code.
For additional information relating to taxes, see "Taxation" in the
Statement of Additional Information.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (par value $0.001
per share) and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
Trust. The shares of each series participate equally in the earnings, dividends
and assets of the particular series. Currently, the Trust has six series of
shares, each of which constitutes a separately managed fund. The Trust reserves
the right to create additional series of shares. The Trust may authorize the
creation of multiple classes of shares of separate series of the Trust.
Currently, the Fund is divided into two classes of shares.
Each share of each class of the Fund represents an equal proportionate
interest in the Fund with each other share of that class. Shares have no
preference, pre-emptive, conversion or similar rights. Shares when issued are
fully paid and non-assessable, except as set forth below. Shareholders are
entitled to one vote for each share held on matters on which they are entitled
to vote. Each Shareholder Servicing Agent has agreed to transmit all proxies and
voting materials from the Trust to their customers who are beneficial owners of
the Fund and such Shareholder Servicing Agents have agreed to vote as instructed
by such customers. The Trust is not required and has no current intention to
hold annual meetings of shareholders, although the Trust will hold special
meetings of Fund shareholders when in the judgment of the Trustees of the Trust
it is necessary or desirable to submit matters for a shareholder vote.
Shareholders of each series generally vote separately, for example, to approve
investment advisory agreements or changes in fundamental investment policies or
restrictions, but shareholders of all series may vote together to the extent
required under the 1940 Act, such as in the election or selection of Trustees,
principal underwriters and accountants for the Trust. Shares of each class of a
series represent an equal pro rata interest in such series and, generally, have
identical voting, dividend, liquidation, and other rights, preferences, powers,
terms and conditions, except that: (a) each class shall have a different
designation; (b) each class of shares shall bear any class expenses; and (c)
each class shall have exclusive voting rights on any matter submitted to
shareholders that relate solely to its distribution arrangement, and each class
shall have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of any other class.
Shareholders of the Fund have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified number of shareholders) the right to communicate with other
shareholders of the Trust in connection with requesting a meeting of
shareholders of the Trust for the purpose of removing one or more Trustees.
Shareholders of the Trust have the right to remove one or more Trustees without
a meeting by a declaration in writing subscribed to by a specified number of
shareholders, however, the Trustees will call such a meeting upon the written
request of shareholders holding at least 10% of the Trust's outstanding shares.
Upon liquidation or dissolution of the Fund, shareholders of the Fund would be
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Fund or the Trust, a Shareholder Servicing Agent may vote
any shares as to which such Shareholder Servicing Agent is the agent of record
and which are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
PERFORMANCE INFORMATION
Yield and total return data for the Fund may from time to time be included
in advertisements about the Trust. "Total return" is expressed in terms of the
average annual compounded rate of return of a hypothetical investment in the
Fund over periods of 1, 5 and 10 years. 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. "Yield"
refers to the net income generated by an investment in the Fund over a stated
30-day period. This income is then annualized -- i.e., the amount of income
generated by the investment during the 30-day period is assumed to be generated
each 30-day period for twelve periods and is shown as a percentage of the
investment. The income earned on the investment is also assumed to be reinvested
at the end of the sixth 30-day period.
Since these total return and yield quotations are based on historical
earnings and since the Fund's total return and yield fluctuate from day to day,
these quotations should not be considered as an indication or representation of
the Fund's total return or yield in the future. Any performance information
should be considered in light of the Fund's investment objective and policies,
characteristics and quality of the Fund's portfolio and the market conditions
during the time period indicated, and should not be considered to be
representative of what may be achieved in the future. From time to time the
Trust may also use comparative performance information in such advertisements,
including the performance of unmanaged indices, the performance of the Consumer
Price Index (as a measure for inflation), and data from Lipper Analytical
Services, Inc. and other industry publications.
A Shareholder Servicing Agent or a securities broker may charge its
customers direct fees in connection with an investment in the Fund, which will
have the effect of reducing the net return on the investment of customers of
that Shareholder Servicing Agent or that securities broker. Such customers may
be able to obtain through their Shareholder Servicing Agent or securities broker
quotations reflecting such decreased return.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to the Trust, 3435 Stelzer
Road, Columbus, Ohio 43219-3035,
GENERAL AND ACCOUNT INFORMATION (888) 525-5757 (TOLL FREE)
--------------------
The Trust's Statement of Additional Information, dated February __, 1997,
with respect to the Fund contains more detailed information about the Fund,
including information related to (i) the Fund's investment restrictions, (ii)
the Trustees and officers of the Trust and the Manager, Sub-Adviser and Sponsor
of the Fund, (iii) portfolio transactions, (iv) the Fund's shares, including
rights and liabilities of shareholders, and (v) additional yield information,
including the method used to calculate the total return and yield of the Fund.
<PAGE>
REPUBLIC
EQUITY
FUND
INVESTMENT MANAGER
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
SUB-ADVISERS
Alliance Capital Management L.P.
1345 Avenue of the Americas, 38th Floor
New York, NY 10105
Brinson Partners, Inc.
209 South LaSalle Street
Chicago, IL 60604-1295
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3035
(614) 470-8000
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
SHAREHOLDER SERVICING AGENTS:
Republic National Bank of New York
Republic Bank For Savings
452 Fifth Avenue
New York, NY 10018
(800) 782-8183
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
REPUBLIC EQUITY FUND
PROSPECTUS
February __, 1997
<PAGE>
REPUBLIC EQUITY FUND
3435 Stelzer Road
Columbus, Ohio 43219-3035
(888) 525-5757 (Toll Free)
Republic National Bank of New York - Investment Manager
("Republic" or the "Manager")
Alliance Capital Management L.P. -
Investment Sub-Adviser
("Alliance" or a "Sub-Adviser")
Brinson Partners, Inc.
Investment Sub-Adviser
("Brinson" or a "Sub-Adviser")
BISYS Fund Services
Administrator, Distributor and Sponsor
("BISYS" or the "Distributor" or the "Sponsor")
STATEMENT OF ADDITIONAL INFORMATION
Republic Equity Fund (the "Fund") is a separate series (portfolio) of the
Republic Funds (the "Trust"), an open-end, management investment company which
currently consists of seven portfolios, each of which has different and distinct
investment objectives and policies. The Fund is described in this Statement of
Additional Information. Shares of the Fund are divided into two separate
classes, the Retail Class and the Adviser Class.
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation. There can be no assurance that the investment
objective of the Fund will be achieved.
Shares of the Fund are continuously offered for sale by the Distributor
at net asset value with no sales charge (i) directly to the public, (ii) to
customers of a financial institution, such as a federal or state-chartered bank,
trust company or savings and loan association that has entered into a
shareholder servicing agreement with the Trust (collectively, "Shareholder
Servicing Agents"), and (iii) to customers of a securities broker that has
entered into a dealer agreement with the Distributor.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS ONLY
AUTHORIZED FOR DISTRIBUTION WHEN PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE
RETAIL CLASS OR THE ADVISER CLASS OF THE FUND, AS APPROPRIATE, EACH DATED
February __, 1997 (each a "Prospectus"). This Statement of Additional
Information contains additional and more detailed information than that set
forth in the Prospectus and should be read in conjunction with the Prospectus.
The Prospectus and Statement of Additional Information may be obtained without
charge by writing or calling the Trust at the address and telephone number
printed above.
Dated: February _, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
Investment Objective, Policies, Risks and Restrictions
Convertible Securities ......................................
Portfolio Securities Loans...................................
Rule 144A Securities.........................................
Repurchase Agreements........................................
Options on Securities........................................
Options on Securities Indices................................
Futures Contracts............................................
Options on Futures Contracts.................................
Forward Contracts............................................
Portfolio Transactions.......................................
Risk Factors.................................................
Investment Restrictions .....................................
Percentage and Rating Restrictions ..........................
Performance Information ..............................................
Management of the Trust ..............................................
Trustees and Officers .......................................
Investment Manager ..........................................
Investment Sub-Adviser ......................................
Distributor, Administrator and Sponsor ......................
Shareholder Servicing Agents, Transfer Agent and
Custodian ..............................................
Expenses and Expense Limits .................................
Valuation of Securities, Redemption in Kind ..........................
Taxation .............................................................
Federal Income Tax ..........................................
Options .....................................................
Investment in Passive Foreign Investment Companies...........
Effect of Foreign Currencies ................................
Disposition of Shares .......................................
Other Information ....................................................
Capitalization ..............................................
Voting Rights ...............................................
Independent Auditors ........................................
Counsel .....................................................
Registration Statement ......................................
Financial Statements .................................................
Appendix .............................................................A-1
References in this Statement of Additional Information to the "Prospectus"
are to the Prospectus, dated February __, 1997, of the Trust by which shares of
the Fund are offered. Unless the context otherwise requires, terms defined in
the Prospectus have the same meaning in this Statement of Additional Information
as in the Prospectus.
<PAGE>
INVESTMENT OBJECTIVE, POLICIES, RISKS AND RESTRICTIONS
The following information supplements the discussion of the investment
objective and policies of the Fund discussed under the caption "Investment
Objective, Risks and Policies" and the discussion of risks described under
"Additional Risk Factors and Policies" in the Prospectus.
The investment objective of the Fund is long-term growth of capital and
income without excessive fluctuations in market value. The Fund will normally
invest in equity securities of seasoned companies in sound financial condition
with large or intermediate capitalization which are expected to show
above-average price appreciation.
CONVERTIBLE SECURITIES
The Fund may buy securities that are convertible into common stock. The
following is a brief description of the various types of convertible securities
in which the Fund may invest.
CONVERTIBLE BONDS are issued with lower coupons than non-convertible bonds
of the same quality and maturity, but they give holders the option to exchange
their bonds for a specific number of shares of the company's common stock at a
predetermined price. This structure allows the convertible bond holder to
participate in share price movements in the company's common stock. The actual
return on a convertible bond may exceed its stated yield if the company's common
stock appreciates in value, and the option to convert to common shares becomes
more valuable.
CONVERTIBLE PREFERRED STOCKS are non-voting equity securities that pay a
fixed dividend. These securities have a convertible feature similar to
convertible bonds; however, they do not have a maturity date. Due to their
fixed-income features, convertible issues typically are more sensitive to
interest rate changes than the underlying common stock. In the event of
liquidation, bondholders would have claims on company assets senior to those of
stockholders; preferred stockholders would have claims senior to those of common
stockholders.
WARRANTS entitle the holder to buy the issuer's stock at a specific price
for a specific period of time. The price of a warrant tends to be more volatile
than, and does not always track, the price of its underlying stock. Warrants are
issued with expiration dates. Once a warrant expires, it has no value in the
market.
RIGHTS represent a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it is
offered to the public.
PORTFOLIO SECURITIES LOANS
The Fund may lend portfolio securities to registered broker-dealers. These
loans may not exceed 30% of the Fund's total assets. The Fund's loans of
securities will be collateralized by cash or marketable securities issued or
guaranteed by the U.S. Government or its agencies ("U.S. Government Securities")
or other permissible means. The cash or instruments collateralizing the Fund's
loans of securities will be maintained at all times in an amount at least equal
to the current market value of the loaned securities. From time to time, the
Fund may allow a part of the interest received with respect to the investment of
collateral received for securities loaned to the borrower and/or a third party
that is not affiliated with the Fund and is acting as a "placing broker." No fee
will be paid to affiliated persons of the Fund.
By lending portfolio securities, the Fund can increase its income by
continuing to receive interest on the loaned securities as well as by either
investing the cash collateral in permissible investments, such as U.S.
Government Securities or obtaining yield in the form of interest paid by the
borrower when such U.S. Government Securities are used as collateral. The Fund
will comply with the following conditions whenever it loans securities: (i) the
Fund must receive at least 100% collateral from the borrower; (ii) the borrower
must increase the collateral whenever the market value of the securities loaned
rises above the level of the collateral; (iii) the Fund must be able to
terminate the loan at any time; (iv) the Fund must receive reasonable
compensation with respect to the loan, as well as any dividends, interest or
other distributions on the loaned securities; (iv) the Fund may pay only
reasonable fees in connection with the loaned securities and (vi) voting rights
on the loaned securities may pass to the borrower except that, if a material
event adversely affecting the investment in the loaned securities occurs, the
Fund's Board of Trustees must terminate the loan and regain the right to vote
the securities.
RULE 144A SECURITIES
The Fund may invest in securities qualifying for resale to "qualified
institutional buyers" under Securities and Exchange Commission ("SEC") Rule 144A
that are determined by the Board, or by a Sub-Adviser pursuant to the Board's
delegation, to be liquid securities. The Board will review quarterly the
liquidity of the investments the Fund makes in such securities.
REPURCHASE AGREEMENTS
As described in the Prospectus, the Fund may enter into repurchase
agreements with sellers who are member firms (or a subsidiary thereof) of the
New York Stock Exchange or members of the Federal Reserve System, recognized
domestic or foreign securities dealers or institutions which a Sub-Adviser has
determined to be of comparable creditworthiness. The securities that the Fund
purchases and holds have values that are equal to or greater than the repurchase
price agreed to be paid by the seller. The repurchase price may be higher than
the purchase price, the difference being income to the Fund, or the purchase and
repurchase prices may be the same, with interest at a standard rate due to the
Fund together with the repurchase price on repurchase.
The repurchase agreement provides that in the event the seller fails to pay
the price agreed upon on the agreed upon delivery date or upon demand, as the
case may be, the Fund will have the right to liquidate the securities. If at the
time the Fund is contractually entitled to exercise its right to liquidate the
securities, the seller is subject to a proceeding under the bankruptcy laws or
its assets are otherwise subject to a stay order, the Fund's exercise of its
right to liquidate the securities may be delayed and result in certain losses
and costs to the Fund. The Fund has adopted and follows procedures which are
intended to minimize the risks of repurchase agreements. For example, the Fund
only enters into repurchase agreements after a Sub-Adviser has determined that
the seller is creditworthy, and the Sub- Adviser monitor that seller's
creditworthiness on an ongoing basis. Moreover, under such agreements, the value
of the securities (which are marked to market every business day) is required to
be greater than the repurchase price, and the Fund has the right to make margin
calls at any time if the value of the securities falls below the agreed upon
margin.
OPTIONS ON SECURITIES
The Fund may write (sell) covered call and put options on securities and
purchase call and put options. The Fund may write options for the purpose of
attempting to increase its return and for hedging purposes. In particular, if
the Fund writes an option which expires unexercised or is closed out by the Fund
at a profit, the Fund retains the premium paid for the option less related
transaction costs, which increases its gross income and offsets in part the
reduced value of the portfolio security in connection with which the option is
written, or the increased cost of portfolio securities to be acquired. In
contrast, however, if the price of the security underlying the option moves
adversely to the Fund's position, the option may be exercised and the Fund will
then be required to purchase or sell the security at a disadvantageous price,
which might only partially be offset by the amount of the premium.
The Fund may write options in connection with buy-and-write transactions;
that is, the Fund may purchase a security and then write a call option against
that security. The exercise price of the call option the Fund determines to
write depends upon the expected price movement of the underlying security. The
exercise price of a call option may be below ("in-the-money"), equal to
("at-the-money") or above ("out-of-the-money") the current value of the
underlying security at the time the option is written.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. Put options may be used by the
Fund in the same market environments in which call options are used in
equivalent buy-and-write transactions.
The Fund may also write combinations of put and call options on the same
security, a practice known as a "straddle." By writing a straddle, the Fund
undertakes a simultaneous obligation to sell or purchase the same security in
the event that one of the options is exercised. If the price of the security
subsequently rises sufficiently above the exercise price to cover the amount of
the premium and transaction costs, the call will likely be exercised and the
Fund will be required to sell the underlying security at a below market price.
This loss may be offset, however, in whole or in part, by the premiums received
on the writing of the two options. Conversely, if the price of the security
declines by a sufficient amount, the put will likely be exercised. The writing
of straddles will likely be effective, therefore, only where the price of a
security remains stable and neither the call nor the put is exercised. In an
instance where one of the options is exercised, the loss on the purchase or sale
of the underlying security may exceed the amount of the premiums received.
By writing a call option on a portfolio security, the Fund limits its
opportunity to profit from any increase in the market value of the underlying
security above the exercise price of the option. By writing a put option, the
Fund assumes the risk that it may be required to purchase the underlying
security for an exercise price above its then current market value, resulting in
a loss unless the security subsequently appreciates in value. The writing of
options will not be undertaken by the Fund solely for hedging purposes, and may
involve certain risks which are not present in the case of hedging transactions.
Moreover, even where options are written for hedging purposes, such transactions
will constitute only a partial hedge against declines in the value of portfolio
securities or against increases in the value of securities to be acquired, up to
the amount of the premium.
The Fund may also purchase put and call options. Put options are purchased
to hedge against a decline in the value of securities held in the Fund's
portfolio. If such a decline occurs, the put options will permit the Fund to
sell the securities underlying such options at the exercise price, or to close
out the options at a profit. The Fund will purchase call options to hedge
against an increase in the price of securities that the Fund anticipates
purchasing in the future. If such an increase occurs, the call option will
permit the Fund to purchase the securities underlying such option at the
exercise price or to close out the option at a profit. The premium paid for a
call or put option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise of the option, and, unless the price of the
underlying security rises or declines sufficiently, the option may expire
worthless to the Fund. In addition, in the event that the price of the security
in connection with which an option was purchased moves in a direction favorable
to the Fund, the benefits realized by the Fund as a result of such favorable
movement will be reduced by the amount of the premium paid for the option and
related transaction costs.
The staff of the SEC has taken the position that purchased over-the-counter
options and certain assets used to cover written over-the-counter options are
illiquid and, therefore, together with other illiquid securities, cannot exceed
a certain percentage of the Fund's assets (the "SEC illiquidity ceiling"). The
Sub-Advisers intend to limit the Fund's writing of over-the-counter options in
accordance with the following procedure. Except as provided below, the Fund
intends to write over-the-counter options only with primary U.S. Government
securities dealers recognized by the Federal Reserve Bank of New York. Also, the
contracts the Fund has in place with such primary dealers will provide that the
Fund has the absolute right to repurchase an option it writes at any time at a
price which represents the fair market value, as determined in good faith
through negotiation between the parties, but which in no event will exceed a
price determined pursuant to a formula in the contract. Although the specific
formula may vary between contracts with different primary dealers, the formula
will generally be based on a multiple of the premium received by the Fund for
writing the option, plus the amount, if any, of the option's intrinsic value
(i.e., the amount that the option is in-the-money). The formula may also include
a factor to account for the difference between the price of the security and the
strike price of the option if the option is written out-of- the-money. The Fund
will treat all or a portion of the formula as illiquid for purposes of the SEC
illiquidity ceiling imposed by the SEC staff. The Fund may also write
over-the-counter options with non-primary dealers, including foreign dealers,
and will treat the assets used to cover these options as illiquid for purposes
of such SEC illiquidity ceiling.
OPTIONS ON SECURITIES INDICES
The Fund may write (sell) covered call and put options and purchase call
and put options on securities indices. The Fund may cover call options on
securities indices by owning securities whose price changes, in the opinion of a
Sub-Adviser, are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities in its portfolio. Where the Fund covers a call option on a securities
index through ownership of securities, such securities may not match the
composition of the index and, in that event, the Fund will not be fully covered
and could be subject to risk of loss in the event of adverse changes in the
value of the index. The Fund may also cover call options on securities indices
by holding a call on the same index and in the same principal amount as the call
written where the exercise price of the call held (a) is equal to or less than
the exercise price of the call written or (b) is greater than the exercise price
of the call written if the difference is maintained by the Fund in cash or cash
equivalents in a segregated account with its custodian. The Fund may cover put
options on securities indices by maintaining cash or cash equivalents with a
value equal to the exercise price in a segregated account with its custodian, or
else by holding a put on the same security and in the same principal amount as
the put written where the exercise price of the put held (a) is equal to or
greater than the exercise price of the put written or (b) is less than the
exercise price of the put written if the difference is maintained by the Fund in
cash or cash equivalents in a segregated account with its custodian. Put and
call options on securities indices may also be covered in such other manner as
may be in accordance with the rules of the exchange on which, or the
counterparty with which, the option is traded and applicable laws and
regulations.
The Fund will receive a premium from writing a put or call option on a
securities index, which increases the Fund's gross income in the event the
option expires unexercised or is closed out at a profit. If the value of an
index on which the Fund has written a call option falls or remains the same, the
Fund will realize a profit in the form of the premium received (less transaction
costs) that could offset all or a portion of any decline in the value of the
securities it owns. If the value of the index rises, however, the Fund will
realize a loss in its call option position, which will reduce the benefit of any
unrealized appreciation in the Fund's investment. By writing a put option, the
Fund assumes the risk of a decline in the index. To the extent that the price
changes of securities owned by the Fund correlate with changes in the value of
the index, writing covered put options on indices will increase the Fund's
losses in the event of a market decline, although such losses will be offset in
part by the premium received for writing the option.
The Fund may also purchase put options on securities indices to hedge their
investments against a decline in value. By purchasing a put option on a stock
index, the Fund will seek to offset a decline in the value of securities it owns
through appreciation of the put option. If the value of the Fund's investments
does not decline as anticipated, or if the value of the option does not
increase, the Fund's loss will be limited to the premium paid for the option
plus related transaction costs. The success of this strategy will largely depend
on the accuracy of the correlation between the changes in value of the index and
the changes in value of the Fund's security holdings.
The purchase of call options on securities indices may be used by the Fund
to attempt to reduce the risk of missing a broad market advance, or an advance
in an industry or market segment, at a time when the Fund holds uninvested cash
or short-term debt securities awaiting investment. When purchasing call options
for this purpose, the Fund will also bear the risk of losing all or a portion of
the premium paid if the value of the index does not rise. The purchase of call
options on securities indices when the Fund is substantially fully invested is a
form of leverage, up to the amount of the premium and related transaction costs,
and involves risks of loss and of increased volatility similar to those involved
in purchasing calls on securities the Fund owns.
FUTURES CONTRACTS
The Fund may enter into futures contracts for the purchase or sale for
future delivery of securities or foreign currencies or contracts based on
indices of securities as such instruments become available for trading. This
investment technique is designed to hedge (i.e., to protect) against anticipated
future changes in interest or exchange rates which otherwise might adversely
affect the value of the Fund's portfolio securities or adversely affect the
prices of long-term bonds or other securities which the Fund intends to purchase
at a later date. Futures contracts may also be entered into for non-hedging
purposes to the extent permitted by applicable law. A "sale" of a futures
contract means a contractual obligation to deliver the securities or foreign
currency called for by the contract at a fixed price at a specified time in the
future. A "purchase" of a futures contract means a contractual obligation to
acquire the securities or foreign currency at a fixed price at a specified time
in the future.
While futures contracts provide for the delivery of securities or
currencies, such deliveries are very seldom made. Generally, a futures contract
is terminated by entering into an offsetting transaction. The Fund will incur
brokerage fees when it purchases and sells futures contracts. At the time such a
purchase or sale is made, the Fund must allocate cash or securities as a margin
deposit ("initial deposit"). It is expected that the initial deposit will vary
but may be as low as 5% or less of the value of the contract. The futures
contract is valued daily thereafter and the payment of "variation margin" may be
required to be paid or received, so that each day the Fund may provide or
receive cash that reflects the decline or increase in the value of the contract.
The purpose of the purchase or sale of a futures contract, for hedging
purposes in the case of a portfolio holding long-term debt securities, is to
protect the Fund from fluctuations in interest rates without actually buying or
selling long-term debt securities. For example, if the Fund owned long-term
bonds and interest rates were expected to increase, the Fund might enter into
futures contracts for the sale of debt securities. If interest rates did
increase, the value of the debt securities in the Fund would decline, but the
value of the Fund's futures contracts should increase at approximately the same
rate, thereby keeping the net asset value of the Fund from declining as much as
it otherwise would have. The Fund could accomplish similar results by selling
bonds with long maturities and investing in bonds with short maturities when
interest rates are expected to increase or by buying bonds with long maturities
and selling bonds with short maturities when interest rates are expected to
decline. However, since the futures market is more liquid than the cash market,
the use of futures contracts as an investment technique allows the Fund to
maintain a defensive position without having to sell its portfolio securities.
Transactions entered into for non-hedging purposes include greater risk,
including the risk of losses which are not offset by gains on other portfolio
assets.
Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to hedge against anticipated purchases of long-term
bonds at higher prices. Since the fluctuations in the value of futures contracts
should be similar to that of long-term bonds, the Fund could take advantage of
the anticipated rise in the value of long-term bonds without actually buying
them until the market had stabilized. At that time, the futures contracts could
be liquidated and the Fund could buy long-term bonds on the cash market.
Purchases of futures contracts would be particularly appropriate when the cash
flow from the sale of new shares of the Fund could have the effect of diluting
dividend earnings. To the extent the Fund enters into futures contracts for this
purpose, the assets in the segregated asset account maintained to cover the
Fund's obligations with respect to such futures contracts will consist of liquid
instruments from the portfolio of the Fund in an amount equal to the difference
between the fluctuating market value of such futures contracts and the aggregate
value of the initial and variation margin payments made by the Portfolio with
respect to such futures contracts, thereby assuring that the transactions are
unleveraged.
Futures contracts on foreign currencies may be used in a similar manner, in
order to protect against declines in the dollar value of portfolio securities
denominated in foreign currencies, or increases in the dollar value of
securities to be acquired.
A futures contract on an index of securities provides for the making and
acceptance of a cash settlement based on changes in value of the underlying
index. The Fund may enter into stock index futures contracts in order to protect
the Fund's current or intended stock investments from broad fluctuations in
stock prices and for non-hedging purposes to the extent permitted by applicable
law. For example, the Fund may sell stock index futures contracts in
anticipation of or during a market decline to attempt to offset the decrease in
market value of the Fund's securities portfolio that might otherwise result. If
such decline occurs, the loss in value of portfolio securities may be offset, in
whole or in part, by gains on the futures position. When the Fund is not fully
invested in the securities market and anticipates a significant market advance,
it may purchase stock index futures contracts in order to gain rapid market
exposure that may, in part or in whole, offset increases in the cost of
securities that Fund intends to purchase. As such acquisitions are made, the
corresponding positions in stock index futures contracts will be closed out. In
a substantial majority of these transactions, the Fund will purchase such
securities upon the termination of the futures position, but under unusual
market conditions, a long futures position may be terminated without a related
purchase of securities. Futures contracts on other securities indices may be
used in a similar manner in order to protect the portfolio from broad
fluctuations in securities prices and for non-hedging purposes to the extent
permitted by applicable law.
OPTIONS ON FUTURES CONTRACTS
The Fund may write and purchase options to buy or sell futures contracts.
The writing of a call option on a futures contract constitutes a partial hedge
against declining prices of the security or currency underlying the futures
contract. If the futures price at expiration of the option is below the exercise
price, the Fund will retain the full amount of the option premium, less related
transaction costs, which provides a partial hedge against any decline that may
have occurred in the Fund's portfolio holdings. The writing of a put option on a
futures contract constitutes a partial hedge against increasing prices of the
security or currency underlying the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Fund will retain
the full amount of the option premium, less related transaction costs, which
provides a partial hedge against any increase in the price of securities which
the Fund intends to purchase. If a put or call option the Fund has written is
exercised, the Fund will incur a loss which will be reduced by the amount of the
premium it receives. Depending on the degree of correlation between changes in
the value of its portfolio securities and changes in the value of its futures
positions, the Fund's losses from existing options on futures contracts may to
some extent be reduced or increased by changes in the value of portfolio
securities.
The Fund may purchase options on futures contracts for hedging purposes as
an alternative to purchasing or selling the underlying futures contracts, or for
non-hedging purposes to the extent permitted by applicable law. For example,
where a decrease in the value of portfolio securities is anticipated as a result
of a projected market-wide decline, a rise in interest rates or a decline in the
dollar value of foreign currencies in which portfolio securities are
denominated, the Fund may, in lieu of selling futures contracts, purchase put
options thereon. In the event that such decrease in portfolio value occurs, it
may be offset, in whole or part, by a profit on the option. Conversely, where it
is projected that the value of securities to be acquired by the Fund will
increase prior to acquisition, due to a market advance, or a decline in interest
rates or a rise in the dollar value of foreign currencies in which securities to
be acquired are denominated, the Fund may purchase call options on futures
contracts, rather than purchasing the underlying futures contracts. As in the
case of Options, the writing of options on futures contracts may require the
Portfolio to forego all or a portion of the benefits of favorable movements in
the price of portfolio securities, and the purchase of options on futures
contracts may require the Fund to forego all or a portion of such benefits up to
the amount of the premium paid and related transaction costs. Transactions
entered into for non-hedging purposes include greater risk, including the risk
of losses which are not offset by gains on other portfolio assets.
FORWARD CONTRACTS
The Fund may enter into forward foreign currency exchange contracts for the
purchase or sale of a specific currency at a future date at a price set at the
time of the contract (a "Forward Contract"). The Fund may enter into Forward
Contracts for hedging purposes as well as for non-hedging purposes. The Fund may
also enter into Forward Contracts for "cross hedging" purposes as noted in the
Prospectus. Transactions in Forward Contracts entered into for hedging purposes
will include forward purchases or sales of foreign currencies for the purpose of
protecting the dollar value of securities denominated in a foreign currency or
protecting the dollar equivalent of interest or dividends to be paid on such
securities. By entering into such transactions, however, the Fund may be
required to forego the benefits of advantageous changes in exchange rates. The
Fund may also enter into transactions in Forward Contracts for other than
hedging purposes, which presents greater profit potential but also involves
increased risk. For example, if a Sub-Adviser believes that the value of a
particular foreign currency will increase or decrease relative to the value of
the U.S. dollar, the Fund may purchase or sell such currency, respectively,
through a Forward Contract. If the expected changes in the value of the currency
occur, the Fund will realize profits which will increase its gross income. Where
exchange rates do not move in the direction or to the extent anticipated,
however, the Fund may sustain losses which will reduce its gross income. Such
transactions, therefore, could be considered speculative.
The Fund has established procedures consistent with statements by the SEC
and its staff regarding the use of Forward Contracts by registered investment
companies, which require the use of segregated assets or "cover" in connection
with the purchase and sale of such contracts. In those instances in which the
Fund satisfies this requirement through segregation of assets, it will maintain,
in a segregated account, cash, cash equivalents or high grade debt securities,
which will be marked to market on a daily basis, in an amount equal to the value
of its commitments under Forward Contracts.
PORTFOLIO TRANSACTIONS
The Sub-Advisers are primarily responsible for portfolio decisions and the
placing of portfolio transactions. The Trust has no obligation to deal with any
dealer or group of dealers in the execution of transactions in portfolio
securities for the Fund. In placing orders for the Fund, the primary
consideration is prompt execution of orders in an effective manner at the most
favorable price, although the Fund does not necessarily pay the lowest spread or
commission available. Other factors taken into consideration are the dealer's
general execution and operational facilities, the type of transaction involved
and other factors such as the dealer's risk in positioning the securities. To
the extent consistent with applicable legal requirements, a Sub-Adviser may
place orders for the purchase and sale of Fund investments for the Fund with a
broker-dealer affiliate of the Manager or a Sub-Adviser.
As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), a Sub-Adviser may cause the Fund to pay a broker-dealer which
provides "brokerage and research services" (as defined in the 1934 Act) to the
Sub-Adviser an amount of commission for effecting a securities transaction for
the Fund in excess of the commission which another broker-dealer would have
charged for effecting that transaction. For the fiscal year ended October 31,
1996, the Fund paid aggregate brokerage commissions equal to $____, of which
$_______ (on $______ of transactions) was paid to broker-dealers that provided
"brokerage and research services" to the Fund's former sub-adviser. For the
period August 1, 1995 to October 31, 1995, no brokerage commissions were paid by
the Fund.
Investment decisions for the Fund and for the other investment advisory
clients of the Sub-Advisers are made with a view to achieving their respective
investment objectives. Investment decisions are the product of many factors in
addition to basic suitability for the particular client involved. Thus, a
particular security may be bought for certain clients even though it could have
been sold for other clients at the same time, and a particular security may be
sold for certain clients even though it could have been bought for other clients
at the same time. Likewise, a particular security may be bought for one or more
clients when one or more other clients are selling that same security. In some
instances, one client may sell a particular security to another client. Two or
more clients may simultaneously purchase or sell the same security, in which
event each day's transactions in that security are, insofar as practicable,
averaged as to price and allocated between such clients in a manner which in a
Sub-Adviser's opinion is equitable to each and in accordance with the amount
being purchased or sold by each. In addition, when purchases or sales of the
same security for the Fund and for other clients of a Sub-Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantage available to large denomination purchases or sales.
There may be circumstances when purchases or sales of portfolio securities for
one or more clients will have an adverse effect on other clients in terms of the
price paid or received or of the size of the position obtainable.
RISK FACTORS
As stated in the Prospectus, the Fund may invest in lower rated,
high-yield, "junk" bonds. In general, the market for lower rated, high-yield
bonds is more limited than the market for higher rated bonds, and because their
markets may be thinner and less active, the market prices of lower rated,
high-yield bonds may fluctuate more than the prices of higher rated bonds,
particularly in times of market stress. In addition, while the market for
high-yield, corporate debt securities has been in existence for many years, the
market in recent years experienced a dramatic increase in the large-scale use of
such securities to fund highly leveraged corporate acquisitions and
restructurings. Accordingly, past experience may not provide an accurate
indication of future performance of the high-yield bond market, especially
during periods of economic recession. Other risks which may be associated with
lower rated, high-yield bonds include their relative insensitivity to
interest-rate changes; the exercise of any of their redemption or call
provisions in a declining market which may result in their replacement by lower
yielding bonds; and legislation, from time to time, which may adversely affect
their market. Since the risk of default is higher among lower rated, high-yield
bonds, a Sub-Adviser's research and analyses are important ingredients in the
selection of lower rated, high-yield bonds. Through portfolio diversification,
good credit analysis and attention to current developments and trends in
interest rates and economic conditions, investment risk can be reduced, although
there is no assurance that losses will not occur. The Fund does not have any
minimum rating criteria applicable to the fixed-income securities in which it
invests. A description of the ratings used herein and in the Prospectus is set
forth in the Appendix to this Statement of Additional Information.
INVESTMENT RESTRICTIONS
The Trust (with respect to the Fund) has adopted the following investment
restrictions which may not be changed without approval by holders of a "majority
of the outstanding voting securities" of the Fund, which as used in this
Statement of Additional Information means the vote of the lesser of (i) 67% or
more of the outstanding "voting securities" of the Fund present at a meeting, if
the holders of more than 50% of the outstanding "voting securities" are present
or represented by proxy, or (ii) more than 50% of the Fund's outstanding "voting
securities." The term "voting securities" as used in this paragraph has the same
meaning as in the Investment Company Act of 1940 ("1940 Act").
As a matter of fundamental policy, the Fund may not (except that no
investment restriction of the Fund shall prevent the Fund from investing all of
its assets (other than assets which are not "investment securities" as defined
in the 1940 Act) in an open-end investment company with substantially the same
investment objectives):
(1) invest in physical commodities or contracts on physical
commodities;
(2) purchase or sell real estate, although it may purchase and
sell securities of companies which deal in real estate, other
than real estate limited partnerships, and may purchase and
sell marketable securities which are secured by interests in
real estate;
(3) make loans except for the lending of portfolio securities
pursuant to guidelines established by the Board of Trustees
and except as otherwise in accordance with the Fund's
investment objective and policies;
(4) borrow money, except from a bank as a temporary measure to
satisfy redemption requests or for extraordinary or emergency
purposes, provided that the Fund maintains asset coverage of
at least 300% for all such borrowings;
(5) underwrite the securities of other issuers (except to the
extent that the Fund may be deemed to be an underwriter within
the meaning of the Securities Act of 1933 (the "1933 Act") in
the disposition of restricted securities);
(6) acquire any securities of companies within one industry, if as
a result of such acquisition, more than 25% of the value of
the Fund's total assets would be invested in securities of
companies within such industry; provided, however, that there
shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities, when the Fund adopts a temporary defensive
position;
(7) issue senior securities, except as permitted under the 1940
Act;
(8) with respect to 75% of its assets, the Fund will not purchase
securities of any issuer if, as a result, more than 5% of the
Fund's total assets taken at market value would be invested in
the securities of any single issuer; and
(9) with respect to 75% of its assets, the Fund will not purchase
a security if, as a result, the Fund would hold more than 10%
of the outstanding voting securities of any issuer.
The Fund is also subject to the following restrictions which may be changed
by the Board of Trustees without shareholder approval. As a matter of non-
fundamental policy, the Fund will not:
(1) borrow money, except that the Fund may borrow for temporary or
emergency purposes up to 10% of its net assets; provided,
however, that the Fund may not purchase any security while
outstanding borrowings exceed 5% of net assets;
(2) sell securities short, unless it owns or has the right to
obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in
options and futures contracts are not deemed to constitute
short sales of securities;
(3) purchase warrants, valued at the lower of cost or market, in
excess of 10% of the value of its net assets. Included within
that amount, but not to exceed 2% of the value of the Fund's
net assets, may be warrants that are not listed on the New
York or American Stock Exchanges or an exchange with
comparable listing requirements. Warrants attached to
securities are not subject to this limitation;
(4) purchase securities on margin, except for use of short-term
credit as may be necessary for the clearance of purchases and
sales of securities, but it may make margin deposits in
connection with transactions in options, futures, and options
on futures;
(5) invest more than 15% of the Fund's net assets (taken at the
greater of cost or market value) in securities that are
illiquid or not readily marketable (excluding Rule 144A
securities deemed by the Board of Trustees of the Trust to be
liquid);
(6) invest more than 15% of the Fund's total assets (taken at the
greater of cost or market value) in (a) securities (including
Rule 144A securities) that are restricted as to resale under
the 1933 Act, and (b) securities that are issued by issuers
which (including predecessors) have been in operation less
than three years (other than U.S. Government securities),
provided, however, that no more than 5% of the Fund's total
assets are invested in securities issued by issuers which
(including predecessors) have been in operation less than
three years;
(7) invest more than 10% of the Fund's total assets (taken at the
greater of cost or market value) in securities (excluding Rule
144A securities) that are restricted as to resale under the
1933 Act;
(8) purchase securities of any issuer if such purchase at the time
thereof would cause the Fund to hold more than 10% of any
class of securities of such issuer, for which purposes all
indebtedness of an issuer shall be deemed a single class and
all preferred stock of anissuer shall be deemed a single
class, except that futures or option contracts shall not be
subject to this Restriction;
(9) invest for the purpose of exercising control over management
of any company;
(10) invest its assets in securities of any investment company,
except by purchase in the open market involving only customary
brokers' commissions or in connection with mergers,
acquisitions of assets or consolidations and except as may
otherwise be permitted by the 1940 Act; provided, however,
that the Fund shall not invest in the shares of any open-end
investment company unless (a) the Sub-Adviser waives any
investment advisory fees with respect to such assets, and (b)
the Fund pays no sales charge in connection with the
investment;
(11) invest more than 5% of its total assets in securities of
issuers (other than securities issued or guaranteed by U.S. or
foreign government or political subdivisions thereof) which
have (with predecessors) a record of less than three years'
continuous operations;
(12) write or acquire options or interests in oil, gas or other
mineral explorations or development programs or leases; and
(14) write puts and calls on securities unless each of the
following conditions are met: (a) the security underlying the
put or call is within the investment policies of the Fund and
the option is issued by the Options Clearing Corporation,
except for put and call options issued by non-U.S. entities or
listed on non-U.S. securities or commodities exchanges; (b)
the aggregate value of the obligations underlying the put
determined as of the date the options are sold shall not
exceed 50% of the Fund's net assets; (c) the securities
subject to the exercise of the call written by the Fund must
be owned by the Fund at the time the call is sold and must
continue to be owned by the Fund until the call has been
exercised, has lapsed, or the Fund has purchased a closing
call, and such purchase has been confirmed, thereby
extinguishing the Fund's obligation to deliver securities
pursuant to the call it has sold; and (d) at the time a put is
written, the Fund establishes a segregated account with its
custodian consisting of cash or short-term U.S. Government
securities equal in value to the amount the Fund will be
obligated to pay upon exercise of the put (this account must
be maintained until the put is exercised, has expired, or the
Fund has purchased a closing put, which is a put of the same
series as the one previously written); and
(15) buy and sell puts and calls on securities, stock index futures
or options on stock index futures, or financial futures or
options on financial futures unless such options are written
by other persons and: (a) the options or futures are offered
through the facilities of a national securities association or
are listed on a national securities or commodities exchange,
except for put and call options issued by non-U.S. entities or
listed on non-U.S. securities or commodities exchanges; (b)
the aggregate premiums paid on all such options which are
held at any time do not exceed 20% of the Fund's total net
assets; and (c) the aggregate margin deposits required on
all such futures or options thereon held at anytime do not
exceed 5% of the Fund's total assets.
PERCENTAGE AND RATING RESTRICTIONS
If a percentage restriction or a rating restriction on investment or
utilization of assets set forth above or referred to in the Prospectus is
adhered to at the time an investment is made or assets are so utilized, a later
change in percentage resulting from changes in the value of the securities held
by the Fund or a later change in the rating of a security held by the Fund is
not considered a violation of policy, however a Sub-Adviser will consider such
change in its determination of whether to hold the security.
PERFORMANCE INFORMATION
The Trust may, from time to time, include the yield and total return for
the Fund, both computed in accordance with formulas prescribed by the SEC, in
advertisements or reports to shareholders or prospective investors.
Quotations of yield for the Fund will be based on all investment income per
share (as defined by the SEC during a particular 30-day (or one month) period
(including dividends and interest), less expenses accrued during the period
("net investment income"), and are computed by dividing net investment income by
the maximum offering price per share on the last day of the period, according to
the following formula:
YIELD = 2[((A-B/CD)+1)6-1]
where a = dividends and interest earned during the period,
b = expenses accrued for the period (net of
reimbursements),
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends,
and
d = the maximum offering price per share on the last day
of the period.
For the 30-day period ended October 31, 1996, the yield of the Fund was
____% for the Retail Class and ____% for the Adviser Class.
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 1, 5 and 10 years (up to the life of the
Fund), calculated pursuant to the following formula: P (1 + T)n = ERV (where P =
a hypothetical initial payment of $1,000, T = the average annual total return, n
= the number of years, and ERV = the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the period). All total return figures
reflect the deduction of a proportional share of Fund expenses on an annual
basis, and assume that all dividends and distributions are reinvested when paid.
The Fund also may, with respect to certain periods of less than one year,
provide total return information for that period that is unannualized. Any such
information would be accompanied by standardized total return information. The
total return of the Retail Class shares of the Fund for the year ended October
31, 1996 was ____%, and for the period from August 1, 1995 (commencement of
operations) to October 31, 1996, total return equalled ____%. The total return
of the Adviser Class shares of the Fund for the period from ______, 1996
(commencement of operations) to October 31, 1996 was ____%.
Performance information for the Fund may also be compared to various
unmanaged indices, such as the Standard & Poor's Stock Index. Unmanaged indices
(I.E., other than Lipper) generally do not reflect deductions for administrative
and management costs and expenses. Comparative information may be compiled or
provided by independent ratings services or by news organizations. Any
performance information should be considered in light of the Fund's investment
objective and policies, characteristics and quality of the Fund, and the market
conditions during the given time period, and should not be considered to be
representative of what may be achieved in the future.
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The principal occupations of the Trustees and executive officers of the
Trust for the past five years are listed below. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined in the 1940 Act) of
the Trust. The address of each, unless otherwise indicated, is 3435 Stelzer
Road, Columbus, Ohio 43219-3035.
FREDERICK C. CHEN, TRUSTEE
126 Butternut Hollow Road, Greenwich, Connecticut 06830 - Management
Consultant.
ALAN S. PARSOW*, TRUSTEE
2222 Skyline Drive, Elkhorn, Nebraska 68022 - General Partner of Parsow
Partnership, Ltd. (investments).
LARRY M. ROBBINS, TRUSTEE
Wharton Communication Program, University of Pennsylvania, 336
Steinberg Hall-Dietrich Hall, Philadelphia, Pennsylvania 19104 -
Director of the Wharton Communication Program and Adjunct Professor of
Management at the Wharton School of the University of Pennsylvania.
MICHAEL SEELY, TRUSTEE
405 Lexington Avenue, Suite 909, New York, New York 10174 - President
of Investor Access Corporation (investor relations consulting firm).
GEORGE O. MARTINEZ*, PRESIDENT AND SECRETARY
Senior Vice President and Director of Legal and Compliance Services,
BISYS Fund Services, Inc; March 1995 to present; Senior Vice
President, Emerald Asset Management, Inc., August 1995 to present;
Vice President and Associate General Counsel, Alliance Capital
Management, June 1989 to March 1995.
KAREN DOYLE*, VICE PRESIDENT
Manager of Client Services for BISYS Fund Services, Inc., October 1994
to present; from 1979 to October 1994, an employee of the Bank of New
York.
FRANK M. DEUTCHKI*, VICE PRESIDENT
From April 1996 to present, an employee of BISYS Fund Services, Inc.;
from September 1995 to April 1996, Vice President, Chase Global Funds
Service; from 1989 to September 1995, Vice President, Mutual Funds
Service Company.
KEVIN MARTIN*, VICE PRESIDENT
From February 1996 to present, employee of BISYS Fund Services, Inc.;
from 1984 to February 1996, Senior Manager, Ernst & Young.
ADRIAN WATERS*, TREASURER
From May 1993 to present, employee of BISYS Fund Services (Ireland)
LTD.; from 1989 to May 1993, Manager, Price Waterhouse.
CATHERINE BRADY*, ASSISTANT TREASURER
From March 1994 to present, an employee of BISYS Fund Services
(Ireland)LTD; from 1990 to March 1994, Supervisor, Price Waterhouse.
ALAINA METZ*, ASSISTANT SECRETARY
Chief Administrator, Administrative and Regulatory Services, BISYS
Fund Services, Inc., June 1995 to present; Supervisor, Mutual
Fund Legal Department, Alliance Capital Management, May 1989 to June
1995.
Messrs. Martinez, Deutchki, Martin and Waters and Mss. Doyle, Brady and
Metz also are officers of certain other investment companies of which BISYS or
an affiliate is the administrator.
COMPENSATION TABLE
Pension
Retirement Total
Benefits Estimated Compensation
Aggregate Accrued as Annual From Fund
Name of Compensation Part of Fund Benefits Upon Complex* Paid
Trustee from Trust Expenses Retirement to Trustees
Frederick C.
Chen $_____ none none $_____
Alan S. Parsow $_____ none none $_____
Larry M.
Robbins $_____ none none $_____
Michael Seely $_____ none none $_____
* The Fund Complex includes the Trust, Republic Advisor Funds Trust,
and Republic Portfolios.
The compensation table above reflects the fees received by the Trustees for
the fiscal year ended October 31, 1996. The Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust will receive an annual
retainer of $_____ and a fee of $______ for each meeting of the Board of
Trustees or committee thereof attended.
As of [ ], 1997, the Trustees and officers of the Trust, as a group, owned
less than 1% of the outstanding shares of the Fund and each class of the Fund.
As of the same date, the following shareholders of record owned 5% or more of
the outstanding shares of each class of the Fund (the Trust has no knowledge of
the beneficial ownership of such shares): [To be provided]
The Trust's Declaration of Trust provides that it will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their officers with the
Trust, unless, as to liability to the Trust or its shareholders, it is finally
adjudicated that they engaged in wilful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in their offices, or unless with
respect to any other matter it is finally adjudicated that they did not act in
good faith in the reasonable belief that their actions were in the best
interests of the Trust. In the case of settlement, such indemnification will not
be provided unless it has been determined by a court or other body approving the
settlement or other disposition, or by a reasonable determination, based upon a
review of readily available facts, by vote of a majority of disinterested
Trustees or in a written opinion of independent counsel, that such officers or
Trustees have not engaged in wilful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
INVESTMENT MANAGER
Republic is the investment manager to the Fund pursuant to an investment
management agreement (the "Investment Management Contract") with the Trust. For
its services, the Manager is paid a fee by the Fund, computed daily and based on
the Fund's average daily net assets, equal on the annual basis to 0.175% of net
assets. For the period from August 1, 1995 (commencement of operations) to
October 31, 1995 and for the fiscal year ended October 31, 1996, investment
management fees aggregated $6,118 and $____, respectively, of which the entire
amount was waived.
The Investment Management Contract will remain in effect until April 7,
1997, and will continue in effect thereafter from year to year with respect to
the Fund, provided such continuance is approved annually (i) by the holders of a
majority of the outstanding voting securities of the Fund or by the Trust's
Board of Trustees, and (ii) by a majority of the Trustees of the Trust who are
not parties to the Investment Management Contract or "interested persons" (as
defined in the 1940 Act) of any such party. The Investment Management Contract
may be terminated with respect to the Fund without penalty by either party on 60
days' written notice and will terminate automatically if assigned.
Republic is a wholly owned subsidiary of Republic New York Corporation, a
registered bank holding company. No securities or instruments issued by Republic
New York Corporation or Republic will be purchased for the Fund.
Republic complies with applicable laws, regulations, and rulings of the
U.S. Comptroller of the Currency relating to fiduciary powers of national banks.
These regulations provide, in general, that assets managed by a national bank as
fiduciary shall not be invested in stock or obligations of, or property acquired
from, the bank, its affiliates or their directors, officers or employees or
other persons with substantial connections with the bank. The regulations
further provide that fiduciary assets shall not be sold or transferred, by loan
or otherwise, to the bank or persons connected with the bank as described above.
Republic, in accordance with federal banking laws, may not purchase for its own
account securities of any investment company the investment adviser of which it
controls, extend credit to any such investment company, or accept the securities
of any such investment company as collateral for a loan to purchase such
securities. Moreover, Republic, its officers and employees do not express any
opinion with respect to the advisability of any purchase of such securities.
The investment management services of Republic to the Fund are not
exclusive under the terms of the Investment Management Contract. Republic is
free to and does render investment management and advisory services to others.
INVESTMENT SUB-ADVISERS
Alliance and Brinson, as the Fund's Sub-Advisers, are responsible for the
investment management of the Fund's assets, including making investment
decisions and placing orders for the purchase and sale of securities for the
Fund directly with the issuers or with brokers or dealers selected by the
Sub-Advisers in their discretion. See "Portfolio Transactions." Each Sub-Adviser
also furnishes to the Board of Trustees of the Trust, which has overall
responsibility for the business and affairs of the Trust, periodic reports on
the investment performance of the Fund. Prior to January 1, 1997, a different
investment management firm served as the Fund's sub-adviser.
For its services, each Sub-Adviser receives from the Fund a fee, computed
daily and based on the Fund's average daily net assets allocated to the
Sub-Adviser for management, at the annual rate of 0.325% of net assets up to $50
million, 0.25% of net assets over $50 million up to $100 million, 0.20% of net
assets over $100 million up to $200 million, and 0.15% of net assets in excess
of $200 million. For the period from August 1, 1995 (commencement of operations)
to October 31, 1995, sub-advisory fees aggregated $11,363, of which the entire
amount was reimbursed, and for the fiscal year ended October 31, 1996,
sub-advisory fees aggregated $______.
Alliance is a Delaware limited partnership. Alliance Capital Management
Corporation ("ACMC") is the general partner of Alliance and conducts no other
active business. Units representing assignment of beneficial ownership of
limited partnership interests of Alliance are publicly traded on the New York
Stock Exchange. As of September 30, 1996, The Equitable Life Assurance Society
of the United States ("Equitable"), ACMC, Inc. and Equitable Capital Management
Corporation ("ECMC") were the beneficial owners of approximately 57.4% of the
outstanding units of Alliance. ACMC, ECMC, and ACMC, Inc. are wholly owned
subsidiaries of Equitable. Equitable, a New York life insurance company, had
total assets as of June 30, 1996 of over $70.9 billion. Equitable is a wholly
owned subsidiary of The Equitable Companies Incorporated, a Delaware corporation
("ECI"), whose shares are publicly traded on the New York Stock Exchange. As of
March 1, 1996, AXA, a French insurance holding company, owned 63.9% of the
issued and outstanding shares of the common stock of ECI.
Brinson is an indirect wholly owned subsidiary of Swiss Bank Corporation
("Swiss Bank"). Swiss Bank, with headquarters in Basel, Switzerland, is an
internationally diversified organization with operations in many aspects of the
financial services industry.
The investment advisory services of each Sub-Adviser to the Fund are not
exclusive under the terms of its Subadvisory Agreement with Republic. Each
Sub-Adviser is free to and does render investment advisory services to others.
ADMINISTRATOR AND SPONSOR
The Administration Agreement will remain in effect until March 31, 1999,
and automatically will continue in effect thereafter from year to year unless
terminated upon 60 days' written notice to BISYS. The Administration Agreement
will terminate automatically in the event of its assignment. The Administration
Agreement also provides that neither BISYS nor its personnel shall be liable for
any error of judgment or mistake of law or for any act or omission in the
administration or management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its or their duties or by reason
of reckless disregard of its or their obligations and duties under the
Administration Agreement.
For the period from August 1, 1995 (commencement of operations) to October
31, 1995, the Fund accrued administrative services fees of $6,992, of which the
entire amount was waived, and for the fiscal year ended October 31, 1996, the
Fund accrued administrative services fees equal to $____.
<PAGE>
DISTRIBUTION PLAN - RETAIL CLASS SHARES ONLY
A Distribution Plan has been adopted by the Trust (the "Distribution Plan")
with respect to the Retail Class shares only, and provides that it may not be
amended to increase materially the costs which the Retail Class shares may bear
pursuant to the Distribution Plan without approval by shareholders of the Retail
Class shares, and that any material amendments of the Distribution Plan must be
approved by the Board of Trustees, and by the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust and have no direct or
indirect financial interest in the operation of the Distribution Plan or in any
related agreement ("Qualified Trustees") , by vote cast in person at a meeting
called for the purpose of considering such amendments. The selection and
nomination of the Trustees who are not "interested persons" of the Trust (the
"Independent Trustees") has been committed to the discretion of the Independent
Trustees. The Distribution Plan has been approved, and is subject to annual
approval, by a majority vote of the Board of Trustees and by a majority vote of
the Qualified Trustees, by vote cast in person at a meeting called for the
purpose of voting on the Distribution Plan. In adopting the Distribution Plan,
the Trustees considered alternative methods to distribute Retail Class shares
and to reduce the Retail Class shares' per share expense ratio and concluded
that there was a reasonable likelihood that the Distribution Plan will benefit
that class and its shareholders. The Distribution Plan is terminable with
respect to the Retail Class shares at any time by a vote of a majority of the
Qualified Trustees or by vote of the holders of a majority of the Retail Class
shares.
Prior to the adoption by the Trustees of a multiple class structure,
effective January 15, 1996, a predecessor distribution plan was in effect with
respect to all shares of the Fund. Pursuant to the predecessor and current
distribution plans, during the fiscal year ended October 31, 1996, the Fund
spent a total of $_____ on the following pursuant to the Distribution Plans:
advertising, $_; printing and mailing of prospectuses to other than current
shareholders, $_____; compensation to underwriters, $_; compensation to
broker-dealers, $_; compensation to sales personnel, $_; interest, carrying or
other financing charges, $_; and other marketing expenses, $_. Total
expenditures pursuant to the Distribution Plans as a percentage of average daily
net assets during the same period were ____%.
ADMINISTRATIVE SERVICES PLAN
An Administrative Services Plan has been adopted by the Trust with respect
to the Retail Class and the Adviser Class, and continues in effect indefinitely
if such continuance is specifically approved at least annually by a vote of both
a majority of the Trustees and a majority of the Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Administrative Services Plan or in any
agreement related to such Plan ("Qualified Trustees"). The Administrative
Services Plan may be terminated at any time by a vote of a majority of the
Qualified Trustees or with respect to the Retail Class or the Adviser Class by a
majority vote of shareholders of that class. The Administrative Services Plan
may not be amended to increase materially the amount of permitted expenses
thereunder with respect to the Retail Class or the Adviser Class without the
approval of a majority of shareholders of that class, and may not be materially
amended in any case without a vote of the majority of both the Trustees and the
Qualified Trustees.
SHAREHOLDER SERVICING AGENTS
The Trust has entered into a shareholder servicing agreement with each
Shareholder Servicing Agent. For additional information, including a description
of the fees paid to Shareholder Servicing Agents from assets attributable to the
Fund's Retail Class shares, see "Management of the Trust - Shareholder Servicing
Agents" in the Prospectus describing the Retail Class shares.
TRANSFER AGENT AND CUSTODIAN
The Board of Trustees of the Trust has also approved a Custodian Agreement
and a Transfer Agency Agreement between the Trust and Investors Bank & Trust
Company ("IBT") pursuant to which IBT will provide custodial, fund accounting,
transfer agency, dividend disbursing and shareholder servicing services to the
Trust and the Fund. The principal business address of IBT is 24 Federal Street,
Boston, Massachusetts 02110.
EXPENSES
Except for the expenses paid by the Manager and the Distributor, the Fund
bears all costs of its operations. Expenses attributable to a class ("Class
Expenses") shall be allocated to that class only. Class Expenses with respect to
the Retail Class shares must include payments made pursuant to the Distribution
Plan and the Administrative Services Plan. In the event a particular expense is
not reasonably allocable by class or to a particular class, it shall be treated
as a Fund expense or a Trust expense. Trust expenses directly related to the
Fund are charged to the Fund; other expenses are allocated proportionally among
all the portfolios of the Trust in relation to the net asset value of the
portfolios.
VALUATION OF SECURITIES; REDEMPTION IN KIND
The net asset value of each share of each class of the Fund is determined
on each day on which the New York Stock Exchange is open for trading. As of the
date of this Statement of Additional Information, the New York Stock Exchange is
open every weekday except for the days on which the following holidays are
observed: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The value of each security for which readily available market quotations
exists is based on a decision as to the broadest and most representative market
for such security. The value of such security is based either on the last sale
price on a national securities exchange, or, in the absence of recorded sales,
at the readily available closing bid price on such exchanges, or at the quoted
bid price in the over-the-counter market. Securities listed on a foreign
exchange are valued at the last quoted sale price available before the time net
assets are valued. Unlisted securities are valued at the average of the quoted
bid and asked prices in the over-the-counter market. Debt securities are valued
by a pricing service which determines valuations based upon market transactions
for normal, institutional-size trading units of similar securities. Securities
or other assets for which market quotations are not readily available are valued
at fair value in accordance with procedures established by the Trust. Such
procedures include the use of independent pricing services, which use prices
based upon yields or prices of securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. All portfolio securities with a remaining maturity of less than 60
days are valued at amortized cost, which approximates market.
The accounting records of the Fund are maintained in U.S. dollars. The
market value of investment securities, other assets and liabilities and forward
contracts denominated in foreign currencies are translated into U.S. dollars at
the prevailing exchange rates at the end of the period. Purchases and sales of
securities, income receipts, and expense payments are translated at the exchange
rate prevailing on the respective dates of such transactions. Reported net
realized gains and losses on foreign currency transactions represent net gains
and losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade and
settlement dates on securities transactions and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received.
The problems inherent in making a good faith determination of value are
recognized in the codification effected by SEC Financial Reporting Release No. 1
("FRR 1" (formerly Accounting Series Release No. 113)) which concludes that
there is "no automatic formula" for calculating the value of restricted
securities. It recommends that the best method simply is to consider all
relevant factors before making any calculation. According to FRR 1 such factors
would include consideration of the:
Type of security involved, financial statements, cost at date
of purchase, size of holding, discount from market value of
unrestricted securities of the same class at the time of
purchase, special reports prepared by analysts, information as
to any transactions or offers with respect to the security,
existence of merger proposals or tender offers affecting the
security, price and extent of public trading in similar
securities of the issuer or comparable companies, and other
relevant matters.
To the extent that the Fund purchases securities which are restricted as to
resale or for which current market quotations are not available, the
Sub-Advisers will value such securities based upon all relevant factors as
outlined in FRR 1.
Subject to the Trust's compliance with applicable regulations, the Trust
has reserved the right to pay the redemption or repurchase price of shares of
the Fund, either totally or partially, by a distribution in kind of the Fund's
portfolio securities (instead of cash). The securities so distributed would be
valued at the same amount as that assigned to them in calculating the net asset
value for the shares being sold. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
TAXATION
FEDERAL INCOME TAX
The Fund intends to qualify annually as a separate "regulated investment
company" (a "RIC") under the Internal Revenue Code of 1986, as amended (the
"Code"). In order to qualify, at least 90% of the Fund's investment company
taxable income (which includes, among other items, interest, dividends and the
excess of net short-term capital gains over net long-term capital losses) must
be distributed to Fund shareholders, and the Fund must meet certain
diversification of assets, source of income, and other requirements. If the Fund
does not so qualify, it will be taxed as an ordinary corporation.
Amounts not distributed by the Fund on a timely basis in accordance with a
calendar year distribution requirement are subject to a nondeductible 4% excise
tax. To prevent imposition of the excise tax, for each calendar year an amount
must be distributed that is equal to the sum of (a) at least 98% of the Fund's
ordinary income (excluding any capital gains or losses) for the calendar year,
(b) at least 98% of the Fund's capital gain net income for the 12-month period
ending, as a general rule, on October 31 of the calendar year, and (c) all such
ordinary income and capital gains for previous years that were not distributed
during such years.
Distributions by the Fund reduce the net asset value of the Fund shares.
Should a distribution reduce the net asset value below a shareholder's cost
basis, the distribution nevertheless would be taxable to the shareholder as
ordinary income or capital gain as described in the Prospectus, even though,
from an investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implication of
buying shares just prior to a distribution by the Fund. The price of shares
purchased at that time includes the amount of the forthcoming distribution, but
the distribution will generally be taxable to them.
If the Fund is the holder of record of any stock on the record date for any
dividends payable with respect to such stock, such dividends are included in the
Fund's gross income not as of the date received but as of the later of (1) the
date such stock became ex-dividend with respect to such dividends (i.e., the
date on which a buyer of the stock would not be entitled to receive the
declared, but unpaid, dividends) or (2) the date the Fund acquired such stock.
Accordingly, in order to satisfy its income distribution requirements, the Fund
may be required to pay dividends based on anticipated earnings, and shareholders
may receive dividends in an earlier year than would otherwise be the case.
Some of the debt securities that may be acquired by the Fund may be treated
as debt securities that are originally issued at a discount. Original issue
discount can generally be defined as the difference between the price at which a
security was issued and its stated redemption price at maturity. Although no
cash income is actually received by the Fund, original issue discount on a
taxable debt security earned in a given year generally is treated for federal
income tax purposes as interest and, therefore, such income would be subject to
the distribution requirements of the Code.
Some of the debt securities may be purchased by the Fund at a discount
which exceeds the original issue discount on such debt securities, if any. This
additional discount represents market discount for federal income tax purposes.
Generally, the gain realized on the disposition of any debt security acquired by
the Fund will be treated as ordinary income to the extent it does not exceed the
accrued market discount on such debt security.
OPTIONS
Some of the options entered into by the Fund may be "Section 1256
contracts." Section 1256 contracts held by the Fund at the end of its taxable
year (and, for purposes of the 4% excise tax, on certain other dates as
prescribed under the Code) are "marked-to-market" with unrealized gains or
losses being treated as though they were realized. Any gains or losses,
including "marked-to-market" gains or losses, on Section 1256 contracts are
generally treated as 60% long-term and 40% short-term capital gains or losses
("60/40"), although all foreign currency gains and losses from such contracts
may be treated as ordinary in character absent a special election.
Generally, certain options transactions undertaken by the Fund may result
in "straddles" for U.S. federal income tax purposes. The straddle rules may
affect the character of gain or loss realized by the Fund. In addition, losses
realized by the Fund on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating
the taxable income for the taxable year in which such losses are realized.
Because only a few regulations implementing the straddle rules have been
promulgated, the tax consequences of transactions in options to the Fund are not
entirely clear. The transactions may increase the amount of short-term capital
gain realized by the Fund, which generally would increase the amount of
dividends. Short-term gain is taxed as ordinary income when distributed to Fund
shareholders.
The Fund may make one or more of the elections available under the Code
which are applicable to straddles. If the Fund makes any of the elections, the
amount, character, and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the elections made. The rules applicable under certain of the elections
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of gains
or losses, defer losses and/or accelerate the recognition of gains or losses
from the affected straddle positions, the amount which must be distributed to
Fund shareholders, and which will be taxed to Fund shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such transactions.
The Fund's intention to qualify as a RIC may limit the extent to which the
Fund will be able to engage in these transactions.
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES
The Fund may invest in shares of foreign corporations which may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute investment-type assets, or 75% or more of its gross income
is investment-type income. If the Fund receives a so-called "excess
distribution" with respect to PFIC stock, the Fund itself may be subject to a
tax on a portion of the excess distribution, whether or not the corresponding
income is distributed by the Fund to shareholders. In general, under the PFIC
rules, an excess distribution is treated as having been realized ratably over
the period during which the Fund held the PFIC shares. The Fund itself will be
subject to tax on the portion, if any, of an excess distribution that is so
allocated to prior Fund taxable years and an interest factor will be added to
the tax, as if the tax had been payable in such prior taxable years. Certain
distributions from a PFIC as well as gain from the sale of PFIC shares are
treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
excess distributions might have been classified as capital gain.
The Fund may be eligible to elect alternative tax treatment with respect to
PFIC shares held by the Fund. Under an election that currently is available in
some circumstances, the Fund generally would be required to include in its gross
income its share of the earnings of a PFIC on a current basis, regardless of
whether distributions are received from the PFIC in a given year. If this
election were made, the special rules, discussed above, relating to the taxation
of excess distributions, would not apply. In addition, another election may be
available that would involve marking-to-market the Fund's PFIC shares at the end
of each taxable year (and on certain other dates prescribed in the Code), with
the result that unrealized gains are treated as though they were realized. If
this election were made, tax at the Fund level under the PFIC rules would
generally be eliminated, but the Fund could, in limited circumstances, incur
nondeductible interest charges. The Fund's intention to qualify annually as a
regulated investment company may limit its elections with respect to PFIC
shares.
Because the application of the PFIC rules may affect, among other things,
the character of gains, the amount of gain or loss and the timing of the
recognition of income with respect to PFIC shares, as well as subject the Fund
itself to tax on certain income from PFIC shares, the amount that must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not invest in PFIC shares.
EFFECT OF FOREIGN CURRENCIES
Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the Fund accrues income or other receivables
or accrues expenses or other liabilities denominated in a foreign currency and
the time the Fund actually collects such receivables or pays such liabilities
generally are treated as ordinary income or loss. Similarly, in disposing of
debt securities denominated in foreign currencies and certain other foreign
currency contracts, gains or losses attributable to fluctuations in the value of
a foreign currency between the date the security or contract is acquired and the
date it is disposed of are also usually treated as ordinary income or loss.
Under Section 988 of the Code, these gains or losses may increase or decrease
the amount of the Fund's investment company taxable income to be distributed to
shareholders as ordinary income.
DISPOSITION OF SHARES
Upon the sale or exchange of shares of the Fund, a shareholder generally
will realize a taxable gain or loss depending upon his basis in the shares. Such
gain or loss will be treated as capital gain or loss if the shares are capital
assets in the shareholder's hands, and will be long-term if the shareholder's
holding period for the shares is more than one year and generally otherwise will
be short-term. Any loss realized on a sale or exchange of Fund shares will be
disallowed to the extent that the shares disposed of are replaced (including
replacement through reinvesting of dividends and capital gain distributions in
the Fund) within a period of 61 days beginning 30 days before and ending 30 days
after the disposition of the shares. In such a case, the basis of the shares
acquired will be adjusted to reflect the disallowed loss.
The information above is only a summary of some of the tax considerations
affecting the Fund and its shareholders. The Fund's distributions may also be
subject to state, local, foreign or other taxes not discussed above. A
prospective investor may wish to consult a tax advisor to determine the
suitability of an investment in the Fund based on the prospective investor's tax
situation.
OTHER INFORMATION
CAPITALIZATION
The Trust is a Massachusetts business trust established under a Declaration
of Trust dated April 22, 1987, as a successor to two previously-existing
Massachusetts business trusts, FundTrust Tax-Free Trust (organized on July 30,
1986) and FundVest (organized on July 17, 1984, and since renamed FundSource).
Prior to October 3, 1994, the name of the Trust was "FundTrust."
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest with a par value of $0.001 each. The Board of
Trustees may establish additional series (with different investment objectives
and fundamental policies) and classes of shares within each series at any time
in the future. Establishment and offering of additional classes or series will
not alter the rights of the Fund's shareholders. When issued, shares are fully
paid, nonassessable, redeemable and freely transferable. Shares do not have
preemptive rights or subscription rights. In liquidation of the Fund, each
shareholder is entitled to receive his pro rata share of the net assets of the
Fund.
VOTING RIGHTS
Under the Declaration of Trust, the Trust is not required to hold annual
meetings of Fund shareholders to elect Trustees or for other purposes. It is not
anticipated that the Trust will hold shareholders' meetings unless required by
law or the Declaration of Trust. In this regard, the Trust will be required to
hold a meeting to elect Trustees to fill any existing vacancies on the Board if,
at any time, fewer than a majority of the Trustees has been elected by the
shareholders of the Trust. In addition, the Declaration of Trust provides that
the holders of not less than two-thirds of the outstanding shares of the Trust
may remove persons serving as Trustee either by declaration in writing or at a
meeting called for such purpose. The Trustees are required to call a meeting for
the purpose of considering the removal of persons serving as Trustee if
requested in writing to do so by the holders of not less than 10% of the
outstanding shares of the Trust.
The Trust's shares do not have cumulative voting rights, so that the
holders of more than 50% of the outstanding shares may elect the entire Board of
Trustees, in which case the holders of the remaining shares would not be able to
elect any Trustees.
INDEPENDENT AUDITORS
The Board of Trustees has appointed KPMG Peat Marwick LLP as independent
auditors of the Funds of the Trust. KPMG Peat Marwick LLP will audit the Trust's
annual financial statements, prepare the Trust's income tax returns, and assist
in the filings with the SEC. KPMG Peat Marwick LLP's address is 99 High Street,
Boston, Massachusetts 02108.
COUNSEL
Dechert Price & Rhoads, 1500 K Street, N.W., Washington, D.C. 20005, passes
upon certain legal matters in connection with the shares of the Fund offered by
the Trust, and also acts as counsel to the Trust.
REGISTRATION STATEMENT
This Statement of Additional Information and the Prospectus do not contain
all the information included in the Trust's registration statement filed with
the SEC under the 1933 Act with respect to shares of the Fund, certain portions
of which have been omitted pursuant to the rules and regulations of the SEC. The
registration statement, including the exhibits filed therewith, may be examined
at the office of the SEC in Washington, D.C.
Statements contained herein and in the Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other document
which was filed as an exhibit to the registration statement, each such statement
being qualified in all respects by such reference.
FINANCIAL STATEMENTS
The Fund's current audited financial statements dated October 31, 1995 and
unaudited semiannual financial statements dated April 30, 1996 are hereby
incorporated herein by reference from the Annual Report of the Fund dated
October 31, 1995, and the Semiannual Report of the Fund dated April 30, 1996,
respectively, as filed with the SEC. A copy of each such report will be provided
without charge to each person receiving this Statement of Additional
Information.
<PAGE>
APPENDIX
Description of Security Ratings
STANDARD & POOR'S
CORPORATE AND MUNICIPAL BONDS
AAA Debt rated "AAA" has the highest rating assigned by Standard &
Poor's to a debt obligation. 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
a 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.
BBB Debt rated "BBB" is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than for debt in higher rated categories.
BB Debt rated "BB" has less near-term vulnerability to default than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to
meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that
is assigned an actual or implied "BBB-" rating.
Plus(+)
or
Minus(-) The ratings from "AA" to "BB" may be modified by the addition
of a plus or minus sign to show relative standing within the
major rating categories.
COMMERCIAL PAPER, INCLUDING TAX EXEMPT
A Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
further refined with the designations 1, 2, and 3 to indicate the
relative degree of safety.
A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to
possess
A-1
<PAGE>
extremely strong safety characteristics are denoted with a plus
(+) designation.
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as
high as for issues designated "A-1".
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the
higher designations.
MOODY'S
CORPORATE AND MUNICIPAL BONDS
Aaa Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are
generally referred to as "gilt edged". Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large
as in Aaa securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which
make the long term risk appear somewhat larger than in Aaa
securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very
moderate, and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterizes
bonds in this class.
A-2
<PAGE>
Note Moody's applies numerical modifiers, 1,2, and 3 in each generic
rating classification from Aa through Bb in its corporate bond
rating system. The modifier 1 indicates that the security rates
in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of its generic rating category.
Those municipal bonds within the Aa, A, Baa, and Ba categories
that Moody's believes possess the strongest credit attributes
within those categories are designated by the symbols Aa1, A1,
Baa1, and Ba1.
COMMERCIAL PAPER
Prime-1 Issuers rated P-1 (or supporting institutions) have a superior
ability for repayment of short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the
following characteristics:
- Leading market positions in well established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance
on debt
and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
- Well established access to a range of financial markets and
assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited
above but to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity
is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market
composition may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt
protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
Not
Prime Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.
FITCH INVESTORS SERVICE
CORPORATE BOND RATINGS
AAA Securities of this rating are regarded as strictly high-grade,
broadly marketable, suitable for investment by trustees and
fiduciary
A-3
<PAGE>
institutions, and liable to but slight market fluctuation other
than through changes in the money rate. The factor last named is
of importance varying with the length of maturity. Such
securities are mainly senior issues of strong companies, and are
most numerous in the railway and public utility fields, though
some industrial obligations have this rating. The prime feature
of an AAA rating is showing of earnings several times or many
times interest requirements with such stability of applicable
earnings that safety is beyond reasonable question whatever
changes occur in conditions. Other features may enter in, such as
a wide margin of protection through collateral security or direct
lien on specific property as in the case of high class equipment
certificates or bonds that are first mortgages on valuable real
estate. Sinking funds or voluntary reduction of the debt by call
or purchase are often factors, while guarantee or assumption by
parties other than the original debtor may also influence the
rating.
AA Securities in this group are of safety virtually beyond question,
and as a class are readily salable while many are highly active.
Their merits are not greatly unlike those of the AAA class, but a
security so rated may be of junior though strong lien - in many
cases directly following an AAA security - or the margin of
safety is less strikingly broad. The issue may be the obligation
of a small company, strongly secured but influenced as to ratings
by the lesser financial power of the enterprise and more local
type of market.
A Securities of this rating are considered to be investment grade
and of high credit quality. The obligor's ability to pay interest
and repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB Securities of this rating are considered to be investment grade
and of satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
Plus(+)
or
Minus(-) Plus and minus signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Plus and minus signs, however, are not used in the "AAA"
category.
COMMERCIAL PAPER RATINGS
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for
timely payment.
A-4
<PAGE>
F-1 Very Strong Credit Quality. Issues assigned this rating reflect
an assurance of timely payment only slightly less in degree than
the strongest issue.
F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues assigned "F-1+"
and F-1" ratings.
F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment grade.
DUFF & PHELPS RATINGS
CORPORATE BOND RATINGS
AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury Funds.
AA+
AA, AA- High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions.
A+
A, A- Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic
stress.
BBB+
BBB,BBB- Below average protection factors but still considered
sufficient for prudent investment. Considerable variability in
risk during economic cycles.
COMMERCIAL PAPER RATINGS
Duff 1+ Highest certainty of timely payment. Short term liquidity,
including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk
free U.S. Treasury short term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk
factors are very small.
A-5
<PAGE>
Duff 2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets
is good. Risk factors are small.
Duff 3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and subject
to more variation. Nevertheless, timely payment is expected.
RF040
A-6
<PAGE>
PART C
Item 24. Financial Statements.
(a) Incorporated by reference into Part A of the Registration
Statement:
FINANCIAL HIGHLIGHTS -- Republic U.S. Government Money Market Fund; Republic New
York Tax Free Money Market Fund; Republic New York Tax Free Bond Fund; Republic
Equity Fund; Republic Fixed Income Fund; Republic International Equity Fund.
(b) Incorporated by reference into Part B of the Registration
Statement:
REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
Statement of Net Assets, September 30, 1995
Statement of Operations for the year ended September 30, 1995
Statement of Changes in Net Assets for the years ended September 30, 1994 and
September 30, 1995
Financial Highlights
Notes to Financial Statements, September 30, 1995
Report of Ernst & Young LLP
Statement of Net Assets, March 31, 1996 (unaudited)
Statement of Operations for the six months ended March 31, 1996 (unaudited)
Statement of Changes in Net Assets for the year ended September 30, 1995 and
the six months ended March 31, 1996 (unaudited)
Financial Highlights (unaudited)
Notes to Financial Statements, March 31, 1996 (unaudited)
REPUBLIC NEW YORK TAX FREE MONEY MARKET FUND
Statement of Net Assets, October 31, 1995
Statement of Operations for the period November 17, 1994 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the period November 17, 1994
(commencement of operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young LLP
REPUBLIC NEW YORK TAX FREE BOND FUND
Schedule of Investments, October 31, 1995
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period May 1, 1995 (commencement of operations)
to October 31, 1995
Statement of Changes in Net Assets for the period May 1, 1995 (commencement of
operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young LLP
REPUBLIC EQUITY FUND
Schedule of Investments, October 31, 1995
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period August 1, 1995 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the
period August 1, 1995 (commencement of operations) to October 31, 1995
Financial Highlights Notes to Financial Statements, October 31, 1995
Report of Ernst & Young LLP
Schedule of Investments, April 30, 1996 (unaudited)
Statement of Assets and Liabilities, April 30, 1996 (unaudited)
Statement of Operations for the Period November 1, 1995 through April 30,
1996 (unaudited)
Statement of Changes in Net Assets (unaudited)
Financial Highlights (unaudited)
Notes to Financial Statements, April 30, 1996 (unaudited)
REPUBLIC FIXED INCOME FUND
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period January 9, 1995 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the period January 9, 1995 (commencement
of operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young LLP
Statement of Assets and Liabilities, April 30, 1996 (unaudited)
Statement of Operations for the Period November 1, 1995 through April 30,
1996 (unaudited)
Statement of Changes in Net Assets (unaudited)
Financial Highlights (unaudited)
Notes to Financial Statements, April 30, 1996 (unaudited)
FIXED INCOME PORTFOLIO
Schedule of Investments, October 31, 1995
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period January 9, 1995 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the period January 9, 1995 (commencement
of operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young
Schedule of Investments, April 30, 1996 (unaudited)
Statement of Assets and Liabilities, April 30, 1996 (unaudited)
Statement of Operations for the Period November 1, 1995 through April 30,
1996 (unaudited)
Statement of Changes in Net Assets (unaudited)
Financial Highlights (unaudited)
Notes to Financial Statements, April 30, 1996 (unaudited)
REPUBLIC INTERNATIONAL EQUITY FUND
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period January 9, 1995 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the period January 9, 1995 (commencement
of operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young LLP
Statement of Assets and Liabilities, April 30, 1996 (unaudited) Statement of
Operations for the Period November 1, 1995 through April 30, 1996 (unaudited)
Statement of Changes in Net Assets (unaudited) Financial Highlights (unaudited)
Notes to Financial Statements, April 30, 1996 (unaudited)
Report of Ernst & Young LLP
INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments, October 31, 1995
Statement of Assets and Liabilities, October 31, 1995
Statement of Operations for the period January 9, 1995 (commencement of
operations) to October 31, 1995
Statement of Changes in Net Assets for the period January 9, 1995 (commencement
of operations) to October 31, 1995
Financial Highlights
Notes to Financial Statements, October 31, 1995
Report of Ernst & Young
Schedule of Investments, April 30, 1996 (unaudited)
Statement of Assets and Liabilities, April 30, 1996 (unaudited)
Statement of Operations for the Period November 1, 1995 through April 30, 1996
(unaudited)
Statement of Changes in Net Assets (unaudited)
Financial Highlights (unaudited)
Notes to Financial Statements, April 30, 1996 (unaudited)
(b) Exhibits
1. Amended and Restated Declaration of Trust, with establishments and
designations of series and further amendments.1
1(a). Establishment and designation of series for Republic Taxable Bond Fund,
Republic Overseas Equity Fund and Republic Opportunity Fund.7
2. By-Laws.1
4. Specimen certificate of shares of beneficial interest of Republic Funds.1
5(a). Master Investment Advisory Contract, with supplements regarding Republic
New York Tax Free Bond Fund, Republic New York Tax Free Money Market Fund and
Republic Equity Fund.1
5(b). Subadvisory Agreement between Lord, Abbett & Co. and Republic National
Bank of New York regarding Republic Equity Fund.1
5(c). Amended and Restated Second Master Investment Advisory Contract, with
supplement regarding Republic U.S. Government Money Market Fund.1
5(d). Subadvisory Agreement between Alliance Capital Management L.P. and
Republic Mational Bank of New York regarding Republic Equity Fund.*
5(e). Subadvisory Agreement between Brinson Partners, Inc. and Republic National
Bank of New York regarding Republic Equity Fund.*
6(a). Master Distribution Contract, with supplements regarding Republic U.S.
Government Money Market Fund, Republic New York Tax Free Money Market Fund,
Republic New York Tax Free Bond Fund, Republic Equity Fund, Republic Taxable
Bond Fund, Republic Overseas Equity Fund and Republic Opportunity Fund.6
6(b). Second Master Distribution Contract, with supplements regarding Republic
International Equity Fund and Republic Fixed Income Fund.1
6(c). Distribution Contract.*
8(a). Custodian Agreement.1
8(b). Transfer Agency and Service Agreement.1
9(a). Form of Service Agreement.1
9(b). Master Administrative Services Contract, with supplements regarding
Republic Republic U.S. Government Money Market Fund, Republic New York Tax Free
Money Market Fund, Republic New York Tax Free Bond Fund, Republic Equity Fund,
Republic Taxable Bond Fund, Republic Overseas Equity Fund and Republic
Opportunity Fund.6
9(c). Second Master Administrative Services Contract, with supplements regarding
Republic Fixed Income Fund and Republic International Equity Fund.1
9(d). Administration Agreement.*
9(e). Amended and Restated Administrative Services Plan.6
10. Opinion of Counsel.2
11. Consent of Independent Auditors.
13(a). Initial Investor Representation letter regarding Republic International
Equity Fund and Republic Fixed Income Fund.3
13(b). Initial Investor Representation letter regarding Republic Equity Fund.2
15(a). Amended and Restated Master Distribution Plan, with supplements regarding
Republic U.S. Government Money Market Fund, Republic New York Tax Free Money
Market Fund, Republic New York Tax Free Bond Fund, Republic Equity Fund,
Republic Taxable Bond Fund, Republic Overseas Equity Fund and Republic
Opportunity Fund.6
16. Schedule of Performance Computations.1
17. Financial Data Schedules.
18. Multiple Class Plan.5
19. Powers of Attorney of Trustees and Officers of Registrant and Republic
Portfolios.8
- -----------------
1 Incorporated herein by reference from post-effective amendment No. 35 to
the registration statement on Form N-1A of the Registrant (File no. 33-7647)
(the "Registration Statement") as filed with the Securities and Exchange
Commission (the "SEC") on January 23, 1996.
2 Incorporated herein by reference from post-effective amendment No. 33 to
the Registration Statement as filed with the SEC on June 27, 1995.
3 Incorporated herein by reference from post-effective amendment No. 29 to
the Registration Statement as filed with the SEC on December 20, 1994.
4 Incorporated herein by reference from Exhibit 18 to post-effective
amendment No. 28 to the Registration Statement as filed with the SEC on December
2, 1994.
5 Incorporated herein by reference from post-effective amendment No. 36 to
the Registration Statement as filed with the SEC on March 1, 1996.
6 Incorporated herein by reference from post-effective amendment No. 37 to
the Registration Statement as filed with the SEC on April 4, 1996.
7 Incorporated herein by reference from post-effective amendment No. 39 to
the Registration Statement as filed with the SEC on June 17, 1996.
8 Incorporated herein by reference from post-effective amendment No. 40 to
the Registration Statement as filed with the SEC on November 27, 1996.
* To be filed by post-effective amendment.
Item 25. Persons Controlled by or under Common Control with
Registrant.
Not applicable.
Item 26. Number of Holders of Securities
As of October 31, 1996, the number of shareholders of each Fund was as
follows:
Republic U.S. Government Money Market Fund: 789
Republic New York Tax Free Money Market Fund: 182
Republic New York Tax Free Bond Fund: 17
Republic Bond Fund: 2
Republic Equity Fund: 34
Republic Overseas Equity Fund: 3
Republic Opportunity Fund: 5
Item 27. Indemnification
Reference is hereby made to Article IV of the Registrant's Declaration
of Trust. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees or officers 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
Investment Company Act of 1940 and, therefore, is unenforceable.
If a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by trustees or officers
of the Registrant in connection with the successful defense of any act, suit or
proceeding) is asserted by such trustees or officers 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.
Item 28. Business and Other Connections of Investment Advisers
(a) Republic National Bank of New York ("Republic") acts as investment
adviser to Republic Funds and Republic Advisor Funds Trust, and is a subsidiary
of Republic New York Corporation ("RNYC"), 452 Fifth Avenue, New York, New York
10018, a registered bank holding company. Republic's directors and principal
executive officers, and their business and other connections for at least the
past two years, are as follows (unless otherwise noted by footnote, the address
of all directors and officers is 452 Fifth Avenue, New York, New York 10018):
NAME -- BUSINESS AND OTHER CONNECTIONS
KURT ANDERSEN
Vice Chairman and a Director of Republic New York Corporation ("RNYC") and
Republic Bank.
ANTHONY G. CHAPPELL
Executive Vice President and Director of Republic Bank.
CYRIL S. DWEK
Vice Chairman of the Board and Director of Republic Bank and RNYC.
ERNEST GINSBERG
Vice Chairman of the Board and Director of RNYC and Republic Bank.
NATHAN HASSON
Vice Chairman of the Board, Director and Treasurer of Republic Bank and
Vice Chairman of the Board and Director of RNYC.
JEFFREY C. KEIL
President and Director of RNYC and Vice Chairman of the Board and
Director of Republic Bank.
PETER KIMMELMAN
A private investor and a Director of RNYC and Republic Bank.(1)
PAUL L. LEE
Executive Vice President and Director of Republic Bank;
Executive Vice President and General Counsel of RNYC.
LEONARD LIEBERMAN
Director of various companies, including Consolidated Cigar Corporation and
Outlet Communications, Inc.; Director of RNYC and Republic Bank.
WILLIAM C. MACMILLEN, JR.
President, William C. MacMillen & Co., Inc. (Investment Banking) and
a Director of RNYC and Republic Bank.(2)
PETER J. MANSBACH
Director and Chairman of the Executive Committee of Republic Bank and RNYC.
MARTIN F. MERTZ
Director of RNYC and Republic Bank.
CHARLES G. MEYER, JR.
President of Cord Meyer Development Co. and Director of Republic Bank.(3)
JAMES L. MORICE
Partner in the management consulting and executive search firm of
Mirtz Morice, Inc. and a Director of RNYC and Republic Bank.(4)
E. DANIEL MORRIS
President, Corsair Capital Corporation and Director of RNYC.
DR. JANET L. NORWOOD
Senior Fellow at The Urban Institute (research organization); Director of RNYC
and Republic Bank.
JOHN A. PANCETTI
Director of RNYC and Republic Bank.
VITO S. PORTERA
Vice Chairman of the Board, and a Director of RNYC and Republic Bank. Also,
Chairman of the Board of Republic International Bank of New York, the Florida
Edge Act subsidiary of Republic Bank.
WILLIAM P. ROGERS
Partner, Rogers & Wells and Director of RNYC and Republic Bank.
SILAS SAAL
Vice Chairman and Director of Republic Bank and RNYC; Chief Trading Officer of
Republic Bank.
DOV C. SCHLEIN
President and Chief Operating Officer of Republic Bank, and a Director of RNYC
and Republic Bank.
RICHARD C. SPIKERMAN
Executive Vice President and Director of Republic Bank.
JOHN TAMBERLANE
Director of Republic Bank; President of the Consumer Bank Division of Republic
Bank.
WALTER H. WEINER
Chairman of the Board, Director and Chief Executive Officer of Republic Bank
and RNYC.
GEORGE T. WENDLER
Vice Chairman and Director of Republic Bank; Senior Credit Officer of Republic
Bank.
PETER WHITE
Senior Consultant and a Director of RNYC and Republic Bank.
- -----------------------------------
(1) 1270 Avenue of the Americas, Suite 3010, New York 10020.
(2) 254 Victoria Place, Lawrence, New York 11559.
(3) 111-15 Queens Boulevard, 2nd Floor, Forest Hills, New York,
New York 11375.
(4) One Dock Street, Stamford, CT 06902
ITEM 29. PRINCIPAL UNDERWRITER
(a) BISYS Fund Services (the "Sponsor") and its affiliates serve as
distributor and administrator for other registered investment companies.
(b) The information required by this Item 29 with respect to each director
or officer of BISYS is hereby incorporated herein by reference from Form BD as
filed by the Sponsor pursuant to the Securities Exchange Act of 1934 (File No.
8-32480).
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The account books and other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of: Republic National
Bank of New York, 452 Fifth Avenue, New York, New York 10018; BISYS Fund
Services, 3435 Stelzer Road, Columbus, Ohio 43219-3035; and Investors Bank &
Trust Company, N.A., 89 South Street, Boston, Massachusetts 02110.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
(b) The Registrant undertakes to comply with Section 16(c) of the 1940
Act as though such provisions of the Act were applicable to the Registrant
except that the request referred to in the third full paragraph thereof may only
be made by shareholders who hold in the aggregate at least 10% of the
outstanding shares of the Registrant, regardless of the net asset value or
values of shares held by such requesting shareholders.
(c) The Registrant undertakes to file a post-effective amendment, using
financials which need not be certified, within four to six months following the
latter of the effective date of Post-Effective Amendment No. 39 or the date
that shares of the Republic Bond Fund, Republic Overseas Equity Fund and
Republic Opportunity Fund were publicly offered. The financial statements
included in such amendment will be as of and for the time period ended on a date
reasonably close or as soon as practicable to the date of the filing of the
amendment.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Republic Funds certifies that it has duly caused
this registration statement on Form N-1A (File No. 33-7647) (the "Registration
Statement") to be signed on its behalf by the undersigned, thereto duly
authorized in Columbus, Ohio on the 13th day of December, 1996.
REPUBLIC FUNDS
By /S/ GEORGE MARTINEZ
---------------------------
George Martinez
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on December 13, 1996.
/S/ GEORGE MARTINEZ
- --------------------------
George Martinez
President
/S/ADRIAN WATERS
- --------------------------
Adrian Waters
Treasurer and Principal Accounting and Financial Officer
ALAN S. PARSOW*
- --------------------------
Alan S. Parsow
Trustee
LARRY M. ROBBINS*
- --------------------------
Larry M. Robbins
Trustee
MICHAEL SEELY*
- --------------------------
Michael Seely
Trustee
FREDERICK C. CHEN*
- --------------------------
Frederick C. Chen
Trustee
*By /S/DAVID J. HARRIS
--------------------------
David J. Harris,
as attorney-in-fact pursuant to a power of attorney filed as
Exhibit 19 to post-effective amendment No. 40.
<PAGE>
SIGNATURES
Republic Portfolios (the "Portfolio Trust") has duly caused this amendment
to the registration statement on Form N-1A (File No. 33-7647) ("Registration
Statement") of Republic Funds (the "Trust") to be signed on its behalf by the
undersigned, thereto duly authorized in Ireland on the 13th day of December,
1996.
REPUBLIC PORTFOLIOS
By GEORGE MARTINEZ**
--------------------------
George Martinez
President
Pursuant to the requirements of the Securities Act of 1933, the Trust's
Registration Statement has been signed below by the following persons in the
capacities indicated on December 13, 1996.
GEORGE MARTINEZ**
- --------------------------
George Martinez
President of the Portfolio Trust
/S/ ADRIAN WATERS
- --------------------------
Adrian Waters
Treasurer and Principal Accounting and Financial Officer of the Portfolio Trust
ALAN S. PARSOW*
- --------------------------
Alan S. Parsow
Trustee of the Portfolio Trust
LARRY M. ROBBINS*
- --------------------------
Larry M. Robbins
Trustee of the Portfolio Trust
MICHAEL SEELY*
- --------------------------
Michael Seely
Trustee of the Portfolio Trust
FREDERICK C. CHEN*
- --------------------------
Frederick C. Chen
Trustee of the Portfolio Trust
*By /S/ DAVID J. HARRIS
--------------------------
David J. Harris,
as attorney-in-fact pursuant to a power of attorney filed as
exhibit 19 to post-effective amendment No. 40.
** By /S/ ADRIAN WATERS
------------------------
Adrian Waters,
as attorney-in-fact pursuant to a power of attorney filed as
exhibit 19 to post-effective amendment No. 40.
<PAGE>
EXHIBIT LIST
Exhibit No. Exhibit Name
11 Consents of Independent Auditors
17 (filed as 27) Financial Data Schedules
CONSENT OF INDEPENDENT AUDITORS
The Board of Trustees
Republic Funds:
We consent to the reference to our firm under the caption "Independent
Auditors" in the statements of additional information included herein.
KPMG Peat Marwick LLP
Boston, Massachusetts
December 13, 1996
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the caption "Financial
Highlights" in the Prospectus of the Republic Equity Fund-Class C Shares/Retail
Class in Post-Effective Amendment No. 41 to the Registration Statement (Form
N-1A, No. 33-7647) of Republic Funds.
We also consent to the incorporation by reference therein of our reports on
the financial statements included in the Annual Reports dated November 10, 1995
for Republic U.S. Government Money Market Fund, and December 8, 1995 for
Republic Equity Fund, Republic New York Tax Free Bond Fund, Republic New York
Tax Free Money Market Fund, Republic International Equity Fund, and Republic
Fixed Income Fund portfolios of Republic Funds.
ERNST & YOUNG LLP
December 13, 1996
Boston, Massachusetts
<PAGE>
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in Post-Effective Amendment
No. 41 to the Registration Statement (Form N-1A, No. 33-7647) of Republic Funds,
of our reports, dated December 8, 1995 for Republic International Equity and
Republic Fixed Income Portfolios of Republic Portfolio Trust, on the financial
statements and financial highlights included in their respective Annual Reports.
ERNST & YOUNG
December 13, 1996
Grand Cayman, Cayman Islands
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC NEW YORK TAX FREE MONEY MARKET FUND AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 007
<NAME> REPUBLIC NEW YORK TAX FREE MONEY MARKET FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-17-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 52,457,495
<INVESTMENTS-AT-VALUE> 52,457,495
<RECEIVABLES> 373,850
<ASSETS-OTHER> 29,570
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 63,860,915
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 208,438
<TOTAL-LIABILITIES> 208,438
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,652,477
<SHARES-COMMON-STOCK> 52,652,477
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 52,652,477
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,983,859
<OTHER-INCOME> 0
<EXPENSES-NET> 210,066
<NET-INVESTMENT-INCOME> 1,773,793
<REALIZED-GAINS-CURRENT> (13,869)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,759,924
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,759,924
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 191,998,598
<NUMBER-OF-SHARES-REDEEMED> 140,393,043
<SHARES-REINVESTED> 1,046,922
<NET-CHANGE-IN-ASSETS> 52,652,477
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 77,177
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 334,167
<AVERAGE-NET-ASSETS> 53,659,095
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.033
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.033
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.41
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC FIXED INCOME FUND AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 008
<NAME> REPUBLIC FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 26,119,355
<INVESTMENTS-AT-VALUE> 26,119,355
<RECEIVABLES> 0
<ASSETS-OTHER> 52,565
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,171,920
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 43,913
<TOTAL-LIABILITIES> 43,913
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 26,128,007
<SHARES-COMMON-STOCK> 2,384,633
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 26,128,007
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 812,161
<OTHER-INCOME> 0
<EXPENSES-NET> 56,649
<NET-INVESTMENT-INCOME> 755,512
<REALIZED-GAINS-CURRENT> 995,337
<APPREC-INCREASE-CURRENT> 338,733
<NET-CHANGE-FROM-OPS> 2,089,582
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 755,512
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,295,445
<NUMBER-OF-SHARES-REDEEMED> 245,291
<SHARES-REINVESTED> 743,683
<NET-CHANGE-IN-ASSETS> 26,128,007
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 107,372
<AVERAGE-NET-ASSETS> 16,557,823
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 0.96
<PER-SHARE-DIVIDEND> 0.46
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.96
<EXPENSE-RATIO> 0.91
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC INTERNATIONAL EQUITY FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 009
<NAME> REPUBLIC INTERNATIONAL EQUITY FUND
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 34,220,743
<INVESTMENTS-AT-VALUE> 34,220,743
<RECEIVABLES> 26,683
<ASSETS-OTHER> 51,355
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34,298,781
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,752
<TOTAL-LIABILITIES> 54,752
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,244,029
<SHARES-COMMON-STOCK> 3,171,731
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 34,244,029
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 300,087
<OTHER-INCOME> 0
<EXPENSES-NET> 82,467
<NET-INVESTMENT-INCOME> 217,620
<REALIZED-GAINS-CURRENT> (93,408)
<APPREC-INCREASE-CURRENT> 1,635,933
<NET-CHANGE-FROM-OPS> 1,760,145
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 69,610
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,852,624
<NUMBER-OF-SHARES-REDEEMED> 368,840
<SHARES-REINVESTED> 69,610
<NET-CHANGE-IN-ASSETS> 34,244,029
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 116,717
<AVERAGE-NET-ASSETS> 21,294,241
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 0.75
<PER-SHARE-DIVIDEND> 0.03
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.80
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC NEW YORK TAX FREE BOND FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 010
<NAME> REPUBLIC NEW YORK TAX FREE BOND FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> MAY-01-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 6,433,758
<INVESTMENTS-AT-VALUE> 6,620,124
<RECEIVABLES> 609,546
<ASSETS-OTHER> 81,947
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,311,617
<PAYABLE-FOR-SECURITIES> 346,378
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57,185
<TOTAL-LIABILITIES> 403,563
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,908,054
<SHARES-COMMON-STOCK> 665,278
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 6,908,054
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 195,996
<OTHER-INCOME> 0
<EXPENSES-NET> 18,026
<NET-INVESTMENT-INCOME> 177,970
<REALIZED-GAINS-CURRENT> 48,739
<APPREC-INCREASE-CURRENT> 186,366
<NET-CHANGE-FROM-OPS> 413,075
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 177,970
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,334,583
<NUMBER-OF-SHARES-REDEEMED> 1,679,949
<SHARES-REINVESTED> 18,315
<NET-CHANGE-IN-ASSETS> 6,908,054
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,063
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 86,378
<AVERAGE-NET-ASSETS> 3,916,331
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 0.38
<PER-SHARE-DIVIDEND> 0.25
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.38
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC EQUITY FUND AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 011
<NAME> REPUBLIC EQUITY FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> AUG-01-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 20,833,025
<INVESTMENTS-AT-VALUE> 20,987,383
<RECEIVABLES> 82,240
<ASSETS-OTHER> 1,212,364
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,281,987
<PAYABLE-FOR-SECURITIES> 138,502
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,085
<TOTAL-LIABILITIES> 189,587
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,092,400
<SHARES-COMMON-STOCK> 2,157,255
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 22,092,400
<DIVIDEND-INCOME> 89,540
<INTEREST-INCOME> 17,635
<OTHER-INCOME> 0
<EXPENSES-NET> 51,552
<NET-INVESTMENT-INCOME> 55,623
<REALIZED-GAINS-CURRENT> (7,450)
<APPREC-INCREASE-CURRENT> 154,358
<NET-CHANGE-FROM-OPS> 202,531
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 45,346
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,934,564
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 651
<NET-CHANGE-IN-ASSETS> 22,092,400
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 17,481
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 85,885
<AVERAGE-NET-ASSETS> 17,359,825
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.24
<PER-SHARE-DIVIDEND> 0.04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.24
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED SEPTEMBER 30, 1995 FOR THE REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 006
<NAME> REPUBLIC U.S. GOV'T MONEY MKT. FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 113,610,700
<INVESTMENTS-AT-VALUE> 113,610,700
<RECEIVABLES> 120,937
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 113,731,637
<PAYABLE-FOR-SECURITIES> 58,468
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,197
<TOTAL-LIABILITIES> 73,665
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 113,196,899
<SHARES-COMMON-STOCK> 113,218,042
<SHARES-COMMON-PRIOR> 111,557,380
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 113,218,042
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,377,771
<OTHER-INCOME> 0
<EXPENSES-NET> 642,995
<NET-INVESTMENT-INCOME> 5,734,776
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5,734,776
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,727,567
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 366,028,959
<NUMBER-OF-SHARES-REDEEMED> 356,309,344
<SHARES-REINVESTED> 3,048,453
<NET-CHANGE-IN-ASSETS> 12,775,277
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 221,919
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 858,878
<AVERAGE-NET-ASSETS> 110,959,533
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED MARCH 31, 1996 FOR THE REPUBLIC U.S. GOVERNMENT MONEY MARKET FUND
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 006
<NAME> REPUBLIC U.S. GOV'T MONEY MKT. FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 205,115,719
<INVESTMENTS-AT-VALUE> 205,115,719
<RECEIVABLES> 1,799,494
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 206,915,213
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 804,736
<TOTAL-LIABILITIES> 804,736
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 206,089,334
<SHARES-COMMON-STOCK> 206,110,477
<SHARES-COMMON-PRIOR> 113,218,042
<ACCUMULATED-NII-CURRENT> 21,143
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 206,110,477
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,364,619
<OTHER-INCOME> 0
<EXPENSES-NET> 436,791
<NET-INVESTMENT-INCOME> 3,927,828
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,927,828
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,927,828
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 387,129,359
<NUMBER-OF-SHARES-REDEEMED> 297,533,330
<SHARES-REINVESTED> 3,296,406
<NET-CHANGE-IN-ASSETS> 92,892,435
<ACCUMULATED-NII-PRIOR> 21,143
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 160,436
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 581,184
<AVERAGE-NET-ASSETS> 160,435,741
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.025
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.025
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED APRIL 30, 1996 FOR THE REPUBLIC EQUITY FUND AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 11
<NAME> REPUBLIC EQUITY FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 30,509,002
<INVESTMENTS-AT-VALUE> 33,194,459
<RECEIVABLES> 41,103
<ASSETS-OTHER> 23,364
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 33,258,926
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 79,138
<TOTAL-LIABILITIES> 79,138
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,178,246
<SHARES-COMMON-STOCK> 2,896,559
<SHARES-COMMON-PRIOR> 2,157,255
<ACCUMULATED-NII-CURRENT> 14,853
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 301,232
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,685,457
<NET-ASSETS> 33,179,788
<DIVIDEND-INCOME> 353,280
<INTEREST-INCOME> 31,809
<OTHER-INCOME> 0
<EXPENSES-NET> 180,758
<NET-INVESTMENT-INCOME> 204,331
<REALIZED-GAINS-CURRENT> 308,682
<APPREC-INCREASE-CURRENT> 2,531,099
<NET-CHANGE-FROM-OPS> 3,044,112
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 199,755
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 784,472
<NUMBER-OF-SHARES-REDEEMED> 45,594
<SHARES-REINVESTED> 426
<NET-CHANGE-IN-ASSETS> 11,087,388
<ACCUMULATED-NII-PRIOR> 10,277
<ACCUMULATED-GAINS-PRIOR> (7,450)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 45,239
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 243,305
<AVERAGE-NET-ASSETS> 27,992,345
<PER-SHARE-NAV-BEGIN> 10.24
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 1.21
<PER-SHARE-DIVIDEND> 0.08
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.45
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED APRIL 30, 1996 FOR REPUBLIC FIXED INCOME FUND, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 008
<NAME> REPUBLIC FIXED INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 39,857,116
<INVESTMENTS-AT-VALUE> 39,348,221
<RECEIVABLES> 59,419
<ASSETS-OTHER> 42,280
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,449,920
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 147,155
<TOTAL-LIABILITIES> 147,155
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,625,691
<SHARES-COMMON-STOCK> 3,778,428
<SHARES-COMMON-PRIOR> 2,384,633
<ACCUMULATED-NII-CURRENT> 37,525
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 148,444
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (508,895)
<NET-ASSETS> 39,302,765
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 997,356
<OTHER-INCOME> 0
<EXPENSES-NET> 22,806
<NET-INVESTMENT-INCOME> 866,476
<REALIZED-GAINS-CURRENT> 175,019
<APPREC-INCREASE-CURRENT> (847,628)
<NET-CHANGE-FROM-OPS> 193,867
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 866,477
<DISTRIBUTIONS-OF-GAINS> 984,386
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,326,605
<NUMBER-OF-SHARES-REDEEMED> 78,556
<SHARES-REINVESTED> 145,746
<NET-CHANGE-IN-ASSETS> 13,174,758
<ACCUMULATED-NII-PRIOR> 37,525
<ACCUMULATED-GAINS-PRIOR> 957,812
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 204,512
<AVERAGE-NET-ASSETS> 31,759,117
<PER-SHARE-NAV-BEGIN> 10.96
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> (0.19)
<PER-SHARE-DIVIDEND> 0.29
<PER-SHARE-DISTRIBUTIONS> 0.37
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.40
<EXPENSE-RATIO> 0.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED APRIL 30, 1996 FOR REPUBLIC INTERNATIONAL EQUITY FUND, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000798290
<NAME> REPUBLIC FUNDS
<SERIES>
<NUMBER> 009
<NAME> REPUBLIC INTERNATIONAL EQUITY FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 73,710,901
<INVESTMENTS-AT-VALUE> 80,513,933
<RECEIVABLES> 43,475
<ASSETS-OTHER> 42,869
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 80,600,277
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36,809
<TOTAL-LIABILITIES> 36,809
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 73,203,495
<SHARES-COMMON-STOCK> 6,789,373
<SHARES-COMMON-PRIOR> 3,171,731
<ACCUMULATED-NII-CURRENT> 65,437
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 491,504
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,803,032
<NET-ASSETS> 80,563,468
<DIVIDEND-INCOME> 443,002
<INTEREST-INCOME> 153,416
<OTHER-INCOME> 0
<EXPENSES-NET> 113,497
<NET-INVESTMENT-INCOME> 253,503
<REALIZED-GAINS-CURRENT> 832,585
<APPREC-INCREASE-CURRENT> 5,167,099
<NET-CHANGE-FROM-OPS> 6,253,187
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 552,556
<DISTRIBUTIONS-OF-GAINS> 31,193
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,688,325
<NUMBER-OF-SHARES-REDEEMED> 120,204
<SHARES-REINVESTED> 49,521
<NET-CHANGE-IN-ASSETS> 46,319,439
<ACCUMULATED-NII-PRIOR> 23,782
<ACCUMULATED-GAINS-PRIOR> 30,820
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 360,187
<AVERAGE-NET-ASSETS> 57,209,055
<PER-SHARE-NAV-BEGIN> 10.80
<PER-SHARE-NII> 0.11
<PER-SHARE-GAIN-APPREC> 1.13
<PER-SHARE-DIVIDEND> 0.16
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.87
<EXPENSE-RATIO> 1.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC FIXED INCOME PORTFOLIO AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NUMBER>001
<NAME>REPUBLIC FIXED INCOME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 37,854,514
<INVESTMENTS-AT-VALUE> 38,267,222
<RECEIVABLES> 1,629,600
<ASSETS-OTHER> 268,865
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,165,687
<PAYABLE-FOR-SECURITIES> 10,054,109
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 89,051
<TOTAL-LIABILITIES> 10,143,160
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30,022,527
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 30,022,527
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 935,978
<OTHER-INCOME> 0
<EXPENSES-NET> 66,214
<NET-INVESTMENT-INCOME> 869,764
<REALIZED-GAINS-CURRENT> 1,056,225
<APPREC-INCREASE-CURRENT> 349,074
<NET-CHANGE-FROM-OPS> 2,275,063
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 29,972,427
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 53,963
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 143,506
<AVERAGE-NET-ASSETS> 17,744,650
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
DATED OCTOBER 31, 1995 FOR THE REPUBLIC INTERNATIONAL EQUITY PORTFOLIO AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NUMBER>002
<NAME>REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> JAN-09-1995
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 38,082,840
<INVESTMENTS-AT-VALUE> 39,264,711
<RECEIVABLES> 244,657
<ASSETS-OTHER> 1,025,777
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,535,145
<PAYABLE-FOR-SECURITIES> 553,714
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,523
<TOTAL-LIABILITIES> 606,237
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 39,928,908
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 39,928,908
<DIVIDEND-INCOME> 313,008
<INTEREST-INCOME> 101,630
<OTHER-INCOME> 0
<EXPENSES-NET> 121,303
<NET-INVESTMENT-INCOME> 293,335
<REALIZED-GAINS-CURRENT> (98,258)
<APPREC-INCREASE-CURRENT> 1,700,597
<NET-CHANGE-FROM-OPS> 1,895,674
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,878,808
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 131,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 263,972
<AVERAGE-NET-ASSETS> 23,263,334
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED APRIL 30, 1996 FOR THE REPUBLIC FIXED INCOME PORTFOLIO AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NAME> REPUBLIC FIXED INCOME PORTFOLIO
<NUMBER> 001
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 71,380,520
<INVESTMENTS-AT-VALUE> 70,431,540
<RECEIVABLES> 424,876
<ASSETS-OTHER> 152,696
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 71,009,112
<PAYABLE-FOR-SECURITIES> 19,045,941
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,155
<TOTAL-LIABILITIES> 19,100,096
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 51,909,016
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 51,909,016
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,303,405
<OTHER-INCOME> 0
<EXPENSES-NET> 141,810
<NET-INVESTMENT-INCOME> 1,161,595
<REALIZED-GAINS-CURRENT> 222,756
<APPREC-INCREASE-CURRENT> (1,196,864)
<NET-CHANGE-FROM-OPS> 187,487
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,886,489
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 77,821
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 146,810
<AVERAGE-NET-ASSETS> 41,732,610
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMI ANNUAL
REPORT DATED APRIL 30, 1996 FOR THE REPUBLIC INTERNATIONAL EQUITY PORTFOLIO AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SEMI ANNUAL REPORT.
</LEGEND>
<CIK> 0000934882
<NAME> REPUBLIC PORTFOLIOS
<SERIES>
<NAME> REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
<NUMBER> 002
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> APR-30-1996
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</TABLE>
