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P R O S P E C T U S
SHAREHOLDER INFORMATION:
SMALL CAP OPPORTUNITIES FUND
612-667-8833 or
(I SHARES)
800-338-1348
AUGUST 15, 1996
NORWEST BANK MINNESOTA, N.A.
733 Marquette Avenue
Minneapolis, Minnesota 55479-0040
NORWEST BANK MINNESOTA, N.A.
Investment Adviser
Transfer Agent
Custodian
FORUM FINANCIAL SERVICES, INC.
Manager and Distributor
Not FDIC Insured
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PROSPECTUS
AUGUST 15, 1996
This Prospectus offers I Shares of Small Cap Opportunities Fund (the "Fund").
The Fund is a separate diversified equity portfolio of Norwest Advantage Funds
(the "Trust"), an open-end management investment company (a mutual fund).
THE FUND CURRENTLY SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING ALL OF
ITS INVESTMENT ASSETS IN SCHRODER U.S. SMALLER COMPANIES PORTFOLIO (THE
"PORTFOLIO"), A SEPARATE PORTFOLIO OF A REGISTERED OPEN-END MANAGEMENT
INVESTMENT COMPANY WITH AN IDENTICAL INVESTMENT OBJECTIVE. ACCORDINGLY, THE
FUND'S INVESTMENT EXPERIENCE WILL CORRESPOND DIRECTLY WITH THE PORTFOLIO'S
INVESTMENT EXPERIENCE.
This Prospectus sets forth concisely the information concerning the Trust and
the Fund that a prospective investor should know before investing. The Trust has
filed with the Securities and Exchange Commission (the "SEC") a Statement of
Additional Information ("SAI") with respect to the Fund dated the same date as
the Prospectus for the Fund and as may be further amended from time to time,
which contains more detailed information about the Trust and the Fund and is
incorporated into this Prospectus by reference. An investor may obtain a copy of
the SAI without charge by contacting the Trust's distributor, Forum Financial
Services, Inc., at Two Portland Square, Portland, Maine 04101 or by calling
207-879-1900. Investors should read this Prospectus and retain it for future
reference.
NORWEST ADVANTAGE FUNDS IS A FAMILY OF OPEN-END INVESTMENT COMPANIES COMMONLY
KNOWN AS MUTUAL FUNDS. THE SHARES OF MUTUAL FUNDS ARE NOT INSURED OR GUARANTEED
BY THE U.S. GOVERNMENT, THE FDIC, THE FEDERAL RESERVE SYSTEM OR ANY OTHER
GOVERNMENT AGENCY. THE SHARES ALSO ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF,
OR ENDORSED OR GUARANTEED BY, NORWEST BANK MINNESOTA, N.A. OR ANY OTHER BANK OR
BANK AFFILIATE.
AN INVESTMENT IN SHARES OF ANY MUTUAL FUND IS SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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.
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TABLE OF CONTENTS
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1. SUMMARY.................................................................. 3
2. INVESTMENT OBJECTIVE AND POLICIES........................................ 5
Investment Objective..................................................... 5
Investment Policies...................................................... 5
Additional Investment Policies and Risk Considerations................... 6
3. MANAGEMENT............................................................... 9
Investment Advisory Services............................................. 9
Management and Distribution Services..................................... 10
Shareholder Servicing and Custody........................................ 11
Expenses of the Fund..................................................... 12
4. PURCHASES AND REDEMPTIONS OF SHARES...................................... 12
General Purchase Information............................................. 12
Purchase Procedures...................................................... 13
General Redemption Information........................................... 14
Redemption Procedures.................................................... 15
Exchanges................................................................ 15
Shareholder Services..................................................... 16
5. DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS................................. 17
Dividends and Distributions.............................................. 17
Tax Matters.............................................................. 17
Shareholder Tax Matters.................................................. 18
6. OTHER INFORMATION........................................................ 18
Banking Law Matters...................................................... 18
Determination of Net Asset Value......................................... 19
Performance Information.................................................. 19
The Trust and Its Shares................................................. 19
Core Trust Structure..................................................... 20
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1. SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained in this Prospectus.
WHO SHOULD INVEST?
I Shares of the Fund are offered through this Prospectus to fiduciary, agency
and custodial clients of bank trust departments, trust companies and their
affiliates, including participants in certain qualified and nonqualified
employee benefit plans ("Plans") and to related IRA and KEOGH accounts. See
"Purchases and Redemptions of Shares." Participants in a Plan should consult
with their employer or plan sponsor to determine if the Fund is offered through
their Plan. While the Fund is not intended to provide a complete or balanced
investment program, it can serve as a component of an investor's long-term
program to accumulate assets for retirement or other major goals.
THE FUND
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is capital appreciation. Current income will be
incidental to the objective of capital appreciation. Currently, the Fund seeks
to achieve its investment objective by investing exclusively in the Portfolio, a
series of Schroder Capital Funds ("Core Trust"), itself a registered open-end
management investment company. The Portfolio has substantially the same
investment objective and policies as the Fund. Accordingly, the investment
experience of the Fund will correspond directly with the investment experience
of the Portfolio. The Fund will seek to achieve its investment objective by
investing, under normal market conditions, at least 65% of its total assets in
equity securities of companies domiciled in the United States that, at the time
of purchase have market capitalizations of $1.5 billion or less.
MANAGEMENT OF THE FUND
The Fund's investment adviser (the "Adviser") is Norwest Investment Management,
a part of Norwest Bank Minnesota, N.A. ("Norwest"). As the Fund invests all of
its assets in the Portfolio, the Fund does not actively employ the Adviser to
manage its investment portfolio. See "Management - Investment Advisory
Services." Norwest serves as the Trust's transfer agent, dividend disbursing
agent and custodian. See "Management - Shareholder Servicing and Custody."
The Portfolio's investment adviser is Schroder Capital Management International
Inc. ("Schroder"), a registered investment adviser under the Investment Advisers
Act of 1940. The advisory fee paid to Schroder by the Portfolio is borne
indirectly by the Fund and any other investors in the Portfolio. See "Management
- - Investment Advisory Services." Schroder and the Adviser are sometimes referred
to collectively as the "Advisers."
The manager of the Trust and distributor of its shares is Forum Financial
Services, Inc. ("Forum"), a registered broker-dealer and member of the National
Association of Securities Dealers, Inc. Norwest provides certain administrative
services to the Fund. Schroder Fund Advisors ("Schroder Advisors") serves as
administrator of Core Trust, for which Forum also provides certain
administrative services. See "Management - Management and Distribution
Services."
PURCHASE AND REDEMPTION OF SHARES
Shares of beneficial interest of the Fund are offered without a sales charge and
may be redeemed without charge. Shares may be purchased or redeemed by mail, by
bank wire and through certain broker-dealers, banks, trust companies, or other
financial institutions. The minimum initial investment in Shares is $1,000. The
minimum subsequent investment is $100. See "Purchases and Redemptions of Shares
- - Purchase Procedures" and "Redemption Procedures."
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CERTAIN RISK FACTORS
There can be no assurance that the Fund will achieve its investment objective,
and the Fund's net asset value and total return will fluctuate based upon
changes in the value of its portfolio securities. Upon redemption, an investment
in the Fund may be worth more or less than its original value.
All investments made by the Fund entail some risk. Certain investments and
investment techniques, however, entail additional risks, such as the potential
use of leverage through borrowings, securities lending and other investment
techniques. See "Investment Objective and Policies - Additional Investment
Policies and Risk Considerations."
The Fund's policy of investing in smaller companies entails certain risks in
addition to those normally associated with investments in equity securities. See
"Investment Objective and Policies - Additional Investment Policies and Risk
Considerations." By investing solely in the Portfolio, the Fund may achieve
certain efficiencies and economies of scale. Nonetheless, this investment could
also have adverse effects on the Fund. Investors in the Fund should consider
these risks, as described under "Other Information - Core Trust Structure."
EXPENSES OF INVESTING IN THE FUND
The purpose of the following table is to assist investors in understanding the
various expenses of both the Fund and the Portfolio that an investor in the Fund
will bear directly or indirectly. There are no transaction charges in connection
with purchases, redemptions or exchanges of Fund shares. The Fund has not
adopted a Rule 12b-1 plan with respect to the Shares and, accordingly, the Fund
incurs no distribution expenses with respect to the Shares.
ANNUAL FUND OPERATING EXPENSES(1)
(As a percentage of average daily net assets)
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Investment Advisory Fees(2).................................................... 0.60%
Other Expenses (after expense reimbursements and fee waivers)(3)............... 0.65%
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Total Operating Expenses....................................................... 1.25%
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(1) For a further description of the various expenses incurred in the operation
of the Fund, see "Management." Expenses associated with the A Shares and B
Shares of the Fund differ from those of the Shares listed in the table shown
above. The Fund's expenses as listed above include the Fund's pro rata portion
of all operating expenses of the Portfolio, which will be borne indirectly by
Fund shareholders. The Fund pays Norwest and Forum for certain administrative
services, and Core Trust pays fees for administrative services rendered to the
Portfolio, of which the Fund bears its pro rata portion. The Trust's Board of
Trustees believes that the aggregate per share expenses of the Fund and the
Portfolio will be approximately equal to the expenses the Fund would incur if
its assets were invested directly in equity securities.
(2) Investment Advisory Fees are those incurred by the Portfolio; as long as its
assets are invested in the Portfolio, the Fund pays no investment advisory fees
directly. If the Fund invested directly in securities, the Fund would pay a
higher advisory fee and lower administrative fees than the Fund pays in
connection with its investment in the Portfolio. See "Investment Objective and
Policies" and "Management - Expenses of the Fund."
(3) Other expenses for the Fund are based on estimated amounts for the Fund's
first fiscal year of operations ending May 31, 1997. Absent estimated expense
reimbursements and fee waivers the expenses of the Fund would be: Other
Expenses, .98%; and Total Operating Expenses, 1.58%. Other Expenses include
transfer agency fees payable to Norwest at an annual rate of up to 0.25% of the
Fund's average daily net assets attributable to I Shares. In addition, Other
Expenses for the Fund include administrative services fees payable to Norwest of
0.25%. Fee waivers are voluntary and may be reduced or eliminated at any time.
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EXAMPLE
The following is a hypothetical example that indicates the dollar amount of
expenses that an investor would pay, assuming a $1,000 investment in the Fund's
Shares, a 5% annual return and reinvestment of all dividends and distributions.
HYPOTHETICAL EXPENSE EXAMPLE
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1 Year 3 Years
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The Example is based on the expenses listed in the "Annual Fund Operating
Expenses" table. The 5% annual return is not predictive of and does not
represent the Fund's projected returns; rather, it is required by government
regulation. The example should not be considered a representation of past or
future expenses or return. Actual expenses and return may be greater or less
than indicated.
2. INVESTMENT OBJECTIVE AND POLICIES
The Fund is designed for the investment of that portion of an investor's funds
that can appropriately bear the special risks associated with an investment in
smaller market capitalization companies with the aim of capital appreciation.
The Fund is not intended for investors whose objective is assured income or
preservation of capital.
INVESTMENT OBJECTIVE
The Fund's investment objective is capital appreciation. Current income will be
incidental to the objective of capital appreciation. There can be no assurance
that the Fund will achieve its investment objective.
The Fund's investment objective is fundamental and cannot be changed without
shareholder approval. The Fund currently seeks to achieve its investment
objective by investing all of its investable assets in the Portfolio, which has
substantially the same investment objective and policies as the Fund. Therefore,
although the following discusses the investment policies of the Portfolio and
the responsibilities of the Core Trust's board of trustees, it applies equally
to the Fund and the Trust's board of trustees (the "Board"). Additional
information concerning the investment policies of the Portfolio and the Fund,
including additional fundamental policies, is contained in the SAI.
INVESTMENT POLICIES
The Portfolio will seek to achieve its investment objective by investing, under
normal market conditions, at least 65% of its total assets in equity securities
of companies domiciled in the United States that, at the time of purchase, have
market capitalizations of $1.5 billion or less. Market capitalization means the
market value of a company's outstanding stock.
In its investment approach, Schroder will attempt to identify securities of
companies which it believes can generate above average earnings growth, selling
at favorable prices in relation to book values and earnings. As part of the
investment decision, Schroder's assessment of the competency of an issuer's
management will be an important consideration. These criteria are not rigid, and
other investments may be included in the Portfolio if they may help the
Portfolio to attain its objective. These criteria can be changed by the board of
trustees of the Core Trust, without shareholder approval.
The Portfolio will invest principally in equity securities (common stocks,
securities convertible into common stocks or, subject to special limitations,
rights or warrants to subscribe for or purchase common stocks). The Portfolio
may also invest to a limited degree in non-convertible debt securities and
preferred stocks when, in the opinion of Schroder, such investments are
warranted to achieve the
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Portfolio's investment objective. A convertible security is a bond, debenture,
note, preferred stock or other security that may be converted into or exchanged
for a prescribed amount of common stock of the same or a different issuer within
a particular period of time at a specified price or formula.
The Portfolio may invest in securities of small, unseasoned companies (which,
together with any predecessors, have been in operation for less than three
years), as well as in securities of more established companies. In view of the
volatility of price movements of the former, as a non-fundamental policy, the
Portfolio currently intends to invest no more than 5% of its total assets in
securities of small, unseasoned issuers.
Although there is no minimum rating for debt securities (convertible or
non-convertible) in which the Portfolio may invest, it is the present intention
of the Portfolio to invest no more than 5% of its net assets in debt securities
rated below Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's Ratings Services ("S&P"), such securities being commonly known
as "high yield/ high risk" securities or "junk bonds," and it will not invest in
debt securities that are in default. High yield/high risk securities are
predominantly speculative with respect to the capacity to pay interest and repay
principal and generally involve a greater volatility of price than securities in
higher rated categories. In the event the Portfolio intends in the future to
invest more than 5% of its net assets in junk bonds, appropriate disclosures
will be made to existing and prospective shareholders. It should be noted that
even bonds rated Baa by Moody's or BBB by S&P are described by those rating
agencies as having speculative characteristics and that changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
of issuers of such bonds to make principal and interest payments than is the
case with higher grade bonds. The Portfolio is not obligated to dispose of
securities due to changes by the rating agencies. See the SAI for information
about the risks associated with investing in junk bonds.
For temporary defensive purposes, the Portfolio may invest without limitation in
(or enter into repurchase agreements maturing in seven days or less with U.S.
banks and broker-dealers with respect to) short-term debt securities, including
commercial paper, U.S. Treasury bills, other short-term U.S. Government
securities, certificates of deposit and bankers' acceptances of U.S. banks. The
Portfolio also may hold cash and time deposits in U.S. banks. See "Investment
Policies" in the SAI for further information about all these securities.
ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS
GENERAL POLICY INFORMATION
The investment objective and all investment policies of each of the Fund and the
Portfolio that are designated as fundamental may not be changed without approval
of the holders of a majority of the outstanding voting securities of the Fund or
the Portfolio, as applicable. A majority of outstanding voting securities means
the lesser of (i) 67% of the shares present or represented at a shareholder
meeting at which the holders of more than 50% of the outstanding shares are
present or represented, or (ii) more than 50% of outstanding shares. Unless
otherwise indicated, all investment policies are nonfundamental and may be
changed by the Board without approval of shareholders of the Fund. Likewise,
nonfundamental investment policies of the Portfolio may be changed by the board
of trustees of Core Trust without shareholder approval. For more information
concerning shareholder voting, see "Other Information - The Trust and Its Shares
- - Shareholder Voting and Other Rights" and "- Core Trust Structure."
INVESTMENT TYPES
COMMON AND PREFERRED STOCK. The Portfolio may invest in common and preferred
stock. Common stockholders are the owners of the company issuing the stock and,
accordingly, vote on various corporate governance matters, such as mergers. They
are not creditors of the company, but rather, upon liquidation of the company,
are entitled to their pro rata share of the company's assets after
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creditors (including fixed income security holders) and, if applicable,
preferred stockholders are paid. Preferred stock is a class of stock having a
preference over common stock as to dividends and, generally, as to the recovery
of investment. A preferred stockholder is a shareholder in the company and not a
creditor of the company, as is a holder of the company's fixed income
securities. Dividends paid to common and preferred stockholders are
distributions of the earnings of the company and not interest payments, which
are expenses of the company. Equity securities owned by the Portfolio may be
traded in the over the counter market or on a securities exchange, but may not
be traded every day or in the volume typical of securities traded on a major
U.S. national securities exchange. As a result, disposition by the Portfolio of
a security to meet redemptions by interest holders or otherwise may require the
Portfolio to sell these securities at a discount from market prices, to sell
during periods when disposition is not desirable, or to make many small sales
over a lengthy period of time. The market value of all securities, including
equity securities, is based upon the market's perception of value and not
necessarily the book value of an issuer or other objective measure of a
company's worth.
REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase agreements. A
repurchase agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller - a U.S. bank or recognized broker-dealer - sells
securities to the Portfolio and agrees to repurchase the securities at the
Portfolio's cost plus interest within a specified period (normally one day). In
these transactions, the values of the underlying securities purchased by the
Portfolio are monitored at all times by Schroder to insure that the total value
of the securities equals or exceeds the value of the repurchase agreement, and
the Portfolio's custodian bank holds the securities until they are repurchased.
In the event of default by the seller under the repurchase agreement, the
Portfolio may have difficulties in exercising its rights to the underlying
securities and may incur costs and experience time delays in disposing of them.
To evaluate potential risks, Schroder reviews the creditworthiness of those
banks and dealers with which the Portfolio enters into repurchase agreements.
ILLIQUID AND RESTRICTED SECURITIES. As a non-fundamental policy, the Portfolio
will not purchase or otherwise acquire any security if, as a result, more than
15% of its net assets (taken at current value) would be invested in securities
that are illiquid by virtue of the absence of a readily available market or
because of legal or contractual restrictions on resale ("restricted
securities"). There may be undesirable delays in selling illiquid securities at
prices representing their fair value. This policy includes over-the-counter
options held by the Portfolio and the in the money portion of the assets used to
cover such options. As stated above, this policy also includes assets which are
subject to material legal restrictions on repatriation. The limitation on
investing in restricted securities does not include securities that may not be
resold to the general public but may be resold to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933. If Schroder
determines that a "Rule 144A security" is liquid pursuant to guidelines adopted
by the board of trustees of the Core Trust, it will not be deemed illiquid.
These guidelines take into account trading activity for the securities and the
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, that security may
become illiquid, which could affect the Portfolio's liquidity. See "Investment
Policies - Illiquid and Restricted Securities" in the SAI for further details.
LOANS OF PORTFOLIO SECURITIES. The Portfolio may lend portfolio securities
(other than in repurchase transactions) to brokers, dealers and other financial
institutions meeting specified credit conditions, if the loan is collateralized
in accordance with applicable regulatory requirements and if, after any loan,
the value of the securities loaned does not exceed 25% of the value of the
Portfolio's total assets. By so doing, the Portfolio attempts to earn income
through the receipt of interest on the loan. In the event of the bankruptcy of
the other party to a securities loan, the Portfolio could experience delays in
recovering the securities it lent. To the extent that, in the meantime, the
value of the securities the Portfolio lent has increased, the Portfolio could
experience a loss.
The Portfolio may lend securities from its portfolio if liquid assets in an
amount at least equal to the current market value of the securities loaned
(including accrued interest thereon) plus the interest
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payable to the Portfolio with respect to the loan is maintained as collateral by
the Portfolio in a segregated account. Any securities that the Portfolio may
receive as collateral will not become a part of its portfolio at the time of the
loan, and, in the event of a default by the borrower, the Portfolio will, if
permitted by law, dispose of such collateral except for such part thereof that
is a security in which the Portfolio is permitted to invest. During the time
that the securities are on loan, the borrower will pay the Portfolio any accrued
income on those securities, and the Portfolio may invest the cash collateral and
earn income or receive an agreed upon fee from a borrower that has delivered
cash equivalent collateral. Cash collateral received by the Portfolio will be
invested in U.S. Government securities and liquid high-grade debt obligations.
The value of securities loaned will be marked to market daily. Portfolio
securities purchased with cash collateral are subject to possible depreciation.
Loans of securities by the Portfolio will be subject to termination at the
Portfolio's or the borrower's option. The Portfolio may pay reasonable
negotiated fees in connection with loaned securities, so long as such fees are
set forth in a written contract and approved by the board of trustees of Core
Trust.
DERIVATIVE SECURITIES: WARRANTS, OPTIONS AND FUTURES TRANSACTIONS.
WARRANTS. The Portfolio may invest in warrants, which are options to purchase an
equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the
warrant's issuance) and usually during a specified period of time. The Portfolio
may not invest in warrants if, as a result, more than 5% of its net assets would
be so invested or if, more than 2% of its net assets would be invested in
warrants that are not listed on the New York or American Stock Exchanges.
OPTIONS AND FUTURES TRANSACTIONS. While the Portfolio does not presently intend
to do so, it may write covered call options and purchase certain put and call
options, stock index futures, and options on stock index futures and
broadly-based stock indices, all of which are referred to as "Hedging
Instruments." In general, the Portfolio may use Hedging Instruments: (1) to
attempt to protect against declines in the market value of the Portfolio's
securities and thus protect the Fund's net asset value per share against
downward market trends, or (2) to establish a position in the equities markets
as a temporary substitute for purchasing particular equity securities. The
Portfolio will not use Hedging Instruments for speculation. The Hedging
Instruments which the Portfolio is authorized to use have certain risks
associated with them. Principal among such risks are: (a) the possible failure
of such instruments as hedging techniques in cases where the price movements of
the securities underlying the options or futures do not follow the price
movements of the portfolio securities subject to the hedge; (b) potentially
unlimited loss associated with futures transactions and the possible lack of a
liquid secondary market for closing out a futures position; and (c) possible
losses resulting from the inability of the Portfolio's investment adviser to
correctly predict the direction of stock prices, interest rates and other
economic factors. The Hedging Instruments the Portfolio may use and the risks
associated with them are described in greater detail under "Investment Policies"
in the SAI.
SHORT SALES AGAINST-THE-BOX. The Portfolio may not sell securities short except
in "short sales against-the-box." For Federal income tax purposes, short sales
against-the-box may be made to defer recognition of gain or loss on the sale of
securities until the short position is closed out. See "Short Sales
Against-the-Box" in the SAI for further details.
RISK CONSIDERATIONS
All investments involve certain risks. Investments in smaller capitalization
companies involve greater risks than those risks associated with investments in
larger capitalization companies. Smaller capitalization companies generally
experience higher growth rates and higher failure rates than do larger
capitalization companies. The trading volume of securities of smaller
capitalization companies is normally less than that of larger capitalization
companies and, consequently, generally has a disproportionate effect on their
market price, tending to make them rise more in response to buying demand and
fall more in response to selling pressure than is the case with larger
capitalization companies.
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Investments in small, unseasoned issuers generally involve greater risk than is
customarily associated with larger, more seasoned companies. Such issuers often
have products and management personnel which have not been thoroughly tested by
time or the marketplace and their financial resources may not be as substantial
as those of more established companies. Their securities, which the Portfolio
may purchase when they are offered to the public for the first time, may have a
limited trading market, which may adversely affect their sale by the Portfolio
and may result in such securities being priced lower than otherwise might be the
case. If other institutional investors engage in trading this type of security,
the Portfolio may be forced to dispose of its holdings at prices lower than
might otherwise be obtained.
PORTFOLIO TRANSACTIONS
The Advisers place orders for the purchase and sale of assets they manage with
brokers and dealers selected by and in the discretion of the respective Adviser.
The Advisers seek "best execution" for all portfolio transactions, but the Fund
may pay higher than the lowest available commission rates when an Adviser
believes it is reasonable to do so in light of the value of the brokerage,
research and other services provided by the broker effecting the transaction.
Subject to the Fund's policy of obtaining the best price consistent with quality
of execution of transactions, each Adviser may employ Norwest Investment
Services, Inc., Schroder Wertheim & Company and other broker-dealer affiliates
of an Adviser (collectively "Affiliated Brokers") to effect brokerage
transactions for the Fund. The Fund's payment of commissions to Affiliated
Brokers is subject to procedures adopted by the Board and, with respect to the
Portfolios of Core Trust, Core Trust's board of trustees, to provide that the
commissions will not exceed the usual and customary broker's commissions charged
by unaffiliated brokers. No specific portion of the Fund's brokerage will be
directed to Affiliated Brokers and in no event will a broker affiliated with an
Adviser directing the transaction receive brokerage transactions in recognition
of research or other services provided to the Adviser.
Tax rules applicable to short-term trading may affect the timing of the Fund's
portfolio transactions or its ability to realize short-term trading profits or
establish short-term positions.
An annual turnover rate of 100 percent would occur if all of the securities in
the Fund were replaced once in a period of 1 year. Higher portfolio turnover
rates may result in higher taxable income for shareholders and may result in
increased brokerage costs to the Fund. For more information about the portfolio
transactions of the Fund and the Portfolio, see the SAI.
3. MANAGEMENT
The business of the Trust is managed under the direction of its Board of
Trustees (the "Board") and the business of Core Trust is managed under the
direction of Core Trust's board of trustees. The Board formulates the general
policies of the Fund and generally meets quarterly to review the results of the
Fund, monitor investment activities and practices and discuss other matters
affecting the Fund and the Trust. The SAI contains general background
information about the trustees and officers of the Trust and Core Trust. The
Board currently consists of seven members.
INVESTMENT ADVISORY SERVICES
The Fund currently invests all of its assets in the Portfolio and has since its
inception. The Fund may withdraw its investment from the Portfolio, for which
Schroder serves as investment adviser, at any time if the Board determines that
it is in the best interests of the Fund and its shareholders to do so. See
"Other Information - Core Trust Structure - Certain Risks of Investing in the
Portfolio." Accordingly, the Fund has retained the Adviser as its investment
adviser and Schroder as its investment subadviser
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to manage the Fund's assets in the event the Fund so withdraws its investment.
Neither the Adviser or Schroder will receive any advisory or subadvisory fees
with respect to the Fund as long as the Fund remains completely invested in the
Portfolio or any other investment company.
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC. Schroder acts as investment
adviser to the Portfolio pursuant to an advisory agreement with Core Trust.
Subject to the general control of Core Trust's board of trustees, Schroder
manages the investment and reinvestment of the assets included in the
Portfolio's investment portfolio and continuously reviews, supervises and
administers the Portfolio's investments. In this regard, it is the
responsibility of Schroder to make decisions relating to the Portfolio's
investments and to place purchase and sale orders regarding such investments
with brokers or dealers selected by it in its discretion. Schroder receives an
advisory fee from Core Trust with respect to the Portfolio at an annual rate of
0.60% of the Portfolio's average daily net assets.
Schroder, whose principal business address is 787 Seventh Avenue, New York, New
York 10019, is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc. Schroders plc is
the holding company parent of a large worldwide group of banks and financial
services companies (referred to as the "Schroder Group"), with associated
companies and branch and representative offices located in seventeen countries
worldwide. The Schroder Group specializes in providing investment management
services and as of December 31, 1995, had assets under management of over $100
billion.
NORWEST INVESTMENT MANAGEMENT. Subject to the general supervision of the Board,
Norwest Investment Management would continuously review, supervise and
administer the Fund's investment program or oversee the investment decisions of
the investment subadviser, as applicable, if the Fund were to invest directly in
securities. The Adviser is a part of Norwest, a subsidiary of Norwest
Corporation, which is a multi-bank holding company that was incorporated under
the laws of Delaware in 1929. As of December 31, 1995, Norwest Corporation was
the 11th largest bank holding company in the United States in terms of assets.
As of that date, the Adviser managed or provided investment advice with respect
to assets totaling approximately $23 billion.
The investment advisory agreement for the Fund provides for an investment
advisory fee payable to Norwest by the Trust at an annual rate of 0.925% of the
average daily net assets of the Fund in the event that the Fund is not
completely invested in the Portfolio or another investment company. The Fund
would not be completely invested in the Portfolio or another investment company
only upon a determination by the Board that it is no longer in the best
interests of the Fund to be so invested. Schroder would assist the Adviser in
carrying out the Adviser's obligations under the investment advisory agreement
pursuant to an investment subadvisory agreement among the Trust, Norwest and
Schroder. Pursuant to the Fund's investment subadvisory agreement with Schroder,
the Adviser (and not the Trust) would pay Schroder a fee for its investment
subadvisory services. This compensation would not increase the amount paid by
the Trust to the Adviser pursuant to the Adviser's investment advisory
agreement. The investment advisory agreement between Schroder and Core Trust
with respect to the Portfolio is the same in all material respects as the Fund's
investment subadvisory agreement except as to the parties and the circumstances
under which fees will be paid.
PORTFOLIO MANAGERS. The Fund invests all of its assets in the Portfolio and,
accordingly, there is currently no portfolio manager for the Fund. Fariba
Talebi, a Vice President of the Trust and a First Vice President of Schroder,
with the assistance of an investment committee, is primarily responsible for the
day-to-day management of the Portfolio's investment portfolio, and has so
managed the Portfolio since its inception. Ms. Talebi has been employed by
Schroder in the investment research and portfolio management areas since 1987.
MANAGEMENT AND DISTRIBUTION SERVICES
Forum supervises the overall management of the Trust (including the Trust's
receipt of services for which the Trust is obligated to pay) and provides the
Trust with general office facilities pursuant to a
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Management Agreement with the Trust. Forum provides persons satisfactory to the
Board to serve as officers of the Trust. Those officers, as well as certain
other officers and Trustees of the Trust, may be directors, officers or
employees of (and persons providing services to the Trust may include) Forum,
its affiliates or certain non-banking affiliates of Norwest. As of the date of
this Prospectus, Forum provided management and administrative services to
registered investment companies and collective investment funds with assets of
approximately $16 billion. Forum is a registered broker-dealer and investment
adviser and is a member of the National Association of Securities Dealers, Inc.
As of the date of this Prospectus, Forum is controlled by John Y. Keffer,
President and Chairman of the Trust. For its services and facilities, Forum
receives from the Fund a management fee at an annual rate of 0.10% of the
average daily net assets attributable to each class of the Fund. From its own
resources, Forum may pay a fee to broker-dealers or other persons for
distribution or other services related to the Fund.
In addition, pursuant to a separate services agreement, Norwest receives a fee
at an annual rate of 0.25% of the average annual daily net assets of the Fund.
Under this agreement, Norwest is responsible for compiling data for and
preparing communications between the Fund and its shareholders, maintaining
requisite information flows between the Fund and the investment adviser to the
Portfolio, monitoring and reporting to the Board on the performance of the
Portfolio and reimbursing the Fund for certain excess expenses. No fees are
payable under this service agreement in the event that the Fund is not
completely invested in the Portfolio or another investment company.
On behalf of the Portfolio, Core Trust has entered into an administrative
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. Schroder Advisors is a wholly-owned subsidiary of Schroder. On behalf of
the Portfolio, Core Trust has also entered into an administrative services
contract with Forum. Pursuant to these agreements, Schroder Advisors and Forum
provide certain management and administrative services necessary for the
Portfolio's operations, other than the administrative services provided to the
Portfolio by Schroder. Forum receives a monthly fee at the annual rate of 0.075%
of the Portfolio's average daily net assets. Schroder Advisors receives no fee
from the Portfolio for the administrative services it provides the Portfolio.
Forum may subcontract any or all of its duties with respect to the Fund to one
or more qualified subadministrators who agree to comply with the terms of
Forum's management agreement. Forum may compensate those agents for their
services; however, no such compensation may increase the aggregate amount of
payments made by the Trust to Forum pursuant to the management agreement.
SHAREHOLDER SERVICING AND CUSTODY
Norwest serves as transfer agent and dividend disbursing agent for the Trust (in
this capacity, the "Transfer Agent"). The Transfer Agent maintains an account
for each shareholder of the Trust (unless such accounts are maintained by
sub-transfer agents or processing agents), performs other transfer agency and
shareholder servicing functions for the Trust, and acts as dividend disbursing
agent for the Trust. The Transfer Agent is permitted to subcontract any or all
of its functions with respect to all or any portion of the Trust's shareholders
to one or more qualified sub-transfer agents or processing agents, which may be
its or Forum's affiliates, who agree to comply with the terms of the Transfer
Agent's agreement with the Trust. The Transfer Agent is permitted to compensate
those agents for their services; however, no such compensation may increase the
aggregate amount of payments by the Trust to the Transfer Agent. For its
services, Norwest is compensated at the annual rate of 0.25% of the Fund's
average annual daily net assets attributable to the Shares.
Norwest also serves as the Trust's custodian and may appoint subcustodians for
the foreign securities and other assets held in foreign countries. Except as
noted below, Norwest currently receives no additional compensation for its
custodial services, but the Fund will incur the expenses and costs of any
subcustodian. The Fund indirectly incurs its pro rata portion of the custodial
fees of Core Trust. The Chase Manhattan Bank, N.A. serves as custodian of the
Portfolio and is paid a fee by Core Trust for its services.
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EXPENSES OF THE FUND
The Fund (as well as the Portfolio) is obligated to pay for all of its expenses,
although Norwest has agreed to reimburse the Trust for certain of the Fund's
operating expenses which in any year exceed the limits prescribed by any state
in which the Fund's shares are qualified for sale. For more information about
Fund expenses, see "Summary - Expenses of Investing in the Fund." These expenses
include: interest charges; taxes; brokerage fees and commissions; certain
insurance premiums; applicable fees and expenses under the Trust's or Core
Trust's contracts with the Advisers, Forum, the Transfer Agent and any
subcustodian; fees of pricing, interest, dividend, credit and other reporting
services; costs of membership in trade associations; auditing, legal and
compliance expenses; costs of preparing and printing the Trust's prospectuses,
statements of additional information and shareholder reports and delivering them
to existing shareholders; compensation of certain of the Trust's or Core Trust's
trustees, officers and employees and other personnel performing services for the
Trust or Core Trust; and registration fees and related expenses.
The Fund's expenses comprise Trust expenses attributable to the Fund and
expenses not attributable to any particular portfolio of the Trust, which are
allocated among the Fund and the portfolio in proportion to their average net
assets. The Fund's expenses include the Fund's pro rata share of the operating
expenses of the Portfolio, which are borne indirectly by the Fund's
shareholders.
The Advisers, Forum, the Transfer Agent and any other service provider to the
Fund or the Portfolio may elect to waive all or a portion of their fees. Any
such waivers will have the effect of increasing the Fund's performance for the
period during which the waiver was in effect. No fee waivers may be recouped at
a later date. Other than investment advisory fees, any fee paid by the Trust or
Core Trust may be increased by the Board or the board of trustees of Core Trust
without shareholder approval. Fee waivers are voluntary and may be reduced or
eliminated at any time.
Each service provider to the Trust or their agents or affiliates may also act in
various capacities for, and receive compensation from, their customers who are
shareholders of the Fund. Under agreements with those customers, these entities
may elect to credit against the fees payable to them by their customers or to
rebate to customers all or a portion of any fee received from the Trust with
respect to assets of those customers invested in the Fund.
4. PURCHASES AND REDEMPTIONS OF SHARES
Shares of the Fund are continuously sold and redeemed at a price equal to their
net asset value on each Fund Business Day (as defined below) without charge. All
transactions in Fund Shares are effected through the Transfer Agent, which
accepts orders for purchases and redemptions only from shareholders of record
and new investors. Shareholders of record receive periodic statements from the
Trust listing all account activity during the statement period. I Shares of a
Fund are offered to fiduciary, agency and custodial clients of bank trust
departments, trust companies and their affiliates.
GENERAL PURCHASE INFORMATION
Investments in the Fund may be made either through certain financial
institutions or by an investor directly. An investor who invests in the Fund
directly will be the shareholder of record. Fund Shares are issued immediately
following the next determination of net asset value made after acceptance of an
investor's subscription. The Fund reserves the right to reject any subscription
for the purchase of its shares. Share certificates are issued only to
shareholders of record upon their written request and are not issued for
fractional shares. With approval of the Trust and the Adviser, shares may be
purchased with portfolio securities in lieu of cash.
Shares of the Fund are offered without a sales charge and may be redeemed
without charge. The minimum initial investment in I Shares is $1,000. The
minimum subsequent investment is $100. Shareholders who elect to purchase I
Shares through electronic share purchase privileges such as the
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Automatic Investment Plan or the Directed Dividend Option are not subject to the
initial investment minimums. See "Purchases and Redemptions of Shares -
Shareholder Services - Automatic Investment Plan" and "Dividends, Distributions
and Tax Matters."
PURCHASE PROCEDURES
INITIAL PURCHASES OF SHARES
Investors may obtain the account application form necessary to open an account
by writing the Trust at the address listed on the cover of this Prospectus.
To participate in shareholder services not referenced on the account application
form and to change information on a shareholder's account (such as addresses),
investors or existing shareholders should contact the Trust. The Trust reserves
the right in the future to modify, limit or terminate any shareholder privilege
upon appropriate notice to shareholders and to charge a fee for certain
shareholder services, although no such fees are currently contemplated. Any
privilege and participation in any program may be terminated by the shareholder
at any time by writing to the Trust.
BY MAIL
Investors may send a check made payable to the Trust along with a completed
account application form to the Trust at the address listed below. Checks are
accepted at full value.
BY BANK WIRE
To make an initial investment in the Fund using the wire system for transmittal
of money among banks, an investor should first telephone the Trust Transfer
Agent at 612-667-8833 or 800-338-1348 to obtain an account number. The investor
should then instruct a bank to wire the investor's money immediately to:
Norwest Bank Minnesota, N.A.
ABA 091 000 019
For Credit to: Norwest Advantage Funds 0844-131
Re: Small Cap Opportunities Fund, I Shares
Account Number:
Account Name:
The investor should then promptly complete and mail the account application
form. There may be a charge by the investor's bank for transmitting the money by
bank wire, and there also may be a charge for the use of Federal funds. The
Trust does not charge investors for the receipt of wire transfers. Payment by
bank wire is treated as a Federal funds payment when received.
THROUGH FINANCIAL INSTITUTIONS
Shares may be purchased and redeemed (and in the case of Plans, generally will
be purchased and redeemed) through certain broker-dealers, banks, trust
companies and their affiliates, including Norwest and its affiliates
("Processing Organizations"). Processing Organizations may charge their
customers a fee for their services and are responsible for promptly transmitting
purchase, redemption and other requests to the Fund.
Investors who purchase shares through a Processing Organization may be charged a
fee if they effect transactions in Fund Shares through a broker or agent and
will be subject to the procedures of their Processing Organization, which may
include limitations, investment minimums, cutoff times and restrictions in
addition to, or different from, those applicable to shareholders who invest in
the Fund directly. These investors should acquaint themselves with their
Processing Organization procedures and should read this Prospectus in
conjunction with any materials and information provided by their Processing
Organization. Customers who purchase the Fund's shares through a Processing
Organization may or may not be the shareholder of record and, subject to their
Processing Organization's and the Fund's procedures, may have Fund shares
transferred into their name. Under their arrangements
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with the Trust, broker-dealer Processing Organizations are not generally
required to deliver payment for purchase orders until several business days
after a purchase order has been received by the Fund. Certain other Processing
Organizations may also enter purchase orders with payment to follow.
Certain shareholder services may not be available to shareholders who have
purchased shares through a Processing Organization. These shareholders should
contact their Processing Organization for further information. The Trust may
confirm purchases and redemptions of a Processing Organization's customers
directly to the Processing Organization, which in turn will provide its
customers with such confirmations and periodic statements as may be required by
law or agreed to between the Processing Organization and its customers. The
Trust is not responsible for the failure of any Processing Organization to carry
out its obligations to its customer. Certain states permit shares of the Fund to
be purchased and redeemed only through registered broker-dealers, including the
Fund's distributor.
SUBSEQUENT PURCHASES OF SHARES
Subsequent purchases may be made by mailing a check, by sending a bank wire or
through the shareholder's Processing Organization as indicated above. All
payments should clearly indicate the shareholder's name and account number.
GENERAL REDEMPTION INFORMATION
There is no minimum period of investment and no restriction on the frequency of
redemptions. Fund Shares are redeemed as of the next determination of the Fund's
net asset value following acceptance by the Transfer Agent of the redemption
order in proper form (and any supporting documentation which the Transfer Agent
may require). Normally, redemption proceeds are paid immediately, but in no
event later than 7 days, following acceptance of a redemption order. Proceeds of
a redemption request, however, will not be paid unless any check used for
investment has been cleared by the shareholder's bank, which may take up to 15
days. Unless otherwise indicated, redemption proceeds normally are paid by check
mailed to the shareholder's record address. The right of redemption may not be
suspended nor the payment dates postponed for more than 7 days except when the
New York Stock Exchange is closed (or when trading thereon is restricted) for
any reason other than its customary weekend or holiday closings or under any
emergency or other circumstances as determined by the SEC.
Shareholders who wish to accomplish redemptions or exchanges by telephone must
elect those privileges. The Trust, the Transfer Agent and Forum are not
responsible for the authenticity of telephone instructions or losses, if any,
resulting from unauthorized telephone redemption or exchange requests which
reasonably are believed to be genuine. The Trust employs reasonable procedures
(including the recording of certain telephone transactions) to insure that
telephone orders are genuine. Shareholders should verify the accuracy of
telephone instructions immediately upon receipt of confirmation statements.
During times of drastic economic or market changes, telephone redemption and
exchange privileges may be difficult to implement. In the event that a
shareholder is unable to reach the Transfer Agent by telephone, requests, may be
mailed or hand-delivered to the Transfer Agent.
SIGNATURE GUARANTEES
A signature guarantee is required for any endorsement on a share certificate and
for instructions to change a shareholder's record name or address, designated
bank account for wire redemptions, Automatic Investment or Withdrawal Plan,
dividend election, telephone redemption or any other option election in
connection with the shareholder's account. Signature guarantees may be provided
by any eligible institution acceptable to the Transfer Agent, including a bank,
a broker, a dealer, a national securities exchange, a credit union, or a savings
association that is authorized to guarantee signatures. Whenever a signature
guarantee is required, each person required to sign for the account must have
that person's signature guaranteed.
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OTHER REDEMPTION INFORMATION
Proceeds of redemptions normally are paid in cash. However, payments may be made
wholly or partially in portfolio securities if the Board determines that payment
in cash would be detrimental to the best interests of the Fund. The Trust will
only effect a redemption in portfolio securities if the particular shareholder
is redeeming more than $250,000 or 1 percent of the Fund's total net assets,
whichever is less, during any 90-day period. Due to the cost to the Trust of
maintaining smaller accounts, the Trust reserves the right to redeem, upon not
less than 60 days written notice, all shares in a Fund account with an aggregate
net asset value of less than $1,000. The Trust will not redeem accounts that
fall below that amount solely as a result of a reduction in net asset value.
REDEMPTION PROCEDURES
Shareholders that wish to redeem shares by telephone or receive redemption
proceeds by bank wire must elect these options by properly completing the
appropriate sections of their account application form. These privileges may not
be available until several weeks after a shareholder's application is received.
Shares for which certificates have been issued may not be redeemed by telephone.
BY MAIL
Shareholders may redeem shares by sending a written request to the Transfer
Agent accompanied by any share certificate that may have been issued to the
shareholder to evidence the shares being redeemed. All written requests for
redemption must be signed by the shareholder with signature guaranteed, and all
certificates submitted for redemption must be endorsed by the shareholder with
signature guaranteed. See "Purchases and Redemptions of Shares - General
Redemption Information."
BY TELEPHONE
A shareholder who has elected telephone redemption privileges may make a
telephone redemption request by calling the Transfer Agent at 800-338-1348 or
612-667-8833 and providing the shareholder's account number, the exact name in
which the shares are registered and the shareholder's social security or
taxpayer identification number. In response to the telephone redemption
instruction, the Trust will mail a check to the shareholder's record address or,
if the shareholder has elected wire redemption privileges, wire the proceeds.
See "Purchases and Redemptions of Shares - General Redemption Information."
BY BANK WIRE
For redemptions of more than $5,000, a shareholder who has elected wire
redemption privileges may request the Fund to transmit the redemption proceeds
by Federal funds wire to a bank account designated in writing by the
shareholder. To request bank wire redemptions by telephone, the shareholder also
must have elected the telephone redemption privilege. Redemption proceeds are
transmitted by wire on the day after a redemption request in proper form is
received by the Trust's Transfer Agent.
EXCHANGES
Shareholders may exchange their Shares for certain other portfolios of the
Trust. The Trust may in the future offer I Shares, Institutional Shares, or
other shares which will be exchangeable with the Shares of the Fund.
The Fund does not charge for exchanges, and there is currently no limit on the
number of exchanges a shareholder may make; the Fund reserves the right,
however, to limit excessive exchanges by any shareholder. Exchanges are subject
to the fees charged by, and the limitations (including minimum investment
restrictions) of, the Fund into which a shareholder is exchanging.
Exchanges may only be made between identically registered accounts or to open a
new account. A new account application is required to open a new account through
an exchange if the new account will
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not have an identical registration and the same shareholder privileges as the
account from which the exchange is being made. Shareholders may only exchange
into a fund if that fund's shares may legally be sold in the shareholder's state
of residence. For Federal tax purposes, an exchange is treated as a redemption
and a simultaneous new purchase. Exchange procedures may be materially amended
or terminated by the Trust at any time upon 60 days' notice to shareholders. See
"Additional Purchase and Redemption Information" in the SAI.
BY MAIL
Exchanges may be made by sending a written request to the Transfer Agent
accompanied by any share certificates for the shares to be exchanged. All
written requests for exchanges must be signed by the shareholder, and all
certificates submitted for exchange must be endorsed by the shareholder with
signature guaranteed. See "Purchases and Redemptions of Shares - General
Redemption Information."
BY TELEPHONE
A shareholder who has elected telephone exchange privileges may make a telephone
exchange by calling the Transfer Agent at 800-338-1348 or 612-667-8833 and
providing the shareholder's account number, the exact name in which the
shareholder's shares are registered and the shareholder's social security or
taxpayer identification number. See "Purchases and Redemptions of Shares -
General Redemption Information."
SHAREHOLDER SERVICES
IRAS AND KEOGHS
Shares may be a suitable investment vehicle for part or all of the assets held
in certain IRAs or KEOGH accounts. An appropriate account application form may
be obtained by contacting the Trust or, for accounts rolling over from a Plan,
the shareholder's employer. Under current IRA rules, by directly rolling over a
distribution from a Plan, investors can avoid the 20 percent withholding tax
imposed on distributions from a Plan. Rollover IRA assets must be held
separately from other IRA assets if the investor wishes to invest his Rollover
IRA in another employer's plan in the future. The amount of the deductible
contribution to an IRA will be reduced if the individual or, in the case of a
married individual filing jointly, either the individual or the individual's
spouse is an active participant in an employer-sponsored retirement plan and has
adjusted gross income above certain levels. Currently, individuals may make
tax-deductible IRA contributions of up to a maximum of $2,000 annually. However,
the deduction will be reduced if the individual or, in the case of a married
individual filing jointly, either the individual or the individual's spouse is
an active participant in an employer-sponsored retirement plan and has adjusted
gross income above certain levels.
AUTOMATIC INVESTMENT PLAN
Under the Automatic Investment Plan which is available to shareholders of the
Fund, shareholders may authorize monthly amounts of $50 or more to be withdrawn
automatically from the shareholder's designated bank account (other than
passbook savings) and sent to the Transfer Agent for investment in the Fund.
Shareholders wishing to use this plan must complete an application which may be
obtained by writing or calling the Transfer Agent. The Trust may modify or
terminate the Automatic Investment Plan with respect to any shareholder in the
event that the Trust is unable to settle any transaction with the shareholder's
bank. If the Automatic Investment Plan is terminated before the shareholder's
account totals $1,000, the Trust reserves the right to close the account in
accordance with the procedures described under "Purchases and Redemptions of
Shares -- General Redemption Information - Other Redemption Information."
AUTOMATIC WITHDRAWAL PLAN
A shareholder of the Fund whose shares in a single account total $1,000 or more
may establish a withdrawal plan to provide for the preauthorized payment from
the shareholder's account of $250 or
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more on a monthly, quarterly, semi-annual or annual basis. Under the withdrawal
plan, sufficient shares in the shareholder's account are redeemed to provide the
amount of the periodic payment and any taxable gain or loss is recognized by the
shareholder upon redemption of the shares.
Shareholders wishing to utilize the withdrawal plan may do so by completing an
application which may be obtained by writing or calling the Transfer Agent. The
Trust may suspend a shareholder's withdrawal plan without notice if the account
contains insufficient funds to effect a withdrawal or if the account balance is
less than the required minimum amount at any time.
REOPENING ACCOUNTS. Provided that the information on the account application
form on file with the Trust is still applicable, a shareholder may reopen an
account, without filing a new account application form, at any time within one
year after the shareholder's account is closed.
5. DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Shares become entitled to receive dividends on the next Fund Business Day after
acceptance of an order and are not entitled to receive dividends declared after
the day on which their redemption becomes effective. Dividends of net investment
income currently are declared and paid at least annually by the Fund in
accordance with the Fund's dividend policy. The Fund's net capital gain, if any,
is distributed at least annually, typically in December.
Shareholders may choose to have dividends and distributions of the Fund
reinvested in shares of the Fund (the "Reinvestment Option"), to receive
dividends and distributions in cash (the "Cash Option") or to direct dividends
and distributions to be reinvested in shares of another fund of the Trust (the
"Directed Dividend Option"). Plan, IRA and KEOGH accounts are automatically
assigned the Reinvestment Option. All dividends and distributions are treated in
the same manner for Federal income tax purposes whether received in cash or
reinvested in shares of a fund.
Under the Reinvestment Option, all dividends and distributions are automatically
invested in additional Shares of the Fund. All dividends and distributions are
reinvested at the Fund's net asset value as of the payment date of the dividend
or distribution. Shareholders are assigned this option unless one of the other
two options is selected. Under the Cash Option, all dividends and distributions
are paid to the shareholder in cash. Under the Directed Dividend Option,
shareholders of the Fund whose shares in a single account of that Fund total
$10,000 or more may elect to have all dividends and distributions reinvested in
shares of another fund of the Trust, provided that those shares are eligible for
sale in the shareholder's state of residence. For further information concerning
the Directed Dividend Option, shareholders should contact the Transfer Agent.
TAX MATTERS
TAXATION OF THE FUNDS. The Fund is treated as a corporation for Federal tax
purposes and intends to qualify for each fiscal year as a regulated investment
company under the Internal Revenue Code of 1986, as amended. In addition, the
Fund intends to distribute all of its net investment income and capital gain
each year. Accordingly, it is anticipated that the Fund will not be liable for
Federal income or excise taxes on its net investment income and capital gain.
THE PORTFOLIO. The Portfolio is not required to pay Federal income taxes on its
net investment income and capital gain, as it is treated as a partnership for
Federal tax purposes. All interest, dividends and gains and losses of the
Portfolio are deemed to have been "passed through" to the Fund in proportion to
its holdings of the Portfolio, regardless of whether such interest, dividends or
gains have been distributed by the Portfolio or losses have been realized by the
Portfolio.
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SHAREHOLDER TAX MATTERS
GENERAL. Dividends paid by the Fund out of its net investment income (including
any realized net short-term capital gain) are taxable to shareholders as
ordinary income. Distributions by the Fund of realized net long-term capital
gain, if any, are taxable to shareholders as long-term capital gain, regardless
of the length of time the shareholder may have held shares in the Fund at the
time of distribution. If Fund shares are sold at a loss after being held for 6
months or less, the loss will be treated as long-term capital loss to the extent
of any long-term capital gain distribution received on those shares.
All capital gain distributions and dividends paid by the Fund and received by a
shareholder reduce the net asset value of the shareholder's shares by the amount
of the distribution or dividend. Furthermore, a dividend or distribution made
shortly after the purchase of shares by a shareholder, although in effect a
return of capital to that particular shareholder, would be taxable to the
shareholder as described above.
It is expected that a substantial portion of the dividends to shareholders will
qualify for the dividends received deduction for corporations. The amount of
such dividends eligible for the dividends received deduction is limited to the
amount of dividends from domestic corporations received during the Fund's fiscal
year.
The Fund may be required by Federal law to withhold 31 percent of reportable
payments (which may include taxable dividends, capital gain distributions and
redemption proceeds) paid to individuals and certain other non-corporate
shareholders. Withholding is not required if a shareholder certifies that the
shareholder's social security or tax identification number provided to the Trust
is correct and that the shareholder is not subject to backup withholding for
prior under-reporting to the Internal Revenue Service.
Reports containing appropriate information with respect to the Federal income
tax status of dividends and distributions paid during the year by the Fund will
be mailed to shareholders shortly after the close of each year.
TAX-DEFERRED ACCOUNTS. Dividends or distributions of net long-term capital gain,
if any, paid with respect to the shares of the Fund held by a tax-deferred
account will not be taxable to that account. Currently, distributions from such
accounts will be taxable to individual participants under applicable tax rules
without regard to the character of the income earned by the account.
6. OTHER INFORMATION
BANKING LAW MATTERS
Federal banking laws and regulations generally permit a bank or bank affiliate
to act as investment adviser, transfer agent and custodian to an investment
company and to purchase shares of the investment company as agent for and upon
the order of a customer. Forum believes that Norwest and any other bank or bank
affiliate that may perform sub-transfer agent or similar services or purchase
shares as agent for its customers may perform the services described in this
Prospectus for the Trust and its shareholders without violating applicable
Federal banking laws or regulations.
Federal or state statutes or regulations and judicial or administrative
decisions or interpretations relating to the activities of banks and their
affiliates, however, could prevent a bank or bank affiliate from continuing to
perform all or a part of the activities contemplated by this Prospectus. If
Norwest or another bank or bank affiliate were prohibited from so acting, its
shareholder customers would be permitted to remain shareholders of the Trust and
alternative means for continuing the servicing of such shareholders would be
sought. In this event, changes in the operation of the Trust might occur
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and shareholders serviced by the bank or bank affiliate might no longer be able
to avail themselves of its services. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.
DETERMINATION OF NET ASSET VALUE
The Trust determines the net asset value per share of the Fund as of 4:00 p.m.,
Eastern time, on each Fund Business Day by dividing the value of the Fund's net
assets (i.e., the value of its securities and other assets less its liabilities)
by the number of shares outstanding at the time the determination is made.
Securities owned by the Fund or the Portfolio for which market quotations are
readily available are valued at current market value or, in their absence, at
fair value as determined by the Board or the Core Trust board of trustees or
pursuant to procedures approved by the Board or the Core Trust board of
trustees, as applicable. The Trust does not determine net asset value on the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
PERFORMANCE INFORMATION
The Fund's performance may be quoted in advertising in terms of yield or total
return. Both types are based on historical results and are not intended to
indicate future performance. The Fund's advertisements may reference ratings and
rankings among similar funds by independent evaluators such as Morningstar,
Lipper Analytical Services, Inc. and IBC/Donoghue, Inc. In addition, the
performance of the Fund may be compared to recognized indices of market
performance. The comparative material found in the Fund's advertisements, sales
literature or reports to shareholders may contain performance ratings. This
material is not to be considered representative or indicative of future
performance.
YIELD. The Fund's yield is a way of showing the rate of income earned by the
Fund as a percentage of the Fund's share price. Yield is calculated by dividing
the net investment income of the Fund for the stated period by the average
number of shares entitled to receive dividends and expressing the result as an
annualized percentage rate based on the Fund's share price at the end of the
period. The Fund may also quote a compounded annualized yield which assumes the
reinvestment of dividends paid by the Fund and therefore will be somewhat higher
than the annualized yield for the same period.
TOTAL RETURN. Total Return refers to the average annual compounded rates of
return over some representative period that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment, after giving effect to the reinvestment of all dividends and
distributions and deductions of expenses during the period. Because average
annual returns tend to smooth out variations in a Fund's returns, shareholders
should recognize that they are not the same as actual year-by-year results.
PERFORMANCE BENCHMARKS. The Fund uses a benchmark securities index as a measure
of the Fund's performance. This index is not used in the management of the Fund
but rather is a standard by which the Advisers and shareholders may compare the
performance of the Fund to an unmanaged composite of securities with similar,
but not identical, characteristics as the Fund. Accordingly, the Adviser
generally uses the index as a comparison to measure the performance of the Fund.
The Fund may from time to time advertise a comparison of its performance against
any index.
THE TRUST AND ITS SHARES
The Trust was originally organized under the name "Prime Value Funds, Inc." as a
Maryland corporation on August 29, 1986 and on July 30, 1993 was reorganized as
a Delaware business trust under the name "Norwest Funds." On October 1, 1995,
the Trust changed its name to "Norwest Advantage Funds." The Trust has an
unlimited number of authorized shares of beneficial interest. The Board may,
without shareholder approval, divide the authorized shares into an unlimited
number of separate
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portfolios or series (such as the Fund) and may divide portfolios or series into
classes of shares (such as I Shares), and the costs of doing so will be borne by
the Trust. Currently the authorized shares of the Trust are divided into 31
series.
OTHER CLASSES OF SHARES. The Fund may issue shares of other classes. The Fund
currently issues three classes of shares, I Shares, A Shares and B Shares, and
may in the future create additional class types. I Shares are offered to
fiduciary, agency and custodial clients of bank trust departments, trust
companies and their affiliates without any sales charges. A Shares are sold with
front-end sales charge or, in some cases, a contingent deferred sales charge. B
Shares are sold with a contingent deferred sales charge and pay distribution
fees. Investor Shares are offered with a minimum investment of $1,000 and incur
greater transfer agency and other expenses than Institutional Shares. Each class
of a Fund will have a different expense ratio and may have different sales
charges (including distribution fees). Each class's performance is affected by
its expenses and sales charges. For more information on any other class of
shares of the Fund investors may contact the Transfer Agent at 612-667-8833 or
800-338-1348. Investors may also contact their Norwest sales representative to
obtain information on the other classes. Sales personnel of broker-dealers and
other financial institutions selling the Fund's shares may receive differing
compensation for selling I Shares, A Shares and B Shares of the Fund.
SHAREHOLDER VOTING AND OTHER RIGHTS. Each share of each portfolio of the Trust
and each class of shares has equal dividend, distribution, liquidation and
voting rights, and fractional shares have those rights proportionately, except
that expenses related to the distribution of the shares of each class (and
certain other expenses such as transfer agency and administration expenses) are
borne solely by those shares and each class votes separately with respect to the
provisions of any Rule 12b-1 plan which pertain to the class and other matters
for which separate class voting is appropriate under applicable law. Generally,
shares will be voted in the aggregate without reference to a particular
portfolio or class, except if the matter affects only one portfolio or class or
voting by portfolio or class is required by law, in which case shares will be
voted separately by portfolio or class, as appropriate. Delaware law does not
require the Trust to hold annual meetings of shareholders, and it is anticipated
that shareholder meetings will be held only when specifically required by
Federal or state law. Shareholders have available certain procedures for the
removal of Trustees. There are no conversion or preemptive rights in connection
with shares of the Trust. All shares when issued in accordance with the terms of
the offering will be fully paid and nonassessable. Shares are redeemable at net
asset value, at the option of the shareholders, subject to any contingent
deferred sales charge that may apply. A shareholder in a portfolio is entitled
to the shareholder's pro rata share of all dividends and distributions arising
from that portfolio's assets and, upon redeeming shares, will receive the
portion of the portfolio's net assets represented by the redeemed shares.
As an investor in the Portfolio, the Fund will be entitled to vote in proportion
to its relative beneficial interest in the Portfolio. On most issues subject to
a vote of investors, as required by the 1940 Act and other applicable law, the
Fund will solicit proxies from shareholders of the Fund and will vote its
interest in the Portfolio in proportion to the votes cast by its shareholders.
If there are other investors in the Portfolio, there can be no assurance that
any issue that receives a majority of the votes cast by Fund shareholders will
receive a majority of votes cast by all investors in the Portfolio; indeed, if
other investors hold a majority interest in the Portfolio, they could hold have
voting control of the Portfolio.
From time to time, a shareholder may own a large percentage of the Fund.
Accordingly, that shareholder may be able to greatly affect (if not determine)
the outcome of a shareholder vote.
CORE TRUST STRUCTURE
The Fund seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which has substantially the same investment
objective and policies as the Fund. Accordingly, the Portfolio directly acquires
its own securities and the Fund acquires an indirect interest in those
securities. The Portfolio is a separate series of Core Trust, a business trust
organized under the laws of
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the State of Delaware in September 1995. Core Trust is registered under the Act
as an open-end management investment company and currently has four separate
portfolios. The assets of the Portfolio, a diversified portfolio, belong only
to, and the liabilities of the Portfolio are borne solely by, the Portfolio and
no other portfolio of Core Trust.
THE PORTFOLIO. The investment objective and fundamental investment policies of
the Fund and the Portfolio can be changed only with shareholder approval. See
"Investment Objective and Policies," and "Management" for a complete description
of the Portfolio's investment objective, policies, restrictions, management, and
expenses.
The Fund's investment in the Portfolio is in the form of a non-transferable
beneficial interest. The Portfolio may permit other investment companies or
institutional investors to invest in it. All investors in the Portfolio will
invest on the same terms and conditions as the Fund and will pay a proportionate
share of the Portfolio's expenses. As of the date of this Prospectus, the
Portfolio has one other investor.
The Portfolio normally will not hold meetings of investors except as required by
the Act. Each investor in the Portfolio will be entitled to vote in proportion
to its relative beneficial interest in the Portfolio. On most issues subject to
a vote of investors, as required by the Act and other applicable law, the Fund
will solicit proxies from shareholders of the Fund and will vote its interest in
the Portfolio in proportion to the votes cast by its shareholders. As there are
other investors in the Portfolio, there can be no assurance that any issue that
receives a majority of the votes cast by Fund shareholders will receive a
majority of votes cast by all investors in the Portfolio; indeed, other
investors holding a majority interest in the Portfolio could have voting control
of the Portfolio.
The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that
might sell its shares to members of the general public would not be required to
sell its shares at the same public offering price as the Fund, and could have
different advisory and other fees and expenses than the Fund. Therefore, Fund
shareholders may have different returns than shareholders in another investment
company that invests exclusively in the Portfolio. Information regarding any
such funds is available from Core Trust by calling Forum Financial Corp. at
(207) 879-8903.
CERTAIN RISKS OF INVESTING IN THE PORTFOLIO. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. For example, if the Portfolio had a large investor other than
the Fund that redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.
The Fund may withdraw its entire investment from the Portfolio at any time, if
the Board determines that it is in the best interests of the Fund and its
shareholders to do so. The Fund might withdraw, for example, if there were other
investors in the Portfolio with power to, and who did by a vote of the
shareholders of all investors (including the Fund), change the investment
objective or policies of the Portfolio in a manner not acceptable to the Board.
A withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by the Portfolio. That distribution could result
in a less diversified portfolio of investments for the Fund and could affect
adversely the liquidity of the Fund's portfolio. If the Fund decided to convert
those securities to cash, it usually would incur brokerage fees or other
transaction costs. If the Fund withdrew its investment from the Portfolio, the
Board would consider what action might be taken, including the management of the
Fund's assets in accordance with its investment objective and policies by the
Adviser and Schroder or the investment of all of the Fund's investable assets in
another pooled investment entity having substantially the same investment
objective as the Fund. The inability of the Fund to find a suitable replacement
investment, in the event the Board decided not to permit the Adviser and
Schroder to manage the Fund's assets, could have a significant impact on
shareholders of the Fund.
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Each investor in the Portfolio, including the Fund, will be liable for all
obligations of the Portfolio, but not any other portfolio of Core Trust. The
risk to an investor in the Portfolio of incurring financial loss on account of
such liability, however, would be limited to circumstances in which the
Portfolio was unable to meet its obligations. Upon liquidation of the Portfolio,
investors would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to investors.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE STATEMENT OF
ADDITIONAL INFORMATION AND THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION
WITH THE OFFERING OF THE FUND'S SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO
ANY PERSON TO WHOM, SUCH OFFER MAY NOT LAWFULLY BE MADE.
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