File # 33-20158
File # 811-5469
Form N-1A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
_________
Post-Effective Amendment No. 18
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 18
(Check appropriate box or boxes.)
WEXFORD TRUST
(Exact Name of Registrant as Specified in Charter)
12300 Perry Highway, WEXFORD, PA 15090-8318
(Address of Principal Executive Offices)
Registrants Telephone Number, including Area Code 724-935-
5520 or 800-860-3863
Ronald H. Muhlenkamp, 12300 Perry Highway, Wexford, PA 15090-
8318
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
XXon (5/1/99) pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on (date) pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on (date) pursuant to paragraph (a)(2) of rule 485.
if appropriate, check the following box: this post-effective amendment
designate a new effective date for a previously filed post-effective
amendment.
CROSS REFERENCE SHEET
(as required by Rule 495)
N-1A Item No. Location
Part A
Item 1. Front and Back Cover Front and Back Cover
Pages Pages
Item 2. Risk/Return Summary: Risk/Return Summary
Investments, Risks and
Performance
Item 3. Risk/Return Summary: Risk/Return Summary
Fee Table
Item 4. Investment Strategies and Risks
Objectives,
Principal
Strategies,
Investment
Objective, And
Related Risks.
Item 5. Managements not applicable
Discussion of Fund
Performance
Item 6. Management Management and
Organization and Organization
Capital Structure
Item 7. Shareholder Shareholder
Information Information
Item 8. Distribution Distribution
Arrangements Arrangements
Item 9. Financial Highlights Financial Highlights
Information
Part B-Statement of
Additional
Information
Item 10. Cover Page and Table Cover Page and Table
of Contents of Contents
Item 11. Fund History Fund History
Item 12. Description of the Fund History;
Fund and its Risks Investment
Policies and
Limitations
And Investment
Information
Item 13. Management of the Management, General
Fund
Item 14. Control Persons and General Information
Principal Holders of
Securities
Item 15. Investment Advisory Management, General
and Other Services Information
Item 16. Brokerage Allocation Portfolio
and Other Practices Transactions
Item 17. Capital Stock and General Information
Other Securities
Item 18. Purchase, Redemption Information; Net
and Pricing of Asset Value
Purchase and
Redemption Shares
Item 19. Tax Status Taxes and
Distributions
Item 20. Underwriters Management
Item 21. Calculation of Fund Performance and
Performance Data Related Information
Item 22. Financial Statements Financial Statements
Part C
23 Exhibits
24 Persons Controlled
by or Under Common
Control with
Registrant
25 Indemnification
26 Business and Other
Connections of
Investment Adviser
27 Principal
Underwriters
28 Location of Accounts
and Records
29 Management Services
30 Undertakings
Signature Page
[LOGO]
PROSPECTUS
May 1, 1999
MUHLENKAMP FUND
(800) 860-3863
E-mail: [email protected]
Web Site: www.muhlenkamp.com
TABLE OF CONTENTS
Fund Basics
Past Performance
Fund Expenses
Management
Shareholder Information
Shareholder Services and Communications
Distributions & Taxes
Financial Highlights
For More Information
INVESTMENT OBJECTIVE
Maximize total return to shareholders through capital
appreciation, and income from dividends and interest, consistent
with reasonable risk.
As with all mutual funds, the Securities and Exchange Commission
does not approve or disapprove these securities, or pass upon
the accuracy or adequacy of the content of this prospectus. Any
representation to the contrary is a criminal offense.
FUND BASICS
INVESTMENT OBJECTIVE & PRINCIPAL STRATEGIES
The Fund seeks to maximize total return to its shareholders
through capital appreciation, and income from dividends and
interest, consistent with reasonable risk. To pursue this goal,
the Fund principally invests in a diversified list of common
stocks.
The Fund invests primarily in companies determined by the Funds
advisor to be highly profitable, yet, undervalued. Company
size, based on market capitalization, is of little importance to
the advisor. The advisor looks for those companies with above
average profitability, as measured by corporate return on equity
(ROE), that sell at below average prices, as measured by price
to earnings ratios (P/E).
The Fund does not subscribe to the philosophy that stocks can be
acquired and held forever; however, the advisor purchases stocks
for the Fund that it intends to hold at least three to five
years. While short-term swings in the marketplace are not
ignored, they are subordinate to the quest for long-term values.
The Fund will sell a stock when the companys, intrinsic value
has been fully realized by the market, earnings disappoint,
growth prospects dim due to changing market or economic
conditions, or the company falls short of the advisors
expectations.
The Fund may purchase fixed-income or debt securities from time
to time as substitutes for stocks when the Funds advisor
determines that market conditions warrant their purchase.
Under adverse market conditions the Fund may take temporary
defensive measures such as holding cash reserves without limit.
In taking such measures the Fund may not achieve its investment
objective.
The Fund intends to invest for the long-term, but may sell
stocks and other securities regardless of how long they have
been held. Over the Funds lifetime, the average turnover has
been less than 30% per year.
Principal Risks
Historically common stocks have outperformed other types of
investments; however, stock prices will fluctuate in the short-
term. Like any investment, an investment in the Fund is subject
to risk. The value of your investment can go up and down. This
means that you could lose money. Stocks are selected by the
advisor based on their potential for long-term growth; however,
there can be no assurance that the objective will be met. The
Fund is subject to risks that affect common stocks in general,
such as general economic conditions and adverse changes
(generally increases) in interest rates. Investments in value
stocks are subject to the risk that the market may never realize
their value, or their prices may go down. Short-term volatility
often accompanies a long-term approach to investing. These and
other factors could adversely affect your investment.
The Funds investment in bonds may be subject to risks that
affect the bond markets in general, such as general economic
conditions and adverse changes (generally increases) in interest
rates.
Side bar
An investment in this Fund is not a bank deposit. It is
not FDIC-insured or government-endorsed. It should be
considered a long-term investment. Long-term is
generally considered to be periods of 3 or more years.
End Side Bar
PAST PERFORMANCE
The bar chart and table below provide an indication of the risk
of investing in the Fund. The bar chart shows the Funds
performance in each calendar year over a ten-year period. The
table shows how the Funds average annual returns for one,
three, five, and ten calendar years compare with those of a
broad-based securities market index. Keep in mind that the
Funds past performance does not indicate how it will perform in
the future.
During the 10-year period shown in the bar chart, the
highest return for a quarter was 19.2% (quarter ending
3/31/91) and the lowest return for a quarter was was
21.2% (quarter ending 09/30/98).
Average Annual One Year Past 3 Past 5 Past 10 years
Total Returns years years
As of 12/31/98
Muhlenkamp Fund 3.22% 21.38% 17.16% 15.43%
S & P 500* 28.12% 27.94% 23.93% 18.74%
*The S & P 500 is the Standard & Poors Composite Index of 500
Stocks, a widely recognized, unmanaged index of common stock
prices.
Value Investing
As with anything you buy, you can pay too much or find good
bargains on individual stocks. A company whose stock appears
under priced in relation to the companys intrinsic worth and
business potential is considered a value stock.
FUND EXPENSES
As an investor, you pay certain fees and expenses in
connection with the Fund, which are described in the table
below. In the table you will see the fees and expenses you
would incur if you bought and held shares of the Fund.
Annual Fund operating expenses are paid out of the Fund
assets. Shareholder transaction fees are paid from your
account.
Shareholder Fees * (expenses that are deducted from your
account)
Sales Charge (Load) Imposed on NONE
Purchases:
Sales Charge (Load) Imposed on NONE
Reinvested Dividends:
Redemption Fees: NONE
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets)
Management Expenses: 1.00%
12b-1 Distribution Fees: NONE
Other Net Operating Expenses: 0.32%
**
Total Fund Expenses: 1.32%
Example: This example is intended to help you compare
the cost of investment in the Fund with the cost of
investing in other mutual funds.
*
Footnote: Investors may be charged an annual account
maintenance fee if their account falls below the
established minimums. Investors may be charged a fee
by their broker if they effect transactions through a
broker or agent. There are certain annual charges
associated with retirement accounts offered by the
Fund.
** Net of commission credits used to pay expenses.
This example assumes that you invest $10,000 in the
Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The
Example also assumes that your investment has a 5%
return each year and that the Funds operating
expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions
your costs would be:
1 year 3 Years 5 Years 10 Years
$134 $418 $722 $1,585
MANAGEMENT
The Investment advisor for the Fund is Muhlenkamp & Co., Inc.,
12300 Perry Hwy, Wexford, Pennsylvania, 15090, a Pennsylvania
corporation principally owned by Ronald H. Muhlenkamp.
The advisor receives a fee from the Fund equal to 1% per annum
of the average daily market value of its net assets. Under terms
of the advisory agreement, total Fund expenses cannot under any
circumstances exceed 2% of the Funds net assets. Should actual
expenses incurred ever exceed the 2% limitation, such excess
expenses shall be paid by the advisor.
Muhlenkamp & Co., Inc. and its principal, Ronald H. Muhlenkamp,
has served as portfolio manager and/or investment advisor to
corporations, individuals, pension and profit-sharing plans and
endowment Funds since 1978. Mr. Muhlenkamp has been active
since 1968 in the field of investment research and/or portfolio
management, both privately and as an officer in charge of
management of corporate monies. As of the date of this
Prospectus, Muhlenkamp & Co., Inc. is under contract to provide
investment management and advice to individual and institutional
clients, in addition to the Fund. The advisor is registered
with the Securities and Exchange Commission under the Investment
Advisors Act of 1940.
Mr. Muhlenkamp holds an engineering degree from Massachusetts
Institute of Technology, an MBA from Harvard Business School and
he has earned the Financial Analyst Federations designation as
a Chartered Financial Analyst.
[side bar]
Year 2000.Many computer systems used today cannot tell the year
2000 from the year 1900 because of the way dates are encoded.
This could be a problem when the year 2000 arrives and could
affect securities trades, interest and dividend payments,
pricing and account services. Although we can't guarantee that
this won't be a problem, the Funds service providers have been
working on adapting their computer systems. They expect that
their systems, and the systems of their service providers, will
be ready for the new millennium. In addition, your investment
in the Fund could be adversely affected if a company that the
Fund has invested in has, or is perceived to have, a Year 2000
problem.
[End side bar]
[SIDE BAR]
Ron Muhlenkamps liquid assets and the entire Muhlenkamp &
Company pension plan are invested in the Muhlenkamp Fund.
[END SIDE BAR]
[SIDE BAR]
Communication
The Muhlenkamp Fund is proud to serve shareholders of all asset
sizes. All shareholders receive a copy of the Muhlenkamp
Memorandum each quarter. This newsletter explains the advisors
view of current and long-term investment conditions.
[End side bar]
SHAREHOLDER INFORMATION
Pricing Policy
You pay no sales charges of any kind to invest in this Fund.
Your price for Fund shares is the Funds net asset value per
share (NAV), which is generally calculated as of the close of
trading on the New York Stock Exchange (usually 4:00 P..M.
Eastern Time) every day the exchange is open. Your order will
be priced at the next net asset value per share (NAV) calculated
after your order is accepted by the Fund. The Funds
investments are valued based on market price, or where market
quotations are not readily available, based upon fair value as
determined in good faith by the Funds board.
Purchasing Shares
You may open an account with an initial investment of $1,500.
If you choose to participate in the Automatic Investment Program
(AIP) the minimum initial investment is $200. The Automatic
Investment Program requires a minimum investment of $50.00 per
month to be automatically invested from your checking or savings
account.
Once your account has been opened, you may make additional
investments to your account subject to a $50 minimum.
Subsequent investments can be made by check, wire transfer,
Electronic Funds Transfer (EFT), or Automatic Investment Plan.
All investments must be made in U.S. dollars. Third party
checks cannot be accepted.
INDIVIDUAL RETIREMENT ACCOUNTS (IRA)
The Fund offers IRAs to any employed individual and his or her
spouse. These include Traditional IRAs, Roth IRAs, SEP-IRAs,
SIMPLE-IRAs, and Spousal IRAs. Existing IRAs may be
transferred or rolled over to a Muhlenkamp Fund IRA. Assets
held in a previous employers qualified retirement plan may also
be rolled over into a Muhlenkamp Fund IRA. The forms and
disclosures needed before investing IRA money in Fund shares may
be obtained by calling the Fund.
Selling Shares
You may sell all or some of your shares by mail or telephone, on
any day that the Fund is open. Your shares will be sold at the
next calculated NAV after the Fundss transfer agent receives
your order and you will generally receive the proceeds within a
week. You may receive your payment by check, wire transfer, Or
Electronic Funds Transfer if previously enrolled in this
program. The Fund reserves the right to delay sending out
redemption proceeds for up to seven days.
Systematic Withdrawals
Shareholders with accounts that have at least $5,000 or more may
direct that the Fund pay an automatic periodic withdrawal of any
amount to any designated payee. To take advantage of this
service, you must make your request in writing, and provide the
signature(s) of the owner(s) exactly as the account is
registered. Requested withdrawals require that shares be
redeemed each period to raise money to make the payments. These
redemptions may be a taxable event for you. You may receive your
periodic withdrawals by check or Electronic Funds Transfer, if
enrolled in this program.
Telephone Requests
The Fund will automatically establish a telephone redemption
option on your account, unless you instruct otherwise on your
application, or in writing subsequently. The Fund will not be
responsible for any account losses due to telephone fraud, as
long as the Fund has taken reasonable steps to verify the
redemption order. The Fund will require that you provide your
account number, name and address exactly as registered on the
account, and the primary Social Security or Employer
Identification Number as registered on the account.
To purchase shares via telephone, you must first enroll in the
Electronic Funds Transfer (EFT) program. Upon receiving a
telephone purchase request, the Fund will electronically
transfer the assets from your bank account.
A Note on Unusual Circumstances
The Fund reserves the right to revise or terminate the telephone
redemption privilege at any time, without notice. In addition,
The Fund can stop selling shares or postpone payment at times
when the New York Stock Exchange is closed or under any
emergency circumstances as determined by the U.S. Securities and
Exchange Commission. If you experience difficulty making a
telephone redemption during periods of drastic economic or
market change, you
can send us your request by regular or express mail. Follow the
instructions on selling or exchanging shares by mail in this
section.
Minimum Account Balance
By November 30th of each year, all accounts must have net
investments (purchases less redemptions) totaling $1,500 or
more, an account value greater than $1,500, or be enrolled in
the Automatic Investment Program. Accounts that do no not meet
one of these three criterions will be charged a $15.00 fee, paid
to the Fund to lower expenses. The Fund will check accounts and
charge this fee annually
DISTRIBUTIONS AND TAXES
The Fund pays dividends annually to shareholders, generally in
December, from net investment income and any net capital gains
that it has realized during the year. For your convenience,
dividends and capital gains are automatically reinvested in the
Fund, Unless you instruct the Fund otherwise. Please refer to
the Financial Highlights section of this prospectus for a
history of the dividend distribution. The Fund has paid only
two capital gain distributions totaling 36 cents per share, in
its history making it very tax efficient.
For federal tax purposes, the Fund's income and short-term
capital gain distributions are taxed as dividends; long-term
capital gain distributions are taxed as long-term capital gains.
Your distributions may also be subject to state income tax. The
distributions are taxable when they are paid, whether you take
them in cash or participate in the dividend reinvestment
program. Each January, the Fund mails you a form indicating the
federal tax status of your dividend and capital gain
distributions.
All shareholders must provide the Fund with a correct taxpayer
identification number (generally your Social Security Number)
and certify that you are not subject to backup withholding. If
you fail to do so, the IRS can require the Fund to withhold 31%
of your taxable distributions and redemptions. Federal law also
requires the Fund to withhold 30% of the applicable tax treaty
rate from dividends paid to certain non-resident alien, non-US
partnership and non-U.S. corporation shareholder accounts.
Please see the statement of additional information and your own
tax adviser for further information.
The Taxpayer Relief Act of 1997
This act made certain changes to capital gains tax rates. Under
the law, taxpayers in all brackets will have an advantage when
it comes to capital gains tax rates. The Fund will provide
information relating to the portion of any Fund distribution
that is eligible for the reduced capital gains tax rate.
[END SIDE BAR]
FINANCIAL HIGHLIGHTS
The following table shows certain financial information for the
Fund. The selected per share data and ratio table comes from
the Funds financial statements, which have been audited by
Deloitte & Touche LLP, independent auditors. The audited
financial statements and auditor reports may be found in the
Funds most recent annual report, which is available upon
request.
[SIDE BAR]
How to Read Financial Highlights
The Fund began fiscal 1998 with a net asset value (share price)
of $36.55. In 1998 the Fund earned $0.08 per share from
investment income (interest & dividends). There was an increase
of $1.10 in the value of investments held or sold by the Fund
resulting in a net increase of $1.18 from investment operations.
Shareholders received $0.08 per share in the form of an ordinary
income dividend. There were no capital gain distributions.
Investment gains ($1.18 per share) minus the distributions
($0.08 per share) resulted in a share price of $37.65 at the end
of the year. This produced a total return of 3.22% from the
Fund for the fiscal year.
As of December 31, 1998 the Fund had $195 million in net assets.
For the year, its net expense ratio was 1.32% ($13.20 per
$1000.00 in net assets). Net investment income amounted to
0.21% of the Funds average net assets. The Fund sold and
replaced securities valued at 27% of its net assets.
SELECTED PER SHARE DATA AND RATIOS
FOR YEARS ENDED DECEMBER 31, 1998-1994
1998 1997 1996 1995 1994
NET ASSET VALUE, BEGINNING 36.55 $27.52 $21.26 $16.23 $17.86
OF YEAR
Income from Investment
Operations:
Net investment income 0.08 0.18 0.14 0.21 0.11
Net gains or (losses) 1.80 8.98 6.23 5.14 (1.39)
on securities
Total From 1.18 9.16 6.37 5.35 (1.28)
Investment Operations
Less Distributions:
Dividends (from (0.08 (0.13) (0.11) (0.21) (0.10)
investment income) )
Distributions (from $0.00 $0.00 $0.00 (0.11) (0.25)
capital gains)
Total (0.08 (0.13) (0.11) (0.32) (0.35)
Distributions )
NET ASSET VALUE, END OF $37.6 $36.55 $27.52 $21.26 $16.23
YEAR 5
Total Return 3.22% 33.28% 29.96% 32.9% (7.20)%
Net Assets, End of Period $194, $125,460 $42,038 $23,571 $16,610
(000s omitted) 962
Ratio of Total Expenses to 1.36% 1.44% 1.56% 1.4% 1.57%
Average Net Assets
Ratio of Net Expenses to 1.32% 1.33% 1.54% 1.35% 1.52%
Average Net Assets
Ratio of Net Investment 0.21% 0.53% 0.58% 1.10% 0.70%
Income to Average Net
Assets
Portfolio Turnover Rate 27.03 13.89% 16.90% 22.70% 25.60%
%
Shareholder Services and Communications
Customer Service 1-800-860-3863
Call this number to perform certain account transactions (change
your address, purchase and sell shares, etc.), obtain account
information and request Fund literature. Customer service
representatives are available during the day to receive orders
and answer questions regarding your account and the Muhlenkamp
Fund in general.
Automated Telephone Service 1-800-860-3863
The Funds automated telephone system offers 24-hour access to
account information, including balances and last transactions.
The daily Net Asset Value (NAV) per share of the Fund is also
posted on the system each business day by 6 p.m. EST.
Statements
Each time there is activity in your account, i.e., a purchase or
sale, the Fund will mail you a confirmation reflecting the
transaction and new share balance of your account. All
shareholders receive quarterly statements reflecting the market
value of their account(s) at the end of the period and any
dividend distributions during the period.
Financial Reports
Shareholders receive Semiannual and Annual Reports detailing the
Funds portfolio holdings and financial statements, as of June
30, and December 31, respectively, of each year. In an effort
to keep Fund expenses to a minimum, the Fund will mail only one
report per household. If your household has numerous
accountholders and you would like a report for each, please
contact customer service at 1-800-860-3863.
Quarterly Newsletter
Shareholders receive a copy of The Muhlenkamp Memorandum each
quarter. This newsletter provides commentary on the previous
quarter and explains the advisors outlook for the future.
Other issues relating to the advisors investment philosophy are
also discussed.
Website www.muhlenkamp.com.
The Funds prospectus, applications, financial reports, current
market commentary, and back issues of the Muhlenkamp Memorandum
are available.
[Back Cover]
FOR MORE INFORMATION
General Information and Other Available Information
These reports include a list of the Funds investments and
financial statements And are incorporated by reference into this
prospectus. The reports also contain a statement from the
investment adviser discussing market conditions and investment
strategies that significantly affected the Funds performance
during the period.
Statement of Additional Information (SAI)
The SAI conations more detailed information on all aspects of
the Fund and is incorporated by reference into this Prospectus.
To obtain more information on the Muhlenkamp Fund free of charge
please contact us:
Phone: 1-800-860-3863
E-mail: [email protected]
Internet: www.muhlenkamp.com
The Annual Report, Semiannual report and SAI have been filed
with the Securities and Exchange Commission (SEC) and are
available for review at the SECs Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or on the SECs website
(http://www.sec.gov). You can also obtain copies of these
documents from the SEC by sending your request and a duplicating
fee to the SECs Public Reference Section, Washington, DC 20549-
6009.
Investment Company File Number 811-5469
Muhlenkamp Fund Symbol: MUHLX
Muhlenkamp Fund CUSIP Number: 962096103
STATEMENT OF ADDITIONAL INFORMATION
for
MUHLENKAMP FUND
[May 1, 1999]
MUHLENKAMP FUND [the "Fund"], a series of the Wexford Trust, is
an open-end diversified investment management company organized
as a business trust.
This Statement of Additional Information is not a Prospectus.
It should be read in conjunction with the Funds Prospectus
dated the same date, a copy of which may be obtained without
charge from the Fund by writing its corporate offices at 12300
Perry Highway, Suite 306, Wexford, PA 15090-8318 or calling
(800) 860-3863.
The Funds most recent Annual Report and Semi-Annual Report to
Shareholders are separate documents supplied with this Statement
of Additional Information. The financial statements,
accompanying notes and report of the independent auditors that
appear in the Annual Report are incorporated by reference in
this Statement of Additional Information.
Table of Contents
Fund History 2
Investment Objectives and 3
Policies
Options and Foreign Securities 4
Investment Restrictions 6
Non-Fundamental Investment 7
Restrictions
History and Background of
Investment Advisor 7
Board of Trustees 9
Investment Advisory Board 9
Brokerage Allocations 10
Net Asset Value Calculation 10
Purchase of Shares 11
Redemption of Shares 13
Federal Income Tax Status 13
Capital Structure 14
Performance Data 14
Financial Information 15
Significant Shareholders 15
Appendix 16
Custodian: Investment Advisor: Transfer Agent
Firstar Bank Muhlenkamp & Co., Inc.
Milwaukee, N.A. 12300 Perry Highway, MUHLENKAMP FUND
777 E. Wisconsin Suite 306 c/o Firstar Mutual Fund
Avenue Wexford, PA 15090-8318 Services, LLC PO Box 701
Milwaukee, WI Tel: Milwaukee, WI 53201-0701
53202 (800) 860-3863
e-mail:
[email protected]
Auditor: Deloitte & Touche LLP, 2500 One PPG Place, Pittsburgh,
PA 15222-5401 has been appointed as the independent certified
public accountant and auditor for the Fund. Neither the firm
nor any of its principals or staff holds any financial interest
directly or indirectly in the Fund.
Distributor: Wexford Trust, P.O. Box 598 Wexford, PA 15090-8318,
Tel: (800) 860-3863, acts as the sole distributor of Fund shares
issued. As of the date of this Prospectus, Muhlenkamp Fund was
the only Fund of the Wexford Trust series registered and in
existence. Muhlenkamp & Company pays for distribution costs to
non-shareholders.
Transfer Agent and Service Provider: Firstar Mutual Fund
Services, LLC, P.O. Box 701, Milwaukee, WI 53201-0701.
Fund History
The Fund is a series of the Wexford Trust, which was organized
as a Massachusetts Business trust on September 21, 1987. The
Trust is an open-end investment management company established
under the laws of the Commonwealth of Massachusetts by an
Agreement and Declaration of Trust dated July 6, 1988(the Trust
Agreement). The Trust Agreement permits the Trustees to issue
an unlimited number of shares of beneficial interest of separate
series without par value. The Fund operates as a diversified
fund. This means that with respect to 75% of its assets, the
Fund will not invest more than 5% in any single issuer.
Fund capital consists of an unlimited number of shares of
beneficial interest having a par value of $.001 each. When
issued, each share or fraction thereof is fully paid, non-
assessable, transferable and redeemable. All shares are of the
same class, and each full share has one vote. As part of a
trust, each fund has its own Board of Trustees which supervise
fund activities and review contractual arrangements. Fractional
shares are issued to three decimal places, but do not carry
voting rights. As a trust, there is no requirement to hold
annual shareholder meetings. However, it is intended that
special meetings, which may be called upon the request of the
owners of 10% of shares outstanding, will be held as needed or
required when and as duly called. Approval of a majority of the
shares outstanding must first be obtained before changing
fundamental policies, to amend the contract with its investment
advisor, to terminate the Fund, or to change any other items on
which shareholders are granted such rights by law or under
provisions of its Declaration of Trust. A majority of Trustees
must have been voted into office by shareholders even though
Trustees may fill vacancies without a shareholder vote so long
as such appointments do not produce a majority of Trustees
holding office. The Fund offers its own shares exclusively.
All shareholder inquiries should be directed to the Muhlenkamp
Fund at the address and telephone number listed on the cover of
this Prospectus.
Investment Objective and Policies
The Fund seeks to maximize total return to its shareholders
through capital appreciation, and income from dividends and
interest, consistent with reasonable risk. To pursue this goal,
the Fund principally invests in a diversified list of common
stocks, unless the stock market environment has risen to a
point where the advisor to the Fund, Muhlenkamp & Co., Inc.,
(MCI), can no longer find equity securities that have been
determined to be undervalued. During such periods the Fund will
invest in fixed-income or debt investments until such time as
more attractive common stocks can be found for purchase.
MCI believes that the success of a stock is dependent upon, and
invariably a reflection of, the quality of management.
Therefore, the Funds advisor spends time assessing
management's ability prior to making a commitment to its shares
with Fund assets. The assessment may include an analysis of
historical financial achievements of the company, direct
discussions with management by telephone or in person, visits to
the company, conversations with security analysts who actively
follow the company for investment brokerage firms, and
discussions with competitors, suppliers, and customers of the
company. While MCI feels this assessment technique to be
clearly instrumental to the success of the investment, it should
be recognized that judgments made by MCI are purely subjective
in nature. There can be no assurance that MCI will be
successful in achieving its investment objectives for the Fund.
It is MCI's belief that the objective of maximizing total return
to shareholders can only be achieved consistently over a long
investment horizon. Typically, this will mean that a stock may
be held for a three-to-five year period or longer if MCI, by its
own determination, feels that the recognition of true business
worth has not yet been attained in the stock's current market
quotation. Thus, the Fund serves little purpose for investors
who wish to take advantage of short-term fluctuations in its net
asset value per share.
Consistent with MCI's objective of seeking to maximize total
returns for Fund shareholders MCI from time to time may also
choose to invest some or all of the Fund's assets in investment
grade fixed-income or debt investments. Such investments will be
purchased and held during periods when MCI is unable to find
stocks that it believes have return expectations commensurate
with the risks that must be assumed by their continued
retention. Additionally, under adverse market conditions the
Fund may take temporary defensive measures such as holding cash
reserves, U.S. treasury securities, or money market instruments
without limit. In taking such measures the Fund may not achieve
its investment objective. The investment objective of the Fund
cannot be changes without a vote of the shareholders. (More
detailed information regarding certain types of fixed income
investment restrictions is contained in the Appendix of
Statement of Additional Information).
MCI recognizes that while the Fund remains small in size (less
than $300 million in total assets at current market), MCI may
have greater flexibility in achieving its objective of
maximizing total returns. As the Fund grows in size, it may
become more difficult for MCI to find securities to invest in
that meet the objectives of the Fund. This may also occur
during periods when the stock market in general has been rising
for a long period of time. Therefore, the Fund has reserved
unto itself the right to limit its asset size by discontinuing
sales of its shares at any time. The Board of Trustees of the
Fund may suspend sales whenever in its collective wisdom it
believes it necessary in order for the Fund to continue to
adhere to its stated objective, or that for other reasons it
would be in the best interests of Fund shareholders to do so.
It should be clear to investors in Fund shares that MCI believes
income is important in maximizing total returns. The Fund's
advisor is aware that annual distributions of capital gains and
dividend/interest income earned on shares may result in a
shareholder paying additional federal, state and/or local income
taxes (For Details, See Federal Income Tax Status). Fund
shareholders should understand that when MCI makes investment
decisions, such tax considerations will be secondary to its
objective of attempting to maximize total returns. This policy
is partly based upon a belief by MCI that such taxes and tax
rates have little or no bearing on an individual company's
attractiveness as an investment. It is also founded on MCI's
belief that tax rates in general, are, or should be, of
declining importance to the investment decision-making process,
viewed in its widest sense. Tax deferred portfolios like IRA
and pension monies, are ideally suited for investment in shares
of the Fund for these reasons
OPTIONS12
The Fund may purchase and write (i.e., sell) put and call
options on any security in which it may invest or options on any
securities index. These options are traded on U.S. exchanges or
in the over-the-counter market to hedge its portfolio and to
enhance the Funds return. The Fund may write covered put and
call options to generate additional income through the receipt
of premiums and purchase call options in an effort to protect
against an increase in the price of securities it intends to
purchase. The Fund may also purchase put and call options to
offset previously written put and call options of the same
series.
A call option gives the purchaser, in exchange for a premium
paid, the right for a specified period of time to purchase the
securities or securities in the index subject to the option at a
specified price (the exercise or strike price). The writer of a
call option, in return for the premium, has the obligation, upon
exercise of the option, to deliver, depending upon the terms of
the option contract, the underlying securities or a specified
amount of cash to the purchaser upon receipt of the exercise
price. When the Fund writes a call option, it gives up the
potential for gain on the underlying securities in excess of the
strike price of the option during the period that the option is
open.
A put option gives the purchaser, in return for a premium, the
right, for a specified period of time, to sell the securities
subject to the option to the writer of the put at the specified
exercise price. The writer of the put option, in return for the
premium, has the obligation, upon exercise of the option, to
acquire the securities underlying the option at the exercise
price. The Fund might, therefore, be obligated to purchase the
underlying securities for more than their current market price.
The Fund will write only covered options. A written option is
covered if, as long as the Fund is obligated under the option,
it (i) owns an offsetting position in the underlying security or
(ii) maintains in a segregated account, cash or other liquid
assets in an amount equal to or greater than its obligation
under the option. Under the first circumstance, the Funds
losses are limited because it owns the underlying security;
under the second circumstance, in the case of a written call
option, the Funds losses are potentially unlimited. There is
no limitation on the amount of call options the Fund may write.
The Fund may also write a call option, which can serve as a
limited short hedge because decreases in value of the hedge
investment would be offset to the extent of the premium received
for writing the option. However, if the security appreciates to
a price higher than the exercise price of the call option, it
can be expected that the call will be exercised and the Fund
will be obligated to sell the security at less than its market
value.
The Fund may purchase and sell put and call options on
securities indices. Securities index options are designed to
reflect price fluctuations in a group of securities or segment
of the securities market rather than price fluctuations in a
single security. Options on securities indices are similar to
options on securities, except that the exercise of securities
index options requires cash payments and does not involve the
actual purchase or sale of securities. When purchasing or
selling securities index options, the Fund is subject to the
risk that the value of its portfolio securities may not change
as much as or more than the index because the Funds investments
generally will not match the composition of the index.
At this time the Fund does not intend to invest (i.e., purchase
& sell call and put options) more than 5% of its net assets in
options.
Risks of Hedging and Return Enhancement Strategies
Participating in the options markets involves investment risks
and transaction costs to which the Fund would not be subject
absent the use of these strategies. The Fund, and thus its
investors, may lose money through any unsuccessful use of these
strategies. Risks inherent in the use of options include (1)
imperfect correlation between the price of the option and
movement in the price of the securities being hedged; (2) the
fact that skills needed to use these strategies are different
from those needed to select portfolio securities; (3) the
possible absence of a liquid secondary market for any particular
instrument at any time; (4) the possible need to defer closing
out certain hedged positions to avoid adverse tax consequences;
and (5) the possible inability of the Fund to purchase or sell a
portfolio security at a time that otherwise would be favorable
for it to do so, or the possible need for the Fund to sell a
portfolio security at a disadvantageous time, due to the need
for the Fund to maintain cover or to segregate securities in
connection with hedging transactions.
The Fund will generally purchase options on an exchange only if
it appears to be a liquid secondary market for such options or
futures; the Fund will generally purchase OTC options only if
the investment advisor believes that the other party to options
will continue to make a market for such options. However, there
can be no assurance that a liquid secondary market will continue
to exist or that the other party will continue to make a market.
Thus, it may not be possible to close an option transaction.
The inability to close option positions also could have an
adverse impact on the Funds ability to effectively hedge its
portfolio. There is also the risk of loss by the Fund of margin
deposits or collateral in the event of bankruptcy of a broker
with whom the Fund has an open position in an option.
Foreign Securities
Although the Fund typically does not invest in foreign
securities, it may do so if the investment advisor deems it to
be appropriate and consistent with the investment objective.
This could carry additional risks due to currency exchange
rates, political instability, or other economic problems.
Investment Restrictions
Under the terms of the By-Laws of the Fund on file in its
Registration Statement under the Investment Company Act of 1940,
the Fund has adopted certain investment restrictions which
cannot be changed or amended unless approved by the vote of a
majority of its outstanding shares as set forth in its By-
Laws and in accordance with requirements under the Investment
Company Act of 1940. Accordingly, the Fund will not:
[A] Invest in the purchase and sale of real estate.
[B] Invest in futures, commodities or in commodity contracts,
restricted securities, mortgages, oil, gas, mineral or other
exploration or development programs.
[C] Borrow money, except for temporary purposes, and then only
in amounts not to exceed in the aggregate 5% of the market value
of its total assets at the time of such borrowing.
[D] Invest more of its assets than is permitted under
regulations in securities of other registered investment
companies, which restricts such investments to a limit of 5%
of the Fund's assets in any one registered investment company,
and 10% overall in all registered investment companies, in no
event to exceed 3% of the outstanding shares of any single
registered investment company.
[E] Invest more than 5% of its total assets at the time of
purchase in securities of companies that have been in business
or been in continuous operation less than 3 years, including
the operations of any predecessor.
[F] Invest or deal in securities which do not have quoted
markets.
[G] Neither alone nor with all other series funds of the Wexford
Trust, own more than 10% of the outstanding voting securities of
any one issuer or company, nor will it, with at least 75% of its
total assets, invest more than 5% of its assets in any single
issue, valued at the time of purchase. This restriction shall
not be applicable for investments in U.S. government or
government agency securities.
[H] Invest 25% or more of its total assets valued at the time
of purchase in any one industry or similar group of companies,
except U.S. government securities.
[I] Maintain margin accounts, will not purchase its investments
on credit or margin, and will not leverage its investments,
except for normal transaction obligations during settlement
periods.
[J] Make any investment for the purpose of obtaining,
exercising or for planning to exercise voting control of subject
company.
[K] Sell securities short.
[L] Underwrite or deal in offerings of securities of other
issuers as a sponsor or underwriter nor invest any Fund
assets in restricted securities or issues that have not
been registered under the Securities Act of 1933 for sale to
the general public. (Note: The Fund may be deemed an
underwriter of securities when it serves as distributor of its
own shares for sale to or purchase from its shareholders.)
[M] Make loans to others or issue senior securities. For
these purposes the purchase of publicly distributed indebtedness
of any kind is excluded and not considered to be making a loan.
In regard to the restriction marked as item [D] above, the Fund
utilizes computerized cash management services offered by its
custodian, which services presently include reinvesting
overnight and short-term cash balances in shares of other
registered investment companies, better known as "money market
funds". The primary investment objective of the money market
funds is safety of principal and maximum current income from
holding highly liquid, short-term, fixed investments,
principally U.S. government and agency issues. The Fund will
not be acquiring such shares as permanent investments but rather
will be utilizing such services solely for convenience and
efficiency as it tries to keep short-term monies invested at
interest only until such time as more permanent reinvestments
can practically be made in the ordinary course of business.
Cash will be held pending the purchase, sale or reinvestment of
the Funds assets. 3
Non-Fundamental Investment Restrictions
Pursuant to Agreements with State Regulators, the Fund may not:
[A]. Invest in Real Estate Limited Partnerships.
[B]. Invest in warrants in excess of 5% of the Funds Net
Assets; no more than 2% of the
Funds net assets may be invested in warrants not listed
on the NY or American Stock
Exchanges.
[C]. Hold more than 15% of net assets in illiquid securities.
[D]. Lend its assets to any person or individual, except by the
purchase of bonds or other debt obligations customarily sold
to institutional investors. However, portfolio securities may
be loaned if collateral values are continuously maintained at
no less than 100% by marking to market daily and the
practice is fair, just and equitable as determined by a
finding that adequate provision has been made for margin
calls, termination of the loan, reasonable servicing fees
(including finders fees), voting rights, dividend rights,
shareholder approval and disclosure. Such lending of
portfolio securities must also be within the limitations
approved by the Securities and Exchange Commission.
.
History and Background of Investment Advisor
The investment advisor to the Fund is Muhlenkamp & Co., Inc.,
[MCI]. MCI is a Pennsylvania corporation practicing as an
Investment Advisor. MCI is registered under the Investment
Advisors Act of 1940 with the Securities and Exchange Commission
MCI is substantially owned by Mr. Ronald H. Muhlenkamp, its
principal officer, who is also the principal officer and a
trustee of the Fund. MCI was incorporated October 1, 1981,
succeeding a sole proprietorship of the same name which has been
offering investment advisory services under the direction and
control of Mr. Muhlenkamp since 1977. MCIs principal activity
is to provide investment advisory and consulting services under
contract to individuals, pension, profit-sharing, IRA and KEOGH
retirement plans, corporations, and non-profit organizations
generally located in the service area that includes the
continental U.S.
Mr. Ronald H. Muhlenkamp, MCI's principal investment
professional, has been employed or active as an investment
advisor doing investment research or managing investment
portfolios since 1970. In addition to the above duties, he
holds responsibilities as President and Director of MCI and is
the principal in charge of all its investment management and
research activities. Mr. Muhlenkamp received a degree in
engineering from the Massachusetts Institute of Technology and a
Masters of Business Administration degree from Harvard Business
School. In addition, Mr. Muhlenkamp is a Chartered Financial
Analyst in the Financial Analyst Federation.
Prior to his forming MCI, Mr. Muhlenkamp served two years with
Berkley Dean & Co., NYC., before spending five years as a
portfolio analyst with Integon Corporation, where he assumed
responsibility for management of its pension account. While
employed at Integon, Mr. Muhlenkamp had the opportunity to
extensively study major investment management practices and
philosophies of the past 30 years. In 1975 Mr. Muhlenkamp
joined C.S. McKee and Company where he was responsible for over
70 investment portfolios. In 1977 Mr. Muhlenkamp left C.S.
McKee and Company to form MCI. He is a member of the Economics
Club of Pittsburgh.
It is the intention of Mr. Muhlenkamp, when advising the Fund,
to follow an approach that is similar to the one he follows in
managing individual portfolios and which has been described
herein and in the Fund Prospectus.
However, relative to individually managed accounts , the Fund
will have more freedom to sell stocks when they reach price
targets, regardless of tax implications. This is so because
investment portfolios for individuals tend to be more
constrained by tax considerations than the Fund intends to be.
As a result, turnover for regulated investment company
portfolios, on average, is higher than for individual
portfolios.
MCI will not invest assets of any other managed account in
shares of the Fund except as directed in writing by a person
unaffiliated with the Fund or with MCI, who has authority to
make such direction. Any investments directed to be made in
Fund shares will be excluded from managed account assets for fee
purposes. Furthermore, MCI, its officers, directors and
affiliated persons, will refrain from expressing any opinion
concerning the Fund to any other person or persons over whose
assets MCI has investment advisory responsibilities and for
which services it receives compensation. MCI, as investment
advisor to the Fund, renders such services under a contract that
provides for payment to MCI of a fee, calculated daily and paid
monthly, at the rate of 1% per annum of the Fund's assets.
This rate is consistent with that being charged by MCI to manage
its other client accounts, but is higher than the fee charged by
most other investment companies. The advisory contract between
MCI and the Fund is subject to approval annually by the Fund's
Board of Trustees, including a majority of the disinterested
Trustees, and is terminable upon 30 days written notice, one
party to the other.
All employees of the investment advisor who perform duties for
the Fund shall remain employees of MCI, which shall bear all
employment costs of such staff. If MCI ceases to operate for
any reason or assigns the contract, such contract is
automatically terminated. It is anticipated that total costs of
Fund operation will be restricted by regulations in those
states in which the Fund anticipates it will seek to be
registered. At present this maximum fee restriction is commonly
set at 2% of the total assets of the company.
Board of Trustees
The names of Board of Trustees of the Fund, as elected by
shareholders at the trust's Annual Meeting of Shareholders, and
their respective duties and affiliations are as follows:
Past Five Year
Position With Business Affiliations
Name and Address The Fund/AGE and Primary Occupation
Ronald H. President, Investment Advisor and
Muhlenkamp* Trustee Principal, Muhlenkamp
Muhlenkamp & & Company, Inc.
Company, Inc 54
12300 Perry Hwy Treasurer & Principal,
Muhlenkamp &
Wexford, PA 15090 Trustee
Co., Inc.
Alfred E. Kraft Trustee Management Consultant
202 Fan Hollow Rd
Uniontown, PA 15401 61
Terrence McElligott Trustee President, West Penn
4103 Penn Ave Brush & Supply, Inc.
Pittsburgh, PA 15224 50
Pension or
Retirement Estimated
Position Aggregate Benefits Annual
Name with Fund Remunerati Accrued During Benefits
on Registrants Upon
latest fiscal Retirement
Year
Ronald H. Trustee & 0 0 0
Muhlenkamp Pres.
Alfred E. Kraft Trustee 0 0 0
Terrence Trustee 0 0 0
McElligott
Investment Advisory Board
Although the Fund currently has no advisory board, the BY-LAWS
of each fund series permits the President of the Fund, with the
approval of the Board of Trustees, to appoint up to 15
individuals to assist the president and the trustees to define
and set overall investment strategies in an attempt to reach the
Funds investment objectives as stated. Members of this
advisory board will either be individuals of prominence or
persons who, in the judgment of the President of the Fund, may
be important to its success and growth. The duties of members
of the Advisory Board shall be totally external to the daily
operation of the Fund itself and such members shall serve
totally at the pleasure of the President. They will have no
direct, active contact with the Fund, they will have no
knowledge of its daily operations nor are they to be
considered control or access persons. They possess only
advisory responsibilities that will be sought by the President,
the Trustees, and by MCI from time to time as they alone deem
necessary or desirable.
It is intended, though not a contractual obligation or duty,
that one or more members of this Advisory Board may attend and
address some or all of the meetings of shareholders, as
arranged. Each Advisory Board member will be available to the
President of each fund and to MCI from time to time by phone
communication, to render advice and counsel, in hopes that such
advice and counsel will lead to a more successful investment
performance.
In the opinion of the advisor the combined experience and
insight of advisory board members tends to support the Funds
objectives and is expected to prove useful to the investment
advisor to the Fund.
Brokerage Allocations
It is the Fund's policy to allocate brokerage business to the
best advantage and benefit of its shareholders. The President
of the Fund and MCI shall be responsible for directing all
transactions through brokerage firms of its choice. Further to
that policy, all securities transactions are made so as to
obtain the most efficient execution at the lowest transaction
cost. Nothing in this policy, however, is to be construed to
prohibit the Fund or MCI from allocating transactions to firms
whose brokerage charges may include the cost of providing
investment research, or other legally permitted services which
the Fund and MCI deem to be necessary and/or valuable to the
successful management of its assets. Each buy or sell order
will be placed according to the type, size and kind of order
involved and as each condition may demand, so as to attempt to
secure the best result for the Fund and its share-holders, all
factors considered.
Net Asset Value Calculation
The net asset value per share is computed by dividing the
aggregate market value of Fund assets daily, less its
liabilities, by the number of portfolio shares outstanding.
Portfolio securities are valued and net asset value per share is
determined as of the close of business on the New York Stock
Exchange (NYSE), which is currently 4:00 p.m. (New York City
time), on each day the NYSE is open and on any other day in
which there is a sufficient degree of trading in Fund portfolio
securities that the current net asset value per share might be
materially affected by changes in portfolio securities values.
NYSE trading is closed weekends and holidays
Portfolio securities listed on an organized exchange are valued
on the basis of the last sale on the date the valuation is
made. Securities that are not traded on that day, and for which
market quotations are otherwise readily available, and over-the-
counter and other traded fixed-income or debt securities for
which market quotations are readily available, are valued on the
basis of the bid price at the close of business on that date.
Securities and other assets for which market quotations are not
readily available or have not traded are valued at fair value as
determined by procedures established by the Board of Trustees.
Notwithstanding the above, bonds and other fixed-income or debt
securities may be valued on the basis of prices determined by
procedures established by the Board of Trustees if it is the
belief of the Board of Trustees that such price determination
more fairly reflects the fair value of such securities. Such
procedures would commonly include pricing on a yield-to-maturity
basis as compared with similarly traded fixed-income or debt
securities. Money market instruments are valued at cost which
approximates market value unless the Board of Trustees
determines that such is not a fair value. The sale of common
shares of any series fund will be suspended during periods when
the determination of its net asset value is suspended pursuant
to rules or orders of the Securities and Exchange
Commission, or may be suspended by the Board of Trustees
whenever in its sole judgment it believes it is in the best
interest of shareholders to do so.
Purchase of Shares
Initial Purchases: Investors may begin an investment in Fund
shares with US $1,500 by simply completing and signing the
enclosed application form. The $1,500 minimum is reduced to
$200 for those new accounts participating in the Automatic
Investment Plan (AIP). All accounts must have a valid tax
identification number. Return the form to MUHLENKAMP FUND, c/o
Firstar Mutual Fund Services, LLC, PO Box 701, Milwaukee, WI
53201-0701, along with a check made payable to the MUHLENKAMP
FUND. Third party checks, credit cards, and cash will not
be accepted. A sample copy of the application form is made a
part of the Fund's Prospectus and is available to prospective
investors upon request to the Wexford Trust, which is the sole
distributor of Fund shares. The offering price of such purchases
will be at the net asset value per share next determined after
receipt by the Fund of a valid purchase order. The date on
which the application is accepted by the Fund and the net asset
value determination as of the close of business on that date
shall determine the purchase price and shall normally be the
purchase date for shares. Payment for shares purchased shall be
by check or receipt of good funds by the Fund, which reserves
the right to withhold or reject requests for purchases for any
reason, including uncollectible funds. In the event of a
cancellation of any purchase due to uncollectible funds, the
purchaser shall be liable for all administrative costs incurred
and for all other losses or charges for such invalid transfer
and/or purchase. Certified checks are not necessary to purchase
Fund shares. There shall be no sales charge for purchase of
shares of common stock of the Fund.
The Fund has authorized one or more brokers to accept on its
behalf purchase and redemption orders. Such brokers are
authorized to designate other intermediaries to accept
purchase and redemption orders on the Funds behalf. The
Fund will be deemed to have received a purchase or redemption
order when an authorized broker or, if applicable, a brokers
authorized designee, accepts the order. Customer orders will
be priced at the Funds Net Asset Value next computed after an
authorized broker accepts them, or the brokers authorized
designee.
Minimum Requirements: As of December all accounts must have
investments totaling $1,500 or more; or an account balance
greater than $1,500; or be enrolled in the AIP. Accounts that
do not meet one of these three criteria will be charged a $15
fee, paid to the Fund to lower overall expensesWe will check
accounts and charge this fee annually.
Subsequent Purchases: Purchases of shares made subsequent to an
initial purchase or purchases by a registered shareholder may
be made by mail MUHLENKAMP FUND, c/o Firstar Mutual Fund
Services, LLC, PO Box 701, Milwaukee, WI 53201-0701. Purchases
of shares made subsequent to an initial purchase or purchases
by a registered shareholder may be made by telephone by calling
800-860-3863.All subsequent purchases must be made with no
less than $50, which is also the minimum for participating in
the Automatic Investment Plan. (See Automatic Investment Plan.)
These minimum requirements also apply to IRAs, Retirement
Accounts and UGMA Accounts and such amounts shall be due and
payable in good funds to the Fund on the purchase date. Third
party checks, credit cards, and cash will not be accepted. No
sales charge shall be made for subsequent Purchases.
Reinvestments: The Fund will automatically reinvest all
dividend distributions to shareholders in additional shares of
the requested fund series at net asset value as next determined
as of the close of business on the payment date of such
dividend distribution, unless otherwise instructed by the
shareholder in writing prior to the record date for such
distributions.
Fractional Shares: When share purchases or redemptions are
made or when cash is requested by a shareholder, shares will be
issued or redeemed respectively, in fractions of a share,
calculated to the third decimal place. (Example: $1,000
invested in shares at a net asset value of $11.76 per share will
purchase 85.034 shares.)
Issuance of Share Certificates: All shareholders, by law, are
entitled to ask to have share certificates issued. Due to the
inconvenience, costs, and additional work involved with issuing
certificates, shareholders are being strongly encouraged to have
all shares held in an account maintained by the Fund itself, as
has become the custom within the mutual fund industry.
Automatic Investment Plan: The Automatic Investment Plan
allows shareholders to authorize the Muhlenkamp Fund to debit
their bank account for the purchase of Muhlenkamp Fund shares.
Investments can be made at least monthly by automatically
deducting $50 or more from the shareholders bank account. In
order to participate in the Automatic Investment Plan an account
in the Muhlenkamp Fund must be opened with a minimum of $200
(IRAs included) and an application for automatic investment must
be completed. Cancellation of the automatic investment plan or
changes to the amount or frequency of the automatic purchase may
be made at any time, by notifying the Muhlenkamp Fund in writing
at least 5 days before the order is effective.
Shares will be purchased at the price next determined following
receipt of funds by the Muhlenkamp Fund. The Muhlenkamp Fund
will send a confirmation for every transaction, and a debit
entry will appear on the shareholders bank statement. In the
event of a cancellation of any purchase due to uncollected
funds, the purchaser shall be liable for all administrative
costs incurred and for all other losses or charges for such
invalid transfer and/or purchase.
To establish an automatic investment plan for a Muhlenkamp Fund
account, complete the Muhlenkamp Fund Automatic Investment
Application and include a voided, unsigned check or a savings
deposit/withdrawal slip from the bank account to be debited.
This service will become effective 15 days after the Muhlenkamp
Fund receives the Automatic Investment Application in good
order.
Redemption of Shares
Shareholders may sell all or a portion of their shares to the
Fund on any day a NAV is calculated and such redemptions will
be made in the manner as described in detail in the Fund's
Prospectus dated this same date. All normal voluntary,
involuntary or Systematic Monthly Withdrawal redemptions are
subject to the terms and conditions as set forth in the
prospectus.
All shareholders, by law, are entitled to ask to have share
certificates issued. Due to the inconvenience, costs, and
additional work involved with issuing certificates,
shareholders are being strongly encouraged to have all shares
held in an account maintained by the Fund itself, as has become
the custom within the mutual fund industry. If share
certificates are issued for any reason, however, and are held by
a shareholder requesting the Fund to redeem shares, it is
required that such share certificates first be delivered in
person or by mail to the Fund in good form for transfer. The
share certificates must be signed and contain a proper
signature guarantee by an official of a commercial bank or a New
York Stock Exchange member firm, before redemption can take
place and payment for shares made to any redeeming
shareholder. The Fund shall have the right to refuse payment to
any registered shareholder until all legal documentation
necessary for a complete and lawful transfer is in the
possession of the Fund or its agents, to the complete
satisfaction of the Fund and its Board of Trustees.
Shareholders participating in the Automatic Investment Plan may
have the proceeds of their redemption deposited directly into
the account previously designated on the Automatic Investment
Application. Under most circumstances, payments will be
transmitted on the third business day or no later than 7
calendar days following receipt by the Muhlenkamp Fund of a
valid request for redemption.
Federal Income Tax Status
It is intended that the Fund qualify for and elect the special
tax treatment afforded a "regulated investment company" under
subchapter M of the Internal Revenue Code. To qualify, the Fund
must: (1) Make an election to be a regulated investment
company; (2) invest and re-invest so that at least 90 percent of
its gross income is derived from dividends, interest, payments
with respect to securities loans, and gains from the sale or
other disposition of stocks or securities; (3) Invest and re-
invest so that less than 30 percent of its gross income is
derived from the sale or other disposition of stock or
securities held for less than three months; (4) Satisfy
certain diversification requirements with respect to its
assets at the close of each quarter of the taxable year; (5)
Distribute to its shareholders substantially all of its
ordinary and capital gain net income.
Dividends paid out as distributions to Fund shareholders are
derived from interest and dividends it receives and from any net
capital gains the Fund may realize during the calendar year.
Dividends derived from investment income are taxable to
shareholders at ordinary income tax rates when received,
regardless of whether received as cash or as additional shares.
The information Fund shareholders will require in order to
correctly report the amount and type of dividends and
distributions on their tax returns will be provided by the Fund
early each calendar year, sufficiently in advance of the date
for filing a calendar year return. To avoid the Fund having to
withhold a portion of your dividends, it is necessary that you
supply the Fund with needed information, including a valid,
correct Social Security or Tax Identification Number.
A regulated investment company must also provide a written
statement on or before January 31 of the subsequent year
containing the following information: The name and address of
the regulated investment company; the name and address of
the shareholder; a statement indicating that the pass-through
entity is required to report the amount of the allocable
affected expenses pursuant to Regulation Section 1.67(n)(i)(i);
the amount of income deemed distributed to the investor; and
the amount of expenses required to be allocated to the investor.
Capital Structure
Under the terms of the Trust's Declaration of Trust, each Fund
shareholder has one vote per share of beneficial interest in the
Trust. A majority of shares, voting in accordance with the
terms as set forth in the Declaration and bylaws: (1) elects a
majority of Fund Trustees; (2) must approve advisory contracts;
(3) can terminate the Trust; and 4) generally holds powers to
determine and/or approve or disapprove fundamental Fund
policies. Required shareholder approvals shall be obtained at
annual or special meetings duly called and held for such
purposes. Trustees are elected to office for an indefinite term
and are charged with the responsibility of over- seeing the day
to day operation and affairs of the Fund for shareholders.
Trustees may appoint persons to fill vacancies without a meeting
or shareholder approval, so long as a majority of Trustees then
serving have been elected by shareholders.
Performance Data
The average total return quotations for 1, 5, and 10 years
ending on 12/31/98 are as follows. It equates the initial
amount to the Ending Redeemable Value: P(1+T)^n=ERV.
P = Initial Purchase of $1,000
T = Average Annual Total Return for the period.
n = Number of Years in the period.
ERV = Ending Redeemable Value at end of applicable 1, 5, and 10
year periods, or fraction thereof.
Period Initia Average Ending Redeemable
l Annual Value
Purcha Return (12/31/98)
se
1 Year $1,000 3.22% $1,032
(since
12/31/97)
5 Years $1,000 $2,207
(since 17.16%
12/31/93)
10 Years $1,000 $4,199
Since 15.36%
12/31/88
The Fund measures performance in terms of total return, which is
calculated for any specified period of time by assuming the
purchase of shares of the Fund at the net asset value at the
beginning of the period. Each dividend or other distribution
paid by the Fund during such period is assumed to have been
reinvested at the net asset value on the reinvestment date. The
shares then owned as a result of this process are valued at the
net asset value at the end of the period. The percentage
increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by
the initial value.
The Funds total return shows its overall dollar or percentage
change in value, including changes in share price and assuming
the Funds dividends and capital gains distributions are
reinvested. A cumulative total return reflects the Funds
performance over a stated period of time. An average annual
total return reflects the hypothetical annually compounded
return that would have produced the same cumulative return if
the Funds performance had been constant over the entire period.
Total return figures are based on the overall change in value of
a hypothetical investment in the Fund. Because average annual
returns for more than one year tend to smooth out variations in
the Funds return, investors should recognize that such figures
are not the same as actual year -by-year results.
Financial Information
The Funds most current Financial Statements are incorporated
into the Statement of Additional Information and are part of
the Prospectus, and will also be furnished without charge upon
request by calling or writing the Investment Advisor for the
Fund at the address on the cover of this Statement of Additional
Information. The annual report contains further information
about the Funds performance.
The Fund will mail a semi-annual report to shareholders
maintaining an active account on June 30th of the current
fiscal year. Annual reports will be mailed to shareholders
maintaining an active account on December 31st of the current
fiscal year. However, the Fund will not mail duplicate
financial reports and prospectuses to shareholders having the
same address of record. Shareholders can obtain additional
copies of the financial reports and prospectus by calling or
writing the Investment Advisor for the Fund at the address on
the cover of this Statement of Additional Information.
Significant Shareholders
The following shareholders have a position with the Fund that is
greater than 5% of total net assets as of the date of this
statement:
National Financial Services
Charles Schwab & Company
\
APPENDIX
Bond Rating Categories as Defined by Standard & Poors are
quoted in part and inserted herein for the information of
potential investors in the Fund as a reference as follows:
A S&Ps corporate or municipal debt rating is a current
assessment of the creditworthiness of an obligor with respect to
a specific obligation. This assessment may take into
consideration obligors such as guarantors, insurers or lessees.
The debt rating is not a recommendation to purchase, sell or
hold a security inasmuch as it does not comment as to market
price or suitability for a particular investor.
The ratings are based on current information furnished by the
issuer or obtained by S&Ps from other sources it considers
reliable. S&Ps does not perform any audit in connection with
any rating and may, on occasion, rely on unaudited financial
information. The ratings may be changed, suspended or withdrawn
as a result of changes in, or availability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I.Likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation;
II. Nature of and provisions of the obligor;
III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors rights.
AAA - Debt rated AAA has the highest rating assigned by
S&Ps. Capacity to pay interest and repay principal is extremely
strong.
AA - Debt rated AA has a very strong capacity to pay interest
and repay principal and differs from the highest rated issues
only in small degree.
A - Debt rated A has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity
to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
BB,B,CCC,CC,C - Debt rated BB,B,CCC,CC, and C 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 - The rating is reserved for income bonds on which no
interest is being paid.
D - Debt rated D is in default, and repayment of interest
and/or repayment of principal are in arrears.
NR - indicates that no rating has been requested, that there
is insufficient information on which to base a rating, or that
S&P does not rate a particular type of obligation as a matter
of policy.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940 the registrant has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereto duly authorized, in the Village of
Wexford, the State of Pennsylvania, this 1st day of May, 1999.
Wexford Trust By Ronald H. Muhlenkamp, President
BY:/S/ Ronald H. Muhlenkamp
Ronald H. Muhlenkamp, President & Trustee
BY: /S/ Alfred E. Kraft
Alfred E. Kraft, Trustee
BY: /S/ Terrence Mcelligott
Terrence McElligott, Trustee
MUHLENKAMP FUND APPLICATION
NAME OF APPLICANT
________________________________________________________________
Joint Tenant _______________________________________________
Social Security Number ________________________________________
Name of Co-Applicant
___________________________________________________________________
1 The account registration will be joint tenants with right of
survivorship unless otherwise specified.
2 Only one Social Security Number is needed for tax reporting.
Gift to__________________________________________________________ as
custodian for_____________________________________________________
a Minor________________________________________________________ under
the___________________ Uniform Gifts/Transfer to Minors Act.
A Trust___________________________________________________________ as trustee
for_________________________________________________________
under
agreement dated______________________________________________
Individual
Retirement
Account
My initial investment is a(n): IRA contribution for Tax Year 19 ____
Simplified Employee Pension-IRA (SEP-IRA)
contribution for Tax Year 19____
Rollover
or transfer from: (Check One)
Another IRA Employer-sponsored retirement
plan
SEP-IRA IRA Rollover [funds previously
received from
a distribution from an employer-
sponsored
retirement plan]
NOTE: If you are establishing an IRA account with the Muhlenkamp Fund you
must complete the 5305-A and Beneficiary Designation forms. If you are
transferring an IRA from another financial institution, custodian, or trustee,
you must also complete a Transfer Letter.
City ___________________________________________ State______________
Zip Code____________________________________________________________________
I am a citizen of U.S. Other (please specify)
I authorize Muhlenkamp Fund to open a New Account for purchase of its
common shares in accordance with these instructions and all applicable
provisions of this application as outlined in the current prospectus which
I have received. Under penalty of perjury, I certify (1) that the number
shown on this form is my correct taxpayer identification number and (2)
that I am not subject to backup withholding because (a) I have not been
notified that I am subject to backup withholding as a result of failure to
report all interest and dividends, or (b) the Internal Revenue Service has
notified me that I am no longer subject to backup withholding.
X_______________________________________________________________________-
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders,
Trustees, Etc. No shareholder shall be subject to any
personal liability whatsoever to any Person in connection
with Trust Property or the acts, obligations or affairs of
the Trust. No Trustee, officer, employee or agent of the
Trust shall be subject to any personal liability whatsoever
to any Person, other than to the Trust or its Shareholders,
in connection with Trust Property or the affairs of the
Trust, save only that arising from bad faith, willful
misfeasance, gross negligence or reckless disregard of his
duties with respect to such Person; and all such Persons
shall look solely to the Trust Property for satisfaction of
claims of any other nature arising in connection with the
affairs of the Trust. If any Shareholder, Trustee, officer,
employee, or agent, as such, of the Trust, is made a party
to any suit or proceeding to enforce any such liability of
the Trust he shall not, on account thereof, be held to any
personal liability The Trust shall indemnify and hold each
Shareholder harmless from and against all claims and
liabilities, to which such Shareholder may become subject by
reasons of his being or having been a Shareholder, and shall
reimburse such Shareholder out of the Trust Property for all
legal and other expenses reasonably incurred by him in
connection with any such claim or liability Indemnification
and reimbursement required by the preceding sentence shall
be made only out of assets of the one or more Series whose
shares were held by said Shareholder at the time of the act
or event occurred which gave rise to the claim against or
liability of said Shareholder. The rights accruing to a
Shareholder under this Section 4.1 shall not exclude any
other right to which such Shareholder may be lawfully
entitled, nor shall anything herein contained restrict the
right of the Trust to indemnify or reimburse a Shareholder
in any appropriate situation even though not specifically
provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No
Trustee, officer, employee or agent of the Trust shall be
liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee, or agent thereof
for any action or failure to act (including without
limitation the failure to compel in any way any former or
acting Trustee to redress any breach of trust) except for
his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of
his office.
Section 4.3. Mandatory Indemnification. (a) Subject to
the exceptions and limitations contained in paragraph (b)
below:
(i) every person who is, or has been, a Trustee or
officer of the Trust shall be indemnified by the Trust to
the fullest extent permitted by law against all liability
and against all expenses reasonably incurred or paid by him
in connection with any claim, action suit or proceeding in
which he becomes involved as a party or otherwise by virtue
of his being or having been a Trustee or officer and against
amounts paid or incurred by in the settlement thereof;
(ii) the words "claim," "action," "suit,' or
"proceeding" shall apply to all claims, actions suits or
proceedings (civil, criminal, or other, including appeals),
actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys'
fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a
Trustee or officer:
(i) against any liability to the Trust or the
Shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties
involved in the conduct of his office;
(ii) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good
faith in the reasonable belief that his action was in the
best interest of the Trust;
(iii) in the event of a settlement or other disposition
not involving a final adjudication as provided in paragraph
(b)(ii) resulting in a payment by a Trustee or officer,
unless there has been a determination that such Trustee or
officer did not engage in willful misfeasance, bad faith,
involved in the conduct of his office:
(A) by the court or other body approving the settlement
or other disposition; or
(8) based upon a review of readily available facts (as
opposed to a full trial-type inquiry) by (x) vote of a
majority of the Non-interested Trustees acting on the matter
(provided that a majority of the Noninterested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel.
(c) The rights of indemnification herein provided may
be insured against by policies maintained by the Trust,
shall be severable, shall not affect any other rights to
which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be
such Trustee or officer and shall inure to the benefit of
the heirs, executors, administrators and assigns of such a
person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the Trust other than
Trustees and officers may be entitled by contract or
otherwise under law.
(d) Expenses of preparation and presentation of a
defense to any claim, action, suit or proceeding of the
character described in paragraph (a) of this Section 4 3 may
be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately
determined that he is not entitled to indemnification under
this Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or
some other appropriate security provided by the recipient,
or the trust shall be insured against losses arising out of
any such advances; or
10
(ii) a majority of the Non-interested Trustees acting
on the matter (provided that a majority of the Non-
interested Trustees act on the matter) or an independent
legal counsel in a written opinion shall determine, based
upon a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to
indemnification.
As used in this Section 4.3, a Non-interested Trustee"
is one who is not (i) en "Interested Personal of the Trust
(including anyone who has been exempted from being an
"Interested Personal by any rule, regulation or order of the
Commission), or (ii) involved in the claim, action, suit or
proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee
shall be obligated to give any bond or other security for
the performance of any of his duties hereunder.
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments. Etc. No purchaser, lender, transfer agent or
other Person dealing with the Trustees or any officer,
employee or agent of the Trust shall be bound to make any
inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of
the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other
security of the Trust or undertaking, and every other act or
thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers,
employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security of
the Trust or undertaking made or issued by the Trustees may
recite that the same is executed or made by them not
individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument
are not binding upon any of the Trustees or Shareholders
individually, but bind only the trust estate, and may
contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not
operate to bind the Trustees individually The Trustees shall
at all times maintain insurance for the protection of the
Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such
other insurance as the Trustees in their sole judgment shall
deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee and
officer or employee of the Trust shall, in the performance
of his duties, be fully and completely justified and
protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of
account or other records of the Trust, upon an opinion of
counsel, or upon reports made to the Trust by any of its
officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected
dealers, accountants, appraiser or other experts or
counsultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee
* Not Applicable
INDEPENDENT AUDITORS' CONSENT
To the Trustees of the Wexford Trust and
Shareholders of the Muhlenkamp Fund:
We consent to the use in Post-Effective Amendment No. 18 to Registration
Statement 33-20158 of The Muhlenkamp Fund of our report dated
January 11, 1999 appearing in the Prospectus, which is a part of such
Registration Statement, and to the reference to us under the heading
"Financial Highlights" in such Prospectus.
/S/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
April 28, 1999
CONSENT OF COUNCEL
We hereby consent to the use of our name by the Muhlenkamp Fund,
in the Prospectus dated May 1, 1999, as legal counsel.
Date: 4/28/99 Kabala & Geeseman
/S/ Alan Z Lefkowitz
BY: Alan Z Lefkowitz
