Matrix Growth Fund
Matrix Emerging Growth Fund
Supplement to Prospectus dated December 31, 1994
The disclosure under the caption "How to Invest in the Funds" and "How to Redeem
an Investment in the Funds" in the Funds' prospectus dated December 31, 1994 is
supplemented by the following information. Shareholders should review those
portions of the prospectus for a complete discussion regarding purchases and
redemptions of fund shares.
Effective March 8, 1996, Star Bank, N.A., 425 Walnut Street, Cincinnati, OH
45202 will serve as Custodian of the Funds' assets and American Data Services,
Inc., 24 West Carver St., Huntington, NY 11743 will serve as the Funds' Transfer
and Shareholder Service Agent.
Shareholders should direct correspondence and inquiries as follows:
INVESTMENTS
BY MAIL: Initial and subsequent investments should be sent to Matrix Growth Fund
or Matrix Emerging Growth Fund, P.O. Box 856, Cincinnati, OH 45264-0856.
BY WIRE: It is necessary to notify the Funds prior to each wire purchase. Wires
sent without notifying the Funds will result in a delay of the effective date of
your purchase.
Shareholders should instruct their bank to wire funds as follows:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Matrix Growth Fund or Matrix Emerging Growth Fund
DDA # 483897989 DDA # 483897997
Account name (shareholder name) Account name (shareholder name)
Shareholder account number Shareholder account number
BY COURIER: All investments sent by overnight or other courier services should
be sent to Matrix Growth Fund or Matrix Emerging Growth Fund, c/o Star Bank,
N.A., 425 Walnut Street, Mutual Fund Custody Dept. M.L. 6118, Cincinnati, OH
45202.
REDEMPTIONS:
DIRECT REDEMPTION: Requests for redemption of fund shares should be mailed to
Matrix Growth Fund or Matrix Emerging Growth Fund, 24 West Carver St.,
Huntington, NY 11743.
TELEPHONE REDEMPTION: If you have completed the Redemption by Telephone portion
of the Funds' account application you may redeem shares on any business day the
New York Stock Exchange is open by calling the Transfer Agent at 1-800-385-7003
before 4:00 p.m. Eastern time.
All other shareholder account questions should be directed to 1-800-385-7003.
The disclosure under the caption "Management of the Funds" in the Prospectus is
revised as follows:
Effective March 8, 1996, Investment Company Administration Corporation ("ICAC")
will act as the Funds' Administrative Manager under substantially the same terms
and conditions as in the previous management agreement with Southampton
Investment Management Company. ICAC and Southampton have the same officers,
directors and employees. Under the current arrangement with Southampton, a
monthly fee is paid at the annual rate of 0.25% of average net assets or
$30,000, whichever is greater. Under the agreement with ICAC, a monthly fee will
be paid by each Fund to ICAC at the following annual rate:
Average net assets of each Fund Fee or fee rate
- ------------------------------- ---------------
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 million to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets
March 8, 1996
<PAGE>
MATRIX GROWTH FUND
MATRIX EMERGING GROWTH FUND
MATRIX GROWTH FUND (the "Growth Fund") is a no-load mutual fund with the
investment objective of long-term growth of capital, with a secondary objective
of conserving principal. The Growth Fund invests in common stocks which the
Adviser believes present opportunity for above average growth of capital. The
Fund may engage to a limited extent in hedging transactions.
MATRIX EMERGING GROWTH FUND (the "Emerging Growth Fund") is a no-load
mutual fund with the investment objective of seeking long-term capital
appreciation. The Emerging Growth Fund invests primarily in the common stocks of
companies with long term growth potential, particularly smaller companies
considered to be in the developing or emerging growth phase.
Sena Weller Rohs Williams, Inc. (the "Adviser"), serves as investment
adviser to both of the Funds.
For information concerning the Funds call:
Sena Weller Rohs Williams, Inc.
300 Main Street
Cincinnati, OH 45202
(513) 621-2875 or
(800) 877-3344
Fund shares may be purchased from:
Matrix Growth Fund
Matrix Emerging Growth Fund
Mutual Fund Services
P.O. Box 14967
Cincinnati, OH 45202-0967
(800) 424-2295
This Prospectus sets forth basic information about the Funds that
prospective investors should know before investing. It should be read and
retained for future reference. The Funds are series of Professionally Managed
Portfolios. A Statement of Additional Information dated December 31, 1994, as
may be amended from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This Statement of
Additional Information is available without charge upon written request to the
Funds at the address or telephone number given above.
<PAGE>
TABLE OF CONTENTS
Expense Table ................................................ 3
Financial Highlights ......................................... 4
Objective and Investment Approach of the Funds ............... 5
Adviser Investment Returns ................................... 6
Management of the Funds ...................................... 9
Distribution Plan ............................................10
How To Invest in the Funds ...................................10
How To Redeem an Investment in the Funds .....................12
Services Available to the Fund's Shareholders ................13
How the Fund's Per Share Value Is Determined .................14
Distributions and Taxes ......................................14
General Information ..........................................15
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1994
<PAGE>
The MATRIX GROWTH FUND (the "Growth Fund") and MATRIX EMERGING GROWTH FUND
(The "Emerging Growth Fund") are diversified series of Professionally Managed
Portfolios (the "Trust"), an open-end management investment company offering
redeemable shares of beneficial interest. Shares may be purchased and redeemed
without a sales or redemption charge at their net asset value. The minimum
initial investment is $1000 with subsequent investments of $100 or more.
EXPENSE TABLE
Expenses are one of several factors to consider when investing in a Fund.
The purpose of the following fee table is to provide an understanding of the
various costs and expenses which may be borne directly or indirectly by an
investment in a Fund. Actual expenses may be more or less than those shown.
Shareholder Transaction Expenses (for each of the Funds)
Maximum Sales Load Imposed on Purchases. . . . . . . . . . . . . . . None
Maximum Sales Load Imposed on Reinvested Dividends . . . . . . . . .None
Deferred Sales Load. . . . .. . ... . . . . . . . . . . . . . . . . .None
Redemption Fees. . . . . . . . . . . . .. . . . . . . . . . . . . . .None
Exchange Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .None
12b-1 Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.25%
Annual Fund Operating Expenses (for each Fund)
(As a percentage of average net assets) Emerging
Growth Growth
Fund Fund
Investment Advisory Fee 0.90% 0.90%
12b-1 Distribution Fee 0.25% 0.25%
Other expenses 0.60%* 0.85%*
Total Fund Operating Expenses 1.75%* 2.00%*
*The Adviser has undertaken to limit the operating expenses for the Growth
Fund to no more than 1.75% of average net assets annually through December 31,
1996 and for the Emerging Growth Fund to no more than 2.00% of average net
assets annually.
Example
This table illustrates the net transaction and operating expenses that
would be incurred by an investment in either of the Funds over different time
periods, assuming a $1,000 investment, a 5% annual return, and redemption at the
end of each time period.
Emerging
Growth Growth
Fund Fund
One year $18 $20
Three years $55 $63
Five years $95 -
Ten years $206 -
The example shown above should not be considered a representation of past
or future expenses and actual expenses may be greater or less than those shown.
In addition, federal regulations require the Example to assume a 5% annual
return, but the Funds' actual return may be higher or lower. See "Management of
the Funds."
FINANCIAL HIGHLIGHTS (Matrix Growth Fund)
The following condensed financial information, including total returns,
for the years ended December 31, 1993, 1992, 1991, and 1990 has been audited by
Arthur Andersen & Co., independant public accountants. The condensed financial
information, excluding total returns, for the periods ending prior to December
31, 1990, has been audited by other independent public accountants. The audit
report on the 1993 financial statements issued by Arthur Andersen & Co. should
be read in conjunction with this condensed financial information. The audit
report on the 1993 financial statements is incorporated by reference in the
Statement of Additional Information. This report is available from the Trust.
The presentation is for a share outstanding throughout each period.
<TABLE>
<CAPTION>
(Unaudited)
Matrix Growth Fund Six Months ___________Year Ended December 31,____________
Ended
June 30, 1994 1993 1992 1991 1990 1989 1988 1987 1986
------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning period $14.51 $14.05 $14.01 $11.03 $11.76 $9.67 $9.96 $10.00 $10.00
Net investment income 0.02 0.06 0.09 0.15 0.18 0.33 0.08 0.03 0.09
Net gains or losses on securities (1.01) 1.25 0.60 3.62 (0.71) 3.16 (0.28) 0.05 (0.09)
Total from investment operations (0.99) 1.31 0.69 3.77 (0.53) 3.49 (0.20) 0.08 0.00
Dividends from net investment income 0.00 (0.06) (0.09) (0.14) (0.20) (0.29) (0.08) (0.11) 0.00
Distributions from capital gains 0.00 (0.79) (0.56) (0.65) 0.00 (1.11) 0.00 0.00 0.00
Returns of capital 0.00 0.00 0.00 0.00 0.00 0.00 (0.01) (0.01) 0.00
Total distributions to shareholders 0.00 (0.85) (0.65) 0.79 0.20 (1.40) (0.09) (0.12) 0.00
Net asset value, end of period $13.52 $14.51 $14.05 $14.01 $11.03 $11.76 $9.67 $9.96 $10.00
Total Return (6.82)% 9.32% 4.92% 34.21% -4.50% 36.27% -2.00% 0.70% 0.00%
Net assets, end of period (millions) $16.83 $19.06 $18.95 $17.44 $11.41 $9.12 $3.59 $4.35 $3.22
Ratio of expenses to average net
assets(2) 1.77% 1.67% 1.50% 1.50% 1.50% 1.50% 1.49% 1.49% 1.47%(3)
Ration of net income to average net
assets(2) 0.25% 0.40% 0.69% 1.17% 1.59% 2.99% 0.78% 0.27% 1.33%(3)
Portfolio turnover rate 22% 30% 51% 70% 79% 130% 132% 157% 96%(3)
</TABLE>
(1) The Gateway Growth Plus Fund (now the Matrix Growth Fund) commenced
operations on May 14, 1986. Effective December 28, 1988, Sena Weller Rohs
Williams, Inc. ("SWRW") became the sub-advisor to the Fund. The Fund
subsequently changed its name.
(2) The ratios of expenses to average net assets would have increased and net
income to average net assets would have decreased by 0.18%, 0.25%, 0.39%, 1.01%,
2.37%, 1.72% and 2.77% in 1992, 1991, 1990, 1989, 1988, 1987 and 1986 had the
Adviser not waived expenses.
(3) Annualized (except for six months ended June 30, 1994).
<PAGE>
OBJECTIVE AND INVESTMENT APPROACH OF THE FUNDS
The Growth Fund
The Growth Fund's primary investment objective is long-term growth of
capital with a secondary objective of conserving principal. Because of the risks
inherent in investing in marketable securities, however, there is no assurance
that these objectives will be achieved.
The Fund attempts to achieve its investment objective primarily by
investing in common stocks of companies which the Adviser believes will have
rising earnings and stable or rising share prices. Earnings growth is evaluated
relative to the earnings history of the company and price trends are also viewed
relative to the long-term price behavior of the company's shares. The Fund
maintains a diversified portfolio without excessive representation in any single
industry group. The policy of the Fund is to maintain substantially all Fund
assets in common stocks.
The Adviser may at times purchase index put options in the Fund's
portfolio, principally to protect against declines in the market value of the
common stocks held in the Fund's portfolio or to attempt to retain unrealized
gains in the value of the securities held. The Fund will limit its purchases of
put options so that no more than 5% of the Fund's net assets are invested in
premiums on the purchase of put options.
Risk Factors. Opportunities to realize net gains vary from time to time
because of general market conditions, economic conditions, the Adviser's ability
to select appropriate investments and other factors. The purchase of put options
involves a risk of loss of all or part of the premium paid. If the price of the
underlying index does not decrease by a sufficient amount, the Fund will
experience a loss equal to the deficiency if it exercises the option, and a loss
of the entire premium if it does not exercise the option. Under unusual market
conditions, such as an interruption in trading in an index or certain stocks in
the index, the Adviser may be unable to hedge the Fund's portfolio effectively.
Restrictions imposed by regulatory agencies also may adversely affect the
hedging strategy. Accordingly, the Fund's total return will fluctuate, and there
can be no assurance that the Fund's investment objective will be realized.
The Emerging Growth Fund
The Investment objective of the Emerging Growth Fund is to seek long-term
capital appreciation. Current income will not be a consideration, except that
the Fund may at times make investments in short-term income producing
securities.
Fund assets will primarily be invested in the common stocks of companies
with long-term growth potential, particularly smaller companies considered to be
in the emerging or developing growth phase. Investments will be directed toward
companies deemed capable of increasing earnings over an extended period of time
at an above average rate and which are in a sound financial position. In seeking
companies whose common stock will meet the Fund's investment objective, the
Adviser's analysis will be based on fundamental analysis of a company, its
industry or industries and appropriate macro-economic factors.
The Fund's investment portfolio will emphasize companies that operate in
various fields of science or technology, and other companies that have developed
innovative products or services that in the opinion of the Adviser have
significant earnings growth potential. Areas of particular interest would
include, but not be limited to, electronics, computers and services,
communications equipment and services, other productivity enhancing equipment,
and health care. In addition, investments may be made in such general areas as
aerospace, energy, natural resources, entertainment and other business and
consumer services believed to have growth potential. The list of industries and
companies given above is for illustration purposes and the Fund's investment
portfolio is not limited to such industries or companies.
Risk Factors. Shares of the Emerging Growth Fund do not represent a
complete investment program. They are designed for investors who understand and
are willing to accept the risks involved in seeking capital appreciation in
smaller, less established companies. There can be no assurance that the Emerging
Growth Fund's investment objective will be achieved, and achievement of the
objective will be particularly difficult during periods when the price of
securities are generally declining.
Smaller and Newer Companies. Many of the companies held by the Emerging
Growth Fund may be smaller and younger than companies whose shares are traded on
the major stock exchanges, and the Fund may invest in new public offerings.
Accordingly, shares of these companies, which typically trade over the counter,
may be more volatile than those of larger exchange-listed companies. New or
improved products or methods of development may have a substantial impact on the
earnings and revenues of such companies, and any such positive and negative
developments could have a corresponding positive or negative effect on the value
of their shares. For these reasons, when the Fund holds a substantial position
in these types of companies, the net asset value of the Fund may be more
volatile. The Fund may not be appropriate for short-term investors.
ADVISER INVESTMENT RETURNS
Set forth in the table below are certain performance data provided by the
Adviser relating to (1) the Matrix Growth Fund, which is the predecessor to the
Growth Fund offered by this prospectus and (2) the Adviser's privately managed
Emerging Growth accounts. With respect to the Emerging Growth Accounts, the
information shown is for two taxable private limited partnership accounts which
had substantially the same investment objective as the Emerging Growth Fund and
were managed using substantially similar investment strategies and techniques as
those contemplated for use by the Emerging Growth Fund. See "Objectives and
Investment Approach of the Fund" on page 4. The results presented are not
intended to predict or suggest the return to be experienced by a Fund or the
return an investor might achieve by investing in a Fund. Results may differ
because of, among other things, differences in brokerage commissions paid,
account expenses, including investment advisory fees, (which expenses and fees
may be higher for the Fund than for the accounts), the size of positions taken
in relation to account size, diversification of securities, timing of purchases
and sales, timing of cash additions and withdrawals, and the private character
of the composite accounts compared with the public character of the Fund.
Investors should be aware that the use of different methods of determining
performance could result in different performance results. Investors should not
rely on the following performance data as an indication of future performance of
the Adviser or of a Fund.
INVESTMENT TOTAL RETURNS
- --------------------------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1994 1993 1992 1991 1990 1989
----- ----- ----- ---- ---- ----
*Growth Fund (4.82%) 9.32% 4.92% 34.21% (4.50%) 36.27%
Standard &
Poor's 500 1.30% 10.08% 7.62% 30.47% (3.11%) 31.48%
*This Fund is the predecessor to the Growth Fund offered by this Prospectus.
- --------------------------------------------------------------------------------
Average Annual Total Return for Periods ended September 30, 1994
Emerging Growth
Limited Partnerships
--------------------
Standard &
Account I Account II Poor's 500
--------- ---------- ----------
One year 9.22% 9.43% 3.68%
Three year 13.57% 13.13% 9.17%
Five year 13.71% 13.35% 9.15%
Ten year 10.79% 10.92% 14.60%
Inception* 11.52% 9.15% --
*Inception dates were 07/01/81 for Account I and 07/01/83 for Account II.
- --------------------------------------------------------------------------------
Please read the following important notes concerning the Emerging Growth
Accounts composite.
1. The results account for both income and capital appreciation or
depreciation (Total Return). Returns are time-weighted and calculated in
compliance with the Association of Investment Management and Research ("AIMR")
performance presentation standards, reduced for investment advisory fees and
operating expenses.
2. Quarterly rate of return for included accounts was the percentage
change in the market value of the account (including income earned) during the
quarter.
Investors should note that the Funds will compute and disclose their
average annual compounded rates of return using the standard formula set forth
in Securities and Exchange Commission rules, which differ in certain respects
from returns for the Emerging Growth Accounts calculated under the AIMR
standards noted above. Unlike the AIMR performance presentation standards which
link quarterly rates of return, the SEC total return calculation method (used in
the computation of performance for the Matrix Emerging Growth Accounts in the
table above) calls for computation and disclosure of an average annual
compounded rate of return for one, five and ten year periods or shorter periods
from inception.
The SEC formula provides a rate of return that equates a hypothetical
initial investment of $1000 to an ending redeemable value. Emerging Growth
Account performance shown is net of advisory fees and operating expenses. The
SEC calculation formula requires that returns to be shown for the Funds be net
of advisory fees as well as maximum applicable sales charges and all other Fund
operating expenses. See "Performance Calculation" at page 15.
3. The Emerging Growth Accounts composite includes all accounts managed by
the Adviser that meet the criteria for inclusion in the composite for each
period presented.
4. The Standard & Poor's 500 Index is an unmanaged index composed of 500
industrial, utility, transportation and financial companies of the U.S. markets.
The index represents about 75% of New York Stock Exchange ("NYSE") market
capitalization and 30% of NYSE issues. It is a capitalization-weighted index
calculated on a total return basis with dividends reinvested.
OTHER INVESTMENT POLICIES OF THE FUNDS
Cash Investments and Repurchase Agreements. Cash which is held by the
Funds for the purpose of paying expenses and effecting share redemptions, or
when the Adviser determines that temporary reduction or liquidation of stock
holdings is appropriate, is invested in securities of the U.S. Government or
government agencies, bankers' acceptances, commercial paper, certificates of
deposit of U.S. branches of domestic banks or repurchase agreements. For
temporary defensive purposes, a Fund may hold up to 100% of its assets in such
instruments.
A repurchase agreement is a short-term investment in which the purchaser
(i.e., a Fund) acquires ownership of a U.S. Government security (which may be of
any maturity) and the seller agrees to repurchase the obligation at a future
time at a set price, thereby determining the yield during the purchaser's
holding period (usually not more than seven days from the date of purchase). Any
repurchase transaction in which a Fund engages will require full
collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, a Fund could experience both delays in liquidating the underlying
security and losses in value. However, each Fund intends to enter into
repurchase agreements only with banks with assets of $500 million or more that
are insured by the Federal Deposit Insurance Corporation and the most
creditworthy registered securities dealers pursuant to procedures adopted and
regularly reviewed by the Trust's Board of Trustees. The Adviser monitors the
creditworthiness of the banks and securities dealers with which each Fund
engages in repurchase transactions.
Illiquid and Restricted Securities. A Fund may not invest more than 15% of
its net assets in illiquid securities, including (i) securities for which there
is no readily available market, (ii) securities the disposition of which would
be subject to legal restrictions (so-called "restricted securities"), and (iii)
repurchase agreements having more than seven days to maturity. A considerable
period of time may elapse between a Fund's decision to dispose of such
securities and the time when the Fund is able to dispose of them, during which
time the value of the securities could decline. Restricted securities do not
include those which meet the requirements of Rule 144A under the Securities Act
of 1933 and which the Trustees have determined to be liquid based on the
applicable trading markets.
Portfolio Turnover. The Adviser believes that the Funds' goals of capital
appreciation can best be achieved by investments in carefully selected companies
with investments most often planned to be long-term in nature. Investment
positions will be monitored continuously, however, and the determination to sell
will be made whenever the Adviser deems the security held to have become
incompatible with a Fund's objective, or if the stock appears excessively
valued.
It is not generally the policy of the Funds to invest for short term
trading purposes. Nonetheless, it is difficult to predict what the portfolio
turnover rate will be and the Adviser may make portfolio changes without regard
to the holding period. Portfolio turnover is particularly difficult to predict
for the first year of operations. However, the Adviser expects that the annual
rate of portfolio turnover generally will not exceed 100% for both the Growth
Fund and 50% for the Emerging Growth Fund.
Each Fund has adopted certain investment restrictions, which are described
fully in the Statement of Additional Information. Like each Fund's investment
objective, certain of these restrictions are fundamental and may be changed only
by a majority vote of the Fund's outstanding shares.
MANAGEMENT OF THE FUNDS
The Board of Trustees of the Trust establishes the Funds' policies and
supervises and reviews the management of the Funds. The Adviser, whose offices
are at 300 Main Street, Cincinnati, Ohio 45202, is a registered investment
adviser under the Investment Advisers Act of 1940, and has provided investment
supervisory services to its clients since 1968. The Adviser is controlled by Mr.
William O. DeWitt Jr., and Mr. Mercer Reynolds. The Adviser currently manages
approximately $850 million for investment companies, individuals, retirement
benefit plans, trusts, charitable organizations and corporations. Peter H.
Williams and David P. Osborn are responsible for management of the Growth Fund
portfolio. Mr. Williams, Senior Vice President of the Adviser, has managed the
Growth Fund's portfolio since December, 1988. Mr. Osborn joined the Adviser in
March, 1992 and is Vice President. He has managed the Growth Fund's portfolio
since November, 1993. From August, 1988 to March, 1992, he was employed by the
investment management and trust division of PNC Bank. Fred W. Weller and Michael
A. Coombe are responsible for management of the Emerging Growth Fund portfolio.
Mr. Weller is Senior Vice President of the Advisor, with which he has been
associated since 1968. He has managed the Adviser's Emerging Growth limited
partnerships since 1981. Mr. Coombe, Vice President, joined the Adviser in 1994.
He was previously associated with the investment management firm of Gradison &
Company.
The Adviser provides the Funds with advice on buying and selling
securities, manages the investments of the Funds, furnishes the Funds with
office space and certain administrative services, and provides most of the
personnel needed by the Funds. As compensation, each Fund pays the Adviser a
monthly management fee (accrued daily) based upon the average daily net assets
of the Fund at the annual rate of 0.9% of the first $50 million of the Fund's
average daily net assets, 0.7% of the Fund's average daily net assets in excess
of $50 million and up to $100 million and 0.6% of the Fund's average daily net
assets in excess of $100 million.
Southampton Investment Management Company (the "Manager") acts as the
Funds' Manager under a Management Agreement. Under that agreement, the Manager
prepares various federal and state regulatory filings, reports and returns for
the Funds, prepares reports and materials to be supplied to the trustees,
monitors the activities of the Funds' custodian, transfer agent and accountants,
and coordinates the preparation and payment of the Funds' expenses and reviews
the Funds' expense accruals. For its services, the Manager receives an annual
fee from each Fund equal to the greater of 0.25 of 1% of the Fund's average
daily net assets or $30,000.
The Funds are responsible for their own operating expenses. The Adviser
has voluntarily undertaken to limit the Growth Fund's operating expenses to
1.75% through December 31, 1996 and the Emerging Growth Fund's operating
expenses to 2.00% of such Fund's average net assets annually. This undertaking
may be modified or withdrawn by the Adviser upon notice to shareholders for the
Emerging Growth Fund and after December 31, 1996 for the Growth Fund. The
Adviser also may reimburse additional amounts to the Funds at any time in order
to reduce their expenses, or to the extent required by applicable securities
laws. To the extent the Adviser performs a service for which a Fund is obligated
to pay, the Fund shall reimburse the Adviser for its costs incurred in rendering
such service. Any reductions made by the Adviser in its fees or payments or
reimbursements of expenses which are a Fund's obligation are subject to
reimbursement by the Fund provided the Fund is able to effect such reimbursement
and remain in compliance with applicable expense limitations. With respect to
the Growth Fund, the Adviser may recapture any fee waiver or expense absorption
only if that Fund could make such repayment and still stay within the total
operating expense cap, if any, then established for it. For purposes of this
recapture provision with respect to the Growth Fund, the Adviser has agreed that
the expense cap will remain at 1.75% or lower through December 31, 1999. A
request for such reimbursement must be reviewed and approved by the Board of
Trustees.
The Adviser considers a number of factors in determining which brokers or
dealers to use for the Funds' portfolio transactions. While these are more fully
discussed in the Statement of Additional Information, the factors include, but
are not limited to, the reasonableness of commissions, quality of services and
execution, and the availability of research which the Adviser may lawfully and
appropriately use in its investment management and advisory capacities. Provided
a Fund receives prompt execution at competitive prices, the Adviser may also
consider the sale of Fund shares as a factor in selecting broker-dealers for the
Fund's portfolio transactions.
DISTRIBUTION PLAN
The Funds have adopted a distribution plan pursuant to Rule 12b-1. The
Plan provides that each Fund may pay distribution and related expenses of up to
an annual rate of 0.25% of the Fund's average net assets to the Adviser as
distribution coordinator. Expenses permitted to be paid by each Fund under its
Plan include: preparation, printing and mailing of prospectuses; shareholder
reports such as semiannual and annual reports, performance reports and
newsletters; sales literature and other promotional material to prospective
investors; direct mail solicitation; advertising; public relations; compensation
of sales personnel, advisers or other third parties for their assistance with
respect to the distribution of the Fund's shares; payments to financial
intermediaries for shareholder support; administrative and accounting services
with respect to the shareholders of the Fund; and such other expenses as may be
approved from time to time by the Board of Trustees.
The Rule 12b-1 Distribution Plan allows excess distribution expenses to be
carried forward by the Adviser, as distribution coordinator, and resubmitted in
a subsequent fiscal year provided that (i) distribution expenses cannot be
carried forward for more than three years following initial submission; (ii) the
Board of Trustees has made a determination at the time of initial submission
that the distribution expenses are appropriate to be carried forward; and(iii)
the Board of Trustees makes a further determination, at the time any
distribution expenses which have been carried forward are resubmitted for
payment, to the effect that payment at the time is appropriate, consistent with
the objectives of the Plan and in the current best interests of shareholders.
HOW TO INVEST IN THE FUNDS
The minimum initial investment in a Fund is $1000. Subsequent investments
must be at least $100. Investments by retirement plans may be for minimums of
$500 and $100, respectively. Reynolds, DeWitt Securities Company, a division of
the Adviser, (the "Distributor"), acts as Distributor of the Funds' shares. The
Distributor may, at its discretion, waive the minimum investment requirements
for purchases in conjunction with certain group or periodic plans.
Shares of the Funds are offered continuously for purchase at their net
asset value per share next determined after a purchase order is received. The
public offering price is effective for orders received by a Fund prior to the
time of the next determination of the Fund's net asset value. Orders received
after the time of the next determination of the applicable Fund's net asset
value will be entered at the next calculated public offering price.
Investors may purchase shares of the Funds by check or wire:
By Check: For initial investments, an investor should complete the Fund's
Account Application (included with this Prospectus). The completed application,
together with a check payable to "Matrix Growth Fund," or "Matrix Emerging
Growth Fund," should be mailed to the Fund's Transfer Agent: The Provident Bank,
Mutual Fund Services, P.O. Box 14967, Cincinnati, OH 45250-0967.
For subsequent investments, a stub is attached to the account statement
sent to shareholders after each transaction. The stub should be detached from
the statement and, together with a check payable to "Matrix Growth Fund," or
"Matrix Emerging Growth Fund," mailed to the Provident Bank in the envelope
provided at the address indicated above. The investor's account number should be
written on the check.
By Wire: For initial investments, before wiring funds, an investor should
call the Transfer Agent at (800) 424-2295 to advise the Transfer Agent that an
initial investment will be made by wire and to receive an account number. The
Transfer Agent will request the investor's name and the dollar amount to be
invested and provide an order confirmation number. The investor should then
complete the Fund's Account Application (included with this Prospectus),
including the date and the order confirmation number on the application. The
completed Account Application should be mailed to the address shown at the top
of the Account Application. The investor's bank should transmit immediately
available funds by wire for purchase of shares, in the investor's name to the
Funds' Custodian, as follows:
The Provident Bank
Attn: Mutual Fund Services ABA
Routing Number: 042-000-424
for further credit to Matrix Growth Fund or
for further credit to Matrix Emerging Growth Fund
Account Number [Name of Shareholder]
For subsequent investments, the investor's bank should wire funds as
indicated above. It is not necessary to contact the Transfer Agent prior to
making subsequent investments by wire, but it is essential that complete
information regarding the investor's account be included in all wire
instructions in order to facilitate prompt and accurate handling of investments.
Investors may obtain further information from the Transfer Agent about remitting
funds in this manner and from their own banks about any fees that may be
imposed.
General. Investors will not be permitted to redeem any shares purchased
with an initial investment made by wire until one business day after the
completed Account Application is received by the Fund. All investments must be
made in U.S. dollars and, to avoid fees and delays, checks should be drawn only
on U.S. banks and should not be made by third party check. A charge may be
imposed if any check used for investment does not clear. The Funds and the
Distributor reserve the right to reject any purchase order in whole or in part.
If an order, together with payment in proper form, is received by the
Transfer Agent by the close of trading on the NYSE (currently 4:00 p.m., New
York City time), Fund shares will be purchased at the offering price determined
as of the close of trading on that day. Otherwise, Fund shares will be purchased
at the offering price determined as of the close of trading on the NYSE on the
next business day.
Federal tax law requires that investors provide a certified Taxpayer
Identification Number and certain other required certifications upon opening or
reopening an account in order to avoid backup withholding of taxes at the rate
of 31% on taxable distributions and proceeds of redemptions. See the Funds'
Account Application for further information concerning this requirement.
The Funds are not required to issue share certificates. All shares are
normally held in non-certificated form registered on the books of the Funds and
the Funds' Transfer Agent for the account of the shareholder.
HOW TO REDEEM AN INVESTMENT IN THE FUNDS
A shareholder has the right to have a Fund redeem all or any portion of
his outstanding shares at their current net asset value on each day the NYSE is
open for trading. The redemption price is the net asset value per share next
determined after the shares are validly tendered for redemption.
Direct Redemption. A written request for redemption must be received by
the Funds' Transfer Agent in order to constitute a valid tender for redemption.
To protect the Funds and their shareholders, a signature guarantee is required
for certain transactions, including redemptions. Signature(s) on the redemption
request must be guaranteed by an "eligible guarantor institution" as defined in
the federal securities laws. These institutions include banks, broker-dealers,
credit unions and savings institutions. A broker-dealer guaranteeing signatures
must be a member of a clearing corporation or maintain net capital of at least
$100,000. Credit unions must be authorized to issue signature guarantees.
Signature guarantees will be accepted from any eligible guarantor institution
which participates in a signature guarantee program. A notary public is not an
acceptable guarantor.
Telephone Redemption. Shareholders who complete the Redemption by
Telephone portion of the Funds' Account Application may redeem shares on any
business day the NYSE is open by calling the Funds' Transfer Agent at (800)
424-2295 before 4:00 p.m. Eastern time. Redemption proceeds will be mailed or
wired at the shareholder's direction the next business day to the predesignated
account. The minimum amount that may be wired is $1,000 (wire charges, if any,
will be deducted from redemption proceeds).
By establishing telephone redemption privileges, a shareholder authorizes
the Funds and their Transfer Agent to act upon the instruction of any person by
telephone to redeem from the account for which such service has been authorized
and transfer the proceeds to the bank account designated in the Authorization.
The Funds and the Transfer Agent will use procedures to confirm that redemption
instructions received by telephone are genuine, including recording of telephone
instructions and requiring a form of personal identification before acting on
such instructions. Neither the Funds nor the Transfer Agent will be liable for
any loss, expense, or cost arising out of any telephone redemption or exchange
request, including any fraudulent or unauthorized requests that are reasonably
believed to be genuine, provided that such procedures are followed. The Funds
may change, modify, or terminate these privileges at any time upon at least 60
days' notice to shareholders.
Shareholders may request telephone redemption privileges after an account
is opened; however, the authorization form will require a separate signature
guarantee. Shareholders may experience delays in exercising telephone redemption
during periods of abnormal market activity.
General. Payment of redemption proceeds will be made promptly, but not
later than seven days after the receipt of all documents in proper form,
including a written redemption order with appropriate signature guarantee in
cases where telephone redemption privileges are not being utilized. The Funds
may suspend the right of redemption under certain extraordinary circumstances in
accordance with the Rules of the Securities and Exchange Commission. In the case
of shares purchased by check and redeemed shortly after purchase, the Funds will
not mail redemption proceeds until it has been notified that the check used for
the purchase has been collected, which may take up to 15 days from the purchase
date. To minimize or avoid such delay, investors may purchase shares by
certified check or federal funds wire. A redemption may result in recognition of
a gain or loss for federal income tax purposes.
Due to the relatively high cost of maintaining smaller accounts, the Funds
reserve the right to redeem shares in any account, other than retirement plan or
Uniform Gifts/Transfers to Minors Act accounts, if at any time, due to
redemptions by the shareholder, the total value of a shareholder's account does
not equal at least $1,000. If a Fund determines to make such an involuntary
redemption, the shareholder will first be notified that the value of his account
is less than $1,000 and will be allowed 30 days to make an additional investment
to bring the value of his account to at least $1,000 before the Fund takes any
action.
SERVICES AVAILABLE TO THE FUNDS' SHAREHOLDERS
Retirement Plans. The minimum initial investment for such plans is $500,
with minimum subsequent investments of $100. The Funds offer a prototype
Individual Retirement Account ("IRA") plan and information is available from the
Distributor or from your securities dealer with respect to Keogh, Section 403(b)
and other retirement plans offered. Investors should consult a tax adviser
before establishing any retirement plan.
Exchange Privilege. Shareholders may exchange shares of the Growth Fund
and Emerging Growth Fund by mailing or delivering written instructions to the
Transfer Agent. Please specify the name of the applicable Fund, the number of
shares or dollar amount to be exchanged, and your name and account number. You
may also exchange shares by telephoning the Transfer Agent at (800) 424-4495
between the hours of 9:00AM and 4:00PM (Eastern time) on a day when the NYSE is
open for normal trading. Telephone exchanges are subject to the identification
procedures noted with respect to telephone redemptions above.
Shareholders also are permitted to exchange their shares for shares of the
Riverfront U.S. Government Money Market Fund (the "Riverfront Fund") which is
managed by Provident Bank, the Fund's custodian and transfer agent. Investors
must obtain the current prospectus for the Riverfront Fund before exchanging for
its shares, and any exchange is conditioned upon the shares of the Riverfront
Fund being qualified for sale in their state of residence. Prior to making such
an exchange, investors should obtain and carefully read the prospectus for the
Riverfront Fund. The exchange privilege does not constitute an offering or
recommendation on the part of the Funds or the Adviser of an investment in the
Riverfront Fund.
Automatic Investment Check Plan. For the convenience of shareholders, the
Funds offer a preauthorized check service under which a check is automatically
drawn on the shareholder's personal checking account each month for a
predetermined amount (but not less than $100), as if the shareholder had written
it himself. Upon receipt of the withdrawn funds, a Fund automatically invests
the money in additional shares of the Fund at the current offering price.
Applications for this service are available from the Distributor. There is no
charge by the Funds for this service. The Distributor may terminate or modify
this privilege at any time, and shareholders may terminate their participation
by notifying the Transfer Agent in writing, sufficiently in advance of the next
scheduled withdrawal.
Systematic Withdrawal Program. As another convenience, the Funds offer a
Systematic Withdrawal Program whereby shareholders may request that a check
drawn in a predetermined amount be sent to them each month or calendar quarter.
A shareholder's account must have Fund shares with a value of at least $10,000
in order to start a Systematic Withdrawal Program, and the minimum amount that
may be withdrawn each month or quarter under the Systematic Withdrawal Program
is $100. This Program may be terminated or modified by a shareholder or the
Funds at any time without charge or penalty.
A withdrawal under the Systematic Withdrawal Program involves a redemption
of shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.
HOW THE FUNDS' PER SHARE VALUE IS DETERMINED
The net asset value of each Fund share is determined once daily as of the
close of public trading on the NYSE (currently 4:00 p.m. Eastern time) on each
day the New York Stock Exchange is open for trading. Net asset value per share
is calculated by dividing the value of the Fund's total assets, less its
liabilities, by the number of Fund shares outstanding.
Portfolio securities are valued using current market values, if available.
Securities for which market quotations are not readily available are valued at
fair values as determined in good faith by or under the supervision of the
Trust's officers in accordance with methods which are specifically authorized by
the Board of Trustees. Short-term obligations with remaining maturities of 60
days or less are valued at amortized cost as reflecting fair value.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Dividends and Distributions. Any dividends from net investment income are
declared and paid annually, typically at the end of each Fund's fiscal year
(December 31). Any undistributed net capital gains realized during the 12-month
period ended each October 31, as well as any additional undistributed capital
gains realized during a Fund's fiscal year, will also be distributed to
shareholders on or about December 31 of each year.
Dividends and capital gain distributions (net of any required tax
withholding) are automatically reinvested in additional shares of a Fund at the
net asset value per share on the reinvestment date unless the shareholder has
previously requested in writing to the Transfer Agent that payment be made in
cash.
Any dividend or distribution paid by a Fund has the effect of reducing the
net asset value per share on the reinvestment date by the amount of the dividend
or distribution. Investors should note that a dividend or distribution paid on
shares purchased shortly before such dividend or distribution was declared will
be subject to income taxes as discussed below even though the dividend or
distribution represents, in substance, a partial return of capital to the
shareholder.
Taxes. Each Fund intends to qualify and elect to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As long as a Fund continues to qualify, and as long as a
Fund distributes all of its income each year to the shareholders, the Fund will
not be subject to any federal income tax or excise taxes based on net income.
Distributions made by a Fund will be taxable to shareholders whether received in
shares (through dividend reinvestment) or in cash. Distributions derived from
net investment income, including net short-term capital gains, are taxable to
shareholders as ordinary income. A portion of these distributions may qualify
for the intercorporate dividends-received deduction. Distributions designated as
capital gains dividends are taxable as long-term capital gains regardless of the
length of time shares of the Fund have been held. Although distributions are
generally taxable when received, certain distributions made in January are
taxable as if received the prior December. Shareholders will be informed
annually of the amount and nature of the Fund's distributions.
Additional information about taxes is set forth in the Statement of
Additional Information. Shareholders should consult their own advisers
concerning federal, state and local taxation of distributions from the Funds.
GENERAL INFORMATION
The Trust. The Trust was organized as a Massachusetts business trust on
February 17, 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. 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. The fiscal year end of each Fund is December 31.
Shareholder Rights. Shares issued by the Funds have no preemptive,
conversion, or subscription rights. Shareholders have equal and exclusive rights
as to dividends and distributions as declared by the Funds and to the net assets
of the Funds upon liquidation or dissolution. A Fund, as a separate series of
the Trust, votes separately on matters affecting only that Fund (e.g., approval
of the Management and Advisery Agreements); all series of the Trust vote as a
single class on matters affecting all series jointly or the Trust as a whole
(e.g., election or removal of Trustees). 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 so choose, elect all of the Trustees. While the Trust is
not required and does not intend to hold annual meetings of shareholders, such
meetings may be called by the Trustees in their discretion, or upon demand by
the holders of 10% or more of the outstanding shares of the Trust for the
purpose of electing or removing Trustees.
Performance Calculation. From time to time, each Fund may publish its
total return in advertisements and communications to investors. Total return
information will include the Fund's average annual compounded rate of return
over the most recent four calendar quarters and over the period from the Fund's
inception of operations. The Fund may also advertise aggregate and average total
return information over different periods of time. The Fund's total return will
be based upon the value of the shares acquired through a hypothetical $1,000
investment at the beginning of the specified period and the net asset value of
such shares at the end of the period, assuming reinvestment of all
distributions. Total return figures will reflect all recurring charges against
Fund income. Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investor's
total return may be in any future period.
Shareholder Inquiries. Shareholder inquiries should be directed to the
Transfer Agent at (800) 424-2295.
<PAGE>
Adviser
Sena Weller Rohs Williams, Inc.
300 Main Street
Cincinnati,OH 45202
(513) 621-2875
(800) 877-3344
o
Distributor
Reynolds DeWitt Securities Company
a division of Sena Weller Rohs Williams, Inc.
300 Main Street
Cincinnati,OH 45202
(513) 621-2875
(800) 877-3344
o
Custodian and Transfer Agent
The Provident Bank
P.O. Box 14967
Cincinnati, Ohio 45250-0967
(800) 424-2295
o
Auditors
Joseph DeCosimo and Company
Atrium Two - Suite 2727
221 East Fourth Street
Cincinnati, OH 45202
o
Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104
MATRIX
GROWTH FUND
Logo
MATRIX
EMERGING
GROWTH
FUND
Prospectus Dated December 31, 1994
