February 20, 1996
VIA EDGAR TRANSMISSION
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Portico Funds, Inc.
(1933 Act Registration No. 33-18255)
(1940 Act Registration No. 811-5380)
Ladies and Gentlemen:
On behalf of Portico Funds, Inc. (the "Fund"), I have transmitted
herewith for filing Post-Effective Amendment No. 28 to the Fund's Registration
Statement on Form N-1A under the Securities Act of 1933 and the Investment
Company Act of 1940.
Pursuant to Rule 485(b) under the Securities Act of 1993, it is proposed
that this Amendment become effective immediately on February 20, 1996. The
purpose of this Amendment is to bring the financial statements up to date and
make other non-material changes to the prospectuses and the statements of
additional information of the Balanced Fund, Growth and Income Fund, Equity
Index Fund, MidCore Growth Fund, Special Growth Fund, International Equity Fund,
Tax-Exempt Intermediate Bond Fund, Short-Term Bond Market Fund, Intermediate
Bond Market Fund, Bond IMMDEX/TM Fund, Money Market Fund, Institutional Money
Market Fund, U.S. Treasury Money Market Fund, U.S. Government Money Market Fund,
and Tax-Exempt Money Market Fund.
Please be advised that the institutional version of the prospectuses for
the money market funds, bond funds, equity funds and international equity fund
have been consolidated into one prospectus. In addition, the retail version of
the prospectus for the International Equity Fund has been consolidated into the
retail version of the prospectus for the other equity funds.
Post-Effective Amendment No. 28 does not contain disclosures that would
render it ineligible to become effective under Rule 485(b) of the Securities Act
of 1933.
As requested in the staff's generic comment letter dated February 25, 1994,
we note for your information that shares of the Company are marketed in part
through banks.
Very truly yours,
/s/ Kenneth L. Greenberg, Esq.
KLG:CS
Enclosures
As filed with the Securities and Exchange Commission on
February 20, 1996.
1933 Act Registration No. 33-18255
1940 Act Registration No. 811-5380
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 28 X
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 29 X
(Check appropriate box or boxes)
PORTICO FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
Portico Funds Center
615 East Michigan Street
Milwaukee, Wisconsin 53201-3011
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (414) 287-3909
W. Bruce McConnel, III, Esquire
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box).
X immediately upon filing pursuant to paragraph (b)
On , 19 pursuant to paragraph (b)
------- --
60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i)
75 days after filing on , 19 pursuant to paragraph (a)(ii)
----------- -- --
on , 19 pursuant to paragraph (a)(ii) of Rule 485.
----------- -- --
If appropriate, check the following box:
this Post-Effective Amendment designates a new effective date for a
previously filed Post-Effective Amendment.
Registrant has registered an indefinite number of shares of its securities
under the Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. The Registrant filed on behalf of
the Money Market Fund, Institutional Money Market Fund, U.S. Treasury Money
Market Fund, U.S. Government Money Market Fund, Short-Term Bond Market Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund, Bond IMMDEX/TM
Fund, Balanced Fund, Growth & Income Fund, Special Growth Fund, Equity Index
Fund, MidCore Growth Fund and International Equity Fund its Rule 24f-2 Notice
for its fiscal year ended October 31, 1995 on December 20, 1995.
PORTICO FUNDS, INC.
(Retail Series)
Short-Term Bond Market Fund,
Intermediate Bond Market Fund,
Tax-Exempt Intermediate Bond Fund
Bond IMMDEX/TM Fund
Form N-1A
Cross Reference Sheet
Part A
Item No. Prospectus Heading
- -------- ------------------
1. Cover Page. . . . . . . . . . . . . . . . . Cover Page
2. Synopsis. . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information . . . . . . Financial Highlights;
Performance Calculations
4. General Description of Registrant . . . . . Cover Page; Investment
Objectives and Policies; Other
Investment Information;
Description of Shares;
Investment Limitations
5. Management of the Fund. . . . . . . . . . . Management of the Funds
5A. Management's Discussion of
Fund Performance. . . . . . . . . . . . . . Inapplicable
6. Capital Stock and Other Securities. . . . . Dividends and Distributions;
Management of the Funds;
Taxes; Description of Shares
7. Purchase of Securities Being Offered. . . . Purchase of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
8. Redemption or Repurchase. . . . . . . . . . Redemption of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
9. Pending Legal Proceedings . . . . . . . . . Not Applicable
***********
Prospectus February 20, 1996
Short-Term Bond Market Fund
Intermediate Bond Market Fund
Tax-Exempt Intermediate Bond Fund
Bond IMMDEX/TM Fund
TABLE OF CONTENTS
Expense Summary 2
Financial Highlights 3
Investment Objectives and Policies 6
Other Investment Information 14
Purchase of Shares 21
Redemption of Shares 27
Shareholder Services 30
Dividends and Distributions 32
Management of the Funds 33
Investment Limitations 37
Taxes 38
Description of Shares 40
Net Asset Value and Days of Operation 41
Performance Calculations 42
Portico Funds, Inc. is a family of sixteen mutual funds that offer a variety of
investment objectives designed to meet the needs of individual and institutional
investors. This Prospectus describes the Retail Shares of the Bond Funds.
Portico Funds also offers retail and institutional shares of equity funds and
shares of money market funds, which are described in separate prospectuses.
The Short-Term Bond Market Fund seeks to provide an annual rate of total return,
before Fund expenses, comparable to the annual rate of total return of the
Lehman Brothers 1-3 year Government/Corporate Bond Index.
The Intermediate Bond Market Fund seeks to provide an annual rate of total
return, before Fund expenses, comparable to the annual rate of total return of
the Lehman Brothers Intermediate Government/Corporate Bond Index.
The Tax-Exempt Intermediate Bond Fund seeks to provide current income that is
substantially exempt from federal income tax and emphasize total return with
relatively low volatility of principal.
The Bond IMMDEX/TM Fund seeks to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers Government/Corporate Bond Index.
Firstar Investment Research & Management Company ("FIRMCO" or the "Adviser")
serves as investment adviser to each Fund, and the Funds are sponsored by B. C.
Ziegler and Company (the "Distributor"). Shareholder Organizations may perform
shareholder servicing and provide assistance in connection with the distribution
of the Funds' shares and receive fees from the Funds for their services. (See
"Management of the Funds").
This Prospectus sets forth concisely the information about the Funds that a
prospective investor should consider before investing. You should read this
Prospectus and retain it for future reference. Additional information about the
Funds, contained in a Statement of Additional Information, has been filed with
the Securities and Exchange Commission and is available upon request without
charge by writing Portico Investor Services at 615 East Michigan Street, P.O.
Box 3011, Milwaukee, Wisconsin 53201-3011, or by calling 1-800-982-8909 or
414-287-3710 (Milwaukee area). The Statement of Additional Information bears
the same date as this Prospectus and is incorporated by reference in its
entirety into the Prospectus.
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.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, FIRSTAR
TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER BANK, OR OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES INVESTMENT
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
February 20, 1996
EXPENSE SUMMARY Below is a summary of the shareholder transaction expenses and
the annual operating expenses expected to be incurred by Retail Shares of the
Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond
and Bond IMMDEX/TM Funds during the year ended December 31, 1996. An example
based on the summary is also shown.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases 2.00%
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None<F1>
Exchange Fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Short-Term Intermediate Tax-Exempt Bond
Bond Market Bond Market Intermediate IMMDEX/TM
Fund Fund Bond Fund Fund
----------- ------------ ------------ --------
Advisory Fees After Fees
Waivers<F2> 0.27% 0.28% 0.09% 0.30%
12b-1 Fees <F3> 0.00% 0.00% 0.00% 0.00%
Shareholder Servicing
Fees <F3> 0.25% 0.25% 0.25% 0.25%
Other Expenses After Fee
Waivers<F4> 0.23% 0.22% 0.41% 0.15%
Total Fund Operating Expenses
After Fee Waivers <F5> 0.75% 0.75% 0.75% 0.70%
<F1> A fee of $10.00 is charged for each wire redemption. See "Redemption of
Shares."
<F2> The Adviser has voluntarily agreed to waive a portion of its fees during
calendar year 1996. Absent advisory fee waivers, advisory fees would be 0.60%,
0.50%, 0.50%, and 0.30%, for the Short-Term Bond Market Fund, Intermediate Bond
Market Fund, Tax- Exempt Intermediate Bond, and Bond IMMDEX/TM Funds,
respectively. See "Management of the Funds" in this Prospectus for a more
complete description and the financial statements for the Short-Term Bond
Market Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund,
and Bond IMMDEX/TM Fund, for the fiscal year ended October 31, 1995
incorporated into the Statement of Additional Information.
<F3> The total of all 12b-1 fees and Shareholder Servicing Fees paid by a Fund
may not exceed, in the aggregate, the annual rate of 0.25% of the Fund's
average daily net assets. The Funds do not expect to pay any 12b-1 fees for the
current year. If 12b-1 fees are paid in the future, long-term shareholders may
pay more than the economic equivalent of the maximum front end sales charge
permitted by the National Association of Securities Dealers.
<F4> With respect to each Fund, the amount of "Other Expenses" in the table
above is based on estimated expenses and projected assets for the 1996 calendar
year. Absent administrative fee waivers, other expenses would be 0.30%, 0.29%,
0.48% and 0.22% for the Short-Term Bond Market, Intermediate Bond Market, Tax-
Exempt Intermediate Bond and Bond IMMDEX/TM Funds, respectively.
<F5> Absent fee waivers, total operating expenses would be 1.15%, 1.04%, 1.23%,
and 0.77% for the Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt
Intermediate Bond, and Bond IMMDEX/TM Funds, respectively.
EXPENSE SUMMARY
Example: You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual returns; and (2) redemption of your investment at the end of the
following periods:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Short-Term Bond Market Fund $28 $43 $61 $111
Intermediate Bond Market Fund 28 43 61 111
Tax-Exempt Intermediate Bond Fund 28 43 61 111
Bond IMMDEX/TM Fund 27 42 58 105
The foregoing tables are intended to assist investors in understanding the
expenses that shareholders bear either directly or indirectly and have been
restated to reflect current fees. In addition, Shareholder Organizations may
charge fees for providing services in connection with their clients' investments
in a Fund's shares.
The example shown above should not be considered a representation of future
investment return or operating expenses. Actual investment return and operating
expenses may be more or less than those shown.
Understanding Expenses
--------------------------------------------------------
Operating a mutual fund involves a variety of expenses for portfolio management,
shareholder statements and reports, and other services. These costs are paid
from a Fund's assets and their effect, except for fees charged directly by a
Shareholder Organization to its customers, are factored into any quoted share
price or return.
FINANCIAL HIGHLIGHTS
The financial highlights for each of the periods presented have been derived
from financial statements which have been audited by Price Waterhouse LLP,
independent accountants, whose report, which appears in the annual report to
shareholders for the fiscal year ended October 31, 1995, is incorporated by
reference into the Statement of Additional Information. Prior to January 9,
1995, the Funds offered only one class of shares to both institutional and
retail investors. On that date, the Funds began offering Institutional Shares to
institutional investors as described in a separate prospectus and Retail Shares
to retail investors as described in this Prospectus. The tables on the following
pages should be read in conjunction with the financial statements and related
notes also incorporated by reference into the Statement of Additional
Information. You may obtain the Statement of Additional Information and the
annual report to shareholders, which contain additional performance information,
free of charge by calling Portico Investor Services or writing to Portico
Investor Services at the address listed on the back cover of this Prospectus.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS Income From Investment Operations Less Distributions
--------------------------------- ------------------
Net Realized
and
Net Asset Unrealized Dividends
Value Net Gains or Total from from Net Distributions
Beginning Investment (Losses) on Investment Investment from Capital Total
of Period Income <F8> Securities Operations Income Gains Distributions
<S> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM BOND MARKET
Dec. 29, 1989 <F6>
through Oct. 31, 1990 $10.00 $0.66 $ (0.21) $0.45 $(0.66) $ - $(0.66)
Year Ended 1991 9.79 0.73 0.54 1.27 (0.73) - (0.73)
Year Ended 1992 <F7> 10.33 0.64 0.29 0.93 (0.64) (0.02) (0.66)
Year Ended 1993 10.60 0.58 0.10 0.68 (0.58) (0.14) (0.72)
Year Ended 1994 10.56 0.56 (0.41) 0.15 (0.56) (0.12) (0.68)
Year Ended 1995 10.03 0.61 0.24 0.85 (0.60) - (0.60)
INTERMEDIATE BOND MARKET
Jan. 5, 19931 <F6>
through Oct. 31, 1993 10.00 0.40 0.45 0.85 (0.40) - (0.40)
Year Ended 1994 10.45 0.51 (0.69) (0.18) (0.51) (0.09) (0.60)
Year Ended 1995 9.67 0.60 0.53 1.13 (0.59) - (0.59)
TAX-EXEMPT INTERMEDIATE BOND
Feb. 8, 1993 <F6>
through Oct. 31, 1993 10.00 0.27 0.26 0.53 (0.27) - (0.27)
Year Ended 1994 10.26 0.41 (0.48) (0.07) (0.41) - (0.41)
Year Ended 1995 9.78 0.42 0.45 0.87 (0.42) - (0.42)
BOND IMMDEX/TM
Dec. 29, 1989 <F6>
through Oct. 31, 1990 25.00 1.67 (0.66) 1.01 (1.49) - (1.49)
Year Ended 1991 24.52 1.85 1.98 3.83 (1.85) - (1.85)
Year Ended 1992 <F7> 26.50 1.75 0.96 2.71 (1.76) (0.14) (1.90)
Year Ended 1993 27.31 1.68 1.83 3.51 (1.70) (0.21) (1.91)
Year Ended 1994 28.91 1.65 (2.74) (1.09) (1.65) (0.50) (2.15)
Year Ended 1995 25.67 1.68 2.30 3.98 (1.79) (0.04) (1.83)
</TABLE>
<TABLE>
<CAPTION>
Less Distributions (con't) Supplemental Data and Ratios
-------------------------- --------------------------------------------------------
Net Ratio of Net
Assets, Ratio of Net Investment
Net Asset Total End of Expenses to Income to Portfolio
Value End Return Period Average Net Average Net Turnover
of Period <F9> <F10> (000s) Assets <F11> Assets <F11> Rate
SHORT-TERM BOND MARKET
<S> <C> <C> <C> <C> <C> <C>
Dec. 29, 1989 <F6>
through Oct. 31, 1990 $ 9.79 4.64% $ 22,731 0.60%<F12> 7.93%<F12> 57.40%
Year Ended 1991 10.33 13.39% 63,183 0.60%<F12> 7.13%<F12> 66.80%
Year Ended 1992 <F7> 10.60 9.28% 129,409 0.60%<F12> 6.00%<F12> 82.20%
Year Ended 1993 10.56 6.70% 142,518 0.52%<F12> 5.53%<F12> 87.62%
Year Ended 1994 10.03 1.46% 122,368 0.50%<F12> 5.43%<F12> 76.13%
Year Ended 1995 10.28 8.74% 47,730 0.69%<F12> 6.04%<F12> 100.58%
INTERMEDIATE BOND MARKET
Jan. 5, 1993 <F6>
through Oct. 31, 1993 10.45 8.58% 56,794 0.50%<F13> 4.65%<F13> 82.37%
Year Ended 1994 9.67 (1.73%) 88,306 0.50%<F13> 5.19%<F13> 56.25%
Year Ended 1995 10.21 12.04% 11,576 0.69%<F13> 6.07%<F13> 66.69%
TAX-EXEMPT INTERMEDIATE BOND
Feb. 8, 1993 <F6>
through Oct. 31, 1993 10.26 5.36% 23,866 0.59%<F14> 3.75%<F14> 3.23%
Year Ended 1994 9.78 (0.73%) 26,167 0.60%<F14> 4.04%<F14> 58.54%
Year Ended 1995 10.23 9.07% 7,711 0.71%<F14> 4.25%<F14> 44.13%
BOND IMMDEX/TM
Dec. 29, 1989 <F6>
through Oct. 31, 1990 24.52 4.21% 44,241 0.50%<F15> 8.10%<F15> 111.28%
Year Ended 1991 26.50 16.16% 90,034 0.50%<F15> 7.85%<F15> 131.69%
Year Ended 1992 <F7> 27.31 10.49% 181,421 0.50%<F15> 6.92%<F15> 37.72%
Year Ended 1993 28.91 13.30% 260,468 0.50%<F15> 6.10%<F15> 81.18%
Year Ended 1994 25.67 (3.89%) 256,778 0.48%<F15> 6.14%<F15> 49.70%
Year Ended 1995 27.82 16.05% 21,875 0.64%<F15> 6.31%<F15> 41.67%
<FN>
<F6> Commencement of operations.
<F7> Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F8> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from federal income tax.
<F9> Not annualized for the period ended October 31, 1990 for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the
period ended October 31, 1993 for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F10> The total return calculation for the Funds does not reflect the maximum sales charge of 2.00%.
<F11> Annualized for the period ended October 31, 1990 for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the period
ended October 31, 1993 for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F12>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 3l, 1995, 1994, 1993,
1992, 1991, and the period ended October 31, 1990 would have been 1.10%, 0.90%, 0.90%, 0.93%,
0.97%, and 1.17%, respectively; and ratios of net investment income to average net assets for the fiscal years ended October 31,
1995, 1994, 1993, 1992, 1991, and the period ended October 31, 1990 would have been 5.63%, 5.03%,5.15 %, 5.67%, 6.76%, and 7.36%,
respectively.
<F13>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 3l, 1995, 1994, and the
period ended October 31, 1993 would have been 0.98%, 0.78%, and 0.89%, respectively; and ratios of net investment income to
average net assets for the fiscal years ended October 31, 1995 and 1994 and the period ended October 31, 1993 would have been
5.78%, 4.91%, and 4.26%, respectively.
<F14>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 3l, 1995, 1994, and the
period ended October 31, 1993 would have been 1.20%, 0.98%, and 1.28%, respectively; and ratios of net investment income to
average net assets for the fiscal years ended October 31, 1995 and 1994 and the period ended October 31, 1993 would have been
3.76%, 3.67%, and 3.07%, respectively.
<F15>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 3l, 1995, 1994, 1993,
1992, 1991, and the period ended October 31, 1990 would have been 0.71%, 0.51%, 0.52%, 0.56%, 0.60%, and 0.65%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, and the
period ended October 31, 1990 would have been 6.24%, 6.10%, 6.08%, 6.86%, 7.75%, and 7.94%, respectively.
INVESTMENT OBJECTIVES AND POLICIES
The descriptions that follow are designed to help you choose the Fund that best fits your investment objectives. You may want to
pursue more than one objective by investing in more than one of the Portico Funds. You are reminded that there are risks in an
investment in the Funds and there can be no assurance that each Fund's investment objective will be attained.
</TABLE>
<TABLE>
<CAPTION>
COMPARISON OF PORTICO BOND FUNDS
SHORT-TERM FULL-TERM BOND
BOND FUND INTERMEDIATE BOND FUNDS FUND
------------------ ---------------------------------------------------- --------------
PORTICO SHORT-TERM PORTICO INTERMEDIATE PORTICO TAX-EXEMPT PORTICO BOND
BOND MARKET FUND BOND MARKET FUND INTERMEDIATE BOND FUND IMMDEX/TM FUND
------------------ ----------------- --------------------- -------------
<C> <C> <C> <C>
The Benchmark: The Benchmark: The Benchmark: The Benchmark:
Lehman Bros. 1-3 Yr. Lehman Bros. Lehman Bros. 5-Year Lehman Bros
Gov't./Corp. Bond Intermediate General Obligation Gov't./Corp. Bond
Index Gov't./Corp. Bond Index Bond Index Index
Average Quality<F16> Average Quality<F16> Average Quality<F16> Average Quality<F16>
of Holdings - AA of Holdings - AA of Holdings - AAA of Holdings - AA
Average Maturity Average Maturity Average Maturity Average Maturity
2.9 Years 4.4 Years 5.1 Years 9.4 Years
1.7 Years Duration 3.2 Years Duration 4.2 Years Duration 5.1 Years Duration
<FN>
Lehman Brothers is neither a sponsor of nor in any way affiliated with Portico Funds.
Average quality, maturity, and duration reflect the portfolio as of October 31, 1995, and will change from time to time in
connection with the management of the portfolios pursuant to the policies described in this prospectus.
<F16>Dollar weighted average quality of portfolio securities held by the Funds.
</TABLE>
Taxable Bond Funds
Short-Term Bond
Market Fund
Intermediate Bond
Market Fund
Bond IMMDEX/TM Fund
Investment Objectives. The SHORT-TERM BOND MARKET FUND
seeks to provide an annual rate of total return, before Fund expenses,
comparable to the annual rate of total return of the Lehman Brothers 1-3 Year
Government/Corporate Bond Index (the "Lehman 1-3 Gov't./Corp.'). The
INTERMEDIATE BOND MARKET FUND seeks to provide an annual rate of total return,
before Fund expenses, comparable to the annual rate of total return of the
Lehman Brothers Intermediate Government/ Corporate Bond Index (the "Lehman
Intermediate Gov't./Corp.'). The BOND IMMDEX/TM FUND seeks to provide an annual
rate of total return, before Fund expenses, comparable to the annual rate of
total return of the Lehman Brothers Government/Corporate Bond Index (the "Lehman
Gov't./Corp.").
Each Fund will attempt to achieve its objective by maintaining a comparable
duration to that of the benchmark index, and may invest a substantial portion of
its assets in securities that are not included in its benchmark index. The
Funds, therefore, are not "index" funds, which typically hold only securities
that are included in the indices they attempt to replicate.
Description of Bond Indices. The bond indices are market value weighted total
return indices measuring both the principal price changes of and income provided
by the underlying universe of securities that comprise the respective index. The
bond indices are intended to measure performance of their respective fixed-rate
debt market over given time intervals and differ with respect to the maturity
range of securities included. Each index is comprised of U.S. Treasury, U.S.
Government agency, dollar-denominated debt of certain foreign, sovereign or
supranational entities and investment grade corporate debt obligations
satisfying the following criteria as defined by Lehman Brothers:
- Fixed-rate debt (as opposed to variable-rate debt);
- At least one year until maturity;
- Minimum outstanding par value of $100 million;
- Minimum quality rating of Baa by Moody's Investors Service, Inc.
("Moody's"), BBB by Standard and Poor's Rating Group ("S&P"), or BBB by
Fitch Investors Service, Inc. ("Fitch"); and
Lehman 1-3 Gov't./Corp.
- From one to three years remaining until maturity.
Lehman Intermediate Gov't./Corp.
- From one to ten years remaining until maturity.
Lehman Gov't./Corp.
- From one to thirty years or more remaining until maturity.
As of October 31, 1995, 878 issues were included in the Lehman 1-3 Gov't./Corp.
representing $965 billion in market value; 3,253 issues were included in the
Lehman Intermediate Gov't./Corp. representing $2.27 trillion in market value;
and 4,615 issues were included in the Lehman Gov't./Corp. representing $3.16
trillion in market value.
Investment Techniques. In constructing and maintaining each Fund's portfolio,
the Adviser attempts to maintain an overall interest rate sensitivity equivalent
to its respective bond index and is intended to produce an annual rate of total
return, before Fund expenses, comparable to that of the respective bond index.
These techniques are used in conjunction with traditional methods of investment
management that rely on economic, financial and market analysis to select
portfolio investments.
The approach employed by the Adviser in managing each Fund's portfolio is to
define and measure the various duration characteristics of each bond index.
"Duration" is a term used to express the average time to receipt of expected
cash flows (discounted to their present value) on a particular fixedincome
instrument or a portfolio of instruments. For example, the duration of a five-
year zero coupon bond which pays no interest or principal until the maturity of
the bond is five years. This is because a zero coupon bond produces no cash flow
until the maturity date. On the other hand, a coupon bond that pays interest
semiannually and matures in five years will have a duration of less than five
years reflecting the semiannual cash flows resulting from coupon payments.
Duration generally defines the effect of interest rate changes on bond prices.
However, for large interest rate changes (generally changes of 1% or more) this
measure will not completely explain the interest rate sensitivity of a bond.
Application of Investment Techniques. The Adviser will select securities for
each Fund's portfolio based upon their expected contribution to the portfolio's
overall duration and total return as compared to each bond index. The Adviser
expects that typically each Fund will hold less than 100 securities that in the
aggregate have similar price sensitivities or durations as the respective bond
index. Although the Adviser expects that as a general matter a significant
percentage of the securities acquired by each Fund will also be securities that
are included in the respective bond index, each Fund may invest more than 50% of
its total assets in securities that are not so included.
In order to reduce a negative deviation in return between each Fund and the
respective bond index, each Fund will normally attempt to be fully invested. The
Adviser may engage in practices that are intended to achieve an enhanced return,
before Fund expenses, over the respective bond index. As indicated above, each
Fund will hold only a percentage of the large number of issues included in its
respective bond index. In addition, a Fund may hold securities which are not
included in its respective bond index, including stripped government, asset-
backed and mortgage-backed obligations, collateralized mortgage obligations,
medium-term notes and Eurobonds, among others. This permits the Adviser to
engage in sampling and other strategies that are designed to achieve an enhanced
incremental gross return above the return on the respective bond index. For
example, the Adviser may, in light of current changes in market conditions,
"swap" portfolio securities whereby a bond or a group of bonds is sold and
another bond or group of bonds is bought that has similar duration
characteristics but, in the Adviser's opinion, a higher expected return.
Furthermore, the percentage mix of government and corporate issues held by a
Fund will differ from the percentage included in its respective bond index
whenever, in the Adviser's judgment, such a mix is desirable. Moreover, the
average quality of bonds held by each Fund (which is expected to be at least the
second highest rating category - AA by S&P or Aa by Moody's) may vary from the
average quality of bonds included in its respective bond index, and in selecting
among the various securities available for investment by a Fund the Adviser will
make its own creditworthiness determinations. These and other practices,
although intended to result in a positive incremental return in favor of a Fund,
may instead result in a negative deviation.
In an effort to make a Fund's duration and return comparable to those of its
respective bond index, the Adviser will continue to monitor a Fund's portfolio
and market changes in accordance with procedures established by the Adviser
under the supervision of the Board of Directors. It should be recognized,
however, that while the sensitivity of a Fund's portfolio to interest rate
changes is expected to be similar to that of its respective bond index, because
of the smaller number of issues held by a Fund, material events affecting a
Fund's portfolio (for example, an issuer's decline in credit quality) may
influence the performance of a Fund to a greater degree than such events will
influence its respective bond index and may prevent a Fund from attaining its
investment objective for particular periods. In the event the performance of a
Fund is not comparable to the performance of its respective bond index, the
Board of Directors will examine the reasons for the deviation and the
availability of corrective measures.
Each Fund's policy is to invest at least 65% of the total value of its assets in
a broad range of corporate, government, government agencies, stripped
government, asset-backed, mortgage-backed and collateralized mortgage
obligations during normal market conditions, as described in greater detail
below. The durations of a Fund will be similar to its respective bond index
during normal market conditions. In addition, the dollar-weighted average
portfolio maturity of each Fund's portfolio will be more than one year but less
than three years for the Short-Term Bond Market Fund; more than three years but
less than ten for the Intermediate Bond Market Fund; and greater than five years
for the Bond IMMDEX/TM Fund during normal market conditions. Debt obligations
acquired by each Fund will be "investment grade" at the time of purchase, that
is, obligations rated within the four highest rating categories by S&P (AAA, AA,
A and BBB), Moody's (Aaa, Aa, A and Baa) or other nationally recognized rating
agencies or obligations that are unrated but determined by the Adviser to be
comparable in quality to instruments that are so rated. Obligations rated in the
lowest of the top four rating categories are considered to have speculative
characteristics and are subject to greater credit and market risk than higher
rated securities. As a result, the market value of these securities may be
expected to fluctuate more than those of securities with higher ratings.
Subsequent to its purchase by a Fund, a rated security may cease to be rated or
its rating may be reduced below the minimum rating required for purchase by that
Fund. The Adviser will consider such an event in determining whether the Fund
should continue to hold the security. The Adviser will sell promptly any
securities that are non-investment grade as a result of these events that exceed
5% of the Fund's net assets. See Appendix A to the Statement of Additional
Information for a description of applicable debt ratings.
Each Fund may make limited investments in guaranteed investment contracts
("GICs") issued by highly rated U.S. insurance companies. Pursuant to such
contracts, the Fund makes cash contributions to a separate account of the
insurance company which has been segregated from the general assets of the
issuer. The insurance company then pays to the Fund at the end of the contract
an amount equal to the cash contributions adjusted for the total return of an
index. A GIC is a separate account obligation of the issuing insurance company.
The Fund will only purchase GICs from issuers which, at the time of purchase,
are rated A or higher by Moody's or S&P, have assets of $1 billion or more and
meet quality and credit standards established by the Adviser. Generally, GICs
are not assignable or transferable without the permission of the issuing
insurance companies, and an active secondary market in GICs does not currently
exist. Therefore, GICs are considered by the Fund to be subject to the 10%
limitation on illiquid investments described under "Other Investment
Information." Generally, a GIC allows a purchaser to buy an annuity with the
money accumulated under the contract; however, the Fund will not purchase any
such annuities.
The Funds may invest in certain other securities not contained in the indices
such as options, futures, repurchase agreements and other cash market
instruments. See "Other Investment Information."
The value of each Fund's portfolio, as is generally the case with each bond
index, can be expected to vary inversely from changes in prevailing interest
rates.
Tax-Exempt Intermediate Bond Fund
The investment objective of the Tax-Exempt Intermediate Bond Fund is to seek to
provide current income that is substantially exempt from federal income tax and
emphasize total return with relatively low volatility of principal. The Fund
will invest primarily in investment grade intermediate-term municipal
obligations issued by state and local governments exempt from federal income
tax. In pursuing its investment objective, the Fund invests in a diversified
portfolio of debt obligations issued by or on behalf of states, territories and
possessions of the United States, the District of Columbia and their
authorities, agencies, instrumentalities and political subdivisions ("Municipal
Obligations"). As a fundamental policy, the Fund will invest at least 80% of its
net assets in securities, the interest on which is exempt from regular federal
income and alternative minimum taxes, except during defensive periods. (See
"Investment Limitations.") The Fund intends to maintain an average weighted
maturity between three and ten years. There is no limit on the maturity of any
individual security in the Fund.
The two principal classifications of Municipal Obligations which may be held by
the Fund are "General Obligation" securities and "Revenue" securities. General
Obligation securities are secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. Revenue
securities are payable only from the revenues derived from a particular facility
or class of facilities or, in some cases, from the proceeds of a special excise
tax or other specific revenue source such as the issuer of the facility being
financed. Private activity bonds (i.e., bonds issued by industrial development
authorities) that are issued by or on behalf of public authorities to finance
various privately operated facilities are included within the term "Municipal
Obligations" if the interest paid thereon is exempt from regular federal income
tax. Private activity bonds are in most cases Revenue securities and are not
payable from the unrestricted revenues of the issuer. The credit quality of such
bonds is usually directly related to the credit standing of the corporate user
of the facility involved.
The Fund may also acquire "Moral Obligation" securities, which are normally
issued by special purpose public authorities. If the issuer of Moral Obligation
securities is unable to meet its debt service obligations from current revenues,
it may draw on a reserve fund, the restoration of which is a moral commitment
but not a legal obligation of the state or municipality which created the
issuer.
Although the Fund does not presently intend to do so on a regular basis, it may
invest more than 25% of its assets in Municipal Obligations, the issuers of
which are located in the same state or the interest on which is paid solely from
revenues of similar projects. To the extent that the Fund's assets are
concentrated in Municipal Obligations payable from revenues on similar projects
or issued by issuers in the same state, the Fund may be subject to the peculiar
economic, political and business risks presented by the laws and economic
conditions relating to such states and projects to a greater extent than it
would be if the Fund's assets were not so concentrated. Furthermore, payment of
Municipal Obligations of certain projects may be secured by mortgages or deeds
of trust. In the event of a default, enforcement of the mortgages or deeds of
trust will be subject to statutory enforcement procedures and limitations,
including rights of redemption and limitations on obtaining deficiency
judgments. In the event of a foreclosure, collection of the proceeds of the
foreclosure may be delayed and the amount of proceeds from the foreclosure may
not be sufficient to pay the principal of and accrued interest on the defaulted
Municipal Obligations.
Opinions relating to the validity of Municipal Obligations and to the exemption
of interest thereon from federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither the Fund nor the Adviser
will review the proceedings relating to the issuance of Municipal Obligations or
the bases for such opinions.
Municipal Obligations purchased by the Fund will be investment grade at the time
of purchase. See "Short-Term Bond Market, Intermediate Bond Market and Bond
IMMDEX/TM Funds" above for a description of "investment grade securities." The
Fund may also purchase Municipal Obligations which are unrated at the time of
purchase but are determined to be of comparable quality by the Adviser or have
comparable ratings from other nationally recognized rating agencies. The Fund
may also acquire municipal notes and other short-term obligations rated SP-1 by
S&P, or MIG-1 by Moody's; tax-exempt commercial paper rated A-1 or higher by
S&P, or VMIG-1 by Moody's. Subsequent to its purchase by the Fund, a rated
security may cease to be rated or its rating may be reduced below the minimum
rating required for purchase by the Fund. The Adviser will consider such event
in determining whether the Fund should continue to hold the security. The
Adviser will sell promptly any securities that are not rated investment grade by
at least one nationally recognized rating agency and that exceed 5% of the
Fund's net assets. As indicated, the Fund's cash balances may be invested in
short-term municipal notes and tax-exempt commercial paper, as well as municipal
bonds with remaining maturities of thirteen months or less and securities issued
by other investment companies which invest in high quality, short-term municipal
debt securities. Except during temporary defensive periods, at least 65% of the
Fund's total assets will be invested in bonds and debentures. The value of the
Fund's portfolio can be expected to vary inversely to changes in prevailing
interest rates.
Municipal Obligations purchased by the Fund may include variable and floating
rate instruments issued by industrial development authorities and other
governmental entities. If such instruments are unrated, they will be determined
by the Fund's Adviser (under the supervision of the Board of Directors) to be of
comparable quality at the time of purchase to investment grade. While there may
be no active secondary market with respect to a particular variable or floating
rate demand instrument purchased by the Fund, the Fund may (at any time or
during specified periods not exceeding thirteen months, depending upon the
instrument involved) demand payment in full of the principal of the instrument
and has the right to resell the instrument to a third party. The absence of such
an active secondary market, however, could make it difficult for the Fund to
dispose of a variable or floating rate demand instrument if the issuer defaulted
on its payment obligation or during periods that the Fund is not entitled to
exercise its demand rights, and the Fund could, for these or other reasons,
suffer a loss with respect to such instruments.
In addition, from time to time, on a temporary defensive basis due to market
conditions, the Fund may hold without any limitations uninvested cash reserves
and invest without any limitations in high quality short-term taxable money
market obligations in such proportions as in the opinion of the Adviser,
prevailing market or economic conditions warrant. Uninvested cash reserves will
not earn income. See "Other Investment Information - Money Market Instruments"
below. Taxable obligations acquired by the Fund will not exceed under normal
market conditions 20% of the Fund's net assets at the time of purchase.
The Fund may purchase put options on Municipal Obligations. A put gives the Fund
the right to sell a Municipal Obligation at a specified price at any time before
a specified date. A put will be sold, transferred or assigned only with the
related Municipal Obligation. The Fund will acquire puts only to enhance
liquidity, shorten the maturity of the related municipal security or permit the
Fund to invest its assets at more favorable rates. The aggregate price of a
security subject to a put may be higher than the price which otherwise would be
paid for the security without such an option, thereby increasing the security's
cost and reducing its yield.
The Fund may also acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a standby commitment, a dealer would
agree to purchase at the Fund's option specified Municipal Obligations at a
specified price. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes.
In addition, the Fund may acquire municipal lease obligations which are issued
by a state or local government or authority to acquire land and a wide variety
of equipment and facilities. These obligations typically are not fully backed by
the municipality's credit, and their interest may become taxable if the lease is
assigned. If the funds are not appropriated for the following year's lease
payments, the lease may terminate, with the possibility of default on the lease
obligation and significant loss to the Fund. Certificates of participation in
municipal lease obligations or installment sale contracts entitle the holder to
a proportionate interest in the lease-purchase payments made. The Adviser
determines and monitors the liquidity of municipal lease obligations (including
certificates of participation) under guidelines approved by the Board of
Directors requiring the Adviser to evaluate the credit quality of such
obligations and report on the nature of and the Fund's trading experience in the
municipal lease market. Under the guidelines, municipal lease obligations that
are not readily marketable and transferable are treated as illiquid. The Fund
will not knowingly invest more than 10% of the value of its net assets in
securities, including municipal leases, that are illiquid.
OTHER INVESTMENT INFORMATION
Money Market Instruments. The Funds may hold short-term U.S. Government
obligations, high quality money market instruments (i.e., rated A-1 or better by
S&P or Prime-1 by Moody's or unrated instruments deemed by the Adviser to be of
comparable quality), repurchase agreements, bank obligations and cash, pending
investment, to meet anticipated redemption requests if, in the opinion of the
Adviser, other suitable securities are unavailable. The foregoing investments
may include among other things commercial paper, variable amount master demand
notes and corporate bonds with remaining maturities of thirteen months or less
and may be in such proportions as, in the opinion of the Adviser, existing
circumstances may warrant. Variable amount master demand notes are unsecured
instruments that permit the indebtedness thereunder to vary and provide for
periodic adjustments in the interest rate. Although the notes are not normally
traded and there may be no secondary market in the notes, the Funds may demand
payment of the principal of the instrument at any time. The notes are not
typically rated by credit rating agencies, but issuers of variable amount master
demand notes must satisfy the same criteria as set forth above for issuers of
commercial paper. If an issuer of a variable amount master demand note defaulted
on its payment obligation, the Funds might be unable to dispose of the note
because of the absence of a secondary market and might, for this or other
reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master demand notes only when the Adviser deems the investment
to involve minimal credit risk. The Funds may also invest in obligations of
foreign banks and foreign branches of U.S. banks and may invest their cash
balances in securities issued by other investment companies which invest in high
quality, short-term debt securities. The Funds will not invest in any Portico
Money Market Fund. In addition to the advisory fees and other expenses the Fund
bears directly in connection with its own operations, as a shareholder of
another investment company, the Fund would bear its pro rata portion of the
other investment company's advisory fees and other expenses, and such fees and
other expenses will be borne indirectly by the Fund's shareholders.
Government Obligations. To the extent consistent with their investment
objectives, the Short-Term Bond Market, Intermediate Bond Market and Bond
IMMDEX/TM Funds may invest in a variety of U.S. Treasury obligations consisting
of bills, notes and bonds, which principally differ only in their interest
rates, maturities and time of issuance. These Funds may also invest in other
securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities. Obligations of certain agencies and instrumentalities, such
as the Government National Mortgage Association ("GNMA"), are supported by the
full faith and credit of the U.S. Treasury; others, such as those of the Export-
Import Bank of the United States, are supported by the right of the issuer to
borrow from the Treasury; others, such as those of the Federal National Mortgage
Association ("FNMA"), are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; still others, such as those of
the Student Loan Marketing Association, are supported only by the credit of the
instrumentalities. No assurance can be given that the U.S. Government would
provide financial support to its agencies or instrumentalities if it is not
obligated to do so by law. There is no assurance that these commitments will be
undertaken or complied with in the future.
Mortgage-Backed and Asset-Backed Securities. The Short-Term Bond Market,
Intermediate Bond Market and Bond IMMDEX/TM Funds may purchase mortgage-backed
and asset-backed securities (i.e., securities backed by credit card receivables,
automobile loans or other assets). The average life of these securities varies
with the maturities of the underlying instruments which, in the case of
mortgages, have maximum maturities of thirty years. The average life of a
mortgagebacked instrument may be substantially less than the original maturity
of the mortgages underlying the securities as the result of scheduled principal
payments and mortgage prepayments. The rate of such mortgage prepayments, and
hence the life of the certificates, will be a function of current market rates
and current conditions in the relevant housing markets. In periods of falling
interest rates, the rate of mortgage prepayments tends to increase. During such
periods, the reinvestment of prepayment proceeds by a Fund will generally be at
lower rates than the rates that were carried by the obligations that have been
prepaid. As a result, the relationship between mortgage prepayments and interest
rates may give some high-yielding mortgage-related securities less potential for
growth in value than non-callable bonds with comparable maturities. In
calculating the average weighted maturity of each Fund, the maturity of asset-
backed securities will be based on estimates of average life.
Presently there are several types of mortgage-backed securities which provide
the holder with a pro rata interest in the underlying mortgages, and
collateralized mortgage obligations ("CMOs") which provide the holder with a
specified interest in the cash flow of a pool of underlying mortgages or other
mortgage-backed securities. CMOs are issued in multiple classes, each with a
specified fixed or floating interest rate and a final distribution date. The
relative payment rights of the various CMO classes may be subject to greater
volatility and interest rate risk than other types of mortgage-backed
obligations. The Short-Term Bond Market, Intermediate Bond Market and Bond
IMMDEX/TM Funds will invest less than 25% of their respective total assets in
CMOs.
Asset-backed securities may involve certain risks that are not presented by
mortgage-backed securities arising primarily from the nature of the underlying
assets (i.e., credit card and automobile loan receivables as opposed to real
estate mortgages). For example, credit card receivables are generally unsecured
and may require the repossession of personal property upon the default of the
debtor which may be difficult or impracticable in some cases.
Non-mortgage asset-backed securities do not have the benefit of the same
security in the collateral as mortgage-backed securities. Credit card
receivables are generally unsecured and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which
have given debtors the right to reduce the balance due on the credit cards. Most
issuers of automobile receivables permit the servicers to retain possession of
the underlying obligations. If the servicer were to sell these obligations to
another party, there is the risk that the purchaser would acquire an interest
superior to that of the holders of related automobile receivables. In addition,
because of the large number of vehicles involved in a typical issuance and
technical requirements under state laws, the trustee for the holders of the
automobile receivables may not have an effective security interest in all of the
obligations backing such receivables. Therefore, there is a possibility that
payments on the receivables together with recoveries on repossessed collateral
may not, in some cases, be able to support payments on these securities.
Asset-backed securities may be subject to greater risk of default during periods
of economic downturn than other instruments. Also, while the secondary market
for asset-backed securities is ordinarily quite liquid, in times of financial
stress the secondary market may not be as liquid as the market for other types
of securities, which could result in a Fund experiencing difficulty in valuing
or liquidating such securities.
Zero Coupon Obligations. The Short-Term Bond Market, Intermediate Bond Market,
Tax-Exempt Intermediate Bond and Bond IMMDEX/TM Funds may acquire zero coupon
obligations. Zero coupon obligations have greater price volatility than similar
maturity coupon obligations and will not result in the payment of interest until
maturity. The Funds will purchase such zero coupon obligations only if the
likely relative greater price volatility of such zero coupon obligations is not
inconsistent with such Fund's investment objective. The Funds will accrue income
on such investments for tax and accounting purposes, as required, which is
distributable to shareholders and which, because no cash is received at the time
of accrual, may require the liquidation of other portfolio securities to satisfy
each Fund's distribution obligations.
Restricted Securities. Each Fund will not knowingly invest more than 10% of the
value of its respective net assets in securities that are illiquid. Repurchase
agreements and time deposits that do not provide for payment to a Fund within
seven days, over-the-counter options, and securities that are not registered
under the Securities Act of 1933 (the "Act") but may be purchased by
institutional buyers under Rule 144A, are subject to this 10% limit (unless such
securities are variable amount master demand notes with maturities of nine
months or less or unless the Board of Directors or the Adviser, pursuant to
guidelines adopted by the Board of Directors, determines that a liquid trading
market exists).
Borrowings. Each Fund may borrow money to the extent described below under
"Investment Limitations." A Fund would borrow money to meet redemption requests
prior to the settlement of securities already sold or in the process of being
sold by the Fund. If the securities held by a Fund should decline in value while
borrowings are outstanding, the net asset value of a Fund's outstanding shares
will decline in value by proportionately more than the decline in value suffered
by a Fund's securities.
Reverse repurchase agreements are considered to be borrowings under the
Investment Company Act of 1940 (the "1940 Act"). At the time a Fund enters into
a reverse repurchase agreement (an agreement under which the Fund sells
portfolio securities and agrees to repurchase them at an agreed upon date and
price), it will place in a segregated custodial account U.S. Government
securities or other liquid high grade debt securities having a value equal to or
greater than the repurchase price (including accrued interest), and will
subsequently monitor the account to insure that such value is maintained.
Reverse repurchase agreements involve the risk that the market value of the
securities sold by the Fund may decline below the price of the securities it is
obligated to repurchase.
When-Issued Purchases and Forward Commitments. Each Fund may purchase securities
on a "when-issued" or delayed delivery basis and may purchase or sell securities
on a "forward commitment" basis. These transactions, which involve a commitment
by the Fund to purchase or sell particular securities with payment and delivery
taking place at a future date (perhaps one or two months later), permit the Fund
to lock in a price or yield on a security it owns or intends to purchase,
regardless of future changes in interest rates. The Fund does not accrue income
until the securities delivery occurs. When-issued and forward commitment
transactions involve the risk, however, that the price or yield obtained in a
transaction (and therefore the value of the security) may be less favorable than
the price or yield (and therefore the value of the security) available in the
market when the securities delivery takes place. Each Fund's forward commitments
and when-issued purchases are not expected to exceed 25% of the value of its
total assets absent unusual market conditions. The Funds do not intend to engage
in whenissued purchases and forward commitments for speculative purposes but
only in furtherance of their respective investment objectives.
Foreign Securities. Each Fund may invest in foreign securities. The Funds'
investments in the securities of foreign issuers may include both securities of
foreign corporations and banks, as well as securities of foreign governments and
their political subdivisions, which will be limited to direct government
obligations and government guaranteed securities in the case of the Short-Term
Bond Market, Intermediate Bond Market and Bond IMMDEX/TM Funds. Investments in
foreign securities, whether made directly or through American Depository
Receipts, involve certain inherent risks and considerations not typically
associated with investing in U.S. companies, such as political or economic
instability of the issuer or the country of issue, the difficulty of predicting
international trade patterns, changes in exchange rates of foreign currencies
and the possibility of adverse changes in investment or exchange control
regulations. There may be less publicly available information about a foreign
company than about a U.S. company. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies. Further, foreign stock markets are generally
not as developed or efficient as those in the U.S., and in most foreign markets
volume and liquidity are less than in the U.S. Fixed commissions on foreign
stock exchanges are generally higher than the negotiated commissions on U.S.
exchanges, and there is generally less government supervision and regulation of
foreign stock exchanges, brokers and companies than in the U.S. With respect to
certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, limitations on the removal of assets or diplomatic
developments that could affect investment within those countries. Because of
these and other factors, securities of foreign companies acquired by the Funds
may be subject to greater fluctuation in price than securities of domestic
companies.
Stripped Securities. To the extent consistent with their investment objectives,
the Short-Term Bond Market, Intermediate Bond Market, and Bond IMMDEX/TM Funds
may purchase participations in trusts that hold U.S. Treasury and agency
securities (such as TIGRs and CATs) and also may purchase Treasury receipts and
other "stripped" securities that evidence ownership in either the future
interest payments or the future principal payments of U.S. Government
obligations. These participations are issued at a discount to their "face
value," and may (particularly in the case of stripped mortgage-backed
securities) exhibit greater price volatility than ordinary debt securities
because of the manner in which their principal and interest are returned to
investors. The SEC staff believes that participations in CATs and TIGRs and
other similar trusts are not U.S. Government securities.
Options. The Short-Term Bond Market, Intermediate Bond Market and Bond IMMDEX/TM
Funds may purchase put and call options in an amount not to exceed 5% of their
respective net assets. Such options may relate to particular securities or
various bond indices and may or may not be listed on a national securities
exchange and issued by the Options Clearing Corporation. Purchasing options is a
specialized investment technique which entails a substantial risk of a complete
loss of the amount paid as premiums to the writer of the option.
The Short-Term Bond Market, Intermediate Bond Market and Bond IMMDEX/TM Funds
will engage in unlisted over-the-counter options only with broker-dealers deemed
creditworthy by the Adviser. Closing transactions in certain options are usually
effected directly with the same broker-dealer that effected the original option
transaction. A Fund bears the risk that the broker-dealer will fail to meet its
obligations. There is no assurance that a liquid secondary trading market exists
for closing out an unlisted option position. Furthermore, unlisted options are
not subject to the protections afforded purchasers of listed options by the
Options Clearing Corporation, which performs the obligations of its members who
fail to perform in connection with the purchase or sale of options.
Each Fund may purchase put options on portfolio securities at or about the same
time that it purchases the underlying security or at a later time. By buying a
put, a Fund limits its risk of loss from a decline in the market value of the
security until the put expires. Any appreciation in the value of and yield
otherwise available from the underlying security, however, will be partially
offset by the amount of the premium paid for the put option and any related
transaction costs. Call options may be purchased by a Fund in order to acquire
the underlying security at a later date at a price that avoids any additional
cost that would result from an increase in the market value of the security. A
call option may also be purchased to increase a Fund's return to investors at a
time when the call is expected to increase in value due to anticipated
appreciation of the underlying security. Prior to its expiration, a purchased
put or call option may be sold in a "closing sale transaction" (a sale by a
Fund, prior to the exercise of the option that it has purchased, of an option of
the same series), and profit or loss from the sale will depend on whether the
amount received is more or less than the premium paid for the option plus the
related transaction costs.
In addition, the Short-Term Bond Market, Intermediate Bond Market, and Bond
IMMDEX/TM Funds may write call options on securities and on various bond
indices. Each Fund may write a call option only if the option is "covered" by
the Fund's holding a position in the underlying securities or otherwise, which
would allow for immediate satisfaction of its obligation. Such options will be
listed on a national securities exchange and the aggregate value of the Fund's
assets subject to options written by the Fund will not exceed 5% of the value of
its net assets during the current year. In order to close out an option
position, a Fund will be required to enter into a "closing purchase transaction"
(the purchase of a call option on a security or an index with the same exercise
price and expiration date as the call option which it previously wrote on the
same security or index).
By writing a covered call option on a security, a Fund foregoes the opportunity
to profit from an increase in the market price of the underlying security above
the exercise price except insofar as the premium represents such a profit, and
it is not able to sell the underlying security until the option expires or is
exercised or the Fund effects a closing purchase transaction by purchasing an
option of the same series. Except to the extent that a written call option on an
index is covered by an option on the same index purchased by the Fund, movements
in the index may result in a loss to the Fund; however, such losses may be
mitigated by changes in the value of securities held by the Fund during the
period the option was outstanding. The use of covered call options will not be a
primary investment technique of the Funds.
For additional information relating to option trading practices and related
risks, see the Statement of Additional Information.
Futures Contracts and Related Options. The Adviser may determine that it would
be in the interest of the Short-Term Bond Market, Intermediate Bond Market and
Bond IMMDEX/TM Funds to purchase or sell futures contracts, or options thereon,
as a hedge against changes resulting from market conditions in the value of the
securities held by the Funds, or of securities which it intends to purchase, to
maintain liquidity, to have fuller exposure to price movements in the respective
bond index or to reduce transaction costs. For example, a Fund may enter into
transactions involving a bond index futures contract, which is a bilateral
agreement pursuant to which the parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the index value (which assigns relative values to the bonds included in the
index) at the close of the last trading day of the contract and the price at
which the futures contract is originally struck. No physical delivery of the
underlying bonds in the index is made. The Adviser may also determine it would
be in the interest of a Fund to purchase or sell interest rate futures
contracts, or options thereon, which provide for the future delivery of
specified fixed-income securities.
Risks associated with the use of futures contracts include (a) imperfect
correlation between the change in market values of the bonds held by a Fund and
the prices of bond index futures contracts, and (b) the possible lack of a
liquid secondary market for futures contracts and the resulting inability of a
Fund to close open futures positions. During the current fiscal year, the Short-
Term Bond Market, Intermediate Bond Market and Bond IMMDEX/TM Funds intend to
limit transactions in futures contracts and related options so that not more
than 5% of a Fundis respective net assets are at risk For a more detailed
description of futures contracts and futures options, including a discussion of
the limitations imposed by federal tax law, see Appendix B to the Statement of
Additional Information.
Portfolio Turnover. Each Fund may sell a portfolio investment soon after its
acquisition if the Adviser believes that such a disposition is consistent with
attaining the investment objective of the Fund. Portfolio investments may be
sold for a variety of reasons, such as a more favorable investment opportunity
or other circumstances bearing on the desirability of continuing to hold such
investments. A high rate of portfolio turnover (over 100%) may involve
correspondingly greater brokerage commission expenses and other transaction
costs, which must be borne directly by the Fund and ultimately by its
shareholders. High portfolio turnover may result in the realization of
substantial net capital gains; to the extent net short-term capital gains are
realized, distributions resulting from such gains will be ordinary income for
federal income tax purposes. (See "Taxes-Federal.") See "Financial Highlights"
for each Fund's portfolio turnover rates.
Bond Indices. The Lehman Brothers 1-3 Government/Corporate, the Lehman Brothers
Intermediate Government/Corporate and the Lehman Brothers Government /Corporate
are trademarks of Lehman Brothers. The Funds, their Adviser and Co-
Administrators are not affiliated in any way with Lehman Brothers. See
"Management of the Funds." Inclusion of a security in the bond indices in no way
implies an opinion by Lehman Brothers as to its attractiveness or
appropriateness as an investment. Lehman Brothers' publication of the bond
indices is not made in connection with any sale or offer for sale of securities
or any solicitations of orders for the purchase of securities.
PURCHASE OF SHARES
Retail Shares of the Funds are offered and sold on a continuous basis by the
distributor for the Funds, B.C. Ziegler and Company (the "Distributor"), which
is independent of the Adviser. The Distributor is a registered broker-dealer
with offices at 215 North Main Street, West Bend, Wisconsin 53095.
Purchase orders for shares may be placed through the transfer agent of the
Funds, registered representatives of Elan Investment Services, Inc. ("Elan"), or
organizations that have entered into distribution or servicing agreements with
the Funds (including Elan, "Shareholder Organizations"). For a discussion of
transactions through Shareholder Organizations, see "Shareholder Organizations"
below.
THE MINIMUM INITIAL AND SUBSEQUENT INVESTMENT FOR SHARES IN A FUND IS $100.
Once each business day, two share prices are calculated for each Fund: the
offering price and the net asset value (NAV). The offering price includes the
sales charge, if any, which you pay when you buy shares, unless you qualify for
a waiver as described below. When you buy shares at the offering price, the
sales charge is deducted and the balance is invested at NAV next computed after
an order with payment is received by the transfer agent. You may calculate your
sales charge as follows:
SHAREHOLDER
SALES CHARGE SALES CHARGE ORGANIZATION
AMOUNT OF AS A AS A REALLOWANCE AS
TRANSACTION AT PERCENTAGE OF PERCENTAGE OF A PERCENTAGE OF
OFFERING PRICE OFFERING PRICE NET ASSET VALUE OFFERING PRICE
- -------------------- -------------- --------------- --------------
Less than $50,000000 2.00% 2.04% 1.50%
$50,000 to $99,99900 1.00% 1.01% 0.50%
$100,000 to $249,999 0.50% 0.50% 0.25%
$250,000 or more000 none none none
The Distributor may reallow the entire sales charge to certain Shareholder
Organizations. To the extent that 90% or more of the sales charge is reallowed,
Shareholder Organizations may be deemed to be underwriters under the Act.
You may purchase shares without a sales charge if: (a) you were a Portico
shareholder as of January 1, 1995 and have continuously maintained a shareholder
account with the Company; (b) you make any purchase within 60 days of a
redemption of Portico Institutional Shares or from accounts for which Firstar
Corporation or its affiliates serves in a trust, agency or custodial capacity;
(c) you are an employee, director or retiree of Firstar Corporation or its
affiliates or of Portico; (d) you maintain a personal trust account with an
affiliate of Firstar Corporation at the time of purchase; (e) you make any
purchase within 60 days of a redemption of a mutual fund on which you paid an
initial sales charge or a contingent deferred sales charge; (f) you are a
registered investment adviser that has entered into an agreement with the
Distributor to purchase shares for your own account or for discretionary client
accounts; or (g) you are a spouse, parent or child of an individual who falls
within the preceding categories (a), (c), or (d) above. In addition, you may
reinvest all or any portion of your proceeds from redemption of shares of the
Funds in Retail Shares of the Funds or Retail Shares of other Portico funds,
within 365 days of a redemption without paying a sales charge. Shares so
reinvested will be purchased at a price equal to the net asset value next
determined after the transfer agent receives payment in proper form.
Quantity Discounts. You may be entitled to reduced sales charges through the
Right of Accumulation or under a Letter of Intent, even if you do not make an
investment of a size that would normally qualify for a quantity discount.
To qualify for a reduction of or exception to the sales charge, you must notify
your Shareholder Organization or the Distributor at the time of purchase or
exchange. The reduction in sales charge is subject to confirmation of your
holdings through a check of records. The Fund may modify or terminate quantity
discounts at any time. For more information about quantity discounts, contact
your Shareholder Organization or Portico Investor Services at 1-800-982-8909. As
a Portico shareholder, you may qualify for discounts on products offered by
Firstar Banks. For further information, contact Portico Investor Services, your
registered representative, or a Firstar Bank.
Rights of Accumulation. A reduced sales charge applies to any purchase of shares
of any Portico Fund that is purchased with a sales charge (an "Eligible Fund")
where an investor's then current aggregate investment is $50,000 or more.
"Aggregate investment" means the total of: (a) the dollar amount of the then
current purchase of shares of an Eligible Fund, and (b) the value (based on
current net asset value) of previously purchased and beneficially owned shares
of any Eligible Fund on which a sales charge has been paid. If, for example, an
investor beneficially owns shares of one or more Eligible Funds with an
aggregate current value of $49,000 on which a sales charge has been paid and
subsequently purchases shares of an Eligible Fund having a current value of
$1,000, the sales charge applicable to the subsequent purchase would be reduced
to 1.00% of the offering price. Similarly, each subsequent investment in
Eligible Fund shares may be added to an investor's aggregate investment at the
time of purchase to determine the applicable sales charge.
Letter of Intent. By signing a Letter of Intent (available from the Distributor
and Shareholder Organizations), an investor becomes eligible for the reduced
sales charge applicable to the total number of Eligible Fund shares purchased in
a 13-month period pursuant to the terms and under the conditions set forth in
the Letter of Intent. To compute the applicable sales charge, the offering price
of shares of an Eligible Fund on which a sales charge has been paid,
beneficially owned by an investor on the date of submission of the Letter of
Intent, may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales charge will be applied only to new purchases.
During the term of the Letter of Intent, the transfer agent will hold in escrow
shares equal to 5% of the amount indicated in the Letter of Intent for payment
of a higher sales charge if an investor does not purchase the full amount
indicated in the Letter of Intent. The escrow will be released when an investor
fulfills the terms of the Letter of Intent by purchasing the specified amount.
Any redemptions made during the 13-month period will be subtracted from the
amount of purchases in determining whether the Letter of Intent has been
completed. If total purchases qualify for a further sales charge reduction, the
sales charge will be adjusted to reflect an investoris total purchases. If total
purchases are less than the amount specified in the Letter of Intent, an
investor will be requested to remit an amount equal to the difference between
the sales charge actually paid and the sales charge applicable to the total
purchases. If such remittance is not received within 20 days, the transfer
agent, as attorney-infact pursuant to the terms of the Letter of Intent and at
the Distributor's direction, will redeem an appropriate number of shares held in
escrow to realize the difference. Signing a Letter of Intent does not bind an
investor to purchase the full amount indicated at the sales charge in effect at
the time of signing, but an investor must complete the intended purchase in
accordance with the terms of the Letter of Intent to obtain the reduced sales
charge. To apply, an investor must indicate his or her intention to do so under
a Letter of Intent at the time of purchase of shares.
Qualification for Discounts. For purposes of applying the Rights of Accumulation
and Letter of Intent privileges described above, the scale of sales charges
applies to the combined purchases made by any individual and/or spouse
purchasing securities for his, her or their own account, or the aggregate
investments of a trustee or other fiduciary or IRA for the benefit of the
persons listed above.
Purchase Orders. Investors may purchase shares of the Funds through registered
representatives of Elan located at Firstar Banks ("Firstar Investment Offices"),
through Elan representatives located at other financial institutions, or
directly with the Funds' transfer agent. All checks must be drawn on a bank
located within the United States and must be payable in U.S. dollars. Subsequent
investments in an existing account in a Fund may be made at any time by sending
to the address below a check or money order payable to the Fund in which the
investment is being made as shown above, along with a letter stating the amount
of the investment, the name of the Fund and the account number in which the
investment is to be made. A $15 fee will be imposed by the Funds' transfer agent
if any check used for investment in an account does not clear, and the investor
involved will be responsible for any loss incurred by a Fund.
PURCHASE ORDERS PLACED THROUGH REGISTERED REPRESENTATIVES
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
IN PERSON - Complete an application at - Bring your check to a
a Firstar Investment Office. Firstar Investment Office.
Call 1-800-982-8909 for the Call 1-800-982-8909 for the
office nearest you. office nearest you.
BY PHONE - Call your registered - Call your registered
representative or call representative or call
1-800-982-8909 for the office 1-800-982-8909 for the
nearest you. office nearest you.
AUTOMATICALLY - Call your registered - Complete a Periodic
representative Investment Plan Application
to obtain a Periodic to automatically purchase
Investment Plan more shares.
Application.
PURCHASE ORDERS PLACED THROUGH THE TRANSFER AGENT
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
BY MAIL - Complete an application and - Make your check payable to
mail it along with a check Portico Funds. Please
payable to Portico Funds, include your account number
P.O. Box 3011, on your check and mail it to
Milwaukee, WI 53201-3011. the address on your
statement.
OVERNIGHT - Complete an application and - Make your check payable to
DELIVERY deliver it along with a check Portico Funds. Please
payable to Portico Funds, include your account number
615 East Michigan St., on your check and deliver it
Milwaukee, WI 53202. to the address at the left.
IN PERSON - Bring your application and - Bring your check to a
check to a Firstar Investment Firstar Investment Office.
Office. Call 1-800-982-8909 Call 1-800-982-8909 for the
for the office nearest you. office nearest you.
AUTOMATICALLY - Call 1-800-982-8909 to obtain - Complete a Periodic
a Periodic Investment Plan Investment Plan Application
Application. to automatically purchase
more shares.
- Open a ConvertiFund(R)
account to automatically
invest proceeds from one
account to another account
of the Portico family of
funds.
BY WIRE - Call 1-800-228-1024 to arrange - Ask your bank to transmit
a wire transaction. Ask your immediately available funds
bank to transmit immediately by wire as described at the
available funds by wire in the left. Please also include
amount of your purchase to: your account number.
Firstar Bank Milwaukee, N.A.
ABA # 0750-00022, Account #
112-952-137 for further
credit to [name of Fund] [the
name/ title on the account].
BY PHONE - Call 1-800-228-1024 to - Call 1-800-228-1024 to
exchange from another exchange from another
Portico Fund account with Portico Fund account with
the same registration including the same registration
name, address and taxpayer including name, address and
ID number. taxpayer ID number.
Investors making initial investments by wire must promptly complete a Purchase
Application and forward it to the respective Fund. REDEMPTIONS WILL NOT BE PAID
UNTIL THE COMPLETED APPLICATION HAS BEEN RECEIVED BY THE TRANSFER AGENT.
If an order and payment are received by the transfer agent or Elan in proper
form (as described above) before the close of regular trading hours on the New
York Stock Exchange (the "Exchange"), currently 3:00 p.m. Central Time, on a
business day, Fund shares will be purchased as of the determination of net asset
value on that day. Purchase orders which are received after the close of regular
trading hours on the Exchange, or on non-business days, and orders for which
payment is not received by the close of regular trading hours on the Exchange on
a business day, will be executed on the next business day after receipt of both
the order and payment in proper form by the transfer agent or Elan.
The Funds will not accept payment in cash or third party checks for the purchase
of shares. Federal regulations require that each investor provide a Social
Security number or other certified taxpayer identification number upon opening
or reopening an account. The Funds reserve the right to reject applications
without such a number or an indication that a number has been applied for. If a
number has been applied for, the number must be provided and certified within
sixty days of the date of the application. Any accounts opened without a proper
number will be subject to backup withholding and may be liquidated and
distributed to the owner(s) of record on or after the first business day
following the sixtieth day of investment, net of the backup withholding tax.
Certificates for shares will be issued only upon shareholder request. The Funds
reserve the right to reject any purchase order. Payment for shares of a Fund in
the amount of $1,000,000 or more may, at the discretion of the Adviser, be made
in the form of securities that are permissible investments for the respective
Fund. For further information, see the Statement of Additional Information or
contact the Portico Investor Services at 1-800-982-8909 or 414-287-3710
(Milwaukee area).
REDEMPTION OF SHARES
Redemption orders are effected at the net asset value per share next determined
after receipt of the order by the transfer agent or Elan. If a redemption order
is received in proper form (as described below) before the close of regular
trading hours on the Exchange, currently 3:00 p.m. Central Time, on a business
day, Fund shares will be redeemed as of the determination of net asset value on
that day. Redemption orders which are received after the close of regular
trading hours on the Exchange, or on non-business days, will be executed on the
next business day. Depending upon the current net asset value of the redeemed
shares at the time of redemption, the value of the shares redeemed may be more
or less than the investor's cost.
REDEMPTION ORDERS
THROUGH A REGISTERED
THROUGH THE TRANSFER AGENT REPRESENTATIVE
-------------------------- ----------------------
BY PHONE - Call 1-800-228-1024 with - Call your registered
your account name, account representative
number and amount of at 1-800-982-8909.
redemption (minimum $500).
Redemption proceeds will
only be sent to a
shareholder's address or
bank account of a
commercial bank located
within the United States
as shown on the transfer
agent's records.
(Available only if
established on the
account application and
if there has been no
change of address by
telephone within the
preceding 15 days.)
BY MAIL, - Mail your instructions to the - Bring your instructions to
OVERNIGHT Portico Funds, P.O. Box 3011, your registered
DELIVERY Milwaukee, WI 53201-3011, representative's
OR IN PERSON or deliver them (via overnight office, or mail or deliver
delivery or in person) to them to Portico Investor
615 E. Michigan Street, Services at 615 East
Milwaukee, WI 53202. Michigan Street, P.O. Box
Include the number of shares 3011, Milwaukee, WI 53201-
or the amount to be redeemed, 3011
your shareholder account
number and Social Security
number or other taxpayer
identification number. Your
instructions must be signed by
all persons required to sign
for transactions exactly as
their names appear on the
account. If the redemption
amount exceeds $50,000, or
if the proceeds are to be
sent elsewhere than the
address of record, or the
address of record has been
changed by telephone within
the preceding 15 days, each
signature must be guaranteed
in writing by either a
commercial bank that is a
member of the FDIC, a trust
company, a credit union, a
savings association, a
member firm of a national
securities exchange or other
eligible guarantor institution.
AUTOMATICALLY - Call 1-800-982-8909 for a - Call your registered
Systematic Withdrawal Plan representative
application ($15,000 account to establish
and $100 minimum a Systematic
per transaction). Withdrawal Plan.
Guarantees must be signed by an eligible guarantor institution and "Signature
Guaranteed" must appear with the signature. If certificates have been issued,
the certificates, properly endorsed or accompanied by a properly executed stock
power and accompanied by signature guarantees, must be received by the transfer
agent or Elan. The Funds may require additional supporting documents for
redemptions made by corporations, executors, administrators, trustees and
guardians. A redemption request will not be deemed to be properly received until
the transfer agent or Elan receives all required documents in proper form.
Purchases of additional shares concurrently with withdrawals could be
disadvantageous because of the sales charge involved in the additional purchase.
The transfer agent charges a $10.00 fee for each payment made by wire of
redemption proceeds, which will be deducted from the shareholder's account. The
transfer agent also charges a $15.00 fee for each IRA distribution (unless it is
part of a Systematic Withdrawal Plan), which will be deducted from the
shareholder's account.
In order to arrange for telephone redemptions after an account has been opened
or to change the bank or account designated to receive redemption proceeds, a
written request must be sent to Portico Investor Services at the address listed
above or contact your registered representative. The request must be signed by
each shareholder of the account. Further documentation may be requested from
corporations, executors, administrators, trustees and guardians.
The Funds reserve the right to refuse a telephone redemption if they believe it
is advisable to do so. Procedures for redeeming shares by telephone may be
modified or terminated by the Funds at any time upon notice to shareholders.
During periods of substantial economic or market change, telephone redemptions
may be difficult to implement. If a shareholder is unable to contact the
transfer agent by telephone, shares may also be redeemed by delivering the
redemption request to the transfer agent.
In an effort to prevent unauthorized or fraudulent redemption requests by
telephone, Portico and the transfer agent employ reasonable procedures specified
by a Fund to confirm that such instructions are genuine. Among the procedures
used to determine authenticity, investors electing to redeem or exchange by
telephone will be required to provide their account number. All such telephone
transactions will be tape recorded and confirmed in writing to the shareholder.
Portico may implement other procedures from time to time. If reasonable
procedures are not implemented, Portico and/or the transfer agent may be liable
for any loss due to unauthorized or fraudulent transactions. In all other cases,
the shareholder is liable for any loss for unauthorized transactions.
Other Redemption Information
The Funds will make payment for redeemed shares typically within one or two
business days, but no later than the seventh day after receipt by the transfer
agent of a request in proper form, except as provided by SEC rules. HOWEVER, IF
ANY PORTION OF THE SHARES TO BE REDEEMED REPRESENTS AN INVESTMENT MADE BY CHECK,
THE FUNDS MAY DELAY THE PAYMENT OF THE REDEMPTION PROCEEDS UNTIL THE TRANSFER
AGENT IS REASONABLY SATISFIED THAT THE CHECK HAS BEEN COLLECTED, WHICH MAY TAKE
TWELVE DAYS FROM THE PURCHASE DATE. This procedure does not apply to shares
purchased by wire payment. An investor purchasing shares by wire must have filed
a Purchase Application before any redemption requests can be paid.
The Funds impose no charge when shares are redeemed and reserve the right to
redeem an account involuntarily, upon sixty days' written notice, if redemptions
cause the account's net asset value to remain at $50 or less. A Fund may also
redeem shares involuntarily if it is appropriate to do so to carry out the
Fund's responsibilities under the 1940 Act and, in certain cases, may make
payment for redemption in securities. Investors would bear any brokerage or
other transaction costs incurred in converting the securities so received to
cash. See the Statement of Additional Information for examples of when such
redemptions might be applicable.
Questions concerning the proper form for redemption requests should be directed
to Portico Investor Services at 1-800-228-1024 or 414-287-3808 (Milwaukee area).
SHAREHOLDER SERVICES
The services and privileges described below are available to retail shareholders
of the Funds. These may be modified or terminated at any time upon notice to
shareholders.
Shareholder Reports
Shareholders will be provided with a report showing portfolio investments and
other information at least semiannually; and after the close of the Funds'
fiscal year which ends October 31, with an annual report containing audited
financial statements. To eliminate unnecessary duplication, only one copy of
shareholder reports will be sent to shareholders with the same mailing address.
Shareholders who desire a duplicate copy of shareholder reports to be mailed to
their residence should call Portico Investor Services at 1-800-982-8909, or
write to Portico Investor Services at the address listed above.
In addition, account statements will be mailed to shareholders after each
purchase, reinvestment of dividends and redemption.
Automated Teleresponse Service
Shareholders using a touch-tone telephone can access information on the Funds
twenty-four hours a day, seven days a week. When calling Portico Investor
Services at 1-800-228-1024, shareholders may choose to use the automated
information feature or, during regular business hours (8:00 a.m. to 7:00 p.m.
Central Time, Monday through Friday), speak with a Portico Investor Services
representative.
The automated service provides the information most frequently requested by
shareholders. After calling the 800-number, pressing "2" on their touch-tone
phone, shareholders can:
1. Determine closing prices for each Fund.
2. Learn how the price of a Fund has changed from the previous day.
3. Hear daily yields for Portico money market funds.
Money market fund yields reflect fee waivers in effect, represent past
performance and will vary. If fees were not waived, yields would be reduced.
Past performance is no guarantee of future results. Current yield refers to
income earned by a fund's investments over a 7-day period. It is then annualized
and stated as a percentage of the investment. Effective yield is the same as
current yield except that it assumes the income earned by an investment in a
fund will be reinvested. An investment in any one of the Portico money market
funds is neither insured nor guaranteed by the U.S. government nor is there any
assurance the funds will be able to maintain a stable net asset value of $1.00
per share.
To speak with a Portico Investor Services representative anytime during an
automated teleresponse session (during regular business hours), shareholders may
press "0."
For total return information, shareholders must call Portico Investor Services
at 1-800-982-8909 or 414-287-3710 (Milwaukee area).
Telephone Exchange Privilege
Except as provided in the next sentence and provided that such other shares may
legally be sold in the state of the investor's residence, shareholders are
generally permitted to exchange their Retail Shares in a Fund (with a minimum
current value of $500) for Retail Shares of other funds in the Portico family of
funds without charge or commission by the Fund. A sales charge will be imposed
on the exchange if the shares of the Fund being acquired have a sales charge and
the shares being redeemed were purchased or otherwise acquired without a sales
charge. Telephone exchange privileges automatically apply to each shareholder of
record and the representative of record unless and until the transfer agent
receives written instructions from the shareholder(s) of record canceling the
privilege.
Portico reserves the right to terminate indefinitely the exchange privilege of
any shareholder, broker, investment adviser or agent who requests more than four
exchanges within a calendar year, whether for oneself or one's customers.
Portico may determine to do so with prior notice to the shareholder, broker,
investment adviser or agent based on a consideration of both the number of
exchanges the particular shareholder, broker, investment adviser or agent has
requested and the time period over which those exchange requests have been made,
together with the level of expense to the Funds or other adverse effects which
may result from the additional exchange requests. If any portion of the shares
to be exchanged represents an investment made by check, a Fund may delay the
acquisition of new shares in an exchange until the transfer agent is reasonably
satisfied that the check has been collected, which may take twelve days from the
purchase date.
Investors may find the exchange privilege useful if their investment objectives
or market outlook should change after they invest in the Portico family of
funds. For federal income tax purposes, an exchange of shares is a taxable event
and, accordingly, a capital gain or loss may be realized by an investor. Before
making an exchange request, an investor should consult a tax or other financial
adviser to determine the tax consequences of a particular exchange. No exchange
fee is currently imposed by Portico on exchanges. Portico, however, reserves the
right to impose a charge in the future.
In order to request an exchange by telephone, a shareholder must give the
account name, account number and the amount or number of shares to be exchanged.
During periods of significant economic or market change, telephone exchanges may
be difficult to implement. If a shareholder is unable to contact the transfer
agent by telephone, shares may also be exchanged by delivering the exchange
request to the transfer agent in person or by mail at the addresses listed above
under "Redemption of Shares."
The Funds reserve the right to reject any exchange request with prior notice to
a shareholder and the exchange privilege may be modified or terminated at any
time. At least sixty days' notice will be given to shareholders of any material
modification or termination except where notice is not required under SEC
regulations. The responsibility of the Funds and their transfer agent for the
authenticity of telephone exchange instructions is limited as described above
under "Redemption of Shares."
Retirement Plans
The Funds offer individual retirement accounts and prototype
defined contribution plans, including simplified employee, 401(k), 403(b),
profit-sharing and money purchase pension plans ("Retirement Plans"). For
details concerning Retirement Plans (including service fees), please call
Portico Investor Services at 1-800-982-8909 or 414-2873710 (Milwaukee area).
DIVIDENDS AND DISTRIBUTIONS
Dividends from a Fund's net investment income are declared and paid monthly by
the Short-Term Bond Market Fund, Intermediate Bond Market Fund, Tax-Exempt
Intermediate Bond Fund, and Bond IMMDEX/TM Funds. Each Fund's net realized
capital gains are distributed at least annually to avoid tax to the Fund.
Dividends and distributions will reduce the net asset value of the Funds' Retail
Shares by the amount of the dividend or distribution. Dividends and
distributions are automatically reinvested in additional Retail Shares of the
Fund on which the dividend or distribution is paid at their net asset value per
share (as determined on the payable date), unless the shareholder notifies the
Fund's transfer agent or a registered representative that dividends or capital
gains distributions, or both, should be paid in cash. Cash dividends and
distributions will be paid by check unless the Fund's transfer agent receives a
voided check or deposit ticket to enable the dividends or distributions to be
directly deposited into the shareholder's bank account. Cash dividends and
distributions will be paid within five business days after the end of the month
in which dividends are declared or within five business days after a redemption
of all of a shareholder's shares of a Fund. Reinvested dividends and
distributions receive the same tax treatment as those paid in cash.
MANAGEMENT OF THE FUNDS
The business and affairs of the Funds are managed under the direction of the
Board of Directors of the Portico Funds, Inc. ("Portico" or the "Company"). The
Statement of Additional Information contains the name and background information
regarding each Director.
Advisory Services
FIRMCO, a Wisconsin corporation and subsidiary of Firstar Corporation, a bank
holding company, serves as investment adviser to each Fund. FIRMCO, with
principal offices at Firstar Center, 777 East Wisconsin Avenue, 8th Floor,
Milwaukee, Wisconsin 53202, has been engaged in the business of providing
investment advisory services since 1986. FIRMCO currently has $15 billion in
assets under active management, of which $9 billion is invested in fixed-income
and money market securities and $6 billion in equity securities.
Subject to the general supervision of the Board of Directors and in accordance
with the respective investment objective and policies of each Fund, the Adviser
manages each Fund's portfolio, makes decisions with respect to and places orders
for all purchases and sales of each Fund's portfolio securities, and maintains
records relating to such purchases and sales. The Adviser is authorized to
allocate purchase and sale orders for portfolio securities to Shareholder
Organizations, including, in the case of agency transactions, Shareholder
Organizations which are affiliated with the Adviser, to take into account the
sale of Fund Shares if the Adviser believes that the quality of the transaction
and the amount of the commission are comparable to what they would be with other
qualified brokerage firms. The Adviser is entitled to receive from each Fund a
fee, calculated daily and payable monthly, at the following annual rates (as a
percentage of the Fund's average daily net assets): 0.60% for the Short-Term
Bond Market Fund, 0.50% for each of the Intermediate Bond Market and Tax-Exempt
Intermediate Bond Funds, and 0.30% for the Bond IMMDEX/TM Fund. The Adviser
earned fees, net of waivers, for the fiscal year ended October 31, 1995, at the
annual rate of 0.26% for the Short-Term Bond Market Fund, 0.28% for the
Intermediate Bond Market Fund, 0.08% for the Tax-Exempt Intermediate Bond Fund
and 0.30% for the Bond IMMDEX/TM Fund.
The Adviser may voluntarily waive all or a portion of the advisory fee otherwise
payable by a Fund from time to time. These waivers may be terminated at any time
at the Adviser's discretion.
The following are biographies of the portfolio managers of each Fund.
Mary Ellen Stanek and Daniel Tranchita co-manage the ShortTerm Bond Market Fund.
Ms. Stanek is the President of FIRMCO and Director of Fixed Income Services; she
has served in this role since 1994. In addition, Ms. Stanek has served as an
officer of the Funds since September 1994. She has seventeen years of investment
management experience and was named a Director of FIRMCO in 1992. Prior to
joining FIRMCO, Ms. Stanek headed the Fixed Income and Quantitative Investment
Management Department at Firstar Trust Company. She has been the Fund's
portfolio manager since its inception on December 29, 1989. Mr. Tranchita is a
Vice President and has been with Firstar since 1989. He has seven years of
investment management experience and has been the portfolio manager of the Fund
since January 1, 1993. Both Ms. Stanek and Mr. Tranchita are Chartered Financial
Analysts.
Mary Ellen Stanek and Teresa Westman co-manage the Intermediate Bond Market
Fund. A Senior Vice President and Senior Portfolio Manager of FIRMCO, Ms.
Westman joined Firstar in 1987 and has nine years of investment management
experience. Ms. Westman is a Chartered Financial Analyst. Both Ms. Stanek and
Ms. Westman have managed the Fund since its inception on January 5, 1993.
Warren Pierson manages the Tax-Exempt Intermediate Bond Fund. Mr. Pierson joined
Firstar in 1985 and has ten years of fixed income experience at Firstar. He is a
Vice President of FIRMCO and has been a portfolio manager of the Fund since June
22, 1993. Mr. Pierson is a Chartered Financial Analyst.
Mary Ellen Stanek and Teresa Westman co-manage the Bond IMMDEX/TM Fund. Ms.
Stanek has managed the Fund since its inception on December 29, 1989. Ms.
Westman has been a portfolio manager of the Fund since January 1, 1992.
Administrative Services
Firstar Trust Company ("Firstar Trust") and B. C. Ziegler and Company
("Ziegler") serve as the Co-Administrators (the "CoAdministrators"). The Co-
Administrators have agreed to provide the following administrative services for
the Portico Funds: assist in maintaining office facilities for the Funds;
furnish clerical and certain other services required by the Funds; compile data
for and prepare notices to the SEC; prepare semiannual reports to the SEC and
current shareholders and filings with state securities commissions; coordinate
federal and state tax returns; monitor the arrangements pertaining to the Funds'
agreements with Shareholder Organizations; monitor the Funds' expense accruals;
monitor compliance with the Funds' investment policies and limitations; and
generally assist the Funds' operations. As further described in the Statement of
Additional Information, certain services under the Co-Administration Agreement
are provided jointly by Firstar Trust and Ziegler and other services are
provided separately by either Firstar Trust or Ziegler. The Co-Administrators
are entitled to receive a fee for their administrative services, computed daily
and payable monthly, at the annual rate of 0.125% of Portico's first $2 billion
of average aggregate daily net assets, plus 0.10% of Portico's average aggregate
daily net assets in excess of $2 billion. The Co-Administrators may voluntarily
waive all or a portion of their administrative fee from time to time. These
waivers may be terminated at any time at the CoAdministrators' discretion.
For the fiscal year ended October 31, 1995, the Funds accrued administrative
fees, after waivers, at the effective annual rates of 0.05% of each Fund's
respective average net assets.
Shareholder Organizations
Portico may enter into agreements from time to time with certain Shareholder
Organizations, including affiliates of the Adviser (such as Elan), providing for
certain support and/or distribution services to their customers who are the
beneficial owners of Retail Shares of the Funds. Under the Service Agreements,
shareholder support services, which are described more fully in the Statement of
Additional Information, may include assisting investors in processing purchase,
exchange and redemption requests; processing dividend and distribution payments
from the Funds; providing information periodically to customers showing their
positions in Retail Shares of the Funds; and providing sub-accounting
with respect to Retail Shares beneficially owned by customers or the information
necessary for sub-accounting. In addition, Shareholder Organizations under a
Distribution and Service Agreement may provide the foregoing shareholder support
services and may also provide assistance, such as the forwarding of sales
literature and advertising to their customers, in connection with the
distribution of Retail Shares. For their services, Shareholder Organizations may
be entitled to receive fees from a Fund at annual rates of up to 0.25% of the
average daily net asset value of the Retail Shares covered by their agreements.
For the 1995 calendar year, Shareholder Organizations received fees pursuant to
such agreements at the annual rates of 0.25% of their average net assets.
Under the terms of their agreements with Portico, Shareholder Organizations are
required to provide a schedule of any fees that they may charge to their
customers relating to the investment of their assets in Retail Shares covered by
the agreements. Investors should read this Prospectus in light of such fee
schedules and under the terms of their Shareholder Organization's agreement with
Portico. In addition, investors should contact their Shareholder Organization
with respect to the availability of shareholder services and the particular
Shareholder Organization's procedures for purchasing and redeeming shares. It is
the responsibility of Shareholder Organizations to transmit purchase and
redemption orders and record those orders in customers' accounts on a timely
basis in accordance with their agreements with customers. At the request of a
Shareholder Organization, the transfer agent's charge of $10.00 for each payment
made by wire of redemption proceeds may be billed directly to the Shareholder
Organization.
The Glass-Steagall Act and other applicable laws, among other things, prohibit
banks from engaging in the business of underwriting securities. Accordingly,
banks will be engaged under agreements with Portico only to perform the
administrative and investor servicing functions described above, and will
represent to Portico that in no event will the services provided by them under
the agreements be primarily intended to result in the sale of Retail Shares.
Conflict-of-interest restrictions may apply to the receipt of compensation paid
by Portico to a Shareholder Organization in connection with the investment of
fiduciary funds in Retail Shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the SEC, the Department of Labor or state
securities commissions, are urged to consult legal counsel before entering into
agreements with Portico.
Agreements that contemplate the provision of distribution services by
Shareholder Organizations are governed by a Distribution and Service Plan (the
"Plan") that has been adopted by Portico pursuant to Rule 12b-1 under the 1940
Act. In the case of the Funds, no payments are made to their Distributor under
the Plan. However, payments to Shareholder Organizations, including affiliates
of the Adviser, under the Plan are not tied directly to their own out-of-pocket
expenses and therefore may be used as they elect (for example, to defray their
overhead expenses), and may exceed their direct and indirect costs.
Custodian, Transfer
and Dividend
Disbursing Agent,
and Accounting Services
Agent
Firstar Trust, an affiliate of the Adviser, provides custodial, transfer agency,
dividend disbursing agency, and accounting services for the Funds. For the
fiscal year ended October 31, 1995, total custodial, transfer agency, dividend
disbursing agency, and accounting services fees earned by Firstar Trust were
approximately 0.12%, 0.10%, 0.20% and 0.06% of the Short-Term Bond Market,
Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond IMMDEX/TM Funds'
average net assets, respectively. Additional information regarding the fees
payable by the Funds to Firstar Trust for these services is provided in the
Statement of Additional Information. Inquiries to the transfer agent may be sent
to the following address: Firstar Trust Company, P.O. Box 3011, Milwaukee,
Wisconsin 53201-3011.
INVESTMENT LIMITATIONS
Except for the limitations detailed below, the investment objective and policies
of each Fund described in this Prospectus are not fundamental and may be changed
by the Board of Directors without the affirmative vote of the holders of a
majority of a Fund's outstanding shares. If there is a change in a Fund's
investment objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial position and
needs. The following descriptions summarize several of each Fund's fundamental
investment limitations which are set forth in full in the Statement of
Additional Information.
NO FUND MAY:
1. Purchase securities of any one issuer (other than U.S. Government securities)
if more than 5% of the value of its total assets will be invested in the
securities of such issuer, except that up to 25% of the value of a Fund's total
assets may be invested without regard to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than 10% of the
outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets in one or more issuers conducting
their principal business activities in the same industry.
4. Borrow money or enter into reverse repurchase agreements except for temporary
purposes in amounts up to 10% of the value of the total assets at the time of
such borrowing, or mortgage, pledge or hypothecate any assets except in
connection with such borrowings. Whenever borrowings (including reverse
repurchase agreements) exceed 5% of the Fund's total assets, the Fund will not
make any investments.
In addition, the Tax-Exempt Intermediate Bond Fund may not:
5. Invest less than 80% of its net assets in securities the interest on which is
exempt from federal income tax, except during defensive periods or during
periods of unusual market conditions. For purposes of this fundamental policy,
Municipal Obligations that are subject to federal alternative minimum tax are
considered taxable.
If a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of the Fund's portfolio securities will not constitute a
violation of such limitation. If due to market fluctuations or other reasons the
amount of borrowings exceed the 10% limit stated above, a Fund will promptly
reduce such amount.
TAXES
Portico's management intends that each Fund will qualify as a Federal "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). Such qualification generally will relieve each Fund of liability for
federal income taxes to the extent its earnings are distributed in accordance
with the Code.
Each Fund contemplates declaring as dividends each year at least 90% of its
investment company income. An investor who receives a dividend derived from
investment company taxable income (which includes any excess of net short-term
capital gain over net long-term capital loss) treats it as a receipt of ordinary
income in the computation of his gross income, whether such dividend is paid in
the form of cash or additional shares of the Fund.
In addition, the Tax-Exempt Intermediate Bond Fund contemplates paying to its
shareholders at least 90% of its exempt interest income net of certain
deductions. Dividends paid by this Fund that are derived from exempt-interest
income generally may be treated by shareholders as items of interest excludable
from their gross income under Section 103(a) of the Code, unless under the
circumstances applicable to the particular shareholder, exclusion would be
disallowed. (See Statement of Additional Information under "Additional
Information Concerning Taxes"). If the Fund should hold certain private activity
bonds issued after August 7, 1986, shareholders must include, as an item of tax
preference, the portion of dividends paid by the Fund that is attributable to
interest on such bonds in their federal alternative minimum taxable income for
purposes of determining liability (if any) for the 26%-28% alternative minimum
tax applicable to individuals and the 20% alternative minimum tax and the
environmental tax applicable to corporations. Corporate shareholders must also
take all exempt-interest dividends into account in determining certain
adjustments for federal alternative minimum and environmental tax purposes. The
environmental tax applicable to corporations is imposed at the rate of 0.12% on
the excess of the corporation's modified federal alternative minimum taxable
income over $2,000,000. Shareholders receiving Social Security benefits should
note that all exempt-interest dividends will be taken into account in
determining the taxability of such benefits.
Any dividend or distribution of a Fund's excess of net longterm capital gain
over its net short-term capital loss will be taxable to a shareholder of the
Fund as long-term capital gain, regardless of how long the shareholder has held
shares of the Fund.
Before purchasing Fund shares, the impact of dividend or capital gain
distributions which are expected to be declared or have been declared but not
paid, should be carefully considered. Any dividend or distribution paid by the
Fund shortly after the purchase of shares of the Fund will have the effect of
reducing the per share net asset value by the per share amount of the dividend
or distribution. Such dividends or distributions, although in effect a return of
capital to shareholders, are subject to income taxes.
Each Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of the dividends or gross sale proceeds paid to any shareholder (i)
who has provided either an incorrect taxpayer identification number or no number
at all, (ii) who is subject to withholding by the Internal Revenue Service for
failure to properly include on his return payments of interest or dividends, or
(iii) who has failed, when required to do so, to certify that he is not subject
to backup withholding. Each Fund generally also will withhold and remit to the
U.S. Treasury 10% of all distributions from individual retirement accounts
(including simplified employee plans) to any investor unless the transfer agent
receives a written request not to withhold federal income tax from the investor
prior to the distribution date; withholding on distributions from other types of
Retirement Plans may be mandatory and may be at a higher rate.
A taxable gain or loss may be realized by a shareholder upon a redemption,
transfer or exchange of Fund shares, depending on the tax basis of the shares
and their price at the time of such disposition. If a shareholder held shares
for six months or less, any loss realized by the shareholder will be disallowed
to the extent of the amount of exempt-interest dividends received with respect
to the shares and will be treated as long-term loss to the extent of any long-
term capital distribution received.
Generally, a shareholder may include sales charges incurred upon the purchase of
Retail Shares in his or her tax basis for such shares for the purpose of
determining gain or loss on a redemption, transfer or exchange of shares.
However, if the shareholder effects an exchange of such shares for Retail Shares
of another fund of the Company within 90 days of the purchase and is able to
reduce the sales charge applicable to the new shares (by virtue of the Company's
exchange privilege), the amount equal to such reduction may not be included in
the tax basis of the shareholderis exchanged shares, but may be included
(subject to the limitation) in the tax basis of the new shares.
The foregoing is only a brief summary of some of the important federal income
tax considerations generally affecting the Funds and their shareholders, and is
not intended as a substitute for careful tax planning and is based on tax laws
and regulations which are in effect on the date of this Prospectus. Such laws
and regulations may be changed by legislative or administrative action.
Accordingly, investors in the Funds should consult their tax advisers with
specific reference to their own tax situation. Shareholders will be advised at
least annually as to the federal income tax consequences of dividends and
distributions made each year.
State and Local
Investors are advised to consult their tax advisers concerning
the application of state and local tax laws, which may have different
consequences from those of the federal income tax law described above. Dividends
paid by the Tax-Exempt Intermediate Bond Fund may be taxable to investors under
state or local law as dividend income even though all or a portion of such
dividends may be derived from interest on obligations which, if realized
directly, would be exempt from such income taxes.
DESCRIPTION OF SHARES
The Company was incorporated under the laws of the State of Wisconsin on
February 15, 1988 and is registered with the SEC as an open-end management
company. The Articles of Incorporation authorize the Board of Directors to issue
up to 150 billion full and fractional shares of common stock, $.0001 par value
per share. The Company currently has 16 classes representing interests in 16
investment portfolios. Each class of the Funds is currently divided into two
separate series, a Retail and Institutional Series, representing interests in
the same Fund. Of these authorized shares, 500 million shares have been
classified for each Retail Series of each Fund discussed in this Prospectus.
Shares of each series bear their pro rata portion of all operating expenses paid
by the Funds, except certain payments under the Funds' Distribution and Service
Plan and Shareholder Servicing Plan applicable only to Retail Series Shares.
Institutional Shares are offered in a separate prospectus and are sold without a
sales charge. The differences in expenses and sales charges will affect the
performance of Institutional and Retail Shares. Institutional Shares are only
sold to and held by (i) trust, agency or custodial accounts opened through trust
companies or trust departments affiliated with Firstar Corporation; (ii)
employer sponsored qualified retirement plans; and (iii) clients of the Adviser.
Retail Shares are available to any investor who does not fall within the three
preceding categories. Portico Funds does not offer the Periodic Investment Plan,
ConvertiFund(R) and Systematic Withdrawal Plan to Shareholders of the
Institutional Series. A salesperson and any other person or Shareholder
Organization entitled to receive compensation for selling or servicing shares of
a Fund may receive different compensation with respect to different series of
shares.
For information regarding the other funds and series, contact Portico Investor
Services at 1-800-982-8909 or 414-287-3710 (Milwaukee area) or your Shareholder
Organization.
Portico does not presently intend to hold annual meetings of shareholders except
as required by the 1940 Act or other applicable law. Portico will call a meeting
of shareholders for the purpose of voting upon the question of removal of a
member of the Board of Directors upon written request of shareholders owning at
least 10% of the outstanding shares of Portico that are entitled to vote. To the
extent required by law, Portico will assist in shareholder communication in such
matters.
Shareholders of each class of the Funds are entitled to one vote for each full
share held and proportionate fractional votes for fractional shares held, and
will vote in the aggregate and not by Fund except where otherwise required by
law. It is contemplated that the shareholders of a Fund will vote separately on
matters relating to its investment advisory agreement and any changes in its
fundamental investment limitations. On any matter submitted to the vote of
shareholders which only pertains to agreements, liabilities or expenses
applicable to the Retail Shares but not the Institutional Shares of the same
Fund, only the Retail Shares will be entitled to vote. Shares of Portico have
noncumulative voting rights and, accordingly, the holders of more than 50% of
Portico's outstanding shares (irrespective of Fund) may elect all of the
Directors. As of January 31, 1996, the Adviser and its affiliates held, on
behalf of their underlying accounts, approximately 72% of Portico's shares that
were outstanding on that date.
Each Retail Share of a Fund represents an equal proportionate interest with
other Retail Shares in the Fund, and is entitled to such dividends and
distributions earned on its assets as are declared at the discretion of the
Board of Directors. Shares of the Funds do not have preemptive rights. Each Fund
is classified as a diversified company under the 1940 Act.
NET ASSET VALUE
AND DAYS OF
OPERATION
The net asset value of each Fund for purposes of pricing
purchase and redemption orders is determined as of the close of regular trading
hours on the Exchange, currently, 3:00 p.m. Central Time, on each day the
Exchange is open for trading. As a result, shares of the Funds will not be
priced on the days which the Exchange observes: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. Net
asset value per Retail Share is calculated by dividing the value of all
securities and other assets owned by each Fund that are allocable to Retail
Shares, less the liabilities charged to Retail Shares, by the number of the
Fund's outstanding Retail Shares.
Shares which are traded on a recognized exchange are valued at the last sale
price on the securities exchange on which such securities are primarily traded
or at the last sale price on the national securities market. Exchange-traded
securities for which there were no transactions are valued at the current bid
prices. Securities traded on only over-the-counter markets are valued on the
basis of closing over-the-counter bid prices. Restricted securities, securities
for which market quotations are not readily available and other assets are
valued at fair value by the Adviser under the supervision of the Board of
Directors.
Each Fund's securities may be valued based on valuations provided by an
independent pricing service. These valuations are reviewed by the Adviser. If
the Adviser believes that a valuation received from the services does not
represent a fair value, it values the security by a method that the Board of
Directors believes will determine a fair value. Any pricing service used may
employ electronic data processing techniques, including a "matrix" system, to
determine valuations.
PERFORMANCE CALCULATIONS
From time to time, total return and yield data for Retail shares of a Fund may
be quoted in advertisements or in communications to shareholders. The total
return of a Fund's Retail Shares will be calculated on an average annual
(compound) total return basis, and may also be calculated on an aggregate total
return basis for various periods. Average annual total return reflects the
average annual percentage change in value of an investment in Retail Shares of a
Fund over the measuring period. Aggregate total return reflects the total
percentage change in value over the measuring period. Both methods of
calculating total return assume that dividends and capital gain distributions
made by the Retail Shares of the Fund during the period are reinvested in Retail
Shares of the Fund and that the maximum sales charge during the period has been
deducted from the investment at the time of the purchase.
All the Funds may advertise total return data without reflecting the sales
charge if they are accompanied, in accordance with SEC rules, by average annual
total return data reflecting the maximum sales charge. Quotations which do not
reflect the sales charge will, of course, be higher than quotations which do.
Yield is computed based on the net income of a Fund's Retail Shares during a 30-
day (or one-month) period, which will be identified in connection with the
particular yield quotation. More specifically, the yield of the Retail Shares of
the Fund is computed by dividing the net income per share of the Retail Shares
of the Fund during a 30-day (or one-month) period by the net asset value per
share of the Retail Shares of the Fund on the last day of the period and
annualizing the result on a semiannual basis. The Tax-Exempt Intermediate Bond
Fund may also quote a tax-equivalent yield which shows the level of taxable
yield needed to produce an after-tax equivalent to the tax-free yield of the
Retail Shares of the Fund. This is done by increasing the yield of the Retail
Shares of the Fund (calculated as above) by the amount necessary to reflect the
payment of federal income tax at a stated tax rate. The "tax equivalent yield"
will always be higher than the "yield" of the Retail Shares of the Fund.
The total return and yield of a Fund's Retail Shares may be compared to those of
other mutual funds with similar investment objectives and to, bond and other
relevant indices or to rankings prepared by independent services or other
financial or industry publications that monitor the performance of mutual funds.
For example, the total return and yield of a Fund's Retail Shares may be
compared to data prepared by Lipper Analytical Services, Inc. In addition, the
total return of a Fund's Retail Shares may be compared to the Lehman Brothers 1-
3 Year Government/Corporate Bond Index; the Merrill Lynch 1-2.99 U.S. Treasury
Bond Index; the Lehman Brothers Intermediate Government/Corporate Bond Index;
the Lehman Brothers 5-Year General Obligation Bond Index; the Lehman Brothers
Government/Corporate Bond Index; and the Consumer Price Index. Total return and
yield data as reported in national financial publications, such as Money
Magazine, Forbes, Barron's, Morningstar Mutual Funds, The Wall Street Journal
and The New York Times, or in publications of a local or regional nature, may
also be used in comparing the performance of the Funds.
Performance quotations represent past performance, and should not be considered
as representative of future results. The investment return and principal value
of an investment in a Fund's Retail Shares will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. Since
performance will fluctuate, performance data for a Fund cannot necessarily be
used to compare an investment in a Fund's Retail Shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield for a stated period of time. Investors should
remember that performance is generally a function of the kind and quality of the
investments held in a portfolio, portfolio maturity, operating expenses and
market conditions. Any fees charged by Shareholder Organizations directly to
their customer accounts in connection with investments in a Fund will not be
included in the Fund's calculations of yield and total return and will reduce
the yield and total return received by the accounts. The methods used to compute
yield and total return are described in more detail in the Statement of
Additional Information.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS
OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUNDS OR BY THEIR DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
PORTICO INVESTOR SERVICES
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI 53201-3011
***********
PORTICO FUNDS, INC.
(Retail Series)
Balanced Fund, Growth and Income Fund,
Special Growth Fund,
Equity Index Fund, MidCore Growth Fund,
International Equity Fund
Form N-1A
Cross Reference Sheet
Part A
Item No. Prospectus Heading
- -------- ------------------
1. Cover Page. . . . . . . . . . . . . . . . . Cover Page
2. Synopsis. . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information . . . . . . Financial Highlights;
Performance Calculations
4. General Description of Registrant . . . . . Cover Page; Investment
Objectives and Policies; Other
Investment Information;
Description of Shares;
Investment Limitations
5. Management of the Fund. . . . . . . . . . . Management of the Funds
5A. Management's Discussion of
Fund Performance. . . . . . . . . . . . . . Inapplicable
6. Capital Stock and Other Securities. . . . . Dividends and Distributions;
Management of the Funds;
Taxes; Description of Shares
7. Purchase of Securities Being Offered. . . . Purchase of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
8. Redemption or Repurchase. . . . . . . . . . Redemption of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
9. Pending Legal Proceedings . . . . . . . . . Not Applicable
*************
Prospectus February 20, 1996
Balanced Fund
Growth and Income Fund
Equity Index Fund
MidCore Growth Fund
Special Growth Fund
International Equity Fund
TABLE OF CONTENTS
Expense Summary 2
Financial Highlights 5
Investment Objectives and Policies 8
Other Investment Information 20
Purchase of Shares 29
Redemption of Shares 35
Shareholder Services 38
Dividends and Distributions 40
Management of the Funds 41
Investment Limitations 46
Taxes 47
Description of Shares 49
Net Asset Value and Days of Operation 50
Performance Calculations 51
Portico Funds, Inc. is a family of sixteen mutual funds that offer a variety of
investment objectives designed to meet the needs of individual and institutional
investors. This Prospectus describes the Retail Shares of six of the Equity
Funds. Portico Funds also offers retail and institutional shares of its bond
funds and shares of its money market funds, which are described in separate
prospectuses.
The Balanced Fund seeks capital appreciation and current income with
relatively low volatility of capital.
The Growth and Income Fund seeks both reasonable income and long-term capital
appreciation.
The Equity Index Fund seeks returns, before Fund expenses, comparable to the
price and yield performance of publicly traded common stocks in the aggregate
as represented by the S&P 500 Stock Index.
The MidCore Growth Fund seeks capital appreciation through investment in
securities of medium- to large-sized companies.
The Special Growth Fund seeks capital appreciation through investment in
securities of small-to medium-sized companies.
The International Equity Fund seeks capital appreciation through investment
in foreign equity securities of small-to medium-sized companies.
Firstar Investment Research & Management Company ("FIRMCO"or the "Adviser")
serves as investment adviser to each Fund, and the Funds are sponsored by
B. C. Ziegler and Company (the "Distributor"). State Street Global Advisors,
a division of State Street Bank and Trust Company (the "Sub-Adviser"), serves
as the sub-adviser to the International Equity Fund. Shareholder
Organizations may perform shareholder servicing and provide assistance in
connection with the distribution of the Funds' shares and receive fees from
the Funds for their services. (See "Management of the Funds").
This Prospectus sets forth concisely the information about the Funds that a
prospective investor should consider before investing. You should read this
Prospectus and retain it for future reference. Additional information about the
Funds, contained in a Statement of Additional Information, has been filed with
the Securities and Exchange Commission and is available upon request without
charge by writing Portico Investor Services at 777 East Wisconsin Avenue, Suite
900, Milwaukee, Wisconsin 53202, or by calling 1-800-982-8909 or 414-287-3710
(Milwaukee area). The Statement of Additional Information bears the same date
as this Prospectus and is incorporated by reference in its entirety into the
Prospectus.
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.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY,
FIRSTAR TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER BANK,
OR OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES
INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
February 20, 1996
EXPENSE SUMMARY Below is a summary of the shareholder transaction expenses and
the annual operating expenses expected to be incurred by Retail
Shares of the Balanced, Growth and Income, Equity Index,
MidCore Growth, Special Growth, and International Equity Funds
during the year ended December 31, 1996. An example based on
the summary is also shown.
<TABLE>
<CAPTION>
Shareholder Balanced Growth And Equity Index MidCore Growth Special Growth International
Transaction Expenses Fund Income Fund Fund Fund Fund Equity Fund
- --------------------------------------- -------- ------------ ------------ -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Load Imposed
on Purchases 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Maximum Sales Load Imposed
on Reinvested Dividends None None None None None None
Deferred Sales Load None None None None None None
Redemption Fees None<F17> None<F17> None<F17> None<F17> None<F17> None<F17>
Exchange Fees None None None None None None
Annual Fund
Operating Expenses
(as a percentage of average net assets)
Advisory Fees After Fee Waivers <F18> 0.52% 0.72% 0.25% 0.71% 0.74% 0.62%
12b-1 Fees <F19> 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Shareholder Servicing Fees <F19> 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses After Fee Waivers <F20> 0.23% 0.18% 0.22% 0.19% 0.16% 0.88%
Total Fund Operating Expenses
After Fee Waivers <F21> 1.00% 1.15% 0.72% 1.15% 1.15% 1.75%
<FN>
<F17>A fee of $10.00 is charged for each wire redemption. See "Redemption of Shares."
<F18>The Adviser has voluntarily agreed to waive a portion of its fees for the Balanced, Growth and Income, Equity Index, MidCore
Growth, Special Growth and International Equity Funds during the calendar year 1996. Absent advisory fee waivers, advisory fees
for the Balanced Fund, Growth and Income Fund, Equity Index Fund, MidCore Growth Fund, Special Growth Fund and International
Equity Fund would be 0.75%, 0.75%, 0.25%, 0.75%, 0.75% and 1.50%, respectively. These advisory fees (except for the fee for the
Equity Index Fund) are higher than the advisory fee payable by most other investment companies. See "Management of the Funds" in
this Prospectus for a more complete description and the financial statements for the Funds for the fiscal year ended October 31,
1995 incorporated into the Statement of Additional Information.
<F19>The total of all 12b-1 fees and Shareholder Servicing Fees paid by a Fund may not exceed, in the aggregate, the annual rate
of 0.25% of a Fund's average daily net assets. The Funds do not expect to pay any 12b-1 fees for the current year. If 12b-1 fees
are paid in the future, long-term shareholders may pay more than the economic equivalent of the maximum front end sales charge
permitted by the National Association of Securities Dealers.
<F20>With respect to the Balanced, Growth and Income, Equity Index, MidCore Growth, Special Growth, and International Equity
Funds, the amount of "Other Expenses" in the table above is based on estimated expenses and projected assets for the 1996
calendar year. Absent administrative fee waivers, other expenses would be 0.30%, 0.25%, 0.29%, 0.26%, 0.23% and 0.95% for the
Balanced, Growth and Income, Equity Index, MidCore Growth, Special Growth and International Equity Funds, respectively.
<F21>Absent fee waivers, total operating expenses would be 1.30%, 1.25%, 0.79%, 1.26%, 1.23% and 2.70% for the Balanced, Growth
and Income, Equity Index, MidCore Growth, Special Growth, and International Equity Funds, respectively.
</TABLE>
EXPENSE SUMMARY Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual returns; and (2) redemption
of your investment at the end of the following periods:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Balanced Fund $50 $71 $ 93 $158
Growth and Income Fund 51 75 101 174
Equity Index Fund 47 62 78 126
MidCore Growth Fund 51 75 101 174
Special Growth Fund 51 75 101 174
International Equity Fund 57 93 131 238
The foregoing tables are intended to assist investors in understanding the
expenses that shareholders bear either directly or indirectly and have been
restated to reflect current fees. In addition, Shareholder Organizations may
charge fees for providing services in connection with their clients' investments
in a Fund's shares.
The example shown above should not be considered a representation of future
investment return or operating expenses. Actual investment return and operating
expenses may be more or less than those shown.
Understanding Expenses
------------------------------------------------------------
Operating a mutual fund involves a variety of expenses for portfolio management,
shareholder statements and reports, and other services. These costs are paid
from a Fund's assets and their effect, except for fees charged directly by a
Shareholder Organization to its customers, are factored into any quoted share
price or return.
FINANCIAL HIGHLIGHTS
The financial highlights for each of the periods presented have been derived
from financial statements which have been audited by Price Waterhouse LLP,
independent accountants, whose report, which appears in the annual report to
shareholders for the fiscal year ended October 31, 1995, is incorporated by
reference into the Statement of Additional Information. Prior to January 9,
1995, the Funds offered only one class of shares to both institutional and
retail investors. On that date, the Funds began offering Institutional Shares to
institutional investors as described in a separate prospectus and Retail Shares
to retail investors as described in this Prospectus. The tables on the following
pages should be read in conjunction with the financial statements and related
notes also incorporated by reference into the Statement of Additional
Information. You may obtain the Statement of Additional Information and the
annual report to shareholders, which contain additional performance information,
free of charge by calling Portico Investor Services or writing to Portico
Investor Services at the address listed on the back cover of this Prospectus.
<TABLE>
<CAPTION>
FINANCIAL
HIGHLIGHTS Income from Investment Operations Less Distributions
--------------------------------- ------------------
Net Asset Net Realized and Dividends
Value, Net Unrealized Total from from Net Distributions
Beginning Investment Gains or (Losses) Investment Investment from Total
of Period Income on Securities Operations Income Capital Gains Distributions
--------- ------ ------------- ---------- ------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCED
Mar. 30, 1992<F22> through
Oct. 31, 1992 $20.00 $ 0.28 $ 0.44 $ 0.72 $ (0.23) $ - $(0.23)
Year Ended 1993 20.49 0.47 2.27 2.74 (0.47) - (0.47)
Year Ended 1994 22.76 0.44 (0.66) (0.22) (0.44) - (0.44)
Year Ended 1995 22.10 0.49 3.77 4.26 (0.47) - (0.47)
GROWTH AND INCOME
Dec. 29, 1989<F22> through
Oct. 31, 1990 20.00 0.69 (2.05) (1.36) (0.65) - (0.65)
Year Ended 1991 17.99 0.79 3.75 4.54 (0.81) - (0.81)
Year Ended 1992 21.72 0.69 0.56 1.25 (0.70) - (0.70)
Year Ended 1993<F24> 22.27 0.56 1.63 2.19 (0.57) (0.19) (0.76)
Year Ended 1994 23.70 0.43 (0.03) (0.40) (0.42) (0.59) (1.01)
Year Ended 1995 23.09 0.37 5.14 5.51 (0.38) (0.60) (0.98)
EQUITY INDEX
Dec. 29, 1989<F22> through
Oct. 31, 1990 25.00 0.59 (3.41) (2.82) (0.55) - (0.55)
Year Ended 1991 21.63 0.73 6.31 7.04 (0.74) (0.06) (0.80)
Year Ended 1992<F23> 27.87 0.73 1.86 2.59 (0.73) (0.01) (0.74)
Year Ended 1993 29.72 0.75 3.32 4.07 (0.75) - (0.75)
Year Ended 1994 33.04 0.77 0.35 1.12 (0.75) - (0.75)
Year Ended 1995 33.41 0.70 7.70 8.40 (0.68) (0.06) (0.74)
MIDCORE GROWTH
Dec. 29, 1992<F22> through
Oct. 31, 1993 20.09 0.09 1.32 1.41 (0.10) - (0.10)
Year Ended 1994 21.40 0.06 0.06 0.12 (0.05) - (0.05)
Year Ended 1995 21.47 (0.02) 4.16 4.14 (0.03) - (0.03)
SPECIAL GROWTH
Dec. 28, 1989<F22> through
Oct. 31, 1990 20.00 0.22 (2.30) (2.08) (0.20) - (0.20)
Year Ended 1991 17.72 0.27 10.34 10.61 (0.28) - (0.28)
Year Ended 1992<F23> 28.05 0.17 2.18 2.35 (0.18) (1.72) (1.90)
Year Ended 1993 28.50 0.07 4.47 4.54 (0.08) (0.62) (0.70)
Year Ended 1994 32.34 0.04 0.85 0.89 (0.04) - (0.04)
Year Ended 1995 33.19 (0.07) 8.49 8.42 - (0.21) (0.21)
INTERNATIONAL EQUITY
Apr. 28, 1994<F22> through
Oct. 31, 1994 20.00 0.04 (0.05) (0.01) - - -
Year Ended 1995 19.99 0.08 (0.87) (0.79) (0.04) (0.01) (0.05)
</TABLE>
<TABLE>
<CAPTION>
Less Distributions (con't) Supplemental Data and Ratios
-------------------------- ----------------------------
Ratio
of Net
Net Asset Net Assets, Ratio of Net Investment
Value, End of Expenses to Income to Portfolio
End Total Period Average Net Average Net Turnover
of Period Return (000s) Assets Assets Rate
--------- ------- ------ ------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
BALANCED
Mar. 30, 1992<F22> through
Oct. 31, 1992 $20.49 3.72% $45,653 0.75%<F28> 2.48%<F28> 29.04%
Year Ended 1993 22.76 13.49% 82,099 0.75%<F28> 2.24%<F28> 71.60%
Year Ended 1994 22.10 (0.93%) 94,657 0.75%<F28> 2.03%<F28> 59.77%
Year Ended 1995 25.89 19.55% 21,832 0.94%<F28> 2.05%<F28> 61.87%
GROWTH AND INCOME
Dec. 29, 1989<F22> through
Oct. 31, 1990 17.99 (6.96%) 65,741 0.74%<F29> 4.39%<F29> 49.85%
Year Ended 1991 21.72 25.63% 103,414 0.75%<F29> 3.93%<F29> 28.05%
Year Ended 1992 22.27 5.82% 135,713 0.75%<F29> 3.16%<F29> 31.25%
Year Ended 1993<F24> 23.70 9.93% 160,704 0.88%<F29> 2.44%<F29> 86.24%
Year Ended 1994 23.09 1.84% 164,053 0.90%<F29> 1.89%<F29> 56.85%
Year Ended 1995 27.62 24.75% 42,424 1.09%<F29> 1.51%<F29> 47.85%
EQUITY INDEX
Dec. 29, 1989<F22> through
Oct. 31, 1990 21.63 (11.46%) 35,569 0.49%<F30> 3.01%<F30> 9.09%
Year Ended 1991 27.87 32.90% 51,481 0.50%<F30> 2.82%<F30> 1.38%
Year Ended 1992<F23> 29.72 9.36% 81,070 0.50%<F30> 2.48%<F30> 5.50%
Year Ended 1993 33.04 13.79% 83,820 0.50%<F30> 2.32%<F30> 13.78%
Year Ended 1994 33.41 3.51% 107,563 0.50%<F30> 2.38%<F30> 13.28%
Year Ended 1995 41.07 25.79% 18,663 0.66%<F30> 2.14%<F30> 4.61%
MIDCORE GROWTH
Dec. 29, 1992<F22> through
Oct. 31, 1993 21.40 7.53% 84,467 0.89%<F31> 0.57%<F31> 46.29%
Year Ended 1994 21.47 0.56% 113,197 0.88%<F31> 0.30%<F31> 33.24%
Year Ended 1995 25.58 19.31% 10,105 1.09%<F31> (0.06%)<F31> 49.84%
SPECIAL GROWTH
Dec. 28, 1989<F22> through
Oct. 31, 1990 17.72 (10.47%) 39,179 0.74%<F32> 1.41%<F32> 41.79%
Year Ended 1991 28.05 60.23% 96,017 0.75%<F32> 1.10%<F32> 48.39%
Year Ended 1992<F23> 28.50 8.86% 205,207 0.76%<F32> 0.65%<F32> 31.94%
Year Ended 1993 32.34 16.15% 347,130 0.88%<F32> 0.24%<F32> 58.80%
Year Ended 1994 33.19 2.77% 395,584 0.89%<F32> 0.13%<F32> 69.74%
Year Ended 1995 41.40 25.56% 87,269 1.09%<F32> (0.19%)<F32> 79.25%
INTERNATIONAL EQUITY
Apr. 28, 1994<F22> through
Oct. 31, 1994 19.99 (0.05%) 23,756 1.49%<F33> 0.44%<F33> 6.55%
Year Ended 1995 19.15 (3.95%) 1,633 1.70%<F33> 0.46%<F33> 15.12%
<FN>
<F22>Commencement of operations.
<F23>Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F24>Effective June 17, 1993, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F25>Not annualized for the period ended October 31, 1990 for the Growth and Income, Equity Index and Special Growth Funds, for
the period ended October 31, 1992 for the Balanced Fund, for the period ended October 31, 1993 for the MidCore Growth Fund, and
for the period ended October 31, 1994 for the International Equity Fund.
<F26>The total return calculations for the Funds do not reflect the maximum sales charge of 4.00%.
<F27>Annualized for the period ended October 31, 1990 for the Growth and Income, Equity Index and Special Growth Funds, for the
period ended October 31, 1992 for the Balanced Fund, for the period ended October 31, 1993 for the MidCore Growth Fund, and for
the period ended October 31, 1994 for the International Equity Fund.
<F28>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
and the period ended October 31, 1992 would have been 1.25%, 1.05%, 1.12%, and 1.13%, respectively; and ratios of net investment
income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, and the period ended October 31, 1992 would
have been 1.74%, 1.73%, 1.87%, and 2.10%, respectively.
<F29>Without fees waived, ratios of net expenses to average net assets for
the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, and the period ended October 31, 1990 would have been 1.20%,
1.01%, 1.02%, 1.03%, 1.04%, and 1.06%, respectively; and ratios of net investment income to average net assets for the fiscal
years ended October 31, 1995, 1994, 1993, 1992, 1991, and the period ended October 31, 1990 would have been 1.40%, 1.78%, 2.30%,
2.88%, 3.64%, and 4.07%, respectively.
<F30>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991, and the period ended October 31, 1990 would have been 0.73%, 0.57%, 0.56%, 0.60%, 0.63%, and 0.70%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, and the
period ended October 31, 1990 would have been 2.07%, 2.31%, 2.26%, 2.39%, 2.69%, and 2.80%, respectively.
<F31>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, and the
period ended October 31, 1993 would have been 1.21%, 1.00%, and 1.08%, respectively; and ratios of net investment income to
average net assets for the fiscal years ended October 31, 1995, 1994, and the period ended October 31, 1993 would have been
(0.18)%, 0.19%, and 0.39%, respectively.
<F32>Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991, and the period ended October 31, 1990 would have been 1.17%, 0.98%, 1.01%, 1.02%, 1.06%, and 1.13%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, and the
period ended October 31, 1990 would have been (0.27)%, 0.04%, 0.11%, 0.39%, 0.79%, and 1.02%, respectively.
<F33>Without fees waived, ratios of net expenses to average net assets for the fiscal year ended October 31, 1995 and the period
ended October 31, 1994 would have been 2.85% and 2.85%, respectively; and ratios of net investment income to average net assets
for the fiscal year ended October 31, 1995 and the period ended October 31, 1994 would have been (0.69)% and (0.92)%,
respectively.
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
The descriptions that follow are designed to help you choose
the Fund that best fits your investment objectives. You may
want to pursue more than one objective by investing in more
than one of the Portico Funds. You are reminded that there are
risks in an investment in the Funds and there can be no
assurance that each Fund's investment objective will be
attained. An investor should not consider an investment in any
individual Fund to be a complete investment program.
Balanced Fund Investment Objective. The investment objective of the Balanced
Fund is to achieve a balance of capital appreciation and
current income with relatively low volatility of capital. The
Fund seeks to achieve its objective through a policy of
diversified investments in fixed-income and equity securities.
Equity securities will be selected on the basis of their
potential for capital appreciation. Current income will not be
a significant consideration in the selection of equity
securities. Fixed-income securities will be selected in an
effort to provide an annual rate of total return with respect
to the fixed-income portion of the Fund's portfolio that is
similar to the annual rate of total return of the Lehman
Brothers Government/Corporate Bond Index on a consistent basis.
In investing in fixed-income securities, the Adviser will use
specialized quantitative investment techniques. (For a
description of the Lehman Brothers Government/Corporate Bond
Index, see "Description of Bond Index" below. For a description
of the specialized quantitative investment techniques see
"Investment Techniques" below).
The Fund's policy is to invest at least 25% of the value of its
total assets in fixed-income senior securities and at least 50%
and no more than 65% in equity securities at all times. The
actual percentage of assets invested in fixedincome and equity
securities will vary from time to time, depending on the
judgment of the Adviser as to the general market and economic
conditions, trends and yields, interest rates and fiscal and
monetary developments.
Investment Techniques. Most equity securities held by the Fund
will be publicly traded common stocks of companies incorporated
in the United States, although up to 25% of its total assets
may be invested, either directly or through investments in
sponsored American Depository Receipts, in the securities of
foreign issuers. From time to time, the Fund may also acquire
preferred stocks. In addition, the Fund may invest in domestic
securities convertible into common stock, such as certain bonds
and preferred stocks, and may invest up to 5% of its net assets
in other types of domestic securities having common stock
characteristics, such as rights and warrants to purchase equity
securities.
The Fund generally invests in companies that the Adviser
considers to be well managed and to have "attractive
fundamental financial characteristics." "Attractive fundamental
financial characteristics" include, among other factors, low
debt, return on equity substantially above the market average
and consistent revenue and earnings per share growth over the
prior three to five years. Companies in which the Fund may make
equity investments generally will have stock market
capitalizations between $100 million and $10 billion. The
median stock market capitalization is generally anticipated to
be between $1 billion and $3 billion and the weighted average
stock market capitalization is generally anticipated to be
between $1.5 billion and $5 billion. Stock market
capitalizations are calculated by multiplying the total number
of common shares outstanding by the market price per share. The
Fund may also invest from time to time a portion of its assets,
not to exceed 20% at the time of purchase, in companies with
larger or smaller market capitalizations.
In constructing and maintaining the fixed-income portion of the
portfolio, the Adviser attempts to achieve an annual rate of
total return, before Fund expenses, comparable to that of the
Lehman Brothers Government/Corporate Bond Index. Specialized
structured investment management techniques are used in
conjunction with traditional methods of investment management
that rely on economic, financial and market analysis to select
portfolio investments.
Fixed-income securities purchased by the Fund may include a
broad range of corporate, government, government agency,
stripped government, asset-backed and mortgage-backed
obligations. The Fund may purchase fixed-income securities
without regard to any maturity limitation.
Debt obligations acquired by the Fund will be "investment
grade" at the time of purchase, that is, obligations rated
within the four highest rating categories by Standard and
Poor's Rating Group ("S&P") (AAA, AA, A and BBB), Moody's
Investors Service, Inc. ("Moody's") (Aaa, Aa, A and Baa) or
other nationally recognized rating agencies or obligations that
are unrated but determined by the Adviser to be comparable in
quality to instruments that are so rated. Obligations rated in
the lowest of the top four rating categories are considered to
have speculative characteristics and are subject to greater
credit and market risk than higher rated securities. As a
result, the market value of these securities may be expected to
fluctuate more than those of securities with higher ratings.
Subsequent to its purchase by the Fund, a rated security may
cease to be rated or its rating may be reduced below the
minimum rating required for purchase by the Fund. The Adviser
will consider such an event in determining whether the Fund
should continue to hold the security. The Adviser will sell
promptly any securities that are not rated investment grade by
at least one nationally recognized rating agency and that
exceed 5% of the Fund's net assets.
Description of Bond Index. The Lehman Brothers
Government/Corporate Bond Index is a market value weighted
total return index measuring both the principal price change of
and income provided by the underlying universe of securities
underlying the index. The Lehman Brothers Government/Corporate
Bond Index is intended to measure performance of its fixed-rate
debt market over given time intervals. The index is comprised
of U.S. Treasury, U.S. Government agency, dollar-denominated
debt of certain foreign, sovereign or supranational entities
and investment grade corporate debt obligations of domestic
entities satisfying the following criteria as defined by Lehman
Brothers:
- Fixed-rate debt (as opposed to variable-rate debt);
- From one to thirty years or more remaining until maturity; -
Minimum outstanding par value of $100 million; and
- Minimum quality rating of Baa by Moody's, or BBB by S&P, or
BBB by Fitch Investors Service, Inc. ("Fitch").
As of October 31, 1995, 4,615 issues were included in the
Lehman Brothers Government/Corporate Bond Index representing
$3.16 trillion in market value.
The Lehman Brothers Government/Corporate Bond Index is a
trademark of Lehman Brothers. The Funds, their Adviser and the
Co-Administrators are not affiliated in any way with Lehman
Brothers. See "Management of the Funds." Inclusion of a
security in the bond index in no way implies an opinion by
Lehman Brothers as to its attractiveness or appropriateness as
an investment. Lehman Brothers' publication of the bond index
is not made in connection with any sale or offer for sale of
securities or any solicitations of orders for the purchase of
securities.
Growth and Income Fund
Investment Objective. The investment objective of the Growth
and Income Fund is to seek both reasonable income and longterm
capital appreciation. In seeking to obtain "reasonable income,"
the Fund will emphasize income-producing securities.
Common stocks purchased by the Fund will be selected primarily
from a universe of domestic companies that have established
dividend-paying histories. During normal market conditions at
least 50% of the Fund's net assets will be invested in income-
producing equity securities, and each company initially
selected for inclusion in the Fund's portfolio must pay a
current dividend. In addition to dividend considerations, the
Fund generally invests in medium- to large-sized companies with
stock market capitalizations over $750 million that the Adviser
considers to be well managed and to have attractive fundamental
financial characteristics. See "Balanced Fund" for a
description of "attractive fundamental financial
characteristics." The Fund may also invest a portion of its
assets, not to exceed 20% at the time of purchase, in companies
with smaller market capitalizations. The median stock market
capitalization is generally expected to be between $2 billion
and $3 billion and the weighted average stock market
capitalization between $9 billion and $12 billion.
In addition to investments in common stocks, the Fund may
invest in bonds, notes, debentures and preferred stocks
convertible into common stocks but only to the extent that
those securities also provide a current interest or dividend
payment stream. Although convertible securities frequently have
speculative characteristics and may be acquired by the Fund
without regard to minimum quality ratings, the Fund intends to
invest less than 5% of its net assets in noninvestment grade
securities. Up to 25% of the Fund's total assets may be
invested, either directly or through sponsored American
Depository Receipts, in the securities of foreign issuers. The
Fund may also purchase put and call options, sell covered call
options and enter into transactions involving futures contracts
and options on futures as described later in this Prospectus.
The Fund may, to the extent consistent with its investment
objective, purchase nonconvertible debt securities. Such debt
obligations acquired by the Fund will be investment grade, as
described above under "Balanced Fund," at the time of purchase
or unrated obligations deemed by the Adviser to be comparable
in quality to instruments so rated.
Equity Index Fund
Investment Objective. The investment objective of the Equity
Index Fund is to seek returns, before Fund expenses, comparable
to the price and yield performance of publicly traded common
stocks in the aggregate, as represented by the S&P 500 Index.
Under normal market conditions the Fund intends to invest
substantially all of its total assets in securities included in
the S&P 500 Index.
In seeking to attain its investment objective, the Fund uses
the S&P 500 Index as the standard performance comparison
because it represents approximately two-thirds of the total
market value of all domestic common stocks and is well known to
investors. The S&P 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock
Exchange. Standard & Poor's selects the stocks included in the
S&P 500 Index on a statistical basis, and the S&P 500 Index is
heavily weighted toward stocks with large market
capitalizations. The S&P 500 Index and the Equity Index Fund
currently have a median stock market capitalization of $4.7
billion and a weighted average stock market capitalization of
$21 billion. Standard & Poor's makes no representation or
warranty, implied or express, to the purchasers of Fund shares,
or any member of the public, regarding the advisability of
investing in index funds or the ability of the S&P 500 Index to
track general stock market performance.
Portfolio Management. Traditional methods of fund investment
management typically involve relatively frequent changes in a
portfolio of securities on the basis of economic, financial and
market analysis. Index funds such as the Fund are not managed
in this manner, however. Instead, with the aid of a computer
program, the Adviser purchases and sells securities for the
Fund in an attempt to produce investment results that
substantially duplicate the performance of the common stocks of
the issuers represented in the S&P 500 Index, taking into
account redemptions, sales of additional Fund shares and other
adjustments as described below.
The Fund does not expect to hold at any particular time all of
the stocks included in the S&P 500 Index. The Adviser believes,
however, that through the application of a capitalization
weighting and sector balancing technique that it will be able
to construct and maintain the Fund's investment portfolio so
that it reasonably tracks the performance of the S&P 500 Index.
The Adviser believes that the Fund will, under normal
conditions, hold securities of approximately 350 to 450 issuers
included in the S&P 500 Index, and that the quarterly
performance of the Fund and the S&P 500 Index will be within +
0.3% under normal market conditions. Redemptions of a
substantial number of shares of the Fund could, however, reduce
the number of issuers represented in the Fund's investment
portfolio, which could, in turn, adversely affect the accuracy
with which the Fund tracks the performance of the S&P 500
Index. In the event the performance of the Fund is not
comparable to the performance of the S&P 500 Index, the Board
of Directors will examine the reasons for the deviation and the
availability of corrective measures. These measures would
include additional fee waivers by the Adviser and Co-
Administrators or adjustments to the Adviser's portfolio
management practices. If substantial deviation in the Fund's
performance continued for extended periods, it is expected that
the Board of Directors would consider possible changes to the
Fund's investment objective.
If an issuer drops in ranking, or is eliminated entirely from
the S&P 500 Index, the Adviser may be required to sell some or
all of the common stock of such issuer then held by the Fund.
Sales of portfolio securities may be made at times when, if the
Adviser were not required to effect purchases and sales of
portfolio securities in accordance with the S&P 500 Index, such
securities might not be sold. Such sales may result in lower
prices for such securities than may have been realized or in
losses that may not have been incurred if the Adviser were not
required to effect the purchases and sales. "Adverse events"
will not necessarily be the basis for the disposition of
portfolio securities, unless an event causes the issuer to be
eliminated entirely from the S&P 500 Index. "Adverse events"
include the failure of an issuer to declare or pay dividends,
the institution against an issuer of materially adverse legal
proceedings, the existence or threat of defaults materially and
adversely affecting an issuer's future declaration and payment
of dividends, or the existence of other materially adverse
credit factors. However, although the Adviser does not intend
to screen securities for investment by the Fund by traditional
methods of financial and market analysis, the Adviser will
monitor the Fund's investment with a view towards removing
stocks of companies which may impair for any reason the Fund's
ability to achieve its investment objective.
The Fund invests primarily in the common stocks that comprise
the S&P 500 Index in accordance with their relative
capitalization and sector weightings as described above. It is
possible, however, that the Fund will from time to time
receive, as a part of a "spin-off" or other corporate
reorganization of an issuer included in the S&P 500 Index,
securities that are themselves outside the S&P 500 Index. Such
securities will be disposed of by the Fund in due course
consistent with the Fund's investment objective.
A portion of the Fund's assets may be invested in options and
futures contracts as described below under "Other Investment
Information."
MidCore Growth Fund
Investment Objective. The investment objective of the MidCore
Growth Fund is capital appreciation. The Fund seeks to achieve
its objective through investment in securities of medium- to
large-sized companies, selected on the basis of their potential
for price appreciation. Current income is not a significant
consideration in the selection of securities for this Fund.
The Fund's policy is to invest at least 50% of the value of its
total assets in equity securities under normal market
conditions. Most equity securities held by the Fund will be
publicly traded common stocks of companies incorporated in the
United States, although up to 25% of its total assets may be
invested, either directly or through investments in American
Depository Receipts, in the securities of foreign issuers. From
time to time, the Fund may also acquire preferred stocks and
obligations, such as bonds, debentures and notes, that in the
opinion of the Adviser present opportunities for capital
appreciation. In addition, the Fund may invest in securities
convertible into common stock, such as certain bonds and
preferred stocks.
The Fund generally invests in medium- to large-sized companies,
with stock market capitalizations over $750 million, that the
Adviser considers to be well managed and to have attractive
fundamental financial characteristics. See "Balanced Fund"
above for description of "attractive fundamental financial
characteristics." The Adviser intends to focus its selection of
securities on medium-sized companies and anticipates the Fund's
median capitalization would be between $2 billion and $2.8
billion; compared with the S&P 500 Index which currently has a
median capitalization of $4.7 billion. The Fund may also invest
from time to time a portion of its assets, not to exceed 20% at
the time of purchase, in companies with market capitalizations
below $750 million.
The Fund may, to the extent consistent with its investment
objective, purchase nonconvertible debt securities. Such debt
obligations acquired by the Fund will be investment grade, as
described above under "Balanced Fund," at the time of purchase
or unrated obligations deemed by the Adviser to be comparable
in quality to instruments so rated.
Special Growth Fund
Investment Objective. The investment objective of the Special
Growth Fund is capital appreciation. The Fund seeks to achieve
its objective through investment in securities of small- to
medium-sized companies. Current income is not a significant
consideration in the selection of securities for this Fund.
Securities are selected for the Fund by the Adviser on the
basis of their potential for price appreciation.
The Fund's policy is to invest at least 50% of the value of its
total assets in equity securities under normal market
conditions. Most equity securities held by the Fund will be
publicly traded common stocks of companies incorporated in the
United States, although up to 25% of its total assets may be
invested, either directly or through investments in American
Depository Receipts, in the securities of foreign issuers. From
time to time, the Fund may also acquire preferred stocks and
obligations, such as bonds, debentures and notes, that in the
opinion of the Adviser present opportunities for capital
appreciation. In addition, the Fund may invest in securities
convertible into common stock, such as certain bonds and
preferred stocks, and may invest up to 5% of its net assets in
other types of securities having common stock characteristics,
such as rights and warrants to purchase equity securities.
The Fund generally invests in small- to medium-sized companies
that the Adviser considers to be well managed and to have
attractive fundamental financial characteristics. See "Balanced
Fund" above for a description of "attractive fundamental
financial characteristics." The Adviser believes greater
potential for price appreciation exists among smallto medium-
sized companies since they tend to be less widely followed by
other securities analysts and thus may be more likely to be
undervalued by the market. Companies with stock market
capitalizations between $50 million and $2 billion are
considered by the Adviser to be small- to medium-sized. The
Fund generally anticipates the median stock market
capitalization to be between $600 million to $900 million and
the weighted average to be between $1 billion and $1.2 billion.
The Fund may also invest from time to time a portion of its
assets, not to exceed 20% at the time of purchase, in companies
with larger or smaller market capitalizations.
Securities of unseasoned companies, that is, companies with
less than three years' continuous operation, which present
risks considerably greater than do common
stocks of more established companies, may be
acquired from time to time by the Fund when the Adviser
believes such investments offer possibilities of attractive
capital appreciation. However, the Fund will not invest more
than 5% of the value of its total assets in the securities of
unseasoned companies. In addition, the Adviser may, to the
extent consistent with the Fund's investment objective of
capital appreciation, acquire for the Fund bonds and other debt
securities. Debt obligations acquired by the Fund will be
investment grade, as described above under "Balanced Fund," at
the time of purchase or unrated obligations deemed by the
Adviser to be comparable in quality to instruments so rated.
In view of the specialized nature of its investment activities,
investment in the Fund's shares may be suitable only for those
investors who are prepared to invest without concern for
current income and are financially able to assume risk in
search of long-term capital gain.
International Equity Fund
Investment Objective. The investment objective of the
International Equity Fund is to seek capital appreciation
through investment in foreign equity securities of small-to
medium-sized companies. The Fund pursues its objective by
investing under normal market conditions substantially all (and
in any event at least 65%) of the value of its total assets in
foreign common stocks and equity related securities (including
convertible securities and warrants) of small to medium market
capitalization (generally between $250 million and $5 billion)
issuers included in the gross domestic product weighted Morgan
Stanley Capital International Europe, Australia and Far East
Index (the "GDP EAFE Index" or "Index"). The Fund will not
follow traditional methods of fund management but rather
investments will be selected through a structured selection
process based on the GDP EAFE Index and its country weightings.
The Fund will attempt to duplicate substantially the country
weightings of the GDP EAFE Index and, within these parameters,
invest primarily in companies included in the Index with small
to medium market capitalizations. The Adviser believes that
companies with small to medium market capitalizations present
greater longterm growth potential than companies with larger
market capitalizations. Although the Fund will follow this
structured selection process based on the GDP EAFE Index, its
country weightings may differ from the actual weightings of the
Index, and its performance will not necessarily be comparable
to the performance of the Index because of the Fund's selected
market capitalization range. It is not the Fund's objective to
track the performance or replicate the holdings of the entire
Index.
GDP EAFE Index. The GDP EAFE Index is composed of a sample of
companies representative of the market structure of 20 European
and Pacific Basin countries. The objective of the GDP EAFE
Index is to represent an unmanaged portfolio containing a broad
selection of companies listed within each local market included
in the Index. The GDP EAFE Index seeks to replicate the
industry composition of each local market, and a representative
sampling of large, medium and small capitalization companies
from each local market, taking into account the stocks'
liquidity. The securities included in the Index and the
industry weightings within each local market are changed
periodically. The country weightings, which are based on each
country's relative gross domestic product, are adjusted
periodically throughout the year. As of October 31, 1995, the
total GDP EAFE Index included 1,107 companies in 20 European
and Pacific Basin countries. Approximately 781 companies (out
of 1,107 in the GDP EAFE Index) or about 27% of the dollar
amount of the total Index fall in the Fund's selected market
capitalization range. The following table lists the countries
included in the GDP EAFE Index and their weightings in the
Index as of October 31, 1995.
GDP EAFE INDEX
COMPOSITION
EAFE
% OF TOTAL MARKET
MARKET CAPITALIZATION<F34>
------ ------------------
Austria 0.3%
Belgium 1.2
Denmark 0.8
Finland 0.7
France 6.5
Germany 6.9
Ireland 0.3
Italy 2.3
Netherlands 4.0
Norway 0.5
Spain 1.8
Sweden 2.1
Switzerland 6.1
United Kingdom 17.1
----
EUROPE 50.6%
Australia 2.7%
Hong Kong 3.2
Japan 39.8
Malaysia 2.2
New Zealand 0.4
Singapore 1.1
----
PACIFIC 49.4%
TOTAL 100.0%
<F34> The weightings are as of October 31, 1995 and will fluctuate. Because the
Fund does not expect to hold at any particular time all of the stocks included
in the Index or, depending on the asset size of the Fund, stocks of companies
located in all of the countries comprising the Index, the information should be
considered only as an approximation of the Fund's intended exposure to the
countries indicated.
The Adviser and Sub-Adviser utilize the "gross domestic product weighted" Index
in order to reduce the relative exposure to any single country (namely, Japan)
which results from an Index that is capitalization weighted. In reducing the
relative exposure to Japan, the weighting process increases the representation
of certain other countries within the Index. Notwithstanding the GDP weighting,
as of October 31, 1995, securities from Japan, Germany and France represented on
a GDP weighted basis an aggregate of approximately 62% of the Index. Therefore,
stocks from these countries will represent a correspondingly large component of
the Fund's total assets. Such a large investment in these markets subjects the
Fund to relatively greater exposure to the political and economic circumstances
of these countries. Based upon the current country weightings of the Index, the
Fund intends to invest more than 25% of its total assets in Japan. To the extent
the Fund's assets are concentrated in the securities of Japanese issuers, the
Fund will be subject to a greater extent to the risks of adverse social,
political or economic events which occur in Japan. Specifically, investments in
the Japanese stock market may entail a higher degree of risk than investments in
other markets. By fundamental measures of corporate valuation, such as its high
price-earnings ratios and low dividend yields, the Japanese markets as a whole
may presently appear expensive relative to other world stock markets (i.e., the
prices of Japanese stocks may presently be relatively high). In addition, the
prices of securities traded on the Japanese markets may be more volatile than
many other markets.
The "GDP EAFE Index" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the Fund.
Inclusion of a security in the GDP EAFE Index in no way implies an opinion by
Morgan Stanley Capital International as to its attractiveness or appropriateness
as an investment. The publication of the GDP EAFE Index is not made in
connection with any sale or offer for sale of securities or any solicitations of
orders for the purchase of securities, and Morgan Stanley Capital International
has no liability, contingent or otherwise, to any person for any loss arising
from results obtained from the use of the Index data.
Portfolio Management. Traditional methods of fund investment management
typically involve changes in a portfolio of securities based on economic,
financial and market analysis. The Fund is not managed in this manner. The
Adviser and SubAdviser will use a structured selection process described below
to select securities for the Fund from those included in the GDP EAFE Index. The
structured selection process utilized by the Fund will attempt to duplicate
substantially the GDP EAFE Index country weightings. When purchasing securities
for the Fund's portfolio, the relative market capitalization weightings of the
equity securities included in each of the local markets of the GDP EAFE Index
will be considered. The weighted capitalization of an issuer is determined by
dividing the issuer's market capitalization by the total market capitalizations
of all issuers included in the local market. Stocks in the GDP EAFE Index will
be selected within each market with market capitalizations at the time of
acquisition of between $250 million and $5 billion. The Fund may retain up to
20% of its total assets directly in stocks of companies whose market
capitalizations either rise above $5 billion or fall below $250 million after
acquisition but are still included in the GDP EAFE Index (and may invest up to
an additional 10% of its total assets indirectly in such stocks through the use
of international stock index futures contracts and related options). Companies
with larger market capitalizations that are included in the Index will not be
purchased except indirectly through the investment in international stock index
futures contracts and related options.
Since the Fund bases its stock selection process on the country weightings of
the GDP EAFE Index, the Fund will normally invest in the securities which are
included in the Index. The Fund may, however, acquire a security that at the
time of purchase is not included in the GDP EAFE Index if Morgan Stanley Capital
International has announced that the security will be included at the next
adjustment of the Index. It is anticipated that no more than 5% of the Fund's
assets would be invested in equity securities which, at the time of purchase,
are not included in the GDP EAFE Index. The Fund may also invest up to 15% of
the Fund's total assets in warrants to purchase, and securities convertible
into, securities included in the Index. Up to 15% of its total assets may be
invested in eligible securities that are held in the form of American Depository
Receipts, European Depository Receipts, and Global Depository Receipts. The Fund
may also invest in international stock index futures contracts. See "Other
Investment Information" below.
On a periodic basis, the Adviser and Sub-Adviser, through reports of the
International Monetary Fund, will monitor developments relating to the gross
domestic product of countries within the Index. The Fund will be periodically
rebalanced to reflect these changes in country weightings through the investment
of new money received by the Fund. In June of each year, Morgan Stanley Capital
International revises all of the country weightings of the Index. At that time,
the Fund, through the investment of new money or through the reallocation of
current portfolio holdings, will rebalance the portfolio in light of the
adjustments made by Morgan Stanley Capital International to the Indexis country
weightings.
Although the Fund will attempt to duplicate substantially the country weightings
of the GDP EAFE Index, the Fund will not hold at any particular time all of the
stocks included in the Index because of the Fund's selected market
capitalization range. The volatility of the Fund may, therefore, be more or less
than the Index because of the Fund's selected market capitalization range.
Approximately 781 securities (out of 1,107 in the GDP EAFE Index) fall in the
Fund's selected market capitalization range representing 27% of the dollar
amount of the total index. The volatility of the Fund may be more or less than
the Index depending on the securities held by the Fund. Depending upon the total
asset size of the Fund, the number of securities held by the Fund is expected to
vary from 450 to 750 and to represent 16 to 20 countries of the GDP EAFE Index.
Redemptions of a substantial number of shares of the Fund could, however, reduce
the number of issuers represented in the Fund's investment portfolio, which
could, in turn, adversely affect the accuracy with which the Fund tracks the
country and industry allocation of the GDP EAFE Index.
To maintain liquidity in an amount to meet anticipated
redemption requests or for day to day operating purposes, a
portion of the Fund's assets (normally not exceeding 5% of
total assets) may be invested in money market instruments and
other short-term obligations. See "Money Market Instruments."
In addition, to the extent the Fund experiences cash inflows
through the issuance of new shares or the sale of portfolio
securities, or at times when desirable equity securities which
are consistent with the Fund's investment objective are
unavailable in sufficient quantities, the Fund may invest in
short-term obligations for a limited time. It is the policy of
the Fund to be as fully invested as practicable in equity and
equity related securities (and stock index futures) at all
times. While this policy permits the Fund to take full
advantage of a period of rising international stock prices, it
limits the Fund from investing in short-term debt securities as
a defensive investment posture during falling markets (except
as described above). Accordingly, shareholders bear the risk of
general declines in stock prices, and bear any risk that the
Fund's exposure to such declines will be lessened by investment
in short-term debt securities.
Because of the Fund's investment policies,
securities may be purchased, retained, and sold by
the Fund when such transactions would not be consistent with
traditional investment criteria. If an issuer drops in ranking,
or is eliminated entirely from the GDP EAFE Index, the Adviser
and Sub-Adviser will be required to sell some or all of the
common stock of such issuer then held by the Fund. Sales of
portfolio securities may be made at times when such securities
might otherwise have not been sold, if the Adviser and Sub-
Adviser were not required to effect purchases and sales of
portfolio securities in accordance with the GDP EAFE Index.
Such sales may result in lower prices for such securities than
may have been realized or in losses that may not have been
incurred if the Fund were not required to effect the purchases
and sales. Adverse events will not necessarily be the basis for
the disposition of portfolio securities, unless an event causes
the issuer to be eliminated entirely from the GDP EAFE Index.
See "Equity Index Fund" for a description of "adverse events."
However, although it is not intended that securities will be
screened for investment by the Fund by traditional methods of
financial and market analysis, the Fund's investments will be
monitored with a view towards removing stocks of companies
which may impair for any reason the Fund's ability to achieve
its investment policies.
Because of the risks associated with international common stock
investments, the Fund is intended to be a long-term investment
vehicle and is not designed to provide investors with a means
of speculating on short-term stock market movements.
OTHER INVESTMENT INFORMATION
Money Market Instruments. The Funds may hold short-term U.S.
Government obligations, high quality money market instruments
(i.e., rated A-1 or better by S&P or Prime-1 by Moody's or
unrated instruments deemed by the Adviser to be of comparable
quality), repurchase agreements, bank obligations and cash,
pending investment, to meet anticipated redemption requests,
if, in the opinion of the Adviser, other suitable securities
are unavailable. The foregoing investments may include among
other things commercial paper, variable amount master demand
notes and corporate bonds with remaining maturities of thirteen
months or less and may be in such proportions as, in the
opinion of the Adviser, existing circumstances may warrant.
Variable amount master demand notes are unsecured instruments
that permit the indebtedness thereunder to vary and provide for
periodic adjustments in the interest rate. Although the notes
are not normally traded and there may be no secondary market in
the notes, the Funds may demand payment of the principal of the
instrument at any time. The notes are not typically rated by
credit rating agencies, but issuers of variable amount master
demand notes must satisfy the same criteria as set forth above
for issuers of commercial paper. If an issuer of a variable
amount master demand note defaulted on its payment obligation,
the Funds might be unable to dispose of the note because of the
absence of a secondary market and might, for this or other
reasons, suffer a loss to the extent of the default. The Funds
invest in variable amount master demand notes only when the
Adviser deems the investment to involve minimal credit risk.
The Funds may also invest in obligations of foreign banks and
foreign branches of U.S. banks and may invest their cash
balances in securities issued by other investment companies
which invest in high quality, short-term debt securities. None
of the Funds will invest in any other Portico Fund. In addition
to the advisory fees and other expenses the Fund bears directly
in connection with its own operations, as a shareholder of
another investment company, the Fund would bear its pro rata
portion of the other investment company's advisory fees and
other expenses, and such fees and other expenses will be borne
indirectly by the Fund's shareholders.
Government Obligations. To the extent consistent with its
objective, the Balanced Fund may invest in a variety of U.S.
Treasury obligations consisting of bills, notes and bonds,
which principally differ only in their interest rates,
maturities and time of issuance. This Fund may also invest in
other securities issued or guaranteed by the U.S. Government,
its agencies and instrumentalities. Obligations of certain
agencies and instrumentalities, such as the Government National
Mortgage Association ("GNMA"), are supported by the full faith
and credit of the U.S. Treasury; others, such as those of the
Export-Import Bank of the United States, are supported by the
right of the issuer to borrow from the Treasury; others, such
as those of the Federal National Mortgage Association ("FNMA"),
are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; still others,
such as those of the Student Loan Marketing Association, are
supported only by the credit of the instrumentalities. No
assurance can be given that the U.S. Government would provide
financial support to its agencies or instrumentalities if it is
not obligated to do so by law. There is no assurance that these
commitments will be undertaken or complied with in the future.
Mortgage-Backed and Asset-Backed Securities. The Balanced Fund
may purchase mortgage-backed and asset-backed securities (i.e.,
securities backed by credit card receivables, automobile loans
or other assets). The average life of these securities varies
with the maturities of the underlying instruments which, in the
case of mortgages, have maximum maturities of thirty years. The
average life of a mortgagebacked instrument may be
substantially less than the original maturity of the mortgages
underlying the securities as the result of scheduled principal
payments and mortgage prepayments. The rate of such mortgage
prepayments, and hence the life of the certificates, will be a
function of current market rates and current conditions in the
relevant housing markets. In periods of falling interest rates,
the rate of mortgage prepayments tends to increase. During such
periods, the reinvestment of prepayment proceeds by a Fund will
generally be at lower rates than the rates that were carried by
the obligations that have been prepaid. As a result, the
relationship between mortgage prepayments and interest rates
may give some high-yielding mortgage-related securities less
potential for growth in value than non-callable bonds with
comparable maturities. In calculating the average weighted
maturity of the Fund, the maturity of asset-backed securities
will be based on estimates of average life.
Presently there are several types of mortgage-backed securities
which provide the holder with a pro rata interest in the
underlying mortgages, and collateralized mortgage obligations
("CMOs") which provide the holder with a specified interest in
the cash flow of a pool of underlying mortgages or other
mortgage-backed securities. CMOs are issued in multiple
classes, each with a specified fixed or floating interest rate
and a final distribution date. The relative payment rights of
the various CMO classes may be subject to greater volatility
and interest rate risk than other types of mortgage-backed
obligations.
Asset-backed securities may involve certain risks that are not
presented by mortgage-backed securities arising primarily from
the nature of the underlying assets (i.e., credit card and
automobile loan receivables as opposed to real estate
mortgages). For example, credit card receivables are generally
unsecured and may require the repossession of personal property
upon the default of the debtor which may be difficult or
impracticable in some cases.
Non-mortgage asset-backed securities do not have the benefit
of the same security in the collateral as mortgage-backed
securities. Credit card receivables are generally unsecured
and the debtors are entitled to the protection of a number of
state and federal consumer credit laws, many of which have
given debtors the right to reduce the balance due on the
credit cards. Most issuers of automobile receivables permit
the servicers to retain possession of the underlying
obligations. If the servicer were to sell these obligations to
another party, there is the risk that the purchaser would
acquire an interest superior to that of the holders of related
automobile receivables. In addition, because of the large
number of vehicles involved in a typical issuance and
technical requirements under state laws, the trustee for the
holders of the automobile receivables may not have an
effective security interest in all of the obligations backing
such receivables. Therefore, there is a possibility that
payments on the receivables together with recoveries on
repossessed collateral may not, in some cases, be able to
support payments on these securities.
Asset-backed securities may be subject to greater risk of
default during periods of economic downturn than other
instruments. Also, while the secondary market for asset-backed
securities is ordinarily quite liquid, in times of financial
stress the secondary market may not be as liquid as the market
for other types of securities, which could result in the
Fund's experiencing difficulty in valuing or liquidating such
securities.
Restricted Securities. Each Fund will not knowingly invest
more than 10% (except the International Equity Fund which is
limited to 5%), and in all cases will not invest more than
15%, of the value of its respective net assets in securities
that are illiquid at the time of purchase. Repurchase
agreements and time deposits that do not provide for payment
to a Fund within seven days, over-the-counter options, and
securities that are not registered under the Securities Act of
1933 (the "Act") but may be purchased by institutional buyers
under Rule 144A, are subject to these limits (unless such
securities are variable amount master demand notes with
maturities of nine months or less or unless the Board of
Directors or the Adviser, or the Adviser (and Sub-Adviser with
regard to the International Equity Fund), pursuant to
guidelines adopted by the Board of Directors, determines that
a liquid trading market exists).
Borrowings. Each Fund may borrow money to the extent described
below under "Investment Limitations." A Fund would borrow money
to meet redemption requests prior to the settlement of
securities already sold or in the process of being sold by the
Fund. If the securities held by a Fund should decline in value
while borrowings are outstanding, the net asset value of a
Fund's outstanding shares will decline in value by
proportionately more than the decline in value suffered by a
Fund's securities. As a result, a Fund's share price may be
subject to greater fluctuation until the borrowing is paid off.
Reverse repurchase agreements are considered to be borrowings
under the Investment Company Act of 1940 (the "1940 Act"). At
the time a Fund enters into a reverse repurchase agreement (an
agreement under which the Fund sells portfolio securities and
agrees to repurchase them at an agreed-upon date and price), it
will place in a segregated custodial account U.S. Government
securities or other liquid high-grade debt securities having a
value equal to or greater than the repurchase price (including
accrued interest), and will subsequently monitor the account to
insure that such value is maintained. Reverse repurchase
agreements involve the risk that the market value of the
securities sold by the Fund may decline below the price of the
securities it is obligated to repurchase.
When-Issued Purchases and Forward Commitments. Each Fund may
purchase securities on a "when-issued" or delayed delivery
basis and may purchase or sell securities on a "forward
commitment" basis. These transactions, which involve a
commitment by the Fund to purchase or sell particular
securities with payment and delivery taking place at a future
date (perhaps one or two months later), permit the Fund to lock
in a price or yield on a security it owns or intends to
purchase, regardless of future changes in interest rates. The
Fund does not accrue income until the securities delivery
occurs. When-issued and forward commitment transactions involve
the risk, however, that the price or yield obtained in a
transaction (and therefore the value of the security) may be
less favorable than the price or yield (and therefore the value
of the security) available in the market when the securities
delivery takes place. Each Fund's forward commitments and when-
issued purchases are not expected to exceed 25% of the value of
its total assets absent unusual market conditions. The Funds do
not intend to engage in whenissued purchases and forward
commitments for speculative purposes but only in furtherance of
their respective investment objectives.
Foreign Securities. Each Fund, except the Equity Index Fund,
may invest in foreign securities. The Funds' investments in the
securities of foreign issuers may include both securities of
foreign corporations and banks, as well as securities of
foreign governments and their political subdivisions.
Investments in foreign securities, whether made directly or
through American Depository Receipts, involve certain inherent
risks and considerations not typically associated with
investing in U.S. companies, such as political or economic
instability of the issuer or the country of issue, the
difficulty of predicting international trade patterns, changes
in exchange rates of foreign currencies and the possibility of
adverse changes in investment or exchange control regulations.
There may be less publicly available information about a
foreign company than about a U.S. company. Foreign companies
are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to domestic
companies. Further, foreign stock markets are generally not as
developed or efficient as those in the U.S., and in most
foreign markets volume and liquidity are less than in the U.S.
Fixed commissions on foreign stock exchanges are generally
higher than the negotiated commissions on U.S. exchanges, and
there is generally less government supervision and regulation
of foreign stock exchanges, brokers and companies than in the
U.S. With respect to certain foreign countries, there is a
possibility of expropriation or confiscatory taxation,
limitations on the removal of assets or diplomatic developments
that could affect investment within those countries.
Additionally, foreign securities and dividends and interest
payable on those securities may be subject to foreign taxes,
including foreign withholding taxes, and other foreign taxes
may apply with respect to securities transactions. See "Taxes."
Transactions in foreign securities may involve greater time
from the trade date until the settlement date than for domestic
securities transactions, and may involve the risk of possible
losses through the holding of securities in custodians and
securities depositories in foreign countries.
Additional costs associated with an investment in foreign
securities may include higher transaction costs and the cost of
foreign currency conversions. Changes in foreign exchange rates
will also affect the value of securities denominated or quoted
in currencies other than the U.S. dollar. In this regard, the
Funds do not intend to hedge against foreign currency risk, and
changes in currency exchange rates will impact a Fund's net
asset value (positively or negatively) irrespective of the
performance of the portfolio securities held by the Fund. The
Funds and their shareholders may encounter substantial
difficulties in obtaining and enforcing judgments against non-
U.S. resident individuals and companies. Because of these and
other factors, securities of foreign companies acquired by the
Funds may be subject to greater fluctuation in price than
securities of domestic companies. Furthermore, because the
International Equity Fund will invest substantially all (and in
any event, at least 65%) of the value of its total assets in
foreign securities, the net asset value of the International
Equity Fund is expected to be volatile.
Stripped Securities. To the extent consistent with its
investment objective, the Balanced Fund may purchase
participations in trusts that hold U.S. Treasury and agency
securities (such as TIGRs and CATs) and also may purchase
Treasury receipts and other "stripped" securities that evidence
ownership in either the future interest payments or the future
principal payments of U.S. Government obligations. These
participations are issued at a discount to their "face value,"
and may (particularly in the case of stripped mortgage-backed
securities) exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and
interest are returned to investors. The SEC staff believes that
participations in CATs and TIGRs and other similar trusts are
not U.S. Government securities.
Options. The Growth and Income and Equity Index Funds may
purchase put and call options in an amount not to exceed 5% of
their respective net assets. Such options may relate to
particular securities or various stock indices and may or may
not be listed on a national securities exchange and issued by
the Options Clearing Corporation. Purchasing options is a
specialized investment technique which entails a substantial
risk of a complete loss of the amount paid as premiums to the
writer of the option.
Each Fund may purchase put options on portfolio securities at
or about the same time that it purchases the underlying
security or at a later time. By buying a put, a Fund limits its
risk of loss from a decline in the market value of the security
until the put expires. Any appreciation in the value of and
yield otherwise available from the underlying security,
however, will be partially offset by the amount of the premium
paid for the put option and any related transaction costs. Call
options may be purchased by a Fund in order to acquire the
underlying security at a later date at a price that avoids any
additional cost that would result from an increase in the
market value of the security. A call option may also be
purchased to increase a Fund's return to investors at a time
when the call is expected to increase in value due to
anticipated appreciation of the underlying security. Prior to
its expiration, a purchased put or call option may be sold in a
"closing sale transaction" (a sale by a Fund, prior to the
exercise of the option that it has purchased, of an option of
the same series), and profit or loss from the sale will depend
on whether the amount received is more or less than the premium
paid for the option plus the related transaction costs.
In addition, the Growth and Income and Equity Index Funds may
write call options on securities and on various stock indices.
Each Fund may write a call option only if the option is
"covered" by the Fund's holding a position in the underlying
securities or otherwise, which would allow for immediate
satisfaction of its obligation. Such options will be listed on
a national securities exchange and the aggregate value of the
Fund's assets subject to options written by the Growth and
Income Fund and the Equity Index Fund will not exceed 25% and
5%, respectively, of the value of its net assets during the
current year. In order to close out an option position, a Fund
will be required to enter into a "closing purchase transaction"
(the purchase of a call option on a security or an index with
the same exercise price and expiration date as the call option
which it previously wrote on the same security or index).
By writing a covered call option on a security, a Fund foregoes
the opportunity to profit from an increase in the market price
of the underlying security above the exercise price except
insofar as the premium represents such a profit, and it is not
able to sell the underlying security until the option expires
or is exercised or the Fund effects a closing purchase
transaction by purchasing an option of the same series. Except
to the extent that a written call option on an index is covered
by an option on the same index purchased by the Fund, movements
in the index may result in a loss to the Fund; however, such
losses may be mitigated by changes in the value of securities
held by the Fund during the period the option was outstanding.
The use of covered call options will not be a primary
investment technique of the Funds.
For additional information relating to option trading practices
and related risks, see the Statement of Additional Information.
Futures Contracts and Related Options. The Adviser may
determine that it would be in the interest of the Growth and
Income, Equity Index and International Equity Funds to purchase
or sell futures contracts, or options thereon, as a hedge
against changes resulting from market conditions in the value
of the securities held by the Funds, or of securities which it
intends to purchase, to maintain liquidity, to have fuller
exposure to price movements in the respective securities index
or to reduce transaction costs. For example, a Fund may enter
into transactions involving a stock index futures contract,
which is a bilateral agreement pursuant to which the parties
agree to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the index
value (which assigns relative values to the common stocks
included in the index) at the close of the last trading day of
the contract and the price at which the futures contract is
originally struck. No physical delivery of the underlying bonds
or stocks in the index is made. The Adviser may also determine
it would be in the interest of a Fund to purchase or sell
interest rate futures contracts, or options thereon, which
provide for the future delivery of specified fixed-income
securities. In addition, the Equity Index Fund will purchase
and sell futures and related options (based only on the S&P 500
Index), to maintain cash reserves while simulating full
investment in the stocks underlying the S&P 500 Index to keep
substantially all of its assets exposed to the market (as
represented by the S&P 500 Index), and to reduce transaction
costs. The International Equity Fund also may invest in
international stock index futures contracts and related options
which are traded on an exchange to maintain cash reserves while
simulating full investment in the stocks underlying the GDP
EAFE Index, to facilitate trading, reduce transaction costs or
seek higher investment returns when a futures contract is
priced more attractively than the underlying index. The Funds
will not use futures contracts for speculative purposes.
Risks associated with the use of futures contracts include (a)
imperfect correlation between the change in market values of
the securities held by a Fund and the prices of stock index
futures contracts, (b) the possible lack of a liquid secondary
market for futures contracts and the resulting inability of a
Fund to close open futures positions, and (c) with regard to
the International Equity Fund, the limited portion of the
Fund's securities which may be included in any one of the
foreign stock index futures which may be utilized by the Fund.
During the current fiscal year, the Growth and Income Fund
intends to limit transactions in futures contracts and related
options so that not more than 5% of its net assets are at risk.
The Equity Index Fund and International Equity Fund intend to
limit their transactions in futures contracts so that not more
than 10% of their respective net assets are at risk. For a more
detailed description of futures contracts and futures options,
including a discussion of the limitations imposed by federal
tax law, see Appendix B to the Statement of Additional
Information.
Convertible Securities and Warrants. The Balanced, Growth and
Income, MidCore Growth, Special Growth, and International
Equity Funds may invest in convertible securities, including
bonds, notes and preferred stock, that may be converted into
common stock either at a stated price or within a specified
period of time. In investing in convertibles, a Fund is looking
for the opportunity, through the conversion feature, to
participate in the capital appreciation of the common stock
into which the securities are convertible, while earning higher
current income than is available from the common stock.
During normal market conditions, no more than 5% of a Fund's
net assets will be purchased or held in convertible or other
securities that (1) are not rated at the time of purchase
investment grade by S&P, Moody's or other nationally recognized
rating agencies; (2) are unrated and have not been determined
by the Adviser (or Adviser and Sub-Adviser with regard to the
International Equity Fund) to be of comparable quality to a
security rated investment grade; or (3) in the case of the
International Equity Fund, have not received the foreign
equivalent of investment grade by a rating agency recognized in
the local market and determined to be of comparable quality by
the Adviser and Sub-Adviser. Securities rated below investment
grade are predominantly speculative and are commonly referred
to as junk bonds. To the extent a Fund purchases convertibles
rated below investment grade or convertibles that are not
rated, a greater risk exists as to the timely repayment of the
principal of, and the timely payment of interest or dividends
on, such securities. Subsequent to its purchase by a Fund, a
rated security may cease to be rated or its rating may be
reduced below a minimum rating for purchase by the Fund. The
Adviser (and Sub-Adviser for the International Equity Fund)
will consider such an event in determining whether a Fund
should continue to hold the security. The Adviser (and Sub-
Adviser for the International Equity Fund) will sell promptly
any securities that are noninvestment grade as a result of
these events and that exceed 5% of a Fund's net assets.
The Balanced, Growth and Income, MidCore Growth, Special
Growth, and International Equity Funds may purchase warrants
and similar rights, which are privileges issued by corporations
enabling the owners to subscribe to and purchase a specified
number of shares of the corporation at a specified price during
a specified period of time. The purchase of warrants involves
the risk that a Fund could lose the purchase value of a warrant
if the right to subscribe to additional shares is not exercised
prior to the warrant's expiration. Also, the purchase of
warrants involves the risk that the effective price paid for
the warrant added to the subscription price of the related
security may exceed the value of the subscribed security's
market price such as when there is no movement in the level of
the underlying security. During normal market conditions, no
more than 5% of each Fund's net assets will be invested in
warrants.
Securities Lending. Although none of the Funds intend to during
the current fiscal year, each of the Funds may lend portfolio
securities.
American Depository Receipts ("ADRs"), European Depository
Receipts ("EDRs"), and Global Depository Receipts ("GDRs"). The
Funds, except for the Equity Index Fund, may invest in
sponsored ADRs, which are receipts issued by an American bank
or trust company evidencing ownership of underlying securities
issued by a foreign issuer, ADRs may be listed on a national
securities exchange or may trade in the over-the-counter
market. ADR prices are denominated in U.S. dollars; the
underlying security may be denominated in a foreign currency.
The International Equity Fund may also invest in EDRs and GDRs.
EDRs are receipts issued by a European financial institution
evidencing ownership of underlying foreign securities and are
usually denominated in foreign currencies. EDRs may not be
denominated in the same currency as the securities they
represent. Generally, EDRs, in bearer form, are designed for
use in the European securities markets. GDRs are issued and
traded in several international financial markets. The
underlying security may be subject to foreign government taxes
which would reduce the yield on such securities. See "Other
Investment Information - Foreign Securities" for a discussion
on certain risks in investing in foreign securities.
Concentration. The Adviser (and Sub-Adviser for the
International Equity Fund) anticipate that from time to time
certain industry sectors will not be represented in the Funds'
portfolios while other sectors will represent a significant
portion. As a matter of fundamental policy, however, the
Adviser (and Sub-Adviser for the International Equity Fund)
will not purchase any securities which would cause 25% or more
of a Fund's total assets at the time of purchase to be invested
in the securities of issuers conducting their principal
business activities in the same industry, and each Fund's
investments will be diversified among individual issuers.
Small Companies. Small companies in which the Funds may invest
may have limited product lines, markets, or financial
resources, or may be dependent upon a small management group,
and their securities may be subject to more abrupt or erratic
market movements than larger, more established companies, both
because their securities are typically traded in lower volume
and because the issuers are typically subject to greater degree
of changes in their earnings and prospects.
Portfolio Turnover. Each Fund may sell a portfolio investment
soon after its acquisition if the Adviser believes that such a
disposition is consistent with attaining the investment
objective of the Fund. Portfolio investments may be sold for a
variety of reasons, such as a more favorable investment
opportunity or other circumstances bearing on the desirability
of continuing to hold such investments. A high rate of
portfolio turnover (over 100%) may involve correspondingly
greater brokerage commission expenses and other transaction
costs, which must be borne directly by the Fund and ultimately
by its shareholders. High portfolio turnover may result in the
realization of substantial net capital gains; to the extent net
short-term capital gains are realized, distributions resulting
from such gains will be ordinary income for federal income tax
purposes. (See "Taxes-Federal.") See "Financial Highlights" for
each Fund's portfolio turnover rates.
PURCHASE OF SHARES
Retail Shares of the Funds are offered and sold on a continuous
basis by the distributor for the Funds, B.C. Ziegler and
Company (the "Distributor"), which is independent of the
Adviser. The Distributor is a registered broker-dealer with
offices at 215 North Main Street, West Bend, Wisconsin 53095.
Purchase orders for shares may be placed through the transfer
agent of the Funds, registered representatives of Elan
Investment Services, Inc. ("Elan"), or organizations that have
entered into distribution or servicing agreements with the
Funds (including Elan, "Shareholder Organizations"). For a
discussion of transactions through Shareholder Organizations,
see "Shareholder Organizations" below.
THE MINIMUM INITIAL AND SUBSEQUENT INVESTMENT FOR SHARES IN A
FUND IS $100.
Once each business day, two share prices are calculated for
each Fund: the offering price and the net asset value (NAV).
The offering price includes the sales charge, if any, which you
pay when you buy shares, unless you qualify for a waiver as
described below. When you buy shares at the offering price, the
sales charge is deducted and the balance is invested at NAV
next computed after an order with payment is received by the
transfer agent. You may calculate your sales charge as follows:
SHAREHOLDER
SALES CHARGE SALES CHARGE ORGANIZATION
AMOUNT OF AS A AS A REALLOWANCE AS
TRANSACTION AT PERCENTAGE OF PERCENTAGE OF A PERCENTAGE OF
OFFERING PRICE OFFERING PRICE NET ASSET VALUE OFFERING PRICE
- -------------------- -------------- --------------- --------------
Less than $50,000000 4.00% 4.16% 3.50%
$50,000 to $99,99900 3.00% 3.09% 2.50%
$100,000 to $249,999 2.00% 2.04% 1.50%
$250,000 or more000 none none none
The Distributor may reallow the entire sales charge to certain
Shareholder Organizations. To the extent that 90% or more of
the sales charge is reallowed, Shareholder Organizations may be
deemed to be underwriters under the Act.
You may purchase shares without a sales charge if: (a) you were
a Portico shareholder as of January 1, 1995 and have
continuously maintained a shareholder account with the Company;
(b) you make any purchase within 60 days of a redemption of
Portico Institutional Shares or from accounts for which Firstar
Corporation or its affiliates serves in a trust, agency or
custodial capacity; (c) you are an employee, director or
retiree of Firstar Corporation or its affiliates or of Portico;
(d) you maintain a personal trust account with an affiliate of
Firstar Corporation at the time of purchase; (e) you make any
purchase within 60 days of a redemption of a mutual fund on
which you paid an initial sales charge or contingent deferred
sales charge; (f) you are a registered investment adviser that
has entered into an agreement with the Distributor to purchase
shares for your own account or for discretionary client
accounts; or (g) you are a spouse, parent or child of an
individual who falls within the preceding categories (a), (c),
or (d) above. In addition, you may reinvest all or any portion
of your proceeds from redemption of shares of the Funds in
Retail Shares of the Funds or Retail Shares of other Portico
funds, within 365 days of a redemption without paying a sales
charge. Shares so reinvested will be purchased at a price equal
to the net asset value next determined after the transfer agent
receives payment in proper form.
Quantity Discounts. You may be entitled to reduced sales
charges through the Right of Accumulation or under a Letter of
Intent, even if you do not make an investment of a size that
would normally qualify for a quantity discount.
To qualify for a reduction of or exception to the sales charge,
you must notify your Shareholder Organization or the
Distributor at the time of purchase or exchange. The reduction
in sales charge is subject to confirmation of your holdings
through a check of records. The Fund may modify or terminate
quantity discounts at any time. For more information about
quantity discounts, contact your Shareholder Organization or
Portico Investor Services at 1-800-982-8909.
As a Portico shareholder, you may qualify for discounts on
products offered by Firstar Banks. For further information,
contact Portico Investor Services, your registered
representative, or a Firstar Bank.
Rights of Accumulation. A reduced sales charge applies to any
purchase of shares of any Portico Fund that is purchased with a
sales charge (an "Eligible Fund") where an investor's then
current aggregate investment is $50,000 or more. "Aggregate
investment" means the total of: (a) the dollar amount of the
then current purchase of shares of an Eligible Fund, and (b)
the value (based on current net asset value) of previously
purchased and beneficially owned shares of any Eligible Funds
on which a sales charge has been paid. If, for example, an
investor beneficially owns shares of one or more Eligible
Funds, with an aggregate current value of $49,000 on which a
sales charge has been paid and subsequently purchases shares of
an Eligible Fund having a current value of $1,000, the sales
charge applicable to the subsequent purchase would be reduced
to 3.00% of the offering price. Similarly, each subsequent
investment in Eligible Fund shares may be added to an
investor's aggregate investment at the time of purchase to
determine the applicable sales charge.
Letter of Intent. By signing a Letter of Intent (available from
the Distributor and Shareholder Organizations), an investor
becomes eligible for the reduced sales charge applicable to the
total number of Eligible Fund shares purchased in a 13-month
period pursuant to the terms and under the conditions set forth
in the Letter of Intent. To compute the applicable sales
charge, the offering price of shares of an Eligible Fund on
which a sales charge has been paid, beneficially owned by an
investor on the date of submission of the Letter of Intent, may
be used as a credit toward completion of the Letter of Intent.
However, the reduced sales charge will be applied only to new
purchases.
During the term of the Letter of Intent, the Transfer Agent
will hold in escrow shares equal to 5% of the amount indicated
in the Letter of Intent for payment of a higher sales charge if
an investor does not purchase the full amount indicated in the
Letter of Intent. The escrow will be released when an investor
fulfills the terms of the Letter of Intent by purchasing the
specified amount. Any redemptions made during the 13-month
period will be subtracted from the amount of purchases in
determining whether the Letter of Intent has been completed. If
total purchases qualify for a further sales charge reduction,
the sales charge will be adjusted to reflect an investor's
total purchases. If total purchases are less than the amount
specified in the Letter of Intent an investor will be requested
to remit an amount equal to the difference between the sales
charge actually paid and the sales charge applicable to the
total purchases. If such remittance is not received within 20
days, the transfer agent, as attorney-infact pursuant to the
terms of the Letter of Intent and at the Distributor's
direction, will redeem an appropriate number of shares held in
escrow to realize the difference. Signing a Letter of Intent
does not bind an investor to purchase the full amount indicated
at the sales charge in effect at the time of signing, but an
investor must complete the intended purchase in accordance with
the terms of the Letter of Intent to obtain the reduced sales
charge. To apply, an investor must indicate his or her
intention to do so under a Letter of Intent at the time of
purchase of Shares.
Qualification for Discounts. For purposes of applying the
Rights of Accumulation and Letter of Intent privileges
described above, the scale of sales charges applies to the
combined purchases made by any individual and/or spouse
purchasing securities for his, her or their own account, or the
aggregate investments of a trustee or other fiduciary or IRA
for the benefit of the persons listed above.
Purchase Orders. Investors may purchase shares of the Funds
through registered representatives of Elan located at Firstar
Banks ("Firstar Investment Offices"), or through Elan
representatives located at other financial institutions, or
directly with the Funds' transfer agent. All checks must be
drawn on a bank located within the United States and must be
payable in U.S. dollars. Subsequent investments in an existing
account in a Fund may be made at any time by sending to the
address below a check or money order payable to the Fund in
which the investment is being made as shown above, along with a
letter stating the amount of the investment, the name of the
Fund and the account number in which the investment is to be
made. A $15 fee will be imposed by the Funds' transfer agent if
any check used for investment in an account does not clear, and
the investor involved will be responsible for any loss incurred
by a Fund.
PURCHASE ORDERS PLACED THROUGH REGISTERED REPRESENTATIVES
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
------------------ --------------------
- ----
IN PERSON - Complete an application at - Bring your check to a Firstar
a Firstar Investment Office. Investment Office. Call
Call 1-800-982-8909 for the 1-800-982-8909 for the office
office nearest you. nearest you.
BY PHONE - Call your registered - Call your registered
representative representative
or call or call
1-800-982-8909 for the office 1-800-982-8909 for the office
nearest you. nearest you.
AUTOMATICALLY- Call your registered - Complete a Periodic Investment
representative Plan Application to
to obtain automatically purchase more
a Periodic Investment Plan shares.
Application.
PURCHASE ORDERS PLACED THROUGH THE TRANSFER AGENT
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
------------------ --------------------
BY MAIL - Complete an application and - Make your check payable to
mail it along with a check Portico Funds. Please include
payable to Portico Funds, your account number on your
P.O. Box 3011, check and mail it to the
Milwaukee, WI 53201-3011. address on your statement.
OVERNIGHT - Complete an application and - Make your check payable to
DELIVERY deliver it along with a check Portico Funds. Please include
payable to Portico Funds, your account number on your
615 East Michigan St., check and deliver it to the
Milwaukee, WI 53202. address at the left.
IN PERSON - Bring your application and - Your check to a Firstar
check to a Firstar Investment Investment Office. Call Office.
Call 1-800-982-8909 1-800-982-8909 for the office
for the office nearest you. nearest you.
AUTOMATICALLY- Call 1-800-982-8909 to obtain - Complete a Periodic
a Periodic Investment Plan Investment Plan Application to
Application. auto matically purchase more
shares.
- Open a ConvertiFund(R) account
to automatically invest
proceeds from one account to
another account of the Portico
family of funds.
BY WIRE - Call 1-800-228-1024 to arrange - Ask your bank to transmit
a wire transaction. Ask your immediately available funds by
bank to transmit immediately wire as described at the left.
available funds by wire in the Please also include your
amount of your purchase to: account number.
Firstar Bank Milwaukee, N.A.
ABA # 0750-00022, Account #
112-952-137 for further
credit to [name of Fund] [the
name/ title on the account].
BY PHONE - Call 1-800-228-1024 to - Call 1-800-228-1024 to
exchange from another exchange
Portico Fund account with from another Portico Fund
the same registration including account with the same
name, address and registration including name,
taxpayer ID number. address and taxpayer
ID number.
Investors making initial investments by wire must promptly
complete a Purchase Application and forward it to the
respective Fund. REDEMPTIONS WILL NOT BE PAID UNTIL THE
COMPLETED APPLICATION HAS BEEN RECEIVED BY THE TRANSFER AGENT.
If an order and payment are received by the transfer agent or
Elan in proper form (as described above) before the close of
regular trading hours on the New York Stock Exchange (the
"Exchange"), currently 3:00 p.m. Central Time, on a business
day, Fund shares will be purchased as of the determination of
net asset value on that day. Purchase orders which are received
after the close of regular trading hours on the Exchange, or on
non-business days, and orders for which payment is not received
by the close of regular trading hours on the Exchange on a
business day, will be executed on the next business day after
receipt of both the order and payment in proper form by the
transfer agent or Elan.
The Funds will not accept payment in cash or third party checks
for the purchase of shares. Federal regulations require that
each investor provide a Social Security number or other
certified taxpayer identification number upon opening or
reopening an account. The Funds reserve the right to reject
applications without such a number or an indication that a
number has been applied for. If a number has been applied for,
the number must be provided and certified within sixty days of
the date of the application. Any accounts opened without a
proper number will be subject to backup withholding and may be
liquidated and distributed to the owner(s) of record on or
after the first business day following the sixtieth day of
investment, net of the backup withholding tax.
Certificates for shares will be issued only upon shareholder
request. The Funds reserve the right to reject any purchase
order. Payment for shares of a Fund in the amount of $1,000,000
or more may, at the discretion of the Adviser, be made in the
form of securities that are permissible investments for the
respective Fund. For further information, see the Statement of
Additional Information or contact the Portico Investor Services
at 1-800-982-8909 or 414-287-3710 (Milwaukee area).
REDEMPTION OF SHARES
Redemption orders are effected at the net asset value per share
next determined after receipt of the order by the transfer
agent or Elan. If a redemption order is received in proper form
(as described below) before the close of regular trading hours
on the Exchange, currently 3:00 p.m. Central Time, on a
business day, Fund shares will be redeemed as of the
determination of net asset value on that day. Redemption orders
which are received after the close of regular trading hours on
the Exchange, or on non-business days, will be executed on the
next business day. Depending upon the current net asset value
of the redeemed shares at the time of redemption, the value of
the shares redeemed may be more or less than the investor's
cost.
REDEMPTION ORDERS
THROUGH A REGISTERED
THROUGH THE TRANSFER AGENT REPRESENTATIVE
-------------------------- -------------------
BY PHONE - Call 1-800-228-1024 with - Call your registered
your account name, account representative
number and amount of at 1-800-982-8909.
redemption (minimum $500).
Redemption proceeds will
only be sent to a
shareholder's address or
bank account of a
commercial bank located
within the United States as
shown on the transfer
agent's records. (Available
only if established on the
account application and if
there has been no change of
address by telephone within
the preceding 15 days.)
BY MAIL,
OVERNIGHT DELIVERY
- Mail your instructions to the - Bring your instructions to
Portico Funds, P.O. Box 3011, your registered
Milwaukee, WI 53201-3011 representative's
or deliver them (via overnight office, or mail or deliver them
delivery or in person) to to Portico Investor Services at
615 E. Michigan Street, 615 East Michigan Street,
Milwaukee, WI 53202 Box 3011,
Include the number of shares Milwaukee, WI 53201-3011
or the amount to be redeemed,
your shareholder account
number and Social Security
number or other taxpayer
identification number. Your
instructions must be signed
by all persons required to
sign for transactions
exactly as their names
appear on the account. If
the redemption amount
exceeds $50,000, or if the
proceeds are to be sent
elsewhere than the address
of record, or the address of
record has been changed by
telephone within the
preceding 15 days, each
signature must be guaranteed
in writing by either a
commercial bank that is a
member of the FDIC, a trust
company, a credit union, a
savings association, a
member firm of a national
securities exchange or other
eligible guarantor
institution.
AUTOMATICALLY - Call 1-800-982-8909 for a - Call your registered
Systematic Withdrawal Plan representative
application ($15,000 account to establish
minimum and $100 minimum a Systematic Withdrawal Plan.
per transaction).
Guarantees must be signed by an eligible guarantor institution
and "Signature Guaranteed" must appear with the signature. If
certificates have been issued, the certificates, properly
endorsed or accompanied by a properly executed stock power and
accompanied by signature guarantees, must be received by the
transfer agent or Elan. The Funds may require additional
supporting documents for redemptions made by corporations,
executors, administrators, trustees and guardians. A redemption
request will not be deemed to be properly received until the
transfer agent or Elan receives all required documents in
proper form. Purchases of additional shares concurrently with
withdrawals could be disadvantageous because of the sales
charge involved in the additional purchases.
The transfer agent charges a $10.00 fee for each payment made
by wire of redemption proceeds, which will be deducted from the
shareholder's account. The transfer agent also charges a $15.00
fee for each IRA distribution (unless it is part of a
Systematic Withdrawal Plan), which will be deducted from the
shareholder's account.
In order to arrange for telephone redemptions after an account
has been opened or to change the bank or account designated to
receive redemption proceeds, a written request must be sent to
Portico Investor Services at the address listed above or
contact your registered representative. The request must be
signed by each shareholder of the account. Further
documentation may be requested from corporations, executors,
administrators, trustees and guardians.
The Funds reserve the right to refuse a telephone redemption if
they believe it is advisable to do so. Procedures for redeeming
shares by telephone may be modified or terminated by the Funds
at any time upon notice to shareholders. During periods of
substantial economic or market change, telephone redemptions
may be difficult to implement. If a shareholder is unable to
contact the transfer agent by telephone, shares may also be
redeemed by delivering the redemption request to the transfer
agent.
In an effort to prevent unauthorized or fraudulent redemption
requests by telephone, Portico and the transfer agent employ
reasonable procedures specified by a Fund to confirm that such
instructions are genuine. Among the procedures used to
determine authenticity, investors electing to redeem or
exchange by telephone will be required to provide their account
number. All such telephone transactions will be tape recorded
and confirmed in writing to the shareholder. Portico may
implement other procedures from time to time. If reasonable
procedures are not implemented, Portico and/or the transfer
agent may be liable for any loss due to unauthorized or
fraudulent transactions. In all other cases, the shareholder is
liable for any loss for unauthorized transactions.
Other Redemption Information
The Funds will make payment for redeemed shares typically
within one or two business days, but no later than the seventh
day after receipt by the transfer agent of a request in proper
form, except as provided by SEC rules. HOWEVER, IF ANY PORTION
OF THE SHARES TO BE REDEEMED REPRESENTS AN INVESTMENT MADE BY
CHECK, THE FUNDS MAY DELAY THE PAYMENT OF THE REDEMPTION
PROCEEDS UNTIL THE TRANSFER AGENT IS REASONABLY SATISFIED THAT
THE CHECK HAS BEEN COLLECTED, WHICH MAY TAKE TWELVE DAYS FROM
THE PURCHASE DATE. This procedure does not apply to shares
purchased by wire payment. An investor purchasing shares by
wire must have filed a Purchase Application before any
redemption requests can be paid.
The Funds impose no charge when shares are redeemed and reserve
the right to redeem an account involuntarily, upon sixty days'
written notice, if redemptions cause the account's net asset
value to remain at $50 or less. A Fund may also redeem shares
involuntarily if it is appropriate to do so to carry out the
Fund's responsibilities under the 1940 Act and, in certain
cases, may make payment for redemption in securities. Investors
would bear any brokerage or other transaction costs incurred in
converting the securities so received to cash. See the
Statement of Additional Information for examples of when such
redemptions might be appropriate.
Questions concerning the proper form for redemption requests
should be directed to Portico Investor Services at 1-800-228-
1024 or 414-287-3808 (Milwaukee area).
SHAREHOLDER SERVICES
The services and privileges described below are available to
retail shareholders of the Funds. These may be modified or
terminated at any time upon notice to shareholders.
Shareholder Reports
Shareholders will be provided with a report showing portfolio
investments and other information at least semiannually; and
after the close of the Funds' fiscal year which ends October
31, with an annual report containing audited financial
statements. To eliminate unnecessary duplication, only one copy
of shareholder reports will be sent to shareholders with the
same mailing address. Shareholders who desire a duplicate copy
of shareholder reports to be mailed to their residence should
call Portico Investor Services at 1-800-982-8909, or write
Portico Investor Services at the address listed above.
In addition, account statements will be mailed to shareholders
after each purchase, reinvestment of dividends and redemption.
Automated Teleresponse Service
Shareholders using a touch-tone telephone can access
information on the Funds twenty-four hours a day, seven days a
week. When calling Portico Investor Services at 1-800-228-1024,
shareholders may choose to use the automated information
feature or, during regular business hours (8:00 a.m. to 7:00
p.m. Central Time, Monday through Friday), speak with a Portico
Investor Services representative.
The automated service provides the information most frequently
requested by shareholders. After calling the 800-number,
pressing "2" on their touch-tone phone, shareholders can:
1. Determine closing prices for each Fund.
2. Learn how the price of a Fund has changed from the previous
day.
3. Hear daily yields for Portico money market funds.
Money market fund yields reflect fee waivers in effect,
represent past performance and will vary. If fees were not
waived, yields would be reduced. Past performance is no
guarantee of future results. Current yield refers to income
earned by a Fund's investments over a 7-day period. It is then
annualized and stated as a percentage of the investment.
Effective yield is the same as current yield except that it
assumes the income earned by an investment in a fund will be
reinvested. An investment in any one of the Portico money
market funds is neither insured nor guaranteed by the U.S.
government nor is there any assurance the funds will be able to
maintain a stable net asset value of $1.00 per share.
To speak with a Portico Investor Services representative
anytime during an automated teleresponse session (during
regular business hours), shareholders may press "0."
For total return information, shareholders must call Portico
Investor Services at 1-800-982-8909 or 414-287-3710 (Milwaukee
area).
Telephone Exchange Privilege
Except as provided in the next sentence and provided that such
other shares may legally be sold in the state of the investor's
residence, shareholders are generally permitted to exchange
their Retail Shares in a Fund (with a minimum current value of
$500) for Retail Shares of other funds in the Portico family of
funds without charge or commission by the Fund. A sales charge
will be imposed on the exchange if the shares of the Fund being
acquired have a sales charge and the shares being redeemed were
purchased or otherwise acquired without a sales charge.
Telephone exchange privileges automatically apply to each
shareholder of record and the representative of record unless
and until the transfer agent receives written instructions from
the shareholder(s) of record canceling the privilege.
Portico reserves the right to terminate indefinitely the
exchange privilege of any shareholder, broker, investment
adviser or agent who requests more than four exchanges within a
calendar year, whether for oneself or one's customers. Portico
may determine to do so with prior notice to the shareholder,
broker, investment adviser or agent based on a consideration of
both the number of exchanges the particular shareholder,
broker, investment adviser or agent has requested and the time
period over which those exchange requests have been made,
together with the level of expense to the Funds or other
adverse effects which may result from the additional exchange
requests. If any portion of the shares to be exchanged
represents an investment made by check, a Fund may delay the
acquisition of new shares in an exchange until the transfer
agent is reasonably satisfied that the check has been
collected, which may take twelve days from the purchase date.
Investors may find the exchange privilege useful if their
investment objectives or market outlook should change after
they invest in the Portico family of funds. For federal income
tax purposes, an exchange of shares is a taxable event and,
accordingly, a capital gain or loss may be realized by an
investor. Before making an exchange request, an investor should
consult a tax or other financial adviser to determine the tax
consequences of a particular exchange. No exchange fee is
currently imposed by Portico on exchanges. Portico, however,
reserves the right to impose a charge in the future. In order
to request an exchange by telephone, a shareholder must give
the account name, account number and the amount or number of
shares to be exchanged. During periods of significant economic
or market change, telephone exchanges may be difficult to
implement. If a shareholder is unable to contact the transfer
agent by telephone, shares may also be exchanged by delivering
the exchange request to the transfer agent in person or by mail
at the addresses listed above under "Redemption of Shares."
The Funds reserve the right to reject any exchange request with
prior notice to a shareholder and the exchange privilege may be
modified or terminated at any time. At least sixty days' notice
will be given to shareholders of any material modification or
termination except where notice is not required under SEC
regulations. The responsibility of the Funds and their transfer
agent for the authenticity of telephone exchange instructions
is limited as described above under "Redemption of Shares."
Retirement Plans
The Funds offer individual retirement accounts and prototype
defined contribution plans, including simplified employee,
401(k), 403(b), profit-sharing and money purchase pension plans
("Retirement Plans"). For details concerning Retirement Plans
(including service fees), please call Portico Investor Services
at 1-800-982-8909 or 414-287-3710 (Milwaukee area).
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income of the Balanced, Growth
and Income, and Equity Index Funds are declared and paid
quarterly. Dividends from net investment income of the MidCore
Growth, Special Growth, and International Equity Funds are
declared and paid annually. Each Fund's net realized capital
gains are distributed at least annually to avoid tax to the
Fund.
Dividends and distributions will reduce the net asset value of
the Retail Shares by the amount of the dividend or
distribution. Dividends and distributions are automatically
reinvested in additional Retail Shares of the Fund on which the
dividend or distribution is paid at their net asset value per
share (as determined on the payable date), unless the
shareholder notifies the Fund's transfer agent or a registered
representative that dividends or capital gains distributions,
or both, should be paid in cash. Cash dividends and
distributions will be paid by check unless the Fund's transfer
agent receives a voided check or deposit ticket to enable the
dividends or distributions to be directly deposited into the
shareholder's bank account. Cash dividends and distributions
will be paid within five business days after the end of the
month in which dividends are declared or within five business
days after a redemption of all of a shareholder's shares of a
Fund. Reinvested dividends and distributions receive the same
tax treatment as those paid in cash.
MANAGEMENT OF THE FUNDS
The business and affairs of the Funds are managed under the
direction of the Board of Directors of the Portico Funds, Inc.
("Portico" or the "Company"). The Statement of Additional
Information contains the name and background information
regarding each Director.
Advisory Services
FIRMCO, a Wisconsin corporation and subsidiary of Firstar
Corporation, a bank holding company, serves as investment
adviser to each Fund. FIRMCO, with principal offices at Firstar
Center, 777 East Wisconsin Avenue, 8th Floor, Milwaukee,
Wisconsin 53202, has been engaged in the business of providing
investment advisory services since 1986. FIRMCO currently has
$15 billion in assets under active management, of which $9
billion is invested in fixed-income and money market securities
and $6 billion in equity securities.
Subject to the general supervision of the Board of Directors
and in accordance with the respective investment objective and
policies of each Fund, the Adviser manages each Fund's
portfolio, makes decisions with respect to and places orders
for all purchases and sales of each Fund's portfolio
securities, and maintains records relating to such purchases
and sales (except for the International Equity Fund). Subject
to the general supervision of the Board of Directors and in
accordance with the investment objective and policies of the
International Equity Fund, the Adviser is responsible for the
management of the Fund's investments and business affairs.
Under the terms of the Advisory Agreement between the Fund and
the Adviser, the Adviser is authorized to delegate its duties
under that agreement to another adviser. As described below,
the Adviser has retained State Street Global Advisors (the
"Sub-Adviser") with respect to the International Equity Fund's
investments. The Adviser and Sub-Adviser jointly determine the
specific securities to be purchased, retained or sold by the
Fund.
The Adviser (or Sub-Adviser for the International Equity Fund)
is authorized to allocate purchase and sale orders for
portfolio securities to Shareholder Organizations, including,
in the case of agency transactions, Shareholder Organizations
which are affiliated with the Adviser (or Sub-Advise72r), to
take into account the sale of Fund shares if the Adviser (or
Sub-Adviser for the International Equity Fund) believes that
the quality of the transaction and the amount of the commission
are comparable to what they would be with other qualified
brokerage firms.
The Adviser is entitled to receive from each Fund a fee,
calculated daily and payable monthly, at the following annual
rates (as a percentage of the Fund's average daily net assets):
0.25% for the Equity Index Fund; 0.75% for each of the
Balanced, Growth and Income, MidCore Growth and Special Growth
Funds; and 1.50% on the International Equity Fund's first $25
million, 1.45% on the next $25 million, 1.40% on the next $50
million, and 1.35% on average daily net assets in excess of
$100 million. The Adviser earned fees, net of waivers, for the
fiscal year ended October 31, 1995, at the annual rate of 0.25%
for the Equity Index Fund, 0.51% for the Balanced Fund, 0.71%
for the Growth and Income Fund, 0.70% for the MidCore Growth
Fund, 0.74% for the Special Growth Fund, and 0.42% for the
International Equity Fund.
The Adviser may voluntarily waive all or a portion of the
advisory fee otherwise payable by a Fund from time to time.
These waivers may be terminated at any time at the Adviser's
discretion.
State Street Global Advisors, a division of State Street Bank
and Trust Company, Two International Place, Boston,
Massachusetts 02110, provides sub-advisory services to the
International Equity Fund. State Street Bank and Trust Company
is a wholly-owned subsidiary of State Street Boston
Corporation, a bank holding company. Subject to the oversight
and supervision of the Fund's Board of Directors, the Sub-
Adviser assists the Adviser in managing the Fund, and jointly
with the Adviser selects investments in accordance with the
Fund's investment objective and policies. Pursuant to its
agreement, the Sub-Adviser places orders for purchases and
sales of the Fund's securities. The Sub-Adviser may utilize
affiliated brokers in connection with the execution of the
Fund's portfolio transactions subject to applicable law and
procedures adopted by the Fund's Board of Directors. Additional
information appears in the Statement of Additional Information.
The Sub-Adviser began investment advisory operations in 1978.
Currently, the Sub-Adviser manages $141 billion in assets of
which $28 billion are invested in international equity
securities.
The Sub-Adviser is entitled to a fee, payable by the Adviser,
for its services and expenses incurred with respect to the
Fund. The fee is computed daily and paid monthly at the
following annual rates (as a percentage of the Fund's average
daily net assets): 0.40% on the Fund's first $25 million of
average daily net assets, 0.35% on the next $25 million, 0.30%
on the next $50 million, and 0.25% of the Fund's average daily
net assets in excess of $100 million.
The Sub-Adviser also acts as custodian and provides accounting
services for the portfolio securities of the International
Equity Fund. See "Custodian, Transfer and Dividend Disbursing
Agent, and Accounting Services Agent" below.
The following are biographies of the portfolio managers of each
Fund.
R. Bart Wear and Teresa Westman co-manage the Balanced
Fund. Ms. Westman, a Senior Vice President and Senior Portfolio
Manager, has managed the Fund since its inception on March 30,
1992. Ms. Westman has been with Firstar since 1987 and has nine
years of investment management experience. Mr. Wear is a Senior
Vice President and Senior Portfolio Manager of FIRMCO and has
been with Firstar since 1983. He has thirteen years of
investment management experience and has been managing the Fund
since January 20, 1994. Both Ms. Westman and Mr. Wear are
Chartered Financial Analysts.
Marian Zentmyer and Maya Bittar co-manage the Growth and Income
Fund. Ms. Zentmyer, a Senior Vice President and Senior
Portfolio Manager of FIRMCO, has managed the Fund since
February 22, 1993. Ms. Zentmyer has been with Firstar since
1982 and has seventeen years of investment management
experience. Ms. Bittar is a Vice President and Portfolio
Manager of FIRMCO and has been with Firstar since 1993. She has
three years of investment management experience and has managed
the Fund since October 1, 1995. Both Ms. Zentmyer and Ms.
Bittar are Chartered Financial Analysts. Ms. Zentmyer is also a
Certified Financial Planner.
Daniel Tranchita manages the Equity Index Fund. Mr. Tranchita
is a Vice President and has been with Firstar since 1989. He
has seven years of investment management experience and has
managed the Fund since July 1, 1992. He is a Chartered
Financial Analyst.
R. Bart Wear manages the MidCore Growth Fund. Mr. Wear has been
managing the Fund since its inception on December 29, 1992.
J. Scott Harkness, Joseph Docter, Todd Krieg and Mark Westman
co-manage the Special Growth Fund. Both Mr. Harkness and Mr.
Docter have managed the Fund since its inception on December
28, 1989. Mr. Harkness is Chairman, a Director and Chief
Investment Officer of FIRMCO. He has been with Firstar for
fifteen years and has sixteen years of investment management
experience. Mr. Docter has been with Firstar since 1984 and has
eleven years of investment management experience. He is a
Senior Vice President and Senior Portfolio Manager of FIRMCO.
Mr. Krieg and Mr. Westman have been with Firstar since 1992 and
have four years of investment management experience. Both Mr.
Krieg and Mr. Westman are Vice Presidents and Portfolio
Managers of FIRMCO and have managed the fund since September 1,
1994 and January 1, 1994, respectively. Mr. Harkness, Mr.
Docter and Mr. Westman are Chartered Financial Analysts.
Daniel Tranchita has managed the International Equity Fund for
the Adviser since its inception on April 28, 1994. The Sub-
Adviser's portfolio management services for the Fund are
conducted by committee, and no one person is primarily
responsible for making recommendations to that committee. The
committee uses a structured selection process which attempts to
duplicate substantially the GDP EAFE Index country weightings.
Administrative Services
Firstar Trust Company ("Firstar Trust") and B. C. Ziegler and
Company ("Ziegler") serve as the Co-Administrators (the "Co-
Administrators"). The Co-Administrators have agreed to provide
the following administrative services for the Portico Funds:
assist in maintaining office facilities for the Funds; furnish
clerical and certain other services required by the Funds;
compile data for and prepare notices to the SEC; prepare
semiannual reports to the SEC and current shareholders and
filings with state securities commissions; coordinate federal
and state tax returns; monitor the arrangements pertaining to
the Funds' agreements with Shareholder Organizations; monitor
the Funds' expense accruals; monitor compliance with the Funds'
investment policies and limitations; and generally assist the
Funds' operations. As further described in the Statement of
Additional Information, certain services under the Co-
Administration Agreement are provided jointly by Firstar Trust
and Ziegler and other services are provided separately by
either Firstar Trust or Ziegler. The Co-Administrators are
entitled to receive a fee for their administrative services,
computed daily and payable monthly, at the annual rate of .125%
of Portico's first $2 billion of average aggregate daily net
assets, plus .10% of Portico's average aggregate daily net
assets in excess of $2 billion. The Co-Administrators may
voluntarily waive all or a portion of their administrative fee
from time to time. These waivers may be terminated at any time
at the Co-Administrators' discretion.
For the fiscal year ended October 31, 1995, the Funds accrued
administrative fees, after waivers, at the effective annual
rate of 0.05% for the Balanced, Growth and Income, Equity
Index, MidCore Growth, Special Growth, and International Equity
Funds.
Shareholder Organizations
Portico may enter into agreements from time to time with
certain Shareholder Organizations, including affiliates of the
Adviser (such as Elan), providing for certain support and/or
distribution services to their customers who are the beneficial
owners of Retail Shares of the Funds. Under the Service
Agreements, shareholder support services, which are described
more fully in the Statement of Additional Information, may
include assisting investors in processing purchase, exchange
and redemption requests; processing dividend and distribution
payments from the Funds; providing information periodically to
customers showing their positions in Retail Shares of the
Funds; and providing sub-accounting with respect to Retail
Shares beneficially owned by customers or the information
necessary for sub-accounting. In addition, Shareholder
Organizations under a Distribution and Service Agreement may
provide the foregoing shareholder support services and may also
provide assistance, such as the forwarding of sales literature
and advertising to their customers, in connection with the
distribution of Retail Shares. For their services, Shareholder
Organizations may be entitled to receive fees from a Fund at
annual rates of up to 0.25% of the average daily net asset
value of the Retail Shares covered by their agreements. For the
1995 calendar year, Shareholder Organizations received fees
pursuant to such agreements at the annual rates of 0.25% of
their average net assets.
Under the terms of their agreements with Portico, Shareholder
Organizations are required to provide a schedule of any fees
that they may charge to their customers relating to the
investment of their assets in Retail Shares covered by the
agreements. Investors should read this Prospectus in light of
such fee schedules and under the terms of their Shareholder
Organization's agreement with Portico. In addition, investors
should contact their Shareholder Organization with respect to
the availability of shareholder services and the particular
Shareholder Organization's procedures for purchasing and
redeeming shares. It is the responsibility of Shareholder
Organizations to transmit purchase and redemption orders and
record those orders in customers' accounts on a timely basis in
accordance with their agreements with customers. At the request
of a Shareholder Organization, the transfer agent's charge of
$10.00 for each payment made by wire of redemption proceeds may
be billed directly to the Shareholder Organization.
The Glass-Steagall Act and other applicable laws, among other
things, prohibit banks from engaging in the business of
underwriting securities. Accordingly, banks will be engaged
under agreements with Portico only to perform the
administrative and investor servicing functions described
above, and will represent to Portico that in no event will the
services provided by them under the agreements be primarily
intended to result in the sale of Retail Shares.
Conflict-of-interest restrictions may apply to the receipt of
compensation paid by Portico to a Shareholder Organization in
connection with the investment of fiduciary funds in Retail
Shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other
money managers subject to the jurisdiction of the SEC, the
Department of Labor or state securities commissions, are urged
to consult legal counsel before entering into agreements with
Portico.
Agreements that contemplate the provision of distribution
services by Shareholder Organizations are governed by a
Distribution and Service Plan (the "Plan") that has been
adopted by Portico pursuant to Rule 12b-1 under the 1940 Act.
In the case of the Funds, no payments are made to their
Distributor under the Plan. However, payments to Shareholder
Organizations, including affiliates of the Adviser and Sub-
Adviser, under the Plan are not tied directly to their own out-
of-pocket expenses and therefore may be used as they elect (for
example, to defray their overhead expenses), and may exceed
their direct and indirect costs.
Custodian, Transfer and Dividend Disbursing Agent, and
Accounting Services Agent Firstar Trust, an affiliate of the
Adviser, provides transfer agency and dividend disbursing
agency services for all the Funds and custodial and accounting
services for each Fund, except the International Equity Fund.
State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110, provides custodial and accounting
services for the International Equity Fund. For the fiscal year
ended October 31, 1995, total transfer agency, dividend
disbursing agency, custodial and accounting services fees
earned by Firstar Trust were approximately 0.13%, 0.09%, 0.11%,
0.08%, 0.07%, and 0.04% of the Balanced , Growth and Income,
Equity Index, MidCore Growth, Special Growth, and International
Equity Funds' average net assets, respectively. Additional
information regarding the fees payable by the Funds to Firstar
Trust and State Street Bank and Trust Company for these
services is provided in the Statement of Additional
Information. Inquiries to the transfer agent may be sent to the
following address: Firstar Trust Company, P.O. Box 3011,
Milwaukee, WI 53201-3011.
INVESTMENT LIMITATIONS
Except for the limitations detailed below, the investment
objective and policies of each Fund described in this
Prospectus are not fundamental and may be changed by the Board
of Directors without the affirmative vote of the holders of a
majority of a Fund's outstanding shares. If there is a change
in a Fund's investment objective, shareholders should consider
whether the Fund remains an appropriate investment in light of
their then current financial position and needs. The following
descriptions summarize several of each Fund's fundamental
investment limitations which are set forth in full in the
Statement of Additional Information.
No Fund may:
1. Purchase securities of any one issuer (other than U.S.
Government securities) if more than 5% of the value of its
total assets will be invested in the securities of such issuer,
except that up to 25% of the value of a Fund's total assets may
be invested without regard to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than
10% of the outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets in one or more
issuers conducting their principal business activities in the
same industry.
4. Borrow money or enter into reverse repurchase agreements
except for temporary purposes in amounts up to 10% of the value
of the total assets at the time of such borrowing, or mortgage,
pledge or hypothecate any assets except in connection with such
borrowings. Whenever borrowings (including reverse repurchase
agreements) exceed 5% of the Fund's total assets, the Fund will
not make any investments. If a percentage limitation is
satisfied at the time of investment, a later increase or
decrease in such percentage resulting from a change in the
value of the Fund's portfolio securities will not constitute a
violation of such limitation. If due to market fluctuations or
other reasons the amount of borrowings or reverse repurchase
agreements exceed the 10% limit stated above, a Fund will
promptly reduce such amount.
TAXES Portico's management intends that each Fund will qualify as a
Federal "regulated investment company" under the Internal
Revenue Code of 1986, as amended (the "Code"). Such
qualification generally will relieve each Fund of liability for
federal income taxes to the extent its earnings are distributed
in accordance with the Code.
Each Fund contemplates declaring as dividends each year at
least 90% of its investment company income. An investor who
receives a dividend derived from investment company taxable
income (which includes any excess of net short-term capital
gain over net long-term capital loss) treats it as a receipt of
ordinary income in the computation of his gross income, whether
such dividend is paid in the form of cash or additional shares
of the Fund. Subject to certain holding requirements, the
dividends received deduction for corporations may apply to such
ordinary income distributions to the extent of the total
qualifying dividends received by a Fund from domestic
corporations for the taxable year.
Any dividend or distribution of a Fund's excess of net longterm
capital gain over its net short-term capital loss will be
taxable to a shareholder of the Fund as long-term capital gain,
regardless of how long the shareholder has held shares of the
Fund.
Before purchasing Fund shares, the impact of dividend or
capital gain distributions which are expected to be declared or
have been declared but not paid, should be carefully
considered. Any dividend or distribution paid by the Fund
shortly after the purchase of shares of the Fund will have the
effect of reducing the per share net asset value by the per
share amount of the dividend or distribution. Such dividends or
distributions, although in effect a return of capital to
shareholders, are subject to income taxes.
Each Fund will be required in certain cases to withhold and
remit to the U.S. Treasury 31% of the dividends or gross sale
proceeds paid to any shareholder (i) who has provided either an
incorrect taxpayer identification number or no number at all,
(ii) who is subject to withholding by the Internal Revenue
Service for failure to properly include on his return payments
of interest or dividends, or (iii) who has failed, when
required to do so, to certify that he is not subject to backup
withholding. Each Fund generally also will withhold and remit
to the U.S. Treasury 10% of all distributions from individual
retirement accounts (including simplified employee plans) to
any investor unless the transfer agent receives a written
request not to withhold federal income tax from the investor
prior to the distribution date; withholding on distributions
from other types of Retirement Plans may be mandatory and may
be at a higher rate.
A taxable gain or loss may be realized by a shareholder upon a
redemption, transfer or exchange of Fund shares, depending on
the tax basis of the shares and their price at the time of such
disposition.
Generally, a shareholder may include sales charges incurred
upon the purchase of Retail Shares in his or her tax basis for
such shares for the purpose of determining gain or loss on a
redemption, transfer or exchange of shares. However, if the
shareholder effects an exchange of such shares for Retail
Shares of another fund of the Company within 90 days of the
purchase and is able to reduce the sales charge applicable to
the new shares (by virtue of the Company's exchange privilege),
the amount equal to such reduction may not be included in the
tax basis of the shareholder's exchanged shares, but may be
included (subject to the limitation) in the tax basis of the
new shares. If a shareholder held shares for six months or
less, any loss realized by the shareholder will be treated as
long-term loss to the extent of any long-term capital gain
distribution received.
Certain income received by the International Equity Fund may be
subject to foreign taxes. If more than 50% in value of the
Fund's total assets at the close of any taxable year consists
of stocks or securities of foreign corporations, the Fund may
elect to treat any foreign taxes paid by it as paid by its
shareholders. If the Fund makes this election, each shareholder
generally will be required to include in income his respective
pro rata portions of foreign taxes and, if he itemizes his
deductions, will be entitled to deduct such respective pro rata
portions in computing his taxable income or, alternatively, to
claim foreign tax credits (subject, in either case, to certain
limitations). Each year that the Fund makes this election, it
will report to its shareholders the amount per share of foreign
taxes it has elected to have treated as paid by its
shareholders. If the Fund's dividends exceed its taxable income
in any year, as a result of currency-related losses or
otherwise, all or a portion of the Fund's dividends may be
treated as a return of capital to shareholders for tax
purposes.
The foregoing is only a brief summary of some of the important
federal income tax considerations generally affecting the Funds
and their shareholders, and is not intended as a substitute for
careful tax planning and is based on tax laws and regulations
which are in effect on the date of this Prospectus. Such laws
and regulations may be changed by legislative or administrative
action. Accordingly, investors in the Funds should consult
their tax advisers with specific reference to their own tax
situation. Shareholders will be advised at least annually as to
the federal income tax consequences of dividends and
distributions made each year.
State and Local Investors are advised to consult their tax advisers concerning
the application of state and local tax laws, which may have
different consequences from those of the federal income tax law
described above.
DESCRIPTION OF SHARES
The Company was incorporated under the laws of the State of
Wisconsin on February 15, 1988 and is registered with the SEC
as an open-end management company. The Articles of
Incorporation authorize the Board of Directors to issue up to
150 billion full and fractional shares of common stock, $.0001
par value per share. The Company currently has 16 classes
representing interests in 16 investment portfolios. Each class
of the Funds is currently divided into two separate series, a
Retail Series and Institutional Series representing interests
in the same Fund. Of these authorized shares, 500 million
shares have been classified for the Retail Series of each Fund
discussed in this Prospectus.
Shares of each series bear their pro rata portion of all
operating expenses paid by the Funds, except certain payments
under the Funds' Distribution and Service Plan and Shareholder
Servicing Plan applicable only to Retail Series Shares.
Institutional Shares are offered in a separate prospectus and
are sold without a sales charge. The differences in expenses and
sales charges will affect the performance of Institutional and
Retail Shares. Institutional Shares are only sold to and held
by (i) trust, agency or custodial accounts opened through trust
companies or trust departments affiliated with Firstar
Corporation; (ii) employer sponsored qualified retirement
plans; and (iii) clients of the Adviser. Retail Shares are
available to any investor who does not fall within the three
preceding categories. Portico Funds does not offer the Periodic
Investment Plan, ConvertiFund(R), and Systematic Withdrawal
Plan to Shareholders of the Institutional Series. A salesperson
and any other person or Shareholder Organization entitled to
receive compensation for selling or servicing shares may
receive different compensation with respect to different series
of shares.
For information regarding the other funds and series, contact
Portico Investor Services at 1-800-982-8909 or 414-287-3710
(Milwaukee area) or your Shareholder Organization.
Portico does not presently intend to hold annual meetings of
shareholders except as required by the 1940 Act or other
applicable law. Portico will call a meeting of shareholders for
the purpose of voting upon the question of removal of a member
of the Board of Directors upon written request of shareholders
owning at least 10% of the outstanding shares of Portico that
are entitled to vote. To the extent required by law, Portico
will assist in shareholder communication in such matters.
Shareholders of each class of the Funds are entitled to one
vote for each full share held and proportionate fractional
votes for fractional shares held, and will vote in the
aggregate and not by Fund except where otherwise required by
law. It is contemplated that the shareholders of a Fund will
vote separately on matters relating to its investment advisory
agreement (or sub-advisory agreement with respect to the
International Equity Fund) and any changes in its fundamental
investment limitations. On any matter submitted to the vote of
shareholders which only pertains to agreements, liabilities or
expenses applicable to the Retail Shares but not the
Institutional Shares of the same Fund, only the Retail Shares
will be entitled to vote. Shares of Portico have noncumulative
voting rights and, accordingly, the holders of more than 50% of
Portico's outstanding shares (irrespective of Fund) may elect
all of the Directors. As of January 31, 1996, the Adviser and
its affiliates held, on behalf of their underlying accounts,
approximately 72% of Portico's shares that were outstanding on
that date.
Each Retail Share of a Fund represents an equal proportionate
interest with other Retail Shares in the Fund, and is entitled
to such dividends and distributions earned on its assets as are
declared at the discretion of the Board of Directors. Shares of
the Funds do not have preemptive rights. Each Fund is
classified as a diversified company under the 1940 Act.
NET ASSET VALUE AND DAYS OF OPERATION
The net asset value of each Fund for purposes of pricing
purchase and redemption orders is determined as of the close of
regular trading hours on the Exchange, currently 3:00 p.m.
Central Time, on each day the Exchange is open for trading. As
a result, shares of the Funds will not be priced on the days
which the Exchange observes: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value per Retail
Share is calculated by dividing the value of all securities and
other assets owned by each Fund that are allocable to Retail
Shares, less the liabilities charged to Retail Shares, by the
number of the Fund's outstanding Retail Shares.
Securities which are traded on a recognized domestic stock
exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded or at
the last sale price on the national securities market.
Portfolio securities which are primarily traded on foreign
securities exchanges are generally valued at the preceding
closing values of such securities on their respective
exchanges, except when an occurrence subsequent to the time a
value was so established is likely to have changed such value.
In such an event, the fair value of those securities will be
determined through the consideration of other factors by or
under the direction of the Board of Directors. Exchange-traded
securities for which there were no transactions are valued on
the average of the current bid and asked prices for the
International Equity Fund and at the current bid prices for the
other Funds. Securities traded on only over-the-counter markets
are valued on the basis of closing over-the-counter bid prices.
Restricted securities, securities for which market quotations
are not readily available and other assets are valued at fair
value by the Adviser under the supervision of the Board of
Directors. Short-term investments having a maturity of 60 days
or less are valued at amortized cost, unless the amortized cost
does not approximate market value.
Each Fund's securities may be valued
based on valuations provided by an independent
pricing service. These valuations are reviewed by the Adviser.
If the Adviser believes that a valuation received from the
service does not represent a fair value, it values the security
by a method that the Board of Directors believes will determine
a fair value. Any pricing service used may employ electronic
data processing techniques, including a "matrix" system, to
determine valuations.
Quotations of foreign securities in foreign currency are
converted to U.S. dollar equivalents using the foreign exchange
quotation in effect at the time net asset value is computed.
Foreign securities held by the International Equity Fund may
trade in their local markets on days the Fund is closed, and
the Fund's net asset value may, therefore, change on days when
investors may not purchase or redeem shares.
PERFORMANCE CALCULATIONS
From time to time, total return data for Retail Shares of a
Fund may be quoted in advertisements or in communications to
shareholders. The total return of a Fund's Retail Shares will
be calculated on an average annual (compound) total return
basis, and may also be calculated on an aggregate total return
basis, for various periods. Average annual total return
reflects the average annual percentage change in value of an
investment in Retail Shares of a Fund over the measuring
period. Aggregate total return reflects the total percentage
change in value over the measuring period. Both methods of
calculating total return assume that dividends and capital gain
distributions made by the Retail Shares of the Fund during the
period are reinvested in Retail Shares of the Fund and that the
maximum sales charge during the period has been deducted from
the investment at the time of purchase.
All the Funds may advertise total return data without
reflecting the sales charge if they are accompanied, in
accordance with SEC rules, by average annual total return data
reflecting the maximum sales charge. Quotations which do not
reflect the sales charge will, of course, be higher than
quotations which do.
The total return of a Fund's Retail Shares may be compared to
those of other mutual funds with similar investment objectives
and to stock, bond and other relevant indices or to rankings
prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For
example, the total return of a Fund's Retail Shares may be
compared to data prepared by Lipper Analytical Services, Inc.
In addition, the total return of a Fund's Retail Shares may be
compared to the S&P 500 Index; the NASDAQ Composite Index, an
index of unmanaged groups of common stocks of domestic
companies that are quoted on the National Association of
Securities Quotation System; the Dow Jones Industrial Average,
a recognized unmanaged index of common stocks of 30 industrial
companies listed on the New York Stock Exchange; the Wilshire
Top 750 Index, an index of domestic equity issues which are
traded over the national exchanges; the Russell 2000 Index;
the Value Line Composite Index, an unmanaged
index of nearly 1,700 stocks reviewed in Ratings &
Reports; the Russell MidCap; the Wilshire MidCap 750
Index; the Lehman Brothers Intermediate Government/Corporate
Bond Index; the Lehman Brothers Government/Corporate Bond
Index; and the Consumer Price Index; the GDP EAFE Index; the
Salmon-Russell Indices; the Russell Universe Indices; and the
Lipper International Indices. Total return data as reported in
national financial publications, such as Money Magazine,
Forbes, Barron's, Morningstar Mutual Funds, The Wall Street
Journal and The New York Times, or in publications of a local
or regional nature, may also be used in comparing the
performance of the Funds.
Performance quotations represent past performance, and should not be considered
as representative of future results. The investment return and principal value
of an investment in a Fund's Retail Shares will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. Since
performance will fluctuate, performance data for a Fund cannot necessarily be
used to compare an investment in a Fund's Retail Shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield for a stated period of time. Investors should
remember that performance is generally a function of the kind and quality of the
investments held in a portfolio, portfolio maturity, operating expenses and
market conditions. Any fees charged by Shareholder Organizations directly to
their customer accounts in connection with investments in a Fund will not be
included in the Fund's calculations of total return and will reduce the total
return received by the accounts. The methods used to compute total return are
described in more detail in the Statement of Additional Information.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS
OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUNDS OR BY THEIR DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
EQUITY INDEX FUND, BY SHAREHOLDERS OF THE FUND, BY ANY PERSON OR BY ANY ENTITY
FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION
WITH THE USE LICENSED BY THE FUND, OR FOR ANY OTHER USE. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE FOR USE WITH RESPECT TO THE
S&P 500 INDEX OR DATA INCLUDED HEREIN. "STANDARD & POOR'S/R," "S&P/R," "S&P
500/R," "STANDARD & POOR'S 500/R," AND "500/R" ARE SERVICE MARKS OF S&P AND
HAVE BEEN LICENSED FOR USE BY PORTICO.
*************
PORTICO FUNDS, INC.
(Money Market Fund, U.S. Treasury Money Market Fund,
U.S. Government Money Market Fund, Tax-Exempt Money Market Fund)
Form N-1A
Cross Reference Sheet
Part A
Item No. Prospectus Heading
- -------- ------------------
1. Cover Page. . . . . . . . . . . . . . . . . Cover Page
2. Synopsis. . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information . . . . . . Financial Highlights; Yield
4. General Description of Registrant . . . . . Cover Page; Investment
Objectives and Policies; Other
Investment Information;
Description of Shares;
Investment Limitations
5. Management of the Fund. . . . . . . . . . . Management of the Funds
5A. Management's Discussion of
Fund Performance. . . . . . . . . . . . . . Inapplicable
6. Capital Stock and Other Securities. . . . . Dividends and Distributions;
Management of the Funds;
Taxes; Description of Shares
7. Purchase of Securities Being Offered. . . . Purchase of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
8. Redemption or Repurchase. . . . . . . . . . Redemption of Shares;
Shareholder Services; Net
Asset Value and Days of
Operation
9. Pending Legal Proceedings . . . . . . . . . Not Applicable
**************
Prospectus February 20, 1996
Money Market Fund
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
Tax-Exempt Money Market Fund
TABLE OF CONTENTS
Expense Summary 2
Financial Highlights 3
Investment Objectives and Policies 6
Other Investment Information 12
Purchase of Shares 13
Redemption of Shares 16
Shareholder Services 19
Dividends and Distributions 22
Management of the Funds 22
Investment Limitations 25
Taxes 27
Description of Shares 28
Net Asset Value and Days of Operation 29
Yield 30
PORTICO FUNDS, INC. is a family of sixteen mutual funds that offer a variety of
investment objectives designed to meet the needs of individual and institutional
investors. This Prospectus describes four separate no-load money market funds
(the "Funds") that are designed to meet the cash management and investment needs
of investors. Portico Funds also offers retail and institutional shares of bond
and equity funds, which are described in separate prospectuses.
AN INVESTMENT IN THE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THE MONEY MARKET FUND seeks to provide a high level of taxable current income
consistent with liquidity, the preservation of capital and a stable net asset
value. The Fund attempts to attain its objective by investing in a broad range
of government, bank and commercial money market instruments.
THE U.S. TREASURY MONEY MARKET FUND seeks to provide a high level of current
income exempt from state income taxes consistent with liquidity, the
preservation of capital and a stable net asset value. The Fund pursues its
objective by investing in obligations issued or guaranteed as to principal and
interest by the U.S. Treasury, the interest income from which is exempt from
state income taxation.
THE U.S. GOVERNMENT MONEY MARKET FUND seeks to provide a high level of taxable
current income consistent with liquidity, the preservation of capital and a
stable net asset value. The Fund attempts to attain its objective by investing
in obligations that are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, and in repurchase agreements relating to such
obligations, irrespective of state income tax considerations.
THE TAX-EXEMPT MONEY MARKET FUND seeks to provide a high level of current income
exempt from federal income taxes consistent with liquidity, the preservation of
capital and a stable net asset value. In pursuing its investment objective, the
Fund invests primarily in short-term debt obligations issued by state and local
governments.
Firstar Investment Research & Management Company ("FIRMCO" or the "Adviser")
serves as investment adviser to each Fund, and the Funds are sponsored by B. C.
Ziegler and Company (the "Distributor"). Shareholder Organizations may perform
shareholder servicing and provide assistance in connection with the distribution
of the Funds' shares and receive fees from the Funds for their services. (See
"Management of the Funds.") This Prospectus sets forth concisely the information
about the Money Market Fund, U.S. Treasury Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund that a prospective investor
should consider before investing. You should read this Prospectus and retain it
for future reference. Additional information about the Funds, contained in a
Statement of Additional Information, has been filed with the Securities and
Exchange Commission and is available upon request without charge by writing
Portico Investor Services at 615 East Michigan Street, P.O. Box 3011, Milwaukee,
WI 53201-3011, or by calling 1-800-982-8909 or 414-287-3710 (Milwaukee area).
The Statement of Additional Information bears the same date as this Prospectus
and is incorporated by reference in its entirety into the Prospectus.
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.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, FIRSTAR
TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER BANK, OR OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES INVESTMENT
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
February 20, 1996
EXPENSE SUMMARY Below is a summary of the shareholder transaction expenses and
the annual operating expenses incurred by the Money Market, U.S. Treasury Money
Market, U.S. Government Money Market, and Tax-Exempt Money Market Funds during
the fiscal year ended October 31, 1995. An example based on the summary is also
shown.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None<F35>
Exchange Fees None
TAX
U.S. U.S. EXEMPT
ANNUAL FUND OPERATING EXPENSES MONEY TREASURY GOVERNMENT MONEY
(AS A PERCENTAGE OF MARKET MONEY MARKET MONEY MARKET MARKET
AVERAGE NET ASSETS) FUND FUND FUND FUND
- ---------------------------- ------ ----------- ----------- -----
Advisory Fees After
Fee Waiver <F36> 0.27% 0.34% 0.42% 0.33%
12b-1 Fees <F37> 0.03% 0.00% 0.00% 0.00%
Shareholder Servicing Fees<F37> 0.01% 0.02% 0.03% 0.03%
Other Expenses After
Fee Waivers<F38> 0.29% 0.24% 0.15% 0.24%
Total Fund Operating Expenses
After Fee Waivers <F39> 0.60% 0.60% 0.60% 0.60%
<F35>A fee of $10.00 is charged for each wire redemption. See "Redemption of
Shares."
<F36>The Adviser has voluntarily agreed to waive a portion of its fees to the
extent that each Fund's total ordinary operating expenses exceed 0.60% during
the current fiscal year. Absent such waivers, advisory fees would be 0.50% for
each Fund. See "Management of the Funds" in this Prospectus for a more complete
description and the Funds' financial statements for the fiscal year ended
October 31, 1995 incorporated into the Statement of Additional Information.
<F37>The total of all 12b-1 fees and Shareholder Servicing Fees paid by a Fund
may not exceed, in the aggregate, the annual rate of 0.25% of the Fund's
average daily net assets. Only the Money Market Fund intends to pay 12b-1 fees
for the current year.
<F38>The Co-Administrators waived 0.07%, 0.07%, 0.07% and 0.07% of their fees
for the Money Market, U.S. Treasury Money Market, U.S. Government Money
Market and Tax-Exempt Money Market Funds, respectively, during the fiscal
year ended October 31, 1995. Absent such waivers, other expenses would be
0.36%, 0.31%, 0.22% and 0.31% for the Money Market, U.S.Treasury Money
Market, U.S. Government Money Market, and Tax-Exempt Money Market Funds,
respectively.
<F39>Absent fee waivers, total operating expenses would be 0.90%, 0.83%, 0.75%
and 0.84% for the Money Market, U. S. Treasury Money Market, U.S. Government
Money Market and Tax-Exempt Money Market Funds, respectively.
EXPENSE SUMMARY Example: You would pay the following expenses on a $1,000
investment in any one of the Funds, assuming (1) 5% annual return and (2)
redemption of your investment at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Money Market Fund, U.S. Treasury
Money Market Fund, U.S. Government
Money Market Fund, Tax-Exempt Money
Market Fund $6 $19 $33 $75
The foregoing tables are intended to assist investors in understanding the
expenses that shareholders bear directly or indirectly. In addition, Shareholder
Organizations may charge fees for providing services in connection with their
clients' investments in a Fund's shares.
The example shown above should not be considered a representation of future
investment return or operating expenses. Actual investment return and operating
expenses may be more or less than those shown.
UNDERSTANDING EXPENSES
Operating a mutual fund involves a variety of expenses for portfolio management,
shareholder statements and reports, and other services. These costs are paid
from a Fund's assets and their effect, except for fees charged directly by a
Shareholder Organization to its customers, are factored into any quoted share
price or return.
FINANCIAL HIGHLIGHTS
The financial highlights for each of the periods presented have been derived
from financial statements which have been audited by Price Waterhouse LLP,
independent accountants, whose report, which appears in the annual report to
shareholders for the fiscal year ended October 31, 1995, is incorporated by
reference into the Statement of Additional Information. The tables on the
following pages should be read in conjunction with the financial statements and
related notes also incorporated by reference into the Statement of Additional
Information. You may obtain the Statement of Additional Information and the
annual report to shareholders, which contains additional performance
information, free of charge by calling or writing Portico Investor Services at
the address listed on the back cover of this Prospectus.
<TABLE>
FINANCIAL HIGHLIGHTS Supplemental Data and Ratios
----------------------------
<CAPTION> Ratio
of Net
Net Asset Dividends Net Asset Net Assets, Ratio of Investment
Value, Net from Net Value, End of Net Expenses Income to
Beginning Investment Investment End of Period to Average Average Total
of Period Income Income Period (000s) Net Assets Net Assets Return
---------- ---------- ---------- -------- --------- ----------- ---------- ------
MONEY MARKET FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 16,<F40> through October 31, 1988 $1.00 $0.05 $(0.05) $1.00 $100,373 0.44%<F42><F43> 7.35%<F42><F43>4.63%<F44>
Year Ended October 31, 1989 1.00 0.08 (0.08) 1.00 201,097 0.60% <F43> 8.66% <F43> 9.01%
Year Ended October 31, 1990 1.00 0.08 (0.08) 1.00 762,170 0.51% <F43> 7.81% <F43> 8.14%
Year Ended October 31, 1991 1.00 0.06 (0.06) 1.00 628,697 0.50% <F43> 6.28% <F43> 6.39%
Year Ended October 31, 1992<F41> 1.00 0.04 (0.04) 1.00 146,012 0.58% <F43> 3.84% <F43> 3.73%
Year Ended October 31, 1993 1.00 0.03 (0.03) 1.00 132,568 0.60% <F43> 2.67% <F43> 2.71%
Year Ended October 31, 1994 1.00 0.03 (0.03) 1.00 165,018 0.60% <F43> 3.44% <F43> 3.42%
Year Ended October 31, 1995 1.00 0.05 (0.05) 1.00 172,261 0.60% <F43> 5.36% <F43> 5.51%
U.S. TREASURY MONEY MARKET FUND
April 29,<F40> through October 31, 1991 1.00 0.03 (0.03) 1.00 36,267 0.52% <F45><F46> 5.23%<F45><F46> 2.69%<F47>
Year Ended October 31, 1992 <F41> 1.00 0.04 (0.04) 1.00 37,342 0.60% <F46> 3.42% <F46> 3.48%
Year Ended October 31, 1993 1.00 0.03 (0.03) 1.00 40,744 0.60% <F46> 2.55% <F46> 2.59%
Year Ended October 31, 1994 1.00 0.03 (0.03) 1.00 56,020 0.60% <F46> 3.14% <F46> 3.20%
Year Ended October 31, 1995 1.00 0.05 (0.05) 1.00 64,655 0.60% <F46> 5.04% <F46> 5.16%
U.S. GOVERNMENT MONEY MARKET FUND
August 1,<F40> through October 31, 1988 1.00 0.02 (0.02) 1.00 49,069 0.50%<F42><F48> 7.56%<F42><F48> 1.91%<F44>
Year Ended October 31, 1989 1.00 0.08 (0.08) 1.00 101,497 0.61% <F48> 8.43% <F48> 8.72%
Year Ended October 31, 1990 1.00 0.08 (0.08) 1.00 153,480 0.60% <F48> 7.55% <F48> 7.84%
Year Ended October 31, 1991 1.00 0.06 (0.06) 1.00 237,752 0.60% <F48> 5.80% <F48> 6.02%
Year Ended October 31, 1992<F41> 1.00 0.04 (0.04) 1.00 221,521 0.60% <F48> 3.56% <F48> 3.60%
Year Ended October 31, 1993 1.00 0.03 (0.03) 1.00 203,165 0.60% <F48> 2.59% <F48> 2.63%
Year Ended October 31, 1994 1.00 0.03 (0.03) 1.00 183,591 0.60% <F48> 3.29% <F48> 3.35%
Year Ended October 31, 1995 1.00 0.05 (0.05) 1.00 163,068 0.60% <F48> 5.24% <F48> 5.37%
TAX-EXEMPT MONEY MARKET FUND
June 27,<F40> through October 31, 1988 1.00 0.02 (0.02) 1.00 10,838 0.52%<F42><F49>5.10%<F42><F49>1.78%<F44>
Year Ended October 31, 1989 1.00 0.06 (0.06) 1.00 18,429 0.60% <F49> 5.82% <F49> 5.99%
Year Ended October 31, 1990 1.00 0.05 (0.05) 1.00 16,424 0.64% <F49> 5.38% <F49> 5.51%
Year Ended October 31, 1991 1.00 0.04 (0.04) 1.00 29,714 0.63% <F49> 4.34% <F49> 4.49%
Year Ended October 31, 1992<F41> 1.00 0.03 (0.03) 1.00 74,343 0.60% <F49> 2.83% <F49> 2.91%
Year Ended October 31, 1993 1.00 0.02 (0.02) 1.00 73,621 0.60% <F49> 2.12% <F49> 2.17%
Year Ended October 31, 1994 1.00 0.02 (0.02) 1.00 70,436 0.60% <F49> 2.23% <F49> 2.25%
Year Ended October 31, 1995 1.00 0.03 (0.03) 1.00 84,084 0.60% <F49> 3.36% <F49> 3.42%
<FN>
<F40> Commencement of operations.
<F41> Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F42> Annualized for the period ended October 31, 1988.
<F43> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 0.90%, 0.93%, 0.99%, 0.96%, 0.94%, 0.94%, 1.01%
and 0.89%, respectively; and ratios of net investment income to average net assets for the fiscal years ended October 31, 1995,
1994, 1993, 1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 5.06%, 3.11%, 2.28%, 3.46%, 5.84%,
7.38%, 8.25% and 6.90%, respectively.
<F44> Not annualized for the period ended October 31, 1988.
<F45> Annualized for the period ended October 31, 1991.
<F46> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, and the period ended October 31, 1991 would have been 0.83%, 0.94%, 0.93%, 1.01% and 1.10%, respectively; and ratios of net
investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, and the period ended October
31, 1991 would have been 4.81%, 2.80%, 2.22%, 3.01% and 4.65%, respectively.
<F47> Not annualized for the period ended October 31, 1991.
<F48> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 0.75%, 0.88%, 0.93%, 0.94%, 0.95%, 1.01%, 1.06% and
0.86%, respectively; and ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994,
1993, 1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 5.09%, 3.01%, 2.26%, 3.22%, 5.45%, 7.14%, 7.98%
and 7.20%, respectively.
<F49> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 0.84%, 0.93%, 0.98%, 1.05%, 1.08%, 1.26%, 1.30% and
1.30%, respectively; and ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994,
1993, 1992, 1991, 1990, 1989, and the period ended October 31, 1988 would have been 3.12%, 1.90%, 1.74%, 2.38%, 3.89%, 4.76%, 5.12%
and 4.32%, respectively.
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
The descriptions that follow are designed to help you choose the Fund that best
fits your investment objectives. You may want to pursue more than one objective
by investing in more than one of the Portico Funds. You are reminded that there
are risks in an investment in the Funds and there can be no assurance that each
Fund's investment objective will be attained. An investor should not consider an
investment in any individual Fund to be a complete investment program.
MONEY MARKET FUND
The investment objective of the Money Market Fund is to seek to
provide a high level of taxable current income consistent with liquidity, the
preservation of capital and a stable net asset value. In pursuing its investment
objective, the Fund will invest, during normal market conditions, at least 80%
of its assets in debt obligations with remaining maturities of thirteen months
or less as determined in accordance with the rules of the Securities and
Exchange Commission ("SEC"). The Fund may purchase a broad range of government,
bank and commercial obligations that are available in the money markets.
The Money Market Fund will purchase only "First Tier Eligible Securities" (as
defined by the SEC) that present minimal credit risks as determined by the
Adviser pursuant to guidelines approved by the Board of Directors (the "Board of
Directors") of Portico Funds, Inc. ("Portico" or the "Company"). First Tier
Eligible Securities consist of (1) securities that either (a) have short-term
debt ratings at the time of purchase in the highest rating category by at least
two unaffiliated nationally recognized statistical rating organizations
("NRSROs") (or one NRSRO if the security was rated by only one NRSRO), or (b)
are issued by issuers with such ratings, and (2) certain securities that are
unrated (including securities of issuers that have long-term but not short-term
ratings) but are of comparable quality as determined in accordance with
guidelines approved by the Board of Directors. The Appendix to the Statement of
Additional Information includes a description of applicable NRSRO ratings. The
following descriptions illustrate the types of instruments in which the Fund
invests.
The Money Market Fund may purchase bank obligations, such as certificates of
deposit, bankers' acceptances and time deposits, including U.S. dollar-
denominated instruments issued or supported by the credit of U.S. or foreign
banks or savings institutions having total assets at the time of purchase in
excess of $1 billion. Investments by the Fund in the obligations of foreign
banks and foreign branches of U.S. banks will not exceed 25% of the value of the
Fund's total assets at the time of investment. The Fund may also make interest-
bearing savings deposits in commercial and savings banks in amounts not in
excess of 5% of its total assets.
The Money Market Fund may purchase commercial paper, including asset-backed
commercial paper, and corporate bonds with remaining maturities of thirteen
months or less which meet the Fund's quality requirements set forth above.
The Money Market Fund may purchase variable and floating rate instruments, which
may have a stated maturity in excess of thirteen months but will permit the Fund
to demand payment of the principal of the instrument at least once every
thirteen months upon not more than thirty days' notice (unless the instrument is
guaranteed by the U.S. Government or an agency or instrumentality thereof). Such
instruments may include variable amount master demand notes, which are unsecured
instruments that permit the indebtedness thereunder to vary in addition to
providing for periodic adjustments in the interest rate. Issues
of unrated variable and floating rate instruments will be determined
by the Adviser (under the supervision of the Board of Directors) to
be of comparable quality at the time of purchase to First Tier Eligible
Securities. An active secondary market may not exist, however, with respect to
particular variable and floating rate instruments, and usually will not exist
with respect to variable amount master demand notes. The absence of a secondary
market could make it difficult for the Fund to dispose of a variable or floating
rate instrument if the issuer defaulted on its payment obligation or during
periods that the Fund could not exercise its demand rights, and the Fund could,
for these or other reasons, suffer a loss with respect to such instruments.
The Money Market Fund may agree to purchase U.S. Government obligations from
financial institutions subject to the seller's agreement to repurchase them at
an agreed upon time and price ("repurchase agreements"). During the term of the
repurchase agreement, the Adviser will continue to monitor the creditworthiness
of the seller and will require the seller to maintain the value of the
securities subject to the agreement at not less than 102% of the repurchase
price. Default or bankruptcy of the seller would, however, expose the Fund to
possible loss because of the adverse market action or delay in connection with
the disposition of the underlying securities. The securities held subject to a
repurchase agreement may have stated maturities exceeding thirteen months,
provided the repurchase agreement itself matures in less than one year. The
Money Market Fund may also purchase obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities. The Fund may also purchase
stripped U.S. Government Obligations and Government-backed trusts. For further
discussion of U.S. Government securities, see "U.S. Treasury Money Market Fund
and U.S. Government Money Market Fund."
The Money Market Fund may acquire certain types of bank instruments issued or
supported by the credit of foreign banks or foreign branches of domestic banks
where the Adviser deems the instrument to present minimal credit risks. Such
instruments nevertheless entail risks that are different from those of
investments in domestic obligations of U.S. banks. Such risks include future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on such instruments, the possible
seizure or nationalization of foreign deposits or the adoption of other foreign
government restrictions which might adversely affect the payment of principal
and interest on such instruments. In addition, foreign banks and foreign
branches of U.S. banks are subject to less stringent reserve requirements and to
different accounting, auditing, reporting and recordkeeping standards than those
applicable to domestic branches of U.S. banks.
U.S. TREASURY MONEY MARKET FUND AND U.S. GOVERNMENT MONEY MARKET FUND
The investment objective of the U.S. Treasury Money Market Fund is to seek to
provide a high level of current income exempt from state income taxes consistent
with liquidity, the preservation of capital and a stable net asset value. The
Fund seeks to achieve its objective by investing in securities with remaining
maturities of thirteen months or less (as determined in accordance with SEC
rules) that are issued or guaranteed as to principal and interest by the U.S.
Treasury (bills, certificates of indebtedness, notes and bonds). However, under
extraordinary circumstances, such as when U.S. Treasury securities are
unavailable, the Fund may temporarily hold cash.
The investment objective of the U.S. Government Money Market Fund is to seek to
provide a high level of taxable current income consistent with liquidity, the
preservation of capital and a stable net asset value (irrespective of state
income tax considerations). The Fund seeks to achieve its objective by investing
primarily in obligations with remaining maturities of thirteen months or less
(as determined in accordance with SEC rules) that are issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, and in repurchase
agreements relating to such obligations. Under normal market conditions, the
Fund intends to invest at least 65% of its total assets in U.S. Government
obligations. Such U.S. Government obligations may include Treasury bills,
certificates of indebtedness, notes and bonds, as well as issues of agencies and
instrumentalities of the U.S. Government, including obligations of Federal Home
Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, ExportImport Bank of the United
States, Small Business Administration, Government National Mortgage Association,
Federal National Mortgage Association, General Services Administration, Student
Loan Marketing Association, Central Bank for Cooperatives, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks, Maritime
Administration, Resolution Trust Corporation and Tennessee Valley Authority.
Obligations of certain agencies and instrumentalities of the U.S. Government,
such as those of the Government National Mortgage Association, are supported by
the full faith and credit of the U.S. Treasury; others, such as the Export-
Import Bank of the United States, are supported by the right of the issuer to
borrow from the Treasury; others, such as those of the Federal National Mortgage
Association, are supported by the discretionary authority of the U.S. Government
to purchase the agency's obligations; still others, such as those of the Student
Loan Marketing Association, are supported only by the credit of the agency or
instrumentality issuing the obligation. No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored agencies
or instrumentalities if it is not obligated to do so by law.
To the extent consistent with their respective investment objectives, each Fund
(except for the U. S. Treasury Money Market Fund) may purchase participations in
trusts that hold U.S. Treasury and agency securities (such as TIGRs and CATs)
and also may purchase Treasury Receipts and other "stripped" securities that
evidence ownership in either the future interest payments or the future
principal payments on U.S. Government obligations. The SEC staff believes that
participation in CATs and TIGRs and other similar trusts are not U.S. Government
securities. These participations are issued at a discount to their "face value,"
and may exhibit greater price volatility than ordinary debt securities because
of the manner in which their principal and interest are returned to investors.
The U.S. Government Money Market Fund may also invest in Government-backed
trusts which hold obligations of foreign governments that are guaranteed or
backed by the full faith and credit of the United States.
The U.S. Treasury Money Market Fund and U.S. Government Money Market Fund may
enter into repurchase agreements with financial institutions. See "Money Market
Fund" above for a discussion of repurchase agreements.
Although substantially all of the instruments acquired by the U.S. Treasury
Money Market Fund and U.S. Government Money Market Fund will be U.S. Government
obligations (or repurchase agreements collateralized by such obligations),
shares of the U.S. Treasury Money Market Fund and U.S. Government Money Market
Fund are not themselves issued or guaranteed by any government agency. U.S.
Government obligations that have stated maturities in excess of thirteen months
but have variable or floating interest rates may be acquired by the Funds in
accordance with SEC rules.
TAX-EXEMPT MONEY MARKET FUND
The investment objective of the Tax-Exempt Money Market Fund is to seek to
provide a high level of current income that is exempt from federal income taxes
consistent with liquidity, the preservation of capital and a stable net asset
value. In pursuing this investment objective, the Fund invests in a diversified
portfolio of debt obligations issued by or on behalf of states, territories and
possessions of the United States, the District of Columbia and their
authorities, agencies, instrumentalities and political sub divisions ("Municipal
Obligations") which meet the Fund's quality requirements set forth below. During
normal market conditions, the Fund will invest at least 80% of its assets in
Municipal Obligations with remaining maturities of thirteen months or less as
determined in accordance with SEC rules. The TaxExempt Money Market Fund will
purchase only Municipal Obligations that are First Tier Eligible Securities as
defined above under "Money Market Fund."
Municipal Obligations purchased by the Fund may be backed by letters of credit
issued by foreign and domestic banks and other financial institutions. Such
letters of credit are not necessarily subject to federal deposit insurance and
adverse developments in the banking industry could have a negative effect on the
credit quality of the Fund's portfolio securities and its ability to maintain a
stable net asset value and share price. Letters of credit, like other
obligations of foreign banks, may involve certain risks in addition to those of
domestic obligations. (See "Money Market Fund" above.)
Municipal Obligations purchased by the Tax-Exempt Money Market Fund may include
variable and floating rate instruments issued by industrial development
authorities and other governmental entities. If such instruments are unrated,
they will be determined by the Fund's Adviser (under the supervision of the
Board of Directors) to be of comparable quality at the time of purchase to First
Tier Eligible Securities. While there may be no active secondary market with
respect to a particular variable or floating rate demand instrument purchased by
the Fund, the Fund may (at any time or during specified periods not exceeding
thirteen months, depending upon the instrument involved) demand payment in full
of the principal of the instrument and may re-sell the instrument to a third
party. The absence of such an active secondary market, however, could make it
difficult for the Fund to dispose of a variable or floating rate demand
instrument if the issuer defaulted on its payment obligation or during periods
that the Fund is not entitled to exercise its demand rights, and the Fund could,
for these or other reasons, suffer a loss with respect to such instruments.
From time to time on a temporary defensive basis due to market conditions, the
Tax-Exempt Money Market Fund may hold uninvested cash reserves or invest in
short-term taxable money market obligations that are permissible investments for
the Money Market Fund, in such proportions as, in the opinion of the Adviser,
prevailing market or economic conditions warrant. Uninvested cash reserves will
not earn income. Taxable obligations acquired by the Fund will not exceed under
normal market conditions 20% of the Fund's total assets at the time of purchase.
The two principal classifications of Municipal Obligations which may be held by
the Tax-Exempt Money Market Fund are "General Obligation" securities and
"Revenue" securities. General Obligation securities are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest. Revenue securities are payable only from the revenues derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source such as the
issuer of the facility being financed. Private activity bonds (e.g., bonds
issued by industrial development authorities) that are issued by or on behalf of
public authorities to finance various privately operated facilities are included
within the term "Municipal Obligations" if the interest paid thereon is exempt
(subject to federal alternative minimum tax) from federal income tax. (The Fund,
however, does not currently intend to acquire private activity bonds that are
subject to the federal alternative minimum tax.) Private activity bonds are in
most cases Revenue securities and are not payable from the unrestricted revenues
of the issuer. The credit quality of such bonds is usually directly related to
the credit standing of the corporate user of the facility involved.
The Tax-Exempt Money Market Fund may also acquire "Moral Obligation" securities,
which are normally issued by special purpose public authorities. If the issuer
of Moral Obligation securities is unable to meet its debt service obligations
from current revenues, it may draw on a reserve fund, the restoration of which
is a moral commitment but not a legal obligation of the state or municipality
which created the issue.
The Tax-Exempt Money Market Fund may purchase securities on a "when-issued" or
"forward commitment" basis. These transactions, which involve a commitment by
the Fund to purchase particular securities with payment and delivery taking
place beyond the normal settlement date, permit the Fund to lock in a price or
yield on a security it intends to purchase, regardless of future changes in
interest rates. When-issued and forward commitment transactions involve the
risk, however, that the price or yield obtained in a transaction may be less
favorable than the price or yield available in the market when the securities
delivery takes place. The Fund expects that its when-issued purchases and
forward commitments will not exceed 25% of the value of its assets absent
unusual market conditions, and that a forward commitment or commitment to
purchase when-issued securities will not exceed forty-five days. The Fund does
not intend to engage in when-issued purchases and forward commitments for
speculative purposes but only in furtherance of its investment objective.
The Tax-Exempt Money Market Fund may acquire "stand-by commitments" with respect
to Municipal Obligations held in its portfolio. Under a stand-by commitment, a
dealer agrees to purchase at the Fund's option specified Municipal Obligations
at a price equal to their amortized cost value plus accrued interest. The Fund
will acquire stand-by commitments solely to facilitate portfolio liquidity and
does not intend to exercise its rights thereunder for trading purposes.
Although the Tax-Exempt Money Market Fund does not presently intend to do so on
a regular basis, it may invest more than 25% of its assets in Municipal
Obligations, the interest on which is paid solely from revenues of similar
projects if such investment is deemed necessary or appropriate by the Adviser.
To the extent that the Fund's assets are concentrated in Municipal Obligations
payable from revenues on similar projects, the Fund will be subject to the
peculiar risks represented by such projects to a greater extent than it would be
if the Fund's assets were not so concentrated. Furthermore, payment of Municipal
Obligations of certain projects may be secured by mortgages or deeds of trust.
In the event of a default, enforcement of the mortgages or deeds of trust will
be subject to statutory enforcement procedures and limitations, including rights
of redemption and limitations on obtaining deficiency judgments. In the event of
a foreclosure, collection of the proceeds of the foreclosure may be delayed and
the amount of proceeds from the foreclosure may not be sufficient to pay the
principal of and accrued interest on the defaulted Municipal Obligations.
Opinions relating to the validity of Municipal Obligations and to the exemption
of interest thereon from federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither Portico nor the Adviser will
review the proceedings relating to the issuance of Municipal Obligations or the
bases for such opinions.
OTHER INVESTMENT INFORMATION
RESTRICTED SECURITIES. No Fund will knowingly invest more than 10% of the value
of its net assets in securities that are illiquid. Repurchase agreements and
time deposits that do not provide for payment to a Fund within seven days, and
securities that are not registered under the Securities Act of 1933 (the "Act")
but that may be purchased by institutional buyers under Rule 144A, are subject
to this 10% limit (unless such securities are variable amount master demand
notes with maturities of nine months or less, privately placed commercial paper,
or the Board of Directors or the Adviser, pursuant to guidelines adopted by the
Board of Directors, determines that a liquid trading market exists).
SECURITIES OF OTHER INVESTMENT COMPANIES. In connection with the management of
their daily cash positions, each Fund may invest in securities issued by other
investment companies with investment objectives and policies similar to their
own which invest in First Tier Eligible Securities and which determine their net
asset value per share based on the amortized cost or penny-rounding method of
valuation. Securities of other investment companies will be acquired by a Fund
within the limits prescribed by the Investment Company Act of 1940 (the "1940
Act"). In addition to the advisory fees and other expenses the Fund bears
directly in connection with its own operations, as a shareholder of another
investment company, a Fund would bear its pro rata portion of the other
investment company's advisory fees and other expenses, and such fees and other
expenses will be borne indirectly by the Fund's Shareholders.
SECURITIES LENDING. Although authorized to do so, the Funds do not presently
intend to lend portfolio securities.
PURCHASE OF SHARES Shares of the Funds are offered and sold on a continuous
basis by the distributor for the Funds, B.C. Ziegler and Company (the
"Distributor"), which is independent of the Adviser. The Distributor is a
registered broker-dealer with offices at 215 North Main Street, West Bend,
Wisconsin 53095.
THE MINIMUM INITIAL AND SUBSEQUENT INVESTMENT FOR SHARES IN A FUND IS $100.
PURCHASE ORDERS. Investors may purchase shares of the Funds through registered
representatives of Elan Investment Services, Inc. ("Elan") located at Firstar
Banks ("Firstar Investment Offices"), through Elan representatives located at
other financial institutions, directly with the Funds' transfer agent, or
through organizations that have entered into distribution or servicing
agreements with the Funds (including Elan, "Shareholder Organizations"). For a
discussion of transactions through Shareholder Organizations, see "Shareholder
Organizations" below. All checks must be drawn on a bank located within the
United States and must be payable in U.S. Dollars. Subsequent investments in an
existing account in a Fund may be made at any time by sending to the address
below a check or money order payable to the Fund in which the investment is
being made as shown above, along with a letter stating the amount of the
investment, the name of the Fund and the account number in which the investment
is to be made. A $15 fee will be imposed by the Funds' transfer agent if any
check used for investment in an account does not clear, and the investor
involved will be responsible for any loss incurred by a Fund.
PURCHASE ORDERS PLACED THROUGH REGISTERED REPRESENTATIVES
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
IN PERSON - Complete an application at - Bring your check to a Firstar a
Firstar Investment Office. Investment Office. Call
Call 1-800-982-8909 for the 1-800-982-8909 for the office
office nearest you. nearest you.
BY PHONE - Call your registered - Call your registered
representative representative
or call or call
1-800-982-8909 for the office 1-800-982-8909 for the office
nearest you. nearest you.
AUTOMATICALLY - Call your registered - Complete a Periodic Investment
representative at the number Plan Application to automatically
on your statement to obtain purchase more shares.
a Periodic Investment Plan
Application.
PURCHASE ORDERS PLACED THROUGH THE TRANSFER AGENT
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
BY MAIL - Complete an application and - Make your check payable to
mail it along with a check Portico Funds. Please include
payable to Portico Funds, your account number on your
P.O. Box 3011, check and mail it to the address
Milwaukee, WI 53201-3011. on your statement.
OVERNIGHT - Complete an application and - Make your check payable to
DELIVERY deliver it along with a check Portico Funds. Please include
payable to Portico Funds, your account number on your
615 East Michigan St., check and deliver it to the
Milwaukee, WI 53202. address at the left.
IN PERSON - Bring your application and - Bring your check to a Firstar
check to a Firstar Investment Investment Office. Call
Office. Call 1-800-982-8909 1-800-982-8909 for the office
for the office nearest you. nearest you.
AUTOMATICALLY - Call 1-800-982-8909 to - Complete a Periodic Investment
obtain a Periodic Investment Plan Application to auto-
Plan Application. matically purchase more shares.
- Open a ConvertiFund(R) account
to automatically invest proceeds
from one account to another
account of the Portico family of
funds.
BY WIRE - Call 1-800-228-1024 to arrange - Ask your bank to transmit
a wire transaction. Ask your immediately available funds by
bank to transmit immediately wire as described at the left.
available funds by wire in the Please also include your
amount of your purchase to: account number.
Firstar Bank Milwaukee, N.A.
ABA # 0750-00022, Account
# 112-952-137 for further
credit to [name of Fund]
[the name/ title on the account].
BY PHONE - Call 1-800-228-1024 to - Call 1-800-228-1024 to exchange
exchange from another from another Portico Fund
Portico Fund account with account with the same
the same registration including registration including name,
name, address and taxpayer address and taxpayer
ID number. ID number.
Investors making initial investments by wire must promptly complete a Purchase
Application and forward it to the respective Fund. REDEMPTIONS WILL NOT BE PAID
UNTIL THE COMPLETED APPLICATION HAS BEEN RECEIVED BY THE TRANSFER AGENT.
Purchase orders received by the transfer agent or Elan in proper form (as
described above) before 11:30 a.m. Central Time on a business day will be
executed at that time, provided the securities dealer or financial institution
placing the order undertakes to pay for its order in immediately available funds
wired to the transfer agent by the close of business the same day, or in the
case of orders placed by other investors, payment in such form and by such time
is guaranteed by a creditworthy financial institution at the time the order is
placed. Purchase orders that are received before 11:30 a.m. Central
Time on a business day when payment is made in any form other than by a
same day wire of immediately available funds, as well as orders received after
11:30 a.m. Central Time and before the close of regular trading hours on the New
York Stock Exchange (the "Exchange"), currently 3:00 p.m. Central Time, will be
executed as of the close of regular trading hours on the Exchange. In addition,
purchase orders received by the transfer agent or Elan before the close of
regular trading hours on the Exchange on a business day will be executed as of
the determination of net asset value on that day if the purchase price is
payable to the Fund on the next business day out of the proceeds from the
investor's redemption of shares in certain other investment companies for which
Firstar Trust Company serves as transfer agent and/or custodian. For information
concerning this procedure, call Portico Investor Services at 1-800-228-1024 or
414-287-3808 (Milwaukee area). Purchase orders that are received after the close
of regular trading hours on the Exchange or on nonbusiness days, and orders for
which payment is not received by the close of regular trading hours on the
Exchange on a business day, will be executed on the next business day after
receipt of both the order and payment in proper form by the transfer agent.
The Funds will not accept payment in cash or third party checks for the purchase
of shares. Federal regulations require that each investor provide a Social
Security number or other certified taxpayer identification number upon opening
or reopening an account. The Funds reserve the right to reject applications
without such a number or an indication that a number has been applied for. If a
number has been applied for, the number must be provided and certified within
sixty days of the date of the application. Any accounts opened without a proper
number will be subject to backup withholding and may be liquidated and
distributed to the owner(s) of record on or after the first business day
following the sixtieth day of investment, net of the backup withholding tax.
Certificates for shares will be issued only upon shareholder request. The Funds
reserve the right to reject any purchase order. Payment for shares of a Fund in
the amount of $1,000,000 or more may, at the discretion of the Adviser, be made
in the form of securities that are permissible investments for the respective
Fund. For further information, see the Statement of Additional Information or
contact Portico Investor Services at 1-800-982-8909 or 414-287-3710 (Milwaukee
area).
REDEMPTION OF SHARES
Redemption orders are effected at the net asset value per share next determined
after receipt of the order by the transfer agent or Elan. If a redemption order
is received by phone (as described below) before 11:30 a.m. Central Time on a
business day, Fund shares will be redeemed as of the determination of net asset
value at 11:30 a.m. Central Time. If a redemption order is received in proper
form (as described below) before the close of regular trading hours on the
Exchange, currently 3:00 p.m. Central Time, on a business day, Fund shares will
be redeemed as of the determination of net asset value at 3:00 p.m. Redemption
orders which are received after the close of regular trading hours on the
Exchange, or on non-business days, will be executed on the next business day.
Depending upon the current net asset value of the redeemed shares at the time of
redemption, the value of the shares redeemed may be more or less than the
investor's cost.
REDEMPTION ORDERS
THROUGH A REGISTERED
THROUGH THE TRANSFER AGENT REPRESENTATIVE
-------------------------- --------------------
BY PHONE - Call 1-800-228-1024 with - Call your registered
your account name, account representative at
number and amount of 1-800-982-8909.
redemption (minimum $500).
Redemption proceeds will
only be sent to a shareholder's
address or bank account of
a commercial bank located
within the United States as
shown on the transfer agent's
records. (Available only if
established on the account
application and if there has
been no change of address by
telephone within the
preceding 15 days.)
BY MAIL, OVERNIGHT DELIVERY OR IN PERSON
- Mail your instructions to the - Bring your instructions to
Portico Funds, P.O. Box 3011, your registered representative's
Milwaukee, WI 53201-3011, office, or mail or deliver them
or deliver them (via overnight to Portico Investor Services at
delivery or in person) to 615 East Michigan Street,
615 E. Michigan Street, P.O. Box 3011,
Milwaukee, WI 53201-3011. Milwaukee, WI 53201-3011
Include the number of shares
or the amount to be redeemed,
your shareholder account
number and Social Security
number or other taxpayer
identification number. Your
instructions must be signed
by all persons required to
sign for transactions exactly
as their names appear on the
account. If the redemption
amount exceeds $50,000, or
if the proceeds are to be
sent elsewhere than the
address of record, or the
address of record has been
changed by telephone within
the preceding 15 days, each
signature must be guaranteed
in writing by either a
commercial bank that is a
member of the FDIC, a trust
company, a credit union, a
savings association, a
member firm of a national
securities exchange or other
eligible guarantor institution.
AUTOMATICALLY - Call 1-800-982-8909 for a - Call your registered
Systematic Withdrawal Plan representative
application ($15,000 account to establish
minimum and $100 minimum a Systematic Withdrawal Plan.
per transaction).
Guarantees must be signed by an eligible guarantor institution and "Signature
Guaranteed" must appear with the signature. If certificates have been issued,
the certificates, properly endorsed or accompanied by a properly executed stock
power and accompanied by signature guarantees, must be received by the transfer
agent or Elan. The Funds may require additional supporting documents for
redemptions made by corporations, executors, administrators, trustees and
guardians. A redemption request will not be deemed to be properly received until
the transfer agent or Elan receives all required documents in proper form.
The transfer agent charges a $10.00 fee for each payment made by wire of
redemption proceeds, which will be deducted from the shareholder's account. The
transfer agent also charges a $15.00 fee for each IRA distribution (unless it is
part of a Systematic Withdrawal Plan), which will be deducted from the
shareholder's account.
In order to arrange for telephone redemptions after an account has been opened
or to change the bank or account designated to receive redemption proceeds, a
written request must be sent to Portico Investor Services at the address listed
above or contact your registered representative. The request must be signed by
each shareholder of the account. Further documentation may be requested from
corporations, executors, administrators, trustees and guardians.
The Funds reserve the right to refuse a telephone redemption if they believe it
is advisable to do so. Procedures for redeeming shares by telephone may be
modified or terminated by the Funds at any time upon notice to shareholders.
During periods of substantial economic or market change, telephone redemptions
may be difficult to implement. If a shareholder is unable to contact the
transfer agent by telephone, shares may also be redeemed by delivering the
redemption request to the transfer agent.
In an effort to prevent unauthorized or fraudulent redemption requests by
telephone, Portico and the transfer agent employ reasonable procedures specified
by a Fund to confirm that such instructions are genuine. Among the procedures
used to determine authenticity, investors electing to redeem or exchange by
telephone will be required to provide their account number. All such telephone
transactions will be tape recorded. Portico may implement other procedures from
time to time. If reasonable procedures are not implemented, Portico and/or the
transfer agent may be liable for any loss due to unauthorized or fraudulent
transactions. In all other cases, the shareholder is liable for any loss for
unauthorized transactions.
CHECK REDEMPTION. An investor may request on the Purchase Application or by
later written request that a Fund provide Redemption Checks ("Checks") drawn on
the Fund in which the investor has made an investment. Checks will be sent only
to the registered owner(s) and only to the address of record. Checks may be made
payable to the order of any person in the amount of $250 or more. Dividends are
earned until the Check clears the transfer agent. When a Check is presented to
the transfer agent for payment, the transfer agent, as the investor's agent,
will cause the particular Fund involved to redeem a sufficient number of the
investor's shares to cover the amount of the Check. Checks will not be returned
to shareholders after clearance. There is no charge to the investor for the use
of the Checks; however, the transfer agent will impose a $15 charge for stopping
payment of a Check upon the request of the investor, or if the transfer agent
cannot honor a Check due to insufficient funds or other valid reason. Because
dividends on each Fund accrue daily, Checks may not be used to close an account,
as a small balance is likely to result.
OTHER REDEMPTION INFORMATION. The Funds will make payment for redeemed shares
typically within one or two business days, but no later than the seventh day
after receipt by the transfer agent of a request in proper form, except as
provided by SEC rules. HOWEVER, IF ANY PORTION OF THE SHARES TO BE REDEEMED
REPRESENTS AN INVESTMENT MADE BY CHECK, THE FUNDS MAY DELAY THE PAYMENT OF THE
REDEMPTION PROCEEDS UNTIL THE TRANSFER AGENT IS REASONABLY SATISFIED THAT THE
CHECK HAS BEEN COLLECTED, WHICH MAY TAKE TWELVE DAYS FROM THE PURCHASE DATE.
This procedure does not apply to shares purchased by wire payment. During the
period prior to the time the shares are redeemed, dividends on such shares will
accrue and be payable, and an investor will be entitled to exercise all other
rights of beneficial ownership. An investor purchasing shares by wire must have
filed a Purchase Application before any redemption requests can be paid.
The Funds impose no charge when shares are redeemed and reserve the right to
redeem an account involuntarily, upon sixty days' written notice, if redemptions
cause the account's net asset value to remain at $50 or less. A Fund may also
redeem shares involuntarily if it is appropriate to do so to carry out the
Fund's responsibilities under the 1940 Act and, in certain cases, may make
payment for redemption in securities. Investors would bear any brokerage or
other transaction costs incurred in converting the securities so received to
cash. See the Statement of Additional Information for examples of when such
redemptions might be appropriate.
Questions concerning the proper form for redemption requests should be directed
to Portico Investor Services at 1-800-228-1024 or 414-287-3808 (Milwaukee area).
SHAREHOLDER SERVICES The services and privileges described below are available
to shareholders of the Funds. These may be modified or terminated at any time
upon notice to shareholders.
SHAREHOLDER REPORTS. Shareholders will be provided with a report showing
portfolio investments and other information at least semiannually; and after the
close of the Funds' fiscal year which ends October 31, with an annual report
containing audited financial statements. To eliminate unnecessary duplication,
only one copy of a shareholder report will be sent to shareholders with the same
mailing address. Shareholders who desire a duplicate copy of a shareholder
report to be mailed to their residence should call Portico Investor Services at
1-800-982-8909, or write Portico Investor Services at the address listed above.
In addition, account statements will be mailed to shareholders monthly,
summarizing all transactions, including purchases, reinvestment of dividends and
redemptions.
AUTOMATED TELERESPONSE SERVICE. Shareholders using a touchtone telephone can
access information on the Funds twenty-four hours a day, seven days a week. When
calling Portico Investor Services at 1-800-228-1024, shareholders may choose to
use the automated information feature or, during regular business hours (8:00
a.m. to 7:00 p.m. Central Time, Monday through Friday), speak with a Portico
Investor Services representative.
The automated service provides the information most frequently requested by
shareholders. After calling the 800-number, pressing "2" on their touch-tone
phone, shareholders can:
1. Determine closing prices for each Fund.
2. Learn how the price of a Fund has changed from the previous day.
3. Hear daily yields for Portico money market funds.
Money market fund yields reflect fee waivers in effect, represent past
performance and will vary. If fees were not waived, yields would be reduced.
Past performance is no guarantee of future results. Current yield refers to
income earned by a Fund's investments over a 7-day period. It is then annualized
and stated as a percentage of the investment. Effective yield is the same as
current yield except that it assumes the income earned by an investment in a
Fund will be reinvested. An investment in any one of the Portico money market
funds is neither insured nor guaranteed by the U.S. government nor is there any
assurance the Funds will be able to maintain a stable net asset value of $1.00
per share.
To speak with a Portico Investor Services representative anytime during an
automated teleresponse session (during regular business hours), shareholders may
press "0."
For total return information, shareholders must call Portico Investor Services
at 1-800-982-8909 or 414-287-3710 (Milwaukee area).
TELEPHONE EXCHANGE PRIVILEGE. Except as provided in the next sentence and
provided that such other shares may be legally sold in the state of the
investor's residence, shareholders are generally permitted to exchange their
shares in a Fund (with a minimum current value of $500) for Retail Shares of
other funds in the Portico family of funds without charge or commission by the
Fund. A sales charge will be imposed on the exchange if the shares of the Fund
being acquired have a sales charge and the shares being redeemed were purchased
or otherwise acquired without a sales charge. Telephone exchange privileges
automatically apply to each shareholder of record and the representative of
record unless and until the transfer agent receives written instructions from
the shareholder(s) of record canceling the privilege.
Portico reserves the right to terminate indefinitely the exchange privilege of
any shareholder, broker, investment adviser or agent who requests more than four
exchanges within a calendar year, whether for oneself or one's customers.
Portico may determine to do so with prior notice to the shareholder, broker,
investment adviser or agent based on a consideration of both the number of
exchanges the particular shareholder, broker, investment adviser or agent has
requested and the time period over which those exchange requests have been made,
together with the level of expense to the Funds or other adverse effects which
may result from the additional exchange requests. If any portion of the shares
to be exchanged represents an investment made by check, a Fund may delay the
acquisition of new shares in an exchange until the transfer agent is reasonably
satisfied that the check has been collected, which may take twelve days from the
purchase date.
Investors may find the exchange privilege useful if their investment objectives
or market outlook should change after they invest in the Portico family of
funds. For federal income tax purposes, an exchange of shares is a taxable event
and, accordingly, a capital gain or loss may be realized by an investor. Before
making an exchange request, an investor should consult a tax or other financial
adviser to determine the tax consequences of a particular exchange. No exchange
fee is currently imposed by Portico on exchanges. Portico, however, reserves the
right to impose a charge in the future.
In order to request an exchange by telephone, a shareholder must give the
account name, account number and the amount or number of shares to be exchanged.
During periods of significant economic or market change, telephone exchanges may
be difficult to implement. If a shareholder is unable to contact the transfer
agent by telephone, shares may also be exchanged by delivering the exchange
request to the transfer agent in person or by mail at the addresses listed above
under "Redemption of Shares."
The Funds reserve the right to reject any exchange request with prior notice to
a shareholder and the exchange privilege may be modified or terminated at any
time. At least sixty days' notice will be given to shareholders of any material
modification or termination except where notice is not required under SEC
regulations. The responsibility of the Funds and their transfer agent for the
authenticity of telephone exchange instructions is limited as described above
under "Redemption of Shares."
RETIREMENT PLANS. The Funds offer individual retirement accounts and prototype
defined contribution plans, including simplified employee, 401(k), 403(b),
profit-sharing and money purchase pension plans ("Retirement Plans"). For
details concerning Retirement Plans (including service fees), please call
Portico Investor Services at 1-800-982-8909 or 414-2873710 (Milwaukee area).
DIVIDENDS AND DISTRIBUTIONS
Shareholders of each Fund are entitled to dividends and distributions arising
only from the net income, including net realized gains and losses, if any,
earned on the investments held by the particular Fund. Each Fund's net income is
declared as a dividend on each business day on the shares that are outstanding
immediately after 11:30 a.m. Central Time on the declaration date. Dividends and
distributions are automatically reinvested in additional shares of the Fund on
which the dividend or distribution is paid at their net asset value per share
(as determined on the payable date), unless the shareholder notifies the
transfer agent or a registered representative that dividends or capital gains
distributions, or both, should be paid in cash. Cash dividends or distributions
will be paid by check unless the transfer agent receives a voided check or
deposit ticket to enable the dividends or distributions to be directly deposited
into the shareholder's bank account. Cash dividends and distributions will be
paid within five business days after the end of the month or within five
business days after a redemption of all of a shareholder's shares of a Fund. The
Funds do not expect to realize net long-term capital gains. Reinvested dividends
and distributions receive the same tax treatment as those paid in cash.
MANAGEMENT OF THE FUNDS
The business and affairs of the Funds are managed under the direction of the
Board of Directors of the Portico Funds, Inc. ("Portico" or the "Company"). The
Statement of Additional Information contains the name and background information
regarding each Director.
ADVISORY SERVICES. FIRMCO, a Wisconsin corporation and subsidiary of Firstar
Corporation, a bank holding company, serves as investment adviser to each Fund.
FIRMCO, with principal offices at Firstar Center, 777 East Wisconsin Avenue, 8th
Floor, Milwaukee, Wisconsin 53202, has been engaged in the business of providing
investment advisory services since 1986. FIRMCO currently has $15 billion in
assets under active management, of which $9 billion is invested in fixed-income
and money market securities and $6 billion in equity securities.
Subject to the general supervision of the Board of Directors and in accordance
with the respective investment objective and policies of each Fund, the Adviser
manages each Fund's portfolio, makes decisions with respect to and places orders
for all purchases and sales of each Fund's portfolio securities, and maintains
records relating to such purchases and sales. The Adviser is authorized to
allocate purchase and sale orders for portfolio securities to Shareholder
Organizations, including, in the case of agency transactions, Shareholder
Organizations which are affiliated with the Adviser, to take into account the
sale of Fund Shares if the Adviser believes that the quality of the transaction
and the amount of the commission are comparable to what they would be with other
qualified brokerage firms.
For the services provided and expenses assumed as investment adviser, the
Adviser is entitled to receive from each Fund a fee, calculated daily and
payable monthly, at the annual rate of 0.50% of the first $2 billion of each
Fund's average daily net assets, plus 0.40% on average daily net assets over $2
billion. The Adviser earned fees, net of waivers, for the fiscal year ended
October 31, 1995, at the annual rate of 0.27% for the Money Market Fund, 0.34 %
for the U.S. Treasury Fund, 0.42% for the U.S. Government Fund, and 0.33% for
the Tax-Exempt Money Market Fund.
The Adviser may voluntarily waive all or a portion of the advisory fee otherwise
payable by a Fund from time to time. These waivers may be terminated at any time
at the Adviser's discretion.
ADMINISTRATIVE SERVICES. Firstar Trust Company ("Firstar Trust") and B. C.
Ziegler and Company ("Ziegler") serve as the Co-Administrators (the "Co-
Administrators"). The CoAdministrators have agreed to provide the following
administrative services for the Portico Funds: assist in maintaining office
facilities for the Funds; furnish clerical and certain other services required
by the Funds; compile data for and prepare notices to the SEC; prepare
semiannual reports to the SEC and current shareholders and filings with state
securities commissions; coordinate federal and state tax returns; monitor the
arrangements pertaining to the Funds' agreements with Shareholder Organizations;
monitor the Funds' expense accruals; monitor compliance with the Funds'
investment policies and limitations; and generally assist in the Funds'
operations. As further described in the Statement of Additional Information,
certain services under the CoAdministration Agreement are provided jointly by
Firstar Trust and Ziegler and other services are provided separately by
either Firstar Trust or Ziegler. The Co-Administrators are entitled to receive a
fee for their administrative services, computed daily and payable monthly, at
the annual rate of 0.125% of Portico's first $2 billion of average aggregate
daily net assets, plus 0.10% of Portico's average aggregate daily net assets in
excess of $2 billion. The CoAdministrators may voluntarily waive all or a
portion of their administrative fee from time to time. These waivers may be
terminated at any time at the Co-Administrators' discretion. For the fiscal year
ended October 31, 1995, the Money Market Fund, U.S. Treasury Money Market Fund,
U.S. Government Money Market Fund and Tax-Exempt Money Market Fund accrued
administrative fees, after waivers, at the effective annual rates of 0.05% of
their average net assets.
SHAREHOLDER ORGANIZATIONS. Portico may enter into agreements from time to time
with certain Shareholder Organizations, including affiliates of the Adviser
(such as Elan), providing for certain support and/or distribution services to
their customers who are the beneficial owners of shares of the Funds. Under the
Service Agreements, shareholder support services, which are described more fully
in the Statement of Additional Information, may include assisting investors in
processing purchase, exchange and redemption requests; processing dividend and
distribution payments from the Funds; providing information periodically to
customers showing their positions in Fund shares; and providing sub-accounting
with respect to Fund shares beneficially owned by customers or the information
necessary for sub-accounting. In addition, Shareholder Organizations under a
Distribution and Service Agreement may provide the foregoing shareholder support
services and may also provide assistance, such as the forwarding of sales
literature and advertising to their customers, in connection with the
distribution of Fund shares. For their services, Shareholder Organizations may
be entitled to receive fees from a Fund at annual rates of up to 0.25% of the
average daily net asset value of the shares covered by their agreements. For the
fiscal year ended October 31, 1995, Shareholder Organizations received fees
pursuant to such agreements at the effective annualized rates of 0.04%, 0.02%,
0.03% and 0.03% of the average net assets of the Money Market Fund, U.S.
Treasury Money Market Fund, U.S. Government Money Market Fund and Tax-Exempt
Money Market Fund, respectively.
Under the terms of their agreements with Portico, Shareholder Organizations are
required to provide a schedule of any fees that they may charge to their
customers relating to the investment of their assets in shares covered by the
agreements. Investors should read this Prospectus in light of such fee schedules
and under the terms of their Shareholder Organization's agreement with Portico.
In addition, investors should contact their Shareholder Organizations with
respect to the availability of shareholder services and the particular
Shareholder Organization's procedures for purchasing and redeeming shares. It is
the responsibility of Shareholder Organizations to transmit purchase and
redemption orders and record those orders in customers' accounts on a timely
basis in accordance with their agreements with customers. At the request of a
Shareholder Organization, the transfer agent's charge of $10.00 for each payment
made by wire of redemption proceeds may be billed directly to the Shareholder
Organization.
The Glass-Steagall Act and other applicable laws, among other things, prohibit
banks from engaging in the business of underwriting securities. Accordingly,
banks will be engaged under agreements with Portico only to perform the
administrative and investor servicing functions described above, and will
represent to Portico that in no event will the services provided by them under
the agreements be primarily intended to result in the sale of Fund shares.
Conflict-of-interest restrictions may apply to the receipt of compensation paid
by Portico to a Shareholder Organization in connection with the investment of
fiduciary funds in Fund shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the SEC, the Department of Labor or state
securities commissions, are urged to consult legal counsel before entering into
agreements with Portico.
Agreements that contemplate the provision of distribution services by
Shareholder Organizations are governed by a Distribution and Service Plan (the
"Plan") that has been adopted by Portico pursuant to Rule 12b-1 under the 1940
Act. In the case of the Funds, no payments are made to their Distributor under
the Plan. However, payments to Shareholder Organizations, including affiliates
of the Adviser, under the Plan are not tied directly to their own out-of-pocket
expenses and therefore may be used as they elect (for example, to defray their
overhead expenses), and may exceed their direct and indirect costs.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND ACCOUNTING SERVICES AGENT
Firstar Trust, an affiliate of the Adviser, provides custodial, transfer agency,
dividend disbursing agency and accounting services for the Funds. For the fiscal
year ended October 31, 1995, total custodial, transfer agency, dividend
disbursing agency and accounting services fees earned by Firstar Trust were
approximately 0.18%, 0.11%, 0.06% and 0.11% of the Money Market, U.S. Treasury
Money Market, U.S. Government Money Market and Tax-Exempt Money Market Funds'
average net assets, respectively. Additional information regarding the fees
payable by the Funds to Firstar Trust for these services is provided in the
Statement of Additional Information. Inquiries to the transfer agent may be sent
to the following address: Firstar Trust Company, P.O. Box 3011, Milwaukee,
Wisconsin 53201-3011.
INVESTMENT LIMITATIONS
Except for the limitations detailed below, the investment objective and
policies of each Fund described in this Prospectus are not fundamental and may
be changed by the Board of Directors without the affirmative vote of the holders
of a majority of a Fund's outstanding shares. If there is a change in a Fund's
investment objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial position and
needs. The following descriptions summarize several of each Fund's fundamental
investment limitations which are set forth in full in the Statement of
Additional Information.
NO FUND MAY:
1. Purchase securities of any one issuer (other than U.S. Government securities)
if more than 5% of the value of its total assets will be invested in the
securities of such issuer, except that up to 25% of the value of the Fund's
total assets may be invested without regard to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than 10% of the
outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets in one or more issuers conducting
their principal business activities in the same industry.
4. Borrow money or enter into reverse repurchase agreements except for temporary
purposes in amounts up to 10% of the value of the total assets at the time of
such borrowing, or mortgage, pledge or hypothecate any assets except in
connection with such borrowings. Whenever borrowings (including reverse
repurchase agreements) exceed 5% of the Fund's total assets, the Fund will not
make any investments.
In addition, the Tax-Exempt Money Market Fund may not:
5. Invest less than 80% of its net assets in securities the interest on which is
exempt from federal income tax, except during defensive periods or during
periods of unusual market conditions. For purposes of this fundamental policy,
Municipal Obligations that are subject to federal alternative minimum tax are
considered taxable.
With respect to Investment Limitation No. 1, in accordance with current SEC
regulations, the Money Market Fund intends (as a matter of nonfundamental
policy) to limit investments in the securities of any single issuer (other than
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities) to not more than 5% of the Fund's total assets at the time of
purchase, provided that the Fund may invest up to 25% of its total assets in the
securities of any one issuer for a period of up to three business days.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's portfolio securities will not constitute a violation of such
limitation. If due to market fluctuations or other reasons the amount of
borrowings exceed the limit stated above, a Fund will promptly reduce such
amount.
TAXES
FEDERAL Portico's management intends that each Fund will qualify as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). Such qualification generally will relieve each Fund of
liability for federal income taxes to the extent its earnings are distributed in
accordance with the Code.
Each Fund contemplates declaring as dividends each year at least 90% of its
investment company income. An investor who receives a dividend derived from
investment company taxable income (which includes any excess of net short-term
capital gain over net long-term capital loss) treats it as a receipt of ordinary
income in the computation of his gross income, whether such dividend is paid in
the form of cash or additional shares of the Fund.
In addition, the Tax-Exempt Money Market Fund contemplates paying to its
shareholders at least 90% of its exempt interest income net of certain
deductions. Dividends derived from exempt interest income may be treated by
shareholders as items of interest excludable from their gross income under
Section 103(a) of the Code, unless under the circumstances applicable to the
particular shareholder, exclusion would be disallowed. (See Statement of
Additional Information under "Additional Information Concerning Taxes.") If the
Tax-Exempt Money Market Fund should hold certain private activity bonds issued
after August 7, 1986, shareholders must include, as an item of tax preference,
the portion of dividends paid by the Fund that is attributable to interest on
such bonds in their federal alternative minimum taxable income for purposes of
determining liability (if any) for the 26%-28% alternative minimum tax
applicable to individuals and the 20% alternative minimum tax and the
environmental tax applicable to corporations. Corporate shareholders must also
take all exempt-interest dividends into account in determining certain
adjustments for federal alternative minimum and environmental tax purposes. The
environmental tax applicable to corporations is imposed at the rate of 0.12% of
the excess of the corporation's modified federal alternative minimum taxable
income over $2,000,000. Shareholders receiving Social Security benefits should
note that all exempt-interest dividends will be taken into account in
determining the taxability of such benefits.
Since all of the net income of the Money Market Fund, U.S. Treasury Money Market
Fund and U.S. Government Money Market Fund is expected to be derived from earned
interest, it is anticipated that all dividends paid by these Funds will be
taxable as ordinary income to those shareholders who are not exempt for federal
income tax purposes, and that no part of any distribution paid by these Funds
will be eligible for the dividends received deduction. Any dividends paid out of
income realized by the Tax Exempt Money Market Fund on taxable securities will
also be taxable to shareholders as ordinary income.
Although the Funds anticipate that they will not have net long-term capital
gain, any dividend or distribution of a Fund's excess of net long-term capital
gain over its net short-term capital loss will be taxable to a shareholder of
the Fund as long-term capital gain, regardless of how long the shareholder has
held shares of the Fund.
Each Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of the dividends or gross sale proceeds paid to any shareholder (i)
who has provided either an incorrect taxpayer identification number or no number
at all, (ii) who is subject to withholding by the Internal Revenue Service for
failure to properly include on his return payments of interest or dividends, or
(iii) who has failed, when required to do so, to certify that he is not subject
to backup withholding. Each Fund generally also will withhold and remit to the
U.S. Treasury 10% of all distributions from individual retirement accounts
(including simplified employee plans) to any investor unless the transfer agent
receives a written request not to withhold federal income tax from the investor
prior to the distribution date; withholding on distributions from other types of
Retirement Plans may be mandatory and may be at a higher rate.
The foregoing is only a brief summary of some of the important federal income
tax considerations generally affecting the Funds and their shareholders and is
not intended as a substitute for careful tax planning and is based on tax laws
and regulations which are in effect on the date of this Prospectus. Such laws
and regulations may be changed by legislative or administrative action.
Accordingly, investors in the Funds should consult their tax advisers with
specific reference to their own tax situation. Shareholders will be advised at
least annually as to the federal income tax consequences of dividends and
distributions made each year.
STATE AND LOCAL Investors are advised to consult their tax advisers concerning
the application of state and local tax laws, which may have different
consequences from those of the federal income tax law described above. In
particular, although the U.S. Treasury Money Market Fund intends to invest
primarily in U.S. Treasury obligations, the interest on which is generally
exempt from state income taxation, an investor should consult his or her own tax
adviser to determine whether distributions from the Fund are exempt from state
taxation in the investor's own state. Similarly, dividends paid by the other
Funds may be taxable to investors under state or local law as dividend income
even though all or a portion of such dividends may be derived from interest on
obligations which, if realized directly, would be exempt from such income taxes.
DESCRIPTION OF SHARES
The Company was incorporated under the laws of the State of Wisconsin on
February 15, 1988 and is registered with the SEC as an open-end management
company. The Articles of Incorporation authorize the Board of Directors to issue
up to 150 billion full and fractional shares of common stock, $.0001 par value
per share. The Company currently has 16 classes representing interests in 16
investment portfolios. Of the authorized shares, five billion shares have been
classified for each Fund discussed in this Prospectus. Each Fund is classified
as a diversified company under the 1940 Act. For information regarding the other
portfolios, contact Portico Investor Services at 1-800-982-8909 or 414-287-3710
(Milwaukee area) or your Shareholder Organization.
Portico does not presently intend to hold annual meetings of shareholders except
as required by the 1940 Act or other applicable law. Portico will call a meeting
of shareholders for the purpose of voting upon the question of removal of a
member of the Board of Directors upon written request of shareholders owning at
least 10% of the outstanding shares of Portico entitled to vote. To the extent
required by law, Portico will assist in shareholder communication in such
matters.
Shareholders of each class of Portico's common stock are entitled to one vote
for each full share held and proportionate fractional votes for fractional
shares held, and will vote in the aggregate and not by class, except where
otherwise required by law. It is contemplated that the shareholders of a Fund
will vote separately as a class on matters relating to its investment advisory
agreement and any changes in its fundamental investment limitations. Shares of
Portico have noncumulative voting rights and, accordingly, the holders of more
than 50% of Portico's outstanding shares (irrespective of class) may elect all
of the Directors. As of January 31, 1996, the Adviser and its affiliates held,
on behalf of their underlying accounts, approximately 72% of Portico's shares
that were outstanding on that date.
Each share of a Fund represents an equal proportionate interest in the Fund, and
is entitled to such dividends and distributions earned on its assets as are
declared at the discretion of the Board of Directors. Shares of the Funds do not
have preemptive rights.
NET ASSET VALUE AND DAYS OF OPERATION
The net asset value of each Fund for purposes of pricing purchase and redemption
orders is determined as of 11:30 a.m. Central Time and as of the close of
regular trading hours on the Exchange, currently 3:00 p.m. Central Time, on each
day on which both the Exchange is open for trading and the Federal Reserve
Banks' Fedline System is open. As a result, shares of the Funds will not be
priced on the days which the Exchange or Federal Reserve Banks observe: New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day
and Christmas Day. Net asset value per share is calculated by dividing the value
of all securities and other assets owned by each Fund, less the liabilities
charged to that Fund by the number of the Fund's outstanding shares.
The Company intends to use its best efforts to maintain the net asset value of
each Fund at $1.00 per share, although there is no assurance that it will be
able to do so on a continuous basis. Net asset value is computed using the
amortized cost method. In connection with the use of this valuation method,
Portico limits the dollar-weighted average maturity of each Fund to not more
than 90 days and the remaining maturity of each portfolio security to not more
than thirteen months with certain exceptions permitted by SEC rules.
YIELD
From time to time each Fund may quote its "yield" and "effective yield,"
and the Tax-Exempt Money Market Fund may also quote its "tax-equivalent yield,"
in advertisements or in communications to shareholders. Each yield figure is
based on historical earnings and is not intended to indicate future performance.
The "yield" of a Fund refers to the income generated by an investment in the
Fund over a seven-day period identified in the advertisement. This income is
then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment. The
"tax-equivalent yield" of the Tax-Exempt Money Market Fund shows the level of
taxable yield needed to produce an after-tax equivalent to the Fund's tax-free
yield. This is done by increasing the Fund's yield (calculated as above) by the
amount necessary to reflect the payment of federal income tax at a stated tax
rate. The "tax-equivalent yield" will always be higher than the "yield" of the
Tax-Exempt Money Market Fund.
Additionally, the yields of the Funds may be compared in such advertisements or
reports to shareholders to those of other mutual funds with similar investment
objectives and to other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the yields of the Money Market Fund
may be compared to the Donoghue's Money Fund Average, the yields of the U.S.
Treasury Money Market Fund and the U.S. Government Money Market Fund may be
compared to the Donoghue's Government Money Fund Average, and the yields of the
Tax-Exempt Money Market Fund may be compared to the Donoghue's Tax-Free Money
Fund Average, which are averages compiled by IBC/Donoghue's Money Fund Report, a
widely recognized independent publication that monitors the performance of money
market funds. In addition, the yields of the Money Market, U.S. Treasury Money
Market, and the U.S. Government Money Market Funds may be compared to
the average yields reported by the Bank Rate Monitor for money market deposit
accounts offered by the 50 leading banks and thrift institutions in the top five
standard metropolitan statistical areas.
Yield data as reported in national financial publications including Money
Magazine, Forbes, Barron's, Morningstar Mutual Funds, The Wall Street Journal
and The New York Times, or in publications of a local or regional nature, may
also be used in comparing the yields of the Funds.
Since yields fluctuate, yield data cannot necessarily be used to compare an
investment in a Fund's shares with bank deposits, savings accounts and similar
investment alternatives which often provide an agreed or guaranteed fixed yield
for a stated period of time. Investors should remember that performance and
yield are generally functions of the kind and quality of the instruments held in
a portfolio, portfolio maturity, operating expenses, and market conditions. Any
fees charged by Shareholder Organizations directly to their customer accounts in
connection with investments in shares of the Funds will not be included in the
Funds' calculations of yield.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS
OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUNDS OR BY THEIR DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
PORTICO INVESTOR SERVICES
615 East Michigan Street
P.O. Box 3011
Milwaukee, Wisconsin 53201-3011
**************
PORTICO FUNDS, INC.
(Institutional Version)
Money Market Fund,
Institutional Money Market Fund,
U.S. Treasury Money Market Fund,
U.S. Government Money Market Fund,
Tax-Exempt Money Market Fund,
Short-Term Bond Market Fund,
Intermediate Bond Market Fund,
Tax-Exempt Intermediate Bond Fund,
Bond IMMDEX/tm Fund,
Balanced Fund,
Growth and Income Fund,
Special Growth Fund,
Equity Index Fund,
MidCore Growth Fund,
International Equity Fund
Form N-1A
Cross Reference Sheet
Part A
Item No. Prospectus Heading
- -------- ------------------
1. Cover Page . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . Expense Summary
3. Condensed Financial Information. . . . . . Financial Highlights;
Performance Calculations
4. General Description of Registrant. . . . . Cover Page; Investment
Objectives and Policies; Other
Investment Information;
Description of Shares;
Investment Limitations
5. Management of the Fund . . . . . . . . . . Management of the Funds
5A. Management's Discussion of
Fund Performance . . . . . . . . . . . . . Inapplicable
6. Capital Stock and Other Securities . . . . Dividends and Distributions;
Management of the Funds;
Taxes; Description of Shares
7. Purchase of Securities Being Offered . . . Purchase of Shares; Net Asset
Value and Days of Operation
8. Redemption or Repurchase . . . . . . . . . Redemption of Shares; Net
Asset Value and Days of
Operation
9. Pending Legal Proceedings. . . . . . . . . Not Applicable
February 20, 1996
Prospectus
Institutional Shares
Money Market Fund
Institutional Money Market Fund
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
Tax-Exempt Money Market Fund
Short-Term Bond Market Fund
Intermediate Bond Market Fund
Tax-Exempt Intermediate Bond Fund
Bond IMMDEX/TM Fund
Balanced Fund
Growth and Income Fund
Equity Index Fund
MidCore Growth Fund
Special Growth Fund
International Equity Fund
TABLE OF CONTENTS
Expense Summary 3
Financial Highlights 5
Investment Objectives and Policies 12
Other Investment Information 27
Purchase of Shares 34
Redemption of Shares 36
Exchange of Shares 37
Dividends and Distributions 37
Management of the Funds 38
Investment Limitations 41
Taxes 42
Description of Shares 43
Net Asset Value and Days of Operation 44
Performance Calculations 45
Portico Funds, Inc. is a family of sixteen mutual funds that offer a variety of
investment objectives designed to meet the needs of institutional and individual
investors. This Prospectus describes the five money market funds, four bond
funds and six equity funds available to institutional investors.
MONEY MARKET FUNDS
An investment in the Money Market Funds is neither insured nor guaranteed by the
U.S. Government. There can be no assurance that these Funds will be able to
maintain a stable net asset value of $1.00 per share.
The Money Market Fund seeks to provide a high level of taxable current income
consistent with liquidity, the preservation of capital and a stable net asset
value. The Fund attempts to attain its objective by investing in a broad range
of government, bank and commercial money market instruments.
The Institutional Money Market Fund seeks to provide a high level of taxable
current income consistent with liquidity, the preservation of capital and a
stable net asset value. The Fund attempts to attain its objective by investing
in a broad range of government, bank and commercial money market instruments.
The U.S. Treasury Money Market Fund seeks to provide a high level of current
income exempt from state income taxes consistent with liquidity, the
preservation of capital and a stable net asset value. The Fund pursues its
objective by investing in obligations issued or guaranteed as to principal and
interest by the U.S. Treasury, the interest income from which is exempt from
state income taxation.
The U.S. Government Money Market Fund seeks to provide a high level of taxable
current income consistent with liquidity, the preservation of capital and a
stable net asset value. The Fund attempts to attain its objective by investing
in obligations that are issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, and in repurchase agreements relating to such
obligations, irrespective of state income tax considerations.
The Tax-Exempt Money Market Fund seeks to provide a high level of current income
exempt from federal income taxes consistent with liquidity, the preservation of
capital and a stable net asset value. In pursuing its investment objective, the
Fund invests primarily in short-term debt obligations issued by state and local
governments.
BOND FUNDS
The Short-Term Bond Market Fund seeks to provide an annual rate of total return,
before Fund expenses, comparable to the annual rate of total return of the
Lehman Brothers 1-3 year Government/Corporate Bond Index.
The Intermediate Bond Market Fund seeks to provide an annual rate of total
return, before Fund expenses, comparable to the annual rate of total return of
the Lehman Brothers Intermediate Government/Corporate Bond Index.
The Tax-Exempt Intermediate Bond Market Fund seeks to provide current income
that is substantially exempt from federal income tax and emphasize total return
with relatively low volatility of principal.
The Bond IMMDEX/TM Fund seeks to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers Government/Corporate Bond Index.
EQUITY FUNDS
The Balanced Fund seeks capital appreciation and current income with relatively
low volatility of capital.
The Growth and Income Fund seeks both reasonable income and long-term capital
appreciation.
The Equity Index Fund seeks returns, before Fund expenses, comparable to the
price and yield performance of publicly traded common stocks in the aggregate as
represented by the S&P 500 Stock Index.
The MidCore Growth Fund seeks capital appreciation through investment in
securities of medium- to large-sized companies.
The Special Growth Fund seeks capital appreciation through investment in
securities of small- to medium-sized companies.
The International Equity Fund seeks capital appreciation through investment in
foreign equity securities of small- to medium-sized companies.
Firstar Investment Research & Management Company ("FIRMCO" or the "Adviser")
serves as investment adviser to each Fund, and the Funds are sponsored by B. C.
Ziegler and Company (the "Distributor"). State Street Global Advisors, a
division of State Street Bank and Trust Company (the "Sub-Adviser"), serves as
the sub-adviser to the International Equity Fund.
This Prospectus sets forth concisely the information about the Funds that a
prospective investor should consider before investing. You should read this
Prospectus and retain it for future reference. Additional information about the
Funds, contained in a Statement of Additional Information, has been filed with
the Securities and Exchange Commission and is available upon request without
charge by writing Portico Investor Services at 615 East Michigan Street, P.O.
Box 3011, Milwaukee, WI 53201-3011, or by calling 1-800-982-8909 or 414-287-3710
(Milwaukee area). The Statement of Additional Information bears the same date as
this Prospectus and is incorporated by reference in its entirety into the
Prospectus.
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.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, FIRSTAR
TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER BANK, OR OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES INVESTMENT
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
February 20, 1996
EXPENSE SUMMARY Below is a summary of the shareholder transaction expenses and
the annual operating expenses expected to be incurred by the
Institutional Money Market Fund and by Institutional Shares of
the Short-Term Bond Market, Intermediate Bond Market, Tax-
Exempt Intermediate Bond, Bond IMMDEX/TM, Balanced, Growth and
Income, Equity Index, MidCore Growth, Special Growth and
International Equity Funds during the year ended December 31,
1996. Also below is a summary of the shareholder transaction
expenses and the annual operating expenses incurred by the
Money Market, U.S. Treasury Money Market, U.S. Government
Money Market and Tax-Exempt Money Market Funds during the
fiscal year ended October 31, 1995. An example based on the
summaries is also shown.
Shareholder Money Market Bond Equity
Transaction Expenses Funds Funds Funds
- -------------------------- ----------- ----- ------
Maximum Sales Load Imposed
on Purchases None None None
Maximum Sales Load Imposed
on Reinvested Dividends None None None
Deferred Sales Load None None None
Redemption Fees1 None<F50> None<F50> None<F50>
Exchange Fees None None None
Advisory Other Total Fund
Annual Fund Fees Shareholder Expenses Operating
Operating Expenses After Fee 12b-1 Servicing After Fee Expenses After
(as a percentage of Waivers Fees Fees Fee Waivers Fee Waivers
average net assets) <F51> <F52> <F52> <F53> <F54>
- --------------------- -------- ----- --------- ----------- -----------
MONEY MARKET FUNDS:
Money Market Fund 0.27% 0.03% 0.01% 0.29% 0.60%
Institutional Money
Market Fund 0.28% 0.00% 0.00% 0.07% 0.35%
U.S.Treasury Money
Market Fund 0.34% 0.00% 0.02% 0.24% 0.60%
U.S. Government Money
Market Fund 0.42% 0.00% 0.03% 0.15% 0.60%
Tax-Exempt Money
Market Fund 0.33% 0.00% 0.03% 0.24% 0.60%
BOND FUNDS:
Short-Term Bond
Market Fund 0.27% 0.00% N.A. 0.23% 0.50%
Intermediate Bond
Market Fund 0.28% 0.00% N.A. 0.22% 0.50%
Tax-Exempt Intermediate
Bond Fund 0.09% 0.00% N.A. 0.41% 0.50%
Bond IMMDEX/TM Fund 0.30% 0.00% N.A. 0.15% 0.45%
EQUITY FUNDS:
Balanced Fund 0.52% 0.00% N.A. 0.23% 0.75%
Growth and Income Fund 0.72% 0.00% N.A. 0.18% 0.90%
Equity Index Fund 0.25% 0.00% N.A. 0.22% 0.47%
MidCore Growth Fund 0.71% 0.00% N.A. 0.19% 0.90%
Special Growth Fund 0.74% 0.00% N.A. 0.16% 0.90%
International Equity Fund 0.62% 0.00% N.A. 0.88% 1.50%
<F50> A fee of $10.00 is charged for each wire redemption. See "Redemption of
Shares."
<F51> The Adviser has voluntarily agreed to waive a portion of its fees for the
Money Market, U.S. Treasury Money Market, U.S. Government Money Market and
Tax-Exempt Money Market Funds to the extent that each Fund's total ordinary
operating expenses exceed 0.60% during the current fiscal year. The Adviser
has voluntarily agreed to waive a portion of its fees for the Institutional
Money Market, Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt
Intermediate Bond, Bond IMMDEX/TM, Balanced, Growth and Income, Equity Index,
MidCore Growth, Special Growth and International Equity Funds during the
calendar year 1996. Absent such waivers, advisory fees would be 0.50%, 0.50%,
0.50%, 0.50%, 0.50%, 0.60%, 0.50%, 0.50%, 0.30%, 0.75%, 0.75%, 0.25%, 0.75%,
0.75%, and 1.50% for the Money Market, U.S. Treasury Money Market, U.S.
Government Money Market, Tax-Exempt Money Market, Institutional Money Market,
Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate
Bond, Bond IMMDEX/TM, Balanced, Growth and Income, Equity Index, MidCore
Growth, Special Growth and International Equity Funds, respectively. Fees of
0.75% or more are higher than the advisory fee payable by most other
investment companies. See "Management of the Funds" in this Prospectus for a
more complete description and the financial statements for the Funds for the
fiscal year ended October 31, 1995 incorporated into the Statement of
Additional Information.
<F52> The total of all 12b-1 fees and Shareholder Servicing Fees may not exceed,
in the aggregate, the annual rate of 0.25% of a Fund's average daily net
assets.
<F53> The Co-Administrators waived 0.07% of their fees for the Money Market,
U.S. Treasury Money Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds during the fiscal year ended October 31, 1995. Absent such
waivers, other expenses would be 0.36%, 0.31%, 0.22%, and 0.31%. With respect
to the other Funds, the amount of "Other Expenses" in the table above is based
on estimated expenses and projected assets for the 1996 calendar year. Absent
administrative fee waivers, other expenses would be 0.15%, 0.30%, 0.29%,
0.48%, 0.22%, 0.30%, 0.25%, 0.29%, 0.26%, 0.23% and 0.95% for the
Institutional Money Market, Short-Term Bond Market, Intermediate Bond Market,
Tax-Exempt Intermediate Bond, Bond IMMDEX/TM, Balanced, Growth and Income,
Equity Index, MidCore Growth, Special Growth and International Equity Funds,
respectively.
<F54> Absent fee waivers, total operating expenses would be 0.90%, 0.83%, 0.75%,
0.84%, 0.64%, 0.90%, 0.79%, 0.98%, 0.52%, 1.05%, 1.00%, 0.54%, 1.01%, 0.98%,
and 2.45% for the Money Market, U.S. Treasury Money Market, U.S. Government
Money Market, Tax-Exempt Money Market, Institutional Money Market, Short-Term
Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond, Bond
IMMDEX/TM, Balanced, Growth and Income, Equity Index, MidCore Growth, Special
Growth and International Equity Funds, respectively.
EXPENSE SUMMARY Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual returns, and (2) redemption
of your investment at the end of the following periods:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Money Market Fund $ 6 $19 $33 $ 75
Institutional Money Market Fund 4 11 20 44
U.S. Treasury Money Market Fund 6 19 33 75
U.S. Government Money Market Fund 6 19 33 75
Tax-Exempt Money Market Fund 6 19 33 75
Short-Term Bond Market Fund 5 16 28 63
Intermediate Bond Market Fund 5 16 28 63
Tax-Exempt Intermediate Bond Fund 5 16 28 63
Bond IMMDEX/TM Fund 5 14 25 57
Balanced Fund 8 24 42 93
Growth and Income Fund 9 29 50 111
Equity Index Fund 5 15 26 60
MidCore Growth Fund 9 29 50 111
Special Growth Fund 9 29 50 111
International Equity Fund 15 47 82 179
The foregoing tables are intended to assist investors in
understanding the expenses that shareholders bear either
directly or indirectly. In addition, Institutions may charge
fees for providing services in connection with their clients'
investments in a Fund's shares.
The example shown above should not be considered a
representation of future investment return or operating
expenses. Actual investment return and operating expenses may
be more or less than those shown. Information regarding the
Funds' actual performance will appear in their annual report
to shareholders. Each shareholder of record at the close of
the fiscal year will be sent the annual report.
FINANCIAL HIGHLIGHTS
The financial highlights for each of the periods presented
have been derived from financial statements which have been
audited by Price Waterhouse LLP, independent accountants,
whose report, which appears in the annual report to
shareholders for the fiscal year ended October 31, 1995, is
incorporated by reference into the Statement of Additional
Information. Prior to January 9, 1995, the Short-Term Bond
Market, Intermediate Bond Market, Tax-Exempt Intermediate
Bond, Bond IMMDEX/TM, Balanced, Growth and Income, Equity
Index, MidCore Growth, Special Growth and International Equity
Funds offered only one class of shares to both institutional
and retail investors. On that date, the Funds began offering
Institutional Shares to institutional investors as described
in this Prospectus and Retail Shares to retail investors as
described in a separate prospectus. The tables on the
following pages should be read in conjunction with the
financial statements and related notes also incorporated by
reference into the Statement of Additional Information. You
may obtain the Statement of Additional Information and the
annual report to shareholders, which contain additional
performance information, free of charge by calling Portico
Investor Services or writing to Portico Investor Services at
the address listed on the back cover of this Prospectus.
FINANCIAL HIGHLIGHTS
Net Asset Dividends Net Asset
Value, Net from Net Value,
Beginning Investment Investment End of
of Period Income Income Period
--------- --------- --------- --------
MONEY MARKET FUND
Mar. 16, 1988 <F55> through
Oct. 31, 1988 $1.00 $0.05 $(0.05) $1.00
Year Ended 1989 1.00 0.08 (0.08) 1.00
Year Ended 1990 1.00 0.08 (0.08) 1.00
Year Ended 1991 1.00 0.06 (0.06) 1.00
Year Ended 19922 1.00 0.04 (0.04) 1.00
Year Ended 1993 1.00 0.03 (0.03) 1.00
Year Ended 1994 1.00 0.03 (0.03) 1.00
Year Ended 1995 1.00 0.05 (0.05) 1.00
INSTITUTIONAL MONEY
MARKET FUND
Apr. 26, 1991<F55> through
Oct. 31, 1991 1.00 0.03 (0.03) 1.00
Year Ended 1992<F56> 1.00 0.04 (0.04) 1.00
Year Ended 1993 1.00 0.03 (0.03) 1.00
Year Ended 1994 1.00 0.04 (0.04) 1.00
Year Ended 1995 1.00 0.06 (0.06) 1.00
U.S. TREASURY MONEY
MARKET FUND
Apr. 29, 1991<F55> through
Oct. 31, 1991 1.00 0.03 (0.03) 1.00
Year Ended 1992 <F56> 1.00 0.04 (0.04) 1.00
Year Ended 1993 1.00 0.03 (0.03) 1.00
Year Ended 1994 1.00 0.03 (0.03) 1.00
Year Ended 1995 1.00 0.05 (0.05) 1.00
U.S. GOVERNMENT MONEY
MARKET FUND
Aug. 1, 1988<F55> through
Oct. 31, 1988 1.00 0.02 (0.02) 1.00
Year Ended 1989 1.00 0.08 (0.08) 1.00
Year Ended 1990 1.00 0.08 (0.08) 1.00
Year Ended 1991 1.00 0.06 (0.06) 1.00
Year Ended 1992 <F56> 1.00 0.04 (0.04) 1.00
Year Ended 1993 1.00 0.03 (0.03) 1.00
Year Ended 1994 1.00 0.03 (0.03) 1.00
Year Ended 1995 1.00 0.05 (0.05) 1.00
TAX-EXEMPT MONEY
MARKET FUND
June 27, 1988<F55> through
Oct. 31, 1988 1.00 0.02 (0.02) 1.00
Year Ended 1989 1.00 0.06 (0.06) 1.00
Year Ended 1990 1.00 0.05 (0.05) 1.00
Year Ended 1991 1.00 0.04 (0.04) 1.00
Year Ended 1992 <F56> 1.00 0.03 (0.03) 1.00
Year Ended 1993 1.00 0.02 (0.02) 1.00
Year Ended 1994 1.00 0.02 (0.02) 1.00
Year Ended 1995 1.00 0.03 (0.03) 1.00
FINANCIAL
HIGHLIGHTS (CONTINUED)
Supplemental Data and Ratios
--------------------------------------
RATIO OF NET
RATIO OF INVESTMENT
NET ASSETS, NET EXPENSES INCOME TO
END OF TO AVERAGE AVERAGE NET TOTAL
PERIOD(000S) NET ASSETS ASSETS RETURN
------------ ----------- ---------- -------
MONEY MARKET FUND
Mar. 16, 1988<F55>
through Oct. 31, 1988 $100,373 0.44%<F57>,<F58>7.35%<F57><F58> 4.63%<F59>
Year Ended 1989 201,097 0.60%<F58> 8.66%<F58> 9.01%
Year Ended 1990 762,170 0.51%<F58> 7.81%<F58> 8.14%
Year Ended 1991 628,697 0.50%<F58> 6.28%<F58> 6.39%
Year Ended 1992 <F56> 146,012 0.58%<F58> 3.84%<F58> 3.73%
Year Ended 1993 132,568 0.60%<F58> 2.67%<F58> 2.71%
Year Ended 1994 165,018 0.60%<F58> 3.44%<F58> 3.42%
Year Ended 1995 172,261 0.60%<F58> 5.36%<F58> 5.51%
INSTITUTIONAL MONEY
MARKET FUND
Apr. 26, 1991<F55> through
Oct. 31, 1991 189,048 0.50% <F60><F61>5.47%<F60><F61>2.87%<F63>
Year Ended 1992<F56> 696,132 0.41%<F61> 3.75%<F61> 3.88%
Year Ended 1993 588,301 0.38%<F61> 2.87%<F61> 2.92%
Year Ended 1994 754,636 0.37%<F61> 3.64%<F61> 3.65%
Year Ended 1995 716,566 0.35%<F61> 5.63%<F61> 5.77%
U.S. TREASURY MONEY
MARKET FUND
Apr. 29, 1991<F55> through
Oct. 31, 1991 36,267 0.52%<F60><F62>5.23%<F60><F62>2.69%<F63>
Year Ended 1992<F56> 37,342 0.60%<F62> 3.42%<F62> 3.48%
Year Ended 1993 40,744 0.60%<F62> 2.55%<F62> 2.59%
Year Ended 1994 56,020 0.60%<F62> 3.14%<F62> 3.20%
Year Ended 1995 64,655 0.60%<F62> 5.04%<F62> 5.16%
U.S. GOVERNMENT MONEY
MARKET FUND
Aug. 1, 1988<F55> through
Oct. 31, 1988 49,069 0.50%<F57><F64>7.56%<F57><F64>1.91%<F59>
Year Ended 1989 101,497 0.61%<F64> 8.43%<F64> 8.72%
Year Ended 1990 153,480 0.60%<F64> 7.55%<F64> 7.84%
Year Ended 1991 237,752 0.60%<F64> 5.80%<F64> 6.02%
Year Ended 1992<F56> 221,521 0.60%<F64> 3.56%<F64> 3.60%
Year Ended 1993 203,165 0.60%<F64> 2.59%<F64> 2.63%
Year Ended 1994 183,591 0.60%<F64> 3.29%<F64> 3.35%
Year Ended 1995 163,068 0.60%<F64> 5.24%<F64> 5.37%
TAX-EXEMPT MONEY
MARKET FUND
June 27, 1988<F55> through
Oct. 31, 1988 10,838 0.52%<F57><F65>5.10%<F57><F65>1.78%<F59>
Year Ended 1989 18,429 0.60%<F65> 5.82%<F65> 5.99%
Year Ended 1990 16,424 0.64%<F65> 5.38%<F65> 5.51%
Year Ended 1991 29,714 0.63%<F65> 4.34%<F65> 4.49%
Year Ended 1992<F56> 74,343 0.60%<F65> 2.83%<F65> 2.91%
Year Ended 1993 73,621 0.60%<F65> 2.12%<F65> 2.17%
Year Ended 1994 70,436 0.60%<F65> 2.23%<F65> 2.25%
Year Ended 1995 84,084 0.60%<F65> 3.36%<F65> 3.42%
<F55> Commencement of operations.
<F56> Effective February 3, 1992, FIRMCO assumed the investment advisory
responsibilities of Firstar Trust Company, an affiliate of FIRMCO.
<F57> Annualized for the period ended October 31, 1988.
<F58> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 and
the period ended October 31, 1988 would have been 0.90%, 0.93%, 0.99%, 0.96%,
0.94%, 0.94%, 1.01% and 0.89%, respectively; and ratios of net investment
income to average net assets for the fiscal years ended October 31, 1995,
1994, 1993, 1992, 1991, 1990 and 1989 and the period ended October 31, 1988
would have been 5.06%, 3.11%, 2.28%, 3.46%, 5.84%, 7.38%, 8.25% and 6.90%,
respectively.
<F59> Not annualized for the period ended October 31, 1988.
<F60> Annualized for the period ended October 31, 1991.
<F61> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1995, 1994, 1993, 1992 and the period ended
October 31, 1991 would have been 0.69%, 0.85%, 0.87%, 0.88% and 0.98%,
respectively; and ratios of net investment income to average net assets for
the fiscal years ended October 31, 1995, 1994, 1993, 1992 and the period ended
October 31, 1991 would have been 5.29%, 3.16%, 2.37%, 3.28% and 4.99%,
respectively.
<F62> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1995, 1994, 1993, 1992 and the period ended
October 31, 1991 would have been 0.83%, 0.94%, 0.93%, 1.01% and 1.10%,
respectively; and ratios of net investment income to average net assets for
the fiscal years ended October 31, 1995, 1994, 1993, 1992 and the period ended
October 31, 1991 would have been 4.81%, 2.80%, 2.22%, 3.01% and 4.65%,
respectively.
<F63> Not annualized for the period ended October 31, 1991.
<F64> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 and
the period ended October 31, 1988 would have been 0.75%, 0.88%, 0.93%, 0.94%,
0.95%, 1.01%, 1.06% and 0.86%, respectively; and ratios of net investment
income to average net assets for the fiscal years ended October 31, 1995,
1994, 1993, 1992, 1991, 1990 and 1989 and the period ended October 31, 1988
would have been 5.09%, 3.01%, 2.26%, 3.22%, 5.45%, 7.14%, 7.98% and 7.20%,
respectively.
<F65> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 and
the period ended October 31, 1988 would have been 0.84%, 0.93%, 0.98%, 1.05%,
1.08%, 1.26%, 1.30% and 1.30%, respectively; and ratios of net investment
income to average net assets for the fiscal years ended October 31, 1995,
1994, 1993, 1992, 1991, 1990 and 1989 and for the period ended October 31,
1988 would have been 3.12%, 1.90%, 1.74%, 2.38%, 3.89%, 4.76%, 5.12% and
4.32%, respectively.
<TABLE>
<CAPTION>
FINANCIAL Income From Investment Operations Less Distributions
HIGHLIGHTS ------------------------------------------------------ -----------------------------------------------
Net Asset Net Realized and
Value, Net Unrealized Gains Total from Dividends from Distributions
Beginning Investment or (Losses) on Investment Net Investment from Total
of Period Income<F70> Securities Operations Income Capital Gains Distributions
--------- ---------- --------------- ---------- -------------- -------------- --------------
SHORT-TERM BOND MARKET
<S> <C> <C> <C> <C> <C> <C> <C>
Dec. 29, 1989<F66> through
Oct. 31, 1990 $10.00 $0.66 $(0.21) $0.45 $(0.66) $ --- $(0.66)
Year Ended 1991 9.79 0.73 0.54 1.27 (0.73) --- (0.73)
Year Ended 1992<F67> 10.33 0.64 0.29 0.93 (0.64) (0.02) (0.66)
Year Ended 1993 10.60 0.58 0.10 0.68 (0.58) (0.14) (0.72)
Year Ended 1994 10.56 0.56 (0.41) 0.15 (0.56) (0.12) (0.68)
Year Ended 1995 10.03 0.63 0.24 0.87 (0.62) --- (0.62)
INTERMEDIATE BOND MARKET
Jan. 5, 1993<F66> through
Oct. 31, 1993 10.00 0.40 0.45 0.85 (0.40) --- (0.40)
Year Ended 1994 10.45 0.51 (0.69) (0.18) (0.51) (0.09) (0.60)
Year Ended 1995 9.67 0.62 0.53 1.15 (0.61) --- (0.61)
TAX-EXEMPT INTERMEDIATE
BOND
Feb. 8, 1993<F66> through
Oct. 31, 1993 10.00 0.27 0.26 0.53 (0.27) --- (0.27)
Year Ended 1994 10.26 0.41 (0.48) (0.07) (0.41) --- (0.41)
Year Ended 1995 9.78 0.44 0.46 0.90 (0.44) --- (0.44)
BOND IMMDEX/TM
Dec. 29, 1989<F66> through
Oct. 31, 1990 25.00 1.67 (0.66) 1.01 (1.49) --- (1.49)
Year Ended 1991 24.52 1.85 1.98 3.83 (1.85) --- (1.85)
Year Ended 1992<F67> 26.50 1.75 0.96 2.71 (1.76) (0.14) (1.90)
Year Ended 1993 27.31 1.68 1.83 3.51 (1.70) (0.21) (1.91)
Year Ended 1994 28.91 1.65 (2.74) (1.09) (1.65) (0.50) (2.15)
Year Ended 1995 25.67 1.74 2.29 4.03 (1.84) (0.04) (1.88)
FINANCIALSupplemental Data and Ratios
HIGHLIGHTS (CONTINUED) Ratio of Net
Net Asset Net Ratio of Net Investment
Value, Assets, Expenses to Income to Portfolio
End Total End of Average Net Average Net Turnover
of Period Return<F69> Period (000s) Assets<F68> Assets<F68> Rate
--------- -------- ------------- ------------ ---------- ---------
SHORT-TERM BOND MARKET
Dec. 29, 1989<F66>through
Oct. 31, 1990 $ 9.79 4.64% $ 22,731 0.60%<F71> 7.93%<F71> 57.40%
Year Ended 1991 10.33 13.39% 63,183 0.60%<F71> 7.13%<F71> 66.80%
Year Ended 1992<F67> 10.60 9.28% 129,409 0.60%<F71> 6.00%<F71> 82.20%
Year Ended 1993 10.56 6.70% 142,518 0.52%<F71> 5.53%<F71> 87.62%
Year Ended 1994 10.03 1.46% 122,368 0.50%<F71> 5.43%<F71> 76.13%
Year Ended 1995 10.28 8.95% 94,959 0.50%<F71> 6.23%<F71> 100.58%
INTERMEDIATE BOND MARKET
Jan. 5, 1993<F66> through
Oct. 31, 1993 10.45 8.58% 56,794 0.50%<F72> 4.65%<F72> 82.37%
Year Ended 1994 9.67 (1.73%) 88,306 0.50%<F72> 5.19%<F72> 56.25%
Year Ended 1995 10.21 12.25% 128,941 0.50%<F72> 6.26%<F72> 66.69%
TAX-EXEMPT INTERMEDIATE BOND
Feb. 8, 1993<F66> through
Oct. 31, 1993 10.26 5.36% 23,866 0.59%<F73> 3.75%<F73> 3.23%
Year Ended 1994 9.78 (0.73%) 26,167 0.60%<F73> 4.04%<F73> 58.54%
Year Ended 1995 10.24 9.38% 27,595 0.51%<F73> 4.45%<F73> 44.13%
BOND IMMDEX/TM
Dec. 29, 1989<F66> through
Oct. 31, 1990 24.52 4.21% 44,241 0.50%<F74> 8.10%<F74> 111.28%
Year Ended 1991 26.50 16.16% 90,034 0.50%<F74> 7.85%<F74> 131.69%
Year Ended 1992<F67> 27.31 10.49% 181,421 0.50%<F74> 6.92%<F74> 37.72%
Year Ended 1993 28.91 13.30% 260,486 0.50%<F74> 6.10%<F74> 81.18%
Year Ended 1994 25.67 (3.89%) 256,778 0.48%<F74> 6.14%<F74> 49.70%
Year Ended 1995 27.82 16.26% 290,274 0.44%<F74> 6.51%<F74> 41.67%
<FN>
<F66> Commencement of operations.
<F67> Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F68> Annualized for the period ended October 31, 1990 for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the period
ended October 31, 1993 for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F69> Not annualized for the period ended October 31, 1990 for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the
period ended October 31, 1993 for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F70> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from federal income tax.
<F71> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991 and the period ended October 31, 1990 would have been 0.91%, 0.90%, 0.90%, 0.93%, 0.97% and 1.17%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991 and the
period ended October 31, 1990 would have been 5.82%, 5.03%, 5.15%, 5.67%, 6.76% and 7.36%, respectively.
<F72> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994 and the
period ended October 31, 1993 would have been 0.79%, 0.78% and 0.89%, respectively; and ratios of net investment income to average
net assets for the fiscal years ended October 31, 1995, 1994, and the period ended October 31, 1993 would have been 5.97%, 4.91%
and 4.26%, respectively.
<F73> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994 and the
period ended October 31, 1993 would have been 1.00%, 0.98% and 1.28%, respectively; and ratios of net investment income to average
net assets for the fiscal years ended October 31, 1995, 1994 and the period ended October 31, 1993 would have been 3.96%, 3.67%
and 3.07%, respectively.
<F74> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991 and the period ended October 31, 1990 would have been 0.51%, 0.51%, 0.52%, 0.56%, 0.60% and 0.65%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991 and the
period ended October 31, 1990 would have been 6.44%, 6.10%, 6.08%, 6.86%, 7.75% and 7.94%, respectively.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL Income from Investment Operations Less Distributions
HIGHLIGHTS ------------------------------------------------------- ---------------------------------------------
Net Asset Net Realized and
Value, Net Unrealized Gains Total from Dividends from Distributions
Beginning Investment or (Losses) on Investment Net Investment from Total
of Period Income Securities Operations Income Capital Gains Distributions
--------- ---------- -------------- ---------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCED
Mar. 30, 1992 <F75>through
Oct. 31, 1992 $20.00 $0.28 $ 0.44 $ 0.72 $(0.23) $ --- $(0.23)
Year Ended 1993 20.49 0.47 2.27 2.74 (0.47) --- (0.47)
Year Ended 1994 22.76 0.44 (0.66) (0.22) (0.44) --- (0.44)
Year Ended 1995 22.10 0.53 3.78 4.31 (0.51) --- (0.51)
GROWTH AND INCOME
Dec. 29, 1989<F75> through
Oct. 31, 1990 20.00 0.69 (2.05) (1.36) (0.65) --- (0.65)
Year Ended 1991 17.99 0.79 3.75 4.54 (0.81) --- (0.81)
Year Ended 1992 21.72 0.69 0.56 1.25 (0.70) --- (0.70)
Year Ended 1993<F77> 22.27 0.56 1.63 2.19 (0.57) (0.19) (0.76)
Year Ended 1994 23.70 0.43 (0.03) (0.40) (0.42) (0.59) (1.01)
Year Ended 1995 23.09 0.42 5.14 5.56 (0.42) (0.60) (1.02)
EQUITY INDEX
Dec. 29, 1989<F75> through
Oct. 31, 1990 25.00 0.59 (3.41) (2.82) (0.55) --- (0.55)
Year Ended 1991 21.63 0.73 6.31 7.04 (0.74) (0.06) (0.80)
Year Ended 1992<F76> 27.87 0.73 1.86 2.59 (0.73) (0.01) (0.74)
Year Ended 1993 29.72 0.75 3.32 4.07 (0.75) --- (0.75)
Year Ended 1994 33.04 0.77 0.35 1.12 (0.75) --- (0.75)
Year Ended 1995 33.41 0.76 7.71 8.47 (0.74) (0.06) (0.80)
MIDCORE GROWTH
Dec. 29, 1992<F75> through
Oct. 31, 1993 20.09 0.09 1.32 1.41 (0.10) --- (0.10)
Year Ended 1994 21.40 0.06 0.06 0.12 (0.05) --- (0.05)
Year Ended 1995 21.47 0.03 4.16 4.19 (0.05) --- (0.05)
SPECIAL GROWTH
Dec. 28, 1989<F75> through
Oct. 31, 1990 20.00 0.22 (2.30) (2.08) (0.20) --- (0.20)
Year Ended 1991 17.72 0.27 10.34 10.61 (0.28) --- (0.28)
Year Ended 1992<F76> 28.05 0.17 2.18 2.35 (0.18) (1.72) (1.90)
Year Ended 1993 28.50 0.07 4.47 4.54 (0.08) (0.62) (0.70)
Year Ended 1994 32.34 0.04 0.85 0.89 (0.04) --- (0.04)
Year Ended 1995 33.19 0.00 8.49 8.49 --- (0.21) (0.21)
INTERNATIONAL EQUITY
Apr. 28, 1994<F75> through
Oct. 31, 1994 20.00 0.04 (0.05) (0.01) --- --- ---
Year Ended 1995 19.99 0.12 (0.87) (0.75) (0.04) (0.01) (0.05)
FINANCIAL Supplemental Data and Ratios
HIGHLIGHTS (CONTINUED) Ratio of Net
Net Asset Net Ratio of Net Investment
Value Assets, Expenses to Income to Portfolio
End Total End of Average Net Average Net Turnover
of Period Return<F78>Period (000s) Assets<F79> Assets<F79> Rate
--------- ------- ------------- ----------- ----------- ---------
BALANCED
Mar. 30, 1992<F75> through
Oct. 31, 1992 $20.49 3.72% $ 45,653 0.75%<F80> 2.48%<F80> 29.04%
Year Ended 1993 22.76 13.49% 82,099 0.75%<F80> 2.24%<F80> 71.60%
Year Ended 1994 22.10 (0.93%) 94,657 0.75%<F80> 2.03%<F80> 59.77%
Year Ended 1995 25.90 19.79% 104,552 0.75%<F80> 2.24%<F80> 61.87%
GROWTH AND INCOME
Dec. 29, 1989<F75> through
Oct. 31, 1990 17.99 (6.96%) 65,741 0.74%<F81> 4.39%<F81> 49.85%
Year Ended 1991 21.72 25.63% 103,414 0.75%<F81> 3.93%<F81> 28.05%
Year Ended 1992 22.27 5.82% 135,713 0.75%<F81> 3.16%<F81> 31.25%
Year Ended 1993<F77> 23.70 9.93% 160,704 0.88%<F81> 2.44%<F81> 86.24%
Year Ended 1994 23.09 1.84% 164,053 0.90%<F81> 1.89%<F81> 56.85%
Year Ended 1995 27.63 25.00% 162,752 0.90%<F81> 1.70%<F81> 47.85%
EQUITY INDEX
Dec. 29, 1989<F75> through
Oct. 31, 1990 21.63 (11.46%) 35,569 0.49%<F81> 3.01%<F82> 9.09%
Year Ended 1991 27.87 32.90% 51,481 0.50%<F82> 2.82%<F82> 1.38%
Year Ended 1992<F76> 29.72 9.36% 81,070 0.50%<F82> 2.48%<F82> 5.50%
Year Ended 1993 33.04 13.79% 83,820 0.50%<F82> 2.32%<F82> 13.78%
Year Ended 1994 33.41 3.51% 107,563 0.50%<F82> 2.38%<F82> 13.28%
Year Ended 1995 41.08 26.02% 138,106 0.46%<F82> 2.34%<F82> 4.61%
MIDCORE GROWTH
Dec. 29, 1992<F75> through
Oct. 31, 1993 21.40 7.53% 84,467 0.89%<F83> 0.57%<F83> 46.29%
Year Ended 1994 21.47 0.56% 113,197 0.88%<F83> 0.30%<F83> 33.24%
Year Ended 1995 25.61 19.55% 134,428 0.90%<F83> 0.13%<F83> 49.84%
SPECIAL GROWTH
Dec. 28, 1989<F75> through
Oct. 31, 1990 17.72 (10.47%) 39,179 0.74%<F84> 1.41%<F84> 41.79%
Year Ended 1991 28.05 60.23% 96,017 0.75%<F84> 1.10%<F84> 48.39%
Year Ended 1992<F76> 28.50 8.86% 205,207 0.76%<F84> 0.65%<F84> 31.94%
Year Ended 1993 32.34 16.15% 347,130 0.88%<F84> 0.24%<F84> 58.80%
Year Ended 1994 33.19 2.77% 395,584 0.89%<F84> 0.13%<F84> 69.74%
Year Ended 1995 41.47 25.79% 434,228 0.90%<F84> 0.00%<F84> 79.25%
INTERNATIONAL EQUITY
Apr. 28, 1994<F75> through
Oct. 31, 1994 19.99 (0.05%) 23,756 1.49%<F85> 0.44%<F85> 6.55%
Year Ended 1995 19.19 (3.75%) 31,187 1.50%<F85> 0.66%<F85> 15.12%
<FN>
<F75> Commencement of operations.
<F76> Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F77> Effective June 17, 1993, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company, an affiliate of
FIRMCO.
<F78> Not annualized for the period ended October 31, 1990 for the Growth and Income, Equity Index and Special Growth Funds, for
the period ended October 31, 1992 for the Balanced Fund, for the period ended October 31, 1993 for the MidCore Growth Fund and for
the period ended October 31, 1994 for the International Equity Fund.
<F79> Annualized for the period ended October 31, 1990 for the Growth and Income, Equity Index and Special Growth Funds, for the
period ended October 31, 1992 for the Balanced Fund, for the period ended October 31, 1993 for the MidCore Growth Fund and for the
period ended October 31, 1994 for the International Equity Fund.
<F80> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993 and
the period ended October 31, 1992 would have been 1.06%, 1.05%, 1.12% and 1.13%, respectively; and ratios of net investment income
to average net assets for the fiscal years ended October 31, 1995, 1994, 1993 and the period ended October 31, 1992 would have
been 1.93%, 1.73%, 1.87% and 2.10%, respectively.
<F81> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991 and the period ended October 31, 1990 would have been 1.01%, 1.01%, 1.02%, 1.03%, 1.04% and 1.06%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991 and the
period ended October 31, 1990 would have been 1.59%, 1.78%, 2.30%, 2.88%, 3.64% and 4.07%, respectively.
<F82> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991 and the period ended October 31, 1990 would have been 0.53%, 0.57%, 0.56%, 0.60%, 0.63% and 0.70%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991 and the
period ended October 31, 1990 would have been 2.27%, 2.31%, 2.26%, 2.39%, 2.69% and 2.80%, respectively.
<F83> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994 and the
period ended October 31, 1993 would have been 1.02%, 1.00% and 1.08%, respectively; and ratios of net investment income to average
net assets for the fiscal years ended October 31, 1995, 1994 and the period ended October 31, 1993 would have been 0.01%, 0.19%
and 0.39%, respectively.
<F84> Without fees waived, ratios of net expenses to average net assets for the fiscal years ended October 31, 1995, 1994, 1993,
1992, 1991 and the period ended October 31, 1990 would have been 0.98%, 0.98%, 1.01%, 1.02%, 1.06% and 1.13%, respectively; and
ratios of net investment income to average net assets for the fiscal years ended October 31, 1995, 1994, 1993, 1992, 1991 and the
period ended October 31, 1990 would have been (0.08)%, 0.04%, 0.11%, 0.39%, 0.79% and 1.02%, respectively.
<F85> Without fees waived, ratios of net expenses to average net assets for the fiscal year ended October 31, 1995 and the period
ended October 31, 1994 would have been 2.65% and 2.85%, respectively; and ratios of net investment income to average net assets
for the fiscal year ended October 31, 1995 and the period ended October 31, 1994 would have been (0.49)% and (0.92)%,
respectively.
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
The descriptions that follow are designed to help you
choose the Fund that best fits your investment
objectives. You may want to pursue more than one
objective by investing in more than one of the Portico
Funds. You are reminded that there are risks in an
investment in the Funds and there can be no assurance
that each Fund's investment objective will be attained.
An investor should not consider an investment in any
individual Fund to be a complete investment program.
MONEY MARKET FUNDS
Money Market Fund
and Institutional
Money Market Fund
The investment objective of the Money Market Fund and the
Institutional Money Market Fund is to
seek to provide a high level of taxable current income
consistent with liquidity, the preservation of
capital and a stable net asset value. In pursuing its
investment objective, each Fund will invest, during
normal market conditions, at least 80% of its assets in
debt obligations with remaining maturities of thirteen
months or less as determined in accordance with the rules
of the Securities and Exchange Commission ("SEC"). Each
Fund may purchase a broad range of government, bank and
commercial obligations that are available in the money
markets.
The Money Market Fund and the Institutional Money Market
Fund will purchase only "First Tier Eligible Securities"
(as defined by the SEC) that present minimal credit risks
as determined by the Adviser pursuant to guidelines
approved by the Board of Directors (the "Board of
Directors") of Portico Funds, Inc. ("Portico" or the
"Company"). First Tier Eligible Securities consist of (1)
securities that either (a) have short-term debt ratings
at the time of purchase in the highest rating category by
at least two unaffiliated nationally recognized
statistical rating organizations ("NRSROs") (or one NRSRO
if the security was rated by only one NRSRO), or (b) are
issued by issuers with such ratings, and (2) certain
securities that are unrated (including securities of
issuers that have long-term but not short-term ratings)
but are of comparable quality as determined in accordance
with guidelines approved by the Board of Directors. The
Appendix to the Statement of Additional Information
includes a description of applicable NRSRO ratings. The
following descriptions illustrate the types of
instruments in which each Fund invests.
The Money Market Fund and the Institutional Money Market
Fund may purchase bank obligations, such as certificates
of deposit, bankers' acceptances and time deposits,
including U.S. dollar-denominated instruments issued or
supported by the credit of U.S. or foreign banks or
savings institutions having total assets at the time of
purchase in excess of $1 billion. Investments by each
Fund in the obligations of foreign banks and foreign
branches of U.S. banks will not exceed 25% of the value
of the Fund's total assets at the time of investment.
Each Fund may also make interest-bearing savings deposits
in commercial and savings banks in amounts not in excess
of 5% of its total assets.
Each Fund may purchase commercial paper, including asset-
backed commercial paper, and corporate bonds with
remaining maturities of thirteen months or less which
meet the Fund's quality requirements set forth above.
The Money Market Fund and the Institutional Money Market
Fund may purchase variable and floating rate instruments,
which may have a stated maturity in excess of thirteen
months but will permit each Fund to demand payment of the
principal of the instrument at least once every thirteen
months upon not more than thirty days' notice (unless the
instrument is guaranteed by the U.S. Government or an
agency or instrumentality thereof). Such instruments may
include variable amount master demand notes, which are
unsecured instruments that permit the indebtedness
thereunder to vary in addition to providing for periodic
adjustments in the interest rate. Issues of unrated
variable and floating rate instruments will be determined
by the Adviser (under the supervision of the Board of
Directors) to be of comparable quality at the time of
purchase to First Tier Eligible Securities. An active
secondary market may not exist, however, with respect to
particular variable and floating rate instruments, and
usually will not exist with respect to variable amount
master demand notes. The absence of a secondary market
could make it difficult for the Fund to dispose of a
variable or floating rate instrument if the issuer
defaulted on its payment obligation or during periods
that the Fund could not exercise its demand rights, and
the Fund could, for these or other reasons, suffer a loss
with respect to such instruments.
The Money Market Fund and the Institutional Money Market
Fund may agree to purchase U.S. Government obligations
from financial institutions subject to the seller's
agreement to repurchase them at an agreed upon time and
price ("repurchase agreements"). During the term of the
repurchase agreement, the Adviser will continue to
monitor the creditworthiness of the seller, and will
require the seller to maintain the value of the
securities subject to the agreement at not less than 102%
of the repurchase price. Default or bankruptcy of the
seller would, however, expose the Fund to possible loss
because of the adverse market action or delay in
connection with the disposition of the underlying
securities. The securities held subject to a repurchase
agreement may have stated maturities exceeding thirteen
months, provided the repurchase agreement itself matures
in less than one year. Each Fund may also purchase
obligations issued or guaranteed by the U.S. Government
or its agencies and instrumentalities. Each Fund may also
purchase stripped U.S. Government obligations and
Government-backed trusts. For further discussion of U.S.
Government obligations and stripped securities, see
"Other Investment Information - Government Obligations."
The Money Market Fund and the Institutional Money Market
Fund may acquire certain types of bank instruments issued
or supported by the credit of foreign banks or foreign
branches of domestic banks where the Adviser deems the
instrument to present minimal credit risks. For a
discussion of the inherent risks of foreign securities,
see "Other Investment Information - Foreign Securities."
U.S. Treasury
Money Market Fund
and U.S. Government
Money Market Fund
The investment objective of the U.S. Treasury Money
Market Fund is to seek to provide a high level of current
income exempt from state income taxes consistent with
liquidity, the preservation of capital and a stable net
asset value. The Fund seeks to achieve its objective by
investing in securities with remaining maturities of
thirteen months or less (as determined in accordance
with SEC rules) that are issued or guaranteed as to
principal and interest by the U.S.Treasury (bills,
certificates of indebtedness, notes and bonds).
However, under extraordinary circumstances, such
as when U.S. Treasury securities are unavailable, the
Fund may temporarily hold cash.
The investment objective of the U.S. Government Money
Market Fund is to seek to provide a high level of taxable
current income consistent with liquidity, the
preservation of capital and a stable net asset value
(irrespective of state income tax considerations). The
Fund seeks to achieve its objective by investing
primarily in obligations with remaining maturities of
thirteen months or less (as determined in accordance with
SEC rules) that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, and in
repurchase agreements relating to such obligations. Under
normal market conditions, the Fund intends to invest at
least 65% of its total assets in U.S. Government
obligations. Such U.S. Government obligations may include
Treasury bills, certificates of indebtedness, notes and
bonds, as well as issues of agencies and
instrumentalities of the U.S. Government, including
obligations of Federal Home Loan Banks, Federal Farm
Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-
Import Bank of the United States, Small Business
Administration, Government National Mortgage Association,
Federal National Mortgage Association, General Services
Administration, Student Loan Marketing Association,
Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Maritime
Administration, Resolution Trust Corporation and
Tennessee Valley Authority. The U.S. Government Money
Market Fund may also purchase stripped U.S. Government
Obligations and Government backed trusts. For further
discussion of U.S. Government obligations, see "Other
Investment Information - Government Obligations."
The U.S. Government Money Market Fund may enter into
repurchase agreements with financial institutions. See
"Money Market Fund and Institutional Money Market Fund"
above for a discussion of repurchase agreements.
Although substantially all of the instruments acquired by
the U.S. Treasury Money Market Fund and U.S. Government
Money Market Fund will be U.S. Government obligations (or
repurchase agreements collateralized by such
obligations), shares of the U.S. Treasury Money Market
Fund and U.S. Government Money Market Fund are not
themselves issued or guaranteed by any government agency.
U.S. Government obligations that have stated maturities
in excess of thirteen months but have variable or
floating interest rates may be acquired by the Funds in
accordance with SEC rules.
Tax-Exempt Money Market Fund
The investment objective of the Tax-Exempt Money Market
Fund is to seek to provide a high level of current income
that is exempt from federal income taxes consistent with
liquidity, the preservation of capital and a stable net
asset value. In pursuing this investment objective, the
Fund invests in a diversified portfolio of debt
obligations issued by or on behalf of states, territories
and possessions of the United States, the District of
Columbia and their authorities, agencies,
instrumentalities and political sub divisions ("Municipal
Obligations") which meet the Fund's quality requirements
set forth below. During normal market conditions, the
Fund will invest at least 80% of its assets in Municipal
Obligations with remaining maturities of thirteen months
or less as determined in accordance with SEC rules. The
Tax-Exempt Money Market Fund will purchase only Municipal
Obligations that are First Tier Eligible Securities as
defined above under "Money Market Fund and Institutional
Money Market Fund."
Municipal Obligations purchased by the Fund may be backed
by letters of credit issued by foreign and domestic banks
and other financial institutions. Such letters of credit
are not necessarily subject to federal deposit insurance
and adverse developments in the banking industry could
have a negative effect on the credit quality of the
Fund's portfolio securities and its ability to maintain a
stable net asset value and share price. Letters of
credit, like other obligations of foreign banks, may
involve certain risks in addition to those of domestic
obligations. See "Other Investment Information - Foreign
Securities."
Municipal Obligations purchased by the Tax-Exempt Money
Market Fund may include variable and floating rate
instruments issued by industrial development authorities
and other governmental entities. If such instruments are
unrated, they will be determined by the Fund's Adviser
(under the supervision of the Board of Directors) to be
of comparable quality at the time of purchase to First
Tier Eligible Securities. While there may be no active
secondary market with respect to a particular variable or
floating rate demand instrument purchased by the Fund,
the Fund may (at any time or during specified periods not
exceeding thirteen months, depending upon the instrument
involved) demand payment in full of the principal of the
instrument and may re-sell the instrument to a third
party. The absence of such an active secondary market,
however, could make it difficult for the Fund to dispose
of a variable or floating rate demand instrument if the
issuer defaulted on its payment obligation or during
periods that the Fund is not entitled to exercise its
demand rights, and the Fund could, for these or other
reasons, suffer a loss with respect to such instruments.
From time to time on a temporary defensive basis due to
market conditions, the Tax-Exempt Money Market Fund may
hold uninvested cash reserves or invest in short-term
taxable money market obligations that are permissible
investments for the Money Market Fund, in such
proportions as, in the opinion of the Adviser, prevailing
market or economic conditions warrant. Uninvested cash
reserves will not earn income. Taxable obligations
acquired by the Fund will not exceed under normal market
conditions 20% of the Fund's total assets at the time of
purchase.
The two principal classifications of Municipal
Obligations which may be held by the Tax-Exempt Money
Market Fund are "General Obligation" securities and
"Revenue" securities. General Obligation securities are
secured by the issuer's pledge of its full faith, credit
and taxing power for the payment of principal and
interest. Revenue securities are payable only from the
revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such
as the issuer of the facility being financed. Private
activity bonds (e.g., bonds issued by industrial
development authorities) that are issued by or on behalf
of public authorities to finance various privately
operated facilities are included within the term
"Municipal Obligations" if the interest paid thereon is
exempt (subject to federal alternative minimum tax) from
federal income tax. (The Fund, however, does not
currently intend to acquire private activity bonds that
are subject to the federal alternative minimum tax.)
Private activity bonds are in most cases Revenue
securities and are not payable from the unrestricted
revenues of the issuer. The credit quality of such bonds
is usually directly related to the credit standing of the
corporate user of the facility involved.
The Tax-Exempt Money Market Fund may also acquire "Moral
Obligation" securities, which are normally issued by
special purpose public authorities. If the issuer of
Moral Obligation securities is unable to meet its debt
service obligations from current revenues, it may draw on
a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or
municipality which created the issuer.
The Tax-Exempt Money Market Fund may purchase securities
on a "when-issued" or delayed delivery basis and may
purchase or sell securities on a "forward commitment"
basis. For more information, see "Other Investment
Information - When Issued Purchases and Forward
Commitments."
The Tax-Exempt Money Market Fund may acquire "stand-by
commitments" with respect to Municipal Obligations held
in its portfolio. Under a stand-by commitment, a dealer
agrees to purchase at the Fund's option specified
Municipal Obligations at a price equal to their amortized
cost value plus accrued interest. The Fund will acquire
stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights
thereunder for trading purposes.
Although the Tax-Exempt Money Market Fund does not
presently intend to do so on a regular basis, it may
invest more than 25% of its assets in Municipal
Obligations, the interest on which is paid solely from
revenues of similar projects if such investment is deemed
necessary or appropriate by the Adviser. To the extent
that the Fund's assets are concentrated in Municipal
Obligations payable from revenues on similar projects,
the Fund will be subject to the peculiar risks
represented by such projects to a greater extent than it
would be if the Fund's assets were not so concentrated.
Furthermore, payment of Municipal Obligations of certain
projects may be secured by mortgages or deeds of trust.
In the event of a default, enforcement of the mortgages
or deeds of trust will be subject to statutory
enforcement procedures and limitations, including rights
of redemption and limitations on obtaining deficiency
judgments. In the event of a foreclosure, collection of
the proceeds of the foreclosure may be delayed and the
amount of proceeds from the foreclosure may not be
sufficient to pay the principal of and accrued interest
on the defaulted Municipal Obligations.
Opinions relating to the validity of Municipal
Obligations and to the exemption of interest thereon from
federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither
Portico nor the Adviser will review the proceedings
relating to the issuance of Municipal Obligations or the
bases for such opinions.
BOND FUNDS Comparison of Portico Bond Funds
Short-Term Full-Term Bond
Bond Fund Intermediate Bond Funds Fund
------------------ ----------------------------------- --------------
Portico Portico Portico Portico
Short-Term Intermediate Tax-Exempt Bond
Bond Market Fund Bond Market Fund Intermediate Bond Fund IMMDEX/TM Fund
The Benchmark: The Benchmark: The Benchmark: The Benchmark:
Lehman Bros. 1-3 Yr. Lehman Bros. Lehman Bros. 5-Year Lehman Bros
Gov't./Corp. Bond Intermediate General Obligation Gov't./Corp.Bond
Index Gov't./Corp. Bond Index Bond Index Index
Average Quality Average Quality Average Quality Average Quality
<F86> <F86> <F86> <F86>
of Holdings-AA of Holdings-AA of Holdings-AAA of Holdings-AA
Average Maturity Average Maturity Average Maturity AverageMaturity
2.9 Years 4.4 Years 5.1 Years 9.4 Years
1.7 Years Duration 3.2 Years Duration 4.2 Years Duration 5.1 Years Duration
Lehman Brothers is neither a sponsor of nor in any way affiliated with
Portico Funds.
Average quality, maturity, and duration reflect the portfolios as of
October 31, 1995, and will change from time to time in connection with the
management of the portfolios pursuant to the policies described in this
Prospectus.
<F86>Dollar-weighted average quality of portfolio securities held by the
Funds.
TAXABLE BOND FUNDS
Short-Term Bond
Market Fund
Intermediate Bond
Market Fund
Bond IMMDEX/TM Fund
Investment Objectives. The Short-Term Bond Market Fund
seeks to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total
return of the Lehman Brothers 1-3 Year
Government/Corporate Bond Index (the "Lehman 1-3
Gov't./Corp."). The Intermediate Bond
Market Fund seeks to provide an annual rate of total
return, before Fund expenses, comparable to the annual
rate of total return of the Lehman Brothers Intermediate
Government/Corporate Bond Index (the "Lehman Intermediate
Gov't./Corp."). The Bond IMMDEX/TM Fund seeks to provide
an annual rate of total return, before Fund expenses,
comparable to the annual rate of total return of the
Lehman Brothers
Government/Corporate Bond Index (the "Lehman
Gov't./Corp.").
Each Fund will attempt to achieve its objective by
maintaining a comparable duration to that of its
benchmark index, and may invest a substantial portion of
its assets in securities that are not included in its
benchmark index. The Funds, therefore, are not "index"
funds, which typically hold only securities that are
included in the indices they attempt to replicate.
Description of Bond Indices. The bond indices are market
value weighted total return indices measuring both the
principal price changes of and income provided by the
underlying universe of securities that comprise the
respective index. The bond indices are intended to
measure performance of their respective fixed-rate debt
market over given time intervals and differ with respect
to the maturity range of securities included. Each index
is comprised of U.S. Treasury, U.S. Government agency,
dollar denominated debt of certain foreign, sovereign or
supranational entities and investment grade corporate
debt obligations satisfying the following criteria as
defined by Lehman Brothers:
- Fixed-rate debt (as opposed to variable-rate debt);
- At least one year until maturity;
- Minimum outstanding par value of $100 million;
- Minimum quality rating of Baa by Moody's Investors
Service, Inc. ("Moody's"), BBB by Standard and Poor's
Rating Group ("S&P"), or BBB by Fitch Investors Service,
Inc. ("Fitch"); and
Lehman 1-3 Gov't./Corp.
- From one to three years remaining until maturity.
Lehman Intermediate Gov't./Corp.
- From one to ten years remaining until maturity.
Lehman Gov't./Corp.
- From one to thirty years or more remaining until
maturity.
As of October 31, 1995, 878 issues were included in the
Lehman 1-3 Gov't./Corp. representing $965 billion in
market value; 3,253 issues were included in the Lehman
Intermediate Gov't./Corp. representing $2.27 trillion in
market value; and 4,615 issues were included in the
Lehman Gov't./Corp. representing $3.16 trillion in market
value.
Investment Techniques. In constructing and maintaining
each Fund's portfolio, the Adviser attempts to maintain
an overall interest rate sensitivity equivalent to its
respective bond index and is intended to produce an
annual rate of total return, before Fund expenses,
comparable to that of the respective bond index. These
techniques are used in conjunction with traditional
methods of investment management that rely on economic,
financial and market analysis to select portfolio
investments.
The approach employed by the Adviser in managing each
Fund's portfolio is to define and measure the various
duration characteristics of each bond index. "Duration"
is a term used to express the average time to receipt of
expected cash flows (discounted to their present value)
on a particular fixed-income instrument or a portfolio of
instruments. For example, the duration of a five-year
zero coupon bond which pays no interest or principal
until the maturity of the bond is five years. This is
because a zero coupon bond produces no cash flow until
the maturity date. On the other hand, a coupon bond that
pays interest semiannually and matures in five years will
have a duration of less than five years reflecting the
semiannual cash flows resulting from coupon payments.
Duration generally defines the effect of interest rate
changes on bond prices. However, for large interest rate
changes (generally changes of 1% or more) this measure
will not completely explain the interest rate sensitivity
of a bond.
Application of Investment Techniques. The Adviser will
select securities for each Fund's portfolio based upon
their expected contribution to the portfolio's overall
duration and total return as compared to each bond index.
The Adviser expects that typically each Fund will hold
less than 100 securities that in the aggregate have
similar price sensitivities or durations as the
respective bond index. Although the Adviser expects that
as a general matter a significant percentage of the
securities acquired by each Fund will also be securities
that are included in the respective bond index, each Fund
may invest more than 50% of its total assets in
securities that are not so included.
In order to reduce a negative deviation in return between
each Fund and the respective bond index, each Fund will
normally attempt to be fully invested. The Adviser may
engage in practices that are intended to achieve an
enhanced return, before Fund expenses, over the
respective bond index. As indicated above, each Fund will
hold only a percentage of the large number of issues
included in its respective bond index. In addition, a
Fund may hold securities which are not included in its
respective bond index, including stripped government,
asset-backed and mortgage-backed obligations,
collateralized mortgage obligations, medium-term notes
and Eurobonds, among others. This permits the Adviser to
engage in sampling and other strategies that are designed
to achieve an enhanced incremental gross return above the
return on the respective bond index. For example, the
Adviser may, in light of current changes in market
conditions, "swap" portfolio securities whereby a bond or
a group of bonds is sold and another bond or group of
bonds is bought that has similar duration characteristics
but, in the Adviser's opinion, a higher expected return.
Furthermore, the percentage mix of government and
corporate issues held by a Fund will differ from the
percentage included in its respective bond index
whenever, in the Adviser's judgment, such a mix is
desirable. Moreover, the average quality of bonds held by
each Fund (which is expected to be at least the second
highest rating category - AA by S&P or Aa by Moody's) may
vary from the average quality of bonds included in its
respective bond index, and in selecting among the various
securities available for investment by a Fund the Adviser
will make its own creditworthiness determinations. These
and other practices, although intended to result in a
positive incremental return in favor of a Fund, may
instead result in a negative deviation.
In an effort to make a Fund's duration and return
comparable to those of its respective bond index, the
Adviser will continue to monitor a Fund's portfolio and
market changes in accordance with procedures established
by the Adviser under the supervision of the Board of
Directors. It should be recognized, however, that while
the sensitivity of a Fund's portfolio to interest rate
changes is expected to be similar to that of its
respective bond index, because of the smaller number of
issues held by a Fund, material events affecting a Fund's
portfolio (for example, an issuer's decline in credit
quality) may influence the performance of a Fund to a
greater degree than such events will influence its
respective bond index and may prevent a Fund from
attaining its investment objective for particular
periods. In the event the performance of a Fund is not
comparable to the performance of its respective bond
index, the Board of Directors will examine the reasons
for the deviation and the availability of corrective
measures.
Each Fund's policy is to invest at least 65% of the total
value of its assets in a broad range of corporate,
government, government agencies, stripped government,
asset-backed and mortgage-backed and collateralized
mortgage obligations during normal market conditions, as
described in greater detail below. The durations of a
Fund will be similar to its respective bond index during
normal market conditions. In addition, the dollar-
weighted average portfolio maturity of each Fund's
portfolio will be more than one year but less than three
years for the Short-Term Bond Market Fund; more than
three years but less than ten for the Intermediate Bond
Market Fund; and greater than five years for the Bond
IMMDEX/TM Fund during normal market conditions. Debt
obligations acquired by each Fund will be "investment
grade" at the time of purchase, that is, obligations
rated within the four highest rating categories by S&P
(AAA, AA, A and BBB), Moody's (Aaa, Aa, A and Baa) or
other nationally recognized rating agencies or
obligations that are unrated but determined by the
Adviser to be comparable in quality to instruments that
are so rated. Obligations rated in the lowest of the top
four rating categories are considered to have speculative
characteristics and are subject to greater credit and
market risk than higher rated securities. As a result,
the market value of these securities may be expected to
fluctuate more than those of securities with higher
ratings. Subsequent to its purchase by a Fund, a rated
security may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by
that Fund. The Adviser will consider such an event in
determining whether the Fund should continue to hold the
security. The Adviser will sell promptly any securities
that are non-investment grade as a result of these events
that exceed 5% of the Fund's net assets. See Appendix A
to the Statement of Additional Information for a
description of applicable debt ratings.
Each Fund may make limited investments in guaranteed
investment contracts ("GICs") issued by highly rated U.S.
insurance companies. Pursuant to such contracts, the Fund
makes cash contributions to a separate account of the
insurance company which has been segregated from the
general assets of the issuer. The insurance company then
pays to the Fund at the end of the contract an amount
equal to the cash contributions adjusted for the total
return of an index. A GIC is a separate account
obligation of the issuing insurance company. The Fund
will only purchase GICs from issuers which, at the time
of purchase, are rated A or higher by Moody's or S&P,
have assets of $1 billion or more and meet quality and
credit standards established by the Adviser. Generally,
GICs are not assignable or transferable without the
permission of the issuing insurance companies, and an
active secondary market in GICs does not currently exist.
Therefore, GICs are considered by the Fund to be subject
to the 10% limitation on illiquid investments described
under "Other Investment Information." Generally, a GIC
allows a purchaser to buy an annuity with the money
accumulated under the contract; however, the Fund will
not purchase any such annuities.
The Funds may invest in certain other securities not
contained in the indices such as options, futures,
repurchase agreements and other cash market instruments.
See "Other Investment Information."
The value of each Fund's portfolio, as is generally the
case with each bond index, can be expected to vary
inversely from changes in prevailing interest rates.
Tax-Exempt Intermediate Bond Fund
The investment objective of the Tax-Exempt Intermediate
Bond Fund is to seek to provide current income that is
substantially exempt from federal income tax and
emphasize total return with relatively low volatility of
principal. The Fund will invest primarily in investment
grade intermediate-term municipal obligations issued by
state and local governments exempt from federal income
tax. In pursuing its investment objective, the Fund
invests in a diversified portfolio of Municipal
Obligations (as defined above under "Tax-Exempt Money
Market Fund"). As a fundamental policy, the Fund will
invest at least 80% of its net assets in securities, the
interest on which is exempt from regular federal income
and alternative minimum taxes, except during defensive
periods. (See "Investment Limitations.") The Fund intends
to maintain an average weighted maturity between three
and ten years. There is no limit on the maturity of any
individual security in the Fund.
For a discussion of "General Obligation," "Revenue" and
"Moral Obligation" securities, see "Tax-Exempt Money
Market Fund" above.
Although the Fund does not presently intend to do so on a
regular basis, it may invest more than 25% of its assets
in Municipal Obligations, the issuers of which are
located in the same state or the interest on which is
paid solely from revenues of similar projects. For a
discussion of the risks involved with concentrating in
such types of investments, see "Tax-Exempt Money Market
Fund."
Opinions relating to the validity of Municipal
Obligations and to the exemption of interest thereon from
federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither the
Fund nor the Adviser will review the proceedings relating
to the issuance of Municipal Obligations or the bases for
such opinions.
Municipal Obligations purchased by the Fund will be
investment grade at the time of purchase. See "Taxable
Bond Funds - Application of Investment Techniques" above
for a description of "investment grade securities." The
Fund may also purchase Municipal Obligations which are
unrated at the time of purchase but are determined to be
of comparable quality by the Adviser or have comparable
ratings from other nationally recognized rating agencies.
The Fund may also acquire municipal notes and other
short-term obligations rated SP-1 by S&P, or MIG-1 by
Moody's; tax-exempt commercial paper rated A-1 or higher
by S&P, or VMIG-1 by Moody's. Subsequent to its purchase
by the Fund, a rated security may cease to be rated or
its rating may be reduced below the minimum rating
required for purchase by the Fund. The Adviser will
consider such event in determining whether the Fund
should continue to hold the security. The Adviser will
sell promptly any securities that are not rated
investment grade by at least one nationally recognized
rating agency and that exceed 5% of the Fund's net
assets. As indicated, the Fund's cash balances may be
invested in short-term municipal notes and tax-exempt
commercial paper, as well as municipal bonds with
remaining maturities of thirteen months or less and
securities issued by other investment companies which
invest in high quality, short-term municipal debt
securities. Except during temporary defensive periods, at
least 65% of the Fund's total assets will be invested in
bonds and debentures. The value of the Fund's portfolio
can be expected to vary inversely to changes in
prevailing interest rates.
Municipal Obligations purchased by the Fund may include
variable and floating rate instruments issued by
industrial development authorities and other governmental
entities. If such instruments are unrated, they will be
determined by the Fund's Adviser (under the supervision
of the Board of Directors) to be of comparable quality at
the time of purchase to investment grade. While there may
be no active secondary market with respect to a
particular variable or floating rate demand instrument
purchased by the Fund, the Fund may (at any time or
during specified periods not exceeding thirteen months,
depending upon the instrument involved) demand payment in
full of the principal of the instrument and has the right
to resell the instrument to a third party. The absence of
such an active secondary market, however, could make it
difficult for the Fund to dispose of a variable or
floating rate demand instrument if the issuer defaulted
on its payment obligation or during periods that the Fund
is not entitled to exercise its demand rights, and the
Fund could, for these or other reasons, suffer a loss
with respect to such instruments.
In addition, from time to time, on a temporary defensive
basis due to market conditions, the Fund may hold without
any limitation uninvested cash reserves and invest
without any limitations in high quality short-term
taxable money market obligations in such proportions as
in the opinion of the Adviser, prevailing market or
economic conditions warrant. Uninvested cash reserves
will not earn income. See "Other Investment Information -
Money Market Instruments" below. Taxable obligations
acquired by the Fund will not exceed under normal market
conditions 20% of the Fund's net assets at the time of
purchase.
The Fund may purchase put options on Municipal
Obligations. A put gives the Fund the right to sell a
Municipal Obligation at a specified price at any time
before a specified date. A put will be sold, transferred
or assigned only with the related Municipal Obligation.
The Fund will acquire puts only to enhance liquidity,
shorten the maturity of the related municipal security or
permit the Fund to invest its assets at more favorable
rates. The aggregate price of a security subject to a put
may be higher than the price which otherwise would be
paid for the security without such an option, thereby
increasing the security's cost and reducing its yield.
The Fund may also acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio.
See "Tax-Exempt Money Market Fund" for a description of
stand-by commitments.
In addition, the Fund may acquire municipal lease
obligations which are issued by a state or local
government or authority to acquire land and a wide
variety of equipment and facilities. These obligations
typically are not fully backed by the municipality's
credit, and their interest may become taxable if the
lease is assigned. If the funds are not appropriated for
the following year's lease payments, the lease may
terminate, with the possibility of default on the lease
obligation and significant loss to the Fund. Certificates
of participation in municipal lease obligations or
installment sale contracts entitle the holder to a
proportionate interest in the lease-purchase payments
made. The Adviser determines and monitors the liquidity
of municipal lease obligations (including certificates of
participation) under guidelines approved by the Board of
Directors requiring the Adviser to evaluate the credit
quality of such obligations and report on the nature of
and the Fund's trading experience in the municipal lease
market. Under the guidelines, municipal lease obligations
that are not readily marketable and transferable are
treated as illiquid. The Fund will not knowingly invest
more than 10% of the value of its net assets in
securities, including municipal leases, that are
illiquid.
EQUITY FUNDS
Balanced Fund Investment Objective. The investment objective of the
Balanced Fund is to achieve a balance of capital
appreciation and current income with relatively low
volatility of capital. The Fund seeks to achieve its
objective through a policy of diversified investments in
fixed-income and equity securities. Equity securities
will be selected on the basis of their potential for
capital appreciation. Current income will not be a
significant consideration in the selection of equity
securities. Fixed-income securities will be selected in
an effort to provide an annual rate of total return with
respect to the fixed-income portion of the Fund's
portfolio that is similar to the annual rate of total
return of the Lehman Brothers Government/Corporate Bond
Index on a consistent basis. In investing in fixed-income
securities, the Adviser will use specialized quantitative
investment techniques. (For a description of the Lehman
Brothers Government/Corporate Bond Index see "Bond Funds
- Description of Bond Indices." For a description of the
specialized quantitative investment techniques see
"Investment Techniques" below).
The Fund's policy is to invest at least 25% of the value
of its total assets in fixed-income senior securities and
at least 50% and no more than 65% in equity securities at
all times. The actual percentage of assets invested in
fixed-income and equity securities will vary from time to
time, depending on the judgment of the Adviser as to the
general market and economic conditions, trends and
yields, interest rates and fiscal and monetary
developments.
Investment Techniques. Most equity securities held by the
Fund will be publicly traded common stocks of companies
incorporated in the United States, although up to 25% of
its total assets may be invested, either directly or
through investments in sponsored American Depository
Receipts, in the securities of foreign issuers. From time
to time, the Fund may also acquire preferred stocks. In
addition, the Fund may invest in domestic securities
convertible into common stock, such as certain bonds and
preferred stocks, and may invest up to 5% of its net
assets in other types of domestic securities having
common stock characteristics, such as rights and warrants
to purchase equity securities.
The Fund generally invests in companies that the Adviser
considers to be well managed and to have "attractive
fundamental financial characteristics." Attractive
fundamental financial characteristics include, among
other factors, low debt, return on equity substantially
above the market average and consistent revenue and
earnings per share growth over the prior three to five
years. Companies in which the Fund may make equity
investments generally will have stock market
capitalizations between $100 million and $10 billion. The
median stock market capitalization is generally
anticipated to be between $1 billion and $3 billion and
the weighted average stock market capitalization is
generally anticipated to be between $1.5 billion and $5
billion. Stock market capitalizations are calculated by
multiplying the total number of common shares outstanding
by the market price per share. The Fund may also invest
from time to time a portion of its assets, not to exceed
20% at the time of purchase, in companies with larger or
smaller market capitalizations.
In constructing and maintaining the fixed-income portion
of the portfolio, the Adviser attempts to achieve an
annual rate of total return, before Fund expenses,
comparable to that of the Lehman Brothers
Government/Corporate Bond Index. See "Bond Funds -
Description of Bond Indices." Specialized structured
investment management techniques are used in conjunction
with traditional methods of investment management that
rely on economic, financial and market analysis to select
portfolio investments.
Fixed-income securities purchased by the Fund may include
a broad range of corporate, government, government
agency, stripped government, asset-backed and mortgage-
backed obligations. The Fund may purchase fixed-income
securities without regard to any maturity limitation.
Debt obligations acquired by the Fund will be investment
grade, as described above under "Taxable Bond Funds -
Application of Investment Techniques," at the time of
purchase, or unrated obligations deemed by the Adviser to
be comparable in quality to instruments so rated.
Growth and Income Fund
Investment Objective. The investment objective of the
Growth and Income Fund is to seek both reasonable income
and long-term capital appreciation. In seeking to obtain
"reasonable income," the Fund will emphasize income-
producing securities.
Common stocks purchased by the Fund will be selected
primarily from a universe of domestic companies that have
established dividend-paying histories. During normal
market conditions, at least 50% of the Fund's net assets
will be invested in income-producing equity securities
and each company initially selected for inclusion in the
Fund's portfolio must pay a current dividend. In addition
to dividend considerations, the Fund generally invests in
medium- to large-sized companies with stock market
capitalizations over $750 million that the Adviser
considers to be well managed and to have attractive
fundamental financial characteristics. See "Balanced
Fund" for a description of "attractive fundamental
financial characteristics." The Fund may also invest a
portion of its assets, not to exceed 20% at the time of
purchase, in companies with smaller market
capitalizations. The median stock market capitalization
is generally expected to be between $2 billion and $3
billion and the weighted average stock market
capitalization between $9 billion and $12 billion.
In addition to investments in common stocks, the Fund may
invest in bonds, notes, debentures and preferred stocks
convertible into common stocks but only to the extent
that those securities also provide a current interest or
dividend payment stream. Although convertible securities
frequently have speculative characteristics and may be
acquired by the Fund without regard to minimum quality
ratings, the Fund intends to invest less than 5% of its
net assets in non-investment grade securities. Up to 25%
of the Fund's total assets may be invested, either
directly or through sponsored American Depository
Receipts, in the securities of foreign issuers. The Fund
may also purchase put and call options, sell covered call
options and enter into transactions involving futures
contracts and options on futures as described later in
this Prospectus.
The Fund may, to the extent consistent with its
investment objective, purchase nonconvertible debt
securities. Such debt obligations acquired by the Fund
will be investment grade, as described above under
"Taxable Bond Funds - Application of Investment
Techniques," at the time of purchase or unrated
obligations deemed by the Adviser to be comparable in
quality to instruments so rated.
Equity Index Fund
Investment Objective. The investment objective of the
Equity Index Fund is to seek returns, before Fund
expenses, comparable to the price and yield performance
of publicly traded common stocks in the aggregate, as
represented by the S&P 500 Index. Under normal market
conditions, the Fund intends to invest substantially all
of its total assets in securities included in the S&P 500
Index.
In seeking to attain its investment objective, the Fund
uses the S&P 500 Index as the standard performance
comparison because it represents approximately two-thirds
of the total market value of all domestic common stocks
and is well known to investors. The S&P 500 Index
consists of 500 selected common stocks, most of which are
listed on the New York Stock Exchange. Standard & Poor's
selects the stocks included in the S&P 500 Index on a
statistical basis, and the S&P 500 Index is heavily
weighted toward stocks with large market capitalizations.
The S&P 500 Index and the Equity Index Fund currently
have a median stock market capitalization of $4.7 billion
and a weighted average stock market capitalization of $21
billion. Standard & Poor's makes no representation or
warranty, implied or express, to the purchasers of Fund
shares, or any member of the public, regarding the
advisability of investing in index funds or the ability
of the S&P 500 Index to track general stock market
performance.
Portfolio Management. Traditional methods of fund
investment management typically involve relatively
frequent changes in a portfolio of securities on the
basis of economic, financial and market analysis. Index
funds such as the Equity Index Fund are not managed in
this manner, however. Instead, with the aid of a computer
program, the Adviser purchases and sells securities for
the Fund in an attempt to produce investment results that
substantially duplicate the performance of the common
stocks of the issuers represented in the S&P 500 Index,
taking into account redemptions, sales of additional Fund
shares and other adjustments as described below.
The Fund does not expect to hold at any particular time
all of the stocks included in the S&P 500 Index. The
Adviser believes, however, that through the application
of a capitalization weighting and sector balancing
technique that it will be able to construct and maintain
the Fund's investment portfolio so that it reasonably
tracks the performance of the S&P 500 Index.
The Adviser believes that the Fund will, under normal
conditions, hold securities of approximately 350 to 450
issuers included in the S&P 500 Index, and that the
quarterly performance of the Fund and the S&P 500 Index
will be within +0.3% under normal market conditions.
Redemptions of a substantial number of shares of the Fund
could, however, reduce the number of issuers represented
in the Fund's investment portfolio, which could, in turn,
adversely affect the accuracy with which the Fund tracks
the performance of the S&P 500 Index. In the event the
performance of the Fund is not comparable to the
performance of the S&P 500 Index, the Board of Directors
will examine the reasons for the deviation and the
availability of corrective measures. These measures would
include additional fee waivers by the Adviser and Co-
Administrators or adjustments to the Adviser's portfolio
management practices. If substantial deviation in the
Fund's performance continued for extended periods, it is
expected the Board of Directors would consider possible
changes to the Fund's investment objective.
If an issuer drops in ranking, or is eliminated entirely
from the S&P 500 Index, the Adviser may be required to
sell some or all of the common stock of such issuer then
held by the Fund. Sales of portfolio securities may be
made at times when, if the Adviser were not required to
effect purchases and sales of portfolio securities in
accordance with the S&P 500 Index, such securities might
not be sold. Such sales may result in lower prices for
such securities than may have been realized or in losses
that may not have been incurred if the Adviser were not
required to effect the purchases and sales. "Adverse
events" will not necessarily be the basis for the
disposition of portfolio securities, unless an event
causes the issuer to be eliminated entirely from the S&P
500 Index. "Adverse events" include the failure of an
issuer to declare or pay dividends, the institution
against an issuer of materially adverse legal
proceedings, the existence or threat of defaults
materially and adversely affecting an issuer's future
declaration and payment of dividends, or the existence of
other materially adverse credit factors. However,
although the Adviser does not intend to screen securities
for investment by the Fund by traditional methods of
financial and market analysis, the Adviser will monitor
the Fund's investment with a view towards removing stocks
of companies which may impair for any reason the Fund's
ability to achieve its investment objective.
The Fund invests primarily in the common stocks that
comprise the S&P 500 Index in accordance with their
relative capitalization and sector weightings as
described above. It is possible, however, that the Fund
will from time to time receive, as a part of a "spin-off"
or other corporate reorganization of an issuer included
in the S&P 500 Index, securities that are themselves
outside the S&P 500 Index. Such securities will be
disposed of by the Fund in due course consistent with the
Fund's investment objective.
A portion of the Fund's assets may be invested in options
and futures contracts as described below under "Other
Investment Information."
MidCore Growth Fund
Investment Objective. The investment objective of the
MidCore Growth Fund is capital appreciation. The Fund
seeks to achieve its objective through investment in
securities of medium- to large-sized companies, selected
on the basis of their potential for price appreciation.
Current income is not a significant consideration in the
selection of securities for this Fund.
The Fund's policy is to invest at least 50% of the value
of its total assets in equity securities under normal
market conditions. Most equity securities held by the
Fund will be publicly traded common stocks of companies
incorporated in the United States, although up to 25% of
its total assets may be invested, either directly or
through investments in American Depository Receipts, in
the securities of foreign issuers. From time to time, the
Fund may also acquire preferred stocks and obligations,
such as bonds, debentures and notes, that in the opinion
of the Adviser present opportunities for capital
appreciation. In addition, the Fund may invest in
securities convertible into common stock, such as certain
bonds and preferred stocks.
The Fund generally invests in medium- to large-sized
companies, with stock market capitalizations over $750
million, that the Adviser considers to be well managed
and to have attractive fundamental financial
characteristics. See "Balanced Fund" above for
description of "attractive fundamental financial
characteristics." The Adviser intends to focus its
selection of securities on medium-sized companies and
anticipates the Fund's median capitalization would be
between $2 billion and $2.8 billion; compared with the
S&P 500 Index which currently has a median capitalization
of $4.7 billion. The Fund may also invest from time to
time a portion of its assets, not to exceed 20% at the
time of purchase, in companies with market
capitalizations below $750 million.
The Fund may, to the extent consistent with its
investment objective, purchase nonconvertible debt
securities. Such debt obligations acquired by the Fund
will be investment grade, as described above under
"Taxable Bond Funds - Application of Investment
Techniques," at the time of purchase or unrated
obligations deemed by the Adviser to be comparable in
quality to instruments so rated.
Special Growth Fund
Investment Objective. The investment objective of the
Special Growth Fund is capital appreciation. The Fund
seeks to achieve its objective through investments in
securities of small- to medium-sized companies. Current
income is not a significant consideration in the
selection of securities for this Fund. Securities are
selected for the Fund by the Adviser on the basis of
their potential for price appreciation.
The Fund's policy is to invest at least 50% of the value
of its total assets in equity securities under normal
market conditions. Most equity securities held by the
Fund will be publicly traded common stocks of companies
incorporated in the United States, although up to 25% of
its total assets may be invested, either directly or
through investments in American Depository Receipts, in
the securities of foreign issuers. From time to time, the
Fund may also acquire preferred stocks and obligations,
such as bonds, debentures and notes, that in the opinion
of the Adviser present opportunities for capital
appreciation. In addition, the Fund may invest in
securities convertible into common stock, such as certain
bonds and preferred stocks, and may invest up to 5% of
its net assets in other types of securities having common
stock characteristics, such as rights and warrants to
purchase equity securities.
The Fund generally invests in small- to medium-sized
companies that the Adviser considers to be well managed
and to have attractive fundamental financial
characteristics. See "Balanced Fund" above for a
description of "attractive fundamental financial
characteristics." The Adviser believes greater potential
for price appreciation exists among small- to medium-
sized companies since they tend to be less widely
followed by other securities analysts and thus may be
more likely to be undervalued by the market. Companies
with stock market capitalizations between $50 million and
$2 billion are considered by the Adviser to be small- to
medium-sized. The Fund generally anticipates the median
stock market capitalization to be between $600 million to
$900 million and the weighted average to be between $1
billion and $1.2 billion. The Fund may also invest from
time to time a portion of its assets, not to exceed 20%
at the time of purchase, in companies with larger or
smaller market capitalizations.
Securities of unseasoned companies, that is, companies
with less than three years' continuous operation, which
present risks considerably greater than do common stocks
of more established companies, may be acquired from time
to time by the Fund when the Adviser believes such
investments offer possibilities of attractive capital
appreciation. However, the Fund will not invest more than
5% of the value of its total assets in the securities of
unseasoned companies. In addition, the Adviser may, to
the extent consistent with the Fund's investment
objective of capital appreciation, acquire for the Fund,
bonds and other debt securities. Debt obligations
acquired by the Fund will be investment grade, as
described above under "Taxable Bond Funds - Application
of Investment Techniques," at the time of purchase or
unrated obligations deemed by the Adviser to be
comparable in quality to instruments so rated.
In view of the specialized nature of its investment
activities, investment in the Fund's shares may be
suitable only for those investors who are prepared to
invest without concern for current income and are
financially able to assume risk in search of long-term
capital gain.
International Equity Fund
Investment Objective. The investment objective of the
International Equity Fund is to seek capital appreciation
through investment in foreign equity securities of small-
to medium-sized companies. The Fund pursues its objective
by investing under normal market conditions substantially
all (and in any event at least 65%) of the value of its
total assets in foreign common stocks and equity related
securities (including convertible securities and
warrants) of small to medium market capitalization
(generally between $250 million and $5 billion) issuers
included in the gross domestic product weighted Morgan
Stanley Capital International Europe, Australia and Far
East Index (the "GDP EAFE Index" or "Index"). The Fund
will not follow traditional methods of fund management
but rather investments will be selected through a
structured selection process based on the GDP EAFE Index
and its country weightings. The Fund will attempt to
duplicate substantially the country weightings of the GDP
EAFE Index and, within these parameters, invest primarily
in companies included in the Index with small to medium
market capitalizations. The Adviser believes that
companies with small to medium market capitalizations
present greater long-term growth potential than companies
with larger market capitalizations. Although the Fund
will follow this structured selection process based on
the GDP EAFE Index, its country weightings may differ
from the actual weightings of the Index, and its
performance will not necessarily be comparable to the
performance of the Index because of the Fund's selected
market capitalization range. It is not the Fund's
objective to track the performance or replicate the
holdings of the entire Index.
GDP EAFE Index. The GDP EAFE Index is composed of a
sample of companies representative of the market
structure of 20 European and Pacific Basin countries. The
objective of the GDP EAFE Index is to represent an
unmanaged portfolio containing a broad selection of
companies listed within each local market included in the
Index. The GDP EAFE Index seeks to replicate the industry
composition of each local market, and a representative
sampling of large, medium and small capitalization
companies from each local market, taking into account the
stocks' liquidity. The securities included in the Index
and the industry weightings within each local market are
changed periodically. The country weightings, which are
based on each country's relative gross domestic product,
are adjusted periodically throughout the year. As of
October 31, 1995, the total GDP EAFE Index included 1,107
companies in 20 European and Pacific Basin countries.
Approximately 781 companies (out of 1,107 in the GDP EAFE
Index) or about 27% of the dollar amount of the total
Index fall in the Fund's selected market capitalization
range. The following table lists the countries included
in the GDP EAFE Index and their weightings in the Index
as of October 31, 1995.
GDP EAFE INDEX
Composition
EAFE
% of Total Market
Market Capitalization1
------- ------------------
Austria 0.3%
Belgium 1.2
Denmark 0.8
Finland 0.7
France 6.5
Germany 6.9
Ireland 0.3
Italy 2.3
Netherlands 4.0
Norway 0.5
Spain 1.8
Sweden 2.1
Switzerland 6.1
United Kingdom 17.1
-----
Europe 50.6%
Australia 2.7%
Hong Kong 3.2
Japan 39.8
Malaysia 2.2
New Zealand 0.4
Singapore 1.1
-----
Pacific 49.4%
Total 100.0%
<F87> The weightings are as of October 31, 1995 and will
fluctuate. Because the Fund does not expect to hold at
any particular time all of the stocks included in the
Index or, depending on the asset size of the Fund,
stocks of companies located in all of the countries
comprising the Index, the information should be
considered only as an approximation of the Fund's
intended exposure to the countries indicated.
The Adviser and Sub-Adviser utilize the "gross domestic
product weighted" Index in order to reduce the relative
exposure to any single country (namely, Japan) which
results from an Index that is capitalization weighted. In
reducing the relative exposure to Japan, the weighting
process increases the representation of certain other
countries within the Index. Notwithstanding the GDP
weighting, as of October 31, 1995, securities from Japan,
Germany and France represented on a GDP weighted basis an
aggregate of approximately 62% of the Index. Therefore,
stocks from these countries will represent a
correspondingly large component of the Fund's total
assets. Such a large investment in these markets subjects
the Fund to relatively greater exposure to the political
and economic circumstances of these countries. Based upon
the current country weightings of the Index, the Fund
intends to invest more than 25% of its total assets in
Japan. To the extent the Fund's assets are concentrated
in the securities of Japanese issuers, the Fund will be
subject to a greater extent to the risks of adverse
social, political or economic events which occur in
Japan. Specifically, investments in the Japanese stock
market may entail a higher degree of risk than
investments in other markets. By fundamental measures of
corporate valuation, such as its high price-earnings
ratios and low dividend yields, the Japanese markets as a
whole may presently appear expensive relative to other
world stock markets (i.e., the prices of Japanese stocks
may presently be relatively high). In addition, the
prices of securities traded on the Japanese markets may
be more volatile than many other markets.
The "GDP EAFE Index" is a registered service mark of
Morgan Stanley Capital International, which does not
sponsor and is in no way affiliated with the Fund.
Inclusion of a security in the GDP EAFE Index in no way
implies an opinion by Morgan Stanley Capital
International as to its attractiveness or appropriateness
as an investment. The publication of the GDP EAFE Index
is not made in connection with any sale or offer for sale
of securities or any solicitations of orders for the
purchase of securities, and Morgan Stanley Capital
International has no liability, contingent or otherwise,
to any person for any loss arising from results obtained
from the use of the Index data.
Portfolio Management. Traditional methods of fund
investment management typically involve changes in a
portfolio of securities based on economic, financial and
market analysis. The Fund is not managed in this manner.
The Adviser and Sub-Adviser will use a structured
selection process described below to select securities
for the Fund from those included in the GDP EAFE Index.
The structured selection process utilized by the Fund
will attempt to duplicate substantially the GDP EAFE
Index country weightings. When purchasing securities for
the Fund's portfolio, the relative market capitalization
weightings of the equity securities included in each of
the local markets of the GDP EAFE Index will be
considered. The weighted capitalization of an issuer is
determined by dividing the issuer's market capitalization
by the total market capitalizations of all issuers
included in the local market. Stocks in the GDP EAFE
Index will be selected within each market with market
capitalizations at the time of acquisition of between
$250 million and $5 billion. The Fund may retain up to
20% of its total assets directly in stocks of companies
whose market capitalizations either rise above $5 billion
or fall below $250 million after acquisition but are
still included in the GDP EAFE Index (and may invest up
to an additional 10% of its total assets indirectly in
such stocks through the use of international stock index
futures contracts and related options). Companies with
larger market capitalizations that are included in the
Index will not be purchased except indirectly through the
investment in international stock index futures contracts
and related options.
Since the Fund bases its stock selection process on the
country weightings of the GDP EAFE Index, the Fund will
normally invest in the securities which are included in
the Index. The Fund may, however, acquire a security that
at the time of purchase is not included in the GDP EAFE
Index if Morgan Stanley Capital International has
announced that the security will be included at the next
adjustment of the Index. It is anticipated that no more
than 5% of the Fund's assets would be invested in equity
securities which, at the time of purchase, are not
included in the GDP EAFE Index. The Fund may also invest
up to 15% of the Fund's total assets in warrants to
purchase, and securities convertible into, securities
included in the Index. Up to 15% of its total assets may
be invested in eligible securities that are held in the
form of American Depository Receipts, European Depository
Receipts, and Global Depository Receipts. The Fund may
also invest in international stock index futures
contracts. For further discussion of American Depository
Receipts, European Depository Receipts, and Global
Depository Receipts and stock index futures contracts,
see "Other Investment Information" below.
On a periodic basis, the Adviser and Sub-Adviser, through
reports of the International Monetary Fund, will monitor
developments relating to the gross domestic product of
countries within the Index. The Fund will be periodically
rebalanced to reflect these changes in country weightings
through the investment of new money received by the Fund.
In June of each year, Morgan Stanley Capital
International revises all of the country weightings of
the Index. At that time, the Fund, through the investment
of new money or through the reallocation of current
portfolio holdings, will rebalance the portfolio in light
of the adjustments made by Morgan Stanley Capital
International to the Index's country weightings.
Although the Fund will attempt to duplicate substantially
the country weightings of the GDP EAFE Index, the Fund
will not hold at any particular time all of the stocks
included in the Index because of the Fund's selected
market capitalization range. The volatility of the Fund
may, therefore, be more or less than the Index because of
the Fund's selected market capitalization range.
Approximately 781 securities (out of 1,107 in the GDP
EAFE Index) fall in the Fund's selected market
capitalization range representing 27% of the dollar
amount of the total Index. The volatility of the Fund may
be more or less than the Index depending on the
securities held by the Fund. Depending upon the total
asset size of the Fund, the number of securities held by
the Fund is expected to vary from 450 to 750 and to
represent 16 to 20 countries of the GDP EAFE Index.
Redemptions of a substantial number of shares of the Fund
could, however, reduce the number of issuers represented
in the Fund's investment portfolio, which could, in turn,
adversely affect the accuracy with which the Fund tracks
the country and industry allocation of the GDP EAFE
Index.
To maintain liquidity in an amount to meet anticipated
redemption requests or for day to day operating purposes,
a portion of the Fund's assets (normally not exceeding 5%
of total assets) may be invested in money market
instruments and other short-term obligations. See "Other
Investment Information - Money Market Instruments." In
addition, to the extent the Fund experiences cash inflows
through the issuance of new shares or the sale of
portfolio securities, or at times when desirable equity
securities which are consistent with the Fund's
investment objective are unavailable in sufficient
quantities, the Fund may invest in short-term obligations
for a limited time. It is the policy of the Fund to be as
fully invested as practicable in equity and equity
related securities (and stock index futures) at all
times. While this policy permits the Fund to take full
advantage of a period of rising international stock
prices, it limits the Fund from investing in short-term
debt securities as a defensive investment posture during
falling markets (except as described above). Accordingly,
shareholders bear the risk of general declines in stock
prices, and bear any risk that the Fund's exposure to
such declines will be lessened by investment in short-
term debt securities.
Because of the Fund's investment policies, securities may
be purchased, retained, and sold by the Fund when such
transactions would not be consistent with traditional
investment criteria. If an issuer drops in ranking, or is
eliminated entirely from the GDP EAFE Index, the Adviser
and Sub-Adviser will be required to sell some or all of
the common stock of such issuer then held by the Fund.
Sales of portfolio securities may be made at times when
such securities might otherwise have not been sold, if
the Adviser and Sub-Adviser were not required to effect
purchases and sales of portfolio securities in accordance
with the GDP EAFE Index. Such sales may result in lower
prices for such securities than may have been realized or
in losses that may not have been incurred if the Fund
were not required to effect the purchases and sales.
Adverse events will not necessarily be the basis for the
disposition of portfolio securities, unless an event
causes the issuer to be eliminated entirely from the GDP
EAFE Index. See "Equity Index Fund" for a description of
"adverse events." However, although it is not intended
that securities will be screened for investment by the
Fund by traditional methods of financial and market
analysis, the Fund's investments will be monitored with a
view towards removing stocks of companies which may
impair for any reason the Fund's ability to achieve its
investment policies.
Because of the risks associated with international common
stock investments, the Fund is intended to be a long-term
investment vehicle and is not designed to provide
investors with a means of speculating on short-term stock
market movements.
OTHER INVESTMENT INFORMATION
Money Market Instruments. The Funds may hold short-term
U.S. Government obligations, high quality money market
instruments (i.e., rated A-1 or better by S&P or Prime-1
by Moody's or unrated instruments deemed by the Adviser
to be of comparable quality), repurchase agreements, bank
obligations and cash, pending investment, to meet
anticipated redemption requests if, in the opinion of the
Adviser, other suitable securities are unavailable. The
foregoing investments may include among other things
commercial paper, variable amount master demand notes and
corporate bonds with remaining maturities of thirteen
months or less and may be in such proportions as, in the
opinion of the Adviser, existing circumstances may
warrant. Variable amount master demand notes are
unsecured instruments that permit the indebtedness
thereunder to vary and provide for periodic adjustments
in the interest rate. Although the notes are not normally
traded and there may be no secondary market in the notes,
the Funds may demand payment of the principal of the
instrument at any time. The notes are not typically rated
by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set
forth above for issuers of commercial paper. If an issuer
of a variable amount master demand note defaulted on its
payment obligation, the Funds might be unable to dispose
of the note because of the absence of a secondary market
and might, for this or other reasons, suffer a loss to
the extent of the default. The Funds invest in variable
amount master demand notes only when the Adviser deems
the investment to involve minimal credit risk. The Funds
may also invest in obligations of foreign banks and
foreign branches of U.S. banks.
Securities of Other Investment Companies. In connection
with the management of daily cash positions, each Money
Market Fund may invest in securities issued by other
investment companies with investment objectives and
policies similar to their own which invest in First Tier
Eligible Securities and which determine their net asset
value per share based on the amortized cost or penny-
rounding method valuation. In addition, the Bond and
Equity Funds may invest their cash balances in securities
issued by other investment companies which invest in high
quality, short-term debt securities. None of the Funds
will invest in any other Portico Fund. Securities of
other investment companies will be acquired by a Fund
within the limits prescribed by the Investment Company
Act of 1940 (the "1940 Act"). In addition to the advisory
fees and other expenses the Fund bears directly in
connection with its own operations, as a shareholder of
another investment company, the Fund would bear its pro
rata portion of the other investment company's advisory
fees and other expenses, and such fees and other expenses
will be borne indirectly by the Fund's shareholders.
Government Obligations. To the extent consistent with
their investment objectives, the Money Market,
Institutional Money Market, U.S. Treasury Money Market,
U.S. Government Money Market, Short-Term Bond Market,
Intermediate Bond Market, Bond IMMDEX/TM and Balanced
Funds may invest in a variety of U.S. Treasury
obligations consisting of bills, notes and bonds, which
principally differ only in their interest rates,
maturities and time of issuance. These Funds may also
invest in other securities issued or guaranteed by the
U.S. Government, its agencies and instrumentalities.
Obligations of certain agencies and instrumentalities,
such as the Government National Mortgage Association
("GNMA"), are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Export-
Import Bank of the United States, are supported by the
right of the issuer to borrow from the Treasury; others,
such as those of the Federal National Mortgage
Association ("FNMA"), are supported by the discretionary
authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Student
Loan Marketing Association, are supported only by the
credit of the instrumentalities. No assurance can be
given that the U.S. Government would provide financial
support to its agencies or instrumentalities if it is not
obligated to do so by law. There is no assurance that
these commitments will be undertaken or complied with in
the future.
Mortgage-Backed and Asset-Backed Securities. The Short-
Term Bond Market, Intermediate Bond Market, Bond
IMMDEX/TM and Balanced Funds may purchase mortgage-backed
and asset-backed securities (i.e., securities backed by
credit card receivables, automobile loans or other
assets). The average life of these securities varies with
the maturities of the underlying instruments which, in
the case of mortgages, have maximum maturities of thirty
years. The average life of a mortgage-backed instrument
may be substantially less than the original maturity of
the mortgages underlying the securities as the result of
scheduled principal payments and mortgage prepayments.
The rate of such mortgage prepayments, and hence the life
of the certificates, will be a function of current market
rates and current conditions in the relevant housing
markets. In periods of falling interest rates, the rate
of mortgage prepayments tends to increase. During such
periods, the reinvestment of prepayment proceeds by a
Fund will generally be at lower rates than the rates that
were carried by the obligations that have been prepaid.
As a result, the relationship between mortgage
prepayments and interest rates may give some high-
yielding mortgage-related securities less potential for
growth in value than non-callable bonds with comparable
maturities. In calculating the average weighted maturity
of each Fund, the maturity of asset-backed securities
will be based on estimates of average life.
Presently there are several types of mortgage-backed
securities which provide the holder with a pro rata
interest in the underlying mortgages, and collateralized
mortgage obligations ("CMOs") which provide the holder
with a specified interest in the cash flow of a pool of
underlying mortgages or other mortgage-backed securities.
CMOs are issued in multiple classes, each with a
specified fixed or floating interest rate and a final
distribution date. The relative payment rights of the
various CMO classes may be subject to greater volatility
and interest rate risk than other types of mortgage-
backed obligations. The Short-Term Bond Market,
Intermediate Bond Market and Bond IMMDEX/TM Funds will
invest less than 25% of their respective total assets in
CMOs.
Asset-backed securities may involve certain risks that
are not presented by mortgage-backed securities arising
primarily from the nature of the underlying assets (i.e.,
credit card and automobile loan receivables as opposed to
real estate mortgages). For example, credit card
receivables are generally unsecured and may require the
repossession of personal property upon the default of the
debtor which may be difficult or impracticable in some
cases.
Non-mortgage asset-backed securities do not have the
benefit of the same security in the collateral as
mortgage-backed securities. Credit card receivables are
generally unsecured and the debtors are entitled to the
protection of a number of state and federal consumer
credit laws, many of which have given debtors the right
to reduce the balance due on the credit cards. Most
issuers of automobile receivables permit the servicers to
retain possession of the underlying obligations. If the
servicer were to sell these obligations to another party,
there is the risk that the purchaser would acquire an
interest superior to that of the holders of related
automobile receivables. In addition, because of the large
number of vehicles involved in a typical issuance and
technical requirements under state laws, the trustee for
the holders of the automobile receivables may not have an
effective security interest in all of the obligations
backing such receivables. Therefore, there is a
possibility that payments on the receivables together
with recoveries on repossessed collateral may not, in
some cases, be able to support payments on these
securities.
Asset-backed securities may be 80subject to greater risk
of default during periods of economic downturn than other
instruments. Also, while the secondary market for asset-
backed securities is ordinarily quite liquid, in times of
financial stress the secondary market may not be as
liquid as the market for other types of securities, which
could result in a Fund's experiencing difficulty in
valuing or liquidating such securities.
Zero Coupon Obligations. The Short-Term Bond Market,
Intermediate Bond Market, Tax-Exempt Intermediate Bond
and Bond IMMDEX/TM Funds may acquire zero coupon
obligations. Zero Coupon Obligations have greater price
volatility than similar maturity coupon obligations and
will not result in the payment of interest until
maturity. The Funds will purchase such zero coupon
obligations only if the likely relative greater price
volatility of such zero coupon obligations is not
inconsistent with such Fund's investment objective. The
Funds will accrue income on such investments for tax and
accounting purposes, as required, which is distributable
to shareholders and which, because no cash is received at
the time of accrual, may require the liquidation of other
portfolio securities to satisfy each Fund's distribution
obligations.
Restricted Securities. Each Fund will not knowingly
invest more than 10% (except the International Equity
Fund which is limited to 5%), and in all cases will not
invest more than 15%, of the value of its respective net
assets in securities that are illiquid at the time of
purchase. Repurchase agreements and time deposits that do
not provide for payment to a Fund within seven days,
over-the-counter options, and securities that are not
registered under the Securities Act of 1933 (the "Act")
but may be purchased by institutional buyers under Rule
144A, are subject to these limits (unless such securities
are variable amount master demand notes with maturities
of nine months or less, privately placed commercial
paper, or unless the Board of Directors or the Adviser,
or the Adviser and Sub-Adviser (with respect to the
International Equity Fund), pursuant to guidelines
adopted by the Board of Directors, determines that a
liquid trading market exists).
Borrowings. Each Fund may borrow money to the extent
described below under "Investment Limitations." A Fund
would borrow money to meet redemption requests prior to
the settlement of securities already sold or in the
process of being sold by the Fund. If the securities held
by a Fund should decline in value while borrowings are
outstanding, the net asset value of a Fund's outstanding
shares will decline in value by proportionately more than
the decline in value suffered by a Fund's securities. As
a result, a Fund's share price may be subject to greater
fluctuation until the borrowing is paid off.
Reverse repurchase agreements are considered to be
borrowings under the 1940 Act. At the time a Fund enters
into a reverse repurchase agreement (an agreement under
which the Fund sells portfolio securities and agrees to
repurchase them at an agreed-upon date and price), it
will place in a segregated custodial account U.S.
Government securities or other liquid high-grade debt
securities having a value equal to or greater than the
repurchase price (including accrued interest), and will
subsequently monitor the account to insure that such
value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities
sold by the Fund may decline below the price of the
securities it is obligated to repurchase.
When-Issued Purchases and Forward Commitments. Each non-
money market Fund and the Tax-Exempt Money Market Fund
may purchase securities on a "when-issued" or delayed
delivery basis and may purchase or sell securities on a
"forward commitment" basis. These transactions, which
involve a commitment by the Fund to purchase or sell
particular securities with payment and delivery taking
place at a future date (perhaps one or two months later),
permit the Fund to lock in a price or yield on a security
it owns or intends to purchase, regardless of future
changes in interest rates. The Fund does not accrue
income until the securities delivery occurs. When-issued
and forward commitment transactions involve the risk,
however, that the price or yield obtained in a
transaction (and therefore the value of the security) may
be less favorable than the price or yield (and therefore
the value of the security) available in the market when
the securities delivery takes place. Each Fund's forward
commitments and when-issued purchases are not expected to
exceed 25% of the value of its total assets absent
unusual market conditions, and in the case of the Tax-
Exempt Money Market Fund a forward commitment or
commitment to purchase will not exceed forty-five days.
These Funds do not intend to engage in when-issued
purchases and forward commitments for speculative
purposes but only in furtherance of their respective
investment objectives.
Foreign Securities. Each Fund, except the U.S. Treasury
Money Market, U.S. Government Money Market and Equity
Index Funds, may invest in foreign securities. The Money
Market Fund and Institutional Money Market Fund may
acquire certain types of bank instruments issued or
supported by the credit of foreign banks or foreign
branches of domestic banks where the Adviser deems the
instrument to present minimal credit risks. The Tax-
Exempt Money Market Fund may purchase Municipal
Obligations backed by letters of credit issued by foreign
banks. The remaining Funds' investments in the securities
of foreign issuers may include both securities of foreign
corporations and banks, as well as securities of foreign
governments and their political subdivisions, which will
be limited to direct government obligations and
government guaranteed securities in the case of the
Short-Term Bond Market, Intermediate Bond Market and Bond
IMMDEX/TM Funds.
Investments in foreign securities, whether made directly
or through American Depository Receipts, involve certain
inherent risks and considerations not typically
associated with investing in U.S. companies, such as
political or economic instability of the issuer or the
country of issue, the difficulty of predicting
international trade patterns, changes in exchange rates
of foreign currencies and the possibility of adverse
changes in investment or exchange control regulations.
There may be less publicly available information about a
foreign company than about a U.S. company. Foreign
companies are not subject to uniform accounting, auditing
and financial reporting standards comparable to those
applicable to domestic companies. In addition, foreign
banks and foreign branches of U.S. banks are subject to
less stringent reserve requirements and to different
accounting, auditing, reporting and recordkeeping
standards than those applicable to domestic branches of
U.S. banks. Further, foreign stock markets are generally
not as developed or efficient as those in the U.S., and
in most foreign markets volume and liquidity are less
than in the U.S. Fixed commissions on foreign stock
exchanges are generally higher than the negotiated
commissions on U.S. exchanges, and there is generally
less government supervision and regulation of foreign
stock exchanges, brokers and companies than in the U.S.
With respect to certain foreign countries, there is a
possibility of expropriation or confiscatory taxation,
limitations on the removal of assets or diplomatic
developments that could affect investment within those
countries. Additionally, foreign securities and dividends
and interest payable on those securities may be subject
to foreign taxes, including foreign withholding taxes,
and other foreign taxes may apply with respect to
securities transactions. See "Taxes." Transactions in
foreign securities may involve greater time from the
trade date until the settlement date than for domestic
securities transactions, and may involve the risk of
possible losses through the holding of securities in
custodians and securities depositories in foreign
countries. Additional costs associated with an investment
in foreign securities may include higher transaction
costs and the cost of foreign currency conversions.
Changes in foreign exchange rates will also affect the
value of securities denominated or quoted in currencies
other than the U.S. dollar. In this regard, the Funds do
not intend to hedge against foreign currency risk, and
changes in currency exchange rates will impact a Fund's
net asset value (positively or negatively) irrespective
of the performance of the portfolio securities held by
the Fund. The Funds and their shareholders may encounter
substantial difficulties in obtaining and enforcing
judgments against non-U.S. resident individuals and
companies. Because of these and other factors, securities
of foreign companies acquired by the Funds may be subject
to greater fluctuation in price than securities of
domestic companies. Furthermore, because the
International Equity Fund will invest substantially all
(and in any event, at least 65%) of the value of its
total assets in foreign securities, the net asset value
of the International Equity Fund is expected to be
volatile.
American Depository Receipts ("ADRs"), European
Depository Receipts ("EDRs"), and Global Depository
Receipts ("GDRs"). The Short-Term Bond Market,
Intermediate Bond Market, Bond IMMDEX/TM, Balanced,
Growth and Income, MidCore Growth, Special Growth and
International Equity Funds may invest in sponsored ADRs,
which are receipts issued by an American bank or trust
company evidencing ownership of underlying securities
issued by a foreign issuer. ADRs may be listed on a
national securities exchange or may trade in the over-
the-counter market. ADR prices are denominated in U.S.
dollars; the underlying security may be denominated in a
foreign currency.
The International Equity Fund may also invest in EDRs and
GDRs. EDRs are receipts issued by a European financial
institution evidencing ownership of underlying foreign
securities and are usually denominated in foreign
currencies. EDRs may not be denominated in the same
currency as the securities they represent. Generally,
EDRs, in bearer form, are designed for use in the
European securities markets. GDRs are issued and traded
in several international financial markets. The
underlying security may be subject to foreign government
taxes which would reduce the yield on such securities.
See "Other Investment Information - Foreign Securities"
above for a discussion of certain risks in investing in
foreign securities.
Securities Lending. Although none of the Funds intend to
during the current fiscal year, each of the Funds may
lend portfolio securities.
Stripped Securities. To the extent consistent with their
investment objectives, the Money Market, Institutional
Money Market, U.S. Government Money Market, Short-Term
Bond Market, Intermediate Bond Market, Bond IMMDEX/TM and
Balanced Funds may purchase participations in trusts that
hold U.S. Treasury and agency securities (such as TIGRs
and CATs) and also may purchase Treasury receipts and
other "stripped" securities that evidence ownership in
either the future interest payments or the future
principal payments of U.S. Government obligations. These
participations are issued at a discount to their "face
value," and may (particularly in the case of stripped
mortgage-backed securities) exhibit greater price
volatility than ordinary debt securities because of the
manner in which their principal and interest are returned
to investors. The SEC staff believes that participations
in CATs and TIGRs and other similar trusts are not U.S.
Government securities. The U.S. Government Money Market
Fund may also invest in Government-backed trusts which
hold obligations of foreign governments that are
guaranteed or backed by the full faith and credit of the
United States.
Options. The Short-Term Bond Market, Intermediate Bond
Market, Bond IMMDEX/TM, Growth and Income and Equity
Index Funds may purchase put and call options in an
amount not to exceed 5% of their respective net assets.
Such options may relate to particular securities or
various stock or bond indices and may or may not be
listed on a national securities exchange and issued by
the Options Clearing Corporation. Purchasing options is a
specialized investment technique which entails a
substantial risk of a complete loss of the amount paid as
premiums to the writer of the option.
The Short-Term Bond Market, Intermediate Bond Market and
Bond IMMDEX/TM Funds will engage in unlisted over-the-
counter options only with broker-dealers deemed
creditworthy by the Adviser. Closing transactions in
certain options are usually effected directly with the
same broker-dealer that effected the original option
transaction. A Fund bears the risk that the broker-dealer
will fail to meet its obligations. There is no assurance
that a liquid secondary trading market exists for closing
out an unlisted option position. Furthermore, unlisted
options are not subject to the protections afforded
purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its
members who fail to perform in connection with the
purchase or sale of options.
Each Fund may purchase put options on portfolio
securities at or about the same time that it purchases
the underlying security or at a later time. By buying a
put, a Fund limits its risk of loss from a decline in the
market value of the security until the put expires. Any
appreciation in the value of and yield otherwise
available from the underlying security, however, will be
partially offset by the amount of the premium paid for
the put option and any related transaction costs. Call
options may be purchased by a Fund in order to acquire
the underlying security at a later date at a price that
avoids any additional cost that would result from an
increase in the market value of the security. A call
option may also be purchased to increase a Fund's return
to investors at a time when the call is expected to
increase in value due to anticipated appreciation of the
underlying security. Prior to its expiration, a purchased
put or call option may be sold in a "closing sale
transaction" (a sale by a Fund, prior to the exercise of
the option that it has purchased, of an option of the
same series), and profit or loss from the sale will
depend on whether the amount received is more or less
than the premium paid for the option plus the related
transaction costs.
In addition, the Short-Term Bond Market, Intermediate
Bond Market, Bond IMMDEX/TM, Growth and Income and Equity
Index Funds may write call options on securities and on
various stock or bond indices. Each Fund may write a call
option only if the option is "covered" by the Fund's
holding a position in the underlying securities or
otherwise, which would allow for immediate satisfaction
of its obligation. Such options will be listed on a
national securities exchange and the aggregate value of
the Fund's assets subject to options written by the
Short-Term Bond Market, Intermediate Bond Market, Bond
IMMDEX/TM, Growth and Income, and Equity Index Funds will
not exceed 5%, 5%, 5%, 25%, and 5%, respectively, of the
value of its net assets during the current year. In order
to close out an option position, a Fund will be required
to enter into a "closing purchase transaction" (the
purchase of a call option on a security or an index with
the same exercise price and expiration date as the call
option which it previously wrote on the same security or
index).
By writing a covered call option on a security, a Fund
foregoes the opportunity to profit from an increase in
the market price of the underlying security above the
exercise price except insofar as the premium represents
such a profit, and it is not able to sell the underlying
security until the option expires or is exercised or the
Fund effects a closing purchase transaction by purchasing
an option of the same series. Except to the extent that a
written call option on an index is covered by an option
on the same index purchased by the Fund, movements in the
index may result in a loss to the Fund; however, such
losses may be mitigated by changes in the value of
securities held by the Fund during the period the option
was outstanding. The use of covered call options will not
be a primary investment technique of the Funds.
For additional information relating to option trading
practices and related risks, see the Statement of
Additional Information.
Futures Contracts and Related Options. The Adviser may
determine that it would be in the interest of the Short-
Term Bond Market, Intermediate Bond Market, Bond
IMMDEX/TM, Growth and Income, Equity Index and
International Equity Funds to purchase or sell futures
contracts, or options thereon, as a hedge against changes
resulting from market conditions in the value of the
securities held by the Funds, or of securities which it
intends to purchase, to maintain liquidity, to have
fuller exposure to price movements in the respective
stock or bond index or to reduce transaction costs. For
example, a Fund may enter into transactions involving a
bond or stock index futures contract, which is a
bilateral agreement pursuant to which the parties agree
to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the
index value (which assigns relative values to the
securities included in the index) at the close of the
last trading day of the contract and the price at which
the futures contract is originally struck. No physical
delivery of the underlying bonds or stocks in the index
is made. The Adviser may also determine that it would be
in the interest of a Fund to purchase or sell interest
rate futures contracts, or options thereon, which provide
for the future delivery of specified fixed-income
securities. In addition, the Equity Index Fund may
purchase and sell futures and related options (based only
on the S&P 500 Index) to maintain cash reserves while
simulating full investment in the stocks underlying the
S&P 500 Index, to keep substantially all of its assets
exposed to the market (as represented by the S&P 500
Index), and to reduce transaction costs. The
International Equity Fund also may invest in
international stock index futures contracts and related
options which are traded on an exchange to maintain cash
reserves while stimulating full investment in the stocks
underlying the GDP EAFE Index, to facilitate trading,
reduce transaction costs or seek higher investment
returns when a futures contract is priced more
attractively then the underlying index. The Funds will
not use futures contracts for speculative purposes.
Risks associated with the use of futures contracts
include (a) imperfect correlation between the change in
market values of the securities held by a Fund and the
prices of bond or stock index futures contracts, (b) the
possible lack of a liquid secondary market for futures
contracts and the resulting inability of a Fund to close
open futures positions and (c) with regard to the
International Equity Fund, the limited portion of the
Fund's securities which may be included in any one of the
foreign stock index futures which may be utilized by the
Fund. The Short-Term Bond Market, Intermediate Bond
Market, Bond IMMDEX/TM and Growth and Income Funds intend
to limit Fund's transactions in futures contracts and
related options so that not more than 5% of a Fund's
respective net assets are at risk. The Equity Index Fund
and International Equity Fund intend to limit their
transactions in futures contracts so that not more than
10% of a Fund's respective net assets are at risk. For a
more detailed description of futures contracts and
futures options, including a discussion of the
limitations imposed by federal tax law, see Appendix B to
the Statement of Additional Information.
Convertible Securities and Warrants. The Balanced, Growth
and Income, MidCore Growth, Special Growth and
International Equity Funds may invest in convertible
securities and warrants, including bonds, notes and
preferred stock, that may be converted into common stock
either at a stated price or within a specified period of
time. In investing in convertibles, a Fund is looking for
the opportunity, through the conversion feature, to
participate in the capital appreciation of the common
stock into which the securities are convertible, while
earning higher current income than is available from the
common stock.
During normal market conditions, no more than 5% of a
Fund's net assets will be purchased or held in
convertible or other securities that (1) are not rated at
the time of purchase investment grade by S&P, Moody's or
other nationally recognized rating agencies; (2) are
unrated and have not been determined by the Adviser (or
Adviser and Sub-Adviser with regard to the International
Equity Fund) to be of comparable quality to a security
rated investment grade; or (3) in the case of the
International Equity Fund, have not received the foreign
equivalent of investment grade by a rating agency
recognized in the local market and determined to be of
comparable quality by the Adviser and Sub-Adviser.
Securities rated below investment grade are predominantly
"Baa" by Moody's or "BBB" by S&P have speculative and are
commonly referred to as junk bonds.characteristics and
changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make
principal and interest payments than is the case with
higher grade securities. To the extent a Fund purchases
convertibles rated below investment grade or convertibles
that are not rated, a greater risk exists as to the
timely repayment of the principal of, and the timely
payment of interest or dividends on, such securities.
Subsequent to its purchase by a Fund, a rated security
may cease to be rated or its rating may be reduced below
a minimum rating for purchase by the Fund. The Adviser
(and Sub-Adviser for the International Equity Fund) will
consider such an event in determining whether a Fund
should continue to hold the security. The Adviser (and
Sub-Adviser for the International Equity Fund) will sell
promptly any securities that are non-investment grade as
a result of these events and that exceed 5% of a Fund's
net assets.
The Balanced, Growth and Income, MidCore Growth, Special
Growth and International Equity Funds may purchase
warrants and similar rights, which are privileges issued
by corporations enabling the owners to subscribe to and
purchase a specified number of shares of the corporation
at the specified price during a specified period of time.
The purchase of warrants involves the risk that a Fund
could lose the purchase value of a warrant if the right
to subscribe to additional shares is not exercised prior
to the warrant's expiration. Also, the purchase of
warrants involves the risk that the effective price paid
for the warrant added to the subscription price of the
related security may exceed the value of the subscribed
security's market price such as when there is no movement
in the level of the underlying security. During normal
market conditions, no more than 5% of each Fund's net
assets will be invested in warrants.
Concentration. The Adviser (and Sub-Adviser for the
International Equity Fund) anticipates that from time to
time certain industry sectors will not be represented in
the portfolios of the Equity Funds while other sectors
will represent a significant portion. As a matter of
fundamental policy, however, the Adviser (and Sub-Adviser
for the International Equity Fund) will not purchase any
securities which would cause 25% or more of a Fund's
total assets at the time of purchase to be invested in
the securities of issuers conducting their principal
business activities in the same industry, and each Fund's
investments will be diversified among individual
investors.
Small Companies. Small companies in which the Funds may
invest may have limited product lines, markets, or
financial resources, or may be dependent upon a small
management group, and their securities may be subject to
more abrupt or erratic market movements than larger, more
established companies, both because their securities are
typically traded in lower volume and because the issuers
are typically subject to greater degree of changes in
their earnings and prospects.
Bond Indices. The Lehman Brothers 1-3 Gov't./Corp., the
Lehman Brothers Intermediate Gov't./Corp. and the Lehman
Brothers Gov't./Corp. are trademarks of Lehman Brothers.
The Funds, their Adviser and Co-Administrators are not
affiliated in any way with Lehman Brothers. See
"Management of the Funds." Inclusion of a security in the
bond indices in no way implies an opinion by Lehman
Brothers as to its attractiveness or appropriateness as
an investment. Lehman Brothers' publication of the bond
indices is not made in connection with any sale or offer
for sale of securities or any solicitations of orders for
the purchase of securities.
Portfolio Turnover. Each Fund may sell a portfolio
investment soon after its acquisition if the Adviser
believes that such a disposition is consistent with
attaining the investment objective of the Fund. Portfolio
investments may be sold for a variety of reasons, such as
a more favorable investment opportunity or other
circumstances bearing on the desirability of continuing
to hold such investments. A high rate of portfolio
turnover (over 100%) may involve correspondingly greater
brokerage commission expenses and other transaction
costs, which must be borne directly by the Fund and
ultimately by its shareholders. High portfolio turnover
may result in the realization of substantial net capital
gains; to the extent net short-term capital gains are
realized, distributions resulting from such gains will be
ordinary income for federal income tax purposes. (See
"Taxes-Federal.") See "Financial Highlights" for the
Funds' portfolio turnover rates.
PURCHASE OF SHARES
Institutional Shares of the Bond and Equity Funds and
Shares of the Money Market Funds are offered and sold on
a continuous basis by the distributor for the Funds, B.C.
Ziegler and Company (the "Distributor"), which is
independent of the Adviser. The Distributor is a
registered broker-dealer with offices at 215 North Main
Street, West Bend, Wisconsin 53095.
Institutional Shares of the Bond and Equity Funds are
exclusively sold to and held by (a) trust, agency or
custodial accounts opened through a Firstar Corporation
trust department, trust company or trust affiliate; (b)
employer-sponsored qualified retirement plans; and (c)
clients of FIRMCO. All share purchases are effected
pursuant to a customer's account at Firstar Trust Company
("Firstar Trust") or at another chosen institution
pursuant to procedures established in connection with the
requirements of the account. Confirmations of share
purchases and redemptions will be sent to Firstar Trust
or the other institution involved. Firstar Trust and the
other institutions (or their nominees) (collectively
referred to as "Institutions") will normally be the
holders of record of Fund shares, and will reflect their
customers' beneficial ownership of shares in the account
statements provided by them to their customers. The
exercise of voting rights and the delivery to customers
of shareholder communications from the Fund will be
governed by the customers' account agreements with
Firstar Trust and the other Institutions. Investors
wishing to purchase shares of the Funds should contact
their account representatives.
Institutional Shares and Shares of the Money Market Funds
are sold without a charge imposed by the Fund, although
Institutions may charge fees for providing administrative
or other services in connection with investments in Fund
shares. The minimum initial investment for shares in the
Institutional Money Market Fund is $1,000,000 to be made
by an individual account or combination of accounts;
however, Institutions may set different minimums for
their customers. There is no minimum initial or
subsequent investment for Shares of the other Money
Market Funds or for Institutional Shares of the Bond and
Equity Funds.
Purchase orders must be transmitted to the Fund's
transfer agent by telephone (1-800-228-1024; in Milwaukee
area: 414-287-3808 or by fax 414-287-3781 only if
preceded by a telephone call) and will be effected by the
transfer agent at its Milwaukee office. Purchase orders
for Money Market Funds that are received by the transfer
agent before 11:30 a.m. Central Time (12:30 p.m. Central
Time for the Institutional Money Market Fund) on a
business day will be executed at that time, provided the
Institution placing the order undertakes to pay for its
order in immediately available funds wired to the
transfer agent by the close of business the same day, or
in the case of orders placed by other investors, payment
in such form and by such time is guaranteed by a
creditworthy financial institution at the time the order
is placed. Purchase orders for Money Market Funds
received before 11:30 a.m. Central Time (12:30 p.m.
Central Time for the Institutional Money Market Fund) on
a business day when payment is made in any form other
than by a same day wire of immediately available funds,
as well as orders received after 11:30 a.m. Central Time
(12:30 p.m. Central Time for the Institutional Money
Market Fund) and before the close of regular trading
hours on the New York Stock Exchange (the "Exchange"),
currently 3:00 p.m. Central Time, will be executed as of
the close of regular trading hours on the Exchange,
provided that payment is received by the close of
business. Purchase orders for all other Funds that are
received by the transfer agent before the close of
regular trading hours on the Exchange, currently 3:00
p.m. Central Time, will be executed as of the close of
regular trading hours on the Exchange, provided that
payment is received by the close of business. Purchase
orders that are received after the close of regular
trading hours on the Exchange or on non-business days,
and orders for which payment is not received by the close
of regular trading hours on the Exchange on a business
day, will be executed on the next business day after
receipt of both the order and payment in proper form by
the transfer agent.
Payment for Fund shares should be transmitted by wire in
immediately available funds to:
Firstar Bank Milwaukee, N.A.
ABA #0750-00022
Account #112-952-137
for further credit to
[name of the Fund]
[the investor's account number and the name/title of the
account].
Payment may also be made by check payable to: Portico
Funds, P.O. Box 3011, Milwaukee, WI 53201-3011, or
delivered (via overnight delivery or in person) to 615 E.
Michigan Street, Milwaukee, WI 53202.
It is the responsibility of Institutions to transmit
orders and payment for the purchase of shares by their
customers to the transfer agent on a timely basis, in
accordance with the procedures stated above.
Certificates for shares will be issued only upon the
request of an Institution. The Funds reserve the right to
reject any purchase order.
Payment for shares of a Fund in the amount of $1,000,000
or more may, at the discretion of the Fund, be made in
the form of securities that are permissible investments
for the Fund involved as described in this Prospectus.
For further information, see the Statement of Additional
Information or contact Portico Investor Services at 1-
800-982-8909 or 414-287-3710 (Milwaukee area).
REDEMPTION OF SHARES
Customers who purchase Institutional Shares of a Fund
through accounts at an Institution may redeem all or part
of their shares in accordance with the instructions and
limitations pertaining to such accounts. The procedures
will vary according to the type of account and
Institution involved, and customers should consult their
account representatives in this regard.
Redemption orders must be transmitted by an Institution
to the transfer agent in writing or by telephone in the
manner described under "Purchase of Shares." Shares are
redeemed at the net asset value per share next determined
after the transfer agent's receipt of the redemption
order.
Payment for redeemed shares will normally be wired in
federal funds on the next business day if the redemption
order is received by the transfer agent before 3:00 p.m.
Central Time. A Fund reserves the right, however, to
delay the wiring of redemption proceeds for up to seven
days after receipt of a redemption order if, in the
judgment of the Adviser, an earlier payment could
adversely affect the Fund. However, if any portion of the
shares to be redeemed represents an investment made by
check, the Funds may delay the payment of the redemption
proceeds until the transfer agent is reasonably satisfied
that the check has been collected, which may take twelve
days from the purchase date. The transfer agent currently
charges a $10.00 fee for each wire payment of redemption
proceeds and a $15.00 fee for each IRA distribution,
which will be deducted from the shareholder's account or,
at the request of an Institution, billed directly to the
Institution requesting the redemption.
Portico imposes no charge when shares are redeemed.
However, Institutions may charge a fee for providing
administrative or other services in connection with
investments in Fund shares. If a customer has agreed with
a particular Institution to maintain a minimum account
balance and the balance falls below that minimum, the
customer may be obliged by the Institution to redeem all
or part of the customer's shares in the Fund to the
extent necessary to maintain the required minimum
balance. Portico may also redeem shares of the Fund
involuntarily or make payment for redemption in
securities if it appears appropriate to do so in light of
Portico's responsibilities under the 1940 Act. Investors
would bear any brokerage or other transaction costs
incurred in converting the securities received to cash.
See the Statement of Additional Information for examples
of when such redemptions might be appropriate.
It is the responsibility of Institutions to transmit
redemption orders and credit their customers' accounts
with the redemption proceeds on a timely basis in
accordance with their agreements with the customers and
to provide their customers with account statements with
respect to share transactions made for the accounts.
In an effort to prevent unauthorized or fraudulent
redemption requests by telephone, Portico and the
transfer agent employ reasonable procedures specified by
the Funds to confirm that such instructions are genuine.
Among the procedures used to determine authenticity,
investors electing to redeem or exchange by telephone
will be required to provide their account number. All
such telephone transactions will be tape recorded and,
except for transactions in Money Market Funds, confirmed
in writing to the shareholder. Portico may implement
other procedures from time to time. If reasonable
procedures are not implemented, Portico and/or the
transfer agent may be liable for any loss due to
unauthorized or fraudulent transactions. In all other
cases, the shareholder is liable for any loss for
unauthorized transactions.
EXCHANGE OF SHARES
Institutional Shareholders generally are permitted to
exchange their Institutional Shares in a Fund (with
minimum current value of $500) for Institutional Shares
of other funds in the Portico family of funds, provided
that such other shares may legally be sold in the state
of the investor's residence and the investor is eligible
for Institutional Shares at the time of the exchange.
This exchange privilege does not apply to shares of the
Institutional Money Market Fund. Portico reserves the
right to terminate indefinitely the exchange privilege of
any shareholder or account representative who requests
more than four exchanges within a calendar year, whether
for oneself or one's customers. Portico may determine to
do so with prior notice to the shareholder or account
representative based on a consideration of both the
number of exchanges the particular shareholder or account
representative has requested and the time period over
which those exchange requests have been made, together
with the level of expense to the Funds or other adverse
effects which may result from the additional exchange
requests.
Investors may find the exchange privilege useful if their
investment objectives or market outlook should change
after they invest in the Portico family of funds. For
federal income tax purposes, an exchange of shares is a
taxable event and, accordingly, a capital gain or loss
may be realized by an investor. Before making an exchange
request, an investor should consult a tax or other
financial adviser to determine the tax consequences of a
particular exchange. No exchange fee is currently imposed
by Portico on exchanges. Portico reserves, however, the
right to impose a charge in the future. In addition,
Institutions may charge a fee for providing
administrative or other services in connection with
exchanges.
The Funds reserve the right to reject any exchange
request with prior notice to a shareholder and the
exchange privilege may be modified or terminated at any
time. At least sixty days' notice will be given to
shareholders of any material modification or termination
except where notice is not required under SEC
regulations. The responsibility of the Funds and their
transfer agent for the authenticity of telephone exchange
instructions is limited as described above under
"Redemption of Shares."
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income of the Money Market,
Institutional Money Market, U.S. Treasury Money Market,
U.S. Government Money Market and Tax-Exempt Money Market
Funds are declared on each business day on the shares
that are outstanding immediately after 11:30 a.m. Central
Time (12:30 p.m. Central Time for the Institutional Money
Market Fund) on the declaration date.
Dividends from net investment income of the Short-Term
Bond Market, Intermediate Bond Market, and Tax-Exempt
Intermediate Bond and Bond IMMDEX/TM Funds are declared
and paid monthly. Dividends from net investment income of
the Balanced, Growth and Income and Equity Index Funds
are declared and paid quarterly. Dividends from net
investment income of the MidCore Growth, Special Growth
and International Equity Funds are declared and paid
annually. Each non-money market Fund's net realized
capital gains are distributed at least annually to avoid
tax to the Fund. The money market Funds do not expect to
realize net long-term capital gains.
Dividends and distributions will reduce the net asset
value of the Institutional Shares of the non-money market
Funds by the amount of the dividend or distribution.
Dividends and distributions are automatically reinvested
in additional Institutional Shares of the non-money
market Funds or Shares of the Money Market Funds on which
the dividend or distribution is paid at their net asset
value per share (as determined on the payable date),
unless the shareholder notifies the transfer agent or
account representative that dividends or capital gains
distributions, or both, should be paid in cash. Cash
dividends and distributions will be paid by check, or by
wire transfer if requested by the shareholder, within
five business days after the end of the month or within
five business days after a redemption of all of a
shareholder's shares of a Fund. Reinvested dividends and
distributions receive the same tax treatment as those
paid in cash.
MANAGEMENT OF THE FUNDS
The business and affairs of the Funds are managed under
the direction of the Board of Directors of the Portico
Funds, Inc. ("Portico" or the "Company"). The Statement
of Additional Information contains the name and
background information regarding each Director.
Advisory Services
FIRMCO, a Wisconsin corporation and subsidiary of Firstar
Corporation, a bank holding company, serves as investment
adviser to each Fund. FIRMCO, with principal offices at
Firstar Center, 777 East Wisconsin Avenue, 8th Floor,
Milwaukee, Wisconsin 53202, has been engaged in the
business of providing investment advisory services since
1986. FIRMCO currently has $15 billion in assets under
active management, of which $9 billion is invested in
fixed income and money market securities and $6 billion
in equity securities.
Subject to the general supervision of the Board of
Directors and in accordance with the respective
investment objective and policies of each Fund, the
Adviser manages each Fund's portfolio, makes decisions
with respect to and places orders for all purchases and
sales of each Fund's portfolio securities, and maintains
records relating to such purchases and sales (except for
the International Equity Fund). Subject to the general
supervision of the Board of Directors and in accordance
with the investment objective and policies of the
International Equity Fund, the Adviser is responsible for
the management of the Fund's investments and business
affairs. Under the terms of the Advisory Agreement
between the Fund and the Adviser, the Adviser is
authorized to delegate its duties under that agreement to
another adviser. As described below, the Adviser has
retained State Street Global Advisers (the "Sub-Adviser")
with respect to the Fund's investments. The Adviser and
Sub-Adviser jointly determine the specific securities to
be purchased, retained or sold by the Fund.
The Adviser (or Sub-Adviser for the International Equity
Fund) is authorized to allocate purchase and sale orders
for portfolio securities to Shareholder Organizations,
including, in the case of agency transactions,
Shareholder Organizations which are affiliated with the
Adviser (or Sub-Adviser), to take into account the sale
of Fund shares if the Adviser (or Sub-Adviser for the
International Equity Fund) believes that the quality of
the transaction and the amount of the commission are
comparable to what they would be with other qualified
brokerage firms.
The Adviser is entitled to receive from each Fund a fee,
calculated daily and payable monthly, at the following
annual rates (as a percentage of the Fund's average daily
net assets): 0.50% on the first $2 billion of the Money
Market, Institutional Money Market, U.S. Treasury Money
Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds, plus 0.40% on average daily net assets in
excess of $2 billion; 0.60% for the Short-Term Bond
Market Fund; 0.50% for each of the Intermediate Bond
Market and Tax-Exempt Intermediate Bond Funds; 0.30% for
the Bond IMMDEX/TM Fund; 0.75% for each of the Balanced,
Growth and Income, MidCore Growth and Special Growth
Funds; 0.25% for the Equity Index Fund; 1.50% on the
International Equity Fund's first $25 million, 1.45% on
the next $25 million, 1.40% of the next $50 million, and
1.35% on average daily net assets in excess of $100
million. The Adviser earned fees, net of waivers, for the
fiscal year ended October 31, 1995, at the annual rate of
0.27% for the Money Market Fund, 0.24% for the
Institutional Money Market Fund, 0.34% for the U.S.
Treasury Money Market Fund, 0.42% for the U.S. Government
Money Market Fund, 0.33% for the Tax-Exempt Money Market
Fund, 0.26% for the Short-Term Bond Market Fund, 0.28%
for the Intermediate Bond Market Fund, 0.08% for the Tax-
Exempt Intermediate Bond Fund, 0.30% for the Bond
IMMDEX/TM Fund, 0.51% for the Balanced Fund, 0.71% for
the Growth and Income Fund, 0.70% for the MidCore Growth
Fund, 0.25% for the Equity Index Fund, 0.74% for the
Special Growth Fund and 0.42% for the International
Equity Fund.
The Adviser may voluntarily waive all or a portion of the
advisory fee otherwise payable by a Fund from time to
time. These waivers may be terminated at any time at the
Adviser's discretion.
State Street Global Advisors, a division of State Street
Bank and Trust Company, Two International Place, Boston,
Massachusetts, 02110, provides sub-advisory services to
the International Equity Fund. State Street Bank and
Trust Company is a wholly-owned subsidiary of State
Street Boston Corporation, a bank holding company.
Subject to the oversight and supervision of the Fund's
Board of Directors, the Sub-Adviser assists the Adviser
in managing the Fund, and jointly with the Adviser
selects investments in accordance with the Fund's
investment objective and policies. Pursuant to its
agreement, the Sub-Adviser places orders for purchases
and sales of the Fund's securities. The Sub-Adviser may
utilize affiliated brokers in connection with the
execution of the Fund's portfolio transactions subject to
applicable law and procedures adopted by the Fund's Board
of Directors. Additional information appears in the
Statement of Additional Information.
The Sub-Adviser began investment advisory operations in
1978. Currently, the Sub-Adviser manages $141 billion in
assets of which $28 billion is invested in international
equity securities.
The Sub-Adviser is entitled to a fee, payable by the
Adviser, for its services and expenses incurred with
respect to the Fund. The fee is computed daily and paid
monthly at the following annual rates (as a percentage of
the Fund's average daily net assets): 0.40% on the Fund's
first $25 million of average daily net assets, 0.35% on
the next $25 million, 0.30% on the next $50 million, and
0.25% of the Fund's average daily net assets in excess of
$100 million.
The Sub-Adviser also acts as custodian and provides
accounting services for the portfolio securities of the
International Equity Fund. See "Custodian, Transfer and
Dividend Disbursing Agent, and Accounting Services Agent"
below.
The following are biographies of the portfolio managers
of each non-money market Fund.
Mary Ellen Stanek and Daniel Tranchita co-manage the
Short-Term Bond Market Fund. Ms. Stanek is the President
of FIRMCO and Director of Fixed Income Services; she has
served in this role since 1994. In addition, Ms. Stanek
has served as an officer of the Funds since September
1994. She has seventeen years of investment management
experience and was named a Director of FIRMCO in 1992.
Prior to joining FIRMCO, Ms. Stanek headed the Fixed
Income and Quantitative Investment Management Department
at Firstar Trust Company. She has been the Fund's
portfolio manager since its inception on December 29,
1989 and is a Chartered Financial Analyst. Mr. Tranchita
is a Vice President and has been with Firstar since 1989.
He has seven years of investment management experience
and has been the portfolio manager of the Fund since
January 1, 1993. Both Ms. Stanek and Mr. Tranchita are
Chartered Financial Analysts.
Mary Ellen Stanek and Teresa Westman co-manage the
Intermediate Bond Market Fund. A Senior Vice President
and Senior Portfolio Manager of FIRMCO, Ms. Westman
joined Firstar in 1987 and has nine years of investment
management experience. Ms. Westman is a Chartered
Financial Analyst. Both Ms. Stanek and Ms. Westman have
managed the Fund since its inception on January 5, 1993.
Warren Pierson manages the Tax-Exempt Intermediate Bond
Fund. Mr. Pierson joined Firstar in 1985 and has ten
years of fixed income experience at Firstar. He is a Vice
President of FIRMCO and has been a portfolio manager of
the Fund since June 22, 1993. Mr. Pierson is a Chartered
Financial Analyst.
Mary Ellen Stanek and Teresa Westman co-manage the Bond
IMMDEX/TM Fund. Ms. Stanek has managed the Fund since its
inception on December 29, 1989. Ms. Westman has been a
portfolio manager of the Fund since January 1, 1992.
R. Bart Wear and Teresa Westman co-manage the Balanced
Fund. Ms. Westman has managed the Fund since its
inception on March 30, 1992. Mr. Wear is a Senior Vice
President and Senior Portfolio Manager of FIRMCO and has
been with Firstar since 1983. He has thirteen years of
investment management experience and has been managing
the Fund since January 20, 1994. Mr. Wear is a Chartered
Financial Analyst.
Marian Zentmyer and Maya Bittar co-manage the Growth and
Income Fund. Ms. Zentmyer has managed the Fund since
February 22, 1993. Ms. Zentmyer, a Senior Vice President
and Senior Portfolio Manager of FIRMCO, has been with
Firstar since 1982 and has seventeen years of investment
management experience. Ms. Bittar is a Vice President and
Portfolio Manager of FIRMCO and has been with Firstar
since 1993. She has three years of investment management
experience and has managed the Fund since October 1,
1995. Both Ms. Zentmyer and Ms. Bittar are Chartered
Financial Analysts. Ms. Zentmyer also is a Certified
Financial Planner.
Daniel Tranchita manages the Equity Index Fund. He has
managed the Fund since July 1, 1992.
R. Bart Wear manages the MidCore Growth Fund. Mr. Wear
has been managing the Fund since its inception on
December 29, 1992.
J. Scott Harkness, Joseph Docter, Todd Krieg and Mark
Westman co-manage the Special Growth Fund. Both Mr.
Harkness and Mr. Docter have managed the Fund since its
inception on December 28, 1989. Mr. Harkness is Chairman,
a Director and Chief Investment Officer of FIRMCO. He has
been with Firstar for fifteen years and has sixteen years
of investment management experience. Mr. Docter has been
with Firstar since 1984 and has eleven years of
investment management experience. He is a Senior Vice
President and Senior Portfolio Manager of FIRMCO. Mr.
Krieg and Mr. Westman have been with Firstar since 1992
and have four years of investment management experience.
Both Mr. Krieg and Mr. Westman are Vice Presidents and
Portfolio Managers of FIRMCO and have managed the Fund
since September 1, 1994 and January 1, 1994,
respectively. Mr. Harkness, Mr. Docter and Mr. Westman
are Chartered Financial Analysts.
Daniel Tranchita has managed the International Equity
Fund for the Adviser since its inception on April 28,
1994. The Sub-Adviser's portfolio management services for
the Fund are conducted by committee, and no one person is
primarily responsible for making recommendations to that
committee. The committee uses a structured selection
process which attempts to duplicate substantially the GDP
EAFE Index country weightings.
Administrative Services
Firstar Trust Company ("Firstar Trust") and B. C. Ziegler
and Company ("Ziegler") serve as the Co-Administrators
(the "Co-Administrators"). The Co-Administrators have
agreed to provide the following administrative services
for the Portico Funds: assist in maintaining office
facilities for the Funds; furnish clerical and certain
other services required by the Funds; compile data for
and prepare notices to the SEC; prepare semiannual
reports to the SEC and current shareholders and filings
with state securities commissions; coordinate federal and
state tax returns; monitor the arrangements pertaining to
the Funds' agreements with shareholder organizations;
monitor the Funds' expense accruals; monitor compliance
with the Funds' investment policies and limitations; and
generally assist the Funds' operations. As further
described in the Statement of Additional Information,
certain services under the Co-Administration Agreement
are provided jointly by Firstar Trust and Ziegler and
other services are provided separately by either Firstar
Trust or Ziegler. The Co-Administrators are entitled to
receive a fee for their administrative services, computed
daily and payable monthly, at the annual rate of 0.125%
of Portico's first $2 billion of average aggregate daily
net assets, plus 0.10% of Portico's average aggregate
daily net assets in excess of $2 billion. The Co-
Administrators may voluntarily waive all or a portion of
their administrative fee from time to time. These waivers
may be terminated at any time at the Co-Administrators'
discretion.
For the fiscal year ended October 31, 1995, the Funds
accrued administrative fees, after waivers, at the
following effective annual rates of each Fund's
respective average net assets: 0.05%, 0.03%, 0.05%,
0.05%, 0.05%, 0.05%, 0.05%, 0.05%, 0.05%, 0.05%, 0.05%,
0.05%, 0.05%, 0.05% and 0.05% for the Money Market,
Institutional Money Market, U.S. Treasury Money Market,
U.S. Government Money Market, Tax-Exempt Money Market,
Short-Term Bond Market, Intermediate Bond Market, Tax-
Exempt Intermediate Bond, Bond IMMDEX/TM, Balanced,
Growth and Income, Equity Index, MidCore Growth, Special
Growth and International Equity Funds.
Custodian, Transfer and Dividend Disbursing Agent,
and Accounting Services Agent
Firstar Trust, an affiliate of the Adviser, provides
transfer agency and dividend disbursing agency services
for all the Funds and custodial and accounting services
for the Funds, except for the International Equity Fund.
State Street Bank and Trust Company, 225 Franklin Street,
Boston,Massachusetts, 02110, provides custodial and accounting
services for the International Equity Fund. For the
fiscal year ended October 31, 1995, total transfer
agency, dividend disbursing agency, custodial and
accounting services fees earned by Firstar Trust were
approximately: 0.18%, 0.03%, 0.11%, 0.06%, 0.11%, 0.12%,
0.10%, 0.20%, 0.06%, 0.13%, 0.09%, 0.11%, 0.08%, 0.07%
and 0.04% of the Money Market, Institutional Money
Market, U.S. Treasury Money Market, U.S. Government Money
Market, Tax-Exempt Money Market, Short-Term Bond Market,
Intermediate Bond Market, Tax-Exempt Intermediate Bond,
Bond IMMDEX/TM, Balanced, Growth and Income, Equity
Index, MidCore Growth, Special Growth and International
Equity Funds' average daily net assets, respectively.
Additional information regarding the fees payable by the
Funds to Firstar Trust and State Street Bank and Trust
Company for these services is provided in the Statement
of Additional Information. Inquiries to the transfer
agent may be sent to the following address: Firstar Trust
Company, P.O. Box 3011, Milwaukee, Wisconsin 53201-3011.
INVESTMENT LIMITATIONS
Except for the limitations detailed below, the investment
objective and policies of each Fund described in this
Prospectus are not fundamental and may be changed by the
Board of Directors without the affirmative vote of the
holders of a majority of a Fund's outstanding shares. If
there is a change in a Fund's investment objective,
shareholders should consider whether the Fund remains an
appropriate investment in light of their then current
financial position and needs. The following descriptions
summarize several of each Fund's fundamental investment
limitations which are set forth in full in the Statement
of Additional Information.
No Fund may:
1. Purchase securities of any one issuer (other than U.S.
Government securities) if more than 5% of the value of
its total assets will be invested in the securities of
such issuer, except that up to 25% of the value of a
Fund's total assets may be invested without regard to
this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more
than 10% of the outstanding voting securities of any
issuer.
3. Invest 25% or more of its total assets in one or more
issuers conducting their principal business activities in
the same industry.
4. Borrow money or enter into reverse repurchase
agreements except for temporary purposes in amounts up to
10% of the value of the total assets at the time of such
borrowing, or mortgage, pledge or hypothecate any assets
except in connection with such borrowings. Whenever
borrowings (including reverse repurchase agreements)
exceed 5% of the Fund's total assets, the Fund will not
make any investments.
In addition, the Tax-Exempt Money Market Fund and the
Tax-Exempt Intermediate Bond Fund
may not:
5. Invest less than 80% of its net assets in securities
the interest on which is exempt from federal income tax,
except during defensive periods or during periods of
unusual market conditions. For purposes of this
fundamental policy, Municipal Obligations that are
subject to federal alternative minimum tax are considered
taxable.
With respect to Investment Limitation No. 1, in
accordance with current SEC regulations, the Money Market
Fund intends (as a matter of nonfundamental policy) to
limit investments in the securities of any single issuer
(other than securities issued or guaranteed by the U.S.
Government, it agencies or instrumentalities) to not more
than 5% of the Fund's total assets at the time of
purchase, provided that the Fund may invest up to 25% of
its total assets in the securities of any one issuer for
a period of up to three business days.
If a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such
percentage resulting from a change in the value of the
Fund's portfolio securities will not constitute a
violation of such limitation. If due to market
fluctuations or other reasons the amount of borrowings or
reverse repurchase agreements exceed the limit stated
above, a Fund will promptly reduce such amount.
TAXES
Federal Portico's management intends that each Fund will qualify
as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"). Such qualification
generally will relieve each Fund of liability for federal
income taxes to the extent its earnings are distributed
in accordance with the Code.
Each Fund contemplates declaring as dividends each year
at least 90% of its investment company income. An
investor who receives a dividend derived from investment
company taxable income (which includes any excess of net
short-term capital gain over net long-term capital loss)
treats it as a receipt of ordinary income in the
computation of his gross income, whether such dividend is
paid in the form of cash or additional shares of the
Fund. Subject to certain holding requirements, the
dividends received deduction for corporations may apply
to such ordinary income distributions to the extent of
the total qualifying dividends received by a Fund from
domestic corporations for the taxable year.
In addition, the Tax-Exempt Money Market Fund and the
Tax-Exempt Intermediate Bond Fund each contemplate paying
to its respective shareholders at least 90% of its exempt
interest income net of certain deductions. Dividends
derived from exempt-interest income generally may be
treated by shareholders as items of interest excludable
from their gross income under Section 103(a) of the Code,
unless under the circumstances applicable to the
particular shareholder, exclusion would be disallowed.
(See Statement of Additional Information under
"Additional Information Concerning Taxes.") If a Fund
should hold certain private activity bonds issued after
August 7, 1986, shareholders must include, as an item of
tax preference, the portion of dividends paid by the Fund
that is attributable to interest on such bonds in their
federal alternative minimum taxable income for purposes
of determining liability (if any) for the 26%-28%
alternative minimum tax applicable to individuals and the
20% alternative minimum tax and the environmental tax
applicable to corporations. Corporate shareholders also
must also take all exempt-interest dividends into account
in determining certain adjustments for federal
alternative minimum and environmental tax purposes. The
environmental tax applicable to corporations is imposed
at the rate of 0.12% on the excess of the corporation's
modified federal alternative minimum taxable income over
$2,000,000. Shareholders receiving Social Security
benefits should note that all exempt-interest dividends
will be taken into account in determining the taxability
of such benefits.
Any dividend or distribution of a Fund's excess of net
long-term capital gain over its net short-term capital
loss will be taxable to a shareholder of the Fund as
long-term capital gain, regardless of how long the
shareholder has held shares of the Fund.
Before purchasing Fund shares, the impact of dividend or
capital gain distributions which are expected to be
declared or have been declared, but not paid, should be
carefully considered. Any dividend or distribution paid
by the Fund shortly after the purchase of shares of the
Fund will have the effect of reducing the per share net
asset value by the per share amount of the dividend or
distribution. Such dividends or distributions, although
in effect a return of capital to shareholders, are
subject to income taxes.
Each Fund will be required in certain cases to withhold
and remit to the U.S. Treasury 31% of the dividends or
gross proceeds realized upon sale paid to any shareholder
(i) who has provided an incorrect taxpayer identification
number or no number at all, (ii) who is subject to
withholding by the Internal Revenue Service for failure
to properly include on his return payments of interest or
dividends or (iii) who has failed, when required to do
so, to certify that he is not subject to backup
withholding. Each Fund generally will also withhold and
remit to the U.S. Treasury 10% of all distributions from
individual retirement accounts (including simplified
employee plans) to any investor unless the transfer agent
receives a written request not to withhold federal income
tax from the investor prior to the distribution date;
withholding on distributions from other types of
Retirement Plans may be mandatory and may be at a higher
rate.
A taxable gain or loss may be realized by a shareholder
upon a redemption, transfer or exchange of Fund shares,
depending on the tax basis of the shares and their price
at the time of such disposition. If a shareholder held
shares for six months or less, any loss realized by the
shareholder will be disallowed to the extent of the
amount of exempt-interest dividends received with respect
to the shares and will be treated as long-term loss to
the extent of any long-term capital distribution
received.
Certain income received by the International Equity Fund
may be subject to foreign taxes. If more than 50% in
value of the Fund's total assets at the close of any
taxable year consists of stocks or securities of foreign
corporations, the Fund may elect to treat any foreign
taxes paid by it as paid by its shareholders. If the Fund
makes this election, each shareholder generally will be
required to include in income his respective pro rata
portions of foreign taxes and, if he itemizes his
deductions, will be entitled to deduct such respective
pro rata portions in computing his taxable income or,
alternatively, to claim foreign tax credits (subject, in
either case, to certain limitations). Each year that the
Fund makes this election, it will report to its
shareholders the amount per share of foreign taxes it has
elected to have treated as paid by its shareholders. If
the Fund's dividends exceed its taxable income in any
year, as a result of currency-related losses or
otherwise, all or a portion of the Fund's dividends may
be treated as a return of capital to shareholders for tax
purposes.
The foregoing is only a brief summary of some of the
important federal income tax considerations generally
affecting the Funds and their shareholders and is not
intended as a substitute for careful tax planning and is
based on tax laws and regulations which are in effect on
the date of this Prospectus. Such laws and regulations
may be changed by legislative or administrative action.
Accordingly, investors in the Funds should consult their
tax advisers with specific reference to their own tax
situation. Shareholders will be advised at least annually
as to the federal income tax consequences of dividends
and distributions made each year.
State and Local Investors are advised to consult their tax advisers
concerning the application of state and local taxes,
which may have different consequences from those of the
federal income tax law described above. In particular,
although the U.S. Treasury Money Market Fund intends to
invest primarily in U.S. Treasury obligations, the
interest on which is generally exempt from state income
taxation, an investor should consult his or her own tax
adviser to determine whether distributions from the Fund
are exempt from state taxation in the investor's own
state. Similarly, dividends paid by the Money Market,
Institutional Money Market, U.S. Government Money Market,
Tax-Exempt Money Market and Tax-Exempt Intermediate Bond
Funds may be taxable to investors under state or local
law as dividend income even though all or a portion of
such dividends may be derived from interest on
obligations which, if realized directly, would be exempt
from such income taxes.
DESCRIPTION OF SHARES
The Company was incorporated under the laws of the State
of Wisconsin on February 15, 1988 and is registered with
the SEC as an open-end management company. The Articles
of Incorporation authorize the Board of Directors to
issue up to 150 billion full and fractional shares of
common stock, $.0001 par value per share. The Company
currently has 16 classes representing interests in 16
investment portfolios. Each class of the Funds is
currently divided into two separate series, an
Institutional Series and a Retail Series, representing
interests in the same Fund. Of these authorized shares, 5
billion shares have been classified for each Money Market
Fund, and 500 million shares for each Institutional
series of each non-money market Fund discussed in this
Prospectus.
Shares of each series bear their pro rata portion of all
operating expenses paid by the Funds, except certain
payments of up to 0.25% of the average daily net assets
of the Retail Shares under the Funds' Distribution and
Service Plan and Shareholder Servicing Plan applicable
only to Retail Series Shares. The differences in expenses
and sales charges will effect the performance of
Institutional and Retail Shares. Retail Shares are
offered in separate prospectuses and, subject to certain
exceptions, are sold with sales charges. Institutional
Shares are only available to and held by (i) trust,
agency or custodial accounts opened through trust
companies or trust departments affiliated with Firstar
Corporation; (ii) employer sponsored qualified retirement
plans; and (iii) clients of the Adviser. Retail Shares
are available to any investor who does not fall within
the three preceding categories. Portico Funds offers
various services and privileges in connection with Retail
Shares that are not offered in connection with
Institutional Shares, including a Periodic Investment
Plan, ConvertiFundR and a Systematic Withdrawal Plan. A
salesperson and any other person or Institution entitled
to receive compensation for selling or servicing shares
may receive different compensation with respect to
different series of shares.
For information regarding the other funds and series,
contact Portico Investor Services at 1-800-982-8909 or
414-287-3710 (Milwaukee area) or your Institution.
Portico does not presently intend to hold annual meetings
of shareholders except as required by the 1940 Act or
other applicable law. Portico will call a meeting of
shareholders for the purpose of voting upon the question
of removal of a member of the Board of Directors upon
written request of shareholders owning at least 10% of
the outstanding shares of Portico that are entitled to
vote. To the extent required by law, Portico will assist
in shareholder communication in such matters.
Shareholders of each class of Funds are entitled to one
vote for each full share held and proportionate
fractional votes for fractional shares held and will vote
in the aggregate and not by Fund except where otherwise
required by law. It is contemplated that the shareholders
of a Fund will vote separately on matters relating to its
investment advisory agreement (or sub-advisory agreement
with respect to the International Equity Fund) and any
changes in its fundamental investment limitations. On any
matter submitted to the vote of shareholders which only
pertains to agreements, liabilities or expenses
applicable to the Institutional Shares but not the Retail
Shares of the same Fund, only the Institutional Shares
will be entitled to vote. Shares of Portico have
noncumulative voting rights and, accordingly, the holders
of more than 50% of Portico's outstanding shares
(irrespective of Fund) may elect all of the Directors. As
of January 31, 1996, the Adviser and its affiliates held,
on behalf of their underlying accounts, approximately 72%
of Portico's shares that were outstanding on that date.
Each Institutional Share of a non-money market Fund
represents an equal proportionate interest with other
Institutional Shares in the non-money market Fund. Each
share of a Money Market Fund represents an equal
proportionate interest in that Fund. Shares are entitled
to such dividends and distributions earned on its assets
as are declared at the discretion of the Board of
Directors. Shares of the Funds do not have preemptive
rights. Each Fund is classified as a diversified company
under the 1940 Act.
NET ASSET VALUE AND DAYS OF OPERATION
Money Market Funds
The net asset value of the Money Market Funds for
purposes of pricing purchase and redemption orders is
determined as of 11:30 a.m. Central Time (12:30 p.m.
Central Time for the Institutional Money Market Fund) and
as of the close of regular trading hours on the Exchange,
currently, 3:00 p.m.Central Time, on each day on which
both the Exchange is open for trading and the Federal
Reserve Banks' Fedline System is open. As a result,
shares of the Funds will not be priced on the days
which the Exchange or Federal Reserve Banks observe:
New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas Day. Net asset value per share is calculated
by dividing the value of all securities and other assets
owned by each Fund, less the liabilities charged to the
Fund, by the number of the Fund's outstanding shares.
The Company intends to use its best efforts to maintain
the net asset value of each Money Market Fund at $1.00
per share, although there is no assurance that it will be
able to do so on a continuous basis. Net asset value is
computed using the amortized cost method. In connection
with the use of this valuation method, Portico limits the
dollar-weighted average maturity of each Fund to not more
than 90 days and the remaining maturity of each portfolio
security to not more than thirteen months with certain
exceptions permitted by SEC rules.
Non-Money Market Funds
The net asset value of each non-money market Fund for
purposes of pricing purchase and redemption orders is
determined as of the close of regular trading hours on
the Exchange, currently, 3:00 p.m. Central Time, on each
day the Exchange is open for trading. As a result, shares
of the Funds will not be priced on the days which the
Exchange observes: New Year's Day, Martin Luther King,
Jr. Day (Bond Funds only), Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. Net asset value per Institutional
Share is calculated by dividing the value of all
securities and other assets owned by each Fund that are
allocable to Institutional Shares, less the liabilities
charged to Institutional Shares, by the number of the
Fund's outstanding Institutional Shares.
Shares which are traded on a recognized domestic stock
exchange are valued at the last sale price on the
securities exchange on which such securities are
primarily traded or at the last sale price on the
national securities market. Portfolio securities which
are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such
securities on their respective exchanges, except when an
occurrence subsequent to the time a value was so
established is likely to have changed such value. In such
an event, the fair value of those securities will be
determined through the consideration of other factors by
or under the direction of the Board of Directors.
Exchange-traded securities for which there were no
transactions are valued on the average of the current bid
and asked prices for the International Equity Fund and at
the current bid prices for the other non-money market
Funds. Securities traded on only over-the-counter markets
are valued on the basis of closing over-the-counter bid
prices. Restricted securities, securities for which
market quotations are not readily available and other
assets are valued at fair value by the Adviser under the
supervision of the Board of Directors. Short-term
investments having a maturity of 60 days or less are
valued at amortized cost, unless the amortized cost does
not approximate market value.
Each Fund's securities may be valued based on valuations
provided by an independent pricing service. These
valuations are reviewed by the Adviser. If the Adviser
believes that a valuation received from the service does
not represent a fair value, it values the security by a
method that the Board of Directors believes will
determine a fair value. Any pricing service used may
employ electronic data processing techniques, including a
"matrix" system, to determine valuations.
Quotations of foreign securities in foreign currency are
converted to U.S. dollar equivalents using the foreign
exchange quotation in effect at the time net asset value
is computed. Foreign securities held by the International
Equity Fund may trade in their local markets on days the
Fund is closed, and the Fund's net asset value may,
therefore, change on days when investors may not purchase
or redeem Fund shares.
PERFORMANCE CALCULATIONS
Money Market Funds
From time to time each Money Market Fund may quote its
"yield" and "effective yield," and the Tax-Exempt Money
Market Fund may also quote its "tax-equivalent yield," in
advertisements or in communications to shareholders. Each
yield figure is based on historical earnings and is not
intended to indicate future performance. The "yield" of a Fund
refers to the income generated by an investment in the
Fund over a seven-day period identified in the
advertisement. This income is then "annualized." That is,
the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-
week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly
but, when annualized, the income earned by an investment
in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because
of the compounding effect of this assumed reinvestment.
The "tax-equivalent yield" of the Tax-Exempt Money Market
Fund shows the level of taxable yield needed to produce
an after-tax equivalent to the Fund's tax-free yield.
This is done by increasing the Fund's yield (calculated
as above) by the amount necessary to reflect the payment
of federal income tax at a stated tax rate. The "tax-
equivalent yield" will always be higher than the "yield"
of the Tax-Exempt Money Market Fund.
Additionally, the yields of the Funds may be compared in
such advertisements or reports to shareholders to those
of other mutual funds with similar investment objectives
and to other relevant indices or to rankings prepared by
independent services or other financial or industry
publications that monitor the performance of mutual
funds. For example, the yields of the Money Market Fund
may be compared to the Donoghue's All Taxable Money Fund
Average, the yields of the Institutional Money Market
Fund may be compared to the Donoghue's Institutional
All Taxable Money Fund Average,the U.S. Treasury
Money Market may be compared to the Donoghue's U.S.
Treasury Money Fund Average, the U.S. Government Money
Market Fund may be compared to the Donoghue's Government
Money Fund Average and the yields of the Tax-Exempt Money
Market Fund may be compared to the Donoghue's Tax-Free
Money Fund Average, which are averages compiled by
IBC/Donoghue's Money Fund Report, a widely recognized
independent publication that monitors the performance
of money market funds. In addition, the yields of the
Money Market, Institutional Money Market,U.S. Treasury
Money Market, and U.S. Government Money Market Funds
may be compared to the average yields reported by the
Bank Rate Monitor for money market deposit accounts
offered by the 50 leading banks and thrift institutions
in the top five standard metropolitan statistical areas.
Yield data as reported in national financial publications
including Money Magazine, Forbes, Barron's, Morningstar
Mutual Funds, The Wall Street Journal and The New York
Times, or in publications of a local or regional nature,
may also be used in comparing the yields of the Funds.
Non-Money Market Funds
From time to time, total return and yield data for the
Institutional Shares of a bond or equity Fund
may be quoted in advertisements or in communications to
shareholders. The total return of a Fund's Institutional
Shares will be calculated on an average annual (compound)
total return basis, and may also be calculated on an
aggregate total return basis, for various periods.
Average annual total return reflects the average annual
percentage change in value of an investment in
Institutional Shares of a Fund over the measuring period.
Aggregate total return reflects the total percentage
change in value over the measuring period. Both methods
of calculating total return assume that dividends and
capital gain distributions made by the Institutional
Shares of the Fund during the period are reinvested in
Institutional Shares of the Fund.
Yield is computed based on the net income of the
Institutional Shares of a bond Fund during a 30-day (or
one-month) period, which will be identified in connection
with the particular yield quotation. More specifically,
the yield of the Institutional Shares of the Fund is
computed by dividing the net income of the Institutional
Shares of the Fund per share during a 30-day (or one-
month) period by the net asset value per share on the
last day of the period and annualizing the result on a
semiannual basis. The Tax-Exempt Intermediate Bond Fund
may also quote a tax-equivalent yield which shows the
level of taxable yield needed to produce an after-tax
equivalent to the tax-free yield of the Institutional
Shares of the Fund. This is done by increasing the yield
of the Institutional Shares of the Fund (calculated as
above) by the amount necessary to reflect the payment of
federal income tax at a stated tax rate. The "tax
equivalent yield" will always be higher than the "yield"
of the Fund.
The total return and yield of a Fund's Institutional
Shares may be compared to those of other mutual funds
with similar investment objectives and to stock, bond and
other relevant indices or to rankings prepared by
independent services or other financial or industry
publications that monitor the performance of mutual
funds. For example, the total return and yield, as
appropriate, of a Fund's Institutional Shares may be
compared to data prepared by Lipper Analytical Services,
Inc. The total return of a bond or balanced Fund's
Institutional Shares may be compared to the Lehman
Brothers 1-3 Year Government/Corporate Bond Index; the
Merrill Lynch 1-2.99 U.S. Treasury Bond Index; the Lehman
Brothers Intermediate Government/Corporate Bond Index;
the Lehman Brothers 5-Year General Obligation Bond Index;
the Lehman Brothers Government/Corporate Bond Index; and
the Consumer Price Index. In addition, the total return
of an equity Fund's Institutional Shares may be compared
to the S&P 500 Index; the NASDAQ Composite Index, an
index of unmanaged groups of common stocks of domestic
companies that are quoted on the National Association of
Securities Quotation System; the Dow Jones Industrial
Average, a recognized unmanaged index of common stocks of
30 industrial companies listed on the New York Stock
Exchange; the Wilshire Top 750 Index, an index of all
domestic equity issues which are traded over the national
exchanges; the Russell 2000 Index; the Value Line
Composite Index, an unmanaged index of nearly 1,700
stocks reviewed in Ratings & Reports; the Russell MidCap;
the Wilshire MidCap 750 Index; and the Consumer Price
Index. In addition, the total return of the Institutional
Shares of the International Equity Fund will be compared
to the GDP EAFE Index and may be compared to the Salomon-
Russell Indices, Russell Universe Indices, Lipper
International Indices, and the domestic indices listed
above. Total return and yield data as reported in
national financial publications, such as Money Magazine,
Forbes, Barron's, Morningstar Mutual Funds, The Wall
Street Journal and The New York Times, or in publications
of a local or regional nature, may also be used in
comparing the performance of the Funds.
Performance quotations represent past performance, and
should not be considered as representative of future
results. The investment return and principal value of an
investment in a Fund's Institutional Shares will
fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Since
performance will fluctuate, performance data for a Fund
cannot necessarily be used to compare an investment in a
Fund's Institutional Shares with bank deposits, savings
accounts and similar investment alternatives which often
provide an agreed or guaranteed fixed yield for a stated
period of time. Investors should remember that
performance is generally a function of the kind and
quality of the investments held in a portfolio, portfolio
maturity, operating expenses and market conditions. Any
fees charged by Institutions directly to their customer
accounts in connection with investments in a Fund will
not be included in the Fund's calculations of yield and
total return and will reduce the yield and total return
received by the accounts. The methods used to compute
yield and total return are described in more detail in
the Statement of Additional Information.
No person has been authorized to give any information or
to make any representations not contained in this
Prospectus, or in the Funds' Statement of Additional
Information incorporated herein by reference, in
connection with the offering made by this Prospectus and,
if given or made, such information or representations
must not be relied upon as having been authorized by the
Funds or their Distributor. This Prospectus does not
constitute an offering by the Funds or by their
Distributor in any jurisdiction in which such offering
may not lawfully be made.
S&P makes no warranty, express or implied, as to results
to be obtained by the Equity Index Fund, by shareholders
of the Fund, by any person or by any entity from the use
of the S&P 500 Index or any data included therein in
connection with the use licensed by the Fund, or for any
other use. S&P makes no express or implied warranties,
and expressly disclaims all such warranties or
merchantability or fitness for a particular purpose for
use with respect to the S&P 500 Index or data included
therein. "Standard & Poor'sR," "S&PR," "S&P 500R,"
"Standard & Poor's 500R," and "500R" are service marks of
S&P and have been licensed for use by Portico.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
PORTICO INVESTOR SERVICES
615 East Michigan Street
P.O. Box 3011
Milwaukee, Wisconsin 53201-3011
To Open an Account
or Request Information
1-800-982-8909
1-414-287-3710
For Account Balances and Investor Services
1-800-228-1024
1-414-287-3808
Portico Investor Services
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI 53201-3011
89-9069A
PORTICO FUNDS, INC.
(Retail and Institutional Series)
Balanced Fund
Growth and Income Fund
Special Growth Fund
Equity Index Fund
MidCore Growth Fund
International Equity Fund
Short-Term Bond Market Fund,
Intermediate Bond Market Fund,
Tax-Exempt Intermediate Bond Fund
Bond IMMDEX/TM Fund
Form N-1A
Cross Reference Sheet
Part B
Item No. Heading
- -------- -------
10. Cover Page . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents. . . . . . . . . . . . . Table of Contents
12. General Information and History. . . . . . Inapplicable
13. Investment Objectives and Policies . . . . Investment Objectives and
Policies
14. Management of the Fund . . . . . . . . . . Management of the Company
15. Control Persons and Principal Holders
of Securities. . . . . . . . . . . . . . . Management of the Company;
Miscellaneous
16. Investment Advisory and Other Services . . Management of the the Company;
Custodian, Transfer Agent and
Accounting Services Agent
17. Brokerage Allocation and Other Practices . Management of the Company
18. Capital Stock and Other Securities . . . . Description of Shares
19. Purchase, Redemption and Pricing of
Securities Net Asset Value;
Being Offered. . . . . . . . . . . . . . . .Additional Purchase and
Redemption Information
20. Tax Status . . . . . . . . . . . . . . . . Additional Information
Concerning Taxes
21. Underwriters . . . . . . . . . . . . . . . .Management of the Company
22. Calculation of Performance Data. . . . . . .Additional Information on
Performance
Part C
Information to be included in Part C is set forth under the appropriate Item, so
numbered in Part C to this Registration Statement.
**************
PORTICO FUNDS, INC.
Statement of Additional Information
Short-Term Bond Market Fund Balanced Fund MidCore Growth Fund
Intermediate Bond Market Fund Growth and Income Fund Special Growth Fund
Tax-Exempt Intermediate Bond Fund Equity Index Fund International Equity
Bond IMMDEX/TM Fund Fund
February 20, 1996
TABLE OF CONTENTS
-----------------
Page
----
Portico Funds.......................................... 2
Investment Objectives and Policies..................... 2
Net Asset Value........................................ 23
Additional Purchase and Redemption Information......... 23
Description of Shares.................................. 27
Additional Information Concerning Taxes................ 29
Management of the Company.............................. 33
Custodian, Transfer Agent and Accounting Services Agent 40
Expenses............................................... 42
Independent Accountants................................ 42
Counsel................................................ 42
Additional Information on Performance ................. 43
Miscellaneous.......................................... 47
Appendix A............................................. A-1
Appendix B............................................. B-1
This Statement of Additional Information is meant to be read in
conjunction with the Portico Funds' Prospectuses dated February 20, 1996, for
the Institutional and Retail Shares of the Short-Term Bond Market Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund, Bond IMMDEX/TM
Fund, Balanced Fund, Growth and Income Fund, Equity Index Fund, MidCore Growth
Fund, Special Growth Fund, and International Equity Fund (collectively referred
to as the "Funds") and is incorporated by reference in its entirety into the
Prospectuses. Because this Statement of Additional Information is not itself a
prospectus, no investment in shares of these Funds should be made solely upon
the information contained herein. Copies of the Prospectus for the Funds may be
obtained by writing or by calling 1-800-982-8909 or 414-287-3710 (Milwaukee
area). Capitalized terms used but not defined herein have the same meanings as
in the Prospectus.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED
BY, INSURED BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE
FDIC, THE FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT
COMPANY, FIRSTAR TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER
BANK, OR OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
PORTICO FUNDS
Portico Funds, Inc. (the "Company") is a Wisconsin corporation which
was incorporated on February 15, 1988 as a management investment company. The
Company is authorized to issue separate classes of shares of Common Stock
representing interests in separate investment portfolios. Each class for the
Funds is currently divided into two series, a retail and institutional series.
This Statement of Additional Information pertains to Retail Series and
Institutional Series Shares of ten diversified portfolios, the Short-Term Bond
Market Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund,
Bond IMMDEX/TM Fund, Balanced Fund, Growth and Income Fund, Equity Index Fund,
MidCore Growth Fund, Special Growth Fund, and International Equity Fund
(collectively the "Funds"). The Short-Term Bond Market Fund changed its name
from Short-Intermediate Fixed Income Fund effective January 1, 1993. The Growth
and Income Fund changed its name from the Income and Growth Fund effective
August 16, 1993. The Balanced Fund commenced operations on March 30, 1992; the
Growth and Income Fund, Equity Index Fund, Short-Term Bond Market Fund and Bond
IMMDEX/TM Fund commenced operations on December 29, 1989; the Special Growth
Fund commenced operations on December 28, 1989; the MidCore Growth Fund
commenced operations on December 29, 1992; the Intermediate Bond Market Fund
commenced operations on January 5, 1993; the Tax-Exempt Intermediate Bond
Fund commenced operations on February 8, 1993; and the International Equity
Fund commenced operations on April 28, 1994. The Company also offers other
investment portfolios which are described in separate Prospectuses and State-
ments of Additional Information. For information concerning these other
portfolios contact the Portico Investor Services at 1-800-982-8909 or write
to 777 East Wisconsin Avenue, Suite 900, Milwaukee, Wisconsin 53202.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Short-Term Bond Market Fund is to seek to
provide an annual rate of total return, before Fund expenses, comparable to the
annual rate of total return on the Lehman Brothers 1-3 Year Government Corporate
Bond Index. The investment objective of the Intermediate Bond Market Fund is to
seek to provide an annual rate of total return, before Fund expenses, comparable
to the annual rate of total return on the Lehman Brothers Intermediate
Government/Corporate Bond Index. The investment objective of the Tax-Exempt
Intermediate Bond Fund is to seek to provide current income that is
substantially exempt from federal income tax and emphasize total return with
relatively low volatility of principal. The investment objective of the Bond
IMMDEX/TM Fund is to seek to provide an annual rate of total return, before Fund
expenses, comparable to the annual rate of total return on the Lehman Brothers
Government Corporate Bond Index. The investment objective of the Balanced Fund
is to seek capital appreciation and current income with low volatility of
capital. The investment objective of the Growth and Income Fund is to seek both
reasonable income and long-term capital appreciation. The investment objective
of the Equity Index Fund is to seek returns, before Fund expenses, comparable to
the price and yield performance of publicly-traded common stocks in the
aggregate, as represented by the S&P 500. The investment objective of the
MidCore Growth Fund is to seek capital appreciation through investment in
securities of medium- to large-sized companies. The investment objective of the
Special Growth Fund is to seek capital appreciation through investment in
securities of small- to medium-sized companies. The investment objective of the
International Equity Fund is to seek capital appreciation through investment in
foreign equity securities of small- to medium-sized companies. There is no
assurance, however, that the Funds' investment objectives will in fact be
attained. The following policies supplement the Funds' respective investment
objectives and policies as set forth in the Prospectus.
Portfolio Transactions
- ----------------------
Subject to the general supervision of the Board of Directors, the
Adviser is responsible for, makes decisions with respect to, and places orders
for all purchases and sales of portfolio securities for each Fund except the
International Equity Fund. Subject to the general supervision of the Board of
Directors, the Adviser is responsible for the portfolio management of the
International Equity Fund. Pursuant to the terms of the Adviser's Advisory
Agreement with the Fund, the Adviser has delegated certain of its duties to
State Street Global Advisors, a division of State Street Bank and Trust Company
(the "Sub-Adviser" or "SSBT"). The Adviser and Sub-Adviser, subject to the
supervision of the Board of Directors, jointly determine the securities to be
purchased, retained or sold by the International Equity Fund. However, the Sub-
Adviser is responsible for placing orders for the purchase and sale of the
Fund's portfolio securities.
The portfolio turnover rate for each Fund is calculated by dividing
the lesser of purchases or sales of portfolio securities for the reporting
period by the monthly average value of the portfolio securities owned during the
reporting period. The calculation excludes all securities, including options,
whose maturities or expiration dates at the time of acquisition are one year or
less. Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may be affected by cash requirements for redemption of
shares and by requirements which enable the Funds to receive favorable tax
treatment. Portfolio turnover will not be a limiting factor in making portfolio
decisions, and each Fund may engage in short-term trading to achieve its
investment objective.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. Unlike transactions on
U.S. stock exchanges which involve the payment of negotiated brokerage
commissions, transactions in foreign securities generally involve the payment of
fixed brokerage commissions which are generally higher than those in the United
States.
Transactions in the over-the-counter market are generally principal
transactions with dealers and the costs of such transactions involve dealer
spreads rather than brokerage commissions. With respect to over-the-counter
transactions, the Adviser and Sub-Adviser will normally deal directly with
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere or as
described below.
Securities purchased and sold by the Short-Term Bond Market Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund and Bond
IMMDEX/TM Fund are generally traded in the over-the-counter market on a net
basis (i.e., without commission) through dealers, or otherwise involve
transactions directly with the issuer of an instrument. The cost of
securities purchased from underwriters includes an underwriting commission
or concession, and the prices at which securities are purchased from and sold
to dealers include a dealer's mark-up or mark-down.
The Funds may participate, if and when practicable, in bidding for the
purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
The Funds will engage in this practice, however, only when the Adviser or Sub-
Adviser, in its sole discretion, believes such practice to be in the Funds'
interests.
For the fiscal years ended October 31, 1995, 1994, and 1993, the
Company paid brokerage commissions of $226,925, $202,429, and $311,410 with
respect to the Growth and Income Fund (including commissions of $16,262 on
$8,134,565 in brokerage transactions paid because of services provided in 1994);
$714,710, $556,029, and $403,555 with respect to the Special Growth Fund; and
$41,610, $55,904, and $47,278 with respect to the Equity Index Fund, respect-
ively. For the same periods, the Short-Term Bond Market and Bond IMMDEX/TM
Funds paid no brokerage commissions. For the fiscal years ended October 31,
1995, 1994 and 1993, the Company paid brokerage commissions of $128,583,
$117,641, and $87,472 with respect to the Balanced Fund (including commissions
of $35,713 on $14,573,796 in brokerage transactions paid because of services
provided in 1994). For the fiscal years ended October 31, 1995, 1994 and the
period from December 29, 1992 to October 31, 1993, the Company paid brokerage
commissions of $190,681, $135,711 and $107,250 with respect to the MidCore
Growth Fund (including commissions of $31,722 on $12,936,494 in brokerage
transactions paid because of services provided in 1994). The Intermediate Bond
Market and Tax-Exempt Intermediate Bond Funds paid no brokerage commissions for
the fiscal years ended October 31, 1995 and 1994 and the periods from their
inception to October 31, 1993. For the fiscal years ended October 31, 1995 and
1994 the Company paid brokerage commissions of $23,067 and $21,346 with respect
to the International Equity Fund. None of the brokerage commissions were paid to
affiliates of the Company, the Adviser, Sub-Adviser or the Co-Administrator.
The Advisory Agreement between the Company and the Adviser and with
respect to the International Equity Fund, the Sub-Advisory Agreement among the
Company, the Adviser and Sub-Adviser, provides that, in executing portfolio
transactions and selecting brokers or dealers, the Adviser and Sub-Adviser will
seek to obtain the best overall terms available. In assessing the best overall
terms available for any transaction, the Adviser or Sub-Adviser shall consider
factors it deems relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commissions, if any, both
for the specific transaction and on a continuing basis. In addition, the
Agreements authorize the Adviser and Sub-Adviser to cause the Funds to pay a
broker-dealer which furnishes brokerage and research services a higher
commission than that which might be charged by another broker-dealer for
effecting the same transaction, provided that the Adviser or Sub-Adviser
determines in good faith that such commission is reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either the particular transaction or the overall
responsibilities of the Adviser and Sub-Adviser to the Funds. Such brokerage
and research services might consist of reports and statistics relating to
specific companies or industries, general summaries of groups of stocks or bonds
and their comparative earnings and yields, or broad overviews of the stock, bond
and government securities markets and the economy.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by the Adviser or Sub-Adviser
and does not reduce the advisory fees payable to it by the Funds. The Directors
will periodically review the commissions paid by the Funds to consider whether
the commissions paid over representative periods of time appear to be reasonable
in relation to the benefits inuring to the Funds. It is possible that certain
of the supplementary research or other services received will primarily benefit
one or more other investment companies or other accounts for which investment
discretion is exercised. Conversely, a Fund may be the primary beneficiary of
the research or services received as a result of portfolio transactions effected
for such other account or investment company.
Portfolio securities will not be purchased from or sold to (and
savings deposits will not be made in and repurchase and reverse repurchase
agreements will not be entered into with) the Adviser, the Sub-Adviser, and the
Distributor or an affiliated person of any of them (as such term is defined in
the 1940 Act) acting as principal. In addition, the Funds will not purchase
securities during the existence of any underwriting or selling group relating
thereto of which the Distributor or its Adviser, or an affiliated person of any
of them, is a member, except to the extent permitted by the Securities and
Exchange Commission ("SEC").
Investment decisions for the Funds are made independently from those
for other investment companies and accounts advised or managed by its Adviser or
Sub-Adviser. Such other investment companies and accounts may also invest in
the same securities as the Funds. When a purchase or sale of the same security
is made at substantially the same time on behalf of a Fund and another
investment company or account, the transaction will be averaged as to price and
available investments allocated as to amount, in a manner which the Adviser or
Sub-Adviser believes to be equitable to the Fund and such other investment
company or account. In some instances, this investment procedure may adversely
affect the price paid or received by a Fund or the size of the position obtained
or sold by the Fund. To the extent permitted by law, the Adviser or Sub-Adviser
may aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.
As of October 31, 1995, the Funds held securities of its regular
brokers or dealers (as defined under the 1940 Act) or their parents as follows:
the Short-Term Bond Market, Intermediate Bond Market, Bond IMMDEX/TM, and
Balanced Funds held securities of Lehman Brothers totaling $5,272,159,
$4,708,711, $11,075,197, and $1,354,472, respectively; the Intermediate Bond
Market, Bond IMMDEX/TM, and Balanced Funds held securities of Goldman Sachs
totaling $2,474,889, $8,687,367, and $959,651, respectively; the Short-Term
Bond Market and Equity Index Funds held securities of Morgan Stanley totaling
$1,253,108 and $234,900, respectively; and the Short-Term Bond Market,
Balanced, Growth and Income, and Equity Index Funds held securities of
Merrill Lynch totaling $87,191, $1,045,475, $1,901,788 and $360,750,
respectively.
Additional Information On Portfolio Instruments
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Ratings. The ratings of Standard & Poor's, Moody's and other
nationally recognized rating agencies represent their opinions as to the quality
of debt securities. It should be emphasized, however, that ratings are general
and are not absolute standards of quality, and debt securities with the same
maturity, interest rate and rating may have different yields while debt
securities of the same maturity and interest rate with different ratings may
have the same yield.
The payment of principal and interest on most debt securities
purchased by a Fund will depend upon the ability of the issuers to meet their
obligations. An issuer's obligations under its debt securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the Federal Bankruptcy Code, and laws, if
any, which may be enacted by federal or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on, and principal of, its debt
securities may be materially adversely affected by litigation or other
conditions.
Subsequent to its purchase by a Fund, a rated security may cease to be
rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Adviser or Sub-Adviser will consider such an event in
determining whether the Fund involved should continue to hold the security.
Securities Lending. Although none of the Funds intend to during the
current fiscal year, each of the Funds may lend its portfolio securities to
unaffiliated domestic broker/dealers and other institutional investors pursuant
to agreements requiring that the loans be secured by collateral equal in value
to at least the market value of the securities loaned in order to increase
return on portfolio securities. Collateral for such loans may include cash,
securities of the U.S. Government, its agencies or instrumentalities, or an
irrevocable letter of credit issued by a bank which meets the investment
standards stated below under "Money Market Instruments," or any combination
thereof. Such loans will not be made during the current year. The Funds may at
any time call a loan and obtain the return of the securities loaned within five
business days. There may be risks of delay in receiving additional collateral
or in recovering the securities loaned or even a loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans will be made only to borrowers deemed by the Adviser (and Sub-Adviser in
the case of the International Equity Fund) to be of good standing and when, in
the Adviser's (and Sub-Adviser's in the case of the International Equity Fund)
judgment, the income to be earned from the loan justifies the attendant risks.
When a Fund lends its securities, it continues to receive interest or dividends
on the securities loaned and may simultaneously earn interest on the investment
of the cash collateral which will be invested in readily marketable, high-
quality, short-term obligations. Although voting rights, or rights to consent,
attendant to securities on loan pass to the borrower, such loans may be called
at any time and will be called so that the securities may be voted by a Fund if
a material event affecting the investment is to occur.
Securities lending arrangements with broker/dealers require that the
loans be secured by collateral equal in value to at least the market value of
the securities loaned. During the term of such arrangements, a Fund will
maintain such value by the daily marking-to-market of the collateral.
Money Market Instruments. As described in the Prospectuses, the Funds
may invest from time to time in "money market instruments," a term that
includes, among other things, bank obligations, commercial paper, variable
amount master demand notes and corporate bonds with remaining maturities of
thirteen months or less. However, as stated in the International Equity Fund's
prospectus, the Fund intends to stay fully invested and therefore investments
in money market instruments by the International Equity Fund are expected to
represent normally less than 5% of the Fund's net assets.
Bank obligations include bankers' acceptances, negotiable certificates
of deposit and nonnegotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in money market
obligations of foreign banks or foreign branches of U.S. banks only where the
Adviser (and Sub-Adviser in the case of the International Equity Fund)
determines the instrument to present minimal credit risks, such investments may
nevertheless entail risks that are different from those of investments in
domestic obligations of U.S. banks due to differences in political, regulatory
and economic systems and conditions. All investments in bank obligations are
limited to the obligations of financial institutions having more than $1 billion
in total assets at the time of purchase, and investments by each Fund in the
obligations of foreign banks and foreign branches of U.S. banks will not exceed
25% of such Fund's total assets at the time of purchase. The Funds may also
make interest-bearing savings deposits in commercial and savings banks in
amounts not in excess of 5% of its net assets.
Investments by a Fund in commercial paper will consist of issues rated
at the time A-1 and/or P-1 by Standard & Poor's, Moody's or similar rating by
another nationally recognized rating agency. In addition, the Funds may acquire
unrated commercial paper and corporate bonds that are determined by the Adviser
at the time of purchase to be of comparable quality to rated instruments that
may be acquired by such Fund as previously described.
The Funds may also purchase variable amount master demand notes which
are unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes
are not typically rated by credit rating agencies, but issuers of variable
amount master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master demand notes only when the Adviser (and Sub-Adviser in
the case of the International Equity Fund) deem the investment to involve
minimal credit risk.
Repurchase Agreements. Each Fund may agree to purchase securities
from financial institutions subject to the seller's agreement to repurchase them
at an agreed upon time and price ("repurchase agreements"). During the term of
the agreement, the Adviser (and Sub-Adviser in the case of the International
Equity Fund) will continue to monitor the creditworthiness of the seller and
will require the seller to maintain the value of the securities subject to the
agreement at not less than 102% of the repurchase price. Default or bankruptcy
of the seller would, however, expose the Fund to possible loss because of
adverse market action or delay in connection with the disposition of the
underlying securities. The securities held subject to a repurchase agreement
may have stated maturities exceeding one year, provided the repurchase agreement
itself matures in less than one year.
The repurchase price under the repurchase agreements described in the
Prospectuses generally equals the price paid by a Fund plus interest negotiated
on the basis of current short-term rates (which may be more or less than the
rate on the securities underlying the repurchase agreement). Securities subject
to repurchase agreements will be held by the Funds' custodian (or sub-custodian)
or in the Federal Reserve/Treasury book-entry system or other authorized
securities depository. Repurchase agreements are considered to be loans under
the 1940 Act. Investments in repurchase agreements for the International Equity
Fund are limited to no more than 5% of the Fund's net assets.
Investment Companies. Each Fund currently intends to limit its
investments in securities issued by other investment companies so that, as
determined immediately after a purchase of such securities is made: (i) not
more than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more than 3% of the outstanding voting stock
of any one investment company will be owned by the Fund or by the Company as a
whole.
The Funds may invest from time to time in securities issued by other
investment companies which invest in high-quality, short-term debt securities.
Securities of other investment companies will be acquired by the Funds within
the limits prescribed by the 1940 Act. As a shareholder of another investment
company, the Funds would bear, along with other shareholders, its pro rata
portion of the other investment company's expenses, including advisory fees and
such fees and other expenses will be borne indirectly by the Fund's
shareholders. These expenses would be in addition to the advisory and other
expenses that the Funds bear directly in connection with their own operations.
Investment in securities issued by other investment companies are not expected
to exceed 5% of the International Equity Fund's net assets.
U.S. Government Obligations. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury bonds, notes
and bills and the obligations of Federal Home Loan Banks, Federal Farm Credit
Banks, Federal Land Banks, the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association, Federal National
Mortgage Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Maritime Administration, and
Resolution Trust Corp.
Bank Obligations. For purposes of the Funds' investment policies with
respect to bank obligations, the assets of a bank or savings institution will be
deemed to include the assets of its domestic and foreign branches. A Fund's
investments in the obligations of foreign branches of U.S. banks and of foreign
banks may subject the Fund to investment risks (similar to those discussed below
under "American Depository Receipts") that are different in some respects from
those of investments in obligations of U.S. domestic issuers. Such risks
include future political and economic developments, the possible imposition of
withholding taxes on interest income, possible seizure or nationalization of
foreign deposits, the possible establishment of exchange controls or the
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest of such obligations. In addition, foreign
branches of U.S. banks and foreign banks may be subject to less stringent
reserve requirements and to different accounting, auditing, reporting and record
keeping standards than those applicable to domestic branches of U.S. banks.
Other Investment Considerations - Balanced Fund, MidCore Growth Fund, Special
- -----------------------------------------------------------------------------
Growth Fund, and International Equity Fund
- ------------------------------------------
The Balanced Fund, MidCore Growth Fund, Special Growth Fund, and
International Equity Fund maintain a long-term investment horizon with respect
to investments in equity securities. However, when a company's growth in
earnings and valuation results in price appreciation that reaches a level which
meets the Fund's established return objective, the stock is normally sold.
Holdings are also sold if there has been significant deterioration in the
underlying fundamentals of the securities involved since their acquisition.
Sale proceeds are either re-invested in money market instruments or in other
securities which meet the respective Fund's investment criteria.
The increase or decrease of cash equivalents in a Fund is primarily
the residual effect of the research process. The portion of a Fund invested in
cash equivalents tends to rise when the pool of acceptable securities is limited
and tends to fall when the Fund's valuation screening process identifies a large
number of attractive securities. Short-term forecasts for the economy and
financial markets are not an important determinant of the level of cash
equivalents in a Fund. As stated in the Prospectuses, however, under normal
market conditions not more than 65% of the value of the Balanced Fund's and at
least 50% of the value of the MidCore Growth Fund's, Special Growth Fund's, and
International Equity Fund's total assets will be invested in equity securities.
The Funds do not attempt to "time" the securities market.
Certain securities owned by the Special Growth Fund may be traded only
in the over-the-counter market or on a regional securities exchange, may be
listed only in the quotation service commonly known as the "pink sheets," and
may not be traded every day or in the volume typical of trading on a national
securities exchange. As a result, there may be a greater fluctuation in the
value of redemptions or for other reasons, to sell these securities at a
discount from market prices, to sell during periods when such disposition is not
desirable, or to make many small sales over a lengthy period of time.
When-Issued Purchases, Delayed Delivery and Forward Commitments. When
any Fund agrees to purchase securities on a when-issued or delayed delivery
basis or enter into a forward commitment to purchase securities, its custodian
will set aside cash or liquid high grade debt securities equal to the amount of
the commitment in a segregated account. Normally, the custodian will set aside
portfolio securities to satisfy a purchase commitment, and in such a case the
Fund may be required subsequently to place additional assets in the segregated
account in order to ensure that the value of the account remains equal to the
amount of the Fund's commitments. It may be expected that the market value of a
Fund's net assets will fluctuate to a greater degree when it sets aside
portfolio securities to cover such purchase commitments than when it sets aside
cash. Because a Fund will set aside cash or liquid assets to satisfy its
purchase commitments in the manner described, the Fund's liquidity and ability
to manage its portfolio might be affected in the event its commitments ever
exceeded 25% of the value of its assets. In the case of a forward commitment to
sell portfolio securities, the Funds' custodian will hold the portfolio
securities themselves in a segregated account while the commitment is
outstanding. When-issued and forward commitment transactions involve the risk
that the price or yield obtained in a transaction (and therefore that value of a
security) may be less favorable then the price or yield (and therefore the value
of a security) available in the market when the securities delivery takes place.
The Funds will make commitments to purchase securities on a when-
issued basis or to purchase or sell securities on a forward commitment basis
only with the intention of completing the transaction and actually purchasing or
selling the securities. If deemed advisable as a matter of investment strategy,
however, a Fund may dispose of or renegotiate a commitment after it is entered
into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a capital gain or loss.
When these Funds engage in when-issued, delayed delivery and forward
commitment transactions, they rely on the other party to consummate the trade.
Failure of such party to do so may result in a Fund's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase
or a forward commitment to purchase securities, and any subsequent fluctuations
in their market value, are taken into account when determining the net asset
value of a Fund starting on the day the Fund agrees to purchase the securities.
The Fund does not earn interest on the securities it has committed to purchase
until they are paid for and delivered on the settlement date. When a Fund makes
a forward commitment to sell securities it owns, the proceeds to be received
upon settlement are included in the Fund's assets. Fluctuations in the market
value of the underlying securities are not reflected in the Fund's net asset
value as long as the commitment remains in effect.
Other Investment Considerations - International Equity Fund, Foreign
Futures and Options. The Adviser and Sub-Adviser may determine that it would be
in the interest of the International Equity Fund to purchase or sell stock index
futures contracts, or options thereon, for the purpose of remaining fully
invested and reducing transactions costs. A stock index futures contract is a
bilateral agreement pursuant to which parties agree to take or make delivery of
an amount of cash equal to a specified dollar amount times the difference
between the index value (which assigns relative values to the securities
included in the index) at the close of the last trading day of the contract and
the price at which the futures contract is originally struck. No physical
delivery of the underlying securities in the index is made.
The International Equity Fund intends to limit its transactions in
stock index futures contracts and related options so that not more than 10% of
its net assets are at risk. In connection with a futures transaction, unless
the transaction is covered in accordance with SEC positions, the Fund will
maintain a segregated account with its custodian or sub-custodian consisting of
cash or liquid high grade debt securities equal to the entire amount at risk
(less margin deposits) on a continuous basis.
Futures purchased or sold by the International Equity Fund (and
related options) will normally be traded in foreign securities. Participation
in foreign futures and foreign options transactions involves the execution and
clearing of trades on or subject to the rules of a foreign board of trade.
Neither the National Futures Association nor any domestic exchange regulates
activities of any foreign boards of trade, including the execution, delivery and
clearing of transactions, or has the power to compel enforcement of the rules of
a foreign board of trade or any applicable foreign law. This is true even if
the exchange is formally linked to a domestic market so that a position taken on
the market may be liquidated by a transaction on another market. Moreover, such
laws or regulations will vary depending on the foreign country in which the
foreign futures or foreign options transaction occurs. For these reasons,
customers who trade foreign futures of foreign options contracts may not be
afforded certain of the protective measures provided by the Commodity Exchange
Act, the Commodity Futures Trading Commission's ("CFTC") regulations and the
rules of the National Futures Association and any domestic exchange, including
the right to use reparations proceedings before the CFTC and arbitration
proceedings provided the by the National Futures Association or any domestic
futures exchange. In particular, the International Equity Fund's investments in
foreign futures or foreign options transactions may not be provided the same
protections in respect of transactions on United States futures exchanges. In
addition, the price of any foreign futures or foreign options contract and,
therefore the potential profit and loss thereon may be affected by any variance
in the foreign exchange rate between the time an order is placed and the time
it is liquidated, offset or exercised. For a further description of futures
contracts and related options, including a discussion of the limitations imposed
by federal tax law, See Appendix B to the Statement of Additional Information.
Other Investment Considerations - Balanced Fund, Short-Term Bond Market Fund,
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Intermediate Bond Market Fund, and Bond IMMDEX/TM Fund
- ----------------------------------------------------
Mortgage-Backed and Asset-Backed Securities. The Balanced Fund, Short-
Term Bond Market Fund, Intermediate Bond Market Fund and Bond IMMDEX/TM Fund
may purchase mortgage-backed and asset-backed securities (collectively called
"asset-backed securities") that are secured or backed by automobile loans,
installment sale contracts, credit card receivables or other assets and are
issued by entities such as Government National Mortgage Association ("GNMA"),
Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage
Corporation ("FHLMC"), commercial banks, trusts, financial companies, finance
subsidiaries of industrial companies, savings and loan associations, mortgage
banks and investment banks. These securities represent interests in pools of
assets in which periodic payments of interest and/or principal on the securities
are made, thus, in effect passing through periodic payments made by the
individual borrowers on the assets that underlie the securities, net of any fees
paid to the issuer or guarantor of the securities. The average life of these
securities varies with the maturities and the prepayment experience of the
underlying instruments.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities guaranteed
by GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") which are guaranteed as to the timely payment of principal and interest
by GNMA and such guarantee is backed by the full faith and credit of the United
States. GNMA is a wholly owned U.S. Government corporation within the
Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-backed securities issued by FNMA
include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as
"Fannie Maes") which are solely the obligations of FNMA and are not backed by or
entitled to the full faith and credit of the United States, but are supported by
the right of the issuer to borrow from the Treasury. FNMA is a government-
sponsored organization owned entirely by private stockholders. Fannie Maes are
guaranteed as to timely payment of the principal and interest by FNMA.
Mortgage-backed securities issued by the FHLMC include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or "PCs"). FHLMC is a
corporate instrumentality of the United States, created pursuant to an Act of
Congress. Freddie Macs are not guaranteed by the United States or by any
Federal Home Loan Bank and do not constitute a debt or obligation of the United
States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to
timely payment of interest, which is guaranteed by the FHLMC. FHLMC guarantees
either ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.
As stated in the Prospectuses for the Balanced Fund, Short-Term Bond
Market Fund, Intermediate Bond Market Fund and Bond IMMDEX/TM Fund, mortgage-
backed securities such as CMOs may be purchased. CMOs are issued in multiple
classes and their relative payment rights may be structured in many ways. In
many cases, however, payments of principal are applied to the CMO classes in
order of their respective maturities, so that no principal payments will be made
on a CMO class until all other classes having an earlier maturity date are paid
in full. The classes may include accrual certificates (also known as "Z-
Bonds"), which do not accrue interest at a specified rate until other specified
classes have been retired and are converted thereafter to interest-paying
securities. They may also include planned amortization classes ("PACs") which
generally require, within certain limits, that specified amounts of principal be
applied to each payment date, and generally exhibit less yield and market
volatility than other classes. Investments in CMO certificates can expose the
Fund to greater volatility and interest rate risk than other types of mortgage-
backed obligations. Prepayments on mortgage-backed securities generally
increase with falling interest rates and decrease with rising interest rates;
furthermore, prepayment rates are influenced by a variety of economic and social
factors.
The yield characteristics of asset-backed securities differ from
traditional debt securities. A major difference is that the principal amount of
the obligations may be prepaid at any time because the underlying assets (i.e.,
loans) generally may be prepaid at any time. As a result, if an asset-backed
security is purchased at a premium, a prepayment rate that is faster than
expected may reduce yield to maturity, while a prepayment rate that is slower
than expected may have the opposite effect of increasing yield to maturity.
Conversely, if an asset-backed security is purchased at a discount, faster than
expected prepayments may increase, while slower than expected prepayments may
decrease, yield to maturity.
In general, the collateral supporting non-mortgage asset-backed
securities is of shorter maturity than mortgage loans. Like other fixed-income
securities, when interest rates rise the value of an asset-backed security
generally will decline; however, when interest rates decline, the value of an
asset-backed security with prepayment features may not increase as much as that
of other fixed-income securities.
Variable Rate Medium Term Notes. The Funds may purchase variable rate
medium term notes which provide for periodic adjustments in the interest rates.
The adjustments in interest rates reflect changes in an index (which may be the
Lehman Brothers 1-3 Year Government/Corporate Bond Index, the Lehman Brothers
Intermediate Government/Corporate Bond Index or the Lehman Brothers
Government/Corporate Bond Index).
Other Investment Considerations - Tax-Exempt Intermediate Bond Fund
- -------------------------------------------------------------------
Municipal Obligations. Municipal Obligations which may be acquired by
the Tax-Exempt Intermediate Bond Fund include debt obligations issued by
governmental entities to obtain funds for various public purposes, including the
construction of a wide range of public facilities, the refunding of outstanding
obligations, the payment of general operating expenses and the extension of
loans to public institutions and facilities.
Certain of the Municipal Obligations held by the Fund may be insured
at the time of issuance as to the timely payment of principal and interest. The
insurance policies will usually be obtained by the issuer of the Municipal
Obligation at the time of its original issuance. In the event that the issuer
defaults on interest or principal payment, the insurer will be notified and will
be required to make payment to the bondholders. There is, however, no guarantee
that the insurer will meet its obligations. In addition, such insurance will
not protect against market fluctuations caused by changes in interest rates and
other factors, including credit downgrades, supply and demand. The Fund may,
from time to time, invest more than 25% of its assets in Municipal Obligations
covered by insurance policies.
The payment of principal and interest on most securities purchased by
the Fund will depend upon the ability of the issuers to meet their obligations.
An issuer's obligations under its Municipal Obligations are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by federal or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or upon the ability of municipalities to levy
taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on, and principal of, its Municipal Obligations may be
materially adversely affected by litigation or other conditions.
Certain types of Municipal Obligations (private activity bonds) have
been or are issued to obtain funds to provide privately operated housing
facilities, pollution control facilities, convention or trade show facilities,
mass transit, airport, port or parking facilities and certain local facilities
for water supply, gas, electricity or sewage or solid waste disposal. Private
activity bonds are also issued on behalf of privately held or publicly owned
corporations in the financing of commercial or industrial facilities. State and
local governments are authorized in most states to issue private activity bonds
for such purposes in order to encourage corporations to locate within their
communities. The principal and interest on these obligations may be payable
from the general revenues of the users of such facilities.
From time to time, proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Obligations. For example, under the Tax Reform Act of
1986, interest on certain private activity bonds must be included in an
investor's alternative minimum taxable income, and corporate investors must
include all tax-exempt interest in their federal alternative minimum taxable
income. The Company cannot, of course, predict what legislation, if any, may be
proposed in the future as regards the income tax status of interest on Municipal
Obligations, or which proposals, if any, might be enacted. Such proposals,
while pending or if enacted, might materially and adversely affect the
availability of Municipal Obligations for investment by the Fund and the
liquidity and value of the Fund's portfolio. In such an event, the Company
would reevaluate the Fund's investment objective and policies and consider
possible changes in its structure or possible dissolution.
Municipal Lease Obligations. As stated in the Prospectus, the Fund
may acquire municipal lease obligations which are issued by a state or local
government authority to acquire land and a wide variety of equipment and
facilities. In making a determination that a municipal lease obligation is
liquid, the Adviser may consider, among other things (i) whether the lease can
be canceled; (ii) the likelihood that the assets represented by the lease can be
sold; (iii) the strength of the lessee's general credit; (iv) the likelihood
that the municipality will discontinue appropriating funds for the leased
property because the property is no longer deemed essential to the operations of
the municipality; and (v) availability of legal recourse in the event of failure
to appropriate.
Stand-By Commitments. The Tax-Exempt Intermediate Bond Fund may
acquire "stand-by commitments" with respect to Municipal Obligations held in its
portfolio. Under a "stand-by commitment," a dealer agrees to buy from the Fund,
at the Fund's option, specified Municipal Obligations at a specified price.
"Stand-by commitments" acquired by the Fund may also be referred to in this
Statement of Additional Information as "put" options.
The amount payable to the Fund upon its exercise of a "stand-by
commitment" is normally (i) the Fund's acquisition cost of the Municipal
Obligations (excluding any accrued interest which the Fund paid on their
acquisition), less any amortized market premium or plus any amortized market or
original issue discount during the period the Fund owned the securities, plus
(ii) all interest accrued on the securities since the last interest payment date
during that period. A stand-by commitment may be sold, transferred or assigned
by the Fund only with the instrument involved.
The Fund expects that "stand-by commitments" will generally be
available without the payment of any direct or indirect consideration. However,
if necessary or advisable, the Fund may pay for a "stand-by commitment" either
separately in cash or by paying a higher price for the portfolio securities
which are acquired subject to the commitment (thus reducing the yield to
maturity otherwise available for the same securities). The total amount paid in
either manner for outstanding "stand-by commitments" held by the Fund will not
exceed 1/2 of 1% of the value of its total assets calculated immediately after
each "stand-by commitment" is acquired.
The Fund intends to enter into "stand-by commitments" only with
dealers, banks and broker/dealers which, in the investment adviser's opinion,
present minimal credit risks. The Fund's reliance upon the credit of these
dealers, banks and broker/dealers is secured by the value of the underlying
Municipal Obligations that are subject to a commitment.
The Fund would acquire "stand-by commitments" solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The acquisition of a "stand-by commitment" would not affect
the valuation or assumed maturity of the underlying Municipal Securities, which
would continue to be valued in accordance with the ordinary method of valuation
employed by the Fund. "Stand-by commitments" which would be acquired by the
Fund would be valued at zero in determining net asset value. Where the Fund
paid any consideration directly or indirectly for a "stand-by commitment," its
cost would be reflected as unrealized depreciation for the period during which
the commitment was held by the Fund.
Variable and Floating Rate Instruments. With respect to the variable
and floating rate instruments that may be acquired by the Tax-Exempt
Intermediate Bond Fund as described in its Prospectus, the Adviser will consider
the earning power, cash flows and other liquidity ratios of the issuers and
guarantors of such instruments and, if the instrument is subject to a demand
feature, will monitor their financial status to meet payment on demand. In
determining average weighted portfolio maturity, an instrument will usually be
deemed to have a maturity equal to the longer of the period remaining to the
next interest rate adjustment or the time the Fund can recover payment of
principal as specified in the instrument. Variable U.S. Government obligations
held by the Fund, however, will be deemed to have maturities equal to the period
remaining until the next interest rate adjustment.
Equity Index Fund Management Techniques When purchasing securities
for the Equity Index Fund's portfolio, the Adviser will consider initially the
relative market capitalization weightings of the stocks included in the S&P 500
Index. The weighted capitalization of an issuer is determined by dividing the
issuer's market capitalization by the total market capitalizations of all
issuers included in the S&P 500 Index.
The Adviser will then compare the industry sector diversification of the
stocks in the Fund, acquired solely on the basis of their weighted
capitalizations, with the industry sector diversification of all issuers
included in the S&P 500 Index. This comparison is made because the Adviser
believes, unless the Fund holds all stocks included in the S&P 500 Index, that
the selection of stocks for purchase by the Fund solely on the basis of their
weighted market capitalizations would tend to place heavier concentration (as
compared to the S&P 500 Index) in certain industry sectors that are dominated by
the larger corporations, such as communications, automobile, oil and energy. As
a result, events disproportionately affecting such industries could affect the
performance of the S&P 500 Index. Conversely, if smaller companies were not
purchased by the Fund, industries included in the S&P 500 Index that are
dominated by smaller market-capitalized companies would be underrepresented (as
compared to the S&P 500 Index).
For these reasons, the Adviser will identify the sectors which are (or,
except for sector balancing, would be) most underrepresented in the Fund's
portfolio and will purchase balancing securities in these sectors until the
portfolio's sector weightings closely match that of the S&P 500 Index. This
process continues until the portfolio is fully invested (except for cash
holdings).
The IMMDEX/TM Model. The IMMDEX/TM model has been developed and is
maintained by Capital Management Sciences ("Capital Management") under the
"IMMDEX/TM" trademark. Capital Management is neither a sponsor of the Bond
IMMDEX/TM Fund nor affiliated in any way with the Bond IMMDEX/TM Fund or the
Adviser. Neither is Capital Management in any way affiliated with Lehman
Brothers which claims no interest in the model or its ability to effectively or
accurately replicate the Lehman Brothers Government/Corporate Bond Index.
Further, Capital Management is not responsible for the management or results of
the Bond IMMDEX/TM Fund's portfolio. Rather, the Adviser will use the IMMDEX/TM
model and the other investment techniques described in the Prospectus in
choosing portfolio securities and executing transactions in an effort to produce
an annual rate of total return for the Bond IMMDEX/TM Fund that is comparable,
before Fund expenses, to that of the Lehman Brothers Government/Corporate Bond
Index.
- ----
Other Portfolio Information
- ---------------------------
Options Trading. As stated in the Short-Term Bond Market Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund, Bond IMMDEX/TM
Fund, Growth and Income Fund, and Equity Index Fund Prospectuses, the Funds may
purchase put and (with the exception of the Tax-Exempt Intermediate Bond Fund)
call options. Option purchases by a Fund will not exceed 5% of its net assets.
Such options may relate to particular securities or to various indices. (In the
case of the Equity Index Fund, such options will relate only to stock indices.)
This is a highly specialized activity which entails greater than ordinary
investment risks. Regardless of how much the market price of the underlying
security or index increases or decreases, the option buyer's risk is limited to
the amount of the original investment for the purchase of the option. However,
options may be more volatile than the underlying securities or indices, and
therefore, on a percentage basis, an investment in options may be subject to
greater fluctuation than an investment in the underlying securities. In
contrast to an option on a particular security, an option on an index provides
the holder with the right to make or receive a cash settlement upon exercise of
the option. The amount of this settlement will be equal to the difference
between the closing price of the index at the time of exercise and the exercise
price of the option expressed in dollars, times a specified multiple. The Tax-
Exempt Intermediate Bond Fund will only purchase put options on Municipal
Obligations, and will do so only to enhance liquidity, shorten the maturity of
the related municipal security or permit the Fund to invest its assets at more
favorable rates.
A call option gives the purchaser of the option the right to buy, and
a writer the obligation to sell, the underlying security or index at the stated
exercise price at any time prior to the expiration of the option, regardless of
the market price of the security. The premium paid to the writer is in
consideration for undertaking the obligations under the option contract. A put
option gives the purchaser the right to sell the underlying security or index at
the stated exercise price at any time prior to the expiration date of the
option, regardless of the market price of the security or index. Put and call
options purchased by a Fund will be valued at the last sale price or, in the
absence of such a price, at the mean between bid and asked prices.
These Funds (with the exception of the Tax-Exempt Intermediate Bond
Fund) may also sell covered call options listed on a national securities
exchange. Such options may relate to particular securities or to various
indices. (In the case of the Equity Index Fund, such options will relate only
to stock indices.) A call option on a security is covered if a Fund owns the
security underlying the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or, if additional cash
consideration is required, cash or cash equivalents in such amount as required
are held in a segregated account by its custodian) upon conversion or exchange
of other securities held by it. A call option on an index is covered if a Fund
maintains with its custodian cash or cash equivalents equal to the contract
value. A call option is also covered if a Fund holds a call on the same
security or index as the call written where the exercise price of the call held
is (i) equal to or less than the exercise price of the call written, or (ii)
greater than the exercise price of the call written provided the difference is
maintained by a Fund in cash or cash equivalents in a segregated account with
its custodian.
A Fund's obligation under a covered call option written by it may be
terminated prior to the expiration date of the option by the Fund's executing a
closing purchase transaction, which is effected by purchasing on an exchange an
option of the same series (i.e., same underlying security or index, exercise
price and expiration date) as the option previously written. Such a purchase
does not result in the ownership of an option. A closing purchase transaction
will ordinarily be effected to realize a profit on an outstanding option, to
prevent an underlying security from being called, to permit the sale of the
underlying security or to permit the writing of a new option containing
different terms. The cost of such a liquidation purchase plus transactions
costs may be greater than the premium received upon the original option, in
which event a Fund will have incurred a loss in the transaction. An option
position may be closed out only on an exchange which provides a secondary market
for an option of the same series. There is no assurance that a liquid secondary
market on an exchange will exist for any particular option. A covered call
option writer, unable to effect a closing purchase transaction, will not be able
to sell an underlying security until the option expires or the underlying
security is delivered upon exercise with the result that the writer in such
circumstances will be subject to the risk of market decline during such period.
A Fund will write an option on a particular security only if the Adviser
believes that a liquid secondary market will exist on an exchange for options of
the same series which will permit the Fund to make a closing purchase
transaction in order to close out its position.
When a Fund writes a covered call option, an amount equal to the net
premium (the premium less the commission) received by the Fund is included in
the liability section of the Fund's statement of assets and liabilities. The
amount of the liability will be subsequently marked-to-market to reflect the
current value of the option written. The current value of the traded option is
the last sale price or, in the absence of a sale, the average of the closing bid
and asked prices. If an option expires on the stipulated expiration date or if
the Fund enters into a closing purchase transaction, it will realize a gain (or
loss if the cost of a closing purchase transaction exceeds the net premium
received when the option is sold) and the liability related to such option will
be eliminated. Any gain on a covered call option on a security may be offset by
a decline in the market price of the underlying security during the option
period. If a covered call option on a security is exercised, the Fund may
deliver the underlying security held by it or purchase the underlying security
in the open market. In either event, the proceeds of the sale will be increased
by the net premium originally received, and the Fund will realize a gain or
loss. Premiums from expired options written by a Fund and net gains from
closing purchase transactions are treated as short-term capital gains for
federal income tax purposes, and losses on closing purchase transactions are
short-term capital losses.
As noted previously, there are several risks associated with
transactions in options on securities and indices. For example, there are
significant differences between the securities and options markets that could
result in an imperfect correlation between these markets, causing a given
transaction not to achieve its objectives. A decision as to whether, when and
how to use options involves the exercise of skill and judgment, and a
transaction may be unsuccessful to some degree because of market behavior or
unexpected events.
Futures Contracts and Related Options The Adviser may determine that
it would be in the interest of the Short-Term Bond Market Fund, Intermediate
Bond Market Fund, Bond IMMDEX/TM Fund, Growth and Income Fund, and Equity Index
Fund to purchase or sell futures contracts, or options thereon, as a hedge
against changes resulting from market conditions in the value of the securities
held by a Fund, or of securities which it intends to purchase. The
International Equity Fund may engage in foreign futures and options (see "Other
Investment Considerations - International Equity Fund - Foreign Futures and
Options'). In addition, the Equity Index Fund will purchase and sell futures
and related options (based only on the S&P 500 Index) to maintain cash reserves
while simulating full investment in the stocks underlying the S&P 500 Index to
keep substantially all of its assets exposed to the market (as represented by
the S&P 500 Index) and to reduce transaction costs. For example, a Fund may
enter into transactions involving an index futures contract, which is a
bilateral agreement pursuant to which the parties agree to take or make delivery
of an amount of cash equal to a specified dollar amount times the difference
between the index value (which assigns relative values to the securities
included in the index) at the close of the last trading day of the contract and
the price at which the futures contract is originally struck. No physical
delivery of the underlying securities in the index is made.
During the current fiscal year the Short-Term Bond Market,
Intermediate Bond Market, Bond IMMDEX/TM, and Growth and Income Funds intend to
limit their transactions in futures contracts and related options so that not
more than 5% of their net assets are at risk and the Equity Index Fund will
limit its transactions in futures such that obligations under the transactions
and contracts represent not more than 10% of its assets. In connection with a
futures transaction, unless the transaction is covered in accordance with SEC
positions, the Fund will maintain a segregated account with its custodian or
sub-custodian consisting of cash or liquid high grade debt securities equal to
the entire amount at risk (less margin deposits) on a continuous basis. For a
more detailed description of futures contracts and related options, including a
discussion of the limitations imposed by federal tax law, see Appendix B to the
Statement of Additional Information.
American Depository Receipts ("ADRs"). The Short-Term Bond Market
Fund, Intermediate Bond Market Fund, Bond IMMDEX/TM Fund, Balanced Fund, Growth
and Income Fund, MidCore Growth Fund, Special Growth Fund, and International
Equity Fund may invest in sponsored ADRs, which are receipts issued by an
American bank or trust company evidencing ownership of underlying securities
issued by a foreign issuer. ADRs may be listed on a national securities
exchange or may trade in the over-the-counter market. ADR prices are
denominated in U.S. dollars; the underlying security may be denominated in a
foreign currency. The underlying security may be subject to foreign government
taxes which would reduce the yield on such securities. Investments in such
securities also involve certain inherent risks, such as political or economic
instability of the country of issue, the difficulty of predicting international
trade patterns and the possibility of imposition of exchange controls. Such
securities may also be subject to greater fluctuations in price than securities
of domestic corporations. In addition, there may be less publicly available
information about a foreign company than about a domestic company. Foreign
companies generally are not subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable to domestic
companies. With respect to certain foreign countries, there is a possibility of
expropriation or confiscatory taxation, or diplomatic developments which could
affect investment in those countries.
Zero Coupon Bonds. Zero coupon obligations have greater price
volatility than coupon obligations and will not result in the payment of
interest until maturity, provided that a Fund will purchase such zero coupon
obligations only if the likely relative greater price volatility of such zero
coupon obligations is not inconsistent with the Fund's investment objective.
Although zero coupon securities pay no interest to holders prior to maturity,
interest on these securities is reported as income to a Fund and distributed to
its shareholders. These distributions must be made from a Fund's cash assets
or, if necessary, from the proceeds of sales of portfolio securities.
Additional income producing securities may not be able to be purchased with cash
used to make such distributions and its current income ultimately may be reduced
as a result.
Convertible Securities. The Balanced , Growth and Income, MidCore
Growth, Special Growth, and International Equity Funds may hold convertible
securities. Convertible securities entitle the holder to receive interest paid
or accrued on debt or the dividend paid on preferred stock until the securities
mature or are redeemed, converted or exchanged. Prior to conversion,
convertible securities have characteristics similar to ordinary debt securities
in that they normally provide a stable stream of income with generally higher
yields than those of common stock of the same or similar issuers. Convertible
securities rank senior to common stock in a corporation's capital structure and
therefore generally entail less risk than the corporation's common stock,
although the extent to which such risk is reduced depends in large measure upon
the degree to which the convertible security sells above its value as a fixed
income security.
As described in the Prospectuses, the Funds may invest a portion of
their assets in convertible securities that are rated below investment grade.
Warrants. 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. They
have no voting rights, pay no dividends and have no rights with respect to the
assets of the company issuing them. Warrants differ from call options in that
warrants are issued by the issuer of the security which may be purchased on
their exercise, whereas call options may be written or issued by anyone. The
prices of warrants do not necessarily move parallel to the prices of the
underlying securities.
Additional Investment Limitations
- ---------------------------------
Each Fund is subject to the investment limitations enumerated in this
subsection which may be changed with respect to a particular Fund only by a vote
of the holders of a majority of such Fund's outstanding shares (as defined under
"Miscellaneous" below).
No Fund may:
1. Make loans, except that a Fund may purchase and hold debt instruments
and enter into repurchase agreements in accordance with its investment objective
and policies and may lend portfolio securities in an amount not exceeding 30% of
its total assets.
2. Purchase securities of companies for the purpose of exercising
control.
3. Purchase or sell real estate or with respect to the International
Equity Fund, real estate limited partnerships, except that each Fund may
purchase securities of issuers which deal in real estate and may purchase
securities which are secured by interests in real estate.
4. Acquire any other investment company or investment company security
except in connection with a merger, consolidation, reorganization or acquisition
of assets or where otherwise permitted by the 1940 Act.
5. Act as an underwriter of securities within the meaning of the
Securities Act of 1933 except insofar as a Fund might be deemed to be an
underwriter upon the disposition of portfolio securities acquired within the
limitation on purchases of restricted securities and except to the extent that
the purchase of obligations directly from the issuer thereof in accordance with
the Fund's investment objective, policies and limitations may be deemed to be
underwriting.
6. Write or sell put options, call options, straddles, spreads, or any
combination thereof, except for transactions in options on securities, indices
of securities, futures contracts and options on futures contracts.
7. Purchase securities on margin, make short sales of securities or
maintain a short position, except that (a) this investment limitation shall not
apply to a Fund's transactions in futures contracts and related options, and (b)
a Fund may obtain short-term credit as may be necessary for the clearance of
purchases and sales of portfolio securities.
8. Purchase or sell commodity contracts, or invest in oil, gas or mineral
exploration or development programs, except that each Fund may, to the extent
appropriate to its investment objective, purchase publicly traded securities of
companies engaging in whole or in part in such activities and may enter into
futures contracts and related options.
In addition, as summarized in the Prospectuses, no Fund may:
9. Purchase securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) if,
immediately after such purchase, more than 5% of the value of the Fund's total
assets would be invested in the securities of such issuer, or more than 10% of
the issuer's outstanding voting securities would be owned by the Fund or Portico
Funds, Inc. (the "Company"), except that up to 25% of the value of the Fund's
total assets may be invested without regard to these limitations. For purposes
of this limitation, a security is considered to be issued by the entity (or
entities) whose assets and revenues back the security. A guarantee of a
security shall not be deemed to be a security issued by the guarantor when the
value of all securities issued and guaranteed by the guarantor, and owned by the
Fund, does not exceed 10% of the value of the Fund's total assets.
10. Purchase any securities which would cause 25% or more of the value of
the Fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry; provided that, (a) with regard to all Funds except the Tax-Exempt
Intermediate Bond Fund, there is no limitation with respect to instruments
issued or guaranteed by the United States, its agencies or instrumentalities and
repurchase agreements secured by such instruments; (b) with regard to the Tax-
Exempt Intermediate Bond Fund, there is no limitation with respect to
instruments issued or guaranteed by the United States, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions and
repurchase agreements secured by such instruments; (c) wholly owned finance
companies will be considered to be in the industries of their parents if their
activities are primarily related to financing the activities of the parents; and
(d) utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry.
11. Borrow money or issue senior securities, except that each Fund may
borrow from banks and enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of the total assets at the time of
such borrowing; or mortgage, pledge or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the Fund's total assets at
the time of such borrowing. The Fund will not purchase securities while its
borrowings (including reverse repurchase agreements) in excess of 5% of its
total assets are outstanding. Securities held in escrow or separate accounts in
connection with the Fund's investment practices described in this Statement of
Additional Information or in the Prospectus are not deemed to be pledged for
purposes of this limitation.
12. With respect to the Tax-Exempt Intermediate Bond Fund, invest less
than 80% of its net assets in securities the interest on which is exempt from
federal income tax except during defensive periods or during unusual market
conditions. For purposes of this fundamental policy, Municipal Obligations that
are subject to federal alternative minimum tax are considered taxable.
If a percentage limitation is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in the
value of the Fund's portfolio securities will not constitute a violation of such
limitation.
If due to market fluctuations or other reasons, the amount of
borrowings and reverse repurchase agreements exceed the limit stated above, the
Funds will promptly reduce such amount. Except as otherwise provided in
Investment Restriction No. 10 above, for the purpose of such restriction, in
determining industry classification with respect to the International Equity
Fund, the Company intends to use the Morgan Stanley Capital International
classification titles.
In order to permit the sale of the Funds' shares in certain states,
the Funds may make commitments more restrictive than the investment policies and
limitations described above. Should a Fund determine that any such commitment is
no longer in the best interests of the Fund, it will revoke the commitment by
terminating sales of its shares in the state involved. Each Fund will operate
in compliance with the following further investment limitations (which are
imposed pursuant to the regulations of a state) to the extent applicable to the
Fund: (1) the Funds will not purchase or sell real estate limited partnership
interests, except that each may purchase securities of issuers which deal in
real estate and may purchase securities which are secured by interests in real
estate; (2) the Funds will not invest in oil, gas or mineral exploration or
development leases, except that each Fund may, to the extent appropriate to its
investment objective, purchase publicly traded securities of companies engaging
in whole or in part in such activities and may enter into futures contracts and
related options; (3) the Funds will limit investments in warrants to no more
than 5% of their respective net assets (and no more than 2% of net assets will
be invested in warrants whose underlying securities are not traded on principal
domestic exchanges) and (4) the Funds will not invest more than 5% of the
portfolio's total assets in the securities of issuers which, together with any
predecessors, have a record of less than three years continuous operation. The
foregoing limitations may be changed with respect to a particular Fund without
the approval of the shareholders of the Fund; provided, however, in such event
the particular Fund will terminate sales of its shares in that state, if any.
With respect to investment limitation No. 3 under "Additional
Investment Limitations"as it relates to the Tax-Exempt Intermediate Bond Fund,
real estate shall include real estate mortgages. Although the foregoing
investment limitations would permit the Tax-Exempt Intermediate Bond Fund to
invest in options, futures contracts, options on futures contracts and engage in
securities lending, the Fund, during the current fiscal year, does not intend to
trade in such instruments (except that the Fund may purchase put options on
Municipal Obligations as described in the Prospectus) or lend portfolio
securities. Prior to engaging in any such transactions, the Fund will provide
its shareholders with notice and add any additional descriptions concerning the
instruments to the Prospectus and this Statement of Additional Information as
may be required. With respect to investment limitation 10 under "Additional
Investment Limitations,"asset-backed securities will be divided according to
the type of assets underlying the security. For example, automobile loans,
credit card receivables and installment sales contracts will each be considered
a separate industry.
NET ASSET VALUE
The net asset value per share of each Fund is calculated separately
for the Institutional Series and Retail Series by adding the value of all
portfolio securities and other assets belonging to the particular Fund that are
allocable to a particular series, subtracting the liabilities charged to that
series, and dividing the result by the number of outstanding shares of that
series. Assets belonging to a Fund consist of the consideration received upon
the issuance of shares of the particular Fund together with all net investment
income, realized gains/losses and proceeds derived from the investment thereof,
including any proceeds from the sale of such investments, any funds or payments
derived from any reinvestment of such proceeds, and a portion of any general
assets of the Company not belonging to a particular investment portfolio. The
liabilities that are charged to a Fund are borne by each share of the Fund,
except for certain payments under the Funds' Distribution and Service Plan and
Shareholder Servicing Plan applicable only to Retail Series Shares of the non-
money market funds. Subject to the provisions of the Articles of Incorporation,
determinations by the Board of Directors as to the direct and allocable
liabilities, and the allocable portion of any general assets, with respect to a
particular Fund are conclusive.
The value of a Fund's portfolio securities that are traded on stock
exchanges outside the United States are based upon the price on the exchange as
of the close of business of the exchange immediately preceding the time of
valuation, except when an occurrence subsequent to the time a value was so
established is likely to have changed such value. Securities trading in over-
the-counter markets in European and Pacific Basin countries is normally
completed well before 3:00 P.M. Central Time. In addition, European and Pacific
Basin securities trading may not take place on all business days. Furthermore,
trading takes place in Japanese markets on certain Saturdays and in various
foreign markets on days which are not business days in New York and on which net
asset value of a Fund, including the International Equity Fund, is not
calculated. The calculation of the net asset value of a Fund, including the
International Equity Fund, may not take place contemporaneously with the
determination of the prices of portfolio securities used in such calculation.
Events affecting the values of portfolio securities that occur between the time
their prices are determined and 3:00 P.M. Central Time, and at other times, may
not be reflected in the calculation of net asset value of a Fund.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Computation of Offering Price of the Funds. An illustration of the
computation of the initial offering price per share of the Retail Shares of the
Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond,
Bond IMMDEX/TM, Balanced, Growth and Income, Equity Index, MidCore Growth,
Special Growth, and International Equity Funds based on the value of each
such Fund's net assets and number of outstanding securities at October 31,
1995, follows:
Short-
Term Bond Intermediate Tax-Exempt Bond
Market Bond Market Intermediate IMMDEX/TM
Fund Fund Bond Fund Fund
---- ---- --------- ----
Net Assets (000s) $47,730 $11,576 $7,711 $21,875
Number of Shares
Outstanding (000s) 4,641 1,133 753 786
Net Asset Value
Per Share $10.28 $10.21 $10.23 $27.82
Sales Charge, 2.00%
of offering price
(2.04% of net asset
value per share) .21 .21 .21 .57
Public Offering Price $10.49 $10.42 $10.44 $28.39
Growth
& Equity MidCore Special International
Balanced Income Index Growth Growth Equity
Fund Fund Fund Fund Fund Fund
---- ------ ---- ---- ---- ----
Net Assets (000s) $21,832 $42,424 $18,663 $10,105 $87,269 $1,663
Number of Shares
Outstanding (000s) 843 1,536 454 395 2,108 85
Net Asset Value
Per Share $25.89 $27.62 $41.07 $25.58 $41.40 $19.15
Sales Charge, 4.00%
of offering price
(4.16% of net asset
value per share) 1.08 1.15 1.71 1.07 1.73 .80
Public Offering Price $26.97 $28.77 $42.78 $26.65 $43.13 $19.95
Prior to January 9, 1995, the Funds offered only one class of shares
to both institutional and retail investors. On that date, the Funds began
offering Institutional Shares to institutional investors and Retail Shares to
retail investors.
Retail Shares of each of the non-money market funds are sold with a
front-end sales charge. A front-end sales charge will not be imposed on
reinvested dividends or distributions. Likewise, there is no front-end sales
charge (provided the status of the investment is explained at the time of
investment) on purchases of Retail Shares if (a) you were a Portico shareholder
as of January 9, 1995 and have continuously maintained a shareholder account
with the Company; (b) you make any purchase within 60 days of a redemption of
Portico Institutional Shares or from accounts for which Firstar Corporation or
its affiliates serves in a trust, agency or custodial capacity; (c) you are an
employee, director or retiree of Firstar Corporation or its affiliates or of
Portico; (d) you maintain a personal trust account with an affiliate of Firstar
Corporation at the time of purchase; (e) you make any purchase within 60 days of
a redemption of a mutual fund on which you paid an initial sales charge or
contingent deferred sales charge; (f) you are a registered investment adviser
that has entered into an agreement with the Distributor to purchase shares for
your own account or for discretionary client accounts; or (g) you are a spouse,
parent or child of an individual who falls within the preceding categories (a),
(c), or (d) above. These exemptions to the imposition of a front-end sales
charge are due to the nature of the investors and/or the reduced sales efforts
that will be needed in obtaining such investments.
Shareholder Organizations or Institutions may be paid by the Funds for
advertising, distribution or shareholder services. Depending on the terms of the
particular account, Shareholder Organizations or Institutions also may charge
their customers fees for automatic investment, redemption and other services
provided. Such fees may include, for example, account maintenance fees,
compensating balance requirements or fees based upon account transactions,
assets or income. Shareholder Organizations or Institutions are responsible for
providing information concerning these services and any charges to any customer
who must authorize the purchase of Fund shares prior to such purchase.
Shares of any Fund for which a redemption order is received in proper
form by the transfer agent or Elan before the close of the Exchange (currently
3:00 p.m. Central Time) on a business day will be redeemed as of the
determination of net asset value on that day. Orders for a redemption received
after the close of the Exchange on a business day or on a non-business day will
be priced as of the determination of net asset value on the next day on which
shares of the particular Fund are priced. If a shareholder requests that
redemption proceeds be paid by federal funds wire, the proceeds will be wired to
a correspondent member bank if the investor's designated bank is not a member of
the Federal Reserve System.
Under the 1940 Act, the Funds may suspend the right of redemption or
postpone the date of payment for shares during any period when (a) trading on
the Exchange is restricted by applicable rules and regulations of the SEC; (b)
the Exchange is closed for other than customary weekend and holiday closings;
(c) the SEC has by order permitted such suspension; or (d) an emergency exists
as determined by the SEC. (The Funds may also suspend or postpone the recording
of the transfer of their shares upon the occurrence of any of the foregoing
conditions.)
The Company's Articles of Incorporation permit the Fund to redeem an
account involuntarily, upon sixty days' notice, if redemptions cause the
account's net asset value to remain at $1,000 or less. The Funds intend to
exercise this right only when the net asset value of an account remains at $50
or less because of redemptions or when an investor discontinues participation in
the Periodic Investment Plan and the net asset value of the account is $50 or
less.
In addition to the situations described in the Funds' Prospectuses
under "Redemption of Shares," the Funds may redeem shares involuntarily to
reimburse the Funds for any loss sustained by reason of the failure of a
shareholder to make full payment for shares purchased by the shareholder or to
collect any charge relating to a transaction effected for the benefit of a
shareholder which is applicable to Fund shares as provided in the Prospectus
from time to time.
Exchange Privilege. By use of the exchange privilege, shareholders
authorize the transfer agent to act on telephonic or written exchange
instructions from any person representing himself to be the shareholder or in
some cases, the shareholder's registered representative or account
representative of record, and believed by the transfer agent to be genuine. The
transfer agent's records of such instructions are binding. The exchange
privilege may be modified or terminated at any time upon notice to shareholders.
Exchange transactions described in paragraphs A, B, and C below will be made on
the basis of the relative net asset values per share of the Funds involved in
the transaction.
A. Retail Shares of any Fund purchased with a sales charge may be exchanged
without a sales charge for Retail Shares of any other Fund offered by the
Company with a sales charge.
B. Shares of any Fund offered by the Company acquired by a previous
exchange transaction involving Retail Shares on which a sales charge has
directly or indirectly been paid (e.g. shares purchased with a sales charge or
issued in connection with an exchange involving shares that had been purchased
with a sales charge) as well as additional Shares acquired through reinvestment
of dividends or distributions on such Shares may be exchanged without a sales
charge for Retail Shares of any other Fund offered by the Company with a sales
charge. To accomplish an exchange under the provisions of this paragraph,
investors must notify the transfer agent of their prior ownership of Retail
Shares and their account number.
C. Shares of any Fund offered by the Company may be exchanged without a
sales charge for Shares of any other Fund of the Company that is offered without
a sales charge.
Except as stated above, a sales charge will be imposed when Shares of a
Fund that were purchased or otherwise acquired without a sales charge are
redeemed and the proceeds are used to purchase Retail Shares of another Fund of
the Company with a sales charge.
Shares in a Fund from which the shareholder is withdrawing an investment
will be redeemed at the net asset value per share next determined on the date of
receipt. Shares of the new Fund into which the shareholder is investing will be
purchased at the net asset value per share next determined (plus any applicable
sales charge) after acceptance of the request by the Company in accordance with
the policies for accepting investments. Exchanges of Shares will be available
only in states where they may legally be made.
For federal income tax purposes, share exchanges are treated as sales
on which the shareholder may realize a gain or loss, depending upon whether the
value of the shares to be given up in exchange is more or less than the basis in
such shares at the time of the exchange. Investors exercising the exchange
privilege should request and review the Prospectus for the shares to be acquired
in the exchange prior to making an exchange.
Additional Information Regarding Shareholder Services for Retail Shares
- -----------------------------------------------------------------------
The Retail Shares of the Funds offer a Periodic Investment Plan
whereby a shareholder may automatically make purchases of shares of a Fund on a
regular, monthly basis ($100 minimum per transaction). Under the Periodic
Investment Plan, a shareholder's designated bank or other financial institution
debits a preauthorized amount on the shareholder's account each month and
applies the amount to the purchase of Retail Shares. The Periodic Investment
Plan must be implemented with a financial institution that is a member of the
Automated Clearing House. No service fee is currently charged by a Fund for
participation in the Periodic Investment Plan. A $15 fee will be imposed by the
transfer agent if sufficient funds are not available in the shareholder's
account or the shareholder's account has been closed at the time of the
automatic transaction.
The Periodic Investment Plan permits an investor to use "Dollar Cost
Averaging"in making investments. Instead of trying to time market
performance, a fixed dollar amount is invested in Retail Shares at predetermined
intervals. This may help investors to reduce their average cost per share
because the agreed upon fixed investment amount allows more Retail Shares to be
purchased during periods of lower Retail Share prices and fewer Retail Shares to
be purchased during periods of higher Retail Share prices. In order to be
effective, Dollar Cost Averaging should usually be followed on a sustained,
consistent basis. Investors should be aware, however, that Retail Shares bought
using Dollar Cost Averaging are purchased without regard to their price on the
day of investment or to market trends. Dollar Cost Averaging does not assure a
profit and does not protect against losses in a declining market. In addition,
while investors may find Dollar Cost Averaging to be beneficial, it will not
prevent a loss if an investor ultimately redeems his Retail Shares at a price
which is lower than their purchase price. An investor may want to consider his
financial ability to continue purchases through periods of low price levels.
The Retail Shares of the Funds permit shareholders to effect
ConvertiFundR transactions, an automated method by which a Retail shareholder
may invest proceeds from one account to another account of the Retail Shares of
the Portico family of funds. Such proceeds include dividend distribution,
capital gain distributions and systematic withdrawals. ConvertiFundR
transactions may be used to invest funds from a regular account to another
regular account, from a qualified plan account to another qualified plan
account, or from a qualified plan account to a regular account.
The Retail Shares of the Funds offer shareholders a Systematic
Withdrawal Plan, which allows a shareholder who owns shares of a Fund worth at
least $15,000 at current net asset value at the time the shareholder initiates
the Systematic Withdrawal Plan to designate that a fixed sum ($100 minimum per
transaction) be distributed to the shareholder or as otherwise directed at
regular intervals.
Special Procedures for In-Kind Payments
- ---------------------------------------
Payment for shares of a Fund may, in the discretion of the Fund, be
made in the form of securities that are permissible investments for the Fund as
described in its Prospectus. For further information about this form of
payment, contact Investor Services at 414-287-3710. In connection with an
in-kind securities payment, a Fund will require, among other things, that the
securities be valued on the day of purchase in accordance with the pricing
methods used by the Fund; that the Fund receive satisfactory assurances that it
will have good and marketable title to the securities received by it; that the
securities be in proper form for transfer to the Fund; that adequate information
be provided to the Fund concerning the basis and other tax matters relating to
the securities; and that the amount of the purchase be at least $1,000,000. The
Funds will consider accepting securities as consideration for shares only if
such securities meet the investment objectives and policies of the particular
Fund, are acquired for investment and not for resale (although the Fund may sell
such securities in response to market or Fund activity), are liquid and have a
value which is readily ascertainable.
DESCRIPTION OF SHARES
---------------------
The Company's Articles of Incorporation authorize the Board of
Directors to issue up to 150,000,000,000 full and fractional shares of common
stock, $.0001 par value per share, which is divided into thirty classes (each, a
"Class" or "Fund"). Each Class below is divided into two series designated
as Institutional Series and Series A/Retail Series (each, a "Series") and
consists of the number of shares set forth next to its Fund name in the table
below:
Fund in which Stock Number of Authorized
Represents Interest Shares in Each Series
------------------- ---------------------
Class-Series of
Common Stock
- ------------
6-Institutional Special Growth 500 Million
6-A 500 Million
7-Institutional Bond IMMDEX/TM 500 Million
7-A 500 Million
8-Institutional Equity Index 500 Million
8-A 500 Million
9-Institutional Growth and Income 500 Million
9-A 500 Million
10-Institutional Short-Term Bond Market 500 Million
10-A 500 Million
11-Institutional Balanced Growth 500 Million
11-A 500 Million
12-Institutional MidCore Growth 500 Million
12-A 500 Million
13-Institutional Intermediate Bond Market 500 Million
13-A 500 Million
14-Institutional Tax-Exempt 500 Million
14-A Intermediate Bond 500 Million
15-Institutional International Equity 500 Million
15-A 500 Million
The Board of Directors has also authorized the issuance of Classes 1
through 5 and Classes 16 and 17 common stock representing interests in seven
other separate investment portfolios which are described in separate Statements
of Additional Information. The remaining authorized shares are classified into
thirteen additional classes representing interest in other potential future
investment portfolios of the Company. The Directors may similarly classify or
reclassify any particular class of shares into one or more additional series.
In the event of a liquidation or dissolution of the Company or an
individual Fund, shareholders of a particular Fund would be entitled to receive
the assets available for distribution belonging to such Fund, and a
proportionate distribution, based upon the relative assets of the Company's
respective investment portfolios, of any general assets not belonging to any
particular portfolio which are available for distribution. Subject to the
allocation of certain costs, expenses, charges and reserves attributed to the
operation of a particular series as described in the Funds' Prospectuses,
shareholders of a Fund are entitled to participate equally in the net
distributable assets of the particular Fund involved on liquidation, based on
the number of shares of the Fund that are held by each shareholder.
Shareholders of the Funds, as well as those of any other investment
portfolio offered by the Company, will vote together in the aggregate and not
separately on a Fund-by-Fund basis, except as otherwise required by law or when
the Board of Directors determines that the matter to be voted upon affects only
the interests of the shareholders of a particular class or a particular series
within a class. Rule 18f-2 under the 1940 Act provides that any matter required
to be submitted to the holders of the outstanding voting securities of an
investment company such as the Company shall not be deemed to have been
effectively acted upon unless approved by the shareholders of each portfolio
affected by the matter. A portfolio is affected by a matter unless it is clear
that the interests of each portfolio in the matter are substantially identical
or that the matter does not affect any interest of the portfolio. Under the
Rule, the approval of an investment advisory agreement or any change in a
fundamental investment policy would be effectively acted upon with respect to a
portfolio only if approved by a majority of the outstanding shares of such
portfolio. However, the Rule also provides that the ratification of the
appointment of independent accountants, the approval of principal underwriting
contracts and the election of Directors may be effectively acted upon by
shareholders of the Company voting together in the aggregate without regard to
particular portfolios. Similarly, on any matter submitted to the vote of
shareholders which only pertains to agreements, liabilities or expenses
applicable to one series of a Fund (such as the Distribution and Service Plan
and Shareholder Service Plan applicable to Retail Shares) but not the other
series of the same Fund, only the affected series will be entitled to vote.
When issued for payment as described in the Funds' Prospectus and this
Statement of Additional Information, shares of the Funds will be fully paid and
non-assessable by the Company, except as provided in Section 180.0622(2)(b) of
the Wisconsin Business Corporation Law, as amended, which in general provides
for personal liability on the part of a corporation's shareholders for unpaid
wages of employees. The Company does not intend to have any employees and, to
that extent, the foregoing statute will be inapplicable to holders of Fund
shares and will not have a material effect on the Company.
The Articles of Incorporation authorize the Board of Directors,
without shareholder approval (unless otherwise required by applicable law), to:
(a) sell and convey the assets belonging to a series of shares to another
management investment company for consideration which may include securities
issued by the purchaser and, in connection therewith, to cause all outstanding
shares of such series to be redeemed at a price which is equal to their net
asset value and which may be paid in cash or by distribution of the securities
or other consideration received from the sale and conveyance; (b) sell and
convert the assets belonging to a series of shares into money and, in connection
therewith, to cause all outstanding shares of such series to be redeemed at
their net asset value; or (c) combine the assets belonging to a series of shares
with the assets belonging to one or more other series of shares if the Board of
Directors reasonably determines that such combination will not have a material
adverse effect on the shareholders of any series participating in such
combination and, in connection therewith, to cause all outstanding shares of any
such series to be redeemed or converted into shares of another series of shares
at their net asset value.
ADDITIONAL INFORMATION CONCERNING TAXES
The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Funds' Prospectuses. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Investors are advised to consult their tax advisers with
specific reference to their own tax situations.
A 4% non-deductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and capital gain net income (excess of capital gains
over capital losses). The Funds intend to make sufficient distributions or
deemed distributions of their ordinary taxable income and any capital gain net
income with respect to each calendar year to avoid liability for this excise
tax.
Each Fund is treated as a separate tax entity under the Code.
Although each Fund expects to qualify as a "regulated investment company" and to
be relieved of all or substantially all federal income taxes, depending upon the
extent of the Company's activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, the Funds may be subject
to the tax laws of such states or localities. In addition, in those states and
localities which have income tax laws, the treatment of the Funds and their
shareholders under such laws may differ from their treatment under federal
income tax laws.
If for any taxable year a Fund does not qualify for the special
federal income tax treatment afforded regulated investment companies, all of its
taxable income will be subject to federal income tax at regular corporate rates
(without any deduction for distributions to its shareholders). In such event,
dividend distributions would be taxable as ordinary income to shareholders to
the extent of the Fund's current and accumulated earnings and profits and would
be eligible for the dividends received deduction in the case of corporate
shareholders.
Investment company taxable income earned by the Fund will be
distributed by the Fund to its shareholders and will be taxable to shareholders
as ordinary income whether paid in cash or additional shares. In general,
investment company taxable income will be the Fund's taxable income, subject to
certain adjustments and excluding the excess of any net long-term capital gain
for the taxable year over the net short-term capital loss, if any, for such
year.
A taxable gain or loss may be realized by a shareholder upon his
redemption, transfer or exchange of Fund shares depending upon the tax basis of
such shares and their price at the time of redemption, transfer or exchange.
Any distribution of the excess of net long-term capital gain over net
short-term capital loss is taxable to shareholders as long-term capital gain,
regardless of how long the shareholder has held the distributing Fund's shares
and whether such gains are received in cash or additional Fund shares. The Fund
will designate such a distribution as capital gain dividend in a written notice
mailed to shareholders within 60 days after the close of the Fund's taxable
year. It should be noted that, upon the sale or exchange of Fund shares, if the
shareholder has not held such shares for more than six months, any loss on the
sale or exchange of those shares will be treated as long-term capital loss to
the extent of the capital gain dividends received with respect to the shares.
Income received by a Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. If more than 50% of the value of the International Equity Fund's total
assets at the close of its taxable year consists of stock or securities of
foreign corporations, the Fund will be eligible to elect to "pass-through" to
its shareholders the amount of foreign income and similar taxes paid by the
Fund. If this election is made, a shareholder will be required to include in
gross income (in addition to taxable dividends actually received) his or her pro
rata share of foreign income and similar taxes paid by the Fund, and will be
entitled either to deduct (as an itemized deduction) his or her pro rata share
of foreign income and similar taxes in computing his taxable income or to use it
(subject to limitations) as a foreign tax credit against his or her U.S. Federal
income tax liability. No deduction for foreign taxes may be claimed by a
shareholder who does not itemize deductions and foreign taxes generally are not
deductible in computing alternative minimum taxable income. Each shareholder of
the International Equity Fund will be notified within 60 days after the close of
the Fund's taxable year whether the foreign income and similar taxes paid by the
Fund will "pass-through" for that year.
Generally, a credit for foreign taxes is subject to the limitation
that it may not exceed the shareholder's U.S. tax attributable to his or her
total foreign source taxable income. For this purpose, if the pass-through
election is made, the source of the International Equity Fund's income will flow
to shareholders of the Fund. With respect to the Fund, gains from the sale of
securities will be treated as derived from U.S. sources and certain currency
fluctuation gains, including fluctuation gains from foreign currency denominated
debt securities, receivables and payables, will be treated as ordinary income
derived from U.S. sources. The limitation on the foreign tax credit is applied
separately to foreign source passive income, and to certain other types of
income. Shareholders may be unable to claim a credit for the full amount of
their proportionate share of foreign taxes paid by the International Equity
Fund. Certain additional limitations are imposed on the use of foreign tax
credits to offset liability for the alternative minimum tax.
If a Fund invests in certain "passive foreign investment companies"
("PFICs") which do not distribute their income on a regular basis, it
generally will be subject to federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such investments even if it distributes the income to its
shareholders. If the Fund qualifies and elects to treat the PFIC as a
"qualified electing fund" ("QEF") and the PFIC furnishes certain financial
information in the required form, the Fund would instead be required to include
in income each year a portion of the ordinary earnings and net capital gains of
the QEF, whether or not received, and such amounts would be subject to the
various distribution requirements described above. In addition, another
election may be available that would involve marking to market the Fund's PFIC
holdings at the end of each taxable year (and on certain other dates prescribed
in the Code), with the result that unrealized gains are treated as though they
were realized. If this election were made, the tax described above at the fund
level under the PFIC rules generally would be eliminated.
The Tax-Exempt Intermediate Bond Fund is designed to provide investors
with current tax-exempt interest income. The Fund is not intended to constitute
a balanced investment program and is not designed for investors seeking capital
appreciation or maximum tax-exempt income irrespective of fluctuations in
principal. Shares of the Fund may not be suitable for tax-exempt institutions,
or for retirement plans qualified under Section 401 of the Internal Revenue Code
of 1986 (the "Code"), H.R. 10 plans and individual retirement accounts because
such plans and accounts are generally tax-exempt and, therefore, not only would
not gain any additional benefit from the Fund's dividends being tax-exempt, but
such dividends ultimately would be taxable to the beneficiaries when distributed
to them. In addition, the Fund may not be an appropriate investment for
entities which are "substantial users" of facilities financed by private
activity bonds or "related persons" thereof. "Substantial user" is defined
under U.S. Treasury Regulations to include a non-exempt person who regularly
uses a part of such facilities in his trade or business and whose gross revenues
derived with respect to the facilities financed by the issuance of bonds are
more than 5% of the total revenues derived by all users of such facilities or
who occupies more than 5% of the usable area of such facilities or for whom such
facilities, part thereof where specifically constructed, reconstructed or
acquired. "Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners and an S Corporation and its
shareholders.
The percentage of total dividends paid by the Tax-Exempt Intermediate
Bond Fund with respect to any taxable year which qualifies as federal exempt-
interest dividends will be the same for all shareholders receiving dividends for
such year. In order for the Fund to pay exempt-interest dividends during any
taxable year, at the close of each taxable quarter at least 50% of the aggregate
value of the Fund's portfolio must consist of federal tax-exempt obligations.
In addition, the Fund must distribute an amount that is at least equal to the
sum of 90% of the net tax-exempt interest income and 90% of the investment
company taxable income earned by the Fund for the taxable year. Within 60 days
of the close of its taxable year, the Fund will notify shareholders of the
portion of the dividends paid by the Fund which constitutes an exempt-interest
dividend with respect to such taxable year. However, the aggregate amount of
dividends so designated cannot exceed the excess of the amount of interest
exempt from tax under Section 103 of the Code received by the Fund during the
taxable year over any amounts disallowed as deductions under Sections 265 and
171(a)(2) of the Code.
Interest on indebtedness incurred by a shareholder to purchase or
carry shares of the Tax-Exempt Intermediate Bond Fund is generally not
deductible for federal income tax purposes if the Fund distributes exempt-
interest dividends during the shareholder's taxable year. If a shareholder
holds shares of the Fund for six months or less, any loss on the sale or
exchange of those shares will be disallowed to the extent of the amount of
exempt-interest dividends received with respect to the shares. The Treasury
Department, however, is authorized to issue regulations reducing the six-month
holding requirement to a period of not less than the greater of 31 days or the
period between regular distributions for investment companies that regularly
distribute at least 90% of their net tax-exempt interest. No such regulations
had been issued as of the date of this Statement of Additional Information.
The foregoing discussion is based on federal tax laws and regulations
which are in effect on the date of this Statement of Additional Information;
such laws and regulations may be changed by legislative or administrative
action.
MANAGEMENT OF THE COMPANY
Directors and Officers
- ----------------------
The Directors and Officers of the Company, their addresses, age,
principal occupations during the past five years and other affiliations are as
follows:
Principal
Position with Occupations During Past 5
Name, Address and Age the Company Years and Other Affiliations
- --------------------- ------------ ----------------------------
James M. Wade <F88> Chairman, Vice President and Chief
2802 Wind Bluff Circle President and Financial Officer, Johnson
Wilmington, NC 28409 Treasurer Controls, Inc. (a controls
Age: 52 manufacturing company)
January 1987 - May 1991.
Glen R. Bomberger Director Executive Vice President, Chief
One Park Plaza Financial Officer
11270 West Park Place and Director, A.O. Smith Corporation
Milwaukee, WI 53224-3690 (a diversified manufacturing
Age: 58 company) since January 1987.
Director of companies affiliated
with A.O. Smith Corporation; Chief
Financial Officer, Director and Vice
President, Smith Investment Company;
Officer and Director of companies
affiliated with Smith Investment
Company.
Jerry G. Remmel Director Vice President, Treasurer and Chief
231 W. Michigan Street Financial Officer of
Milwaukee, WI 53203 Wisconsin Energy Corporation since
Age: 64 1994; Treasurer of Wisconsin
Electric Power Company since 1973;
Director Wisconsin Electric Power
Company since 1989; Senior Vice
President, Wisconsin Electric Power
Company 1988 - 1994; Chief Financial
Officer, Wisconsin Electric Power
Company since 1983; Vice President
and Treasurer, Wisconsin Electric
Power Company 1983 - 1989.
Richard K. Riederer Director President and Chief Operating
400 Three Springs Drive Officer of Weirton Steel
Weirton, WV 26062-4989 since 1995; Executive Vice President
Age: 51 and Chief Financial Officer, Weirton
Steel January 1994-1995; Vice
President of Finance and Chief
Financial Officer, Weirton Steel
January 1989-1994; Member-Board of
Directors of American Iron and Steel
Institute since 1995; Member-Board
of Directors, National Association
of Manufacturers since 1995.
Charles R. Roy <F88> Director Vice President - Finance, Chief
14245 Heatherwood Court Financial Officer and
Elm Grove, WI 53122 Secretary, Rexnord Corporation (an
Age: 65 equipment manufacturing company),
1988 - 1992; Vice President -
Finance and Administration, Rexnord,
Inc., 1982 - 1992; Officer and
Director of several Rexnord
subsidiaries until 1992.
Mary Ellen Stanek Vice President President and Chief Operating
777 East Wisconsin Avenue Officer, FIRMCO since
Suite 800 1994, Director since 1992 and
Milwaukee, WI 53202 Director of Fixed Income
Age: 39 Securities since 1990.
W. Bruce McConnel, III Secretary Partner of the law firm of Drinker
Philadelphia National Biddle & Reath.
Bank Building
1345 Chestnut Street
Philadelphia, PA 19107
Age: 52
<F88>Messrs. Wade and Roy are considered by the Company to be "interested
directors" of the Company as defined in the 1940 Act.
The following chart provides certain information about the Director
fees for the year ended October 31, 1995 of the Company's Directors.
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM
BENEFITS ESTIMATED COMPANY
AGGREGATE ACCRUED ANNUAL AND FUND
NAME OF COMPENSATION AS PART BENEFITS COMPLEX <F89>
PERSON/ FROM THE OF FUND UPON PAID TO
POSITION COMPANY EXPENSES RETIREMENT DIRECTORS
James M. Wade
President,
Treasurer and $15,250 $0 $0 $15,250
Chairman of the
Board
Glen R.
Bomberger $12,500<F90> $0 $0 $12,500
Director
Jerry G. Remmel
Director $12,500 $0 $0 $12,500
Richard K.
Riederer $12,500 $0 $0 $12,500
Director
Charles R. Roy
Director $12,500 $0 $0 $12,500
<F89>The "Fund Complex" includes only the Company.
<F90>Includes $12,500 which Mr. Bomberger elected to defer under the Company's
deferred compensation plan.
Each Director receives an annual fee of $7,000, a $1,000 per meeting
attendance fee and reimbursement of expenses incurred as a Director. The
Chairman of the Board is entitled to receive an additional $3,000 per annum for
services in such capacity. For the fiscal year ended October 31, 1995, the
Directors and Officers received aggregate fees of $65,250. Ms. Stanek receives
no fees from the Company for her services as Vice President, although FIRMCO, of
which she is President, receives fees from the Company for advisory services.
Drinker Biddle & Reath, of which Mr. McConnel is a partner, receives legal fees
as counsel to the Company. As of the date of this Statement of Additional
Information, the Directors and Officers of the Company, as a group, owned less
than 1% of the outstanding shares of each Fund.
Advisory Services
- -----------------
FIRMCO became the investment adviser to the Short-Term Bond Market
Fund, Special Growth Fund, Bond IMMDEX/TM Fund and Equity Index Fund as of
February 3, 1992 and became the Investment Adviser to the Growth and Income Fund
effective June 17, 1993. Prior thereto, investment advisory services were
provided by Firstar Trust Company, an affiliate of FIRMCO. Firstar Trust
Company has guaranteed all obligations incurred by FIRMCO in connection with its
Investment Advisory Agreement. FIRMCO is also the Investment Adviser to the
MidCore Growth Fund, Intermediate Bond Market Fund, Balanced Fund, Tax-Exempt
Intermediate Bond Fund, and International Equity Fund. In its Investment
Advisory Agreement, the Adviser has agreed to pay all expenses incurred by it in
connection with its advisory activities, other than the cost of securities and
other investments, including brokerage commissions and other transaction
charges, if any, purchased or sold for the Funds.
The Adviser is entitled to 4/10ths of the gross income earned by each
Fund on each loan of its securities, excluding capital gains or losses, if any.
Pursuant to current policy of the Securities and Exchange Commission, the Funds
do not intend to receive separate compensation for securities lending activity.
The Adviser has also agreed that if, in any fiscal year, the expenses borne by a
Fund exceed the applicable expense limitations imposed by the securities
regulations of any state in which shares of the Fund are registered or qualified
for sale to the public, it will reimburse the Fund for any excess to the extent
required by such regulations. To the knowledge of the Funds, of the applicable
expense limitations in effect as of the date of this Statement of Additional
Information, none is more restrictive than 2-1/2% of the first $30 million of a
Fund's average annual net assets, 2% of the next $70 million of average annual
net assets, and 1-1/2% of the remaining average annual net assets. In addition,
the Adviser may also voluntarily waive additional advisory fees otherwise
payable by the Funds. Certain expenses including interest, taxes, brokerage,
and distribution expenses are not subject to this expense cap.
For the services provided and expenses assumed by the Adviser under
its investment advisory agreement in effect for the fiscal years ended October
31, 1995, 1994, and 1993, the Adviser earned and waived advisory fees as
follows:
Advisory Fees Earned (Advisory Fees Waived)
-------------------------------------------
1995 1994 1993
---- ---- ----
Short-Term Bond $330,777 (436,239) $339,126 (444,879) $317,404 (480,447)
Market Fund
Special Growth 3,291,584 2,576,044 (119,214) 1,756,010 (326,231)
Fund (48,415)
Bond IMMDEX/TM
Fund 831,690 (0) 774,322 (--) 658,553 (14,233)
Equity Index Fund 319,929 (0) 197,707 (13,606) 175,599 (33,166)
Intermediate Bond 299,128 (238,251) 217,173 (151,906) 36,816 (101,798)<F91>
Market Fund
MidCore Growth 894,728 (61,640) 708,137 (61,181) 287,778 (76,613)<F92>
Fund
Balanced Fund 560,913 (267,253) 458,789 (213,732) 260,303 (225,409)
Growth and Income 1,281,117 (69,004) 1,133,488 (83,990) 916,091 (188,529)<F93>
Fund
Tax-Exempt
Intermediate Bond 22,909 (128,234) 48,723 (90,055) 0 (61,028)<F94>
Fund
International 119,342 (311,670) 20,285 (111,361)<F95> --
Equity Fund
<F91>From inception (January 5, 1993) to October 31, 1993.
<F92>From inception (December 29, 1992) to October 31, 1993.
<F93>Firstar Trust Company earned (waived) advisory fees of $527,493 and
$(138,409) from November 1, 1992 thru June 16, 1993. FIRMCO earned (waived)
advisory fees of $388,598 and $(50,120) from June 17, 1993 thru October 31,
1993.
<F94>From inception (February 8, 1993) to October 31, 1993
<F95>From inception (April 28, 1994) to October 31, 1994.
Under its Investment Advisory Agreement, the Adviser is not liable for
any error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of such Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
its reckless disregard of its duties and obligations under the Agreement.
With regard to the International Equity Fund, under the Investment
Advisory Agreement, the Adviser is authorized to delegate its responsibilities
to another adviser. The Adviser has appointed State Street Global Advisors as
Sub-Adviser to the International Equity Fund. See "Sub-Adviser" below. The
Adviser and Sub-Adviser jointly determine the securities to be purchased,
retained or sold by the International Equity Fund.
Sub-Adviser. The International Equity Fund receives sub-advisory
-----------
services from State Street Global Advisors, a division of State Street Bank and
Trust Company (the "Sub-Adviser" or "SSBT"). Under the terms of the Sub-
Advisory Agreement between the Adviser and Sub-Adviser, the Sub-Adviser
furnishes investment advisory and portfolio management services to the
International Equity Fund with respect to its investments. The Sub-Adviser is
responsible, jointly with the Adviser, for decisions to buy and sell the
International Equity Fund's investments and all other transactions related to
investment therein. The Sub-Adviser negotiates brokerage commissions and places
orders of purchases and sales of the International Equity Fund's portfolio
securities. During the term of the Sub-Advisory Agreement, the Sub-Adviser will
bear all expenses incurred by it in connection with its services under such
agreement.
Pursuant to the Sub-Advisory Agreement, in the absence of willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser or
reckless disregard of its obligations and duties thereunder, or loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services, the Sub-Adviser will not be subject to any liability to the Adviser,
the International Equity Fund or the Company, or to any shareholder of the
International Equity Fund or the Company, for any act or omission in the course
of, or connected with, rendering services under the Sub-Advisory Agreement. See
"Banking Laws and Regulations" below for information regarding certain banking
laws and regulations and their applicability to the Sub-Adviser and its services
under the Sub-Advisory agreement.
Banking Laws and Regulations. Banking laws and regulations, including the
Glass-Steagall Act as presently interpreted by the Board of Governors of the
Federal Reserve System, presently (a) prohibit a bank holding company registered
under the Federal Bank Holding Company Act of 1956 or any bank or non-bank
affiliate thereof from sponsoring, organizing, controlling or distributing the
shares of a registered, open-end investment company continuously engaged in the
issuance of its shares, and prohibit banks generally from underwriting
securities, but (b) do not prohibit such a bank holding company or affiliate or
banks generally from acting as investment adviser, transfer agent or custodian
to such an investment company or from purchasing shares of such a company as
agent and upon order of a customer. In 1971, the United States Supreme Court
held in Investment Company Institute vs. Camp that the Glass-Steagall Act
prohibits a national bank from operating a fund for the collective investment of
managing agency accounts. Subsequently, the Board of Governors of the Federal
Reserve System (the "Board") issued a regulation and interpretation to the
effect that the Glass-Steagall Act and such decision forbid a bank holding
company registered under the Federal Bank Holding Company Act of 1956 (the
"Holding Company Act"), or any non-bank affiliate thereof from sponsoring,
organizing or controlling a registered, open-end investment company continuously
engaged in the issuance of its shares, but did not prohibit such a holding
company or affiliate from acting as investment adviser, transfer agent and
custodian to such an investment company. In 1981, the United States Supreme
Court held in Board of Governors of the Federal Reserve System v. Investment
Company Institute that the Board did not exceed its authority under the Holding
Company Act when it adopted its regulation and interpretation authorizing bank
holding companies and their non-bank affiliates to act as investment advisers to
registered closed-end investment companies. FIRMCO, Firstar Trust Company and
SSBT are subject to such banking laws and regulations.
FIRMCO and Firstar Trust Company and the Sub-Adviser believe that they
may perform the services for the Funds contemplated by their respective
agreements with the Company without violation of the Glass-Steagall Act or other
applicable banking laws or regulations. These companies further believe that,
if the question were properly presented, a court should hold that these
companies may each perform such activities without violation of the Glass-
Steagall Act or other applicable banking laws and or regulations. It should be
noted, however, there have been no cases deciding whether banks and their
affiliates may perform services comparable to those performed by these
companies, and future changes in either federal or state statutes and
regulations relating to permissible activities of banks or trust companies and
their subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of present and future statutes and regulations,
could prevent such companies from continuing to perform such services for the
Funds. If the companies were prohibited from continuing to perform advisory,
accounting, shareholder servicing and custody services for the Funds, it is
expected that the Board of Directors would recommend that the Funds enter into
new agreements or would consider the possible termination of the Funds. Any new
advisory or sub-advisory agreement would be subject to shareholder approval.
Shares of the Funds are not bank deposits, are neither endorsed by,
insured by, or guaranteed by, obligations of, nor otherwise supported by the
FDIC, the Federal Reserve Board, Firstar Trust Company or FIRMCO, SSBT, their
affiliates or any other bank, or any other governmental agency. An investment
in the Funds involves risks including possible loss of principal.
Administration and Distribution Services
- ----------------------------------------
Firstar Trust Company ("Firstar Trust") became a Co-Administrator to
the Funds on September 1, 1994, and B. C. Ziegler and Company ("Ziegler")
became a Co-Administrator to the Funds on January 1, 1995. Under the Co-
Administration Agreement, the following administrative services will be provided
jointly by the Co-Administrators: assist in maintaining office facilities,
furnish clerical services, stationery and office supplies; monitor the company's
arrangements with respect to services provided by Shareholder Organizations; and
generally assist in the Funds' operations. The following administrative
services will be provided by Ziegler: review and comment upon the registration
statement and amendments thereto prepared by Firstar Trust or counsel to the
company, as requested by Firstar Trust ; review and comment upon sales
literature and advertising relating to the company, as requested by Firstar
Trust; assist in the administration of the marketing budget; periodically review
blue sky registration and sales reports for the Funds; attend meetings of the
Board of Directors, as requested by the Board of Directors of the Funds; and
such other services as may be requested in writing and expressly agreed to by
Ziegler. The following administrative services will be provided by Firstar
Trust: compile data for and prepare with respect to the Funds timely Notices to
the SEC required pursuant to Rule 24f-2 under the 1940 Act and Semi-Annual
Reports on Form N-SAR; coordinate execution and filing by the company of all
federal and state tax returns and required tax filings other than those required
to be made by the company's custodian and transfer agent; prepare compliance
filings and Blue Sky registrations pursuant to state securities laws with the
advice of the company's counsel; assist to the extent requested by the company
with the company's preparation of annual and semi-annual reports to Fund
shareholders and registration statements for the Funds; monitor each Fund's
expense accruals and cause all appropriate expenses to be paid on proper
authorization from each Fund; monitor each Fund's status as a regulated
investment company under Subchapter M of the Code; maintain each Fund's fidelity
bond as required by the 1940 Act; and monitor compliance with the policies and
limitations of each Fund as set forth in the prospectuses, statements of
additional information, by-laws and articles of incorporation.
Each of the Co-Administrators have agreed to pay all expenses incurred by
it in connection with its administrative activities. Under the Co-
Administration Agreement, the Co-Administrators are not liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the performance of the Co-Administration Agreement, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of the Co-
Administrators in the performance of their respective duties or from their
reckless disregard of their duties and obligations under the Agreement.
The Distributor provides distribution services for each Fund as
described in the Funds' Prospectus pursuant to a Distribution Agreement with the
Funds under which the Distributor, as agent, sells shares of each Fund on a
continuous basis. The Distributor has agreed to use its best efforts to solicit
orders for the sale of shares, although it is not obliged to sell any particular
amount of shares. The Distributor causes expenses to be paid for the cost of
printing and distributing prospectuses to persons who are not shareholders of
the Funds (excluding preparation and printing expenses necessary for the
continued registration of the Funds' shares) and of printing and distributing
all sales literature. For the fiscal years ended October 31, 1994 and 1993,
Sunstone Financial Group, Inc. ("Sunstone"), Portico Funds' former Distributor
and Co-Administrator, received no fees for its distribution services. For the
fiscal year ended October 31, 1995, Ziegler received no fees for its
distribution services.
For its administrative services for the fiscal years ended October 31,
1995, 1994 and 1993, the Co-Administrators (and Sunstone for the fiscal years
ended October 31, 1994 and 1993) earned and waived the following administrative
fees:
Administration Fees Earned (Administration Fees Waived)
-------------------------------------------------------
1995 1994 1993
---- ---- ----
Short-Term Bond 59,323 (95,852) $88,025 (72,075) $143,310 (22,909)
Market Fund
Special Growth Fund 194,656 (345,563) 249,168 (190,836) 298,874 (48,166)
Bond IMMDEX/TM Fund 151,431 (174,586) 227,105 (85,036) 241,390 (38,937)
Equity Index Fund 57,944 (97,841) 57,234 (46,232) 90,049 (14,334)
Intermediate Bond 49,597 (80,727) 37,683 (52,610) 29,638 (5,016)<F96>
Market Fund
MidCore Growth Fund 64,612 (90,089) 71,418 (54,096) 52,063 (8,669)<F97>
Balanced Fund 51,415 (82,629) 56,667 (53,098) 69,662 (11,290)
Growth and Income 82,730 (134,204) 110,256 (88,529) 158,713 (25,390)
Fund
Tax-Exempt 14,551 (22,137)
Intermediate Bond 20,580 (13,392) 2,384 (10,679)<F98>
Fund
International Equity 14,701 (20,395) 5,560 (6,117)<F99> ---
Fund
<F96>From inception (January 5, 1993) to October 31, 1993.
<F97>From inception (December 29, 1992) to October 31, 1993.
<F98>From inception (February 8, 1993) to October 31, 1993.
<F99>From inception (April 28, 1994) to October 31, 1994.
Shareholder Organizations
- -------------------------
As stated in the Funds' Prospectus, for Retail Shares the Funds intend
to enter into agreements from time to time with Shareholder Organizations
providing for support and/or distribution services to customers of the
Shareholder Organizations who are the beneficial owners of Retail Shares of the
Fund. Under the agreements, the Funds may pay Shareholder Organizations up to
0.25% (on an annualized basis) of the average daily net asset value of Retail
Shares beneficially owned by their customers. Services provided by Shareholder
Organizations under their agreements may include: (i) processing dividend and
distribution payments from a Fund; (ii) providing information periodically to
customers showing their share positions; (iii) arranging for bank wires; (iv)
responding to customer inquiries; (v) providing sub-accounting with respect to
shares beneficially owned by customers or the information necessary for sub-
accounting; (vi) forwarding shareholder communications; (vii) assisting in
processing share purchase, exchange and redemption requests from customers;
(viii) assisting customers in changing dividend options, account designations
and addresses; and (ix) other similar services requested by the Funds. In
addition, Shareholder Organizations, under the Distribution and Service Plan,
may provide assistance (such as the forwarding of sales literature and
advertising to their customers) in connection with the distribution of Fund
shares. All fees paid under these agreements are borne exclusively by the
Fund's Retail Shares.
The Funds' arrangements with Shareholder Organizations under the
agreements are governed by two Plans (a Service Plan and a Distribution and
Service Plan), which have been adopted by the Board of Directors. Because the
Distribution and Service Plan contemplates the provision of services related to
the distribution of Retail Shares (in addition to support services), that Plan
has been adopted in accordance with Rule 12b-1 under the 1940 Act and Rule 18f-3
of the 1940 Act. In accordance with the Plans, the Board of Directors reviews,
at least quarterly, a written report of the amounts expended in connection with
the Funds' arrangements with Shareholder Organizations and the purposes for
which the expenditures were made. In addition, the Funds' arrangements with
Shareholder Organizations must be approved annually by a majority of the
Directors, including a majority of the Directors who are not "interested
persons" of the Funds as defined in the 1940 Act and have no direct or indirect
financial interest in such arrangements (the "Disinterested Directors").
The Funds believe that there is a reasonable likelihood that their
arrangements with Shareholder Organizations will benefit each Fund and the
holders of Retail Shares as a way of allowing Shareholder Organizations to
participate with the Funds in the provision of support and distribution services
to customers of the Shareholder Organization who own Retail Shares. Any
material amendment to the arrangements with Shareholder Organizations under the
agreements must be approved by a majority of the Board of Directors (including a
majority of the Disinterested Directors), and any amendment to increase
materially the costs under the Distribution and Service Plan with respect to a
Fund must be approved by the holders of a majority of the outstanding Retail
Shares of the Fund involved. So long as the Plans are in effect, the selection
and nomination of the members of the Board of Directors who are not "interested
persons" (as defined in the 1940 Act) of the Funds will be committed to the
discretion of such Disinterested Directors.
For the fiscal years ended 1994 and 1993, the Company did not pay any
fees to Shareholder Organizations pursuant to Service Plans and Distribution and
Service Plans with respect to the Funds.
The Funds paid fees to Shareholder Organizations, none of which were
affiliated with the Adviser, pursuant to the Service Plan for the fiscal year
ended October 31, 1995 as follows:
Fees Earned by Non-Affiliated
Shareholder Organizations
-------------------------
Short-Term Bond Market Fund $ 983
Special Growth Fund $ 980
Bond IMMDEX/TM Fund $ -0-
Equity Index Fund $1,945
Intermediate Bond Market Fund $ 17
MidCore Growth Fund $ -0-
Balanced Fund $ -0-
Growth and Income Fund $ 335
Tax-Exempt Intermediate Bond Fund $ 6
International Equity Fund $ -0-
The Funds paid fees to Shareholder Organizations, all of which were affiliated
with the Adviser, pursuant to the Service Plan for the fiscal year ended October
31, 1995 as follows:
Fees Earned by Affiliated
Shareholder Organizations
-------------------------
Short-Term Bond Market Fund $ 88,763
Special Growth Fund $148,367
Bond IMMDEX/TM Fund $ 34,141
Equity Index Fund $ 28,307
Intermediate Bond Market Fund $ 19,233
MidCore Growth Fund $ 16,740
Balanced Fund $ 36,588
Growth and Income Fund $ 73,097
Tax-Exempt Intermediate Bond Fund $ 13,724
International Equity Fund $ 2,866
CUSTODIAN, TRANSFER AGENT AND ACCOUNTING SERVICES AGENT
Firstar Trust serves as custodian of all the Funds' assets except for
the International Equity Fund pursuant to a Custody Agreement. Under the
Custody Agreement, Firstar Trust has agreed to (i) maintain a separate account
in the name of each Fund, (ii) make receipts and disbursements of money on
behalf of each Fund, (iii) collect and receive all income and other payments and
distributions on account of each Fund's portfolio investments, (iv) respond to
correspondence from shareholders, security brokers and others relating to its
duties and (v) make periodic reports to the Company concerning each Fund's
operations. Firstar Trust may, at its own expense, open and maintain a custody
account or accounts on behalf of each Fund with other banks or trust companies,
provided that Firstar Trust shall remain liable for the performance of all of
its duties under the Custody Agreement notwithstanding any delegation. For its
services as custodian, Firstar Trust is entitled to receive a fee, payable
quarterly, based on the annual rate of $0.20 per $1,000 of the market value of
each Fund's assets. In addition, Firstar Trust, as custodian, is entitled to
certain charges for securities transactions and reimbursement for expenses.
State Street Bank and Trust Company ("SSBT") serves as custodian of
the International Equity Fund's assets pursuant to a Custody Agreement. Under
the Custody Agreement, SSBT has agreed to, among other things, (i) maintain
custody of all Fund assets and settle Fund purchases and sales, (ii) make
receipts and disbursements of money on behalf of the Fund, (iii) collect and
receive all income and other payments and distributions on account of the Fund's
portfolio investments, (iv) respond to correspondence from shareholders,
security brokers and others relating to its duties and (v) make periodic reports
to the Company concerning the Fund's operations. SSBT may, at its own expense,
open and maintain a custody account or accounts on behalf of the Fund with other
banks or trust companies, provided that SSBT shall remain liable for the
performance of all of its duties under the Custody Agreement notwithstanding any
delegation. For its services as a custodian, SSBT is entitled to receive a fee,
payable monthly, based on the following annual rates of the market value of the
Fund's assets: 0.01% of all domestically held assets and asset charges ranging
from 0.05% to 0.40% of all securities held in custody outside the U.S. depending
on where the securities are held and total Fund assets. In addition, SSBT, as
custodian, is entitled to certain charges for securities transactions and
reimbursement for expenses. Also, pursuant to the Custody Agreement, SSBT has
agreed to maintain the financial accounts and records of the Fund in compliance
with the 1940 Act and to provide other accounting services to the Fund. For its
accounting services, SSBT is entitled to receive fees in addition to its custody
fees, payable monthly, including a monthly base and quote charge and pricing
charges per security per month. In addition, SSBT is entitled to reimbursement
of certain expenses.
Firstar Trust also serves as transfer agent and dividend disbursing
agent for each Fund under a Shareholder Servicing Agent Agreement. As transfer
and dividend disbursing agent, Firstar Trust has agreed to (i) issue and redeem
shares of the Funds, (ii) make dividend and other distributions to shareholders
of the Funds, (iii) respond to correspondence by Fund shareholders and others
relating to its duties, (iv) maintain shareholder accounts, and (v) make
periodic reports to the Funds. For its transfer agency and dividend disbursing
services, Firstar Trust is entitled to receive fees at the minimum rate of
$12,000 per portfolio plus $13 per account. Also, Firstar Trust is entitled to
certain other transaction charges and reimbursement for expenses. In addition,
Firstar Trust is entitled to receive, with respect to the Periodic Investment
Plan, $125.00 per monthly or bi-monthly cycle for the Funds and all other
investment portfolios of the Company.
In addition, all the Funds, with the exception of the International
Equity Fund, have entered into a Fund Accounting Servicing Agreement with
Firstar Trust pursuant to which Firstar Trust has agreed to maintain the
financial accounts and records of the Funds in compliance with the 1940 Act and
to provide other accounting services to the Funds. For its accounting services,
Firstar Trust is entitled to receive fees, payable monthly, at the following
annual rates of the market value of each Fund's assets: Balanced Fund, Growth
and Income Fund, Equity Index Fund, MidCore Growth Fund, and Special Growth Fund
- -- $27,500 on the first $40 million, 1.25/100th of 1% on the next $200 million,
and 6.25/1000ths of 1% on the balance, plus out-of-pocket expenses, including
pricing expenses; and Short-Term Bond Market Fund, Intermediate Bond Market
Fund, Tax-Exempt Intermediate Bond Fund and Bond IMMDEX/TM Fund -- $31,250 on
the first $40 million, 2.5/100th of 1% on the next $100 million, and
1.25/100th of 1% on the next $100 million, and 6.25/1000th of 1% on the
balance, plus out-of-pocket expenses, including pricing expenses.
EXPENSES
Operating expenses of the Funds include taxes, interest, fees and
expenses of Directors and officers, Securities and Exchange Commission fees,
state securities and qualification fees, advisory fees, administrative fees,
Shareholder Organization fees (Retail Shares only), charges of the custodian and
transfer agent, dividend disbursing agent and accounting services agent, certain
insurance premiums , auditing and legal expenses, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to
shareholders, costs of shareholder reports and meetings and any extraordinary
expenses. The Funds also pay any brokerage fees, commissions and other
transactions charges (if any) incurred in connection with the purchase or sale
of portfolio securities.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, 100 East Wisconsin
Avenue, Suite 1500, Milwaukee, Wisconsin, 53202, serve as auditors for the
Company. The financial statements and related report of Price Waterhouse LLP,
contained in the respective Fund's Annual Report for the fiscal year ended
October 31, 1995 are incorporated herein by reference. No other part of a
Fund's annual report is incorporated herein by reference.
COUNSEL
Drinker Biddle & Reath (of which Mr. McConnel, Secretary of the
Company, is a partner), Philadelphia National Bank Building, 1345 Chestnut
Street, Philadelphia, Pennsylvania 19107, serve as counsel to the Company and
will pass upon the legality of the shares offered by each Fund's Prospectus.
ADDITIONAL INFORMATION ON PERFORMANCE
From time to time, the total return of the Retail Shares and
Institutional Shares of each Fund and the yields of such shares of the Short-
Term Bond Market Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate
Bond Fund and Bond IMMDEX/TM Fund may be quoted in advertisements, shareholder
reports or other communications to shareholders. Performance information is
generally available by calling the Portico Investor Services at 1-800-982-8909.
Yield Calculations.
- ------------------
The yield of a series of shares is calculated by dividing the net
investment income per share for that series (as described below) earned during a
30-day (or one-month) period by the net asset value per share for that series
(including the maximum front end sales charge of 2.00% for the Retail Shares of
the bond funds) on the last day of the period and annualizing the result on a
semiannual basis by adding one to the quotient, raising the sum to the power of
six, subtracting one from the result and then doubling the difference. Net
investment income per share earned during the period attributable to that series
is based on the average daily number of shares of the series outstanding during
the period entitled to receive dividends and includes dividends and interest
earned during the period attributable to that series minus expenses accrued for
the period, attributable to that series net of reimbursements.
This calculation can be expressed as follows:
Yield = 2[((a-b)/(cxd)+1)^6-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = Maximum offering price per share on the last day of the
period.
For the purpose of determining net investment income earned during the
period (variable "a" in the formula), dividend income on equity securities held
by a Fund is recognized by accruing 1/360 of the stated dividend rate of the
security each day that the security is in the portfolio. A Fund calculates
interest earned on any debt obligations held in its portfolio by computing the
yield to maturity of each obligation held by it based on the market value of the
obligation (including actual accrued interest) at the close of business on the
last business day of each month, or, with respect to obligations purchased
during the month, the purchase price (plus actual accrued interest) and dividing
the result by 360 and multiplying the quotient by the market value of the obli-
gation (including actual accrued interest) in order to determine the interest
income on the obligation for each day of the subsequent month that the
obligation is in the portfolio. For purposes of this calculation, it is assumed
that each month contains 30 days. The maturity of an obligation with a call
provision is the next call date on which the obligation reasonably may be
expected to be called or, if none, the maturity date. With respect to debt
obligations purchased at a discount or premium, the formula generally calls for
amortization of the discount or premium. The amortization schedule will be
adjusted monthly to reflect changes in the market values of such debt
obligations.
Interest earned on tax-exempt obligations of the Tax-Exempt
Intermediate Bond Fund that are issued without original issue discount and have
a current market discount is calculated by using the coupon rate of interest
instead of the yield to maturity. In the case of tax-exempt obligations that
are issued with original issue discount but which have discounts based on
current market value that exceed the then-remaining portion of the original
issue discount (market discount), the yield to maturity is the imputed rate
based on the original issue discount calculation. On the other hand, in the
case of tax-exempt obligations that are issued with original issue discount but
which have the discounts based on current market value that are less than the
then-remaining portion of the original issue discount (market premium), the
yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed obligations which
are expected to be subject to monthly payments of principal and interest ("pay
downs"), (a) gain or loss attributable to actual monthly pay downs are accounted
for as an increase or decrease to interest income during the period; and (b) a
Fund may elect either (i) to amortize the discount and premium on the remaining
security, based on the cost of the security, to the weighted average maturity
date, if such information is available, or to the remaining term of the
security, if any, if the weighted average maturity date is not available, or
(ii) not to amortize discount or premium on the remaining security.
Undeclared earned income may be subtracted from the net asset value
per share (variable "d" in the formula). Undeclared earned income is the net
investment income which, at the end of the 30-day base period, has not been
declared as a dividend, but is reasonably expected to be and is declared as a
dividend shortly thereafter.
In addition, the Tax-Exempt Intermediate Bond Fund may advertise a
"tax-equivalent yield" which is computed by: (a) dividing the portion of the
Fund's yield for a particular series (as calculated above) that is exempt from
federal income tax by one minus a stated federal income tax rate; and (b) adding
the figure resulting from (a) above to that portion, if any, of the Fund's yield
that is not exempt from federal income tax.
For the 30-day period ended October 31, 1995, the annualized yields
for Institutional Shares of the Short-Term Bond Market Fund, Intermediate Bond
Market Fund and Bond IMMDEX/TM Fund were 5.96%, 5.90%, and 6.19%, respectively.
Without fees waived by the Adviser and the Co-Administrators during such period,
the annualized yields would have been 5.54%, 5.52%, and 6.12%, respectively.
For the same period, the annualized taxable yield for the Tax-Exempt
Intermediate Bond Fund was 4.11%, and the tax-equivalent annualized yield was
5.96% (3.49% and 5.06%, respectively, without fees waived by the Adviser and Co-
Administrators during such period).
For the 30-day period ended October 31, 1995, the annualized yields,
assuming the maximum sales charge, for Retail Shares of the Short-Term Bond
Market Fund, Intermediate Bond Market Fund and Bond IMMDEX/TM Fund were 5.59%,
5.53%, and 5.82%, respectively. Without fees waived by the Adviser and the Co-
Administrators during such period, the annualized yields would have been 5.16%,
5.15%, and 5.74%, respectively. For the same period, the annualized taxable
yield for the Tax-Exempt Intermediate Bond Fund would have been 3.79% and the
tax-equivalent annualized yield would have been 5.49% (3.18% and 4.61%,
respectively, without fees waived by the Adviser and Co-Administrators during
such period).
For the 30-day period ended October 31, 1995 , the annualized yields
for Retail Shares of the Short-Term Bond Market Fund, Intermediate Bond Market
Fund and Bond IMMDEXa Fund purchased without a front end sales charge were
5.71%, 5.65%, and 5.94%, respectively. Without fees waived by the Adviser and
the Co-Administrators during such period, the annualized yields would have been
5.28%, 5.27% and 5.86%, respectively. For the same period, the annualized
taxable yield for the Tax-Exempt Intermediate Bond Fund purchased without a
front end sales charge would have been 3.86%, and the tax-equivalent annualized
yield would have been 5.59% (3.25%, and 4.71%, respectively, without fees waived
by the Adviser and Co-Administrators during such period).
Total Return Calculations.
- -------------------------
Each Fund computes "average annual total return" separately for its
Retail and Institutional Shares by determining the average annual compounded
rates of return during specified periods that equate the initial amount invested
in a particular series to the ending redeemable value of such investment in the
series. This is done by dividing the ending redeemable value of a hypothetical
$1,000 initial payment by $1,000 and raising the quotient to a power equal to
one divided by the number of years (or fractional portion thereof) covered by
the computation and subtracting one from the result. This calculation can be
expressed as follows:
T = [(ERV/P)^1/n-1]
Where: T = average annual total return.
ERV = ending redeemable value at the end of the period
covered by the computation of a hypothetical $1,000
payment made at the beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in terms
of years.
The Funds compute their aggregate total returns separately for the
Retail and Institutional Series, by determining the aggregate rates of return
during specified periods that likewise equate the initial amount invested in a
particular series to the ending redeemable value of such investment in the
series. The formula for calculating aggregate total return is as follows:
T = [(ERV/P)-1]
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete redemption
of the hypothetical investment and the deduction of all nonrecurring charges at
the end of the period covered by the computations. In addition, the Funds'
average annual total return and aggregate total return reflect the deduction of
the maximum front-end sales charge in connection with the purchase of Retail
Shares. The Funds may also advertise total return data without reflecting sales
charges in accordance with the rules of the Securities and Exchange Commission.
Quotations that do not reflect the sales charge will, of course, be higher than
quotations that do reflect the sales charge.
The average annual total returns for the period from commencement of
operations to October 31, 1995 and for the one year and five year periods ended
October 31, 1995 were respectively 7.54%, 8.95%, and 7.88% with respect to
Institutional Shares of the Short-Term Bond Market Fund; 9.44%, 16.26%, and
10.19% with respect to Institutional Shares of the Bond IMMDEX/TM Fund; 9.85%,
25.00%, and 13.21% with respect to Institutional Shares of the Growth and Income
Fund; 11.72%, 26.02%, and 16.61% with respect to Institutional Shares of the
Equity Index Fund; and 15.70%, 25.79%, and 21.22% with respect to Institutional
Shares of the Special Growth Fund. The average annual total returns for the
period from commencement of operations to October 31, 1995 and for the one year
period ended October 31, 1995 were respectively 9.76% and 19.79% with respect to
Institutional Shares of the Balanced Fund; 9.47% and 19.55%, with respect to
Institutional Shares of the MidCore Growth Fund; 6.61% and 12.25% with respect
to Institutional Shares of the Intermediate Bond Market Fund; 5.06% and 9.38%
with respect to Institutional Shares of the Tax-Exempt Intermediate Bond Fund;
and (2.53)% and (3.75)% with respect to Institutional Shares of the
International Equity Fund.
Prior to January 9, 1995, each of the Funds offered one series of
shares without a sales charge to both retail and institutional investors.
Assuming that the Funds' maximum sales charge for Retail Shares of the Funds had
been in effect, the average annual total returns for the period from
commencement of operations to October 31, 1995 and for the one year and five
year periods ended October 31, 1995 would have been respectively: 7.15%, 6.62%,
and 7.42% with respect to Retail Shares of the Short-Term Bond Market Fund;
9.02%, 13.75%, and 9.71% with respect to Retail Shares of the Bond IMMDEX/TM
Fund; 9.04%, 19.77%, and 12.25% with respect to Retail Shares of the Growth and
Income Fund; 10.90%, 20.76%, and 15.63% with respect to Retail Shares of the
Equity Index Fund; and 14.86%, 20.55%, and 20.20% with respect to Retail Shares
of the Special Growth Fund. The average annual total returns for the period
from commencement of operations to October 31, 1995 and for the one year period
ended October 31, 1995 would have been respectively: 8.46% and 14.77% with
respect to Retail Shares of the Balanced Fund; 7.83% and 14.56% with respect to
Retail Shares of the MidCore Growth Fund; 5.79% and 9.77% with respect to Retail
Shares of the Intermediate Bond Market Fund; 4.19% and 6.88% with respect to the
Tax-Exempt Intermediate Bond Fund; and (5.24)% and (7.78)% with respect to
Retail Shares of the International Equity Fund.
The Funds may also from time to time include discussions or
illustrations of the effects of compounding in advertisements. "Compounding"
refers to the fact that, if dividends or other distributions on a Fund
investment are reinvested by being paid in additional Fund shares, any future
income or capital appreciation of a Fund would increase the value, not only of
the original Fund investment, but also of the additional Fund shares received
through reinvestment. As a result, the value of the Fund investment would
increase more quickly than if dividends or other distribution had been paid in
cash. The Funds may also include discussions or illustrations of the potential
investment goals of a prospective investor, investment management techniques,
policies or investment suitability of a Fund, economic conditions, the effects
of inflation and historical performance of various asset classes, including but
not limited to, stocks, bonds and Treasury bills. From time to time
advertisements or communications to shareholders may summarize the substance of
information contained in shareholder reports (including the investment
composition of a Fund), as well as the views of the Adviser or Sub-Adviser as to
market, economic, trade and interest trends, legislative, regulatory and
monetary developments, investment strategies and related matters believed to be
of relevance to a Fund. The Funds may also include in advertisements, charts,
graphs or drawings which illustrate the potential risks and rewards of
investment in various investment vehicles, including but not limited to stocks,
bonds, treasury bills and shares of a Fund. In addition, advertisement or
shareholder communications may include a discussion of certain attributes or
benefits to be derived by an investment in a Fund. Such advertisements or
communications may include symbols, headlines or other materials which highlight
or summarize the information discussed in more detail therein.
MISCELLANEOUS
As used in this Statement of Additional Information and in the Funds'
Prospectus, a majority of the outstanding shares of a Fund or portfolio means
the lesser of (1) 67% of the shares of the particular Fund or portfolio
represented at a meeting at which the holders of more than 50% of the
outstanding shares of such Fund or portfolio are present in person or by proxy,
or (2) more than 50% of the outstanding shares of such Fund or portfolio.
As of January 31, 1996, the Adviser and its affiliates held of record
substantially all of the outstanding shares of each of the Company's investment
portfolios as agent, custodian, trustee or investment adviser on behalf of their
customers. At such date, Firstar Trust Company, P.O. Box 2054, Milwaukee,
Wisconsin 53201, and its affiliated banks held as beneficial owner five percent
or more of the outstanding shares of the following investment portfolios of the
Company because they possessed sole voting or investment power with respect to
such shares: Money Market Fund (2%); Institutional Money Market Fund (82%); Tax-
Exempt Money Market Fund (56%); U.S. Treasury Money Market Fund (43%); U.S.
Government Money Market Fund (66%); Growth and Income Fund (69%); Short-Term
Bond Market Fund (62%); Special Growth Fund (70%); Bond IMMDEX/TM Fund (84%);
Equity Index Fund (80%); Balanced Fund (81%); Intermediate Bond Market Fund
(79%); MidCore Growth Fund (86%); Tax-Exempt Intermediate Bond Fund (66%);
International Equity Fund (94%); and MicroCap Fund (85%). At such date, no
other person was known by the Company to hold of record or beneficially 5% or
more of the outstanding shares of any investment portfolio of the Company.
APPENDIX A
----------
Commercial Paper Ratings
- ------------------------
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market. The following summarizes the rating categories used by Standard and
Poor's for commercial paper.
"A-1" - Issue's degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics are denoted
"A-1+."
"A-2" - Issue's capacity for timely payment is satisfactory. However, the
relative degree of safety is not as high as for issues designated "A-1."
"A-3" - Issue has an adequate capacity for timely payment. It is however,
somewhat more vulnerable to the adverse effects of changes and circumstances
than an obligation carrying a higher designation.
"B"- Issue has only a speculative capacity for timely payment.
"C" - Issue has a doubtful capacity for payment.
"D" - Issue is in payment default.
Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of 9 months. The following summarizes the rating categories used by
Moody's for commercial paper:
"Prime-1" - Issuer or related supporting institutions are considered to
have a superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structures with
moderate reliance on debt and ample asset protection; broad margins in earning
coverage of fixed financial charges and high internal cash generation; and well-
established access to a range of financial markets and assured sources of
alternate liquidity.
"Prime-2" - Issuer or related supporting institutions are considered to
have a strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
"Prime-3" - Issuer or related supporting institutions have an acceptable
capacity for repayment of short-term promissory obligations. The effects of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuer does not fall within any of the Prime rating
categories.
The three rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D- 1," "D- 2" and "D- 3." Duff &
Phelps employs three designations, "D- 1+," " D- 1" and "D- 1-," within the
highest rating category. The following summarizes the rating categories used by
Duff & Phelps for commercial paper:
"D-1+" - Debt possesses highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment. Liquidity
factors are excellent and supported by good fundamental protection factors.
Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty for timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
"D-3" - Debt possesses satisfactory liquidity, and other protection factors
qualify issue as investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.
"D-4" - Debt possesses speculative investment characteristics. Liquidity
is not sufficient to insure against disruption in debt service. Operating
factors and market access may be subject to a high degree of variation.
"D-5" - Issuer failed to meet scheduled principal and/or interest payments.
Fitch short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years. The following
summarizes the rating categories used by Fitch for short-term obligations:
"F-1+" - Securities possess exceptionally strong credit quality. Issues
assigned this rating are regarded as having the strongest degree of assurance
for timely payment.
"F-1" - Securities possess very strong credit quality. Issues assigned
this rating reflect an assurance of timely payment only slightly less in degree
than issues rated "F-1+."
"F-2" - Securities possess good credit quality. Issues assigned this
rating have a satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as the "F-1+" and "F-1" categories.
"F-3" - Securities possess fair credit quality. Issues assigned this
rating have characteristics suggesting that the degree of assurance for timely
payment is adequate; however, near-term adverse changes could cause these
securities to be rated below investment grade.
"F-S" - Securities possess weak credit quality. Issues assigned this
rating have characteristics suggesting a minimal degree of assurance for timely
payment and are vulnerable to near-term adverse changes in financial and
economic conditions.
"D" - Securities are in actual or imminent payment default.
Fitch may also use the symbol "LOC" with its short-term ratings to indicate
that the rating is based upon a letter of credit issued by a commercial bank.
Thomson BankWatch short-term ratings assess the likelihood of an untimely
payment of principal or interest of unsubordinated instruments having a maturity
of one year or less which is issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the ratings used by Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's highest rating
category and indicates a very high likelihood that principal and interest will
be paid on a timely basis.
"TBW-2" - This designation indicates that while the degree of safety
regarding timely repayment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated "TBW-1."
"TBW-3" - This designation represents the lowest investment grade category
and indicates that while the debt is more susceptible to adverse developments
(both internal and external) than obligations with higher ratings, the capacity
to service principal and interest in a timely fashion is considered adequate.
"TBW-4" - This designation indicates that the debt is regarded as non-
investment grade and therefore speculative.
IBCA assesses the investment quality of unsecured debt with an original
maturity of less than one year which is issued by bank holding companies and
their principal bank subsidiaries. The following summarizes the rating
categories used by IBCA for short term debt ratings:
"A1+" - Obligations supported by the highest capacity for timely repayment.
"A1" - Obligations are supported by a strong capacity for timely repayment.
"A2" - Obligations are supported by a satisfactory capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
"A3" - Obligations are supported by a satisfactory capacity for timely
repayment. Such capacity is more susceptible to adverse changes in business,
economic or financial conditions than for obligations in higher categories.
"B" - Obligation for which the capacity for timely repayment is susceptible
to adverse changes in business, economic or financial conditions.
"C" - Obligations for which there is an inadequate capacity to insure
timely repayment.
"D" - Obligations which have a high risk of default or which are currently
in default.
Corporate and Municipal Long-Term Debt Ratings
- ----------------------------------------------
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - This designation represents the highest rating assigned by Standard
& Poor's to a debt obligation and indicates an extremely strong capacity to pay
interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to pay interest
and repay principal and differs from AAA issues only in small degree.
"A" - Debt is considered to have a strong capacity to pay interest and
repay principal although such issues are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay interest and
repay principal. Whereas such issues normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
"BB," "B," "CCC," "CC," and "C" - Debt is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
"CI" - This rating is reserved for income bonds on which no interest is
being paid.
"D" - Debt is in payment default. This rating is used when interest
payments or principal payments are not made on the date due, even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. Rating is also used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
"r" - This rating is attached to highlight derivative, hybrid, and certain
other obligations that S & P believes may experience high volatility or high
variability in expected returns due to non-credit risks. Examples of such
obligations are: securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and interest
only and principal only mortgage securities.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards. Together
with the "Aaa" group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have speculative
characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these ratings
provide questionable protection of interest and principal ("Ba" indicates some
speculative elements; "B" indicates a general lack of characteristics of
desirable investment; "Caa" represents a poor standing; "Ca" represents
obligations which are speculative in a high degree; and "C" represents the
lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Con. () - Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes the probable credit stature upon
completion of construction or elimination of basis of condition.
Moody's applies numerical modifiers 1, 2 and 3 in each generic
classification from "Aa" to "B" in its bond rating system. The modifier 1
indicates that the issuer ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issuer ranks at the lower end of its generic rating category.
The following summarizes the long-term debt ratings used by Duff & Phelps
for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
"AA" - Debt is considered of high quality. Protection factors are strong.
Risk is modest but may vary slightly from time to time because of economic
conditions.
"A" - Debt possesses protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
"BBB" - Debt possesses below average protection factors but such protection
factors are still considered sufficient for prudent investment. Considerable
variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these ratings
is considered to be below investment grade. Although below investment grade,
debt rated "BB" is deemed likely to meet obligations when due. Debt rated "B"
possesses the risk that obligations will not be met when due. Debt rated "CCC"
is well below investment grade and has considerable uncertainty as to timely
payment of principal, interest or preferred dividends. Debt rated "DD" is a
defaulted debt obligation, and the rating "DP" represents preferred stock with
dividend arrearages.
To provide more detailed indications of credit quality, the "AA," "A,"
"BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.
The following summarizes the highest four ratings used by Fitch for
corporate and municipal bonds:
"AAA" - bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA." Because bonds rated
in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debts of these issuers is generally rated "F-
1+."
"A" - Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
"BB," "B," "CCC," "CC," "C," "DDD," "DD," and "D" - bonds that possess one
of these ratings are considered by Fitch to be speculative investments. The
ratings "BB" to "C" represent Fitch's assessment of the likelihood of timely
payment of principal and interest in accordance with the terms of obligation for
bond issues not in default. For defaulted bonds, the rating "DDD" to "D" is an
assessment of the ultimate recovery value through reorganization or liquidation.
To provide more detailed indications of credit quality, the Fitch ratings
from and including "AA" to "C" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major rating categories.
Thomson BankWatch assesses the likelihood of an untimely repayment of
principal or interest over the term to maturity of long-term debt and preferred
stock which are issued by United States commercial banks, thrifts and non-bank
banks; non-United States banks; and broker-dealers. The following summarizes
the rating categories used by Thomson BankWatch for long-term debt ratings:
"AAA" - This designation represents the highest category assigned by
Thomson BankWatch to long-term debt and indicates that the ability to repay
principal and interest on a timely basis is very high.
"AA" - This designation indicates a very strong ability to repay principal
and interest on a timely basis with limited incremental risk versus issues rated
in the highest category.
"A" - This designation indicates that the ability to repay principal and
interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
"BBB" - This designation represents Thomson BankWatch's lowest investment
grade category and indicates an acceptable capacity to repay principal and
interest. Issues rated "BBB" are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
"BB," "B," "CCC," and "CC" - These designations are assigned by Thomson
BankWatch to non-investment grade long-term debt. Such issues are regarded as
having speculative characteristics regarding the likelihood of timely payment of
principal and interest. "BB" indicates the lowest degree of speculation and
"CC" the highest degree of speculation.
"D" - this designation indicates that the long-term debt is in default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include a
plus or minus sign designation which indicates where within the respective
category the issue is placed.
IBCA assesses the investment quality of unsecured debt with an original
maturity of more than one year which is issued by bank holding companies and
their principal bank subsidiaries. The following summarizes the rating
categories used by IBCA for long-term ratings:
"AAA" - Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk substantially.
"AA" - Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.
"A" - Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong, although
adverse changes in business, economic or financial conditions may lead to
increased investment risk.
"BBB" - Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
adequate, although adverse changes in business, economic or financial conditions
are more likely to lead to increased investment risk than for obligations in
other categories.
"BB," "B," "CCC," "CC," and "C" - Obligations are assigned one of these
ratings where it is considered that speculative characteristics are present.
"BB" represents the lowest degree of speculation and indicates a possibility of
investment risk developing. "C" represents the highest degree of speculation
and indicates that the obligations are currently in default.
IBCA may append a rating of plus (+) or minus (-) to a rating to denote
relative status within major rating categories.
Municipal Note Ratings
- ----------------------
A Standard and Poor's rating reflects the liquidity concerns and market
access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's Rating Group for municipal
notes:
"SP-1" - The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory capacity
to pay principal and interest.
"SP-3" - The issuers of these municipal notes exhibit speculative capacity
to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:
"MIG-1" / "VMIG-1" - Loans bearing this designation are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
"MIG-2" / "VMIG-2" - Loans bearing this designation are of high quality,
with margins of protection ample although not so large as in the preceding
group.
"MIG-3" / "VMIG-3" - Loans bearing this designation are of favorable
quality, with all security elements accounted for but lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.
"MIG-4" / "VMIG-4" - Loans bearing this designation are of adequate
quality, carrying specific risk but having protection commonly regarded as
required of an investment security and not distinctly or predominantly
speculative.
"SG" - Loans bearing this designation are of speculative quality and lack
margins of protection.
Duff & Phelps and Fitch use the short-term ratings described under
commercial Paper Ratings for Municipal notes.
APPENDIX B
ADDITIONAL INFORMATION CONCERNING FUTURES AND RELATED OPTIONS
As stated in the Prospectus, certain of the Funds may enter into futures
contracts and options for hedging purposes. Such transactions are described in
this Appendix. In addition, the Equity Index Fund will purchase and sell
futures and related options (based only on the S&P 500 Index in the case of the
Equity Index Fund) to maintain cash reserves while-simulating full investment in
the stocks underlying the S&P 500 Index, to keep substantially all of its assets
exposed to the market (as represented by the S&P 500 Index), and to reduce
transaction costs. The International Equity Fund may also purchase and sell
index futures contracts and options to maintain cash reserves, to keep all of
its assets substantially exposed to the markets included in the GDP EAFE Index,
to facilitate trading and to reduce transaction costs. During the current
fiscal year, the Short-Term Bond Market, Intermediate Bond Market, Bond
IMMDEX/TM and Growth and Income Funds intend to limit their transactions in
futures contracts and options so that not more than 5% of their net assets, if
any, are at risk and the Equity Index Fund and International Equity Fund will
limit its transactions in futures such that obligations under the transactions
and contracts represent not more than 10% of its assets. Furthermore, in no
event would any Fund purchase or sell futures contracts, or related options
thereon if, immediately thereafter, the aggregate initial margin that is
required to be posted by the Fund under the rules of the exchange on which the
futures contract (or futures option) is traded, plus any premiums paid by the
Fund on its open futures options positions, exceeds 5% of the fund's total
assets, after taking into account any unrealized profits and unrealized losses
on the Fund's open contracts and excluding the amount that a futures option is
"in-the-money" at the time of purchase (an option to buy a futures contract is
"in-the-money" if the value of the contract that is subject to the option
exceeds the exercise price; and option to sell a futures contract is "in-the-
money" if the exercise price exceeds the value of the contract that is subject
of the option.) The International Equity Fund will only enter into futures
contracts and futures options which are standardized and traded on a U.S. or
foreign exchange, board of trade or similar entity, or in the case of futures
options, for which an established over-the-counter market exists.
I. Interest Rate Futures Contracts
Use of Interest Rate Futures Contracts. Bond prices are established in
both the cash market and the futures market. In the cash market, bonds are
purchased and sold with payment for the full purchase price of the bond being
made in cash, generally within five business days after the trade. In the
futures market, only a contract is made to purchase or sell a bond in the future
for a set price on a certain date. Historically, the prices for bonds
established in the futures markets have tended to move generally in the
aggregate in concert with the cash market prices and have maintained fairly
predictable relationships. Accordingly, the Short-Term Bond Market Fund,
Intermediate Bond Market Fund and Bond IMMDEX/TM Fund may use interest rate
futures as a defense, or hedge, against anticipated interest rate changes and
not for speculation. As described below, this would include the use of futures
contract sales to protect against expected increases in interest rates and
futures contract purchases to offset the impact of interest rate declines.
The Short-Term Bond Market Fund, Intermediate Bond Market Fund and Bond
IMMDEX/TM Fund presently could accomplish a similar result to that which they
hope to achieve through the use of futures contracts by selling bonds with long
maturities and investing in bonds with short maturities when interest rates are
expected to increase, or conversely, selling short-term bonds and investing in
long-term bonds when interest rates are expected to decline. However, because
of the liquidity that is often available in the futures market the protection is
more likely to be achieved, perhaps at a lower cost and without changing the
rate of interest being earned by the Fund, through using futures contracts.
Description of Interest Rate Futures Contracts. An interest rate futures
contract sale would create an obligation by the Short-Term Bond Market Fund,
Intermediate Bond Market Fund and Bond IMMDEX/TM Fund, as seller, to deliver the
specific type of financial instrument called for in the contract at a specific
future time for a specified price. A futures contract purchase would create an
obligation by the Fund, as purchaser, to take delivery of the specific type of
financial instrument at a specific future time at a specific price. The
specific securities delivered or taken, respectively, at settlement date, would
not be determined until at or near that date. The determination would be in
accordance with the rules of the exchange on which the futures contract sale or
purchase was made.
Although interest rate futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed out
before the settlement date without the making or taking of delivery of
securities. Closing out a futures contract sale is effected by the Fund's
entering into a futures contract purchase for the same aggregate amount of the
specific type of financial instrument and the same delivery date. If the price
in the sale exceeds the price in the offsetting purchase, the Fund is paid the
difference and thus realizes a gain. If the offsetting purchase price exceeds
the sale price, the Fund pays the difference and realizes a loss. Similarly,
the closing out of a futures contract purchase is effected by the Fund's
entering into a futures contract sale. If the offsetting sale price exceeds the
purchase price, the Fund realizes a gain, and if the purchase price exceeds the
offsetting sale price, the Fund realizes a loss.
Interest rate futures contracts are traded in an auction environment on the
floors of several exchanges - principally, the Chicago Board of Trade, the
Chicago Mercantile Exchange and the New York Futures Exchange. The Fund would
deal only in standardized contracts on recognized exchanges. Each exchange
guarantees performance under contract provisions through a clearing corporation,
a nonprofit organization managed by the exchange membership.
A public market now exists in futures contracts covering various financial
instruments including long-term U.S. Treasury Bonds and Notes; Government
National Mortgage Association (GNMA) modified pass-through mortgage-backed
securities; three-month U.S. Treasury Bills; and ninety-day commercial paper.
The Short-Term Bond Market Fund, Intermediate Bond Market Fund and Bond
IMMDEX/TM Fund may trade in any futures contract for which there exists a public
market, including, without limitation, the foregoing instruments.
Examples of Futures Contract Sale. The Short-Term Bond Market Fund,
Intermediate Bond Market Fund and Bond IMMDEX/TM Fund would engage in an
interest rate futures contract sale to maintain the income advantage from
continued holding of a long-term bond while endeavoring to avoid part or all of
the loss in market value that would otherwise accompany a decline in long-term
securities prices. Assume that the market value of a certain security in the
Fund tends to move in concert with the futures market prices of long-term U.S.
Treasury bonds ("Treasury bonds"). The Adviser wishes to fix the current market
value of this portfolio security until some point in the future. Assume the
portfolio security has a market value of 100, and the Adviser believes that,
because of an anticipated rise in interest rates, the value will decline to 95.
The Fund might enter into futures contract sales of Treasury bonds for an
equivalent of 98. If the market value of the portfolio security does indeed
decline from 100 to 95, the equivalent futures market price for the Treasury
bonds might also decline from 98 to 93.
In that case, the five-point loss in the market value of the portfolio
security would be offset by the five-point gain realized by closing out the
futures contract sale. Of course, the futures market price of Treasury bonds
might well decline to more than 93 or to less than 93 because of the imperfect
correlation between cash and futures prices mentioned below.
The Adviser could be wrong in its forecast of interest rates and the
equivalent futures market price could rise above 98. In this case, the market
value of the portfolio securities, including the portfolio security being
protected, would increase. The benefit of this increase would be reduced by the
loss realized on closing out the futures contract sale.
If interest rate levels did not change, the Fund in the above example might
incur a loss of 2 points (which might be reduced by an offsetting transaction
prior to the settlement date). In each transaction, transaction expenses would
also be incurred.
Examples of Futures Contract Purchase. The Short-Term Bond Market Fund,
Intermediate Bond Market Fund and Bond IMMDEX/TM Fund would engage in an
interest rate futures contract purchase when it is not fully invested in long-
term bonds but wishes to defer for a time the purchase of long-term bonds in
light of the availability of advantageous interim investments, e.g., shorter-
term securities whose yields are greater than those available on long-term
bonds. The Fund's basic motivation would be to maintain for a time the income
advantage from investment in the short-term securities; the Fund would be
endeavoring at the same time to eliminate the effect of all or part of an
expected increase in market price of the long-term bonds that the fund may
purchase.
For example, assume that the market price of a long-term bond that the Fund
may purchase, currently yielding 10%, tends to move in concert with futures
market prices of Treasury bonds. The Adviser wishes to fix the current market
price (and thus 10% yield) of the long-term bond until the time (four months
away in this example) when it may purchase the bond. Assume the long-term bond
has a market price of 100, and the Adviser believes that, because of an
anticipated fall in interest rates, the price will have risen to 105 (and the
yield will have dropped to about 9 1/2%) in four months. The Fund might enter
into futures contracts purchases of Treasury bonds for an equivalent price of
98. At the same time, the Fund would assign a pool of investments in short-term
securities that are either maturing in four months or earmarked for sale in four
months, for purchase of the long-term bond at an assumed market price of 100.
Assume these short-term securities are yielding 15%. If the market price of the
long-term bond does indeed rise from 100 to 105, the equivalent futures market
price for Treasury bonds might also rise from 98 to 103. In that case, the 5-
point increase in the price that the Fund pays for the long-term bond would be
offset by the 5-point gain realized by closing out the futures contract
purchase.
The Adviser could be wrong in its forecast of interest rates; long-term
interest rates might rise to above 10%; and the equivalent futures market price
could fall below 98. If short-term rates at the same time fall to 10% or below,
it is possible that the fund would continue with its purchase program for long-
term bonds. The market price of available long-term bonds would have decreased.
The benefit of this price decrease, and thus yield increase, will be reduced by
the loss realized on closing out the futures contract purchase.
If, however, short-term rates remained above available long-term rates, it
is possible that the Fund would discontinue its purchase program for long-term
bonds. The yield on short-term securities in the portfolio, including those
originally in the pool assigned to the particular long-term bond, would remain
higher than yields on long-term bonds. The benefit of this continued
incremental income will be reduced by the loss realized on closing out the
futures contract purchase.
In each transaction, expenses would also be incurred.
II. Index Futures Contracts.
A stock or bond index assigns relative values to the stocks or bonds
included in the index and the index fluctuates with changes in the market values
of the stocks or bonds included. Some stock index futures contracts are based
on broad market indexes, such as the Standard & Poor's 500 or the New York Stock
Exchange Composite Index. In contrast, certain exchanges offer futures
contracts on narrower market indexes, such as the Standard & Poor's 100 or
indexes based on an industry or market segment, such as oil and gas stocks.
Futures contracts are traded on organized exchanges regulated by the Commodity
Futures Trading Commission. Transactions on such exchanges are cleared through
a clearing corporation, which guarantees the performance of the parties to each
contract. With regard to the International Equity Fund, the Adviser and Sub-
Adviser anticipate engaging in transactions, from time to time, in foreign stock
index futures such as the ALL-ORDS (Australia), CAC-40 (France), TOPIX (Japan)
and the FTSE-100 (United Kingdom).
The Growth and Income Fund, the Equity Index and International Equity Funds
will sell index futures contracts in order to offset a decrease in market value
of its portfolio securities that might otherwise result from a market decline.
The Funds may do so either to hedge the value of its portfolio as a whole, or to
protect against declines, occurring prior to sales of securities, in the value
of the securities to be sold. Conversely, these Funds may purchase index
futures contracts in anticipation of purchases of securities, with respect to
the Equity Index Fund and International Equity Fund, to maintain cash reserves
while simulating full investment in stocks underlying the S&P 500 Index (in the
case of the Equity Index Fund) and the portion of the GDP EAFE Index within
which the International Equity Fund invests (in the case of the International
Equity Fund) and to keep substantially all of its assets exposed to market. In
a substantial majority of these transactions, the Funds will purchase such
securities upon termination of the long futures position, but a long futures
position may be terminated without a corresponding purchase of securities.
In addition, the funds may utilize index futures contracts in anticipation
of changes in the composition of its portfolio holdings. For example, in the
event that a Fund expects to narrow the range of industry groups represented in
its holdings it may, prior to making purchases of the actual securities,
establish a long futures position based on a more restricted index, such as an
index comprised of securities of a particular industry group. The Fund may also
sell futures contracts in connection with this strategy, in order to protect
against the possibility that the value of the securities to be sold as part of
the restructuring of the portfolio will decline prior to the time of sale.
The following are examples of transactions in stock index futures (net of
commissions and premiums, if any).
ANTICIPATORY PURCHASE HEDGE: Buy the Future Hedge
Objective: Protect Against Increasing Price
Portfolio Futures
--------- -------
-Day Hedge is Placed-
Anticipate Buying $62,500 Buying 1 Index Futures at 125
Equity Portfolio Value of Futures=$62,500/Contract
-Day Hedge is Lifted-
Buy Equity Portfolio with Sell 1 Index Futures at 130
Actual Cost = $65,000 Value of Futures = $65,000/Contract
Increase in Purchase Price = $2,500 Gain on Futures = $2,500
HEDGING A STOCK PORTFOLIO: Sell the Future
Hedge Objective: Protect Against Declining
Value of the Portfolio
Factors:
Value of Stock Portfolio = $1,000,000
Value of Futures Contract = 125 x $500 = $62,500
Portfolio Beta Relative to the Index = 1.0
Portfolio Futures
--------- -------
-Day Hedge is Placed-
Anticipate Selling $1,000,000 Sell 16 Index Futures at 125
Equity Portfolio Value of Futures = $1,000,000
-Day Hedge is Lifted-
Equity Portfolio - Own Buy 16 Index Futures at 120
Stock with Value = $960,000 Value of Futures = $960,000
Loss in Portfolio Value = $40,000 Gain on Futures = $40,000
If however, the market moved in the opposite direction, that is, market value
decreased and the Fund had entered into an anticipatory purchase hedge, or
market value increased and the fund had hedged its stock portfolio, the results
of the Fund's transactions in stock index futures would be as set forth below.
Portfolio Futures
--------- -------
-Day Hedge is Placed-
Anticipate Buying $62,500 Buying 1 Index Futures at 125
Equity Portfolio Value of Futures=$62,500/Contract
Portfolio Futures
--------- -------
-Day Hedge is Lifted-
Buy Equity Portfolio with Sell 1 Index Futures at 120
Actual Cost - $60,000 Value of Futures = $60,000/Contract
Decrease in Purchase Price = $2,500 Loss on Futures = $2,500
HEDGING A STOCK PORTFOLIO: Sell the Future
Hedge Objective: Protect Against Declining
Value of the Portfolio
Factors:
Value of Stock Portfolio = $1,000,000
Value of Futures Contract = 125 x $500 = $62,500
Portfolio Beta Relative to the Index = 1.0
Portfolio Futures
--------- -------
-Day Hedge is Placed-
Anticipate Selling $1,000,000 Sell 16 Index Futures at 125
Equity Portfolio Value of Futures = $1,000,000
-Day Hedge is Lifted-
Equity Portfolio - Own Buy 16 Index Futures at 130
Stock with Value = $1,040,000 Value of Futures = $1,040,000
Loss in Portfolio Value = $40,000 Gain on Futures = $40,000
III. Margin Payments.
Unlike when a Fund purchases or sells a security, no price is paid or
received by the Fund upon the purchase or sale of a futures contract.
Initially, in accordance with the terms of the exchange on which such futures
contract is traded, the fund may be required to deposit with the broker or in a
segregated account with the Fund's custodian an amount of cash or cash
equivalents, the value of which may vary but is generally equal to 10% or less
of the value of the contract. This amount is known as initial margin. The
nature of initial margin in futures transactions is different from that of
margin in security transactions in that futures contract margin does not involve
the borrowing of funds by the customer to finance the transactions. Rather, the
initial margin is in the nature of a performance bond or good faith deposit on
the contract which is returned to the Fund upon termination of the futures
contract assuming all contractual obligations have been satisfied. Subsequent
payments, called variation margin, to and from the broker, will be made on a
daily basis as the price of the underlying security or index fluctuates making
the long and short positions in the futures contract more or less valuable, a
process known as marking to the market. For example, when a Fund has purchased
a futures contract and the price of the contract has risen in response to a rise
in the underlying instruments, that position will have increased in value and
the Fund will be entitled to receive from the broker a variation margin payment
equal to that increase in value. Conversely, where a Fund has purchased a
futures contract and the price of the future contract has declined in response
to a decrease in the underlying instruments, the position would be less valuable
and the Fund would be required to make a variation margin payment to the broker.
At any time prior to expiration of the futures contract, the Adviser and the
Sub-Adviser may elect to close the position by taking an opposite position,
subject to the availability of a secondary market, which will operate to
terminate the Fund's position in the futures contract. A final determination of
variation margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or gain.
IV. Risks of Transactions in Futures Contracts.
There are several risks in connection with the use of futures by a Fund as
a hedging devise. One risk arises because of the imperfect correlation between
movements in the price of the future and movements in the price of the
securities which are the subject of the hedge. The price of the future may move
more than or less than the price of the securities being hedged. If the price
of the future moves less than the price of the securities which are the subject
of the hedge, the hedge will not be fully effective but, if the price of the
securities being hedged has moved in an unfavorable direction, the Fund would be
in a better position than if it had not hedged at all. If the price of the
securities being hedged has moved in an unfavorable direction, the Fund would be
in a better position than if it had not hedged at all. If the price of the
securities being hedged has moved in a favorable direction, this advantage will
be partially offset by the loss on the future. If the price of the future moves
more than the price of the hedged securities, the Fund involved will experience
either a loss or gain on the future which will not be completely offset by
movements in the price of the securities which are the subject of the hedge. To
compensate for the imperfect correlation of movements in the price of securities
being hedged and movements in the price of futures contracts, a Fund may buy or
sell futures contracts in a greater dollar amount than the dollar amount of
securities being hedged if the volatility over a particular time period of the
prices of such securities has been greater than the volatility over such time
period of the future, or if otherwise deemed to be appropriate by the Adviser.
Conversely, a Fund may buy or sell fewer futures contracts if the volatility
over a particular time period of the prices of the securities being hedged is
less than the volatility over such time period of the futures contract being
used, or if otherwise deemed to be appropriate by the Adviser. It is also
possible that, where a Fund has sold futures to hedge its portfolio against a
decline in the market, the market may advance and the value of securities held
by the Fund may decline. If this occurred, the Fund would lose money on the
future and also experience a decline in value in its portfolio securities. With
regard to the International Equity Fund, there is presently no index futures
contract that is based on the GDP EAFE Index and there is an imperfect
correlation between the securities represented by the various international
stock index futures available to the Fund and the GDP EAFE Index.
Where futures are purchased to hedge against a possible increase in the
price of securities before a Fund is able to invest its cash (or cash
equivalents) in securities (or options) in an orderly fashion, it is possible
that the market may decline instead; if the Fund then concludes not to invest in
securities or options at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss on the futures
contract that is not offset by a reduction in the price of securities purchased.
In instances involving the purchase of futures contracts by a Fund, an
amount of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the Fund's custodian
and/or in a margin account with a broker to collateralize the position and
thereby insure that the use of such futures is unleveraged.
In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between movements in the futures and the securities
being hedged, the price of futures may not correlate perfectly with movement in
the cash market due to certain market distortions. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through off-setting transactions which could distort the normal relationship
between the cash and futures markets. Second, with respect to financial futures
contracts, the liquidity of the futures market depends on participants entering
into off-setting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the futures
market could be reduced thus producing distortions. Third, from the point of
view of speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may also cause temporary
price distortions. Due to the possibility of price distortion in the futures
market, and because of the imperfect correlation between the movements in the
cash market and movements in the price of futures, a correct forecast of general
market trends or interest rate movements by the Adviser and Sub-Adviser may
still not result in a successful hedging transaction over a short time frame.
Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Fund
intends to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a liquid
secondary market on any exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be possible to
close a futures investment position, and in the event of adverse price
movements, a Fund would continue to be required to make daily cash payments of
variation margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the futures
contract can be terminated. In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses on the futures
contract and thus provide an offset on a futures contract.
Further, it should be noted that the liquidity of a secondary market in a
futures contract may be adversely affected by "daily price fluctuation limits"
established by commodity exchanges which limit the amount of fluctuation in a
futures contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price beyond
the limit, thus preventing the liquidation of open futures positions.
Successful use of futures by a Fund is also subject to the Adviser's
ability to predict correctly movements in the direction of the market. For
example, if a Fund has hedged against the possibility of a decline in the market
adversely affecting securities held in its portfolio and securities prices
increase instead, the Fund will lose part or all of the benefit to the increased
value of its securities which it has hedged because it will have offsetting
losses in its futures positions. In addition, in such situations, if the Fund
has insufficient cash, it may have to sell securities to meet daily variation
margin requirements. Such sales of securities may be, but will not necessarily
be, at increased prices which reflect the rising market. A Fund may have to
sell securities at a time when it may be disadvantageous to do so.
V. Options on Futures Contracts.
A Fund may purchase options on the futures contracts described above. A
futures option gives the holder, in return for the premium paid, the right to
buy (call) from or sell (put) to the writer of the option a futures contract at
a specified price at any time during the period of the option. Upon exercise,
the writer of the option is obligated to pay the difference between the cash
value of the futures contract and the exercise price. Like the buyer or seller
of a futures contract, the holder, or writer, of an option has the right to
terminate its position prior to the scheduled expiration of the option by
selling, or purchasing, an option of the same series, at which time the person
entering into the closing transaction will realize a gain or loss.
Investments in futures options involve some of the same considerations that
are involved in connection with investments in futures contracts (for example,
the existence of a liquid secondary market). In addition, the purchase of an
option also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option purchased.
Depending on the pricing of the option compared to either the futures contract
upon which it is based, or upon the price of the securities being hedged, an
option may or may not be less risky than ownership of the futures contract or
such securities. In general, the market prices of options can be expected to be
more volatile than the market prices on the underlying futures contract.
Compared to the purchase or sale of futures contracts, however, the purchase of
call or put options on futures contracts may frequently involve less potential
risk to a Fund because the maximum amount at risk is the premium paid for the
options (plus transaction costs). Although permitted by their fundamental
investment policies, the Funds do not currently intend to write futures options,
and will not do so in the future absent any necessary regulatory approvals.
VI. Accounting and Tax Treatment.
Accounting for futures contracts and options will be in accordance with
generally accepted accounting principles.
Generally, futures contracts held by a Fund at the close of the Fund's
taxable year will be treated for federal income tax purposes as sold for their
fair market value on the last business day of such year, a process known as
"mark-to-market." Forty percent of any gain or loss resulting from such
constructive sale will be treated as short-term capital gain or loss and 60% of
such gain or loss will be treated as long-term capital gain or loss without
regard to the length of time the Fund holds the futures contract ("the 40%-60%
rule"). The amount of any capital gain or loss actually realized by a Fund in a
subsequent sale or other disposition of those futures contracts will be adjusted
to reflect any capital gain or loss taken into account by the Fund in a prior
year as a result of the constructive sale of the contracts. With respect to
futures contracts to sell, which will be regarded as parts of a "mixed straddle"
because their values fluctuate inversely to the values of specific securities
held by the Fund, losses as to such contracts to sell will be subject to certain
loss deferral rules which limit the amount of loss currently deductible on
either part of the straddle to the amount thereof which exceeds the unrecognized
gain (if any) with respect to the other part of the straddle, and to certain
wash sales regulations. Under short sales rules, which will also be applicable,
the holding period of the securities forming part of the straddle will (if they
have not been held for the long-term holding period) be deemed not to begin
prior to termination of the straddle. With respect to certain futures
contracts, deductions for interest and carrying charges will not be allowed.
Notwithstanding the rules described above, with respect to futures contracts to
sell which are properly identified as such, a Fund may make an election which
will exempt (in whole or in part) those identified futures contracts from being
treated for federal income tax purposes as sold on the last business day of the
Fund's taxable year, but gains and losses will be subject to such short sales,
wash sales, loss deferral rules and the requirement to capitalize interest and
carrying charges. Under temporary regulations, a Fund would be allowed (in lieu
of the foregoing) to elect to either (1) to offset gains or losses from portions
which are part of a mixed straddle by separately identifying each mixed straddle
to which such treatment applies, or (2) to establish a mixed straddle account
for which gains and losses would be recognized and offset on a periodic basis
during the taxable year. Under either election, the 40%-60% rule will apply to
the net gain or loss attributable to the futures contracts, but in the case of a
mixed straddle account election, not more than 50% of any net gain may be
treated as long-term and no more than 40% of any net loss may be treated as
short-term. Options on futures contracts generally receive federal tax
treatment similar to that described above.
Special rules govern the federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules include the
following: (i) the acquisition of, or becoming the obligor under, a bond or
other debt instrument (including, to the extent provided in Treasury
regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option or similar financial instrument. The
disposition of a currency other than the U.S. dollar by a U.S. taxpayer is also
treated as a transaction subject to the special currency rules. However,
foreign currency-related regulated futures contracts and nonequity options are
generally not subject to the special currency rules if they are or would be
treated as sold for their fair market value at year-end under the mark-to-market
rules unless an election is made to have such currency rules apply. With
respect to transactions covered by the special rules, foreign currency gain or
loss is calculated separately from any gain or loss on the underlying
transaction and is normally taxable as ordinary gain or loss. The Fund may
elect to treat as capital gain or loss foreign currency gain or loss arising
from certain identified forward contracts, futures contracts and options that
are capital assets in the hands of the Fund and which are not part of a
straddle. In accordance with Treasury regulations, certain transactions subject
to the special currency rules that are part of a "Section 988 hedging
transactions" (as defined in the Code and the Treasury regulations) will be
integrated and treated as a single transaction or otherwise treated consistently
for purposes of the Code. "Section 988 hedging transactions" are not subject to
the mark-to-market or loss deferral rules under the Code. It is possible that
some of the non-U.S. dollar denominated investments that Growth and Income Fund,
and International Equity Fund may make will be subject to the special currency
rules described above. Gain or loss attributable to the foreign currency
component of transactions engaged in by a Fund which are not subject to the
special currency rules (such as foreign equity investment other than certain
preferred stocks) will be treated as capital gain or loss and will not be
segregated from the gain or loss on the underlying transaction.
Qualification as a regulated investment company under the Code requires
that each Fund satisfy certain requirements with respect to the source of its
income during a taxable year. At least 90% of the gross income of each Fund
must be derived from dividends, interest, certain payments with respect to
securities loans, gains from the sale or other disposition of stock, securities
or foreign currencies, and other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to the Fund's
business of investing in such stock, securities or currencies. The Treasury
Department may by regulation exclude from qualifying income foreign currency
gains which are not directly related to a Fund's principal business of
investment in stock or securities, or options and futures with respect to stock
or securities. Any income derived by a Fund from a partnership or trust is
treated for this purpose as derived with respect to the Fund's business of
investment in stock, securities or currencies only to the extent that such
income is attributable to items of income which would have been qualifying
income if realized by the Fund in the same manner as by the partnership or
trust.
An additional requirement for qualification as a regulated investment
company under the Code is that less than 30% of a Fund's gross income must be
derived from gains realized on the sale or other disposition of the following
investments held for less than three months: (1) stock and securities (as
defined in section 2(a)(36) of the 1940 Act); (2) options, futures and forward
contracts other than those on foreign currencies; and (3) foreign currencies
(and options, futures and forward contracts on foreign currencies) that are not
directly related to a Fund's principal business of investment in stock and
securities (and options and futures with respect to stock and securities). With
respect to futures contracts and other financial instruments subject to the
marking-to-market rules, the Internal Revenue Service has ruled in private
letter rulings that a gain realized from such a futures contract or financial
instrument will be treated as being derived from a security held for three
months or more (regardless of the actual period for which the contract or
instrument is held) if the gain arises as a result of a constructive sale under
the marking-to-market rules, and will be treated as being derived from a
security held for less than three months only if the contract or instrument is
terminated (or transferred) during the taxable year (other than by reason of
mark-to-market) and less than three months have elapsed between the date the
contract or instrument is acquired and the termination date. In determining
whether the 30% test is met for a taxable year, increases and decreases in the
value of each Fund's futures contracts and other investments that qualify as
part of a "designated hedge," as defined in the Code, may be netted.
**************
PORTICO FUNDS, INC.
(Money Market Fund, U.S. Treasury Money Market Fund,
U.S. Government Money Market Fund, Tax-Exempt Money Market Fund
and Institutional Money Market Fund)
Form N-1A
Cross Reference Sheet
Part B
Item No. Heading
- -------- -------
10. Cover Page . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents. . . . . . . . . . . . . Table of Contents
12. General Information and History. . . . . . Inapplicable
13. Investment Objectives and Policies . . . . Investment Objectives and
Policies
14. Management of the Fund . . . . . . . . . . Management of the Company
15. Control Persons and Principal Holders
of Securities. . . . . . . . . . . . . . . Management of the Company;
Miscellaneous
16. Investment Advisory and Other Services . . Management of the the Company;
Custodian, Transfer Agent and
Accounting Services Agent;
Expenses
17. Brokerage Allocation and Other Practices . Management of the Company
18. Capital Stock and Other Securities . . . . Description of Shares
19. Purchase, Redemption and Pricing
of Securities Net Asset Value;
Being Offered. . . Additional Purchase and
Redemption Information
20. Tax Status . . . . . . . . . . . . . . . . Additional Information
Concerning Taxes
21. Underwriters . . . . . . . . . . . . . . . .Management of the Company
22. Calculation of Performance Data. . . . . . .Additional Information on
Yield
Part C
Information to be included in Part C is set forth under the appropriate item so
numbered in Part C to this Registration Statement.
**************
PORTICO FUNDS, INC.
Statement of Additional Information
for the Money Market Fund
Institutional Money Market Fund
U.S. Treasury Money Market Fund
U.S. Government Money Market Fund
Tax-Exempt Money Market Fund
February 20, 1996
TABLE OF CONTENTS
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Page
----
Portico Funds........................................... 2
Investment Objectives and Policies...................... 2
Additional Information on Portfolio Instruments......... 11
Net Asset Value......................................... 14
Additional Purchase and Redemption Information.......... 15
Additional Information Regarding Shareholder Services
for the U.S. Government Money
Market, U.S. Treasury Money Market, Money Market and
Tax-Exempt Money Market Funds......................... 17
Description of Shares................................... 18
Additional Information Concerning Taxes................. 20
Management of the Company............................... 22
Custodian, Transfer Agent, Disbursing Agent and
Accounting Services Agent............................. 31
Expenses................................................ 31
Independent Accountants................................. 32
Counsel................................................. 32
Additional Information on Yield......................... 32
Miscellaneous........................................... 33
Appendix................................................ A-1
This Statement of Additional Information is meant to be read in conjunction with
the Portico Funds' Prospectuses dated February 20, 1996 for the Money Market
Fund, Institutional Money Market Fund, U.S. Treasury Money Market Fund
(formerly, U. S. Federal Money Market Fund), U.S. Government Money Market Fund
and Tax-Exempt Money Market Fund (collectively referred to as the "Funds"), and
is incorporated by reference in its entirety into those Prospectuses. Because
this Statement of Additional Information is not itself a prospectus, no
investment in shares of these Funds should be made solely upon the information
contained herein. Copies of the Prospectuses for the Funds may be obtained by
writing Portico Investor Services at 777 East Wisconsin Avenue, Suite 900,
Milwaukee, Wisconsin 53202 or by calling 1-800-982-8909 or 414-287-3710
(Milwaukee area). Capitalized terms used but not defined herein have the same
meanings as in the Prospectuses.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS, AND ARE NEITHER ENDORSED BY, INSURED
BY, GUARANTEED BY, OBLIGATIONS OF, NOR OTHERWISE SUPPORTED BY THE FDIC, THE
FEDERAL RESERVE BOARD, FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY, FIRSTAR
TRUST COMPANY, FIRSTAR CORPORATION, ITS AFFILIATES OR ANY OTHER BANK, OR OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTICO FUNDS INVOLVES INVESTMENT
RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL.
PORTICO FUNDS
Portico Funds, Inc. (the "Company") is a Wisconsin corporation which was
incorporated on February 15, 1988 as a management investment company. The
Company is authorized to issue separate classes of shares of Common Stock
representing interests in separate investment portfolios. This Statement of
Additional Information pertains to five diversified portfolios, the Money Market
Fund, Institutional Money Market Fund, U.S. Treasury Money Market Fund, U.S.
Government Money Market Fund and Tax-Exempt Money Market Fund. The Money Market
Fund, Institutional Money Market Fund, U.S. Treasury Money Market Fund, U.S.
Government Money Market Fund and Tax-Exempt Money Market Fund commenced
operations on March 16, 1988, April 26, 1991, April 29, 1991, August 1, 1988 and
June 27, 1988, respectively. The Company also offers other investment portfolios
which are described in separate Prospectuses and Statements of Additional
Information. For information concerning these other portfolios contact Portico
Investor Services at 777 East Wisconsin Avenue, Suite 900, Milwaukee, Wisconsin
53202 or by calling 1-800-982-8909 or 414-287-3710 (Milwaukee area).
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Money Market Fund, the Institutional Money
Market Fund and the U.S. Government Money Market Fund is to seek a high level of
taxable current income consistent with liquidity, the preservation of capital
and a stable net asset value; the investment objective of the U.S. Treasury
Money Market Fund is to seek to provide a high level of current income exempt
from state income taxes consistent with liquidity, the preservation of capital
and a stable net asset value; and the investment objective of the Tax-Exempt
Money Market Fund is to seek a high level of current income exempt from federal
income taxes consistent with liquidity, the preservation of capital and a stable
net asset value. There is no assurance, however, that the Funds' investment
objectives will be obtained. The following policies supplement the Funds'
respective investment objectives and policies as set forth in their
Prospectuses.
Portfolio Transactions
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Subject to the general supervision of the Board of Directors, the Adviser is
responsible for, makes decisions with respect to, and places orders for all
purchases and sales of portfolio securities for each Fund.
Securities purchased and sold by each Fund are generally traded in the over-the-
counter market on a net basis (i.e., without commission) through dealers, or
otherwise involve transactions directly with the issuer of an instrument. The
cost of securities purchased from underwriters includes an underwriting
commission or concession, and the prices at which securities are purchased from
and sold to dealers include a dealer's mark-up or mark-down. With respect to
over-the-counter transactions, the Adviser will normally deal directly with
dealers who make a market in the instruments involved except in those
circumstances where more favorable prices and execution are available elsewhere.
The Funds may participate, if and when practicable, in bidding for the purchase
of portfolio securities directly from an issuer in order to take advantage of
the lower purchase price available to members of a bidding group. The Funds
will engage in this practice, however, only when the Adviser, in its sole
discretion, believes such practice to be in the Funds' interests.
The Funds do not intend to seek profits from short-term trading. Because the
Funds will invest only in short-term debt instruments, their annual portfolio
turnover rates will be relatively high, but brokerage commissions are normally
not paid on money market instruments, and portfolio turnover is not expected to
have a material effect on the Funds' net investment income.
The Advisory Agreement between the Company and the Adviser provides that, in
executing portfolio transactions and selecting brokers or dealers, the Adviser
will seek to obtain the best overall terms available. In assessing the best
overall terms available for any transaction, the Adviser shall consider factors
it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In addition, the Agreement
authorizes the Adviser to cause the Funds to pay a broker-dealer which furnishes
brokerage and research services a higher commission than that which might be
charged by another broker-dealer for effecting the same transaction, provided
that the Adviser determines in good faith that such commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Adviser to the Funds. Such brokerage and
research services might consist of reports and statistics relating to specific
companies or industries, general summaries of groups of stocks or bonds and
their comparative earnings and yields, or broad overviews of the stock, bond and
government securities markets and the economy.
Supplementary research information so received is in addition to, and not in
lieu of, services required to be performed by the Adviser and does not reduce
the advisory fees payable to it by the Funds. The Directors will periodically
review the commissions paid by the Funds to consider whether the commissions
paid over representative periods of time appear to be reasonable in relation to
the benefits inuring to the Funds. It is possible that certain of the
supplementary research or other services received will primarily benefit one or
more other investment companies or other accounts for which investment
discretion is exercised. Conversely, a Fund may be the primary beneficiary of
the research or services received as a result of portfolio transactions effected
for such other account or investment company.
Portfolio securities will not be purchased from or sold to (and savings deposits
will not be made in and repurchase and reverse repurchase agreements will not be
entered into with) the Adviser, the Distributor or an affiliated person of
either of them (as such term is defined in the 1940 Act) acting as principal. In
addition, the Funds will not purchase securities during the existence of any
underwriting or selling group relating thereto of which the Distributor or the
Adviser, or an affiliated person of either of them, is a member, except to the
extent permitted by the Securities and Exchange Commission.
Investment decisions for the Funds are made independently from those for other
investment companies and accounts advised or managed by the Adviser. Such other
investment companies and accounts may also invest in the same securities as the
Funds. When a purchase or sale of the same security is made at substantially
the same time on behalf of a Fund and another investment company or account, the
transaction will be averaged as to price and available investments allocated as
to amount, in a manner which the Adviser believes to be equitable to the Fund
and such other investment company or account. In some instances, this
investment procedure may adversely affect the price paid or received by a Fund
or the size of the position obtained or sold by the Fund. To the extent
permitted by law, the Adviser may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other investment
companies or accounts in executing transactions.
Additional Information on Portico Instruments
- ---------------------------------------------
Ratings. Subsequent to its purchase by a Fund, a rated security may cease to be
- -------
rated or its rating may be reduced below the minimum rating required for
purchase by a Fund. The Board of Directors or the Adviser, pursuant to
guidelines adopted by the Board, will in accordance with Rule 2a-7 under the
1940 Act consider such an event in determining whether the Fund involved should
continue to hold the security. In addition, it is possible that unregistered
securities purchased by a Fund in reliance upon Rule 144A under the Securities
Act of 1933 could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
period, uninterested in purchasing these securities.
Variable and Floating Rate Instruments. With respect to the variable and
- --------------------------------------
floating rate instruments that may be acquired by the Money Market, Tax-Exempt
Money Market and Institutional Money Market Funds as described in their
Prospectuses, the Adviser will consider the earning power, cash flows and other
liquidity ratios of the issuers and guarantors of such instruments and, if the
instrument is subject to a demand feature, will monitor their financial status
to meet payment on demand. In determining average weighted portfolio maturity,
an instrument will usually be deemed to have a maturity equal to the longer of
the period remaining to the next interest rate adjustment or the time the Fund
involved can recover payment of principal as specified in the instrument.
Variable U.S. Government obligations held by a Fund, however, will be deemed to
have maturities equal to the period remaining until the next interest rate
adjustment.
The variable and floating rate demand instruments that the Tax-Exempt Money
Market Fund may purchase include participations in Municipal Obligations
purchased from and owned by financial institutions, primarily banks.
Participation interests provide the Fund with a specified undivided interest (up
to 100%) in the underlying obligation and the right to demand payment of the
unpaid principal balance plus accrued interest on the participation interest
from the institution upon a specified number of days' notice, not to exceed
thirty days. Each participation interest is backed by an irrevocable letter of
credit or guarantee of a bank that the Adviser has determined meets the
prescribed quality standards for the Fund. The bank typically retains fees out
of the interest paid on the obligation for servicing the obligation, providing
the letter of credit and issuing the repurchase commitment.
U.S. Government Obligations. Examples of the types of U.S. Government
- ---------------------------
obligations that may be acquired by the Funds include U.S. Treasury bonds, notes
and bills and the obligations of Federal Home Loan Banks, Federal Farm Credit
Banks, Federal Land Banks, the Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association, Federal National
Mortgage Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Maritime Administration, and
Resolution Trust Corp.
Stripped U.S. Government Obligations and Government-Backed Trusts. The Money
- -----------------------------------------------------------------
Market Fund, U.S. Government Money Market Fund and Institutional Money Market
Fund may acquire U.S. Government obligations and their unmatured interest
coupons which have been separated ("stripped") by their holder, typically a
custodian bank or investment brokerage firm. Having separated the interest
coupons from the underlying principal of the U.S. Government obligations, the
holder will resell the stripped securities in custodial receipt programs with a
number of different names, including "Treasury Income Growth Receipts" ("TIGRs")
and Certificate of Accrual on Treasury Securities ("CATs"). The stripped
coupons are sold separately from the underlying principal, which is sold at a
deep discount because the buyer receives only the right to receive a future
fixed payment on the security and does not receive any rights to periodic
interest (cash) payments. Purchasers of stripped securities acquire, in effect,
discount obligations that are economically identical to the zero coupon
securities that the Treasury Department sells itself. The underlying U.S.
Treasury bonds and notes themselves are held in book-entry form at the Federal
Reserve Bank or, in the case of bearer securities (i.e., unregistered securities
which are owned ostensibly by the bearer or holder), in trust on behalf of the
owners. Counsel to the underwriters of these certificates or other evidences of
ownership of the U.S. Treasury securities have stated that, in their opinion,
purchasers of the stripped securities, such as the Funds, most likely will be
deemed the beneficial holders of the underlying U.S. Government obligations for
federal tax and security purposes. The SEC staff believes that participations
in CATs and TIGRs and other similar trusts are not U.S. Government securities.
Within the past several years, the Treasury Department has facilitated transfers
of ownership of zero coupon securities by accounting separately for the
beneficial ownership of particular interest coupon and principal payments on
Treasury securities through the Federal Reserve book-entry record-keeping
system. The Federal Reserve program as established by the Treasury Department
is known as "STRIPS" or "Separate Trading of Registered Interest and Principal
of Securities." Under the STRIPS program, a Fund will be able to have its
beneficial ownership of zero coupon securities recorded directly in the book-
entry record-keeping system in lieu of having to hold certificates or other
evidences of ownership of the underlying U.S. Treasury securities.
The Money Market Fund, U.S. Government Money Market Fund and Institutional Money
Market Fund may also invest in certificates issued by Government-backed trusts.
Such certificates represent an undivided fractional interest in the respective
Government-backed trust's assets. The assets of each Government-backed trust
consists of (i) a promissory note issued by a foreign government (the "Note"),
(ii) a guaranty by the U.S. Government, acting through the Defense Security
Assistance Agency of the Department of Defense, of the due and punctual payment
of 90% of all principal and interest due on such Note and (iii) a beneficial
interest in a government securities trust holding U.S. Treasury bills, notes and
other direct obligations of the U.S. Treasury sufficient to provide the Trust
with funds in an amount equal to at least 10% of all principal and interest
payments due on the Note. No more than 35% of the value of a Fund's total
assets will be invested in stripped securities not purchased through the Federal
Reserve's STRIPS program and Government-backed trusts.
Investment Companies. Each Fund currently intends to limit its investments in
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securities issued by other investment companies so that, as determined
immediately after a purchase of such securities is made: (i) not more than 5%
of the value of the Fund's total assets will be invested in the securities of
any one investment company; (ii) not more than 10% of the value of its total
assets will be invested in the aggregate in securities of investment companies
as a group; and (iii) not more than 3% of the outstanding voting stock of any
one investment company will be owned by the Fund or by the Company as a whole.
Repurchase Agreements. Each Fund (except the Tax-Exempt Money Market Fund) may
- ---------------------
agree to purchase securities from financial institutions subject to the seller's
agreement to repurchase them at an agreed upon time and price ("repurchase
agreements"). During the term of the agreement, the Adviser will continue to
monitor the creditworthiness of the seller and will require the seller to
maintain the value of the securities subject to the agreement at not less than
102% of the repurchase price. Default or bankruptcy of the seller would,
however, expose the Fund to possible loss because of adverse market action or
delay in connection with the disposition of the underlying securities. The
securities held subject to a repurchase agreement may have stated maturities
exceeding thirteen months, provided the repurchase agreement itself matures in
less than one year.
The repurchase price under the repurchase agreements described in the
Prospectuses generally equals the price paid by a Fund plus interest negotiated
on the basis of current short-term rates (which may be more or less than the
rate on the securities underlying the repurchase agreement). Securities subject
to repurchase agreements will be held by the Funds' custodian (or sub-custodian)
or in the Federal Reserve/Treasury book-entry system or other authorized
securities depository. Repurchase agreements are considered to be loans under
the 1940 Act.
Reverse Repurchase Agreements. Reverse repurchase agreements are considered to
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be borrowings under the 1940 Act. At the time a Fund enters into a reverse
repurchase agreement (an agreement under which a Fund sells portfolio securities
and agrees to repurchase them at an agreed-upon date and price), it will place
in a segregated custodial account U.S. Government securities or other liquid
high-grade debt securities having a value equal to or greater than the
repurchase price (including accrued interest), and will subsequently monitor the
account to insure that such value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by a Fund may
decline below the price of the securities it is obligated to repurchase.
Securities Lending. To increase return on portfolio securities, the Funds may
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lend their portfolio securities to broker/dealers and other institutional
investors pursuant to agreements requiring that the loans be secured by
collateral equal in value to at least the market value of the securities loaned.
Collateral for such loans may include cash, securities of the U.S. Government,
its agencies or instrumentalities, or an irrevocable letter of credit issued by
a bank which meets the investment standards of the Fund or any combination
thereof. Such loans will not be made, if, as a result, the aggregate of all
outstanding loans of the Fund exceeds 30% of the value of its total assets.
There may be risks of delay in receiving additional collateral or in recovering
the securities loaned or even a loss of rights in the collateral should the
borrower of the securities fail financially. However, loans will be made only
to borrowers deemed by the Adviser to be of good standing and when, in the
Adviser's judgment, the income to be earned from the loan justifies the
attendant risks. When a Fund lends its securities, it continues to receive
interest or dividends on the securities loaned and may simultaneously earn
interest on the investment of the cash collateral which will be invested in
readily marketable, high-quality, short-term obligations. Although voting
rights, or rights to consent, attendant to securities on loan pass to the
borrower, such loans may be called at any time and will be called so that the
securities may be voted by a Fund if a material event affecting the investment
is to occur.
Securities lending arrangements with broker/dealers require that the loans be
secured by collateral equal in value to at least the market value of the
securities loaned. During the term of such arrangements, a Fund will maintain
such value by the daily marking-to-market of the collateral.
Other Investment Considerations - Tax-Exempt Money Market Fund.
- --------------------------------------------------------------
Municipal Obligations which may be acquired by the Tax-Exempt Money Market Fund
- ---------------------
include debt obligations issued by governmental entities to obtain funds for
various public purposes, including the construction of a wide range of public
facilities, the refunding of outstanding obligations, the payment of general
operating expenses and the extension of loans to public institutions and
facilities.
The two principal classifications of Municipal Obligations which may be held by
the Tax-Exempt Money Market Fund are General Obligation securities and Revenue
securities. The Fund may also acquire Moral Obligation securities.
There are, of course, variations in the quality of Municipal Obligations both
within a particular classification and between classifications, and the yields
on Municipal Obligations depend upon a variety of factors, including general
money market conditions, the financial condition of the issuer, general
conditions of the municipal bond market, the size of a particular offering, the
maturity of the obligation and the rating of the issue. The ratings of NRSROs
represent their opinions as to the quality of Municipal Obligations. It should
be emphasized, however, that ratings are general and are not absolute standards
of quality, and Municipal Obligations with the same maturity, interest rate and
rating may have different yields while Municipal Obligations of the same
maturity and interest rate with different ratings may have the same yield.
The payment of principal and interest on most securities purchased by the Tax-
Exempt Money Market Fund will depend upon the ability of the issuers to meet
their obligations. An issuer's obligations under its Municipal Obligations are
subject to the provisions of bankruptcy, insolvency, and other laws affecting
the rights and remedies of creditors, such as the Federal Bankruptcy Code, and
laws, if any, which may be enacted by federal or state legislatures extending
the time for payment of principal or interest, or both, or imposing other
constraints upon enforcement of such obligations or upon the ability of
municipalities to levy taxes. The power or ability of an issuer to meet its
obligations for the payment of interest on, and principal of, its Municipal
Obligations may be materially adversely affected by litigation or other
conditions.
Certain of the Municipal Obligations held by the Tax-Exempt Money Market Fund
may be insured at the time of issuance as to the timely payment of principal and
interest. The insurance policies will usually be obtained by the issuer of the
Municipal Obligation at the time of its original issuance. In the event that
the issuer defaults on interest or principal payment, the insurer will be
notified and will be required to make payment to the bondholders. There is,
however, no guarantee that the insurer will meet its obligations. In addition,
such insurance will not protect against market fluctuations caused by changes in
interest rates and other factors. The Tax-Exempt Money Market Fund may, from
time to time, invest more than 25% of its assets in Municipal Obligations
covered by insurance policies.
Municipal Obligations acquired by the Tax-Exempt Money Market Fund may include
short-term General Obligation Notes, Tax Anticipation Notes, Bond Anticipation
Notes, Revenue Anticipation Notes, Tax-Exempt Commercial Paper, Construction
Loan Notes and other forms of short-term tax-exempt loans. Such instruments are
issued with a short-term maturity in anticipation of the receipt of tax funds,
the proceeds of bond placements or other revenues. In addition, the Fund may
invest in bonds and other types of tax-exempt instruments provided they have
remaining maturities of thirteen months or less at the time of purchase.
Certain types of Municipal Obligations (private activity bonds) have been or are
issued to obtain funds to provide privately operated housing facilities,
pollution control facilities, convention or trade show facilities, mass transit,
airport, port or parking facilities and certain local facilities for water
supply, gas, electricity or sewage or solid waste disposal. Private activity
bonds are also issued on behalf of privately held or publicly owned corporations
in the financing of commercial or industrial facilities. State and local
governments are authorized in most states to issue private activity bonds for
such purposes in order to encourage corporations to locate within their
communities. The principal and interest on these obligations may be payable
from the general revenues of the users of such facilities.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Obligations. For example, under the Tax Reform Act of
1986, interest on certain private activity bonds must be included in an
investor's alternative minimum taxable income, and corporate investors must
include all tax-exempt interest in their federal alternative minimum taxable
income. The Company cannot, of course, predict what legislation, if any, may be
proposed in the future as regards the income tax status of interest on Municipal
Obligations, or which proposals, if any, might be enacted. Such proposals,
while pending or if enacted, might materially and adversely affect the
availability of Municipal Obligations for investment by the Tax-Exempt Money
Market Fund and the liquidity and value of the Fund's portfolio. In such an
event, the Company would reevaluate the Fund's investment objective and policies
and consider possible changes in its structure or possible dissolution.
When-Issued Purchases and Forward Commitments. When the Tax-Exempt Money Market
- ---------------------------------------------
Fund agrees to purchase securities on a when-issued or forward commitment basis,
the custodian will set aside cash or liquid high-grade debt securities equal to
the amount of the commitment in a segregated account. Normally, the custodian
will set aside portfolio securities to satisfy a purchase commitment, and in
such a case the Fund may be required subsequently to place additional assets in
the separate account in order to ensure that the value of the account remains
equal to the amount of the Fund's commitments. It may be expected that the
market value of the Fund's net assets will fluctuate to a greater degree when it
sets aside portfolio securities to cover such purchase commitments than when it
sets aside cash. Because the Fund will set aside cash or liquid assets to
satisfy its purchase commitments in the manner described, the Fund's liquidity
and ability to manage its portfolio might be affected in the event its forward
commitments and commitments to purchase when-issued securities ever exceeded 25%
of the value of its assets.
The Tax-Exempt Money Market Fund will purchase securities on a when-issued or
forward commitment basis only with the intention of completing the transaction
and actually purchasing the securities. If deemed advisable as a matter of
investment strategy, however, the Fund may dispose of or renegotiate a
commitment after it is entered into, and may sell securities it has committed to
purchase before those securities are delivered to the Fund on the settlement
date. In these cases the Fund may realize a taxable capital gain or loss.
When the Tax-Exempt Money Market Fund engages in when-issued and forward
commitment transactions, it relies on the other party to consummate the trade.
Failure of such party to do so may result in the Fund's incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
the Tax-Exempt Money Market Fund starting on the day the Fund agrees to purchase
the securities. The Fund does not earn interest on the securities it has
committed to purchase until they are paid for and delivered on the settlement
date.
Stand-By Commitments. The Tax-Exempt Money Market Fund may acquire "stand-by
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commitments" with respect to Municipal Obligations held in its portfolio. Under
a stand-by commitment, a dealer or bank agrees to purchase at the Fund's option
specified Municipal Obligations at a specified price. Stand-by commitments may
be exercisable by the Fund at any time before the maturity of the underlying
Municipal Obligations and may be sold, transferred or assigned only with the
instruments involved.
The amount payable to the Fund upon its exercise of a stand-by commitment is
normally (i) the Fund's acquisition cost of the Municipal Obligations (excluding
any accrued interest which the Fund paid on their acquisition), less any
amortized market premium or plus any amortized market or original issue discount
during the period the Fund owned the securities, plus (ii) all interest accrued
on the securities since the last interest payment date during that period. A
"stand-by commitment" may be sold, transferred or assigned by the Fund only with
the instrument involved.
The Fund expects that stand-by commitments will generally be available without
the payment of any direct or indirect consideration. However, if necessary or
advisable, the Fund may pay for a stand-by commitment either separately in cash
or by paying a higher price for portfolio securities which are acquired subject
to the commitment (thus reducing the yield to maturity otherwise available for
the same securities). Where the Fund has paid any consideration directly or
indirectly for a stand-by commitment, its cost would be reflected as unrealized
loss for the period during which the commitment was held by the Fund and will be
reflected in realized gain or loss when the commitment is exercised or expires.
The total amount paid in either manner for outstanding stand-by commitments held
by the Fund will not exceed 1/2 of 1% of the value of its total assets
calculated immediately after each stand-by commitment is acquired.
The Fund intends to enter into stand-by commitments only with dealers, banks and
broker-dealers which, in the Adviser's opinion, present minimal credit risks.
The Fund's reliances upon the credit of those dealers, banks and broker/dealers
is secured by the value of the underlying Municipal Obligations that are subject
to a commitment.
The Fund would acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights thereunder for trading
purposes. The acquisition of a stand-by commitment will not affect the
valuation or assumed maturity of the underlying Municipal Obligations which will
continue to be valued in accordance with the ordinary method of valuation
employed by the Fund. Stand-by commitments acquired by the Fund would be valued
at zero in determining net asset value where the Fund paid any consideration
directly or indirectly for a stand-by commitment, its cost would be reflected as
unrealized depreciation for the period in which the commitment was held by the
Fund.
During the current fiscal year, the Adviser expects that not more than 5% of the
net assets of the Tax-Exempt Money Market Fund will be invested at any time in a
particular class of taxable obligations described in the Fund's prospectus.
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS
Additional Investment Limitations
- ---------------------------------
Each Fund is subject to the investment limitations enumerated in this subsection
which may be changed with respect to a particular Fund only by a vote of the
holders of a majority of such Fund's outstanding shares (as defined under
"Miscellaneous" below).
No Fund may:
1. Make loans, except that the Fund may purchase and hold debt instruments and
enter into repurchase agreements in accordance with its investment objective and
policies and may lend portfolio securities in an amount not exceeding 30% of its
total assets.
2. Purchase securities of companies for the purpose of exercising control.
3. Purchase or sell real estate, except that each Fund may purchase securities
of issuers which deal in real estate and may purchase securities which are
secured by interests in real estate.
4. Acquire any other investment company or investment company security except
in connection with a merger, consolidation, reorganization or acquisition of
assets or where otherwise permitted by the 1940 Act.
5. Act as an underwriter of securities within the meaning of the Securities Act
of 1933 except insofar as a Fund might be deemed to be an underwriter upon the
disposition of portfolio securities acquired within the limitation on purchases
of restricted securities and except to the extent that the purchase of
obligations directly from the issuer thereof in accordance with the Fund's
investment objective, policies and limitations may be deemed to be underwriting.
6. Write or sell put options, call options, straddles, spreads, or any
combination thereof, except for transactions in options on securities, indices
of securities, futures contracts and options on futures contracts.
7. Borrow money or issue senior securities, except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary purposes
in amounts up to 10% of the value of its total assets at the time of such
borrowing; or mortgage, pledge or hypothecate any assets, except in connection
with any such borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of a Fund's total assets at the time of
such borrowing. No Fund will purchase securities while its borrowings
(including reverse repurchase agreements) in excess of 5% of its total assets
are outstanding. Securities held in escrow or separate accounts in connection
with a Fund's investment practices described in this Statement of Additional
Information or in its Prospectus are not deemed to be pledged for purposes of
this limitation.
8. Purchase securities on margin, make short sales of securities or maintain a
short position, except that (a) this investment limitation shall not apply to a
Fund's transactions in futures contracts and related options, and (b) a Fund may
obtain short-term credit as may be necessary for the clearance of purchases and
sales of portfolio securities.
9. Purchase or sell commodity contracts, or invest in oil, gas or mineral
exploration or development programs, except that each Fund may, to the extent
appropriate to its investment objective, purchase publicly traded securities of
companies engaging in whole or in part in such activities and may enter into
futures contracts and related options.
In addition, as summarized in the Prospectuses, no Fund may:
10.Purchase securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities ("U.S.
Government securities')) if, immediately after such purchase, more than 5% of
the value of the Fund's total assets would be invested in the securities of such
issuer, or more than 10% of the issuer's outstanding voting securities would be
owned by the Fund or Portico Funds, Inc. (the "Company"), except that up to
25% of the value of the Fund's total assets may be invested without regard to
these limitations. For purposes of this limitation, a security is considered to
be issued by the entity (or entities) whose assets and revenues back the
security. A guarantee of a security shall not be deemed to be a security issued
by the guarantor when the value of all securities issued and guaranteed by the
guarantor, and owned by the Fund, does not exceed 10% of the value of the Fund's
total assets. In accordance with current SEC regulations, the Money Market Fund
and Institutional Money Market Fund intend (as a matter of nonfundamental
policy) to limit investments in the securities of any single issuer (other than
U.S. Government securities) to not more than 5% of the Fund's total assets,
provided that the Fund may invest up to 25% of its total assets in the
securities of any one issuer for a period of up to three business days.
11.Purchase any securities which would cause 25% or more of the value of the
Fund's total assets at the time of purchase to be invested in the securities of
one or more issuers conducting their principal business activities in the same
industry; provided that, (a) there is no limitation with respect to (i)
instruments issued or guaranteed by the United States, any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions; (ii)
instruments issued by domestic branches of U.S. banks; and (iii) repurchase
agreements secured by the instruments described in clauses (i) and (ii); (b)
wholly owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of the parents; and (c) utilities will be divided according to their
services, for example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry.
Although the foregoing investment limitations would permit the Funds to invest
in options, futures contracts and options on future contracts, the Funds, during
the current fiscal year, do not intend to trade in such instruments. Prior to
making any such investments, the Funds would notify their shareholders and add
appropriate descriptions concerning the instruments to their Prospectuses and
this Statement of Additional Information.
In order to permit the sale of the Funds' shares in certain states, the Funds
may make commitments more restrictive than the investment policies and
limitations described above. Should the Company determine that any such
commitment is no longer in the best interests of a Fund, it will revoke the
commitment by terminating sales of its shares in the state involved. Each Fund
will operate in compliance with the following further investment limitations
(which are imposed pursuant to the regulations of a state) to the extent
applicable to the Fund: (1) the Funds will limit investments in warrants,
valued at the lower of cost or market, to no more than 5% of their respective
net assets (and no more than 2% of net assets will be invested in warrants which
are not listed on the New York or American Stock Exchange); (2) the Funds will
not purchase or sell real estate limited partnership interests, except that each
may purchase securities of issuers which deal in real estate and may purchase
securities which are secured by interests in real estate; and (3) the Funds will
not invest in oil, gas or mineral exploration or development leases, except that
each Fund may, to the extent appropriate to its investment objective, purchase
publicly traded securities of companies engaging in whole or part in such
activities. Irrespective of these undertakings, none of the Funds intends to
make any investments in warrants, real estate limited partnership interests or
oil, gas or mineral exploration or development leases.
NET ASSET VALUE
The net asset value per share of each Fund described in this Statement of
Additional Information is calculated separately by adding the value of all
portfolio securities and other assets belonging to the particular Fund,
subtracting the liabilities charged to the Fund, and dividing the result by the
number of outstanding shares of that Fund. Assets belonging to a Fund consist
of the consideration received upon the issuance of shares of the particular Fund
together with all net investment income, realized gains/losses and proceeds
derived from the investment thereof, including any proceeds from the sale of
such investments, any funds or payments derived from any reinvestment of such
proceeds, and a portion of any general assets of the Company not belonging to a
particular investment portfolio. Assets belonging to a particular Fund are
charged with the direct liabilities of that Fund and with a share of the general
liabilities of the Company which are normally allocated in proportion to the
relative net asset values of all of the Company's investment portfolios at the
time of allocation. Subject to the provisions of the Articles of Incorporation,
determinations by the Board of Directors as to the direct and allocable
liabilities, and the allocable portion of any general assets, with respect to a
particular Fund are conclusive.
The Company uses the amortized cost method of valuation to value each Fund's
portfolio securities, pursuant to which an instrument is valued at its cost
initially and thereafter a constant amortization to maturity of any discount or
premium is assumed, regardless of the impact of fluctuating interest rates on
the market value of the instrument. This method may result in periods during
which value, as determined by amortized cost, is higher or lower than the price
a Fund would receive if it sold the instrument. The market value of portfolio
securities held by a Fund can be expected to vary inversely with changes in
prevailing interest rates.
Each Fund attempts to maintain a dollar-weighted average portfolio maturity
appropriate to its objective of maintaining a stable net asset value per share.
In this regard, except for securities subject to repurchase agreements, each
Fund will neither purchase a security deemed to have a remaining maturity of
more than thirteen months within the meaning of the 1940 Act nor maintain a
dollar-weighted average maturity which exceeds 90 days. The Board of Directors
has also established procedures that are intended to stabilize the net asset
value per share of each Fund for purposes of sales and redemptions at $1.00.
These procedures include the determination, at such intervals as the Directors
deem appropriate, of the extent, if any, to which the net asset value per share
of each Fund calculated by using available market quotations deviates from $1.00
per share. In the event such deviation exceeds one-half of one percent, the
Board will promptly consider what action, if any, should be initiated. If the
Board believes that the extent of any deviation from a $1.00 amortized cost
price per share may result in material dilution or other unfair results to new
or existing investors, it has agreed to take such steps as it considers
appropriate to eliminate or reduce to the extent reasonably practicable any such
dilution or unfair results. These steps may include selling portfolio
instruments prior to maturity; shortening the average portfolio maturity;
withholding or reducing dividends; redeeming shares in kind; reducing the number
of outstanding shares without monetary consideration; or utilizing a net asset
value per share determined by using available market quotations.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares of each Fund described in this Statement of Additional Information are
sold without a sales charge imposed by the Company, although Shareholder
Organizations or Institutions may be paid by the Company for advertising,
distribution, or shareholder services. Depending on the terms of the particular
account, Shareholder Organizations or Institutions also may charge their
customers fees for automatic investment, redemption and other services provided.
Such fees may include, for example, account maintenance fees, compensating
balance requirements or fees based upon account transactions, assets or income.
Shareholder Organizations or Institutions are responsible for providing
information concerning these services and any charges to any customer who must
authorize the purchase of Fund shares prior to such purchase.
Investors redeeming shares by check generally will be subject to the same rules
and regulations that the transfer agent applies to checking accounts, although
the election of this privilege creates only a shareholder-transfer agent
relationship with the transfer agent. Because dividends on each Fund accrue
daily, checks may not be used to close an account, as a small balance is likely
to result.
Under the 1940 Act, the Funds may suspend the right of redemption or postpone
the date of payment for shares during any period when (a) trading on the
Exchange is restricted by applicable rules and regulations of the Securities and
Exchange Commission ("SEC"); (b) the Exchange is closed for other than customary
weekend and holiday closings; (c) the SEC has by order permitted such
suspension; or (d) an emergency exists as determined by the SEC. (The Funds may
also suspend or postpone the recording of the transfer of their shares upon the
occurrence of any of the foregoing conditions.)
In addition to the situations described in the Funds' Prospectuses under
"Redemption of Shares" and in the Statement of Additional Information under "Net
Asset Value," the Company may redeem shares involuntarily to reimburse the Funds
for any loss sustained by reason of the failure of a shareholder to make full
payment for shares purchased by the shareholder or to collect any charge
relating to a transaction effected for the benefit of a shareholder which is
applicable to Fund shares as provided in the Prospectuses from time to time.
Exchange Privilege (Not Available for Shares of the Institutional Money Market
Fund). By use of the exchange privilege, shareholders of the Money Market Fund,
U.S. Treasury Money Market Fund, U.S. Government Money Market Fund and Tax-
Exempt Money Market Fund authorize the transfer agent to act on telephonic or
written exchange instructions from any person representing himself to be the
shareholder or in some cases, the shareholder's registered representative of
record, and believed by the transfer agent to be genuine. The transfer agent's
records of such instructions are binding. The exchange privilege may be
modified or terminated at any time upon notice to shareholders.
Exchange transactions involving shares of the Money Market Fund, U.S. Treasury
Money Market Fund, U.S. Government Money Market Fund or Tax-Exempt Money Market
Fund and described in paragraphs A, B and C below will be made on the basis of
the relative net asset values per share of the funds involved in the
transactions.
A. Retail Shares of any Equity or Bond Fund purchased with a sales charge may
be exchanged without a sales charge for Retail Shares of any other Equity or
Bond Fund offered by the Company with a sales charge.
B. Shares of any Equity or Bond Fund offered by the Company acquired by a
previous exchange transaction involving Retail Shares on which a sales charge
has directly or indirectly been paid (e.g., shares purchased with a sales
charge or issued in connection with an exchange involving shares that had
been purchased with a sales charge) as well as additional Shares acquired
through reinvestment of dividends or distributions on such Shares may be
exchanged without a sales charge for Retail Shares of any other Fund offered
by the Company with a sales charge. To accomplish an exchange under the
provisions of this paragraph, investors must notify the transfer agent of
their prior ownership of Retail Shares and their account number.
C. Shares of any Fund offered by the Company (including shares of each money
market Fund offered by the Company except the Institutional Money Market
Fund) may be exchanged without a sales charge for Shares of any other Fund of
the Company that is offered without a sales charge (including shares of each
money market Fund offered by the Company except the Institutional Money
Market Fund).
Except as stated above, a sales charge will be imposed when Shares of a Fund
that were purchased or otherwise acquired without a sales charge (including
shares of each money market Fund offered by the Company except the Institutional
Money Market Fund) are redeemed and the proceeds are used to purchase Retail
Shares of another Fund of the Company with a sales charge.
Shares in a Fund from which the shareholder is withdrawing an investment will be
redeemed at the net asset value per share next determined on the date of
receipt. Shares of the new Fund into which the shareholder is investing will be
purchased at the net asset value per share next determined (plus any applicable
sales charge) after acceptance of the request by the Company in accordance with
the Company's customary policies for accepting investments. Exchanges of Shares
will be available only in states where they may legally be made.
For federal income tax purposes, share exchanges are treated as sales on which
the shareholder may realize a gain or loss, depending upon whether the value of
the shares to be given up in exchange is more or less than the basis in such
shares at the time of the exchange. Investors exercising the exchange privilege
should request and review the Prospectus for the shares to be acquired in the
exchange prior to making an exchange.
Special Procedures for In-Kind Payments
- ---------------------------------------
Payment for shares of a Fund may, in the discretion of the Fund, be made in the
form of securities that are permissible investments for the Fund as described in
its Prospectus. For further information about this form of payment, contact
Portico Investor Services at 414-287-3710. In connection with an in-kind
securities payment, a Fund will require, among other things, that the securities
be valued on the day of purchase in accordance with the pricing methods used by
the Fund; that the Fund receive satisfactory assurances that it will have good
and marketable title to the securities received by it; that the securities be in
proper form for transfer to the Fund; that adequate information be provided to
the Fund concerning the basis and other tax matters relating to the securities;
and that the amount of the purchase be at least $1,000,000. In addition, the
Funds will consider accepting securities as consideration for shares only if
such securities are acquired for investment and not for resale (although the
Funds may sell such securities in response to market or Fund activity), are
liquid and have a value which is readily ascertainable.
- ---
ADDITIONAL INFORMATION REGARDING SHAREHOLDER SERVICES FOR
THE U.S. GOVERNMENT MONEY MARKET,
U.S. TREASURY MONEY MARKET,
MONEY MARKET AND
TAX-EXEMPT MONEY MARKET FUNDS
Periodic Investment Plan
- ------------------------
The Funds offer a Periodic Investment Plan whereby a shareholder may
automatically make purchases of shares of a Fund on a regular, monthly basis
($50 minimum per transaction). Under the Periodic Investment Plan, a
shareholder's designated bank or other financial institution debits a
preauthorized amount on the shareholder's account each month and applies the
amount to the purchase of Fund shares. The Periodic Investment Plan must be
implemented with a financial institution that is a member of the Automated
Clearing House. No service fee is currently charged by a Fund for participation
in the Periodic Investment Plan. A $15 fee will be imposed by the transfer
agent if sufficient funds are not available in the shareholder's account or the
shareholder's account has been closed at the time of the automatic transaction.
ConvertiFund/R Transactions
- --------------------------
The Funds permit shareholders to effect ConvertiFund/R transactions, an
automated method by which a shareholder may invest proceeds from one account to
another account of the Portico family of funds. Such proceeds include dividend
distributions, capital gain distributions and systematic withdrawals.
ConvertiFund/R transactions may be used to invest funds from a regular account
to another regular account, from a qualified plan account to another qualified
plan account, or from a qualified plan account to a regular account.
Investments in the non-money market funds will be subject to the applicable
sales charges.
Systematic Withdrawal Plan
- --------------------------
The Funds offer shareholders a Systematic Withdrawal Plan, which allows a
shareholder who owns shares of a Fund worth at least $15,000 at current net
asset value at the time the shareholder initiates the Systematic Withdrawal Plan
to designate that a fixed sum ($50 minimum per transaction) be distributed to
the shareholder or as otherwise directed at regular intervals.
DESCRIPTION OF SHARES
The Company's Articles of Incorporation authorize the Board of Directors to
issue up to 150 billion full and fractional shares of common stock, $.0001 par
value per share that shall be divided into thirty classes (each a designated
"class" or "fund"). Each class is further divided into two series,
Institutional Series and Series A/Retail Series (each, a "Series") and, with
respect to the Funds, consists of shares set forth next to its name in the table
below:
Class-Series of Fund in Which Stock Number of Authorized
Common Stock Represents Interest Shares in Each
- ------------ ------------------- --------------
Initial Series
--------------
1-Institutional Money Market 5 billion
1-A 5 billion
2-Institutional Tax-Exempt Money Market 5 billion
2-A 5 billion
3-Institutional U.S. Government Money 5 billion
3-A Market 5 billion
4-Institutional Institutional Money 5 billion
4-A Market 5 billion
5-Institutional U.S. Treasury Money 5 billion
5-A Market 5 billion
Currently, only Series A Shares of the Money Market Funds have been offered by
the Company. The Board of Directors has also authorized the issuance of Classes
6 through 17 common stock representing interests in twelve other separate
investment portfolios which are described in separate prospectuses and Statement
of Additional Information. The remaining authorized shares have been classified
by the Board into thirteen additional classes representing interest in other
potential future investment portfolios of the Company. The Directors may
similarly classify or reclassify any particular class of shares into one or more
additional series.
In the event of a liquidation or dissolution of the Company or an individual
Fund, shareholders of a particular Fund would be entitled to receive the assets
available for distribution belonging to such Fund, and a proportionate
distribution, based upon the relative assets of the Company's respective
investment portfolios, of any general assets not belonging to any particular
portfolio which are available for distribution. Subject to the allocation of
certain costs, expenses, charges and reserves attributable to the operation of a
particular series, shareholders of a Fund are entitled to participate equally in
the net distributable assets of the particular Fund involved on liquidation,
based on the number of shares of the Fund that are held by each shareholder.
Shareholders of the Funds, as well as those of any other investment portfolio
offered by the Company, will vote together in the aggregate and not separately
on a Fund-by-Fund basis, except as otherwise required by law or when the Board
of Directors determines that the matter to be voted upon affects only the
interests of the shareholders of a particular class or a particular series
within a class. Rule 18f-2 under the 1940 Act provides that any matter required
to be submitted to the holders of the outstanding voting securities of an
investment company such as the Company shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each portfolio affected by the matter. A portfolio is
affected by a matter unless it is clear that the interests of each portfolio in
the matter are substantially identical or that the matter does not affect any
interest of the portfolio. Under the Rule, the approval of an investment
advisory agreement or any change in a fundamental investment policy would be
effectively acted upon with respect to a portfolio only if approved by a
majority of the outstanding shares of such portfolio. However, the Rule also
provides that the ratification of the appointment of independent accountants,
the approval of principal underwriting contracts and the election of Directors
may be effectively acted upon by shareholders of the Company voting together in
the aggregate without regard to particular portfolios.
When issued for payment as described in the Funds' Prospectuses and this
Statement of Additional Information, shares of the Funds will be fully paid and
non-assessable by the Company, except as provided in Section 180.0622(2)(b) of
the Wisconsin Business Corporation Law, as amended, which in general provides
for personal liability on the part of a corporation's shareholders for unpaid
wages of employees. The Company does not intend to have any employees and, to
that extent, the foregoing statute will be inapplicable to holders of Fund
shares and will not have a material effect on the Company.
The Articles of Incorporation authorize the Board of Directors, without
shareholder approval (unless otherwise required by applicable law), to: (a) sell
and convey the assets belonging to a series of shares to another management
investment company for consideration which may include securities issued by the
purchaser and, in connection therewith, to cause all outstanding shares of such
series to be redeemed at a price which is equal to their net asset value and
which may be paid in cash or by distribution of the securities or other
consideration received from the sale and conveyance; (b) sell and convert the
assets belonging to a series of shares into money and, in connection therewith,
to cause all outstanding shares of such series to be redeemed at their net asset
value; or (c) combine the assets belonging to a series of shares with the assets
belonging to one or more other series of shares if the Board of Directors
reasonably determines that such combination will not have a material adverse
effect on the shareholders of any series participating in such combination and,
in connection therewith, to cause all outstanding shares of any such series to
be redeemed or converted into shares of another series of shares at their net
asset value.
ADDITIONAL INFORMATION CONCERNING TAXES
The following is only a summary of certain additional tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' Prospectuses. No attempt is made to present a detailed explanation of
the tax treatment of the Funds or their shareholders, and the discussion here
and in the Prospectuses is not intended as a substitute for careful tax
planning. Investors are advised to consult their tax advisers with specific
reference to their own tax situations.
Tax-Exempt Money Market Fund
- ----------------------------
As described above and in its Prospectus, the Tax-Exempt Money Market Fund is
designed to provide investors with current tax-exempt interest income. This
Fund is not intended to constitute a balanced investment program and is not
designed for investors seeking capital appreciation or maximum tax-exempt income
irrespective of fluctuations in principal. Shares of the Fund may not be
suitable for tax-exempt institutions, or for retirement plans qualified under
Section 401 of the Internal Revenue Code of 1986 (the "Code"), H.R. 10 plans and
individual retirement accounts since such plans and accounts are generally tax-
exempt and, therefore, not only would not gain any additional benefit from the
Fund's dividends being tax-exempt, but such dividends would be ultimately
taxable to the beneficiaries when distributed to them. In addition, the Fund
may not be an appropriate investment for entities which are "substantial users"
of facilities financed by private activity bonds or "related persons" thereof.
"Substantial user" is defined under U.S. Treasury Regulations to include a non-
exempt person who regularly uses a part of such facilities in his trade or
business and whose gross revenues derived with respect to the facilities
financed by the issuance of bonds are more than 5% of the total revenues derived
by all users of such facilities, who occupies more than 5% of the usable area of
such facilities or for whom such facilities or a part thereof were specifically
constructed, reconstructed or acquired. "Related persons" include certain
related natural persons, affiliated corporations, a partnership and its partners
and an S Corporation and its shareholders.
The percentage of total dividends paid by the Tax-Exempt Money Market Fund with
respect to any taxable year which qualifies as federal exempt-interest dividends
will be the same for all shareholders receiving dividends for such year. In
order for this Fund to pay exempt-interest dividends during any taxable year, at
the close of each taxable quarter at least 50% of the aggregate value of the
Fund's portfolio must consist of tax-exempt obligations. In addition, the Fund
must distribute an amount that is at least equal to the sum of 90% of the net
tax-exempt interest income and 90% of the investment company taxable income
earned by the Fund for the taxable year. Within 60 days of the close of its
taxable year, the Fund will notify shareholders of the portion of the dividends
paid by the Fund which constitutes an exempt-interest dividend with respect to
such taxable year. However, the aggregate amount of dividends so designated
cannot exceed the excess of the amount of interest exempt from tax under Section
103 of the Code received by the Fund during the taxable year over any amounts
disallowed as deductions under Sections 265 and 171(a)(2) of the Code.
Interest on indebtedness incurred by a shareholder to purchase or carry shares
of the Tax-Exempt Money Market Fund generally is not deductible for federal
income tax purposes if the Fund distributes exempt-interest dividends during the
shareholder's taxable year. If a shareholder holds shares of the Tax-Exempt
Money Market Fund for six months or less, any loss on the sale or exchange of
those shares will be disallowed to the extent of the amount of exempt-interest
dividends received with respect to the shares. The Treasury Department,
however, is authorized to issue regulations reducing the six-month holding
requirement to a period of not less than the greater of 31 days or the period
between regular distributions for investment companies that regularly distribute
at least 90% of their net tax-exempt interest. No such regulations had been
issued as of the date of this Statement of Additional Information.
All Funds
- ---------
Investment company taxable income earned by the Money Market Fund, the
Institutional Money Market Fund, the U.S. Treasury Money Market Fund, the U.S.
Government Money Market Fund or the Tax-Exempt Money Market Fund will be
distributed by the Funds to their shareholders, and will be taxable to
shareholders as ordinary income whether paid in cash or additional shares. In
general, investment company taxable income will be a Fund's taxable income,
subject to certain adjustments and excluding the excess of any net long-term
capital gain for the taxable year over the net short-term capital loss, if any,
for such year.
Similarly, while the Funds do not expect to realize long-term capital gains, any
net realized long-term capital gains will be distributed at least annually. The
Funds will generally have no tax liability with respect to such gains and the
distributions (whether paid in cash or additional shares) will be taxable to
shareholders as long-term capital gains, regardless of how long a shareholder
has held Fund shares. Such distributions will be designated as a capital gain
dividend in a written notice mailed by the Company to shareholders after the
close of the Company's taxable year.
A 4% non-deductible excise tax is imposed on regulated investment companies that
fail to currently distribute specified percentages of their ordinary taxable
income and capital gain net income (excess of capital gains over capital
losses). The Funds intend to make sufficient distributions or deemed
distributions of their ordinary taxable income and any capital gain net income
with respect to each calendar year to avoid liability for this excise tax.
Each Fund is treated as a separate tax entity under the Code. Although each
Fund expects to qualify as a "regulated investment company" and to be relieved
of all or substantially all federal income taxes, depending upon the extent of
the Company's activities in states and localities in which its offices are
maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, the Funds may be subject
to the tax laws of such states or localities. In addition, in those states and
localities which have income tax laws, the treatment of the Funds and their
shareholders under such laws may differ from their treatment under federal
income tax laws.
If for any taxable year a Fund does not qualify for the special federal income
tax treatment afforded regulated investment companies, all of its taxable income
will be subject to federal income tax at regular corporate rates (without any
deduction for distributions to its shareholders). In such event, dividend
distributions (including amounts derived from interest on Municipal Obligations)
would be taxable as ordinary income to shareholders to the extent of the Fund's
current and accumulated earnings and profits and would be eligible for the
dividends received deduction in the case of corporate shareholders.
The foregoing discussion is based on federal tax laws and regulations which are
in effect on the date of this Statement of Additional Information; such laws and
regulations may be changed by legislative or administrative action.
MANAGEMENT OF THE COMPANY
Directors and Officers
- ----------------------
The Directors and officers of the Company, their addresses, age, principal
occupations during the past five years and other affiliations are as follows:
Position Principal
with Occupations During Past
Name, Address the 5 Years and Other
and Age Company Affiliations
- --------------------- ----------- ------------
James M. Wade<F100> Chairman, Vice President and
2802 Wind Bluff Circle President Chief Financial
Wilmington, NC 28409 and Officer, Johnson
Age: 52 Treasurer Controls, Inc. (a
controls manufacturing
company), January 1987
- May 1991.
Glen R. Bomberger Director Executive Vice
One Park Plaza President, Chief
11270 West Park Place Financial Officer and
Milwaukee, WI 53224- Director, A.O. Smith
3690 Corporation (a
Age: 58 diversified
manufacturing company)
since January 1987;
Director of companies
affiliated with A.O.
Smith Corporation;
Chief Financial
Officer, Director and
Vice President, Smith
Investment Company;
Officer and Director of
companies affiliated
with Smith Investment
Company.
Jerry G. Remmel Director Vice President,
231 W. Michigan Street Treasurer and Chief
Milwaukee, WI 53202 Financial Officer of
Age: 64 Wisconsin Energy
Corporation since 1994;
Treasurer of Wisconsin
Electric Power Company
since 1973; Director,
Wisconsin Electric
Power Company since
1989; Senior Vice
President, Wisconsin
Electric Power Company
1988-1994; Chief
Financial Officer,
Wisconsin Electric
Power Company since
1983; Vice President
and Treasurer,
Wisconsin Electric
Power Company, 1983 -
1989.
Richard K. Riederer Director President and Chief
400 Three Springs Operating Officer of
Drive Weirton Steel since
Weirton, WV 26062- 1995; Executive Vice
4989 President and Chief
Age: 51 Financial Officer,
Weirton Steel, January
1994-1995; Vice
President of Finance
and Chief Financial
Officer, Weirton Steel,
January 1989-1994;
Member Board of
Directors of American
Iron and Steel
Institute since 1995;
Member Board of
Directors, National
Association of
Manufacturers since
1995.
Charles R. Roy<F100> Director Vice President -
14245 Heatherwood Finance, Chief
Court Financial Officer and
Elm Grove, WI 53122 Secretary, Rexnord
Age: 65 Corporation (an
equipment manufacturing
company), since 1988 -
1992; Vice President -
Finance and
Administration,
Rexnord, Inc., 1982 -
1992; Officer and
Director of several
Rexnord subsidiaries
until 1992.
Mary Ellen Stanek Vice President and Chief
777 East Wisconsin President Operating Officer
Avenue FIRMCO since 1994,
Suite 1800 Director since 1992 and
Milwaukee, WI 53202 Director of Fixed
Age: 39 Income series since
1990.
W. Bruce McConnel, III Secretary Partner of the law firm
Philadelphia National of Drinker Biddle &
Bank Reath.
1345 Chestnut Street
Philadelphia, PA
19107
Age: 52
<F100>Messrs. Wade and Roy are considered by the Company to be "interested
directors" of the Company as defined in the 1940 Act.
The following chart provides certain information about the Director
fees for the year ended October 31, 1995 of the Company's Directors.
PENSION OR TOTAL
RETIREMENT COMPENSATION
AGGREGATE BENEFITS ESTIMATED FROM
NAME OF COMPENSATION ACCRUED AS ANNUAL COMPANY AND
PERSON/ FROM PART OF BENEFITS FUND
POSITION THE FUND UPON COMPLEX <F101> PAID TO
COMPANY EXPENSES RETIREMENT DIRECTORS
- --------- ------------ --------- ---------- ----------------------
James M. Wade
President,
Treasurer $15,250 $0 $0 $15,250
and
Chairman of
the Board
Glen R.
Bomberger 12,500<F102> $0 $0 12,500
Director
Jerry G.
Remmel 12,500 $0 $0 12,500
Director
Richard K.
Riederer 12,500 $0 $0 12,500
Director
Charles R.
Roy 12,500 $0 $0 12,500
Director
<F101>The "Fund Complex" includes only the Company.
<F102>Includes $12,500 which Mr. Bomberger elected to defer under the
Company's deferred compensation plan.
Each Director receives an annual fee of $7,000, a $1,000 per meeting attendance
fee and reimbursement of expenses incurred as a Director. The Chairman of the
Board is entitled to receive an additional $3,000 per annum for services in such
capacity. For the fiscal year ended October 31, 1995, the Directors and
Officers received aggregate fees of $65,250. Ms. Stanek receives no fees from
the Company for her services as Vice President, although FIRMCO, of which she is
President, receives fees from the Company for advisory services. Drinker Biddle
& Reath, of which Mr. McConnel is a partner, receives legal fees as counsel to
the Company. As of the date of this Statement of Additional Information, the
Directors and Officers of the Company, as a group, owned less than 1% of the
outstanding shares of each Fund.
- ----
Advisory Services
- -----------------
FIRMCO became the investment adviser to the Funds as of February 3, 1992. Prior
thereto, investment advisory services were provided by Firstar Trust Company, an
affiliate of the Adviser. Firstar Trust Company has guaranteed all obligations
incurred by FIRMCO in connection with its Investment Advisory Agreement with the
Funds. In its Investment Advisory Agreement, the Adviser has agreed to pay all
expenses incurred by it in connection with its advisory activities, other than
the cost of securities and other investments, including brokerage commissions
and other transaction charges, if any, purchased or sold for the Funds.
The Adviser has also agreed that if, in any fiscal year, the expenses borne by a
Fund exceed the applicable expense limitations imposed by the securities
regulations of any state in which shares of the Fund are registered or qualified
for sale to the public, it will reimburse the Fund for any excess to the extent
required by such regulations. To the knowledge of the Funds, of the applicable
expense limitations in effect as of the date of this Statement of Additional
Information, none is more restrictive than 2-1/2% of the first $30 million of a
Fund's average annual net assets, 2% of the next $70 million of average annual
net assets, and 1-1/2% of the remaining average annual net assets. In addition,
the Adviser may also voluntarily waive additional advisory fees otherwise
payable by the Funds. Certain expenses including interest, taxes, brokerage and
distribution expenses are not subject to this expense cap. In addition, the
Adviser is entitled to 4/10ths of the gross income earned by each Fund on each
loan of its securities, excluding capital gains or losses, if any.
For the services provided and expenses assumed by the Adviser under its
investment advisory agreements for the fiscal years ended October 31, 1995,
1994, and 1993, the Adviser earned and waived advisory fees as follows:
Advisory Fees Earned (Advisory Fees Waived)
-------------------------------------------
1995 1994 1993
---- ---- ----
Money Market Fund $422,104 (365,955) $319,171 (384,249) $162,625 (465,960)
U.S. Treasury Money 199,277 (97,487) 102,634 (130,917) 97,048 (165,142)
Market Fund
U.S. Government 730,168 (136,091) 524,889 (442,933) 389,745 (646,522)
Money Market Fund
Tax-Exempt Money 232,548 (118,037) 171,919 (214,967) 84,322 (226,002)
Market Fund
Institutional Money 1,670,220 722,865 (2,610,542) $247,162
Market Fund (1,882,153) (3,089,292)
Under its Investment Advisory Agreement, the Adviser is not liable for any error
of judgment or mistake of law or for any loss suffered by the Company in
connection with the performance of such Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
its reckless disregard of its duties and obligations under the Agreement.
Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, presently
(a) prohibit a bank holding company registered under the Federal Bank Holding
Company Act of 1956 or any bank or non-bank affiliate thereof from sponsoring,
organizing, controlling or distributing the shares of a registered, open-end
investment company continuously engaged in the issuance of its shares, and
prohibit banks generally from underwriting securities, but (b) do not prohibit
such a bank holding company or affiliate or banks generally from acting as
investment adviser, transfer agent or custodian to such an investment company or
from purchasing shares of such a company as agent and upon order of a customer.
In 1971, the United States Supreme Court held in Investment Company Institute
vs. Camp that the Glass-Steagall Act prohibits a national bank from operating a
fund for the collective investment of managing agency accounts. Subsequently,
the Board of Governors of the Federal Reserve System (the "Board") issued a
regulation and interpretation to the effect that the Glass-Steagall Act and such
decision forbid a bank holding company registered under the Federal Bank Holding
Company Act of 1956 (the "Holding Company Act"), or any non-bank affiliate
thereof from sponsoring, organizing or controlling a registered, open-end
investment company continuously engaged in the issuance of its shares, but did
not prohibit such a holding company or affiliate from acting as investment
adviser, transfer agent and custodian to such an investment. company. In 1981,
the United States Supreme Court held in Board of Governors of the Federal
Reserve System vs. Investment Company Institute that the Board did not exceed
its authority under the Holding Company Act when it adopted its regulation and
interpretation authorizing bank holding companies and their non-bank affiliates
to act as investment advisers to registered closed-end investment companies.
FIRMCO and Firstar Trust Company are subject to such banking laws and
regulations.
The Adviser and Firstar Trust Company believe that they may perform the services
for the Funds contemplated by their respective agreements with the Company
without violation of the Glass-Steagall Act or other applicable banking laws or
regulations. These companies further believe that, if the question were properly
presented, a court should hold that these companies may each perform such
activities without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. It should be noted, however, there have been no
cases deciding whether banks and their affiliates may perform services
comparable to those performed by these companies, and future changes in either
federal or state statutes and regulations relating to permissible activities of
banks or trust companies and their subsidiaries or affiliates, as well as
further judicial or administrative decisions or interpretations of present and
future statutes and regulations, could prevent such companies from continuing to
perform such services for the Funds. If the companies were prohibited from
continuing to perform advisory, accounting, shareholder servicing and custody
services for the Funds, it is expected that the Board of Directors would
recommend that the Funds enter into new agreements or would consider the
possible termination of the Funds.
Shares of the Funds are not bank deposits, are not insured by the FDIC or any
other governmental agency, are not endorsed, insured or guaranteed by Firstar
Trust Company or FIRMCO and are not obligations of or otherwise supported by
Firstar Trust Company or FIRMCO.
Administration and Distribution Services
- ----------------------------------------
Firstar Trust Company ("Firstar") became a Co-Administrator to the Funds on
September 1, 1994, and B. C. Ziegler and Company ("Ziegler") became a Co-
Administrator to the Funds on January 1, 1995. Under the Co-Administration
Agreement, the following administrative services will be provided jointly by the
Co-Administrators: assist in maintaining office facilities, furnish clerical
services, stationery and office supplies; monitor the company's arrangements
with respect to services provided by Shareholder Organizations; and generally
assist in the Funds' operations. The following administrative services will be
provided by Ziegler: review and comment upon the registration statement and
amendments thereto prepared by Firstar or counsel to the company, as requested
by Firstar; review and comment upon sales literature and advertising relating to
the company, as requested by Firstar; assist in the preparation of the marketing
budget; periodically review blue sky registration and sales reports for the
Funds; attend meetings of the Board of Directors, as requested by the Board of
Directors of the Funds; and such other services as may be requested in writing
and expressly agreed to by Ziegler. The following administrative services will
be provided by Firstar: compile data for and prepare with respect to the Funds
timely Notices to the Securities and Exchange Commission required pursuant to
rule 24f-2 under the 1940 Act and Semi-Annual Reports on Form N-SAR; coordinate
execution and filing by the company of all federal and state tax returns and
required tax filings other than those required to be made by the company's
custodian and transfer agent; prepare compliance filings and blue sky
registrations pursuant to state securities laws with the advice of the company's
counsel; assist to the extent requested by the company with the company's
preparation of annual and semi-annual reports to Fund shareholders and
registration statements for the Funds; monitor each Fund's expense accruals and
cause all appropriate expenses to be paid on proper authorization from each
Fund; monitor each Fund's status as a regulated investment company under
Subchapter M of the Code; maintain each Fund's fidelity bond as required by the
1940 Act; and monitor compliance with the policies and limitations of each Fund
as set forth in the prospectuses, statements of additional information, by-laws
and articles of incorporation.
Each of the Co-Administrators have agreed to pay all expenses incurred by it in
connection with its administrative activities. Under the Co-Administration
Agreement, the Co-Administrators are not liable for any error of judgment or
mistake of law or for any loss suffered by the Funds in connection with the
performance of the Co-Administration Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Co-
Administrators in the performance of their respective duties or from their
reckless disregard of their duties and obligations under the Agreement.
The Distributor also provides distribution services for each Fund as described
in the Funds' Prospectuses pursuant to a Distribution Agreement with the Funds
under which the Distributor, as agent, sells shares of each Fund on a continuous
basis. The Distributor has agreed to use its best efforts to solicit orders for
the sale of shares, although it is not obliged to sell any particular amount of
shares. The Distributor causes expenses to be paid for the cost of printing
and distributing prospectuses to persons who are not shareholders of the Funds
(excluding preparation and printing expenses necessary for the continued
registration of the Funds' shares) and of printing and distributing all sales
literature. For the fiscal years ended October 31, 1994 and 1993, Sunstone
Financial Group, Inc., ("Sunstone") Portico Funds' former Distributor and Co-
Administrator, received no fees for its distribution services. For the fiscal
year ended October 31, 1995, Ziegler received no fees for its distribution
services. For the fiscal years ended October 31, 1995, 1994, and 1993, the
following administrative fees were earned and waived:
Administration Fees Earned (Administration Fees Waived)
-------------------------------------------------------
1995 1994 1993
---- ---- ----
Money Market Fund $72,183 $90,485 $135,520
(119,354) (81,639) (21,626)
U.S. Treasury 27,263 29,836 56,585
Money Market Fund (44,793) (27,368) (8,963)
U. S. Government 77,856 132,045 223,641
Money Market Fund (130,337) (105,050) (35,426)
Tax-Exempt Money 31,469 56,785 66,947
Market Fund (51,566) (37,943) (10,636)
Institutional 215,820 221,920 607,848
Money Market Fund (647,783) (593,834) (226,265)
Shareholder Organizations (Money Market, U.S. Government Money Market, U.S.
- -------------------------
Treasury Money Market and Tax-Exempt Money Market Funds):
As stated in the Funds' Prospectus, the Funds intend to enter into agreements
from time to time with Shareholder Organizations providing for support and/or
distribution services to customers of the Shareholder Organizations who are the
beneficial owners of Fund shares. Under the agreements, the Funds may pay
Shareholder Organizations up to 0.25% (on an annualized basis) of the average
daily net asset value of the shares beneficially owned by their customers.
Services provided by Shareholder Organizations under their agreements may
include: (i) processing dividend and distribution payments from a Fund; (ii)
providing information periodically to customers showing their share positions;
(iii) arranging for bank wires; (iv) responding to customer inquiries; (v)
providing sub-accounting with respect to shares beneficially owned by customers
or the information necessary for sub-accounting; (vi) forwarding shareholder
communications; (vii) assisting in processing share purchase, exchange and
redemption requests from customers; (viii) assisting customers in changing
dividend options, account designations and addresses; and (ix) other similar
services requested by the Funds. In addition, under the Distribution and
Service Plan, Shareholder Organizations may provide assistance (such as the
forwarding of sales literature and advertising to their customers) in connection
with the distribution of Fund shares.
The Funds' arrangements with Shareholder Organizations under the agreements are
governed by two Plans (a Service Plan and a Distribution and Service Plan),
which have been adopted by the Board of Directors. Because the Distribution and
Service Plan contemplates the provision of services related to the distribution
of Fund shares (in addition to support services), that Plan has been adopted in
accordance with Rule 12b-1 under the 1940 Act. In accordance with the Plans,
the Board of Directors reviews, at least quarterly, a written report of the
amounts expended in connection with the Funds' arrangements with Shareholder
Organizations and the purposes for which the expenditures were made. In
addition, the Funds' arrangements with Shareholder Organizations must be
approved annually by a majority of the Directors, including a majority of the
Directors who are not "interested persons" of the Funds as defined in the 1940
Act and have no direct or indirect financial interest in such arrangements (the
"Disinterested Directors").
The Funds believe that there is a reasonable likelihood that their arrangements
with Shareholder Organizations have benefited each Fund and its shareholders as
a way of allowing Shareholders Organizations to participate with the Funds in
the provision of support and distribution services to customers of the
Shareholder Organizations who own Fund shares. Any material amendment to the
arrangements with Shareholder Organizations under the agreements must be
approved by a majority of the Board of Directors (including a majority of the
Disinterested Directors), and any amendment to increase materially the costs
under the Distribution and Service Plan with respect to a Fund must be approved
by the holders of a majority of the outstanding shares of the Fund involved. So
long as the Distribution and Service Plan is in effect, the selection and
nomination of the members of the Board of Directors who are not "interested
persons" (as defined in the 1940 Act) of the Funds will be committed to the
discretion of such disinterested Directors.
The Funds paid fees to Shareholder Organizations, none of which were affiliated
with the Adviser, pursuant to the Distribution and Service Plan for the fiscal
years ended October 31, 1995, 1994, and 1993 as follows:
Fees Earned by Non-Affiliated
Shareholder Organizations
-------------------------
1995 1994 1993
---- ---- ----
Money Market Fund $35,574 $19,423 $18,584
U.S. Government Money 365 573 856
Market Fund
Tax-Exempt Money Market 260 222 1,174
Fund
Institutional Money 0 0 0
Market Fund
U.S. Treasury Money 46 0 0
Market Fund
The Funds paid fees to Shareholder Organizations, all of which were affiliated
with the Adviser, pursuant to the Service Plan for the fiscal years ended
October 31, 1995,1994, and 1993 as follows:
Fees Earned by Affiliated
Shareholder Organizations
-------------------------
1995 1994 1993
---- ---- ----
Money Market Fund $9,663 $61,480 $49,187
U.S. Government Money 48,913 367,140 422,756
Market Fund
Tax-Exempt Money Market 16,271 110,489 87,425
Fund
Institutional Money 293,262 1,324,778 1,341,439
Market Fund
U. S. Treasury Money 12,934 50,187 73,820
Market Fund
As of January 1, 1995, the Institutional Money Market Fund no longer pays
Shareholder Organization fees under the Service Plan.
CUSTODIAN, TRANSFER AGENT, DISBURSING AGENT AND ACCOUNTING SERVICES AGENT
Firstar Trust Company serves as custodian of the Funds' assets pursuant to a
Custody Agreement. Under the Custody Agreement, Firstar Trust Company has
agreed to (i) maintain a separate account in the name of each Fund, (ii) make
receipts and disbursements of money on behalf of each Fund, (iii) collect and
receive all income and other payments and distributions on account of each
Fund's portfolio investments, (iv) respond to correspondence from shareholders,
security brokers and others relating to its duties and (v) make periodic reports
to the Company concerning each Fund's operations. Firstar Trust Company may, at
its own expense, open and maintain a custody account or accounts on behalf of
each Fund with other banks or trust companies, provided that Firstar Trust
Company shall remain liable for the performance of all of its duties under the
Custody Agreement notwithstanding any delegation. For its services as
custodian, Firstar Trust Company is entitled to receive a fee, payable
quarterly, based on the following annual rate of $0.20 per $1,000 of the market
value of each Fund's assets. In addition, Firstar Trust Company, as custodian,
is entitled to certain charges for securities transactions and reimbursement for
expenses.
Firstar Trust Company also serves as transfer agent and dividend disbursing
agent for each Fund under a Shareholder Servicing Agent Agreement. As transfer
and dividend disbursing agent, Firstar Trust Company has agreed to (i) issue and
redeem shares of the Funds, (ii) make dividend and other distributions to
shareholders of the Funds, (iii) respond to correspondence by Fund shareholders
and others relating to its duties, (iv) maintain shareholder accounts, and (v)
make periodic reports to the Funds. For its transfer agency and dividend
disbursing services, Firstar Trust Company is entitled to receive a fee at the
following rates: $6,000 per portfolio plus $20 per shareholder account and
$1.00 per financial transaction in excess of 4 per year per account, plus
certain other transaction charges and reimbursement for expenses. In addition,
Firstar Trust Company is entitled to receive, with respect to the Periodic
Investment Plan, $125.00 per monthly or bi-monthly cycle for the Funds and all
other investment portfolios of the Company.
In addition, the Funds have entered into a Fund Accounting Servicing Agreement
with Firstar Trust Company pursuant to which Firstar Trust Company has agreed to
maintain the financial accounts and records of the Funds in compliance with the
1940 Act and to provide other accounting services to the Funds. For its
accounting services, Firstar Trust Company is entitled to receive fees, payable
monthly, at the annual rate of $25,000 on the first $40 million of each Fund's
assets and 1/100th of 1% on the next $200 million of such assets, plus out-of-
pocket expenses, including pricing expenses. The annual fee for the
Institutional Money Market Fund is capped at $45,000.
EXPENSES
Operating expenses of the Funds include taxes, interest, fees and expenses of
Directors and officers, Securities and Exchange Commission fees, state
securities qualification fees, advisory fees, administrative fees, Shareholder
Organization fees, charges of the custodian and transfer agent, dividend
disbursing agent and accounting services agent, certain insurance premiums,
auditing and legal expenses, costs of preparing and printing prospectuses for
regulatory purposes and for distribution to shareholders, costs of shareholder
reports and meetings and any extraordinary expenses. The Funds also pay any
brokerage fees. commissions and other transaction charges (if any) incurred in
connection with the purchase and sale of portfolio securities.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, 100 E. Wisconsin Avenue, Suite
1500, Milwaukee, Wisconsin 53202, serve as auditors for the Company. The
financial statements and related report of Price Waterhouse LLP contained in the
respective Fund's Annual Report for the fiscal year ended October 31, 1995 are
incorporated herein by reference. No other part of the Fund's Annual Report is
incorporated herein by reference.
COUNSEL
Drinker Biddle & Reath (of which Mr. McConnel, Secretary of the Company, is a
partner), Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107, serve as counsel to the Company and will pass
upon the legality of the shares offered by each Fund's Prospectus.
ADDITIONAL INFORMATION ON YIELD
The "yield" and "effective yield" of each Fund described in their Prospectuses
are calculated according to formulas prescribed by the Securities and Exchange
Commission. The standardized seven-day yield for each Fund is computed
separately by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account in the particular Fund involved
having a balance of one share at the beginning of the period, dividing the net
change in account value by the value of the account at the beginning of the base
period to obtain the base period return, and multiplying the base period return
by (365/7). The net change in the value of an account in a Fund includes the
value of additional shares purchased with dividends from the original share, and
dividends declared on both the original share and any such additional shares and
all fees, other than nonrecurring account sales charges, that are charged to all
shareholder accounts in proportion to the length of the base period and the
Fund's average account size. The capital changes to be excluded from the
calculation of the net change in account value are realized gains and losses
from the sale of securities and unrealized appreciation and depreciation. The
effective annualized yield for each Fund is computed by compounding a particular
Fund's unannualized base period return (calculated as above) by adding 1 to the
base period return, raising the sum to a power equal to 365 divided by 7, and
subtracting one from the result. The fees which may be imposed by financial
intermediaries directly on their customers for cash management services are not
reflected in the Company's calculations of yields for the Funds.
In addition, the Tax-Exempt Money Market Fund may advertise its standardized
"tax-equivalent yield," which is computed by: (a) dividing the portion of the
Fund's yield (as calculated above) that is exempt from federal income tax by one
minus a stated federal income tax rate; and (b) adding the figure resulting from
(a) above to that portion, if any, of the Fund's yield that is not exempt from
federal income tax.
The current yield for each of the Funds may be obtained by calling Portico
Investor Services at 1-800-228-1024. For the seven-day period ended October 31,
1995, the annualized yields of the Money Market Fund, Institutional Money Market
Fund, U.S. Treasury Money Market Fund, U.S. Government Money Market Fund and
Tax-Exempt Money Market Fund were 5.23%, 5.50%, 4.89%, 4.60% and 3.40%,
respectively. Without fees waived by the Adviser and Co-Administrators during
such period, the annualized yields of such Funds would have been 4.96%, 5.17%,
4.65%, 4.46% and 3.21%, respectively. For the seven-day period ended October
31, 1995, the effective yields of the Money Market Fund, Institutional Money
Market Fund, U.S. Treasury Money Market Fund, U.S. Government Money Market Fund
and Tax-Exempt Money Market Fund were 5.36%, 5.65%, 5.01%, 4.70% and 3.46%,
respectively. Without fees waived by the Adviser and Co-Administrators during
such period, the effective yields of such Funds would have been 5.09%, 5.32%,
4.77%, 4.56% and 3.27%, respectively. For the seven-day period ended October
31, 1995, the tax-equivalent yield of the Tax-Exempt Money Market Fund was 4.93%
(assuming a federal income tax rate of 31%). Without fees waived by the Adviser
and Co-Administrators during such period, the tax-equivalent yield of such Fund
would have been 4.65%.
MISCELLANEOUS
As used in this Statement of Additional Information and in the Funds'
Prospectuses, a "majority of the outstanding shares" of a Fund or portfolio
means the lesser of (1) 67% of the shares of the particular Fund represented at
a meeting at which the holders of more than 50% of the outstanding shares of
such Fund or portfolio are present in person or by proxy, or (2) more than 50%
of the outstanding shares of such Fund or portfolio.
As of January 31, 1996, the Adviser and its affiliates held of record
substantially all of the outstanding shares of each of the Company's investment
portfolios as agent, custodian, trustee or investment adviser on behalf of their
customers. At such date, Firstar Trust Company, P.O. Box 2054, Milwaukee,
Wisconsin 53202, and its affiliated banks held as beneficial owner five percent
or more of the outstanding shares of the following investment portfolios of the
Company because they possessed sole voting or investment power with respect to
such shares: Money Market Fund (2%); Institutional Money Market Fund (82%);
U.S. Government Money Market Fund (66%); Tax-Exempt Money Market Fund (56%);
U.S. Treasury Money Market Fund (43%); Growth and Income Fund (69%); Short-Term
Bond Market Fund (62%); Special Growth Fund (70%); Bond IMMDEXTM Fund (84%);
Equity Index Fund (80%); Balanced Fund (81%); MidCore Growth Fund (86%);
Intermediate Bond Market Fund (79%), Tax-Exempt Intermediate Bond Fund (66%),
International Equity Fund (94%); and MicroCap Fund (85%). At such date, no
other person was known by the Company to hold of record or beneficially 5% or
more of the outstanding shares of any investment portfolio of the Company.
APPENDIX A
----------
Commercial Paper Ratings
- ------------------------
A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market. The following summarizes the rating categories used by Standard and
Poor's for commercial paper.
"A-1" - Issue's degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics are denoted
"A-1+."
"A-2" - Issue's capacity for timely payment is satisfactory. However, the
relative degree of safety is not as high as for issues designated "A-1."
"A-3" - Issue has an adequate capacity for timely payment. It is however,
somewhat more vulnerable to the adverse effects of changes and circumstances
than an obligation carrying a higher designation.
"B" - Issue has only a speculative capacity for timely payment.
"C" - Issue has a doubtful capacity for payment.
"D" - Issue is in payment default.
Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of 9 months. The following summarizes the rating categories used by
Moody's for commercial paper:
"Prime-1" - Issuer or related supporting institutions are considered to
have a superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structures with
moderate reliance on debt and ample asset protection; broad margins in earning
coverage of fixed financial charges and high internal cash generation; and well-
established access to a range of financial markets and assured sources of
alternate liquidity.
"Prime-2" - Issuer or related supporting institutions are considered to
have a strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.
"Prime-3" - Issuer or related supporting institutions have an acceptable
capacity for repayment of short-term promissory obligations. The effects of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.
"Not Prime" - Issuer does not fall within any of the Prime rating
categories.
The three rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D- 1," "D- 2" and "D- 3." Duff &
Phelps employs three designations, "D- 1+," " D- 1" and "D- 1-," within the
highest rating category. The following summarizes the rating categories used by
Duff & Phelps for commercial paper:
"D-1+" - Debt possesses highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
"D-1" - Debt possesses very high certainty of timely payment. Liquidity
factors are excellent and supported by good fundamental protection factors.
Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty for timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
"D-3" - Debt possesses satisfactory liquidity, and other protection factors
qualify issue as investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.
"D-4" - Debt possesses speculative investment characteristics. Liquidity
is not sufficient to insure against disruption in debt service. Operating
factors and market access may be subject to a high degree of variation.
"D-5" - Issuer failed to meet scheduled principal and/or interest payments.
Fitch short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years. The following
summarizes the rating categories used by Fitch for short-term obligations:
"F-1+" - Securities possess exceptionally strong credit quality. Issues
assigned this rating are regarded as having the strongest degree of assurance
for timely payment.
"F-1" - Securities possess very strong credit quality. Issues assigned
this rating reflect an assurance of timely payment only slightly less in degree
than issues rated "F-1+."
"F-2" - Securities possess good credit quality. Issues assigned this
rating have a satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as the "F-1+" and "F-1" categories.
"F-3" - Securities possess fair credit quality. Issues assigned this
rating have characteristics suggesting that the degree of assurance for timely
payment is adequate; however, near-term adverse changes could cause these
securities to be rated below investment grade.
"F-S" - Securities possess weak credit quality. Issues assigned this
rating have characteristics suggesting a minimal degree of assurance for timely
payment and are vulnerable to near-term adverse changes in financial and
economic conditions.
"D" - Securities are in actual or imminent payment default.
Fitch may also use the symbol "LOC" with its short-term ratings to indicate
that the rating is based upon a letter of credit issued by a commercial bank.
Thomson BankWatch short-term ratings assess the likelihood of an untimely
payment of principal or interest of unsubordinated instruments having a maturity
of one year or less which is issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the ratings used by Thomson BankWatch:
"TBW-1" - This designation represents Thomson BankWatch's highest rating
category and indicates a very high likelihood that principal and interest will
be paid on a timely basis.
"TBW-2" - This designation indicates that while the degree of safety
regarding timely repayment of principal and interest is strong, the relative
degree of safety is not as high as for issues rated "TBW-1."
"TBW-3" - This designation represents the lowest investment grade category
and indicates that while the debt is more susceptible to adverse developments
(both internal and external) than obligations with higher ratings, the capacity
to service principal and interest in a timely fashion is considered adequate.
"TBW-4" - This designation indicates that the debt is regarded as non-
investment grade and therefore speculative.
IBCA assesses the investment quality of unsecured debt with an original
maturity of less than one year which is issued by bank holding companies and
their principal bank subsidiaries. The following summarizes the rating
categories used by IBCA for short term debt ratings:
"A1+" - Obligations supported by the highest capacity for timely repayment.
"A1" - Obligations are supported by a strong capacity for timely repayment.
"A2" - Obligations are supported by a satisfactory capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
"A3" - Obligations are supported by a satisfactory capacity for timely
repayment. Such capacity is more susceptible to adverse changes in business,
economic or financial conditions than for obligations in higher categories.
"B" - Obligation for which the capacity for timely repayment is susceptible
to adverse changes in business, economic or financial conditions.
"C" - Obligations for which there is an inadequate capacity to insure
timely repayment.
"D" - Obligations which have a high risk of default or which are currently
in default.
Corporate and Municipal Long-Term Debt Ratings
The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:
"AAA" - This designation represents the highest rating assigned by Standard
& Poor's to a debt obligation and indicates an extremely strong capacity to pay
interest and repay principal.
"AA" - Debt is considered to have a very strong capacity to pay interest
and repay principal and differs from AAA issues only in small degree.
"A" - Debt is considered to have a strong capacity to pay interest and
repay principal although such issues are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
"BBB" - Debt is regarded as having an adequate capacity to pay interest and
repay principal. Whereas such issues normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
"BB," "B," "CCC," "CC," and "C" - Debt is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
"CI" - This rating is reserved for income bonds on which no interest is
being paid.
"D" - Debt is in payment default. This rating is used when interest
payments or principal payments are not made on the date due, even if the
applicable grace period has not expired, unless S&P believes such payments will
be made during such grace period. Rating is also used upon the filing of a
bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
"r" - This rating is attached to highlight derivative, hybrid, and certain
other obligations that S & P believes may experience high volatility or high
variability in expected returns due to non-credit risks. Examples of such
obligations are: securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and interest
only and principal only mortgage securities.
The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards. Together
with the "Aaa" group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in "Aaa" securities.
"A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
"Baa" - Bonds considered medium-grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have speculative
characteristics as well.
"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these ratings
provide questionable protection of interest and principal ("Ba" indicates some
speculative elements; "B" indicates a general lack of characteristics of
desirable investment; "Caa" represents a poor standing; "Ca" represents
obligations which are speculative in a high degree; and "C" represents the
lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in default.
Con. () - Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes the probable credit stature upon
completion of construction or elimination of basis of condition.
Moody's applies numerical modifiers 1, 2 and 3 in each generic
classification from "Aa" to "B" in its bond rating system. The modifier 1
indicates that the issuer ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issuer ranks at the lower end of its generic rating category.
The following summarizes the long-term debt ratings used by Duff & Phelps
for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
"AA" - Debt is considered of high quality. Protection factors are strong.
Risk is modest but may vary slightly from time to time because of economic
conditions.
"A" - Debt possesses protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.
"BBB" - Debt possesses below average protection factors but such protection
factors are still considered sufficient for prudent investment. Considerable
variability in risk is present during economic cycles.
"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these ratings
is considered to be below investment grade. Although below investment grade,
debt rated "BB" is deemed likely to meet obligations when due. Debt rated "B"
possesses the risk that obligations will not be met when due. Debt rated "CCC"
is well below investment grade and has considerable uncertainty as to timely
payment of principal, interest or preferred dividends. Debt rated "DD" is a
defaulted debt obligation, and the rating "DP" represents preferred stock with
dividend arrearages.
To provide more detailed indications of credit quality, the "AA," "A,"
"BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.
The following summarizes the highest four ratings used by Fitch for
corporate and municipal bonds:
"AAA" - bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA." Because bonds rated
in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debts of these issuers is generally rated "F-
1+."
"A" - Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
"BBB" - Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
"BB," "B," "CCC," "CC," "C," "DDD," "DD," and "D" - bonds that possess one
of these ratings are considered by Fitch to be speculative investments. The
ratings "BB" to "C" represent Fitch's assessment of the likelihood of timely
payment of principal and interest in accordance with the terms of obligation for
bond issues not in default. For defaulted bonds, the rating "DDD" to "D" is an
assessment of the ultimate recovery value through reorganization or liquidation.
To provide more detailed indications of credit quality, the Fitch ratings
from and including "AA" to "C" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major rating categories.
Thomson BankWatch assesses the likelihood of an untimely repayment of
principal or interest over the term to maturity of long-term debt and preferred
stock which are issued by United States commercial banks, thrifts and non-bank
banks; non-United States banks; and broker-dealers. The following summarizes
the rating categories used by Thomson BankWatch for long-term debt ratings:
"AAA" - This designation represents the highest category assigned by
Thomson BankWatch to long-term debt and indicates that the ability to repay
principal and interest on a timely basis is very high.
"AA" - This designation indicates a very strong ability to repay principal
and interest on a timely basis with limited incremental risk versus issues rated
in the highest category.
"A" - This designation indicates that the ability to repay principal and
interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
"BBB" - This designation represents Thomson BankWatch's lowest investment
grade category and indicates an acceptable capacity to repay principal and
interest. Issues rated "BBB" are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.
"BB," "B," "CCC," and "CC" - These designations are assigned by Thomson
BankWatch to non-investment grade long-term debt. Such issues are regarded as
having speculative characteristics regarding the likelihood of timely payment of
principal and interest. "BB" indicates the lowest degree of speculation and
"CC" the highest degree of speculation.
"D" - this designation indicates that the long-term debt is in default.
PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include a
plus or minus sign designation which indicates where within the respective
category the issue is placed.
IBCA assesses the investment quality of unsecured debt with an original
maturity of more than one year which is issued by bank holding companies and
their principal bank subsidiaries. The following summarizes the rating
categories used by IBCA for long-term ratings:
"AAA" - Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk substantially.
"AA" - Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.
"A" - Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong, although
adverse changes in business, economic or financial conditions may lead to
increased investment risk.
"BBB" - Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and interest is
adequate, although adverse changes in business, economic or financial conditions
are more likely to lead to increased investment risk than for obligations in
other categories.
"BB," "B," "CCC," "CC," and "C" - Obligations are assigned one of these
ratings where it is considered that speculative characteristics are present.
"BB" represents the lowest degree of speculation and indicates a possibility of
investment risk developing. "C" represents the highest degree of speculation
and indicates that the obligations are currently in default.
IBCA may append a rating of plus (+) or minus (-) to a rating to denote
relative status within major rating categories.
Municipal Note Ratings
- ----------------------
A Standard and Poor's rating reflects the liquidity concerns and market
access risks unique to notes due in three years or less. The following
summarizes the ratings used by Standard & Poor's Rating Group for municipal
notes:
"SP-1" - The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory capacity
to pay principal and interest.
"SP-3" - The issuers of these municipal notes exhibit speculative capacity
to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:
"MIG-1" / "VMIG-1" - Loans bearing this designation are of the best
quality, enjoying strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to the market for
refinancing.
"MIG-2" / "VMIG-2" - Loans bearing this designation are of high quality,
with margins of protection ample although not so large as in the preceding
group.
"MIG-3" / "VMIG-3" - Loans bearing this designation are of favorable
quality, with all security elements accounted for but lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well established.
"MIG-4" / "VMIG-4" - Loans bearing this designation are of adequate
quality, carrying specific risk but having protection commonly regarded as
required of an investment security and not distinctly or predominantly
speculative.
"SG" - Loans bearing this designation are of speculative quality and lack
margins of protection.
Duff & Phelps and Fitch use the short-term ratings described under
commercial Paper Ratings for Municipal notes.
**************
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Included in the Retail Prospectus for the Money Market Fund, U.S.
Treasury Money Market Fund (formerly, U.S. Federal Money Market
Fund), U.S. Government Money Market Fund, and Tax-Exempt Money
Market Fund:
Financial Highlights for the Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund for the years
ended October 31, 1995, October 31, 1994, October 31, 1993, October
31, 1992, October 31, 1991, October 31, 1990 and October 31, 1989
and the period from commencement of operations (March 16, 1988,
August 1, 1988 and June 27, 1988 with respect to the Money Market
Fund, U.S. Government Money Market Fund and Tax Exempt Money Market
Fund, respectively) to October 31, 1988.
Financial Highlights for the U.S. Treasury Money Market Fund
(formerly, U.S. Federal Money Market Fund) for the years ended
October 31, 1995, October 31, 1994, October 31, 1993, October 31,
1992 and the period from commencement of operations (April 29, 1991
with respect to U.S. Treasury Money Market Fund (formerly, U.S.
Federal Money Market Fund)) to October 31, 1991.
Incorporated by reference into the Statement of Additional
Information for the Money Market Fund, Institutional Money Market
Fund, U.S. Treasury Money Market Fund (formerly, U.S. Federal Money
Market Fund), U.S. Government Money Market Fund, and Tax- Exempt
Money Market Fund:
Reports of Independent Accountants -- November 29, 1995 -- Money
Market Fund, U.S. Treasury Money Market Fund (formerly, U.S. Federal
Money Market Fund), U.S. Government Money Market Fund, Tax Exempt
Money Market Fund and Institutional Money Market Fund.
Statement of Assets and Liabilities -- October 31, 1995 -- Money
Market Fund, U.S. Government Money Market Fund, U.S. Treasury Money
Market Fund (formerly, U.S. Federal Money Market Fund), Tax Exempt
Money Market Fund and Institutional Money Market Fund.
Schedule of Investments -- October 31, 1995 -Money Market Fund, U.S.
Treasury Money Market Fund (formerly, U.S. Federal Money Market
Fund), U.S. Government Money Market Fund, Tax-Exempt Money Market
Fund and Institutional Money Market Fund.
Statement of Operations for the year ended October 31, 1995 -- Money
Market Fund, U.S. Treasury Money Market Fund (formerly, U.S. Federal
Money Market Fund), U.S Government Money Market Fund, Tax-Exempt
Money Market Fund and Institutional Money Market Fund.
Statement of Changes in Net Assets for the years ended October 31,
1995 and October 31, 1994 -Money Market Fund, U.S. Government Money
Market Fund, Tax- Exempt Money Market Fund, U.S. Treasury Money
Market Fund (formerly, U.S. Federal Money Market Fund) and
Institutional Money Market Fund.
Financial Highlights for the Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund for the years
ended October 31, 1995, October 31, 1994, October 31, 1993, October
31, 1992, October 31, 1991, October 31, 1990 and October 31, 1989
and the period from commencement of operations (March 16, 1988,
August 1, 1988 and June 27, 1988 with respect to the Money Market
Fund, U.S. Government Money Market Fund and Tax Exempt Money Market
Fund, respectively) to October 31, 1988.
Financial Highlights for the Institutional Money Market Fund and
U.S. Treasury Money Market Fund (formerly, U.S. Federal Money Market
Fund) for the years ended October 31, 1995, October 31, 1994,
October 31, 1993, October 31, 1992, and the period from commencement
of operations (April 26, 1991 and April 29, 1991 with respect to the
Institutional Money Market Fund and U.S. Treasury Money Market Fund
(formerly, U.S. Federal Money Market Fund), respectively) to October
31, 1991.
Notes to Financial Statements -- October 31, 1995 -- Money Market
Fund, U.S. Treasury Money Market Fund (formerly, U.S. Federal Money
Market Fund), U.S. Government Money Market Fund, Tax-Exempt Money
Market Fund and Institutional Money Market Fund.
(2) Included in the Retail Prospectus for the Balanced Fund, Growth and
Income Fund (formerly, Income and Growth Fund), Special Growth Fund,
Equity Index Fund, MidCore Growth Fund and International Equity
Fund:
Financial Highlights for the Growth and Income Fund (formerly,
Income and Growth Fund), Special Growth Fund and Equity Index Fund
for the years ended October 31, 1995, October 31, 1994, October 31,
1993, 1992, 1991 and for the period from the commencement of
operations (December 28, 1989 with respect to the Special Growth
Fund and December 29, 1989 with respect to the Growth and Income
(formerly, Income and Growth Fund), and Equity Index Fund) to
October 31, 1990.
Financial Highlights for the Balanced Fund for the years ended
October 31, 1995, October 31, 1994, October 31, 1993 and for the
period from commencement of operations (March 30, 1992 with respect
to the Balanced Fund) to October 31, 1992.
Financial Highlights for the MidCore Growth Fund for the years ended
October 31, 1995, October 31, 1994 and for the period from
commencement of operations (December 29, 1992 with respect to the
MidCore Growth Fund) to October 31, 1993.
Financial Highlights for the International Equity Fund for the year
ended October 31, 1995 and for the period from commencement of
operations (April 28, 1994 with respect to the International Equity
Fund) to October 31, 1994.
(3) Included in the Retail Prospectus for the Short-Term Bond Market
Fund (formerly, Short Intermediate Fixed Income Fund), Bond
IMMDEX/TM Fund, Intermediate Bond Market Fund and Tax-Exempt
Intermediate Bond Fund:
Financial Highlights for the Short-Term Bond Market Fund (formerly,
Short-Intermediate Fixed Income Fund) and Bond IMMDEX/TM Fund for
the years ended October 31, 1995, 1994, 1993, 1992, 1991 and for the
period from the commencement of operations (December 29, 1989 with
respect to the Short-Term Bond Market Fund (formerly, Short-
Intermediate Fixed Income Fund) and Bond IMMDEX/TM Fund to October
31, 1990.
Financial Highlights for the Intermediate Bond Market Fund and Tax-
Exempt Intermediate Bond Fund for the years ended October 31, 1995
and October 31, 1994 and for the period from commencement of
operations (January 5, 1993 with respect to the Intermediate Bond
Market Fund and February 8, 1993 with respect to the Tax-Exempt
Intermediate Bond Fund) to October 31, 1993.
(4) Included in the Institutional Prospectus for the Money Market Fund,
Institutional Money Market Fund, U.S. Treasury Money Market Fund,
U.S. Government Money Market Fund, Tax-Exempt Money Market Fund,
Balanced Fund, Growth and Income Fund (formerly, Income and Growth
Fund), Special Growth Fund, Equity Index Fund, MidCore Growth Fund,
International Equity Fund, Short-Term Bond Market Fund (formerly,
Short- Intermediate Fixed Income Fund), Bond IMMDEX/TM Fund,
Intermediate Bond Market Fund and Tax-Exempt Intermediate Bond Fund:
Financial Highlights for the Institutional Money Market Fund for the
years ended October 31, 1995, October 31, 1994, October 31, 1993,
October 31, 1992 and the period from commencement of operations
(April 26, 1991) to October 31, 1991.
Financial Highlights for the Money Market Fund, U.S. Government
Money Market Fund and Tax-Exempt Money Market Fund for the years
ended October 31, 1995, October 31, 1994, October 31, 1993, October
31, 1992, October 31, 1991, October 31, 1990 and October 31, 1989
and the period from commencement of operations (March 16, 1988,
August 1, 1988 and June 27, 1988 with respect to the Money Market
Fund, U.S. Government Money Market Fund and Tax ExEmpt Money Market
Fund, respectively) to October 31, 1988.
Financial Highlights for the U.S. Treasury Money Market Fund
(formerly, U.S. Federal Money Market Fund) for the years ended
October 31, 1995, October 31, 1994, October 31, 1993, October 31,
1992 and the period from commencement of operations (April 29, 1991
with respect to U.S. Treasury Money Market Fund (formerly, U.S.
Federal Money Market Fund)) to October 31, 1991.
Financial Highlights for the Growth and Income Fund (formerly,
Income and Growth Fund), Special Growth Fund and Equity Index Fund
for the years ended October 31, 1995, October 31, 1994, October 31,
1993, 1992, 1991 and for the period from the commencement of
operations (December 28, 1989 with respect to the Special Growth
Fund and December 29, 1989 with respect to the Growth and Income
(formerly, Income and Growth Fund), and Equity Index Fund) to
October 31, 1990.
Financial Highlights for the Balanced Fund for the years ended
October 31, 1995, October 31, 1994, October 31, 1993 and for the
period from commencement of operations (March 30, 1992 with respect
to the Balanced Fund) to October 31, 1992.
Financial Highlights for the MidCore Growth Fund for the years ended
October 31, 1995, October 31, 1994 and for the period from
commencement of operations (December 29, 1992 with respect to the
MidCore Growth Fund) to October 31, 1993.
Financial Highlights for the International Equity Fund for the year
ended October 31, 1995 and for the period from commencement of
operations (April 28, 1994 with respect to the International Equity
Fund) to October 31, 1994.
Financial Highlights for the Short-Term Bond Market Fund (formerly,
Short-Intermediate Fixed Income Fund) and Bond IMMDEX/TM Fund for
the years ended October 31, 1995, 1994, 1993, 1992, 1991 and for the
period from the commencement of operations (December 29, 1989 with
respect to the Short-Term Bond Market Fund (formerly, Short-
Intermediate Fixed Income Fund) and Bond IMMDEX/TM Fund to October
31, 1990.
Financial Highlights for the Intermediate Bond Market Fund and Tax-
Exempt Intermediate Bond Fund for the years ended October 31, 1995
and October 31, 1994 and for the period from commencement of
operations (January 5, 1993 with respect to the Intermediate Bond
Market Fund and February 8, 1993 with respect to the Tax-Exempt
Intermediate Bond Fund) to October 31, 1993.
(5) Incorporated by reference in the Statement of Additional Information
for the Short-Term Bond Market Fund, Intermediate Bond Market Fund,
Tax ExEmpt Intermediate Bond Fund, Bond IMMDEX/TM Fund, Balanced
Fund, Growth and Income Fund, Equity Index Fund, MidCore Growth
Fund, Special Growth Fund and International Equity Fund:
Report of Independent Accountants -- November 29, 1995 -- Short-Term
Bond Market Fund, Intermediate Bond Market Fund, Tax-Exempt
Intermediate Bond Fund, and Bond IMMDEX/TM Fund.
Statement of Assets and Liabilities -- October 31, 1995 -- Short-
Term Bond Market Fund, Intermediate Bond Market Fund, Tax-Exempt
Intermediate Bond Fund, and Bond IMMDEX/TM Fund.
Schedule of Investments -- October 31, 1995 -Short- Term Bond Market
Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond
Fund, and Bond IMMDEX/TM Fund.
Statement of Operations for the year ended October 31, 1995 --
Short-Term Bond Market Fund, Intermediate Bond Market Fund, Tax-
Exempt Intermediate Bond Fund, and Bond IMMDEX/TM Fund.
Statement of Changes in Net Assets for the years ended October 31,
1995 and October 31, 1994, -Short- Term Bond Market Fund (formerly,
Short Intermediate Fixed Income Fund) Intermediate Bond Market Fund,
Tax- Exempt Intermediate Bond Fund and Bond IMMDEX/TM Fund.
Financial Highlights for the Short-Term Bond Market Fund and Bond
IMMDEX/TM Fund for the years ended October 31, 1995, 1994, 1993,
1992, 1991 and for the period from the commencement of operations
(December 29, 1989 with respect to the Short-Term Bond Market Fund
and Bond IMMDEX/TM Fund) to October 31, 1990.
Financial Highlights for the Intermediate Bond Market Fund and Tax-
Exempt Intermediate Bond Fund for the years ended October 31, 1995
and October 31, 1994 and for the period from commencement of
operations (January 5, 1993 with respect to the Intermediate Bond
Market Fund and February 8, 1993 with respect to the Tax-Exempt
Intermediate Bond Fund) to October 31, 1993.
Notes to Financial Statements -- October 31, 1995 -- Short-Term Bond
Market Fund (formerly, Short Intermediate Fixed Income Fund),
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund,
and Bond IMMDEX/TM Fund.
Report of Independent Accountants -- November 29, 1995 -- Balanced
Fund, Growth and Income Fund, Equity Index Fund, MidCore Growth
Fund, Special Growth Fund and International Equity Fund.
Statement of Assets and Liabilities -- October 31, 1995 -- Balanced
Fund, Growth and Income Fund, Equity Index Fund, MidCore Growth
Fund, Special Growth Fund and International Equity Fund.
Schedule of Investments -- October 31, 1995 -Balanced Fund, Growth
and Income Fund, Equity Index Fund, MidCore Growth Fund, Special
Growth Fund and International Equity Fund.
Statement of Operations -- October 31, 1995 -Balanced Fund, Growth
and Income Fund, Equity Index Fund, MidCore Growth Fund, Special
Growth Fund and International Equity Fund.
Statement of Changes in Net Assets for the years ended October 31,
1995 and October 31, 1994, -Growth and Income Fund, Equity Index
Fund and Special Growth Fund, Balanced Fund and MidCore Growth Fund.
Statement of Changes in Net Assets for the year ended October 31,
1995 and for the period from the commencement of operations (April
28, 1994 with respect to the International Equity Fund) to October
31, 1994 -- International Equity Fund.
Financial Highlights for the Growth and Income Fund, Special Growth
Fund, and Equity Index Fund for the years ended October 31, 1995,
1994, 1993, 1992, 1991 and for the period from the commencement of
operations (December 28, 1989 with respect to the Special Growth
Fund and December 29, 1989 with respect to the Growth and Income and
Equity Index Fund) to October 31, 1990.
Financial Highlights for the Balanced Fund for the years ended
October 31, 1995, 1994, 1993 and for the period from commencement of
operations (March 30, 1992 with respect to the Balanced Fund) to
October 31, 1992.
Financial Highlights for the MidCore Growth Fund for the years ended
October 31, 1995 and October 31, 1994 and for the period from
commencement of operations (December 29, 1992 with respect to the
MidCore Growth Fund) to October 31, 1993.
Financial Highlights for the International Equity Fund for the year
ended October 31, 1995 and for the period from the commencement of
operations (April 28, 1994 with respect to the International Equity
Fund) to October 31, 1994.
Notes to Financial Statements -- October 31, 1995 -- Balanced Fund,
Growth and Income Fund (formerly, Income and Growth Fund), Equity
Index Fund, MidCore Growth Fund, Special Growth Fund and
International Equity Fund.
(6) Included in the Prospectus for the MicroCap Fund - Financial
Highlights for the period from the commencement of operations
(August 1, 1995) to December 31, 1995.
(7) Incorporated by reference in the Statement of Additional Information
for the MicroCap Fund --
Statement of Assets and Liabilities -- December 31, 1995 -- MicroCap
Fund.
Schedule of Investments -- December 31, 1995 -- MicroCap Fund.
Statement of Operations -- December 31, 1995 -- MicroCap Fund.
Statement of Changes in Net Assets for the period from the
commencement of operations (August 1, 1995 to December 31, 1995) --
MicroCap Fund.
Notes to Financial Statements -- December 31, 1995 -- MicroCap Fund.
(8) Included in the Prospectus of the Balanced Income Fund - None.
(9) Incorporated by reference in the Statement of Additional Information
for the Balanced Income Fund - None.
(10)All required financial statements are included in Parts A and B
hereof, or incorporated by reference. All other financial statements
and schedules are inapplicable.
(b) Exhibits
(1) (a) Articles of Incorporation filed February 19, 1988.
(b) Amendment No. 1 to the Articles of filed June 30, 1989.
(c) Amendment No. 2 to the Articles of Incorporation filed June 30,
1989.
(d) Amendment No. 3 to the Articles of Incorporation filed November 12,
1991.
(e) Amendment No. 4 to the Articles of Incorporation filed August 18,
1992.
(f) Amendment No. 5 to the Articles of Incorporation filed October 23,
1992.
(g) Amendment No. 6 to the Articles of Incorporation filed January 26,
1993.
(h) Amendment No. 7 to the Articles of Incorporation filed February 10,
1994.
(i) Amendment No. 8 to the Articles of Incorporation filed December 29,
1994.
(j) Amendment No. 9 to the Articles of Incorporation filed July 20,
1995.
(k) Amendment No. 10 to the Articles of Incorporation filed November 10,
1995.
(2) (a) Registrant's By-laws dated September 9, 1988.
(b) Amendment to By-Laws as approved by the Registrant's Board of
Directors on February 23, 1990.
(c) Amendment to By-Laws as approved by the Registrant's Board of
Directors on February 15, 1991.
(d) Amendment to By-Laws as approved by the Registrant's Board of
Directors on June 21, 1991.
(3) None.
(4) (a) Specimen copies of share certificates for Series A Common Stock are
incorporated by reference to Exhibit(4)(a) to Post-Effective
Amendment No. 7 to the Registration Statement filed June 19,
1990("Post-Effective Amendment No. 7").
(b) Specimen copies of share certificates for Series B Common Stock are
incorporated by reference to Exhibit(4)(b) to Post-Effective
Amendment No. 7.
(c) Specimen copies of share certificates for Series C Common Stock are
incorporated by reference to Exhibit(4)(c) to Post-Effective
Amendment No. 7.
(d) Specimen copy of share certificate for Series D Common Stock is
incorporated by reference to Exhibit(4)(d) to Post-Effective
Amendment No. 7.
(e) Specimen copy of share certificate for Series E Common Stock is
incorporated by reference to Exhibit(4)(e) to Post-Effective
Amendment No. 7.
(f) Specimen copy of share certificate for Series F Common Stock is
incorporated by reference to Exhibit(4)(f) to Post-Effective
Amendment No. 7.
(g) Specimen copy of share certificate for Series G Common Stock is
incorporated by reference to Exhibit(4)(g) to Post-Effective
Amendment No. 7.
(h) Specimen copy of share certificate for Series H Common Stock is
incorporated by reference to Exhibit(4)(h) to Post-Effective
Amendment No. 7.
(i) Specimen copy of share certificate for Series I Common Stock is
incorporated by reference to Exhibit(4)(i) to Post-Effective
Amendment No. 8 to the Registration Statement filed December 31,
1990("Post-Effective Amendment No. 8").
(j) Specimen copy of share certificate for Series J Common Stock is
incorporated by reference to Exhibit(4)(j) to Post-Effective
Amendment No. 8.
(k) Specimen copy of share certificate for Series K Common Stock is
incorporated by reference to Exhibit(4)(k) to Post-Effective
Amendment No. 11 to the Registration Statement filed January 13,
1992("Post-Effective Amendment No. 11").
(l) Specimen copy of share certificate for Series L Common Stock is
incorporated by reference to Exhibit(4)(l) to Post-Effective
Amendment No. 12 to the Registration Statement filed August 4,
1992("Post-Effective Amendment No. 12").
(m) Specimen copy of share certificate for Series M Common Stock is
incorporated by reference to Exhibit(4)(m) to Post-Effective
Amendment No. 12.
(n) Specimen copy of share certificate for Series N Common Stock is
incorporated by reference to Exhibit 4(n) to Post-Effective
Amendment No. 16 to the Registration Statement, filed December 31,
1992("Post-Effective Amendment No. 16").
(o) Specimen copy of share certificate for Series O Common Stock is
incorporated by reference to Exhibit 4(o) to Post-Effective
Amendment No. 20 to the Registration Statement filed February 3,
1994("Post-Effective Amendment No. 20").
(p) Specimen copies of the share certificates for Class 16 -
Institutional Series and Class 16 A Series Common Stock are
incorporated by reference to Exhibit(4)(p) to Post-Effective
Amendment No. 26 to the Registration Statement, filed September 20,
1995("Post-Effective Amendment No. 26").
(q) Form of specimen copies of the share certificates for Class 17 -
Institutional Series and Class 17 - A Series Common Stock are
incorporated by reference to Exhibit(4)(q) to Post-Effective
Amendment No. 26.
(5) (a) Investment Advisory Agreement between Registrant and First
Wisconsin Trust Company dated August 29, 1991 with respect to the
Money Market Fund, U.S. Government Money Market Fund, Tax-Exempt
Money Market Fund, Income and Growth Fund, Short-Intermediate Fixed
Income Fund, Special Growth Fund, Bond IMMDEX/TM Fund, Equity Index
Fund, Institutional Money Market Fund and U.S. Federal Money Market
Fund.
(b) Assumption and Guarantee Agreement between First Wisconsin Trust
Company and First Wisconsin Asset Management dated February 3,
1992.
(c) Investment Advisory Agreement between Registrant and First
Wisconsin Asset Management dated March 27, 1992 with respect to the
Balanced Fund.
(d) Addendum No. 1 dated December 27, 1992 to Investment Advisory
Agreement between Registrant and Firstar Investment Research and
Management Company dated March 27, 1992 with respect to the MidCore
Growth Fund and Intermediate Bond Market Fund.
(e) Addendum No. 2 dated February 5, 1993, to Investment Advisory
Agreement between the Registrant and Firstar Investment Research
and Management Company dated March 27, 1992 with respect to the
Tax-Exempt Intermediate Bond Fund.
(f) Assumption and Guarantee Agreement between Firstar Trust Company
and Firstar Investment Research and Management Company dated June
17, 1993 with respect to the Income and Growth Fund.
(g) Addendum No. 3 dated April 26, 1994, to Investment Advisory
Agreement between the Registrant and Firstar Investment Research
and Management Company dated March 27, 1992 with respect to the
International Equity Fund.
(h) Sub-Advisory Agreement among Firstar Investment Research and
Management Company, the Registrant and State Street Bank and Trust
Company dated April 26, 1994, with respect to the International
Equity Fund.
(i) Addendum No. 4 to the Investment Advisory Agreement between
Registrant and Firstar Investment Research and Management Company
dated March 27, 1992 with respect to the MicroCap Fund.
(j) Form of Addendum No. 5 to the Investment Advisory Agreement between
Registrant and Firstar Investment Research & Management Company
dated March 27, 1992 with respect to the Balanced Income Fund.
(6) (a) Distribution Agreement between Registrant and B.C. Ziegler &
Company dated as of January 1, 1995, with respect to Money Market
Fund, U.S. Government Money Market Fund, Tax-Exempt Money Market
Fund, Growth and Income Fund, Short-Term Bond Market Fund, Special
Growth Fund, Bond IMMDEX/TM Fund, Equity Index Fund, Institutional
Money Market Fund, U.S. Treasury Money Market Fund, Balanced Fund,
Intermediate Bond Market Fund, MidCore Growth Fund, Tax-Exempt
Intermediate Bond Fund and International Equity Fund.
(b) Addendum No. 1 to the Distribution Agreement between Registrant and
B.C. Ziegler and Company dated as of January 1, 1995 with respect
to the MicroCap Fund.
(c) Form of Addendum No. 2 to the Distribution Agreement between
Registrant and B.C. Ziegler and Company dated as of January 1, 1995
with respect to the Balanced Income Fund.
(7) Deferred Compensation Plan dated September 16, 1994 and Deferred
Compensation Agreement between Registrant and its Directors.
(8) (a) Custodian Agreement between Registrant and First Wisconsin Trust
Company dated July 29, 1988.
(b) Letter dated December 28, 1989 with respect to the Custodian
Agreement with respect to the Equity Index Fund.
(c) Revised Mutual Fund Custodial Agent Service Annual Fee Schedule
dated February 23, 1990 to the Custodian Agreement.
(d) Amendment dated May 1, 1990 to the Custodian Agreement between
Registrant and First Wisconsin Trust Company.
(e) Letter dated April 19, 1991 with respect to the Custodian Agreement
with respect to the Institutional Money Market Fund and U.S.
Federal Money Market Fund.
(f) Letter dated March 27, 1992 with respect to the Custodian Agreement
with respect to the Balanced Fund.
(g) Letter dated December 27, 1992 with respect to the Custodian
Agreement with respect to the Intermediate Bond Market Fund and
MidCore Growth Fund.
(h) Letter dated February 5, 1993 with respect to the Custodian
Agreement with respect to the Tax-Exempt Intermediate Bond Fund.
(i) Custodian Arrangement between Registrant and State Street Bank and
Trust Company dated April 26, 1994, with respect to the
International Equity Fund is incorporated by reference to
Exhibit(8)(i) to Post-Effective Amendment No. 21 to the
Registration Statement filed on November 1, 1994) "Post Effective
Amendment No. 21").
(j) Letter Agreement dated August 1, 1995 with respect to the Custodian
Agreement with respect to the MicroCap Fund.
(k) Form of Letter Agreement with respect to the Custodian Agreement
with respect to the Balanced Income Fund.
(9) (a) Co-Administration Agreement Among the Registrant, B.C. Ziegler &
Company and Firstar Trust Company dated as of January 1, 1995.
(b) Addendum No. 1 to the Co-Administration Agreement among the
Registrant, B.C. Ziegler and Company and Firstar Trust Company
dated as of January 1, 1995 with respect to the MicroCap Fund.
(c) Form of Addendum No. 2 to the Co- Administration Agreement among
the Registrant, B.C. Ziegler and Company and Firstar Trust Company
dated as of January 1, 1995 with respect to the Balanced Income
Fund.
(d) Fund Accounting Servicing Agreement dated March 23, 1988 between
Registrant and First Wisconsin Trust Company.
(e) Letter dated July 29, 1988 with respect to the Fund Accounting
Servicing Agreement.
(f) Letter dated December 28, 1989 with respect to the Fund Accounting
Servicing Agreement with respect to the Equity Index Fund.
(g) Letter dated April 19, 1991 with respect to the Fund Accounting
Servicing Agreement with respect to the Institutional Money Market
Fund and U.S. Federal Money Market Fund.
(h) Letter dated March 27, 1992 with respect to the Fund Accounting
Servicing Agreement with respect to the Balanced Fund.
(i) Letter dated December 27, 1992 with respect to the Fund Accounting
Servicing Agreement with respect to the Intermediate Bond Market
Fund and MidCore Growth Fund.
(j) Letter dated February 5, 1993 with respect to the Fund Accounting
Servicing Agreement with respect to the Tax-Exempt Intermediate
Bond Fund is incorporated by reference to Exhibit(9)(i) to Post-
Effective Amendment No. 17 to the Registration Statement filed June
16, 1993("Post- Effective Amendment No. 17.").
(k) Revised Fund Valuation and Accounting Fee Schedule dated February
23, 1990 to the Fund Accounting Servicing Agreement with respect to
the Money Market Fund, Tax-Exempt Money Market Fund and U.S.
Government Money Market Fund.
(l) Revised Fund Valuation and Accounting Fee Schedule dated February
23, 1990 to the Fund Accounting Servicing Agreement with respect to
the Equity Index Fund.
(m) Revised Fund Valuation and Accounting Fee Schedule dated November
1, 1990 to the Fund Accounting and Servicing Agreement with respect
to the Equity Index Fund, Income and Growth Fund, Special Growth
Fund, Short Intermediate Fixed Income Fund, and Bond IMMDEX/TM
Fund.
(n) Letter Agreement dated August 1, 1995 with respect to the Fund
Accounting Servicing Agreement with respect to the MicroCap Fund.
(o) Form of Letter Agreement with respect to the Fund Accounting
Servicing Agreement with respect to the Balanced Income Fund.
(p) Shareholder Servicing Agent Agreement dated March 23, 1988 between
Registrant and First Wisconsin Trust Company.
(q) Letter dated July 29, 1988 with respect to Shareholder Servicing
Agent Agreement.
(r) Letter dated December 28, 1989 with respect to the Shareholder
Servicing Agent Agreement with respect to the Equity Index Fund.
(s) Letter dated April 23, 1991 with respect to the Shareholder
Servicing Agent Agreement with respect to the Institutional Money
Market Fund and U.S. Federal Money Market Fund.
(t) Letter dated March 27, 1992 with respect to the Shareholder
Servicing Agent Agreement with respect to the Balanced Fund.
(u) Letter dated December 27, 1992 with respect to the Shareholder
Servicing Agent Agreement with respect to the Intermediate Bond
Market Fund and MidCore Growth Fund.
(v) Letter dated February 5, 1993 with respect to the Shareholder
Servicing Agent Agreement with respect to the Tax-Exempt
Intermediate Bond Fund is incorporated by reference to
Exhibit(9)(t) to Post-Effective Amendment No. 17.
(w) Letter dated April 26, 1994 with respect to the Shareholder
Servicing Agent Agreement with respect to the International Equity
Fund.
(x) Amendment dated May 1, 1990 to the Shareholder Servicing Agent
Agreement between Registrant and First Wisconsin Trust Company.
(y) Letter Agreement dated August 1, 1995 with respect to Shareholder
Servicing Agent Agreement with respect to the MicroCap Fund.
(z) Form of Letter with respect to Shareholder Servicing Agent
Agreement with respect to the Balanced Income Fund.
(aa) Plan of Reorganization.
(ab) Purchase and Assumption Agreement dated February 22, 1988.
(ac) Amended and Restated Service Plan and Servicing Agreement.
(10)<F103> Opinion and Consent of Counsel.
<F103> Filed with the SEC on December 20, 1995 under Rule 24f-2 as part of
Registrant's Rule 24f-2 Notice.
(11)(a) Consent of Drinker Biddle & Reath.
(b) Consent of Price Waterhouse L.L.P.
(12) None.
(13)(a) Purchase Agreement between Registrant and ALPS Securities, Inc. is
incorporated by reference to Exhibit (13) to Post-Effective
Amendment No. 3 to the Registration Statement filed April 15, 1988
("Post-Effective Amendment No. 3").
(b) Purchase Agreement between ALPS Securities, Inc. and Sunstone
Financial Group, Inc. dated May 1, 1990 is incorporated by reference
to Exhibit (13)(b) to Post-Effective Amendment No. 7.
(14)Individual Retirement Account Documents.
(15)(a) Amended and Restated Distribution and Service Plan and Form of
Distribution and Servicing Agreement.
(16)(a) Schedule for Computation of Performance Quotations -- Money Market
Fund.
(b) Schedule for Computation of Performance Quotations -- Tax-Exempt
Money Market Fund.
(c) Schedule for Computation of Performance Quotations -- U.S.
Government Money Market Fund.
(d) Schedule of Computation of Performance Quotations -- Growth and
Income Fund.
(e) Schedule of Computation of Performance -- Short-Term Bond Market
Fund.
(f) Schedule of Computation of Performance Quotations -- Special Growth
Fund.
(g) Schedule of Computation of Performance Quotations -- Bond IMMDEX/TM
Fund.
(h) Schedule of Computation of Performance Quotations -- Equity Index
Fund.
(i) Schedule of Computation of Performance Quotations -- Institutional
Money Market Fund.
(j) Schedule of Computation of Performance Quotations -- U.S. Treasury
Money Market Fund.
(k) Schedule of Computation of Performance Quotations -- Balanced Fund.
(l) Schedule of Computation of Performance Quotations -- MidCore Growth
Fund.
(m) Schedule of Computation of Performance Quotations -- Intermediate
Bond Market Fund.
(n) Schedule of Computation of Performance Quotations -- Tax-Exempt
Intermediate Bond Fund.
(o) Schedule of Computation of Performance Quotations -- International
Equity Fund.
(p) Schedule of Computation of Performance Quotations -- MicroCap Fund
is incorporated by reference to Exhibit (16)(p) to Post Effective
Amendment No. 27 to the Registration Statement filed February 1,
1996 ("Post-Effective Amendment No. 27").
(17)Financial Data Schedules.
(18)Amended and Restated Plan Pursuant to Rule 18f-3 for Operation of a
Multi-Series System.
(24)(a) The audited financial statements and related notes thereto included
in the Annual Report for the year ended October 31, 1995 for the
Short-Term Bond Market Fund, Intermediate Bond Market Fund, Tax-
Exempt Intermediate Bond Fund and Bond IMMDEX/TM Fund.
(b) The audited financial statements and related notes thereto included
in the Annual Report for the year ended October 31, 1995 for the
Balanced Fund, Growth and Income Fund, Equity Index Fund, MidCore
Growth Fund, Special Growth Fund and International Equity Fund.
(c) The audited financial statements and related notes thereto included
in the Annual Report for the year ended October 31, 1995 for the
Money Market Fund, U.S. Treasury Money Market Fund, U.S. Government
Money Market Fund and Tax- Exempt Money Market Fund.
(d) The audited financial statements and related notes thereto included
in the Annual Report for the year ended October 31, 1995 for the
Institutional Money Market Fund.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by its Board of Directors.
Item 26. NUMBER OF HOLDERS OF SECURITIES AS OF DECEMBER 31, 1995:
Number of
Title of Class Series Record Holders
- -------------- ------ --------------
Money Market Fund 1-A 3,089
Tax-Exempt Money
Market Fund 2-A 388
U.S. Government
Money Market Fund 3-A 256
Institutional
Money Market Fund 4-A 68
U.S. Treasury
Money Market Fund 5-A 103
Special Growth Fund 6-Institutional 447
6-A 6,279
Bond IMMDEX/TM Fund 7-Institutional 129
7-A 800
Equity Index Fund 8-Institutional 117
8-A 1,158
Growth and Income Fund 9-Institutional 150
9-A 2,964
Short-Term 10-Institutional 54
Bond Market Fund 10-A 1,881
Balanced Fund 11-Institutional 170
11-A 1,402
MidCore Growth Fund 12-Institutional 63
12-A 706
Intermediate Bond 13-Institutional 28
Market Fund 13-A 245
Tax-Exempt Intermediate 14-Institutional 14
Bond Fund 14-A 108
International 15-Institutional 26
Equity Fund 15-A 262
MicroCap Fund 16-Institutional 14
16-A 190
Item 27. INDEMNIFICATION
Indemnification of Registrant's principal underwriter, custodians and
transfer agents against certain losses is provided for, respectively, in Section
1.9 of the Distribution Agreement, filed as Exhibit (6)(a) hereto, Section 11 of
the Custodian Agreement, filed as Exhibit (8)(a) hereto, and Section 6(c) of the
Shareholder Servicing Agent Agreement filed as Exhibit (9)(p) hereto.
Registrant has obtained from a major insurance carrier a directors' and
officers' liability policy covering certain types of errors and omissions.
Article IX of Registrant's Articles of Incorporation, filed as Exhibit
(1)(a) hereto, provides for the indemnification of Registrant's directors and
officers to the full extent permitted by the Wisconsin Business Corporation Law
and the Investment Company Act of 1940.
Article VII of the By-laws of the Registrant, filed as Exhibit (2)(a)
hereto, provides that officers and directors of the Registrant shall be
indemnified by the Registrant against judgments, penalties, fines, excise taxes,
settlements and reasonable expenses (including attorney's fees) incurred in
connection with a legal action, suit or proceeding to the full extent
permissible under the Wisconsin Business Corporation Law, the Securities Act of
1933 and the Investment Company Act of 1940.
In no event will Registrant indemnify any of its directors or officers
against any liability to which such person would otherwise be subject by reason
of his willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office. Registrant will comply
with Rule 484 under the Securities Act of 1933 and Release No. 11330 under the
Investment Company Act of 1940 in connection with any indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, 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 Registrant of expenses incurred or
paid by a director, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, 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.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Firstar Investment Research and Management Company, investment adviser
to the Money Market Fund, Institutional Money Market Fund, U.S. Treasury Money
Market Fund, U.S. Government Money Market Fund, Tax-Exempt Money Market Fund,
Short-Term Bond Market Fund, Growth and Income Fund, Special Growth Fund, Bond
IMMDEX/TM Fund, Equity Index Fund, Balanced Fund, Intermediate Bond Market Fund,
MidCore Growth Fund, Tax-Exempt Intermediate Bond Fund, International Equity
Fund and MicroCap Fund, is a registered investment adviser under the Investment
Advisers Act of 1940.
To Registrant's knowledge, none of the directors or senior executive
officers of Firstar Investment Research and Management Company, except those set
forth below, is, or has been at any time during Registrant's past two fiscal
years, engaged in any other business, profession, vocation or employment of a
substantial nature, except that certain directors and officers of Firstar
Investment Research and Management Company also hold various positions with, and
engage in business for, their respective affiliates. Set forth below are the
names and principal businesses of the directors and certain of the senior
executive officers of Firstar Investment Research and Management Company who are
or have been engaged in any other business, profession, vocation or employment
of a substantial nature.
FIRSTAR INVESTMENT RESEARCH AND MANAGEMENT COMPANY
Position with
Firstar Investment
Research and Other Business Type of Name
Management Company Connections Business
------------------ ----------- --------
John A. Becker Director President, Firstar Bank
Corporation, 777 E. Holding Co.
Wisconsin Avenue,
Milwaukee, WI 53201
Michael J. Bills Director Executive Vice Bank
President, Firstar Holding Co.
Corporation, 777 E.
Wisconsin Avenue,
Milwaukee, WI 53201
J. Scott Harkness Director and None
Chairman
Steven R. Parish Director Senior Vice Bank
President, First
National Bank of
Madison, First Plaza,
1 South Pinchney Street,
P.O. Box 7900, Madison,
WI 53707
Blaine E. Rieke Director Chairman of the Trust
Board and Chief Company
Executor Officer,
Firstar Trust
Company, 777 E.
Wisconsin Avenue,
Milwaukee, WI 53202
Mary Ellen Stanek Director, Chief Vice President, Investment
Operating Officer Portico Funds, Inc. Company
and President Portico Funds Center,
615 East Michigan Street,
P.O. Box 3011, Milwaukee,
WI 53201-3011
Robert L. Webster Director President, Trust
Firstar Trust Company
Company, 777 E.
Wisconsin Avenue,
Milwaukee, WI 53202
Dennis Wallestad Vice President, None
Secretary and
Treasurer
State Street Global Advisors serves as sub-investment adviser to the
International Equity Fund. State Street Global Advisors is an area of State
Street Bank and Trust Company, a Massachusetts bank, and currently manages large
institutional accounts and collective investment funds. To Registrant's
knowledge, none of the directors or senior executive officers of State Street
Global Advisors except those set forth below, is, or has been at any time during
Registrant's past two fiscal years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain directors
and officers of State Street Global Advisors also hold various positions with,
and engage in business for, their respective affiliates. Set forth below are
the names and principal businesses of the directors and certain of the senior
executive officers of State Street Global Advisors who are or have been engaged
in any other business, profession, vocation or employment of a substantial
nature.
STATE STREET GLOBAL ADVISORS
----------------------------
Position with Other Business
State Street Connections and
Name Global Advisors Address <F104>
- ---- --------------- ---------------
Tenley E. Albright, M.D Director Chairman, Western. Resources, Inc.
Joseph A. Baute Director Chairman, Nashua Corporation
L. MacAlister Booth Director Retired Chairman, President and CEO,
Polaroid Corporation
Marshall N. Carter Chairman Director, Euroclear; and CEO
Director, Orbis International
James I. Cash, Jr. Director The James E. Robinson Professor of
Business Administration, Harvard
Business School
Truman S. Casner Director Partner, Ropes & Gray
Nader F. Darehshori Director Chairman, President and CEO, Houghton
Mifflin Company
Arthur L. Goldstein Director Chairman and CEO, Ionics,
Incorporated
Charles F. Kaye Director President, Transportation
Investments, Inc.
John M. Kucharski Director Chairman, President and CEO, EG&G,
Inc.
Charles R. LaMantia Director President and CEO, Arthur D. Little,
Inc.
David B. Perini Director Chairman and President, Perini
Corporation
Dennis J. Picard Director Chairman and CEO, Raytheon Company,
Position with State Street other
Business
Alfred Poe Director President, Meal Enhancement Group,
Campbell Soup Company
Bernard W. Reznicek Director Dean of the College of Business
Administration, Creighton University
David A. Spina President and Chairman, Massachusetts Housing
Chief Operating Investment Corporation,
Officer Director Metropolitan Boston Housing
Partnership, Inc., Chairman, Dana
Hall School
Robert E. Weissman Director Chairman, President and CEO, The Dun
& Bradstreet Corp.
<F104> Address of all individuals: State Street Boston Corporation, 225 Franklin
Street, Boston, Massachusetts 02110.
Item 29. PRINCIPAL UNDERWRITER
(a) B.C. Ziegler & Company ("B.C. Ziegler"), the Registrant's current
principal underwriter, serves as principal underwriter of the shares of the
Principal Preservation Funds, American Tax-Exempt Bond Trust, Series 1 (and
subsequent series); Ziegler U.S. Government Securities Trust, Series 1 (and
subsequent series); American Income Trust, Series 1 (and subsequent series);
Ziegler Money Market Trust; and The Insured American Tax-Exempt Bond Trust,
Series 1 (and subsequent series).
(b) To the best of Registrant's knowledge, the directors and executive
officers of B.C. Ziegler & Company are as follows:
Positions and
Name and Principal Position and Offices Offices with
Business Address with B. C. Ziegler Registrant
- ---------------- ------------------ ----------
R. Douglas Ziegler Chairman of the Board and Director None
Peter D. Ziegler President, Chief Executive
Officer and Director None
S. Charles O'Meara Senior Vice President and
General Counsel and Director None
Eugene H. Rudnicki Senior Vice President - Acquisition None
Vernon C. Van Vooren Senior Vice President - Corporate
Finance, Treasurer and Director None
John C. Wagner Senior Vice President - Retail Sales None
James R. Wyatt Senior Vice President None
Donald A. Carlson, Jr. Senior Vice President None
Neil L. Fuerbringer Senior Vice President -
Administration None
Michael P. Doyle Senior Vice President -
Retail Operations None
Lynn R. Van Horn Senior Vice President -
Finance and Director None
Ronald N. Spears Senior Vice President None
Jeffrey C. Vredenbregt Vice President, Assistant
Treasurer and Controller None
Charles G. Stevens Vice President - Marketing Director None
Jack H. Downer Vice President - MIS Director None
Robert J. Tuszynski Vice President - Director
of Mutual Funds None
Gerry Aman Vice President - Insurance None
Sheila K. Hittman Vice President - Personnel None
Robert J. Johnson Vice President - Compliance None
James M. Bushman Vice President - Recruiting
and Training Coordinator None
Lay C. Rosenheimer Vice President - Bond Sales Control None
Darrell P. Frank Vice President - Director of
Strategic Change None
James L. Brendemuehl Vice President - Mutual Funds
and UIT's None
Ronald C. Strzok Assistant Vice President -
Administration None
Jerome Ferrara, Jr. Assistant Vice President -
Mutual Funds None
Janine R. Schmidt Corporate Secretary None
Kathleen A. Lochen Assistant Secretary None
The address of each of the foregoing is 215 North Main Street, West Bend,
Wisconsin 53095, (414) 334-5521.
(e) None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
(1) Firstar Trust Company, 615 E. Michigan Street, Milwaukee, WI 53201
(records relating to its function as custodian, transfer agent, fund
accounting servicing agent, shareholder servicing agent and co-
administrator).
(2) Firstar Investment Research and Management Company, First Wisconsin
Center, 777 E. Wisconsin Avenue, Suite 1800, Milwaukee, WI 53202
(records relating to its function as investment adviser).
(3) State Street Global Advisors, Two International Plaza, Boston, MA 02110,
(records relating to its function as sub-investment adviser for the
International Equity Fund).
(4) State Street Bank and Trust Company, Two International Plaza, Boston, MA
02110, (records relating to its function as custodian and fund
accounting service agent for the International Equity Fund).
(5) B.C. Ziegler & Company, 215 North Main Street, West Bend, Wisconsin
53095-3348 (records relating to its functions as distributor and co-
administrator).
(6) Drinker Biddle & Reath, Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107 (Registrant's Articles
of Incorporation, By-laws and Minute Books).
Item 31. MANAGEMENT SERVICES
None.
Item 32. UNDERTAKINGS
(1) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment No. 28 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, and Commonwealth of Pennsylvania, on
the 15th day of February, 1996.
PORTICO FUNDS, INC.
Registrant
By *James M. Wade
--------------
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 28 to the Registration Statement of the Registrant has
been signed by the following persons in the capacities and on the dates
indicated:
Signature Title Date
- --------- ----- ----
Chairman, President
*James M. Wade and Treasurer February 15, 1996
(James M. Wade)
*Richard Riederer Director February 15, 1996
(Richard Riederer)
*Jerry Remmel Director February 15, 1996
(Jerry Remmel)
*Glen R. Bomberger Director February 15, 1996
Glen R. Bomberger)
*Charles R. Roy Director February 15, 1996
(Charles R. Roy)
*By /s/ W. Bruce McConnel, III February 15, 1996
W. Bruce McConnel, III
Attorney-in-fact
POWER OF ATTORNEY
-----------------
Charles R. Roy, whose signature appears below, does hereby constitute and
appoint James M. Wade and W. Bruce McConnel, III, and either of them, his true
and lawful attorneys and agents, with power of substitution or resubstitution,
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, or either of them, may deem necessary or advisable or
which may be required to enable Portico Funds, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement under the said
Acts, and any and all amendments (including post-effective amendments) thereto,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company said Registration Statement and any and
all such amendments thereto that are filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: February 23, 1990
/s/ Charles R. Roy
Charles R. Roy
POWER OF ATTORNEY
-----------------
Glen R. Bomberger, whose signature appears below, does hereby constitute
and appoint James M. Wade and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Portico Funds, Inc.
(the "Company") to comply with the Investment Company Act of 1940, as amended,
and the Securities Act of 1933, as amended (the "Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of the Company's
Registration Statement under the said Acts, and any and all amendments
(including post-effective amendments) thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Company said Registration Statement and any and all such amendments
thereto that are filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
Date: February 23, 1990
/s/ Glen R. Bomberger
Glen R. Bomberger
POWER OF ATTORNEY
-----------------
James M. Wade, whose signature appears below, does hereby constitute and
appoint W. Bruce McConnel, III his true and lawful attorney and agent, with
power of substitution or resubstitution, to do any and all acts and things and
to execute any and all instruments which said attorney and agent may deem
necessary or advisable or which may be required to enable Portico Funds, Inc.
(the "Company") to comply with the Investment Company Act of 1940, as amended,
and the Securities Act of 1933, as amended (the "Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of the Company's
Registration Statement under the said Acts, and any and all amendments
(including post-effective amendments) thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Company said Registration Statement and any and all such amendments
thereto that are filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorney and agent
shall do or cause to be done by virtue hereof.
Date: February 23, 1990
/s/ James M. Wade
James M. Wade
POWER OF ATTORNEY
-----------------
Richard K. Riederer, whose signature appears below, does hereby constitute
and appoint James M. Wade and W. Bruce McConnel, III, and either of them, his
true and lawful attorneys and agents, with power of substitution or
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, may deem
necessary or advisable or which may be required to enable Portico Funds, Inc.
(the "Company") to comply with the Investment Company Act of 1940, as amended,
and the Securities Act of 1933, as amended (the "Acts"), and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, in connection with the filing and effectiveness of the Company's
Registration Statement under the said Acts, and any and all amendments
(including post-effective amendments) thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign in the name and on behalf of the undersigned as a director and/or officer
of the Company said Registration Statement and any and all such amendments
thereto that are filed with the Securities and Exchange Commission under said
Acts, and any other instruments or documents related thereto, and the
undersigned does hereby ratify and confirm all that said attorneys and agents,
or either of them, shall do or cause to be done by virtue hereof.
Date: February 23, 1990
/s/ Richard K. Riederer
Richard K. Riederer
POWER OF ATTORNEY
-----------------
Jerry Remmel, whose signature appears below, does hereby constitute and
appoint James M. Wade and W. Bruce McConnel, III, and either of them, his true
and lawful attorneys and agents, with power of substitution or resubstitution,
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, or either of them, may deem necessary or advisable or
which may be required to enable Portico Funds, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended (the "Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement under the said
Acts, and any and all amendments (including post-effective amendments) thereto,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company said Registration Statement and any and
all such amendments thereto that are filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Date: February 23, 1990
/s/ Jerry Remmel
Jerry Remmel
EXHIBIT INDEX
-------------
Exhibit Number Description Page
- -------------- ----------- ----
(1)(a) Articles of Incorporation filed February 19, 1988.
(1)(b) Amendment No. 1 to the Articles of Incorporation filed June 30,
1989.
(1)(c) Amendment No. 2 to the Articles of Incorporation filed June 30,
1989.
(1)(d) Amendment No. 3 to the Articles of Incorporation filed November
12, 1991.
(1)(e) Amendment No. 4 to the Articles of Incorporation filed August 18,
1992.
(1)(f) Amendment No. 5 to the Articles of Incorporation filed October
23, 1992.
(1)(g) Amendment No. 6 to the Articles of Incorporation filed January
26, 1993.
(1)(h) Amendment No. 7 to the Articles of Incorporation filed February
10, 1994.
(1)(i) Amendment No. 8 to the Articles of Incorporation filed December
29, 1994.
(1)(j) Amendment No. 9 to the Articles of Incorporation filed July 20,
1995.
(1)(k) Amendment No. 10 to the Articles of Incorporation filed November
10, 1995.
(2)(a) Registrant's By-laws dated September 9, 1988.
(2)(b) Amendment to By-Laws as approved by the Registrant's Board of
Directors on February 23, 1990.
(2)(c) Amendment to By-Laws as approved by the Registrant's Board of
Directors on February 15, 1991.
(2)(d) Amendment to By-Laws as approved by theRegistrant's Board of
Directors on June 21, 1991.
(5)(a) Investment Advisory Agreement between Registrant and First
Wisconsin Trust Company dated August 29, 1991 with respect to the
Money Market Fund, U.S. Government Money Market Fund, Tax-Exempt
Money Market Fund, Income and Growth Fund, Short-Intermediate
Fixed Income Fund, Special Growth Fund, Bond IMMDEX/TM Fund,
Equity Index Fund, Institutional Money Market Fund and U.S.
Federal Money Market Fund.
(5)(b) Assumption and Guarantee Agreement between First Wisconsin Trust
Company and First Wisconsin Asset Management dated February 3,
1992.
(5)(c) Investment Advisory Agreement between Registrant and First
Wisconsin Asset Management dated March 27, 1992 with respect to
the Balanced Fund.
(5)(d) Addendum No. 1 dated December 27, 1992 to Investment Advisory
Agreement between Registrant and Firstar Investment Research and
Management Company dated March 27, 1992 with respect to the
MidCore Growth Fund and Intermediate Bond Market Fund.
(5)(e) Addendum No. 2 dated February 5, 1993, to Investment Advisory
Agreement between the Registrant and Firstar Investment Research
and Management Company dated March 27, 1992 with respect to the
Tax-Exempt Intermediate Bond Fund.
(5)(f) Assumption and Guarantee Agreement between Firstar Trust Company
and Firstar Investment Research and Management Company dated June
17, 1993 with respect to the Income and Growth Fund.
(5)(g) Addendum No. 3 dated April 26, 1994, to Investment Advisory
Agreement between the Registrant and Firstar Investment Research
and Management Company dated March 27, 1992 with respect to the
International Equity Fund.
(5)(h) Sub-Advisory Agreement among Firstar Investment Research and
Management Company, the Registrant and State Street Bank and
Trust Company dated April 26, 1994, with respect to the
International Equity Fund.
(5)(i) Addendum No. 4 to the Investment Advisory Agreement between
Registrant and Firstar Investment Research and Management Company
dated March 27, 1992 with respect to the MicroCap Fund.
(5)(j) Form of Addendum No. 5 to the Investment Advisory Agreement
between Registrant and Firstar Investment Research & Management
Company dated March 27, 1992 with respect to the Balanced Income
Fund.
(6)(a) Distribution Agreement between Registrant and B.C. Ziegler &
Company dated as of January 1, 1995, with respect to Money Market
Fund, U.S. Government Money Market Fund, Tax-Exempt Money Market
Fund, Growth and Income Fund, Short-Term Bond Market Fund,
Special Growth Fund, Bond IMMDEX/TM Fund, Equity Index Fund,
Institutional Money Market Fund, U.S. Treasury Money Market Fund,
Balanced Fund, Intermediate Bond Market Fund, MidCore Growth
Fund, Tax-Exempt Intermediate Bond Fund and International Equity
Fund.
(6)(b) Addendum No. 1 to the Distribution Agreement between Registrant
and B.C. Ziegler and Company dated as of January 1, 1995 with
respect to the MicroCap Fund.
(6)(c) Form of Addendum No. 2 to the Distribution Agreement between
Registrant and B.C. Ziegler and Company dated as of January 1,
1995 with respect to the Balanced Income Fund.
(7) Deferred Compensation Plan dated September 16, 1994 and Deferred
Compensation Agreement between Registrant and its Directors.
(8)(a) Custodian Agreement between Registrant and First Wisconsin Trust
Company dated July 29, 1988.
(8)(b) Letter dated December 28, 1989 with respect to the Custodian
Agreement with respect to the Equity Index Fund.
(8)(c) Revised Mutual Fund Custodial Agent Service Annual Fee Schedule
dated February 23, 1990 to the Custodian Agreement.
(8)(d) Amendment dated May 1, 1990 to the Custodian Agreement between
Registrant and First Wisconsin Trust Company.
(8)(e) Letter dated April 19, 1991 with respect to the Custodian
Agreement with respect to the Institutional Money Market Fund and
U.S. Federal Money Market Fund.
(8)(f) Letter dated March 27, 1992 with respect to the Custodian
Agreement with respect to the Balanced Fund.
(8)(g) Letter dated December 27, 1992 with respect to the Custodian
Agreement with respect to the Intermediate Bond Market Fund and
MidCore Growth Fund.
(8)(h) Letter dated February 5, 1993 with respect to the Custodian
Agreement with respect to the Tax-Exempt Intermediate Bond Fund.
(8)(j) Letter Agreement dated August 1, 1995 with respect to the
Custodian Agreement with respect to the MicroCap Fund.
(8)(k) Form of Letter Agreement with respect to the Custodian Agreement
with respect to the Balanced Income Fund.
(9)(a) Co-Administration Agreement Among the Registrant, B.C. Ziegler &
Company and Firstar Trust Company dated as of January 1, 1995.
(9)(b) Addendum No. 1 to the Co-Administration Agreement among the
Registrant, B.C. Ziegler and Company and Firstar Trust Company
dated as of January 1, 1995 with respect to the MicroCap Fund.
(9)(c) Form of Addendum No. 2 to the Co- Administration Agreement among
the Registrant, B.C. Ziegler and Company and Firstar Trust
Company dated as of January 1, 1995 with respect to the Balanced
Income Fund.
(9)(d) Fund Accounting Servicing Agreement dated March 23, 1988 between
Registrant and First Wisconsin Trust Company.
(9)(e) Letter dated July 29, 1988 with respect to the Fund Accounting
Servicing Agreement.
(9)(f) Letter dated December 28, 1989 with respect to the Fund
Accounting Servicing Agreement with respect to the Equity Index
Fund.
(9)(g) Letter dated April 19, 1991 with respect to the Fund Accounting
Servicing Agreement with respect to the Institutional Money
Market Fund and U.S. Federal Money Market Fund.
(9)(h) Letter dated March 27, 1992 with respect to the Fund Accounting
Servicing Agreement with respect to the Balanced Fund.
(9)(i) Letter dated December 27, 1992 with respect to the Fund
Accounting Servicing Agreement with respect to the Intermediate
Bond Market Fund and MidCore Growth Fund.
(9)(k) Revised Fund Valuation and Accounting Fee Schedule dated February
23, 1990 to the Fund Accounting Servicing Agreement with respect
to the Money Market Fund, Tax-Exempt Money Market Fund and U.S.
Government Money Market Fund.
(9)(l) Revised Fund Valuation and Accounting Fee Schedule dated February
23, 1990 to the Fund Accounting Servicing Agreement with respect
to the Equity Index Fund.
(9)(m) Revised Fund Valuation and Accounting Fee Schedule dated November
1, 1990 to the Fund Accounting and Servicing Agreement with
respect to the Equity Index Fund, Income and Growth Fund, Special
Growth Fund, ShortIntermediate Fixed Income Fund, and Bond
IMMDEX/TM Fund.
(9)(n) Letter Agreement dated August 1, 1995 with respect to the Fund
Accounting Servicing Agreement with respect to the MicroCap Fund.
(9)(o) Form of Letter Agreement with respect to the Fund Accounting
Servicing Agreement with respect to the Balanced Income Fund.
(9)(p) Shareholder Servicing Agent Agreement dated March 23, 1988
between Registrant and First Wisconsin Trust Company.
(9)(q) Letter dated July 29, 1988 with respect to Shareholder Servicing
Agent Agreement.
(9)(r) Letter dated December 28, 1989 with respect to the Shareholder
Servicing Agent Agreement with respect to the Equity Index Fund.
(9)(s) Letter dated April 23, 1991 with respect to the Shareholder
Servicing Agent Agreement with respect to the Institutional Money
Market Fund and U.S. Federal Money Market Fund.
(9)(t) Letter dated March 27, 1992 with respect to the Shareholder
Servicing Agent Agreement with respect to the Balanced Fund.
(9)(u) Letter dated December 27, 1992 with respect to the Shareholder
Servicing Agent Agreement with respect to the Intermediate Bond
Market Fund and MidCore Growth Fund.
(9)(w) Letter dated April 26, 1994 with respect to the Shareholder
Servicing Agent Agreement with respect to the International
Equity Fund.
(9)(x) Amendment dated May 1, 1990 to the Shareholder Servicing Agent
Agreement between Registrant and First Wisconsin Trust Company.
(9)(y) Letter Agreement dated August 1, 1995 with respect to Shareholder
Servicing Agent Agreement with respect to the MicroCap Fund.
(9)(z) Form of Letter with respect to Shareholder Servicing Agent
Agreement with respect to the Balanced Income Fund.
(9)(aa) Plan of Reorganization.
(9)(ab) Purchase and Assumption Agreement dated February 22, 1988.
(9)(ac) Amended and Restated Service Plan and Servicing Agreement.
(11)(a) Consent of Drinker Biddle and Reath.
(11)(b) Consent of Price Waterhouse L.L.P.
(14) Individual Retirement Account Documents.
(15)(a) Amended and Restated Distribution and Service Plan and Form of
Distribution and Servicing Agreement.
(16)(a) Schedule for Computation of Performance Quotations -- Money
Market Fund.
(16)(b) Schedule for Computation of Performance Quotations -- Tax-Exempt
Money Market Fund.
(16)(c) Schedule for Computation of Performance Quotations -- U.S.
Government Money Market Fund.
(16)(d) Schedule of Computation of Performance Quotations -- Growth and
Income Fund.
(16)(e) Schedule of Computation of Performance Quotations -- Short-Term
Bond Market Fund.
(16)(f) Schedule of Computation of Performance Quotations -- Special
Growth Fund.
(16)(g) Schedule of Computation of Performance Quotations -- Bond
IMMDEX/TM Fund.
(16)(h) Schedule of Computation of Performance Quotations -- Equity Index
Fund.
(16)(i) Schedule of Computation of Performance Quotations --
Institutional Money Market Fund.
(16)(j) Schedule of Computation of Performance Quotations -- U.S.
Treasury Money Market Fund.
(16)(k) Schedule of Computation of Performance Quotations -- Balanced
Fund.
(16)(l) Schedule of Computation of Performance Quotations -- MidCore
Growth Fund.
(16)(m) Schedule of Computation of Performance Quotations -- Intermediate
Bond Market Fund.
(16)(n) Schedule of Computation of Performance Quotations -- Tax-Exempt
Intermediate Bond Fund.
(16)(o) Schedule of Computation of Performance Quotations --
International Equity Fund.
(17) Financial Data Schedules.
(18) Amended and Restated Plan Pursuant to Rule 18f-3 for Operation of
a Multi-Class System.
(24)(a) The audited financial statements and related notes thereto
included in the Annual Report for the year ended October 31, 1995
for the Short-Term Bond Market Fund, Intermediate Bond Market
Fund, Tax-Exempt Intermediate Bond Fund and Bond IMMDEX/TM Fund.
(24)(b) The audited financial statements and related notes thereto
included in the Annual Report for the year ended October 31, 1995
for the Balanced Fund, Growth and Income Fund, Equity Index Fund,
MidCore Growth Fund, Special Growth Fund and International Equity
Fund.
(24)(c) The audited financial statements and related notes thereto
included in the Annual Report for the year ended October 31, 1995
for the Money Market Fund, U.S. Treasury Money Market Fund, U.S.
Government Money Market Fund and Tax-Exempt Money Market Fund.
(24)(d) The audited financial statements and related notes thereto
included in the Annual Report for the year ended October 31, 1995
for the Institutional Money Market Fund.
Exhibit (1)(a)
ARTICLES OF INCORPORATION
OF
ELAN FUNDS, INC.
The undersigned, for the purpose of forming a Wisconsin corporation under
Chapter 180 of the Wisconsin Statutes, adopts the following Articles of
Incorporation:
ARTICLE I
---------
The name of the corporation (hereinafter called "Corporation") is:
ELAN FUNDS, INC.
ARTICLE II
----------
The period of existence shall be perpetual.
ARTICLE III
-----------
The purpose for which the Corporation is organized shall be to act as a
management investment company under the Investment Company Act of 1940 and any
successor statute thereto, and to carry on and engage in any other lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes.
ARTICLE IV
----------
The Corporation is expressly empowered as follows:
(A) To hold, invest and reinvest its assets in securities and other
investments or to hold part or all of its assets in cash.
(B) To issue and sell shares and other securities of the Corporation in such
amounts and on such terms and conditions and for such purposes and for such
amount or kind of consideration as may now or hereafter be permitted by law.
(C) To redeem, purchase or otherwise acquire, hold, dispose of, resell,
transfer, reissue or cancel (all without the vote or consent of the shareholders
of the Corporation) shares and other securities of the Corporation, in any
manner and to the extent now or hereafter permitted by law and by these Articles
of Incorporation.
(D) To enter into a written contract or contracts with any person or persons
(whether natural or organized as a corporation, partnership, trust, association
or other form) providing for a delegation of the management of all or part of
the Corporation's securities portfolio(s) and also for the delegation of the
performance of various administrative or corporate functions, subject to the
direction of the Board of Directors.
(E) To enter into a written contract or contracts appointing one or more
distributors or agents or both for the sale of the shares and other securities
of the Corporation on such terms and conditions as the Board of Directors of the
Corporation may deem reasonable and proper, and to allow such person or persons
a commission on the sale of such shares and other securities.
(F) To adopt, on such terms and conditions as the Board of Directors may in
their discretion determine, one or more plans pursuant to which any person or
persons may be compensated directly or indirectly by the Corporation for
shareholder servicing, administration or distribution with respect to one or
more classes of the Corporation's shares and other securities, including without
limitation plans subject to Rule 12b-1 under the Investment Company Act of 1940,
and the Corporation may also enter into agreements pursuant to such plans.
(G) To enter into a written contract or contracts employing such custodian
or custodians for the safekeeping of the property of the Corporation and of its
shares and other securities, such dividend disbursing agent or agents, and such
transfer agent or agents and registrar or registrars for its shares and other
securities, on such terms and conditions as the Board of Directors of the
Corporation may deem reasonable and proper for the conduct of the affairs of the
Corporation, and to pay the fees and disbursements of such custodians, dividend
disbursing agents, transfer agents and registrars out of the income and/or any
other property of the Corporation. Notwithstanding any other provision of these
Articles of Incorporation or the By-Laws of the Corporation, the Board of
Directors may cause any or all of the property of the Corporation to be
transferred to, or to be acquired and held in the name of, a custodian or
custodians so appointed or any nominee or nominees of the Corporation or nominee
or nominees of such custodian or custodians satisfactory to the Board of
Directors.
(H) To employ the same person, in any multiple capacity under Sections (D),
(E), (F) and (G) of this Article IV, who may receive compensation from the
Corporation in as many capacities in which such person shall serve the
Corporation. The Corporation may also enter into any other agreement or
arrangement necessary or appropriate to the conduct of the business of the
Corporation or any class of its shares or other securities with any person,
including any person in which any director, officer, representative, employee or
shareholder of the Corporation may be interested, and no such agreement or
arrangement shall be invalidated or rendered voidable by reason of the existence
of any such relationship, nor shall any person holding such relationship be
liable by reason of such relationship for any loss or expense to the Corporation
under or by reason of said agreement or arrangement, or accountable for any
profit realized directly or indirectly therefrom.
(I) To do any and all such further acts or things and to exercise any and
all such further powers or rights as may be necessary, incidental, relative,
conducive, appropriate or desirable for the accomplishment, carrying out, or
attainment of the purposes stated in Article III hereof.
The Corporation shall be authorized to exercise and enjoy all of the powers,
rights and privileges granted to, or conferred upon, corporations by the
Wisconsin Business Corporation Law, as now or hereafter in force, and the
enumeration of the foregoing shall not be deemed to exclude any powers, rights
or privileges so granted or conferred.
ARTICLE V
---------
A. The aggregate number of shares which the Corporation shall have authority
to issue is Seven Billion (7,000,000,000) shares of Common Stock, which shall be
divided into sixteen (16) classes designated as Classes A-1, A-2, B-1, B-2, C,
D, E, F, G, H, I, J, K, L, M and N Common Stock, respectively. Each of Classes
A-1, A-2, B-1 and B-2 Common Stock of the Corporation shall consist of One
Billion (1,000,000,000) shares, and each of Classes C, D, E, F, G, H, I, J, K,
L, M and N Common Stock of the Corporation shall consist of Two Hundred Fifty
Million (250,000,000) shares. The par value of the shares of each of the
Corporation's classes of Common Stock shall be $.0001 per share.
B. Shares of Class A-1, Class A-2, Class B-1 and Class B-2 Common Stock of
the Corporation shall have the following preferences, limitations and relative
rights:
(1) DIVIDEND RECORD DATES AND CERTAIN DEFINITIONS.
(a) Shares of Class A-1 Common Stock and Class A-2 Common Stock of the
Corporation shall be identical in all respects, except that the Board of
Directors in its discretion may, in declaring any dividend, establish one record
date with respect to the Class A-1 Common Stock and a different record date with
respect to the Class A-2 Common Stock for the purpose of determining which
shareholders are entitled to receive a dividend.
(b) Shares of Class B-1 Common Stock and Class B-2 Common Stock of the
Corporation shall be identical in all respects, except that the Board of
Directors in its discretion may, in declaring any dividend, establish one record
date with respect to the Class B-1 Common Stock and a different record date with
respect to the Class B-2 Common Stock for the purpose of determining which
shareholders are entitled to receive a dividend.
(c) For purposes of this Section (B) of Article V: (i) Class A-1 Common
Stock and Class A-2 Common Stock of the Corporation shall together be deemed to
be "classes with the same alphabetical designation"; (ii) Class B-1 Common Stock
and Class B-2 Common Stock of the Corporation shall together be deemed to be
"classes with the same alphabetical designation"; and (iii) Class A-1, Class A-
2, Class B-1 and Class B-2 Common Stock of the Corporation shall each be deemed
to be a "commingled class" of Common Stock.
(2) ASSETS BELONGING TO CLASSES WITH SAME ALPHABETICAL DESIGNATION. All
consideration received by the Corporation for the issue and sale of shares of
any commingled class of the Corporation's Common Stock shall be commingled,
invested and reinvested together with the consideration received by the
Corporation for the issue and sale of shares of the other commingled class of
Common Stock that has the same alphabetical designation, along with all income,
earnings, profits and proceeds derived from the investment thereof, including
any proceeds derived from the sale, exchange or liquidation of such investments,
and funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, and any general assets of the Corporation not belonging to
a particular class of Common Stock of the Corporation which the Board of
Directors may, in their sole discretion, allocate to such commingled classes of
Common Stock having the same alphabetical designation, and shall irrevocably
belong to the commingled classes of Common Stock with respect to which such
assets, payments or funds were received or allocated for all purposes, subject
only to the rights of creditors, and shall be so handled upon the books of
account of the Corporation. Such assets and the income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any assets derived from any reinvestment of such
proceeds in whatever form, are referred to as "assets belonging to" such
commingled classes of Common Stock. Each share of the commingled classes having
the same alphabetical designation shall share equally with each other share of
such classes in the assets belonging to such classes. Shareholders of any
commingled class of Common Stock of the Corporation shall have no right, title
or interest in or to the assets belonging to any class of Common Stock with a
different alphabetical designation.
(3) LIABILITIES BELONGING TO CLASSES WITH SAME ALPHABETICAL DESIGNATION.
The assets belonging to commingled classes of the Corporation's Common Stock
with the same alphabetical designation shall be charged with the direct
liabilities in respect to such commingled classes and shall also be charged with
such classes' proportionate share of the general liabilities of the Corporation
as determined by comparing the assets belonging to such commingled classes with
the aggregate assets of the Corporation, PROVIDED, that the Board of Directors
may, in their discretion, direct that any one or more general liabilities of the
Corporation be allocated to the respective classes of its Common Stock on a
different basis. The liabilities so charged to such commingled classes of
Common Stock with the same alphabetical designation are herein referred to as
"liabilities belonging to" such commingled classes, and each share of such
commingled classes shall be charged equally with each other share of the classes
having the same alphabetical designation with the liabilities belonging to such
classes.
(4) DIVIDENDS AND DISTRIBUTIONS. Shares of commingled classes of Common
Stock having the same alphabetical designation shall be entitled to such
dividends and distributions, in stock or in cash or both, as may be declared
from time to time by the Board of Directors, acting in their sole discretion,
with respect to such classes, PROVIDED that such dividends and distributions
shall be paid only out of the lawfully available "assets belonging to" such
commingled classes as such term is defined in Section (B)(2) of this Article V.
(5) LIQUIDATION DIVIDENDS AND DISTRIBUTIONS. In the event of the
liquidation or dissolution of the Corporation, the shareholders of commingled
classes of Common Stock having the same alphabetical designation shall be
entitled to receive out of the assets of the Corporation available for
distribution to shareholders, but other than general assets not belonging to any
particular class of Common Stock, the assets belonging to such commingled
classes, and the assets so distributable to the shareholders of such commingled
class as shall be distributed among such shareholders in proportion to the
number of shares of such commingled classes held by them and recorded on the
books of the Corporation. In the event that there are any general assets not
belonging to any particular class of the Corporation's Common Stock and
available for distribution, the shareholders of commingled classes of Common
Stock having the same alphabetical designation shall be entitled to receive a
portion of such general assets determined by comparing the assets belonging to
such commingled classes with the aggregate assets of the Corporation; and the
assets so distributable to the shareholders of such commingled classes shall be
distributed among such shareholders in proportion to the number of shares of
such commingled classes held by them and recorded on the books of the Trust.
(6) VOTING RIGHTS. Shareholders of each commingled class of the
Corporation's Common Stock shall be entitled to one (1) vote for each full
share, and a fractional vote for each fractional share, of such class then
standing in his or her name on the books of the Corporation. On any matter
submitted to a vote of shareholders all shares of a commingled class of the
Corporation's Common Stock then issued and outstanding and entitled to vote
shall be voted in the aggregate with all other shares of the Corporation's
Common Stock then issued and outstanding and entitled to vote, irrespective of
class, and not as a separate class, except (a) as otherwise required by the
Wisconsin Business Corporation Law, the Investment Company Act of 1940 or the
regulations thereunder, or other applicable law, or (b) when the matter to be
acted upon affects only the interests of shareholders of a particular class or
particular classes of the Corporation's Common Stock (in which case only shares
of the affected class or classes shall be entitled to vote thereon). Without
affecting the foregoing, shares of the commingled classes of the Corporation's
Common Stock having the same alphabetical designation shall always vote together
in the aggregate and not as separate classes on all matters submitted to a vote
of the shareholders of such commingled classes, except as otherwise required by
applicable law.
(7) REDEMPTION OF SHARES. To the extent of the assets of the Corporation
legally available for such redemptions, a shareholder of the Corporation shall
have the right to require the Corporation to redeem his full and fractional
shares of any commingled class of Common Stock out of the assets belonging to
the commingled classes with the same alphabetical designation as such class at a
redemption price equal to the net asset value per share next determined after
receipt of a request to redeem in proper form as determined by the Board of
Directors subject to the right of the Corporation to suspend the right of
redemption of shares or postpone the date of payment of such redemption price in
accordance with the provisions of applicable law. The Board of Directors shall
establish such rules and procedures as they deem appropriate for the redemption
of shares, provided that all redemptions shall be in accordance with the
Investment Company Act of 1940 and the Wisconsin Business Corporation Law.
Without limiting the foregoing, the Corporation shall, to the extent permitted
by applicable law, have the right at any time to redeem the shares of any
commingled class of Common Stock owned by any holder thereof: (a) in connection
with the termination of any commingled class of the Corporation's Common Stock
as provided hereunder; (b) if the value of such shares in the account maintained
by the Corporation or its transfer agent for any commingled class is less than
One Thousand Dollars ($1,000), PROVIDED that the Corporation shall provide a
shareholder with written notice at least sixty (60) days prior to effecting such
a redemption of shares as a result of not satisfying such requirement; (c) to
reimburse the Corporation for any loss it has sustained by reason of the failure
of such shareholder to make full payment for shares of the Corporation's Common
Stock purchased by such shareholder; (d) to collect any charge relating to a
transaction effected for the benefit of such shareholder which is applicable to
shares of the Corporation's Common Stock as provided in the prospectus relating
to such shares; or (e) if the net income with respect to any commingled class of
Common Stock should be negative or it should otherwise be appropriate to carry
out the Corporation's responsibilities under the Investment Company Act of 1940,
in each case subject to such further terms and conditions as the Board of
Directors may from time to time establish. The redemption price of shares of
any commingled class of the Corporation's Common Stock shall, except as
otherwise provided in this sub-section, be the net asset value thereof as
determined by the Board of Directors from time to time in accordance with the
provisions of applicable law, less such redemption fee or other charge, if any,
as may be fixed by the Board of Directors. When the net income of any
commingled classes of Common Stock having the same alphabetical designation and
with respect to which the Board of Directors have, in their discretion,
established a policy of maintaining a constant net asset value per share is
negative or whenever deemed appropriate by the Board of Directors in order to
carry out the Corporation's responsibilities under the Investment Company Act of
1940, the Corporation may, without payment or compensation but in consideration
of the interests of the Corporation and the holders of shares of such commingled
classes in maintaining a constant net asset value per share of such classes,
redeem pro rata from each holder of record of such classes on such day, such
number of full and fractional shares of such commingled classes as may be
necessary to reduce the aggregate number of outstanding shares in order to
permit the net asset value thereof to remain constant. Payment of the redemption
price, if any, shall be made in cash by the Corporation at such time and in such
manner as may be determined from time to time by the Board of Directors unless,
in the opinion of the Board of Directors, which shall be conclusive, conditions
exist which make payment wholly in cash unwise or undesirable; in such event the
Corporation may make payment in the assets belonging or allocable to the
commingled classes of Common Stock having the same alphabetical designation as
the class of Common Stock redemption of which is being sought, the value of
which shall be determined as provided herein. Any shares of a commingled class
of the Corporation's Common Stock that are redeemed by the Corporation shall be
deemed to be cancelled and restored to the status of authorized but unissued
shares of the particular class involved and, unless otherwise determined by the
Board of Directors of the Corporation, may be reissued from time to time in the
same manner as other authorized, unissued shares of the same commingled class.
(8) TERMINATION OF CLASSES. Without the vote of the shares of any class of
Common Stock of the Corporation then outstanding (unless otherwise required by
applicable law), the Corporation may, if so determined by the Board of
Directors:
(a) Sell and convey the assets belonging to any commingled classes of Common
Stock having the same alphabetical designation to another trust or corporation
that is a management investment company (as defined in the Investment Company
Act of 1940) and is organized under the laws of any jurisdiction within the
United States for consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or contingent,
belonging to such commingled classes and which may include securities issued by
such trust or corporation. Following such sale and conveyance, and after making
provision for the payment of any liabilities belonging to such commingled
classes of Common Stock that are not assumed by the purchaser of the assets
belonging to such classes, the Corporation may, at its option, redeem all
outstanding shares of such commingled classes at the net asset value as
determined by the Board of Directors in accordance with the provisions of
applicable law, less such redemption fee or other charge, if any, as may be
fixed by the Board of Directors. Notwithstanding any other provision of these
Articles of Incorporation to the contrary, the redemption price may be paid in
cash or by distribution of the securities or other consideration received by the
Board of Directors for the assets belonging to such commingled classes of Common
Stock upon such conditions as the Board of Directors deem, in their sole
discretion, to be appropriate consistent with applicable law and these Articles
of Incorporation.
(b) Sell and convert the assets belonging to any commingled classes of
Common Stock having the same alphabetical designation into money and, after
making provision for the payment of all obligations, taxes and other
liabilities, accrued or contingent, belonging to such commingled classes, the
Corporation may, at its option, (i) redeem all outstanding shares of such
commingled classes at net asset value as determined by the Board of Directors in
accordance with the provisions of applicable law, less such redemption fee or
other charge, if any, as may be fixed by the Board of Directors upon such
conditions as the Board of Directors deem, in their sole discretion, to be
appropriate consistent with applicable law and these Articles of Incorporation,
or (ii) combine the assets belonging to such commingled classes following such
sale and conversion with the assets belonging to any one or more other class(es)
of the Corporation's Common Stock pursuant to and in accordance with Section
(B)(8)(c) of this Article V;
(c) Combine the assets belonging to any commingled classes of Common Stock
having the same alphabetical designation with the assets belonging to any one or
more other classes of Common Stock of the Corporation if the Board of Directors
reasonably determine that such combination will not have a material adverse
effect on the shareholders of any class of Common Stock participating in such
combination. In connection with any such combination of assets the shares of
any commingled class of Common Stock then outstanding may, if so determined by
the Board of Directors, be converted into shares of any other class or classes
of Common Stock of the Corporation with respect to which conversion is permitted
by applicable law, or may be redeemed, at the option of the Board of Directors,
at net asset value as determined by the Board of Directors in accordance with
the provisions of applicable law, less such redemption fee or other charge, or
conversion cost, if any, as may be fixed by the Board of Directors upon such
conditions as the Board of Directors deem, in their sole discretion, to be
appropriate consistent with applicable law and these Articles of Incorporation.
Notwithstanding any other provision of these Articles of Incorporation to the
contrary, any redemption price, or part thereof, paid pursuant to this Section
(B)(8)(c) may be paid in shares of any other existing or future class or classes
of Common Stock of the Corporation.
(9) NO PREEMPTIVE RIGHTS. No holder of shares of any commingled class of
the Corporation's Common Stock shall, as such holder, have any preemptive or
other right to purchase, subscribe for or otherwise acquire any shares of any
class of Common Stock of the Corporation, or any securities of the Corporation
convertible into such shares or carrying a right to subscribe to or acquire such
shares (whether such shares or securities are now or hereafter authorized or are
acquired by the Corporation after the issuance thereof), other than such right,
if any, as the Board of Directors, in their discretion, may determine.
C. Shares of Class C, Class D, Class E, Class F, Class G,
Class H, Class I, Class J, Class K, Class L, Class M and Class N Common Stock of
the Corporation shall have the following preferences, limitations and relative
rights:
(1) DEFINITION. For the purpose of this Section (C) of Article V, Class C,
Class D, Class E, Class F, Class G, Class H, Class I, Class J, Class K, Class
L, Class M and Class N Common Stock of the Corporation shall each be deemed to
be an "uncommingled class" of Common Stock.
(2) ASSETS BELONGING TO AN UNCOMMINGLED CLASS. Consideration that is
received by the Corporation for the issue or sale of shares of any uncommingled
class of the Corporation's Common Stock (a) shall not be commingled with the
consideration that is received by the Corporation for the issue or sale of
shares of any other class of Common Stock, and (b) together with all assets in
which such consideration is invested and reinvested, income, earnings, profits
and proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, any such funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, and any general assets of the
Corporation not belonging to a particular class of Common Stock of the
Corporation which the Board of Directors may, in their sole discretion, allocate
to an uncommingled class, shall irrevocably belong to the uncommingled class of
the Corporation's Common Stock with respect to which such assets, payments or
funds were received or allocated for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the Corporation.
Such assets and the income, earnings, profits and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation thereof, and any
assets derived from any reinvestment of such proceeds in whatever form, are
herein referred to as "assets belonging to" such uncommingled class.
Shareholders of any uncommingled class of Common Stock of the Corporation shall
have no right, title or interest in or to the assets belonging to any class of
Common Stock with a different alphabetical designation.
(3) LIABILITIES BELONGING TO AN UNCOMMINGLED CLASS. The assets belonging to
any uncommingled class of the Corporation's Common Stock shall be charged with
the direct liabilities in respect of such class and shall also be charged with
such class, proportionate share of the general liabilities of the Corporation as
determined by comparing the assets belonging to such uncommingled class with the
aggregate assets of the Corporation, provided that the Board of Directors may,
in their discretion, direct that any one or more general liabilities of the
Corporation be allocated to the respective classes of its Common Stock on a
different basis. The liabilities so charged to an uncommingled class of Common
Stock are herein referred to as "liabilities belonging to" such uncommingled
class.
(4) DIVIDENDS AND DISTRIBUTIONS. Shares of an uncommingled class of the
Corporation's Common Stock shall be entitled to such dividends and
distributions, in stock or in cash or both, as may be declared from time to time
by the Board of Directors, acting in their sole discretion, with respect to such
class; provided, however, that such dividends and distributions shall be paid
only out of the lawfully available "assets belonging to" such uncommingled class
as such phrase is defined in Section (C)(2) of this Article V.
(5) LIQUIDATION DIVIDENDS AND DISTRIBUTIONS. In the event of the
liquidation or dissolution of the Corporation, the shareholders of an
uncommingled class of the Corporation's Common Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to
shareholders, but other than general assets not belonging to any particular
class of Common Stock, the assets belonging to such uncommingled class, and the
assets so distributable to the shareholders of any uncommingled class of the
Corporation's Common Stock shall be distributed among such shareholders in
proportion to the number of shares of such uncommingled class of the
Corporation's Common Stock held by them and recorded on the books of the
Corporation. In the event that there are any general assets not belonging to any
particular class of Corporation's Common Stock and available for distribution,
the shareholders of any uncommingled class of Common Stock shall be entitled to
receive a portion of such general assets determined by comparing the assets
belonging to such uncommingled class with the aggregate assets of the
Corporation; and the assets so distributable to the shareholders of such
uncommingled class shall be distributed among such shareholders in proportion to
the number of shares of such uncommingled class of the Corporation's Common
Stock held by them and recorded on the books of the Corporation.
(6) VOTING RIGHTS. Shareholders of an uncommingled class of the
Corporation's Common Stock shall be entitled to one (1) vote for each full
share, and a fractional vote for each fractional share, of such class then
standing in his or her name an the books of the Corporation. On any matter
submitted to a vote of shareholders all shares of an uncommingled class of the
Corporation's Common Stock then issued and outstanding and entitled to vote
shall be voted in the aggregate with all other shares of the Corporation's
Common Stock then issued and outstanding and entitled to vote, irrespective of
class, and not as a separate class, except (a) as otherwise required by the
Wisconsin Business Corporation Law, the Investment Company Act of 1940 or the
regulations thereunder, or other applicable law, or (b) when the matter to be
acted upon affects only the interests of shareholders of a particular class or
particular classes of the Corporation's Common Stock (in which case only shares
of the affected class or classes shall be entitled to vote thereon).
(7) REDEMPTION OF SHARES. To the extent of the assets of the Corporation
legally available for such redemptions, a shareholder of the Corporation shall
have the right to require the Corporation to redeem his full and fractional
shares of any uncommingled class of Common Stock out of the assets belonging to
such class at a redemption price equal to the net asset value per share next
determined after receipt of a request to redeem in proper form as determined by
the Board of Directors, subject to the right of the Corporation to suspend the
right of redemption of shares or postpone the date of payment of such redemption
price in accordance with the provisions of applicable law. The Board of
Directors shall establish such rules and procedures as they deem appropriate for
the redemption of shares, provided that all redemptions shall be in accordance
with the Investment Company Act of 1940 and the Wisconsin Business Corporation
Law. Without limiting the foregoing, the Corporation shall, to the extent
permitted by applicable law, have the right at any time to redeem the shares of
any uncommingled class of Common Stock owned by any holder thereof: (a) in
connection with the termination of any uncommingled class of the Corporation's
Common Stock as provided hereunder; (b) if the value of such shares in the
account maintained by the Corporation or its transfer agent for any uncommingled
class is less than One Thousand Dollars ($1,000) PROVIDED that the Corporation
shall provide a shareholder with written notice at least sixty (60) days prior
to effecting such a redemption of shares as a result of not satisfying such
requirement; (c) to reimburse the Corporation for any loss it has sustained by
reason of the failure of such shareholder to make full payment for shares of the
Corporation's Common Stock purchased by such shareholder; (d) to collect any
charge relating to a transaction effected for the benefit of such shareholder
which is applicable to shares of the Corporation's Common Stock as provided in
the prospectus relating to such shares; or (e) if the net income with respect to
any uncommingled class of Common Stock should be negative or it should otherwise
be appropriate to carry out the Corporation's responsibilities under the
Investment Company Act of 1940, in each case subject to such further terms and
conditions as the Board of Directors may from time to time establish. The
redemption price of shares of any uncommingled class of the Corporation's Common
Stock shall, except as otherwise provided in this sub-section, be the net asset
value thereof as determined by the Board of Directors from time to time in
accordance with the provisions of applicable law, less such redemption fee or
other charge, if any, as may be fixed by the Board of Directors. When the net
income of any uncommingled class of Common Stock with respect to which the Board
of Directors have, in their discretion, established a policy of maintaining a
constant net asset value per share is negative or whenever deemed appropriate by
the Board of Directors in order to carry out the Corporation's responsibilities
under the Investment Company Act of 1940, the Corporation may, without payment
of compensation but in consideration of the interests of the Corporation and the
holders of shares of such uncommingled class in maintaining a constant net asset
value per share of such class, redeem pro rata from each holder of record of
such class on such day, such number of full and fractional shares of such
uncommingled class as may be necessary to reduce the aggregate number of
outstanding shares in order to permit the net asset value thereof to remain
constant. Payment of the redemption price, if any, shall be made in cash by the
Corporation at such time and in such manner as may be determined from time to
time by the Board of Directors unless, in the opinion of the Board of Directors,
which shall be conclusive, conditions exist which make payment wholly in cash
unwise or undesirable; in such event the Corporation may make payment in the
assets belonging or allocable to the uncommingled class redemption of which is
being sought, the value of which shall be determined as provided herein. Any
shares of an uncommingled class of the Corporation's Common Stock that are
redeemed by the Corporation shall be deemed to be cancelled and returned to the
status of authorized but unissued shares of the particular class involved and,
unless otherwise determined by the Board of Directors of the Corporation, may be
reissued from time to time in the same manner and to the same extent as other
authorized, unissued shares of the same uncommingled class.
(8) TERMINATION OF CLASSES. Without the vote of the shares of any class of
the Corporation's Common Stock then outstanding (unless otherwise required by
applicable law), the Corporation may, if so determined by the Board of
Directors:
(a) Sell and convey the assets belonging to any uncommingled class of Common
Stock to another trust or corporation that is a management investment company
(as defined in the Investment Company Act of 1940) and is organized under the
laws of any jurisdiction within the United States for consideration which may
include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, belonging to such uncommingled class and
which may include securities issued by such trust or corporation. Following
such sale and conveyance, and after making provision for the payment of any
liabilities belonging to such uncommingled class of Common Stock that are not
assumed by the purchaser of the assets belonging to such class, the Corporation
may, at its option, redeem all outstanding shares of such uncommingled class at
the net asset value thereof as determined by the Board of Directors in
accordance with the provisions of applicable law, less such redemption fee or
other charge, if any, as may be fixed by the Board of Directors.
Notwithstanding any other provision of these Articles of Incorporation to the
contrary, the redemption price may be paid in cash or by distribution of the
securities or other consideration received by the Corporation for the assets
belonging to such class of Common Stock upon such conditions as the Board of
Directors deem, in their sole discretion, to be appropriate consistent with
applicable law and these Articles of Incorporation;
(b) Sell and convert the assets belonging to an uncommingled class of Common
Stock into money and, after making provision for the payment of all obligations,
taxes and other liabilities, accrued or contingent, belonging to such
uncommingled class, the Corporation may, at its option, (i) redeem all
outstanding shares of such uncommingled class at the net asset value thereof as
determined by the Board of Directors in accordance with the provisions of
applicable law, less such redemption fee or other charge, if any, as may be
fixed by the Board of Directors upon such conditions as the Board of Directors
deem, in their sole discretion, to be appropriate consistent with applicable law
and these Articles of Incorporation; or (ii) combine the assets belonging to
such uncommingled class following such sale and conversion with the assets
belonging to any one or more other classes of Common Stock of the Corporation
pursuant to and in accordance with Section (C)(8)(c) of this Article V; or
(c) Combine the assets belonging to an uncommingled class of Common Stock
with the assets belonging to any one or more other classes of Common Stock of
the Corporation if the Board of Directors reasonably determine that such
combination will not have a material adverse effect on the shareholders of any
class of Common Stock of the Corporation participating in such combination. In
connection with any such combination of assets the shares of any uncommingled
class of Common Stock then outstanding may, if so determined by the Board of
Directors, be converted into shares of any other class or classes of Common
Stock of the Corporation with respect to which conversion is permitted by
applicable law, or may be redeemed, at the option of the Corporation, at the net
asset value thereof as determined by the Board of Directors in accordance with
the provisions of applicable law, less such redemption fee or other charge, or
conversion cost, if any, as may be fixed by the Board of Directors upon such
conditions as the Board of Directors deem, in their sole discretion, to be
appropriate consistent with applicable law and these Articles of Incorporation.
Notwithstanding any other provision of these Articles of Incorporation to the
contrary, any redemption price, or part thereof, paid pursuant to this Section
(C)(8)(c) may be paid in shares of any other class or classes of Common Stock of
the Corporation participating in such combination.
(9) NO PREEMPTIVE RIGHTS. No holder of shares of any uncommingled class of
the Corporation's Common Stock shall, as such holder, have any preemptive or
other right to purchase, subscribe for or otherwise acquire any shares of any
class of Common Stock of the Corporation, or any securities of the Corporation
convertible into such shares or carrying a right to subscribe to or acquire such
shares (whether such shares or securities are now or hereinafter authorized or
are acquired by the Corporation after the issuance thereof), other than such
right, if any, as the Board of Directors, in their discretion, may determine.
ARTICLE VI
----------
The number of directors constituting the Board of Directors shall initially
be four (4), and the names of the initial directors are James M. Wade, Glen R.
Bomberger, Jerry Remmel and Richard Riederer. Thereafter, the number of
directors shall be such number as is fixed from time to time by the By-Laws.
ARTICLE VII
-----------
From time to time, any of the provisions of these Articles of Incorporation
may be amended, altered or repealed (including any amendment which changes the
terms of any of the outstanding stock by classification, reclassification or
otherwise) to the extent and in the manner now or hereafter permitted by
Wisconsin law. Other provisions which might under the Statutes of the State of
Wisconsin at the time in force be lawfully contained in Articles of
Incorporation may also be added or inserted to the extent and in the manner
permitted by Wisconsin law. All rights at any time conferred upon the
shareholders of the Corporation by these Articles of Incorporation are granted
subject to the provisions of this Article VII. The term "these Articles of
Incorporation" as used herein and in the By-Laws of the Corporation shall be
deemed to mean these Articles of Incorporation as from time to time amended and
restated.
ARTICLE VIII
------------
Any determination made in good faith, and so far as accounting matters are
involved in accordance with accepted accounting practices, by or pursuant to the
direction of the Board of Directors of the Corporation as to the amount and
value of assets, obligations or liabilities of the Corporation or any class of
Common Stock, as to the amount of net income of the Corporation or any class of
Common Stock from dividends and interest for any period or amounts at any time
legally available for the payment of dividends, as to the amount of any reserves
or charges set up and the propriety thereof, as to the time of or purpose for
creating reserves or as to the use, alteration or cancellation of any reserves
or charges (whether or not any obligation or liability for which such reserves
or charges shall have been created shall have been paid or discharged or shall
be then or thereafter required to be paid or discharged), as to the value of any
security owned by the Corporation or any class of Common Stock, as to the
allocation of any assets or liabilities to a class or classes of Common Stock,
as to the times at which shares of any class of Common Stock shall be deemed to
be outstanding or no longer outstanding or as to any other matters relating to
the issuance, sale, redemption or other acquisition or disposition of securities
or shares of the Corporation, and any reasonable determination made in good
faith by the Board of Directors of the Corporation as to whether any transaction
constitutes a purchase of securities on "margin," a sale of securities "short,"
or an underwriting of the sale of, or a participation in any underwriting or
selling group in connection with the public distribution of, any securities,
shall be final and conclusive, and shall be binding upon the Corporation and all
holders of its shares past, present and future, and shares of the Corporation
are issued and sold on the condition and understanding, evidenced by the
purchase of such shares or acceptance of share certificates, that any and all
such determinations shall be binding as aforesaid. No provision of these
Articles of Incorporation shall be effective to (i) require a waiver or
compliance with any provision of the Securities Act of 1933 or the Investment
Company Act of 1940, or of any valid rule, regulation or order of the Securities
and Exchange Commission thereunder or (ii) protect or purport to protect any
director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
ARTICLE IX
----------
(A) Each director and each officer of the Corporation shall be indemnified
by the Corporation against all liabilities and expenses reasonably incurred by
him in connection with the defense or disposition of any action, suit or other
proceeding in which he may be involved or with which he may be threatened by
reason of his being or having been such a director or officer to the full extent
permitted by the Wisconsin Business Corporation Law and the Investment Company
Act of 1940, as such statutes are now or hereafter in force, and shall be
entitled to the advance of related expenses.
(B) So long as permitted by Wisconsin law, the books of the Corporation may
be kept outside of the State of Wisconsin at such place or places as may be
determined from time to time by the Board of Directors or designated in the By-
Laws of the Corporation.
(C) In furtherance, and not in limitation, of the powers conferred by the
laws of the State of Wisconsin the Board of Directors of the Corporation is
expressly authorized:
(1) To make, alter or repeal the By-Laws of the Corporation, except where
such power is reserved by the ByLaws to the shareholders, and except as
otherwise required by the Investment Company Act of 1940, as now or hereafter in
force.
(2) From time to time to determine whether and to what extent and at what
times and places and under what conditions and regulations the books and
accounts of the Corporation, or any of them other than the stock ledger, shall
be open to the inspection of the shareholders, and no shareholder shall have the
right to inspect any account or book or document of the Corporation, except as
conferred by law or authorized by resolution of the Board of Directors or of the
shareholders.
(3) Without the assent or vote of the shareholders, to authorize the
issuance from time to time of shares of any class of Common Stock of the
Corporation for such consideration as the Board of Directors may deem advisable.
(4) Without the assent or vote of the shareholders, to authorize and issue
such obligations of the Corporation, secured and unsecured, as the Board of
Directors may determine, and to authorize and cause to be executed mortgages and
liens upon the property of the Corporation, real or personal.
(5) Notwithstanding anything in these Articles of Incorporation to the
contrary, to establish in its absolute discretion the basis or method for
determining the value of the assets belonging to any class of Common Stock of
the Corporation, the value of the liabilities belonging to any class of Common
Stock, the allocation of assets or liabilities to any class of Common Stock, the
times at which shares of any class of Common Stock shall be deemed outstanding
and the net asset value of each share of each class of Common Stock for purposes
of sales, redemptions and repurchases and for any other purposes.
(6) To determine in accordance with accepted accounting principles and
practices what constitutes net profits, earnings, surplus or net assets in
excess of capital, and to determine what accounting periods shall be used by the
Corporation for any purpose, whether annual or any other period, including
daily; to set apart out of any funds of the Corporation such reserves for such
purposes as it shall determine and to abolish the same; to declare and pay any
dividends and distributions in cash, securities or other property from surplus
or any funds legally available therefor, at such intervals (which may be as
frequently as daily) or on such other periodic basis, as it shall determine; to
declare such dividends or distributions by means of a formula or other method of
determination, at meetings held less frequently than the frequency of the
effectiveness of such declarations; to establish payment dates for dividends or
any other distributions on any basis, including dates occurring less frequently
than the effectiveness of declarations thereof; and to provide for the payment
of declared dividends on a date earlier or later than the specified payment date
in the case of shareholders of the Corporation redeeming their entire ownership
of shares of any class of the Corporation.
(7) In addition to the powers and authorities granted herein and by
statute expressly conferred upon it, the Board of Directors is authorized to
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, subject, nevertheless, to the provisions of Wisconsin
law, these Articles of Incorporation and the By-Laws of the Corporation.
ARTICLE X
---------
The address of the initial registered office of the Corporation is Suite
3800, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, which is in Milwaukee
County.
ARTICLE XI
----------
The name of the initial registered agent of the Corporation at such address
is F & L Corp.
ARTICLE XII
-----------
The name and address of the incorporator is:
Name Address
---- -------
Christian G. Steinmetz Suite 3800
777 E. Wisconsin Ave.
Milwaukee, WI 53202
Executive in triplicate this 12th day of February, 1988.
/s/ Christian G. Steinmetz
STATE OF WISCONSIN :
: ss.
COUNTY OF MILWAUKEE :
Personally came before me this 12th day of February, 1988, the above-named
Christian G. Steinmetz to me known to be the person who executed the foregoing
instrument, and acknowledged the same.
/s/ [signature illegible] Notary Public
NOTARIAL My Commission expires: Permanent
SEAL
This document is required to be recorded in the office of the Register of Deeds
for Milwaukee County, Wisconsin.
This document was drafted by
and should be returned to:
Jeffrey A. Dalke
DRINKER BIDDLE & REATH
1100 Philadelphia National Bank Building
Broad and Chestnut Streets
Philadelphia, PA 19107
Exhibit (1)(b)
United States of America
State of Wisconsin
OFFICE OF THE SECRETARY OF STATE
To All to Whom These Presents Shall Come:
The undersigned, as Secretary of State of the State of Wisconsin, certifies
that the attached is a duplicate of a document accepted and filed in my office.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at Madison, on the date of filing of said document.
/s/ Douglas LaFollette
DOUGLAS La FOLLETTE
Secretary of State
(Form 4) - 1986 State of Wisconsin Please read instructions
AMENDMENT SECRETARY OF STATE on the reverse before (stock
corp) attempting to complete this
form.
Resolved, That
(See Attached)
The undersigned officers of ELAN FUNDS, INC. (enter the present corporate name,
before any change this amendment may cause) a Wisconsin corporation the
registered office in Milwaukee County, Wisconsin, CERTIFY:
OR (Please strike out the item you do not use) -
See instruction 1
1 (B) The foregoing amendment of the
articles of incorporation of said corporation was adopted by the
shareholders on the 16th day of March, 1989 by the following vote:
(See Attached)
VOTE ON ADOPTION
Number
Number of Number of Number
Number of SHARES of "yes" "Yes" of "No"
SHARES entitled votes votes votes
Class outstanding to vote REQUIRED CAST CAST
- ----- ----------- ------- -------- ---- ----
Common
Preferred
2 (See instruction 2)
Not Applicable.
Executed in duplicate and seal (if any) affixed this 20th day of JUNE, 1989.
AFFIX SEAL
or state that
there is none
BY: /s/ W. Bruce McConnel BY: /s/ W. Alexander
as (Secretary)or (Asst Secretary) as (Vice-President)
indicate which indicate which
This document was drafted by Mary Beth M. Wong, Esq.
Please print or type the name of the individual
Form 4
Amendment
State of Wisconsin
ELAN FUNDS, INC.
Attachment
RESOLVED, that the Articles of Incorporation of the Company shall be
amended by striking out Section A of Article V of the Articles of Incorporation
in its entirety and inserting in lieu thereof the following:
A. The aggregate number of shares which the Corporation shall have
authority to issue is Seven Billion Seven Hundred Fifty Million
(7,750,000,000) shares of Common Stock, which shall be divided into sixteen
(16) classes designated as Classes A-1, A-2, B-1, B-2, C, D, E, F, G, H, I,
J, K, L, M and N Common Stock, respectively. Each of classes A-1, A-2, B-
1, B-2 and C Common Stock of the Corporation shall consist of One Billion
(1,000,000,000) shares, and each of Classes D, E, F, G, H, I, J, K, L, M
and N Common Stock of the Corporation shall consist of Two Hundred Fifty
million (250,000,000) shares. The par value of the shares of each of the
Corporation's classes of Common Stock shall be $.0001 per share.
<TABLE>
Form 4
AMENDMENT
<CAPTION>
State of Wisconsin
ELAN FUNDS, INC.
Attachment
VOTE ON ADOPTION
Number of Number of
Number of SHARES "Yes" votes Number of Number of
SHARES entitled to REQUIRED "Yes" votes "No"votes
Class outstanding vote (Majority) CAST CAST
- ----- ----------- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C>
Common- 177,986,703 118,907,460.29 59,453,730.145 118,080,339.53 158,245.81
Common-
Class C only 54,848,367 29,204,353.6 14,602,176.8 28,803,691.08 0
Preferred 0 0 0 0 0
Number of shares represented at the meeting, in person or by proxy.
</TABLE>
AMENDMENT STOCK
Mail Returned Copy to:
(FILL IN THE NAME AND ADDRESS HERE)
Mary Beth M. Wong, Esq.
Drinker Biddle & Reath
1100 Philadelphia National Bank Building
Broad & Chestnut Streets
Philadelphia, Penna. 19107
If a problem exists with the filing of this form, may we call you to attempt to
resolve it? If so, please provide us with a phone number at which you can be
reached during the day. 215 - 988-2906
INSTRUCTIONS
1. Amendment may be effected either by
A) Vote of the shareholders, at a shareholder's meeting. Use item 1(b).
OR
B) Written consent of all shareholders, without a meeting. Use item 1(a).
Ref. sec. 180.25 Wis. Stats. For corporations organized on or after 1 Jan 1973,
statutory minimum of affirmative votes to adopt resolution is a majority of the
shares entitled to vote. For corporations organized previously, statutory
minimum is 2/3 of the shares entitled to vote, unless articles provide for
majority vote. (If any class or series of shares is entitled to vote as a
class, minimum vote requirements must be met by each class or series entitled to
vote thereon as a class and of the total shares entitled to vote thereon.)
2. Item 2. If amendment provides for exchange, reclassification or
cancellation of issued shares, or effects a change in the amount of stated
capital, enter a statement of the manner in which the same will be accomplished.
Ref. sec. 180.53(6) & (7) Wisconsin Statutes.
3. Affix CORPORATE SEAL to each copy of the document, or enter the remark "NO
SEAL" if the corporation does not have a seal. The PRESIDENT (or vice-
president) and SECRETARY (or asst. secretary) are to sign each copy with the
original signatures. Carbon copy, xerox, or rubber stamp signatures are not
acceptable.
4. Submit in DUPLICATE ORIGINAL. Furnish Secretary of State two copies of the
document. (Mailing address: Corporation Division, Secretary of State, P.O. Box
7846, Madison, WI 53707.) One copy will be retained (filed) by Secretary of
State and the other copy transmitted directly to the Register of Deeds of the
county named in this document, together with your check for the recording fee.
When the recording has been accomplished, the document will be returned to the
address you furnish on the back of this form.
5. Two SEPARATE REMITTANCES are required.
A) Send a filing fee of $25 (or more), payable to SECRETARY OF STATE.
Additional fee may be due if amendment causes an increase in authorized capital
shares. The rate on shares is $1.25 per $1,000 on par value shares, and/or 2
1/2 cents per share on no par value shares. Compute fee at such rates on the
aggregate number of shares AFTER giving effect to the amendment. Deduct
therefrom the fee applicable to the authorized shares BEFORE amendment. The
remainder, if any, is the additional fee due.
B) Send a RECORDING FEE of $6, payable to REGISTER OF DEEDS of the county
named in this document as the county within which the corporation's registered
office is located. If you append additional pages to this standard form, add $2
more recording fee for each additional page.
Please furnish the fee for the Register of Deeds in check form with your
document, and we will transmit to the Register of Deeds with the document for
recording.
Exhibit (1)(c)
United States of America
State of Wisconsin
OFFICE OF THE SECRETARY OF STATE
To All to Whom These Presents Shall Come:
The undersigned, as Secretary of State of the State of Wisconsin, certifies that
the attached is a duplicate of a document accepted and filed in my office.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal, at Madison, on the date of filing of said document.
/s/ Douglas LaFollette
DOUGLAS La FOLLETTE
Secretary of State
(Form 4) - 1986 State of Wisconsin Please read instructions
AMENDMENT SECRETARY OF STATE on the reverse before
(stock corp) attempting to complete this form.
Resolved, That the Articles of Incorporation of the Company shall be
amended by: striking out Article I of the Articles of Incorporation in its
entirety and inserted in lieu thereof the following:
The name of the Corporation (hereinafter called "Corporation") is:
Portico Funds, Inc.
The undersigned officers of ELAN FUNDS, INC. (enter the present corporate name,
before any change this amendment may cause) a Wisconsin corporation the
registered office in Milwaukee County, Wisconsin, CERTIFY:
OR (Please strike out the item you do not use) -
See instruction 1
1 (B) The foregoing amendment of the
articles of incorporation of said corporation was adopted by the
shareholders on the 16th day of March, 1989 by the following vote:
(See Attached)
VOTE ON ADOPTION
Number
Number of Number of Number
Number of SHARES of "yes" "Yes" of "No"
SHARES entitled votes votes votes
Class outstanding to vote REQUIRED CAST CAST
- ----- ----------- ------- -------- ---- ----
Common
Preferred
2 (See instruction 2)
Not Applicable.
Executed in duplicate and seal (if any) affixed this 20th day of JUNE, 1989.
AFFIX SEAL
or state that
there is none
BY: /s/ W. Bruce McConnel BY: /s/ W. Alexander
as (Secretary)or (Asst Secretary) as (Vice-President)
indicate which indicate which
This document was drafted by Mary Beth M. Wong, Esq.
Please print or type the name of the individual
<TABLE>
Form 4
AMENDMENT
<CAPTION>
State of Wisconsin
ELAN FUNDS, INC.
Attachment
VOTE ON ADOPTION
Number of Number of
Number of SHARES "Yes" votes Number of Number of
SHARES entitled to REQUIRED "Yes" votes "No" votes
Class outstanding vote (Majority) CAST CAST
- ----- ----------- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C>
Common 216,354,839.56 155,503,520.024.2 77,751,760.012 147,316,669.664 8,186,850.38
Preferred 0 0 0 0 0
Number of shares represented at the meeting, in person or by proxy.
</TABLE>
AMENDMENT STOCK
Mail Returned Copy to:
(FILL IN THE NAME AND ADDRESS HERE)
Mary Beth M. Wong, Esq.
Drinker Biddle & Reath
1100 Philadelphia National Bank Building
Broad & Chestnut Streets Philadelphia, Penna. 19107
If a problem exists with the filing of this form, may we call you to attempt to
resolve it? If so, please provide us with a phone number at which you can be
reached during the day. 215-988-2906
INSTRUCTIONS
1. Amendment may be effected either by
A) Vote of the shareholders, at a shareholder's meeting. Use item 1(b).
OR
B) Written consent of all shareholders, without a meeting. Use item 1(a).
Ref. sec. 180.25 Wis. Stats. For corporations organized on or after 1 Jan 1973,
statutory minimum of affirmative votes to adopt resolution is a majority of the
shares entitled to vote. For corporations organized previously, statutory
minimum is 2/3 of the shares entitled to vote, unless articles provide for
majority vote. (If any class or series of shares is entitled to vote as a
class, minimum vote requirements must be met by each class or series entitled to
vote thereon as a class and of the total shares entitled to vote thereon.)
2. Item 2. If amendment provides for exchange, reclassification or
cancellation of issued shares, or effects a change in the amount of stated
capital, enter a statement of the manner in which the same will be accomplished.
Ref. sec. 180.53(6) & (7) Wisconsin Statutes.
3. Affix CORPORATE SEAL to each copy of the document, or enter the remark "NO
SEAL" if the corporation does not have a seal. The PRESIDENT (or vice-
president) and SECRETARY (or asst. secretary) are to sign each copy with the
original signatures. Carbon copy, xerox, or rubber stamp signatures are not
acceptable.
4. Submit in DUPLICATE ORIGINAL. Furnish Secretary of State two copies of the
document. (Mailing address: Corporation Division, Secretary of State, P.O. Box
7846, Madison, WI 53707.) One copy will be retained (filed) by Secretary of
State and the other copy transmitted directly to the Register of Deeds of the
county named in this document, together with your check for the recording fee.
When the recording has been accomplished, the document will be returned to the
address you furnish on the back of this form.
5. Two SEPARATE REMITTANCES are required.
A) Send a filing fee of $25 (or more), payable to SECRETARY OF STATE.
Additional fee may be due if amendment causes an increase in authorized capital
shares. The rate on shares is $1.25 per $1,000 on par value shares, and/or 2
1/2 cents per share on no par value shares. Compute fee at such rates on the
aggregate number of shares AFTER giving effect to the amendment. Deduct
therefrom the fee applicable to the authorized shares BEFORE amendment. The
remainder, if any, is the additional fee due.
B) Send a RECORDING FEE of $6, payable to REGISTER OF DEEDS of the county
named in this document as the county within which the corporation's registered
office is located. If you append additional pages to this standard form, add $2
more recording fee for each additional page.
Please furnish the fee for the Register of Deeds in check form with your
document, and we will transmit to the Register of Deeds with the document for
recording.
Exhibit (1)(d)
ARTICLES OF AMENDMENT Stock (for profit)
Kevin S. Crossett, Esq. Please indicate where you
DRINKER BIDDLE & REATH would like the
1100 PNB Building acknowledgement copy of
Broad and Chestnut Streets the filed document sent.
Philadelphia, PA 19107 Please indicate complete
name and mailing address.
Your phone number during the day: (215) 988-2561
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholders approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS of BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
*** FOR USE ON AND AFTER JANUARY 1, 1991 ***
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc. (prior to any change effected by
this amendment)
Text of Amendment:
See Attached.
B. Amendment(s) to the articles of incorporation adopted on June 21, 1991 &
August 29, 1991 (date)
Indicate the method of adoption by checking the appropriate choice below:
( ) By the Board of Directors (In accordance with sec. 180.1002, Wis.
Stats.)
OR
(X) By the Board of Directors and Shareholders (In accordance with sec.
180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares (In
accordance with sec. 180.1005, Wis. Stats.)
C. Executed on behalf of the corporation on October 31, 1991
/s/ Miriam Allison (signature)
Miriam Meyer Allison (printed name)
Vice President (title)
D. This document was drafted by Kevin S. Crossett, Esq. (name of individual
required by law)
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON JUNE 21, 1991
AND BY SHAREHOLDERS ON AUGUST 29, 1991
--------------------------------------
RESOLVED, that the Articles of Incorporation of the Company shall be
amended by striking out Article V in its entirety and inserting in lieu thereof
the following:
ARTICLE V
---------
A. The aggregate number of shares which the Corporation shall have
authority to issue is Seven Billion, Seven Hundred Fifty Million (7,750,000,000)
shares of Common Stock, consisting of one class only with a par value of $.0001
per share and designated as "Common Stock." The Common Stock shall be divided
into ten (10) series designated as series A, B, C, D, E, F, G, H, I and J,
respectively. Each of the foregoing Series shall consist of the number of
shares set forth next to its designation in the table below:
Series Shares
------ ------
A 1,500,000,000
B 1,000,000,000
C 1,000,000,000
D 50,000,000
E 50,000,000
F 50,000,000
G 50,000,000
H 50,000,000
I 2,500,000,000
J 1,000,000,000
The Board of Directors may from time to time create one or more additional
series of shares of Common Stock and determine the numbers of shares of
such series and the designations, preferences, limitations and relative
rights thereof, and may amend these Articles of Incorporation to provide
for such additional series, without shareholder action, to the extent
permitted by the Wisconsin Business Corporation Law. The Board of
Directors may also, without shareholder action, amend these Articles of
Incorporation to alter or revoke any preferences, limitations or relative
rights of a series created by the Board of Directors provided shares of
such series have not been issued.
B. Shares of Series A, B, C, D, E, F, G, H, I and J Common Stock of the
Corporation shall have the following preferences, limitations and relative
rights:
(1) DEFINITION. For purposes of this Section (B) of Article V, Series
A, B, C, D, E, F, G, H, I and J Common Stock of the Corporation shall be defined
individually and collectively as a "Series."
(2) ASSETS BELONGING TO A SERIES. Consideration that is received by
the Corporation for the issue or sale of shares of any Series of the
Corporation's Common Stock (a) shall not be commingled with the consideration
that is received by the Corporation for the issue or sale of shares of any other
Series of Common Stock; and (b) together with all assets in which such
consideration is invested and reinvested, income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, any such funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of the
Corporation not belonging to a particular Series of Common Stock of the
Corporation which the Board of Directors may, in their sole discretion, allocate
to a Series, shall irrevocably belong to the Series of the Corporation's Common
Stock with respect to which such assets, payments or funds were received or
allocated for all purposes, subject only to the rights of creditors, and shall
be so handled upon the books of account of the Corporation. Such assets and the
income, earnings, profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form, are herein referred to as
"assets belonging to" such Series. Shareholders shall have no right, title or
interest in or to the assets belonging to any Series of Common Stock with a
different alphabetical designation.
(3) LIABILITIES BELONGING TO A SERIES. The assets belonging to any
Series of the Corporation's Common Stock shall be charged with the direct
liabilities in respect of such Series and shall also be charged with such
Series' proportionate share of the general liabilities of the Corporation as
determined by comparing the assets belonging to such Series with the aggregate
assets of the Corporation, provided that the Board of Directors may, in their
discretion, direct that any one or more general liabilities of the Corporation
be allocated to the respective Series of its Common Stock on a different basis.
The liabilities so charged to a Series of Common Stock are herein referred to as
"liabilities belonging to" such Series.
(4) DIVIDENDS AND DISTRIBUTIONS. Shares of a Series of the
Corporation's Common Stock shall be entitled to such dividends and
distributions, in stock or in cash or both, as may be declared from time to time
by the Board of Directors, acting in their sole discretion, with respect to such
Series; provided, however, that such dividends and distributions shall be paid
only out of the lawfully available "assets belonging to" such Series as such
phrase is defined in Section (B)(2) of this Article V.
(5) LIQUIDATION DIVIDENDS AND DISTRIBUTIONS. In the event of the
liquidation or dissolution of the Corporation, the shareholders of a Series of
the Corporation's Common Stock shall be entitled to receive out of the assets of
the Corporation available for distribution to shareholders, but other than
general assets not belonging to any particular Series, the assets belonging to
such Series, and the assets so distributable to the shareholders of any Series
of the Corporation's Common Stock shall be distributed among such shareholders
in proportion to the number of shares of such Series of the Corporation's Common
Stock held by them and recorded on the books of the Corporation. In the event
that there are any general assets not belonging to any particular Series of the
Corporation's Common Stock (or any other series of the Corporation's Common
Stock) and available for distribution, the shareholders of any Series of Common
Stock shall be entitled to receive a portion of such general assets determined
by comparing the assets belonging to such Series with the aggregate assets of
the Corporation; and the assets so distributable to the shareholders of such
Series shall be distributed among such shareholders in proportion to the number
of shares of such Series of the Corporation's Common Stock held by them and
recorded on the books of the Corporation.
(6) VOTING RIGHTS. Shareholders of a Series of the Corporation's
Common Stock shall be entitled to one (1) vote for each full share, and a
fractional vote for each fractional share, of such Series then standing in his
or her name on the books of the Corporation. On any matter submitted to a vote
of shareholders all shares of a Series of the Corporation's Common Stock then
issued and outstanding and entitled to vote shall be voted in the aggregate with
all other shares of the Corporation's Common Stock then issued and outstanding
and entitled to vote, irrespective of Series, and not as a separate Series,
except (a) as otherwise required by the Wisconsin Business Corporation Law, the
Investment Company Act of 1940 or the regulations thereunder, or other
applicable law; or (b) when the matter to be acted upon affects only the
interests of shareholders of one or more particular Series of the Corporation's
Common Stock (in which case only shares of the affected Series shall be entitled
to vote thereon).
(7) REDEMPTION OF SHARES. To the extent of the assets of the
Corporation legally available for such redemptions, a shareholder of the
Corporation shall have the right to require the Corporation to redeem his full
and fractional shares of any Series of Common Stock out of the assets belonging
to such Series at a redemption price established as provided below, subject to
the right of the Corporation to suspend the right of redemption of shares or
postpone the date of payment of such redemption price in accordance with the
provisions of applicable law. The Board of Directors shall establish such rules
and procedures as they deem appropriate for the redemption of shares, provided
that all redemptions shall be in accordance with the Investment Company Act of
1940 and the Wisconsin Business Corporation Law. Without limiting the foregoing,
the Corporation shall, to the extent permitted by applicable law, have the right
at any time to redeem the shares of any Series of Common Stock owned by any
holder thereof: (a) in connection with the termination of any Series of the
Corporation's Common Stock as provided hereunder; (b) if the value of such
shares in the account maintained by the Corporation or its transfer agent for
any Series is less than One Thousand Dollars ($1,000) provided that the
Corporation shall provide a shareholder with written notice at least sixty (60)
days prior to effecting such a redemption of shares as a result of not
satisfying such requirement; (c) to reimburse the Corporation for any loss it
has sustained by reason of the failure of such shareholder to make full payment
for shares of the Corporation's Common Stock purchased by such shareholder; (d)
to collect any charge relating to a transaction effected for the benefit of such
shareholder which is applicable to shares of the Corporation's Common Stock as
provided in the prospectus relating to such shares; or (e) if the net income
with respect to any Series of Common Stock should be negative or it should
otherwise be appropriate to carry out the Corporation's responsibilities under
the Investment Company Act of 1940, in each case subject to such further terms
and conditions as the Board of Directors may from time to time establish. The
redemption price of shares of any Series of the Corporation's Common Stock
shall, except as otherwise provided in this subsection, be the net asset value
thereof as determined by the Board of Directors from time to time in accordance
with the provisions of applicable law, less such redemption fee or other charge,
if any, as may be fixed by the Board of Directors. When the net income of any
Series of Common Stock with respect to which the Board of Directors have, in
their discretion, established a policy of maintaining a constant net asset value
per share is negative or whenever deemed appropriate by the Board of Directors
in order to carry out the Corporation's responsibilities under the Investment
Company Act of 1940, the Corporation may, without payment of compensation but in
consideration of the interests of the Corporation and the holders of shares of
such Series in maintaining a constant net asset value per share of such Series,
redeem pro rata from each holder of record of such Series on such day, such
number of full and fractional shares of such Series as may be necessary to
reduce the aggregate number of outstanding shares in order to permit the net
asset value thereof to remain constant. Payment of the redemption price, if
any, shall be made in cash by the Corporation at such time and in such manner as
may be determined from time to time by the Board of Directors unless, in the
opinion of the Board of Directors, which shall be conclusive, conditions exist
which make payment wholly in cash unwise or undesirable; in such event the
Corporation may make payment in the assets belonging or allocable to the Series
redemption of which is being sought, the value of which shall be determined as
provided herein. Any shares of a Series of the Corporation's Common Stock that
are redeemed by the Corporation shall be deemed to be cancelled and returned to
the status of authorized but unissued shares of the particular Series involved
and, unless otherwise determined by the Board of Directors of the Corporation,
may be reissued from time to time in the same manner and to the same extent as
other authorized, unissued shares of the same Series.
(8) TERMINATION OF SERIES. Without the vote of the shares of any
Series of the Corporation's Common Stock then outstanding (unless otherwise
required by applicable law), the Corporation may, if so determined by the Board
of Directors:
(a) Sell and convey the assets belonging to any Series of Common
Stock to another trust or corporation that is a management investment
company (as defined in the Investment Company Act of 1940) and is organized
under the laws of any jurisdiction within the United States for
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, belonging
to such Series and which may include securities issued by such trust or
corporation. Following such sale and conveyance, and after making
provision for the payment of any liabilities belonging to such Series of
Common Stock that are not assumed by the purchaser of the assets belonging
to such class, the Corporation may, at its option, redeem all outstanding
shares of such Series at the net asset value thereof as determined by the
Board of Directors in accordance with the provisions of applicable law,
less such redemption fee or other charge, if any, as may be fixed by the
Board of Directors. Notwithstanding any other provision of these Articles
of Incorporation to the contrary, the redemption price may be paid in cash
or by distribution of the securities or other consideration received by the
Corporation for the assets belonging to such Series of Common Stock upon
such conditions as the Board of Directors deem, in their sole discretion,
to be appropriate and consistent with applicable law and these Articles of
Incorporation;
(b) Sell and convert the assets belonging to a Series of Common Stock
into money and, after making provision for the payment of all obligations,
taxes and other liabilities, accrued or contingent, belonging to such
Series, the Corporation may, at its option (i) redeem all outstanding
shares of such Series at the net asset value thereof as determined by the
Board of Directors in accordance with the provisions of applicable law,
less such redemption fee or other charge, if any, as may be fixed by the
Board of Directors upon such conditions as the Board of Directors deem, in
their sole discretion, to be appropriate and consistent with applicable law
and these Articles of
Incorporation; or combine the assets belonging to such Series following
such sale and conversion with the assets belonging to any one or more other
Series of Common Stock of the Corporation pursuant to and in accordance
with Section (B)(8)(c) of this Article V; or
(c) Combine the assets belonging to a Series of Common Stock with the
assets belonging to any one or more other Series of Common Stock of the
Corporation if the Board of Directors reasonably determines that such
combination will not have a material adverse effect on the shareholders of
any Series of Common Stock of the Corporation participating in such
combination. In connection with any such combination of assets the shares
of any Series of Common Stock then outstanding may, if so determined by the
Board of Directors, be converted into shares of any other Series of Common
Stock of the Corporation with respect to which conversion is permitted by
applicable law, or may be redeemed, at the option of the Corporation, at
the net asset value thereof as determined by the Board of Directors in
accordance with the provisions of applicable law, less such redemption fee
or other charge, or conversion cost, if any, as may be fixed by the Board
of Directors upon such conditions as the Board of Directors deem, in their
sole discretion, to be appropriate and consistent with applicable law and
these Articles of Incorporation. Notwithstanding any other provision of
these Articles of Incorporation to the contrary, any redemption price, or
part thereof, paid pursuant to this Section (B)(8)(c) may be paid in shares
of one or more other Series of Common Stock of the Corporation
participating in such combination.
(9) NO PREEMPTIVE RIGHTS. No holder of shares of any Series of the
Corporation's Common Stock shall, as such holder, have any preemptive or other
right to purchase, subscribe for or otherwise acquire any shares of any Series
of Common Stock of the Corporation, or any securities of the Corporation
convertible into such shares or carrying a right to subscribe to or acquire such
shares (whether such shares or securities are now or hereafter authorized or are
acquired by the Corporation after the issuance thereof), other than such right,
if any, as the Board of Directors, in their discretion, may determine.
Upon the effectiveness of this amendment to Article V:
(1) Each of the heretofore existing classes designated as Classes A-1,
A-2, B-1, B-2, C, D, E, F, G, H, I and J Common Stock shall be reclassified as
Series of Common Stock and designated as set forth below, and each share or
fraction thereof of each such heretofore existing class shall be converted into
a share or fraction thereof of the respective Series:
Class Series
----- ------
A-1, A-2 A
B-1, B-2 B
C C
D D
E E
F F
G G
H H
I I
J J
(2) Each of the heretofore existing classes designated as Classes K,
L, M and N Common Stock shall be reclassified into and become a part of the
single class of Common Stock.
(3) All assets and liabilities heretofore belonging to commingled
classes with the same alphabetical designation (Classes A-1 and A-2; Classes B-1
and B-2) shall belong to Series with the same alphabetical designation (Series
A; Series B, respectively), and all assets and liabilities belonging to
uncommingled classes (Classes C, D, E, F, G, H, I and J) shall belong to Series
with the same alphabetical designation (Series C, D, E, F, G, H, I and J,
respectively).
<TABLE>
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON JUNE 21, 1991
AND BY SHAREHOLDERS ON AUGUST 29, 1991
State of Wisconsin
Portico Funds, Inc.
Attachment
VOTE ON ADOPTION OF AMENDMENT
<CAPTION>
Total "Affirmative"
Number of Shares Number of Votes
Outstanding and Number of Required For Number of Number of
Entitled Shares Voting Adoption of "Affirmative" "Negative"
Class<F105> to Vote at Meeting Amendment Votes Cast Votes Cast
- ----- ------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
A 640,201,674.280 406,953,112.727 272,658,585.527 387,462,922.787 12,974,794.500
B 26,193,201.610 14,535,628.940 9,738,871.390 13,178,061.100 593,032.580
C 188,035,332.230 105,887,996.870 70,944,957.903 105,219,588.350 470,429.110
D 4,278,368.113 3,059,483.256 2,049,853.781 2,961,409.281 27,818.672
E 4,657,498.590 3,240,105.546 2,170,870.716 3,054,087.774 118,016.409
F 2,849,560.427 2,098,416.654 1,405,939.158 2,029,673.705 14,960.091
G 2,610,829.027 1,814,673.458 1,215,831.217 1,781,154.710 8,867.720
H 1,742,522.535 1,590,177.684 871,261.268 1,547,329.275 4,986.477
I 190,557,989.050 117,449,413.050 78,691,106.744 107,418,393.660 1,836,691.500
J 34,628,928.450 18,918,659.460 12,675,501.838 18,318,513.460 509,360.400
<FN>
<F105>Portico Funds, Inc. only issues common stock.
</TABLE>
Exhibit (1)(e)
*** FOR USE ON AND AFTER JANUARY 1, 1991 ***
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc. (Prior to any change effected by
this amendment)
Text of Amendment:
See Attached.
B. Amendment(s) to the articles of incorporation adopted on December 13, 1991
(date)
Indicate the method of adoption by checking the appropriate choice below:
(X) By the Board of Directors (In accordance with sec. 180.1002 Wis.
Stats.)
OR
( ) By the Board of Directors and Shareholders (In accordance with sec.
180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares (In
accordance with sec. 180.1005, Wis. Stats.)
Executed on behalf of the corporation on August 3, 1992 (date)
/s/ W. Bruce McConnel, III (signature)
W. Bruce McConnel, III (printed name)
Secretary (title)
D. This document was drafted by Jeffrey A. Dalke (name of individual required
by law)
Jeffrey A. Dalke, Esq. Please indicate where you would
DRINKER BIDDLE & REATH like the acknowledgement copy
1100 PNB Building of the filed document sent.
Broad and Chestnut Streets Please include complete
Philadelphia, PA 19107 name and mailing address.
Your phone number during the day: (215) 988-2607
INSTRUCTIONS (Ref. Sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholder approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of Shares - See
Sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment by a vote or consent of less than 2/3rds of the shares subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec, 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING
- ------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped "FILED"
will be sent to the address indicated above.
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON DECEMBER 13, 1991
PURSUANT TO SECTION 180.0602 OF THE WISCONSIN STATUTES
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the
terms of the Company's Series K Common Stock and the number of
shares thereof is as follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, Fifty Million authorized, unissued
and unclassified shares of Common Stock of the Company be, and
hereby are, divided into and classified as Series K Common Stock,
with all of the preferences, limitations and relative rights set
forth in Article V. B. of said Articles of Incorporation.
(d) No shares of Series K Common Stock have been issued. The Company
has previously attempted to issue shares of Series K Common
Stock; however, these shares cannot be issued, in accordance with
Section 180.0602, until the filing of this Amendment.
(e) The Amendment was adopted on December 13, 1991.
(f) The Amendment was unanimously adopted by the Board of Directors
and shareholder action was not required.
Exhibit (1)(f)
*** FOR USE AFTER JANUARY 1, 1991 ***
ARTICLES OF AMENDMENT
Stock (for Profit)
A. Name of Corporation: Portico Funds, Inc. (Prior to any change effected by
this amendment)
Text of Amendment:
See Attached.
B. Amendment(s) to the articles of incorporation adopted on June 26, 1992
(date)
Indicate the method of adoption by checking the appropriate choice below:
(X) By the Board of Directors (In accordance with sec.
180.1002, Wisc. Stats.)
OR
( ) By the Board of Directors and Shareholders (in accordance with sec.
180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares (In
accordance with sec. 180.1005, Wis. Stats.)
C. Executed on behalf of the corporation on October 12, 1992 (date)
/s/W. Bruce McConnel, III (Signature)
W. Bruce McConnel, III (printed name)
Secretary (title)
D. This document was drafted by Jeffrey A. Dalke (name of individual required
by law)
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON JUNE 26, 1992
PURSUANT TO SECTION 180.0602 OF THE WISCONSIN STATUTES
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the terms of the
Company's Series L Common Stock and Series M Common Stock, and
the number of shares thereof is as follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, Fifty Million authorized, unissued
and unclassified shares of Common Stock of the Company be, and
hereby are, divided into and classified as Series L Common Stock,
with all of the preferences, limitations and relative rights set
forth in Article V. B. of said Articles of Incorporation;
FURTHER RESOLVED, that pursuant to Article V of the Articles
of Incorporation of the Company, Fifty Million authorized,
unissued and unclassified shares of Common Stock of the Company
be, and hereby are, divided into and classified as Series M
Common Stock, with all of the preferences, limitations and
relative rights set forth in Article V. B. of said Articles of
Incorporation.
(d) No shares of the Company's Series L Common Stock or Series M
Common Stock have been issued.
(e) The Amendment was adopted on June 26, 1992.
(f) The Amendment was unanimously adopted by the Board of Directors
and shareholder action was not required.
ARTICLES OF AMENDMENT Stock(for profit)
Jeffrey A. Dalke, Esq. Please indicate where you
DRINKER BIDDLE & REATH would like the acknowledgement
1100 PNB Building copy of the filed document
Broad and Chestnut Streets sent. Please include complete Philadelphia,
Pa. 19107 name and mailing address.
Your phone number during the day: (215) 988-2607
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box 7846,
Madison, Wisconsin, 53707-7846. The original must include an original manual
signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation of
issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board of
Directors and adopted by shareholder approval. Voting requirements differ with
circumstances and provisions in the articles of incorporation. See sec. 18.1003
Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec.180.1005 Wis. Stats for conditions attached to the adoption of an amendment
approved by a vote or consent of less than 2/3rds of the shares subscribed for.
C. Enter the date of execution and the name and title of the person signing the
document. The document must be signed by one of the following: An officer (or
incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, Sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00,
payable to SECRETARY OF STATE. If the amendment causes an increase in the
number of authorized shares, provide an additional fee of 1 cent for each new
authorized share. When the document has been filed, an acknowledgement copy
stamped "FILED" will be sent to the address indicated above.
Exhibit (1)(g)
*** FOR USE ON AND AFTER JANUARY 1, 1991 ***
Form 4
Secretary of State
WISCONSIN
11/90
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds. Inc. (prior to any change effected by
this amendment)
Text of Amendment:
See Attached.
B. Amendment(s) to the articles of incorporation adopted on December 10, 1992
(date)
Indicate the method of adoption by checking the appropriate choice below:
(X) By the Board of Directors (In accordance with sec. 180.1002, Wis. Stats.)
OR
( ) By the Board of Directors and Shareholders (In accordance with sec.
180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares
(In accordance with sec. 180.1003, Wis. Stats.)
C. Executed on behalf of the corporation on January 21, 1993 (date)
/s/ W. Bruce McConnel, III (signature)
W. Bruce McConnel, III (printed name)
Secretary (title)
D. This document was drafted by Debra J. Kertzman, Esquire (name of individual
required by law)
SEE REVERSE (for Instructions, Suggestions, Filing Fees and Procedures.)
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON DECEMBER 10, 1992
PURSUANT TO SECTION 180.0602 OF THE WISCONSIN STATUTES
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the terms of the
Company's Series N Common Stock, and the number of shares thereof
is as follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, Fifty Million authorized, unissued
and unclassified shares of Common Stock of the Company be, and
hereby are, divided into and classified as Series N Common Stock,
with all of the preferences, limitations and relative rights set
forth in Article V. B. of said Articles of Incorporation.
(d) No shares of the Company's Series N Common Stock have been issued.
(e) The Amendment was adopted on December 10, 1992.
(f) The Amendment was unanimously adopted by the Board of Directors
and shareholder action was not required.
ARTICLES OF AMENDMENT Stock(for profit)
Debra J. Kertzman, Esq. Please indicate where you
DRINKER BIDDLE & REATH would like the
1100 PNB Building acknowledgement copy of
Broad and Chestnut Streets the filed document sent.
Philadelphia, PA 19107 Please include complete
name and mailing address.
Your phone number during the day: (215) 988-2604
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholders approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
Exhibit (1)(h)
***FOR USE ON AND AFTER JANUARY 1, 1991***
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc. (prior to any change effected by
this amendment)
Text of Amendment:
See Attached.
B. Amendment(s) to the articles of incorporation adopted on December 22, 1993
(date)
Indicate the method of adoption by checking the appropriate choice below:
(X) By the Board of Directors (In accordance with sec. 180.1002, Wis.
Stats.)
OR
( ) By the Board of Directors and Shareholders (In accordance with sec.
180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares (In
accordance with sec. 180.1005, Wis. Stats.)
C. Executed on behalf of the corporation on February 4, 1994 (date)
/s/ W. Bruce McConnel,III (signature)
W. Bruce McConnel,III (printed name)
Secretary (title)
D. This document was drafted by Kenneth L. Greenberg, Esquire (name of
individual required by law)
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures.
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON DECEMBER 22, 1993
PURSUANT TO SECTION 180.0602 OF THE WISCONSIN STATUTES
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the terms of the
Company's Series O Common Stock, and the number of shares thereof
is as follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, Fifty Million authorized, unissued
and unclassified shares of Common Stock of the Company be, and
hereby are, divided into and classified as Series O Common Stock,
with all of the preferences, limitations and relative rights set
forth in Article V.B. of said Articles of Incorporation.
(d) No shares of the Company's Series O Common Stock have been issued.
(e) The Amendment was adopted on December 22, 1993.
(f) The Amendment was unanimously adopted by the Board of Directors
and shareholder action was not required.
ARTICLES OF AMENDMENT Stock(for profit)
Kenneth L. Greenberg, Esquire Please indicate where you
DRINKER BIDDLE & REATH would like the acknowledgement
PNB Building, 11th Floor copy of the filed document sent.
1345 Chestnut Street Please include complete name and
Philadelphia, PA 19107 mailing address.
Your phone number during the day: (215) 988-1152
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholder approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
Exhibit (1)(i)
ARTICLES OF AMENDMENT Stock(for profit)
Kenneth L. Greenberg, Esquire Please indicate where you
DRINKER BIDDLE & REATH would like the acknowledgement
PNB Building, 11th Floor copy of the filed document sent.
1345 Chestnut Street Please include complete name and
Philadelphia, PA 19107 mailing address.
Your phone number during the day: (215) 988-1152
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholder approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc. (prior to any change effected by
this amendment)
Text of Amendment (Refer to the existing articles of incorporation and
instruction A. Determine those items to be changed and set forth below the
number identifying the paragraph being changed and how the amended
paragraph is to read.)
RESOLVED, THAT, the articles of incorporation be amended as follows:
SEE ATTACHED
The effective date of these Articles of Amendment shall be January 1,
1995.
B. Amendment(s) adopted on June 10, 1994 (Directors) and November 28, 1994
(Shareholders) (date)
Indicate the method of adoption by checking the appropriate choice below:
( ) In accordance with sec. 180.1002, Wis. Stats. (By the Board of
Directors)
OR
(X) In accordance with sec. 180.1003, Wis. Stats. (By the Board of
Directors and Shareholders)
OR
( ) In accordance with sec. 180.1005, Wis. Stats. (By Incorporators or
Board of Directors, before issuance of shares)
C. Executed on behalf of the corporation on December 19,
1994 (date)
/s/ W. Bruce McConnel, III (signature)
W. Bruce McConnel,III (printed name)
Secretary (officer's title)
D. This document was drafted by Kenneth L. Greenberg, Esquire (name of
individual required by law)
FILING FEE - $40.00 OR MORE
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures
<TABLE>
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON JUNE 10, 1994
AND BY SHAREHOLDERS ON NOVEMBER 28, 1994
State of Wisconsin
Portico Funds, Inc.
Attachment
VOTE ON ADOPTION OF AMENDMENT
-----------------------------
<CAPTION>
Total "Affirmative"
Number of Shares Number of Votes
Outstanding and Number of Required For Number of Number of
Entitled Shares Voting Adoption of "Affirmative" "Negative"
Class<F106> to Vote at Meeting Amendment Votes Cast Votes Cast
- ----- ------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
163,560,563.750 92,638,784.530 46,319,392.266 86,288,778.770 3,630,438.980
74,797,747.180 51,519,891.640 25,759,945.830 44,651,983.320 846,935.790
196,779,462.640 109,382,559.590 54,691,279.796 107,328,204.550 713,358.930
7,165,341.474 6,003,091.133 3,001,545.567 5,899,975.762 54,450.907
12,447,527.135 7,625,748.266 3,812,874.134 7,346,966.530 106,134.189
11,847,631.717 9,526,524.276 4,763,262.139 9,335,174.570 112,209.383
9,838,186.633 8,375,554.559 4,187,777.280 8,325,035.807 40,806.292
3,178,527.104 2,664,817.311 1,332,408.656 2,635,390.648 22,095.457
681,213,202.920 381,255,082.650 190,627,541.326 379,030,027.140 1,467,903.400
50,214,331.680 36,314,114.350 18,157,057.176 35,272,207.830 1,009,430.140
4,160,034.723 3,483,742.625 1,741,871.313 3,440,441.578 25,073.667
5,208,459.373 4,276,708.261 2,138,354.131 4,206,218.962 56,051.598
8,685,601.896 8,096,200.898 4,048,100.450 8,051,089.809 38,604.016
2,743,811.787 1,792,168.544 896,084.273 1,684,586.151 82,246.396
954,088.941 924,767.842 462,383.922 923,327.434 846.876
<FN>
<F106> Portico Funds, Inc. only issues common stock.
</TABLE>
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON JUNE 10, 1994
AND BY SHAREHOLDERS ON NOVEMBER 28, 1994
----------------------------------------
RESOLVED, that the Articles of Incorporation of the Company shall be
amended by striking out Article V in its entirety and inserting in lieu thereof
the following:
ARTICLE V
---------
A. The aggregate number of shares which the Corporation shall have
authority to issue is one-hundred and fifty billion (150,000,000,000) shares of
Common Stock, which shall be divided into thirty (30) classes designated as
Classes 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21, 22, 23, 24, 25, 26, 27, 28, 29 and 30, respectively (each, a "Class" and
collectively, the "Classes") and shall be designated as "Common Stock." The par
value of the shares of each of the Corporation's Classes of Common Stock shall
be $.0001 per share. Each of Classes 1, 2, 3, 4 and 5 shall consist of twenty
billion (20,000,000,000) shares and each of Classes 6, 7, 8, 9, 10, 11, 12, 13,
14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29 and 30 shall
consist of two billion (2,000,000,000) shares. The Common Stock of the
following Classes shall initially be divided into two series designated as
Institutional Series and Series A (each, a "Series") and shall consist of the
number of shares set forth next to its designation in the table below:
Class and Series Shares
---------------- ------
1-Institutional 5,000,000,000
1-A 5,000,000,000
2-Institutional 5,000,000,000
2-A 5,000,000,000
3-Institutional 5,000,000,000
3-A 5,000,000,000
4-Institutional 5,000,000,000
4-A 5,000,000,000
5-Institutional 5,000,000,000
5-A 5,000,000,000
6-Institutional 500,000,000
6-A 500,000,000
7-Institutional 500,000,000
7-A 500,000,000
8-Institutional 500,000,000
8-A 500,000,000
9-Institutional 500,000,000
9-A 500,000,000
10-Institutional 500,000,000
10-A 500,000,000
11-Institutional 500,000,000
11-A 500,000,000
12-Institutional 500,000,000
12-A 500,000,000
13-Institutional 500,000,000
13-A 500,000,000
14-Institutional 500,000,000
14-A 500,000,000
15-Institutional 500,000,000
15-A 500,000,000
The Board of Directors may from time to time create one or more additional
series of shares in any or all of its thirty (30) Classes of Common Stock and
determine the number of shares of such series and the designations, preferences,
limitations and relative rights thereof, and may amend these Articles of
Incorporation to provide for such additional series, without shareholder action,
to the extent permitted by the Wisconsin Business Corporation Law. The Board of
Directors may also, without shareholder action, amend these Articles of
Incorporation to alter or revoke any preferences, limitations or relative rights
of any class or series provided shares of such class or series have not been
issued. The initial Institutional Series and Series A created by this Amendment
to the Articles of Incorporation and any series hereafter created by subsequent
amendment are each referred to herein as a "Series."
B. Shares of Classes 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,
17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29 and 30 Common Stock of the
Corporation, and shares of the Institutional Series and Series A thereof whether
now or hereafter created, shall, unless altered or revoked as provided in the
immediately preceding paragraph, have the following preferences, limitations and
relative rights:
(1) ASSETS BELONGING TO A CLASS. Consideration that is received by the
Corporation for the issue or sale of shares of any Class of the Corporation's
Common Stock (a) shall not be commingled with the consideration that is received
by the Corporation for the issue or sale of shares of any other Class of Common
Stock; and (b) together with all assets in which such consideration is invested
and reinvested, income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, any such funds
or payments derived from any reinvestment of such proceeds in whatever form the
same may be, and any general assets of the Corporation not belonging to a
particular Class of Common Stock of the Corporation which the Board of Directors
may, in their sole discretion, allocate to a Class, shall irrevocably belong to
the Class of the Corporation's Common Stock with respect to which such assets,
payments or funds were received or allocated for all purposes, subject only to
the rights of creditors, and shall be so handled upon the books of account of
the Corporation. Such assets and the income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any assets derived from any reinvestment of such proceeds in
whatever form, are herein referred to as "assets belonging to" such Class.
Shareholders of a Class of Common Stock of the Corporation shall have no right,
title or interest in or to the assets belonging to any Class of Common Stock
with a different numerical designation. Each Series of a Class of the
Corporation's Common Stock shall share equally, based on relative net asset
value or such other basis prescribed by the Securities and Exchange Commission,
with all Series of such Class in the assets belonging to such Class.
(2) LIABILITIES BELONGING TO A CLASS. The assets belonging to any
Class of the Corporation's Common Stock shall be charged with the direct
liabilities in respect of such Class and shall also be charged with such Class's
proportionate share of the general liabilities of the Corporation as determined
by comparing the assets belonging to such Class with the aggregate assets of the
Corporation, PROVIDED that the Board of Directors may, in their discretion,
direct that any one or more general liabilities of the Corporation be allocated
to the respective Classes of its Common Stock on a different basis. The
liabilities so charged to a Class of Common Stock are herein referred to as
"liabilities belonging to" such Class. Except as provided in the next sentence
or otherwise required or permitted by applicable law or any rule or order of the
Securities and Exchange Commission, each Series of a Class of the Corporation's
Common Stock shall bear a pro rata portion, based on relative net asset value or
such other method prescribed by the Securities and Exchange Commission, of the
"liabilities belonging to" such Class. To the extent permitted by rule or order
of the Securities and Exchange Commission, the Board of Directors may allocate
all or a portion of any expenses, costs, charges and reserves to any one or more
Series of the Corporation's Common Stock as follows:
(a) A Series with respect to which agreements are entered into by or on
behalf of the Corporation pursuant to which institutions agree to provide
distribution, administrative or other services with respect to beneficial owners
of shares of that Series but not with respect to beneficial owners of shares of
other Series of the same Class shall bear the expenses and liabilities relating
to such agreements, as well as any other expenses directly attributable to such
Series which the Board of Directors determine should be borne solely by such
Series; and
(b) A Series shall not be required to bear the expenses and liabilities
relating to any agreement described in clause (a) above pursuant to which an
institution agrees to provide services with respect to beneficial owners of
shares of other Series of the same Class but not to beneficial owners of shares
of that Series, or any other expenses directly attributable to one or more other
Series of shares which the Board of Directors determine should be borne solely
by such other Series.
(3) DIVIDENDS AND DISTRIBUTIONS. Shares of each Series of a Class of
the Corporation's Common Stock shall be entitled to such dividends and
distributions, in stock or in cash or both, as may be declared from time to time
by the Board of Directors, acting in their sole discretion, with respect to such
Series; provided, however, that such dividends and distributions shall be paid
only out of the lawfully available "assets belonging to" the Class of which such
Series is part as such phrase is defined in Section (B)(1) of this Article V.
(4) LIQUIDATION DIVIDENDS AND DISTRIBUTIONS. In the event of the
liquidation or dissolution of the Corporation, the shareholders of each Series
of a Class of the Corporation's Common Stock shall be entitled to receive, as a
Series, out of the assets of the Corporation available for distribution to
shareholders, but other than general assets not belonging to any particular
Class of Common Stock, the excess of the assets belonging to such Class of
Common Stock that are allocated to such Series in accordance with Section (B)(1)
of this Article V over the liabilities belonging to that Class that are
allocated to that Series in accordance with Section (B)(2) of this Article V,
and the assets so distributable to the shareholders of any particular Series
shall be distributed among such shareholders in proportion to the number of
shares of such Series held by them and recorded on the books of the Corporation.
In the event that there are any general assets not belonging to any particular
Class of the Corporation's Common Stock and available for distribution, the
shareholders of a Class of Common Stock shall be entitled to receive a portion
of such general assets determined by comparing the assets belonging to such
Class with the aggregate assets of the Corporation; the shareholders of each
Series of such Class shall be entitled to receive, as a Series, the portion of
such assets that are allocated such Series in accordance with Section (B)(1) of
this Article V; and the assets so distributable to the shareholders of any
particular Series shall be distributed among such shareholders in proportion to
the number of shares of such Series held by them and recorded on the books of
the Corporation.
(5) VOTING RIGHTS. Shareholders of each Class of the Corporation's
Common Stock shall be entitled to one (1) vote for each full share, and a
fractional vote for each fractional share, of such Class then standing in his or
her name on the books of the Corporation. On any matter submitted to a vote of
shareholders, shares of all Classes that are then issued and outstanding and
entitled to vote shall be voted in the aggregate and not by Class except: (a)
as otherwise required by applicable law or permitted by the Board of Directors,
or (b) when the matter, as conclusively determined by the Board of Directors,
affects only the interests of the shareholders of a particular Class or Classes
(in which case only shareholders of the affected Class or Classes shall be
entitled to vote thereon). Each share of a Series of a Class shall vote
together in the aggregate with all other Shares of the same Class and not by
Series on all matters submitted to a vote of the shareholders of the Class,
except that:
(x) on any matter that pertains to the agreements or expenses and
liabilities described in subsection (B)(2)(a) of this Article V (or to any plan
or other document adopted by the Corporation relating to said agreements,
expenses or liabilities) and is submitted to a vote of shareholders of the
Corporation, only the particular Series specified therein shall be entitled to
vote, except that: (i) if said matter affects shares in the Corporation other
than such Series, such other affected shares in the Corporation shall also be
entitled to vote, and in such case the particular Series of shares so specified
shall be voted in the aggregate together with such other affected shares and not
by individual Series except where otherwise required by law or permitted by the
Board of Directors of the Corporation; and (ii) if said matter does not affect
the particular Series of shares specified therein, said Series of shares shall
not be entitled to vote (except where required by law or permitted by the Board
of Directors) even though the matter is submitted to a vote of the holders of
shares in the Corporation other than shares of such Series; and
(y) on any matter that pertains to the agreements or expenses and
liabilities described in subsection B(2)(b) of this Article V (or any plan or
other document adopted by the Corporation relating to said agreements, expenses
or liabilities) and is submitted to a vote of shareholders of the Corporation,
the particular Series of shares specified therein shall not be entitled to vote,
except where otherwise required by law or permitted by the Board of Directors of
the Corporation, and except that if said matter affects such Series of shares,
such Series of shares shall be entitled to vote, and in such case shall be voted
in the aggregate together with all other shares in the Corporation voting on the
matter and not by individual Series except where otherwise required by law or
permitted by the Board of Directors.
(6) REDEMPTION OF SHARES. To the extent of the assets of the
Corporation legally available for such redemptions, a shareholder of the
Corporation shall have the right to require the Corporation to redeem his or her
full and fractional shares of any Class of Common Stock out of the assets
belonging to such Class at a redemption price established as provided below,
subject to the right of the Corporation to suspend the right of redemption of
shares or postpone the date of payment of such redemption price in accordance
with the provisions of applicable law. The Board of Directors shall establish
such rules and procedures as they deem appropriate for the redemption of shares,
provided that all redemptions shall be in accordance with the Investment Company
Act of 1940 and the Wisconsin Business Corporation Law. Without limiting the
foregoing, the Corporation shall, to the extent permitted by applicable law,
have the right at any time to redeem the shares of any Class and Series of
Common Stock owned by any holder thereof: (a) in connection with the
termination of any Class of the Corporation's Common Stock as provided
hereunder; (b) if the value of such shares in the account maintained by the
Corporation or its transfer agent for any Series is less than One Thousand
Dollars ($1,000) PROVIDED that the Corporation shall provide a shareholder with
written notice at least sixty (60) days prior to effecting such a redemption of
shares as a result of not satisfying such requirement; (c) to reimburse the
Corporation for any loss it has sustained by reason of the failure of such
shareholder to make full payment for shares of the Corporation's Common Stock
purchased by such shareholder; (d) to collect any charge relating to a
transaction effected for the benefit of such shareholder which is applicable to
shares of the Corporation's Common Stock as provided in the prospectus relating
to such shares; or (e) if the net income with respect to any Class or Series of
Common Stock should be negative or it should otherwise be appropriate to carry
out the Corporation's responsibilities under the Investment Company Act of 1940,
in each case subject to such further terms and conditions as the Board of
Directors may from time to time establish. The redemption price of shares of
any Class or Series of the Corporation's Common Stock shall, except as otherwise
provided in this section, be the net asset value thereof as determined by the
Board of Directors from time to time in accordance with the provisions of
applicable law and these Articles of Incorporation, less such redemption fee or
other charge, if any, as may be fixed by the Board of Directors. When the net
income of any Class or Series of Common Stock with respect to which the Board of
Directors have, in their discretion, established a policy of maintaining a
constant net asset value per share is negative or whenever deemed appropriate by
the Board of Directors in order to carry out the Corporation's responsibilities
under the Investment Company Act of 1940, the Corporation may, without payment
of compensation but in consideration of the interests of the Corporation and the
holders of shares of such Class or Series in maintaining a constant net asset
value per share of such Class or Series, redeem pro rata from each holder of
record of such Class or Series on such day, such number of full and fractional
shares of such Class or Series as may be necessary to reduce the aggregate
number of outstanding shares in order to permit the net asset value thereof to
remain constant. Payment of the redemption price, if any, shall be made in cash
by the Corporation at such time and in such manner as may be determined from
time to time by the Board of Directors unless, in the opinion of the Board of
Directors, which shall be conclusive, conditions exist which make payment wholly
in cash unwise or undesirable; in such event the Corporation may make payment in
the assets belonging or allocable to the Class redemption of which is being
sought, the value of which shall be determined as provided herein. Any shares
of a Class of the Corporation's Common Stock that are redeemed by the
Corporation shall be deemed to be cancelled and returned to the status of
authorized but unissued shares of the particular Class and Series involved and,
unless otherwise determined by the Board of Directors of the Corporation, may be
reissued from time to time in the same manner and to the same extent as other
authorized, unissued shares of the same Class and Series.
(7) TERMINATION OF CLASSES. Without the vote of the shares of any
Class or Series of the Corporation's Common Stock then outstanding (unless
otherwise required by applicable law), the Corporation may, if so determined by
the Board of Directors:
(a) Sell and convey the assets belonging to any Class of Common Stock
to another trust or corporation that is a management investment company (as
defined in the Investment Company Act of 1940) and is organized under the
laws of any jurisdiction within the United States for consideration which
may include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, belonging to such Class and which may
include securities issued by such trust or corporation. Following such sale
and conveyance, and after making provision for the payment of any
liabilities belonging to such Class of Common Stock that are not assumed by
the purchaser of the assets belonging to such Class, the Corporation may,
at its option, redeem all outstanding shares of such Class at their net
asset value as determined by the Board of Directors in accordance with the
provisions of applicable law and these Articles of Incorporation, less such
redemption fee or other charge, if any, as may be fixed by the Board of
Directors. Notwithstanding any other provision of these Articles of
Incorporation to the contrary, the redemption price may be paid in cash or
by distribution of the securities or other consideration received by the
Corporation for the assets belonging to such Class of Common Stock upon
such conditions as the Board of Directors deem, in their sole discretion,
to be appropriate and consistent with applicable law and these Articles of
Incorporation;
(b) Sell and convert the assets belonging to a Class of Common Stock
into money and, after making provision for the payment of all obligations,
taxes and other liabilities, accrued or contingent, belonging to such
Class, the Corporation may, at its option, (i) redeem all outstanding
shares of such Class at their net asset value as determined by the Board of
Directors in accordance with the provisions of applicable law and these
Articles of Incorporation, less such redemption fee or other charge, if
any, as may be fixed by the Board of Directors upon such conditions as the
Board of Directors deem, in their sole discretion, to be appropriate and
consistent with applicable law and these Articles of Incorporation; or
combine the assets belonging to such Class following such sale and
conversion with the assets belonging to any one or more other Classes of
Common Stock of the Corporation pursuant to and in accordance with Section
(B)(7)(c) of this Article V; or
(c) Combine the assets belonging to a Class of Common Stock with the
assets belonging to any one or more other Classes of Common Stock of the
Corporation if the Board of Directors reasonably determines that such
combination will not have a material adverse effect on the shareholders of
any Class of Common Stock of the Corporation participating in such
combination. In connection with any such combination of assets, the shares
of any Class of Common Stock (and any Series therein) then outstanding may,
if so determined by the Board of Directors, be converted into shares of any
other Class or Classes of Common Stock of the Corporation (and any Series
therein) with respect to which conversion is permitted by applicable law,
or may be redeemed, at the option of the Corporation, at their net asset
value as determined by the Board of Directors in accordance with the
provisions of applicable law and these Articles of Incorporation, less such
redemption fee or other charge, or conversion cost, if any, as may be fixed
by the Board of Directors upon such conditions as the Board of Directors
deem, in their sole discretion, to be appropriate and consistent with
applicable law and these Articles of Incorporation. Notwithstanding any
other provision of these Articles of Incorporation to the contrary, any
redemption price, or part thereof, paid pursuant to this Section (B)(7)(c)
may be paid in shares of one or more other Class or Classes of Common Stock
of the Corporation (and any one or more Series thereof) participating in
such combination.
(8) CONVERSION RIGHTS. The Board of Directors shall have the authority
to provide from time to time that the holders of shares of any Series of any
Class of the Corporation's Common Stock shall have the right to convert or
exchange said shares for or into shares of one or more other Series of the same
or another Class in accordance with such requirements and procedures as may be
established from time to time by the Board of Directors.
(9) NO PREEMPTIVE RIGHTS. No holder of shares of any Class or Series
of the Corporation's Common Stock shall, as such holder, have any preemptive or
other right to purchase, subscribe for or otherwise acquire any shares of any
Class of Common Stock of the Corporation, or any Series thereof, or any
securities of the Corporation convertible into such shares or carrying a right
to subscribe to or acquire such shares (whether such shares or securities are
now or hereafter authorized or are acquired by the Corporation after the
issuance thereof), other than such right, if any, as the Board of Directors, in
their discretion, may determine.
C. Upon the effectiveness of this amendment to Article V of the Articles of
Incorporation:
(1) Each of the heretofore existing Series designated as Series A, B,
C, D, E, F, G, H, I, J, K, L, M, N and O Common Stock shall be reclassified as
Classes and Series of Common Stock and designated as set forth below, and each
share or fraction thereof of each such heretofore existing Series shall be
converted into a share or fraction thereof of the respective Class and Series:
Series Class and Series
------ ----------------
A 1-A
B 2-A
C 3-A
D 9-A
E 10-A
F 6-A
G 7-A
H 8-A
I 4-A
J 5-A
K 11-A
L 12-A
M 13-A
N 14-A
O 15-A
(2) All assets and liabilities belonging to an existing Series
designated as Series A, B, C, D, E, F, G, H, I, J, K, L, M, N and O Common Stock
shall belong to a Class with a numerical designation set forth below:
Series Class and Series
------ ----------------
A 1
B 2
C 3
D 9
E 10
F 6
G 7
H 8
I 4
J 5
K 11
L 12
M 13
N 14
O 15
Exhibit (1)(j)
ARTICLES OF AMENDMENT Stock(for profit)
Kenneth L. Greenberg, Esquire Please indicate where you
DRINKER BIDDLE & REATH would like the acknowledgement
PNB Building, 11th Floor copy of the filed document sent.
1345 Chestnut Street Please include complete name and
Philadelphia, PA 19107 mailing address.
Your phone number during the day: (215) 988-1152
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholder approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc. (prior to any change effected by
this amendment)
Text of Amendment (Refer to the existing articles of incorporation and
instruction A. Determine those items to changed and set forth below the number
identifying the paragraph being changed and how the amended paragraph is to
read.)
RESOLVED, THAT, the articles of incorporation be amended as follows:
SEE ATTACHED
B. Amendment(s) adopted on April 21, 1995 (date)
Indicate the method of adoption by checking the appropriate choice below:
(X) In accordance with sec. 180.1002, Wis. Stats. (By the Board of
Directors)
OR
( ) In accordance with sec. 180.1003, Wis. Stats. (By the Board of
Directors and Shareholders)
OR
( ) In accordance with sec. 180.1005, Wis. Stats. (By Incorporators or
Board of Directors, before issuance of shares)
C. Executed on behalf of the corporation on July 12, 1995 (date)
/s/ W. Bruce McConnel, III (signature)
W. Bruce McConnel, III (printed name)
Secretary (officer's title)
D. This document was drafted by Kenneth L.Greenberg, Esq. (name of
individual required by law)
FILING FEE - $40.00 OR MORE
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON APRIL 21, 1995
PURSUANT SECTION 180.1002 OF THE WISCONSIN STATUTES.
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the terms of the
Company's Class 16 - Institutional Series and Class 16-A
Series Common Stock and the number of shares thereof is as
follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, Fifty Million authorized,
unissued and unclassified shares of Class 16 Common Stock of
the Company be, and hereby are, divided into and classified
as Class 16 - Institutional Series and Fifty Million
authorized, unissued and unclassified shares of Class 16
Common Stock of the Company be, and hereby are divided into
and classified as Class 16-A Series Common Stock, with all of
the preferences, limitations and relative rights set forth in
Article V. B. of said Articles of Incorporation.
(d) No shares of the Company's Class 16 - Institutional Series
and Class 16-A Series Common Stock have been issued.
(e) The Amendment was adopted on April 21, 1995.
(f) The Amendment was unanimously adopted by the Board of
Directors and shareholder action was not required.
Exhibit (1)(k)
ARTICLES OF AMENDMENT Stock(for profit)
Kenneth L. Greenberg, Esquire Please indicate where you
DRINKER BIDDLE & REATH would like the acknowledgement
PNB Building, 11th Floor copy of the filed document sent.
1345 Chestnut Street Please include complete name and
Philadelphia, PA 19107 mailing address.
Your phone number during the day: (215) 988-1152
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin, 53707-7846. (If sent by Express or Priority U.S.
mail, address to 30 W. Mifflin Street, 9th Floor, Madison, WI 53703). The
original must include an original manual signature (sec. 180.0120(3)(c), Wis.
Stats). If you have any additional questions, please call the Corporations
Division at 608-266-3590.
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s). The text should recite the
resolution adopted (e.g.) "RESOLVED, THAT, Article 1 of the Articles of
Incorporation is hereby amended to read as follows.... etc.").
If an amendment provides for an exchange, reclassification or cancellation
of issued shares, state the provisions for implementing the amendment if not
contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than one
amendment, identify the date of adoption of each. Mark one of the three choices
to indicate the method of adoption of the amendment(s).
By BOARD OF DIRECTORS - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By BOARD OF DIRECTORS AND SHAREHOLDERS - Amendments proposed by the Board
of Directors and adopted by shareholder approval. Voting requirements differ
with circumstances and provisions in the articles of incorporation. See sec.
180.1003 Wis. Stats. for specific information.
By INCORPORATORS or BOARD OF DIRECTORS - Before issuance of shares - See
sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed for.
C. Enter the date of execution and the name and title of the person signing
the document. The document must be signed by one of the following: An officer
(or incorporator if directors have not been elected) of the corporation or the
fiduciary if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary. At least one copy must bear an original manual
signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner. If
document is NOT drafted in Wisconsin, please so state.
FILING FEES
- -----------
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: Portico Funds, Inc prior to any change effected by
this amendment)
Text of Amendment (Refer to the existing articles of incorporation and
instruction A. Determine those items to changed and set forth below the
number identifying the paragraph being changed and how the amended
paragraph is to read.)
RESOLVED, THAT, the articles of incorporation be amended as follows:
SEE ATTACHED
B. Amendment(s) adopted on September 15, 1995 (date)
Indicate the method of adoption by checking the appropriate choice below:
(X) In accordance with sec. 180.1002, Wis. Stats. (By the Board of
Directors)
OR
( ) In accordance with sec. 180.1003, Wis. Stats. (By the Board of
Directors and Shareholders)
OR
( ) In accordance with sec. 180.1005, Wis. Stats. (By Incorporators or
Board of Directors, before issuance of shares)
C. Executed on behalf of the corporation on November 6, 1995 (date)
/s/ W. Bruce McConnel, III (signature)
W. Bruce McConnel, III (printed name)
Secretary (officer's title)
D. This document was drafted by Kenneth L.Greenberg, Esq. (name of individual
required by law)
FILING FEE - $40.00 OR MORE
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures
AMENDMENT TO ARTICLES OF INCORPORATION
ADOPTED BY BOARD OF DIRECTORS ON SEPTEMBER 15, 1995
PURSUANT SECTION 180.1002 OF THE WISCONSIN STATUTES.
(a) The name of the Company is Portico Funds, Inc.
(b) and (c) The text of the Amendment which determines the terms of the
Company's Class 17 - Institutional Series and Class 17-A Series
Common Stock and the number of shares thereof is as follows:
RESOLVED, that pursuant to Article V of the Articles of
Incorporation of the Company, One Hundred Million authorized,
unissued and unclassified shares of Class 17 Common Stock of the
Company be, and hereby are, divided into and classified as Class
17 - Institutional Series and One Hundred Million authorized,
unissued and unclassified shares of Class 17 Common Stock of the
Company be, and hereby are divided into and classified as Class
17-A Series Common Stock, with all of the preferences,
limitations and relative rights set forth in Article V. B. of
said Articles of Incorporation.
(d) No shares of the Company's Class 17 - Institutional Series and
Class 17-A Series Common Stock have been issued.
(e) The Amendment was adopted on September 15, 1995.
(f) The Amendment was unanimously adopted by the Board of Directors
and shareholder action was not required.
Exhibit (2)(a)
ELAN FUNDS, INC.
(a Wisconsin Corporation)
BY-LAWS
ARTICLE I. OFFICES
Section 1. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
Section 2. Registered Office. The registered office of the corporation
required by the Wisconsin Business Corporation Law to be maintained in the State
of Wisconsin may be, but need not be, identical to its place of business, and
the address of the registered office may be changed from time to time by the
Board of Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meetings. The annual meeting of the shareholders of the
corporation shall be held at the registered office of the corporation, or at
such other place, within or without the state of Wisconsin, as may be determined
by the Board of Directors and so shall be designated in the notice of said
meeting, on such day during the month of April and at such time as shall be
specified by the Board of Directors, for the purpose of electing directors and
for the transaction of such other business as may properly be brought before the
meeting. If the election of directors shall not be held on the day fixed as
herein provided for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as is convenient.
Any business of the corporation may be transacted at the annual meeting without
being specifically designated in the notice except such business as is
specifically required by statute to be stated in the notice.
Section 2. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called by the President, the Board of Directors, or the
Secretary at the written request of the holders of not less than ten (10)
percent of all shares entitled to vote at the meeting. Such request shall state
the purpose or purposes of the proposed meeting and the matters proposed to be
acted on at it. If a special meeting be called, the place of meeting shall be
the registered office of the corporation in the state of Wisconsin or such other
suitable place within or without Wisconsin as may be designated by the Board of
Directors.
Section 3. Notice of Meetings and Voting Records. Written notice stating
the place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than 10 nor more than 50 days before the date of the meeting (unless a different
time is required by law or the articles of incorporation), either personally or
by mail, by or at the direction of the President, the Secretary, or other
officer or persons calling the meeting, to each shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed delivered when
deposited in the United States mail, addressed to the shareholder at his address
as it appears on the stock record books of the corporation, with postage thereon
prepaid.
The officer or agent having charge of the stock transfer books for shares of
the corporation shall, before each meeting of shareholders, make a complete
record of the shareholders entitled to vote at such meeting, or any adjournment
thereof, with the address of and the number of shares held by each. Such record
shall be produced and kept open at the time and place of the meeting during the
whole time of the meeting for the purposes of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such record or transfer books or to vote at any meeting of
shareholders. Failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 4. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the corporation may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, 50 days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least 10 days
immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 50 days and, in case of a meeting of shareholders, not less than 10 days
prior to the date on which the particular action, requiring such determination
of shareholders, is to be taken.
Section 5. Quorum. Except as otherwise provided by statute or in the
Articles of Incorporation, a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. If a quorum is present, the affirmative vote of the majority of
the shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless the vote of a greater number or
voting by classes is required by law or the Articles of Incorporation. Though
less than a quorum of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. Any meeting may be adjourned
to reconvene at any place designated by vote of a majority of the shares
represented thereat.
Section 6. Organization. The Chairman of the Board, Vice Chairman or the
President, and in their absence, a Vice President in the order provided under
Article IV, Section 9, and in their absence, any person chosen by the
shareholders present shall call the meeting of the shareholders to order and
shall act as chairman of the meeting, and the Secretary of the corporation shall
act as secretary of all meetings of the shareholders but, in the absence of the
Secretary, the presiding officer may appoint any other person to act as
secretary of the meeting.
Section 7. Proxies. At all meetings of shareholders, a shareholder entitled
to vote may vote in person or by proxy appointed in writing by the shareholder
or by his duly authorized attorney in fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any time before it is
voted, either by written notice filed with the Secretary or the acting secretary
of the meeting or by oral notice given by the shareholder to the presiding
officer during the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy. The Board of Directors shall have the power and authority to make
rules establishing presumptions as to the validity and sufficiency of proxies.
Section 8. Voting of Shares. Each outstanding share shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders,
except to the extent that the voting rights of the shares of any class or
classes are enlarged, limited or denied by the Articles of Incorporation.
Section 9. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the name of another
corporation may be voted either in person or by proxy, by the president of such
corporation or any other officer appointed by such president. A proxy executed
by any principal officer of such other corporation or assistant thereto shall be
conclusive evidence of the signer's authority to act, in the absence of express
notice to this corporation, given in writing to the Secretary of this
corporation, of the designation of some other person by the Board of Directors
or the By-laws of such other corporation.
(b) Legal Representatives and Fiduciaries. Shares held by any
administrator, executor, guardian, conservator, trustee in bankruptcy, receiver,
or assignee for creditors may be voted by him, either in person or by proxy,
without a transfer of such shares into his name provided that there is filed
with the Secretary before or at the time of meeting proper evidence of his
incumbency and the number of shares held. Shares standing the name of a
fiduciary may be voted by him, either in person or by proxy. A proxy executed
by a fiduciary shall be conclusive evidence of the signer's authority to act in
the absence of express notice to this corporation, given in writing to the
Secretary of this corporation that such manner of voting is expressly prohibited
or otherwise directed by the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are pledged shall be entitled
to vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
(d) Treasury Stock and Subsidiaries. Neither treasury shares, nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of directors of such other corporation is held by this
corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares entitled to vote, but shares of its own issue held
by this corporation in a fiduciary capacity, or held by such other corporation
in a fiduciary capacity, may be voted and shall be counted in determining the
total number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor may be voted by such minor in person
or by proxy and no such vote shall be subject to disaffirmance or avoidance,
unless prior to such vote the Secretary of the Corporation has received written
notice or has actual knowledge that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held by an incompetent or
spendthrift may be voted by such incompetent or spendthrift in person or by
proxy and no such vote shall be subject to disaffirmance or avoidance, unless
prior to such vote the Secretary of the corporation has actual knowledge that
such shareholder has been adjudicated an incompetent or spendthrift or actual
knowledge of the filing of judicial proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names of two or more
individuals who are named in the registration as joint tenants may be voted in
person or by proxy signed by any one or more of such individuals if either (i)
no other such individual or his legal represenative is present and claims the
right to participate in the voting of such shares or prior to the vote files
with the Secretary of the corporation a contrary written voting authorization of
direction or written denial of authority of the individual present or signing
the proxy the proxy proposed to be voted or (ii) all such other individuals are
deceased and the Secretary of the corporation has no actual knowledge that the
survivor has been adjudicated not to be the successor to the interests of those
decease.
Section 10. Waiver of Notice by Shareholders. Whenever any notice is
required to be given to any shareholder of the corporation under the Articles of
Incorporation or By-laws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice; provided that such waiver in respect to any matter of which notice
is required under any provision of the Wisconsin Business Coproration Law shall
contain the same information as would have been required to be included in such
notice, except the time and place of meeting.
Section 11. Unanimous Consent without Meeting. Any action required or
permitted by the Articles of Incorporation or By-laws or any provision of law to
be taken at a meeting of the shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE III.
Section 1. Election and Powers. The Board of Directors shall consist of
five (5) members. The number of directors may be increased or decreased from
time to time by amendment to, or in the manner provided in, the Articles of
Incorporation or the By-laws, but no decrease shall have the effect of
shortening the term of any incumbent director. The business and affairs of the
corporation shall be managed by its Board of Directors except such as are by law
or the Articles of Incorporation or the Bylaws expressly conferred or reserved
to the shareholders.
Section 2. Regular Meetings. Regular meetings of the Board of Directors may
be held with or without notice as prescribed in these By-laws, on such dates as
the Board may from time to time determine.
Section 3. Special Meetings. Special meetings of the Board of Directors may
be called by or at the request of the Chairman, Vice-Chairman, President,
Secretary or by a majority of directors.
Section 4. Notice of Special Meetings; Waiver. Notice of the place, day and
hour of every special meeting shall be given by written notice delivered by mail
(not less than 48 hours prior to the special meeting) or given personally or by
telegram (not less than 24 hours prior to the meeting) to each director at his
business address or at such other address as such director shall have designated
in writing filed with the Secretary. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice is given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegraph company. Whenever
any notice whatever is required to be given to any director of the corporation
under the Articles of Incorporation or By-laws or any provision of law, a waiver
thereof in writing, signed at any time, whether before or after the time of
meeting, by the director entitled to such notice, shall be deemed equivalent to
the giving of such notice. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting and objects thereat to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of waiver of notice of such
meeting.
Section 5. Place of Meeting. The Board of Directors or, in the case of a
special meeting, the Chairman, Vice-Chairman, President or Secretary calling the
meeting may fix any place, either within or without the State of Wisconsin, as
the place for holding any meeting of the Board of Directors, and if no other
place is fixed the place of the meeting shall be the registered office of the
corporation in the State of Wisconsin.
Section 6. Quorum and Board Action. Except as otherwise provided by law or
by the Articles of Incorporation or these Bylaws, a majority of the directors
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but a majority of the directors present (though less than
such quorum) may adjourn the meeting from time to time without further notice.
The act of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors, unless the act of a
greater number is required by law or by the Articles or Incorporation or these
By-laws.
Section 7. Chairman and Vice Chairman. The Board of Directors may at any
time appoint one of its members as Chairman of the Board, who shall serve at the
pleasure of the Board and who shall perform and execute such duties and powers
as may be conferred upon or assigned to him by the Board or these By-laws, but
who shall not by reason of performing and executing these duties and powers be
deemed an officer or employee of the corporation. The Board of Directors may
also appoint one of its members as Vice Chairman of the Board who shall, during
the absence or disability of the Chairman, exercise all of the functions of the
Chairman. In addition, the Vice Chairman shall perform such other duties as
shall from time to time be assigned to him by the Board of Directors, the
Chairman or as prescribed by these By-Laws.
Section 8. Organization. The Chairman, and in his absence the Vice-
Chairman, and in their absence any director chosen by the directors present
shall call meetings of the Board of Directors to order and shall act as Chairman
of the meeting. The Secretary of the corporation shall act as secretary of all
meetings of the Board of Directors but in the absence of the Secretary, the
presiding officer may appoint any Assistant Secretary (if any) or any director
or other person present to act as secretary of the meeting.
Section 9. Vacancies. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a quorum of the Board
of Directors; provided, that in the case of a vacancy created by the removal of
a director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.
Section 10. Removal. At any meeting of the shareholders called for that
purpose, the shareholders of the corporation may remove from office any director
or the entire Board of Directors, with or without cause, by the affirmative vote
of a majority of the outstanding shares entitled to vote for the election of
such director or Board of Directors, and any vacancy so created may be filled by
the shareholders.
Section 11. Resignation. A director may resign at any time by filing his or
her written resignation with the Secretary of the corporation.
Section 12. Committees. The Board of Directors may designate one or more
committees, each committee to consist of 3 or more directors elected by the
Board of Directors, which except as limited by law, resolution of the Board of
Directors, the Articles of Incorporation or the By-laws, shall have and may
exercise, when the Board of Directors is not in session, the powers of the Board
of Directors in the management of the business and affairs of the corporation.
The Board of Directors may elect one or more of its members as alternate
committee members. The designation of such committee or committees shall not
operate to relieve the Board of Directors or any member thereof of any
responsibility imposed upon it or him by law.
Section 13. Telephone Conference. Members of the Board of Directors or any
committee thereof may participate in a meeting of the Board or such committee by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time and participation by such means shall constitute presence in person at the
meeting except for the purpose of voting on any investment advisory agreement or
distribution plan of the corporation.
Section 14. Compensation. Directors shall be entitled to receive such
compensation from the corporation for their services as may from time to time be
voted by the Board of Directors.
Section 15. Unanimous Consent Without Meeting. Any action required or
permitted by the Articles of Incorporation or By-laws or any provision of law to
be taken by the Board of Directors at a meeting or by resolution may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors then in office.
Section 16. Tenure and Qualifications. Each director shall hold office
until the next annual meeting of shareholders and until his or her successor
shall have been elected, or until his or her prior death, resignation or
removal. Directors need not be residents of the State of Wisconsin or
shareholders of the corporation.
ARTICLE IV. OFFICERS
Section 1. Number. The principal officers of the corporation shall consist
of a President, one or more Vice Presidents, a Secretary, and a Treasurer, each
of whom shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the same person,
except the offices of President and Secretary and the offices of President and
Vice President.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of shareholders. Each officer shall
hold office until his successor shall have been duly elected or until his prior
death, resignation or removal.
Section 3. Resignation. An officer may resign at any time by filing his or
her written resignation with the Secretary of the corporation.
Section 4. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.
Section 5. Vacancies. A vacancy in any principal office because of the
death, resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term.
Section 6. President. The President shall be the chief executive officer of
the corporation and shall have general supervision over the business and
operations of the corporation, subject, however, to the control of the Board of
Directors. He, or such persons as he shall designate, shall sign, execute,
acknowledge, verify, deliver and accept, in the name of the corporation, deeds,
mortgages, bonds, contracts and other instruments authorized by the Board of
Directors, except in the case where the signing, execution, acknowledgement,
verification, delivery or acceptance thereof shall be delegated by the Board to
some other officer or agent of the corporation; and, in general, he shall have
general executive powers as well as other powers and duties as from time to time
may be conferred upon or assigned to him by the Board.
Section 7. The Vice Presidents. In the absence or disability of the
President, or when so directed by the President, the Vice President or, if their
shall be more than one the Vice Presidents in the order determined by the Board
of Directors, shall perform any or all of the duties of the President as
designated by the Board of Directors, and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the President; provided,
however, that no Vice President shall act as a member of or as chairman of any
committee of which the President is a member or chairman by designation of ex-
officio, except when designated by the Board. Each Vice President shall perform
such other duties as from time to time may be conferred upon or assigned to him
by the Board or the President.
Section 8. The Secretary. The Secretary shall record all the votes of the
shareholders and of the directors and the minutes of the meetings of the
shareholders and of the Board of Directors in a book or books to be kept for
that purpose; he shall see that notices of meetings of the shareholders and the
Board of Directors are given and that all records and reports are properly kept
and filed by the corporation as required by law; he shall be the custodian of
the seal of the corporation and shall see that it is affixed to all documents to
be executed on behalf of the corporation under its seal, provided that in lieu
of affixing the corporate seal to any document, it shall be sufficient to meet
the requirements of any law, rule or regulation relating to a corporate seal to
affix the word "(SEAL)" adjacent to the signature of the authorized officer of
the corporation; and, in general, he shall perform all duties incident to the
office of Secretary, and such other duties as from time to time may be conferred
upon or assigned to him by the Board or the President.
Section 9. Assistant Secretaries. In the absence or disability of the
Secretary, or when so directed by the Secretary, any Assistant Secretary may
perform any or all of the duties of the Secretary, and, when so acting, shall
have all the powers of, and be subject to all restrictions upon, the Secretary.
Each Assistant Secretary shall perform such other duties as from time to time
may be conferred upon or assigned to him by the Board of Directors, the
President or the Secretary.
Section 10. The Treasurer. Subject to the provisions of any contract which
may be entered into with any custodian pursuant to authority granted by the
Board of Directors, the Treasurer shall have charge of all receipts and
disbursements of the corporation and shall have or provide for the custody of
its funds and securities; he shall have full authority to receive and give
receipts for all money due and payable to the corporation, and to endorse
checks, drafts and warrants, in its name and on its behalf, and to give full
discharge for the same; he shall deposit all funds of the corporation, except
such as may be required for current use, in such banks or other places of
deposit as the Board of Directors may from time to time designate; and, in
general, he shall perform all duties incident to the office of Treasurer and
such other duties as from time to time may be conferred upon or assigned to him
by the Board or the President.
Section 11. Assistant Treasurers. In the absence or disability of the
Treasurer, or when so directed by the Treasurer, any Assistant Treasurer may
perform any or all of the duties of the Treasurer, and, when so acting, shall
have all the powers of, and be subject to all the restrictions upon, the
Treasurer. Each Assistant Treasurer shall perform all such other duties as from
time to time may be conferred upon or assigned to him by the Board of Directors,
the President or the Treasurer.
Section 12. Compensation of Officers. The compensation of all officers
shall be fixed from time to time by the Board of Directors, or any committee or
officer authorized by the Board so to do. No officer shall be precluded from
receiving such compensation by reason of the fact that he is also a director of
the corporation.
ARTICLE V. STOCK
Section 1. Certificates. Each shareholder shall be entitled upon request to
have a certificate or certificates which shall represent and certify the number
and kind of shares owned by him in the corporation. Each certificate shall be
signed by the President or a Vice President and countersigned by the Secretary
or an Assistant Secretary and shall be sealed with the corporate seal. The
signatures may be either manual or facsimile signatures and the seal may be
either facsimile or any other form of seal. In case any officer who has signed
any certificate ceases to be an officer of the corporation before the
certificate is issued, the certificate may nevertheless be issued by the
corporation with the same effect as if the officer had not ceased to be such
officer as of the date of its issue.
Section 2. Issuance and Transfer. The name and address of the person to
whom shares of stock of the corporation are issued shall be entered in the stock
transfer books of the corporation. All certificates surrendered to the
corporation for redemption or transfer shall be cancelled, returned to the
status of authorized and unissued shares and the transaction recorded in the
stock transfer books. Certificates for shares shall be numbered in the order of
issuance. Transfer or redemption of shares of stock of the corporation shall be
made only on the stock transfer books of the corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto duly authorized by power of
attorney duly executed and filed with the transfer agent or the Secretary of the
corporation, and on surrender for cancellation of the certificate for such
shares, if any. The person in whose name shares stand on the books of the
corporation shall be deemed by the corporation to be the owner thereof for all
purposes.
Section 3. Lost, Stolen or Destroyed Certificates. The Board of Directors
may direct a new certificate to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been stolen,
lost or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be stolen, lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such stolen, lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and to give the corporation a bond, with sufficient surety,
to the corporation to indemnify it against any loss or claim which may arise by
reason of the issuance of a new certificate.
Section 4. Stock Ledger. The corporation shall maintain, at its registered
office or principle place of business or at the office of its transfer agents or
registrars, an original stock ledger containing the names and addresses of all
stockholders and the number of shares of each class held by each stockholder.
ARTICLE VI. SEAL
The seal of the Corporation shall be in such form as the Board of Directors
shall prescribe.
ARTICLE VII. SUNDRY PROVISIONS
Section 1. Checks. Except as otherwise authorized by the Board of
Directors, all checks and drafts for the payment of money shall be signed in the
name of the corporation by the Custodian, and all requirements or orders for the
payment of money by the Custodian or for the issue of checks and drafts
therefor, all promissory notes, all assignments of stock or securities standing
in the name of the corporation, and all requisitions or orders for the
assignment of stock or securities standing in the name of the custodian or its
nominee, or for the execution of powers to transfer the same, shall be signed in
the name of the corporation by persons duly authorized to sign by the Board of
Directors of the corporation.
Section 2. Amendments.
(a) By Shareholders. These By-laws may be altered, amended or repealed
and new By-laws may be adopted by the shareholders by affirmative vote of not
less than a majority of the shares present or represented at any annual or
special meeting of the shareholders at which a quorum is in attendance.
(b) By Directors. These By-laws may also be altered, amended or
appealed and new By-laws may be adopted by the Board of Directors by affirmative
vote of a majority of the number or directors present at any meeting at which a
quorum is in attendance; but no By-law adopted by the shareholders shall be
amended or repealed by the Board of Directors if the By-laws so adopted so
provides.
(c) Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
By-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
By-laws so that the By-laws would be consistent with such action, shall be given
the same effect as though the By-laws had been temporarily amended or suspended
so far, but only so far, as is necessary to permit the specific action so taken
or authorized.
Section 3. Indemnification of Directors and Officers.
(a) Indemnification. Any person who was or is a party or is threatened
to be made a party in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is a current or former director or officer of the
corporation, or is or was serving while a director or officer of the
corporation, at the request of the corporation, as a director, officer, partner,
trustee, employee, agent or fiduciary of another corporation, partnership, joint
venture, trust, enterprise or employee benefit plan, shall be indemnified by the
corporation against judgments, penalties, fines, excise taxes, settlements and
reasonable expenses (including attorney's fees) actually incurred by such person
in connection with such action, suit or proceeding to the full extent
permissible under the Wisconsin Business Corporation Law, the Securities Act of
1933 and the Investment Company Act of 1940, as such statutes are now or
hereafter in force, except that such indemnity shall not protect any such person
against any liability to the corporation or any stockholder thereof to which
such person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
(b) Advances. Any current or former director or officer of the
corporation claiming indemnification within the scope of this Section 3 shall be
entitled to advances from the corporation for payment of the reasonable expenses
incurred by him in connection with the proceedings to which he is a party in the
manner and to the full extent permissible under the Wisconsin Business
Corporation Law, the Securities Act of 1933 and the Investment Company Act of
1940, as such statutes are now or hereafter in force.
(c) Procedures. On the request of any current or former director or
officer requesting indemnification or an advance under this Section 3, the Board
of Directors shall determine, or cause to be determined, in a manner consistent
with the Wisconsin Business Corporation Law, the Securities Act of 1933 and the
Investment Company Act of 1940, as such statutes are now or hereafter in force,
whether the standards required by this Section 3 have been met.
(d) Other Rights. The indemnification provided by this Section 3 shall
not be deemed exclusive of any other right, in respect of indemnification or
otherwise, to which those seeking such indemnification may be entitled under any
insurance or other agreement, vote of stockholders or disinterested directors or
otherwise, both as to action by a director or officer of the corporation in his
official capacity and as to action by such person in another capacity while
holding such office or position, and shall continue as to a person who has
ceased to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Exhibit (2)(b)
PORTICO FUNDS, INC.
Amendment of By-Laws
Adopted by the Board of Directors on February 23, 1990
RESOLVED, that the first sentence of Article II, Section 1 of the By-Laws
of the Company be, and the same hereby is, amended and restated in its entirety
as follows:
SECTION 1. Annual Meetings. The annual meeting of the shareholders of the
corporation shall be held at the registered office of the corporation, or
at such other place, within or without the state of Wisconsin, as may be
determined by the Board of Directors and as shall be designated in the
notice of said meeting, on such day during the month of June and at such
time as shall be specified by the Board of Directors, for the purpose of
electing directors and for the transaction of such other business as may
properly be brought before the meeting.
Exhibit (2)(c)
PORTICO FUNDS, INC.
Amendment of By-Laws
Adopted by the Board of Directors on February 15, 1991
Amendments to By-Laws.
- ----------------------
RESOLVED, that Section 1 of Article I of the Company's By-Laws be, and
hereby is, amended and restated in its entirety to read as follows:
Section 1. No Annual Meeting Required. No annual meeting of
shareholders of the corporation shall be held unless required by the
applicable law or otherwise determined by the Board of Directors. Any
annual meeting of shareholders of the corporation shall be held on
such date and at such time and place, within or without the state of
Wisconsin, as the Board of Directors may designate.
FURTHER RESOLVED, that Section 16 of Article III of the Company's By-
Laws be, and hereby is, amended and restated in its entirety to read as follows:
Section 16. Tenure and Qualifications. Subject to the provisions of
Article I, Section 1, the members of the Board of Directors shall be
elected by the shareholders at their annual meeting and each director
shall hold office until the next annual meeting of shareholders and
until his or her successor shall have been duly elected and qualified,
or until his or her prior death, resignation or removal.
Exhibit (2)(d)
PORTICO FUNDS, INC.
Amendment of By-Laws
Adopted by the Board of Directors on June 21, 1991
Amendments to By-Laws.
- ----------------------
RESOLVED, that Section 3, 4 and 5 of Article II of the Company's By-
Laws be, and the same hereby are, amended and restated in their entirety as
follows:
Section 3. Notice of Meetings and Shareholders' List for Meetings.
Written notice stating the date, time and place to any meeting of
shareholders and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less
than 10 days nor more than 60 days before the date of the meeting
(unless a different time is provided by applicable law or the Articles
of Incorporation), either personally or by mail, by or at the
direction of the President or the Secretary, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice shall
be deemed to be effective when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears on
the stock record books of the corporation, with postage thereon
prepaid.
After a record date for a special or annual meeting of
shareholders has been fixed, the corporation shall prepare a list of
the names of all of the shareholders entitled to notice of the
meeting. The list shall be arranged by class or series of shares, if
any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection and copying
by any shareholder or his or her agent, subject to the limitations
imposed by applicable law, beginning 2 business days after notice of
the meeting is given for which the list was prepared and continuing to
the date of the meeting, at the corporation's principal office or at a
place identified in the meeting notice in the city where the meeting
will be held, and shall be available at the meeting or any adjournment
thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken
at a meeting of shareholders.
Section 4. Fixing of Record Date. The Board of Directors may fix in
advance a date as the record date for the purpose of determining
shareholders entitled to notice of and to vote at any meeting of
shareholders, shareholders entitled to demand a special meeting as
contemplated by Section 2 hereof, shareholders entitled to take any
other action, or shareholders for any other legal purpose. Such
record date shall not be more than 70 days prior to the date on which
the particular action, requiring such determination of shareholders,
is to be taken. If no record date is fixed by the Board of Directors
or by applicable law for the determination of shareholders entitled to
notice of and to vote at a meeting of shareholders, the record date
shall be the close of business on the day before thefirst notice is
given to shareholders. If no record date is fixed by the Board of
Directors or by applicable law for the determination of shareholders
entitled to demand a special meeting as contemplated in Section 2
hereof, the record date shall be the date that the first shareholder
signs the written request. Except as provided by applicable law, a
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders is effective for any adjournment of such
meeting unless the Board of Directors fixes a new record date, which
it shall do if the meeting is adjourned to a date more than 120 days
after the date fixed for the original meeting. The record date for
determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of
the corporation's shares) or a share dividend is the date on which the
Board of Directors authorized the distribution or share dividend, as
the case may be, unless the Board of Directors fixes a different
record date.
Section 5. Quorum and Voting Requirements. Shares entitled to vote
as a separate voting group may take action on a matter at a meeting
only if a quorum of those shares exists with respect to that matter.
Except as otherwise provided in the Articles of Incorporation or by
applicable law, a majority of the votes entitled to be cast on the
matter shall constitute a quorum of the voting group for action on
that matter. If a quorum is present, except in the case of the
election of directors, action on a matter shall be approved if the
votes cast within the voting group favoring the action exceed the
votes cast opposing the action, unless the Articles of Incorporation
or applicable law requires a greater number of affirmative votes.
Unless otherwise provided in the Articles of Incorporation, each
director shall be elected by a plurality of the votes cast by the
shares entitled to vote in the election of directors at a meeting at
which a quorum is present. Though less than a quorum of the
outstanding votes of a voting group are represented at a meeting, a
majority of the votes so represented may adjourn the meeting from time
to time without further notice. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
notified.
Exhibit (5)(a)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of August 29, 1991, between PORTICO FUNDS, INC., a
Wisconsin corporation (herein called "Portico Funds"), and FIRST WISCONSIN TRUST
COMPANY ("Investment Adviser"), a subsidiary of Firstar Corporation.
WHEREAS, Portico Funds is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, Portico Funds desires to retain the Investment Adviser to furnish
investment advisory and other services to Portico Funds for its Money Market
Fund, Institutional Money Market Fund, U.S. Federal Money Market Fund, U.S.
Government Money Market Fund, Tax-Exempt Money Market Fund, Income and Growth
Fund, Short-Intermediate Fixed Income Fund, Special Growth Fund, Bond IMMDEX/TM
Fund and Equity Index Fund (the "Funds"), and the Investment Adviser is willing
to so furnish such services;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment.
(a) Portico Funds hereby appoints the Investment Adviser to act as
investment adviser to each Fund for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
(b) In the event that Portico Funds establishes one or more
portfolios other than the Funds with respect to which it desires to retain the
Investment Adviser to act as investment adviser hereunder, it shall notify the
Investment Adviser in writing. If the Investment Adviser is willing to render
such services under this Agreement it shall notify Portico Funds in writing
whereupon such portfolio shall become a Fund hereunder and shall be subject to
the provisions of this Agreement to the same extent as the ten Funds named above
in the recitals except to the extent that said provisions (including those
relating to the compensation payable by the Fund to the Investment Adviser) are
modified with respect to such Fund in writing by Portico Funds and the
Investment Adviser at the time.
2. Delivery of Documents. Portico Funds has furnished the Investment
Adviser with copies properly certified or authenticated of each of the
following:
(a) Portico Funds' Articles of Incorporation, as filed with the State
Secretary of the State of Wisconsin on February 15, 1988, and all
amendments thereto (such Articles of Incorporation, as presently in
effect and as the same shall from time to time be amended, are herein
called the "Articles of Incorporation");
(b) Portico Funds' By-laws and amendments thereto;
(c) Resolutions of Portico Funds' Board of Directors authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) Portico Funds' Registration Statement, as amended, on Form N-1A
under the Securities Act of 1933, as amended ("1933 Act") (File No. 33-
18255), and under the 1940 Act; and
(e) The most recent prospectuses of Portico Funds relating to the
Funds (such prospectuses together with the related statement of
additional information, as presently in effect and all amendments and
supplements thereto, herein called the "Prospectuses").
Portico Funds will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing, if any.
3. Services. Subject to the supervision of Portico Funds' Board of
Directors, the Investment Adviser will be responsible for the management of, and
will provide a continuous investment program for, each Fund including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Funds. The Investment Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each of the Funds. The Investment Adviser will provide the services
rendered by it under this Agreement in accordance with each Fund's investment
objective, policies and restrictions as stated in its Prospectus and resolutions
of Portico Funds' Board of Directors. Without limiting the generality of the
foregoing, the Investment Adviser is hereby specifically authorized to invest
and reinvest the assets of a Fund, in its discretion as investment adviser,
agent and fiduciary for the Funds, in (i) variable amount demand notes of
corporate borrowers held by the Investment Adviser for the investment of monies
held by the Investment Adviser in its capacity as fiduciary, agent and custodian
and (ii) securities of other investment companies whether or not the same are
advised or managed by the Investment Adviser or another affiliated person of
Portico Funds. Unless the Board of Directors of Portico Funds directs otherwise
in a particular instance or generally, the Investment Adviser is hereby further
authorized, on behalf of Portico Funds, to vote, give and withhold consents with
respect to, and take all other similar actions relating to the securities and
other investments owned by the Funds. In addition, the Investment Adviser
agrees that it will:
(a) Establish and monitor investment criteria and policies for each
Fund;
(b) Update each Fund's cash availability throughout the day as
required;
(c) Maintain historical tax lots for each portfolio security held by
the Funds;
(d) Transmit trades to Portico Funds' custodian for proper
settlement;
(e) Maintain all books and records with respect to each Fund's
securities transactions;
(f) Supply Portico Funds and its Board of Directors with reports,
statistical data and economic information as requested; and
(g) Prepare a quarterly broker security transaction summary and
monthly security transaction listing for each Fund.
4. Other Covenants. The Investment Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Securities and Exchange Commission and will in addition conduct its
activities under this Agreement in accordance with other applicable law;
(b) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(c) will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer.
In executing portfolio transactions and selecting brokers or dealers,
the Investment Adviser will use its best efforts to seek on behalf of
the Funds the best overall terms available. In assessing the best
overall terms available for any transaction, the Investment Adviser
shall consider all factors that it deems relevant, including the breadth
of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the brokerdealer to execute a
particular transaction, the Investment Adviser may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Funds
and/or other accounts over which the Investment Adviser or an affiliate
of the Investment Adviser exercises investment discretion. The
Investment Adviser is authorized, subject to the prior approval of
Portico Funds' Board of Directors, to pay to a broker or dealer who
provides such brokerage and research services a commission for executing
a portfolio transaction for any of the Funds which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Investment Adviser
determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided by such
broker or dealer -- viewed in terms of that particular transaction or in
terms of the overall responsibilities of the Investment Adviser to the
Funds. In addition, the Investment Adviser is authorized to take into
account the sale of shares of Portico Funds in allocating purchase and
sale orders for portfolio securities to brokers or dealers (including
brokers and dealers that are affiliated with the Investment Adviser or
Portico Funds' principal underwriter), provided that the Investment
Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no
instance, however, will portfolio securities be purchased from or sold
to the Investment Adviser, Portico Funds' principal underwriter, or any
affiliated person of either Portico Funds, the Investment Adviser, or
the principal underwriter, acting as principal in the transaction,
except to the extent permitted by the Securities and Exchange
Commission; and
(d) will maintain a policy and practice of conducting its investment
advisory services hereunder independently of the commercial banking
operations of it and its affiliates. When the Investment Adviser makes
investment recommendations for a Fund, its investment advisory personnel
will not inquire or take into consideration whether the issuer of
securities proposed for purchase or sale for the Fund's account are
customers of the commercial department maintained by it or one of its
affiliates. In dealing with commercial customers, the commercial
departments of the Investment Adviser and its affiliates will not
inquire or take into consideration whether securities of those customers
are held by the Funds.
5. Services Not Exclusive. The services furnished by the Investment
Adviser hereunder are deemed not to be exclusive, and the Investment Adviser
shall be free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. To the extent that the purchase
or sale of securities or other investments of the same issuer may be deemed by
the Investment Adviser to be suitable for two or more accounts managed by the
Investment Adviser, the available securities or investments may be allocated in
a manner believed by the Investment Adviser to be equitable to each account. It
is recognized that in some cases this procedure may adversely affect the price
paid or received by a Fund or the size of the position obtainable for or
disposed of by a Fund.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for each Fund are the property of Portico Funds and further agrees
to surrender promptly to Portico Funds any of such records upon Portico Funds'
request. The Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased or sold for any of the Funds. In addition, if the aggregate
expenses borne by any Fund in any fiscal year exceed the applicable expense
limitations imposed by the securities regulations of any state in which its
shares are registered or qualified for sale to the public, the Investment
Adviser shall reimburse the Fund for any such excess to the extent that said
securities regulations so require. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Portico Funds will pay the Investment Adviser and
the Investment Adviser will accept as full compensation therefor: (a) 4/10ths
of the gross income earned by each Fund on each loan of its securities
(excluding capital gains and losses, if any); plus (b) with respect to the Money
Market Fund, Tax-Exempt Money Market Fund, U.S. Government Money Market Fund,
Institutional Money Market Fund and U.S. Federal Money Market Fund, a fee,
computed daily and payable monthly, at the annual rate of .50% of the first $2
billion of each Fund's average daily net assets considered separately on a per-
Fund basis, plus .40% of each Fund's average daily net assets over $2 billion;
plus (c) with respect to the remaining Funds, a fee, computed daily and payable
monthly, at the following annual rates - .75% of the average daily net assets of
the Income and Growth Fund; .75% of the average daily net assets of the Special
Growth Fund; .60% of the average daily net assets of the Short-Intermediate
Fixed Income Fund; .30% of the average daily net assets of the Bond IMMDEX/TM
Fund; and .25% of the average daily net assets of the Equity Index Fund. Such
fee as is attributable to each Fund shall be a separate charge to each such Fund
and shall be the several (and not joint or joint and several) obligation of each
such Fund.
9. Limitation of Liability. The Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by Portico
Funds in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
10. Duration and Termination. This Agreement shall become effective as of
the date hereof with respect to the Funds listed in Section 1(a) hereof, and
with respect to any additional Fund, on the date of receipt by Portico Funds of
notice from the Investment Adviser in accordance with Section 1(b) hereof that
the Investment Adviser is willing to serve as investment adviser with respect to
such Fund, provided that this Agreement (as supplemented by the terms specified
in any notice and agreement pursuant to Section 1(b) hereof) shall have been
approved by the shareholders of the Funds in accordance with the requirements of
the 1940 Act and, unless sooner terminated as provided herein, shall continue in
effect with respect to each Fund until February 29, 1992. Thereafter, if not
terminated, this Agreement shall automatically continue in effect as to a
particular Fund for successive annual periods, provided such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of Portico Funds' Board of Directors who are not interested persons of
any party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by Portico Funds' Board of Directors or by
vote of a majority of the outstanding voting securities of such Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to any Fund
at any time, without the payment of any penalty, by Portico Funds (by vote of
Portico Funds' Board of Directors or by vote of a majority of the outstanding
voting securities of such Fund), or by the Investment Adviser on sixty days'
written notice. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meaning as such terms have in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective as to a particular Fund until approved by vote of a majority of the
outstanding voting securities of such Fund.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Wisconsin law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: PORTICO FUNDS, INC.
(a Wisconsin corporation)
/s/ Dana J. Russart By /s/ Miriam Allison
[Seal] (Authorized Officer)
Attest: FIRST WISCONSIN TRUST COMPANY
/s/ Andrea Lydolph By /s/ Thomas E. Hatcher
[Seal] Assistant Secretary (Authorized Officer)
Exhibit (5)(b)
ASSUMPTION AND GUARANTEE
AGREEMENT made as of February 3, 1992 between FIRST WISCONSIN TRUST
COMPANY, a banking institution chartered under the laws of the State of
Wisconsin ("First Wisconsin"), and FIRST WISCONSIN ASSET MANAGEMENT, a Wisconsin
corporation ("FWAM"), both of which are wholly owned subsidiaries of Firstar
Corporation.
WHEREAS, Portico Funds, Inc., a Wisconsin corporation ("Portico Funds"), is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, First Wisconsin has been previously appointed as investment
adviser to Portico Funds for its Money Market Fund, Institutional Money Market
Fund, U.S. Federal Money Market Fund, U.S. Government Money Market Fund, Tax-
Exempt Money Market Fund, Income and Growth Fund, Short-Intermediate Fixed
Income Fund, Special Growth Fund, Bond IMMDEX/TM Fund and Equity Index Fund
pursuant to the Investment Advisory Agreement between First Wisconsin and
Portico Funds dated August 29, 1991 (the "Investment Advisory Agreement"); and
WHEREAS, First Wisconsin and FWAM desire to have FWAM be the named
investment adviser with respect to the Money Market Fund, Institutional Money
Market Fund, U.S. Federal Money Market Fund, U.S. Government Money Market Fund,
Tax-Exempt Money Market Fund, Short-Intermediate Fixed Income Fund, Special
Growth Fund, Bond IMMDEX/TM Fund and Equity Index Fund (the "Funds") pursuant to
the Investment Advisory Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. FWAM hereby assumes all rights and obligations of First Wisconsin under
the Agreement.
2. First Wisconsin hereby represents that (i) the management personnel of
First Wisconsin responsible for providing investment advisory services to the
Funds under the Investment Advisory Agreement, including the portfolio managers
and the supervisory personnel, are employees of FWAM where they continue to
provide such services for the Funds, and (ii) both First Wisconsin and FWAM
remain wholly owned subsidiaries of Firstar Corporation. Consequently, First
Wisconsin believes that the proposed assumption does not involve a change in
actual control or actual management with respect to the investment adviser or
the Funds.
3. First Wisconsin hereby unconditionally guarantees the due performance
of its obligations by FWAM in connection with the Investment Advisory Agreement.
4. Both parties hereby agree that this Assumption and Guarantee shall be
attached to and made a part of the Investment Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: FIRST WISCONSIN TRUST COMPANY
/s/ [signature illegible] By/s/ Thomas E. Hatcher
[Seal] (Authorized Officer)
Attest: FIRST WISCONSIN ASSET MANAGEMENT
/s/ Michael Bills By/s/ [signature illegible]
[Seal] (Authorized Officer)
Exhibit (5)(c)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of March 27, 1992, between PORTICO FUNDS, INC., a
Wisconsin corporation (herein called "Portico Funds"), and FIRST WISCONSIN ASSET
MANAGEMENT ("Investment Adviser"), a subsidiary of Firstar Corporation.
WHEREAS, Portico Funds is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, Portico Funds desires to retain the Investment Adviser to furnish
investment advisory and other services to Portico Funds for its Balanced Fund
portfolio (the "Fund"), and the Investment Adviser is willing to so furnish such
services;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment.
(a) Portico Funds hereby appoints the Investment Adviser to act as
investment adviser to the Fund for the period and on the terms set forth in this
Agreement. The Investment Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
(b) In the event that Portico Funds establishes one or more
portfolios other than the Fund with respect to which it desires to retain the
Investment Adviser to act as investment adviser hereunder, it shall notify the
Investment Adviser in writing. If the Investment Adviser is willing to render
such services under this Agreement it shall notify Portico Funds in writing
whereupon such additional portfolio shall become subject to the provisions of
this Agreement to the same extent as the Fund named above in the recitals except
to the extent that said provisions (including those relating to the compensation
payable by the Fund to the Investment Adviser) are modified with respect to such
portfolio in writing by Portico Funds and the Investment Adviser at the time.
2. Delivery of Documents. Portico Funds has furnished the Investment
Adviser with copies properly certified or authenticated of each of the
following:
(a) Portico Funds' Articles of Incorporation, as filed with the
State Secretary of the State of Wisconsin on February 15, 1988, and all
amendments thereto (such Articles of Incorporation, as presently in effect
and as the same shall from time to time be amended, are herein called the
"Articles of Incorporation");
(b) Portico Funds' By-laws and amendments thereto;
(c) Resolutions of Portico Funds' Board of Directors authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) Portico Funds' Registration Statement, as amended, on Form N-1A
under the Securities Act of 1933, as amended ("1933 Act") (File No. 33-
18255), and under the 1940 Act; and
(e) The most recent prospectus of Portico Funds relating to the Fund
(such prospectus together with the related statement of additional
information, as presently in effect and all amendments and supplements
thereto, herein called the "Prospectus").
Portico Funds will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing, if any.
3. Services. Subject to the supervision of Portico Funds' Board of
Directors, the Investment Adviser will be responsible for the management of, and
will provide a continuous investment program for, the Fund including investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Fund. The Investment Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by the Fund. The Investment Adviser will provide the services rendered by
it under this Agreement in accordance with the Fund's investment objective,
policies and restrictions as stated in its Prospectus and resolutions of Portico
Funds' Board of Directors. Without limiting the generality of the foregoing,
the Investment Adviser is hereby specifically authorized to invest and reinvest
the assets of the Fund, in its discretion as investment adviser, agent and
fiduciary for the Fund, in (i) variable amount demand notes of corporate
borrowers held by the Investment Adviser for the investment of monies held by
the Investment Adviser in its capacity as fiduciary, agent and custodian and
(ii) securities of other investment companies whether or not the same are
advised or managed by the Investment Adviser or another affiliated person of
Portico Funds. Unless the Board of Directors of Portico Funds directs otherwise
in a particular instance or generally, the Investment Adviser is hereby further
authorized, on behalf of Portico Funds, to vote, give and withhold consents with
respect to, and take all other similar actions relating to the securities and
other investments owned by the Fund. In addition, the Investment Adviser agrees
that it will:
(a) Establish and monitor investment criteria and policies for the
Fund;
(b) Update the Fund's cash availability the day as required;
(c) Maintain historical tax lots for each portfolio held by the
Fund;
(d) Transmit trades to Portico Funds' custodian for proper
settlement;
(e) maintain all books and records with respect the Fund's
securities transactions;
(f) Supply Portico Funds and its Board of Directors with reports,
statistical data and economic information as requested; and
(g) Prepare a quarterly broker security transaction summary and
monthly security transaction listing for the Fund.
4. Other Covenants. The Investment Adviser agrees that it:
(a) will comply with all applicable Rules and
Regulations of the Securities and Exchange Commission and will in addition
conduct its activities under this Agreement in accordance with other applicable
law;
(b) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will place orders pursuant to its investment determinations for
the Fund either directly with the issuer or with any broker or dealer. In
executing portfolio transactions and selecting brokers or dealers, the
Investment Adviser will use its best efforts to seek on behalf of the Fund the
best overall terms available. In assessing the best overall terms available for
any transaction, the Investment Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker-dealer to execute a particular
transaction, the Investment Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) provided to the Fund and/or other accounts over which the
Investment Adviser or an affiliate of the Investment Adviser exercises
investment discretion. The Investment Adviser is authorized, subject to the
prior approval of Portico Funds' Board of Directors, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Investment Adviser determines in good faith
that such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer -- viewed in terms of
that particular transaction or in terms of the overall responsibilities of the
Investment Adviser to the Fund. In addition, the Investment Adviser is
authorized to take into account the sale of shares of Portico Funds in
allocating purchase and sale orders for portfolio securities to brokers or
dealers (including brokers and dealers that are affiliated with the Investment
Adviser or Portico Funds' principal underwriter), provided that the Investment
Adviser believes that the quality of the transaction and the commission are
comparable to what they would be with other qualified firms. In no instance,
however, will portfolio securities be purchased from or sold to the Investment
Adviser, Portico Funds' principal underwriter, or any affiliated person of
either Portico Funds, the Investment Adviser, or the principal underwriter,
acting as principal in the transaction, except to the extent permitted by the
Securities and Exchange Commission; and
(d) will maintain a policy and practice of conducting its investment
advisory services hereunder independently of the commercial banking operations
of it and its affiliates. When the Investment Adviser makes investment
recommendations for the Fund, its investment advisory personnel will not inquire
or take into consideration whether the issuer of securities proposed for
purchase or sale for the Fund's account are customers of the commercial
department maintained by it or one of its affiliates. In dealing with
commercial customers, the commercial departments of the Investment Adviser and
its affiliates will not inquire or take into consideration whether securities of
those customers are held by the Fund.
5. Services Not Exclusive. The services furnished by the Investment
Adviser hereunder are deemed not to be exclusive, and the Investment Adviser
shall be free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. To the extent that the purchase
or sale of securities or other investments of the same issuer may be deemed by
the Investment Adviser to be suitable for two or more accounts managed by the
Investment Adviser, the available securities or investments may be allocated in
a manner believed by the Investment Adviser to be equitable to each account. It
is recognized that in some cases this procedure may adversely affect the price
paid or received by the Fund or the size of the position obtainable for or
disposed of by the Fund.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for the Fund are the property of Portico Funds and further agrees
to surrender promptly to Portico Funds any of such records upon Portico Funds'
request. The Investment Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased or sold for the Fund. In addition, if the aggregate expenses
borne by the Fund in any fiscal year exceed the applicable expense limitations
imposed by the securities regulations of any state in which its shares are
registered or qualified for sale to the public, the Investment Adviser shall
reimburse the Fund for any such excess to the extent that said securities
regulations so require. Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, Portico Funds will pay the Investment Adviser and
the Investment Adviser will accept as full compensation therefor: (a) 4/10ths of
the gross income earned by the Fund on each loan of its securities (excluding
capital gains and losses, if any), plus (b) a fee, computed daily and payable
monthly, at the annual rate of .75% of the average daily net assets of the Fund.
9. Limitation of Liability. The Investment Adviser shallnot be liable
for any error of judgment or mistake of law or for any loss suffered by Portico
Funds in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
10. Duration and Termination. This Agreement shall become effective as of
the date hereof with respect to the Fund listed in Section 1(a) hereof, and with
respect to any additional portfolio, on the date of receipt by Portico Funds of
notice from the Investment Adviser in accordance with Section 1(b) hereof that
the Investment Adviser is willing to serve as investment adviser with respect to
such portfolio, provided that this Agreement (as supplemented by the terms
specified in any notice and agreement pursuant to Section 1(b) hereof) shall
have been approved by the shareholders of the Fund (or any portfolio added
pursuant to Section 1(b) hereof) in accordance with the requirements of the 1940
Act and, unless sooner terminated as provided herein, shall continue in effect
with respect to the Fund (or any portfolio added pursuant to Section 1(b)
hereof) until February 28, 1993. Thereafter, if not terminated, this Agreement
shall automatically continue in effect as to a particular portfolio for
successive annual periods, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of Portico Funds'
Board of Directors who are not interested persons of any party to this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by Portico Funds' Board of Directors or by vote of a majority
of the outstanding voting securities of such portfolio. Notwithstanding the
foregoing, this Agreement may be terminated as to a particular portfolio at any
time, without the payment of any penalty, by Portico Funds (by vote of Portico
Funds' Board of Directors or by vote of a majority of the outstanding voting
securities of such portfolio), or by the Investment Adviser on sixty days'
written notice. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meaning as such terms have in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective as to the Fund (or any other portfolio subject to this Agreement)
until approved by vote of a majority of the outstanding voting securities of the
Fund (or such portfolio).
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Wisconsin law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: PORTICO FUNDS, INC.
(a Wisconsin corporation)
/s/ Dana J. Russart By /s/Miriam Allison
[Seal] (Authorized Officer)
Attest: FIRST WISCONSIN ASSET MANAGEMENT
/s/ Michael Bills By /s/ [signature illegible]
[Seal] (Authorized Officer)
Exhibit (5)(d)
ADDENDUM NO. 1 TO INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 27th day of December, 1992, is entered into
between PORTICO FUNDS, INC. (the "Company"), a Wisconsin corporation, and
Firstar Investment Research and Management Company (the "Investment Adviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed the Investment Adviser to
act as investment adviser to the Company for its Balanced Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as the
investment adviser under the Advisory Agreement, the Company shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Company in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Company and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified the Investment Adviser that it has established the MidCore Growth
Fund and the Intermediate Bond Market Fund and that it desires to retain the
Investment Adviser to act as the investment adviser therefor, and the Investment
Adviser has notified the Company that it is willing to serve as investment
adviser for the MidCore Growth Fund and the Intermediate Bond Market Fund (the
"Funds");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Company for the MidCore Growth Fund and the
Intermediate Bond Market Fund for the period and the terms set forth
in the Advisory Agreement. The Investment Adviser hereby accepts such
appointment and agrees to render the services set forth in the Advisory
Agreement, for the compensation herein provided.
2. Compensation. For the services provided and the expenses assumed
pursuant to the Advisory Agreement with respect to the MidCore Growth Fund and
the Intermediate Bond Fund, the Company will pay the Investment Adviser and the
Investment Adviser will accept as full compensation therefor (a) 4/10 of the
gross income earned by each Fund on each loan of its securities (excluding
capital gains and losses if any), plus (b) with respect to the MidCore Growth
Fund, a fee, computed daily and paid monthly, at the annual rate of .75% of the
average daily net assets of the Fund, plus (c) with respect to the Intermediate
Bond Market Fund, a fee, computed daily and paid monthly, at the annual rate of
.50% of the average daily net assets of the Fund. Such fee as is attributable to
each Fund will be a separate charge to each such Fund and will be the several
(and not the joint and several) obligation of each such Fund.
3. Miscellaneous. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Miriam Allison
Title
FIRSTAR INVESTMENT RESEARCH AND MANAGEMENT COMPANY
By:/s/ Michael Bills
Title: President
Exhibit (5)(e)
ADDENDUM NO. 2 TO INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 5th day of February, 1993, is entered into
between PORTICO FUNDS, INC. (the "Company"), a Wisconsin corporation, and
Firstar Investment Research and Management Company (the "Investment Adviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed the Investment Adviser to
act as investment adviser to the Company for its Balanced Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as the
investment adviser under the Advisory Agreement, the Company shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Company in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Company and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified the Investment Adviser that it has established the Tax-Exempt
Intermediate Bond Fund and that it desires to retain the Investment Adviser to
act as the investment adviser therefor, and the Investment Adviser has notified
the Company that it is willing to serve as investment adviser for the Tax-Exempt
Intermediate Bond Fund (the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Company for the Tax-Exempt Intermediate Bond Fund
for the period and the terms set forth in the Advisory Agreement. The
Investment Adviser hereby accepts such appointment and agrees to render the
services set forth in the Advisory Agreement, for the compensation herein
provided.
2. Compensation. For the services provided and the expenses assumed
pursuant to the Advisory Agreement with respect to the Fund, the Company will
pay the Investment Adviser and the Investment Adviser will accept as full
compensation therefore a fee, computed daily and paid monthly, at the annual
rate of .50% of the average daily net assets of the Fund. Such fee will be a
separate charge to the Fund.
3. Miscellaneous. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Miriam Allison
Title: Vice President
FIRSTAR INVESTMENT RESEARCH AND MANAGEMENT COMPANY
By:/s/ Michael Bills
Title: President
Exhibit (5)(f)
ASSUMPTION AND GUARANTEE
AGREEMENT made as of June 17, 1993 between FIRSTAR TRUST COMPANY (formerly,
First Wisconsin Trust Company), a banking institution chartered under the laws
of the State of Wisconsin ("Firstar"), and FIRSTAR INVESTMENT RESEARCH AND
MANAGEMENT COMPANY ("FIRMCO"), a Wisconsin corporation, both of which are wholly
owned subsidiaries of Firstar Corporation.
WHEREAS, Portico Funds, Inc., a Wisconsin corporation ("Portico Funds"), is
registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Firstar has been previously appointed as investment adviser to
Portico Funds, Inc. for its Income and Growth Fund pursuant to the Investment
Advisory Agreement between Firstar and Portico Funds, Inc. dated August 29, 1991
(the "Investment Advisory Agreement"); and
WHEREAS, Firstar and FIRMCO desire to have FIRMCO be the named investment
adviser with respect to the Income and Growth Fund (the "Fund") pursuant to the
Investment Advisory Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. FIRMCO hereby assumes all rights and obligations of Firstar under the
Agreement.
2. Firstar hereby represents that (i) the management personnel of Firstar
responsible for providing investment advisory services to the Fund under the
Investment Advisory Agreement, including the portfolio managers and the
supervisory personnel, are employees of FIRMCO where they continue to provide
such services for the Fund, and (ii) both Firstar and FIRMCO remain wholly owned
subsidiaries of Firstar Corporation. Consequently, Firstar believes that the
proposed assumption does not involve a change in actual control or actual
management with respect to the investment adviser or the Fund.
3. Firstar hereby unconditionally guarantees the due performance of its
obligations by FIRMCO in connection with the Investment Advisory Agreement.
4. Both parties hereby agree that this Assumption and Guarantee shall be
attached to and made a part of this Investment Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: FIRSTAR TRUST COMPANY
/s/ [signature illegible] By /s/ Thomas E. Hatcher
(Seal) (Authorized Officer)
Attest: FIRSTAR INVESTMENT RESEARCH
AND MANAGEMENT COMPANY
/s/ Dana J. Russart By /s/ Michael Bills
[Seal] (Authorized Officer)
Exhibit (5)(g)
ADDENDUM NO. 3 TO INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 26th day of April, 1994, is entered into
between PORTICO FUNDS, INC. (the "Company"), a Wisconsin corporation, and
Firstar Investment Research and Management Company (the "Investment Adviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed the Investment Adviser to
act as investment adviser to the Company for its Balanced Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as the
investment adviser under the Advisory Agreement, the Company shall so notify the
Investment Adviser in writing and if the Investment Adviser is willing to render
such services it shall notify the Company in writing, and the compensation to be
paid to the Investment Adviser shall be that which is agreed to in writing by
the Company and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified the Investment Adviser that it has established the International
Equity Fund and that it desires to retain the Investment Adviser to act as the
investment adviser therefor, and the Investment Adviser has notified the Company
that it is willing to serve as investment adviser for the International Equity
Fund (the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Company for the International Equity Fund for the
period and the terms set forth herein and in the Advisory Agreement. The
Investment Adviser hereby accepts such appointment and agrees to render the
services set forth herein and in the Advisory Agreement, for the compensation
herein provided.
2. Subcontractors. It is understood that the Investment Adviser may from
time to time employ or associate with itself such person or persons as the
Investment Adviser may believe to be particularly fitted to assist in the
performance of this Agreement; provided, however, that the compensation of such
person or person shall be paid by the Investment Adviser and that any person
providing investment advisory services to the Fund shall be approved in
accordance with the provisions of the 1940 Act. Each such sub-adviser is
hereinafter referred to as a "SubAdviser".
Notwithstanding the approval of any such Sub-Adviser(s), however, in
carrying out its obligations hereunder the Investment Adviser shall in all
events:
a. determine, either in its sole discretion or jointly with the Sub-
Adviser(s), the securities and other investments to be purchased, retained
or sold by the Fund;
b. establish and monitor investment criteria and policies for the
Fund;
c. review investments in the Fund to ensure that each Sub-Adviser
performs its sub-advisory services in accordance with the Fund's investment
objective, policies and restrictions as stated in its prospectus and
statement of additional information;
d. review, monitor, analyze and report to the Board of Directors on
the performance of the Sub-Adviser(s);
e. furnish to the Board of Directors or the SubAdviser(s), reports,
statistical and economic information as may be requested; and
f. recommend, either in its sole discretion or in conjunction with
the Sub-Adviser(s), potential changes in investment policy.
3. Compensation. For the services provided and the expenses assumed with
respect to the International Equity Fund pursuant to the Advisory Agreement and
this Addendum, the Company will pay the Investment Adviser and the Investment
Adviser will accept as full compensation therefor (a) 4/10 of the gross income
earned by the Fund on the loan of its securities (excluding capital gains and
losses if any), plus (b) a fee, computed daily and paid monthly, at the annual
rate of 1.50% of the first $25 million of the Fund's average net assets, 1.45%
of the next $25 million of the Fund's average net assets, 1.40% of the next $50
million of the Fund's average net assets, and 1.35% of the Fund's average net
assets exceeding $100 million.
4. Miscellaneous. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Miriam Allison
Title
FIRSTAR INVESTMENT RESEARCH AND AND MANAGEMENT COMPANY
By:/s/ Mary Ellen Stanek
Title
Exhibit (5)(h)
SUB-ADVISORY AGREEMENT
PORTICO FUNDS, INC.--INTERNATIONAL EQUITY FUND
AGREEMENT dated as of April 26, 1994 among FIRSTAR INVESTMENT RESEARCH &
MANAGEMENT COMPANY, a Wisconsin corporation (the "Investment Adviser"), PORTICO
FUNDS, INC., a Wisconsin corporation and an open-end management investment
company under the Investment Company Act of 1940 (the "Company"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts bank (the "SubAdviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 and Addendum No. 3
thereto of even date herewith (together the "Advisory Agreement") whereunder the
Investment Adviser has been appointed to act as investment adviser to the
Company's International Equity Fund (the "Fund"); and
WHEREAS, the Advisory Agreement authorizes the Investment Adviser to employ
or associate with itself another person or persons to provide sub-investment
advisory services to the Fund; and
WHEREAS, the parties hereto wish that the Sub-Adviser provide the services
set forth herein for the Fund in return for the compensation herein stated;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Services. The Sub-Adviser will manage jointly with the Investment Adviser
the investment of the assets of the Fund in accordance with the investment
objectives, investment policies and restrictions as stated in the Fund's
prospectus, statement of additional information and resolutions of the Company's
Board of Directors, and will perform the other services herein set forth,
subject to the supervision of the Investment Adviser and the Board of Directors
of the Company.
In carrying out its obligations hereunder, the Sub-Adviser shall:
a. jointly determine with the Investment Adviser the securities and other
investments, to be purchased, retained or sold by the Fund;
b. evaluate such economic, statistical and financial information and
undertake such investment research as it shall believe advisable;
c. negotiate brokerage commissions and place all orders for purchases and
sales of the Fund's securities and other investments;
d. update the Fund's cash availability throughout the day as required for
Subadviser's execution of security transactions;
e. transmit trades to the Fund's custodian or sub-custodian for proper
settlement;
f. maintain all books and records with respect to the Fund's securities
transactions executed by the Sub-Adviser;
g. provide such reports and data in hard copy and machine readable form
as are requested by the Investment Adviser and which are consistent with
the Sub-Adviser's normal data production capabilities;
h. assist the Investment Adviser in supplying the Fund's Board of
Directors with reports, statistical data and economic information as
reasonably requested;
i. prepare a quarterly broker security transaction summary and monthly
security transaction listing for the Fund; and
j. shall vote all proxies solicited by or with respect to the issuers of
securities in which assets of the Fund may be invested from time to time.
2. Compensation. The Investment Adviser shall pay the Sub-Adviser a fee,
computed daily and paid monthly, at the annual rate of .40% of the first $25
million of the Fund's average net assets, .35% of the next $25 million of the
Fund's average net assets, .30% of the next $50 million of the Fund's average
net assets, and .25% of the Fund's average net assets exceeding $100 million.
3. Services Not Exclusive. The Sub-Adviser shall be free to render similar
services to others so long as its services hereunder are not impaired thereby.
To the extent that the purchase or sale of securities or other investments of
the same issuer may be deemed by the Sub-Adviser to be suitable for two or more
accounts managed by the Sub-Adviser, the available securities or investments may
be allocated in a manner believed by the Sub-Adviser to be equitable to each
account. It is recognized that in some cases this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtainable for or disposed of by the Fund.
4. Other Covenants. The Sub-Adviser agrees that it:
a. will comply with all applicable Rules and Regulations of the Securities
and Exchange Commission and will in addition conduct its activities under
this Agreement in accordance with other applicable law; it being understood
that the Fund shall be ultimately responsible for its own compliance with
such applicable rules and regulations; the Investment Adviser shall be
responsible for its own compliance with such applicable rules and
regulations; and the Sub-Adviser shall be responsible for its own
compliance with such rules and regulations;
b. will use the comparable level of skill and care in providing such
services as it uses in providing services to fiduciary accounts for which
it has investment responsibilities consistent with its fiduciary
obligations under any relevant applicable law;
c. will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
executing portfolio transactions and selecting brokers or dealers, the Sub-
Adviser will use its best efforts to seek on behalf of the Fund the best
overall terms available. In assessing the best overall terms available for
any transaction, the SubAdviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the
broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In evaluating the
best overall terms available, and in selecting the broker-dealer to execute
a particular transaction, the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Fund and/or other accounts
over which the Sub-Adviser or an affiliate of the Sub-Adviser exercises
investment discretion. The Sub-Adviser is authorized, subject to the prior
approval of the Company's Board of Directors, to pay to a broker or dealer
who provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer --
viewed in terms of that particular transaction or in terms of the overall
responsibilities of the SubAdviser to the Fund. In addition, the Sub-
Adviser is authorized to take into account the sale of shares of the
Company in allocating purchase and sale orders for portfolio securities to
brokers or dealers (including brokers and dealers that are affiliated with
the Investment Adviser, Sub-Adviser or the Company's principal
underwriter), provided that the Sub-Adviser believes that the quality of
the transaction and the commission are comparable to what they would be
with other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Sub-Adviser, the Investment
Adviser, the Company's principal underwriter, or any affiliated person of
either the Company, the Investment Adviser, Sub-Adviser or the principal
underwriter, acting as principal in the transaction, except to the extent
permitted by the Securities and Exchange Commission through rules,
regulations, decisions and no-action letters; and
d. will maintain a policy and practice of conducting its investment
advisory services hereunder independently of the commercial banking
operations of it and its affiliates. When the Sub-Adviser makes investment
recommendations for the Fund, its investment advisory personnel will not
inquire or take into consideration whether the issuer of securities
proposed for purchase or sale for the Fund's account are customers of the
commercial department maintained by it or one of its affiliates.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the Investment Company Act of 1940 (the "1940 Act"), the Sub-Adviser hereby
agrees that all records which it maintains for the Fund are the property of the
Company and further agrees to surrender promptly to the Company any of such
records upon the Company's request. The Sub-Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records required
to be maintained by Rule 31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions, stamp taxes and other transaction charges, if any)
purchased or sold for the Fund.
7. Limitation of Liability. The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Company in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-Adviser in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
8. Duration and Termination. This Agreement shall become effective as of the
date of its execution, and (a) unless otherwise terminated, shall continue until
February 28, 1995 and from year to year thereafter so long as approved annually
in accordance with the 1940 Act and the rules thereunder; (b) may be terminated
without penalty on sixty (60) days' written notice to the Sub-Adviser (i) by the
Investment Adviser, (ii) by vote of the Board of Directors of the Company or
(iii) by vote of a majority of the outstanding voting securities of the Fund;
(c) shall automatically terminate in the event of its assignment or the
termination of the Advisory Agreement between the Investment Adviser and the
Company; and (d) may be terminated without penalty by the Sub-Adviser on sixty
(60) days' written notice to the Investment Adviser and the Company.
9. Amendment of this Agreement. This Agreement may be amended in accordance
with the 1940 Act.
10. Miscellaneous. For purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities" and "assignment" shall have their
respective meanings defined in the 1940 Act and exemptions and interpretations
issued by the Securities and Exchange Commission under the 1940 Act. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Massachusetts law.
FIRSTAR INVESTMENT RESEARCH & MANAGEMENT COMPANY
By: /s/ Mary Ellen Stanek
Title: President
PORTICO FUNDS, INC.
By: /s/ Miriam Allison
Title:
STATE STREET BANK AND TRUST COMPANY
By: /s/ Nadine A. Lynch
Title:
Exhibit (5)(i)
ADDENDUM NO. 4 TO THE INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the 1st day of August, 1995, is entered into
between PORTICO FUNDS, INC. (the "Company"), a Wisconsin corporation, and
Firstar Investment Research and Management Company (the "Investment Adviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed the Investment Adviser to
act as investment adviser to the Company for its Balanced Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as the
investment adviser under the Advisory Agreement, the Company shall so notify the
Investment Adviser in writing, and if the Investment Adviser is willing to
render such services it shall notify the Company in writing, and the
compensation to be paid to the Investment Adviser shall be that which is agreed
to in writing by the Company and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified the Investment Adviser that it has established the MicroCap Fund
and that it desires to retain the Investment Adviser to act as the investment
adviser therefor, and the Investment Adviser has notified the Company that it is
willing to serve as investment adviser for the MicroCap Fund (the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Company for the MicroCap Fund for the period and
the terms set forth herein and in the Advisory Agreement. The Investment
Adviser hereby accepts such appointment and agrees to render the services set
forth herein and in the Advisory Agreement, for the compensation herein
provided.
2. Compensation. For the services provided and the expenses assumed with
respect to the MicroCap Fund pursuant to the Advisory Agreement and this
Addendum, the Company will pay the Investment Adviser and the Investment Adviser
will accept as full compensation therefor (a) 4/10 of the gross income earned by
the Fund on the loan of its securities (excluding capital gains and losses if
any), plus (b) a fee, computed daily and paid monthly, at the annual rate of
1.50% of the Fund's average daily net assets.
3. Miscellaneous. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this
Addendum as of the date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Mary Ellen Stanek
Title:Vice President
FIRSTAR INVESTMENT RESEARCH AND MANAGEMENT COMPANY
By:/s/Dennis Wallestad
Title:Vice President
Exhibit (5)(j)
ADDENDUM NO. 5 TO THE INVESTMENT ADVISORY AGREEMENT
This Addendum, dated as of the day of , 1995, is entered into
--- ---------
between PORTICO FUNDS, INC. (the "Company"), a Wisconsin corporation, and
Firstar Investment Research and Management Company (the "Investment Adviser").
WHEREAS, the Company and the Investment Adviser have entered into an
Investment Advisory Agreement dated as of March 27, 1992 (the "Advisory
Agreement"), pursuant to which the Company appointed the Investment Adviser to
act as investment adviser to the Company for its Balanced Fund;
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the event
the Company establishes one or more additional investment portfolios with
respect to which it desires to retain the Investment Adviser to act as the
investment adviser under the Advisory Agreement, the Company shall so notify the
Investment Adviser in writing, and if the Investment Adviser is willing to
render such services it shall notify the Company in writing, and the
compensation to be paid to the Investment Adviser shall be that which is agreed
to in writing by the Company and the Investment Adviser; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the Company
has notified the Investment Adviser that it has established the Balanced Income
Fund and that it desires to retain the Investment Adviser to act as the
investment adviser therefor, and the Investment Adviser has notified the Company
that it is willing to serve as investment adviser for the Balanced Income Fund
(the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints the Investment Adviser to act
as investment adviser to the Company for the Balanced Income Fund for the period
and the terms set forth herein and in the Advisory Agreement. The Investment
Adviser hereby accepts such appointment and agrees to render the services set
forth herein and in the Advisory Agreement, for the compensation herein
provided.
2. Compensation. For the services provided and the expenses assumed with
respect to the Balanced Income Fund pursuant to the Advisory Agreement and this
Addendum, the Company will pay the Investment Adviser and the Investment Adviser
will accept as full compensation therefor (a) 4/10 of the gross income earned by
the Fund on the loan of its securities (excluding capital gains and losses if
any), plus (b) a fee, computed daily and paid monthly, at the annual rate of
.75% of the Fund's average daily net assets.
3. Miscellaneous. Except to the extent supplemented hereby, the Advisory
Agreement shall remain unchanged and in full force and effect and is hereby
ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:
----------------------
Title:
--------------
FIRSTAR INVESTMENT RESEARCH AND MANAGEMENT COMPANY
By:
----------------------
Title:
--------------
Exhibit (6)(a)
DISTRIBUTION AGREEMENT
January 1, 1995
B.C. Ziegler and Company
215 North Main Street
West Bend, Wisconsin 53095
Ladies and Gentlemen:
This is to confirm that in consideration of the agreements hereinafter
contained, the undersigned, Portico Funds, Inc., a Wisconsin corporation
("Portico Funds"), has agreed that you shall be, for the period of this
Agreement, the distributor of shares of Common Stock (the "Shares") of Portico
Funds' Money Market Fund, Tax-Exempt Money Market Fund, Growth and Income Fund,
Short-Term Bond Market Fund, Bond IMMDEX/TM Fund, Special Growth Fund, U.S.
Government Money Market Fund, Equity Index Fund, Institutional Money Market
Fund, U.S. Treasury Money Market Fund, Balanced Fund, MidCore Growth Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund, International
Equity Fund and other such funds as may be contemplated (the "Funds").
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares in accordance
with the instructions of Portico Funds' Board of Directors and the registration
statement and prospectuses then in effect with respect to the Funds under the
Securities Act of 1933, as amended, and will transmit promptly any orders
received by you for the purchase or redemption of Shares either directly to
Portico Funds' transfer agent for the Fund involved or to any qualified
broker/dealer for transmittal to said agent.
1.1(a) You agree to use your best efforts to solicit orders for the sale
of Shares. You shall cause expenses to be paid for appropriate activities which
you deem reasonable which are primarily intended to result in the sale of
Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. In addition, you will provide one or more persons, during
normal business hours, to respond to telephone questions with respect to the
Funds. It is contemplated that you may enter into selling agreements with
qualified broker/dealers and other persons with respect to the offering of
Shares to the public, and in so doing you will act only on your own behalf as
principal.
1.1(b) All Shares of the Funds offered for sale by you shall be offered
for sale to the public at a price per share (the "offering price") equal to (a)
their net asset value (determined in the manner set forth in Portico Funds'
Articles of Incorporation and then current prospectuses) plus, except to those
classes of persons set forth in the then current prospectuses (b) a sales charge
which shall be the percentage of the offering price of such shares as set forth
in Portico Funds' then current prospectuses. The offering price, if not an
exact multiple of one
cent, shall be adjusted to the nearest cent. Concessions by you to
broker/dealers and other persons shall be set forth in either the selling
agreements between you and such broker/dealers and persons or, if such
concessions are described in Portico Funds' then current prospectuses for the
Fund, shall be as so set forth. No broker/dealer or other person who enters into
a selling agreement with you shall be authorized to act as agent for Portico
Funds in connection with the offering or sale of its Shares to the public or
otherwise.
1.1(c) If any Shares sold by Portico Funds are redeemed or repurchased by
Portico Funds or by you as agent or are tendered for redemption within seven
business days after the date of confirmation of the original purchase of said
Shares, you shall forfeit the amount above the net asset value received by you
in respect of such Shares, provided that the portion, if any, of such amount re-
allowed by you to broker/dealers or other persons shall be repayable to Portico
Funds only to the extent recovered by you from the broker/dealer or other person
concerned. You shall include in the forms of agreement with such broker/dealers
and other persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by Portico Funds or by you as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
1.2 You shall act as distributor of the Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended, by the Securities and Exchange Commission or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.3 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, Portico
Funds' officers may decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such orders and to
make such sales and Portico Funds shall advise you promptly of such
determination.
1.4 Portico Funds agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as amended, and to
be responsible for all expenses in connection with maintaining facilities for
the issue and transfer of Shares and for supplying information, prices and other
data to be furnished by Portico Funds hereunder.
1.5 Portico Funds agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which may be
reasonably necessary in the discretion of Portico Funds' officers in connection
with the qualification of Shares for sale in such states as you may designate to
Portico Funds and Portico Funds may approve, and Portico Funds agrees to pay all
expenses which may be incurred in connection with such qualification. You shall
pay all expenses connected with your own qualification as a broker under State
or Federal laws and, except as otherwise specifically provided in this
agreement, all other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.6 Portico Funds shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect to Portico
Funds and the Shares as you may reasonably request, and Portico Funds warrants
that the statements contained in any such information, when so signed by Portico
Funds' officers, shall be true and correct. Portico Funds also shall furnish
you upon request with: (a) annual audited reports of Portico Funds' books and
accounts with respect to each of the Funds, made by independent public
accountants regularly retained by Portico Funds, (b) semi-annual reports with
respect to each of the Funds prepared by Portico Funds, and (c) from time to
time such additional information regarding Portico Funds' financial condition as
you may reasonably request.
1.7 Portico Funds represents to you that all registration statements and
prospectuses filed by Portico Funds with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the Shares have
been prepared in conformity with the requirements of said Act and rules and
regulations of the Securities and Exchange Commission thereunder. As used in
this agreement the terms "registration statement" and "prospectus" shall mean
any registration statement and prospectus (together with the related statement
of additional information) filed with the Securities and Exchange Commission
with respect to any of the Shares and any amendments and supplements thereto
which at any time shall have been filed with said Commission. Portico Funds
represents and warrants to you that any registration statement and prospectus,
when such registration statement becomes effective, will contain all statements
required to be stated therein in conformity with said Act and the rules and
regulations of said Commission; that all statements of fact contained in the
registration statement and prospectus will be materially true and correct when
such registration statement becomes effective; and that neither the registration
statement nor any prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Portico Funds may but shall not be obligated to propose from
time to time such amendment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of future
developments, may, in the opinion of Portico Funds' counsel, be necessary or
advisable. If Portico Funds shall not propose such an amendment or amendments
and/or supplement or supplements within fifteen days after receipt by Portico
Funds of a written request from you to do so, you may, at your option, terminate
this agreement. Portico Funds shall not file any amendment to the registration
statement or supplement to any prospectus without giving you reasonable notice
thereof in advance; provided, however, that nothing contained in this agreement
shall in any way limit Portico Funds' right to file at any time such amendments
to any registration statement and/or supplements to any prospectus, of whatever
character, as Portico Funds may deem advisable, such right being in all respects
absolute and unconditional.
1.8 Portico Funds authorizes you to use any prospectus, in the form
furnished to you from time to time, in connection with the sale of Shares.
Portico Funds agrees to indemnify, defend and hold you, your several officers
and directors, and any person who controls you within the meaning of Section 15
of the Securities Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based upon any
untrue statement, or alleged untrue statement, of a material fact contained in
the registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that Portico
Funds' agreement to indemnify you, your officers or directors, and any such
controlling person shall not be deemed to cover any claims, demands, liabilities
or expenses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the registration statement or prospectus in
reliance upon and in conformity with written information furnished to Portico
Funds or its counsel by you and used in the preparation thereof; and provided
further that Portico Funds' agreement to indemnify you and Portico Funds'
representations and warranties herein set forth shall not be deemed to cover any
liability to Portico Funds or its shareholders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties under this agreement. Portico Funds' agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon Portico Funds' being notified of any
action brought against you, your officers or directors, or any such controlling
person, such notification to be given by letter or by telegram addressed to
Portico Funds at its principal office within ten days after the summons or other
first legal process shall have been served. The failure so to notify Portico
Funds of any such action shall not relieve Portico Funds from any liability
which Portico Funds may have to the person against whom such action is brought
by reason of any such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of Portico Funds' indemnity
agreement contained in this paragraph 1.8. Portico Funds will be entitled to
assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by Portico Funds and approved by you. In the event Portico
Funds elects to assume the defense of any such suit and retain counsel of good
standing approved by you which approval shall not be unreasonably withheld, the
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case Portico Funds does not
elect to assume the defense of any such suit, or in case you do not approve of
counsel chosen by Portico Funds, Portico Funds will reimburse you, your officers
and directors, or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
you or them. Portico Funds' indemnification agreement contained in this
paragraph 1.8 and Portico Funds' representations and warranties in this
agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of you, your officers and directors, or any
controlling person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to your benefit, to the benefit of
your several officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors. Portico Funds agrees
promptly to notify you of the commencement of any litigation or proceedings
against Portico Funds or any of its officers or directors in connection with the
issue and sale of any of the Shares.
1.9 You agree to indemnify, defend and hold Portico Funds, its several
officers and directors, and any person who controls Portico Funds within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which Portico
Funds, its officers or directors, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by Portico Funds,
its officers or directors, or such controlling person resulting from such claims
or demands, shall arise out of or be based upon any untrue, or alleged untrue,
written statement of a material fact contained in information furnished by you
to Portico Funds or its counsel and used in Portico Funds' registration
statement or in the corresponding statements made in the prospectus, or shall
arise out of or be based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished by you to Portico
Funds or its counsel and required to be stated in such answers or necessary to
make such information not misleading. Your agreement to indemnify Portico
Funds, its officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of any action
brought against Portico Funds, its officers or directors, or any such
controlling person, such notification to be given by letter or telegram
addressed to you at your principal office within ten days after the summons or
other first legal process shall have been served. You shall have the right to
control the defense of such action, with counsel of your own choosing,
satisfactory to Portico Funds, if such action is based solely upon such alleged
misstatement or omission on your part, and in any other event Portico Funds, its
officers or directors or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action.
The failure so to notify you of any such action shall not relieve you from any
liability which you may have to Portico Funds, its officers or directors, or to
such controlling person by reason of any such untrue, or alleged untrue,
statement or omission, or alleged omission, otherwise than on account of your
indemnity agreement contained in this paragraph 1.9.
1.10 No Shares shall be offered by either you or Portico Funds under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by Portico Funds if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as current prospectuses as
required by Section 10 of said Act, as amended, are not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.10 shall in any way restrict or have an application to or
bearing upon Portico Funds' obligation to repurchase Shares from any shareholder
in accordance with the provisions of the prospectus or Articles of
Incorporation.
1.11 Portico Funds agrees to advise you promptly in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the
registration statement or prospectuses then in effect or the
initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any statement
of a material fact made in the
registration statement or prospectuses then in effect or which
requires the making of a change in such registration statement or
prospectuses in order to make the statements therein not misleading;
and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus
which may from time to time be filed with the Securities and Exchange
Commission.
2. Term
2.1 This agreement shall become effective as the date hereof and, unless
sooner terminated, shall continue until February 28, 1996, and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) Portico Funds' Board of
Directors or (ii) the vote of a majority (as defined in the Investment Company
Act of 1940) of the Fund's outstanding Shares, provided that in either event its
continuance also is approved by a majority of Portico Funds' directors who are
not "interested persons" (as defined in said Act) of any party to this
agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This agreement is terminable without penalty, on not less
than 60 days' notice, by Portico Funds' Board of Directors, by vote of the
holders of a majority (as defined in said Act) of the Fund's outstanding Shares,
or by you. This agreement will also terminate automatically in the event of its
assignment (as defined in said Act).
3. Miscellaneous
3.1 Portico Funds recognizes that from time to time your directors,
officers and employees may serve as directors, officers and employees of other
corporations (including other investment companies) and that such other
corporations may include the name B.C. Ziegler and Company as part of their
name, and that you or your affiliates may enter into investment advisory or
other agreements with such other corporations.
3.2 You agree on behalf of yourself and your employees to treat
confidentially and as proprietary information of Portico Funds all records and
other information relative to the Funds and prior, present or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than performance of your
responsibilities and duties hereunder, except after prior notification to and
approval in writing by Portico Funds, which approval shall not be unreasonably
withheld and may not be withheld where you may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by Portico
Funds.
3.3 No provision of this agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
3.4 This agreement shall be governed by Wisconsin law.
Please confirm that the foregoing is in accordance with your understanding
by indicating your acceptance hereof at the place below indicated, whereupon it
shall become a binding agreement between us.
Very truly yours,
PORTICO FUNDS, INC.
By: /s/ J M Wade
(Authorized Officer)
Accepted:
B.C. ZIEGLER AND COMPANY
By: /s/ Robert J. Tuszynski
(Authorized Officer)
Exhibit (6)(b)
ADDENDUM NO. 1 TO THE DISTRIBUTION AGREEMENT
This Addendum, dated as of the 1st day of August, 1995, is entered into
between Portico Funds, Inc. (the "Company"), a Wisconsin corporation, and B.C.
Ziegler and Company, a Wisconsin corporation ("BCZ").
WHEREAS, the Company and BCZ have entered into a Distribution Agreement
dated as of January 1, 1995 (the "Distribution Agreement"), pursuant to which
the Company appointed BCZ to provide distribution services to the Company for
its Money Market Fund, TaxExempt Money Market Fund, Growth and Income Fund,
Short-Term Bond Market Fund, Bond IMMDEX/TM Fund, Special Growth Fund, U.S.
Government Money Market Fund, Equity Index Fund, Institutional Money Market
Fund, U.S. Treasury Money Market Fund, Balanced Fund, MidCore Growth Fund,
Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond Fund, International
Equity Fund and any other Portico Funds that may be contemplated;
WHEREAS, the Company is establishing one additional investment portfolio to
be known as the MicroCap Fund and desires to retain BCZ to act as the
distributor under the Distribution Agreement; and
WHEREAS, BCZ is willing to serve as distributor for theMicroCap Fund (the
"Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints BCZ to act distributor to the
Company for the MicroCap Fund for the period and the terms set forth herein and
in the Distribution Agreement. BCZ hereby accepts such appointment and agrees
to render the services set forth herein and in the Distribution Agreement.
2. Miscellaneous. Except to the extent supplemented hereby, the
Distribution Agreement shall remain unchanged and in full force and effect and
is hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Mary Ellen Stanek
Title:Vice President
B.C. ZIEGLER AND COMPANY
By:/s/ Robert J. Tuszynski
Title:Vice President
Exhibit (6)(c)
ADDENDUM NO. 2 TO THE DISTRIBUTION AGREEMENT
This Addendum, dated as of the day of , 1995, is entered
--- -----------
into between Portico Funds, Inc. (the "Company"), a Wisconsin corporation, and
B.C. Ziegler and Company, a Wisconsin corporation ("BCZ").
WHEREAS, the Company and BCZ have entered into a Distribution Agreement
dated as of January 1, 1995 and amended as of August 1, 1995, (the "Distribution
Agreement"), pursuant to which the Company appointed BCZ to provide distribution
services to the Company for its Money Market Fund, Tax-Exempt Money Market Fund,
Growth and Income Fund, Short-Term Bond Market Fund, Bond IMMDEX/TM Fund,
Special Growth Fund, U.S. Government Money Market Fund, Equity Index Fund,
Institutional Money Market Fund, U.S. Treasury Money Market Fund, Balanced Fund,
MidCore Growth Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond
Fund, International Equity Fund, MicroCap Fund and any other Portico Funds that
may be contemplated;
WHEREAS, the Company is establishing one additional investment portfolio to
be known as the Balanced Income Fund and desires to retain BCZ to act as the
distributor under the Distribution Agreement; and
WHEREAS, BCZ is willing to serve as distributor for the Balanced Income
Fund (the "Fund");
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints BCZ to act as distributor to
the Company for the Balanced Income Fund for the period and the terms set forth
herein and in the Distribution Agreement. BCZ hereby accepts such appointment
and agrees to render the services set forth herein and in the Distribution
Agreement.
2. Miscellaneous. Except to the extent supplemented hereby, the
Distribution Agreement shall remain unchanged and in full force and effect and
is hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:
------------------
Title:
-------------
B.C. ZIEGLER AND COMPANY
By:
------------------
Title:
-------------
Exhibit (7)
PORTICO FUNDS, INC.
DEFERRED COMPENSATION PLAN
1. Eligibility. Each Director of the Board of Directors of Portico Funds,
Inc. (the "Company") shall be eligible to participate in the Portico Funds, Inc.
Deferred Compensation Plan (the "Plan").
2. Terms of Participation
(a) A Director may elect to participate in the Plan by signing the
Deferred Compensation Agreement (the "Agreement") in the form attached hereto
and incorporated by reference herein. A Director's participation will commence
on January 1 of the calendar year immediately following the year in which the
Director executed the Agreement, except that when a Director executes an
Agreement within 30 days of the Plan's effective date or within 30 days of first
becoming eligible to participate in the Plan, participation will commence on the
date of the Agreement.
(b) Participation in the Plan will continue until the Director
furnishes written notice to the Company that the Director terminates his
participation in the Plan or until such time as the Company terminates the Plan
pursuant to Section 6 below. Termination by a Director shall be made by written
notice delivered or mailed to the Treasurer of the Company (the "Treasurer") no
later than December 31 of the calendar year preceding the calendar year in which
such termination is to take effect.
(c) A Director who has terminated his participation may subsequently
elect to participate in the Plan by executing a new Agreement in accordance with
subsection (a) above.
(d) A Director may alter the amount of deferral for any future calendar
year, and/or elect a new date on which to receive amounts deferred in future
calendar years, if the Director and the Company enter into a new Agreement on or
before December 31 of the calendar year preceding the calendar year for which
the new Agreement is to take effect. For each new Agreement which changes the
date of receipt of deferred amounts, a new record account (the "Deferred
Compensation Account" or "Account") will be established for the Director.
3. Deferred Compensation Account. While a Director participates in the
Plan pursuant to an Agreement, all deferred compensation payable by the Company
for the Director's services shall be credited to the Director's Deferred
Compensation Account under the applicable Agreement. A Director shall allocate
amounts in his Account(s) among the investment options available under the Plan
by submitting a written request to the Treasurer (or his delegate) on such form
as may be required by the Treasurer prior to the date deferrals are scheduled to
begin. The Board of Directors (the "Board") shall specify from time to time the
investment options available under the Plan. The Director may request that the
investment allocation of his Account, including past as well as future
deferrals, be changed by submitting a written request to the Treasurer (or his
delegate) on such form as may be required by the Treasurer, or by telephoning
the Treasurer (or his delegate). Such changes shall become effective as soon as
administratively feasible after the Treasurer receives such request.
The Director's Account(s) will be credited with any income, gains, and
losses that would have been realized if amounts equal to the deferred amounts
had been invested in accordance with the Director's allocation election on the
date such deferred amounts were credited to the Director's Account(s). For this
purpose, any amounts that would have been received, had amounts been invested as
described above, from a chosen investment option will be treated as if
reinvested in that option on the date such amounts would have been received.
4. Distribution. As of January 31 of the year chosen by the Director in
the applicable Agreement, or if earlier, as of January 31 of the year following
the year in which the Director dies, retires, resigns, becomes disabled or
otherwise ceases to be a member of the Board, the total amount credited to the
Director's Account under the applicable Agreement shall be distributed to the
Director (or upon his death, to his designated beneficiary) in accordance with
one of the alternatives set forth below. Selection of an alternative shall be
made at the time the Director executes the Agreement.
(i) One single-sum payment; or
(ii) Any number of approximately equal annual installments for a period
of two to 15 years. Installments shall be paid annually as of January 31 until
the balance in the Director's Account is exhausted.
A Director may elect in writing to have distribution of his Account occur in
a lump sum, or commence in installments, on a January 31 earlier than the date
elected in the Agreement. However, if such an election is made, the Director
will forfeit 6% of his Account balance as of the new date elected for
commencement of payments.
The amount of each installment payment, other than the final payment, shall
be equal to 1/n multiplied by the balance in the Director's Account as of the
previous December 31, where "n" equals the number of payments yet to be made.
The final payment will equal the balance in the Director's Account as of the
previous December 31. For example, if payments are to be made in ten annual
installments commencing on January 31, 2000, the first payment will be equal to
1/10th of the December 31, 1999 balance in the Account, and the following year's
payment would be equal to 1/9th of the December 31, 2000 balance.
If the balance in the Director's Account as of the date of the first
scheduled payment is less than $2,000, the Company shall instead pay such amount
in a single-sum as of that date. Further, the Director may not select a period
of time which will cause an annual payment to be less than $1,000.
Notwithstanding the foregoing, in the event the Director ceases to be a Director
of the Company and becomes a proprietor, officer, partner, employee, or
otherwise becomes affiliated with any business or entity that is in competition
with the Company, or becomes employed by any governmental agency having
jurisdiction over the affairs of the Company, the Company reserves the right at
the sole discretion of the Board to make an immediate single-sum payment to the
Director in an amount equal to the balance in the Director's Account at that
time.
Notwithstanding the preceding two paragraphs, the Company may at any time
make a single-sum payment to the Director (or surviving beneficiary) equal to a
part or all of the balance in the Director's Accounts upon a showing of an
unforeseeable financial emergency caused by circumstances beyond the control of
the Director (or surviving beneficiary) which would result in severe financial
hardship if such payments were not made. The determination of whether such
emergency exists shall be made at the sole discretion of the Board (with the
Director requesting the payment not participating in the discussion or the
decision). The amount of the payment shall be limited to the amount necessary to
meet the financial emergency, and any remaining balance in the Director's
Accounts shall thereafter be paid at the time and in the manner otherwise set
forth in this Section.
If there is no beneficiary designation in effect at the Director's death or
the designated beneficiary is dead at the Director's death, any amounts in the
Director's Accounts shall be paid in a single-sum to the Director's Estate. If
the designated beneficiary dies after beginning to receive installment payments,
any amounts payable from the Director's Accounts shall be paid in a single-sum
to the beneficiary's estate at the beneficiary's death.
5. Designation of Beneficiary. A Director may designate in writing any
person or legal entity as his beneficiary to receive any amounts payable from
his Accounts upon his death. If the Director should die without effectively
designating a surviving beneficiary, his beneficiary shall be his estate.
6. Amendment and Termination of the Plan. The Company reserves the right
to amend or terminate the Plan by a Board resolution. A written notice of any
such amendment or termination shall be delivered or mailed to each participating
Director no later than December 31 of the calendar year preceding the calendar
year in which the amendment or termination is to take effect. The balance in
the Director's Accounts shall remain subject to the provisions of the Plan and
distribution will not be accelerated because of the termination of the Plan.
7. Non-Assignability. The right of the Director or any other person to
receive payments under this Plan or any Agreement thereunder shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Director or
any beneficiary.
8. Miscellaneous
(a) The Company shall not be required to fund or secure in any way its
obligations hereunder. Nothing in the Plan or in any Agreement thereunder and
no action taken pursuant to the provisions of the Plan or of any Agreement
thereunder shall be construed to create a trust or a fiduciary relationship of
any kind. Payments under the Plan and any Agreement thereunder shall be made
when due from the general assets of the Company. Neither a Director nor his
designated beneficiary shall acquire any interest in such assets by virtue of
the Plan or any Agreement thereunder. This Plan constitutes a mere promise by
the Company to make benefit payments in the future, and to the extent that a
Director or his designated beneficiary acquires a right to receive any payment
from the Company under the Plan, such right shall be no greater than the right
of any unsecured general creditor of the Company. The Company and Director
intend for this Plan to be unfunded for tax purposes and for the purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
(b) The Company shall have full power and authority to interpret, construe
and administer this Plan and any Agreement thereunder and its interpretation and
construction thereof, and actions thereunder, including any valuation of the
Director's Accounts, or the amount or recipient of the payment to be made
therefrom, shall be binding and conclusive on all persons for all purposes. The
Company shall not be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Plan and any
Agreement thereunder unless attributable to its own willful misconduct or lack
of good faith.
(c) To the extent required by law, the Company shall withhold federal or
state income or employment taxes from any payments under the Plan or any
Agreement thereunder and shall furnish the Director (or beneficiary) and the
applicable governmental agency or agencies with such reports, statements or
information as may be required in connection with such payments.
(d) If the Company shall find that any person to whom any payment is
payable under this Plan or any Agreement thereunder is unable to care for his
affairs because of illness or accident, or is a minor, any payment due (unless a
prior claim therefore shall have been made by a duly appointed guardian,
committee or other legal representative) may be paid to the spouse, a parent, or
a brother or sister, or to any person deemed by the Company to have incurred
expense for the person who is otherwise entitled to payment, in such manner and
proportions as the Company may determine. Any such payment shall serve to
discharge the liability of the Company under this Agreement to make payment to
the person who is otherwise entitled to payment.
(e) All expenses incurred in administering this Plan and any Agreement
thereunder shall be paid by the Company.
(f) Nothing in this Plan or any Agreement thereunder shall be construed as
conferring any right on the part of the Director to be or remain a Director of
the Company or to receive any particular amount of Director's fees.
(g) This Plan and any Agreement thereunder shall be binding upon, and inure
to the benefit of, the Company, its successors and assigns, and each Director
and his heirs, executors, administrators, and legal representatives.
(h) This Plan and any Agreement thereunder shall be governed by and
construed under the laws of the State of Wisconsin.
Adopted by the Board of Directors
Date: September 16, 1994 /s/ W. Bruce McConnel, III
W. Bruce McConnel, III Secretary of Portico
Funds, Inc.
PORTICO FUNDS, INC. DEFERRED COMPENSATION PLAN
DIRECTOR ACCOUNT ALLOCATION REQUEST
I hereby request to have my Accounts under Portico Funds, Inc. Deferred
Compensation Plan invested in the following investment options in the
percentages indicated as soon as administratively feasible. This request
supersedes any prior requests I have made with respect to such Plan, and
applies to amounts deferred in the past under the Plan as well as to future
deferrals. I hereby agree to assume all risks in connection with the
investment performance of the amounts which are invested in accordance with this
election.
Percentage
Invested Investment Option
-------- -----------------
90-DAY TREASURY BILLS ACCOUNT
----------
MONEY MARKET FUND
----------
U.S. GOVERNMENT MONEY MARKET FUND
----------
U.S. TREASURY MONEY MARKET FUND
----------
TAX-EXEMPT MONEY MARKET FUND
----------
SHORT-TERM BOND MARKET FUND
----------
INTERMEDIATE BOND MARKET FUND
----------
BOND IMMDEX/TM FUND
----------
TAX-EXEMPT INTERMEDIATE BOND FUND
----------
BALANCED FUND
----------
GROWTH AND INCOME FUND
----------
EQUITY INDEX FUND
----------
MIDCORE GROWTH FUND
----------
SPECIAL GROWTH FUND
----------
INTERNATIONAL EQUITY FUND
----------
100%
==========
DATED: , 19
--------------------- -- ------------------------
Director
Exhibit (7)
PORTICO FUNDS, INC.
DEFERRED COMPENSATION AGREEMENT
This Agreement is entered into this day of , 19 , between
---- ----------- --
Portico Funds, Inc. (the "Company") (consisting of the Balanced Fund, Growth and
Income Fund, Equity Index Fund, MidCore Growth Fund, Special Growth Fund,
International Equity Fund, Tax-Exempt Intermediate Bond Fund, Short-Term Bond
Market Fund, Intermediate Bond Market Fund, Bond IMMDEX/TM Fund, Money Market
Fund, Institutional Money Market Fund, U.S. Treasury Money Market Fund, U.S.
Government Money Market Fund, and Tax-Exempt Money Market Fund and any other
investment portfolio which may be established by the Company in the future (each
a "Portfolio" and collectively, the "Portfolios")), and
----------------------
(the "Director").
WHEREAS, the Director will be rendering valuable services to the Company as a
member of the Board of Directors (the "Board"), and the Company is willing to
accommodate the Director's desire to be compensated for such services on a
deferred basis;
NOW, THEREFORE, the parties hereto agree as follows:
1. With respect to services performed by the Director for the Company on and
after , 19 , the Director shall defer % of the amounts
------------- -- ----
otherwise payable to the Director for serving as a Director. The deferred
compensation shall be credited to a book reserve maintained by the Company
in the Director's name together with credited amounts in the nature of
income, gains, and losses (the "Account(s)"). Any Account maintained for
the Director shall be paid to the Director on a deferred basis in
accordance with the terms of this Agreement.
2. The Company shall credit the Director's Account as of the day such amount
would have been paid to the Director if this Agreement were not in effect.
Such Account shall be valued at fair market value as of the last day of the
calendar year and such other dates as are necessary for the proper
administration of this Agreement, and the Director shall receive a written
accounting of his Account balance(s) following such valuation.
The Director may request that all or a portion of the amount in his Account
be allocated among one or more of the investment options offered by the
Board under the Portico Funds, Inc. Deferred Compensation Plan (the
"Plan"). The initial allocation request may be made at the time of
enrollment. Once made, an investment allocation request shall remain in
effect for all future amounts allocated to the Director's Account until
changed by the Director. The Director may change his investment allocation
for past deferrals and future deferrals by submitting a written request to
the Treasurer of the Company (the "Treasurer") (or his delegate) on such
form as may be required by the Treasurer or by telephoning the Treasurer
(or his delegate). Such changes shall become effective as soon as
administratively feasible after the Treasurer (or his delegate) receives
such request. Although the Company intends to invest the amounts in the
Director's Account according to the Director's requests, the Company
reserves the right to invest the amounts in the Director's Account without
regard to such requests.
The Director agrees on behalf of the Director and any designated
beneficiary to assume all risks in connection with the investment
performance of any amounts which are invested or which continue to be
invested in accordance with the investment directions of the Director.
Title to and beneficial ownership of any assets, whether cash or
investments, which the Company may use to pay benefits hereunder, shall at
all times remain in the Company, and the Director and any designated
beneficiary shall not have any property interest whatsoever in any specific
assets of the Company.
3. As of January 31, , or if earlier, as of January 31 of the calendar
----
year following the calendar year the Director dies, retires, resigns,
becomes disabled or otherwise ceases to be a member of the Board, the
Company (subject to the terms of the Plan) shall: (check one)
pay the Director (or his beneficiary) a single-sum amount equal to the
balance in the Director's Account on that date; or
commence making annual payments to the Director (or his beneficiary) for
a period of (two through 15) years.
--
If the second box is selected, such payments shall be made on January 31st
of each year in approximately equal annual installments as adjusted and
computed by the Company in accordance with the terms of the Plan, with the
final payment equalling the then remaining balance in the Director's
Account.
The Director may elect in writing to have distribution of his Account occur
in a lump sum, or commence in installments, on a January 31, earlier than
the one listed above. However, if such an election is made, the Director
will forfeit 6% of his Account balance as of the new date elected for
commencement of payments.
4. In the event that the Director dies before payments have commenced or been
completed under Section 3, the Company shall make payment in accordance
with Section 3 to the Director's designated beneficiary, whose name and
address are
--------------------------------------
--------------------------------------
If there is no beneficiary designation in effect at the Director's death or
the designated beneficiary is dead at the Director's death, any amounts in
the Director's Account shall be paid in a single sum to the Director's
estate. If the designated beneficiary dies after beginning to receive
installment payments, any amounts payable from the Director's Account shall
be paid in a single sum to the beneficiary's estate at the beneficiary's
death.
5. This Agreement shall remain in effect with respect to the Director's
compensation for services performed as a Director of the Company in all
future years unless terminated on a prospective basis in accordance with
the terms of the Plan. The Director may subsequently elect to defer his
compensation by executing a new Deferred Compensation Agreement. If a new
Agreement is entered into which changes the date of receipt of deferred
amounts, a new Director's Account will be established for purposes of
crediting deferrals, income, gains, and losses under the new Agreement.
Any new Agreement shall relate solely to compensation for services
performed after the new Agreement becomes effective and shall not alter the
terms of this Agreement with respect to the deferred payment of
compensation for services performed during any calendar year in which this
Agreement was in effect. Notwithstanding the foregoing, the Director may at
any time amend the beneficiary designation hereunder by written notice to
the Company.
6. This Agreement constitutes a mere promise by the Company to make benefit
payments in the future, and the right of any person to receive such
payments under this Agreement shall be no greater than the right of any
unsecured general creditor of the Company. The Company and Director intend
for this Agreement to be unfunded for tax purposes and for the purposes of
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
7. Any written notice to the Company referred to in this Agreement shall be
made by mailing or delivering such notice to the Company, c/o Portico Funds
Center, 615 East Michigan Street, P.O. Box 3011, Milwaukee, Wisconsin
53201-3011, to the attention of the Treasurer. Any written notice to the
Director referred to in this Agreement shall be made by delivery to the
Director in person or by mailing such notice to the Director at his last
known place of residence or business address.
8. This Agreement is subject to all of the terms contained in the Plan as
attached hereto and incorporated by reference herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
Portico Funds, Inc.
By
---------------------------
, Director
---------------------
(Signature of Director)
Exhibit (8)(a)
CUSTODIAN AGREEMENT
This contract between Elan Funds, Inc., a Wisconsin corporation,
hereinafter called "Elan Funds" and First Wisconsin Trust Company, a Wisconsin
corporation, hereinafter called the "Custodian," is entered into as of this 29th
day of July, 1988.
WITNESSETH:
WHEREAS, Elan Funds is authorized to issue shares of Common Stock in
separate classes representing interests in separate portfolios of securities and
other assets; and
WHEREAS, Elan Funds intends to offer Shares representing interests in
seven portfolios, the Money Market Fund, U.S. Government Money Market Fund, Tax-
Exempt Money Market Fund, Income Equity Fund, Short-Intermediate Bond Fund, Bond
Index Fund and Growth Equity Fund (such portfolios together with any other
portfolios subsequently established by Elan Funds and made subject to this
contract in accordance with paragraph 16 hereof, being herein referred to
collectively as the "Funds" and individually as a "Fund").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Definitions
The word "securities" as used herein include stocks, shares, bonds,
debentures, notes, mortgages, or other obligations and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets, including, without limitation,
all income and proceeds in respect thereof.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of Elan Funds by any two of the
President, a Vice President, the Secretary and the Treasurer of Elan Funds, or
by any other person duly authorized to sign by the Board of Directors of Elan
Funds, as set forth from time to time in the certificate described in Section 2
hereof.
2. Names, Titles and Signatures of Elan Funds' Officers
An officer of Elan Funds will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof and to give oral instructions hereunder, and the
names of the members of the Board of Directors, together with any changes which
may occur from time to time.
3. Appointment
Elan Funds hereby appoints Custodian to act as custodian of the
securities and moneys belonging to each of the Funds for the period and on the
terms set forth in this Agreement. Custodian accepts such appointment and
agrees to furnish the services herein set forth in return for the compensation
provided in paragraph 11 of this Agreement. Custodian agrees to comply with all
relevant provisions of the Investment Company Act of 1940 (the "1940 Act") and
applicable rules and regulations thereunder. In connection with said
appointment, Elan Funds will deliver or cause to be delivered to Custodian all
securities, other investments and moneys with respect to the Funds owned by
them, including cash received for the issuance of Shares, at any time during the
period of this Agreement.
4. Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or accounts
in the name of each Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of each Fund. Custodian shall make payments of cash to, or for
the account of, each Fund from such cash only (a) for the purchase of securities
and other investments for a Fund (including variable amount demand notes of
corporate borrowers held by the Custodian for the investment of monies held by
the Custodian in its capacity as fiduciary, agent and custodian) upon the
delivery of such securities and investments (or upon receipt of a copy of the
broker's or dealer's confirmation, the payee's invoice or comparable
confirmation with respect to such securities) to Custodian, registered in the
name of a Fund or of the nominee of Custodian referred to in Section 8 or in
proper form for transfer, (b) for the purchase or redemption of Shares of a Fund
upon delivery thereof to Elan Funds' transfer agent, (c) for the payment of
interest, dividends, taxes, investment adviser's fees, administrator's fees,
payments to Service Organizations (as defined in Elan Funds' prospectuses), or
other operating expenses (including, without limitation thereto, fees for legal,
accounting, auditing and custodian services and expenses for printing and
postage), (d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by a Fund and held by or to be
delivered to Custodian, or (e) for other proper corporate purposes certified by
resolution of the Board of Directors of Elan Funds. Before making any such
payment Custodian shall receive (and may rely upon) an officers' certificate
requesting such payment and stating that it is for a purpose permitted under the
terms of items (a), (b), (c) or (d) of this Subsection A, and also, in respect
of item (e), upon receipt of an officers' certificate specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose of Elan Funds, and naming the
person or persons to whom such payment is to be made; provided, however, that an
officers' certificate need not precede the disbursement of cash for the purpose
of purchasing a money market instrument (including investments in variable
amount demand notes held by the Custodian) if the President, a Vice President,
the Secretary or the Treasurer of a Fund or any other persons duly authorized by
the Board of Directors issues appropriate oral instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two business
days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of each Fund.
5. Receipt of Securities
Except for securities deposited in a securities depository or book-
entry system pursuant to Section 14, Custodian shall hold and physically
segregate in a separate account, identifiable at all times from those of any
other persons, firms or corporations, pursuant to the provisions hereof, all
securities and other investments received by it from or for the account of each
Fund. All such securities are to be held or disposed of by Custodian for, and
subject at all times to the instructions of, each Fund pursuant to the terms of
this Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities, except pursuant
to the direction of a Fund and only for the account of a Fund as set forth in
Section 6 of this Agreement. In no case may any Director, officer, employee or
agent of Elan Funds withdraw any securities upon his mere receipt.
6. Transfer, Exchange, Redelivery, etc. of Securities
Custodian agrees to transfer, exchange or deliver securities and other
investments held by it hereunder only (a) for sales of such securities and other
investments (including variable amount demand notes of corporate borrowers held
by the Custodian for the investment of monies held by the Custodian in its
capacity as fiduciary, agent and custodian) for the account of a Fund upon
receipt by Custodian of payment therefor, (b) when such securities are called,
redeemed or retired or otherwise become payable, (c) for examination by any
broker selling any such securities in accordance with "street delivery" custom,
(d) in exchange for, or upon conversion into, other securities alone or other
securities and cash whether pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment, or otherwise, (e) upon
conversion of such securities pursuant to their terms into other securities, (f)
upon exercise of subscription, purchase or other similar rights represented by
such securities, (g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities, (h) for the purpose of redeeming in kind
Shares of a Fund upon delivery thereof to Custodian, or (i) for other proper
purposes of Elan Funds. Before making any such transfer, exchange or delivery
pursuant to items (b), (c), (d), (e), (f), and (g), securities or cash
receivable in exchange therefor, or a written receipt therefor, shall have been
received by Custodian. In addition, before making such transfer, exchange or
delivery under this Section 6, Custodian shall receive (and may rely upon) an
officers' certificate requesting such transfer, exchange or delivery, and
stating that it is for a purpose permitted under the terms of items (a), (b),
(c), (d), (e), (f), (g) or (h) of this Section 6 and also, in respect of item
(i), upon receipt of an officers' certificate specifying the securities to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper purpose of Elan Funds, and naming the
person or persons to whom delivery of such securities shall be made; provided,
however, that an officers' certificate need not precede any such transfer,
exchange or delivery of a money market instrument (including investments in
variable amount demand notes held by the Custodian) if the President, a Vice
President, the Secretary or the Treasurer of Elan Funds or any other persons
duly authorized by the Board of Directors issues appropriate oral instructions
to Custodian and an appropriate officers' certificate is received by Custodian
within two business days thereafter.
7. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) collect and receive for the account of each Fund
all payments received in payment for Shares issued by that Fund; (b) upon
receipt of notice by Elan Funds' transfer agent stating that such transfer agent
is required to redeem Shares, pay the redemption proceeds therefor in accordance
with the Prospectus of each Fund; (c) endorse and deposit for collection, in the
name of Elan Funds, checks, drafts, or other orders for the payment of money on
the same day as received; (d) present for payment all coupons and other income
items held by it for the account of Fund(s) which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund(s); (e) collect interest, dividends and other payments, with notice
to the Fund(s), for the account of the Fund(s); (f) receive and hold for the
account of the Fund(s) all stock dividends, rights and similar securities issued
with respect to any securities held by it hereunder; (g) execute as agent on
behalf of the Fund(s) all necessary ownership certificate required by the
Internal Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any state now or hereafter in effect,
inserting the Funds' names on such certificates as the owners of the securities
covered thereby, to the extent it may lawfully do so; and (h) make cash
disbursements for the payment of advisory and administration fees, as well as
fees payable to Service Organizations (as defined in Elan Funds' prospectuses),
in accordance with the provisions of Elan Funds' agreements under which said
fees are payable.
8. Registration of Securities
Except as otherwise directed by an officers' certificate Custodian
shall register all securities and other investments, except such as are in
bearer form, in the name of the Fund involved or in the name of a registered
nominee of Custodian as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder or in any provision of any
subsequent Federal Tax law exempting such transaction from liability for stock
transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state.
Elan Funds shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities and other
investments which it may hold for the account of the Funds and which may from
time to time be registered in the name of the Funds.
9. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of a Fund, except in accordance
with the instructions contained in an officers' certificate. Custodian shall
deliver, or cause to be executed and delivered, to Elan Funds all notices,
proxies and proxy soliciting materials with relation to such securities, such
proxies to be executed by the registered holder of such securities (if
registered otherwise than in the name of a Fund), but without indicating the
manner in which such proxies are to be voted.
10. Transfer Tax and Other Disbursements
The Funds shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities and other investments made
hereunder, and for the other disbursements and expenses set forth in Exhibit A
attached hereto, as the same is modified from time to time upon the mutual
agreement of the parties.
Custodian shall execute and deliver such certificates in connection
with securities and other investments delivered to it or by it under this
Agreement as may be required under the provisions of the Internal Revenue Code
and any Regulations of the Treasury Department issued thereunder, or under the
laws of any state, to exempt from taxation any exemptable transfers and/or
deliveries of any such securities.
11. Concerning Custodian
Custodian shall be paid, for its services pursuant to this Agreement,
such compensation as may from time to time be agreed upon in writing between the
two parties. Until modified in writing such compensation shall be as set forth
in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board of Directors, and may rely on the genuineness of any such document which
it in good faith believes to have been validly executed.
Elan Funds agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct; provided, however, that Custodian shall only be indemnified
hereunder from assets of Elan Funds belonging to the Fund with respect to which
such taxes, charges, expenses, assessments, claims and liabilities were
incurred. Custodian is authorized to charge any account of the indemnifying Fund
for such items. In the event of any advance of cash for any purpose made by
Custodian resulting from orders or instructions of a Fund, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund with respect to which the same was
incurred shall be security therefor.
12. Reports by Custodian
Custodian shall furnish Elan Funds weekly with a statement summarizing
all transactions and entries for the account of each Fund. Custodian shall
furnish Elan Funds at the end of every month with a list of the portfolio
securities showing the aggregate cost of each issue. Custodian shall furnish
each Fund, at the close of Elan Funds' fiscal year, a list showing the cost of
the securities held by it for each Fund hereunder, adjusted for all commitments
confirmed by each Fund as of such close, certified by a duly authorized officer
of Custodian. The books and records of Custodian pertaining to its actions
under this Agreement shall be open to inspection and audit at reasonable times
by officers of, and of auditors and other agents employed by, Elan Funds.
13. Termination or Assignment
This Agreement may be terminated by Elan Funds, or by Custodian, on sixty
days' notice, given in writing and sent by registered mail to Custodian at P.O.
Box 2054, Milwaukee, Wisconsin 53201, or to Elan Funds, c/o Alps Securities,
Inc., 600 Seventeenth Street, Suite 1605 South, Denver, Colorado 80202, as the
case may be. Upon any termination of this Agreement, pending appointment of a
successor to Custodian or a vote of the shareholders of Elan Funds to dissolve
or to function without a custodian of its cash, securities and other property,
Custodian shall not deliver cash, securities or other property of Elan Funds to
it, but may deliver them to a bank or trust company in the City of Milwaukee of
its own selection, having an aggregate capital, surplus and undivided profits,
as shown by its last published report of not less than Two Million Dollars
($2,000,000) as a Custodian for Elan Funds to be held under terms similar to
those of this Agreement; provided, however, that Custodian shall not be required
to make any such delivery or payment with respect to a Fund until full payment
shall have been made by Elan Funds of all liabilities constituting a charge on
or against the properties then held by Custodian or on or against Custodian,
with respect to said Fund, and until full payment shall have been made to
Custodian with respect to said Fund of all its fees, compensation, costs and
expenses, subject to the provisions of Section 11 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
Elan Funds, authorized or approved by a resolution of its Board of Directors.
In the event that in connection with termination a successor to any of
the Custodian's duties or responsibilities hereunder is designated by Elan Funds
by written notice to the Custodian, the Custodian will promptly, upon such
termination and at the expense of Elan Funds, transfer to such successor all
books and records of the Elan Funds.
14. Deposits of Securities in Securities Depositories and Federal
Reserve/Treasury Book-Entry System
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency, securities depository or the
Federal Reserve/Treasury book-entry system for United States and federal
securities, provided, however, that Custodian and the central securities
clearing agency, securities depository or book-entry system meets all applicable
federal and state laws and regulations including, without limitation, Rule 17f-4
under the 1940 Act, and the Board of Directors of Elan Funds approves by
resolution the use of such central securities clearing agency, securities
depository or book-entry system.
15. Subcustodians
Custodian is hereby authorized to engage, at its own expense, another
bank or trust company as a subcustodian for all or any part of a Fund's assets,
so long as any such bank or trust company is a bank or trust company organized
under the laws of any state of the United States or under the laws of the United
States having an aggregate capital, surplus and undivided profits, as shown by
its last published report, of not less than Two Million Dollars ($2,000,000) and
provided further that, if the Custodian utilizes the services of a subcustodian,
the Custodian shall remain responsible for the performance of all its duties
under this Agreement and shall be as fully liable and responsible under the
terms of this Agreement for any losses caused to a Fund by the subcustodian as
it would have been if the Custodian had itself caused such losses.
16. Additional Portfolios
In the event that Elan Funds establishes one or more portfolios of
shares in addition to the Funds with respect to which it desires to have the
Custodian render services as Custodian under the terms hereof, it shall notify
the Custodian in writing, and if the Custodian agrees in writing to provide such
services, such portfolio will become a Fund hereunder, and shall be maintained
and accounted for by the Custodian on a discrete basis.
17. Records
Custodian shall keep and maintain appropriate books and records for
each Fund with respect to its duties hereunder. The books and records
pertaining to the Funds which are in the possession of Custodian shall be the
property of Elan Funds. Such books and records shall be prepared and maintained
as required by the 1940 Act and other applicable securities laws and rules and
regulations. Upon the reasonable request of Elan Funds, copies of any such
books and records shall be provided by Custodian to Elan Funds or its authorized
representatives at Elan Funds' expense.
18. Correspondence
Custodian will answer correspondence from securities brokers and
others relating to its duties hereunder and such other correspondence as may
from to time be mutually agreed upon between Custodian and Elan Funds.
19. Cooperation With Accountants
Custodian shall cooperate with Elan Funds' independent public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their unqualified
opinion, as such may be required by Elan Funds from time to time.
20. Equipment Failures
In the event of equipment failures beyond Custodian's control,
Custodian shall, at no additional expense to Elan Funds, take reasonable steps
to minimize service interruptions but shall have no liability with respect
thereto. Custodian shall enter into and maintain in effect with appropriate
parties one or more agreements making reasonable provision for emergency use of
electronic data processing equipment to the extent appropriate equipment is
available.
21. Amendment
This Agreement may be amended by mutual written consent of the
parties. If, at any time during the existence of this Agreement, Elan Funds
deems it necessary or advisable in the best interests of Elan Funds that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or state regulatory
agencies or other governmental authority, or to obtain any advantage under state
or federal laws, and shall notify Custodian of the form of amendment which is
deemed necessary or advisable and the reasons therefor, and if Custodian
declines to assent to such amendment, Elan Funds may terminate this Agreement
forthwith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective seals to be affixed hereto as of the date first
above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
(SEAL)
Attest: FIRST WISCONSIN TRUST COMPANY
/s/ Andrea Lydolph By /s/ James D. Hintz
Assistant Secretary Vice President
(SEAL)
Attest: ELAN FUNDS, INC.
/s/ W. Bruce McConnel, III By /s/ James M. Wade
Secretary President
Exhibit A
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE
Annual Fee per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000
$ .50 per $1,000 on the next $5,000,000
$ .25 per $1,000 on the next $40,000,000
$ .20 per $1,000 on the balance
Minimum Annual Fee $900 per Fund
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt, delivery
$17.00 per Book Entry Securities (Depository or Federal System)
$25.00 per Definitive Securities (Physical)
$75.00 per Euroclear
$ 8.00 per Principal reduction on pass-through certificates
$35.00 per Option/Futures Contract
$12.00 per variation margin transaction
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged to the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(b)
CUSTODIAN AGREEMENT
(Equity Index Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated July 29, 1988
that you and we have entered into, we are writing to request that you render
custodial services under the terms of said agreement with respect to the Equity
Index Fund, an additional portfolio which we are establishing. Your
compensation for the services provided under said agreement for said additional
portfolio shall be determined in accordance with Exhibit A of said agreement.
Please sign two copies of this letter where indicated to signify your agreement
to provide said services.
Sincerely,
Dated: December 28, 1989 PORTICO FUNDS, INC.
(formerly Elan Funds, Inc.)
By: /s/ James M. Wade
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz Dated: December 28, 1989
Title: Vice President
/s/ Gene E. Plegen
Assistant Secretary
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE
PORTICO FUNDS
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000
$ .50 per $1,000 on the next $5,000,000
$ .25 per $1,000 on the next $40,000,000
$ .20 per $1,000 on the next $250,000,000
$ .15 per $1,000 on the balance
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt, delivery.
$17.00 per Book Entry Securities (Depository or Federal Reserve System)
$25.00 per Definitive Securities (Physical)
$75.00 per Euroclear
$ 8.00 per Principal reduction on pass-through certificates
$35.00 per Option/Futures Contract
$12.00 per variation margin transaction
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged to the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(c)
CUSTODIAN AGREEMENT
(All Funds)
(Revised Fee Schedule)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated July 29, 1988
that you and we have entered into, we are writing to obtain your written
approval of the revised fee schedule attached hereto for your services under
said agreement with respect to the Money Market Fund, U.S. Government Money
Market Fund, Tax-Exempt Money Market Fund, Short-Intermediate Fixed Income and
Growth Fund, Equity Index Fund, Bond IMMDEX/TM Fund and Special Growth Fund.
Please sign two copies of this letter where indicted to signify your
agreement to the compensation terms set forth on the attached fee schedule,
which terms are to become effective as of the date set forth below.
Sincerely,
Dated as of February 23, 1990 PORTICO FUNDS, INC.
(formerly Elan Funds, Inc.)
By: /s/ W. Alexander
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ James Hintz Dated as of February 23, 1990
Title:Vice President
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE
PORTICO FUNDS
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000
$ .50 per $1,000 on the next $5,000,000
$ .25 per $1,000 on the next $40,000,000
$ .20 per $1,000 on the next $250,000,000
$ .15 per $1,000 on the balance
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt, delivery.
$17.00 per Book Entry Securities (Depository or Federal Reserve System)
$25.00 per Definitive Securities (Physical)
$75.00 per Euroclear
$ 8.00 per Principal reduction on pass-through certificates
$35.00 per Option/Futures Contract
$12.00 per variation margin transaction
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged to the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(d)
AMENDMENT TO
CUSTODIAN AGREEMENT
PORTICO FUNDS, INC. (formerly, Elan Funds, Inc.), a Wisconsin
corporation, and FIRST WISCONSIN TRUST COMPANY, parties to a Custodian Agreement
dated July 29, 1988, hereby amend and restate the first sentence of Section 13
of such Agreement in its entirety as follows:
This Agreement may be terminated by Portico Funds, or by Custodian, on
sixty days' notice, given in writing and sent by registered mail to
Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to Portico
Funds, c/o Sunstone Financial Group, Inc., 207 E. Buffalo Street, Suite
315, Milwaukee, Wisconsin 53202, or at such other address as one party may
provide to the other in writing, as the case may be.
IN WITNESS WHEREOF, the parties have executed this Amendment as of May
1, 1990.
PORTICO FUNDS, INC.
By:/s/ James M. Wade
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz
(Authorized Officer)
Exhibit (8)(e)
CUSTODIAN AGREEMENT
(Addition of Institutional Money Market Fund and
U.S. Federal Money Market Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July 29,
1988 and amended as of May 1, 1990, between you and Portico Funds Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the Institutional Money Market Fund and U.S. Federal Money Market Fund,
additional portfolios which the Company is establishing. Your compensation for
the services provided under said agreement for said additional portfolios shall
be determined in accordance with the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: April 19, 1991 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz Dated: April 19, 1991
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE FOR
Institutional Money Market Fund
U.S. Federal Money Market Fund
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000,
$ .50 per $1,000 on the next $5,000,000,
$ .25 per $1,000 on the next $40,000,000,
$ .20 per $1,000 on the next $250,000,000, and
$ .15 per $1,000 on the balance.
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt and delivery.
$17.00 per Book Entry Securities (Depository or Federal
Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(f)
CUSTODIAN AGREEMENT
(Addition of Balanced Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July
29, 1988 and amended as of May 1, 1990, between you and Portico Funds Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the Balanced Fund, an additional portfolio which the Company is establishing.
Your compensation for the services provided under said agreement for said
additional portfolio shall be determined in accordance with the fee schedule
attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: March 27, 1992 PORTICO FUNDS, INC.
By: /s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/[signature illegible] Dated: March 27, 1992
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE FOR
Balanced Fund
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000,
$ .50 per $1,000 on the next $5,000,000,
$ .25 per $1,000 on the next $40,000,000,
$ .20 per $1,000 on the next $250,000,000, and
$ .15 per $1,000 on the balance.
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt and delivery.
$17.00 per Book Entry Securities (Depository or Federal
Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(g)
CUSTODIAN AGREEMENT
(Addition of MidCore Growth Fund and
Intermediate Bond Market Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July 29,
1988 and amended as of May 1, 1990, between you and Portico Funds Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the MidCore Growth Fund and Intermediate Bond Market Fund, two additional
portfolios which the Company is establishing. Your compensation for the
services provided under said agreement for said additional portfolios shall be
determined in accordance with the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: December 27, 1992 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ [signature illegible] Dated: December 27, 1992
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE FOR
MidCore Growth Fund and
Intermediate Bond Market Fund
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000,
$ .50 per $1,000 on the next $5,000,000,
$ .25 per $1,000 on the next $40,000,000,
$ .20 per $1,000 on the next $250,000,000, and
$ .15 per $1,000 on the balance.
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt and delivery.
$17.00 per Book Entry Securities (Depository or Federal
Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(h)
CUSTODIAN AGREEMENT
(Addition of Tax-Exempt Intermediate Bond Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July 29,
1988 and amended as of May 1, 1990, between you and Portico Funds Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the Tax-Exempt Intermediate Bond Fund, an additional portfolio which the Company
is establishing. Your compensation for the services provided under said
agreement for said additional portfolio shall be determined in accordance with
the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: PORTICO FUNDS, INC.
February 5, 1993
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ [signture illegible] Dated: February 5, 1993
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE FOR
Tax-Exempt Intermediate Bond Fund
Annual Fee Per Fund based on market value of assets:
$1.00 per $1,000 on the first $5,000,000,
$ .50 per $1,000 on the next $5,000,000,
$ .25 per $1,000 on the next $40,000,000,
$ .20 per $1,000 on the next $250,000,000, and
$ .15 per $1,000 on the balance.
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt and delivery.
$17.00 per Book Entry Securities (Depository or Federal
Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(j)
CUSTODIAN AGREEMENT
(Addition of the MicroCap Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July
29, 1988 and amended as of May 1, 1990, between you and Portico Funds, Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the MicroCap Fund, an additional portfolio which the Company is establishing.
Your compensation for the services provided under said agreement for said
additional portfolio shall be determined in accordance with the fee schedule
attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: August 1, 1995 PORTICO FUNDS, INC.
By: /s/ Mary Ellen Stanek
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ James C. Tyler Dated:August 1, 1995
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE FOR
MicroCap Fund
Annual Fee Per Fund based on market value of assets:
$ .20 per $1,000 on the market value of the Fund's assets
Investment Transactions: Purchase, sale, exchange, tender, redemption
(maturity), receipt and delivery.
$12.00 per Book Entry Securities (Depository or Federal
Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (8)(k)
CUSTODIAN AGREEMENT
(Addition of the Balanced Income Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 16 of the Custodian Agreement dated as of July 29,
1988 and amended as of May 1, 1990, between you and Portico Funds, Inc.
(formerly, Elan Funds, Inc.) (the "Company"), the Company requests that you
render services as Custodian under the terms of said agreement with respect to
the Balanced Income Fund, an additional portfolio which the Company is
establishing. Your compensation for the services provided under said agreement
for said additional portfolio shall be determined in accordance with the fee
schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to serve as Custodian and to the compensation terms set forth on the
attached fee schedule.
Sincerely,
Dated: , 1995 PORTICO FUNDS, INC.
---------------
By:
----------------------
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By: Dated:
----------------------- -------------------
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL
AGENT SERVICE ANNUAL FEE SCHEDULE
FOR
Balanced Income Fund
Annual Fee Per Fund based on market value of assets:
$ .20 per $1,000 on the market value of the Fund's assets
Investment Transactions: Purchase, sale, exchange, tender,
redemption (maturity), receipt and delivery.
$12.00 per Book Entry Securities (Depository or Federal Reserve System).
$25.00 per Definitive Securities (Physical).
$75.00 per Euroclear.
$ 8.00 per Principal reduction on pass-through certificates.
$35.00 per Option/Futures Contract.
$12.00 per variation margin transaction.
Extraordinary expenses based on time and complexity involved.
Out-of-Pocket Expenses: Charged on the account.
Fees are billed quarterly based on the value at the beginning of the quarter.
Exhibit (9)(a)
CO-ADMINISTRATION AGREEMENT
January 1, 1995
B.C. Ziegler and Company
215 North Main Street
West Bend, Wisconsin 53095
Firstar Trust Company
P.O. Box 2054
Milwaukee, Wisconsin 53201
Ladies and Gentlemen:
Portico Funds, Inc., a Wisconsin corporation ("Portico Funds"), herewith
confirms its agreement with B.C. Ziegler and Company, a Wisconsin corporation
("BCZ"), and Firstar Trust Company, a Wisconsin corporation ("Firstar") (each a
"CoAdministrator" and collectively, the "Co-Administrators"), as follows:
Portico Funds desires to employ the capital of its Money Market Fund, Tax-
Exempt Money Market Fund, Growth and Income Fund, Short-Term Bond Market Fund,
Bond IMMDEX/TM Fund, Special Growth Fund, U.S. Government Money Market Fund,
Equity Index Fund, Institutional Money Market Fund, U.S. Treasury Money Market
Fund, Balanced Fund, MidCore Growth Fund, Intermediate Bond Market Fund, Tax-
Exempt Intermediate Bond Fund, International Equity Fund and any other Portico
Funds that may be contemplated (the "Funds") by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
in the Funds' Prospectuses and Statements of Additional Information as from time
to time in effect, copies of which have been or will be submitted to the Co-
Administrators, and resolutions of Portico Funds' Board of Directors. Portico
Funds desires to employ the Co-Administrators as its co-administrators for the
Funds, and the Co-Administrators desire to be employed in such capacity.
1. Services as Co-Administrators
Subject to the direction and control of the Board of Directors of Portico
Funds, the Co-Administrators will provide the following administration services:
a. Services to be Provided Jointly. The following
services will be provided jointly by the Co-Administrators:
(1) assist in maintaining office facilities (which may be in the
offices of either Co-Administrator or a corporate affiliate but shall be in such
location as Portico Funds shall reasonably determine);
(2) furnish clerical services and stationery and office supplies;
(3) monitor Portico Funds' arrangements with respect to services
provided by institutions ("Shareholder Organizations") to their customers, who
are the beneficial owners of shares of the Funds, pursuant to agreements between
Portico Funds and such Shareholder Organizations including, among other things,
reviewing the qualifications of Shareholder Organizations wishing to enter into
agreements, with Portico Funds assisting in the execution and delivery of such
agreements, reporting to the Board of Directors with respect to the amounts paid
or payable by Portico Funds from time to time under the agreements and the
nature of the services provided by Shareholder Organizations, and maintaining
appropriate records in connection with its monitoring duties; and
(4) generally assist in the Funds' operations.
b. Services to be Provided by BCZ. The following services shall be
provided by BCZ:
(1) review and comment upon the registration statement and amendments
thereto prepared by Firstar or counsel to Portico Funds, as requested by
Firstar;
(2) review and comment upon sales literature and advertising relating
to Portico Funds;
(3) assist in the administration of the marketing budget at the
direction of Firstar as may be agreeable to BCZ;
(4) periodically review Blue Sky registration and sales reports for
the Funds, as requested;
(5) attend meetings of the Board of Directors, as requested by the
Board of Directors of the Funds; and
(6) such other services as may be requested in writing and expressly
agreed to by BCZ.
c. Services to be Provided by Firstar. The following services shall be
provided by Firstar:
(1) compile data for and prepare with respect to the Funds timely
Notices to the Securities and Exchange Commission required pursuant to Rule 24f-
2 under the Investment Company Act of 1940 (the "1940 Act") and Semi-Annual
Reports on Form N-SAR;
(2) coordinate execution and filing by Portico Funds of all federal
and state tax returns and required tax filings other than those required to be
made by Portico Funds' custodian and transfer agent;
(3) prepare compliance filings and Blue Sky registrations pursuant to
state securities laws with the advice of Portico Funds' counsel;
(4) assist to the extent requested by Portico Funds with Portico
Funds' preparation of Annual and Semi-Annual Reports to Fund shareholders and
Registration Statements for the Funds (on Form N-1A or any replacement
therefor);
(5) monitor each Fund's expense accruals and cause all appropriate
expenses to be paid on proper authorization from each Fund;
(6) monitor each Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended from time to time;
(7) maintain each Fund's fidelity bond as required by the 1940 Act;
and
(8) monitor compliance with the policies and limitations of each Fund
as set forth in the Prospectuses, Statements of Additional Information, By-laws
and Articles of Incorporation.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Co-Administrators hereby agree that all records which they maintain for the
Funds are the property of Portico Funds and further agree to surrender promptly
to Portico Funds any of such records upon Portico Funds' request. The Co-
Administrators further agree to preserve for the periods prescribed by Rule 31a-
2 under the 1940 Act the records required to be maintained by Rule 31a-1 under
the 1940 Act.
2. Fees; Delegation; Expenses
In consideration of services rendered pursuant to this Agreement, Portico
Funds will pay the Co-Administrators jointly a fee, computed daily and payable
monthly, at the annual rate of .125% of the Funds' first $2 billion of average
aggregate daily net assets, plus 0.10% of the Funds' average aggregate daily net
assets in excess of $2 billion. Net asset value shall be computed in accordance
with the Funds' Prospectuses and resolutions of Portico Funds' Board of
Directors. The fee for the period from the day of the month this Agreement is
entered into until the end of that month shall be pro-rated according to the
proportion which such period bears to the full monthly period. Upon any
termination of this Agreement before the end of any month, the fee for such part
of a month shall be pro-rated according to the proportion which such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. Such fee as is attributable to each Fund shall
be a separate charge to such Fund and shall be the several (and not joint or
joint and several) obligation of each such Fund. The Co-Administrators may,
from time to time, agree upon and notify the Portico Funds in writing of the
manner in which the fees should be allocated and paid separately to the Co-
Administrators, and the Portico Funds shall comply with the terms of such
specific allocation and payment agreement.
The Co-Administrators will from time to time employ or associate with
themselves such person or persons as the CoAdministrators may believe to be
particularly fitted to assist them in the performance of this Agreement. Such
person or persons may be officers and employees who are employed by either of
the Co-Administrators and Portico Funds. The compensation of such person or
persons shall be paid by such Co-Administrator employing such persons and no
obligation shall be incurred on behalf of the Funds in such respect.
The Co-Administrators will bear all expenses in connection with the
performance of their respective services under this Agreement except as
otherwise provided herein. Other expenses to be incurred in the operation of
the Funds, including taxes, interest, brokerage fees and commissions, if any,
salaries and fees of officers and Directors, Securities and Exchange Commission
fees and state Blue Sky qualification fees, advisory and administration fees,
charges of custodians and transfer agents, dividend disbursing and accounting
services agents, distribution expenses, certain insurance premiums, outside
auditing and legal expenses, costs of maintenance of corporate existence,
typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders, costs of shareholder reports and meetings
and any extraordinary expenses, will be borne by the Funds.
3. Limitation of Liability
Neither Co-Administrator shall be liable for any error of judgment or
mistake of law or for any loss suffered by Portico Funds in connection with the
matters to which this Agreement relates, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
4. Term
This Agreement shall become effective as of the date hereof, unless sooner
terminated as provided herein, shall continue in effect with respect to each
Fund until February 28, 1996. Thereafter, if not terminated, this Agreement
shall continue automatically in effect as to a particular Fund for successive
annual periods, provided such continuance is specifically approved at least
annually (i) by Portico Funds' Board of Directors or (ii) by a vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
such Fund, and in either event the continuance is also approved by the majority
of Portico Funds' Directors who are not interested persons (as defined in the
1940 Act) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is
terminable, without penalty, by Portico Funds' Board of Directors, by vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of a
Fund, with respect to that Fund, or by either Co-Administrator, on not less than
sixty days' notice. This Agreement shall be governed by Wisconsin law.
5. Other Provisions
Portico Funds recognizes that from time to time directors, officers and
employees of either one of the CoAdministrators may serve as directors, officers
and employees of other corporations (including other investment companies), that
such other corporations may include the name of either one of the Co-
Administrators as part of their name and that either one of the Co-
Administrators or its affiliates may enter into investment advisory or other
agreements with such other corporations.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
PORTICO FUNDS, INC.
By/s/ J. M. Wade
Authorized Officer
Accepted:
B.C. ZIEGLER AND COMPANY
By:/s/ Robert J. Tuszynski
Authorized Officer
FIRSTAR TRUST COMPANY
By:/s/ Joseph L. Neuberger
Authorized Officer
Exhibit (9)(b)
ADDENDUM NO. 1 TO THE CO-ADMINISTRATION AGREEMENT
This Addendum, dated as of the 1st day of August, 1995, is entered into
among Portico Funds, Inc. (the "Company"), a Wisconsin corporation, Firstar
Trust Company, a Wisconsin corporation ("Firstar"), and B.C. Ziegler and
Company, a Wisconsin corporation ("BCZ").
WHEREAS, the Company, Firstar and BCZ have entered into a Co-Administration
Agreement dated as of January 1, 1995 (the "CoAdministration Agreement"),
pursuant to which the Company appointed Firstar and BCZ to provide certain co-
administrative services to the Company for its Money Market Fund, Tax-Exempt
Money Market Fund, Growth and Income Fund, Short-Term Bond Market Fund, Bond
IMMDEX/TM Fund, Special Growth Fund, U.S. Government Money Market Fund, Equity
Index Fund, Institutional Money Market Fund, U.S. Treasury Money Market Fund,
Balanced Fund, MidCore Growth Fund, Intermediate Bond Market Fund, Tax-Exempt
Intermediate Bond Fund, International Equity Fund and any other Portico Funds
that may be contemplated (collectively, the "Funds");
WHEREAS, the Company is establishing one additional investment portfolio to
be known as the MicroCap Fund and desires to retain Firstar and BCZ to act as
the co-administrators under the Co-Administration Agreement; and
WHEREAS, Firstar and BCZ are willing to serve as co-administrators for the
MicroCap Fund;
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints Firstar and BCZ to act as co-
administrators to the Company for the MicroCap Fund for the period and the terms
set forth herein and in the CoAdministration Agreement. Firstar and BCZ hereby
accept such appointment and agree to render the services set forth herein and in
the Co-Administration Agreement, for the compensation herein provided.
2. Compensation. For the services provided and the expenses assumed with
respect to the MicroCap Fund and the other Funds pursuant to the Co-
Administration Agreement and this Addendum, the Company will pay Firstar and
BCZ, and Firstar and BCZ will accept as full compensation therefor, a fee,
computed daily and payable monthly, at the annual rate of .125% of the Funds'
first $2 billion of average aggregate daily net assets, plus 0.10% of the Funds'
average aggregate daily net assets in excess of $2 billion. Such fee as is
attributable to the MicroCap Fund shall be a separate charge to such Fund and
shall be the obligation of the MicroCap Fund.
3. Miscellaneous. Except to the extent supplemented hereby, the Co-
Administration Agreement shall remain unchanged and in full force and effect and
is hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:/s/ Mary Ellen Stanek
Title:Vice President
FIRSTAR TRUST COMPANY
By:/s/ Joseph L. Neuberger
Title:Vice President
B.C. ZIEGLER AND COMPANY
By:/s/ Robert J. Tuszynski
Title:Vice President
Exhibit (9)(c)
ADDENDUM NO. 2 TO THE CO-ADMINISTRATION AGREEMENT
This Addendum, dated as of the day of , 1995, is entered into
--- ---------
among Portico Funds, Inc. (the "Company"), a Wisconsin corporation, Firstar
Trust Company, a Wisconsin corporation ("Firstar"), and B.C. Ziegler and
Company, a Wisconsin corporation ("BCZ").
WHEREAS, the Company, Firstar and BCZ have entered into a Co-Administration
Agreement dated as of January 1, 1995 and amended as of August 1, 1995 (the "Co-
Administration Agreement"), pursuant to which the Company appointed Firstar and
BCZ to provide certain co-administrative services to the Company for its Money
Market Fund, Tax-Exempt Money Market Fund, Growth and Income Fund, Short-Term
Bond Market Fund, Bond IMMDEXTM Fund, Special Growth Fund, U.S. Government Money
Market Fund, Equity Index Fund, Institutional Money Market Fund, U.S. Treasury
Money Market Fund, Balanced Fund, MidCore Growth Fund, Intermediate Bond Market
Fund, Tax-Exempt Intermediate Bond Fund, International Equity Fund, MicroCap
Fund and any other Portico Funds that may be contemplated (collectively, the
"Funds");
WHEREAS, the Company is establishing one additional investment portfolio to
be known as the Balanced Income Fund and desires to retain Firstar and BCZ to
act as the co-administrators under the Co-Administration Agreement; and
WHEREAS, Firstar and BCZ are willing to serve as co-administrators for the
Balanced Income Fund;
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment. The Company hereby appoints Firstar and BCZ to act as co-
administrators to the Company for the Balanced Income Fund for the period and
the terms set forth herein and in the Co-Administration Agreement. Firstar and
BCZ hereby accept such appointment and agree to render the services set forth
herein and in the Co-Administration Agreement, for the compensation herein
provided.
2. Compensation. For the services provided and the expenses assumed with
respect to the Balanced Income Fund and the other Funds pursuant to the Co-
Administration Agreement and this Addendum, the Company will pay Firstar and
BCZ, and Firstar and BCZ will accept as full compensation therefor, a fee,
computed daily and payable monthly, at the annual rate of .125% of the Funds'
first $2 billion of average aggregate daily net assets, plus 0.10% of the Funds'
average aggregate daily net assets in excess of $2 billion. Such fee as is
attributable to the Balanced Income Fund shall be a separate charge to such Fund
and shall be the obligation of the Balanced Income Fund.
3. Miscellaneous. Except to the extent supplemented hereby, the Co-
Administration Agreement shall remain unchanged and in full force and effect and
is hereby ratified and confirmed in all respects as supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the
date and year first above written.
PORTICO FUNDS, INC.
By:
-----------------------
Title:
---------------
FIRSTAR TRUST COMPANY
By:
-----------------------
Title:
---------------
B.C. ZIEGLER AND COMPANY
By:
-----------------------
Title:
---------------
Exhibit (9)(d)
FUND ACCOUNTING SERVICING AGREEMENT
This Contract between Elan Funds, Inc., a Wisconsin corporation, hereinafter
called the "Elan Funds," and First Wisconsin Trust Company, a Wisconsin
corporation, hereinafter called the "Trust Company," is entered into as of this
23rd day of March, 1988.
WHEREAS, Elan Funds is authorized to issue shares of Common Stock
("Shares") in separate classes representing interests in separate portfolios of
securities and other assets; and
WHEREAS, Elan Funds intends to initially offer Shares in two portfolios,
Elan Money Market Fund and Elan Tax-Exempt Money Market Fund (such Funds
together with any other portfolios subsequently established by Elan Funds and
made subject to this contract in accordance with Paragraph 4 hereof, being
herein referred to collectively as the "Funds" and individually as a "Fund");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Services. Elan Funds hereby appoints the Trust Company its agent to
perform the duties hereinafter set forth, and the Trust Company hereby accepts
such appointment. As Elan Funds's agent, the Trust Company agrees to provide
the following mutual fund accounting services to Elan Funds with respect to each
Fund:
A. Portfolio Accounting Services:
(1) Maintain, together with the investment manager, portfolio records on a
trade date basis using security trade information communicated from the
investment manager on a timely basis.
(2) For each valuation date, obtain prices from a pricing source approved
by the Board of Directors as well as prices that are otherwise readily
available to the Trust Company and apply those prices to the portfolio
positions. For those securities where market quotations are not
readily available, the Board of Directors shall approve, in good faith,
the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each valuation
date and calculate gross earnings on investments for the accounting
period.
(4) Determine gain/loss on security sales and identify them as to short-
short, short or long term status. Account for periodic distributions
of gain to shareholders and maintain undistributed gain or loss
balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual amounts as
directed by Elan Funds as to methodology, rate, or dollar amount.
(2) Account for Fund expenditures and maintain expense accrual balances at
the level of accounting detail specified by Elan Funds.
(3) Support periodic expense accrual review, i.e., comparison of actual
expense activity versus accrual amounts.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund Share purchases, sales, exchanges, transfers, dividend
reinvestments, and other Fund Share activity, for each of the Funds, as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by Elan Funds.
(3) Determine net investment income, exemptinterest income and capital
gains and losses (collectively, "earnings") for each of the Funds as of
each valuation date or other time prescribed in the prospectus and
statement of additional information (collectively, "Prospectus") of
each Fund. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income, exempt-
interest income and capital gain/loss balances as of each valuation
date.
(4) Maintain a general ledger for each ofthe Funds in the form defined by
Elan Funds and produce a set of financial statements as may be agreed
upon from time to time as of each valuation date.
(5) For each day a Fund is open as defined in its Prospectus, determine the
net asset value of said Fund according to the accounting policies and
procedures set forth in said Prospectus.
(6) Calculate per Share net asset value, per Share net earnings, and other
per Share amounts reflective of Fund operation at such time and in such
manner as required by the Prospectus of each Fund. Perform the
calculations using the number of Shares outstanding reported by the
transfer agent to be applicable at the time of calculation.
(7) Communicate, at an agreed upon time, the per Share price for each
valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of accounting
detail to support month-end ledger balances.
(9) Perform such duties as are assigned to Trust Company, including,
without limitation, the pricing of portfolio securities according to
market determinations, under the resolutions that are adopted by the
Board of Directors in accordance with Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act") with respect to those Funds using
the amortized cost or pennyrounding pricing methods.
D. Tax Accounting Services:
(1) Maintain tax accounting records for each Fund's investment portfolio so
as to support tax reporting required for IRS defined regulated
investment companies.
(2) Maintain, together with the investment manager, tax lot detail for said
investment portfolios.
(3) Calculate taxable gain/loss on security sales using the tax cost basis
defined for each Fund.
(4) Report the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Maintain accounting records to support compliance monitoring by Elan
Funds.
(2) Support reporting to regulatory bodies and support financial statement
preparation by making the Fund accounting records available to Elan
Funds, the Securities and Exchange Commission, and the outside
auditors.
(3) Maintain, keep and preserve each Fund's accounting records and books of
original entry according to the 1940 Act and regulations provided
thereunder.
2. Changes In Accounting Procedures. Any resolution
passed by the Board of Directors that affects accounting practices and
procedures under this Agreement shall be effective upon written receipt and
acceptance by the Trust Company.
3. Compensation. The Trust Company shall be compensated for providing the
above-referenced services in accordance with the Fee Schedule attached hereto as
Exhibit A.
4. Additional Portfolios. In the event that Elan Funds establishes one or
more portfolios in addition to the Funds with respect to which it desires to
have the Trust Company render accounting services under the terms hereof, it
shall so notify the Trust Company in writing, and if the Trust Company agrees in
writing to provide such services, such portfolios will become Funds hereunder.
5. Term of Agreement. This Agreement may be terminated by either party
upon giving sixty (60) days prior written notice to the other party. However,
this Agreement may be replaced or modified by a subsequent agreement between the
parties.
6. Duties in the Event of Termination. In the event that in connection
with termination a Successor to any of the Trust Company, duties or
responsibilities hereunder is designated by Elan Funds by written notice to the
Trust Company, the Trust Company will promptly, upon such termination and at the
expense of Elan Funds, transfer to such Successor all books, records,
correspondence and other data established or maintained by the Trust Company
under this Agreement in a form reasonably acceptable to Elan Funds (if such form
differs from the form in which the Trust Company has maintained the same, Elan
Funds shall pay any expenses associated with transferring the same to such
form), and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from the Trust Company's personnel in the
establishment of books, records and other data by such Successor.
7. Choice of Law. This contract shall be construed in accordance with the
laws of the State of Wisconsin.
8. Records. The books and records pertaining to the Funds which are In
the possession of Trust Company shall be the property of Elan Funds. Elan
Funds, or Elan Funds's authorized representatives, shall have access to such
books and records at all times during Trust Company's normal business hours, and
such books and records shall be surrendered to Elan Funds promptly upon request.
Upon the reasonable request of Elan Funds, copies of any such books and records
shall be provided by Trust Company to Elan Funds or Elan Funds's authorized
representative at Elan Funds's expense.
9. Cooperation With Accountants. Trust Company shall cooperate with Elan
Funds independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their unqualified opinion, including but not limited to the
opinion included in Elan Fund's semi-annual report on Form N-SAR.
10. Equipment Failures. In the event of equipment failures beyond Trust
Company's control, Trust Company shall, at no additional expense to Elan Funds,
take reasonable steps to minimize service interruptions but shall have no
liability with respect thereto. Trust Company shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing equipment
to the extent appropriate equipment is available.
11. Non-Assignability. Trust Company shall not assign or delegate its
duties under this Agreement to any other person without the prior written
consent of Elan Funds.
12. Amendment. This Agreement may be amended by mutual written consent of
the parties. If, at any time during the existence of this Agreement, Elan Funds
deems it necessary or advisable in the best interests of Elan Funds that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or state regulatory
agencies or other governmental authority, or to obtain any advantage under state
or federal laws, and shall notify Trust Company of the form of amendment which
is deemed necessary or advisable and the reasons therefor, and if Trust Company
declines to assent to such amendment, Elan Funds may terminate this Agreement
forthwith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective seals to be affixed hereto as of the date first
above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
(SEAL)
ATTEST: FIRST WISCONSIN TRUST COMPANY
/s/ Diane Bowen By /s/ James D. Hintz
Assistant Secretary Vice President
(SEAL)
ATTEST: ELAN FUNDS, INC.
/s/ W. Bruce McConnel, III By /s/ James M. Wade
Secretary President
Exhibit A
FUND VALUATION AND ACCOUNTING
FEE SCHEDULE
Portfolio Services
Annual Fee schedule per Fund based on market value of assets.
$20,000 on the first $40,000,000
1/100 of 1% (1 Basis Point) on the balance
$3.50 per month per asset in excess of 50 assets
Fees are billed monthly.
Exhibit (9)(e)
FUND ACCOUNTING SERVICING AGREEMENT
(Income Equity Fund, Short-Intermediate Bond Fund,
Bond Index Fund, Growth Equity Fund and
U.S Government Money Market Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, Wisconsin 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement
dated March 23, 1988 that you and we have entered into, we are writing to
request that you render accounting services under the terms of said agreement
with respect to the following additional portfolios which we are establishing:
Income Equity Fund, Short-Intermediate Bond Fund, Bond Index Fund, Growth Equity
Fund and U.S. Government Money Market Fund. Your compensation for the services
provided under said agreement for said additional portfolios, as well as for the
Money Market Fund and Tax-Exempt Money Market Fund, shall be determined in
accordance with the fee schedule attached hereto. Please sign two copies of this
letter where indicated to signify your agreement to provide said services and to
the compensation terms set forth on the attached fee schedule.
Sincerely,
Dated: July 29, 1988 ELAN FUNDS, INC.
By: /s/ W. R. Alexander
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ James M. Wade Dated: July 29, 1988
Title: Vice President
Exhibit A
FUND VALUATION AND ACCOUNTING FEE SCHEDULE FOR
Elan Money Market Fund
Elan Tax-Exempt Money Market Fund
Elan U.S. Government Money Market Fund
Portfolio Services
Annual fee schedule per Fund based on market value of assets.
$20,000 on the first $40,000,000
1/100 of 1% (1 basis point) on the balance
$3.50 per month per asset in excess of 50 assets
Fees are billed monthly.
FIRST WISCONSIN TRUST COMPANY
FUND VALUATION AND ACCOUNTING
FOR
ELAN FUNDS, INC
Income Equity Fund Growth Equity Fund
Short-Intermediate Bond Fund Bond Index Fund
Portfolio Services
Annual fee schedule per fund based on market value of assets.
$20,000.00 for first 40,000,000.00
2/100 of 1% (2 basis points) on the next $200,000,000.00
1/100 of 1% (1 basis point) on the balance
$3.50 per month per asset in excess of 50 assets
Fees are billed monthly.
Exhibit (9)(f)
FUND ACCOUNTING SERVICING AGREEMENT
(Equity Index Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render accounting services under the terms of said agreement with respect to
the Equity Index Fund, an additional portfolio we are establishing. Your
compensation for the services provided under said agreement for said additional
portfolio shall be determined in accordance with the fee schedule attached
hereto. Please sign two copies of this letter where indicated to signify your
agreement to provide said services and to the compensation terms set forth on
the attached fee schedule.
Sincerely,
Dated: December 28, 1989 PORTICO FUNDS, INC.
(formerly Elan Funds, Inc.)
By: /s/ James M. Wade
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ James Hintz Dated: December 28, 1989
Title: Vice President
/s/ Gene E. Plegen, Assistant Secretary
FIRST WISCONSIN TRUST COMPANY
FUND VALUATION AND ACCOUNTING FOR
PORTICO FUNDS, INC.
Equity Index Fund
Portfolio Services
Annual fee schedule for Equity Index Fund based on market value of assets.
$20,000.00 for first $40,000,000.00
2/100 of 1% (2 basis points) on the next $200,000,000.00
1/100 of 1% (1 basis point) on the balance.
$3.50 per month per asset in excess of 50 assets
Fees are billed monthly.
Exhibit (9)(g)
FUND ACCOUNTING SERVICING AGREEMENT
(Addition of Institutional Money Market Fund and
U.S Federal Money Market Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
as of March 23, 1988, between you and portico Funds Inc. (formerly, Elan Funds,
Inc.) (the "Company"), the Company requests that you render accounting services
under the terms of said agreement with respect to the Institutional Money Market
Fund and U.S. Federal Money Market Fund, additional portfolios the Company is
establishing. Your compensation for the services provided under said agreement
for said additional portfolios shall be determined in accordance with the fee
schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to provide said services and to the compensation terms set forth on
said fee schedule.
Sincerely,
Dated: April 19, 1991 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz Dated: April 19, 1991
(Authorized Officer)
FUND VALUATION AND ACCOUNTING FEE SCHEDULE
FOR
Institutional Money Market Fund
U.S. Federal Money Market Fund
Portfolio Services
Annual fee schedule per Fund based on market value of assets:
$20,000 on the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
Plus out-of-pocket expenses including pricing.
Fees are billed monthly.
Exhibit (9)(h)
FUND ACCOUNTING SERVICING AGREEMENT
(Addition of Balanced Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render accounting services under the terms of said agreement with respect to
the Balanced Fund, an additional portfolio we are establishing. Your
compensation for the services provided under said agreement for said additional
portfolio shall be determined in accordance with the fee schedule attached
hereto. Please sign two copies of this letter where indicated to signify your
agreement to provide said services and to the compensation terms set forth on
the attached fee schedule.
Sincerely,
Dated: March 27, 1992 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ Joe D. Redwine Dated: March 27, 1992
Title:Vice President
/s/ Andrea Lydolph, Assistant Secretary
FIRST WISCONSIN TRUST COMPANY
FUND VALUATION AND ACCOUNTING
FOR
PORTICO FUNDS, INC.
Balanced Fund
Portfolio Services
Annual fee schedule for Balanced Fund based on market value of assets.
$20,000.00 for first $40,000,000.00
1/100 of 1% (1 basis points) on the next $200,000,000.00
5/1000 of 1% (1/2 basis point) on the balance.
Out-of-Pocket Expenses: Charged on the Account.
Fees are billed monthly.
Exhibit (9)(i)
FUND ACCOUNTING SERVICING AGREEMENT
(Addition of MidCore Growth Fund and
Intermediate Bond Market Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render accounting services under the terms of said agreement with respect to
the Midcore Growth Fund and Intermediate Bond Market Fund, two additional
portfolios we are establishing. Your compensation for the services provided
under said agreement for said additional portfolios shall be determined in
accordance with the fee schedule attached hereto. Please sign two copies of
this letter where indicated to signify your agreement to provide said services
and to the compensation terms set forth on the attached fee schedule.
Sincerely,
Dated: December 27, 1992 PORTICO FUNDS, INC.
By: /s/ Miriam Allison
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ Joe D. Redwine Dated: December 27, 1992
Title:Vice President
/s/ Andrea Lydolph, Assistant Secretary
FIRSTAR TRUST COMPANY
FUND VALUATION AND ACCOUNTING FOR
PORTICO FUNDS, INC.
Mid-Core Growth Fund and Intermediate Bond Market Fund
Portfolio Services
Annual fee schedule for MidCore Growth Fund based on market value of assets.
$20,000.00 for first $40,000,000.00
1/100 of 1% (1 basis points) on the next $200,000,000.00
5/1000 of 1% (1/2 basis point) on the balance.
[$3.50 per month per asset in excess of 50 assets]
Out-of-Pocket Expenses: Charged on the Account.
Fees are billed monthly.
Annual fee schedule for Intermediate Bond Market Fund based on market value of
assets.
$20,000.00 for first $40,000,000.00
2/100 of 1% (2 basis points) on the next $100,000,000.00
1/100 of 1% (1 basis points) on the next $100,000,000.00
5/1000 of 1% (1/2 basis point) on the balance.
[$3.50 per month per asset in excess of 50 assets]
Out-of-Pocket Expenses: Charged on the Account.
Fees are billed monthly.
Exhibit (9)(k)
FUND ACCOUNTING SERVICING AGREEMENT
(Money Market Fund, Tax-Exempt Money Market Fund,
U.S. Government Money Market Fund and Equity Index Fund)
(Revised Fee Schedules)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 12 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to obtain your
written approval of the revised fee schedule attached hereto for your services
under said agreement with respect to the: (i) Money Market Fund, Tax-Exempt
Money Market Fund, U.S. Government Money Market Fund; and (ii) Equity Index
Fund.
Please sign two copies of this letter where indicated to signify your
agreement to the compensation terms set forth on the attached fee schedule,
which terms are to become effective as of the date set forth below.
Sincerely,
Dated as of February 23, 1990 PORTICO FUNDS, INC.
(formerly Elan Funds, Inc.)
By: /s/ W. Alexander
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ James Hintz Dated as of February 23, 1990
Title:Vice President
FUND VALUATION AND ACCOUNTING FEE SCHEDULE
For
Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Money Market Fund
PORTFOLIO SERVICES
Annual fee schedule per Fund based on market value of assets:
$20,000 on the first $40,000,000
1/100 of 1% (1 basis point) on the next $160,000,000
Plus out-of-pocket expenses including pricing<F107>.
Fees are billed monthly.
<F107>Pricing on the Governmental Fund will be waived through June 30, 1990
and on the Tax-Exempt Fund through December 31, 1990.
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
FUND VALUATION AND ACCOUNTING
ANNUAL FEE SCHEDULE
EQUITY INDEX FUND
PORTFOLIO SERVICES
- Annual fee per fund based on market value of assets:
$20,000 for first $40,000,000
1/100 of 1% (1 basis point) on next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
- Out-of-Pocket expenses, including pricing
- Fees are billed monthly
EXHIBIT (9)(l)
February 23, 1990
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SERVICES
FUND VALUATION AND ACCOUNTING
ANNUAL FEE SCHEDULE
EQUITY INDEX FUND
PORTFOLIO SERVICES
- - Annual fee for fund based on market value of assets:
$20,000 for first $40,000,000
1/100 of 1% (1 basis point) on next $200,000,000
5/1000 of 1% (< basis point) on the balance
- - Out-of Pocket expenses, including pricing
- - Fees are billed monthly
Exhibit (9)(m)
November 1, 1990
Portico Funds, Inc.
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202
Re: Portico Funds, Inc. - Fund Valuation and Accounting Services;
Revised Fee Schedule
Ladies and Gentlemen:
This letter constitutes our agreement, and supersedes any prior agreement,
with respect to compensation to be paid to First Wisconsin Trust Company ("First
Wisconsin") under the terms of a Fund Accounting Servicing Agreement dated March
23, 1988, between you (the "Company) and First Wisconsin, with respect to the
Equity Index Fund, Income and Growth Fund, Special Growth Fund, Short-
Intermediate Fixed Income Fund and Bond IMMDEX/TM Fund portfolios of the Company
-
(the "Portfolios"). Pursuant to Paragraph 12 of that Agreement, and in
consideration of the services to be provided to you, effective November 1, 1990
each Portfolio will pay First Wisconsin in accordance with the revised fee
schedule attached hereto as Exhibit A. The fee attributable to each Portfolio
shall be the several (and not joint or joint and several) obligation of each
such Portfolio.
If the foregoing accurately sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.
Very truly yours,
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz
Title: Vice President
ACCEPTED: PORTICO FUNDS, INC.
By: /s/ Miriam Allison
Title: Vice President
Date: November 1, 1990
EXHIBIT A
FIRST WISCONSIN TRUST COMPANY
FUND VALUATION AND ACCOUNTING FOR
PORTICO FUNDS, INC.
EQUITY INDEX FUND
INCOME & GROWTH FUND
SPECIAL GROWTH FUND
SHORT-INTERMEDIATE FIXED INCOME FUND
BOND IMMDEX/TMFUND
PORTFOLIO SERVICES - FIXED INCOME FUNDS
- - Annual fee per fund based on market value of assets:
$20,000 for first $40,000,000
2/100 of 1% (2 Basis Points) on the next $100,000,000
1/100 of 1% (1 Basis Point) on the next $100,000,000
5/1000 of 1% (1/2 Basis Point) on the balance
- - Out-of-Pocket Expenses including daily pricing service.
- - Fees are billed monthly
PORTFOLIO SERVICES - EQUITY/BALANCED FUNDS
- - Annual fee per fund based on market value of assets:
$20,000 for first $40,000,000
1/100 of 1% (1 Basis Point) on the next $200,000,000
5/1000 of 1% (1/2 Basis Point) on the balance
- - Out-of-Pocket Expenses including daily pricing services
- - Fees are billed monthly
Effective November 1, 1990
Exhibit (9)(n)
FUND ACCOUNTING SERVICING AGREEMENT
(Addition of MicroCap Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render accounting services under the terms of said agreement with respect to
the MicroCap Fund, one additional portfolio we are establishing. Your
compensation for the services provided under said agreement for said additional
portfolio shall be determined in accordance with the fee schedule attached
hereto. Please sign two copies of this letter where indicated to signify your
agreement to provide said services and to the compensation terms set forth on
the attached fee schedule.
Sincerely,
Dated: August 1, 1995 PORTICO FUNDS, INC.
By:/s/ Mary Ellen Stanek
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ James C. Tyler Dated: August 1, 1995
(Authorized Officer)
FIRSTAR TRUST COMPANY
FUND VALUATION AND ACCOUNTING
FOR
PORTICO FUNDS, INC.
MicroCap Fund
-------------
Portfolio Services
Annual fee schedule for MicroCap Fund based on market value of assets.
$27,500 for first $40,000,000.00
1.25/100 of 1% on the next $200,000,000.00
6.25/100 of 1% on the balance.
Out-of-Pocket Expenses: Charged on the Account.
Fees are billed monthly.
Exhibit (9)(o)
FUND ACCOUNTING SERVICING AGREEMENT
(Addition of Balanced Income Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 4 of the Fund Accounting Servicing Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render accounting services under the terms of said agreement with respect to
the Balanced Income Fund, one additional portfolio we are establishing. Your
compensation for the services provided under said agreement for said additional
portfolio shall be determined in accordance with the fee schedule attached
hereto. Please sign two copies of this letter where indicated to signify your
agreement to provide said services and to the compensation terms set forth on
the attached fee schedule.
Sincerely,
Dated: , 1995 PORTICO FUNDS, INC.
------------
By:
----------------------
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By: Dated: , 1995
-------------------------- ------------
(Authorized Officer)
FIRSTAR TRUST COMPANY
FUND VALUATION AND ACCOUNTING
FOR
PORTICO FUNDS, INC.
Balanced Income Fund
Portfolio Services
Annual fee schedule for Balanced Income Fund based on market value of assets.
$27,500 for first $40,000,000.00
1.25/100 of 1% on the next $200,000,000.00
6.25/100 of 1% on the balance.
Out-of-Pocket Expenses: Charged on the Account.
Fees are billed monthly.
Exhibit (9)(p)
SHAREHOLDER SERVICING AGENT AGREEMENT
This contract between Elan Funds, Inc., a Wisconsin corporation,
hereinafter called "Elan Funds," and First Wisconsin Trust Company, a Wisconsin
corporation, hereinafter called the "Agent," is entered into as of this 23rd day
of March, 1988.
WITNESSETH:
WHEREAS, Elan Funds is authorized to issue shares of Common Stock in
separate classes ("Shares") representing interests in separate portfolios of
securities and other assets; and
WHEREAS, Elan Funds intends to initially offer Shares in two
portfolios, Elan Money Market Fund and Elan Tax-Exempt Money Market Fund (such
portfolios together with any other portfolios subsequently established by Elan
Funds and made subject to this contract in accordance with paragraph 7 hereof,
being herein referred to collectively as the "Funds" and individually as a
"Fund");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Appointment. Elan Funds hereby appoints Agent to act as
Shareholder Servicing Agent for the Funds. Agent hereby accepts such
appointment and agrees to furnish the services herein set forth in accordance
with this Agreement and each Fund's Prospectus and Statement of Additional
Information (hereafter "Prospectus") in return for the compensation provided in
paragraph 5 of this Agreement. Agent hereby represents and warrants that it is,
and shall continue to be, duly registered as a transfer agent pursuant to
Section 17A of the Securities Exchange Act of 1934 and such other provisions of
law as required and shall continue to be so for the term of this Agreement.
Should Agent fail to be so registered as a transfer agent at any time during
this Agreement, Elan Funds may, on written notice to Agent, immediately
terminate this Agreement.
2. Authority of Agent. Agent is hereby authorized by Elan Funds to
receive all payments which may from time to time be delivered to it by or for
the account of each Fund; to issue confirmations and/or certificates for Shares
of each Fund upon receipt of payment; to redeem or repurchase on behalf of each
Fund Shares of each Fund upon receipt of certificates properly endorsed or
properly executed written or telephone requests as described in the Prospectus
of each Fund; and to act as dividend disbursing agent for the Funds.
3. Duties of the Agent. Agent hereby agrees to perform the following
duties in accordance with this Agreement and the Prospectus of each Fund:
A. Process new accounts.
B. Process purchases, both initial and subsequent.
C. Transfer Shares to an existing account or to a new account upon
receipt of required documentation in good order.
D. Redeem uncertificated and/or certificated Shares upon receipt of
required documentation in good order and disburse the redemption proceeds
therefor.
E. Issue and/or cancel certificates as in- structed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory indemnification or bond.
F. Distribute dividends and/or capital gain distributions. This includes
disbursements as cash or reinvestment and to change the disbursement option at
the request of shareholders.
G. Process exchanges between Funds (process and direct
purchase/redemption and initiate new account or process to existing account).
H. Make miscellaneous changes to records, including, but not necessarily
limited to, address changes and changes in plans (such as systematic withdrawal,
dividend reinvestment, etc.).
I. Prepare and mail a year-to-date confirmation and statement as each
transaction is recorded in a shareholder account.
J. Handle telephone calls and correspondence in reply to shareholder
requests except those items set forth in referrals to Elan Funds.
K. Provide reports to Elan Funds with respect to each Fund:
Daily - transaction journal with analysis of accounts.
Monthly - analysis of transactions and accounts by types.
Quarterly - state sales analysis; sales by size; analysis of
systematic withdrawals, Keogh, IRA and 403(b)(7) plans; printout
of shareholder balances.
L. Prepare a daily control and reconciliation of each Fund's Shares with
Agent's records and Elan Funds' office records.
M. Prepare address labels or confirmations for four reports to
shareholders per year.
N. Mail and tabulate proxies (and mail proxy solicitation materials) for
meetings of shareholders, including preparation of certified shareholder list
and daily report to Elan Funds' management, if required. All proxy related
expenses including stationery and postage shall be an "out-of-pocket" expense in
accordance with paragraph 5.
O. Prepare and mail annual Form 1099, Form W-2P and 5498 to shareholders
to whom dividends or distributions are paid, with a copy for the IRS, as well as
any other notices and information relating to exempt-interest dividends, capital
gains or other items required under the Internal Revenue Code of 1986, the
Investment Company Act of 1940 (the "1940 Act") or state law.
P. Provide readily obtainable data which may from time to time be
requested for audit purposes.
Q. Replace lost or destroyed checks.
R. Continuously maintain all records for active and closed accounts
during the current year.
S. Furnish shareholder data information for a current calendar year in
connection with IRA and Keogh Plans in a format suitable for mailing to
shareholders.
T. Withhold such sums as are required to be withheld under applicable
Federal and state income tax laws, rules and regulations.
U. Maintain registry records with respect to the Shares of each Fund in
usual form.
4.Referrals to Elan Funds. Agent hereby agrees to refer to Elan Funds'
distributor for reply the following:
A. Requests for investment information, including performance and
outlook.
B. Requests for information about specific plans: (such as IRA, Keogh,
Automatic Investment, Systematic Withdrawal).
C. Requests for information about exchanges between the Funds.
D. Requests for historical Fund prices.
E. Requests for information about the value and timing of dividend
payments.
F. Questions regarding correspondence from the Funds and newspaper
articles.
G. Any requests for information from non-shareholders.
5.Compensation to Agent. Agent shall be compensated for its services
hereunder as may from time to time be agreed upon in writing between the two
parties. Elan Funds will reimburse Agent for all out-of-pocket expenses,
including, but not necessarily limited to, postage, confirmation forms, proxy
handling, etc. Special projects, not included in the fee schedule and requested
by proper instructions from Elan Funds, shall be completed by Agent and invoiced
to the Funds as mutually agreed upon.
6.Rights and Powers of Agent. Agent's rights and powers with respect to
acting for and on behalf of Elan Funds, including rights and powers of Agent's
officers and directors, shall be as follows:
A. No order, direction, approval, contract or obligation on behalf of
Elan Funds with or in any way affecting Agent shall be deemed binding unless
made in the form of an "officers' certificate" as defined in the Custodian
Agreement of even date herewith between Elan Funds and First Wisconsin Trust
Company.
B. The services of Agent to Elan Funds are not to be deemed exclusive and
Agent shall be free to render similar services to others as long as its services
for others do not in any manner or way hinder, preclude or prevent Agent from
performing its duties and obligations under this Agreement.
C. Elan Funds will indemnify the Agent and hold it harmless from and
against all costs, losses, and expenses which may be incurred by it and all
claims and liabilities which may be asserted or assessed against it as a result
of any action taken by it without negligence and in good faith, and for any act,
omission, delay or refusal made by the Agent in connection with this agency in
reliance upon or in accordance with any instruction or advice of any duly
authorized officer of Elan Funds.
7.Additional Portfolios. In the event that Elan Funds establishes one or
more portfolios in addition to the Funds with respect to which it desires to
have the Agent render services as Shareholder Servicing Agent under the terms
hereof, it shall so notify the Agent in writing, and if the Agent agrees in
writing to provide such services, such portfolio will become a Fund hereunder.
8.Effective Date. This Agreement shall become effective as of the date
first above written.
9.Termination of Agreement. This Agreement shall continue in force an
effect until terminated as provided in this Agreement. Notwithstanding anything
herein to the contrary, this Agreement may be terminated at any time, without
payment of any penalty, by Elan Funds or Agent upon ninety (90) days' written
notice to the other party.
In the event that in connection with termination a successor to the
Agent is designated by Elan Funds by written notice to the Agent, the Agent will
promptly, upon such termination and at the expense of Elan Funds, transfer to
such successor a certified list of the shareholders of each Fund (with name,
address and tax identification or social security number), any historical record
of the account of each shareholder and the status thereof, and all other books,
records, correspondence and other data of Elan Funds established or maintained
by the Agent under this Agreement, in a form reasonably acceptable to Elan Funds
(if such form differs from the form in which the Agent has maintained the same,
Elan Funds shall pay any expenses associated with transferring the same to such
form), and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from the Agent's personnel in the
establishment of books, records and other data by such successor.
10. Amendment. This Agreement may be amended by mutual written consent of
the parties. If, at any time during the existence of this Agreement, Elan Funds
deems it necessary or advisable in the best interests of Elan Funds that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or state regulatory
agencies or other governmental authority, or to obtain any advantage under state
or federal laws, and shall notify Agent of the form of amendment which is deemed
necessary or advisable and the reasons therefor, and if Agent declines to assent
to such amendment, Elan Funds may terminate this Agreement forthwith.
11. Notice. Any notice that is required to be given by one party to each
other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid, in the case of Agent to Agent's principal place
of business, or in the case of Elan Funds to Elan Funds c/o ALPS Securities,
Inc., 600 Seventeenth Street, Suite 1605 South, Denver, Colorado 80202.
12. Records. The books and records pertaining to the Funds which are in
the possession of Agent shall be the property of Elan Funds. Such books and
records shall be prepared and maintained as required by the 1940 Act, as
amended, and other applicable securities laws and rules and regulations. Elan
Funds, or its authorized representatives, shall have access to such books and
records at all times during Agent's normal business hours, and such books and
records shall be surrendered to Elan Funds promptly upon request. Upon the
reasonable request of Elan Funds, copies of any such books and records shall be
provided by Agent to Elan Funds or its authorized representative at its expense.
13. Cooperation With Accountants. Agent shall cooperate with Elan Funds'
independent certified public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their unqualified opinion, including but not limited to the opinion included
in Elan Funds' semi-annual report on Form N-SAR.
14. Equipment Failures. In the event of equipment failures beyond Agent's
control, Agent shall, at no additional expense to Elan Funds, take reasonable
steps to minimize service interruptions but shall have no liability with respect
thereto. Agent shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provision for emergency use of
electronic data processing equipment to the extent appropriate equipment is
available.
15. Non-Assignability. Agent shall not assign or delegate its duties
under this Agreement to any other person without the prior written consent of
Elan Funds.
16. Insurance. Agent will provide the customary and normal fidelity
coverage available to transfer agents for investment companies. Agent will at
least annually furnish to Elan Funds a letter setting forth the insurance
coverage thereon, any changes in such coverage, and will notify Elan Funds
promptly of any claim relating to it and will deliver the same to Elan Funds.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective seals to seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
ELAN FUNDS, INC. FIRST WISCONSIN TRUST COMPANY
By: /s/ James M. Wade By: /s/ James D. Hintz
President Vice President
(SEAL) (SEAL)
Attest:/s/ W. Bruce McConnel, III Attest:/s/ Diane Bowen
Secretary Assistant Secretary
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
MONEY MARKET FUND
Fee Schedule
------------
Fund Characteristics: No Load Fund
Daily Dividend Automatically Reinvested Monthly
Telephone Exchange Option
Telephone Redemption Option
Check Writing
Automatic Investment Plan
Fee Schedule: $18.00 per Shareholder Account
$ 1.00 per Financial Transaction in Excess of 4 per
Year per Account
$ 7.50 per Wire Transfer
No Charge for Non-Financial Transactions
Fees to be Billed on a Monthly Basis
Plus, Out-of-Pocket Expenses Including, but not Limited to:
- Telephone
- Postage
- Programming
- Retention of Records
- Stationery/Envelopes
- Mailing
- Insurance
- Proxy Activities
- All Other Out-of-Pocket Expenses
Plus, with respect to Automatic Investment Plan:
$125.00 per monthly or bimonthly cycle for all funds in Group
$ 0.50 per Fund account set up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
Exhibit (9)(q)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Income Equity Fund, Short-Intermediate Bond Fund,
Bond Index Fund, Growth Equity Fund and
U.S. Government Money Market Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, Wisconsin 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated March 23, 1988 that you and we have entered into, we are writing to
request that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the following additional portfolios which we
are establishing: Income Equity Fund, Short-Intermediate Bond Fund, Bond Index
Fund, Growth Equity Fund and U.S. Government Money Market Fund. Your
compensation for the services provided as Shareholder Services Agent for said
additional portfolios, as well as for the Money Market Fund and Tax-Exempt Money
Market Fund, shall be determined in accordance with the fee schedule attached
hereto. Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Services Agent and to the compensation
terms set forth to said fee schedule.
Sincerely,
Dated: July 29, 1988 ELAN FUNDS, INC.
By: /s/ W. Alexander
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By: /s/ James D. Hintz Dated: July 29, 1988
Title: Vice President
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
Elan Money Market Fund
Elan Tax-Exempt Money Market Fund
Elan U.S. Government Money Market Fund
Fee Schedule
Fund Characteristics:
No Load Fund
Daily Dividend Automatically Reinvested Monthly
Telephone Exchange Option
Telephone Redemption Option
Check Writing
Automatic Investment Plan
Fee Schedule:
$18.00 per Shareholder Account
$ 1.00 per Financial Transaction in Excess of 4
per year per account
$ 7.50 per Wire Transfer
No Charge for Non-Financial Transactions.
Fees to be billed on a Monthly Basis.
Plus out-of-pocket expenses including, but not limited to:
- Telephone
- Postage
- Programming
- Retention of Records
- Stationery/Envelopes
- Mailing
- Insurance
- Proxy Activities
- All other out-of-pocket-expenses
Plus, with respect to Automatic Investment Plan:
$125.00 per monthly or bi-monthly cycle for
all funds in group
$ 0.50 per Fund account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
ELAN FUNDS, INC.
Income Equity Fund
Growth Equity Fund
Annual Fee Schedule
$10.00 per Shareholder Account on the first 20,000 Accounts
$ 9.50 per Shareholder Account on the next 40,000 Accounts
$ 9.00 per Shareholder Account on the next 40,000 Accounts
$ 8.50 per Shareholder Account on the balance
$ 5.00 per exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationary/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of-pocket expenses
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
ELAN FUNDS, INC.
Short-Intermediate Bond Fund
Bond Index Fund
Annual Fee Schedule
$12.00 per Shareholder Account on the first 20,000 Accounts
$11.50 per Shareholder Account on the next 80,000 Accounts
$11.00 per Shareholder Account on the balance.
$ 5.00 per exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of-pocket expenses
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
Exhibit (9)(r)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of Equity Index Fund and
Revised Fee Schedule)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement dated
March 23, 1988 that you and we have entered into, we are writing to request that
you render services as Shareholder Servicing Agent under the terms of said
agreement with respect to the Equity Index Fund, an additional portfolio we are
establishing.
In addition, we are writing to obtain your written approval of the revised
fee schedule attached hereto for your services as Shareholder Services Agent for
said additional portfolio, as well as for the Money Market Fund, Tax-Exempt
Money Market Fund, U.S. Government Money Market Fund, Income and Growth Fund
(formerly Income Equity Fund), Short-Intermediate Fixed Income Fund (formerly
Short-Intermediate Bond Fund), Special Growth Fund (formerly Growth Equity Fund)
and Bond IMMDEX/TMFund (formerly Bond Index Fund).
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Services Agent and to the compensation
terms set forth to said fee schedule, which terms are to become effective as of
the date set forth below.
Sincerely,
Dated: December 28, 1989 PORTICO FUNDS, INC.
(formerly Elan Funds, Inc.)
By:/s/ James M. Wade
Title: Vice President
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz Dated: December 28, 1989
Title:Vice President
/s/ Gene E. Plegen, Assistant Secretary
MUTUAL FUND SHAREHOLDER SERVICES FOR
PORTICO FUNDS, INC.
Money Market Fund Tax-Exempt Money Market Fund
U.S. Government Money Market Fund
Fee Schedule
Fund Characteristics:
No Load Fund
Daily Dividend Automatically Reinvested Monthly
Telephone Exchange Option
Telephone Redemption Option
Check Writing
Automatic Investment Plan
Fee Schedule:
$18.00 per Shareholder Account
$ 1.00 per Financial Transaction in Excess of 4 per year per account
$ 7.50 per Wire Transfer
No Charge for Non-Financial Transactions.
Fees to be billed on a Monthly Basis.
Plus out-of-pocket expenses including, but not limited to:
- Telephone
- Postage
- Programming
- Retention of Records
- Stationery/Envelopes
- Mailing
- Insurance
- Proxy Activities
- All other out-of-pocket expenses
Plus, with respect to Automatic investment Plan:
$125.00 per monthly or bimonthly cycle for all funds in group
$ 0.50 per Fund account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Income and Growth Fund
Special Growth Fund
Equity Index Fund
Annual Fee Schedule
$10.00 per Shareholder Account on the first 20,000 Accounts
$ 9.50 per Shareholder Account on the next 40,000 Accounts
$ 9.00 per Shareholder Account on the next 40,000 Accounts
$ 8.50 per Shareholder Account on the balance
$ 5.00 per exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Short-Intermediate Fixed Income Fund
Bond IMMDEX/TMFund
Annual Fee Schedule
$12.00 per Shareholder Account on the first 20,000 Accounts
$11.50 per Shareholder Account on the next 80,000 Accounts
$11.00 per Shareholder Account on the balance.
$ 5.00 per exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
FUNDS, INC.
(All Portfolios)
Charge for dedicated telephone representatives for Portico Funds, Inc. (to be
billed on a monthly basis):
$25,000 per year per representative
Exhibit (9)(s)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of Institutional Money Market Fund and
U.S. Federal Money Market Fund)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the Institutional Money Market Fund and U.S.
Federal Money Market Fund, additional portfolios the Company is establishing.
Your compensation for the services provided under said agreement for said
additional portfolios shall be determined in accordance with the fee schedule
attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent and to the compensation
terms set forth on the attached fee schedule.
Sincerely,
Dated: April 23, 1991 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz Dated: April 23, 1991
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Institutional Money Market Fund
U.S. Federal Money Market Fund
Fee Schedule
Fund Characteristics:
No Load Fund
Daily Dividend Automatically Reinvested Monthly
Telephone Exchange Option (not applicable with respect to the Institutional
Money Market Fund)
Telephone Redemption Option (not applicable with respect to the Institutional
Money Market Fund)
Check Writing (not applicable with respect to the Institutional Money Market
Fund)
Automatic Investment Plan (not applicable with respect to the Institutional
Money Market Fund)
Fee Schedule:
$500.00 Minimum Monthly charge (Institutional Money Market Fund)
$ 18.00 per Shareholder Account
$ 1.00 per Financial Transaction in Excess of 4 per year per account
$ 7.50 per Wire Transfer
No Charge for Non-Financial Transactions.
Fees to be billed on a Monthly Basis.
Plus out-of-pocket expenses including, but not limited to:
- Telephone
- Postage
- Programming
- Retention of Records
- Stationery/Envelopes
- Mailing
- Insurance
- Proxy Activities
- All other out-of-pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
Plus, with respect to Automatic Investment Plan:
$125.00 per monthly or bimonthly cycle for all funds in group
$ 0.50 per Fund account set-up and/or change
$ 0.35 per item on first 10,000 items
$ 0.25 per item on the next 15,000 items
$ 0.20 per item on the balance
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
(All Portfolios)
Charge for dedicated telephone representatives for Portico Funds, Inc. (to be
billed on a monthly basis):
$25,000 per year per representative
Exhibit (9)(t)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of Balanced Fund and
Revised Fee Schedules)
First Wisconsin Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the Balanced Fund, an additional portfolio the
Company is establishing. Your compensation for the services provided under said
agreement for said additional portfolio shall be determined in accordance with
the fee schedule attached hereto. In addition, we are writing to obtain your
written approval of the revised fee schedules attached hereto for services as
Shareholder Servicing Agent for the Money Market Fund, Institutional Money
Market Fund, U.S. Federal Money Market Fund, U.S. Government Money Market Fund,
Tax-Exempt Money Market Fund, Income and Growth Fund, Special Growth Fund,
Equity Index Fund, Short-Intermediate Fixed Income Fund and Bond IMMDEX/TM Fund.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent for the Balanced Fund and
to the compensation terms set forth on the attached fee schedules for each of
the Company's Funds, which terms are to become effective as of the date set
forth below.
Sincerely,
Dated: March 27, 1992 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRST WISCONSIN TRUST COMPANY
By:/s/ [signature illegible] Dated: March 27, 1992
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Income and Growth Fund Special Growth Fund
Equity Index Fund Balanced Fund
Annual Fee Schedule
- -------------------
$10.50 per Shareholder Account on the first 20,000 Accounts
$10.00 per Shareholder Account on the next 40,000 Accounts
$ 9.50 per Shareholder Account on the next 40,000 Accounts
$ 9.00 per Shareholder Account on the balance
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum annual fee of $6,000 per Fund.
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Money Market Fund
Institutional Money Market Fund
U.S. Federal Money Market Fund
U.S. Government Money Market Fund
Tax-Exempt Money Market Fund
Fee Schedule
------------
Fund Characteristics:
No Load Fund
Daily Dividend Automatically Reinvested Monthly
Telephone Exchange Option (not applicable with respect to the Institutional
Money Market Fund)
Telephone Redemption Option (not applicable with respect to the Institutional
Money Market Fund)
Check Writing (not applicable with respect to the Institutional Money Market
Fund)
Automatic Investment Plan (not applicable with respect to the Institutional
Money Market Fund)
Fee Schedule
$18.50 per Shareholder Account
$ 1.00 per Financial Transaction in excess of $150.00 per month per account
for the Institutional Money Market Fund and 4 per year per account
for all other Funds
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum monthly charge of $500 each for the Institutional Money Market Fund and
U.S. Federal Money Market Fund.
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Short-Intermediate Fixed Income Fund
Bond IMMDEX/TMFund
----------------
Annual Fee Schedule
$12.00 per Shareholder Account on the first 20,000 Accounts
$11.50 per Shareholder Account on the next 80,000 Accounts
$11.00 per Shareholder Account on the balance.
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
Exhibit (9)(u)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of MidCore Growth Fund and
Intermediate Bond Market Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the MidCore Growth Fund and Intermediate Bond
Market Fund, two additional portfolios the Company is establishing. Your
compensation for the services provided under said agreement for said additional
portfolios shall be determined in accordance with the fee schedule attached
hereto.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent for the MidCore Growth Fund
and Intermediate Bond Market Fund and to the compensation terms set forth on the
attached fee schedules for the two new Funds, which terms are to become
effective as of the date set forth below.
Sincerely,
Dated: December 27, 1992 PORTICO FUNDS, INC.
By: /s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ [signature illegible] Dated: December 27, 1992
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
FUNDS, INC.
MidCore Growth Fund
-------------------
Annual Fee Schedule
$10.50 per Shareholder Account on the first 20,000
Accounts
$10.00 per Shareholder Account on the next 40,000 Accounts
$ 9.50 per Shareholder Account on the next 40,000 Accounts
$ 9.00 per Shareholder Account on the balance
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum annual fee of $6,000 per Fund.
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of-pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
FIRST WISCONSIN TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Intermediate Bond Market Fund
-----------------------------
Annual Fee Schedule
$12.00 per Shareholder Account on the first 20,000
Accounts
$11.50 per Shareholder Account on the next 80,000 Accounts
$11.00 per Shareholder Account on the balance
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of-pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
Exhibit (9)(w)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of the International Equity Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the International Equity Fund, one additional
portfolio the Company is establishing. Your compensation for the services
provided under said agreement for said additional portfolios shall be determined
in accordance with the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent for the International
Equity Fund and to the compensation terms set forth on the attached fee
schedules for the one new Fund, which terms are to become effective as of the
date set forth below.
Sincerely,
Dated: April 26, 1994 PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ James C. Tyler Dated: April 26, 1994
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES FOR
PORTICO FUNDS, INC.
International Equity Fund
Annual Fee Schedule
$13.00 per Shareholder account
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum annual fee of $6,000 per Fund. Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
Exhibit (9)(x)
AMENDMENT TO
SHAREHOLDER SERVICING AGENT AGREEMENT
PORTICO FUNDS, INC., a Wisconsin corporation (formerly, Elan Funds, Inc.),
and FIRST WISCONSIN TRUST COMPANY, a banking institution chartered under the
laws of Wisconsin, parties to a Shareholder Servicing Agent Agreement dated as
of March 23, 1988, hereby amend and restate Section 11 of such Agreement in its
entirely as follows:
11. Notice. Any notice that is required to be given by one party to each
other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid, in the case of Agent to Agent's principal place
of business, or in the case of Portico Funds to Portico Funds c/o Sunstone
Financial Group, Inc., 207 E. Buffalo Street, Suite 315, Milwaukee, WI 53202,
or at such other address as one party may provide to the other in writing, as
the case may be.
IN WITNESS WHEREOF, the parties have executed this Amendment as of May 1,
1990.
Very truly yours,
PORTICO FUNDS, INC.
By:/s/ Miriam Allison
(Authorized Officer)
FIRST WISCONSIN TRUST COMPANY
By:/s/ James Hintz (Authorized Officer)
Exhibit (9)(y)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of the MicroCap Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the MicroCap Fund, one additional portfolio
the Company is establishing. Your compensation for the services provided under
said agreement for said additional portfolio shall be determined in accordance
with the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent for the MicroCap Fund and
to the compensation terms set forth on the attached fee schedule for the new
Fund, which terms are to become effective as of the date set forth below.
Sincerely,
Dated: August 1, 1995 PORTICO FUNDS, INC.
By:/s/ Mary Ellen Stanek
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By:/s/ James C. Tyler Dated: August 1, 1995
(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
MicroCap Fund
-------------
Annual Fee Schedule
$13.00 per Shareholder account
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum annual fee of $12,000 per Fund.
Account fees shall be waived on the initial 460 accounts per series.
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Insurance
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
Exhibit (9)(z)
SHAREHOLDER SERVICING AGENT AGREEMENT
(Addition of the Balanced Income Fund)
Firstar Trust Company
P.O. Box 2054
Milwaukee, WI 53201
Gentlemen:
Pursuant to Paragraph 7 of the Shareholder Servicing Agent Agreement
dated as of March 23, 1988 and amended as of May 1, 1990, between you and
Portico Funds, Inc. (formerly, Elan Funds, Inc.) (the "Company"), the Company
requests that you render services as Shareholder Servicing Agent under the terms
of said agreement with respect to the Balanced Income Fund, one additional
portfolio the Company is establishing. Your compensation for the services
provided under said agreement for said additional portfolio shall be determined
in accordance with the fee schedule attached hereto.
Please sign two copies of this letter where indicated to signify your
agreement to so serve as Shareholder Servicing Agent for the Balanced Income
Fund and to the compensation terms set forth on the attached fee schedule for
the new Fund, which terms are to become effective as of the date set forth
below.
Sincerely,
Dated: , 1995 PORTICO FUNDS, INC.
------------
By:
-------------------
(Authorized Officer)
ACKNOWLEDGED AND AGREED:
FIRSTAR TRUST COMPANY
By: Dated: , 1995
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(Authorized Officer)
FIRSTAR TRUST COMPANY
MUTUAL FUND SHAREHOLDER SERVICES
FOR
PORTICO FUNDS, INC.
Balanced Income Fund
--------------------
Annual Fee Schedule
$13.00 per Shareholder account
$ 5.00 per telephone exchange
$ 7.50 per wire transfer
Minimum annual fee of $12,000 per Fund.
Account fees shall be waived on the initial 460 accounts per series.
Fees billed monthly.
Plus out-of-pocket expenses including, but not limited to:
- Telephone--Toll-free lines
- Postage
- Programming
- Stationery/Envelopes
- Mailing
- Proxies
- Insurance
- Retention of Records
- Microfilm/Microfiche of Records
- Special Reports
- All other out-of pocket expenses
Plus, with respect to Two-Dimensional Transaction:
$1.00 per shareholder account to set-up
$1.00 per shareholder account to alter
AUTOMATIC INVESTMENT PLAN PROCESSING
$125.00 per cycle
$ 0.50 per account set-up and/or change
$ 0.50 per item
$ 3.25 per correction, reversal or return item
Exhibit (9)(aa)
PLAN OF REORGANIZATION
PLAN OF REORGANIZATION (the "Plan") in respect of Elan Funds, Inc., a
Wisconsin business corporation (the "Corporation"), and Elan Funds, a
Massachusetts business trust (the "Trust").
SECTION I
Sale of Assets and Assumption of Liabilities
--------------------------------------------
Subject to the provisions of this Plan, the Trust shall sell, convey,
transfer and assign to the Corporation, and the Corporation shall purchase,
acquire and accept from the Trust, all property of every description and all
interests, rights, privileges and powers, belonging to the Trust (collectively,
the "Property"). As full consideration for said sale of the Property by the
Trust, the Corporation shall assume and agree fully to satisfy and discharge all
liabilities and obligations of the Trust, whether accrued, absolute, contingent
or otherwise (collectively, the "Liabilities"). The Trust and the Corporation
acknowledge that prior to said sale of the Property and assumption of the
Liabilities, ALPS Securities, Inc. ("ALPS"), as sole shareholder of the Trust,
may redeem its shares in the Trust with the understanding that the proceeds of
said redemption will subsequently be reinvested in shares of the Corporation.
In the event ALPS does not redeem its shares in the Trust as aforesaid, then:
(a) the Corporation shall issue to the Trust at the time of said sale of the
Property and assumption of the Liabilities full and fractional shares of its
Class A-2 and Class B-2 Common Stock (the "Corporation Shares") equal in number
to the number of full and fractional Class A-2 and "Trust Shares") that are then
outstanding and owned by ALPS; and (b) the Trust shall credit to ALPS at the
time of said Corporation Shares so received by it and shall cancel all the Trust
Shares, except such Trust Shares as may be necessary or appropriate to remain
outstanding in order to permit the Trust to complete its liquidation.
SECTION II
Shareholder Consent
-------------------
Prior to the Effective Date (as defined below) of the Reorganization
and as a condition thereto, the Trust shall submit this Plan and the
transactions contemplated hereby to ALPS, as sole shareholder of the Trust, for
its approval.
SECTION III
Closing
-------
The sale of the Property and assumption of the Liabilities (the
"Effective Date") described above shall occur on such date and at such time and
place as the officers of the Corporation and Trust determine in their
discretion.
SECTION IV
Miscellaneous
-------------
The Corporation and the Trust shall take such further action as may be
necessary or desirable and proper to consummate the transactions contemplated
hereby.
This Plan and the transactions contemplated hereby may be abandoned
for any reason (including, without limitation, the receipt of advice of counsel
to the Corporation and Trust that the same may have adverse tax consequences for
either of them) at any time prior to the time that the sale of the Property and
assumption of Liabilities occurs upon the concurring votes of a majority of the
entire Board of Directors of the Corporation and a majority of all of the
Trustees of the Trust.
Exhibit (9)(ab)
PURCHASE AND ASSUMPTION AGREEMENT
This Agreement is made on the 22nd day of February, 1988 between Elan
Funds, Inc., a Wisconsin corporation (the "Corporation"), and Elan Funds, a
Massachusetts business trust (the "Trust").
BACKGROUND
The Board of Trustees and Sole Shareholder of the Trust and the Board
of Directors of the Corporation have approved a Plan of Reorganization (the
"Plan") providing for the purchase by the Corporation of all of the property,
and the assumption by the Corporation of all of the liabilities, of the Trust.
As set forth in Section I of the Plan, ALPS Securities, Inc., as sole
shareholder of the Trust, has redeemed its shares in the Trust, and is
concurrently herewith reinvesting the proceeds of said redemption in shares of
the Corporation. The parties hereto now wish, by this Agreement, to complete
the consummation of the transactions contemplated by the Plan.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
The Trust hereby sells, conveys, transfers and assigns to the
Corporation, and the Corporation hereby purchases, acquires and accepts from the
Trust, all property of every description, and all interests, rights, privileges
and powers belonging to the Trust except such nominal property as is necessary
to complete the liquidation of the Trust (collectively, the "Property").
TO HAVE AND TO HOLD the Property to the Corporation, its successors
and assigns, to its and their own use and behoof, forever.
As full consideration for said sale of the Property by the Trust, the
Corporation hereby assumes and agrees fully to satisfy and discharge all
liabilities and obligations of the Trust, whether accrued, absolute, contingent
or otherwise (collectively, the "Liabilities"). All of the Liabilities shall
henceforth attach to the Corporation and may be enforced against it to the same
extent as if the same had been incurred by it.
The Corporation and the Trust shall take such further action as may be
necessary or desirable and proper to consummate the transactions contemplated
hereby.
The names "Elan Funds" and "Trustees of Elan Funds" refer respectively
to the Trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under an Agreement and Declaration of Trust
dated October 29, 1987 which is hereby referred to and a copy of which is on
file at the office of the State Secretary of the Commonwealth of Massachusetts
and the principal office of the Trust. The obligations of "Elan Funds' entered
into in the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders, or representatives of the Trust
personally, but bind only the Trust Property, and all persons dealing with any
class of shares of the Trust must look solely to the Trust Property belonging
to such class for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
(Corporate Seal) ELAN FUNDS, INC.
Attest /s/ W. Bruce McConnel, III By /s/ James M. Wade
ELAN FUNDS
Witness
/s/ W. Bruce McConnel, III /s/ James M. Wade
Exhibit (9)(ac)
PORTICO FUNDS, INC.
AMENDED AND RESTATED SERVICE PLAN
Section 1. Any officer of Portico Funds, Inc. ("Portico Funds") is
authorized to execute and deliver, in the name and on behalf of Portico Funds,
written agreements based on the form attached hereto as Appendix A or any other
form duly approved by the Board of Directors ("Agreements") with securities
dealers, financial institutions and other industry professionals ("Shareholder
Organizations") that are shareholders or dealers of record or which have a
servicing relationship with the beneficial owners of Shares of Series A Shares
of any Portico Fund except the Institutional Money Market Fund (each, a "Fund"
and collectively, the "Funds"). Pursuant to such Agreements, Shareholder
Organizations shall provide support services as set forth therein to their
clients who beneficially own Series A Shares of any Fund offered by Portico
Funds in consideration of a fee, computed monthly in the manner set forth in the
Agreements, at an annual rate of up to .25% of the average daily net asset value
of the outstanding Series A Shares beneficially owned by such clients. Firstar
Trust Company ("Firstar") and its affiliates are eligible to become Shareholder
Organizations and to receive fees under this Plan.
Section 2. Firstar shall monitor the arrangements pertaining to Portico
Funds' Agreements with Shareholder Organizations in accordance with the terms of
Firstar's coadministration agreement with Portico Funds. Portico Funds shall
not be obliged to execute any Agreement with any qualifying Shareholder
Organization.
Section 3. So long as this Plan is in effect, Firstar shall provide to
Portico Funds' Board of Directors, and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such expenditures were made.
Section 4. This Plan has previously become effective with respect to each
particular Fund upon the approval of the Plan (and the form of Agreement
attached hereto) by a majority of the Board of Directors, including a majority
of the Directors who are not "interested persons," as defined in the Act, of
Portico Funds and have no direct or indirect financial interest in the operation
of this Plan or in any Agreement related to this Plan (the "Disinterested
Directors"), pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of this Plan (and form of Agreement).
Section 5. Unless sooner terminated, this Plan shall continue until
February 29, 1995 and thereafter shall continue automatically for successive
annual periods provided such continuance is approved at least annually in the
manner set forth in Section 4.
Section 6. This Plan may be amended at any time with respect to any Fund
by the Board of Directors, provided that any material amendment of the terms of
this Plan shall become effective only upon the approvals set forth in Section 4.
Section 7. This Plan is terminable at any time with respect to any Fund
by vote of a majority of the Disinterested Directors.
Section 8. While this Plan is in effect, the selection and nomination of
those Directors who are not "interested persons" (as defined in the Act) of
Portico Funds shall be committed to the discretion of such non-interested
Directors.
Section 9. All expenses incurred by Portico Funds with respect to the
Series A Shares of a particular Fund in connection with Agreements and the
implementation of this Plan shall be borne entirely by Series A Shares of such
Fund.
Section 10. Portico Funds originally adopted this Plan as of December 16,
1988 and was amended and restated on February 17, 1995.
Appendix A
SERVICING AGREEMENT
Gentlemen:
We wish to enter into this Servicing Agreement with you concerning the
provision of support services to your clients ("Clients") who may from time to
time beneficially own shares of the Series A Common Stock of any Fund except the
Institutional Money Market Fund offered by Portico Funds, Inc.
The terms and conditions of this Servicing Agreement are as follows:
Section 1. You agree to provide the following support services to Clients
who may from time to time beneficially own Series A Shares: (i) processing
dividend and distribution payments from us on behalf of Clients; (ii) providing
information periodically to Clients showing their positions in Series A Shares;
(iii) arranging for bank wires; (iv) responding to Client inquiries relating to
the services performed by you; (v) providing subaccounting with respect to
Series A Shares beneficially owned by Clients or the information to us necessary
for subaccounting; (vi) if required by law, forwarding shareholder
communications from us (such as proxies, shareholder reports, annual and semi-
annual financial statements and dividend, distribution and tax notices) to
Clients; (vii) processing exchange and redemption requests from Clients and
placing net exchange and redemption orders with our service contractors; (viii)
assisting Clients in changing dividend options, account designations and
addresses; and (ix) providing such other similar services as we may reasonably
request to the extent you are permitted to do so under applicable statutes,
rules and regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
Section 3. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning us or the Series A Shares
except those contained in our then current prospectuses and statements of
additional information for Series A Shares, copies of which will be supplied by
us to you, or in such supplemental literature or advertising as may be
authorized by us in writing.
Section 4. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for us in any
matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Series A Shares (or orders relating to the same) by
or on behalf of Clients. You and your employees will, upon request, be
available during normal business hours to consult with us or our designees
concerning the performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by you
hereunder, we will pay to you, and you will accept as full payment therefor, a
fee at the annual rate of . of 1% of the average daily net asset value of the
--
Series A Shares beneficially owned by your Clients for whom you are the dealer
of record or holder of record or with whom you have a servicing relationship
(the "Clients' Series A Shares"), which fee will be computed daily and payable
monthly. For purposes of determining the fees payable under this Section 5, the
average daily net asset value of the Clients' Series A Shares will be computed
in the manner specified in our Registration Statement (as the same is in effect
from time to time) in connection with the computation of the net asset value of
Series A Shares for purposes of purchases and redemptions. The fee rate stated
above may be prospectively increased or decreased by us, in our sole discretion,
at any time upon notice to you. Further, we may, in our discretion and without
notice, suspend or withdraw the sale of Series A Shares, including the sale of
Series A Shares to you for the account of any Client or Clients. All fees
payable by Portico Funds under this Agreement with respect to the Series A
Shares of a particular Fund shall be borne by, and be payable entirely out of
the assets allocable to, said Series A Shares; and no other Fund or series of
Shares offered by Portico Funds shall be responsible for such fees.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by us pursuant to this Agreement will provide to our Board of
Directors, and our Directors will review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made. In addition, you will furnish us or our designees with such information
as we or they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Directors concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
Section 7. We may enter into other similar Agreements with any other
person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you hereunder, together
with any other compensation you receive from Clients for services contemplated
by this Agreement, will not be excessive or unreasonable under the laws and
instruments governing your relationships with Clients; (ii) you will provide to
Clients a schedule of any fees that you may charge to them relating to the
investment of their assets in Series A Shares; and (iii) the services provided
by you under this Agreement will in no event be primarily intended to result in
the sale of Series A Shares.
Section 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless
sooner terminated, this Agreement will continue until February 28, 199 , and
-
thereafter will continue automatically for successive annual periods provided
such continuance is specifically approved at least annually by us in the manner
described in Section 12. This Agreement is terminable with respect to the
Series A Shares of any Fund, without penalty, at any time by us (which
termination may be by a vote of a majority of the Disinterested Directors as
defined in Section 12) or by you upon notice to the other party hereto. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the Act).
Section 10. All notices and other communications to either you or us will
be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address stated herein.
Section 11. This Agreement will be construed in accordance with the laws
of the State of Wisconsin.
Section 12. This Agreement has been approved by vote of a majority of (i)
our Board of Directors and (ii) those Directors who are not "interested persons"
(as defined in the Investment Company Act of 1940) of us and have no direct or
indirect financial interest in the operation of the Service Plan adopted by us
or in any agreement related thereto cast in person at a meeting called for the
purpose of voting on such approval ("Disinterested Directors").
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us.
Very truly yours,
PORTICO FUNDS, INC.
By:
----------------------
Date: (Authorized Officer)
---------------
Accepted and Agreed to:
[Service Organization]
By:
----------------------
Date: (Authorized Officer)
---------------
Exhibit (11)(a)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to
our Firm under the caption "Counsel" in the Statement of Additional Information
that is included in PostEffective Amendment No. 28 to the Registration Statement
(No. 3318255) on Form N-1A under the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, of Portico Funds, Inc. This consent does not
constitute a consent under section 7 of the Securities Act of 1933, and in
consenting to the use of our name and the references to our Firm under such
caption we have not certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent is required under
said section 7 or the rules and regulations of the Securities and Exchange
Commission thereunder.
/s/ DRINKER BIDDLE & REATH
DRINKER BIDDLE & REATH
Philadelphia, Pennsylvania
February 15, 1996
**************
Exhibit 11(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
and Statements of Additional Information constituting parts of this
Post-Effective Amendment No. 28 to the registration statement on Form
N-1A (the "Registration Statement") of our reports dated November 29,
1995, relating to the financial statements and financial highlights
appearing in the October 31, 1995 Annual Reports to Shareholders of
Portico Balanced Fund, Portico Bond IMMDEX Fund, Portico Equity Index
Fund, Portico Growth and Income Fund, Portico Intermediate Bond Market
Fund, Portico Institutional Money Market Fund, Portico International
Equity Fund, Portico MidCore Growth Fund, Portico Money Market Fund,
Portico Special Growth Fund, Portico Short-Term Bond Market Fund,
Portico Tax-Exempt Intermediate Bond Fund, Portico Tax-Exempt Money
Market Fund,Portico U.S. Government Money Market Fund and Portico U.S.
Treasury Money Market Fund (portfolios of Portico Funds, Inc.) which are
also incorporated by reference into the Registration Statement. We also
consent to the references to us under the headings "Financial
Highlights" in each Prospectus and under the headings "Independent
Accountants" in each Statement of Additional Information.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Milwaukee, Wisconsin
February 15, 1996
**************
Exhibit (14)
PORTICO FUNDS INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
An Individual Retirement Account (the "IRA") is hereby established by
the person named in the accompanying Application upon the following terms and
conditions and in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"). The information contained in the Application shall be part of
this IRA as if set forth herein.
Portico Funds, Inc., a "regulated investment company" as defined in
Section 851 of the Code, is the sponsor of this IRA.
ARTICLE I. DEFINITIONS
Whenever used in this IRA, the following terms shall have the meanings
set forth below:
1.1 "Code" means the Internal Revenue Code of 1986, as amended.
1.2 "Compensation" means wages, salaries, professional fees, or other
amounts derived from or received for personal services actually rendered
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses) and includes earned income as defined in Section
401(c)(2) of the Code (reduced by any amount allowable as a deduction in
computing adjusted gross income under Section 62(7) of the Code). Compensation
does not include amounts derived from or received as earnings or profits from
property (including, but not limited to, interest and dividends) or amounts not
includable in gross income. Compensation also does not include any amount
received as a pension, annuity, or deferred compensation. Compensation shall
include any amount includable in the individual's gross income under Section 71
of the Code with respect to a divorce or separation instrument described in
Section 71(b)(2)(A) of the Code.
1.3 "Custodian" means First Wisconsin Trust Company.
1.4 "Direct Transfer" means a transfer of assets for the benefit of
an Investor from a trustee or custodian of a trust or custodial account
maintained as an individual retirement account or from an insurance company's
contract maintained as an individual retirement annuity.
1.5 "Disability" means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long-continued
and indefinite duration.
1.6 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.7 "Fund" means an investment portfolio managed by Portico.
1.8 "Inherited IRA" means an IRA maintained for an
Investor's beneficiary other than the Investor's surviving spouse.
1.9 "Investor" means the individual who signed the Application and
for whom, or for whose Nonworking Spouse, an IRA has been established.
1.10 "Nonworking Spouse" means any person who has no Compensation
(determined without regard to Section 911 of the Code) for the taxable year or
who elects to be treated as having no Compensation, and who is the spouse of an
individual who files a joint return for the taxable year with such person.
1.11 "Portico" means Portico Funds, Inc., a Wisconsin corporation and
a regulated investment company, authorized to issue separate classes of shares
in separate investment portfolios, for which the Custodian serves as investment
adviser.
1.12 "Rollover Contribution" means a rollover contribution as
described in Section 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3) of
the Code and regulations thereunder.
1.13 "SEP Contribution" means a contribution made under a simplified
employee pension as defined in Section 408(k) of the Code.
1.14 "Shares" means common stock of a Fund which Portico has agreed to
offer to Investors through the IRA.
ARTICLE II. ELIGIBILITY
2.1 Any person who receives Compensation during ataxable year is
eligible to establish an IRA for such taxable year. In addition, any person
making a Rollover Contribution or a Direct Transfer may establish an IRA. An
otherwise eligible person may not establish an IRA for the taxable year in which
he or she attains age 70-1/2 or in any later taxable year (unless making a SEP
Contribution, a Rollover Contribution or a Direct Transfer or establishing an
IRA for his or her Nonworking Spouse who is under age 70-1/2).
ARTICLE III. PARTICIPATION
3.1 An Investor who wishes to establish an IRA may do so by signing
the Application and mailing it to the address indicated.
3.2 An Investor may establish a separate IRA for his or her
Nonworking Spouse to which contributions may be made within the limitations set
forth in Article IV. A Nonworking Spouse for whom such separate IRA is
established shall be considered the sole owner of all amounts contributed
thereto and the earnings thereon and shall have the right to direct the time and
manner of distribution under Article VI. When any provision of this IRA gives
the Investor a right, option, or privilege with respect to his or her IRA, or
imposes any duty, risk, or limitation of liability on the Investor, such
provision shall be deemed to extend to the Nonworking Spouse as to his or her
separate IRA.
ARTICLE IV. CONTRIBUTIONS
4.1 (a) For any taxable year in which the Investor does not make a
contribution on behalf of his or her Nonworking Spouse under the provisions of
Section 4.2, the Investor may contribute cash to his or her IRA for such taxable
year in an amount not in excess of (i) the lesser of 100 percent of the
Investor's Compensation for such taxable year or $2,000 plus (ii) any permitted
SEP Contribution plus (iii) any Rollover Contribution or Direct Transfer. SEP
Contributions shall not exceed $30,000 for any taxable year of the Investor.
(b) The Custodian, Portico, and the Funds are not responsible
for determining the amount an Investor may contribute. The Investor may not
contribute more than $2,000 plus any permitted SEP Contribution made on the
Investor's behalf for any taxable year plus any Rollover Contribution or Direct
Transfer.
(c) The Investor may generally make a Rollover Contribution or
Direct Transfer. However, no Rollover Contribution or Direct Transfer may be
made to or from an Inherited IRA. Unless the Custodian is directed otherwise by
the Investor, any Rollover Contribution or Direct Transfer and the earnings
thereon shall be held by the Custodian in a separate IRA for the Investor. The
Custodian, by accepting a Rollover Contribution or a Direct Transfer, does not
accept responsibility for the tax results of the rollover or transfer, the
responsibility for which rests with the Investor who directs or consents to such
a rollover or transfer.
(d) If for a taxable year the Investor contributes an amount in
excess of the amount he or she is permitted to contribute, such excess
contribution (including any income attributable to such excess contribution)
shall, upon the written request of the Investor, be paid to him or her by the
Custodian on or before the day on which such Investor's federal income tax
return for such taxable year is due (including extensions of such day), provided
no deduction has been allowed under Section 219 of the Code with respect to such
excess contribution. Subject to the application of penalties imposed by law, an
excess contribution shall be paid to the Investor by the Custodian after the day
on which such Investor's federal income tax return for such taxable year is due
(including extensions of such day) (excluding any income attributable to such
excess contribution), upon the written request of the Investor in accordance
with Section 408(d)(5) of the Code.
4.2 An Investor may contribute cash to his or her IRA and also to his
or her Nonworking Spouse's separate IRA. Aggregate contributions to the two
separate IRAs under this Section 4.2 for a taxable year may not exceed $2,250,
and contributions to either of the separate IRAs may not exceed $2,000.
4.3 The interest of the Investor in his or her IRA shall be non-
forfeitable at all times but shall be subject to the fees, expenses, and charges
described in Section 7.6.
ARTICLE V. INVESTMENT OF CONTRIBUTIONS
5.1 Except as provided in Section 5.2, all contributions made by the
Investor shall be used by the Custodian to purchase Shares, as directed by the
Investor. All dividends and capital gains paid by a Fund attributable to Shares
held in the IRA shall be reinvested in additional Shares of that Fund. The
Investor may direct the Custodian to redeem all or any number of
Shares of a particular Fund and reinvest the proceeds in one or more other
Funds. The assets of the IRA shall not be commingled with other property except
in a common trust fund or common investment fund (within the meaning of Section
408(a)(5) of the Code).
5.2 The Investor shall not direct the Custodian to purchase shares in
any of the Funds unless he or she shall have received the prospectus(es) for the
Fund(s) in which the Investor directs the Custodian to invest his or her IRA;
and, by giving such directions to the Custodian, the Investor shall be deemed to
have acknowledged receipt thereof. The Custodian shall be responsible for
executing such instructions promptly; provided, however, that the Custodian
shall not be obligated to invest any portion of the Investor's initial
contribution to his or her IRA until seven calendar days shall have elapsed from
the date of acceptance of the Application by the Custodian.
5.3 Contributions may not in any event be used for the purchase of
life insurance or "collectibles" (as defined in Section 408(m)(2) of the Code).
5.4 Under no circumstances shall any part of the assets in the IRA be
used for, or diverted to, purposes other than for the exclusive benefit of the
Investor and/or his or her beneficiary.
ARTICLE VI. DISTRIBUTIONS
6.1 The entire interest of the Investor in the IRA shall be
distributed, or shall commence to be distributed, not later than April 1 of the
calendar year following the calendar year in which he or she attains age 70-1/2.
At that time, the distribution of the Investor's interest shall be made, at the
election of the Investor, (i) in a single sum payment or (ii) in equal or
substantially equal annual payments over a specified period not extending beyond
the life expectancy of the Investor or the life expectancy of the Investor and
his or her designated beneficiary. Annual payments for subsequent years,
including the year the applicable April 1 occurs, must be made by December 31 of
that year. If the Investor elects (ii) as his or her method of distribution,
the annual payment required to be made by April 1 is for the calendar year the
Investor attained age 70-1/2. If the Investor's designated beneficiary is not
his or her spouse, the method of distribution selected must satisfy the
incidental death benefit requirements described in Section 408(a)(6) of the Code
and regulations thereunder.
If the Investor fails to elect any of the methods of distribution
described above on or before the last business day before April 1 of the
calendar year following the calendar year in which he or she attains age 70-1/2,
the Custodian shall distribute the Investor's entire interest on the last
business day before such date by a single sum payment.
6.2 If an Investor dies after distribution of his or her interest has
commenced in accordance with a method of distribution under Section 6.1, the
remaining portion of such interest shall be distributed at least as rapidly as
such interest would have been distributed under such method as of the date of
the Investor's death or, if the Investor designates his or her spouse as
beneficiary and the spouse elects to treat the IRA as the spouse's own IRA, then
the remaining portion of such interest shall be subject to the distribution
rules of this Article VI treating the spouse as the Investor. The spouse shall
be deemed to have made such an election if the spouse makes a regular
contribution to the IRA, makes a Rollover Contribution or Direct Transfer to or
from the IRA, or fails to elect any of the distribution methods described in
Section 6.3.
6.3 If an Investor dies before distribution of his or her interest
has commenced under Section 6.1, the entire interest of the Investor shall, at
the election of his or her designated beneficiary, either (i) be distributed by
December 31 of the year containing the fifth anniversary of the Investor's
death, or (ii) be distributed in equal or substantially equal annual payments
over a specified period not extending beyond the life expectancy of the
designated beneficiary (calculated by use of the return multiples specified in
Treas. Reg. Sec.1.72-9). If made under (ii) above, distribution shall commence
not later than the later of December 31 of the year after the year of the
Investor's death, or, if the Investor's beneficiary is his or her surviving
spouse, December 31 of the year the Investor would have attained age 70-1/2. If
the beneficiary does not make arrangements for distribution before the date in
(i) above, the Custodian shall distribute the entire balance in the IRA to the
beneficiary in a single sum payment on or before that date.
6.4 For purposes of Section 6.3, if the Investor's designated
beneficiary is his or her surviving spouse, and if the surviving spouse dies
before distributions to the surviving spouse begin, then Section 6.3 shall be
applied as if the surviving spouse were the Investor.
6.5 If the Investor or his or her designated beneficiary elects to
receive distributions in installment payments under Section 6.1 or 6.3, the
minimum annual payment shall be determined by dividing the entire balance in the
IRA, as of the close of business on December 31 of the preceding year, by the
life expectancy of the Investor (or the joint life and last survivor expectancy
of the Investor and his or her designated beneficiary, or the life expectancy of
the designated beneficiary, whichever applies). In the case of distributions
under Section 6.1, the initial life expectancy (or initial joint life and last
survivor expectancy) shall be determined using the attained ages of the Investor
and the designated beneficiary (if applicable) as of their birthdays in the year
the Investor attains age 70-1/2. In the case of distributions under Section
6.3, the initial life expectancy shall be determined using the attained age of
the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
Unless the Investor (or his or her spouse) elects not to have life
expectancy recalculated, the Investor's life expectancy (and the life expectancy
of the Investor's spouse, if applicable) shall be recalculated annually using
their attained ages as of their birthdays in the year for which the minimum
annual payment is being determined. The life expectancy of the designated
beneficiary (other than the spouse) shall not be recalculated and instead shall
be reduced by one for each year after the year the non-spouse beneficiary's life
expectancy is first required to be calculated. The minimum annual payment may
be made in a series of installments (e.g., monthly, quarterly, etc.) as long as
the total payments for the year made by the date required are not less than the
minimum amounts required. For purposes of this Section 6.5, the minimum payment
amounts shall be calculated by use of the return multiples specified in Treas.
Reg. Section1.72-9.
6.6 If the Investor dies before his or her entire
interest has been distributed, and if the beneficiary is other than the
surviving spouse, no additional cash contributions, SEP Contributions, Rollover
Contributions or Direct Transfers may be accepted in the IRA.
6.7 The Investor's beneficiary shall be the person or persons or
other legal entity named as beneficiary(ies) on the Application or, if no
designation is made, the surviving spouse of the Investor (if any) or otherwise
the estate of the Investor.
6.8 Distribution to an Investor of his or her interest in his or her
IRA not be made any time upon the request of the Investor.
6.9 The Investor shall direct the Custodian as to all distributions
to the Investor to be made under this Article VI. Such instructions must be
communicated to the Custodian no later than 60 days prior to the date on which
such amount is to be distributed. Neither the Custodian, nor Portico, nor any
Fund shall have any liability to the Investor, to the Investor's surviving
spouse, or to any designated beneficiary for any taxes or penalties imposed
under the Code or for any other damages resulting from the applicable
individual's receipt of, or failure to receive, distributions in accordance with
the rules provided above.
ARTICLE VII. ADMINISTRATION
7.1 Except as otherwise provided in this IRA, the Custodian shall
exercise as agent on behalf of the Investor, his or her surviving spouse, and
any beneficiary any and all powers such persons themselves could exercise as an
owner of the property held, including, but not limited to, the following powers.
(a) To receive contributions pursuant to the provisions of this
IRA;
(b) To hold, invest, and reinvest such contributions in Shares;
(c) To register any property held by the Custodian in its own
name, or in nominee or bearer form that will pass deliver; and
(d) To make distributions from the IRA in cash or in Shares
pursuant to the provisions of this IRA.
7.2 The Custodian shall mail to the Investor all proxies, proxy
soliciting materials, and periodic reports or other communications (including
all prospectuses that the Fund(s) regularly send to existing shareholders) that
may come into the Custodian's possession by reason of its custody of Shares. It
is intended that the Investor shall vote all proxies, notwithstanding the fact
that the Custodian may be the registered owner of the Shares. The Custodian
shall have no further liability or responsibility with respect to the voting of
the Shares.
7.3 The Custodian shall keep accurate and detailed account of its
receipts, investments, and disbursements. As soon as practicable after December
31 of each year, and whenever required by ERISA or the Code or regulations
thereunder, the Custodian shall file with the Investor a written report of the
Custodian's transactions relating to the IRA during the period from the last
previous accounting, and shall file such other reports with the Internal Revenue
Service as may be required. The Investor agrees to provide the Custodian with
any information necessary for the Custodian to prepare any such reports.
Unless the Investor sends the Custodian written objection to a
report within 60 days after its receipt, the Investor shall be deemed to have
approved such report and, in such case, the Custodian, Portico, and all Funds
shall be forever released and discharged with respect to all matters included
therein.
7.4 The Custodian shall use ordinary care and reasonable diligence in
the performance of its duties as Custodian. The Custodian shall not be liable
for a mistake in judgment, for any action taken in good faith, or for any loss
that is not a result of its gross negligence, except as provided by ERISA or the
Code or regulations thereunder.
7.5 The Custodian shall be under no duty to make suggestions to the
Investor with respect to the retention or disposition of any contributions or
assets held in the IRA.
7.6 The Custodian shall pay out of the IRA (if not otherwise paid by
the Investor) expenses of administration, any taxes, and its fee(s) for
maintaining the IRA which are described in the Disclosure Statement accompanying
this IRA. The Custodian may sell Shares and use the proceeds of sale to pay
the foregoing expenses.
7.7 The Custodian may resign as Custodian of any IRA or of all IRAs,
in either case upon 30 days' prior written notice to each Investor who will be
affected by the resignation.
ARTICLE VIII. PORTICO FUNDS, INC.
8.1 The Investor delegates to Portico the power (i) to establish the
Custodian's fees, and (ii) to amend this IRA as provided in Article IX. The
powers herein delated to Portico shall be exercised by the officer thereof as
Portico may designate from time to time, and shall be exercised only when
similarly exercised with respect to all other Investors adopting this form of
IRA.
8.2 Neither Portico nor any officer, director, board, committee, or
employee of Portico shall incur any liability of any nature to the Investor, his
or her spouse or beneficiary, or any other person in connection with any act
done or omitted to be done in good faith in the exercise of any power or
authority herein delegated to Portico.
8.3 If Portico shall hereafter determine that it is no longer
desirable for it to continue to exercise any of the powers hereby delegated, it
may relieve itself of any further responsibilities hereunder by notice in
writing to the Investor and the Custodian at least 60 days prior to the date on
which Portico proposes to discontinue the exercise of the powers delegated to
it.
ARTICLE IX. AMENDMENT AND TERMINATION
9.1 The Investor delegates to Portico the power to amend this IRA
unilaterally (except the power to amend the Application). The Investor may
amend his or her Application by submitting to Portico (i) a copy of such amended
Application and (ii) evidence satisfactory to Portico that the IRA as amended by
the amended Application will continue to qualify as an individual retirement
account under the provisions of Section 408 of the Code.
9.2 No amendment shall be effective if it would cause or permit (i)
any part of the IRA to be diverted to any purpose that is not for the exclusive
benefit of the Investor and his or her beneficiary; (ii) the Investor to be
deprived of any portion of his or her interest in the IRA, unless such action is
taken in order to satisfy qualification requirements under the Code; of (iii)
the imposition of an additional duty on Portico without its written consent.
9.3 The Investor reserves the right to terminate this IRA by
instrument in writing signed by him or her and filed with Portico.
PORTICO FUNDS INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT PORTICO FUNDS
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
This Disclosure Statement contains information concerning
certain legal and financial aspects of the Portico Funds Individual Retirement
Account (the "Portico Funds IRA" or the "IRA"). Portico Funds, Inc. is the
"Sponsor" and First Wisconsin Trust Company ("First Wisconsin") is the
"Custodian" of the Portico Funds IRA. This Disclosure Statement should be read
in conjunction with the Portico Funds IRA.
While this Disclosure Statement sets forth certain restrictions and
limitations to which individual retirement accounts in general and the Portico
Funds IRA in particular are subject, it does not restate the specific terms of
the Portico Funds IRA itself. IN THE EVENT OF ANY CONFLICT BETWEEN THE
PROVISIONS OF THIS DISCLOSURE STATEMENT AND THE TAPES OF THE PORTICO FUNDS IRA,
THE LATTER SHALL CONTROL.
Internal Revenue Service regulations require that you be given this
Disclosure Statement to make certain that you fully understand the nature of an
individual retirement account. Please read this Disclosure Statement
carefully.
RIGHT OF REVOCATION
If you establish a Portico Funds IRA, you may revoke it by notifying the
transfer agent in writing by first class mail, postmarked within seven days
after the date on which you established your Portico Funds IRA. Such notice
must be sent to the following address:
Investor Services Representative
Portico Funds, Inc.
First Wisconsin Trust Company
Box 701
Milwaukee, Wisconsin 53201-0701
(414) 287-3808
or delivered to the following address:
First Wisconsin Trust Company
615 East Michigan Street
Milwaukee, Wisconsin 53202
In the event of revocation, all contributions made under the Portico Funds IRA
will be returned to you, without adjustment for administrative expenses or for
fluctuation in market value.
1. What is a Portico Funds IRA? A Portico Funds IRA is a custodial
account which allows you, if you are an eligible individual described in
Question 2 below, to save for your retirement. Contributions made to an IRA
(except for rollover contributions and direct transfers discussed in Question 8)
may be deductible from your gross income for the taxable year for which you make
the contribution, and earnings from an IRA are generally exempt from taxation
until distribution is made to you.
2. Who is eligible to participate? You may make a contribution to the
Portico Funds IRA only if you have not yet reached age 70-1/2 before the close
of your taxable year for which the contribution is made (except in the case of
contributions for your non-working spouse under the age of 701/2). The fact
that you are covered under any other type of retirement plan will not prevent
you from making contributions to an IRA.
3. How much can I contribute and deduct if I am not an active participant? If
neither you, nor your spouse, is an active participant in a retirement plan (see
below), you may make a contribution of up to the lesser of $2,000 (or $2,250 in
the case of a spousal IRA) or 100 percent of compensation and take a deduction
for the entire amount contributed.
You are an "active participant" for a year if you are covered by a
retirement plan. You are covered by a "retirement plan" for a year if your
employer or union has a retirement plan under which money is added to your
account or you are eligible to earn retirement credits. For example, if you are
covered under a profit-sharing plan, certain government plans, a salary
reduction arrangement (such as a tax-sheltered annuity arrangement or a 401(k)
plan), a simplified employee pension plan ("SEP") or a plan which promises you a
retirement benefit which is based upon the number of years of service you have
with the employer, you are likely to be an active participant. Your Form W-2 for
the year should indicate your participation status.
You are an active participant for a year even if you are not yet
vested in your retirement benefit. Also, if you make required contributions or
voluntary employee contributions to a retirement plan, you are an active
participant. In certain plans you may be an active participant even if you were
only with the employer for part of the year.
If you and your spouse live apart at all times during a taxable year
and file separate returns for the taxable year, you and your spouse will not be
treated as married for purposes of these rules.
4. Are my IRA contributions deductible if I am an active participant? If
either you or your spouse is an active participant in an employer sponsored
retirement plan in any year, the deductibility of your IRA contribution will
depend upon adjusted gross income: if,
(a) adjusted gross income (AGI) is under $25,000 ($40,000 for married
persons filing jointly) - the full $2,000 (or $2,250 for spousal IRA) remains in
effect;
(b) AGI between $25,000 and $35,000 ($40,000 and $50,000 for married
persons filing jointly) - the maximum $2,000 ($2,250) amount is prorated with a
floor of $200;
(c) AGI over $35,000 ($50,000 for married persons filing jointly) -
no deduction is allowed.
5. Can I make nondeductible contributions to my IRA? Nondeductible
contributions are allowed up to the lesser of 100 percent of compensation or
$2,000 ($2,250 for a spousal IRA). You may also choose to make a contribution
nondeductible even if you could have deducted part or all of the contribution.
Interest or other earnings on your IRA contribution, whether from deductible or
nondeductible contributions, will not be taxed until taken out of your IRA and
distributed to you.
If you make a nondeductible contribution to an IRA, you must report
the amount of the nondeductible contribution to the IRA as a part of your tax
return for the year.
You may make a $2,000 contribution at any time during the year, if
your compensation for the year will be at least $2,000, without having to know
how much will be deductible. When you fill out your tax return, you may then
figure out how much is deductible.
6. When must I make contributions to my IRA? Contributions to your
Portico Funds IRA for a particular taxable year may be made up until the initial
date you are required to file your federal income tax return for that year
(April 15, if you figure your taxes on a calendar year basis). There is a $100
minimum initial investment required for each Fund in which your Portico Funds
IRA is invested.
7. Can an IRA be opened for a nonworking spouse? If you work, file a
joint federal income tax return with your spouse for a taxable year, and your
spouse has no compensation (or elects to be treated as having no compensation),
you may start a spousal IRA. The overall contribution on behalf of both you and
your spouse for any year may not exceed the lesser of:
(i) Your compensation for the taxable year, or
(ii) $2,250.
In no event, however, may the contribution to either your IRA or your spouse's
IRA exceed $2,000.
There is no requirement that the contributions be divided equally
between the IRA of your nonworking spouse and your IRA. If you have attained
age 70-1/2 before the close of the taxable year, you may nevertheless contribute
to a separate IRA for your nonworking spouse, provided the nonworking spouse is
under age 70-1/2.
8. How do I roll over money from one IRA or retirement plan to an IRA? You
may generally transfer assets from a retirement program or another IRA
(including an individual retirement annuity) to your Portico Funds IRA or from
your Portico Funds IRA to another IRA without incurring federal income tax at
the time of distribution to you. Such a tax-free transfer is called a "rollover
contribution." You may make a rollover contribution from one IRA to another IRA
only if you have made no other rollover contributions from the IRA to another
within a one-year period. The one-year period begins on the day you receive the
IRA distribution, not on the date you reinvest or roll it over into another IRA.
The amount to be rolled over must be reinvested, within 60 days of the date it
is received, in another IRA; if property other than cash is received as a
distribution, that same property must be reinvested.
9. May I transfer my IRA from one trustee/custodian to another? An IRA
may be transferred to another IRA as often as you wish, provided that the funds
are transferred directly from the trustee or custodian of the first IRA to the
trustee or custodian of the IRA established in its place. The funds cannot be
within the control or use of the IRA owner.
10. If I roll over a distribution from my employer's plan to an IRA, can I
roll those assets into my new employer's plan? Yes. In this situation, your IRA
serves as a conduit between your old plan and your new employer's retirement
plan. However, the assets must be maintained separately and not combined with a
regular IRA to which contributions are made.
11. What is a SEP-IRA? An employer who adopts a simplified employee
pension plan (a "SEP") may make contributions on behalf of its employees to
their separate Portico Funds IRAs. If your employer has adopted a SEP, your
employer may make SEP contributions directly to your IRA each year in an amount
up to the lesser of $30,000 or 15% of your compensation (13.043% of your net
earnings before the contribution if you are selfemployed). Of course, you must
meet the eligibility requirements of your employer's SEP in order to be entitled
to contributions. Your employer can tell you what the eligibility requirements
are. SEPs are available from Portico Funds, Inc.
(a) Contributions after age 70-1/2. Your employer may make
contributions on your behalf to your IRA through a SEP even after you have
attained age 70-1/2.
(b) Excess contributions. If your employer makes SEP contributions
to your IRA in excess of the limit, you may be subject to the 6% excise tax on
excess contributions.
(c) Active participant. You will generally be considered an active
participant in a retirement plan for a year if you are covered by your
employer's SEP in that year. As an active participant, the amount of deductible
contributions you may make to the IRA may be limited as discussed in Question 4.
12. What happens if I contribute more than $2,000 (or $2,250)? Excess
contributions are subject to an annual federal excise tax of 6% of the amount of
the excess contribution until it is eliminated. However, you can eliminate this
excess in any one or more of the following three ways:
(a) Excess contributions withdrawn from an IRA, together with
all earnings thereon, prior to the time for filing your federal income tax
return for such taxable year (including extensions) will not be subject to the
6% federal excise tax. The earnings distributed must be included in gross income
for the taxable year in which the excess contribution was made.
(b) If you withdraw your excess contribution after the date for
filing your federal income tax return (including extensions), the entire
distribution will be subject to the 6% federal excise tax, federal income tax,
and, if you have not reached age 59-1/2, will also be subject to a 10%.
additional federal income tax on premature distributions. However, you may
receive a distribution of your excess contributions without being required to
include the amount of the distribution in your gross income or to pay the 10%
additional federal income tax (but you will still be subject to the 6% federal
excise tax for the year of contribution), provided that you have taken no
federal income tax deduction for the amount of the excess contribution
distributed, and the total contribution, including the excess contribution, for
the taxable year in which the excess contribution was made, did not exceed
$2,250.
(c) You may reduce or eliminate an excess contribution in later taxable years
for which you are eligible to contribute to an IRA if you do not make the
maximum allowable contribution for retirement savings in the later year. So, if
you contribute less than the maximum contribution allowed for any year after the
excess contribution was made, the difference between the maximum contribution
allowable and the amount claimed can be used to reduce or eliminate the excess
contribution. The amount of the excess contribution used will also reduce or
eliminate the amount subject to the 6% federal excise tax for the year in which
it is used.
13. What happens to my IRA upon death? If you die before the entire fund
has been distributed, the remaining funds in your IRA must be distributed in a
single sum or installments to your designated beneficiary by December 31 of the
fifth year after the year of your death except that (i) if distributions began
before your death over a fixed period of time permitted by tax laws,
distribution may continue over the unexpired portion of that period, even if it
is longer than five years, or (ii) if distributions begin to your designated
beneficiary by December 31 of the year after the year of your death and the
payments are to be made over a period not exceeding your beneficiary's life
expectancy, payments may be made over that period, even if it is longer than
five years. If your beneficiary is your surviving spouse, the distributions in
(ii) do not have to begin until the later of the date in (ii) or December 31 of
the year you would have attained age 70 1/2.
The distributions discussed above need not be made if your designated
beneficiary is your surviving spouse and he or she elects to treat his or her
interest in your IRA as his or her own IRA. If your beneficiary is your
surviving spouse and he or she makes this election or is deemed to have made
this election, your beneficiary will become subject to all the terms, conditions
and restrictions of the IRA which are applicable to you.
14. Can I withdraw funds from my IRA? Funds generally cannot be withdrawn
from your IRA without adverse tax consequences prior to the date on which you
attain age 59-1/2. Any distributions prior to that time are considered to be
premature distributions.
Distributions after you attain age 59-1/2 or after you die or are
disabled are, for federal income tax purposes, taxed in full to you or your
beneficiaries at ordinary income tax rates unless you have made nondeductible
contributions. Because nondeductible IRA contributions are made using income
which has already been taxed (that is, they are not deductible contributions),
the portion of the IRA distributions consisting of nondeductible contributions
will not be taxed again when received by you. If you make any nondeductible IRA
contributions, each distribution from your IRA will consist of a nontaxable
portion (return of nondeductible contributions) and a taxable portion (return of
deductible contributions, if any, and account earnings). Thus, you may not take
a distribution which is entirely tax-free.
The following formula is used to determine the nontaxable portion of your
distributions for a taxable year:
Remaining
Nondeductible Total Nontaxable
Contributions x Distributions = Distributions
Year-end total IRA (for the year) (for the year)
Account Balances
A single sum distribution from your IRA is not eligible for special
five- or ten-year income averaging or capital gains treatment sometimes
available for lump sum distributions from certain employer retirement plans.
15. When must I begin receiving a distribution from my IRA?
You must begin to receive distributions from your IRA on or before April 1 of
the calendar year following the calendar year in which you attain age 70-1/2.
Further, a minimum distribution must be made each year. This minimum
distribution is based on your life expectancy or the joint life expectancy of
you and your designated beneficiary and is computed under annuity tables
published by the Internal Revenue Service. In determining the amount of the
minimum distribution from your IRA for any year, any amounts withdrawn from your
IRA for the purpose of making a rollover or transfer to another IRA will be
considered as part of your IRA for such year.
In order to insure that the minimum amount required to be distributed
after you reach age 70-1/2 or after you die is in fact paid out to you or your
beneficiary, a 50% federal excise tax will be imposed on the difference between
the amount of the distribution actually made and the amount that should have
been distributed, except that the IRS may waive the penalty, if it finds that
the minimum requirement has not been met because of a reasonable error and
appropriate steps are being taken to correct the error.
16. Can my IRA be disqualified? Yes. If you borrow money from your IRA,
or if you use all or any portion of your IRA as security for a loan (or engage
in any other prohibited transaction), your IRA will lose its tax-exempt status
as of the first day of the year in which the prohibited transaction occurs. In
addition, if you have not attained age 59-1/2, you may also have to pay the 10%.
penalty tax on premature distributions.
17. Are taxes withheld on distributions I receive from my IRA? Federal
income taxes will be withheld on any distributions you receive from your IRA
unless you elect not to have tax withheld. Generally, tax will be withheld at
the rate of 10% of each distribution. You must elect not to have federal income
tax withheld at the same time you request a withdrawal from your IRA, otherwise,
tax will automatically be withheld. When distributions from your IRA have begun
and are being made on an annual, quarterly, or monthly basis, you will be
provided with a notice of your right to elect not to have tax withheld prior to
the beginning of each calendar year to which the notice relates.
18. What reports must I file with the IRS? You are not required to file Form
5329 (Return for Individual Retirement Arrangement Taxes) with the IRS unless
you owe one of the penalty taxes for premature distributions, excess
contributions, or under- distribution. You are required to file Form 8606
(Nondeductible IRA Contributions ...) for any year for which you choose to make
nondeductible contributions.
19. Is the Portico Funds IRA in compliance with the Internal Revenue
Service requirements? The Portico funds IRA was approved by the IRS (Letter
Serial Number B112218a) on October 3, 1988 (under the name "Elan Funds
Individual Retirement Account Custodial Agreement"). IRS approval is an opinion
only as to the form of the Portico Funds IRA, and does not represent any opinion
by the IRS as to the merits of the Portico Funds IRA.
20. What will the rate of return be on my Portico IRA contributions? The
Custodian will invest the funds in your IRA, in accordance with your directions,
in shares of one or more of the investment portfolios managed by Portico Funds,
Inc. The value of your Portico Funds IRA may increase or decrease as a result
of the investment performance of the Fund(s) in which your contributions are
invested. Thus, the rate of growth of your IRA cannot be guaranteed or
reasonably projected.
Fund shares are not bank deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by First Wisconsin, and are
not otherwise obligations of First Wisconsin.
21. What are the IRA fees? The Custodian will charge the following fees:
(a) Annual maintenance fee $10.00 per account
(b) Transfer to/from successor/
prior custodian $12.00
(c) Automatic periodic distribu-
tions $15.00 annually
(d) Total distribution (including
rollover or direct transfers) $15.00
(e) Refund of excess contribution $15.00
(f) Any outgoing wire transfer $ 7.50
The annual maintenance fee will be deducted from your account annually on the
last business day of each September (or on the date you redeem or transfer your
entire account balance, if earlier). The charge for refund of excess
contribution will be deducted from your account at the time of the refund. The
fees are subject to change.
22. QUALIFIED TAX ADVICE. THE PRECEDING IS A GENERAL
DESCRIPTION OF THE MANNER IN WHICH IRAS ARE TAXED UNDER THE INTERNAL REVENUE
CODE. BECAUSE OF THE UNFAVORABLE TAX CONSEQUENCES WHICH COULD RESULT FROM
IMPROPER ESTABLISHMENT OR USE OF A PORTICO FUND IRA, YOU MAY WISH TO CONSULT
WITH AN ATTORNEY OR OTHER QUALIFIED TAX ADVISER. NEITHER FIRST WISCONSIN TRUST
COMPANY, NOR PORTICO FUND, INC., NOR ANY FUND GIVES TAX OR OTHER LEGAL ADVICE OR
ASSUMES ANY LIABILITY FOR TAX OR OTHER CONSEQUENCES TO INVESTORS, THEIR SPOUSES,
THEIR BENEFICIARIES, OR ANY OTHER PARTIES ARISING FROM PORTICO FUNDS IRA.
<TABLE>
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PORTICO FUNDS
IRA Application
#1...Please print Beneficiary Designation (Optional)
( ) ( )
- ------------------------- -- -------------------- ---------------------------- -- -----------------
Your Name Day Phone Name of Beneficiary Day Phone
- ------------------------------------------------- -------------------------------------------------
Address Address
- ------------------------------------------------- -------------------------------------------------
City State Zip City State Zip
2------------------------------------------------- -------------------------------------------------
Date of Birth Social Security Number Date of Birth Social Security Number
#2...Please indicate the type of IRA
( ) Individual Retirement Account ($2,000 maximum)
For Tax Year 19 .
---
( ) Spousal Account ($250 minimum) for a non-working spouse. Please use separate application for a spousal IRA
For Tax Year 19 .
---
( ) Rollover account (you had physical receipt of assets for less than 60 days)
If Rollover Account, please specify the type of account held by previous custodian below:
( )IRA ( ) Corporate ( ) Pension Plan ( ) Profit Sharing Plan ( ) 403(b) ( ) 401(k)
( )Other (please specify)
-----------------------------------------------------------
Please indicate by checking below if assets are a direct transfer from previous custodian (you did not have personal receipt of
assets)
( ) Transfer Account (please complete the IRA Transfer Form)
#3...Please fill in the amount to be invested
(Minimum investment is $100)
Initial amount of contribution to the Portico Money Market Fund $
----------------
#4...Acknowledgement and Signature
I adopt the Portico IRA, appointing the First Wisconsin Trust Company to act as Custodian, and to perform administrative services.
I have received and read the Prospectus for the Portfolio(s) in which I am making my contribution, and have read and understand the
IRA Custodial Agreement and Disclosure Statement. I certify under penalties of perjury that my Social Security Number (above) is
correct and that I am of legal age. I understand the following fees may be separately billed or collected by redeeming sufficient
shares from each portfolio account balance: (1) an annual $10 maintenance fee, and (2) a $15 account liquidation fee. I will
supply the Internal Revenue Service with information as to any taxable year as required unless filed by the Custodian.
I have read, accept and incorporate the Custodial Agreement herein, by reference. I appoint First Wisconsin Trust Company or its
successors, as custodian of the account(s).
Appointment of Custodian accepted:
FIRST WISCONSIN TRUST COMPANY
- -------------------------------------------------
Your Signature Date
- -------------------------------------------------
First Wisconsin Trust Company Date
- -------------------------------------------------
Authorized Signature
Please mail completed form to:
Portico Funds
First Wisconsin Trust Co.
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
(FOR FUND USE ONLY)
SERVICE ORGANIZATION
----------------
BRANCH
------------------------------
REPRESENTATIVE
----------------------
REPRESENTATIVE NUMBER
---------------
</TABLE>
<TABLE>
<CAPTION>
PORTICO FUNDS
IRA Transfer Form
INSTRUCTIONS:Use this form when transferring funds from an existing IRA to the Portico Funds IRA.
If you are establishing a new account, you must also fill out a Portico Funds application form. A $12.00 transfer-in fee should
accompany this form; otherwise the fee will be deducted from the amount of the transfer. Please complete sections #1-3 below and
send this transfer form along with your application or existing Fund IRA account number to:
Portico Funds
P.O. Box 701
Milwaukee, WI 53201-0701
Please be advised that your current Trustee/Custodian may require that you obtain a signature guarantee to process this transfer.
Upon receipt of the completed form(s) from you, we will contact your current custodian and process this transfer for you. We will
notify you when the transfer has been processed and your funds have been invested in the Portico Funds.
<S> <C>
#1...Your Name
- ------------------------------------------------- -------------------------------------------------
Your Name Social Security Number
- ------------------------------------------------- -------------------------------------------------
Address Work Telephone
- ------------------------------------------------- -------------------------------------------------
City State ZIP Home Telephone
#2...Attention: Retirement Plan Department
Please consider this your authority to transfer: ( ) All of my assets in account #:
--------------------
( ) $ in account #:
---------- -------------------------
-------------------------------------------- -------------------------------------------------
Name of Current Custodian (mutual fund, bank, S&L, etc.) Maturity Date (if applicable)
-------------------------------------------- -------------------------------------------------
Address Current Account Number
-------------------------------------------- -------------------------------------------------
City State ZIP
It is my intention to transfer these assets to an IRA with the Portico Funds for which First Wisconsin Trust Company acts as
custodian.
-------------------------------------------- -------------------------------------------------
Signature Date of Signature Signature Guarantee (if required)
#3...Please deposit these assets into:
(x) My existing IRA With the Portico FundsAccount#:
( ) A new account With the Portico Funds
(This portion to be completed by the First Wisconsin Trust Company-Trustee/Custodian for the IRA)
ACCEPTANCE: Please be advised that the First Wisconsin Trust Company has been appointed to serve as successor custodian of this
IRA. Please send the check representing the liquidation of the assets indicated above along with a copy of this form to identify
the check as a transfer of assets to:
First Wisconsin Trust Company
P.O. Box 701
Milwaukee, WI 53201-0701
- ------------------------------------ -------------------------
Authorized Signature Date
</TABLE>
Exhibit (15)(a)
PORTICO FUNDS, INC.
AMENDED AND RESTATED DISTRIBUTION AND SERVICE PLAN
This Distribution and Service Plan (the "Plan") has been adopted by the
Board of Directors of Portico Funds, Inc. in accordance with Rule 12b-1 under
the Investment Company Act of 1940 (the "Act").
Section 1. Any officer of Portico Funds, Inc. ("Portico Funds"), is
authorized to execute and deliver, in the name and on behalf of Portico Funds,
written agreements based on the form attached hereto as Appendix A or any other
form duly approved by the Board of Directors ("Agreements") with securities
dealers, financial institutions and other industry professionals ("Shareholder
Organizations") that are shareholders or dealers of record or which have a
servicing relationship with the beneficial owners of Shares of Series A Shares
of any Portico Fund except the Institutional Money Market Fund (each, a "Fund"
and collectively, the "Funds"). Pursuant to such Agreements, Shareholder
Organizations shall provide distribution and support services as set forth
therein to their clients who acquire and beneficially own Series A Shares of any
Fund offered by Portico Funds in consideration of a fee, computed monthly in the
manner set forth in the Agreements, at an annual rate of up to .25% of the
average daily net asset value of the outstanding Series A Shares beneficially
owned by such clients. Firstar Trust Company ("Firstar") and its affiliates are
eligible to become Shareholder Organizations and to receive fees under this
Plan.
Section 2. The distributor shall monitor the arrangements pertaining
to Portico Funds' Agreements with Shareholder Organizations in accordance with
the terms of the distributor's agreement with Portico Funds. Portico Funds
shall not be obliged to execute any Agreement with any qualifying Shareholder
Organization.
Section 3. So long as this Plan is in effect, the distributor shall
provide to Portico Funds' Board of Directors, and the Directors shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such expenditures were made.
Section 4. This Plan has previously become effective with respect to
each particular Fund upon the approval of the Plan (and the form of Agreement
attached hereto) by (a) a majority of the Board of Directors, including a
majority of the Directors who are not "interested persons," as defined in the
Act, of Portico Funds and have no direct or indirect financial interest in the
operation of this Plan or in any Agreement related to this Plan (the
"Disinterested Directors"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan (and form of
Agreement), and (b) a majority (as defined in the Act) of the outstanding Series
A Shares of such Fund.
Section 5. Unless sooner terminated, this Plan shall continue until
February 29, 1995 and thereafter shall continue automatically for successive
annual periods provided such continuance is approved at least annually in the
manner set forth in Section 4(a).
Section 6. This Plan may be amended at any time with respect to any
Fund by the Board of Directors, provided that (a) any amendment to increase
materially the costs (whether for distribution or any other purpose) which such
Fund may bear pursuant to this Plan shall be effective only upon the favorable
vote of a majority (as defined in the Act) of the outstanding Series A Shares of
such Fund, and (b) any material amendment of the terms of this Plan shall become
effective only upon the approvals set forth in Section 4(a).
Section 7. This Plan is terminable at any time with respect to any Fund
by (a) vote of a majority of the Disinterested Directors, or (b) vote of a
majority (as defined in the Act) of the Series A Shares of such Fund.
Section 8. While this Plan is in effect, the selection and nomination
of those Directors who are not "interested persons" (as defined in the Act) of
Portico Funds shall be committed to the discretion of such non-interested
Directors.
Section 9. All expenses incurred by Portico Funds with respect to the
Series A Shares of a particular Fund in connection with Agreements and the
implementation of this Plan shall be borne entirely by Series A Shares of such
Fund.
Section 10. Portico Funds originally adopted this Plan as of February
25, 1988 and was amended and re-adopted on December 16, 1994.
Appendix A
DISTRIBUTION AND SERVICING AGREEMENT
Gentlemen:
We wish to enter into this Distribution and Servicing Agreement
("Agreement") with you concerning the provision of distribution services (and,
to the extent provided below, support services) to your clients ("Clients") who
may from time to time acquire and beneficially own shares of Series A Common
Stock of any Fund except the Institutional Money Market Fund offered by Portico
Funds, Inc.
The terms and conditions of this Agreement are as follows:
Section 1. You will provide reasonable assistance in connection with
the distribution of Series A Shares to Clients as requested from time to time by
our distributor, which assistance may include forwarding sales literature and
advertising provided by our distributor for Clients. In addition, you agree to
provide the following support services to Clients who may from time to time
acquire and beneficially own Series A Shares:<F108> (i) processing dividend and
distribution payments from us on behalf of Clients; (ii) providing information
periodically to Clients showing their positions in Series A Shares; (iii)
arranging for bank wires; (iv) responding to Client inquiries relating to the
services performed by you; (v) providing subaccounting with respect to Series A
Shares beneficially owned by Clients or the information to us necessary for
subaccounting; (vi) if required by law, forwarding shareholder communications
from us (such as proxies, shareholder reports, annual and semiannual financial
statements and dividend, distribution and tax notices) to Clients; (vii)
assisting in processing purchase, exchange and redemption requests from Clients
and in placing such orders with our service contractors; (viii) assisting
Clients in changing dividend options, account designations and addresses; and
(ix) providing such other similar services as we may reasonably request to the
extent you are permitted to do so under applicable statutes, rules and
regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the aforementioned
services and assistance to Clients.
Section 3. Neither you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the Series A Shares
except those contained in our then current prospectuses and statements of
additional information for Series A Shares, copies of which will be supplied by
us to you, or in such supplemental literature or advertising as may be
authorized by us in writing.
Section 4. For all purposes of this Agreement you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Series A Shares (or orders relating to the same) by
or on behalf of Clients. You and your employees will, upon request, be
available during normal business hours to consult with us or our designees
concerning the performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee at the annual rate of . of 1% of the average daily net asset value of
---
the Series A Shares beneficially owned by your Clients for whom you are the
dealer of record or holder of record or with whom you have a servicing
relationship (the "Clients' Series A Shares"), which fee will be computed daily
and payable monthly. For purposes of determining the fees payable under this
Section 5, the average daily net asset value of the Clients' Series A Shares
will be computed in the manner specified in our Registration Statement (as the
same is in effect from time to time) in connection with the computation of the
net asset value of Series A Shares for purposes of purchases and redemptions.
The fee rate stated above may be prospectively increased or decreased by us, in
our sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of Series A Shares,
including the sale of Series A Shares to you for the account of any Client or
Clients. All fees payable by Portico Funds under this Agreement with respect to
the Series A Shares of a particular Fund shall be borne by, and be payable
entirely out of the assets allocable to, said Series A Shares; and no other Fund
or series of Shares offered by Portico Funds shall be responsible for such fees.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by us pursuant to this Agreement will provide to our Board of
Directors, and our Directors will review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made. In addition, you will furnish us or our designees with such information
as we or they may reasonably request (including, without limitation, periodic
certifications confirming the provision to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Directors concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports
or filings that may be required by law.
Section 7. We may enter into other similar Agreements with any other
person or persons without your consent.
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you hereunder, together
with any other compensation you receive from Clients for services contemplated
by this Agreement, will not be excessive or unreasonable under the laws and
instruments governing your relationships with Clients; and (ii) you will provide
to Clients a schedule of any fees that you may charge to them relating to the
investment of their assets in Series A Shares. In addition, you understand that
this Agreement has been entered into pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "Act"), and is subject to the provisions of said Rule,
as well as any other applicable rules or regulations promulgated by the
Securities and Exchange Commission.
Section 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless
sooner terminated, this Agreement will continue until February 28, 199 , and
-
thereafter will continue automatically for successive annual periods provided
such continuance is specifically approved at least annually by us in the manner
described in Section 12. This Agreement is terminable with respect to the Series
A Shares of any Fund, without penalty, at any time by us (which termination may
be by a vote of a majority of the Disinterested Directors as defined in Section
12 or by vote of the holders of a majority of the outstanding Series A Shares of
such Fund) or by you upon notice to the other party hereto. This Agreement will
also terminate automatically in the event of its assignment (as defined in the
Act).
Section 10. All notices and other communications to either you or us
will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address stated herein.
Section 11. This Agreement will be construed in accordance with the
laws of the State of Wisconsin.
Section 12. This Agreement has been approved by vote of a majority of
(i) our Board of Directors and (ii) those Directors who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in the operation of the Distribution and
Service Plan adopted by us or in any agreement related thereto cast in person at
a meeting called for the purpose of voting on such approval ("Disinterested
Directors").
<F108>Services may be modified or omitted in the particular case and items
renumbered.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us.
Very truly yours,
PORTICO FUNDS, INC.
Date: By:
-------------- ----------------------------
(Authorized Officer)
Accepted and Agreed to:
[Shareholder Organization]
Date: By:
-------------- ----------------------------
(Authorized Officer)
Exhibit (16)(a)
MONEY MARKET FUND
-----------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
YIELD
FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 31, 1995
ANNUALIZED YIELD = 5.23%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN/1 X 365/7)
= (.00100225735/1) X 365/7
= 5.23%
EFFECTIVE YIELD = 5.36%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN + 1)^365/7 - 1
= (.00100225735 + 1)^365/7 - 1
= 5.36%
Exhibit (16)(b)
TAX-EXEMPT MONEY MARKET FUND
- ----------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
YIELD
FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 31, 1995
ANNUALIZED YIELD = 3.40%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN/1 X 365/7)
= (.00065222427/1) X 365/7
= 3.40%
EFFECTIVE YIELD = 3.46%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN + 1)^365/7 - 1
= (.00065222427 + 1)^365/7 - 1
= 3.46%
Exhibit (16)(c)
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
YIELD
FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 31, 1995
ANNUALIZED YIELD = 4.60%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN/1 X 365/7
= (.00088161915/1) X 365/7
= 4.60%
EFFECTIVE YIELD = 4.70%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN + 1)^365/7 - 1
= (.00088161915 + 1)^365/7 - 1
= 4.70%
Exhibit (16)(d)
PORTICO GROWTH AND INCOME FUND
- ------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,730.73/ 1,384.62) - 1
Total Return = 25.00%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,730.73/ 1,000.00) - 1
Total Return = 73.07%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,727.28/ 1,384.62) - 1
Total Return = 24.75%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,727.28/ 1,000.00) - 1
Total Return = 72.73%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,658.33/ 1,384.62) - 1
Total Return = 19.77%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,658.45/ 1,000.00) - 1
Total Return = 65.85%
Exhibit (16)(e)
PORTICO SHORT-TERM BOND MARKET FUND
- -----------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,529.01/ 1,403.65) - 1
Total Return = 8.95%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,529.01/ 1,000.00) - 1
Total Return = 52.90%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,526.36/ 1,403.65) - 1
Total Return = 8.74%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,526.36/ 1,000.00) - 1
Total Return = 52.64%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,496.52/ 1,403.65) - 1
Total Return = 6.62%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,497.23/ 1,000.00) - 1
Total Return = 49.72%
Exhibit (16)(f)
PORTICO SPECIAL GROWTH FUND
- ---------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,344.89/ 1,864.11) - 1
Total Return = 25.79%
For the Period from December 28, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,344.89/ 1,000.00) - 1
Total Return = 134.49%
RETAIL SALES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,340.64/ 1,864.11) - 1
Total Return = 25.56%
For the Period from December 28, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,340.64/ 1,000.00) - 1
Total Return = 134.06%
RETAIL SALES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,247.2/ 1,864.11) - 1
Total Return = 20.55%
For the Period from December 28, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (2,247.37/ 1,000.00) - 1
Total Return = 124.74%
Exhibit (16)(g)
PORTICO BOND IMMDEX/TM FUND
- ---------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,693.38/ 1,456.50) - 1
Total Return = 16.26%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,693.38/ 1,000.00) - 1
Total Return = 69.34%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,690.31/ 1,456.50) - 1
Total Return = 16.05%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,690.31/ 1,000.00) - 1
Total Return = 69.03%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,656.75/ 1,456.50) - 1
Total Return = 13.75%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,656.51/ 1,000.00) - 1
Total Return = 65.65%
Exhibit (16)(h)
PORTICO EQUITY INDEX FUND
- -------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,910.12/ 1,515.74) - 1
Total Return = 26.02%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,910.12/ 1,000.00) - 1
Total Return = 91.01%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,906.64/ 1,515.74) - 1
Total Return = 25.79%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,906.64/ 1,000.00) - 1
Total Return = 90.66%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,830.48/ 1,515.74) - 1
Total Return = 20.76%
For the Period from December 29, 1989
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,830.49/ 1,000.00) - 1
Total Return = 83.05%
Exhibit (16)(i)
INSTITUTIONAL MONEY MARKET FUND
- ---------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
YIELD
FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 31, 1995
ANNUALIZED YIELD = 5.50%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN/1 X 365/7
= (.00105419057/1) X 365/7
= 5.50%
EFFECTIVE YIELD = 5.65%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN + 1)^365/7 - 1
= (.00105419057 + 1)^365/7 - 1
= 5.65%
Exhibit (16)(j)
U.S. TREASURY MONEY MARKET FUND
- -------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
YIELD
FOR THE SEVEN-DAY PERIOD ENDED OCTOBER 31, 1995
ANNUALIZED YIELD = 4.89%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN/1 X 365/7
= (.00093786644/1) X 365/7
= 4.89%
EFFECTIVE YIELD = 5.01%
FORMULA:
ANNUALIZED YIELD = (BASE PERIOD RETURN + 1)^365/7 - 1
= (.00093786644 + 1)^365/7 - 1
= 5.01%
Exhibit (16)(k)
PORTICO BALANCED FUND
- ---------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,396.91/ 1,166.18) - 1
Total Return = 19.79%
For the Period from March 30, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,396.91/ 1,000.00) - 1
Total Return = 39.69%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,394.11/1,166.18) - 1
Total Return = 19.55%
For the Period from March 30, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,394.11/ 1,000.00) - 1
Total Return = 39.41%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,338.39/ 1,166,18) - 1
Total Return = 14.77%
For the Period from March 30, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,338.56/ 1,000.00) - 1
Total Return = 33.86%
Exhibit (16)(l)
PORTICO MIDCORE GROWTH FUND
- ---------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,292.69/ 1,081.31) - 1
Total Return = 19.55%
For the Period from December 29, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,292.69/ 1,000.00) - 1
Total Return = 29.27%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,290.07/ 1,081.31) - 1
Total Return = 19.31%
For the Period from December 29, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,290.07/ 1,000.00) - 1
Total Return = 29.01%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,238.73/ 1,081.31) - 1
Total Return = 14.56%
For the Period from December 29, 1992
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,238.67/ 1,000.00) - 1
Total Return = 23.87%
Exhibit (16)(m)
PORTICO INTERMEDIATE BOND MARKET FUND
- -------------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,197.78/ 1,067.07) - 1
Total Return = 12.25%
For the Period from January 5, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,197.78/ 1,000.00) - 1
Total Return = 19.78%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,195.59/ 1,06.07) - 1
Total Return = 12.04%
For the Period from January 5, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,195.59/ 1,000.00) - 1
Total Return = 19.56%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,171.36/ 1,067.07) - 1
Total Return = 9.77%
For the Period from January 5, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,172.35/ 1,000.00) - 1
Total Return = 17.23%
Exhibit (16)(n)
PORTICO TAX-EXEMPT INTERMEDIATE BOND FUND
- -----------------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,143.99/ 1,045.89) - 1
Total Return = 9.38%
For the Period from February 8, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,143.99/ 1,000.00) - 1
Total Return = 14.40%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,140.76/ 1,045.89) - 1
Total Return = 9.07%
For the Period from February 8, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,140.76/ 1,000.00) - 1
Total Return = 14.08%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,117.89/ 1,045.89) - 1
Total Return = 6.88%
For the Period from February 8, 1993
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (1,118.39/ 1,000.00) - 1
Total Return = 11.84%
Exhibit (16)(o)
PORTICO INTERNATIONAL EQUITY FUND
- ---------------------------------
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
TOTAL RETURN
INSTITUTIONAL SERIES
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (962.04/ 999.50) - 1
Total Return = -3.75%
For the Period from April 28, 1994
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (962.04/ 1,000.00) - 1
Total Return = -3.80%
RETAIL SERIES - WITHOUT SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (960.04/ 999.50) - 1
Total Return = -3.95%
For the Period from April 28, 1994
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (960.04/ 1,000.00) - 1
Total Return = -4.00%
RETAIL SERIES - WITH SALES LOAD
For the Year Ended October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (921.76/ 999.50) - 1
Total Return = -7.78%
For the Period from April 28, 1994
(Commencement of Operations)
to October 31, 1995
Total Return = (Ending Redeemable Value/Initial Value) - 1
Total Return = (921.78/ 1,000.00) - 1
Total Return = -7.82%
****************
Exhibit (17)
[ARTICLE] 6
[SERIES]
[NUMBER] 1
[NAME] PORTICO MONEY MARKET FUND
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 173,033
[INVESTMENTS-AT-VALUE] 173,033
[RECEIVABLES] 80
[ASSETS-OTHER] 9
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 173,122
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 861
[TOTAL-LIABILITIES] 861
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 172,244
[SHARES-COMMON-STOCK] 172,261
[SHARES-COMMON-PRIOR] 165,018
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 172,261
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 9,388
[OTHER-INCOME] 0
[EXPENSES-NET] 945
[NET-INVESTMENT-INCOME] 8,443
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 8,443
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 8,443
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 601,835
[NUMBER-OF-SHARES-REDEEMED] 601,692
[SHARES-REINVESTED] 7,100
[NET-CHANGE-IN-ASSETS] 7,243
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 788
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,430
[AVERAGE-NET-ASSETS] 157,621
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .05
[PER-SHARE-GAIN-APPREC] 005
[PER-SHARE-DIVIDEND] .05
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is actual and not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 2
[NAME] PORTICO U.S. GOVERNMENT MONEY MARKET FUND
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 163,056
[INVESTMENTS-AT-VALUE] 163,056
[RECEIVABLES] 769
[ASSETS-OTHER] 9
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 163,834
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 766
[TOTAL-LIABILITIES] 766
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 163,052
[SHARES-COMMON-STOCK] 163,068
[SHARES-COMMON-PRIOR] 183,591
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 163,068
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 10,115
[OTHER-INCOME] 0
[EXPENSES-NET] 1,039
[NET-INVESTMENT-INCOME] 9,076
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 9,076
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 9,076
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 875,356
[NUMBER-OF-SHARES-REDEEMED] 898,528
[SHARES-REINVESTED] 2,649
[NET-CHANGE-IN-ASSETS] (20,523)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 866
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,305
[AVERAGE-NET-ASSETS] 173,252
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .05
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] .05
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .6
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is the actual amount and not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 3
[NAME] PORTICO TAX-EXEMPT MONEY MARKET FUND
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1995
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 83,469
[INVESTMENTS-AT-VALUE] 83,469
[RECEIVABLES] 654
[ASSETS-OTHER] 226
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 84,349
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 265
[TOTAL-LIABILITIES] 265
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 84,076
[SHARES-COMMON-STOCK] 84,084
[SHARES-COMMON-PRIOR] 70,436
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 84,084
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 2,779
[OTHER-INCOME] 0
[EXPENSES-NET] 420
[NET-INVESTMENT-INCOME] 2,359
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 2,359
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,359
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 182,982
[NUMBER-OF-SHARES-REDEEMED] 170,218
[SHARES-REINVESTED] 884
[NET-CHANGE-IN-ASSETS] 13,648
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 351
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 590
[AVERAGE-NET-ASSETS] 70,117
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .03
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] .03
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .6
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is the actual amount and not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 4
[NAME] PORTICO SHORT-TERM BOND MARKET FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 140,017
[INVESTMENTS-AT-VALUE] 140,828
[RECEIVABLES] 5,128
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 145,960
[PAYABLE-FOR-SECURITIES] 3,191
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 80
[TOTAL-LIABILITIES] 3,271
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 143,386
[SHARES-COMMON-STOCK] 4,641
[SHARES-COMMON-PRIOR] 12,200
[ACCUMULATED-NII-CURRENT] 119
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,628)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 811
[NET-ASSETS] 142,689
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 8,616
[OTHER-INCOME] 0
[EXPENSES-NET] 729
[NET-INVESTMENT-INCOME] 7,887
[REALIZED-GAINS-CURRENT] (329)
[APPREC-INCREASE-CURRENT] 3,275
[NET-CHANGE-FROM-OPS] 10,833
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 3,617
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,264
[NUMBER-OF-SHARES-REDEEMED] 9,150
[SHARES-REINVESTED] 327
[NET-CHANGE-IN-ASSETS] 20,321
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (1,361)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 767
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,261
[AVERAGE-NET-ASSETS] 127,903
[PER-SHARE-NAV-BEGIN] 10.03
[PER-SHARE-NII] .61
[PER-SHARE-GAIN-APPREC] .24
[PER-SHARE-DIVIDEND] .6
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.27
[EXPENSE-RATIO] .69
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is actual and not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 5
[NAME] PORTICO BOND IMMDEX - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 293,903
[INVESTMENTS-AT-VALUE] 307,132
[RECEIVABLES] 5,190
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 312,330
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 181
[TOTAL-LIABILITIES] 181
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 299,707
[SHARES-COMMON-STOCK] 786
[SHARES-COMMON-PRIOR] 10,004
[ACCUMULATED-NII-CURRENT] 261
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,049)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 13,229
[NET-ASSETS] 312,149
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 19,286
[OTHER-INCOME] 0
[EXPENSES-NET] 1,261
[NET-INVESTMENT-INCOME] 18,025
[REALIZED-GAINS-CURRENT] (890)
[APPREC-INCREASE-CURRENT] 24,964
[NET-CHANGE-FROM-OPS] 42,099
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 4,860
[DISTRIBUTIONS-OF-GAINS] 404
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 644
[NUMBER-OF-SHARES-REDEEMED] 10,042
[SHARES-REINVESTED] 180
[NET-CHANGE-IN-ASSETS] 55,371
[ACCUMULATED-NII-PRIOR] 1,494
[ACCUMULATED-GAINS-PRIOR] (67)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 832
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,436
[AVERAGE-NET-ASSETS] 277,498
[PER-SHARE-NAV-BEGIN] 25.67
[PER-SHARE-NII] 1.68
[PER-SHARE-GAIN-APPREC] 2.30
[PER-SHARE-DIVIDEND] 1.79
[PER-SHARE-DISTRIBUTIONS] .04
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 27.82
[EXPENSE-RATIO] .64
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is actual and not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 6
[NAME] PORTICO GROWTH AND INCOME FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 168,068
[INVESTMENTS-AT-VALUE] 207,586
[RECEIVABLES] 465
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 208,055
[PAYABLE-FOR-SECURITIES] 2,697
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 182
[TOTAL-LIABILITIES] 2,879
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 156,703
[SHARES-COMMON-STOCK] 1,536
[SHARES-COMMON-PRIOR] 7,105
[ACCUMULATED-NII-CURRENT] 175
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 8,779
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 39,518
[NET-ASSETS] 205,176
[DIVIDEND-INCOME] 3,924
[INTEREST-INCOME] 744
[OTHER-INCOME] 0
[EXPENSES-NET] 1,693
[NET-INVESTMENT-INCOME] 2,975
[REALIZED-GAINS-CURRENT] 8,861
[APPREC-INCREASE-CURRENT] 28,643
[NET-CHANGE-FROM-OPS] 40,479
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,299
[DISTRIBUTIONS-OF-GAINS] 4,244
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 466
[NUMBER-OF-SHARES-REDEEMED] 6,267
[SHARES-REINVESTED] 232
[NET-CHANGE-IN-ASSETS] 41,123
[ACCUMULATED-NII-PRIOR] 165
[ACCUMULATED-GAINS-PRIOR] 4,161
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,350
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,896
[AVERAGE-NET-ASSETS] 180,154
[PER-SHARE-NAV-BEGIN] 23.09
[PER-SHARE-NII] .37
[PER-SHARE-GAIN-APPREC] 5.14
[PER-SHARE-DIVIDEND] .38
[PER-SHARE-DISTRIBUTIONS] .60
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 27.62
[EXPENSE-RATIO] 1.09
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F109>
<FN>
<F109>The expense ratio is actual and is not expressed in 1,000's
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 7
[NAME] PORTICO EQUITY INDEX - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 110,846
[INVESTMENTS-AT-VALUE] 156,546
[RECEIVABLES] 339
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 156,893
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 124
[TOTAL-LIABILITIES] 124
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 109,821
[SHARES-COMMON-STOCK] 454
[SHARES-COMMON-PRIOR] 3,219
[ACCUMULATED-NII-CURRENT] 245
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 972
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 45,731
[NET-ASSETS] 156,769
[DIVIDEND-INCOME] 3,200
[INTEREST-INCOME] 377
[OTHER-INCOME] 0
[EXPENSES-NET] 628
[NET-INVESTMENT-INCOME] 2,949
[REALIZED-GAINS-CURRENT] 1,377
[APPREC-INCREASE-CURRENT] 26,047
[NET-CHANGE-FROM-OPS] 30,373
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 957
[DISTRIBUTIONS-OF-GAINS] 201
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 326
[NUMBER-OF-SHARES-REDEEMED] 3,123
[SHARES-REINVESTED] 32
[NET-CHANGE-IN-ASSETS] 49,206
[ACCUMULATED-NII-PRIOR] 149
[ACCUMULATED-GAINS-PRIOR] (200)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 320
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 726
[AVERAGE-NET-ASSETS] 128,656
[PER-SHARE-NAV-BEGIN] 33.41
[PER-SHARE-NII] .7
[PER-SHARE-GAIN-APPREC] 7.70
[PER-SHARE-DIVIDEND] .68
[PER-SHARE-DISTRIBUTIONS] .06
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 41.07
[EXPENSE-RATIO] .66
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 8
[NAME] PORTICO SPECIAL GROWTH FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 393,397
[INVESTMENTS-AT-VALUE] 510,669
[RECEIVABLES] 11,323
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 521,996
[PAYABLE-FOR-SECURITIES] 71
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 428
[TOTAL-LIABILITIES] 499
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 347,915
[SHARES-COMMON-STOCK] 2,108
[SHARES-COMMON-PRIOR] 11,919
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 56,309
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 117,272
[NET-ASSETS] 521,497
[DIVIDEND-INCOME] 1,539
[INTEREST-INCOME] 2,461
[OTHER-INCOME] 0
[EXPENSES-NET] 4,148
[NET-INVESTMENT-INCOME] (148)
[REALIZED-GAINS-CURRENT] 57,101
[APPREC-INCREASE-CURRENT] 49,078
[NET-CHANGE-FROM-OPS] 106,031
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 2,526
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,531
[NUMBER-OF-SHARES-REDEEMED] 11,413
[SHARES-REINVESTED] 71
[NET-CHANGE-IN-ASSETS] 125,913
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 1,922
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,340
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 4,542
[AVERAGE-NET-ASSETS] 445,793
[PER-SHARE-NAV-BEGIN] 33.19
[PER-SHARE-NII] (.07)
[PER-SHARE-GAIN-APPREC] 8.49
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] .21
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 41.4
[EXPENSE-RATIO] 1.09
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 9
[NAME] PORTICO INSTITUTIONAL MONEY MARKET FUND
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 719,652
[INVESTMENTS-AT-VALUE] 719,652
[RECEIVABLES] 275
[ASSETS-OTHER] 3
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 719,930
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 3,364
[TOTAL-LIABILITIES] 3,364
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 716,494
[SHARES-COMMON-STOCK] 716,566
[SHARES-COMMON-PRIOR] 754,636
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 716,566
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 42,483
[OTHER-INCOME] 0
[EXPENSES-NET] 2,513
[NET-INVESTMENT-INCOME] 39,970
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 39,970
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 39,970
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 2,916,794
[NUMBER-OF-SHARES-REDEEMED] 2,958,874
[SHARES-REINVESTED] 4,010
[NET-CHANGE-IN-ASSETS] (38,070)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,552
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 5,043
[AVERAGE-NET-ASSETS] 710,475
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .06
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] .06
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .35
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 10
[NAME] PORTICO U.S. TREASURY MONEY MARKET FUND
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 63,872
[INVESTMENTS-AT-VALUE] 63,872
[RECEIVABLES] 1,082
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 64,958
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 303
[TOTAL-LIABILITIES] 303
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 64,649
[SHARES-COMMON-STOCK] 64,655
[SHARES-COMMON-PRIOR] 56,020
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 64,655
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 3,348
[OTHER-INCOME] 0
[EXPENSES-NET] 356
[NET-INVESTMENT-INCOME] 2,992
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 2,992
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,992
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 205,921
[NUMBER-OF-SHARES-REDEEMED] 197,569
[SHARES-REINVESTED] 283
[NET-CHANGE-IN-ASSETS] 8,635
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 297
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 498
[AVERAGE-NET-ASSETS] 59,356
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .05
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] .05
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .60<F110>
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 11
[NAME] PORTICO BALANCED FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 104,294
[INVESTMENTS-AT-VALUE] 125,237
[RECEIVABLES] 1,505
[ASSETS-OTHER] 16
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 126,758
[PAYABLE-FOR-SECURITIES] 277
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 97
[TOTAL-LIABILITIES] 374
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 102,869
[SHARES-COMMON-STOCK] 843
[SHARES-COMMON-PRIOR] 4,283
[ACCUMULATED-NII-CURRENT] 226
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 2,346
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 20,943
[NET-ASSETS] 126,384
[DIVIDEND-INCOME] 411
[INTEREST-INCOME] 2,897
[OTHER-INCOME] 0
[EXPENSES-NET] 864
[NET-INVESTMENT-INCOME] 2,444
[REALIZED-GAINS-CURRENT] 3,757
[APPREC-INCREASE-CURRENT] 14,596
[NET-CHANGE-FROM-OPS] 20,797
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 825
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 774
[NUMBER-OF-SHARES-REDEEMED] 4,250
[SHARES-REINVESTED] 36
[NET-CHANGE-IN-ASSETS] 31,727
[ACCUMULATED-NII-PRIOR] 146
[ACCUMULATED-GAINS-PRIOR] (1,412)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 828
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,214
[AVERAGE-NET-ASSETS] 110,668
[PER-SHARE-NAV-BEGIN] 22.10
[PER-SHARE-NII] .49
[PER-SHARE-GAIN-APPREC] 3.77
[PER-SHARE-DIVIDEND] .47
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 25.89
[EXPENSE-RATIO] .94
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 12
[NAME] PORTICO MIDCORE GROWTH FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 109,839
[INVESTMENTS-AT-VALUE] 144,662
[RECEIVABLES] 592
[ASSETS-OTHER] 10
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 145,264
[PAYABLE-FOR-SECURITIES] 608
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 123
[TOTAL-LIABILITIES] 731
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 114,780
[SHARES-COMMON-STOCK] 395
[SHARES-COMMON-PRIOR] 5,273
[ACCUMULATED-NII-CURRENT] (1)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (5,070)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 34,823
[NET-ASSETS] 144,533
[DIVIDEND-INCOME] 916
[INTEREST-INCOME] 393
[OTHER-INCOME] 0
[EXPENSES-NET] 1,164
[NET-INVESTMENT-INCOME] 145
[REALIZED-GAINS-CURRENT] 2,657
[APPREC-INCREASE-CURRENT] 20,823
[NET-CHANGE-FROM-OPS] 23,625
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 138
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,367
[NUMBER-OF-SHARES-REDEEMED] 6,250
[SHARES-REINVESTED] 5
[NET-CHANGE-IN-ASSETS] 31,336
[ACCUMULATED-NII-PRIOR] 50
[ACCUMULATED-GAINS-PRIOR] (7,727)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 956
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,316
[AVERAGE-NET-ASSETS] 127,611
[PER-SHARE-NAV-BEGIN] 21.47
[PER-SHARE-NII] .02
[PER-SHARE-GAIN-APPREC] 4.16
[PER-SHARE-DIVIDEND] .03
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 25.58
[EXPENSE-RATIO] 1.09
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 13
[NAME] PORTICO INTERMEDIATE BOND MARKET - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1995
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 136,097
[INVESTMENTS-AT-VALUE] 139,159
[RECEIVABLES] 2,657
[ASSETS-OTHER] 9
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 141,825
[PAYABLE-FOR-SECURITIES] 1,240
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 68
[TOTAL-LIABILITIES] 1,308
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 139,176
[SHARES-COMMON-STOCK] 1,133
[SHARES-COMMON-PRIOR] 9,128
[ACCUMULATED-NII-CURRENT] 112
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,834)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 3,062
[NET-ASSETS] 140,517
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 7,277
[OTHER-INCOME] 0
[EXPENSES-NET] 557
[NET-INVESTMENT-INCOME] 6,720
[REALIZED-GAINS-CURRENT] (417)
[APPREC-INCREASE-CURRENT] 6,232
[NET-CHANGE-FROM-OPS] 12,535
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,556
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,114
[NUMBER-OF-SHARES-REDEEMED] 9,224
[SHARES-REINVESTED] 115
[NET-CHANGE-IN-ASSETS] 52,211
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (1,418)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 537
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 876
[AVERAGE-NET-ASSETS] 107,737
[PER-SHARE-NAV-BEGIN] 9.67
[PER-SHARE-NII] .60
[PER-SHARE-GAIN-APPREC] .53
[PER-SHARE-DIVIDEND] .59
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.21
[EXPENSE-RATIO] .69
[AVG-DEBT-OUTSTANDING] 0<F110>
[AVG-DEBT-PER-SHARE] 0
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 14
[NAME] PORTICO TAX-EXEMPT INTERMEDIATE BOND FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 34,023
[INVESTMENTS-AT-VALUE] 34,621
[RECEIVABLES] 698
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 35,327
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 21
[TOTAL-LIABILITIES] 21
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 34,830
[SHARES-COMMON-STOCK] 753
[SHARES-COMMON-PRIOR] 2,675
[ACCUMULATED-NII-CURRENT] 20
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (142)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 598
[NET-ASSETS] 35,306
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1,501
[OTHER-INCOME] 0
[EXPENSES-NET] 169
[NET-INVESTMENT-INCOME] 1,332
[REALIZED-GAINS-CURRENT] 8
[APPREC-INCREASE-CURRENT] 1,367
[NET-CHANGE-FROM-OPS] 2,707
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 466
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 875
[NUMBER-OF-SHARES-REDEEMED] 2,832
[SHARES-REINVESTED] 35
[NET-CHANGE-IN-ASSETS] 9,139
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (150)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 151
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 319
[AVERAGE-NET-ASSETS] 30,272
[PER-SHARE-NAV-BEGIN] 9.78
[PER-SHARE-NII] .42
[PER-SHARE-GAIN-APPREC] .45
[PER-SHARE-DIVIDEND] .42
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.23
[EXPENSE-RATIO] .71
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 15
[NAME] PORTICO INTERNATIONAL EQUITY FUND - RETAIL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 34,597
[INVESTMENTS-AT-VALUE] 32,752
[RECEIVABLES] 343
[ASSETS-OTHER] 159
[OTHER-ITEMS-ASSETS] 67
[TOTAL-ASSETS] 33,321
[PAYABLE-FOR-SECURITIES] 266
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 235
[TOTAL-LIABILITIES] 501
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 33,840
[SHARES-COMMON-STOCK] 85
[SHARES-COMMON-PRIOR] 1,188
[ACCUMULATED-NII-CURRENT] 156
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 666
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (1,842)
[NET-ASSETS] 32,820
[DIVIDEND-INCOME] 538
[INTEREST-INCOME] 89
[OTHER-INCOME] 0
[EXPENSES-NET] 435
[NET-INVESTMENT-INCOME] 192
[REALIZED-GAINS-CURRENT] 661
[APPREC-INCREASE-CURRENT] (1,825)
[NET-CHANGE-FROM-OPS] (972)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 55
[DISTRIBUTIONS-OF-GAINS] 8
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 160
[NUMBER-OF-SHARES-REDEEMED] 1,266
[SHARES-REINVESTED] 3
[NET-CHANGE-IN-ASSETS] 9,064
[ACCUMULATED-NII-PRIOR] 43
[ACCUMULATED-GAINS-PRIOR] (20)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 431
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 767
[AVERAGE-NET-ASSETS] 28,810
[PER-SHARE-NAV-BEGIN] 19.99
[PER-SHARE-NII] .08
[PER-SHARE-GAIN-APPREC] (.87)
[PER-SHARE-DIVIDEND] .04
[PER-SHARE-DISTRIBUTIONS] .01
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 19.15
[EXPENSE-RATIO] 1.70
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 16
[NAME] PORTICO SHORT-TERM BOND MARKET FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 140,017
[INVESTMENTS-AT-VALUE] 140,828
[RECEIVABLES] 5,128
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 145,960
[PAYABLE-FOR-SECURITIES] 3,191
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 80
[TOTAL-LIABILITIES] 3,271
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 143,386
[SHARES-COMMON-STOCK] 9,233
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 119
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,628)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 811
[NET-ASSETS] 142,689
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 8,616
[OTHER-INCOME] 0
[EXPENSES-NET] 729
[NET-INVESTMENT-INCOME] 7,887
[REALIZED-GAINS-CURRENT] (329)
[APPREC-INCREASE-CURRENT] 3,275
[NET-CHANGE-FROM-OPS] 10,833
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 4,133
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 10,267
[NUMBER-OF-SHARES-REDEEMED] 1,336
[SHARES-REINVESTED] 302
[NET-CHANGE-IN-ASSETS] 20,321
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (1,361)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 767
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,261
[AVERAGE-NET-ASSETS] 127,903
[PER-SHARE-NAV-BEGIN] 10.03
[PER-SHARE-NII] .63
[PER-SHARE-GAIN-APPREC] .24
[PER-SHARE-DIVIDEND] .62
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.28
[EXPENSE-RATIO] .50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 17
[NAME] PORTICO BOND IMMDEX - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 293,903
[INVESTMENTS-AT-VALUE] 307,132
[RECEIVABLES] 5,190
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 312,330
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 181
[TOTAL-LIABILITIES] 181
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 299,707
[SHARES-COMMON-STOCK] 10,433
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 261
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,049)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 13,229
[NET-ASSETS] 312,149
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 19,286
[OTHER-INCOME] 0
[EXPENSES-NET] 1,261
[NET-INVESTMENT-INCOME] 18,025
[REALIZED-GAINS-CURRENT] (890)
[APPREC-INCREASE-CURRENT] 24,964
[NET-CHANGE-FROM-OPS] 42,099
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 14,132
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 11387
[NUMBER-OF-SHARES-REDEEMED] 1,421
[SHARES-REINVESTED] 467
[NET-CHANGE-IN-ASSETS] 55,371
[ACCUMULATED-NII-PRIOR] 1,494
[ACCUMULATED-GAINS-PRIOR] (67)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 832
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,436
[AVERAGE-NET-ASSETS] 277,498
[PER-SHARE-NAV-BEGIN] 25.67
[PER-SHARE-NII] 1.74
[PER-SHARE-GAIN-APPREC] 2.29
[PER-SHARE-DIVIDEND] 1.84
[PER-SHARE-DISTRIBUTIONS] .04
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 27.82
[EXPENSE-RATIO] .44
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 18
[NAME] PORTICO GROWTH AND INCOME FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 168,068
[INVESTMENTS-AT-VALUE] 207,586
[RECEIVABLES] 465
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 208,055
[PAYABLE-FOR-SECURITIES] 2,697
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 182
[TOTAL-LIABILITIES] 2,879
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 156,703
[SHARES-COMMON-STOCK] 5,891
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 175
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 8,779
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 39,518
[NET-ASSETS] 205,176
[DIVIDEND-INCOME] 3,924
[INTEREST-INCOME] 744
[OTHER-INCOME] 0
[EXPENSES-NET] 1,693
[NET-INVESTMENT-INCOME] 2,975
[REALIZED-GAINS-CURRENT] 8,861
[APPREC-INCREASE-CURRENT] 28,643
[NET-CHANGE-FROM-OPS] 40,479
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,711
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 6,786
[NUMBER-OF-SHARES-REDEEMED] 956
[SHARES-REINVESTED] 61
[NET-CHANGE-IN-ASSETS] 41,123
[ACCUMULATED-NII-PRIOR] 165
[ACCUMULATED-GAINS-PRIOR] 4,161
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,350
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,896
[AVERAGE-NET-ASSETS] 180,154
[PER-SHARE-NAV-BEGIN] 23.09
[PER-SHARE-NII] .42
[PER-SHARE-GAIN-APPREC] 5.14
[PER-SHARE-DIVIDEND] .42
[PER-SHARE-DISTRIBUTIONS] .60
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 27.63
[EXPENSE-RATIO] .90
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 19
[NAME] PORTICO EQUITY INDEX FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 110,846
[INVESTMENTS-AT-VALUE] 156,546
[RECEIVABLES] 339
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 156,893
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 124
[TOTAL-LIABILITIES] 124
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 109,821
[SHARES-COMMON-STOCK] 3,362
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 245
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 972
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 45,731
[NET-ASSETS] 156,769
[DIVIDEND-INCOME] 3,200
[INTEREST-INCOME] 377
[OTHER-INCOME] 0
[EXPENSES-NET] 628
[NET-INVESTMENT-INCOME] 2,949
[REALIZED-GAINS-CURRENT] 1,377
[APPREC-INCREASE-CURRENT] 26,047
[NET-CHANGE-FROM-OPS] 30,373
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,941
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3,773
[NUMBER-OF-SHARES-REDEEMED] 458
[SHARES-REINVESTED] 47
[NET-CHANGE-IN-ASSETS] 49,206
[ACCUMULATED-NII-PRIOR] 149
[ACCUMULATED-GAINS-PRIOR] (200)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 320
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 726
[AVERAGE-NET-ASSETS] 128,656
[PER-SHARE-NAV-BEGIN] 33.41
[PER-SHARE-NII] .76
[PER-SHARE-GAIN-APPREC] 7.71
[PER-SHARE-DIVIDEND] .74
[PER-SHARE-DISTRIBUTIONS] .06
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 41.08
[EXPENSE-RATIO] .460
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 20
[NAME] PORTICO SPECIAL GROWTH FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 393,397
[INVESTMENTS-AT-VALUE] 510,669
[RECEIVABLES] 11,323
[ASSETS-OTHER] 4
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 521,996
[PAYABLE-FOR-SECURITIES] 71
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 428
[TOTAL-LIABILITIES] 499
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 347,915
[SHARES-COMMON-STOCK] 10,470
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 56,309
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 117,272
[NET-ASSETS] 521,497
[DIVIDEND-INCOME] 1,539
[INTEREST-INCOME] 2,461
[OTHER-INCOME] 0
[EXPENSES-NET] 4,148
[NET-INVESTMENT-INCOME] (148)
[REALIZED-GAINS-CURRENT] 57,101
[APPREC-INCREASE-CURRENT] 49,078
[NET-CHANGE-FROM-OPS] 106,031
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 45
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 11,941
[NUMBER-OF-SHARES-REDEEMED] 1,472
[SHARES-REINVESTED] 1
[NET-CHANGE-IN-ASSETS] 125,913
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 1,922
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,340
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 4,542
[AVERAGE-NET-ASSETS] 445,793
[PER-SHARE-NAV-BEGIN] 33.19
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 8.49
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] .21
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 41.47
[EXPENSE-RATIO] .900
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 21
[NAME] PORTICO BALANCED FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 104,294
[INVESTMENTS-AT-VALUE] 125,237
[RECEIVABLES] 1,505
[ASSETS-OTHER] 16
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 126,758
[PAYABLE-FOR-SECURITIES] 277
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 97
[TOTAL-LIABILITIES] 374
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 102,869
[SHARES-COMMON-STOCK] 4,036
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 226
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 2,346
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 20,943
[NET-ASSETS] 126,384
[DIVIDEND-INCOME] 411
[INTEREST-INCOME] 2,897
[OTHER-INCOME] 0
[EXPENSES-NET] 864
[NET-INVESTMENT-INCOME] 2,444
[REALIZED-GAINS-CURRENT] 3,757
[APPREC-INCREASE-CURRENT] 14,596
[NET-CHANGE-FROM-OPS] 20,797
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,555
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 5,447
[NUMBER-OF-SHARES-REDEEMED] 1,473
[SHARES-REINVESTED] 62
[NET-CHANGE-IN-ASSETS] 31,727
[ACCUMULATED-NII-PRIOR] 146
[ACCUMULATED-GAINS-PRIOR] (1,412)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 828
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,214
[AVERAGE-NET-ASSETS] 110,668
[PER-SHARE-NAV-BEGIN] 22.10
[PER-SHARE-NII] .53
[PER-SHARE-GAIN-APPREC] 3.78
[PER-SHARE-DIVIDEND] .51
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 25.9
[EXPENSE-RATIO] .750
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 22
[NAME] PORTICO MIDCORE GROWTH FUND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 109,839
[INVESTMENTS-AT-VALUE] 144,662
[RECEIVABLES] 592
[ASSETS-OTHER] 10
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 145,264
[PAYABLE-FOR-SECURITIES] 608
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 123
[TOTAL-LIABILITIES] 731
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 114,780
[SHARES-COMMON-STOCK] 5,250
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] (1)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (5,070)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 34,823
[NET-ASSETS] 144,533
[DIVIDEND-INCOME] 916
[INTEREST-INCOME] 393
[OTHER-INCOME] 0
[EXPENSES-NET] 1,164
[NET-INVESTMENT-INCOME] 145
[REALIZED-GAINS-CURRENT] 2,657
[APPREC-INCREASE-CURRENT] 20,823
[NET-CHANGE-FROM-OPS] 23,625
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 122
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 6,039
[NUMBER-OF-SHARES-REDEEMED] 794
[SHARES-REINVESTED] 5
[NET-CHANGE-IN-ASSETS] 31,336
[ACCUMULATED-NII-PRIOR] 50
[ACCUMULATED-GAINS-PRIOR] (7,727)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 956
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,316
[AVERAGE-NET-ASSETS] 127,611
[PER-SHARE-NAV-BEGIN] 21.47
[PER-SHARE-NII] .03
[PER-SHARE-GAIN-APPREC] 4.16
[PER-SHARE-DIVIDEND] .05
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 25.61
[EXPENSE-RATIO] .900
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 23
[NAME] PORTICO INTERMEDIATE BOND MARKET - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 136,097
[INVESTMENTS-AT-VALUE] 139,159
[RECEIVABLES] 2,657
[ASSETS-OTHER] 9
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 141,825
[PAYABLE-FOR-SECURITIES] 1,240
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 68
[TOTAL-LIABILITIES] 1,308
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 139,176
[SHARES-COMMON-STOCK] 12,625
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 112
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1,834)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 3,062
[NET-ASSETS] 140,517
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 7,277
[OTHER-INCOME] 0
[EXPENSES-NET] 557
[NET-INVESTMENT-INCOME] 6,720
[REALIZED-GAINS-CURRENT] (417)
[APPREC-INCREASE-CURRENT] 6,232
[NET-CHANGE-FROM-OPS] 12,535
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 5,060
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 13,722
[NUMBER-OF-SHARES-REDEEMED] 1,422
[SHARES-REINVESTED] 325
[NET-CHANGE-IN-ASSETS] 52,211
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (1,418)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 537
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 876
[AVERAGE-NET-ASSETS] 107,737
[PER-SHARE-NAV-BEGIN] 9.67
[PER-SHARE-NII] .62
[PER-SHARE-GAIN-APPREC] .53
[PER-SHARE-DIVIDEND] .61
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.21
[EXPENSE-RATIO] .500
[AVG-DEBT-OUTSTANDING] 0<F110>
[AVG-DEBT-PER-SHARE] 0
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 24
[NAME] PORTICO TAX-EXEMPT INTERMEDIATE BOND - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 34,023
[INVESTMENTS-AT-VALUE] 34,621
[RECEIVABLES] 698
[ASSETS-OTHER] 8
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 35,327
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 21
[TOTAL-LIABILITIES] 21
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 34,830
[SHARES-COMMON-STOCK] 2,696
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 20
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (142)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 598
[NET-ASSETS] 35,306
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1,501
[OTHER-INCOME] 0
[EXPENSES-NET] 169
[NET-INVESTMENT-INCOME] 1,332
[REALIZED-GAINS-CURRENT] 8
[APPREC-INCREASE-CURRENT] 1,367
[NET-CHANGE-FROM-OPS] 2,707
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 853
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3,017
[NUMBER-OF-SHARES-REDEEMED] 354
[SHARES-REINVESTED] 33
[NET-CHANGE-IN-ASSETS] 9,139
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (150)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 151
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 319
[AVERAGE-NET-ASSETS] 30,272
[PER-SHARE-NAV-BEGIN] 9.78
[PER-SHARE-NII] .44
[PER-SHARE-GAIN-APPREC] .46
[PER-SHARE-DIVIDEND] .44
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.24
[EXPENSE-RATIO] .500
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0<F110>
<FN>
<F110>The expense ratio is actual.
</FN>
</TABLE>
[ARTICLE] 6
[SERIES]
[NUMBER] 25
[NAME] PORTICO INTERNATIONAL EQUITY - INSTITUTIONAL SERIES
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-START] NOV-01-1994
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 34,597
[INVESTMENTS-AT-VALUE] 32,752
[RECEIVABLES] 343
[ASSETS-OTHER] 159
[OTHER-ITEMS-ASSETS] 67
[TOTAL-ASSETS] 33,321
[PAYABLE-FOR-SECURITIES] 266
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 235
[TOTAL-LIABILITIES] 501
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 33,840
[SHARES-COMMON-STOCK] 1,625
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 156
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 666
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (1,842)
[NET-ASSETS] 32,820
[DIVIDEND-INCOME] 538
[INTEREST-INCOME] 89
[OTHER-INCOME] 0
[EXPENSES-NET] 435
[NET-INVESTMENT-INCOME] 192
[REALIZED-GAINS-CURRENT] 661
[APPREC-INCREASE-CURRENT] (1,825)
[NET-CHANGE-FROM-OPS] (972)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,691
[NUMBER-OF-SHARES-REDEEMED] 66
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 9,064
[ACCUMULATED-NII-PRIOR] 43
[ACCUMULATED-GAINS-PRIOR] (20)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 431
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 767
[AVERAGE-NET-ASSETS] 28,810
[PER-SHARE-NAV-BEGIN] 19.99
[PER-SHARE-NII] .12
[PER-SHARE-GAIN-APPREC] (.87)
[PER-SHARE-DIVIDEND] .04
[PER-SHARE-DISTRIBUTIONS] .01
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 19.19
[EXPENSE-RATIO] 1.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
Exhibit (18)
PORTICO FUNDS, INC.
(the "Company")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI-SERIES SYSTEM
---------------------
I. INTRODUCTION
On February 23, 1995, the Securities and Exchange Commission (the
"Commission") promulgated Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act") which permits the creation and operation of a multi-
class distribution structure (or in the case of the Company, a multi-series
distribution structure) without the need to obtain an exemptive order under
Section 18 of the 1940 Act. Rule 18f-3, which became effective on April 3,
1995, requires an investment company to file with the Commission a written plan
specifying all of the differences among classes, including the various services
offered to shareholders, different distribution arrangements for each class,
methods for allocating expenses relating to those differences and any conversion
features or exchange privileges. Currently, the Company operates a multi-series
distribution structure pursuant to an exemptive order granted by the Commission
on December 6, 1994. On March 17, 1995, the Board of Directors of the Company
authorized the Company to operate its current multi-series distribution
structure in compliance with Rule 18f-3. This Plan pursuant to Rule 18f-3 for
operation of a multi-series system became effective on April 3, 1995, was
hereby amended and restated on June 16, 1995 and is hereby amended and restated
on September 15, 1995.
II. ATTRIBUTES OF SERIES
A. Generally
The Company shall initially offer two series -- Institutional and Series A
("Retail") shares. In general, shares of each series shall be identical except
for different expense variables (which will result in different returns for each
series), certain related rights and certain shareholder services. More
particularly, the Institutional and Retail shares of an investment portfolio (a
"Fund") of the Company shall represent interests in the same portfolio of
investments of the particular Fund, and shall be identical in all respects,
except for: (a) the impact of (i) expenses assessed to a series pursuant to a
Service Plan and Distribution and Service Plan (collectively, the "Plans"), and
(ii) any other incremental expenses subsequently identified that should be
properly allocated to one series so long as any subsequent changes in expense
allocations are reviewed and approved by a vote of the Board of Directors,
including a majority of the independent directors; (b) the fact that the series
shall vote separately with respect to a Fund's Plans and any matter submitted to
shareholders relating to series expenses; (c) the different exchange privileges
of the series of shares; (d) the designation of each series of shares of a Fund;
(e) the sales load applicable to Retail shares and (f) the different shareholder
services relating to a series of shares.
B. Distribution Arrangements, Expenses and Sales Charges
Retail Shares- Non-Money Market Funds
Retail shares of the Growth and Income Fund, Short-Term Bond Market Fund,
Special Growth Fund, Bond IMMDEX/TM Fund, Equity Index Fund, Balanced Fund,
MidCore Growth Fund, Intermediate Bond Market Fund, Tax-Exempt Intermediate Bond
Fund, International Equity Fund, MicroCap Fund and Balanced Income Fund (the
"Non- Money Market Funds") shall be offered to the general public and shall be
subject to a shareholder servicing and/or distribution fee payable pursuant to
the Plans which shall not initially exceed 0.25% (on an annual basis) of the
average daily net assets attributable to Retail shares of the Non-Money Market
Funds. Retail shares of the Growth and Income Fund, Special Growth Fund, Equity
Index Fund, Balanced Fund, MidCore Growth Fund, International Equity Fund,
MicroCap Fund and Balanced Income Fund shall be further subject to a sales
charge which shall not initially exceed 4.0% of the offering price of the Retail
shares of those Funds. Retail shares of the Short-Term Bond Market Fund, Bond
IMMDEX/TM Fund, Intermediate Bond Market Fund and Tax- Exempt Intermediate Bond
Fund shall be further subject to a sales charge which shall not initially exceed
2.0% of the offering price of the Retail shares of those Funds.
Shareholder services under the Plans may include: (i) processing dividend
and distribution payments; (ii) providing information periodically to customers
showing their positions in Retail shares; (iii) arranging for bank wires; (iv)
responding to customer inquiries relating to the services performed by
shareholder service organizations; (v) providing subaccounting with respect to
Retail shares beneficially owned by customers or the information necessary for
subaccounting; (vi) forwarding shareholder communications (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to customers; (vii) processing exchange and
redemption requests from customers and placing net exchange and redemption
orders with the Company's service contractors; and (viii) assisting customers in
changing dividend options, account designations and addresses. In addition,
distribution services may be provided under the Distribution and Service Plan
such as assistance by broker/dealers in forwarding sales literature and
advertising to customers.
Retail Shares - Money Market Funds
Retail shares of the Money Market Fund, Tax-Exempt Money Market Fund, U.S.
Government Money Market Fund, Institutional Money Market Fund and U.S. Treasury
Money Market Fund (the "Money Market Funds") shall be offered to institutional
investors and the general public and, except for the Institutional Money Market
Fund, shall be subject to a shareholder servicing and/or distribution fee
payable pursuant to the Plans which shall not initially exceed 0.25% (on an
annual basis) of the average daily net assets attributable to Retail shares of
the Money Market Funds. Retail shares of the Money Market Funds shall not be
subject to a sales charge.
Institutional Shares - Non-Money Market Funds
Institutional shares of the Non-Money Market Funds shall be offered to (i)
all trust, agency or custodial accounts opened through trust companies or trust
departments affiliated with Firstar Corporation, (ii) all employer-sponsored
qualified retirement plans and (iii) all clients of Firstar Investment Research
& Management Company. Institutional shares shall be offered without a sales
charge and shall not be subject to a shareholder servicing and/or distribution
fee payable pursuant to the Plans.
C. Exchange Privileges
Retail Shares (Except the Institutional Money Market Fund)
Retail shareholders shall be generally permitted to exchange their shares
in a Fund for Retail shares of other Funds of the Company without charge or
commission by the Fund (except a wire redemption fee which may be waived). A
sales charge shall be imposed on the exchange, in accordance with the
regulations of the Securities and Exchange Commission, if the shares of the Fund
being acquired have a sales charge and the shares being redeemed were purchased
without a sales charge.
Institutional Shares
The Company shall not initially offer Institutional shares an exchange
privilege.
D. Shareholder Services
1. Periodic Investment Plan
Retail Shares
Retail shares of the Funds shall initially offer a periodic investment plan
whereby a shareholder may automatically make purchases of shares of a Fund on a
regular, periodic basis.
Institutional Shares
The Company shall not initially offer Institutional shares a periodic
investment plan.
2. Convertifund/R Transactions
Retail Shares
Retail shares shall initially permit shareholders to effect Convertifundt
transactions whereby a Retail shareholder may invest proceeds, including
dividend distributions, capital gain distributions and systematic withdrawals,
from one account to another account of the Retail shares of the Company.
Convertifund/R transactions may be used to invest funds from a regular account
to another regular account, from a qualified plan to another qualified plan
account or from a qualified plan account to a regular account.
Institutional Shares
The Company shall not initially offer Institutional shares the
Convertifund/R transaction service.
3. Systematic Withdrawal Plan
Retail Shares
Retail shares shall initially offer a systematic withdrawal plan which
allows a shareholder to designate a fixed sum to be distributed to the
shareholder or as otherwise directed at regular intervals.
Institutional Shares
The Company shall not initially offer Institutional shares a systematic
withdrawal plan.
E. Methodology for Allocating Expenses Between Series
In allocating expenses a determination shall be made as to which expenses
are series level and which expenses are Fund level.
Prior to determining the day's net asset value or dividends/distributions,
the following expense items must be calculated as indicated:
1. Adviser's Fee
The current day's accrual shall be calculated using the beginning of the
day's total net assets of the Fund, and shall be allocated to each series based
upon the relative "adjusted net assets" of each series or the relative "value of
adjusted dividend shares" of each series as appropriate.
2. Distribution and Service and Shareholder Service Fees ("Service Fees")
The current day's accrual shall be calculated using the beginning of the
day's net assets attributable to Retail shares, based on the rates as stated in
the Plans. Service fees shall not be charged to the Institutional shares.
3. Other Series Specific Expenses
Daily accruals shall be made for each series based on budgeted expenses
attributable to each such series.
4. Other Expenses
Daily accruals shall be determined from expense budgets and will be
allocated to each series based upon the relative "adjusted net assets" of each
series or the relative "value of adjusted dividend shares" of each series, as
Exhibit (24)(A)
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OCTOBER 31, 1995
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BOND FUND FUND
----------- ----------- ------------ ---------
ASSETS:
Investments, at value
(cost $140,017,
$136,097, $34,023
and $293,903,
respectively) $140,828 $139,159 $ 34,621 $307,132
Interest receivable 2,149 2,650 687 5,127
Capital shares sold 78 7 11 63
Receivable for
securities sold 2,901 - - -
Organization costs,
net of accumulated
amortization - 5 4 -
Other assets 4 4 4 8
--------- --------- --------- ---------
Total Assets 145,960 141,825 35,327 312,330
------- ------- ------ -------
LIABILITIES:
Capital shares
redeemed 1 - - 44
Payable for
securities
purchased 3,191 1,240 - -
Payable to affiliates 63 41 6 112
Accrued expenses 16 27 15 25
-------- -------- -------- --------
Total Liabilities 3,271 1,308 21 181
------- -------- -------- --------
NET ASSETS $142,689 $140,517 $ 35,306 $312,149
======== ======== ======== ========
NET ASSETS CONSIST OF:
Capital stock $143,387 $139,177 $ 34,830 $299,708
Undistributed net
investment income 119 112 20 261
Undistributed
accumulated net
realized (losses) (1,628) (1,834) (142) (1,049)
Unrealized net
appreciation on
investments 811 3,062 598 13,229
-------- -------- -------- --------
Total Net Assets $142,689 $140,517 $ 35,306 $312,149
======== ======== ======== ========
SERIES A:
Net assets $ 47,730 $ 11,576 $ 7,711 $ 21,875
Shares authorized
($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and
outstanding 4,641 1,133 753 786
Net asset value and
redemption price
per share<F111> $ 10.28 $ 10.21 $ 10.23 $ 27.82
======= ======= ======= =======
Maximum offering
price per share<F111> $ 10.49 $ 10.42 $ 10.44 $ 28.39
======= ======= ======= =======
SERIES INSTITUTIONAL:
Net assets $ 94,959 $128,941 $ 27,595 $290,274
Shares authorized
($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and
outstanding 9,233 12,625 2,696 10,433
Net asset value,
redemption price
and offering
price per share<F111> $ 10.28 $ 10.21 $ 10.24 $ 27.82
======= ======= ======= =======
<F111>Amounts may not recalculate due to rounding.
See notes to the financial statements.
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
YEAR ENDED OCTOBER 31, 1995
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BOND FUND FUND
----------- ------------ ----------- --------
INVESTMENT INCOME:
Interest income $ 8,616 $ 7,277 $ 1,501 $19,286
------- ------- -------- -------
EXPENSES:
Investment
advisory fees 767 537 151 832
Administration fees 155 130 37 326
Shareowner servicing
and accounting costs 140 90 61 110
Service organization
fees - Series A 89 19 14 34
Custody fees 34 28 7 65
Federal and state
registration fees 12 21 8 7
Professional fees 22 28 26 29
Reports to
shareowners 30 12 8 22
Amortization of
organization costs 3 3 2 2
Directors' fees and
expenses 4 4 4 4
Other 5 4 1 5
------ ------- ------ ------
Total expenses
before waiver 1,261 876 319 1,436
Less: Waiver of expenses (532) (319) (150) (175)
------ ------- ------ ------
Net Expenses 729 557 169 1,261
------ ------- ------ ------
NET INVESTMENT INCOME 7,887 6,720 1,332 18,025
------ ------- ------ ------
REALIZED AND
UNREALIZED GAIN (LOSS):
Net realized gain
(loss) on investment
transactions (329) (417) 8 (890)
Change in unrealized
appreciation
(depreciation)
on investments 3,275 6,232 1,367 24,964
------ ------- ------ ------
Net gain on
investments 2,946 5,815 1,375 24,074
------ ------- ------ ------
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS $10,833 $12,535 $2,707 $42,099
======= ======= ====== =======
See notes to the financial statements.
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
<CAPTION>
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE BOND IMMDEX/TM
FUND FUND FUND FUND
--------------------- --------------------- ------------------- --------------------
Year ended October 31, Year ended October 31, Year ended October 31, Year ended October 31,
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 7,887 $ 7,093 $ 6,720 $ 3,836 $ 1,332 $ 1,122 $ 18,025 $ 15,688
Net realized gain
(loss) on investments (329) (1,338) (417) (1,418) 8 (150) (890) (67)
Change in unrealized
appreciation
(depreciation) on
investments 3,275 (4,019) 6,232 (3,723) 1,367 (1,174) 24,964 (26,057)
-------- -------- -------- -------- ------- -------- -------- ---------
Net increase (decrease)
in net assets
resulting from operations 10,833 1,736 12,535 (1,305) 2,707 (202) 42,099 (10,436)
-------- -------- -------- ------- ------- ------- -------- ---------
CAPITAL SHARE TRANSACTIONS:
Shares sold 47,914 37,720 61,490 45,014 16,278 13,858 72,259 50,075
Shares issued to owners in
reinvestment of dividends 6,375 6,571 4,371 2,882 676 681 17,191 18,402
-------- -------- -------- -------- ------- ------- -------- ---------
54,289 44,291 65,861 47,896 16,954 14,539 89,450 68,477
Shares redeemed (37,051) (57,510) (19,569) (10,681) (9,203) (10,909) (56,782) (41,787)
-------- -------- -------- -------- ------- -------- -------- ---------
Net increase (decrease) 17,238 (13,219) 46,292 37,215 7,751 3,630 32,668 26,690
-------- ------- -------- -------- ------- -------- -------- ---------
DISTRIBUTIONS TO SHAREOWNERS<F112>:
From net investment income (1,426) (7,093) (1,081) (3,837) (228) (1,122) (3,950) (15,515)
From net realized gains - (1,574) - (561) - (5) (404) (4,447)
-------- -------- -------- -------- ------- ------- ------- ---------
(1,426) (8,667) (1,081) (4,398) (228) (1,127) (4,354) (19,962)
-------- ------- -------- -------- ------- ------- -------- ---------
DISTRIBUTIONS TO SERIES A
SHAREOWNERS<F112>:
From net investment income (2,191) - (475) - (238) - (910) -
-------- -------- -------- ------- ------- --------- -------- --------
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS<F112>:
From net investment income (4,133) - (5,060) - (853) - (14,132) -
-------- -------- -------- ------- ------- ------- -------- --------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 20,321 (20,150) 52,211 31,512 9,139 2,301 55,371 (3,708)
NET ASSETS:
Beginning of period 122,368 142,518 88,306 56,794 26,167 23,866 256,778 260,486
-------- ------- ------- ------- ------- ------- -------- --------
End of period (including
undistributed net
investment income of $119,
$0, $112, $0, $20, $0, $261
and $1,494, respectively) $142,689 $122,368 $140,517 $88,306 $35,306 $26,167 $312,149 $256,778
======== ======== ======== ======= ======= ======= ======== ========
<FN>
<F112>On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional series shares.
Distributions to shareowners from net investment income and net realized gains reflect activity for the Funds for the period
November 1, 1994, through January 9, 1995, and for each Fund's respective class of Shares for the period from January 10, 1995,
through October 31, 1995.
See notes to the financial statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS, PART 1
<CAPTION>
SHORT-TERM BOND MARKET FUND
-----------------------------------------------------------------------------------------------
Year ended
October 31, Dec. 29, 1989<F113>
1995<F115> Year ended October 31, through
------------------------------ ------------------------------------------ Oct. 31,
Per Share Data: Series A Series Institutional 1994 1993 1992<F114> 1991 1990
-------- -------------------- ---- ---- --------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.03 $10.03 $10.56 $10.60 $10.33 $ 9.79 $10.00
Income from investment operations:
Net investment income<F116> 0.61 0.63 0.56 0.58 0.64 0.73 0.66
Net realized and unrealized
gains (losses) on securities 0.24 0.24 (0.41) 0.10 0.29 0.54 (0.21)
---- ---- ------ ---- ---- ---- ------
Total from investment
operations 0.85 0.87 0.15 0.68 0.93 1.27 0.45
---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.60) (0.62) (0.56) (0.58) (0.64) (0.73) (0.66)
Distributions from capital gains - - (0.12) (0.14) (0.02) - -
------ ------ ------ ------ ------ ------ ------
Total distributions (0.60) (0.62) (0.68) (0.72) (0.66) (0.73) (0.66)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $10.28 $10.28 $10.03 $10.56 $10.60 $10.33 $9.79
====== ====== ====== ====== ====== ====== =====
Total return<F117><F118> 8.74% 8.95% 1.46% 6.70% 9.28% 13.39% 4.64%
Supplemental data and ratios:
Net assets, in thousands,
end of period $47,730 $94,959 $122,368 $142,518 $129,409 $63,183 $22,731
Ratio of net expenses
to average net assets<F119> 0.69% 0.50% 0.50% 0.52% 0.60% 0.60% 0.60%
Ratio of net investment income
to average net assets<F119> 6.04% 6.23% 5.43% 5.53% 6.00% 7.13% 7.93%
Portfolio turnover rate <F120> 100.58% 100.58% 76.13% 87.62% 82.20% 66.80% 57.40%
FINANCIAL HIGHLIGHTS, PART 2
INTERMEDIATE BOND MARKET FUND TAX-EXEMPT INTERMEDIATE BOND FUND
---------------------------------------------- -------------------------------------------------
Year ended Year ended Feb. 8,
October 31, 1995<F115> Year Jan. 5, 1993<F113> October 31, 1995<F115> Year 1993<F113>
----------------------- ended through ------------------------- ended through
Per Share Data: Series Series Oct. 31, Oct. 31, Series Series Oct. 31, Oct. 31,
A Institutional 1994 1993 A Institutional 1994 1993
------ ------------- ---- ---- ------ ------------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $9.67 $9.67 $10.45 $10.00 $9.78 $9.78 $10.26 $10.00
Income from investment
operations:
Net investment income<F116>0.60 0.62 0.51 0.40 0.42 0.44 0.41 0.27
Net realized and
unrealized
gains (losses) on
securities 0.53 0.53 (0.69) 0.45 0.45 0.46 (0.48) 0.26
---- ---- ------ ---- ---- ---- ------ ----
Total from investment
operations 1.13 1.15 (0.18) 0.85 0.87 0.90 (0.07) 0.53
---- ---- ------ ---- ---- ---- ------ ----
Less distributions:
Dividends from net
investment income (0.59) (0.61) (0.51) (0.40) (0.42) (0.44) (0.41) (0.27)
Distributions from
capital gains - - (0.09) - - - - -
----- ------ ------ ------ ------ ------ ------ ------
Total distributions (0.59) (0.61) (0.60) (0.40) (0.42) (0.44) (0.41) (0.27)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end
of period $10.21 $10.21 $9.67 $10.45 $10.23 $10.24 $9.78 $10.26
===== ===== ===== ===== ===== ===== ===== =====
Total return<F117><F118> 12.04% 12.25% (1.73)% 8.58% 9.07% 9.38% (0.73)% 5.36%
Supplemental data and
ratios:
Net assets, in thousands,
end of period $11,576 $128,941 $88,306 $56,794 $7,711 $27,595 $26,167 $23,866
Ratio of net expenses
to average net
assets<F119> 0.69% 0.50% 0.50% 0.50% 0.71% 0.51% 0.60% 0.59%
Ratio of net investment
income to average net
assets<F119> 6.07% 6.26% 5.19% 4.65% 4.25% 4.45% 4.04% 3.75%
Portfolio turnover
rate<F120> 66.69% 66.69% 56.25% 82.37% 44.13% 44.13% 58.54% 3.23%
<FN>
<F113>Commencement of operations.
<F114>Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company.
<F115>On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional series shares. For the year
ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net investment income to
average net assets, total return and the per share income from investment operations and distributions are presented on a basis
whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses) and distributions for the period
November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon the relative net assets of each class of
shares as of the close of business on January 9, 1995, and the results thereof combined with the results of operations and
distributions for each applicable class for the period January 10, 1995 through October 31, 1995.
<F116>For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F117>Not annualized for the period ended October 31, 1990, for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the
period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F118>The total return calculation does not reflect the 2% front end sales charge for Series A.
<F119>Annualized for the period ended October 31, 1990, for the Short-Term Bond Market and Bond IMMDEX/TM Funds and for the period
ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds.
<F120>Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
See notes to the financial statements.
</TABLE>
SHORT-TERM BOND MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal
Amount Market Value
(in thousands) (in thousands)
- -------------- --------------
LONG-TERM INVESTMENTS 98.2%
ASSET-BACKED SECURITIES 27.1%
AUTO LOAN RECEIVABLES 3.6%
$4,328 Capital Auto Receivables Asset Trust Series
1993-3, Asset Backed Certificates,
4.60%, 10/15/98 $ 4,237
779 USAA Auto Loan Grantor Trust, Series
1994-1, Class A, 5.00%, 11/15/99 773
87 ML Asset Backed Corporation, Series 1992-1,
Class A2, 5.50%, 5/15/98 87
-----
5,097
-----
CREDIT CARD RECEIVABLES 23.5%
Banc One Credit Card Master Trust:
2,000 Series 1994-A, Class A, 7.15%, 11/15/96 2,028
2,500 Series 1994-B, Class A, 7.55%, 11/15/97 2,578
4,750 Capital One Master Trust, Series
1994-4, Class A, 6.80%, 8/15/97 4,828
5,050 Chase Manhattan Credit Card Master Trust
Series 1992-1, Asset Backed Certificates,
7.40%, 5/15/00 5,144
2,570 Discover Card Master Trust, Series 1992-B,
Class A, 6.80%, 6/15/98 2,611
3,350 Discover Card Master Trust I, Series 1993-2,
Class A, 5.40%, 5/15/99 3,296
MBNA Master Credit Card Trust:
1,000 Series 1992-1, Class A, 7.25%, 12/15/97 1,020
3,650 Series 1992-2, Class A, 6.20%, 2/15/98 3,664
5,120 Sears Credit Account Master Trust, Series
1994-2, Class A, 7.25%, 2/15/98 5,245
3,000 Standard Credit Card Trust, Series 1990-3,
Class A, Credit Card Participation
Certificates, 9.50%, 5/10/97 3,146
------
33,560
------
CORPORATE BONDS 35.8%
4,169 Atlantic Richfield Notes, 10.25%, 7/02/00 4,464
5,000 Bear Stearns Floating Rate Medium Term Notes,
6.125% (30 day LIBOR +0.25%), 4/08/97 5,013
875 Bear Stearns Company Senior Notes,
9.125%, 4/15/98 933
1,090 Beneficial Corporation Medium Term Notes,
9.80%, 5/12/97 1,149
1,000 BP America, Inc. Debentures,
8.875%, 12/01/97 1,059
2,000 BP America Inc. Guaranteed Debentures,
10.00%, 7/01/18 2,279
2,000 Chrysler Corporation Debentures,
10.95%, 8/01/17 2,238
2,498 Chrysler Financial Corporation Debentures,
10.40%, 8/01/99 2,676
1,000 Deseret Gn & Trans Cooperative,
10.11%, 12/15/17 1,111
Ford Capital B. V. Notes:
1,524 9.375%, 1/01/98 1,626
2,040 9.00%, 8/15/98 2,191
500 Ford Motor Credit Co. Debentures,
8.875%, 6/15/99 542
3,600 General Motors Acceptance Corporation
Notes, 7.75%, 1/15/99 3,756
2,625 GTE Corporation Debentures,
10.75%, 9/15/17 2,946
600 Heller Financial, Inc. Notes, 7.75%, 5/15/97 615
900 International Lease Finance Corporation
Medium Term Notes, 6.375%, 11/01/96 902
Lehman Brothers Holdings, Inc. Debentures:
900 10.75%, 4/29/96 920
400 Zero Coupon, 5/16/96 387
750 8.375%, 4/01/97 771
3,000 8.875%, 11/01/98 3,195
MONY Funding, Inc. Debentures:
4,245 8.25%, 10/29/96 4,311
700 8.125%, 4/07/97 713
2,000 NationsBank Corporation Notes,
6.625%, 1/15/98 2,023
1,000 Paine Webber Group, Inc. Medium Term
Notes, 5.45%, 1/28/98 976
3,000 Smith Barney Holdings Inc. Notes,
5.625%, 11/15/98 2,953
1,123 Tennessee Gas Pipeline Co. Debentures,
9.25%, 5/15/96 1,142
200 Transamerica Financial Group, Inc.
Subordinated Notes, 8.125%, 10/15/96 204
------
51,095
------
MORTGAGE-BACKED SECURITIES 9.9%
1,082 Citicorp Real Estate Mortgage Investment
Conduit, 8.75%, 5/25/21 1,104
841 GE Home Equity Loan Asset Backed Certificates,
Series 1991-1, Class A, 7.20%, 8/30/11 852
841 Household Finance Corporation, Home Equity
Loan Asset Backed Certificates, Series
1991-2, Class A3, 7.25%, 8/19/06 856
65 MDC Asset Investors Trust,
6.75%, 7/20/13 65
1,251 Morgan Stanley Mortgage Trust, Series 40,
Class 6, 7.00%, 1/20/97 1,253
Resolution Trust Corporation:
166 Series 1992-MH1, Class A1, 7.00%, 4/15/97 166
2,249 Series 1992-MH2, Class A1, 7.00%, 2/15/19 2,254
2,500 Security Pacific Acceptance Corporation,
Series 1992-2, Class A3, 7.50%, 6/15/12 2,599
Security Pacific Home Equity Loan:
1,350 Series 1991-1, Class B, 8.85%, 5/15/98 1,421
3,482 Series 1991-2, Class B, 8.15%, 6/15/20 3,539
------
14,109
------
OTHER 4.0%
Florida Housing Finance Agency:
450 Antigua Club-A-2, 8.625%, 8/01/01 486
425 Brittany Apartments-C-2, 8.625%, 8/01/02 461
550 Maitland Club-B-2, 8.625%, 8/01/01 594
1,250 Hydro-Quebec Canada Debentures,
13.375%, 2/15/13 1,487
2,250 Ontario Province Debentures,
17.00%, 11/05/11 2,625
-------
5,653
-------
U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES 11.0%
Federal Home Loan Mortgage Corporation
Participation Certificates:
132 7.00%, 12/01/01 131
201 7.75%, 7/01/09 205
443 Federal Home Loan Mortgage Corporation
Pass-Thru Certificates,Series 1269,
Class E, 7.00%, 5/15/97 443
Federal National Mortgage Association
Guaranteed Real Estate Mortgage
InvestmentConduits Pass-Thru Certificates:
4,640 Series G92-54, Class VB, 7.50%, 12/25/99 4,767
2,999 Series X-19A, Class A, 6.50%, 10/25/00 3,010
Federal National Mortgage Association
Real Estate Mortgage Investment Conduits:
1,000 Series 1992-100, Class H, 7.50%, 9/25/00 999
1,751 Series 1993-155, Class PE, 5.85%, 7/25/98 1,743
1,337 Federal National Mortgage Association
Stripped Mortgage-Backed Securities, Series
1989-75, Class C, Principal Only, 12/25/96 1,268
3,100 Government Trust Certificates, Series 2D
9.25%, 11/15/96 3,145
------
15,711
------
U.S. TREASURY OBLIGATIONS 10.4%
U.S. Treasury Notes:
5,975 5.625%, 1/31/98 5,969
6,550 9.25%, 8/15/98 7,139
1,000 8.875%, 2/15/99 1,093
600 6.75%, 5/31/99 619
-------
14,820
-------
Total Long-Term Investments
(Cost $139,234) 140,045
-------
Number
of Shares
(in thousands)
- -------------
SHORT-TERM INVESTMENTS 0.5%
INVESTMENT COMPANIES 0.5%
10 Financial Square Prime Obligation Fund 10
773 Short-Term Investments Co.
Liquid Assets Portfolio 773
-------
Total Short-Term Investments (Cost $783) 783
-------
Total Investments 98.7% (Cost $140,017) 140,828
-------
Other Assets, less Liabilities 1.3% 1,861
-------
NET ASSETS 100.0% $142,689
=======
See notes to the financial statements.
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal
Amount Market Value
(in thousands) (in thousands)
- -------------- --------------
LONG-TERM INVESTMENTS 97.5%
ASSET-BACKED SECURITIES 19.1%
CREDIT CARD RECEIVABLES 19.1%
$2,000 American Express Master Trust Credit Cards,
Series 1994-2, Class A, 7.60%, 8/15/02 $ 2,121
1,610 Banc One Credit Card Master Trust 1994-C,
Class A, 7.80%, 12/15/00 1,686
Discover Card Master Trust I:
3,600 Series 1993-A, Class A, 6.20%, 5/16/06 3,619
1,000 Series 1993-2, Class A, 5.40%, 5/15/99 984
500 Series 1993-3, Class A, 6.25%, 8/16/00 493
3,475 First Chicago Master Trust II, Series 1994-L,
Class A, 7.15%, 2/15/00 3,588
1,000 HFC Private Label Credit Card Trust II,
Series 1994-2, Class A, 7.80%, 9/20/03 1,047
2,700 MBNA Master Credit Card Trust, Series
1993-3, Class A, Asset Backed Certificates,
5.40%, 3/15/99 2,654
5,700 Sears Credit Account Master Trust II,
Series 1994-1, Class A, 7.00%, 8/15/00 5,878
4,800 Standard Credit Card Trust I, Series 1993-3,
Credit Card Participation Certificates,
Class A, 5.50%, 1/07/99 4,723
-------
26,793
-------
CORPORATE BONDS 28.1%
1,500 BankAmerica Subordinated Notes,
10.00%, 2/01/03 1,792
1,000 Bankers Trust - NY, Subordinated Debentures,
9.50%, 6/14/00 1,117
700 Bank Nova Scotia Subordinated Debentures,
9.00%, 10/01/99 766
1,000 Chase Manhattan Corporation Medium
Term Notes, 8.65%, 2/13/99 1,070
906 Chase Manhattan Corporation Subordinated
Notes, 10.00%, 6/15/99 1,012
Chemical Banking Corporation Subordinated Notes:
1,000 10.375%, 3/15/99 1,123
925 9.75%, 6/15/99 1,029
Chrysler Financial Corporation Debentures:
1,596 10.40%, 8/01/99 1,710
750 13.25%, 10/15/99 922
700 12.75%, 11/01/99 849
2,390 Ford Motor Credit Co. Notes,
5.625%, 12/15/98 2,359
640 Ford Capital B.V. Notes, 9.00%, 8/15/98 687
1,050 General Motors Acceptance Corporation
Notes, 8.00%, 10/01/99 1,110
1,000 General Motors Corporation Debentures,
9.625%, 12/01/00 1,137
2,450 Goldman Sachs Group, L.P. Notes,
6.875%, 9/15/99, (Acquired 10/15/93,
5/13/94; Cost $2,446)<F121> 2,475
1,300 Heller Financial, Inc. Notes, 9.375%, 3/15/98 1,391
1,290 Household Finance Co. Senior Subordinated
Notes, 9.55%, 4/01/00 1,444
International Lease Finance Corporation
Medium Term Notes:
2,000 5.92%, 1/15/98 1,995
500 8.25%, 10/19/98 528
Lehman Brothers Holdings, Inc. Notes:
1,500 8.375%, 2/15/99 1,582
2,000 6.90%, 7/15/99 2,015
1,005 Lehman Brothers, Inc. Senior Subordinated
Notes, 10.00%, 5/15/99 1,112
700 Midland American Capital Corporation
Debentures, 12.75%, 11/15/03 821
MONY Funding, Inc. Debentures:
2,130 8.25%, 10/29/96 2,163
1,325 8.125%, 4/07/97 1,349
1,400 Paine Webber Group, Inc. Senior Notes,
6.25%, 6/15/98 1,388
750 Salomon, Inc. Medium Term Notes,
5.50%, 1/31/98 728
650 The Charles Schwab Corporation Medium
Term Notes, 6.06%, 10/02/00 636
1,731 Security Pacific Corporation Debentures,
9.75%, 5/15/99 1,907
1,250 Smith Barney Holdings, Inc. Notes,
5.50%, 1/15/99 1,222
------
39,439
------
OTHER 3.9%
1,000 Nova Scotia (Province of Canada)
Debentures, 11.50%, 5/15/13 1,158
400 Ontario Province Debentures,
11.75%, 4/25/13 466
St. Louis, Missouri Taxable
Airport Revenue Bonds:
1,800 Series 1993, Lambert-St. Louis
International Airport, 5.30%, 7/01/98 1,764
1,000 Series 1993A, Lambert-St. Louis
International Airport, 5.50%, 7/01/98 984
1,110 Security Pacific Home Equity Loan, Series
1991-2, Class B, 8.15%, 6/15/20 1,128
------
5,500
------
U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES 6.1%
Federal Home Loan Mortgage Corporation
Real Estate Mortgage Investment Conduit
Pass-Thru Certificates:
500 Series 1339, Class B, 8.00%, 6/15/99 517
1,000 Series 1289, Class PR, 7.50%, 2/15/03 1,036
1,366 Series 1456, Class LA, 7.50%, 5/15/03 1,396
1,000 Federal Home Loan Mortgage Corporation - Government
National Mortgage Association
Real Estate Mortgage Investment Conduits,
Series 8, Class VB, 7.00%, 4/25/03 1,023
1,200 Federal National Mortgage Association,
Medium Term Bonds, 8.25%, 5/16/05 1,232
Federal National Mortgage Association
Real Estate Mortgage Investment Conduit
Pass-Thru Certificates:
800 Series 1993-23, Class PU, 7.50%, 1/25/00 824
500 Series 1992-73, Class L, 7.50%, 1/25/01 515
2,000 U.S. Department of Veterans Affairs Guaranteed
REMIC Pass-Thru Certificates, Vendee Mortgage
Trust, 1993-1, Class G, 7.00%, 2/15/00 2,051
------
8,594
------
U.S. TREASURY OBLIGATIONS 40.3%
U.S. Treasury Bonds:
2,500 10.75%, 2/15/03 3,198
6,950 11.875%, 11/15/03 9,513
5,400 10.75%, 8/15/05 7,234
U.S. Treasury Notes:
6,750 5.625%, 1/31/98 6,744
29,050 6.75%, 5/31/99 29,967
------
56,656
------
Total Long-Term Investments
(Cost $133,920) 136,982
-------
Number
of Shares
(in thousands)
- --------------
SHORT-TERM INVESTMENTS 1.5%
INVESTMENT COMPANIES 1.5%
10 Financial Square Prime Obligation Fund 10
2,167 Short-Term Investments Co.
Liquid Assets Portfolio 2,167
-------
Total Short-Term Investments
(Cost $2,177) 2,177
-------
Total Investments 99.0%
(Cost $136,097) 139,159
-------
Other Assets, less Liabilities 1.0% 1,358
-------
TOTAL NET ASSETS 100.0% $140,517
=======
<F121> Unregistered Security
See notes to the financial statements.
TAX-EXEMPT INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal Market
Amount Value
(in thousands) (in thousands)
- -------------- --------------
GENERAL OBLIGATION 3.8%
$ 150 Racine, Wisconsin Unified School District,
4.80%, 4/01/01 $ 151
Washington State:
100 6.75%, 10/01/01 108
1,000 6.30%, 9/01/02 1,089
-------
Total General Obligation
(Cost $1,353) 1,348
-------
REVENUE BONDS 7.6%
HOUSING 6.1%
1,000 Saint Charles, Illinois, Industrial
Development - Covington Ct Project,
Mandatory Put 9/01/98, 5.50%, 12/01/09 1,034
1,105 South Dakota Housing Development Authority -
Home Ownership Mortgages, 4.85%, 5/01/01 1,105
-------
2,139
-------
OTHER 0.6%
200 Georgia State Municipal Electric Authority,
4.50%, 1/01/00 200
-------
UNIVERSITY 0.9%
310 New England Education Student Loan
Marketing Corporation, 5.80%, 3/01/02 325
-------
Total Revenue Bonds
(Cost $2,632) 2,664
-------
PREREFUNDED AND ESCROWED
TO MATURITY 72.4%
1,300 Alaska State Housing Finance Corporation,
6.375%, 12/01/12, Prerefunded 12/01/02 1,433
550 Birmingham, Alabama Waterworks and
Sewer, 7.20%, 1/01/19, Prerefunded 1/01/00 616
610 Central Lake County, Illinois Joint Action,
7.00%, 5/01/19, Prerefunded 5/01/00 683
590 Clark County, Nevada School District,
7.625%, 5/01/07, Prerefunded 5/01/00 676
500 Clark County, Nevada School District,
7.65%, 5/01/10, Prerefunded 5/01/00 573
1,000 Convention Center Authority - Rhode
Island Revenue, 6.65%, 5/15/12,
Prerefunded 5/15/01 1,118
1,045 Denver, Colorado City and County School
District No. 1, 6.75%, 12/01/12,
Prerefunded 12/01/02 1,184
1,000 District of Columbia, 8.00%, 6/01/08,
Prerefunded 6/01/98 1,110
475 Farmington, New Mexico, Power Revenue
Bonds, 9.875%, 1/01/13, Prerefunded 7/01/05 650
800 Gadsden East Alabama Medical Clinic -
Baptist Hospital of Gadsden, 7.80%,
11/01/21, Prerefunded 11/01/01 948
1,000 Georgia Municipal Electric Authority Power
Revenue, 8.125%, 1/01/17, Crossover
Refunded 1/01/98 1,093
570 Illinois Education Facilities Authority -
Chicago College of Osteopathic Medicine,
Escrowed to Maturity, 8.75%, 7/01/99 628
2,355 Illinois Education Facilities Authority - Loyola,
7.125%, 7/01/21, Prerefunded 7/01/01 2,692
1,000 Illinois Health Facilities Authority - Swedish -
American Hospital, 7.40%, 4/01/20,
Prerefunded 4/01/00 1,134
1,000 Maricopa County, Arizona, School District
No. 1, Phoenix Elementary,
6.60%, 7/01/03, Prerefunded 7/01/01 1,110
1,000 Maricopa County, Arizona School District
No. 11, Peoria University, 7.00%, 7/01/05,
Prerefunded 7/01/01 1,122
500 Metropolitan Nashville Airport,
7.75%, 7/01/07, Prerefunded 7/01/01 587
870 Michigan State Hospital Financial Authority -
Sister of Mercy Health Corp., 7.50%,
2/15/18, Prerefunded 2/15/01 1,004
1,300 Nevada State,
6.20%, 5/01/04, Prerefunded 5/01/01 1,414
1,000 Philadelphia, Pennsylvania, Regional Port
Authority, Lease Revenue Bonds, 7.15%,
8/01/20, Prerefunded 8/01/00 1,115
1,000 Snohomish County, Washington - Public
Hospital, Stevens Memorial Hospital,
6.85%, 12/01/11, Prerefunded 12/01/01 1,122
1,000 Tucson, Arizona Street and Highway User
Revenue Bonds, Escrowed to Maturity,
9.25%, 7/01/02 1,265
1,005 University of Illinois, Escrowed to Maturity,
6.10%, 10/01/03 1,105
1,000 Wausau, Wisconsin School District, 6.50%,
4/01/10, Prerefunded 4/01/02 1,102
80 Williston, North Dakota, Escrowed to Maturity,
6.00%, 6/01/98 83
------
Total Prerefunded and Escrowed to Maturity
(Cost $25,030) 25,567
------
INSURED BONDS 9.2%
EDUCATION 0.6%
200 Merrillville, Indiana Multi-School Building
Corporation, 6.375%, 7/01/03 218
------
GENERAL OBLIGATION 5.3%
900 Camden, New Jersey, 6.15%, 2/15/00 967
675 Chicago, Illinois, 11.60%, 1/01/01 897
------
1,864
------
PUBLIC FACILITIES & IMPROVEMENTS 3.0%
1,000 Illinois State
6.00%, 7/01/06 1,069
------
WATER AND SEWER 0.3%
100 Pima County, Arizona Sewer
6.20%, 7/01/00 108
------
Total Insured Bonds
(Cost $3,225) 3,259
------
Number
of Shares
(in thousands)
--------------
INVESTMENT COMPANIES 5.1%
1,624 Financial Square Tax-Exempt Money Market 1,624
159 Tax-Free Investment Trusts 159
------
Total Investment Companies
(Cost $1,783) 1,783
------
Total Investments 98.1%
(Cost $34,023) 34,621
------
Other Assets, less Liabilities 1.9% 685
------
NET ASSETS 100.0% $35,306
======
See notes to the financial statements.
BOND IMMDEX/TM FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal
Amount Market Value
(in thousands) (in thousands)
- -------------- --------------
LONG-TERM INVESTMENTS 96.3%
ASSET-BACKED SECURITIES 20.7%
CREDIT CARD RECEIVABLES 20.7%
$2,600 Banc One Credit Card Master Trust,
Series 1994-C, Class A, 7.80%, 12/15/00 $ 2,724
14,600 Discover Card Master Trust I, Series 1993-2,
Class A, Credit Card Pass-Thru Certificates,
5.40%, 5/15/99 14,365
8,500 First Chicago Master Trust II, Series 1994-L,
Class A, 7.15%, 2/15/00 8,777
2,600 HFC Private Label Credit Card Master Trust II,
Series 1994-2, Class A, 7.80%, 9/20/03 2,721
9,400 MBNA Master Credit Card Trust, Series 1993-3,
Class A, Asset Backed Certificates,
5.40%, 3/15/99 9,241
14,250 Sears Credit Account Master Trust II,
Series 1994-1, Class A, 7.00%, 8/15/00 14,694
12,375 Standard Credit Card Trust I, Series 1993-3,
Credit Card Participation Certificates,
Class A, 5.50%, 1/07/99 12,176
------
64,698
------
CORPORATE BONDS 35.3%
500 American General Finance Corporation
Medium Term Notes, 9.75%, 9/30/98 532
3,250 BankAmerica Subordinated Notes,
10.00%, 2/01/03 3,883
3,000 Bear Stearns Company Senior Notes,
7.625%, 9/15/99 3,122
2,000 British Telecommunications Pub. Ltd. Co.
Debentures, 9.625%, 2/15/19 2,278
500 Burlington Northern Railroad Company
Equipment Trust Cerificates,
11.85%, 1/15/99 581
525 Chase Manhattan Corporation Medium Term
Notes, 8.65%, 2/13/99 562
4,417 Chase Manhattan Corporation Subordinated
Notes, 10.00%, 6/15/99 4,934
Chemical Banking Corporation
Subordinated Notes:
1,715 10.375%, 3/15/99 1,925
3,952 9.75%, 6/15/99 4,396
Chrysler Financial Corporation Debentures:
6,192 13.25%, 10/15/99 7,615
1,728 12.75%, 11/01/99 2,096
3,468 First Chicago Subordinated Notes,
9.00%, 6/15/99 3,780
Ford Capital B. V. Notes:
1,217 9.375%, 1/01/98 1,298
1,450 9.00%, 8/15/98 1,557
Ford Motor Credit Co. Medium Term Notes:
5,000 8.45%, 12/30/98 5,318
500 8.875%, 6/15/99 542
General Motors Acceptance Corporation
Medium Term Notes:
1,750 5.75%, 12/10/97 1,738
1,250 8.00%, 10/01/99 1,321
1,500 Georgia Pacific Corporation Debentures,
9.50%, 2/15/18 1,565
8,600 Goldman Sachs Group, L.P. Notes, 6.875%,
9/15/99 (Acquired 8/18/93, 10/15/93,
5/13/94; Cost $8,639) <F122> 8,687
1,300 GTE Florida Inc. Bonds,
9.625%, 4/01/30 1,377
8,990 Heller Financial, Inc. Debentures,
9.375%, 3/15/98 9,617
2,300 Household Finance Corporation Debentures,
9.625%, 7/15/00 2,595
3,500 International Lease Finance Corporation
Medium Term Notes, 9.82%, 12/14/98 3,853
2,495 Lehman Brothers Holdings Inc. Debentures,
8.875%, 11/01/98 2,657
1,700 Lehman Brothers Holdings Inc. Notes,
6.90%, 7/15/99 1,713
6,060 Lehman Brothers, Inc. Debentures,
10.00%, 5/15/99 6,705
3,479 Midland American Capital Corporation
Debentures, 12.75%, 11/15/03 4,078
5,050 MONY Funding, Inc. Debentures,
8.125%, 4/07/97 5,143
1,700 NCNB Corp. Bonds,
10.20%, 7/15/15 2,206
1,000 Deseret Gn &Trans Cooperative,
9.375%, 1/02/11 1,054
2,416 Pacific Gas & Electric Corporation
Eurodollar Debentures, 12.00%, 1/09/00 2,568
2,800 Salomon, Inc. Medium Term Notes,
5.50%, 1/31/98 2,719
The Charles Schwab Corporation Medium
Term Notes:
2,000 5.84%, 9/30/99 1,955
2,250 5.90%, 10/01/99 2,204
800 Tennessee Gas Pipeline Co. Debentures,
6.00%, 12/15/11 703
1,200 Westvaco Corporation Debentures,
10.125%, 6/01/19 1,398
-------
110,275
-------
OTHER 2.1%
1,700 Italy (Republic of) Debentures,
6.875%, 9/27/23 1,566
840 New Jersey Economic Development
Authority, 7.75%, 6/01/01 865
1,620 Ontario Province Debentures, 11.75%, 4/25/13 1,888
1,800 Quebec Province Bonds, 11.00%, 6/15/15 2,129
-------
6,448
-------
U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES 3.2%
500 Federal Home Loan Mortgage Corporation
Guaranteed Real Estate Mortgage Investment
Conduit Pass-Thru Certificates, Series 1169,
Class D, 7.00%, 5/15/21 505
33 Federal Home Loan Mortgage Corporation
Multiclass Mortgage Participation
Certificates, Series 1259, Class IC, Interest
Only, 1007.05%, 10/15/05 424
162 Federal Home Loan Mortgage Corporation
Participation Certificates, 7.50%, 4/01/07 162
3900 Federal National Mortgage Association
Debentures, 9.50%, 11/10/20 4163
Federal National Mortgage Association
Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
500 Series 1989-90, Class E, 8.70%, 12/25/19 523
456 Series 1990-72, Class A, 9.00%, 7/25/20 470
538 Series 1990-72, Class B, 9.00%, 7/25/20 589
Federal National Mortgage Association
Guaranteed Real Estate Mortgage Investment
Conduit Stripped Mortgage-Backed Securities:
320 Series 1991-94, Class H, Principal Only,
9/25/97 221
11 Series 1992-29, Class K, Interest Only,
977.92%, 11/25/00 197
25 Series 1992-145, Class N, Interest Only,
1010.06%, 1/25/06 728
1,300 Series 1989-39, Class C, Principal Only,
6/25/17 1,199
Federal National Mortgage Association
Pass-Thru Certificates:
646 7.50%, 8/01/07 658
197 7.75%, 6/01/08 201
------
10,040
------
U.S. TREASURY OBLIGATIONS 35.0%
U.S. Treasury Bonds:
4,500 10.75%, 2/15/03 5,756
68,900 9.25%, 2/15/16 91,120
11,950 U.S. Treasury Notes,
6.75%, 5/31/99 12,327
-------
109,203
-------
Total Long-Term Investments
(Cost $287,435) 300,664
-------
Number
of Shares
(in thousands)
- --------------
SHORT-TERM INVESTMENTS 2.1%
INVESTMENT COMPANIES 2.1%
11 Financial Square Prime Obligation Fund 11
6,457 Short-Term Investments Co.
Liquid Assets Portfolio 6,457
-------
Total Short-Term Investments (Cost $6,468) 6,468
-------
Total Investments 98.4% (Cost $293,903) 307,132
-------
Other Assets, less Liabilities 1.6% 5,017
-------
TOTAL NET ASSETS 100.0% $312,149
=======
<F122> Unregistered Security
See notes to the financial statements.
SHORT-TERM BOND MARKET FUND
INTERMEDIATE BOND MARKET FUND
TAX-EXEMPT INTERMEDIATE BOND FUND
BOND IMMDEX/TM FUND
NOTES TO THE FINANCIAL STATEMENTS
1.ORGANIZATION
Portico Funds, Inc. (the "Company") was incorporated on February 15, 1988, as
a Wisconsin Corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940. The Short-Term Bond Market,
Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond IMMDEX/TM
Funds (the "Funds") are separate, diversified investment portfolios of the
Company. The Short-Term Bond Market Fund and Bond IMMDEX/TM Fund commenced
operations on December 29, 1989; the Intermediate Bond Market Fund commenced
operations on January 5, 1993; and the Tax-Exempt Intermediate Bond Fund
commenced operations on February 8, 1993.
The costs, in thousands, incurred in connection with the organization,
initial registration and public offering of shares aggregating $44, $14, $11 and
$46 for the Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt
Intermediate Bond and Bond IMMDEX/TM Funds, respectively, have been paid by the
Funds. These costs are being amortized over the period of benefit, but not to
exceed sixty months from each Fund's commencement of operations.
The Company has issued two classes of Fund shares in each of the Funds:Series
A and Series Institutional. The Series A shares are subject to a 0.25%
shareowner service fee and to an initial sales charge imposed at the time of
purchase, in accordance with the Funds' prospectus. The maximum sales charge is
2% of the offering price or 2.08% of the net asset value. Each class of shares
for each Fund has identical rights and privileges except with respect to
shareowner organization fees paid by Series A shares, voting rights on matters
affecting a single class of shares and the exchange privileges of each class of
shares.
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized exchange
are valued at the last sale price on the securities exchange on which such
securities are primarily traded or at the last sale price on the national
securities market. Exchange-traded securities for which there were no
transactions are valued at the current bid prices. Securities traded on only
over-the-counter markets are valued on the basis of closing over-the-counter bid
prices. Instruments with a remaining maturity of 60 days or less are valued on
an amortized cost basis which approximates market value. Securities for which
quotations are not readily available and other assets are valued at fair value
as deter mined by the investment adviser under the supervision of the Board of
Directors.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intend to continue
to so comply in future years.
c) Income and Expenses - The Funds are charged for those expenses that are
directly attributable to each portfolio, such as advisory, administration and
certain shareowner service fees. Expenses that are not directly attributable to
a portfolio are typically allocated among the Company's portfolios in proportion
to their respective net assets, number of shareowner accounts or net sales,
where applicable. Net investment income other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative net asset value of outstanding shares (or the
value of dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current day's capital share
activity of the respective class).
d) Distributions to Shareowners - For the period ended April 30, 1995, dividends
from net investment income of the Short-Term Bond Market, Intermediate Bond
Market and Tax-Exempt Intermediate Bond Funds were declared daily and paid
monthly. Dividends from net investment income of the Bond IMMDEX/TM Fund were
declared and paid quarterly. Effective May 1, 1995, net investment income
dividends for the Funds are declared and paid monthly. For the Bond IMMDEX/TM
Fund, net investment income for the month of April was distributed to
shareowners in the month of April. Distributions of net realized capital gains,
if any, will be declared at least annually.
e) Unregistered Security - The Intermediate Bond Market and Bond IMMDEX/TM Funds
own a certain investment security which is unregistered and thus restricted to
resale. This security is valued by the Funds after giving due consideration to
pertinent factors including recent private sales, market conditions and the
issuer's financial performance. Where future disposition of this security
requires registration under the Securities Act of 1933, the Funds have the right
to include their security in such registration, generally without cost to the
Funds. The Funds have no right to require registration of unregistered
securities.
f) Other - Investment and shareowner transactions are recorded no later than the
first business day after the trade date. The Funds determine the gain or loss
realized from investment transactions by comparing the original cost of the
security lot sold with the net sale proceeds. Interest income is recognized on
an accrual basis. Discounts and premiums on bonds are amortized over the life of
the respective bond. Generally accepted accounting principles require that
permanent financial reporting and tax differences be reclassified to capital
stock.
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales, in thousands, of securities, excluding
short-term investments, for the Funds for the year ended October 31, 1995, were
as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BONDFUND FUND
------------ ------------ ----------- ---------
Purchases:
U.S. Government $50,654 $64,976 - $77,597
Other 94,429 54,076 $19,445 71,413
Sales:
U.S. Government 44,085 40,663 - 71,901
Other 81,326 26,908 12,877 37,744
At October 31, 1995, gross unrealized appreciation and depreciation of
investments for federal income tax purposes, in thousands, were as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BONDFUND FUND
----------- ----------- ----------- ---------
Appreciation $1,587 $3,415 $ 657 $15,130
(Depreciation) (968) (353) (61) (1,962)
-------- -------- ------- ---------
Net unrealized
appreciation on
investments $ 619 $3,062 $ 596 $13,168
====== ====== ===== =======
At October 31, 1995, the cost of investments, in thousands, for federal income
tax purposes was $140,209, $136,097, $34,025 and $293,964 for the Short-Term
Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond
IMMDEX/TM Funds, respectively. At October 31, 1995, the Short-Term Bond Market,
Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds had accumulated
net realized capital loss carryovers, in thousands, of $1,248, $1,266 and $140,
respectively, expiring in 2002. The Short-Term Bond Market, Intermediate Bond
Market and Bond IMMDEX/TM Funds had accumulated net realized capital loss
carryovers, in thousands, of $189, $568 and $987, respectively, expiring in
2003. For the year ended October 31, 1995, the Tax-Exempt Intermediate Bond Fund
utilized, in thousands, capital loss carryovers of $10. To the extent each Fund
realizes future net capital gains, taxable distributions to its respective
shareowners will be offset by any unused capital loss carryover.
<TABLE>
4.CAPITAL SHARE TRANSACTIONS
On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective January 9,
1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional series shares. Transactions in capital
shares for the Funds, in thousands, were as follows:
<CAPTION>
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BOND FUND FUND
-------------------- ------------------ ------------------ -----------------
Amount Shares Amount Shares Amount Shares Amount Shares
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERIOD FROM JAN. 10, TO
OCT. 31, 1995:
Series A shares:
Reclassification of
previous class $ 113,766 11,467 $ 90,367 9,487 $ 28,273 2,909 $ 250,315 9,893
Exchange out to Series
Institutional shares (67,630) (6,818) (82,619) (8,669) (21,916) (2,255) (236,263) (9,338)
Shares sold 10,062 985 5,347 537 2,477 246 8,406 311
Shares issued to owners
in reinvestment
of dividends 1,889 186 257 25 202 20 674 24
Shares redeemed (11,995) (1,179) (2,445) (247) (1,682) (167) (2,814) (104)
--------- ------- ------- ----- ------- ----- ------- -----
Net increase $ 46,092 4,641 $ 10,907 1,133 $ 7,354 753 $ 20,318 786
======== ===== ====== ===== ====== ===== ======= =====
Series Institutional shares:
Exchange in from
Series A shares $ 67,630 6,818 $ 82,619 8,669 $ 21,916 2,255 $ 236,263 9,338
Shares sold 35,067 3,449 50,608 5,053 7,707 762 55,322 2,049
Shares issued to owners
in reinvestment
of dividends 3,077 302 3,251 325 328 33 12,580 467
Shares redeemed (13,589) (1,336) (14,172) (1,422) (3,554) (354) (38,641) (1,421)
-------- ------- -------- ------- ------- ----- -------- -------
Net increase $ 92,185 9,233 $122,306 12,625 $ 26,397 2,696 $ 265,524 10,433
======== ======= ======== ======= ======= ===== ======== =======
PERIOD FROM NOV. 1, 1994 TO
JAN. 9, 1995:
Previous Class:
Reclassification to
Series A shares $(113,766) (11,467) $ (90,367) (9,487) $(28,273) (2,909) $(250,315) (9,893)
Shares sold 2,785 279 5,535 577 6,094 629 8,531 333
Shares issued to owners
in reinvestment
of dividends 1,409 141 863 90 146 15 3,937 156
Shares redeemed (11,467) (1,153) (2,952) (308) (3,967) (410) (15,327) (600)
-------- ------- ------- ----- ------- ----- -------- -----
Net (decrease) $(121,039) (12,200) $ (86,921) (9,128) $(26,000) (2,675) $(253,174) (10,004)
========== ======== ======== ======= ========= ======= ======== =======
FOR THE YEAR ENDED
OCTOBER 31, 1994:
Shares sold $ 37,720 3,648 $ 45,014 4,469 $ 13,858 1,371 $ 50,075 1,831
Shares issued to owners
in reinvestment
of dividends 6,571 639 2,882 287 681 68 18,402 687
Shares redeemed (57,510) (5,587) (10,681) (1,062) (10,909) (1,090) (41,787) (1,523)
-------- ------- -------- ------- -------- ------- -------- -------
Net increase (decrease) $ (13,219) (1,300) $ 37,215 3,694 $ 3,630 349 $ 26,690 995
========= ======= ======== ======= ======== ======= ========= =======
</TABLE>
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company ("FIRMCO"). FIRMCO is a subsidiary of
Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Funds, FIRMCO is entitled to receive a fee,
calculated daily and payable monthly, at the annual rates presented below as
applied to each Fund's daily net assets. For the year ended October 31, 1995,
FIRMCO voluntarily waived the following fees, in thousands, by Fund:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX/TM
FUND FUND BOND FUND FUND
----------- ------------ ------------- ----------
Annual rate 0.60% 0.50% 0.50% 0.30%
Fees waived $436 $238 $128 -
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets, plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the year ended October
31, 1995, $96, $81, $22 and $175 of administration fees, in thousands, were
voluntarily waived for the Short Term Bond Market, Intermediate Bond Market,
Tax-Exempt Intermediate Bond and Bond IMMDEX/TM Funds, respectively.
Effective January 9, 1995, the Company entered into Servicing Agreements with
certain Service Organizations, including FIRMCO affiliates, for the Series A
class of shares. The Service Organizations are entitled to receive fees from the
Funds up to the annual rate of 0.25% of the average daily net asset value of the
Series A shares for certain support and/or distribution services to customers of
the Service Organizations who are beneficial owners of Series A shares. These
services may include assisting customers in processing purchase, exchange and
redemption requests; processing dividend and distribution payments from the
Funds; and providing information periodically to customers showing their
positions in Series A shares. Service Organization fees, in thousands, paid by
the Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate
Bond and Bond IMMDEX/TM Funds to FIRMCO affiliates aggregated $79, $17, $12 and
$30, respectively, for the year ended October 31, 1995.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual fee from the Company for service as a Director and is eligible to
participate in a deferred compensation plan with respect to these fees.
Participants in the plan may designate their deferred Director's fees as if
invested in any one of the Portico Funds (with the exception of the MicroCap
Fund) or in 90-day U.S. Treasury bills. The value of each Director's deferred
compensation account will increase or decrease as if it were invested in shares
of the selected Portico Funds or 90-day U.S. Treasury bills. The Funds maintain
their proportionate share of the Company's liability for deferred fees.
Report of Independent Accountants
To the Board of Directors and Shareholders of the Portico Short-Term Bond Market
Fund, the Portico Intermediate Bond Market Fund, the Portico Tax-Exempt
Intermediate Bond Fund and the Portico Bond IMMDEX/TM Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Portico Short-Term Bond Market
Fund, the Portico Intermediate Bond Market Fund, the Portico Tax-Exempt
Intermediate Bond Fund and the Portico Bond IMMDEX/TM Fund (four of the
portfolios of Portico Funds, Inc. (the "Funds") at October 31, 1995, the
results of each of their operations for the year then ended, the changes in each
of their net assets for each of the two years in the period then ended, and each
of their financial highlights for the year ended October 31, 1995, and for each
of the other periods indicated, all in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse
Milwaukee, Wisconsin
November 29, 1995
- -Portico Funds are available through:
- the Portico Funds Center,
- Investment Specialists who are registered representatives of Elan Investment
Services, Inc., a registered broker/dealer, NASD and SIPC member,
- and through selected shareholder organizations.
This report is authorized for distribution only when preceded or accompanied by
a current prospectus.
To Open an Account or Request Information
1-800-982-8909
1-414-287-3710
For Account Balances and Investor Services
1-800-228-1024
1-414-287-3808
Portico Funds Center
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI 53201-3011
- -----------------------------------------------------------------------------
Exhibit (24)(b)
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OCTOBER 31, 1995
<CAPTION>
GROWTH AND EQUITY MIDCORE SPECIAL INTERNATIONAL
BALANCED INCOME INDEX GROWTH GROWTH EQUITY
FUND FUND FUND FUND FUND FUND
-------- ---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost
$104,294, $168,068,
$110,846, $109,839,
$393,397 and $34,597,
respectively) $125,237 $207,586 $156,546 $144,662 $510,669 $ 32,752
Foreign currency (cost $156) - - - - - 159
Income receivable 673 293 255 66 246 66
Capital shares sold 9 172 84 12 91 12
Receivable for securities sold 823 - - 514 10,986 125
Receivable for foreign
currency purchased - - - - - 140
Other assets 16 4 8 10 4 67
------- ------- ------- ------- ------- ------
Total Assets 126,758 208,055 156,893 145,264 521,996 33,321
------- ------- ------- ------- ------- ------
LIABILITIES:
Payable for securities
purchased 277 2,697 - 608 71 266
Payable for foreign
currency purchased - - - - - 140
Payable to affiliates 80 161 57 100 392 58
Accrued expenses and
other liabilities 17 21 67 23 36 37
------- ------- ------- ------- ------- ------
Total Liabilities 374 2,879 124 731 499 501
------- ------- ------- ------- ------- ------
NET ASSETS $126,384 $205,176 $156,769 $144,533 $521,497 $ 32,820
======= ======= ======= ======= ======= =======
NET ASSETS CONSIST OF:
Capital stock $102,869 $156,704 $109,821 $114,781 $347,916 $ 33,840
Undistributed net
investment income (loss) 226 175 245 (1) - 156
Undistributed accumulated
net realized
gains (losses) on:
Investments 2,346 8,779 972 (5,070) 56,309 666
Unrealized net appreciation
(depreciation) on:
Investments 20,943 39,518 45,700 34,823 117,272 (1,845)
Futures contracts - - 31 - - -
Foreign currency - - - - - 3
------- ------- ------- ------- ------- -------
Total Net Assets $126,384 $205,176 $156,769 $144,533 $521,497 $ 32,820
======== ======== ======== ======== ======== ========
SERIES A:
Net assets $ 21,832 $ 42,424 $ 18,663 $ 10,105 $ 87,269 $ 1,633
Shares authorized
($.0001 par value) 500,000 500,000 500,000 500,000 500,000 500,000
Shares issued and
outstanding 843 1,536 454 395 2,108 85
Net asset value and
redemption price
per share<F123> $25.89 $27.62 $41.07 $25.58 $41.40 $19.15
======= ======= ======= ======= ======= =======
Maximum offering
price per share<F123> $26.97 $28.77 $42.78 $26.65 $43.13 $19.95
======= ======= ======= ======= ======= =======
SERIES INSTITUTIONAL:
Net assets $104,552 $162,752 $138,106 $134,428 $434,228 $ 31,187
Shares authorized
($.0001 par value) 500,000 500,000 500,000 500,000 500,000 500,000
Shares issued and
outstanding 4,036 5,891 3,362 5,250 10,470 1,625
Net asset value,
redemption price and
offering price
per share<F123> $25.90 $27.63 $41.08 $25.61 $41.47 $19.19
======= ======= ======= ======= ======= =======
<FN>
<F123> Amounts may not recalculate due to rounding.
See notes to the financial statements.
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS, PART 1
(AMOUNTS IN THOUSANDS)
BALANCED FUND GROWTH AND INCOME FUND
--------------- ----------------
YEAR ENDED OCT. 31, YEAR ENDED OCT. 31,
------------------- ------------------
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment income (loss) $ 2,444 $ 1,817 $ 2,975 $ 3,075
Net realized gain (loss) on:
Investments 3,757 (1,339) 8,861 4,230
Foreign currency - - - -
Change in unrealized
appreciation (depreciation) on:
Investments 14,596 (1,391) 28,643 (4,285)
Foreign currency - - - -
------- ------- ------- -------
Net increase (decrease) in
net assets resulting from
operations 20,797 (913) 40,479 3,020
------ ----- ------ -----
CAPITAL SHARE TRANSACTIONS:
Shares sold 51,996 28,851 39,149 34,645
Shares issued to owners in
reinvestment of dividends 2,325 1,738 6,778 6,597
----- ----- ----- -----
54,321 30,589 45,927 41,242
Shares redeemed (41,011) (15,322) (38,029) (33,938)
-------- -------- -------- --------
Net increase 13,310 15,267 7,898 7,304
------ ------ ----- -----
DISTRIBUTIONS TO SHAREOWNERS<F124>:
From net investment income (540) (1,796) (925) (2,975)
From net realized gains - - (4,244) (4,000)
----- ------ ------- -------
(540) (1,796) (5,169) (6,975)
----- ------- ------- -------
DISTRIBUTIONS TO SERIES A
SHAREOWNERS<F124>:
From net investment income (285) - (374) -
----- ------- ----- -------
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS<F124>:
From net investment income (1,555) - (1,711) -
From net realized gains - - - -
------ ------ ------ -------
(1,555) - (1,711) -
------- ------- ------- --------
TOTAL INCREASE IN NET ASSETS 31,727 12,558 41,123 3,349
NET ASSETS:
Beginning of period 94,657 82,099 164,053 160,704
------ ------ ------- -------
End of period (including
undistributed net
investment income
(loss) of $226, $146,
$175, $165, $245,
$149, $(1), $50, $0,
$0, $156 and
$43, respectively) $126,384 $94,657 $205,176 $164,053
======= ======= ======= =======
STATEMENT OF CHANGES IN NET ASSETS, PART 2
(AMOUNTS IN THOUSANDS)
EQUITY INDEX FUND MIDCORE GROWTH FUND
------------------- ---------------
YEAR ENDED OCT. 31, YEAR ENDED OCT. 31,
------------------- ------------
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment income (loss) $ 2,949 $ 2,017 $ 145 $ 305
Net realized gain (loss) on:
Investments 1,377 338 2,657 (4,766)
Foreign currency - - - -
Change in unrealized appreciation
(depreciation) on:
Investments 26,047 1,004 20,823 4,961
Foreign currency - - - -
------ ------ ------ ------
Net increase (decrease) in
net assets
resulting from operations 30,373 3,359 23,625 500
------ ----- ------ ---
CAPITAL SHARE TRANSACTIONS:
Shares sold 43,586 44,189 49,755 45,282
Shares issued to owners in
reinvestment of dividends 2,893 1,769 222 214
----- ----- --- ---
46,479 45,958 49,977 45,496
Shares redeemed (24,547) (23,637) (42,006) (17,031)
-------- -------- -------- --------
Net increase 21,932 22,321 7,971 28,465
------ ------ ----- ------
DISTRIBUTIONS TO SHAREOWNERS<F124>:
From net investment income (731) (1,937) (137) (235)
From net realized gains (201) - - -
----- ------- ----- -----
(932) (1,937) (137) (235)
----- ------- ----- -----
DISTRIBUTIONS TO SERIES A
SHAREOWNERS<F124>:
From net investment income (226) - (1) -
----- ------ --- -----
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS<F124>:
From net investment income (1,941) - (122) -
From net realized gains - - - -
----- ------ ----- -----
(1,941) - (122) -
------- ------ ----- -----
TOTAL INCREASE IN NET ASSETS 49,206 23,743 31,336 28,730
NET ASSETS:
Beginning of period 107,563 83,820 113,197 84,467
------- ------ ------- ------
End of period (including
undistributed net
investment income
(loss) of $226, $146,
$175, $165, $245,
$149, $(1), $50, $0, $0,
$156 and $43, respectively) $156,769 $107,563 $144,533 $113,197
======= ======= ======= =======
STATEMENT OF CHANGES IN NET ASSETS, PART 3
(AMOUNTS IN THOUSANDS)
INTERNATIONAL
SPECIAL GROWTH FUND EQUITY FUND
-------------------- -------------
APRIL 28,
YEAR ENDED 1994
OCT. 31, YEAR ENDED THROUGH
----------------- OCT. 31, OCT. 31,
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment income (loss) $ (148) $ 476 $ 165 $ 43
Net realized gain (loss) on:
Investments 57,101 6,275 463 8
Foreign currency - - 225 (28)
Change in unrealized
appreciation (depreciation) on:
Investments 49,078 4,233 (1,826) (19)
Foreign currency - - 1 2
------ ------ ------ ------
Net increase (decrease) in
net assets
resulting from operations 106,031 10,984 (972) 6
------- ------ ----- ------
CAPITAL SHARE TRANSACTIONS:
Shares sold 130,385 209,100 12,055 24,430
Shares issued to owners in
reinvestment of dividends 2,330 436 59 -
------- ------- ------ ------
132,715 209,536 12,114 24,430
Shares redeemed (110,262) (171,571) (2,015) (680)
--------- --------- ------- -----
Net increase 22,453 37,965 10,099 23,750
------ ------ ------ ------
DISTRIBUTIONS TO SHAREOWNERS<F124>:
From net investment income - (495) (55) -
From net realized gains (2,526) - (8) -
------- ----- ---- ------
(2,526) (495) (63) -
------- ----- ---- ------
DISTRIBUTIONS TO SERIES A
SHAREOWNERS<F124>:
From net investment income - - - -
------ ------ ------ ------
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS<F124>:
From net investment income - - - -
From net realized gains (45) - - -
---- ---- ----- -----
(45) - - -
---- ---- ----- -----
TOTAL INCREASE IN NET ASSETS 125,913 48,454 9,064 23,756
NET ASSETS:
Beginning of period 395,584 347,130 23,756 -
------- ------- ------ ------
End of period (including
undistributed
net investment income
(loss) of $226, $146,
$175, $165, $245,
$149, $(1), $50, $0, $0,
$156 and $43, respectively) $521,497 $395,584 $32,820 $23,756
======= ======= ======= =======
<F124>On January 9, 1995, all previously existing series of shares of each Fund
were reclassified as Series A shares. Effective January 9, 1995, Institutional
shareowners exchanged their Series A shares for the Funds' Institutional series
shares. Distributions to shareowners from net investment income and net realized
gains reflect activity for the Funds for the period November 1, 1994 through
January 9, 1995 and for each Fund's respective class of shares for the period
from January 10, 1995 through October 31, 1995.
See notes to the financial statements.
FINANCIAL HIGHLIGHTS, PART 1
BALANCED FUND
------------------------------------------------------
Year
ended
October 31, Year ended March 30,
1995<F128> October 31, 1992<F125>
through
Series Series ----------------- Oct. 31,
A Institutional 1994 1993 1992
------ ------------- ---- ---- ----
Per Share Data:
Net asset value,
beginning of period $22.10 $22.10 $22.76 $20.49 $20.00
Income from investment
operations:
Net investment income 0.49 0.53 0.44 0.47 0.28
Net realized and
unrealized gains
(losses) on securities 3.77 3.78 (0.66) 2.27 0.44
---- ---- ------ ---- ----
Total from investment
operations 4.26 4.31 (0.22) 2.74 0.72
---- ---- ------ ---- ----
Less distributions:
Dividends from net
investment income (0.47) (0.51) (0.44) (0.47) (0.23)
Distributions from
capital gains - - - - -
----- ----- ------ ------ ------
Total distributions (0.47) (0.51) (0.44) (0.47) (0.23)
------ ------ ------ ------ ------
Net asset value,
end of period $25.89 $25.90 $22.10 $22.76 $20.49
====== ====== ====== ====== ======
Total return<F129><F130>19.55% 19.79% (0.93)% 13.49% 3.72%
Supplemental data and
ratios:
Net assets, in
thousands,
end of period $21,832 $104,552 $94,657 $82,099 $45,653
Ratio of net expenses
to average net
assets<F131> 0.94% 0.75% 0.75% 0.75% 0.75%
Ratio of net
investment income
to average net
assets<F131> 2.05% 2.24% 2.03% 2.24% 2.48%
Portfolio turnover
rate<F132> 61.87% 61.87% 59.77% 71.60% 29.04%
FINANCIAL HIGHLIGHTS, PART 2
GROWTH AND INCOME FUND
-----------------------------------------------------------
Year ended
October 31, Dec. 29,
1995<F128> 1989<F125>
------------------- Year ended October 31, through
Series Series ------------------------- Oct. 31,
A Institutional 1994 1993<F126>1992 1991 1990
---- ------------- ---- ---- ---- ---- ----
Per Share Data:
Net asset value,
beginning of
period $23.09 $23.09 $23.70 $22.27 $21.72 $17.99 $20.00
Income from
investment
operations:
Net investment
income 0.37 0.42 0.43 0.56 0.69 0.79 0.69
Net realized and
unrealized
gains (losses) on
securities 5.14 5.14 (0.03) 1.63 0.56 3.75 (2.05)
---- ---- ------ ---- ---- ---- ------
Total from
investment
operations 5.51 5.56 0.40 2.19 1.25 4.54 (1.36)
---- ---- ---- ---- ---- ---- ------
Less distributions:
Dividends from net
investment income (0.38) (0.42) (0.42) (0.57) (0.70) (0.81) (0.65)
Distributions from
capital gains (0.60) (0.60) (0.59) (0.19) - - -
------ ------ ------ ------ ----- ----- -----
Total distributions (0.98) (1.02) (1.01) (0.76) (0.70) (0.81) (0.65)
------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $27.62 $27.63 $23.09 $23.70 $22.27 $21.72 $17.99
====== ===== ===== ===== ===== ===== =====
Total return
<F129><F130> 24.75% 25.00% 1.84% 9.93% 5.82% 25.63% (6.96)%
Supplemental data
and ratios:
Net assets, in
thousands,
end of period $42,424 $162,752 $164,053 $160,704 $135,713 $103,414 $65,741
Ratio of net
expenses
to average
net assets<F131> 1.09% 0.90% 0.90% 0.88% 0.75% 0.75% 0.74%
Ratio of net
investment income
to average net
assets<F131> 1.51% 1.70% 1.89% 2.44% 3.16% 3.93% 4.39%
Portfolio turnover
rate<F132> 47.85% 47.85% 56.85% 86.24% 31.25% 28.05% 49.85%
FINANCIAL HIGHLIGHTS, PART 3
EQUITY FUND INDEX
-----------------------------------------------------------
Year ended
October 31, Dec. 29,
1995<F128> 1989<F125>
----------------- Year ended October 31, through
Series Series ------------------------------ Oct. 31,
A Institutional 1994 1993 1992<F127> 1991 1990
- ------------- ---- ---- ---- ---- ----
Per Share Data:
Net asset value,
beginning of
period $33.41 $33.41 $33.04 $29.72 $27.87 $21.63 $25.00
Income from
investment
operations:
Net investment
income 0.70 0.76 0.77 0.75 0.73 0.73 0.59
Net realized and
unrealized
gains (losses)
on securities 7.70 7.71 0.35 3.32 1.86 6.31 (3.41)
---- ---- ---- ---- ---- ---- ------
Total from
investment
operations 8.40 8.47 1.12 4.07 2.59 7.04 (2.82)
---- ---- ---- ---- ---- ---- ------
Less distributions:
Dividends from
net investment
income (0.68) (0.74) (0.75) (0.75) (0.73) (0.74) (0.55)
Distributions from
capital gains (0.06) (0.06) - - (0.01) (0.06) -
------ ------ ----- ----- ------ ------ -----
Total distributions (0.74) (0.80) (0.75) (0.75) (0.74) (0.80) (0.55)
------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $41.07 $41.08 $33.41 $33.04 $29.72 $27.87 $21.63
====== ====== ====== ====== ====== ===== =====
Total return
<F129><F130> 25.79% 26.02% 3.51% 13.79% 9.36% 32.90%(11.46)%
Supplemental data
and ratios:
Net assets, in
thousands, end
of period $18,663 $138,106 $107,563 $83,820 $81,070 $51,481 $35,569
Ratio of net
expenses
to average
net assets<F131> 0.66% 0.46% 0.50% 0.50% 0.50% 0.50% 0.49%
Ratio of net
investment income
to average net
assets<F131> 2.14% 2.34% 2.38% 2.32% 2.48% 2.82% 3.01%
Portfolio turnover
rate<F132> 4.61% 4.61% 13.28% 13.78% 5.50% 1.38% 9.09%
FINANCIAL HIGHLIGHTS, PART 4
MIDCORE GROWTH FUND
---------------------------------------------------
Dec. 29,
October 31, 1995<F128> Year 1992<F125>
----------------------- ended through
Series Series Oct. 31, Oct. 31,
A Institutional 1994 1993
- ------------- ---- ----
Per Share Data:
Net asset value,
beginning of period $21.47 $21.47 $21.40 $20.09
Income from investment
operations:
Net investment income (0.02) 0.03 0.06 0.09
Net realized and
unrealized
gains (losses)
on securities 4.16 4.16 0.06 1.32
---- ---- ---- ----
Total from investment
operations 4.14 4.19 0.12 1.41
---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.03) (0.05) (0.05) (0.10)
Distributions from
capital gains - - - -
----- ----- ----- -----
Total distributions (0.03) (0.05) (0.05) (0.10)
------ ------ ------ ------
Net asset value, end
of period $25.58 $25.61 $21.47 $21.40
====== ====== ====== ======
Total return<F129><F130> 19.31% 19.55% 0.56% 7.53%
Supplemental data
and ratios:
Net assets, in
thousands, end
of period $10,105 $134,428 $113,197 $84,467
Ratio of net expenses
to average net
assets<F131> 1.09% 0.90% 0.88% 0.89%
Ratio of net investment
income
to average
net assets<F131> (0.06)% 0.13% 0.30% 0.57%
Portfolio turnover
rate<F132> 49.84% 49.84% 33.24% 46.29%
FINANCIAL HIGHLIGHTS, PART 5
SPECIAL GROWTH FUND
---------------------------------------------------------
Year ended Dec. 28,
October 31, 1995<F128> 1989<F125>
------------------ Year ended October 31, through
Series Series ---------------------------- Oct. 31,
A Institutional 1994 1993 1992<F127>1991 1990
- ------------- ---- ---- ---- ---- ----
Per Share Data:
Net asset value,
beginning of
period $33.19 $33.19 $32.34 $28.50 $28.05 $17.72 $20.00
Income from
investment operations:
Net investment
income (0.07) 0.00 0.04 0.07 0.17 0.27 0.22
Net realized
and unrealized
gains (losses)
on securities 8.49 8.49 0.85 4.47 2.18 10.34 (2.30)
---- ---- ---- ---- ---- ----- ------
Total from
investment
operations 8.42 8.49 0.89 4.54 2.35 10.61 (2.08)
---- ---- ---- ---- ---- ----- ------
Less distributions:
Dividends from
net investment
income - - (0.04) (0.08) (0.18) (0.28) (0.20)
Distributions
from capital
gains (0.21) (0.21) - (0.62) (1.72) - -
------ ------ ----- ------ ------ ----- -----
Total
distributions (0.21) (0.21) (0.04) (0.70) (1.90) (0.28) (0.20)
------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $41.40 $41.47 $33.19 $32.34 $28.50 $28.05 $17.72
====== ====== ====== ====== ====== ====== ======
Total return
<F129><F130> 25.56% 25.79% 2.77% 16.15% 8.86% 60.23%(10.47)%
Supplemental data
and ratios:
Net assets, in
thousands, end
of period $87,269 $434,228 $395,584$347,130 $205,207 $96,017 $39,179
Ratio of net
expenses
to average net
assets<F131> 1.09% 0.90% 0.89% 0.88% 0.76% 0.75% 0.74%
Ratio of net
investment income
to average net
assets<F131> (0.19)% 0.00% 0.13% 0.24% 0.65% 1.10% 1.41%
Portfolio turnover
rate<F132> 79.25% 79.25% 69.74% 58.80% 31.94% 48.39% 41.79%
FINANCIAL HIGHLIGHTS, PART 6
INTERNATIONAL EQUITY FUND
--------------------------------------
April 28,
Year ended 1994<F125>
October 31, 1995<F128> through
---------------------------- Oct. 31,
Series A Series Institutional 1994
-------- -------------------- ----
Per Share Data:
Net asset value,
beginning of period $19.99 $19.99 $20.00
Income from investment operations:
Net investment income 0.08 0.12 0.04
Net realized and unrealized
gains (losses) on securities (0.87) (0.87) (0.05)
Total from investment operations (0.79) (0.75) (0.01)
Less distributions:
Dividends from net
investment income (0.04) (0.04) -
Distributions from capital gains (0.01) (0.01) -
Total distributions (0.05) (0.05) -
Net asset value, end of period $19.15 $19.19 $19.99
Total return<F129><F130> (3.95)% (3.75)% (0.05)%
Supplemental data and ratios:
Net assets, in thousands,
end of period $1,633 $31,187 $23,756
Ratio of net expenses
to average net assets<F131> 1.70% 1.50% 1.49%
Ratio of net investment income
to average net assets<F131> 0.46% 0.66% 0.44%
Portfolio turnover rate<F132> 15.12% 15.12% 6.55%
<F125>Commencement of operations.
<F126>Effective June 17, 1993, FIRMCO assumed the investment advisory
responsibilities of Firstar Trust Company.
<F127>Effective February 3, 1992, FIRMCO assumed the investment advisory
responsibilities of Firstar Trust Company.
<F128>On January 9, 1995, all previously existing series of shares of each Fund
were reclassified as Series A shares. Effective January 9, 1995, Institutional
shareowners exchanged their Series A shares for the Funds' Institutional series
shares. For the year ended October 31, 1995, the Financial Highlights ratios of
net expenses to average net assets, ratios of net investment income to average
net assets, total return and the per share income from investment operations and
distributions are presented on a basis whereby the Funds' net investment income,
net expenses, net realized and unrealized gains (losses) and distributions for
the period November 1, 1994, through January 9, 1995, were allocated to each
class of shares based upon the relative net assets of each class of shares as of
the close of business on January 9, 1995, and the results thereof combined with
the results of operations and distributions for each applicable class for the
period January 10, 1995, through October 31, 1995.
<F129>Not annualized for the period ended October 31, 1990, for the Growth and
Income, Equity Index and Special Growth Funds and for the period ended October
31, 1992, for the Balanced Fund and for the period ended October 31, 1993, for
the MidCore Growth Fund and for the period ended October 31, 1994, for the
International Equity Fund.
<F130>The total return does not reflect the 4% front-end sales charge for
Series A.
<131>Annualized for the period ended October 31, 1990, for the Growth and
Income, Equity Index and Special Growth Funds and for the period ended October
31, 1992, for the Balanced Fund and for the period ended October 31, 1993, for
the MidCore Growth Fund and for the period ended October 31, 1994, for the
International Equity Fund.
<F132>Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
See notes to the financial statements.
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
YEAR ENDED OCTOBER 31, 1995
GROWTH EQUITY MIDCORE SPECIAL INTERNATIONAL
BALANCED AND INCOME INDEX GROWTH GROWTH EQUITY
FUND FUND FUND FUND FUND FUND
-------- --------- ------ ------- ------- ------------
INVESTMENT INCOME:
Dividend income:
Domestic $ 411 $ 3,924 $ 3,200 $ 916 $ 1,539 -
Foreign (net of
withholding
taxes of $84) - - - - - $ 538
Interest income:
Domestic 2,897 744 377 393 2,461 87
Foreign - - - - - 2
----- ----- ----- ----- ----- -----
3,308 4,668 3,577 1,309 4,000 627
----- ----- ----- ----- ----- ---
EXPENSES:
Investment advisory
fees 828 1,350 320 956 3,340 431
Administration fees 134 217 156 155 540 35
Shareowner servicing
and accounting costs 99 132 94 71 244 95
Service organization
fees - Series A 37 73 30 17 149 3
Custody fees 56 48 62 37 123 72
Federal and state
registration fees 10 16 19 25 32 34
Professional fees 24 29 27 33 34 40
Reports to shareowners 13 18 6 10 62 46
Amortization of
organization costs 5 1 1 3 2 5
Directors' fees and
expenses 5 5 5 5 5 5
Other 3 7 6 4 11 1
---- ---- ---- ---- ----- ----
Total expenses
before waiver 1,214 1,896 726 1,316 4,542 767
Less: Waiver of
expenses (350) (203) (98) (152) (394) (332)
----- ----- ---- ----- ----- -----
Net Expenses 864 1,693 628 1,164 4,148 435
--- ----- --- ----- ----- ---
NET INVESTMENT
INCOME (LOSS) 2,444 2,975 2,949 145 (148) 192
----- ----- ----- --- ----- ---
REALIZED AND
UNREALIZED
GAIN (LOSS):
Net realized gain
(loss) on:
Investments 3,757 8,861 1,377 2,657 57,101 666
Foreign currency - - - - - (5)
Change in unrealized
appreciation
(depreciation) on:
Investments 14,596 28,643 26,047 20,823 49,078 (1,826)
Foreign currency - - - - - 1
------ ------ ------ ------ ------ ------
Net gain on
investments
and foreign
currency 18,353 37,504 27,424 23,480 106,179 (1,164)
------ ------ ------ ------ ------- -------
NET INCREASE
(DECREASE)
IN NET ASSETS
RESULTING
FROM OPERATIONS $20,797 $40,479 $30,373 $23,625 $106,031 $ (972)
======= ======= ======= ======= ======= =====
See notes to the financial statements.
BALANCED FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market Value
of Shares (in thousands)
-------- ------------
COMMON STOCKS 63.0%
AUTO PARTS 1.0%
5,200 APS Holding Corporation<F133> 107
25,000 AutoZone, Inc.<F133> 619
1,600 Copart, Inc.<F133> 36
19,800 Lear Seating Corporation<F133> 549
-----
1,311
-----
BIO-TECHNOLOGY 0.4%
12,000 Millipore Corporation 424
10,600 Perseptive Biosystems, Inc. <F133> 112
-----
536
-----
BUILDING MATERIALS 0.2%
6,900 Home Depot, Inc. 257
-----
BUSINESS MACHINES & SOFTWARE 0.8%
16,600 Ceridian Corporation<F133> 722
900 Madge Networks N. V. <F133> 38
3,500 Mylex Corporation<F133> 65
1,800 National Instruments Corporation<F133> 34
3,500 Network General Corporation<F133> 145
-----
1,004
-----
BUSINESS SERVICES 4.9%
18,900 H & R Block, Inc. 780
7,100 Danka Business Systems PLC ADR 238
30,061 First Data Corporation 1,988
2,425 FIserv, Inc. <F133> 62
8,100 Franklin Quest Company<F133> 193
26,000 General Motors Corporation - Class E 1,225
5,800 Interim Services, Inc. <F133> 173
29,400 Manpower, Inc. 797
10,900 Medaphis Corporation<F133> 346
8,100 Robert Half International, Inc. <F133> 296
5,500 U.S. Delivery Systems, Inc. <F133> 114
-----
6,212
-----
CAPITAL GOODS 0.4%
10,400 York International Corporation 455
-----
CHEMICALS 0.4%
21,200 Airgas, Inc. <F133> 564
-----
COMMUNICATIONS & MEDIA 2.4%
4,000 Cellstar Corporation<F133> 111
11,400 Infinity Broadcasting Corporation<F87> 371
25,800 Interpublic Group of Companies, Inc. 999
53,300 PanAmSat Corporation<F133> 806
13,600 Reuters Holdings, PLC ADR 755
-----
3,042
-----
COMPUTERS 2.8%
17,200 Bay Networks<F133> 1,139
12,600 Compuware Corporation<F133> 287
1,900 McAfee Associates, Inc. <F133> 111
2,600 Microsoft Corporation<F133> 260
2,000 Parametric Technology Company<F87> 134
33,500 Platinum Technology<F133> 611
3,500 Reynolds & Reynolds - Class A 125
1,800 Softkey International, Inc. <F133> 57
31,100 Sungard Data Systems, Inc. <F133> 855
---
3,579
-----
CONSUMER PRODUCTS 0.5%
23,900 Newell Company 577
-----
CONSUMER SERVICES 0.6%
20,300 Loewen Group, Inc. 813
-----
CONTAINERS 0.2%
11,000 Sealed Air Corporation<F133> 290
-----
DISTRIBUTION 1.5%
21,800 Alco Standard Corporation 1,929
-----
DIVERSIFIED 0.2%
7,600 Kemet Corporation<F133> 262
-----
DRUGS 1.0%
30,200 Elan Corporation, PLC ADR<F133> 1,212
-----
ELECTRICAL EQUIPMENT 1.9%
34,600 AVX Corporation 1,077
28,687 Molex, Inc. - Class A 882
10,800 Vishay Intertechnology, Inc. <F133> 381
-----
2,340
-----
ELECTRONICS 0.9%
16,000 Arrow Electronics, Inc. <F133> $ 812
1,300 Checkpoint Systems, Inc. <F133> 38
5,000 Digi International, Inc. <F133> 134
1,300 Progress Software Corporation<F133> 85
200 SGS-Thomson Microelectronics N.V.<F133> 9
-----
1,078
-----
ENTERTAINMENT & LEISURE 3.0%
41,400 GTECH Holdings Corporation<F133> 1,014
10,900 Hollywood Entertainment Corporation 291
44,800 Mirage Resorts, Inc. <F133> 1,467
5,000 Regal Cinemas, Inc. <F133> 196
17,436 Viacom, Inc. - Class B<F133> 872
-----
3,840
-----
FINANCE COMPANIES 1.3%
1,800 Advanta Corporation - Class B 64
31,800 First USA, Inc. 1,463
3,900 National Data Corporation 103
-----
1,630
-----
FINANCIAL SERVICES 3.4%
6,400 AMBAC, Inc. 270
11,600 Federal National Mortgage Association 1,216
2,100 Green Tree Financial Corporation 56
44,000 MBNA Corporation 1,622
10,800 Quick And Reilly Group, Inc. 257
40,700 The Charles Schwab Corporation 931
-----
4,352
-----
HEALTH CARE SERVICES & SUPPLIES 11.5%
7,100 American Medical Response, Inc. <F133> 205
36,000 Biomet, Inc. <F133> 599
12,450 Cardinal Health, Inc. 640
40,825 Columbia/HCA Healthcare Corporation 2,006
3,600 Cordis Corporation<F133> 398
45,900 Foundation Health Corporation<F133> 1,945
24,100 Health Care & Retirement Corporation<F87> 708
35,212 Health Management Associates, Inc. -
Class A 757
17,400 Healthsource, Inc. <F133> 922
23,000 Lincare Holdings, Inc. <F133> 572
8,500 Medisense, Inc. <F133> 182
7,900 Medpartners, Inc. <F133> 221
6,500 Multicare Companies, Inc. <F133> 122
13,600 Oxford Health Plans<F133> 1,064
12,700 Pacificare Health Systems, Inc. <F133> 924
13,100 Quorum Health Group, Inc. <F133> 281
6,100 Renal Treatment Centers, Inc. <F133> 220
23,800 Surgical Care Affiliates, Inc. 705
16,600 United Healthcare Corporation 882
40,700 Vencor, Inc. <F133> 1,129
-----
14,482
------
HOSPITAL SUPPLIES & SERVICES 0.3%
6,800 Boston Scientific Corporation<F133> 286
2,000 IDEXX Laboratories, Inc. 81
-----
367
-----
HOUSING 1.0%
32,118 Clayton Homes, Inc. 843
6,200 Oakwood Homes Corp. 233
7,800 Toll Brothers, Inc. <F133> 139
---
1,215
-----
INSURANCE 4.1%
23,600 AFLAC, Inc. 962
8,600 Equitable of Iowa Companies 301
11,400 Arthur J. Gallagher & Company 403
17,200 MBIA, Inc. 1,198
26,300 MGIC Investment Corporation 1,496
21,700 Protective Life Corporation 618
5,400 Vesta Insurance Group, Inc. 218
-----
5,196
-----
LODGING 0.2%
9,500 La Quinta Inns, Inc. 245
-----
MACHINERY - AUTOMOTIVE 1.0%
34,100 Varity Corporation<F133> 1,236
-----
MACHINERY - INDUSTRIAL 1.1%
23,700 Thermo Electron Corporation<F133> 1,090
14,100 TriMas Corporation 293
---
1,383
-----
MISCELLANEOUS 0.1%
5,300 Keane, Inc. <F133> 143
-----
OFFICE PRODUCTS 1.0%
9,325 Office Depot, Inc. <F133> 267
3,000 OfficeMax, Inc. <F133> 74
23,650 Staples, Inc. <F133> 630
6,500 Viking Office Products, Inc. <F133> 289
-----
1,260
-----
OIL & GAS DOMESTIC 0.6%
16,000 Enron Corporation 550
11,500 NGC Corporation 104
2,680 Tejas Gas Corporation<F133> 126
-----
780
-----
POLLUTION CONTROL 0.5%
19,600 Browning-Ferris Industries, Inc. 571
-----
PRINTING & PUBLISHING 0.1%
4,200 Banta Corporation 182
-----
PRODUCTION 1.5%
7,000 Dover Corporation 277
25,900 Tyco International, Ltd. 1,573
-----
1,850
-----
RAILROADS 0.7%
11,500 Arnold Industries, Inc. 187
3,000 Burlington Northern Santa Fe 252
5,450 Comair Holdings, Inc. 153
4,584 Fritz Companies, Inc. 160
3,800 Heartland Express, Inc. <F133> 103
1,700 TNT Freightways Corporation 31
-----
886
-----
RESTAURANTS 0.9%
9,750 Apple South, Inc. 200
1,500 DF & R Restaurants, Inc. <F133> 46
5,900 IHOP Corporation<F133> 127
2,500 Landry's Seafood Restaurants Incorporated 34
6,300 Lone Star Steakhouse & Saloon<F133> 243
13,800 Outback Steakhouse, Inc. <F133> 433
-----
1,083
-----
RETAIL 3.6%
400 CompUSA, Inc. <F133> 15
27,400 Consolidated Stores Corporation<F133> 634
12,000 Dept 56, Inc.<F133> 544
3,600 Discount Auto Parts, Inc.<F133> 96
31,685 Dollar General Corporation 776
33,000 General Nutrition Companies, Inc.<F133 821
24,800 Kohl's Corporation<F133> 1,125
6,600 Lowe's Companies, Inc. 178
3,700 Micro Warehouse, Inc.<F133> 165
13,100 Musicland Stores Corporation<F133> 85
9,100 Sports and Recreation, Inc.<F133> 67
5,200 Trend Lines, Inc. - Class A<F133> 68
-----
4,574
-----
SEMICONDUCTORS 1.4%
9,800 Atmel Corporation<F133> 306
1,400 Burr-Brown Corporation<F133> 46
11,300 Dallas Semiconductor Corporation 240
3,800 Integrated Circuit Systems<F133> 52
2,100 Lattice Semiconductor Corporation<F133> 82
1,800 Linear Technology Corporation 79
12,100 LSI Logic Corporation<F133> 570
600 Maxim Integrated Products, Inc.<F133> 45
3,400 Microchip Technology, Inc.<F133> 135
1,100 SDL, Inc.<F133> 28
5,700 S3 Inc.<F133> 98
2,900 Triquint Semiconductor, Inc.<F133> 66
1,900 VLSI Technology<F133> 45
-----
1,792
-----
TELECOMMUNICATIONS 2.1%
13,000 Aspect Telecommunications
Corporation <F133> 447
12,400 Boston Technology, Inc.<F133> 171
20,600 Century Telephone Enterprises 597
6,200 Cidco, Inc. <F133> 184
2,300 Comverse Technology<F133> 52
11,300 DSC Communications Corporation<F133> 418
3,300 Pairgain Technologies<F133> 141
500 U.S. Robotics Corporation<F133> 46
19,500 Worldcom, Inc.<F133> 636
-----
2,692
-----
TEXTILES & APPAREL 1.1%
6,000 Gymboree Corporation<F133> 136
15,100 Jones Apparel Group, Inc.<F133> 517
4,400 The Men's Wearhouse, Inc.<F133> 171
8,000 Nike, Inc. - Class B 454
2,200 Oakley Incorporated<F133> 76
----
1,354
-----
TRAVEL & RECREATION 2.3%
53,500 Carnival Corporation - Class A 1,244
30,000 CUC International, Inc.<F133> 1,039
27,400 Promus Hotel Corporation<F133> 603
-----
2,886
-----
TRUCKING 0.1%
3,550 Wabash National Corporation 90
-----
Total Common Stocks
(Cost $60,528) 79,550
------
Principal
Amount Market Value
(in thousands) (in thousands)
- -------------- --------------
LONG-TERM INVESTMENTS 33.7%
ASSET-BACKED SECURITIES 7.1%
CREDIT CARD RECEIVABLES 7.1%
350 Banc One Credit Card Master Trust
1994-C, Class A, 7.80%, 12/15/00 367
1,000 Capital One Master Trust I, Series
1993-1, Class A, 5.20%, 10/15/98 980
1,700 Discover Card Master Trust I, Series
1993-2, Class A, Credit Card Pass-Thru
Certificates, 5.40%, 5/15/99 1,673
1,150 First Chicago Master Trust I,
Series 1994-L, 7.15%, 2/15/00 1,187
350 HFC Private Label Credit Card Trust,
Series 1994-2, Class A, 7.80%, 9/20/03 366
950 MBNA Master Credit Card Trust,
Series 1993-3, Asset Backed Certificates,
5.40%, 3/15/99 934
1,800 Sears Credit Account Master Trust II,
Class A, Master Trust Certificates,
Series 1994-1, 7.00%, 8/15/00 1,856
CREDIT CARD RECEIVABLES 7.1% (CONT.)
1,650 Standard Credit Card Trust, Series 1993-3,
Credit Card Participation Certificates,
5.50%, 1/07/99 1,623
-----
8,986
-----
CORPORATE BONDS 10.7%
350 Bankamerica Corp. Subordinated Notes,
7.75%, 7/15/02 373
250 Chase Manhattan Corporation Subordinated
Notes, 10.00%, 6/15/99 279
250 Chase Manhattan Corporation Medium Term
Notes, 8.65%, 2/13/99 267
Chemical Banking Corporation
Subordinated Notes:
250 10.375%, 3/15/99 281
750 9.75%, 6/15/99 834
1,050 Chrysler Financial Corporation
Debentures, 13.25%, 10/15/99 1,291
650 Ford Capital B.V. Notes,
9.00%, 8/15/98 698
450 Ford Motor Credit Co. Debentures,
5.625%, 12/15/98 444
350 General Motors Acceptance Corporation
Medium Term Notes, 5.75%, 12/10/97 347
950 Goldman Sachs Group, L.P. Notes, 6.875%,
9/15/99 (Acquired 10/15/93, 5/13/94;
Cost $957) <F134> 960
300 GTE Northwest First Mortgage, Series EE,
9.75%, 10/15/30 321
Heller Financial, Inc. Notes:
750 9.375%, 3/15/98 802
350 7.875%, 11/01/99 368
1,000 Household Finance Corp. Subordinated
Notes, 7.125%, 4/30/99 1,025
1,105 International Lease Finance Corporation
Debentures, 8.35%, 10/01/98 1,169
550 Lehman Brothers Holdings, Inc. Notes,
8.375%, 2/15/99 580
700 Lehman Brothers Holdings, Inc. Senior
Subordinated Notes, 10.00%, 5/15/99 774
1,000 Merrill Lynch Senior Notes,
7.75%, 3/01/99 1,046
150 NCNB Corp. Debentures,
10.20%, 7/15/15 195
350 Salomon, Inc. Medium Term Notes,
5.50%, 1/31/98 340
550 The Charles Schwab Corporation Medium
Term Notes, 5.90%, 10/01/99 539
600 Security Pacific Corp. Debentures,
9.75%, 5/15/99 661
-----
13,594
------
OTHER 0.4%
250 Italy (Republic of) Debentures,
6.875%, 9/27/23 230
250 Quebec Province,
11.00%, 6/15/15 296
-----
526
-----
U.S. GOVERNMENT AGENCY ISSUES 0.6%
350 Federal Home Loan Mortgage Corporation
Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru
Certificates, Series 1169,
Class D, 7.00%, 5/15/21 353
350 Federal National Mortgage Association
Debentures, 9.50%, 11/10/20 374
-----
727
-----
U.S. TREASURY OBLIGATIONS 14.9%
U. S. Treasury Bonds:
1,200 10.75%, 2/15/03 1,535
9,925 9.25%, 2/15/16 13,126
4,000 U. S. Treasury Notes,
6.75%, 5/31/99 4,126
-----
18,787
------
Total Long-Term Investments
(Cost $40,699) 42,620
------
SHORT-TERM INVESTMENTS 2.4%
INVESTMENT COMPANIES 2.4%
10 Financial Square Prime Obligation Fund$ 10
3,057 Short-Term Investments Co.
Liquid Assets Portfolio 3,057
-----
Total Short-Term Investments
(Cost $3,067) 3,067
-----
Total Investments 99.1%
(Cost $104,294) 125,237
-------
Other Assets, less Liabilities 0.9% 1,147
-----
NET ASSETS 100.0% $126,384
=======
<F133>Non-income producing
<F134>Unregistered security
See notes to the financial statements.
GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market Value
of Shares (in thousands)
- --------- ------------
COMMON STOCKS 80.9%
AEROSPACE & AIRCRAFT 0.9%
43,000 Rockwell International Corporation 1,913
-----
BANKING 1.7%
120,800 Norwest Corporation 3,564
-----
BUSINESS SERVICES 3.6%
128,625 H & R Block, Inc. 5,306
51,200 Service Corporation International 2,054
-----
7,360
-----
CHEMICALS 5.7%
86,700 Avery Dennison Corporation 3,880
40,200 Ecolab, Inc. 1,166
44,600 Hercules, Inc. 2,381
110,200 Praxair, Inc. 2,975
33,300 Valspar Corporation 1,299
-----
11,701
------
COMMUNICATIONS & MEDIA 1.8%
95,600 Interpublic Group of Companies, Inc. 3,705
-----
CONSUMER PRODUCTS 3.3%
56,900 Duracell International, Inc. 2,980
156,000 Newell Company 3,764
-----
6,744
-----
CONTAINERS 0.9%
69,000 Bemis Company, Inc. 1,794
-----
COSMETICS & SOAP 1.4%
62,000 Gillette Company 2,999
-----
DISTRIBUTION 3.7%
85,425 Alco Standard Corporation 7,560
-----
DRUGS 8.4%
73,000 Allergan, Inc. 2,144
36,000 Johnson & Johnson 2,934
84,325 McKesson Corporation 4,026
98,200 Pfizer, Inc. 5,634
46,000 Schering-Plough 2,467
-----
17,205
------
ELECTRIC 2.0%
111,250 Nipsco Industries, Inc. $4,061
------
ELECTRICAL EQUIPMENT 4.9%
52,000 AMP, Inc. 2,041
86,700 Belden, Inc. 2,092
37,600 Emerson Electric Company 2,679
50,200 General Electric Company 3,175
-----
9,987
-----
ELECTRONICS 1.2%
38,750 Motorola, Inc. 2,543
-----
FINANCIAL SERVICES 3.0%
46,100 Federal National Mortgage Association 4,835
35,000 MBNA Corporation 1,290
-----
6,125
-----
FOOD, BEVERAGES & TOBACCO 3.1%
21,500 McCormick and Co. 532
83,800 Nabisco Holdings Corporation - Class A 2,252
66,325 PepsiCo, Inc. 3,499
-----
6,283
-----
INSURANCE 4.4%
43,700 MBIA, Inc. 3,042
55,700 MGIC Investment Corporation 3,168
211,600 Western National Corp. 2,910
-----
9,120
-----
NATURAL GAS 0.9%
55,000 Enron Corporation 1,891
-----
OFFICE EQUIPMENT 2.5%
95,000 Diebold, Inc. 5,035
-----
OIL - DOMESTIC 0.9%
56,600 Phillips Petroleum Company 1,825
-----
OIL - INTERNATIONAL 1.8%
37,325 Mobil Corporation 3,760
-----
PAPER & FOREST PRODUCTS 1.6%
11,850 Kimberly-Clark Corporation 861
44,950 Scott Paper Company 2,393
-----
3,254
-----
POLLUTION CONTROL 0.9%
65,900 Browning-Ferris Industries, Inc. 1,919
-----
PRINTING & PUBLISHING 2.7%
29,575 McGraw-Hill, Inc. 2,421
48,925 Tribune Company 3,088
-----
5,509
-----
PRODUCTION 4.2%
53,300 Dover Corporation 2,105
26,400 Harsco Corporation 1,393
85,000 Tyco International, Ltd. 5,164
-----
8,662
-----
RAILROADS 2.0%
107,000 Illinois Central Corporation - Class A 4,093
-----
REAL ESTATE 3.1%
70,525 Federal Realty Investment Trust 1,428
70,600 Post Properties, Inc. 2,118
166,416 Security Capital Industrial 2,725
-----
6,271
-----
RETAIL 5.7%
93,200 Albertson's, Inc. 3,099
30,900 Gap, Inc. 1,217
117,150 Hannaford Brothers Company 3,060
109,350 May Department Stores Company 4,292
-----
11,668
------
TELECOMMUNICATIONS 4.1%
27,350 AT & T Corporation 1,751
143,000 Frontier Corporation 3,861
65,700 GTE Corporation 2,710
-----
8,322
-----
TEXTILES & APPAREL 0.5%
46,700 Warnaco Group - Class A 1,086
-----
Total Common Stock
(Cost $129,746) 165,959
-------
PREFERRED STOCK 4.8%
BUSINESS SERVICES 1.8%
57,000 General Motors Corporation Series C 3,819
-----
FINANCIAL SERVICES 3.0%
77,300 American Express 4,242
35,300 Merrill Lynch & Co., Inc, 6.5% Strypes 1,902
-----
6,144
-----
Total Preferred Stock
(Cost $8,493) 9,963
-----
Principal
Amount
(in thousands)
- --------------
LONG-TERM INVESTMENTS 4.1%
CORPORATE CONVERTIBLE BONDS 4.1%
81 Browning-Ferris Industries, Inc.
(Aces) Subordinated Convertible
Debentures, 7.25%, 6/30/98 2,673
-----
2,175 Service Corporation International
Subordinated Convertible Debentures,
6.50%, 9/01/01 4,176
-----
800 Thermo Electron Corporation
Subordinated Convertible Debentures,
4.625%, 8/01/97 1,648
-----
Total Long-Term Investments
(Cost $6,662) 8,497
-----
Number
of Shares Market Value
(in thousands) (in thousands)
- -------------- ------------
SHORT-TERM INVESTMENTS 11.3%
INVESTMENT COMPANIES 7.9%
6,451 Financial Square Prime Obligation Fund 6,451
9,716 Short-Term Investments Co.
Liquid Assets Portfolio 9,716
-----
16,167
------
Principal
Amount
(in thousands)
- --------------
VARIABLE RATE DEMAND NOTES 3.4%
7,000 Warner-Lambert Co. 7,000
-----
Total Short-Term Investments
(Cost $23,167) 23,167
------
Total Investments 101.1%
(Cost $168,068) 207,586
-------
Liabilities, less Other
Assets (1.1)% (2,410)
-------
NET ASSETS 100.0% $205,176
========
See notes to the financial statements.
EQUITY INDEX FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market Value
of Shares (in thousands)
--------- -------------
COMMON STOCKS 94.2%
AEROSPACE & AIRCRAFT 2.3%
10,100 Allied Signal, Inc. 429
12,000 Boeing Company 788
2,000 General Dynamics Corporation 111
6,934 Lockheed Martin Corporation 472
4,000 McDonnell Douglas Corporation 327
1,700 Northrop Grumman Corporation 97
9,000 Raytheon Company 393
7,600 Rockwell International Corporation 338
3,200 Textron, Inc. 220
4,200 United Technologies Corporation 373
-----
3,548
-----
AIR TRANSPORTATION 0.4%
2,600 AMR Corporation<F135> 172
1,800 Delta Air Lines, Inc. 118
1,800 Federal Express Corporation<F135> 148
5,600 Southwest Airlines Company 112
-----
550
-----
APPLIANCES 0.3%
1,500 Armstrong World Industries, Inc. 89
3,200 Black & Decker Corporation 108
4,000 Maytag Corporation 76
1,400 Snap-On Tools, Inc. 59
2,400 Whirlpool Corporation 127
-----
459
-----
AUTO & TRUCK 2.2%
12,875 Chrysler Corporation 665
3,700 Dana Corporation 95
2,800 Eaton Corporation 144
2,000 Echlin, Inc. 71
35,700 Ford Motor Company 1,026
25,900 General Motors Corporation 1,133
4,125 Genuine Parts Company 163
1,320 PACCAR, Inc. 55
2,200 TRW, Inc. 145
---
3,497
-----
BANKING 5.6%
13,687 Banc One Corporation 462
3,900 Bank of Boston Corporation 174
6,500 Bank of New York 273
13,112 BankAmerica Corporation 754
2,900 Bankers Trust New York Corporation 185
3,300 Barnett Banks, Inc. 182
4,000 Boatmen's Bancshares, Inc. 152
6,500 Chase Manhattan Corporation 371
8,382 Chemical Banking Corporation 477
13,700 Citicorp 889
4,800 CoreStates Financial Corporation 175
4,700 First Bank System, Inc. 234
3,100 First Chicago Corporation 210
2,800 First Fidelity Bancorporation 183
2,600 First Interstate Bancorp, Inc. 335
6,200 First Union Corporation 308
4,800 Fleet Financial Group, Inc. 186
4,800 Mellon Bank Corporation 241
6,600 J.P. Morgan & Company, Inc. 509
9,305 NationsBank Corporation 612
5,350 NBD Bancorp, Inc. 203
11,000 Norwest Corporation 324
7,900 PNC Bank Corporation 207
1,700 Republic New York Corporation 100
4,000 Shawmut National Corporation 136
3,800 Sun Trust Banks, Inc. 245
3,600 US Bancorp 107
5,700 Wachovia Corporation 252
1,700 Wells Fargo & Company 357
---
8,843
-----
BIO-TECHNOLOGY 0.3%
9,200 Amgen, Inc. <F135> 442
1,800 Millipore Corporation 64
---
506
---
BUILDING & HOUSING 0.5%
8,300 Corning, Inc. 217
3,200 Fluor Corporation 181
5,500 Masco Corporation 155
2,000 Owens-Corning Fiberglass Corporation<F135> 85
1,500 The Stanley Works 72
-----
710
-----
BUILDING MATERIALS 0.5%
16,400 Home Depot, Inc. 611
1,700 Johnson Controls, Inc. 99
-----
710
-----
BUSINESS MACHINES & SOFTWARE 3.1%
2,700 Amdahl Corporation<F135> 25
3,900 Apple Computer, Inc. 142
1,500 Ceridian Corporation<F135> 65
9,400 COMPAQ Computer Corporation<F135> 524
4,950 Digital Equipment Corporation<F135> 268
4,300 Honeywell, Inc. 181
19,900 International Business
Machines Corporation 1,935
14,550 Oracle Systems Corporation<F135> 635
5,400 Pitney-Bowes, Inc. 236
3,200 Sun Microsystems, Inc. <F135> 250
3,900 Tandem Computers, Inc. <F135> 44
5,000 Unisys Corporation<F135> 28
3,850 Xerox Corporation 500
---
4,833
-----
BUSINESS SERVICES 1.9%
1,600 Autodesk, Inc. 54
5,000 Automatic Data Processing, Inc. 358
3,600 H & R Block, Inc. 148
9,200 Cisco Systems, Inc. <F135> 713
8,250 Computer Associates International, Inc. 454
2,000 Computer Sciences Corporation<F135> 134
3,400 Deluxe Corporation 91
3,300 Dial Corporation 80
6,121 Dun & Bradstreet Corporation 366
4,100 First Data Corporation 271
3,600 Moore Corporation Limited 69
1,600 National Service Industries 48
3,800 Service Corporation International 152
-----
2,938
-----
CHEMICALS 2.9%
4,000 Air Products and Chemicals, Inc. 206
9,500 Dow Chemical Company 652
19,100 Dupont (E.I.) De Nemours & Company 1,191
2,200 Ecolab, Inc. 64
3,400 W.R. Grace & Company 190
2,500 Great Lakes Chemical Corporation 168
3,900 Hercules, Inc. 208
4,100 Monsanto Company 429
5,800 Morton International, Inc. 177
2,500 Nalco Chemical Company 75
7,300 PPG Industries, Inc. 310
4,900 Praxair, Inc. 132
2,300 Rohm & Haas Company 127
5,200 Rubbermaid, Inc. 136
3,300 Sherwin-Williams Company 124
2,000 Sigma-Aldrich Corporation 95
4,650 Union Carbide Corporation 176
3,000 The Williams Companies, Inc. 116
-----
4,576
-----
COMPUTERS 0.1%
5,700 Silicon Graphics, Inc. 190
CONGLOMERATE 0.4%
3,600 ITT Corporation 441
5,924 Tenneco, Inc. 260
-----
701
-----
CONSUMER DURABLES 0.6%
3,037 Eastman Chemical Company 181
11,550 Eastman Kodak Company 723
1,428 Polaroid Corporation 61
-----
965
-----
CONSUMER PRODUCTS 0.1%
6,100 Newell Company 147
-----
CONTAINERS 0.2%
1,200 Ball Corporation 33
2,100 Bemis Company, Inc. 55
3,200 Crown Cork & Seal Company, Inc.<F135> 112
3,242 Stone Container Corporation 53
-----
253
-----
COSMETICS & SOAP 2.2%
2,300 Avon Products, Inc. 164
1,700 Clorox Company 122
4,900 Colgate-Palmolive Company 339
15,144 Gillette Company 733
4,100 International Flavors & Fragrances, Inc. 198
23,900 Procter & Gamble Company 1,936
-----
3,492
-----
DISTRIBUTION 0.1%
1,679 Alco Standard Corporation 149
-----
DIVERSIFIED 0.5%
5,500 Unilever N.V. 720
-----
DRUGS 7.8%
27,700 Abbott Laboratories 1,101
2,800 Allergan, Inc. 82
2,700 Alza Corporation - Class A<F135> 59
10,500 American Home Products Corporation 931
1,700 Bard (C.R.), Inc. 48
9,600 Baxter International, Inc. 371
2,100 Becton, Dickinson & Company 136
17,660 Bristol-Meyers Squibb Company 1,347
22,500 Johnson & Johnson 1,834
10,100 Eli Lilly & Company 976
8,200 Medtronic, Inc. 474
42,700 Merck & Company, Inc. 2,455
21,600 Pfizer, Inc. 1,239
12,800 Schering-Plough 686
1,600 St. Jude Medical, Inc. <F135> 85
5,800 Tenet Healthcare Corporation 104
5,900 Upjohn Company 299
------
12,227
------
ELECTRIC 1.0%
5,432 CINergy Corporation 154
8,600 Consolidated Edison Company
Of New York, Inc. 261
7,300 Duke Power Company 327
4,500 General Public Utilities Corporation 141
9,800 PacifiCorp 185
8,400 Texas Utilities Company 309
3,500 Union Electric Company 137
-----
1,514
-----
ELECTRICAL EQUIPMENT 3.0%
7,500 AMP, Inc. 294
8,300 Emerson Electric Company 591
58,500 General Electric Company 3,700
1,700 Grainger (W.W.), Inc. 106
2,600 Scientific-Atlanta, Inc. 32
-----
4,723
-----
ELECTRONICS 4.1%
1,700 General Signal Corporation 54
1,400 Harris Corporation 81
17,800 Hewlett-Packard Company 1,649
28,200 Intel Corporation 1,970
6,200 Loral Corporation 184
20,500 Motorola, Inc. 1,345
4,200 National Semiconductor Corporation<F135> 102
8,500 Northern Telecom Ltd. 306
1,200 Perkin-Elmer Corporation 42
1,100 Tektronix, Inc. 65
1,900 Teledyne, Inc. 47
6,600 Texas Instruments, Inc. 450
650 Thomas & Betts Corporation 42
1,600 Western Atlas, Inc. <F135> 70
-----
6,407
-----
ENERGY 3.0%
6,500 American Electric Power Company 248
5,750 Baltimore Gas & Electric Company 154
5,700 Carolina Power & Light Company 187
6,300 Central & South West Corporation 169
4,125 Coastal Corporation 134
3,300 Consolidated Natural Gas Company 125
5,300 Detroit Edison Company 179
6,300 Dominion Resources, Inc. 250
7,700 Entergy Corporation 219
6,500 FPL Group, Inc. 272
4,300 Houston Industries, Inc. 199
4,100 Niagara Mohawk Power Corporation 44
1,400 NICOR, Inc. 38
2,300 Northern States Power Company 109
5,100 Ohio Edison Company 117
3,100 Pacific Enterprises, Inc. 77
14,400 Pacific Gas & Electric Company 423
4,608 Panhandle Eastern Corporation 116
7,800 Peco Energy Company 228
8,300 Public Service Enterprises Group, Inc. 244
16,300 SCEcorp 277
3,100 Sonat, Inc. 89
24,000 Southern Company 573
7,700 Unicom Corporation 252
-----
4,723
-----
ENERGY-RAW MATERIALS 0.4%
5,100 Baker Hughes, Inc. 100
6,100 Dresser Industries, Inc. 127
4,300 Halliburton Company 178
900 Louisiana Land & Exploration Company 32
2,300 McDermott International, Inc. 37
10,300 Occidental Petroleum Corporation 221
-----
695
-----
ENTERTAINMENT & LEISURE 1.5%
4,500 Brunswick Corporation 88
3,650 Hasbro, Inc. 111
900 King World Productions, Inc. <F135> 31
7,290 Mattel, Inc. 210
24,300 McDonald's Corporation 996
2,400 Premark International, Inc. 111
6,621 Price/Costco, Inc.<F135> 113
12,685 Viacom, Inc. - Class B 634
3,850 Wendy's International, Inc. 77
-----
2,371
-----
FINANCE 1.5%
17,100 American Express Company 695
1,600 Beneficial Corporation 78
5,100 Great Western Financial Corporation 115
3,700 H.F. Ahmanson & Company 92
3,200 Household International, Inc. 180
6,500 Merrill Lynch & Company, Inc. 361
5,100 National City Corporation<F135> 157
3,500 Salomon, Inc. 126
56 Transport Holdings, Inc. - Class A<F135> 2
11,339 The Travelers, Inc. 573
-----
2,379
-----
FINANCIAL SERVICES 1.1%
5,973 Dean Witter Discover and Company 297
9,500 Federal National Mortgage Association 996
4,800 MBNA Corporation 177
2,700 Morgan Stanley Group, Inc. 235
-----
1,705
-----
FOOD, BEVERAGES & TOBACCO 7.7%
6,400 American Brands, Inc. 274
20,711 Archer-Daniels-Midland Company 334
8,700 Campbell Soup Company 456
43,600 Coca-Cola Company 3,134
8,375 ConAgra, Inc. 323
5,000 CPC International, Inc. 332
5,900 Dardeen Restaurants, Inc. 67
5,100 General Mills, Inc. 293
8,600 Heinz (H.J.) Company 400
3,100 Hershey Foods Corporation 185
7,700 Kellogg Company 556
2,100 Loews Corporation 308
26,700 PepsiCo, Inc. 1,408
29,100 Philip Morris Companies, Inc. 2,459
2,900 Pioneer Hi-Bred International, Inc. 144
4,600 Quaker Oats Company 157
3,400 Ralston-Ralston Purina Group 202
16,900 Sara Lee Corporation 496
5,900 Sysco Corporation 179
6,600 UST, Inc. 198
3,800 Wrigley (Wm) Jr. Company 177
------
12,082
------
FOREST PRODUCTS 1.7%
1,500 Avery Dennison Corporation 67
1,400 Boise Cascade Corporation 51
3,500 Champion International Corporation 187
1,300 Federal Paperboard Company 55
3,400 Georgia-Pacific Corporation 280
8,600 International Paper Company 318
2,900 James River Corporation of Virginia 93
5,700 Kimberly-Clark Corporation 414
3,672 Louisiana Pacific Corporation 88
2,200 Mead Corporation 127
700 Potlatch Corporation 29
5,200 Scott Paper Company 277
1,550 Temple-Inland, Inc. 71
2,350 Union Camp Corporation 120
2,925 Westvaco Corporation 81
7,050 Weyerhaeuser Company 311
2,200 Willamette Industries 128
-----
2,697
-----
GOLD & PRECIOUS METALS 0.6%
12,600 Barrick Gold Corporation 291
3,500 Cyprus Amax Minerals Company 91
3,000 Echo Bay Mines, Ltd. 27
7,100 Freeport McMoRan Copper & Gold, Inc. 162
4,100 Homestake Mining Company 63
8,461 Placer Dome, Inc. 185
5,152 Santa Fe Pacific Gold Corporation 51
-----
870
---
HEALTH CARE SERVICES & SUPPLIES 1.1%
1,800 Bausch & Lomb, Inc. 62
2,700 Beverly Enterprises<F135> 32
15,252 Columbia/HCA Healthcare Corporation 749
2,200 Manor Care, Inc. 72
5,800 United Healthcare Corporation 308
4,600 Warner-Lambert Company 392
-----
1,615
-----
HOSPITAL SUPPLIES & SERVICES 0.2%
3,300 Biomet, Inc. <F135> 55
5,400 Boston Scientific Corporation<F135> 227
1,500 US Surgical Corporation 37
-----
319
-----
INSURANCE 3.4%
4,200 Aetna Life and Casualty Company 296
1,300 Alexander & Alexander Services, Inc. 29
15,773 Allstate Corporation 580
7,300 American General Corporation 240
16,355 American International Group, Inc. 1,380
3,100 Chubb Corporation 279
2,500 CIGNA Corporation 248
2,900 General Re Corporation 420
1,700 Jefferson-Pilot Corporation 112
8,202 KeyCorp 277
3,100 Lincoln National Corporation 138
2,600 Marsh & McLennan Companies, Inc. 213
3,200 Providian Corporation 126
2,200 SAFECO Corporation 141
2,900 St. Paul Companies, Inc. 147
2,450 Torchmark Corporation 102
2,200 Transamerica Corporation 149
2,600 UNUM Corporation 137
5,400 US Healthcare, Inc. 208
2,800 USF&G Corporation 47
-----
5,269
-----
LIQUOR 0.7%
8,800 Anheuser-Busch Companies, Inc. 581
2,500 Brown-Foreman Corporation - Class B 95
12,800 Seagram Company Ltd. 461
-----
MACHINERY - AUTOMOTIVE 0.0%
1,500 Varity Corporation<F135> 54
-----
MACHINERY - INDUSTRIAL 0.0%
1,600 Harnischfeger Industries, Inc. 50
-----
MEDIA 1.9%
1,200 Andrew Corporation<F135> 51
5,500 Capital Cities/ABC, Inc. 652
2,375 CBS, Inc. 192
8,100 Comcast Corporation - Class A 145
3,700 Dow Jones & Company, Inc. 130
4,900 Gannett Company, Inc. 266
2,500 Harcourt General, Inc. 99
2,800 Interpublic Group Of Companies, Inc. 108
1,900 Knight-Ridder, Inc. 105
3,100 New York Times Company - Class A 86
23,100 Tele-Communications, Inc. - Class A<F135> 393
13,100 Time Warner, Inc. 478
3,623 Times Mirror Company - Class A 105
2,200 Tribune Company 139
-----
2,949
-----
METALS & MINERALS 0.3%
3,100 Bethlehem Steel Corporation<F135> 41
1,300 Inland Steel Industries, Inc. 30
3,000 Nucor Corporation 144
11,466 USX Corporation-Marathon Group, Inc. 204
2,293 USX Corporation-US Steel Group, Inc. 69
3,225 Worthington Industries, Inc. 54
-----
542
-----
MISCELLANEOUS 0.8%
5,400 Applied Materials, Inc. <F135> 271
2,900 Mallinckrodt Group, Inc. 101
14,700 Minnesota Mining & Manufacturing
Company 836
-----
1,208
-----
NATURAL GAS 0.2%
8,500 Enron Corporation 292
-----
NON-FERROUS METALS 0.8%
7,850 Alcan Aluminum Ltd. 248
6,400 Aluminum Company of America 326
1,200 ASARCO, Inc. 39
4,800 Englehard Corporation 119
3,600 Inco, Ltd. 124
2,721 Newmont Mining Corporation 103
2,700 Phelps Dodge Corporation 171
2,100 Reynolds Metals Company 106
-----
1,236
-----
OFFICE EQUIPMENT 0.1%
12,000 Novell, Inc. 198
-----
OIL - DOMESTIC 1.9%
3,000 Amerada Hess Corporation 135
17,200 Amoco Corporation 1,099
1,900 Ashland, Inc. 60
5,500 Atlantic Richfield Company 587
4,800 Burlington Resources, Inc. 173
1,800 Columbia Gas Systems, Inc. <F135> 69
1,600 Kerr-McGee Corporation 88
4,900 Oryx Energy Company<F135> 56
1,700 Pennzoil Company 64
8,800 Phillips Petroleum Company 284
3,800 Sun Company, Inc. 109
8,100 Unocal Corporation 213
-----
2,937
-----
OIL & GAS SERVICES 0.3%
8,700 Schlumberger, Ltd. 542
-----
OIL - INTERNATIONAL 5.5%
22,500 Chevron Corporation 1,052
42,700 Exxon Corporation 3,261
13,600 Mobil Corporation 1,370
18,600 Royal Dutch Petroleum Company 2,285
9,200 Texaco, Inc. 627
-----
8,595
-----
POLLUTION CONTROL 0.4%
7,100 Browning-Ferris Industries, Inc. 207
17,300 WMX Technologies, Inc. 487
-----
694
-----
PRINTING & PUBLISHING 0.2%
1,600 McGraw-Hill, Inc. 131
5,000 R.R. Donnelley & Sons Company 182
-----
313
-----
PRODUCTION 1.4%
1,200 Briggs & Stratton Corporation 48
6,800 Caterpillar, Inc. 382
1,400 Cincinnati Milacron, Inc. 36
4,200 Cooper Industries, Inc. 142
3,100 Deere & Company 277
4,400 Dover Corporation 174
1,400 FMC Corporation<F135> 100
1,600 Foster Wheeler Corporation 60
4,000 Illinois Tool Works, Inc. 233
3,800 Ingersoll-Rand Company 134
3,466 Pall Corporation 84
2,250 Parker-Hannifin Corporation 76
1,850 Raychem Corporation 86
1,300 Timken Company 52
2,500 Tyco International, Ltd. 152
13,100 Westinghouse Electric Corporation 185
-----
2,221
-----
RAILROADS 1.2%
5,281 Burlington Northern Santa Fe 443
2,600 Conrail, Inc. 179
3,560 CSX Corporation 298
4,500 Norfolk Southern Corporation 348
7,300 Union Pacific Corporation 477
3,500 Whitman Corporation 74
-----
1,819
-----
RETAIL 3.8%
8,600 Albertson's, Inc. 286
2,600 American Greetings Corporation 82
5,200 American Stores Company 155
3,300 Circuit City Stores, Inc. 110
2,500 Dayton Hudson Corporation 172
4,300 Dillard Department Stores,
Inc. - Class A 117
4,900 Gap, Inc. 193
2,500 Giant Food, Inc. 80
15,400 Kmart Corporation 125
3,800 Kroger Corporation<F135> 127
12,000 The Limited, Inc. 221
5,600 Lowe's Companies, Inc. 151
8,876 May Department Stores Company 348
900 Mercantile Stores Company, Inc. 40
2,800 Nordstrom, Inc. 104
8,300 J.C. Penney Company, Inc. 350
2,000 Pep Boys-Manny, Moe & Jack 44
3,100 Rite Aid Corporation 84
13,500 Sears Roebuck and Company 459
2,200 Supervalu, Inc. 68
2,600 Tandy Corporation 128
2,500 TJX Companies, Inc. 34
10,225 Toys "R" Us, Inc. <F135> 224
8,900 Walgreen Company 254
79,700 Wal-Mart Stores, Inc. 1,724
2,700 Winn-Dixie Stores, Inc. 176
4,400 Woolworth Corporation 64
-----
5,920
-----
SAVINGS & LOAN 0.3%
6,100 Federal Home Loan Mortgage Corporation 422
1,700 Golden West Financial Corporation 85
-----
507
-----
SEMICONDUCTORS 0.4%
3,900 Advanced Micro Devices, Inc. <F135> 93
7,100 Micron Technology Incorporated 501
-----
594
-----
SOFTWARE 1.3%
20,100 Microsoft Corporation<F135> 2,010
-----
TELECOMMUNICATIONS 8.6%
16,900 Airtouch Communications, Inc. 482
6,500 Alltell Corporation 199
19,200 Ameritech Corporation 1,037
54,656 AT & T Corporation 3,498
15,200 Bell Atlantic Corporation 967
17,000 BellSouth Corp 1,301
2,500 Cabletron Systems<F135> 197
4,400 DSC Communications Corporation<F135> 163
33,200 GTE Corporation 1,370
23,900 MCI Communications Corporation 596
14,500 NYNEX Corporation 682
14,500 Pacific Telesis Group 440
21,000 SBC Communications, Inc. 1,173
12,000 Sprint Corporation 462
2,800 Tellabs, Inc. <F135> 95
16,553 US West, Inc. 788
------
13,450
------
TEXTILES & APPAREL 0.5%
2,500 Fruit of the Loom, Inc. <F135> 43
3,600 Liz Claiborne, Inc. 102
3,600 Melville Corporation 115
5,400 Nike, Inc. - Class B 306
2,600 Reebok International Ltd. 88
2,000 Russell Corporation 49
2,077 VF Corporation 99
-----
802
-----
TIRE & RUBBER 0.2%
3,200 Cooper Tire & Rubber Company 74
800 Goodrich (B.F.) Company 53
5,262 Goodyear Tire & Rubber Company 200
-----
327
-----
TRANSPORTATION 0.0%
2,000 Pittson Company 55
-----
TRANSPORTATION EQUIPMENT 0.0%
1,700 Cummins Engine Company, Inc. 60
-----
TRAVEL & RECREATION 1.0%
5,850 CUC International, Inc. <F135> 203
3,650 Harrahs Entertainment, Inc. <F135> 90
1,600 Hilton Hotels Corporation 107
4,900 Marriott International, Inc. 181
18,100 Walt Disney Company 1,043
-----
1,624
-----
TRUCKING 0.1%
1,300 Roadway Services, Inc. 58
3,450 Ryder System, Inc. 83
-----
141
-----
Total Common Stock
(Cost $101,960) 147,660
-------
PREFERRED STOCKS 0.0%
19 Teledyne Inc. Preferred Ser E -
-----
Total Preferred Stock
(Cost $0) -
-----
1,137
Principal
Amount Market Value
(in thousands) (in thousands)
- -------------- --------------
SHORT-TERM INVESTMENTS 5.7%
U.S. TREASURIES 0.2%
330 U.S. Treasury Bill,
5.42%, 11/02/95 330
------
Total U.S. Treasuries
(Cost $330) 330
------
VARIABLE RATE DEMAND NOTES 5.5%
2,324 Eli Lilly Demand Note 2,324
4,174 Sara Lee Demand Note 4,174
2,058 Southwestern Bell Demand Note 2,058
-----
Total Variable Rate Demand Notes
(Cost $8,556) 8,556
-----
Total Short-Term Investments
(Cost $8,886) 8,886
-----
Total Investments 99.9%
(Cost $110,846) 156,546
-------
Other Assets, less Liabilities 0.1% 223
-----
TOTAL NET ASSETS 100.0% 156,769
=======
<F135>Non-income producing
See notes to the financial statements.
MIDCORE GROWTH FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market Value
of Shares (in thousands)
--------- --------------
COMMON STOCKS 98.3%
AUTO PARTS 2.0%
72,900 AutoZone, Inc.<F136> 1,804
37,000 Lear Seating Corporation<F136> 1,027
-----
2,831
-----
BIO-TECHNOLOGY 0.8%
33,700 Millipore Corporation 1,192
-----
BUILDING MATERIALS 0.5%
18,000 Home Depot, Inc. 670
-----
BUSINESS SERVICES 9.8%
46,900 Ceridian Corporation<F136> 2,040
58,500 H & R Block, Inc. 2,413
86,815 First Data Corporation 5,741
77,900 General Motors Corporation - Class E 3,671
8,000 Reynolds & Reynolds - Class A 285
------
14,150
------
CAPITAL GOODS - MANUFACTURING 3.8%
20,000 Dover Corporation 790
78,000 Tyco International, Ltd. 4,739
-----
5,529
-----
COMMUNICATIONS & MEDIA 5.4%
28,000 Infinity Broadcasting Corporation<F136> 910
70,800 Interpublic Group of Companies, Inc. 2,744
125,000 PanAmSat Corporation<F136> 1,891
41,600 Reuters Holdings, PLC ADR 2,309
-----
7,854
-----
COMPUTERS 1.7%
89,200 Sungard Data Systems, Inc. <F136> 2,453
-----
CONSUMER PRODUCTS 1.3%
75,000 Newell Company 1,809
-----
DISTRIBUTION 3.9%
64,200 Alco Standard Corporation 5,682
DRUGS 2.6%
95,200 Elan Corporation, PLC ADR<F136> 3,820
-----
ELECTRICAL EQUIPMENT 4.5%
66,000 AVX Corporation 2,054
20,000 Kemet Corporation<F136> 690
80,093 Molex, Inc. - Class A 2,463
3,000 SGS-Thomson Microelectronics<F136> 136
31,000 Vishay Intertechnology, Inc. <F136> 1,093
-----
6,436
-----
ENERGY - NATURAL GAS 1.1%
46,000 Enron Corporation 1,581
-----
ENTERTAINMENT & LEISURE 5.5%
122,200 GTECH Holdings Corporation<F136> 2,994
74,000 Mirage Resorts, Inc. <F136> 2,423
49,735 Viacom, Inc. - Class B<F136> 2,487
-----
7,904
-----
FINANCE COMPANIES 3.1%
97,200 First USA, Inc. 4,471
-----
FINANCIAL SERVICES 5.8%
33,000 Federal National Mortgage Association 3,461
134,900 MBNA Corporation 4,974
-----
8,435
-----
HEALTH CARE SERVICES & SUPPLIES 12.8%
115,464 Columbia/HCA Healthcare Corporation 5,672
118,400 Foundation Health Corporation<F136> 5,017
73,700 Health Care & Retirement
Corporation<F136> 2,165
77,500 Lincare Holdings, Inc. <F136> 1,928
47,000 United Healthcare Corporation 2,497
45,000 Vencor, Inc. <F136> 1,249
------
18,528
------
HOSPITAL SUPPLIES & SERVICES 0.5%
18,000 Boston Scientific Corporation<F136> 758
------
INSURANCE 5.8%
66,750 AFLAC, Inc. 2,720
48,800 MBIA, Inc. 3,398
39,000 MGIC Investment Corporation 2,218
-----
8,336
-----
LODGING 1.6%
25,000 La Quinta Inns, Inc. 644
78,000 Promus Hotel Corporation<F136> 1,716
-----
2,360
-----
MACHINERY - AUTOMOTIVE 1.7%
67,000 Varity Corporation<F136> 2,429
-----
MACHINERY - DIVERSIFIED 1.0%
32,400 York International Corporation 1,418
-----
MACHINERY - INDUSTRIAL 2.3%
71,400 Thermo Electron Corporation<F136> 3,284
-----
OFFICE PRODUCTS 1.3%
73,250 Staples, Inc. <F136> 1,950
-----
POLLUTION CONTROL 1.1%
55,000 Browning-Ferris Industries, Inc. 1,602
-----
RETAIL 3.2%
104,000 General Nutrition Companies, Inc. <F136>2,587
30,000 Kohl's Corporation<F136> 1,361
25,425 Lowe's Companies, Inc. 686
-----
4,634
-----
SEMICONDUCTORS 1.1%
32,700 LSI Logic Corporation<F136> 1,541
-----
SOFTWARE 3.9%
49,000 Bay Networks<F136> 3,246
9,000 Microsoft Corporation<F136> 900
80,200 Platinum Technology<F136> 1,464
-----
5,610
-----
TEXTILES & APPAREL 1.8%
25,100 Cintas Corporation 1,054
28,000 Nike, Inc. - Class B 1,589
-----
2,643
-----
TRANSPORTATION - RAILROAD 0.5%
9,000 Burlington Northern Santa Fe Company 755
-----
TRAVEL & RECREATION 5.2%
151,400 Carnival Corporation - Class A 3,520
116,350 CUC International, Inc. <F136> 4,029
-----
7,549
-----
UTILITIES - TELEPHONE 2.7%
31,500 DSC Communications Corporation<F136> 1,165
29,200 Frontier Corporation 788
60,000 WorldCom, Inc. <F136> 1,958
-----
3,911
-----
Total Common Stock
(Cost $107,302) 142,125
-------
Number
of Shares
(in thousands)
-------------
SHORT-TERM INVESTMENTS 1.8%
INVESTMENT COMPANIES 1.8%
10 Financial Square Prime Obligation Fund 10
2,527 Short-Term Investments Co.
Liquid Assets Portfolio 2,527
-----
Total Short-Term Investments
(Cost $2,537) 2,537
-----
Total Investments 100.1%
(Cost $109,839) 144,662
-------
Liabilities, less Other
Assets (0.1)% (129)
-----
TOTAL NET ASSETS 100.0% 144,533
=======
<F136>Non-income producing
See notes to the financial statements.
SPECIAL GROWTH FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market Value
of Shares (in thousands)
--------- -------------
COMMON STOCKS 89.5%
AIR TRANSPORTATION 0.4%
72,750 Comair Holdings, Inc. 2,041
-----
AUTO PARTS 0.9%
64,800 APS Holding Corporation<F137> 1,328
42,800 Copart, Inc. <F137> 974
88,300 Lear Seating Corporation<F137> 2,450
-----
4,752
-----
BIO-TECHNOLOGY 0.4%
209,300 Perseptive Biosystems, Inc. <F137> 2,224
-----
BUSINESS MACHINES & SOFTWARE 0.7%
9,900 Madge Networks N. V. 415
62,600 Mylex Corporation<F137> 1,166
31,400 National Instruments Corporation<F137> 589
43,400 Network General Corporation<F137> 1,801
-----
3,971
-----
BUSINESS SERVICES 6.1%
30,450 FIserv, Inc. <F137> 784
124,100 Franklin Quest Company<F137> 2,963
85,200 Interim Services, Inc. <F137> 2,535
98,500 Keane, Inc. <F137> 2,659
403,500 Manpower, Inc. 10,945
180,800 Medaphis Corporation<F137> 5,740
117,600 Robert Half International, Inc. <F137> 4,292
81,000 U.S. Delivery Systems, Inc. <F137> 1,681
------
31,599
------
CHEMICALS 1.5%
283,500 Airgas, Inc. <F137> 7,548
-----
COMMUNICATIONS & MEDIA 0.4%
75,400 Cellstar Corporation<F137> 2,092
-----
COMPUTERS 0.6%
98,500 Danka Business Systems PLC ADR 3,300
-----
CONSUMER SERVICES 2.4%
316,100 Loewen Group, Inc. 12,659
------
CONTAINERS 0.8%
147,800 Sealed Air Corporation<F137> 3,898
-----
ELECTRICAL EQUIPMENT 0.9%
156,400 AVX Corporation 4,868
-----
ELECTRONICS 2.9%
218,200 Arrow Electronics, Inc. <F137> 11,074
21,100 Checkpoint Systems, Inc. <F137> 609
94,200 Digi International, Inc. <F137> 2,520
13,600 Progress Software Corporation<F137> 891
-----
15,094
------
ENERGY - OIL & GAS 0.8%
182,300 NGC Corporation 1,641
48,400 Tejas Gas Corporation<F137> 2,269
-----
3,910
-----
ENTERTAINMENT & LEISURE 3.1%
174,700 Hollywood Entertainment Corporation 4,673
260,900 Mirage Resorts, Inc. <F137> 8,544
5,000 Movie Gallery, Inc. <F137> 193
72,950 Regal Cinemas, Inc. <F137> 2,863
-----
16,273
------
FINANCIAL SERVICES 4.8%
29,700 Advanta Corporation - Class B 1,062
96,700 AMBAC, Inc. 4,073
39,600 Green Tree Financial Corporation 1,054
72,900 National Data Corporation 1,932
174,636 Quick And Reilly Group, Inc. 4,148
555,100 The Charles Schwab Corporation 12,698
------
24,967
------
HEALTH CARE SERVICES & SUPPLIES 21.5%
105,700 American Medical Response, Inc. <F137> 3,052
482,300 Biomet, Inc. <F137> 8,018
173,556 Cardinal Health, Inc. 8,916
52,300 Cordis Corporation<F137> 5,779
546,975 Health Management Associates,
Inc. - Class A 11,760
238,000 Healthsource, Inc. <F137> 12,614
136,200 Medisense, Inc. <F137> 2,911
100,100 Medpartners, Inc. <F137> 2,803
108,800 Multicare Companies, Inc. <F137> 2,040
188,500 Oxford Health Plans<F137> 14,750
167,600 Pacificare Health Systems, Inc. <F137> 12,193
216,500 Quorum Health Group, Inc. <F137> 4,641
108,700 Renal Treatment Centers<F137> 3,913
343,300 Surgical Care Affiliates 10,170
321,500 Vencor, Inc. <F137> 8,922
-----
112,482
-------
HOSPITAL SUPPLIES & SERVICES 0.9%
20,400 Idexx Laboratories, Inc. 831
109,800 Omnicare, Inc. 3,980
-----
4,811
-----
HOUSING 3.6%
432,115 Clayton Homes, Inc. 11,343
88,700 Oakwood Homes Corp. 3,326
126,875 Southern Energy Homes, Inc. <F137> 1,871
125,300 Toll Brothers, Inc. <F137> 2,240
-----
18,780
------
INSURANCE 5.8%
122,800 Equitable Iowa Companies 4,298
170,900 Arthur J. Gallagher & Company 6,046
157,700 MGIC Investment Corporation 8,969
289,300 Protective Life Corporation 8,245
68,000 Vesta Insurance Group, Inc. 2,745
-----
30,303
------
LIQUOR 0.3%
27,500 Canandaigua Wine Company, Inc. <F137> 1,320
-----
MACHINERY - AUTOMOTIVE 1.3%
190,900 Varity Corporation<F137> 6,920
-----
MACHINERY - INDUSTRIAL 0.8%
198,500 TriMas Corporation 4,119
-----
OFFICE PRODUCTS 1.7%
126,375 Office Depot, Inc. <F137> 3,617
44,800 Officemax, Inc. <F137> 1,109
98,500 Viking Office Products, Inc. <F137> 4,383
-----
9,109
-----
PRINTING & PUBLISHING 0.5%
61,200 Banta Corporation 2,647
-----
RESTAURANTS 3.2%
158,450 Apple South, Inc. 3,248
31,200 DF & R Restaurants, Inc. <F137> 952
100,000 IHOP Corporation<F137> 2,150
37,700 Landrys Seafood
Restaurants Incorporated 509
107,400 Lone Star Steakhouse & Saloon<F137> 4,148
178,900 Outback Steakhouse, Inc. <F137> 5,613
-----
16,620
------
RETAIL 8.5%
13,800 CompUSA, Inc. <F137> 528
388,000 Consolidated Stores Corporation<F137> 8,972
159,000 Dept 56, Inc. <F137> 7,215
53,600 Discount Auto Parts, Inc. <F137> 1,434
431,157 Dollar General Corporation 10,563
200,600 Kohl's Corporation<F137> 9,102
54,700 Micro Warehouse, Inc. <F137> 2,434
214,000 Musicland Stores Corporation<F137> 1,391
146,400 Sports and Recreation, Inc. <F137> 1,080
107,800 Trend Lines, Inc. - Class A<F137> 1,415
-----
44,134
------
SEMICONDUCTORS 3.5%
131,700 Atmel Corporation 4,116
24,700 Burr-Brown Corporation 803
158,100 Dallas Semiconductor Corporation 3,360
65,400 Integrated Circuit Systems<F137> 887
22,600 Lattice Semiconductor Corporation<F137> 887
28,900 Linear Technology Corporation 1,264
37,600 Maxim Integrated Products<F137> 2,811
39,525 Microchip Technology, Inc. <F137> 1,569
14,500 SDL, Inc. <F137> 370
56,700 S3 Incorporated<F137> 971
39,500 Triquint Semiconductor, Inc. <F137> 899
11,100 VLSI Technology<F137> 261
---
18,198
------
SOFTWARE 1.7%
179,600 Compuware Corporation<F137> 4,086
32,000 McAfee Associates, Inc. <F137> 1,864
30,100 Parametric Technology Company<F137> 2,017
26,400 Softkey International, Inc. <F137> 832
-----
8,799
-----
TELECOMMUNICATIONS 3.5%
225,200 Aspect Telecommunications Corporation 7,741
224,100 Boston Technology, Inc. <F137> 3,081
99,100 Cidco, Inc. <F137> 2,936
43,900 Comverse Technology<F137> 999
71,900 Pairgain Technologies<F137> 3,074
4,700 U.S. Robotics Corporation<F137> 435
-----
18,266
------
TEXTILES & APPAREL 2.7%
98,300 Gymboree Corporation<F91> 2,224
227,400 Jones Apparel Group, Inc. <F137> 7,788
72,200 The Men's Wearhouse, Inc. <F137> 2,816
36,300 Oakley Incorporated<F137> 1,252
-----
14,080
------
TRANSPORTATION 1.3%
144,300 Arnold Industries, Inc. 2,345
81,228 Fritz Companies, Inc. 2,843
59,250 Heartland Express, Inc. <F137> 1,607
8,700 TNT Freightways Corporation 157
-----
6,952
-----
TRANSPORTATION EQUIPMENT 0.3%
53,150 Wabash National Corporation 1,349
-----
UTILITIES - TELEPHONE 1.7%
306,800 Century Telephone Enterprises 8,897
-----
Total Common Stock
(Cost $349,710) 466,982
-------
SHORT-TERM INVESTMENTS 8.4%
INVESTMENT COMPANIES 6.5%
9,878 Financial Square Prime Obligation Fund 9,878
23,835 Short-Term Investments Co.
Liquid Assets Portfolio 23,835
------
33,713
------
Principal
Amount
(in thousands)
- --------------
COMMERCIAL PAPER 1.9%
$10,000 ITT Hartford Group
5.78%, 11/17/95 9,974
-----
Total Short-Term Investments
(Cost $43,687) 43,687
------
Total Investments 97.9%
(Cost $393,397) 510,669
-------
Other Assets, less Liabilities 2.1% 10,828
------
TOTAL NET ASSETS 100.0% 521,497
=======
<F137>Non-income producing
See notes to the financial statements.
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Number Market
of Shares Industry Value
- --------- -------- ------
COMMON AND PREFERRED STOCKS 96.7%
AUSTRALIA 2.6%
1,400 Aberfoyle Non-ferrous Metals 2,929
9,400 Amcor Limited Forest Products 70,361
4,323 Ampolex Ltd. Gas Exploration 8,550
4,200 Ashton Mining Ltd. Non-ferrous Metals 5,271
11,744 Australian National Industries Conglomerates 9,202
16,900 Boral Limited Construction Materials 40,367
3,300 Brambles Inds Ltd. Business Services 35,043
7,694 Burns Philp & Co. Retail Trade 17,207
2,700 Caltex Australia Petroleum Services 8,708
7,499 Coca-Cola Amatil Limited Food & Beverage 57,957
17,592 Coles Myer Limited Retail Trade 60,621
14,604 CSR Limited Conglomerates 46,547
4,228 Email Limited Household Appliances 10,613
4,654 FAI Insurances Insurance 2,089
50,000 Fosters Brewing Group Limited Food & Beverage 47,543
9,658 General Prop Trust Units Real Estate 16,604
14,200 Gold Mines Of Kalg Gold 11,342
433 Goldfields Limited<F138> Gold 1,070
17,810 Goodman Fielder Ltd. Food & Beverage 17,883
5,738 Hardie (James) Inds Construction Materials 9,384
4,500 ICI Australia Chemical 30,808
3,437 Lend Lease Corporation Limited Real Estate 47,740
23,722 MIM Holdings Limited Non-ferrous Metals 31,940
3,400 Newcrest Mining<F138> Gold 13,966
10,252 North Ltd. Non-ferrous Metals 28,855
2,125 OPSM Protector Ltd. Drugs & Healthcare 3,233
16,191 Pacific Dunlop Ltd. Conglomerates 39,166
13,600 Pioneer International Ltd. Construction Materials 33,312
9,664 QCT Resources Miscellaneous 12,497
3,029 Renison Goldfields
Consolidated Ltd. Gold 12,719
1,800 Rothmans Holdings Tobacco 6,709
7,990 Santos Ltd. Petroleum Services 21,577
6,323 Schroders Property Fund Mutual Fund 10,307
2,585 Smith (Howard) Conglomerates 11,405
8,463 Southcorp Holdings Ltd. Food & Beverage 18,219
4,786 Stockland Trust Group Real Estate 11,177
8,600 TNT<F138> Transportation 12,103
4,100 Tubemakers of Australia Industrial Machinery 9,980
14,680 Westfield Trust Real Estate 26,242
610 Westfield Trust New Units Real Estate 1,090
-----
862,336
-------
AUSTRIA 1.3%
100 Austrian Airlines<F138> Air Travel 16,397
300 BBAG Oesterr Brau Beverage & Tobacco 15,408
1,020 Creditanstalt Bank Bank 53,521
560 Creditanstalt Bank Preferred Bank 27,915
300 EA-Generali AG Insurance 82,037
100 Lenzing AG Chemicals 8,416
1,100 Oester Elektrizita Electric Utilities 67,153
957 OMV AG<F138> Miscellaneous 82,565
400 Veitsch-Radex AG<F138> Non-ferrous Metals 8,960
300 Wienerberger Baust Construction Materials 60,241
300 Z Laenderbank Bank
Austria AG Preferred Bank 13,925
------
436,538
-------
BELGIUM 1.7%
30 Bekaert SA Industrial Machinery 22,001
50 CBR Cimenteries Construction Materials 20,362
710 Delhaize Le Lion Retail Trade 27,443
150 Electrabel Electronics 34,011
490 Fortis AG Insurance 52,515
215 Generale De Banque Banks 69,451
5 Generale De Banque VVPR Banks 1,615
375 Gevaert Chemicals 21,872
102 Glaverbel Groupe Containers & Glass 11,564
2 Glaverbel Groupe VVPR Containers & Glass -
320 GPE Bruxelles LAM Conglomerates 41,966
180 Kredietbank Banks 45,099
25 Kredietbank VVPR Banks 6,341
205 Royale Belge Insurance 37,001
25 Royale Belge BBPR Insurance 4,555
125 Solvay Chemicals 63,199
175 Tractebelinv Intl Conglomerates 64,019
25 Tractebelinv Intl VVPR Conglomerates 9,145
350 Union Miniere<F138> Non-ferrous Metals 22,769
------
554,928
-------
DENMARK 1.2%
400 Carlsberg A Food & Beverage 20,708
325 Carlsberg B Food & Beverage 16,825
2 D/S 1912 B Conglomerates 39,148
2 D/S Svendborg B Conglomerates 56,160
625 Danisco Food & Beverage 28,469
90 Danske Luftfartsel DDL<F138> Air Travel 7,491
595 Den Danske Bank Banks 39,402
105 FLS Industries B Industrial Machinery 9,642
65 GN Store Nord Telecommunications 4,816
335 ISS International Service
System Series B Conglomerates 6,864
135 Korn-Og Foderstof Food & Beverage 6,174
30 Lauritzen (J) Holding B<F138> Conglomerates 4,939
85 NKT Holding Electrical Equipment 4,774
425 Novo Nordisk As B Drugs & Healthcare 54,034
240 OK Ostasiatiske Kompagni<F138> Conglomerates 6,190
115 Radio Meter As B Drugs & Healthcare 7,026
65 Sophus Berendsen A Conglomerates 7,075
200 Sophus Berendsen B Conglomerates 21,915
70 Superfos A/S Chemicals 6,210
600 Unidanmark A Banks 27,550
------
375,412
-------
FINLAND 0.8%
400 Amer Group Conglomerate 6,329
300 Cultor Oy Series 1 Household Products 12,291
300 Instrumentarium Series A Drugs & Healthcare 7,417
7,860 Kansallis-Yhtymai<F138> Banks 6,292
1,500 Kesko Retail 18,789
100 Kone Corp B Industrial Machinery 9,112
1,400 Kymmene Corp. Forest Products 38,238
200 Metra AB A Conglomerates 8,759
200 Metra AB B Conglomerates 8,665
2,100 Outokumpu Oy A Non-ferrous Metals 33,376
400 Pohjola A Insurance 5,698
300 Pohjola B Insurance 4,379
2,600 Repola Forest Products 50,321
300 Sampo (Vakuutusosak) A Insurance 16,600
100 Stockmann AB (OY) Retail 5,886
9,500 Unitas Series A<F138> Banks 23,039
------
255,191
-------
FRANCE 10.5%
935 Accor Leisure 111,025
900 Bic Toys, Amusements &
Sporting Goods 85,348
50 Bongrain SA Food & Beverage 26,436
774 Bouygues Home Builders 82,258
650 Canal Plus Broadcasting 112,254
2,750 Carnaudmetalbox Containers & Glass 115,218
2,036 Casino Guich Perr Leisure 58,256
568 Casino Guich Perr Preferred Leisure 11,667
275 Chargeurs Conglomerates 56,541
100 Cie Gen Geophysique<F138> Petroleum Services 3,577
350 Club Mediterranee<F138> Leisure 27,433
908 Compagnie Bancaire Financial Services 94,087
160 Comptoirs Modernes Retail 51,340
315 CPR Cie Par Reesco Investment Companies 24,206
1,251 Credit Foncier de France<F138> Banks 23,139
426 Credit National Banks 26,032
200 Dollfus-Mieg DMC Apparel & Textiles 8,539
450 Docks de France Retail 68,426
340 Ecco Ste Business Services 52,672
850 Eridania Beghin-Say Household Products 142,799
300 Essilor International Drugs & Healthcare 55,489
125 Eurafrance Financial Services 41,770
57 Europe 1 Registered Broadcasting 11,824
400 Finextel Financial Services 5,085
302 GTM Entrepose Home Builders 19,566
1,673 Havas Business Services 115,912
504 Imetal Non-ferrous Metals 59,332
2,850 Lagardere Groupe Publishing 53,180
920 Legrand Electical Equipment 153,807
3,600 Michelin (CGDE) Class B Tires & Rubber 145,313
966 Moulinex<F138> Household Products 19,239
500 Nord-Est Steel 11,292
1,885 Pernod-Ricard Food & Beverage 114,535
730 Pinault-Printemps-Redoute Retail 158,147
600 Promodes Retail 146,048
100 Sagem Electronics 55,591
250 Saint Louis Food & Beverage 71,839
50 Salomon SA Toys, Amusements &
Sporting Goods 28,838
3,413 Sanofi Drugs & Healthcare 217,563
4,250 Schneider SA (Ex Spep) Industrial Machinery 163,819
600 Sefimeg Real Estate 39,731
1,700 Seita Beverages & Tobacco 59,065
574 Simco Real Estate 46,157
10 Skis Rossignol Toys, Amusements &
Sporting Goods 2,665
216 Sodexho Leisure 55,932
50 Sommer Allibert Construction Materials 13,213
420 Sovac Financial Services 52,190
3,862 Thomson - CSF<F138> Aerospace 80,430
300 Unibail SA Financial Services 27,622
256 Union Immobiliere France Real Estate 21,441
8,050 Usinor Sacilor<F138> Steel 120,103
2,150 Valeo Industrial Machinery 97,066
---------
3,445,057
---------
GERMANY 15.5%
3,000 Agiv AG Construction & Mining 63,055
50 Amb Aach & Mun Bet Insurance 31,953
300 Amb Aach & Mun Bet Registered Insurance 201,307
300 Asko Deut Kaufhaus Retail Trade 155,720
300 Beiersdorf AG Series ABC Drugs & Healthcare 201,307
250 Bilfinger & Berger Home Builders 91,955
321 Brau Und Brunnen Food & Beverage 54,476
950 Bremer Vulkan Verbund<F138> Industrial Machinery 29,546
210 CKAG Colonia Konzern AG Insurance 164,028
50 CKAG Colonia Konzern
AG Non-Voting Preferred Insurance 29,042
6,550 Continental AG Industrial Machinery 92,555
650 Degussa AG Chemicals 209,082
100 DLW AG Construction Materials 18,817
2,200 Douglas Holding AG Retail Trade 80,452
102 Dyckerhoff AG Construction Materials 44,905
102 Dyckerhoff AG Non-Voting
Preferred Construction Materials 24,915
200 Fag Kugelfischer<F138> Industrial Machinery 26,912
330 Heidelberg Zement Construction Materials 206,206
150 Herlitz AG Business Services 27,693
100 Herlitz AG Non-Voting
Preferred Business Services 17,574
541 Hochtief AG Construction Materials 210,131
62 Holsten Brauerei AG Food & Beverage 13,648
150 Iwka AG Industrial Machinery 27,746
650 Karstadt AG Retail Trade 283,391
550 Kaufhof Holding AG Retail Trade 188,241
150 Kaufhof Holding AG Non-Voting
Preferred Retail Trade 40,048
4,200 Klockner Humboldt-Deutz<F138> Industrial Machinery 27,795
630 Linde AG Industrial Machinery 386,956
150 Linotype-Hell AG<F138> Computers & Business Equipment 18,959
2,637 Lufthansa AG<F138> Air Travel 366,630
150 Lufthansa AG Non-Voting
Preferred<F138> Air Travel 19,172
800 Man AG Industrial Machinery 231,769
300 Man AG Non-Voting Preferred Industrial Machinery 68,061
50 Munchener Ruck Nam Insurance 88,404
1,150 Preussag AG Conglomerates 326,635
500 PWA Papierwerke Waldhof<F138> Forest Products 79,884
100 Rheinmetall Berlin Aerospace 14,343
1,450 RWE AG Non-Voting Preferred Electic Utilities 410,814
150 Salamander AG Apparel & Textiles 26,628
5,100 Schering AG Drugs & Healthcare 355,620
150 Strabag AG Home Builders 25,030
500 Volkswagen AG Non-Voting
Preferred Automobiles 113,967
---------
5,095,372
---------
GREAT BRITAIN 7.9%
2,500 Amec Home Builders 2,268
3,500 Anglian Water Business Services 31,063
3,700 Argos Retail 29,831
334 Argyll Group Retail 1,694
10,200 Arjo Wiggins Appleton Forest Products 37,659
5,600 Associated British Foods Food & Beverage 62,158
2,200 Barratt Developments Home Builders 6,734
4,900 BBA Group<F138> Industrial Machinery 20,797
11,400 BET Conglomerates 22,663
4,419 BICC Electrical Equipment 18,372
9,100 Blue Circle Industries Construction Materials 41,781
2,343 Bowthorpe Electronics 15,878
6,000 BPB Industries Construction Materials 26,365
5,300 British Aerospace Aerospace 59,288
4,600 British Land Co. Real Estate 26,346
25,100 British Steel Steel 64,651
2,500 Burmah Castrol PLC Petroleum Services 38,853
2,100 Calor Group Gas & Pipeline Utilities 8,499
7,400 Caradon PLC Containers & Glass 23,118
2,900 Carlton Communications Broadcasting 44,086
3,400 Chubb Security Business Services 17,837
8,709 Coats Viyella Apparel & Textiles 25,695
800 Cobham PLC Aerospace 4,986
340 Costain Group<F138> Home Builders 392
5,000 Courtaulds PLC Chemicals 30,530
1,200 Courtaulds Textile Apparel & Textiles 7,772
2,430 Dawson International Apparel & Textiles 4,562
2,739 De La Rue Business Services 38,959
1,800 Delta Electrical Equipment 11,956
2,336 East Midlands Electricity Electric Utilities 32,010
3,000 Eastern Group Electric Utilities 46,056
5,070 Electrocomponents Electronics 25,918
3,812 English China Clays Mining 20,540
6,840 FKI Electrical Equipment 17,537
11,700 Forte Leisure 46,519
5,600 General Accident Insurance 57,122
4,300 GKN Industrial Machinery 54,751
3,900 Great Portland Estates Real Estate 9,968
10,831 Guardian Royal Exchange Insurance 39,134
3,568 Hammerson PLC Real Estate 18,380
8,815 Harrison & Crosfield Miscellaneous 20,167
2,800 Hepworth Construction Materials 12,745
4,300 IMI Non-ferrous Metals 22,321
2,700 Johnson Matthey Conglomerates 25,816
14,497 Ladbroke Group Hotels & Restaurants 37,969
1,133 Laing (John) Home Builders 3,986
1,700 Laird Group Industrial Machinery 11,171
12,000 Lasmo Gas Exploration 29,157
6,084 Legal & General GR Insurance 65,611
1,400 Lex Service Business Services 7,289
2,500 London Electricity Electric Utilities 35,579
9,600 Lonrho Conglomerates 23,705
9,906 Lucas Industries Industrial Machinery 29,931
1,400 Manweb Electric Utilities 22,199
3,733 Marley Home Builders 6,332
5,100 MEPC Real Estate 30,256
2,212 Mercury Asset Management Gp Financial Services 32,231
1,534 Meyer International Forest Products 8,471
4,700 Next Retail 30,589
5,063 North West Water Group Business Services 47,491
1,257 North West Water Group
(Registered) Business Services 3,570
1,238 Northern Electric Electric Utilities 17,336
1,400 Northern Electric Preferred Electric Utilities 2,181
1,900 Ocean Group Trucking & Freight Forwarding 11,032
500 Oxford Instruments Electronics 3,353
9,900 Pilkington Containers & Glass 29,522
1,600 Provident Financial Financial Services 19,413
3,400 Racal Electronics Electonics 13,545
6,468 Redland Construction Materials 35,565
6,200 Rexam Construction Materials 39,618
3,100 RMC Group Construction Materials 49,977
18,032 Rolls Royce Automobiles 43,814
8,100 Royal Insurance Holdings Insurance 49,906
7,700 Rugby Group Construction Materials 12,999
2,400 Schroders Financial Services 50,969
7,600 Scottish & Newcastle Food & Beverage 70,328
18,800 Sears PLC Retail 30,107
6,400 Sedgwick Group Insurance 10,704
3,000 Seeboard Electric Utilities 24,542
4,700 Slough Estates Real Estate 14,535
3,700 Smiths Industries Industrial Machinery 33,859
3,400 Southern Electric Electric Utilities 51,097
2,060 Southern Water Electric Utilities 22,118
3,300 St. James' Place Capital Financial Services 6,092
6,235 T & N Industrial Machinery 14,117
11,043 Tarmac Construction Materials 14,984
4,951 Tate & Lyle Food & Beverage 35,074
4,700 Taylor Woodrow Home Builders 7,898
5,000 Thames Water Business Services 41,535
5,832 TI Group Conglomerates 39,889
13,000 Trafalgar House Conglomerates 4,666
1,800 Transport Development Railroads & Equipment 5,495
2,900 Unigate Food & Beverage 19,172
6,600 United Biscuits Food & Beverage 28,481
4,000 Vickers Industrial Machinery 15,841
1,516 Welsh Water Business Services 17,999
1,530 Welsh Water Preferred Business Services 2,505
7,200 Williams Holdings Construction Materials 35,614
5,100 Willis Corroon Group Insurance 10,139
2,300 Wilson (Connoly) Holdings Home Builders 5,171
4,400 Wimpey (George) Home Builders 7,081
6,900 Wolseley Construction Materials 42,676
---------
2,590,263
---------
HONG KONG 1.0%
10,000 Applied International Holdings Electonics 931
8,200 Bank Of East Asia Banks 28,900
27,000 Cathay Pacific Airways Air Travel 39,810
16,000 Chinese Estates Real Estate 11,692
6,000 Dickson Concepts International Retail 4,346
6,000 Giordano International Retail 4,966
13,000 Hang Lung Development Co. Real Estate 21,606
1,600 Hongkong Aircraft Haeco Aerospace 4,118
23,200 Hongkong & China Gas Electric Utilities 37,657
9,500 Hongkong & Shangai Hotel Conglomerates 11,918
41,000 Hopewell Holdings Real Estate 25,851
9,000 Hysan Development Real Estate 22,931
3,500 Johnson Electric Holdings Electrical Equipment 7,311
4,000 Kumagai Gumi (HK) Home Builders 3,026
2,000 Lai Sun Garment International Apparel & Textiles 2,108
5,000 Miramar Hotel & Invest. Hotels & Restaurants 10,573
12,000 Oriental Press Group Publishing 4,928
6,000 Peregrine Investments<F138> Real Estate 7,644
26,000 Regal Hotels International Hotels & Restaurants 4,876
14,000 Shangri-La Asia Leisure 15,482
14,000 Shun Tak Holdings Aerospace 11,045
9,000 Stelux Holdings International Conglomerates 2,328
14,000 South China Morning Post Broadcasting 8,148
5,300 Tai Cheung Holdings Real Estate 4,456
4,000 Television Broadcasts Broadcasting 16,038
1,460 Wing Lung Bank Banks 8,082
2,500 Winsor Industrial Corp. Apparel & Textiles 2,247
-------
323,018
-------
IRELAND 0.4%
6,200 Allied Irish Banks Banks 31,296
3,300 CRH Construction Materials 21,783
2,600 Fyffes Food & Beverage 4,322
805 Greencore Group Food & Beverage 6,447
1,100 Independent News PLC Newspapers 6,585
2,900 Irish Life Insurance 10,674
1,500 Kerry Group A Food & Beverage 11,649
9,840 Smurfit (Jefferson) Paper 26,108
6,700 Waterford Wedgewood Toys, Amusements &
Sporting Goods 6,070
1,645 Woodchester Investments Financial Services 4,471
129,405
ITALY 7.7%
7,000 Arn Mondadori Edit Broadcasting, Advertising &
Publishing 51,814
83,500 Banca Commerciale Italiana Banks 162,637
17,500 Banca Naz Agricolt<F138> Banks 12,844
10,000 Banca Naz Agricolt Priv<F138> Banks 3,852
8,000 Banca Naz Agricolt,
Non-Convertible
Preferred<F138> Banks 2,961
1,500 Banca Naz Agricoltura<F138> Agricultural Machinery 555
11,000 Banca Popolare Milano<F138> Banks 44,851
24,000 Banco Ambros Veneto<F138> Banks 62,478
11,000 Banco Ambros Veneto,
Non-Convertible Preferred Banks 13,490
9,000 Benetton Group Apparel & Textiles 93,125
6,600 Cartiere Burgo Forest Products 37,530
15,500 Cementir Construction Materials 12,902
118,000 Credito Italiano Ord Banks 134,051
2,000 Danieli Industrial Machinery 10,902
2,000 Danieli, Non-Convertible
Preferred Industrial Machinery 5,520
34,000 Edison Ord Electric Utilities 136,499
17,500 Fidis Conglomerates 31,835
32,000 IMI Istituto Mobiliare Banks 174,839
29,000 Impregilo Ord<F138> Home Builders 25,195
39,000 Ist Bc S.Paolo (To) Banks 215,287
8,200 Italcementi Construction Materials 50,667
4,000 Italcementi, Non-Convertible
Preferred Construction Materials 11,643
35,000 Italgas Gas & Pipeline Utilities 93,090
3,000 La Previdente Insurance 20,644
21,000 Magneti Marelli Industrial Machinery 40,178
3,000 Marzotto & Figli Apparel & Textiles 19,101
25,000 Mediobanca Banks 167,017
282,000 Montedison<F138> Conglomerates 194,233
36,000 Montedison, Non-Convertible
Preferred<F138> Conglomerates 21,115
63,000 Olivetti<F138> Computers & Business Equipment 47,028
4,500 Olivetti, Non-Convertible
Preferred<F138> Computers & Business Equipment 2,484
1,000 Olivetti, Priv<F138> Computers & Business Equipment 1,004
58,000 Parmalat Finanziaria Food & Beverage 45,843
75,000 Pirelli Spa Industrial Machinery 96,917
4,000 Pirelli Spa, Non-Convertible
Preferred Industrial Machinery 4,065
14,220 Ras Insurance 142,722
5,780 Ras, Non-Convertible Preferred Insurance 31,889
8,000 Rinascente Retail 47,423
2,000 Rinascente, Non-Convertible
Preferred Retail 5,608
2,000 Rinascente, Priv Retail 5,332
3,000 Sai, Non-Convertible Preferred Insurance 12,703
6,000 Sai Ord Insurance 61,048
20,000 Saipem Petroleum 44,161
4,333 Sasib Industrial Machinery 19,190
3,000 Sasib, Non-Convertible
Preferred Industrial Machinery 7,433
11,000 Sirti Home Builders 67,001
34,000 SNIA BPD<F138> Conglomerates 33,208
2,000 SNIA BPD, Non-Convertible
Preferred Conglomerates 1,204
---------
2,527,118
---------
JAPAN 34.0%
9,000 77th Bank Banks 83,623
2,000 Advantest Corp. Electronics 113,453
2,000 Aida Engineering Industrial Machinery 14,045
4,000 Alps Electric Co. <F138> Electronics 41,078
7,000 Amada Co. Industrial Machinery 69,832
2,000 Amano Corporation Pollution Control 24,255
10,000 Aoki Corp. Home Builders 39,611
2,000 Aoyama Trading Co. Conglomerates 53,988
1,300 Arabian Oil Co. International Oil 49,841
11,000 Asahi Breweries Food & Beverage 119,419
3,000 Asahi Optical Co. <F138> Toys, Amusement &
Sporting Goods 10,944
15,000 Ashikaga Bank Banks 88,904
5,000 Asics Corp. <F138> Apparel & Textiles 13,448
6,000 Banyu Pharmaceutical Co. Drugs & Healthcare 63,377
6,000 Brother Industries Household Appliances &
Furnishings 30,104
7,000 Casio Computer Co. Toys, Amusement &
Sporting Goods 61,274
14,000 Chichibu Onoda Cement Construction Materials 70,517
5,000 Chiyoda Corp. Industrial Machinery 46,506
6,000 Chugai Pharmaceutical Co. Drugs & Healthcare 54,810
8,000 Citizen Watch Co., Ltd. Retail 54,849
15,000 Cosmo Oil Company International Oil 73,353
3,100 Credit Saison Co. Financial Services 65,187
2,000 CSK Corporation Business Services 56,726
9,000 Daicel Chemical Ind. Chemicals 47,269
10,000 Daido Steel Company Steel 44,501
3,000 Daifuku Co. Industrial Machinery 35,796
7,000 Daiichi Pharmaceutical Co. Drugs & Healthcare 97,902
6,000 Daikin Industries Industrial Machinery 47,826
5,000 Daikyo Inc. Real Estate 33,400
7,000 Daimaru Inc. Apparel & Textiles 44,501
20,000 Dainippon Ink Chemicals 85,090
5,000 Dainippon Screen Mfg. Co.<F138> Electonics 44,697
6,000 Daishowa Paper Mfg. Co.<F138> Paper 44,071
3,000 Daito Trust Construction Construction & Mining 26,407
4,000 Daiwa Kosho Lease Co. Real Estate 35,992
11,000 Denki Kagaku Kogyo K.K. Chemicals 37,009
7,000 Ebara Corp. Industrial Machinery 97,217
7,000 Eisai Co. Drugs & Healthcare 118,441
3,000 Ezaki Glico Co. Food & Beverage 24,793
8,000 Fujikura Industrial Machinery 50,624
12,000 Fujita Corp. Home Builders 54,575
3,000 Fujita Kanko Inc. Leisure 63,671
16,000 Furukawa Electric Co. Electrical Equipment 71,827
3,000 Gakken Co. <F138> Broadcasting 16,578
5,000 Gunze Limited Apparel & Textiles 27,874
5,000 Hankyu Deptartment Stores Retail 61,617
10,000 Haseko Corp. Home Builders 35,601
8,000 Hazama Corp. Home Builders 31,610
6,000 Higo Bank Banks 45,831
1,050 Hirose Electric Co. Electronics 67,060
9,000 Hokkaido Bank Banks 26,847
17,000 Hokuriku Bank Banks 99,760
9,000 Honshu Paper Co. Paper 51,230
3,000 House Food Corp. Food & Beverage 54,575
3,000 Hoya Corp. Drugs & Healthcare 88,024
6,000 Inax Corporation Construction Materials 54,105
5,000 Isetan Co. Retail 66,507
8,000 Ishihara Sangyo Kaisha<F138> Industrial Machinery 23,786
6,000 Itoham Foods Inc. Food & Beverage 43,953
6,000 Iwatani International Electric Utilities 28,109
4,000 Jaccs Co. Financial Services 36,461
27,000 Japan Energy Corp. Miscellaneous 77,373
3,000 Japan Metal & Chemicals<F138> Chemicals 15,551
9,000 Japan Steel Works Steel 21,830
2,000 Jeol<F138> Electronics 15,746
4,000 JGC Corp. Electronics 43,425
2,000 Kaken Pharmaceutical Co. Drugs & Healthcare 16,353
6,000 Kamigumi Co. Business Services 54,281
5,000 Kandenko Co. Home Builders 61,617
12,000 Kanebo<F138> Apparel & Textiles 23,708
9,000 Kaneka Corp. Chemicals 56,335
7,000 Kansai Paint Co. Chemicals 30,398
2,000 Katokichi Co. Food & Beverage 36,579
14,000 Kawasaki Kisen Kaisha<F138> Trucking & Freight Forwarding 37,518
12,000 Keihin Electric Express Railroads & Equipment 70,419
5,000 Kikkoman Corp. Food & Beverage 35,699
6,000 Kinden Corporation Home Builders 103,281
1,000 Kissei Pharmaceutical Co. Drugs & Healthcare 28,950
3,000 Kokuyo Co. Business Services 64,551
2,000 Komori Corporation Industrial Machinery 47,337
1,000 Konami Co. Business Services 22,495
9,000 Konica Corporation Photography 60,296
5,000 Koyo Seiko Co. Industrial Machinery 39,855
17,000 Kumagai Gumi Co. Construction Materials 65,177
6,000 Kurabo Industries Apparel & Textiles 20,422
8,000 Kuraray Co. Chemicals 79,026
5,000 Kureha Chemical Ind Co. Chemicals 19,659
3,000 Kurita Water Industries Business Services 83,623
11,000 Kyowa Hakko Kogyo Co. Drugs & Healthcare 102,098
2,000 Kyudenko Corp. Electrical Equipment 26,994
7,000 Lion Corp. Drugs & Healthcare 38,887
3,000 Maeda Road Construction Construction Materials 53,695
2,000 Makino Milling Machine<F138> Industrial Machinery 16,764
4,000 Makita Corp. Electrical Equipment 62,204
3,000 Marudai Food Co. Food & Beverage 20,245
7,000 Maruha Corp. <F138> Food & Beverage 20,539
7,000 Meiji Milk Products Co. Food & Beverage 38,134
9,000 Meiji Seika Kaisha Food & Beverage 49,205
10,000 Minebea Co. Industrial Machinery 81,178
3,000 Misawa Homes Co. Home Builders 23,356
12,000 Mitsubishi Gas Chemical Chemicals 52,345
11,000 Mitsubishi Oil Co. International Oil 87,359
8,000 Mitsubishi Paper Mills Paper 48,667
3,000 Mitsubishi Steel Mfg.<F138> Steel 15,052
4,000 Mitsubishi Warehouse Business Services 55,162
20,000 Mitsui Engineering &
Shipbuilding<F138> Industrial Machinery 43,816
12,000 Mitsui Mining & Smelting<F138> Mining 39,904
27,000 Mitsui Osk Lines<F138> Trucking & Freight Forwarding 70,771
3,000 Mitsui-Soko Co. Trucking & Freight Forwarding 19,864
19,000 Mitsui Toatsu Chemicals Chemicals 70,057
12,000 Mitsukoshi Retail 95,183
4,000 Mochida Pharmaceutical Drugs & Healthcare 51,641
2,000 Mori Seiki Co. Industrial Machinery 39,513
4,000 Nagase & Co. Chemicals 31,689
19,000 Nagoya Railroad Co. Railroads & Equipment 89,383
11,000 Nankai Electric Railway Railroads & Equipment 71,651
9,000 NGK Insulators Electrical Equipment 82,918
5,000 NGK Spark Plug Co. Industrial Machinery 68,463
11,000 Nichido Fire & Marine Insurance 82,302
7,000 Nichii Co. Retail 82,156
8,000 Nichirei Corp. <F138> Household Products 45,694
8,000 Nihon Cement Co. Construction Materials 49,215
8,000 Niigata Engineering Co. Industrial Machinery 24,255
3,000 Nippon Beet Sugar Mfg. Co. Food & Beverage 11,737
3,000 Nippon Comsys Corp. Computers & Business Equipment 31,689
3,000 Nippon Denko Co. Steel 10,181
14,000 Nippon Fire & Marine Insurance 75,309
13,000 Nippon Light Metal Co. Non-ferrous Metals 70,439
6,000 Nippon Meat Packers Food & Beverage 81,569
4,000 Nippon Sharyo Industrial Machinery 32,706
11,000 Nippon Sheet Glass Co. Containers & Glass 47,660
8,000 Nippon Shinpan Co. Financial Services 49,998
5,000 Nippon Shokubai Co. Chemicals 43,621
7,000 Nippon Suisan Kaisha<F138> Food & Beverage 28,412
7,000 Nishimatsu Construction Construction & Mining Equipment 78,732
6,000 Nisshinbo Industries Apparel & Textiles 53,284
3,000 Nissin Food Products Co. Food & Beverage 67,485
4,000 Nitto Denko Corp. Electronics 63,768
5,000 NOF Corp. Chemicals 25,429
4,000 Noritake Co. Toys, Amusement &
Sporting Goods 27,776
14,000 NSK Industrial Machinery 83,936
11,000 NTN Corp. Industrial Machinery 67,240
18,000 Obayashi Corp. Home Builders 133,972
4,000 Okamoto Industries Tires & Rubber 23,864
3,000 Okuma Corp. <F138> Industrial Machinery 22,153
6,000 Okumura Corp. Home Builders 52,462
7,000 Olympus Optical Co. Photography 65,382
7,000 Omron Corp. Electrical Equipment 163,627
4,000 Onward Kashiyama Co. Apparel & Textiles 55,162
8,000 Orient Corp. Financial Services 36,305
2,000 Orix Corp. Financial Services 70,419
9,000 Penta-Ocean Construction Home Builders 63,905
5,000 Pioneer Electronic Corp. Household Appliances &
Furnishings 76,776
4,000 Q.P. Corp. Conglomerates 32,080
7,000 Renown Apparel & Textiles 19,101
3,000 Rohm Co. <F138> Electronics 182,209
10,000 Sagami Railway Co. Railroads & Equipment 40,491
3,000 Sanden Corp. Electrical Equipment 17,018
6,000 Sankyo Aluminum Ind. Co. Aluminum 31,278
2,000 Sanrio Co. Retail 19,952
6,000 Sanwa Shutter Corp. Construction Materials 40,784
8,000 Sapporo Breweries Food & Beverage 68,385
3,000 Seiko Corporation Retail 20,510
4,000 Seino Transportation Co. Railroads & Equipment 61,812
6,000 Seiyu Apparel & Textiles 69,832
6,000 Settsu Corp. <F138> Paper 16,725
1,000 Shimachu Co. Retail 26,407
3,000 Shimano Inc. Leisure 55,748
9,000 Shionogi & Co. Drugs & Healthcare 75,348
10,000 Shiseido Co. Drugs & Healthcare 100,738
2,000 Shochiku Co. Leisure 20,148
3,000 Shokusan Jutaku Sogo Co. <F138> Construction Materials 9,477
26,000 Showa Denko K.K. <F138> Chemicals 76,287
3,000 Skylark Co. Hotels & Restaurants 46,653
8,000 Snow Brand Milk Food & Beverage 52,423
4,000 Sumitomo Forestry Co. Forest Products 56,335
14,000 Sumitomo Heavy Ind. Industrial Machinery 39,024
14,000 Sumitomo Metal Mining Co. Non-ferrous Metals 110,499
11,000 Sumitomo Osaka Cement Co. Construction Materials 44,432
3,000 Taiyo Uden Co. Electronics 29,928
5,000 Takara Shuzo Co. Household Products 43,816
3,000 Takara Standard Co. Food & Beverage 30,808
7,000 Takashimaya Co. Retail 97,217
2,000 Takuma Co. Telecommunication Services 25,429
6,000 Tanabe Seiyaku Co. Drugs & Healthcare 39,317
24,000 Teijin Chemicals 110,089
6,000 Teikoku Oil Co. International Oil 34,623
5,000 Toa Corporation Home Builders 33,938
440 Toho Co. Leisure 61,969
4,000 Tokyo Broadcasting Broadcasting 58,683
4,000 Tokyo Dome Corp. Leisure 60,639
4,000 Tokyo Electronic Power Co. Electronics 173,700
3,000 Tokyo Style Co. Apparel & Textiles 45,479
5,000 Tokyo Tatemono Co. Real Estate 20,148
7,000 Tokyotokeiba Co. Leisure 24,510
14,000 Tosoh Corp. <F138> Chemicals 61,480
5,000 Toyo Engineering Electronics 27,385
1,000 Toyo Exterior Co. Home Builders 20,930
3,000 Toyo Kanetsu K.K. Petroleum Services 12,059
17,000 Toyobo Co. Apparel & Textiles 55,866
7,000 Toyoda Automatic Loom Industrial Machinery 109,541
4,000 Tsubakimoto Chain Co. Industrial Machinery 18,778
2,000 Tsugami Corp. Industrial Machinery 10,074
21,000 Ube Industries<F138> Chemicals 69,421
2,000 Uni-Charm Corp. Household Products 44,990
1,000 Uniden Corp. Household Products 16,138
12,000 Unitika<F138> Chemicals 29,576
5,000 Yamaguchi Bank Banks 82,645
5,000 Yamaha Corp. Toys, Amusement &
Sporting Goods 79,711
9,000 Yamato Transport Co. Trucking & Freight Forwarding 96,826
6,000 Yamazaki Baking Co. Food & Beverage 106,215
6,000 Yokogawa Electric Corp. Electronics 45,772
----------
----------
MALAYSIA 0.5%
1,000 AMMB Holdings Financial Services 12,387
1,800 Amsteel Corp. Steel 1,254
100 Amsteel Corp. Rights to
Chocolate Products,
Expire 11/1/95 Steel -
200 Amsteel Corp. Rights to
Common Shares,
Expire 11/1/95 Steel -
333 Amsteel Corp. Warrants,
Expire 11/1/95 Steel 45
1,000 Aokam Perdana Paper 1,675
1,500 Berjaya Group Leisure 950
1,000 Berjaya Leisure Leisure 759
1,000 Commerce Asset-Holding Financial Services 4,955
2,000 DCB Holdings Financial Services 5,663
1,000 Edaran Otomobil Nasional Retail 7,865
1,000 Ekran Building Construction 2,536
2,000 Faber Group<F138> Leisure 1,699
2,000 Golden Hope Plantations Food & Beverages 3,146
1,000 Guinness Anchor Food & Beverages 1,691
1,000 Highlands & Lowlands Food & Beverages 1,557
1,000 Hong Leong Properties Real Estate 1,077
100 Hong Leong Properties Rights,
Expire 11/11/95 Real Estate -
1,000 Hume Industries Construction Materials 5,348
1,000 Idris Hydraulic<F138> Financial Services 1,136
1,000 IGB Corp. Real Estate 865
1,000 IOI Corp. Chemicals 936
250 IOI Corp. Rights,
Expire 12/19/95 Chemicals -
1,000 Jaya Tiasa Holdings Forest Products 2,989
1,000 Johan Holdings Industrial Machinery 735
1,000 Kedah Cement Holdings Construction Materials 1,557
1,000 Kuala Lumpur Kepong Food & Beverages 2,694
1,500 Land & General Forest Products 3,480
1,000 Landmarks Hotels & Restaurants 1,125
1,000 Leader Universal Holdings Electrical Equipment 2,694
125 Lion Land Berhad Real Estate 135
2,000 Magnum Corp. Leisure 3,398
2,000 Malaysian Airline System Air Travel 5,466
1,000 Malayan Cement Construction Materials 1,746
2,000 Malayan United Industies Financial Services 1,581
2,333 Malaysia Int'l. Shipping Containers & Glass 6,147
1,000 Malaysia Mining Corp. Mining 1,337
1,000 Malaysian Mosaics Retail 1,121
1,000 Malaysian Resources Corp. Mining 1,455
2,000 MBF Capital Financial Services 1,887
1,000 Metroplex Real Estate 783
2,000 Mulpha International Conglomerates 1,825
1,000 Multi-Purpose Holdings Conglomerates 1,337
1,000 Nestle Food & Beverage 7,039
1,000 Perlis Plantations Mining 2,969
1,000 Perusahaan Otomobl Automobiles 3,578
1,000 Promet Petroleum Services 916
2,000 Public Bank Banks 3,539
1,000 Rashid Hussain Financial Services 2,477
1,000 RJ Reynolds Food & Beverage 2,045
1,000 Rothmans Pall Mall Tobacco 7,393
1,000 Selangor Properties Real Estate 900
1,000 Shell Refining Co. International Oil 2,989
2,000 Ta Enterprise<F138> Financial Services 2,289
1,000 Tan Chong Motor Holdings Industrial Machinery 940
2,000 Technology Resources
Industries<F138> Electronics 5,073
1,000 Time Engineering Electronics 2,556
1,000 UMW Holdings Industrial Machinery 2,379
1,000 United Engineers Industrial Machinery 6,213
1,000 YTL Corp. Home Builders 5,427
-------
157,758
-------
NETHERLANDS 2.5%
5,674 Ahold NV Retail 214,737
987 Getronics NV Computers & Business Equipment 47,036
149 Hollandsche Benton Groep Home Builders 22,443
1,460 Hoogovens (Kon.) Steel 49,896
1,100 IHC Caland NV Home Builders 31,258
4,204 KLM<F138> Air Travel 138,617
4,650 Koninklijke KNP BT NV Paper 139,785
1,042 Nedlloyd (Kon.) Trucking & Freight Forwarding 26,444
754 OCE-Van der Grinten NV Computers & Business Equipment 43,185
1,399 Pakhoed (Kon.) Petroleum Services 38,072
1,395 Stad Rotterdam Insurance 38,404
1,354 Stork NV Industrial Machinery 32,734
-------
822,611
-------
NEW ZEALAND 0.4%
27,075 Brierley Investments Limited Investment Companies 21,090
17,600 Carter Holt Harvey Forest Products 42,057
1,027 Fisher & Paykel Industries Household Appliances &
Furnishings 3,356
15,100 Fletcher Challenge Forest Products 39,970
8,257 Fletcher Challenge
Forest Division Forest Products 11,392
5,600 Lion Nathan Limited Food & Beverage 12,716
1,000 Wilson & Horton Publishing 5,941
-------
136,522
-------
NORWAY 0.9%
1,000 Aker A Conglomerates 12,602
1,000 Bergesen (Dy) A Trucking & Freight Forwarding 20,710
400 Bergesen (Dy) B,
Non-Voting Preferred Trucking & Freight Forwarding 8,220
600 Dyno Industrier Chemicals 12,137
1,200 Elkem Non-ferrous Metals 13,004
1,775 Hafslund Nycomed A Drugs & Healthcare 50,722
722 Hafslund Nycomed B Drugs & Healthcare 20,168
1,100 Kvaerner As Agricultural Machinery 46,267
800 Leif Hoegh & Co. Trucking & Freight Forwarding 11,559
1,200 Orkla A Conglomerates 62,032
600 Petroleum Geo-Services<F138> Energy Equipment & Services 11,366
6,300 Uni Storebrand Ord<F138> Insurance 31,758
500 Unitor Containers & Glass 6,181
-------
306,726
-------
SINGAPORE 0.5%
2,000 Amcol Holdings Electronics 4,411
4,400 City Developments Real Estate 27,216
1,000 Cycle & Carriage Automobiles 8,907
4,000 DBS Land Real Estate 11,820
1,000 First Capital Corp. Hotels & Restaurants 2,700
1,000 Fraser & Neave Food & Beverage 11,805
2,000 Hai Sun Hup Group Trucking & Freight Forwarding 1,280
1,000 Haw Par Bros. Int'l. Conglomerates 2,071
2,000 Hotel Properties Hotels & Restaurants 3,026
1,000 Inchcape Berhad Business Services 3,238
1,000 Jurong Shipyard Industrial Machinery 6,645
3,000 Keppel Corp. Industrial Machinery 24,601
2,000 Lum Chang Holdings Home Builders 1,626
1,200 Metro Holdings Retail 5,090
2,000 Natsteel Steel 4,029
4,000 Neptune Orient Lines Nol Trucking & Freight Forwarding 4,383
1,000 Overseas Union Ent. Leisure 5,302
2,000 Parkway Holdings Real Estate 5,062
1,000 Shangri-La Hotel Hotels & Restaurants 3,195
200 Singapore Press Holdings Publishing 3,125
3,000 Straits Steamship Land Conglomerates 8,398
2,000 Straits Trading Co. Non-ferrous Metals 4,355
8,000 UIC United Industrial Conglomerates 7,126
3,000 United Overseas Land Real Estate 5,387
-------
164,798
-------
SPAIN 3.5%
48 Acerinox Aluminum 599
535 Acerinox Registered Aluminum 56,279
800 Alba (Corp Financiera) Conglomerates 44,172
10,414 Autopistas CESA (Acesa) Automobiles 97,112
7,850 BCO Central Hispano Registered Banks 162,458
1,300 Corporacion Mapfire Insurance 66,462
2,700 Dragados Y Construccion Home Builders 35,337
2,300 Ebro Agricolas Food & Beverage 22,859
1,000 ENCE (Empresa Nac Celulosa) Forest Products 18,282
1,050 Fasa Renault Automobiles 33,497
700 Fomento Const Y Contra Home Builders 49,358
1,800 Gas Natural SDG SA Electric Utilities 246,479
1,050 Metrovacesa Real Estate 31,951
1,900 Urbis (Inmobilaria) Real Estate 9,201
350 Portland Valderrivas Construction Materials 23,047
1,750 Tabacalera Food & Beverage 58,476
13,900 Union Electrica Fenosa Electric Utilities 64,582
2,400 Uralita Construction Materials 24,147
2,050 Vallehermoso SA Real Estate 33,119
1,100 Viscofan Aluminum 13,767
407 Zardoya Otis Industrial Machinery 39,685
---------
1,130,869
---------
SWEDEN 1.7%
1,800 AGA Series A Chemicals 24,113
1,500 AGA Series B Chemicals 19,417
1,700 Atlas Copco Series A Industrial Machinery 25,716
800 Atlas Copco Series B Construction & Mining 12,102
400 Autoliv Industrial Components 22,939
1,000 Electrolux Series B Household Appliances &
Furnishings 42,748
200 Esselte Series A Electronics 3,025
700 Euroc Series A Construction Materials 17,385
600 Hennes & Mauritz Series B Retail 39,196
300 Securitas Series B Business Services 11,605
7,300 Skand. Enskilda Banken
Series A Banks 49,226
1,400 Skandia Foersaekrings Insurance 35,508
1,700 Skanska Series B Home Builders 55,015
700 SKF Series A Construction & Mining 13,013
900 SKF Series B Industrial Machinery 17,069
3,400 Stora Kopparbergs Series A Forest Products 41,198
1,000 Stora Kopparbergs Series B Forest Products 12,117
2,700 Svenska Cellulosa Forest Products 46,127
2,900 Svenska Handelsbk Series A Banks 50,853
300 Svenska Handelsbk Series B Banks 5,035
1,600 Trelleborg Series B Mining 17,942
-------
561,349
-------
SWITZERLAND 2.1%
148 Adia Porteur<F138> Business Services 24,482
50 Alusuisse-Lonza Hldg Non-ferrous Metals 38,187
100 Alusuisse-Lonza Hldg
Registered Aluminum 76,111
80 Danzas Holding Household Products 14,289
15 Fischer (Georg) Inhaber Ag Industrial Machinery 20,722
15 Fischer (Georg) Inhaber Ag
Registered Industrial Machinery 3,960
40 Forbo Holding Registered Construction Materials 16,859
700 Holderbank Fin Warrants,
Expire 12/20/95 Financial Services 832
148 Holderbk FN Glarus Financial Services 118,765
55 Interdiscount Holding<F138> Retail Trade 6,291
50 Interdiscount Holding
Warrants, Expire 11/15/96 Retail Trade 15
10 Jelmoli Holding Retail Trade 4,795
35 Jelmoli Holding Registered Retail Trade 3,326
10 Kuoni Reisen Series B Leisure 15,926
95 Merkur Holding Ag Registered Retail Trade 21,148
15 Moevenpick Holdings Leisure 6,243
10 Moevenpick Holdings Registered Leisure 4,751
35 Schindler Holding Ag Industrial Machinery 32,798
40 SGS Holding Business Services 75,495
50 Sika Finanz Inhaber Ag Construction Materials 12,846
90 SMH Ag Neuenburg Toys, Amusement &
Sporting Goods 56,067
355 SMH Ag Neuenburg Registered Toys, Amusement &
Sporting Goods 47,635
20 Sulzer Ag Industrial Machinery 11,967
65 Sulzer Ag Registered Industrial Machinery 41,465
55 Swissair<F138> Air Travel 34,602
--------
689,577
Total Common and Preferred Stocks
(Cost) $33,582,527 31,737,386
SHORT-TERM INVESTMENTS 3.1%
UNITED STATES 3.1%
332,000 Short-Term Investments Co.
Prime Portfolio Investment Company 332,000
682,000 Financial Square Prime
Obligation Fund Investment Company 682,000
-------
Total Short-Term Investments
(Cost $1,014,000) 1,014,000
Total Investments 99.8%
(Cost $34,596,527) 32,751,386
Other Assets, less
Liabilities 0.2% 68,772
TOTAL NET ASSETS 100.0% 32,820,158
<F138>Non-income producing
See notes to the financial statements.
BALANCED FUND
GROWTH AND INCOME FUND
EQUITY INDEX FUND
MIDCORE GROWTH FUND
SPECIAL GROWTH FUND
INTERNATIONAL EQUITY FUND
NOTES TO THE FINANCIAL STATEMENTS
1.ORGANIZATION
Portico Funds, Inc. (the "Company") was incorporated on February 15, 1988, as
a Wisconsin Corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940. The Balanced Fund, the Growth
and Income Fund, the Equity Index Fund, the MidCore Growth Fund, the Special
Growth Fund, and the International Equity Fund (the "Funds") are separate,
diversified investment portfolios of the Company. The Special Growth Fund
commenced operations on December 28, 1989; the Growth and Income Fund and Equity
Index Fund commenced operations on December 29, 1989; the Balanced Fund
commenced operations on March 30, 1992; the MidCore Growth Fund commenced
operations on December 29, 1992; and the International Equity Fund commenced
operations on April 28, 1994.
The costs, in thousands, incurred in connection with the organization, initial
registration and public offering of shares aggregating $25, $46, $44, $14, $45
and $27 for the Balanced, Growth and Income, Equity Index, MidCore Growth,
Special Growth and International Equity Funds, respectively, have been paid by
the Funds. These costs are being amortized over the period of benefit, but not
to exceed sixty months from each Fund's commencement of operations.
The Company has issued two classes of Fund shares in each of the Funds:Series
A and Series Institutional. The Series A shares are subject to a 0.25% service
organization fee and an initial sales charge imposed at the time of purchase, in
accordance with the Funds' prospectus. The maximum sales charge is 4% of the
offering price or 4.16% of the net asset value. Each class of shares for each
Fund has identical rights and privileges except with respect to service
organization fees paid by Series A shares, voting rights on matters affecting a
single class of shares and the exchange privileges of each class of shares.
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized stock
exchange are valued at the last sale price on the securities exchange on which
such securities are primarily traded or at the last sale price on a national
securities exchange. Exchange-traded securities for which there were no
transactions are valued at the current bid prices, with the exception of the
International Equity Fund, which is valued at the average of the current bid and
asked prices. Securities traded on only over-the-counter markets are valued on
the basis of closing over-the-counter bid prices. Instruments with a remaining
maturity of 60 days or less are valued on an amortized cost basis. Securities
for which market quotations are not readily available and other assets are
valued at fair value as determined by the investment adviser under the
supervision of the Board of Directors. Portfolio securities which are primarily
traded on foreign securities exchanges are generally valued at the preceding
closing values of such securities on their respective exchanges, except when an
occurrence subsequent to the time a value was so established is likely to have
changed such value. In such an event, the fair value of those securities is
determined through the consideration of other factors by or under the direction
of the Board of Directors. Quotations of foreign securities in foreign currency
are converted to United States ("U.S.") dollar equivalents using the foreign
exchange quotation in effect at the time net asset value is computed. Foreign
securities held by the International Equity Fund may trade in their local
markets on days the U.S. exchanges are closed, and the International Equity
Fund's net asset value may, therefore, change on days when investors may not
purchase or redeem Fund shares.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intend to continue
to so comply in future years.
c) Income and Expenses - The Funds are charged for those expenses that are
directly attributable to each portfolio, such as advisory, administration and
certain shareowner service fees. Expenses that are not directly attributable to
a portfolio are typically allocated among the Company's portfolios in proportion
to their respective net assets, number of shareowner accounts, or net sales,
where applicable. Net investment income other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative net asset value of outstanding shares of each
class of shares at the beginning of the day (after adjusting for the current
day's capital share activity of the respective class).
d) Distributions to Shareowners - Dividends from net investment income are
declared and paid quarterly, for the Balanced, Growth and Income and Equity
Index Funds and annually for the MidCore Growth, Special Growth and
International Equity Funds. Distributions of net realized capital gains, if any,
will be declared at least annually.
e) Futures Contracts - The Equity Index Fund may utilize futures contracts to a
limited extent. The primary risks associated with the use of futures contracts
include an imperfect correlation between the change in market value of the
securities held by the Fund and the prices of futures contracts and the
possibility of an illiquid market. Futures contracts are valued based upon their
quoted daily settlement prices. Changes in initial settlement value are
accounted for as unrealized appreciation (depreciation) until the contracts are
terminated at which time realized gains and losses are recognized.
f) When-Issued Securities - The Funds may purchase securities on a when-issued
or delayed delivery basis. Although the payment and interest terms of these
securities are established at the time the purchaser enters into the agreement,
these securities may be delivered and paid for at a future date, generally
within 45 days. The Fund records purchases of when-issued securities and
reflects the values of such securities in determining net asset value in the
same manner as other portfolio securities. The Fund segregates and maintains at
all times cash, cash equivalents, or other high-quality liquid debt securities
in an amount at least equal to the amount of outstanding commitments for when-
issued securities.
g) Unregistered Security - The Balanced Fund owns an investment security which
is unregistered and thus restricted as to resale. This security is valued by the
Fund after giving due consideration to pertinent factors including recent
private sales, market conditions and the issuer's financial performance. Where
future disposition of this security requires registration under the Securities
Act of 1933, the Fund has the right to include its security in such
registration, generally without cost to the Fund. The Fund has no right to
require registration of unregistered securities.
h) Foreign Currency Translations - The books and records of the International
Equity Fund are maintained in U.S. dollars. Foreign currencies, investments, and
other assets and liabilities denominated in foreign currencies are translated
into U.S. dollars at the exchange rates prevailing at the end of the period, and
purchases and sales of investment securities, and income and expenses
denominated in foreign currencies are translated on the respective dates of such
transactions. Unrealized gains and losses on investments which result from
changes in foreign currency exchange rates have been included in the unrealized
net appreciation (depreciation) on investments. Foreign currency exchange gains
and losses included in net appreciation (depreciation) on foreign currency and
net realized gains and losses on foreign currency include foreign currency gains
and losses between trade date and settlement date on investment securities
transactions, foreign currency transactions and the difference between the
amounts of interest and dividends recorded on the books of the Fund and the
amount actually received. The portion of the foreign currency gains and losses
related to fluctuation in exchange rates between the initial purchase trade date
and subsequent sale trade date of a security is included in realized gains and
losses on investment transactions.
i) Other - Investment and shareowner transactions are recorded no later than the
first business day after the trade date. The Funds determine the gain or loss
realized from the investment transactions by comparing the original cost of the
security lot sold with the net sale proceeds. Dividend income is recognized on
the ex-dividend date or as soon as information is available to the Funds, and
interest income is recognized on an accrual basis. Generally accepted accounting
principles require that permanent financial reporting and tax differences be
reclassified to capital stock.
3.CAPITAL SHARE TRANSACTIONS
On January 9, 1995, all previously existing series of shares of each Fund were
reclassified as Series A shares. Effective January 9, 1995, Institutional
shareowners exchanged their Series A shares for the Funds' Institutional series
shares. Transactions in capital shares for the Funds, in thousands, were as
follows:
BALANCED GROWTH AND INCOME EQUITY INDEX
FUND FUND FUND
--------------- -------------- --------------
Amount Shares Amount Shares Amount Shares
------ ------ ------ ------ ------ ------
PERIOD FROM JAN. 10,
TO OCT. 31, 1995:
Series A shares:
Reclassification of
previous class $101,671 4,722 $159,134 7,206 $107,441 3,306
Exchange out to Series
Institutional shares (85,645) (3,978) (125,287) (5,674) (94,927)(2,921)
Shares sold 4,044 166 5,748 225 6,511 171
Shares issued to owners
in reinvestment of
dividends 279 12 358 14 222 5
Shares redeemed (1,911) (79) (5,802) (235) (4,042) (107)
------- ---- ------- ----- ------- -----
Net increase $ 18,438 843 $34,151 1,536 $15,205 454
======= ===== ====== ===== ====== =====
Series Institutional shares:
Exchange in from
Series A shares $ 85,645 3,978 $125,287 5,674 $ 94,927 2,921
Shares sold 34,956 1,469 27,970 1,112 32,025 852
Shares issued to owners
in revinvestment of
dividends 1,518 62 1,572 61 1,803 47
Shares redeemed (34,962) (1,473) (24,218) (956) (17,405) (458)
-------- ------- -------- ----- -------- -----
Net increase $ 87,157 4,036 $130,611 5,891 $111,350 3,362
======= ===== ======= ===== ======= =====
PERIOD FROM NOV. 1, 1994
TO JAN. 9, 1995:
Previous class:
Reclassification to
Series A shares $(101,671) (4,722)$(159,134) (7,206)$(107,441)(3,306)
Shares sold 12,996 608 5,431 241 5,050 155
Shares issued to owners
in reinvestment of
dividends 528 24 4,848 218 868 27
Shares redeemed (4,138) (193) (8,009) (358) (3,100) (95)
------- ----- ------- ----- ------- ----
Net (decrease) $ (92,285) (4,283)$(156,864) (7,105)$(104,623)(3,219)
======= ====== ======== ====== ======= ======
FOR THE YEAR ENDED
OCTOBER 31, 1994:
Shares sold $ 28,851 1,287 $ 34,645 1,503 $ 44,189 1,348
Shares issued to owners
in reinvestment of
dividends 1,738 79 6,597 291 1,769 55
Shares redeemed (15,322) (691) (33,938) (1,471) (23,637) (721)
Net increase $ 15,267 675 $ 7,304 323 $ 22,321 682
MIDCORE GROWTH SPECIAL GROWTH INTERNATIONAL
FUND FUND EQUITY FUND
--------------- -------------- --------------
Amount Shares Amount Shares Amount Shares
------ ------ ------ ------ ------ ------
PERIOD FROM JAN. 10
TO OCT. 31, 1995:
Series A shares:
Reclassification of
previous class $114,588 5,531 $380,463 11,829 $ 24,309 1,297
Exchange to Series
Institutional (106,247) (5,128) (313,914) (9,761) (23,001)(1,228)
Shares sold 3,309 141 20,357 553 878 46
Shares issued to owners
in reinvestment of
dividends 1 - - - - -
Shares redeemed (3,301) (149) (18,782) (513) (574) (30)
------- ----- -------- ----- ----- ----
Net increase $ 8,350 395 $68,124 2,108 $1,612 85
======= ===== ======= ====== ======= =====
Series Institutional
shares:
Exchange in
from Series A $106,247 5,128 $313,914 9,761 $ 23,001 1,228
Shares sold 21,193 911 78,933 2,180 8,978 463
Shares issued to owners
in revinvestment of
dividends 105 5 39 1 - -
Shares redeemed (18,595) (794) (54,904) (1,472) (1,285) (66)
-------- ----- -------- ------- ------- ----
Net increase $108,950 5,250 $337,982 10,470 $30,694 1,625
======= ===== ======= ====== ====== =====
PERIOD FROM NOV. 1, 1994
TO JAN. 9, 1995:
Previous class:
Reclassification to
Series A shares $(114,588) (5,531)$(380,463)(11,829) $(24,309)(1,297)
Shares sold 25,253 1,226 31,095 978 2,199 114
Shares issued to owners
in reinvestment of
dividends 116 5 2,291 71 59 3
Shares redeemed (20,110) (973) (36,576) (1,139) (156) (8)
-------- ----- -------- ------- ----- ---
Net (decrease) $(109,329) (5,273)$(383,653)(11,919) $(22,207)(1,188)
======== ===== ======= ====== ====== =====
FOR THE YEAR ENDED
OCTOBER 31, 1994<F139>:
Shares sold $ 45,282 2,117 $209,100 6,493 $ 24,430 1,222
Shares issued to owners
in reinvestment of
dividends 214 10 436 14 - -
Shares redeemed (17,031) (801) (171,571) (5,323) (680) (34)
-------- ----- --------- ------- ----- ----
Net increase $ 28,465 1,326 $ 37,965 1,184 $ 23,750 1,188
======== ===== ======= ====== ====== =====
<F139>For the period April 28, 1994 through October 31, 1994 for International
Equity Fund.
4.INVESTMENT TRANSACTIONS
The aggregate purchases and sales, in thousands, of securities, excluding
short-term investments, for the Funds for the year ended October 31, 1995, were
as follows:
GROWTH AND EQUITY MIDCORE SPECIAL INTERNATIONAL
BALANCED INCOME INDEX GROWTH GROWTH EQUITY
------ ----- ------ ------ ------
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
Purchases:
U.S. Government $17,102 - - - - -
Other 61,887 $80,249 $24,791 $73,142 $320,229 $14,946
Sales:
U.S. Government 14,091 - - - - -
Other 49,665 84,312 5,643 60,497 320,809 4,161
Equity Index Fund transactions in futures contracts during the period October
31, 1994 to October 31, 1995, in thousands, were as follows:
AGGREGATE
NUMBER OF FACE VALUE OF
CONTRACTS CONTRACTS <F140>
--------- --------------
Outstanding at October 31, 1994 22 $ 5,138
Contracts opened 227 59,470
Contracts closed (220) (56,173)
Outstanding at October 31, 1995 29 $ 8,435
<F140>The aggregate face value of contracts is computed on the date each
contract is opened.
The number of futures contracts and gross unrealized appreciation, in thousands,
as of October 31, 1995 were as follows:
NUMBER OF UNREALIZED
CONTRACTS APPRECIATION
--------- ------------
S&P 500 Financial Futures Contract
Expiration date 12/95<F141> 29 $31
<F141>At October 31, 1995, U.S. Treasury Bills of $330, in thousands, were held
as collateral by the custodian in an initial margin account in connection with
open futures contracts held by the Equity Index Fund.
The International Equity Fund enters into foreign currency forward contracts to
hedge against foreign currency risk on unsettled trades.
At October 31, 1995, gross unrealized appreciation and depreciation of
investments for federal tax purposes, in thousands, were as follows:
GROWTH EQUITY MIDCORE SPECIAL INTERNATIONAL
BALANCED AND INCOME INDEX GROWTH GROWTH EQUITY
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
Appreciation $22,532 $40,340 $47,904 $36,632 $130,604 $ 1,871
(Depreciation) (1,897) (881) (2,589) (1,880) (14,503) (3,720)
------- ----- ------- ------- -------- -------
Net unrealized
appreciation
(depreciation) on
investments $20,635 $39,459 $45,315 $34,752 $116,101 $(1,849)
====== ====== ====== ====== ======= ======
At October 31, 1995, the cost of investments, in thousands, for federal income
tax purposes was $104,602, $168,127, $111,231, $109,910, $394,568 and $34,601
for the Balanced, Growth and Income, Equity Index, MidCore Growth, Special
Growth and International Equity Funds, respectively.
At October 31, 1995, the Midcore Growth Fund had accumulated net realized
capital loss carryovers, in thousands, of $295 expiring in 2001. The MidCore
Growth Fund had accumulated net realized capital loss carryovers, in thousands,
of $4,704, expiring in 2002. To the extent the MidCore Growth Fund realizes
future net capital gains, taxable distributions to its shareowners will be
offset by any unused capital loss carryover. For the year ended October 31,
1995, the Balanced and MidCore Growth Funds utilized, in thousands, capital loss
carryovers of $1,398 and $2,666, respectively. For the year ended October 31,
1995, the following percent of dividends paid from net investment income
qualifies for the dividend received deduction available to corporate
stockholders:Balanced Fund 17%, Growth and Income Fund 100%, Equity Index Fund
90% and MidCore Growth Fund 100%. In addition, the Special Growth Fund's capital
gain distribution of $2,571, in thousands, contains $116, in thousands, of
ordinary income that qualifies for an 8% dividend received deduction available
to corporate shareholders.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company ("FIRMCO"). FIRMCO is a subsidiary of
Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Funds, the Adviser is entitled to receive a fee,
calculated daily and payable monthly, at the annual rates presented below as
applied to each Fund's daily net assets. FIRMCOentered into a Sub-Advisory
Agreement with State Street Bank and Trust Company (the "Sub-Adviser") for the
International Equity Fund. The Sub-Adviser is a wholly-owned subsidiary of State
Street Boston Corporation, a bank holding company. Pursuant to its Sub-Advisory
Agreement with FIRMCO, the Sub-Adviser is entitled to receive a fee from FIRMCO,
calculated daily and payable monthly, at the annual rate presented below as
applied to the International Equity Fund's daily net assets.
For the period ended October 31, 1995, FIRMCO voluntarily waived the following
fees, in thousands, by Fund:
GROWTH EQUITY MIDCORE SPECIAL INTERNATIONAL
BALANCED AND INCOME INDEX GROWTH GROWTH EQUITY
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
Annual Rate 0.75% 0.75% 0.25% 0.75% 0.75% <F142><F143>
Fees waived $267 $69 - $62 $48 $312
<F142>FIRMCO is entitled to receive a fee, calculated daily and payable monthly,
at the annual rate of 1.50% of the Fund's first $25 million of average daily net
assets, 1.45% on the next $25 million, 1.40% on the next $50 million and 1.35%
of the Fund's average daily net assets in excess of $100 million.
<F143>to its Sub-Advisory Agreement with FIRMCO, the Sub-Adviser is entitled to
receive a fee from FIRMCO, calculated daily and payable monthly, at the annual
rate of 0.40% of the Fund's first $25 million of average daily net assets, 0.35%
on the next $25 million, 0.30% on the next $50 million and 0.25% of the Fund's
average daily net assets in excess of $100 million.
State Street Bank and Trust Company serves as custodian and accounting
services agent for the International Equity Fund, and Firstar Trust Company, an
affiliate of FIRMCO, serves as custodian and accounting services agent for the
remaining Funds. Firstar Trust Company serves as transfer agent for all the
Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets, plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the year ended October
31, 1995, $83, $134, $98, $90, $346 and $20 of administration fees, in
thousands, were voluntarily waived for the Balanced, Growth and Income, Equity
Index, MidCore Growth, Special Growth and International Equity Funds,
respectively.
The Company has entered into Servicing Agreements with certain Service
Organizations, including FIRMCOaffiliates, for the Series A class of shares. The
Service Organizations are entitled to receive fees from the Funds up to the
annual rate of 0.25% of the average daily net asset value of the Series A Shares
for certain support and/or distribution services to customers of the Service
Organizations who are beneficial owners of Fund Series A Shares. These services
may include assisting customers in processing purchase, exchange and redemption
requests; processing dividend and distribution payments from the Funds; and
providing information periodically to customers showing their positions in Fund
Series A Shares. Service Organization fees, in thousands, paid by the Balanced,
Growth and Income, Equity Index, MidCore Growth, Special Growth and
International Equity Funds to FIRMCOaffiliates aggregated $32, $64, $25, $15,
$130 and $3 respectively, for the year ended October 31, 1995.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual fee from the Company for service as a Director and is eligible to
participate in a deferred compensation plan with respect to these fees.
Participants in the plan may designate their deferred Director's fees as if
invested in any one of the Portico Funds (with the exception of the MicroCap
Fund) or in 90-day U.S. Treasury bills. The value of each Director's deferred
compensation account will increase or decrease as if it were invested in shares
of the selected Portico Funds or 90-day U.S. Treasury bills. The Funds maintain
their proportionate share of the Company's liability for deferred fees.
6. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments involves
special risks and considerations not typically associated with investing in
U.S.companies and the U.S. government. These risks include revaluation of
currencies and future adverse political and economic developments. Moreover,
securities of many foreign companies and foreign governments and their markets
may be less liquid and their prices more volatile than those of securities of
comparable U.S. companies and the U.S.Government.
7. DISTRIBUTIONS
On November 8, 1995, a distribution of approximately $4.58 per share (including
$1.55 taxable to shareowners as ordinary income dividends and $3.03 applicable
to long-term capital gains), aggregating $57,481, in thousands, was paid by the
Special Growth Fund to the shareowners of record on November 7, 1995, of both
the Series A and Series Institutional Shares.
On November 8, 1995, a long-term capital gain distribution of approximately
$1.19 per share aggregating $8,837, in thousands, was paid by the Growth and
Income Fund to the shareowners of record on November 7, 1995, of both the Series
A and Series Institutional Shares.
Report of Independent Accountants
To the Board of Directors and Shareholders of the Portico Balanced Fund, the
Portico Growth and Income Fund, the Portico Equity Index Fund, the Portico
MidCore Growth Fund, the Portico Special Growth Fund, and the Portico
International Equity Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Portico Balanced Fund, the
Portico Growth and Income Fund, the Portico Equity Index Fund, the Portico
MidCore Growth Fund, the Portico Special Growth Fund and the Portico
International Equity Fund (six of the portfolios of Portico Funds, Inc. (the
"Funds")) at October 31, 1995, the results of each of their operations for the
year then ended, the changes in each of their net assets for the year ended
October 31, 1995, and for each of the other periods indicated, and each of their
financial highlights for the year ended October 31, 1995, and for each of the
other periods indicated, all in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1995, by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse
Milwaukee, Wisconsin
November 29, 1995
- -Portico Funds are available through:
- the Portico Funds Center,
- Investment Specialists who are registered representatives of Elan Investment
Services, Inc., a registered broker/dealer, NASD and SIPC member,
- and through selected shareholder organizations.
This report is authorized for distribution only when preceded or accompanied by
a current prospectus.
To Open an Account or Request Information
1-800-982-8909
1-414-287-3710
For Account Balances and Investor Services
1-800-228-1024
1-414-287-3808
Portico Funds Center
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI 53201-3011
- ----------------------------------------------------------------------------
Exhibit (24)(c)
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OCTOBER 31, 1995 U.S. U.S.
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
----------- ----------- ----------- -----------
ASSETS:
Investments, at
amortized cost $173,033 $63,872 $163,056 $83,469
Interest receivable 80 1,082 769 654
Cash - - - 223
Other 9 4 9 3
------- ------ ------- -------
Total Assets 173,122 64,958 163,834 84,349
------- ------ ------- ------
LIABILITIES:
Dividends payable 723 258 659 211
Payable to affiliates 109 28 81 34
Accrued expenses and other
liabilities 29 17 26 20
------- ------- ------- -------
Total Liabilities 861 303 766 265
------- ------- ------- -------
NET ASSETS $172,261 $64,655 $163,068 $84,084
======== ======= ======== =======
CAPITAL STOCK, $.0001
par value
Authorized 5,000,000 5,000,000 5,000,000 5,000,000
Issued and outstanding 172,261 64,655 163,068 84,084
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $1.00 $1.00 $1.00 $1.00
======== ======= ======== =======
See notes to the financial statements.
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
YEAR ENDED OCTOBER 31, 1995 U.S. U.S.
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND
----------- ----------- ----------- -----------
INVESTMENT INCOME:
Interest income $9,388 $3,348 $10,115 $2,779
------ ------ ------- ------
EXPENSES:
Investment advisory fees 788 297 866 351
Administration fees 191 72 208 83
Service organization fees 55 12 54 19
Custody fees 47 18 50 19
Shareowner servicing and
accounting costs 238 45 62 57
Professional fees 25 22 23 21
Reports to shareowners 48 9 12 9
Federal and state
registration fees 29 15 20 23
Directors' fees and expenses 3 4 4 5
Other 6 4 6 3
------ ------ ------- -------
Total expenses before waiver 1,430 498 1,305 590
Less: Waiver of expenses (485) (142) (266) (170)
------ ------ ------- -------
Net Expenses 945 356 1,039 420
------ ------ ------- -------
NET INVESTMENT INCOME $8,443 $2,992 $ 9,076 $2,359
====== ====== ======= ======
See notes to the financial statements.
STATEMENT OF CHANGES IN NET ASSETS, PART 1
(AMOUNTS IN THOUSANDS) U.S. TREASURY
MONEY MARKET FUND MONEY MARKET FUND
----------------- -----------------
Year ended October 31, Year ended October 31,
--------------------- ---------------------
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment income $ 8,443 $ 4,842 $ 2,992 $ 1,470
--------- --------- --------- ---------
Increase in net assets
resulting from
operations 8,443 4,842 2,992 1,470
--------- --------- --------- ---------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 601,835 626,248 205,921 137,603
Shares issued to
owners in reinvestment
of dividends 7,100 3,613 283 148
--------- --------- --------- ---------
608,935 629,861 206,204 137,751
Shares redeemed (601,692) (597,411) (197,569) (122,475)
--------- --------- --------- ---------
Net increase (decrease) 7,243 32,450 8,635 15,276
--------- --------- --------- ---------
DIVIDENDS PAID FROM:
Net investment income (8,443) (4,842) (2,992) (1,470)
--------- --------- --------- ---------
TOTAL INCREASE
(DECREASE) IN
NET ASSETS 7,243 32,450 8,635 15,276
NET ASSETS:
Beginning of year 165,018 132,568 56,020 40,744
------- ------- ------ ------
End of year $172,261 $165,018 $ 64,655 $ 56,020
======== ======== ======== ========
STATEMENT OF CHANGES IN NET ASSETS, PART 2
(AMOUNTS IN THOUSANDS)
U.S. GOVERNMENT TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND
--------------------- ---------------------
Year ended October 31, Year ended October 31,
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment income $ 9,076 $ 6,375 $ 2,359 $ 1,724
-------- -------- -------- --------
Increase in net assets
resulting from
operations 9,076 6,375 2,359 1,724
-------- -------- -------- --------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 875,356 672,045 182,982 173,282
Shares issued to
owners in reinvestment
of dividends 2,649 1,425 884 676
--------- --------- -------- ---------
878,005 673,470 183,866 173,958
Shares redeemed (898,528) (693,044) (170,218) (177,143)
--------- --------- --------- ---------
Net increase (decrease) (20,523) (19,574) 13,648 (3,185)
--------- --------- --------- ---------
DIVIDENDS PAID FROM:
Net investment income (9,076) (6,375) (2,359) (1,724)
--------- --------- --------- ---------
TOTAL INCREASE
(DECREASE) IN
NET ASSETS (20,523) (19,574) 13,648 (3,185)
NET ASSETS:
Beginning of year 183,591 203,165 70,436 73,621
--------- --------- --------- ---------
End of year $163,068 $183,591 $ 84,084 $ 70,436
========= ========= ========= =========
See notes to the financial statements.
<TABLE>
FINANCIAL HIGHLIGHTS, PART 1
<CAPTION>
MONEY MARKET FUND
-------------------------------------------------------------------------------------------
March 16,
1988<F144>
Year ended October 31, through
Oct. 31,
1995 1994 1993 1992<F145> 1991 1990 1989 1988
---- ---- ---- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value,
beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from
investment
operations:
Net investment
income<F146> 0.05 0.03 0.03 0.04 0.06 0.08 0.08 0.05
---- ---- ---- ---- ---- ---- ---- ----
Total from
investment
operations 0.05 0.03 0.03 0.04 0.06 0.08 0.08 0.05
---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from
net investment
income (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.08) (0.05)
------ ------ ------ ------ ------ ------ ------ ------
Total
distributions (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.08) (0.05)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== =====
Total Return<F147> 5.51% 3.42% 2.71% 3.73% 6.39% 8.14% 9.01% 4.63%
Supplemental data and ratios:
Net assets, in
thousands,
end of period $172,261 $165,018 $132,568 $146,012 $628,697 $762,170 $201,097 $100,373
Ratio of net
expenses to
average net
assets <F148> 0.60% 0.60% 0.60% 0.58% 0.50% 0.51% 0.60% 0.44%
Ratio of net
investment
income to
average
net assets<F148> 5.36% 3.44% 2.67% 3.84% 6.28% 7.81% 8.66% 7.35%
</TABLE>
FINANCIAL HIGHLIGHTS, PART 2
U.S. TREASURY
MONEY MARKET FUND
-----------------------------------------------
April 29
1991<F144>
Year ended October 31, through
---------------------- Oct. 31,
1995 1994 1993 1992<F145> 1991
---- ---- ---- -------- ----
Per Share Data:
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income<F146> 0.05 0.03 0.03 0.04 0.03
---- ---- ---- ---- ----
Total from investment
operations 0.05 0.03 0.03 0.04 0.03
---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.05) (0.03) (0.03) (0.04) (0.03)
------ ------ ------ ------ ------
Total distributions (0.05) (0.03) (0.03) (0.04) (0.03)
------ ------ ------ ------ ------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return<F147> 5.16% 3.20% 2.59% 3.48% 2.69%
Supplemental data and ratios:
Net assets, in thousands,
end of period $64,655 $56,020 $40,744 $37,342 $36,267
Ratio of net expenses to
average net assets<F148> 0.60% 0.60% 0.60% 0.60% 0.52%
Ratio of net investment
income to average
net assets<F148> 5.04% 3.14% 2.55% 3.42% 5.23%
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS, PART 3
U.S. GOVERNMENT
MONEY MARKET FUND
--------------------------------------------------------------------------
Aug. 1, 1988 <F144>
Year ended October 31, through
---------------------- Oct. 31,
1995 1994 1993 1992<F145> 1991 1990 1989 1988
---- ---- ---- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income<F146> 0.05 0.03 0.03 0.04 0.06 0.08 0.08 0.02
---- ---- ---- ---- ---- ---- ---- ----
Total from investment
operations 0.05 0.03 0.03 0.04 0.06 0.08 0.08 0.02
---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.08) (0.02)
------ ------ ------ ------ ------ ------ ------ ------
Total distributions (0.05) (0.03) (0.03) (0.04) (0.06) (0.08) (0.08) (0.02)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== =====
Total Return<F147> 5.37% 3.35% 2.63% 3.60% 6.02% 7.84% 8.72% 1.91%
Supplemental data and ratios:
Net assets, in thousands,
end of period $163,068 $183,591 $203,165 $211,521 $237,752 $153,480 $101,497 $49,069
Ratio of net expenses to
average net assets<F148> 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.61% 0.50%
Ratio of net investment
income to average
net assets<F148> 5.24% 3.29% 2.59% 3.56% 5.80% 7.55% 8.43% 7.56%
FINANCIAL HIGHLIGHTS, PART 4
TAX-EXEMPT
MONEY MARKET FUND
---------------------------------------------------------------------------------------------
June 27,
1988<F144>
Year ended October 31, through
----------------------
1995 1994 1993 1992<F145> 1991 1990 1989 Oct. 31, 1988
---- ---- ---- -------- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value,
beginning of
period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment
income<F146> 0.03 0.02 0.02 0.03 0.04 0.05 0.06 0.02
---- ---- ---- ---- ---- ---- ---- ----
Total from investment
operations 0.03 0.02 0.02 0.03 0.04 0.05 0.06 0.02
---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment
income (0.03) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.02)
------ ------ ------ ------ ------ ------ ------ ------
Total
distributions (0.03) (0.02) (0.02) (0.03) (0.04) (0.05) (0.06) (0.02)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== ===== =====
Total Return<F147> 3.42% 2.25% 2.17% 2.91% 4.49% 5.51% 5.99% 1.78%
Supplemental data and ratios:
Net assets, in thousands,
end of period $84,084 $70,436 $73,621 $74,343 $29,714 $16,424 $18,429 $10,838
Ratio of net
expenses to
average net
assets<F148> 0.60% 0.60% 0.60% 0.60% 0.63% 0.64% 0.60% 0.52%
Ratio of net investment
income to
average
net assets<F148> 3.36% 2.23% 2.12% 2.83% 4.34% 5.38% 5.82% 5.10%
<FN>
<F144> Commencement of operations.
<F145> Effective February 3, 1992, FIRMCO assumed the investment advisory responsibilities of Firstar Trust Company.
<F146> For the Tax-Exempt Money Market Fund, substantially all investment income is exempt from Federal income tax.
<F147> Not annualized for the period ended October 31, 1988, for the Money Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds and for the period ended October 31, 1991, for the U.S. Treasury Money Market Fund.
<F148> Annualized for the period ended October 31, 1988, for the Money Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds and for the period ended October 31, 1991, for the U.S. Treasury Money Market Fund.
See notes to the financial statement.
</TABLE>
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal Amortized
Amount Cost
(in thousands) (in thousands)
------------ ------------
COMMERICAL PAPER 89.4%
ASSET BACKED 2.0%
$3,500 Ciesco L.P.,
5.67%, 11/09/95 $ 3,496
-------
AUTOS & TRUCKS 4.6%
Ford Credit Europe PLC,
4,000 5.71%, 1/08/96 3,957
4,000 5.69%, 1/25/96 3,946
-----
7,903
-----
BANKING - FOREIGN 2.3%
4,000 Deutsche Bank Financial Inc.,
5.68%, 1/16/96 3,952
-----
BEVERAGES 2.0%
3,500 Brown-Forman Corporation,
5.62%, 12/18/95 3,474
-----
CONGLOMERATES 6.4%
Mitsubishi International Corp.,
3,500 5.73%, 11/10/95 3,495
3,500 5.76%, 1/24/96 3,453
4,000 Sumitomo Corporation of America,
5.80%, 1/29/96 3,943
-----
10,891
------
CONSUMER STAPLES 3.9%
2,656 Hitachi America, Ltd.,
5.65%, 1/12/96 2,626
4,000 Unilever Capital Corporation,
5.62%, 11/29/95 3,982
-----
6,608
-----
DRUGS 5.8%
3,500 Colgate-Palmolive Company,
5.68%, 12/11/95 3,478
Sandoz Corporation,
3,500 5.65%, 11/03/95 3,499
3,000 5.68%, 11/15/95 2,993
-----
9,970
-----
ELECTRONICS 2.0%
3,500 Panasonic Finance Inc.,
5.70%, 12/29/95 3,468
-----
ENERGY 4.0%
Arco Coal Australia Inc.,
3,500 5.66%, 12/07/95 3,480
3,500 5.66%, 12/13/95 3,477
-----
6,957
-----
EQUIPMENT - LEASING 2.0%
3,500 International Lease Finance Corp.,
5.70%, 11/20/95 3,489
-----
FINANCE 18.2%
American Express Co.,
3,000 5.63%, 11/02/95 3,000
3,000 5.60%, 11/07/95 2,997
4,000 General Electric Capital Corp.,
5.67%, 11/14/95 3,992
4,000 Hanson Finance (U.K.) PLC,
5.62%, 1/11/96 3,956
3,500 Heller Financial, Inc.,
5.69%, 11/28/95 3,485
3,500 Paccar Financial Company,
5.67%, 11/30/95 3,484
3,500 Swedish Export Credit Corp.,
5.68%, 11/22/95 3,488
Transamerica Finance Corp.,
3,500 5.71%, 11/17/95 3,491
3,500 5.71%, 11/21/95 3,489
-----
31,382
------
FINANCE - SERVICES 10.6%
4,000 Goldman Sachs Group, L.P.,
5.70%, 1/10/96 3,956
Merrill Lynch and Co., Inc.,
4,000 5.70%, 1/31/96 3,942
3,500 5.60%, 3/05/96 3,432
Morgan Stanley Group, Inc.,
3,000 5.60%, 12/19/95 2,978
4,000 5.60%, 12/20/95 3,970
-----
18,278
------
FOOD 2.3%
4,000 CPC International, Inc.,
5.69%, 2/05/96 3,939
-----
INSURANCE 8.7%
3,500 American General Corporation,
5.70%, 12/06/95 3,481
4,000 ITT Hartford Group, Inc.,
5.77%, 11/06/95 3,997
John Hancock Capital Corp.,
4,000 5.72%, 12/28/95 3,964
3,500 5.73%, 1/11/96 3,460
-----
14,902
------
METALS & MINING 2.0%
3,500 RTZ America Inc.,
5.62%, 12/15/95 3,476
-----
SOVEREIGN 6.3%
Quebec Province of Canada,
4,000 5.62%, 1/09/96 3,957
4,000 5.71%, 1/30/96 3,943
3,000 Wool International,
5.69%, 12/01/95 2,986
-----
10,886
------
TECHNOLOGY 4.0%
3,500 Pitney Bowes Credit Corporation,
5.62%, 12/12/95 3,477
3,500 Xerox Corporation,
5.65%, 12/04/95 3,482
-----
6,959
-----
UTILITIES 2.3%
4,000 AT&T Capital Corporation,
5.71%, 1/19/96 3,950
-----
Total Commercial Paper 153,980
-------
VARIABLE RATE DEMAND NOTES 4.6%
8,000 WPL Holdings Demand Note 8,000
-----
Total Variable Rate Demand Notes 8,000
-----
Number
of Shares
(in thousands)
------------
INVESTMENT COMPANIES 6.4%
2,442 Financial Square Prime
Obligation Fund 2,442
8,611 Short-Term Investments Co.
Liquid Assets Portfolio 8,611
-----
Total Investment Companies 11,053
------
Total Investments 100.4% 173,033
-------
Liabilities, less Other Assets (0.4)% (772)
-------
NET ASSETS 100.0% $172,261
=======
See notes to the financial statement.
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal Amortized
Amount Cost
(in thousands) (in thousands)
------------ -------------
U.S. TREASURIES 90.2%
U.S. TREASURY NOTES 68.7%
7,000 11.50%, 11/15/95 7,015
5,500 5.125%, 11/15/95 5,499
12,600 7.50%, 1/31/96 12,654
6,000 7.88%, 2/15/96 6,039
7,200 4.63%, 2/15/96 7,180
2,500 7.38%, 5/15/96 2,523
3,500 4.25%, 5/15/96 3,475
-------
44,385
-------
U.S. TREASURY BILLS 21.5%
4,000 5.14%, 11/30/95 3,983
5,000 5.32%, 12/14/95 4,968
5,000 5.34%, 1/04/96 4,953
------
13,904
------
Total U.S. Treasuries 58,289
------
Number
of Shares
(in thousands)
------------
INVESTMENT COMPANIES 8.6%
2,826 Institutional Liquid Assets
Treasury Instruments Portfolio 2,826
2,757 Short-Term Investments Co.
Treasury Tax Advantage Portfolio 2,757
-----
Total Investment Companies 5,583
-----
Total Investments 98.8% 63,872
------
Other Assets, less Liabilities 1.2% 783
------
NET ASSETS 100.0% $64,655
======
See notes to the financial statement.
U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal Amortized
Amount Cost
(in thousands) (in thousands)
------------ ------------
U.S. GOVERNMENT AGENCIES 93.4%
FEDERAL FARM CREDIT BANK 21.1%
Federal Farm Credit Bank Discount Notes:
5,000 5.55%, 11/01/95 5,000
6,000 5.59%, 11/15/95 5,987
5,000 5.59%, 11/21/95 4,984
3,615 5.56%, 12/01/95 3,598
5,000 5.59%, 12/04/95 4,974
5,000 5.57%, 12/14/95 4,967
5,000 5.46%, 1/23/96 4,937
------
34,447
------
FEDERAL HOME LOAN BANK 7.9%
Federal Home Loan Bank Discount Notes:
4,000 5.52%, 12/18/95 3,971
5,000 5.48%, 12/26/95 4,958
4,000 5.51%, 1/08/96 3,959
------
12,888
------
FEDERAL HOME LOAN MORTGAGE CORP. 16.5%
Federal Home Loan Mortgage Corp. Discount Notes:
4,000 5.59%, 11/06/95 3,997
4,000 5.62%, 11/17/95 3,990
4,000 5.60%, 11/20/95 3,988
5,000 5.58%, 12/07/95 4,972
3,000 5.58%, 12/08/95 2,983
4,000 5.59%, 1/09/96 3,957
3,000 5.58%, 1/17/96 2,964
------
26,851
------
FEDERAL NATIONAL MORTGAGE ASSN. 21.2%
Federal National Mortgage Assn. Discount Notes:
4,000 5.62%, 11/13/95 3,993
4,000 5.59%, 11/30/95 3,982
4,000 5.85%, 12/11/95 3,974
4,005 5.56%, 12/22/95 3,973
5,000 5.53%, 12/27/95 4,957
4,000 5.53%, 12/28/95 3,965
5,000 5.50%, 2/23/96 4,913
5,000 5.50%, 3/13/96 4,898
------
34,655
------
OTHER 2.4%
4,000 Tennessee Valley Authority Discount Note,
5.60%, 11/08/95 3,996
------
STUDENT LOAN MARKETING ASSN. 16.8%
Student Loan Marketing Assn. Floating Rate Notes:
5,000 5.60%, 7/19/96 5,001
13,500 5.66%, 12/20/96<F149> 13,497
3,810 5.80%, 10/30/97<F149> 3,813
5,000 5.80%, 11/20/97<F149> 5,005
------
27,316
------
GOVERNMENT BOND 7.5%
Government Trust Certificates, Class 2-D:
4,975 9.25%, 11/15/95 5,015
4,975 9.25%, 5/15/96 5,044
2,138 9.25%, 11/15/96 2,168
------
12,227
------
Total U.S. Government Agencies 152,380
-------
Number
of Shares
(in thousands)
------------
INVESTMENT COMPANIES 6.5%
4,535 Financial Square Government
Obligation Fund 4,535
6,141 Short-Term Investments Co.
Treasury Portfolio 6,141
------
Total Investment Companies 10,676
------
Total Investments 99.9% 163,056
-------
Other Assets, less Liabilities 0.1% 12
-------
NET ASSETS 100.0% $163,068
========
<F149>Stated maturity with weekly interest rate reset.
See notes to the financial statements.
TAX-EXEMPT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
Principal Amortized
Amount Cost
(in thousands) (in thousands)
------------ ------------
GENERAL OBLIGATION 4.7%
930 Carson City, Nevada School District,
9.00%, 4/01/96 947
490 Fox Valley, Wisconsin, VTAE District,
5.20%, 6/01/96 493
1,000 Honolulu, Hawaii, City and County,
9.00%, 3/01/96 1,018
1,000 New Jersey State,
7.30%, 11/01/95 1,000
480 Northwestern Mutual Life,
4.50%, 2/15/09<F150><F152> 480
-----
Total General Obligation 3,938
-----
NOTES AND BONDS 6.3%
INDUSTRIAL DEVELOPMENT/
POLLUTION CONTROL REVENUE 3.3%
2,000 Illinois Development Finance Authority,
Enterprise Office, 4.00%, 12/01/17<F150><F152> 2,000
800 Moffat County, Colorado, Pollution Control,
3.95%, 7/01/10<F150><F151> 800
-----
2,800
-----
MISCELLANEOUS 2.4%
2,000 Illinois State Revenue Anticipation Certificates,
4.50%, 5/10/96 2,008
-----
TRANSPORTATION REVENUE 0.6%
500 Maryland State Department of Transportation
and Construction, 5.70%, 9/01/96 507
-----
Total Notes and Bonds 5,315
-----
PREREFUNDED AND ESCROWED
TO MATURITY 12.9%
1,000 District of Columbia - Series A,
7.875%, 6/01/06, Prerefunded 6/01/96 1,043
1,100 Harris County, Texas - Hospital District,
8.50%, 4/01/15, Prerefunded 4/01/96 1,143
2,445 Kentucky Development Finance Authority -
Good Samaritan Hospital,
10.25%, 12/01/11, Prerefunded 12/01/95 2,505
2,085 Lowndes County, Mississippi - Hospital Revenue,
11.00%, 2/01/16, Prerefunded 2/01/96 2,179
665 Maine Municipal Bond Bank,
6.30%, 11/01/99, Prerefunded 11/01/96 686
1,000 Maricopa County, Arizona, State Transportation
Board - Regional Area Road Fund,
7.60%, 7/01/01, Prerefunded 7/01/96 1,046
2,155 Muskingum County, Ohio, Certificates -
Office Building Project, 9.20%,
6/01/10, Prerefunded 6/01/96 2,259
-----
Total Prerefunded and Escrowed to Maturity 10,861
------
REVENUE BONDS 62.3%
(DAILY/WEEKLY/MONTHLY PUT BONDS)
ELECTRIC REVENUE 6.2%
2,100 County of Mason, Kentucky, Series 1984B,
3.95%, 10/15/14<F150> 2,100
3,085 Putnam County, Florida Development
Authority - Seminole Electric,
3.95%, 3/15/14<F150> 3,085
-----
5,185
-----
HOSPITAL REVENUE 23.5%
2,000 Des Moines, Iowa, Methodist Medical
Center Project, 4.00%, 8/01/15<F150> 2,000
1,000 Illinois Health Facilities Authority,
4.00%, 1/01/16<F150> 1,000
1,000 Illinois Health Facilities Authority -
Evangelical Hospitals, 3.85%, 1/01/16<F150> 1,000
3,000 Indiana Health,
3.90%, 12/01/02<F150> 3,000
2,600 Jefferson Parish, Louisiana, Hospital,
3.90%, 12/01/15<F150> 2,600
2,300 Louisiana PFA Hospital Equipment,
4.30%, 12/01/05<F150> 2,300
1,845 Richland County, South Carolina, Orangeburg -
Calhoun Regional Hospital, 4.30%, 10/01/06<F150> 1,845
500 West Virginia State Hospital Finance
Authority - St. Joseph's Hospital Project,
4.15%, 10/01/10<F150> 500
2,000 Wisconsin State Health & Educational
Facilities - Blood Center, 3.95%, 6/01/19<F150> 2,000
3,500 Wisconsin State Health & Educational
Facilities - Marshfield Clinic, 3.90%,
6/01/10<F150> 3,500
------
19,745
------
HOUSING REVENUE 13.3%
2,000 Broward County, Florida, Housing Finance
Authority - Quiet Creek Apartments,
4.15%, 12/01/29<F150> 2,000
1,800 Dade County, Florida, Housing Finance
Authority - Nob Hill Project Series 1,
4.15%, 12/01/29<F150> 1,800
2,200 Fulton County, Georgia, Housing Authority,
4.30%, 8/01/16<F150>, called 11/01/95 2,200
1,625 Illinois Development Finance Authority -
St. Paul's House, 3.95%, 2/01/25<F150> 1,625
2,990 Industrial Development Authority of St. Louis,
4.15%, 2/01/07<F150> 2,990
555 Washington State Housing Finance -
Community Multifamily Mortgage,
4.05%, 10/01/20<F150> 555
------
11,170
------
INDUSTRIAL DEVELOPMENT/POLLUTION
CONTROL REVENUE 4.7%
1,350 Oakbrook Terrace, Illinois - Oakbrook
Terrace Atrium, 4.25%, 12/01/25<F150> 1,350
2,600 Oklahoma County, Oklahoma Finance
Authority - Perrine Office Project,
4.25%, 12/01/14<F150> 2,600
-----
3,950
-----
MISCELLANEOUS 1.8%
1,000 Glendale, California, Reliance Development
Public Parking, 3.90%, 12/01/14<F150> 1,000
510 Indianapolis, Indiana, Economic Development -
Jewish Federation Campus, 3.90%, 4/01/05<F150> 510
---
1,510
-----
POOLED GOVERNMENT AUTHORITY REVENUE 6.1%
3,100 Illinois Educational Facilities Authority,
4.00%, 12/01/25, Prerefunded 12/01/95<F150> 3,100
2,000 Indiana Hospital Equipment Financing
Authority, Series A, 3.90%, 12/01/15<F150> 2,000
-----
5,100
-----
UNIVERSITY REVENUE 10.4%
2,500 Illinois Development Finance Authority -
Aurora - Central Catholic High School,
3.95%, 4/01/24<F150> 2,500
2,000 Illinois Development Finance Authority -
Lake Forest Academy, 3.95%, 12/01/24<F150> 2,000
3,000 Illinois Development Finance Authority -
St. Ignatius College Prep, 3.95%, 6/01/24<F150> 3,000
1,275 University of Iowa, Facilities Corp.,
4.00%, 6/01/05<F150> 1,275
-----
8,775
-----
Total Revenue Bonds 55,435
------
INVESTMENT COMPANIES 9.4%
4,204 Financial Square Tax-Exempt
Money Market Fund 4,204
3,716 Tax-Free Investment Trusts 3,716
-----
Total Investment Companies 7,920
-----
Total Investments 99.3% 83,469
------
Other Assets, less Liabilities 0.7% 615
------
NET ASSETS 100.0% $84,084
=======
<F150>Variable rate security
<F151>Stated maturity with mandatory put
<F152>Stated maturity with option to put
See notes to the financial statements.
MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
1.ORGANIZATION
Portico Funds, Inc. (the "Company") was incorporated on February 15, 1988, as
a Wisconsin Corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended. The Money Market,
U.S. Treasury Money Market (formerly the U.S. Federal Money Market Fund), U.S.
Government Money Market and Tax-Exempt Money Market Funds (the "Funds") are
separate, diversified investment portfolios of the Company. The Money Market,
U.S. Treasury Money Market, U.S. Government Money Market and Tax-Exempt Money
Market Funds commenced operations on March 16, 1988, April 29, 1991, August 1,
1988 and June 27, 1988, respectively.
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - The securities are valued on the
basis of amortized cost for financial reporting purposes and federal income tax
purposes, which approximates market
value. Variable rate demand notes are valued at cost which approximates market
value.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and intend to continue to so comply
in future years.
c) Expenses - The Funds are charged for those expenses
that are directly attributable to each portfolio such as advisory,
administration, service organization fees and certain shareowner service fees.
Expenses that are not directly attributable to a portfolio are typically
allocated among the Company's portfolios in proportion to their respective net
assets, number of shareowner accounts or net sales, where applicable.
d) Distributions to Shareowners - Dividends from net investment income are
declared daily and paid monthly. Distributions of net realized capital gains, if
any, will be declared at least annually.
e) Other - The Funds recognize interest income on the accrual basis. For
securities with put provisions, discounts and premiums are amortized to the
earlier of the put date or maturity. For the remainder of securities, discounts
and premiums are amortized over the life of the respective securities.
Investment and shareowner transactions are recorded no later than the first
business day after the trade date. Realized gains and losses from investment
transactions are reported on an identified cost basis which is the same basis
the Funds use for federal income tax purposes. The U.S. Government Money Market
Fund has investments in floating rate government agency notes. The notes have
weekly interest rate reset provisions which are tied to the 90-day Treasury bill
rate. The Fund values the securities at amortized cost, which approximates
market. Transactions in capital shares at $1.00 per share are shown in the
Statement of Changes in Net Assets. Generally accepted accounting principles
require that permanent financial reporting and tax differences be reclassified
to capital stock.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company ("FIRMCO"). FIRMCO is a subsidiary of
Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Funds, FIRMCO is entitled to receive a fee,
calculated daily and payable monthly, at the annual rate of 0.50% on the first
$2 billion of each Fund's average daily net assets, and 0.40% of each Fund's
average daily net assets in excess of $2 billion. For the year ended October 31,
1995, FIRMCO voluntarily waived $366, $97, $136 and $118 of its advisory fees,
in thousands, for the Money Market, U.S. Treasury Money Market, U.S. Government
Money Market and Tax-Exempt Money Market Funds, respectively.
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the year ended October
31, 1995, $119, $45, $130 and $52 of administration fees, in thousands, are
voluntarily waived for the Money Market, U.S. Treasury Money Market, U.S.
Government Money Market and Tax-Exempt Money Market Funds, respectively.
Prior to January 1, 1995, The Funds had Servicing Agreements with certain
Service Organizations, including FIRMCO and its affiliates. The Service
Organizations were entitled to receive fees from the Funds up to the annual rate
of 0.25% of the average daily net assets of the Funds for certain support and/or
distribution services to customers of the Service Organizations who were
beneficial owners of Fund shares. Service Organization fees, in thousands, paid
by the Money Market, U.S. Treasury Money Market, U.S. Government Money Market
and Tax-Exempt Money Market Funds to FIRMCO and its affiliates aggregated $15,
$19, $75 and $25, respectively, for the year ended October 31, 1995. The
Servicing Agreements were terminated effective January 1, 1995.
The Funds have adopted a Service and Distribution Plan pursuant to Rule 12b-1
of the Investment Company Act of 1940 and made payments, in thousands, for the
Money Market Fund of $33, for the year ended October 31, 1995. No payments for
the U.S. Government Money Market, U.S. Treasury Money Market or Tax-Exempt Money
Market Funds were made during the year ended October 31, 1995.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual fee from the Company for service as a Director and is eligible to
participate in a deferred compensation plan with respect to these fees.
Participants in the plan may designate their deferred Director's fees as if
invested in any one of the Portico Funds (with the exception of the MicroCap
Fund)or in 90-day U.S. Treasury bills. The value of each Director's deferred
compensation account will increase or decrease as if it were invested in shares
of the selected Portico Funds or 90-day U.S. Treasury bills. The Funds maintain
their proportionate share of the Company's liability for deferred fees.
Report of Independent Accountants
To the Board of Directors and Shareholders of the Portico Money Market Fund, the
Portico U.S.Treasury Money Market Fund, the Portico U.S. Government Money Market
Fund and the Portico Tax-Exempt Money Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Portico Money Market Fund, the
Portico U.S.Treasury Money Market Fund (formerly the Portico U.S. Federal Money
Market Fund), the Portico U.S. Government Money Market Fund and the Portico Tax-
Exempt Money Market Fund (four of the portfolios of Portico Funds, Inc. (the
"Funds")) at October 31, 1995, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended, and each of their financial highlights for the
year ended October 31, 1995, and for each of the other periods indicated, all in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1995 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
/s/ Price Waterhouse
Milwaukee, Wisconsin
November 29, 1995
- -Portico Funds are available through:
- the Portico Funds Center,
- Investment Specialists who are registered representatives of Elan Investment
Services, Inc., a registered broker/dealer, NASD and SIPC member,
- and through selected shareholder organizations.
This report is authorized for distribution only when preceded or accompanied by
a current prospectus.
To Open an Account or Request Information
1-800-982-8909
1-414-287-3710
For Account Balances and Investor Services
1-800-228-1024
1-414-287-3808
Portico Funds Center
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI 53201-3011
- ------------------------------------------------------------------------------
Exhibit (24)(d)
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
(Amounts in thousands, except per share data)
October 31, 1995
ASSETS:
Investments, at amortized cost $719,652
Interest receivable 275
Other 3
--------
Total Assets 719,930
--------
LIABILITIES:
Dividends payable 3,139
Payable to affiliates 197
Accrued expenses 28
--------
Total Liabilities 3,364
--------
NET ASSETS $716,566
========
CAPITAL STOCK, $.0001 par value
Authorized 5,000,000
Issued and outstanding 716,566
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $1.00
=======
See notes to the financial statements.
INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF OPERATIONS
(Amounts in thousands)
Year Ended October 31, 1995
INVESTMENT INCOME:
Interest income $42,483
--------
EXPENSES:
Investment advisory fees 3,552
Administration fees 864
Service organization fees 271
Custody fees 170
Federal and state registration fees 42
Shareowner servicing and
accounting costs 63
Professional fees 27
Reports to shareowners 13
Amortization of organization costs 4
Directors' fees and expenses 5
Other 32
--------
Total expenses before waiver 5,043
Less: Waiver of expenses (2,530)
--------
Net Expenses 2,513
--------
NET INVESTMENT INCOME $39,970
========
STATEMENT OF CHANGES IN NET ASSETS
(Amounts in thousands)
Year Ended October 31,
----------------------
1995 1994
---- ----
OPERATIONS:
Net investment income $ 39,970 $ 24,254
---------- ----------
Increase in net assets resulting
from operations 39,970 24,254
---------- ----------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 2,916,794 1,760,075
Shares issued to owners in
reinvestment of dividends 4,010 1,226
---------- ----------
2,920,804 1,761,301
Shares redeemed (2,958,874) (1,594,966)
---------- ----------
Net increase (decrease) (38,070) 166,335
---------- ----------
DIVIDENDS PAID FROM:
Net investment income (39,970) (24,254)
---------- ----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (38,070) 166,335
NET ASSETS:
Beginning of year 754,636 588,301
---------- ----------
End of year $ 716,566 $ 754,636
========== ==========
See notes to the financial statements.
INSTITUTIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
April 26,
1991<F153>
Year ended Oct.31, through
----------------------------------- Oct.31,
1995 1994 1993 1992<F154> 1991
---- ---- ---- -------- ----
Per Share Data:
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income 0.06 0.04 0.03 0.04 0.03
------- ------- ------- ------- -------
Total from investment
operations 0.06 0.04 0.03 0.04 0.03
------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.06) (0.04) (0.03) (0.04) (0.03)
------- ------- ------- ------- -------
Total distributions (0.06) (0.04) (0.03) (0.04) (0.03)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return<F155> 5.77% 3.65% 2.92% 3.88% 2.87%
Supplemental data and ratios:
Net assets, in thousands,
end of period $716,566 $754,636 $588,301 $696,132 $189,048
Ratio of net expenses to
average net assets<F156> 0.35% 0.37% 0.38% 0.41% 0.50%
Ratio of net investment income
to average net assets<F156> 5.63% 3.64% 2.87% 3.75% 5.47%
<F153>Commencement of operations.
<F154>Effective February 3, 1992, FIRMCO assumed the investment advisory
responsibilities of Firstar Trust Company.
<F155>Not annualized for the period ended October 31, 1991.
<F156>Annualized for the period ended October 31, 1991.
See notes to the financial statements.
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
Principal Amortized
Amount Cost
(in thousands) (in thousands)
- -------------- --------------
COMMERCIAL PAPER 90.2%
Asset Backed 10.4%
Ciesco L.P.,
$15,000 5.67%, 11/09/95 $14,981
15,000 5.68%, 11/22/95 14,950
Corporate Asset Funding Co., Inc.,
15,000 5.68%, 11/21/95 14,953
15,000 5.69%, 1/09/96 14,836
15,000 New Center Asset Trust,
5.75%, 11/29/95 14,933
------
74,653
------
Auto & Truck 3.7%
Ford Credit Europe PLC,
15,000 5.71%, 1/08/96 14,838
12,000 5.69%, 1/25/96 11,839
------
26,677
------
Basic Industry 2.1%
15,000 U.S. Borax & Chemical Corp.,
5.70%, 1/16/96 14,820
------
Conglomerates 7.2%
Mitsubishi International Corp.,
14,000 5.74%, 11/01/95 14,000
8,000 5.85%, 1/04/96 7,917
Sumitomo Corporation of America,
15,000 5.75%, 11/16/95 14,964
15,000 5.80%, 1/29/96 14,785
------
51,666
------
Consumer Staples 1.4%
10,000 Hitachi America, Ltd.,
5.68%, 11/20/95 9,970
------
Drugs 9.3%
Colgate-Palmolive Company,
15,000 5.67%, 11/13/95 14,972
12,000 5.71%, 12/11/95 11,924
10,000 Lilly (Eli) & Co.,
6.37%, 11/07/95 9,989
Sandoz Corporation,
15,000 5.65%, 11/03/95 14,995
15,000 5.68%, 11/15/95 14,967
------
66,847
------
Electronics 2.1%
15,000 Panasonic Finance,
5.70%, 12/29/95 14,862
------
Energy 3.2%
Arco Coal Australia Inc.,
12,624 5.66%, 12/07/95 12,552
10,550 5.66%, 12/08/95 10,489
------
23,041
------
Finance 21.1%
American Express Credit Corporation,
15,000 5.63%, 11/02/95 14,998
13,000 5.70%, 11/13/95 12,975
15,000 CIT Group Holdings, Inc.,
5.66%, 12/21/95 14,882
13,000 General Electric Capital Corporation,
5.67%, 12/15/95 12,910
13,000 Hanson Finance (U.K.) PLC,
5.62%, 1/12/96 12,854
Heller Financial, Inc.,
13,000 5.69%, 11/28/95 12,945
15,000 5.70%, 1/19/96 14,812
13,000 Household Finance Corporation,
5.70%, 1/16/96 12,844
10,000 National Rural Utilities C.F.C.,
5.80%, 11/01/95 10,000
Paccar Financial Company,
10,000 5.62%, 12/15/95 9,931
9,000 5.60%, 12/19/95 8,933
13,000 Swedish Export Credit Corporation,
5.67%, 12/05/95 12,930
-------
151,014
-------
Finance - Services 10.1%
Goldman Sachs Group, L.P.,
15,000 5.70%, 1/10/96 14,834
15,000 5.73%, 1/11/96 14,830
13,000 Merrill Lynch & Co., Inc.,
5.68%, 11/27/95 12,947
Morgan Stanley Group, Inc.,
15,000 5.70%, 1/18/96 14,815
15,000 5.72%, 1/23/96 14,802
------
72,228
------
Food 1.4%
10,000 CPC International, Inc.,
5.70%, 1/22/96 9,870
------
Insurance 8.0%
12,900 American Family Financial Services, Inc.,
5.74%, 12/13/95 12,814
ITT Hartford Group, Inc.,
14,000 5.77%, 11/06/95 13,989
7,562 5.73%, 12/06/95 7,520
8,500 John Hancock Capital Corp.,
5.72%, 12/28/95 8,423
15,000 Prudential Funding Corp.,
5.62%, 12/28/95 14,866
------
57,612
------
Miscellaneous 1.4%
10,000 International Lease Finance Corp.,
5.68%, 11/10/95 9,986
------
Sovereign 4.7%
Quebec Province of Canada,
14,000 5.71%, 1/30/96 13,800
12,000 5.60%, 2/29/96 11,776
8,000 Wool International,
5.69%, 12/01/95 7,962
------
33,538
------
Technology 2.0%
15,000 Xerox Corporation,
5.70%, 1/17/96 14,817
------
Utilities 2.1%
15,000 AT & T Capital Corp.,
5.64%, 11/17/95 14,962
------
Total Commercial Paper 646,563
-------
VARIABLE RATE DEMAND NOTES 2.8%
20,000 WPL Holdings Demand Note 20,000
------
Total Variable Rate Demand Notes 20,000
------
Number
of Shares
(in thousands)
- --------------
INVESTMENT COMPANIES 7.4%
18,797 Financial Square Prime Obligation Fund 18,797
34,292 Short-Term Investments Co.
Liquid Assets Portfolio 34,292
------
Total Investment Companies 53,089
------
Total Investments 100.4% 719,652
-------
Liabilities, less Other Assets (0.4)% (3,086)
-------
NET ASSETS 100.0% $716,566
========
See notes to the financial statements.
INSTITUTIONAL MONEY MARKET FUND
Notes to the Financial Statements
1. ORGANIZATION
Portico Funds, Inc. (the "Company") was incorporated on February 15, 1988, as
a Wisconsin Corporation and is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended. The Institutional
Money Market Fund (the "Fund") which commenced operations on April 26, 1991,
is a separate, diversified investment portfolio of the Company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in preparation of its financial statements. These policies
are in conformity with generally accepted accounting principles.
a) Investment Valuation - The securities are valued on the
basis of amortized cost for financial reporting purposes and federal income tax
purposes, which approximates market
value. Variable rate demand notes are valued at cost which approximates market
value.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Fund has complied with the provisions of the Internal Revenue Code
available to regulated investment companies and intends to continue to so comply
in future years.
c) Expenses - The Fund is charged for those expenses that are directly
attributable to it, such as advisory, administration, service organization fees
and certain shareowner service fees. Expenses that are not directly attributable
to a portfolio are typically allocated among the Company's portfolios in
proportion to their respective net assets, number of shareowner accounts or net
sales, where applicable.
d) Distributions to Shareowners - Dividends from net investment income are
declared daily and paid monthly. Distributions of net realized capital gains, if
any, will be declared at least annually.
e) Other - The Fund recognizes interest income on the accrual basis. Discounts
and premiums are amortized over the life of the respective security. Investment
and shareowner transactions are recorded no later than the first business day
after the trade date. Realized gains and losses from investment transactions are
reported on an identified cost basis which is the same basis the Fund uses for
federal income tax purposes. Transactions in capital shares at $1.00 per share
are shown in the Statement of Changes in Net Assets. Generally accepted
accounting principles require that permanent financial reporting and tax
differences be reclassified to capital stock.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company ("FIRMCO"). FIRMCO is a subsidiary of
Firstar Corporation, a publicly held bank holding company. Pursuant to its
Advisory Agreement with the Fund, FIRMCO is entitled to receive a fee,
calculated daily and payable monthly, at the annual rate of 0.50% of the Fund's
first $2 billion of average daily net assets, and 0.40% of the Fund's average
daily net assets in excess of $2 billion. For the year ended October 31, 1995,
FIRMCO voluntarily waived $1,882 of its advisory fees, in thousands, for the
Fund.
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Fund.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.125% of the Company's first $2 billion
of average aggregate daily net assets, plus 0.10% of the Company's average
aggregate daily net assets in excess of $2 billion. For the year ended October
31, 1995, $648 of administration fees, in thousands, were voluntarily waived for
the Fund.
Prior to January 1, 1995, the Fund had entered into Servicing Agreements with
certain Service Organizations, including affiliates of FIRMCO. The Service
Organizations were entitled to receive fees from the Fund up to an annual rate
of 0.25% of the daily net assets of the Fund for certain support and/or
distribution services to customers of the Service Organizations who were
beneficial owners of Fund shares. Service Organization fees, in thousands, paid
by the Fund to affiliates of FIRMCO aggregated $293 for the year ended October
31, 1995. The Servicing Agreements were terminated effective January 1, 1995.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual fee from the Company for service as a Director and is eligible to
participate in a deferred compensation plan with respect to these fees.
Participants in the plan may designate their deferred Director's fees as if
invested in any one of the Portico Funds (with the exception of the MicroCap
Fund) or in 90-day U.S. Treasury bills. The value of each Director's deferred
compensation account will increase or decrease as if it were invested in shares
of the selected Portico Funds or 90-day U.S.Treasury bills. The Fund maintains
its proportionate share of the Company's liability for deferred fees.
Report of Independent Accountants
To the Board of Directors and Shareholders of the Portico Institutional Money
Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Portico Institutional Money
Market Fund (one of the portfolios of Portico Funds, Inc. (the "Fund") at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the four years in the period then ended and
for the period April 26, 1991 (commencement of operations) through October 31,
1991, all in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1995 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
/s/ Price Waterhouse
Milwaukee, Wisconsin
November 29, 1995
- -Portico Funds are available through:
- the Portico Funds Center,
- Investment Specialists who are registered representatives of Elan Investment
Services, Inc., a registered broker/dealer, NASD and SIPC member,
- and through selected shareholder organizations.
This report is authorized for distribution only when preceded or accompanied by
a current prospectus.
To Open an Account or Request Information
1-800-982-8909
1-414-287-3710
For Account Balances and Investor Services
1-800-228-1024
1-414-287-3808
Portico Funds Center
615 East Michigan Street
P.O. Box 3011
Milwaukee, WI53201-3011
