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. 19
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 19
(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)
on (5/1/99) pursuant to paragraph (b)
x 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 designates a new effective date
for a previously filed post-effective amendment.
<TABLE>
CROSS REFERENCE SHEET
(as required by Rule 495)
<C> <C>
N-1A Item No. Location
Part A
Item 1. Front and Back Cover Pages Front and Back Cover Pages
Item 2. Risk/Return Summary: Investments, Risk/Return Summary
Risks and Performance
Item 3. Risk/Return Summary: Fee Table Risk/Return Summary
Item 4. Investment Objectives, Principal Strategies, Investment Objective,
And Related Risks. Strategies and Risks
Item 5. Managements Discussion of Fund Performance not applicable
Item 6. Management Organization and Capital Structure Management and
Organization
Item 7. Shareholder Information Shareholder Information
Item 8. Distribution Arrangements Distribution Arrangements
Item 9. Financial Highlights Information Financial Highlights
Part B-Statement of Additional Information
Item 10. Cover Page and Table of Contents Cover Page and Table of
Contents
Item 11. Fund History Fund History
Item 12. Description of the Fund and its Fund History; Investment
Risks Policies and Limitations
and Investment
Techniques
Item 13. Management of the Fund Management, General
Information
Item 14. Control Persons and Principal Holders of
Securities General Information
Item 15. Investment Advisory and Other Services Management, General
Information
Item 16. Brokerage Allocation and Other Practices Portfolio Transactions
Item 17. Capital Stock and Other Securities General Information
Item 18. Purchase, Redemption and Pricing of Purchase and Redemption
Shares Information; Net Asset Value
Item 19. Tax Status Taxes and Distributions
Item 20. Underwriters Management
Item 21. Calculation of Performance Data Fund Performance and
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
</TABLE>
[LOGO]
PROSPECTUS
May 1, 1999
MUHLENKAMP FUND
P.O. Box 701
Milwaukee, WI 53201-0701
(800) 860-3863
e-mail: [email protected]
Web Site: www.muhlenkamp.com
TABLE OF CONTENTS
Fund Basics
Fund Expenses
Management
Shareholder Information
Distributions
Taxes
Financial Highlights
For More Information
INVESTMENT OBJECTIVE
Maximize total return by acquiring and holding a diversified
list of common stocks
The Securities and Exchange Commission does not approve or pass
upon the content of this prospectus. Any representation to the
contrary is a criminal offense.
FUND BASICS
Goals and Objectives.
The investment objective of the Fund is to seek to maximize the
total return to its shareholders through a combination of income
from dividends and interest and from capital appreciation,
consistent with reasonable risk. To pursue this goal, the Fund
normally invests in a diversified list of common stocks. The
Fund may also invest in fixed-income or debt securities from
time to time as substitutes for stocks when market conditions,
in the opinion of the investment advisor, warrant such a move.
The investment adviser believes that these conditions are
unusual. The advisor has managed money for over 30 years.
During this time, he has developed a method for analyzing
fundamental economic conditions, the markets, and individual
securities. The decision-making criteria for owning equity
securities uses a combination of corporate returns on equity and
price-to-book value ratios. The advisor seeks equity securities
in which the above criteria indicate to the advisor that
available returns may exceed the current inflation rate (as
measured by the Consumer Price Index) by 4%. Common stocks
acquired will generally be of companies whose securities are
listed on the major securities exchanges. The Fund may also
purchase selected companies that are traded in the over-the-
counter market.
The investment advisor to the Fund does not subscribe to the
philosophy that securities can be acquired and held forever.
The adviser believes that securities markets, as well as
industries and companies, can be cyclical in nature as a result
of inherent industry, corporate, or even international factors,
such as technological, economic, monetary, social or political
forces, either alone or in combination with one another. The
life span of such cycles will vary and may be long or short-
term. For these reasons, the advisor places emphasis on a
business-like evaluation of current conditions and studies
market history to get a better understanding of security values
under different conditions, but does not try to apply historical
evaluation methods directly to todays markets. While short-
term swings in the marketplace are not ignored, they are
subordinated by the Funds advisor to the quest for long-term
values.
Basic investment goals the investment advisor shall bear in mind
as it seeks to maximize the Funds total return to shareholders
are: (1) to preserve capital; and (2) to achieve its return
expectations without subjecting the portfolio to
unacceptable business or market risks.
The fund may purchase and 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. At this time the Fund does not intend to
invest (i.e., purchase & sell call and put options) on more than
5% of its net assets in options.
Principal Risks
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. While investments are
selected, which the Investment Adviser believes will experience
long-term growth, there can be no assurance that the objective
will be met. The fund is subject to risks that affect equity
securities markets 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.
Side bar
The types of investments that the fund may invest in are
fairly broad, including stocks, bonds, cash equivalents and
other investment companies. The purpose of the broad list of
types of investments is to allow flexibility in managing the
assets. This flexibility also entails the risk that assets will
be invested in various types of securities at the wrong time and
prices. The fund may also invest in options. This practice is
used primarily to hedge the funds portfolio and may also be
used to increase returns, however, there is risk that such
practice sometimes may reduce returns or increased volatility.
End side bar
The following chart illustrates how fund results vary over time.
The Muhlenkamp Funds past performance is not necessarily an
indication of how it will perform in the future.
1998 3.22%
1997 33.30%
1996 29.96%
1995 32.96%
1994 -7.17%
1993 18.09%
1992 15.77%
1991 45.39%
1990 -14.86%
1989 12.45%
During the 10-year period shown in the bar chart, the
highest return for a quarter was 12.48% (quarter ending
12/31/98) and the lowest return for a quarter was was
-21.2% (quarter ending 09/30/98).
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.
End Side Bar
Average Annual One Year Past 5 years Past 10 years
Total Returns
Muhlenkamp Fund 3.22% 21.38% 15.43%
S & P 500* 28.12% 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.
FUND EXPENSES
As an investor, you pay certain fees and expenses in
connection with the fund, which are described in the table
below. 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) -
*
Footnote: Investors may be charged an account maintenance
charge 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.
Annual Fund Operating Expenses (expenses that are deducted
from Fund assets)
Management Fees.......... 1.0%
Distribution (12b-1) Fees....................... None
Other Expenses............ 0. 36%
Commission Credits used to Pay Expenses. -0.04%
Total Annual Fund Operating 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.
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
13 41 70 153
side bar
Fees:
Management fee: fee paid to the investment adviser for
managing the funds portfolio.
Distribution fee: fee paid to the funds distributor for
maintaining shareholder accounts, providing information for
prospective investors and account maintenance.
Other expenses: fees paid by the fund for miscellaneous
items such as asset custody, shareholder record keeping,
fund administration, and registration fees.
End side bar
MANAGEMENT
The Investment Advisor for the fund is Muhlenkamp & Co., Inc.,
12300 Perry Hwy, Wexford, Pennsylvania, 15090, is 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 without interruption since
1970 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 cant guarantee that
this wont 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]
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.
Transfer Agent and Service Provider: Firstar Mutual Fund
Services, LLC, P.O. Box 701, Milwaukee, WI 53201-0701.
SHAREHOLDER INFORMATION
Purchasing Shares
You may open an account with an initial investment of $1,500.
If you choose to participate in the Automatic Investment Program
the minimum initial investment is $200. The Automatic Investment
Program requires a minimum investment of $50 per month to be
automatically invested from your checking or savings account.
By calendar year end all accounts must have net investments
(purchases less redemptions) totaling $1,500 or more; or 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 fee, paid to
the Fund to lower expenses. We will check accounts and charge
this fee annually. Your price for fund shares is the funds net
asset value per share ("NAV"). The NAV is calculated each day
the New York Stock Exchange (NYSE) is open and is based on the
value of the funds investments. These investments are priced
based on their current market value. When market quotations are
not readily available, the investments are priced at fair value
as determined by the funds pricing committee.
Opening an Account
Send the application and a check made payable to the Muhlenkamp
Fund c/o Firstar Mutual Fund Services, LLC P.O. Box 701,
Milwaukee, WI 53201-0701.
You may also open an account by having your investment wired to
the fund. You must first call the Transfer Agent at 800-860-
3863 to set up your account and receive an account number.
Then, you should provide your bank with the following
information:
Firstar Bank, Milwaukee, NA
ABA #075000022
Attn: Muhlenkamp Fund
D.D.A. #112-952-137
For further credit to shareholder account name
For the Shareholder Account Number
Attn: Mutual Fund Services
Additional Investments
You may purchase additional shares at any time by mail or wire.
Each additional purchase should reference your name, account
number and the name of the fund. The minimum requirement for
additional purchases is $50.
[sidebar]
Net Asset Value- This is the price per share of a mutual fund.
It is determined by taking the total market value of the funds
assets (assets - liabilities) divided by the total number of
fund shares outstanding. The NAV is calculated for each day as
of the close of business of the New York Stock Exchange.
Securities in the funds portfolio will ordinarily be valued
based upon market quotes. If quotations are not available,
securities or other assets will be valued by a method, which the
Trustees believe most accurately reflects fair value.
End side bar
Side bar
IRA and Retirement Accounts-The fund offers IRA and Retirement
Accounts to any employed individual and his or her spouse. The
number and amounts may be limited by the maximum allowed
contribution per year. Existing IRA accounts may be rolled over
into a new "self-directed IRA account" that invests in shares of
the fund. The forms and disclosures needed before investing IRA
money in fund shares may be obtained by calling the fund.
End side bar
Selling shares
You may sell all or some of your shares on any day that the fund
is open for business by mail or telephone. You may redeem by
calling the fund at 800-860-3863 (We must have an Electronic
Funds Transfer form on file) or by sending your request by mail
to Muhlenkamp Fund, c/o Firstar Mutual Fund Services, LLC P.O.
Box 701, Milwaukee, WI 53201-0701.
Your shares will be sold at the next NAV calculated after the
funds transfer agent accepts your order. You may receive your
payment by check or federal wire transfer. The proceeds may be
more or less than the purchase price of your shares.
Systematic Withdrawals
Shareholders with accounts that have at least $5,000 or more may
direct that the fund pay an automatic monthly 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 month to raise money to make the payments. These
redemptions may be a taxable event for you.
Minimum Account Balance
The fund reserves the right to redeem any shareholder account
that has a balance less than $1,500 due to redemptions
(excluding participants in the Automatic Investment Program),
not due to market value. The fund charges a 15.00 annual fee
for shareholder accounts that are maintained in an amount less
than 1,500. Shareholders who participate in the automatic
investment program will pay the maintenance charge if their
account falls below $200.
DISTRIBUTIONS
The fund pays dividends annually to shareholders from net
investment income and any net capital gains that it has realized
during the year.. Please refer to the Financial Highlights
section of this prospectus for a history of the dividend
distribution. Please note that the fund has paid only two
capital gain distributions in its history making it very tax
efficient.
For your convenience, dividends and capital gains are
automatically reinvested in the fund. If you ask us to pay the
distributions in cash, we will send you a check instead of
purchasing more shares of the fund. For cash distributions you
need to telephone the Fund at (800) 860-3863 . You will receive
confirmation that shows the payment amount and a summary of all
transactions. Check are normally mailed within five business
days of the payment date.
TAXES
As with any investment, you should consider how your
investment in the fund would be taxed. For federal tax
purposes, the funds 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 funds 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 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.
[SIDE BAR]
Portfolio turnover averages less than 25% annually. The
Muhlenkamp Fund has paid only two capital gain distributions in
10 years, totaling 36 cents per share.
[END SIDE BAR]
<TABLE>
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for each share outstanding
throughout each year ending on December 31st. 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 may be found in the funds most recent annual report.
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31, 1989 THROUGH 1998
<C> <C> <C> <C>
1998 1997 1996 1995 1994
NET ASSET VALUE, 36.55 $27.52 $21.26 $16.23 $17.86
BEGINNING OF YEAR
Income from
Investment Operations:
Net investment 0.08 0.18 0.14 0.21 0.11
income (1)
Net gains or 1.80 8.98 6.23 5.14 (1.39)
(losses) on securities
(3)
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 - - (0.11) (0.25)
capital gains)
Return of capital - - - -
Total (0.08) (0.13) (0.11) (0.32) (0.35)
Distributions
NET ASSET VALUE, END OF $37.65 $36.55 $27.52 $21.26 $16.23
YEAR
Total Return (2) 3.22% 33.28% 29.96% 32.9% (7.20)%
Net Assets, End of $194,962 $125,460 $42,038 $23,571 $16,610
Period (000s omitted)
Ratio of Total Expenses 1.36% 1.44% 1.56% 1.4% 1.57%
to Average Net Assets
(2)
Ratio of Net Expenses 1.32% 1.33% 1.54% 1.35% 1.52%
to Average Net Assets
(2)
Ratio of Net Investment 0.21% 0.53% 0.58% 1.10% 0.70%
Income to Average Net
Assets (3)
Portfolio Turnover Rate 27.03% 13.89% 16.90% 22.70% 25.60%
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31, 1989 THROUGH 1998
1993 1992 1991 1990 1989
NET ASSET VALUE, $15.20 $13.25 9.21 $11.05 $10.04
BEGINNING OF YEAR
Income from
Investment Operations:
Net investment 0.12 0.20 .13 0.19 .39
income (1)
Net gains or 2.63 1.89 4.05 (1.83) 0.86
(losses) on securities
(3)
Total From 2.75 2.09 4.18 (1.64) 1.25
Investment Operations
Less Distributions:
Dividends (from (0.08) (0.14) (.11) (0.19) (0.25)
investment income)
Distributions (from - - - - -
capital gains)
Return of capital (0.01) - (.03) - -
Total (0.09) (0.14) (.14) (0.19) (0.25)
Distributions
NET ASSET VALUE, END OF $17.86 $15.20 $13.25 $9.21 $11.04
YEAR
Total Return (2) 18.10% 15.80% 45.40% (14.86%) 12.50%
Net Assets, End of $12,057 $1,962 $1,183 $1,104
Period (000s omitted) $4,716
Ratio of Total Expenses 1.30% 1.41% 1.71% 1.76% 1.54%
to Average Net Assets
(2)
Ratio of Net Expenses 1.23% 1.28% - - -
to Average Net Assets
(2)
Ratio of Net Investment 0.70% 1.44% 1.17% 1.95% 3.04%
Income to Average Net
Assets
Portfolio Turnover Rate 14.10% 20.10% 52.50% 47.47% 34.46%
(1) Computed on weighted average number of shares
outstanding during the year.
(2) During the years ended December 31, 1992 through
1998, the Fund utilized commission credits of $4,240,
$5,950, $8,830, $11,000, $5,000, $47,425 and _58,010,
respectively, to pay certain expenses of the Fund. The
total return for the Fund would have been 15.6%, 18.0%,
(7.2)%, 32.9%, 29.9%, 33.2% and 3.3% for the years
ended December 31, 1992 through 1998, respectively,
without the credits.
(3) The amount shown in this caption for a share
outstanding does not coorrespond with the aggregate net
realized and unrealized gains or (losses) on security
transactuioins for the year ended December 31, 1998,
due to the timing of sales and repurchases of fund
shares in relation to fluctuating market values of the
investments of the fund.
See notes to financial statements.
</TABLE>
[Back Cover]
FOR MORE INFORMATION
General Information and Other Available Information
The fund sends investors a semi-annual report and an audited
annual report. These reports include a list of the fund
investments and the funds financial statements. The annual
report also contains a statement from the investment adviser
discussing market conditions and investment strategies that
significantly affected the funds performance during its last
fiscal year.
The fund has a Statement of Additional Information that contains
more detailed information on all aspects of the fund and is
incorporated by reference into this prospectus. The Statement
of Additional Information has been filed with the Securities and
Exchange Commission and is available for review at the SECs
Public Reference Room (1-800-SEC-0330) or on the SECs web site
at http://www.sec.gov.
Shareholders may obtain any of these documents free of charge by
calling the fund at 800-860-3863.
This information is also available at the funds web site located
at www.muhlenkamp.com.
Investment Company File No. 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 Contents1
Page
Fund History 2
2
Investment Objectives and Policies
Options 3
Investment Restrictions 5
Non-Fundamental Investment Restrictions 6
History and Background of Investment Advisor 7
Board of Trustees 8
Investment Advisory Board 9
Brokerage Allocations 10
Net Asset Value Calculation 10
Purchase of Shares 10
Redemption of Shares 12
Federal Income Tax Status2 12
Capital Structure 13
Performance Data 13
Financial Information 14
Significant Shareholders 15
Appendix 15
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]
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 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
It is the intention of the Fund to attempt to maximize total
returns for its shareholders by seeking income from dividends
and interest as well as capital gains from increases in the
value of its investments. The Fund invests in common stocks
most of the time 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
managements 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 MCIs 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 stocks 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 MCIs 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 Funds assets in fixed-
income or debt investments of the types more fully described in
the Funds Prospectus dated this same date. 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. (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 $300million 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 Funds
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 companys
attractiveness as an investment. It is also founded on MCIs
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.
OPTIONS34
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.
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 Funds 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.
5
[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. 6
Non-Fundamental Investment Restrictions
Pursuant to Agreements with State Regulators,
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. Under normal market conditions the Fund may not 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
and with the Pennsylvania Securities Commission, Harrisburg,
PA.
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, MCIs 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 Funds 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 Funds 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 trusts Annual Meeting of Shareholders, and
their respective duties and affiliations are as follows:
Past Five Year
Position With Business
Name and Address The Fund Affiliations
and Primary
Occupation
Ronald H. President, Trustee Investment Advisor
Muhlenkamp* and Principal,
Muhlenkamp & Muhlenkamp &
Company, Inc Company, Inc.
12300 Perry Hwy Treasurer & Principal,
Muhlenkamp &
Wexford, PA 15090 Trustee
Co., Inc.
Alfred E. Kraft Trustee Management
202 Fan Hollow Rd Consultant
Uniontown, PA 15401
Terrence McElligott Trustee President, West Penn
4103 Penn Ave Brush & Supply, Inc.
Pittsburgh, PA 15224
*Interested persons as defined under the Investment Company Act
of 1940
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 Funds 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 Funds 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 30, 1999 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 expenses. We 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 purchases7.
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 Funds
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 Trusts 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 provided to all
as 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:
Ronald H. Muhlenkamp, President & Trustee
BY:
Alfred E. Kraft, Trustee
BY:
Terrence McElligott, Trustee
