SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 9 to 33-10888
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 9
to 33-10888
THE EHRENKRANTZ TRUST
(Exact Name of Registrant as Specified in Chapter)
598 Madison Ave., Fourteenth Floor, New York, NY 10022
(Name and Address of Principal Executive Office)
(800) 867-8600
(Registrant's Telephone Number, including area code)
LOUIS EHRENKRANTZ
598 Madison Avenue, Fourteenth Floor, New York, NY 10022
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as practicable after Amendment becomes effective.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b)
_______on (date) pursuant to paragraph (b)
_______60 days after filing pursuant to paragraph (a)
_______on (date) pursuant to paragraph (a) of Rule 485.
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-2. The
Notice required by Rule 24f-2 was filed with the Commission on February 15,
1996.
<PAGE>
THE EHRENKRANTZ TRUST
CROSS REFERENCE SHEET
Form N-1A Item
Number and Caption Heading in Prospectus
1. Cover Page Cover Page
2. Synopsis Not Applicable
3. Condensed Financial Information Condensed Financial Information
4. General Description The Ehrenkrantz Trust; The
of Registrant Ehrenkrantz Growth Fund; General
Information; Description of
the Fund
5. Management of the Fund Management, Investment Advisory
Services
6. Capital Stock and Other Description of the Fund; Share-
Securities holderRetirement Plans;
Redemption of Shares; Dividends,
Distributions and Taxes;
Determination of Net Asset Value.
7. Purchase of Securities Purchase of Shares; Determination
Being Offered of Net Asset Value; Investment
Objectives; Investment Strategy
8. Redemption of Repurchase Redemption of Shares
9. Legal Proceedings Not Applicable
<PAGE>
The Ehrenkrantz Trust
Prospectus 1730 K Street, N.W.
April 29, 1996 Washington, DC 20006
1-800-424-8570
In the Washington DC Area (202) 223-1000
______________________________________________________________________________
THE EHRENKRANTZ GROWTH FUND
The Ehrenkrantz Trust is a Massachusetts business trust organized as a
diversified, open-end management investment company offering redeemable shares
of beneficial interest. The Fund's investment objective is capital
appreciation, subject to varying market risks.
A Mutual Fund Managed by
Ehrenkrantz King Nussbaum, Inc.
1-800-867-8600
______________________________________________________________________________
This Prospectus is intended to set forth clearly information about the Fund
that a prospective investor should know before investing. Please read it and
retain it for future reference. Additional information about the Fund and its
performance, including the Statement of Additional Information dated April
29, 1996, which is incorporated by reference into this Prospectus, has been
filed with the Securities and Exchange Commission and is available without
charge upon request to the Trust at Suite 904, 1730 K Street, N.W.,
Washington, DC 20006.
_____________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________________________________________________________
<PAGE>
SUMMARY OF FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Sales load imposed on purchases*
Sales Load Imposed on Reinvested Dividends ..........................None
Deferred Sales Load..................................................None
Redemption Fees......................................................None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees.....................................................1.00%
12b-1 fees...........................................................None
Other expenses:
Shareholder Services & Fund Accounting.........................0.60%
Audit fees ....................................................0.09%
Custodian fees.................................................0.08%
Other (Refunds)............................................... 0.30%
Total Fund operating expenses** ....................................2.07%
The purpose of the above table is to assist shareholders in understanding the
various costs and expenses that a shareholder will bear by investing in the
Trust. The percentages listed above, expressing various annual operating
expenses of the Fund, are based on amounts incurred by the Fund for the fiscal
year ended December 31, 1995.
EXAMPLE
You would pay the following
expenses on a $1,000 investment 1 year $21
assuming (1) 5% annual return 3 years $63
and (2) redemption at the end 5 years $108
of each time period: 10 years $227
NOTE: This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown above.
* The Fund eliminated a 4.5% sales load effective January 1, 1994.
** The Advisor assumed certain operating expenses. It intends to continue to
do so but may discontinue such practice at any time upon thirty days written
notice to shareholders. In that event, the Fund could be responsible for
total expenses up to 2.5%. This assumes that 2.07% is representative of
annual Fund operating expenses as a percentage of the average net assets.
<PAGE>
TABLE OF CONTENTS
Page
Officers and Trustees................................................Back Cover
Condensed Financial Information......................................
The Ehrenkrantz Trust................................................
The Ehrenkrantz Growth Fund .........................................
Investment Strategy..................................................
Investment Policies..................................................
Risk Factors ........................................................
Management .........................................................
Investment Advisory Services.........................................
Purchase of Shares...................................................
Shareholder Retirement Plans.........................................
Redemption of Fund Shares............................................
Telephone Transactions...............................................
Dividends, Distributions and Taxes ..................................
Determination of Net Asset Value ...................................
Description of the Fund ............................................
Shareholder Inquiries ...............................................
General Information .................................................
Investment Application .............................................
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus and the Statement
of Additional Information dated April 29, 1996, and, if given or made, such
information or representations may not be relied upon as having been authorized
by the Fund. This Prospectus does not constitute an offer to sell securities
in any state or jurisdiction in which such offering may not lawfully be made.
The delivery of this Prospectus at any time shall not imply that there has
been no change in the affairs of the Fund since the date hereof.
<PAGE>
CONDENSED FINANCIAL INFORMATION
(Selected Per Share Data for a share outstanding
throughout the period indicated)
The Condensed Financial Information has been examined by Roy G. Hale, CPA,
the Fund's auditor, as indicated in his report dated February 21, 1996 on the
Fund's financial statements as of December 31, 1995 which are incorporated by
reference into the Fund's Statement of Additional Information. The Condensed
Financial Information should be read in conjunction with the Fund's financial
statements and notes thereto. The Statement of Additional Information may be
obtained from the Fund without charge. Additional information about the Fund's
performance is contained in the annual report, which may be obtained without
charge.
<TABLE>
<CAPTION>
THE EHRENKRANTZ TRUST
Financial Highlights
for a Share Outstanding Throughout the Period Indicated**
Ehrenkrantz Growth Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991 1990 1989 1988 1987
Investment income $.206 $.165 $.124 $.133 $.219 $.24 $.27 $.18 $.21
Other Income --- --- --- .001 .004 --- --- --- ---
Expenses .111 .124 .093 .100 .099 .10 .08 .06 .07
Net investment income .095 .041 .031 .034 .124 .14 .19 .12 .14
Distribution from net
investment income (.095) (.035) (.033) (.182) (.115) (.13) (.38) (.12) (.08)
Distribution of
capital gains (.498) (.362) (.352) (.103) (.116) (.135) (.09) --- ---
Distribution considered
to be return of capital --- --- --- --- --- --- (.06) --- ---
Net realized and unrealized
gain (loss) on securities .739 (.023) .217 .600 (.255) .74 .59 (.77) .47
Net increase (decrease) in
net asset value .241 .379 .181 (.030) .484 (.380) .40 .59 (.71)
NET ASSET VALUE:
Beginning of the period $5.18 $5.56 $5.38 $5.41 $4.93 $5.31 $4.91 $4.29 $5.00
End of period $5.42 $5.18 $5.56 $5.38 $5.41 $4.93 $5.31 $4.88 $4.29
Average annual total return 16.0% 0.3% 10.0% 4.7% 14.7% (2.2%) 18.9% 16.6% (12.6%)
Ratio of operating expenses
to average net assets 2.1% 2.3% 1.7% 1.9% 1.9% 2.1% 1.6% 1.5% 2.0%
Ratio of net investment income
to average net assets 1.8% 0.8% 0.6% 0.7% 2.4% 2.6% 3.7% 5.0% 4.0%
Portfolio turnover rate 79.0% 121.99% 137.2% 155.9% 109.0% 158.0% 164.0% 64.0% 33.0%
Number of shares outstanding
at end of the period 1,266,708 1,210,727 1,148,084 1,146,531 1,168,900 1,184,082 1,163,267 594,900 487,721
<FN>
**The above per share information is based upon a monthly average of shares
outstanding.
</FN>
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
THE EHRENKRANTZ TRUST
The Ehrenkrantz Trust (the "Trust") is a diversified, open-end management
investment company commonly called a "mutual fund." It was organized as a
Massachusetts business trust in 1986 and commenced operations on January 1,
1987. The Trust has only one class of share of beneficial interest. The
shares presently are issued in one series: The Ehrenkrantz Growth Fund. The
Ehrenkrantz Undiscovered Equities Fund Series was merged into the Growth
Series on May 31, 1989.
THE EHRENKRANTZ GROWTH FUND
The primary investment objective of the Growth Fund is capital
appreciation. The underlying assets of this series will primarily be invested
in both listed and unlisted common stocks and convertible securities believed
to offer favorable possibilities of capital appreciation commensurate with
reasonable risk. Current income will be only a secondary consideration in
selecting portfolio securities. Securities will be selected by the Investment
Committee of Ehrenkrantz King Nussbaum, Inc., the Trust's Investment Advisor,
through application of the investment strategy which is described below.
No particular person is primarily responsible for making recommendations to
the committee.
INVESTMENT STRATEGY
In selecting portfolio securities for the Fund, the Investment Committee
goes beyond traditional financial analysis and brings other disciplines into
the selection process. They believe that financial analysis is not enough
and, hence, apply their expertise in the social sciences and mass psychology
when selecting securities for the Fund. The investment philosophy applied by
Louis Ehrenkrantz and the Investment Committee involves a knowledge of history,
the humanities, social sciences and technology. This knowledge, they believe,
allows them to anticipate social trends and, consequently, select securities
which will benefit from the evolution of these trends. There can, of course,
be no assurance that the Fund's investment objectives will be achieved through
application of this investment strategy or that its shareholders will be
protected from the risk of loss inherent in stock ownership.
INVESTMENT POLICIES
In seeking to attain the Fund's investment objective, the Advisor intends
to invest the major portion of the Fund's assets in diversified portfolios of
common stocks and other equity-type securities which, in the opinion of the
Advisor, have capital appreciation possibilities consistent with the strategy
described above. Other equity-type securities will be limited to convertible
debentures, convertible preferred stock and warrants to purchase common stock.
Since the major portion of the portfolio is expected to consist of common
stocks and other equity-type securities, its net asset value will likely be
more volatile than portfolios containing a substantial amount of fixed
income securities.
<PAGE>
Except as described herein, the Fund may invest in all types of common
stocks and other equity-type securities, without regard to any objective
investment criteria such as size, exchange listing, earnings history, book
value, share price or other factors. The selection of investments will
depend solely on the Advisor's judgment that the investments selected will
further the attainment of the Fund's investment objective.
The Fund may invest in repurchase agreements. These involve the
acquisition by the Fund of an underlying debt instrument for a period usually
not exceeding one week, subject to an obligation of the seller to repurchase,
and the Fund to resell, the instrument at the fixed price. The Fund's Custodian
will have custody of securities acquired by the Fund under a repurchase
agreement. Under the Investment Company Act of 1940, repurchase agreements
may be considered loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements with selected securities dealers or banks or other
recognized financial institutions and will require that additional securities
be deposited with it if the value of the securities purchased should decrease
below resale price. Certain costs may be incurred by the Fund in connection
with the sale of the securities if the seller does not repurchase them in
accordance with the repurchase agreement. The Fund will consider, on an
ongoing basis, the credit worthiness of the institutions with which it enters
into repurchase agreements.
The fund may invest up to 10% of its assets in securities of foreign
issuers. Such investments may involve risks which are in addition to the
usual risks inherent in domestic investments. These risks include political
or economic instability of the issuer or the country of issue, the difficulty
of predicting international trade patterns and the possible imposition of
exchange controls. Such securities may also be subject to greater fluctuations
in price than securities of U.S. corporations. In addition, there may be less
publicly available information about a foreign company than a domestic company.
Foreign companies generally are not subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to domestic
companies. Dividends and interest in foreign securities may be subject to
foreign withholding taxes, which would reduce the Fund's income without
providing a tax credit for the Fund's shareholders. Although the Fund intends
to invest in securities of foreign issuers domiciled in nations which the
Advisor considers as having stable and friendly governments, there is the
possibility of exploitation, confiscatory taxation, currency blockage or
political or social instability which could adversely affect investments in
those nations. Finally, in the event of a default on any foreign debt
obligations, it may be more difficult for the Fund to obtain or to enforce a
judgement against the issuer of such securities.
In addition to investment in common stocks and other equity-type
securities, the Fund may invest in debt obligations which, in the Advisor's
opinion, offer the possibility of capital appreciation. Such debt obligations
include those of the U.S. Government and its agencies, states and
municipalities and their agencies, or corporate issuers. The advisor does
not anticipate investing a significant portion of Fund assets in debt
obligations but has not set any limitation on the percentage of total assets
that may be so invested. The Fund also may invest up to 100% of its assets
in U.S. Government debt securities or cash for defensive purposes.
<PAGE>
The Fund may write covered call options if, as a result thereof, the
value of the stocks underlying such calls does not exceed 25% of the Fund's
net assets.
The foregoing investment policies are not fundamental and the Fund's Board
of Trustees may change such policies without shareholder approval. As a
matter of fundamental policy which cannot be changed without the approval
of a majority of the Fund's voting securities, the Fund will not:
1. Purchase the securities of any issuer if such purchase would cause more
than 5% of the value of the Fund's total assets to be invested in the
securities of any one issuer (except securities of the U.S. Government or
any agency thereof), nor purchase more than 10% of the outstanding securities
of any one issuer.
2. Borrow money except from banks for temporary or emergency purposes
(but not for the purpose of investing) and then only in an amount not to
exceed 5% of the value of the Fund's net assets at the time the borrowing
is incurred.
3. Concentrate more than 25% of the Fund's assets in any one industry.
Certain other investment restrictions are set forth in the Statement of
Additional Information. The Advisor does not anticipate that the Fund's
portfolio turnover rate will exceed 200%. For instance, a rate of 100% would
result if all the securities in the portfolio at the beginning of an annual
period had been replaced by the end of the period.
There can, of course, be no assurance that the Fund's investment objective
can be achieved or that its shareholders will be protected from the risk of
loss inherent in stock ownership.
RISK FACTORS
The Fund's share price will fluctuate. When you sell your shares you may
lose money. Growth stocks can be volatile for several reasons. Since they
usually reinvest a high portion of earnings in their own businesses, they may
lack the comfortable dividend yield associated with value stocks that can
cushion total return in a bear market. Also, they normally carry a higher
price/earnings ration than many other stocks; consequently, if earning
expectations are not met, investors often punish growth stocks inordinately.
The Manager's investment philosophy involves, to an extent, the
anticipation of social trends. Such anticipation could, of course, be wrong,
in which event the Fund's investment objective might not be met, and
shareholders would be subject to risk of loss.
The Fund may invest in small capital equity securities. Such companies
may be under capitalized in comparison to other better capitalized companies.
Hence, the risk of loss with respect to such investments generally is greater.
<PAGE>
The Fund may invest up to 10% of its assets in Foreign Securities. These
include nondollar-denominated securities traded outside of the U. S. and
dollar-denominated securities traded in the U. S. (such as ADRs). Such
investments increase a portfolio's diversification and may enhance return,
but they also involve some special risks, such as exposure to potentially
adverse local political and economic developments; nationalization and
exchange controls; potentially lower liquidity and higher volatility; possible
problems arising from accounting, disclosure, settlement, and regulatory
practices that differ from U. S. standards; and the chance that fluctuations in
foreign exchange rates will decrease the investment's value (favorable changes
can increase its value). These risks are greater for investments in
emerging markets.
The Fund does not invest in below investment grade debt obligations.
The Fund's portfolio turnover rated for the fiscal years ending December 31,
1995, 1994 and 1993 were 79%, 122% and 137%, respectively. This relatively
high turnover rate may involve the payment of corresponding high brokerage
commissions which are payable by the Fund, the result of which is to lower
net asset value.
MANAGEMENT
The Fund's Investment Advisor is Ehrenkrantz King Nussbaum, Inc. ("EKN"),
formerly King Capital, Inc., a Delaware Corporation organized in 1986. The
Advisor was organized to act as advisor to the Fund. The Advisor's President
is Mr. Louis Ehrenkrantz, editor of The Ehrenkrantz Report, an investment
newsletter. Prior to management of this Fund, neither Mr. Ehrenkrantz nor the
Advisor has previously advised an investment company, however, Mr.
Ehrenkrantz has been publishing his views in the newsletter since 1977.
INVESTMENT ADVISORY SERVICES
The Fund has entered into an investment advisory agreement with EKN, under
the terms of which the Advisor is responsible for the general management of the
Fund, as well as for decisions to buy and sell securities for the Fund, for
broker-dealer selection and for negotiation of commission rates under standards
established and periodically reviewed by the Board of Trustees. The Board has
established procedures under which the Advisor may allocate brokerage
transactions to EKN provided that compensation to it on each transaction is
reasonable and fair compared to the commission, fees or other remuneration
received or to be received by other broker-dealers in connection with
comparable transactions involving similar securities during a comparable period
of time. In addition, consistent with the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., and subject to seeking the
most favorable price and execution available and such other policies as the
Board may determine, the Advisor may consider services in connection with the
sale of shares as a factor in the selection of broker-dealers to execute
portfolio transactions for the Fund. (See "Portfolio Transactions and
Brokerage" in the Statement of Additional Information.) As compensation for
its services, the Fund pays to the Advisor a monthly advisory fee at the
annual rate of 1% of the average daily net asset value of its portfolio.
During the year ended December 31, 1995, the fund paid advisory fees of $66,039.
The advisory fee percentage is in excess of that paid by most other mutual
funds. Except for expenses which may be paid or assumed by the Advisor, the
Fund pays all of its operating expenses including, but not limited to, the
expenses of maintaining its own books of account; the expenses of maintaining
one or more of its custodians, transfer agents, dividend disbursing agents
and agents for administration of shareholder accounts; the expenses of
<PAGE>
computing daily net asset value; the fees and expenses of the Trustees; the
expenses of meetings of shareholders; the expenses of printing and mailing
shareholder reports and other required reports and documents provided
shareholders; taxes, interest and commissions, SEC and state registration
fees; the expenses of Trust existence; all or part of the salaries of Fund
officers and other employees who also may be directors or officers or
employees of the Advisor; the fees of its auditors and legal counsel; travel,
entertainment, publications, telephone and office equipment expense; office
space rent; and all other ordinary expenses of operation. During the year
ended December 31, 1995, the Fund paid operating expenses, including advisory
fees, of $137,185. These amounts resulted in a ratio of operating expenses to
average net assets of 2.1%. (See "Investment Advisory Services" in the
Statement of Additional Information.)
PURCHASE OF SHARES
Shares are offered continuously for sale at their offering price which is
the net asset value per share computed as described in "Determination of Net
Asset Value," below. There is no sales charge. Initial investments must be
at least $500 and subsequent investments must be at least $50.
Shares may be purchased on any business day by completing the application
included in this PROSPECTUS and forwarding it to the shareholder service agent.
Purchase orders for shares of the Fund received in proper form by the
shareholder agent prior to 4:00 PM on any day the New York Stock Exchange is
open are confirmed at the net asset value of the Fund's shares determined at
the close on that day.
Payment of the purchase price for shares is due no later than three
(3) business days from the purchase date.
Additions to an investment account may be made at any time by mailing a
check directly to the shareholder service agent along with the deposit stub
attached to the confirmation of each purchase.
Stock certificates are not necessary and complicate redemption. They will,
however, be issued upon written request.
All income dividends and all capital gains distributions payable on shares
of the Fund will be reinvested in additional Fund shares at the net asset value
in effect on the dividend or distribution record date unless you elect
otherwise by written notice to us. The Fund acts as your agent to reinvest
dividends and distributions in additional shares. You may at any time change
your election as to whether to receive dividends and distribution in cash or
to have them reinvested by giving written notice of such change of election.
Any such change of election applies to dividends and distributions, the record
date for which falls on or after the date the written notice is received.
If you have any questions, contact the Fund toll free at 800-424-8570.
SHAREHOLDER RETIREMENT PLANS
Individuals, if qualified, may establish their own tax-sheltered Individual
Retirement Account ("IRA"). The Fund makes available a prototype IRA Plan for
adoption by individuals. A description of applicable service fees and certain
of the limitations on contributions and withdrawals, as well as applicable
forms, are available from the Trust upon request. The IRA documents contain a
disclosure statement which the IRS requires to be furnished to individuals who
are considering adopting an IRA.
<PAGE>
Because a retirement program involves commitments covering future years, it
is important that the investment objectives of the Fund in which one chooses to
invest be consistent with the participants' retirement objective. Premature
withdrawals from a retirement plan may result in adverse tax consequences.
REDEMPTION OF FUND SHARES
You may withdraw money at any time by following the procedures set forth
below:
Accounts without share certificates -- simply send a signed request (all joint
owners must sign) stating the amount which you would like to withdraw. For
amounts over $1000 you will have to take your request to a commercial bank or
trust company and ask them to stamp your request with a "signature guarantee."
Your bank or trust company will know how to do this.
Accounts with share certificates -- (1) sign the share certificates (all joint
owners must sign); (2) take the certificates to your commercial bank or trust
company; (3) ask the bank or trust company to stamp the certificates with a
"signature guarantee" and (4) mail the certificates to the Fund at
1730 K Street, N.W., Washington, DC 20006, along with a written request that
we redeem the shares.
TELEPHONE TRANSACTIONS
Telephone redemptions may be elected by checking the appropriate box on the
investment application. Those shareholders making such election will receive
a telephone redemption form which sets forth the conditions and potential
liabilities associated with such election. The Fund uses reasonable procedures
(including shareholder identity verification) to confirm that instructions
given by telephone are genuine and is not liable for acting on these
instructions. If these procedures are not followed, the Fund may be liable for
any losses that may result from acting on the instructions given.
Requests for redemptions by corporations, executors, administrators,
trustees or guardians may require further documentation. Please call or write
for details if you have one of these types of accounts.
The proceeds of redemptions are ordinarily paid by check within seven days
after receipt of a redemption request in proper form. Proceeds may also be
wired to a bank or trust company if you have authorized wire transfers on your
investment application. It is mandatory that the Funds redeem shares within
seven days of the request of a shareholder. However, if your check for the
purchase of such shares has not cleared, we will not mail redemption proceeds
until it has cleared. This may take fifteen (15) days.
The right of redemption may be suspended during any period when:
(a) trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission, or such Exchange is closed for other than
weekends and holidays; (b) the Commission has by Order permitted such
suspension or (c) an emergency as determined by the Commission exists, making
disposal of portfolio securities or valuation of net assets of the Fund not
reasonably practical.
For Fund expense reasons we may close an account upon thirty (30) days
notice when the asset value of the remaining shares in an account is below $500.
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will annually distribute to shareholders substantially all of its
taxable net investment income (consisting of dividend and interest income and
the excess, if any, of net short-term capital gains over net long-term capital
losses) in the forms of dividends. The Fund anticipates that it will
distribute substantially all of its "net capital gain" income (the excess of
net long-term capital gain over net short-term capital loss) for each taxable
year as a capital gain dividend. Each shareholder shall be deemed to have
elected to have the distribution reinvested on the distribution payment date
in whole or fractional shares at net asset value, unless the shareholder has
elected to receive the distributions in cash by so indicating on the
investment application.
The Fund has elected to be and has been taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended.
So long as the Fund qualifies for this tax treatment, the Fund will be
relieved of Federal income tax on amounts distributed to Shareholders, but
Shareholders, unless otherwise exempt, will pay income or capital gains taxes
on the amounts so distributed (except distributions treated as return of
capital) regardless of whether such distributions are paid in cash or
reinvested in additional Shares.
The Fund will be required in certain cases to withhold 20% of dividends
paid to any Shareholder who does not comply with the Fund's request for a tax
identification number, who provides an incorrect number, who is subject to
special withholding requirements by the Internal Revenue Service or who fails
to certify to the Fund that he is not subject to withholding.
Shareholders will be advised annually as to the Federal income tax
consequences of distributions made during the year. Shareholders are advised
to consult with their tax advisors concerning the application of state and
local taxes on investments in the Fund which may differ from the Federal
income tax consequences described above. For a more detailed discussion of
the tax treatment of dividends and distributions you may refer to the Fund's
Statement of Additional Information.
DETERMINATION OF NET ASSET VALUE
Net asset value per share for the Fund is determined as of the close of
trading of the New York Stock Exchange (currently 4:00 p.m., New York Time) on
days when the Exchange is open for business. It is computed by dividing the
value of net assets of the Fund (i.e., the value of the assets less
liabilities) by the total number of shares outstanding in the Fund. Portfolio
securities are valued at the last sales price on the national securities
exchange on which such securities are primarily traded. Securities not listed
on an exchange or securities in which there were no transactions are valued
at the most recent reported bid price. Any securities or other assets for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Trustees. Debt securities having maturities of
less than 60 days are valued by the amortized cost method. Expenses and fees,
including the management fee, are accrued daily and taken into account for the
purpose of determining the net asset value.
<PAGE>
DESCRIPTION OF THE FUND
The Fund is a series of the Ehrenkrantz Trust which was organized as a
Massachusetts business trust on December 9, 1986. It commenced operations on
January 1, 1987. The Agreement and Declaration of Trust permits the Board of
Trustees to issue an unlimited number of full and fractional shares of
beneficial interest without par value, which may be issued in any number of
series (called Funds). The Ehrenkrantz Growth Fund is currently the only
series, although the Board of Trustees may from time to time issue other
series, the assets and liabilities of which will be separate and distinct
from any other series. A previously authorized series, The Ehrenkrantz
Undiscovered Equities Fund was merged into the Growth Fund on May 31, 1989.
Shares issued by a Fund have no preemptive, conversion or sinking fund rights.
Shareholders of a Fund have equal and exclusive rights as to dividends and
distributions as declared by that Fund and to the net assets of the Fund upon
liquidation or dissolution.
Voting rights are not cumulative, so that the holders of more than 50% of
the shares voting in any election of Trustees can, if they choose to do so,
elect all the Trustees. While the Funds are not required to, nor intend to,
hold annual meetings of shareholders, such meetings may be called by the
Trustees at their discretion or upon demand by the holders of 10% or more of
the outstanding shares of the Fund for the purpose of electing or removing
Trustees. As of December 31, 1995, EKN, the Fund's advisor, owned
approximately 2.56% of the outstanding shares of the Growth Fund, and may be
a "control person" of the Fund as that term is defined in the Investment
Company Act of 1940.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Fund at 1730 K Street,
N.W., Washington, DC 20006 (Telephone: 1-800-424-8570 or (202) 223-1000).
GENERAL INFORMATION
Roy G. Hale serves as the auditor for the Fund. Reports containing
financial statements, at least one of which will be audited, will be sent
to shareholders twice during the fiscal year of the Fund which ends
on December 31.
Riggs National Bank, Washington, DC, serves as custodian of the Fund's
assets.
Steadman Security Corp., 1730 K Street, N.W., Washington DC 20006 serves
as the Fund's transfer and dividend disbursing agent and agent for
administration of shareholder accounts.
<PAGE>
THE EHRENKRANTZ TRUST
Board of Trustees and Officers
*LOUIS EHRENKRANTZ, Chairman
*IRWIN NUSSBAUM, President
*JOAN KING, Vice-President, Secretary Treasurer
STANLEY H. BROWN, Financial Journalist, Editorial Consultant
RICHARD GRAY, Private Investor
DONNA LEWIS, President D.S. Lewis Co.
ROBERT R. PERRINE, Account Executive/Announcer WQEW Radio
MIRIAM PRICE, Private Investor
*ARTHUR WALSH, Account Executive Gruntal & Co., Inc.
* Interested Person of the Fund within the
meaning of Section 2(a)(19) under the
Investment Company Act of 1940.
Manager and Investment Advisor
EHRENKRANTZ KING NUSSBAUM, INC.
New York City, NY
Custodian
RIGGS NATIONAL BANK
Washington, DC
General Counsel
THOMAS C. HENRY
Washington, DC
Auditor
ROY G. HALE, CPA
La Plata, MD
Transfer Agent, Dividend Disbursing Agent and Agent
for Administration of Shareholder Accounts
STEADMAN SECURITY CORPORATION
1730 K Street, N.W.
Washington, DC 20006
(202) 223-1000
(800) 424-8570
<PAGE>
PROSPECTUS
April 29, 1996
The Ehrenkrantz
Trust
EHRENKRANTZ
GROWTH FUND
A mutual fund
with the investment
objective of
growth of capital
Investment Adviser
Ehrenkrantz King Nussbaum, Inc.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE EHRENKRANTZ TRUST
1730 K Street, N.W.
Washington, D.C. 20006
1-800-424-8570
202-223-1000
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the prospectus of The Ehrenkrantz Trust dated
April 29, 1996. Requests for copies of the prospectus should be made by
writing to The Ehrenkrantz Trust, 1730 K Street, N.W., Washington, D.C. 20006
or by calling one of the numbers listed above.
<PAGE>
THE EHRENKRANTZ TRUST
Table of Contents
Page
INVESTMENT RESTRICTIONS 1
INVESTMENTS 3
TRUSTEES AND OFFICERS OF THE TRUST 5
PRINCIPAL SHAREHOLDERS 8
INVESTMENT ADVISOR 9
PORTFOLIO TRANSACTIONS AND BROKERAGE 11
CUSTODIAN 15
TAX STATUS 15
DETERMINATION OF THE NET ASSET VALUE 16
DIVIDENDS 16
SHAREHOLDER ACCOUNTS 16
AUDITORS 16
LEGAL COUNSEL 16
FEDERAL & STATE REGISTRATION OF SHARES 16
GENERAL INFORMATION 16
PERFORMANCE INFORMATION 18
FINANCIAL STATEMENTS Appended
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information and the Prospectus dated April 29, 1996 and, if given or made,
such information or representations may not be relied upon as having been
authorized by the Trust. The delivery of this Statement of Additional
Information at any time shall not imply that there has been no change in the
affairs of the Trust since the date hereof.
This Statement of Additional Information does not constitute an offer to
sell securities.
<PAGE>
INVESTMENT RESTRICTIONS
In seeking to achieve its investment objective, the Fund has adopted the
following restrictions which are matters of fundamental policy and cannot be
changed without approval by the holders of the lesser of: (i) 67% of a Fund's
shares present or represented at a shareholders' meeting at which the holders
of more than 50% of such shares are present or represented; or (ii) more than
50% of the outstanding shares of the Fund.
The Fund may not:
1. Purchase the securities of any issuer if such purchase would cause more
than 5% of the value of the Fund's total assets to be invested in
securities of any one issuer (except securities of the United States
Government or any instrumentality thereof), nor purchase more than 10%
of the outstanding securities of any one issuer.
2. Purchase securities of other investment companies.
3. Purchase or retain the securities of any issuer if those trustees,
officers or directors of the Trust or the Advisor owning individually
more than 1/2 of 1% of the securities of such issuer together own more
than 5% of the securities of such issuer.
4. Purchase, hold or deal in commodities or commodity contracts or in real
estate, but this shall not prohibit the Fund from investing in
marketable securities of companies engaged in real estate activities or
investments.
5. Borrow money except from banks for temporary or emergency purposes (but
not for the purchase of securities) and then only in an amount not to
exceed 5% of the value of the Fund's net assets at the time the
borrowings incurred.
6. Pledge, mortgage, hypothecate or otherwise encumber any of it's assets.
7. Lend any money or other assets except through the purchase of a portion
of an issue of publicly distributed bonds, debentures or other debt
securities, or private issues of debt securities (subject to the
limitation in Section 8 below), or the acquisition of repurchase
agreements and commercial paper of corporations.
8. Invest in restricted securities (restricted as to disposition under
Federal securities laws) or illiquid or other securities without readily
available market quotations, including repurchase agreements maturing in
more than seven days, if as a result of any such investment, more than
10% of the Fund's total assets would be invested in restricted, illiquid
or other securities without readily available market quotations.
9. Act as an underwriter of securities of other issuers.
10. Invest in the securities of a company for the purpose of management or
the exercise of control.
11. Concentrate its investments in any particular industry or industries,
except that the Fund may invest not more than 25% of the value of its
total assets in a single industry.
12. Participate on a joint or joint and several basis in any trading account
in any securities.
13. Sell securities short except where a long position is held in the same
security which equals or exceeds the number of shares sold short.
14. Purchase any securities on margin.
<PAGE>
15. Purchase the warrants of any issuer if, as a result, more than 2% of the
value of the total assets of the Fund would be invested in warrants
which are not listed on the New York Stock Exchange or American Stock
Exchange, or more than 5% of the value of the total assets of the Fund
would be invested in warrants whether or not so listed, such warrants in
each case to be valued at the lower of cost or market, but assigning no
value to warrants acquired by the Fund in units with or attached to debt
securities.
16. Invest in interests in oil or other mineral exploration programs. If a
percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in market
value of the investment or the total assets will not constitute a
violation of that restriction.
INVESTMENTS
The following information supplements the discussion of the Fund's
investment objectives and strategy which are described in detail in the
prospectus under the caption "Investment Objectives" and "Investment
Strategy:"
WARRANTS
The Fund may invest in warrants; however, not more than 5% of its assets
(at the time of purchase) will be invested in warrants other than warrants
acquired in units or attached to other securities. Of such 5% not more than
2% of assets at the time of purchase may be invested in warrants that are not
listed on the New York or American Stock Exchanges. Warrants are pure
speculation in that they have no voting rights, pay no dividends and have no
right with respect to the assets of the corporation issuing them. Warrants
basically are options to purchase equity securities at a specific price valid
for a specific period of time. They do not represent ownership of the
securities, but only the right to buy them. The prices of warrants do not
necessarily move parallel to the prices of the underlying securities.
The Fund may sell (write) covered call options on specific equity
securities. A call option gives the holder (buyer) the right to purchase a
security at a specified price (the exercise price) at any time before a
certain date (the expiration date). The Fund receives a premium (less a
commission)for writing the option which premium would partially or completely
offset any decline in price. If, for example, the Fund wrote an option at $50
on the same 100 shares of ABC bought at $40 per share and now selling for $50
per share, it might receive a premium of approximately $600. If the market
price of the underlying security declined to $45, the option will not be
exercised and the Fund could offset the unrealized loss of $500 by the $600
premium. On the other hand, if the market price of the underlying security
increases to $55, the option would be exercised and the Fund will have
foregone the unrealized $1,500 gain for $1,000 gain plus the $600 premium.
The Fund can also close out its position in the call option by repurchasing
the option contract separately and independent of any transaction in the
underlying security and, therefore, realize capital gain or loss. If the Fund
could not enter into such a closing purchase transaction, it may be required
<PAGE>
to hold a security that it may otherwise have sold to protect against
depreciation. Brokerage commissions associated with selling options are
proportionately higher than those associated with general securities
transactions.
PRIVATE PLACEMENTS (RESTRICTED SECURITIES)
The Fund may invest in restricted securities (privately placed
securities) and other securities without readily available market quotations
but will not acquire such securities and other illiquid securities or
securities without readily available market quotations, such as repurchase
agreements maturing in more than seven days, if as a result they would
comprise more than 10% of the value of the Fund's total assets.
Restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a registration
statement is in effect under the Securities Act of 1933. Where registration
is required, the Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a less favorable price than
prevailed when it decided to sell. Restricted securities will be priced at
fair value as determined in good faith by the Board of Trustees. If through
the appreciation of restricted securities or the depreciation of unrestricted
securities, the Fund should be in a position where more than 10% of the value
of its net assets are invested in illiquid assets, including restricted
securities, the Fund will take appropriate steps to protect liquidity.
TRUSTEES AND OFFICERS OF THE TRUST
Trustees and Officers of the Trust, together with their principal
business occupations during the last five years, and other information are
shown below. Each Trustee who is deemed an "interested person," as defined in
the Investment Company Act of 1940 (the "Act") is indicated by an asterisk *:
Louis Ehrenkrantz, Trustee and Chairman *
Mr. Ehrenkrantz was a Registered Representative affiliated with Merrill
Lynch Pierce Fenner and Smith from 1960 to 1967. Thereafter, he was an office
manager of Francis I. DuPont & Co., Inc. until 1971. Between 1971 and 1973 he
held various managerial positions with several large brokerage firms,
including Philips Appel and Walden, Josephthal & Co. and Andresen & Co. In
1973, he formed Rosenkrantz, Ehrenkrantz, Lyon & Ross, where he served as a
director until November 1984, at which time he joined Reich & Co., Inc.
members of the New York and American Stock Exchanges, as a director of the
Ehrenkrantz & King Division and Vice-President of Reich. Mr. Ehrenkrantz left
Reich & Co. in October of 1990 and joined Ladenburg, Thalmann & Co., Inc.,
members of the New York and American Stock Exchanges, as Managing Director.
In August, 1993 he resigned his position with Ladenburg. Mr. Ehrenkrantz is
President and a director of the Advisor.
<PAGE>
Irwin Nussbaum, Trustee and President *
Mr. Nussbaum was employed by E. Lowitz & Co., a New York Stock Exchange,
Inc. ("NYSE") member firm, from 1955 to 1972. In addition to his other
responsibilities, he supervised the over-the-counter trading department. In
1972, he became the Manager of Retail Sales at Ross Low Bull, Inc. (Member
NYSE). From November 1973 through September 1982, Mr. Nussbaum was Director
of Institutional Sales and a Registered Representative at Shoenberg, Hieber
Inc. (Member NYSE). In October 1982, Mr. Nussbaum joined Reich & Co., Inc. as
co-director of the retail sales division and later as Executive Director of
the Ehrenkrantz & King Division and a Vice-President of Reich. Mr. Nussbaum
left Reich & Co. in October of 1990 and joined Ladenburg, Thalmann & Co., Inc.
as an Executive Marketing Director. He resigned his position at Ladenburg in
August 1993. Mr. Nussbaum is also a partner in United Research Capital
Investors, a partnership formed to acquire an Options Trading Right on the
NYSE's Options Exchange, and he is the Options Right Holder on that Exchange.
Mr. Nussbaum is Executive Vice-President and a director of the Advisor.
Joan King, Trustee, Vice-President, Treasurer and Secretary *
Ms. King was a Registered Representative and General Partner of Ross Low
Bull & Co. from January 1965 through May 1971. She served as Executive
Vice-President and Chief Financial Officer of Ross Low Bull, Inc. from June
1971 through October 1973. During that period, she became the first female
Associate Member of the American Stock Exchange. In November 1973, she became
an officer and director of Shoenberg, Hieber Inc. In October 1982, she joined
Reich & Co., Inc. as co-director of the retail sales division and later as a
Director of the Ehrenkrantz & King Division and a Vice-President of Reich.
Ms. King is a partner in United Research Capital Investors. She left Reich &
Co. in October of 1990 and joined Ladenburg, Thalmann & Co., Inc. as an
Executive Marketing Director. She resigned her position at Ladenburg in
August 1993. She is Chairman, Secretary, Treasurer and a director of the
Advisor.
Stanley H. Brown
Mr. Brown is a financial journalist and editorial consultant. He was
formerly Senior Editor of Forbes Magazine, associate editor of Fortune
Magazine and news editor of Business Week.
Donna Lewis
Ms. Lewis is President of D. S. Lewis Co. and former president of T. H.
Angermeier, both jewelry companies.
Miriam Price
Ms. Price is a private investor. She is the former Office Manager of C
& M Manufacturing Co., Inc.
Arthur Walsh, Trustee *
Mr. Walsh has been an account executive with Gruntal & Co., Inc.,
Roseland, NJ since 1979.
Richard Gray, Trustee
From 1971 to 1990, Mr. Gray was President, Director and Principal
Shareholder of Silver, Gray & Co., Inc., a New York Stock Brokerage Firm. He
is presently a Private Investor.
<PAGE>
Robert R. Perrine, Trustee
Mr. Perrine is an Account Executive/Announcer for WQEW Radio, New York.
He was formerly an Account Executive for Jukebox Radio, New Jersey and was
National Sales Manager for WEVD Radio, New York.
As of December 31, 1995, the Officers and Trustees of the Trust owned
shares of beneficial interest in the Trust as follows:
TRUSTEE SHARES
Louis Ehrenkrantz 7,775
Irwin Nussbaum 11,898
Joan King 5,591
Arthur Walsh 684
Miriam Price 6,467
Robert R. Perrine 482
Trustees and Officers of the Trust who are officers or stockholders of
the Advisor do not receive any direct remuneration from the Trust for serving
as Trustees or officers but they may be considered to have received
remuneration indirectly. Those Trustees who are not so affiliated with the
Advisor may receive a fee for each Board of Trustees' meeting attended, plus
reimbursement for out-of-pocket expenses in attending meetings. During the
year ended December 31, 1995, they received no such fees or expense
reimbursements.
Some of the Trustees of the Fund are customers of, and have had normal
brokerage transactions with Ehrenkrantz King Nussbaum, Inc. in the ordinary
course of business. All such transactions were made on substantially the same
terms as those prevailing at the time for comparable transactions with
unrelated persons. Additional transactions may be expected to take place in
the future.
PRINCIPAL SHAREHOLDERS
As of December 31, 1995, the Advisor, Ehrenkrantz King Nussbaum, Inc.,
598 Madison Ave., 14th Floor, New York, NY 10022, owned 2.56% of the
outstanding shares of the Fund. As of December 31, 1995, Anne Jackson
Wallach, Eli Wallach, E/O Bernard Manger, H & E Eisenstodt, and R. Weiner
owned 7.0%, 10.0%, 2.9%, 3.5%, and 2.9% respectively of the outstanding shares
of the Fund. No other person owns more than 2% of the Fund's Shares.
INVESTMENTS ADVISOR
The Advisor to the Trust is Ehrenkrantz King Nussbaum, Inc ("EKN),
formerly King Capital, Inc. The principal stockholders of the Advisor are Mr.
Louis Ehrenkrantz, Mr. Irwin Nussbaum, Ms. Joan King, Mr. Richard Weiner and
Investor Resources Services, Inc. The address of each is 598 Madison Ave.,
14th Floor, New York, NY.
<PAGE>
The Advisory Agreement is dated December 9, 1986. It is required to be
approved annually by the Board of Trustees or by vote of a majority of the
Fund's outstanding voting securities. In addition, and in either case, each
annual renewal must be approved by the vote of a majority of the Trustees who
are not parties to the Advisory Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement is terminable without penalty, on 60 days'
written notice, by the Trustees, by vote of a majority of the Fund's
outstanding voting securities, or by the Advisor, and will terminate
automatically in the event of its assignment.
Under the terms of the Advisory Agreement, the Advisor manages the day
to day operations of the Fund pursuant to direction by the Fund's Board of
Trustees. The Advisor is responsible for investment decisions and supplies
investment research and portfolio management.
Under the terms of the Advisory Agreement, the Trust pays all of its
ordinary expenses of operation, such expenses of operation including, but not
being limited to, the following: (i) the expenses of maintaining its own
books of account; (ii) the expenses of maintaining one or more of its
custodians, transfer agents, agents for administration of shareholder accounts
and dividend disbursing agents; (iii) the expenses of computing the daily net
asset value of shares of the Trust; (iv) the fees and expenses of its
Trustees, excluding those Trustees who also may be Directors of the Advisor,
and the fees and expenses of the members of any Committee of the Trust
excluding any members who also may be Directors or officers or employees (or
all of these) of the Advisor, and who perform services therefor and are
compensated thereby; (v) the expenses of meetings of its shareholders; (vi)
the expenses of printing and mailing of all shareholder reports and other
required reports and documents provided shareholders, including, but not
limited to, the cost of printing and mailing prospectuses to shareholders;
(vii) taxes of any kind assessed against the Trust; (viii) interest and
commissions; (ix) Securities and Exchange Commission fees; (x) State
registration fees; (xi) the expenses of Trust existence; (xii) all or part of
the salaries of the Trust officers and other employees who also may be
directors or officers or employees (or all of these) of the Advisor; (xiii)
the fees of its auditors; (xiv) the fees of its legal counsel; (xv) travel,
entertainment, publications, telephone, and communications expense; (xvi)
office space rent, and (xvii) all other ordinary expenses of operation. The
Trust also pays all extraordinary expenses of whatever kind or nature, unless
such expenses have been specifically assumed by the Advisor. For the fiscal
year ended December 31, 1995, the Advisor has assumed some of the expenses of
the Fund. It may discontinue doing so at any time upon thirty days notice to
shareholders.
The assets of the Trust received for the issue or sale of each series
(Fund) and all income, earnings, profits and proceeds thereof, subject only to
the rights of creditors, are especially allocated to such series, and
constitute the underlying assets of such series. The underlying assets of
each series are required to be segregated on the books of account, and are to
be charged with the liabilities in respect of such series and with a share of
the general liabilities of the Trust. Liabilities in respect to any two
series are to be allocated in proportion to the asset value of the respective
series except where direct expenses can otherwise be fairly made. The
Trustees have the right to determine which liabilities are allocable to a
given series, and which are general or allocable to both series.
<PAGE>
Because of various state law requirements, the Advisor must reimburse
the Fund for annual expenses to the extent that aggregate operating expenses
of the Fund (excluding interest, taxes, brokerage commissions and
extraordinary expenses such as litigation costs) exceed in any fiscal year
2.5% of the first $30 million of net assets of the Fund; 2% of the next $70
million, and 1.5% of average annual net assets of the Fund in excess of $100
million. For the purpose of determining whether the Fund is entitled to
reimbursement, the expenses of the Fund are calculated on a yearly basis. If
the Fund is entitled to reimbursement, such reimbursement will be made within
120 days of fiscal year end.
As compensation for its services, the Trust pays to the Advisor a
monthly advisory fee computed at the annual rate of 1% of the Fund's average
daily net asset value. The advisory fees paid by the Fund for the years 1995,
1994, 1993, were $66,039, $62,636, and $61,985 respectively.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Advisor is responsible for decisions to buy and sell securities for
the Fund and for the placement of its portfolio business and the negotiation
of the commissions to be paid on such transactions. It is the policy of the
Advisor to seek the best execution at the best security price available with
respect to each transaction, in light of the overall quality of brokerage and
research services provided to the Advisor or the Fund. The best price to the
Fund means the best net price without regard to the mix between purchase or
sale price and commission, if any. In selecting broker-dealers and in
negotiating commission, the Advisor considers the firm's reliability, the
quality of its execution services on a continuing basis and its financial
condition. Brokerage may be allocated based on the sale of Fund shares
subject to the above constraints.
The Advisor intends to direct certain of the Fund's portfolio brokerage
business to EKN in its capacity as a broker dealer. The Fund will not deal
with EKN in any transaction in which EKN acts as a principal; that is, an
order will not be placed with EKN if execution of the trade involves EKN
serving as a principal with respect to any part of the Fund's order, nor will
the Fund buy or sell over-the-counter securities with EKN acting as market
maker. If EKN is participating in an underwriting or selling group, the Fund
may not buy portfolio securities from the group except in accordance with
rules of the SEC. The Advisor believes that the limitation will not affect
the Fund's ability to achieve its investment objective.
The portfolio transactions effected through EKN are subject to certain
policies and procedures incorporating the standards of Rule 17e-1 promulgated
under the Investment Company Act of 1940 which requires that the commissions
paid EKN must be "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities during a comparable
period of time". Rule 17e-1 also contains requirements for the review of such
transactions by the Board of Trustees and requires the Advisor to furnish
reports and to maintain records in connection with such reviews. Pursuant to
rules promulgated under Section 11(a) of the Securities Exchange Act of 1934,
the Trustees have approved a written agreement that permits EKN to effect
Portfolio Transactions on National Securities Exchanges and to retain
compensation in connection with such transactions.
<PAGE>
Messrs. Ehrenkrantz and Nussbaum and Ms. King, principal shareholders of
the Advisor maintain employment relationships with EKN. Hence, they may
share, indirectly, in commissions paid by the Fund to EKN. As a result of the
existence of the foregoing relationships among Mr. Ehrenkrantz, Mr. Nussbaum,
Ms. King and EKN, it is conceivable that conflicts of interests may arise from
time to time between the Fund and such parties.
Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment advisor, under certain circumstances, to cause an
account to pay a broker or dealer who supplies brokerage and research services
a commission for effecting a transaction in excess of the amount of commission
another broker or dealer would have charged for effecting the transaction.
Brokerage and research services, include (a) furnishing advice as to the value
of securities, the advisability of investing, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities, (b) furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy, and
the performance of accounts and (c) effecting securities transactions and
performing functions incidental thereto (such as clearance, settlement and
custody).
The Advisor may cause the Fund to pay a broker which provides brokerage
and research services to the Advisor a commission for effecting a securities
transaction in excess of the amount another broker would have charged for
effecting the transaction. The Advisor is of the opinion that the continued
receipt of supplemental investment research services from broker-dealers is
essential to its provision of high quality portfolio management services to
the Fund. Such higher commissions will not be paid by the Fund unless (a) the
Advisor determines in good faith that the amount is reasonable in relation to
the services in terms of the particular transaction or in terms of the
Advisor's overall responsibilities with respect to the accounts as to which it
exercises investment discretion, (b) such payment is made in compliance with
the provisions of Section 28(e), other applicable state and federal laws, and
the Advisory Agreement and (c) in the opinion of the Advisor, the total
commissions paid by the Fund will be reasonable in relation to the benefits to
the Fund over the long term. The investment advisory fee paid by the Fund
under the Advisory Agreement is not reduced as a result of the Advisor's
receipt of research services.
The Advisor seeks to allocate portfolio transactions equitably whenever
concurrent decisions are made to purchase or sell securities by the Fund. In
some cases, this procedure could have an adverse effect on the price or the
amount of securities available to a particular Fund. In making such
allocations between the Fund and such other client, the main factors
considered by the Advisor are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held, and opinions of the persons responsible for recommending the
investment. During 1993, 1994, and 1995, the Fund paid an aggregate of
$32,057, $15,529, and $12,084 respectively in commissions to broker-dealers
for execution of portfolio transactions. Ladenburg, Thalmann & Co., Inc.
effected 52% of the Fund's aggregate dollar amount of transaction involving
the payment of commissions during 1993. In 1994 and 1995, EKN effected
transactions involving $14,249 and $10,684 or 92% and 88% respectively of
aggregate commissions.
<PAGE>
The portfolio turnover rate of the Fund for each of the last three years
has been 1995 - 79%; 1994 - 121.99%; and 1993 - 137.2%.
CUSTODIAN
As custodian of the Fund's assets, The Riggs National Bank of Washington
has custody of all securities and cash of the Fund, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as directed by
officers of the Fund. The custodian is in no way responsible for any of the
investment policies or decisions of the Fund.
TAX STATUS
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended.
Dividends paid by the Fund may be eligible for the dividends-received
deduction for corporate shareholders. For tax purposes, it does not make any
difference whether dividends and capital gain distributions are paid in cash
or in additional shares. The Fund must declare dividends equal to at least
98% of ordinary income (as of December 31) and capital gains (as of October
31) in order to avoid a federal excise tax and distribute 100% of ordinary
income and capital gains as of December 31 to avoid federal income tax.
At the time of your purchase, the Fund's net asset value may reflect
undistributed income, capital gains or net unrealized appreciation of
securities held by the Fund. A subsequent distribution to you of such
amounts, although constituting a return of your investment, would be taxable
as either dividends or capital gain distributions. For federal income tax
purposes, the Fund is permitted to carry forward its net realized capital
losses, if any, for eight years and realize net capital gains up to the amount
of such losses without being required to pay taxes on, or distribute such
gains. On December 31, 1994, the books of the Fund indicated that the Fund's
aggregate net assets included unrealized appreciation of $595,276.
If, in any taxable year, the Fund should not qualify as a regulated
investment company under the Code: (i) the Fund would be taxed at normal
corporate rates on the entire amount of its taxable income without deduction
for dividends or other distributions to shareholders; and (ii) the Fund's
distributions to the extent made out of the Fund's current or ordinary
dividends (regardless of whether they would otherwise have been considered
capital gain dividends).
Taxation of Foreign Shareholders
The Code provides that dividends from net income will be subject to U.
S. tax. For shareholders who are not engaged in a business in the U. S., this
tax would be imposed at the rate of 30% upon the gross amount of the dividends
in the absence of a Tax Treaty providing for a reduced rate or exemption from
U. S. taxation. Distributions of net long-term capital gains realized by the
Fund are not subject to tax unless the foreign shareholder is a nonresident
alien individual who was physically present in the U. S. during the tax year
for more than 182 days.
<PAGE>
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the caption "Determination of Net
Asset Value" the net asset value of the Fund will be determined as of the close
of trading on each day the New York Stock Exchange is open for trading. The New
York Stock Exchange is open for trading Monday through Friday except New
Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Additionally, if any of
the aforementioned holidays falls on a Saturday, the New York Stock Exchange
will not be open for trading on the preceding Friday and when any such holiday
falls on a Sunday, the New York Stock Exchange will not be open for trading on
the succeeding Monday, unless unusual business conditions exist, such as the
ending of a monthly or the yearly accounting period.
DIVIDENDS
All income dividends and capital gain distributions will be invested
automatically in additional Fund shares, unless the Fund is otherwise notified
in writing.
SHAREHOLDER ACCOUNTS
A shareholder's account may be terminated by the Fund on not less than
30 days' notice if, at the time of any transfer or redemption of shares in the
account, the value of the remaining shares in the account, at the current
offering price, falls below $500, provided that such reduction in net asset
value below $500 is the result of withdraws and not market fluctuations. Upon
any such termination, the shares will be redeemed at the then current net
asset value and a check for the proceeds of redemption sent within seven days
of such redemption.
AUDITORS
Roy G. Hale, CPA, La Plata, MD, has been selected as the auditor for the
Fund.
LEGAL COUNSEL
Thomas C. Henry, Esquire, whose address is 504 Talbot Street, St.
Michaels, MD 21663, is legal counsel to the Fund.
FEDERAL AND STATE REGISTRATION OF SHARES
The Fund's shares are registered for sale under the Securities Act of
1933, and the Fund or its shares are registered under the laws of those states
which require registration and in which Fund shares are offered for sale.
<PAGE>
GENERAL INFORMATION
The Trust was formed in 1986 as a diversified, open-end management
investment company.
The Trust has been organized as an unincorporated business Trust under
the laws of the Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust dated December 19, 1986 (the "Trust Agreement") and
commenced operations as an investment company on January 1, 1987.
Shares do not have cumulative voting rights, which means that holders of
more than 50 percent of the shares voting for the election of Trustees can
elect all Trustees. Shares are transferable but have no preemptive,
conversion or subscription rights with respect to the election of Trustees and
the ratification of the selection of independent accountants. Meetings of
shareholders normally will not be held for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by shareholders, at which time the Trustees then in
office will call a shareholders' meeting for the election of Trustees.
Shareholders of record of no less than two-thirds of the outstanding shares of
the Fund may remove a Trustee through a declaration in writing or by vote cast
in person or by proxy at a meeting called for that purpose. Under the Trust
Agreement, the Trustees are required to call a meeting of shareholders for the
purpose of voting on the question of removal of any such Trustee when
requested in writing to do so by the shareholders of record of not less than
10 percent of the Trust's outstanding shares.
Massachusetts law provides that shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given
in each agreement, obligation or instrument entered into or executed by the
Trust or a Trustee. The Trust Agreement provides for indemnification from the
Fund's property for all losses and expenses of any shareholder held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its
obligations, a possibility that the Trust believes is remote. Upon payment of
any liability incurred by the Trust, the shareholder paying the liability will
be entitled to reimbursement from the general assets of the Trust. The
Trustees intend to conduct the operations of the Trust in a manner so as to
avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Trust.
PERFORMANCE INFORMATION
For purposes of quoting and comparing the performance of the Fund to that
of other open-end diversified management investment companies and to stock or
other relevant indices in advertisements or in certain reports to
Shareholders, performance will be stated in terms of total return, rather than
in terms of yield. The total return quotations, under the rules of the
Securities and Exchange Commission, must be calculated according to the
following formula:
<PAGE>
P(1 + T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1, 5 or 10 year periods at the end of the
1, 5 or 10 year periods (or fractional portion thereof.)
Under the foregoing formula the time periods used in advertising will be
based on rolling calendar quarters, updated to the last day of the most recent
quarter prior to submission of the advertising for publication, and will cover
one, five and ten year periods or a shorter period dating from the
commencement of the Fund's operations. In calculating the ending redeemable
value, the maximum sales load is deducted from the initial $1,000 payment and
all dividends and distributions by the Fund are assumed to have been
reinvested at net asset value as described in the prospectus on the
reinvestment dates during the period. "T" in the formula above, is calculated
by finding the average annual compounded rates of return over the period that
would equate an assumed initial payment of $1,000 to the ending redeemable
value. The Fund may also from time to time include in such advertising total
return figures that are not calculated according to the formula set forth
above in order to compare more accurately the Fund's performance with other
measures of investment return.
For example, in comparing the Fund's total return with data published by
Lipper Analytical Servicing, Inc., the Fund calculates its aggregate and
average annual total return for the specified periods of time by assuming the
investment of $10,000 in Fund Shares and assuming the reinvestment of each
dividend or other distribution at net asset value on the reinvestment date.
For purpose of other comparisons, the Fund performs a second alternative
computation for its aggregate and average annual total return by assuming the
investment of $10,000 in Fund Shares and assuming no reinvestment of dividends
or other distributions. For these alternative computations, the Fund assumes
that the $10,000 invested in Fund Shares is net of all sales charges (as
distinguished from the computation required by the SEC where the $1,000
payment is reduced by sales charges before being invested in Fund Shares).
The Fund will, however, disclose the maximum sales charges and will also
disclose that the performance data do not reflect sales charges and that
inclusion of sales charges would reduce the performance quoted. Such
alternative total return information will be given no greater prominence in
such advertising than the information prescribed under SEC rules and all
advertisements containing performance data will include a legend disclosing
that such performance data represent past performance and that the investment
return and principal value and investment will fluctuate so that an investor's
shares, when redeemed may be worth more or less than their original cost.
<PAGE>
THE EHRENKRANTZ TRUST
COMPRISED OF
THE EHRENKRANTZ GROWTH FUND
FINANCIAL STATEMENTS
DECEMBER 31, 1995
<PAGE>
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Given our large case position, the annual return of 16.34 percent, while below
major market indices, represents a credible performance. We are still of the
opinion a sizable market correction before Election Day is a strong possibility.
We are positioning your fund for the coming years by continuing to emphasize
major commitments in the communications and entertainment industries. As the
communication revolution unfolds, we think the distinction between
entertainment and communications will be blurred. We also think acceptance of
the gaming industry will be widespread in the near future and, consequently,
intend to add to our holdings in that industry.
Our open door policy, which we think is rare in the mutual fund industry,
remains in force. Any shareholder who wishes to discuss the portfolio, or who
would like to be apprised of current positions, may call Louis
Ehrenkrantz directly at (212) 508-4701 for periodic updates.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Trust's Stock for the last seven years with the cumulative total return
(including the reinvestment of all dividends) of (i) Standard & Poor's 500
Stock Index and (ii) the Lipper Analytical Securities Corp--Growth & Income
Index. There can be no assurance that the performance of the Trust will
continue into the future with the same or similar trends depicted in the
graph below.
<TABLE>
<CAPTION>
Comparison of Seven-Year Cumulative Return Among the Ehrenkrantz Trust,
the S&P Index and the Lipper Analytical Securities Corp--Growth & Income Index.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1988 1989 1990 1991 1992 1993 1994 1995
Ehrenkrantz Trust $10,000 $11,936 $14,156 $13,848 $15,900 $16,673 $16,856 $19,553
S&P 500 $10,000 $11,200 $14,224 $13,228 $16,667 $17,334 $18,588 $24,928
Lipper Analytical
Service-Growth Income
Fund Index $10,000 $11,900 $14,637 $13,759 $17,474 $19,396 $21,934 $28,505
</TABLE>
Assumes $10,000 invested on January 1, 1988 in each of (1) the Trust s Stock;
(2) the S&P 500 Composite Stock Index and (3) the Lipper Analytical
Securities Corp.--Growth & Income Index.
<PAGE>
<TABLE>
<CAPTION>
EHRENKRANTZ GROWTH FUND
Portfolio of Investments
December 31, 1995
<S> <C> <C>
Market
Common Stocks - 100% Shares Value
Chemicals - .86%
Ethyl Corporation 2,000 25,000
Communications - Media - 9.5%
Dun & Bradstreet Corporation 2,000 129,500
Liberty Media, Inc. 1,250 33,594
U.S. West Media Group, Inc. 6,000 114,000
277,094
Communications - Equipment - 6.47%
Airtouch Communications, Inc. 3,000 84,750
General Instrument Corporation 2,000 46,750
Verifone, Inc. 2,000 57,250
188,750
Defense - 1.97%
BTG, Inc. 5,000 57,500
Electronics & Electrical Equipment - 7.57%
Comcast Class A SPL (non-vtg) 5,000 90,938
Philips Electronics N.V. 3,000 107,625
Ultimate Electronics, Inc. 3,000 22,500
221,063
Entertainment - 2.57%
Bailey Entertainment Corporation 3,000 42,000
Griffen Gaming & Entertainment, Inc. 3,000 33,000
75,000
Household Products - 7.68%
Corning, Inc. 7,000 224,000
Lottery Systems - 2.67%
GTECH Holdings Corporation, Inc. 3,000 78,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
Ehrenkrantz Growth Fund
Portfolio of Investments
Page 2
<S> <C> <C>
Market
Common Stocks - 100% Shares Value
Manufacturing - 5.73%
Singer Company N.V. 6,000 167,250
Oil - 7.66%
Mobil Corporation 2,000 223,500
Pharmaceuticals - 3.62%
Mylan Laboratories, Inc. 4,500 105,750
Publishing - 8.38%
Tribune Company 4,000 244,500
Real Estate - 9.49%
Evans Withycombe Residential 3,000 64,500
Oasis Residential, Inc. 3,000 68,250
Public Storage, Inc. 4,000 76,000
Square Industries, Inc. 8,000 68,000
276,750
Software - 2.65%
Nichols Research Corporation 3,000 77,250
Telecommunications - 10.73%
Tele-Communications, Inc., Class A 5,000 99,375
U.S. West, Inc. 6,000 213,750
313,125
Utilities - 3.50%
Aquarion Company 4,000 102,000
Water Purification - 8.95%
Ionics, Inc. 6,000 261,000
Total Portfolio of Investments $2,917,532
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE EHRENKRANTZ GROWTH FUND
Statement of Assets and Liabilities
For the year ended December 31, 1995
<S> <C>
Assets:
Investments at market value (cost $2,917,532
$2,355,611) (Note 1)
Cash and cash equivalents 4,027,879
Subscriptions receivable 400
Dividends and interest receivable 21,612
Total Assets 6,967,423
Liabilities:
Due to brokers and dealers 47,075
Redemptions payable 2,650
Options written 2,125
Accrued expenses 12,997
Total Liabilities 64,847
Net Assets applicable to outstanding shares $6,902,576
Net Asset Value (NAV) per share based on
1,266,708 shares of beneficial interest
(offering and redemption price) $ 5.45
The accompanying notes are an integral part of the financial statements.
<PAGE>
The Ehrenkrantz Growth Fund
Statement of Assets and Liabilities
Page 2
Net assets consist of:
Unrealized appreciation on investments $ 561,921
(Note 3)
Undistributed net income 10,792
Paid in Capital 6,329,863
Net Assets $6,902,576
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE EHRENKRANTZ GROWTH FUND
Statement of Operations
For the year ended December 31, 1995
<S> <C> <C>
Investment income:
Dividends $ 66,165
Interest 188,644 $ 254,809
Expenses:
Management fees (Note 2) 66,039
Shareholder services &
fund accounting fees 39,875
Blue Sky registration fees 2,250
Printing costs 226
Custodian fees 5,455
Legal fees 16,779
Audit fees 5,800
Taxes 761
Total Expenses 137,185
Net investment income 117,624
Net realized gains on security
transactions 617,288
Net change in unrealized
appreciation on investments 298,332
Net gain on investments 915,620
Net increase in net assets
resulting from operations $1,033,244
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE EHRENKRANTZ GROWTH FUND
Statement of Changes in Net Assets
For the years ending December 31, 1995 and 1994
<S> <C> <C>
1995 1994
Operations:
Net investment income $117,624 $48,439
Net realized gain from
investments 617,288 426,520
Net change in unrealized
appreciation from investments 298,332 (399,480)
Net change in net assets resulting
from operations 1,033,244 75,479
Distribution to shareholders (734,677) ( 468,144)
Increase (decrease) in net assets
from trust share transactions (Note 4) 289,846 319,106
Change in net assets 588,413 ( 73,559)
Net assets at the beginning of
the period 6,314,163 6,387,722
Net assets at the end of period $6,902,576 $6,314,163
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE EHRENKRANTZ GROWTH FUND
Notes to Financial Statements
For the year ending December 31, 1995
1. Significant accounting policies.
The Ehrenkrantz Trust was organized on December 9, 1986 under the laws of the
Commonwealth of Massachusetts and is a business entity commonly known as a
Massachusetts Business Trust with the authority to issue an unlimited number
of shares of beneficial interest of separate series, without par value.
The Trust consists of the Ehrenkrantz Growth Fund.
Security valuation.
Investments in securities are valued at the last reported sales price, for
NYSE, AMEX and NASDAQ National Market listed securities, on the last business
day of the period, or, in the absence of a recorded sale, and for securities
traded in the over-the-counter market, at the most recent reported bid price;
call options written are valued at the last quoted asked price. Short-term
investments are carried at cost, which, when combined with accrued interest
receivable, approximates market value.
Federal incomes taxes.
It is the Fund s policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income and long-term capital gains to its
shareholders. Therefore, federal income tax provisions are not reflected in
the financial statements.
Other.
Security transactions are accounted for on the date the securities are
purchased or sold. Dividend income is recorded on the ex-dividend date.
In determining the net realized gain and loss from sale of securities, the
cost of securities sold is determined on the basis of identifying the specific
certificates delivered against each sale.
<PAGE>
THE EHRENKRANTZ GROWTH FUND
Notes to Financial Statements - (Continued)
2. Investment advisory agreement.
The Ehrenkrantz Growth Fund has entered into an investment advisory agreement
with Ehrenkrantz King Nussbaum, Inc. Under the terms of the advisory agreement,
the advisor manages the day to day operations of the Fund pursuant to direction
by the Ehrenkrantz Trust s Board of Trustees. The advisor is responsible for
investment decisions and supplies investment research and portfolio management.
As compensation for its services, the Fund pays to the advisor a monthly
advisor fee computed at the rate of 1% of the Fund s average daily net asset
value. The fee will be reduced for any fiscal year if the Fund s expenses,
as defined, exceed certain limitations.
3. Investment transactions.
Unrealized appreciation at
December 21, 1995 $ 595,276
Unrealized depreciation at
December 31, 1995 ( 33,355)
Net appreciation $561,921
Purchase and sale of securities other than short-term investments for the year
ended December 31, 1995 aggregated $2,636,300 and $4,803,763 respectively.
To the extend consistent with applicable law, statute, and regulations, the
Ehrenkrantz Trust s Board of Trustees determined that portfolio transactions
would be effected primarily through the firm of Ehrenkrantz King Nussbaum, Inc.
Over-the-counter purchases and sales are transacted directly with principal
market makers except in those cases in which better prices and executions may
be obtained elsewhere.
<PAGE>
THE EHRENKRANTZ GROWTH FUND
Notes to Financial Statements - (Continued)
4. Trust shares.
Transactions in trust shares were as follows:
<TABLE>
<S> <C> <C> <C> <C>
1995 1994
Shares Amount Shares Amount
Shares sold 21,146 $120,725 46,568 $257,527
Shares issued
from investment
of dividends 134,148 724,401 89,315 466,224
Shares
repurchased (99,313) (555,279) (73,240) (404,645)
Total change
in shares 55,981 $289,847 62,643 $ 319,106
</TABLE>
<TABLE>
<CAPTION>
Shares outstanding:
<S> <C> <C>
Beginning of year 1,210,727 1,148,084
End of year 1,266,708 1,210,727
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE EHRENKRANTZ GROWTH FUND
Supplementary Information
1. Selected data for each trust share outstanding throughout calendar years
1995 and 1994.
<S> <C> <C>
1995 1994
Investment income $ .206 $ .165
Expenses .111 .124
Net income .095 .041
Distribution to shareholders ( .593) ( .397)
Net realized and unrealized
gain on securities .739 ( .023)
Net increase (decrease) in net
asset value $ .241 $( .379)
Net asset value:
Beginning of the period $ 5.18 $ 5.56
End of the period $ 5.42 $ 5.18
Average annual total return 16% 0.3%
Ratio of operating expenses to
average net assets 2.1% 2.3%
Ratio of net investment income
to average net assets 1.8% 0.8%
Portfolio turnover rate 79% 118%
Number of shares outstanding
at end of the period 1,266,708 1,210,727
</TABLE>
<PAGE>
Form N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Statement of Assets and Liabilities, Statement of Operations,
Statement of Changes in Net Assets, Condensed Financial
Information, Portfolio of Investments and related notes,
included in Part B of this Registration Statement.
(b) Exhibits:
(1) Agreements and Declaration of Trust (incorporated by
reference to Regis. State. No. 33-10888)
(2) By-Laws (incorporated by reference to Regis. State.
No. 33-10888)
(4) Specimen Share Certificate (incorporated by reference to
Regis. State. No. 33-10888)
(5) Investment Advisory Agreement (incorporated by reference to
Regis. State. No. 33-10888)
(7) Distribution Agreement (incorporated by reference to Regis.
State. No. 3-10888, Amendment 5)
(8) Custodian Agreement (incorporated by reference to Regis.
State. No. 33-10888)
(10) Opinion and Consent of Counsel
(11) Consent of Independent Certified Public Accountants
Item 25. Persons Controlled by or under Common Control with Registrant.
As of December 31, 1995, Ehrenkrantz King Nussbaum, Inc. (EKN), a
Delaware Corporation and the Trust's Advisor, owned 2.56% of the Fund's shares.
The principal shareholders of EKN are Louis Ehrenkrantz (8.13%), Irwin
Nussbaum (8.13%), Joan King (8.13%), Richard Weiner (8.51%) and Investor
Resources Services, Inc. (8.51%).
Item 26. Number of Holders of Securities.
As of December 31, 1995, there were 326 shareholders of record.
Item 27. Indemnification.
Please see Article VI of By-Laws (Exhibit 2). Pursuant to Rule 484 under
the Securities Act of 1933, as amended, the Registrant furnishes the following
undertaking:
"Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
<PAGE>
incurred or paid by a trustee, officer of controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities 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 issue."
Notwithstanding the provisions contained in the Registrant's By-Laws, in
the absence of authorization by the appropriate court on the merits pursuant to
Sections 4 and 5 of Article VI of said By-Laws, any indemnification under said
Article shall be made by Registrant only if authorized in the manner provided
in either subsection (a) or (b) of Section 6 of Article VI.
Item 28. Business and Other Connections of Investment Advisor.
Please see Parts A and B of this Registration Statement for discussion of
Investment Advisor.
Item 29. Principal Underwriters.
None
Item 30. Locations of Accounts and Records.
The accounts, books or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
will be kept by the Registrant at its offices, 598 Madison Ave., 14th Floor,
New York, NY.
The Riggs National Bank, Washington, DC, acting as custodian will maintain
records relating to such activities. Steadman Security Corporation,
1730 K Street, N. W., Washington, DC 20006, acting as Transfer Agent and Agent
for Administration of shareholder accounts, will maintain records relating to
such activities.
Item 31. Management Services.
There are no management-related service contracts not discussed in Part A
or Part B of this Registration Statement.
Item 32. Undertakings.
None.
ROY G. HALE
Certified Public Accountant
301-870-3374 P.O. Box
2634
800-286-4602 LaPlata, MD
20646
Trustees and Shareholders
The Ehrenkrantz Trust
New York, New York
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNT
I hereby consent to the inclusion of my report, dated February 21, 1996, in
the Registration Statement being filed under the Securities Act of 1933 and
the Investment Company Act of 1940 by The Ehrenkrantz Growth Fund relating to
the financial statements, as of December 31, 1995, referred to therein.
I also consent to the reference to my practice as an independent certified
public accountant.
Roy G. Hale
Certified Public Accountant
February 21, 1996
La Plata, Maryland
IN WITNESS HEREOF, a majority of the Trustees named below do hereby set
their hands this 8th day of April, 1996:
/s/ Louis Ehrenkrantz
Louis Ehrenkrantz
/s/ Irwin Nussbaum
Irwin Nussbaum
/s/ Joan King
Joan King
/s/ Stanley H. Brown
Stanley H. Brown
/s/ Donna Lewis
Donna Lewis
/s/ Miriam Price
Miriam Price
/s/ Arthur Walsh
Arthur Walsh
/s/ Richard Gray
Richard Gray
/s/ Robert R. Perrine
Robert R. Perrine
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 2,355,611
[INVESTMENTS-AT-VALUE] 2,917,532
[RECEIVABLES] 22,012
[ASSETS-OTHER] 4,027,879
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 6,967,423
[PAYABLE-FOR-SECURITIES] 47,075
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 17,772
[TOTAL-LIABILITIES] 64,847
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 6,329,863
[SHARES-COMMON-STOCK] 1,266,708
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 10,642
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 150
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 561,921
[NET-ASSETS] 6,902,576
[DIVIDEND-INCOME] 66,165
[INTEREST-INCOME] 188,644
[OTHER-INCOME] 0
[EXPENSES-NET] 137,185
[NET-INVESTMENT-INCOME] 117,624
[REALIZED-GAINS-CURRENT] 617,288
[APPREC-INCREASE-CURRENT] 298,332
[NET-CHANGE-FROM-OPS] 1,033,244
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 117,539
[DISTRIBUTIONS-OF-GAINS] 617,138
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 21,146
[NUMBER-OF-SHARES-REDEEMED] 99,313
[SHARES-REINVESTED] 134,148
[NET-CHANGE-IN-ASSETS] 289,847
[ACCUMULATED-NII-PRIOR] 10,558
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 66,039
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 137,185
[AVERAGE-NET-ASSETS] 6,608,370
[PER-SHARE-NAV-BEGIN] 5.18
[PER-SHARE-NII] 0.24
[PER-SHARE-GAIN-APPREC] 0.74
[PER-SHARE-DIVIDEND] 0.10
[PER-SHARE-DISTRIBUTIONS] 0.54
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.45
[EXPENSE-RATIO] 2.1
[AVG-DEBT-OUTSTANDING] 39,271
[AVG-DEBT-PER-SHARE] 0.03
</TABLE>
