<PAGE>
As filed with the Securities and Exchange Commission on
July 25, 2000
---------------------------
Registration No. 333-_______
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[_] PRE-EFFECTIVE AMENDMENT NO._________
[X] POST-EFFECTIVE AMENDMENT NO. 35
------
(Check appropriate box or boxes)
_______________
Fifth Third Funds
(Exact Name of Registrant as Specified in Charter)
1-888-799-5353
(Area Code and Telephone Number)
3435 Stelzer Road
Columbus, OH 43219
(Address of Principal Executive Offices)
_______________
ALAN G. PRIEST, ESQUIRE
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
(Name and address of Agent for Service)
_______________
Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective.
It is proposed that this filing will become effective on August 24, 2000
pursuant to Rule 488.
Title of securities being offered: Units of beneficial interest.
An indefinite amount of the Registrant's securities has been registered
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. In reliance upon such Rule, no filing fee is being paid at
this time.
<PAGE>
IMPORTANT SHAREHOLDER INFORMATION
Fifth Third Funds
Fifth Third Cardinal Fund
The document you hold in your hands contains your Combined Prospectus/Proxy
Statement and proxy card. A proxy card is, in essence, a ballot. When you vote
your proxy, you tell us how to vote on your behalf on important issues relating
to the Fifth Third Cardinal Fund ("Cardinal Fund"). If you simply sign the
proxy without specifying a vote, your shares will be voted in accordance with
the recommendations of the Board of Trustees.
We urge you to spend a few minutes with the Combined Prospectus/Proxy
Statement, fill out your proxy card, and return it to us (or vote by telephone
or the Internet). Voting your proxy, and doing so promptly, enables Fifth Third
Funds to avoid conducting additional mailings.
Please take a few moments to exercise your right to vote. Thank you.
The Combined Prospectus/Proxy Statement constitutes the Proxy Statement of
Fifth Third Funds for the meeting of shareholders of the Cardinal Fund. It also
constitutes the Prospectus of the Fifth Third Quality Growth Fund ("Quality
Growth Fund") which is to issue shares to be distributed to Cardinal Fund
shareholders in connection with the proposed reorganization of the Cardinal Fund
with and into the Quality Growth Fund. The Trustees of Fifth Third Funds are
recommending that shareholders of the Cardinal Fund approve a reorganization in
which the Cardinal Fund will transfer all of its assets to the Quality Growth
Fund in return for Investment A, Investment C and Institutional shares of the
Quality Growth Fund. At the same time, the Quality Growth Fund will assume all
of the liabilities of the Cardinal Fund. After the transfer, shares of the
Quality Growth Fund will be distributed to the Cardinal Fund's shareholders tax-
free in liquidation of the Cardinal Fund. As a result of these transactions,
your shares of the Cardinal Fund will, in effect, be exchanged at net asset
value and on a tax-free basis for shares of the Quality Growth Fund. Cardinal
Fund shareholders holding Investment A, Investment C or Institutional shares,
will receive Investment A, Investment C or Institutional shares, respectively,
of the Quality Growth Fund.
-2-
<PAGE>
Fifth Third Funds
Fifth Third Cardinal Fund
3435 Stelzer Road
Columbus, Ohio 43219
August [DATE], 2000
-------------
To the Shareholders:
Enclosed you will find several documents being provided to you in
connection with a special meeting of the shareholders of the Fifth Third
Cardinal Fund ("Cardinal Fund") to be held on October 17, 2000 at 10:00 a.m. at
the offices of Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio
45263. We hope this material will receive your immediate attention and that, if
you cannot attend the meeting in person, you will vote your proxy promptly.
The Trustees of Fifth Third Funds are recommending that shareholders of the
Cardinal Fund approve a reorganization in which the Cardinal Fund will transfer
all of its assets to the Fifth Third Quality Growth Fund ("Quality Growth Fund")
in return for Investment A, Investment C and Institutional shares of the Quality
Growth Fund. At the same time, the Quality Growth Fund will assume all of the
liabilities of the Cardinal Fund. After the transfer, shares of the Quality
Growth Fund will be distributed to the Cardinal Fund's shareholders tax-free in
liquidation of the Cardinal Fund. As a result of these transactions, your
shares of the Cardinal Fund will, in effect, be exchanged at net asset value and
on a tax-free basis for shares of the Quality Growth Fund. Cardinal Fund
shareholders holding Investment A, Investment C or Institutional shares, will
receive Investment A, Investment C or Institutional shares, respectively, of the
Quality Growth Fund.
Fifth Third Bank has advised the Fifth Third Fund's Trustees that it
believes that the above-described transaction offers the shareholders of the
Cardinal Fund the opportunity to pursue similar investment objectives more
effectively and with resulting economies of scale and potentially lower expense
ratios over time.
THE TRUSTEES BELIEVE THAT THE PROPOSED COMBINATION OF THE CARDINAL FUND
WITH THE QUALITY GROWTH FUND IS IN THE BEST INTERESTS OF THE CARDINAL FUND AND
ITS SHAREHOLDERS AND RECOMMEND THAT YOU VOTE IN FAVOR OF SUCH PROPOSAL.
The Notice of Special Meeting of Shareholders, the accompanying Combined
Prospectus/Proxy Statement, and the form of proxy are enclosed. Please read
them carefully. If you are unable to attend the meeting in person, we urge you
to sign, date, and return the proxy card (or vote by telephone or the Internet)
so that your shares may be voted in accordance with your instructions.
Since the meeting is less than eight weeks away, we urge you to give the
enclosed material your prompt attention so as to avoid the expense of additional
mailings.
Your vote is important to us. Thank you for taking the time to consider
this important proposal.
Sincerely yours,
Jeffrey C. Cusick
Vice-President
Fifth Third Funds
-3-
<PAGE>
FIFTH THIRD FUNDS
Fifth Third Cardinal Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the Fifth Third Cardinal Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Fifth
Third Cardinal Fund ("Cardinal Fund"), separate series of Fifth Third Funds,
will be held at Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio
45263 on October 17, 2000 at 10:00 a.m. Eastern time, for the following
purposes:
1. To consider and act upon a Plan of Reorganization ("Plan") adopted by
Fifth Third Funds providing for the transfer of all of the assets of
the Cardinal Fund to the Fifth Third Quality Growth Fund ("Quality
Growth Fund") in exchange for Investment A, Investment C, and
Institutional shares (collectively, "Shares") of the Quality Growth
Fund and the assumption by the Quality Growth Fund of all of the
liabilities of the Cardinal Fund, followed by the dissolution and
liquidation of the Cardinal Fund, and the distribution of Shares of
the Quality Growth Fund to the shareholders of the Cardinal Fund;
2. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The proposed transaction is described in the attached Combined
Prospectus/Proxy Statement. A copy of the Plan is appended as Appendix A
thereto.
Pursuant to instructions of the Board of Trustees of Fifth Third Funds, the
close of business on August 18, 2000, has been designated as the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting.
SHAREHOLDERS ARE REQUESTED TO PROMPTLY VOTE BY TELEPHONE OR THE INTERNET OR
TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY
CARD WHICH IS BEING SOLICITED BY FIFTH THIRD FUNDS' BOARD OF TRUSTEES. THIS IS
IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING. PROXIES MAY BE REVOKED AT
ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO FIFTH THIRD FUNDS A WRITTEN
NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE
SPECIAL MEETING AND VOTING IN PERSON.
By Order of the Trustees
Rodney L. Ruehle
Secretary
Fifth Third Funds
Columbus, Ohio
August [DATE], 2000
-------------
-4-
<PAGE>
Prospectus/Proxy Statement
August [DATE], 2000
-------------
Fifth Third Funds
3435 Stelzer Road
Columbus, Ohio 43219
Tel. No. 1-888-799-5353
COMBINED PROSPECTUS/PROXY STATEMENT
This Combined Prospectus/Proxy Statement is furnished in connection with
the solicitation of proxies from the holders of units of beneficial interest
("Shares") of Fifth Third Cardinal Fund ("Cardinal Fund"), for use at a Special
Meeting of Shareholders to approve the reorganization of the Cardinal Fund. The
reorganization contemplates the transfer of all the assets and liabilities of
the Cardinal Fund to the Fifth Third Quality Growth Fund ("Quality Growth Fund")
(collectively with the Cardinal Fund, the "Funds") in exchange for Shares of the
Quality Growth Fund, followed by the dissolution and liquidation of the Cardinal
Fund, and the distribution of Quality Growth Fund Shares to Shareholders of the
Cardinal Fund (the "Transaction"). As a result of the Transaction, each
Shareholder of the Cardinal Fund will receive, on a tax-free basis, a number of
full and fractional Shares of the Quality Growth Fund equal at the date of the
exchange to the value of the net assets of the Cardinal Fund transferred to the
Quality Growth Fund that are attributable to the Shareholder. Cardinal Fund
Shareholders holding Investment A, Investment C, or Institutional Shares, will
receive Investment A, Investment C, or Institutional Shares, respectively, of
the Quality Growth Fund.
Both the Cardinal Fund and the Quality Growth Fund are portfolios
("series") of Fifth Third Funds, which is an open end management investment
company consisting of 18 separate funds.
This Combined Prospectus/Proxy Statement explains concisely what you should
know before investing in the Quality Growth Fund. Please read it carefully and
keep it for future reference.
The current Statement of Additional Information of Fifth Third Funds for
the Cardinal Fund and the Quality Growth Fund, dated November 30, 1999 (revised
February 1, 2000 and June 1, 2000), has been filed with the Securities and
Exchange Commission and is incorporated by reference. The prospectuses for the
Quality Growth Fund and the Cardinal Fund, dated November 30, 1999 and the
Statement of Additional Information (revised February 1, 2000 and June 1, 2000)
may be obtained, without charge, by writing Fifth Third Funds, 3435 Stelzer
Road, Columbus, Ohio 43219 or by calling 1-888-799-5353. In addition, a
Statement of Additional Information dated August 23, 2000, relating to the
Transaction described in this Combined Prospectus/Proxy Statement has been filed
with the Securities and Exchange Commission and is also incorporated into this
Combined Prospectus/Proxy Statement by reference. Such Statement of Additional
Information may be obtained, without charge, by writing Fifth Third Funds at the
above-listed address or by calling 1-888-799-5353.
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON YOUR INVESTMENT IN A FUND. YOUR
INVESTMENT IN A FUND IS NOT A DEPOSIT OR AN OBLIGATION OF FIFTH THIRD BANK, ITS
AFFILIATES, OR ANY BANK. IT IS NOT INSURED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
-5-
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PROPOSAL (1) APPROVAL OF
PLAN OF REORGANIZATION..........................................
FEE TABLE.......................................................
SYNOPSIS........................................................
RISK FACTORS....................................................
INFORMATION ABOUT THE TRANSACTION...............................
INFORMATION ABOUT THE QUALITY GROWTH FUND AND THE
CARDINAL FUND.............................................
VOTING INFORMATION..............................................
INTEREST OF CERTAIN PERSONS.....................................
FORM OF PLAN OF REORGANIZATION
APPENDIX A......................................................
</TABLE>
-6-
<PAGE>
PROPOSAL (1) -- APPROVAL OF
---------------------------
PLAN OF REORGANIZATION
----------------------
At a meeting held on June 21, 2000, all of the Trustees of Fifth Third
Funds unanimously approved a Plan of Reorganization pursuant to which the
Cardinal Fund would be merged with and into the Quality Growth Fund on or about
October 30, 2000 ("the Exchange Date"). On the Exchange Date, the Cardinal
Fund will transfer all of its assets and liabilities to the Quality Growth Fund
in exchange for Shares of the Quality Growth Fund having an aggregate net asset
value equal to the aggregate value of the net assets acquired from the Cardinal
Fund. The assets and liabilities of the Cardinal Fund and the Quality Growth
Fund will be valued as of the close of trading on the New York Stock Exchange on
the business day next preceding the Exchange Date. Following the transfer, the
Cardinal Fund will be dissolved and Shares of the Quality Growth Fund received
by the Cardinal Fund will be distributed to Cardinal Fund Shareholders in
liquidation of the Cardinal Fund. As a result of the proposed Transaction,
Shareholders of the Cardinal Fund will receive, on a tax-free basis, a number of
full and fractional Shares equal in value at the date of the exchange to the
value of the net assets of the Cardinal Fund transferred to the Quality Growth
Fund attributable to the Shareholder (based on the proportion of the outstanding
Shares of the Cardinal Fund owned at the time by the Shareholder). All Cardinal
Fund shareholders will receive shares of the Fifth Third Class (Investment A,
Investment C, or Institutional) that corresponds to the class of Cardinal Fund
Shares that they hold.
For the reasons set forth below under "Reasons for the Proposed
Reorganization," the Board of Trustees of Fifth Third Funds, including Trustees
of Fifth Third Funds who are not "interested persons" of Fifth Third Funds as
defined in the Investment Company Act of 1940 (the "1940 Act") (the "Independent
Trustees"), unanimously concluded that participation in the proposed Transaction
is in the best interests of the Cardinal Fund, the Quality Growth Fund and their
respective existing Shareholders. The Trustees have further concluded that the
economic interests of Shareholders of the Funds will not be diluted as a result
of the proposed Transaction. In reaching this conclusion, the Trustees
considered, among other things, the similarity of the investment objectives of
the Cardinal Fund and the Quality Growth Fund; the expense ratios of the
Cardinal Fund compared to the Quality Growth Fund; the performance of the
Quality Growth Fund as compared to the Cardinal Fund; the investment management
efficiencies that may be gained; the potential economies of scale which could be
realized as a result of the increase in size of the Quality Growth Fund; the
qualifications and experience of Fifth Third Bank (the "Advisor"); the
recommendation of the Advisor in favor of the Transaction; and the fact that the
Transaction will be free of federal income taxes.
-7-
<PAGE>
FEE TABLE
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy
and hold Shares of the Fund:
<TABLE>
<CAPTION>
Fifth Third Fifth Third
Cardinal Quality Growth Combined
Fund Fund Fund Pro Forma
------------------------------- --------------------------- ---------------------------
Inv. A Inv. C Instit. Inv. A Inv. C Instit. Inv. A Inv. C Instit.
--------- ------- -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder Fees
(fees paid directly from your
investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as
a percentage of offering
price) 4.50% None None 4.50% None None 4.50% None None
Maximum Sales Charge on
Reinvested Dividends None None None None None None None None None
Maximum Deferred
Sales Charge (as a
percentage of original
purchase price or
redemption proceeds, as
applicable) None 1.00% None None 1.00% None None 1.00% None
Redemption Fee None None None None None None None None None
Exchange Fee None None None None None None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.60% 0.60% 0.60% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
Distribution/Service (12b-1) Fees 0.25%/1/ 1.00%/1/ None 0.25%/1/ 1.00%/1/ None 0.25%/1/ 1.00%/1/ None
Other Expenses 0.26% 0.29% 0.29% 0.24% 0.30% 0.25% 0.23% 0.23% 0.23%
Total Annual Fund Operating
Expenses 1.11%/2/ 1.89%/2/ 0.89%/2/ 1.29%/3/ 2.10%/3/ 1.05%/3/ 1.28%/4/ 2.03%/4/ 1.03%/4/
</TABLE>
/1/ Certain Service Organizations may receive fees from a Fund in amounts up to
an annual rate of 0.25% of the daily net asset value of the Fund shares owned by
the shareholders with whom the Service Organization has a servicing
relationship.
/2/ Other expenses are restated to reflect current fees. The expenses noted
above do not reflect any fee waivers or expense reimbursement arrangements that
are or were in effect. Total expenses after fee waivers and expense
reimbursements for each Class of the Cardinal Fund are: Investment A Shares,
1.04%; Investment C Shares, 1.65%; and Institutional Shares, 0.82%. Any fee
waiver or expense reimbursement arrangement is voluntary and may be discontinued
at any time.
/3/ Other expenses are restated to reflect current fees. The expenses noted
above do not reflect any fee waivers or expense reimbursement arrangements that
are or were in effect. Total expenses after fee waivers and expense
reimbursements for each Class of the Quality Growth Fund are: Investment A
Shares, 1.21%; Investment C Shares, 1.80%; and Institutional Shares, 1.00%. Any
fee waiver or expense reimbursement arrangement is voluntary and may be
discontinued at any time.
/4/ Other expenses are based on estimated amounts for the current fiscal year.
Total expenses after fee waivers and expense reimbursements for each Class of
the Quality Growth Fund will be as follows: Investment A Shares, 1.25%;
Investment C Shares, 2.00%; and Institutional Shares, 1.00%. Any fee waiver or
expense reimbursement arrangement is voluntary and may be discontinued at any
time.
-8-
<PAGE>
Fifth Third Cardinal Fund
Fifth Third Quality Growth Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Amounts are presented assuming redemption at the end of
each period or no redemption in the case of Investment C Shares. Because these
examples are hypothetical and for comparison only, your actual costs may be
different.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Fifth Third Cardinal Fund
Investment A Shares............. $558 $787 $1,034 $1,741
Investment C Shares
Assuming Redemption......... $292 $594 $1,021 $2,212
Assuming No Redemption...... $192 $594 $1,021 $2,212
Institutional Shares............ $ 91 $284 $ 493 $1,096
Fifth Third Quality Growth Fund
Investment A Shares............. $575 $841 $1,126 $1,936
Investment C Shares
Assuming Redemption......... $313 $658 $1,129 $2,431
Assuming No Redemption...... $213 $658 $1,129 $2,431
Institutional Shares............ $107 $334 $ 579 $1,283
Combined Fund Pro Forma
Investment A Shares............. $575 $838 $1,121 $1,926
Investment C Shares
Assuming Redemption......... $306 $637 $1,093 $2,358
Assuming No Redemption...... $206 $637 $1,093 $2,358
Institutional Shares............ $105 $328 $ 569 $1,259
</TABLE>
-9-
<PAGE>
SYNOPSIS OF PROSPECTUS
----------------------
Summary. The following is a synopsis of certain information relating to the
-------
Transaction and is qualified by reference to the more complete information
contained in this Combined Prospectus/Proxy Statement, the Statement of
Additional Information of Fifth Third Funds, and the Appendix attached hereto.
Fifth Third Funds' Annual Reports and Semi-Annual Reports to Shareholders may be
obtained free of charge by calling 1-800-799-5353 or writing Fifth Third Funds,
3435 Stelzer Road, Columbus, Ohio 43219.
Key Features of Transaction. The shareholders of the Cardinal Fund are being
----------------------------
asked to approve or disapprove (1) the Plan of Reorganization by and between the
Cardinal Fund and the Quality Growth Fund dated as of June 21, 2000 (the
"Plan"), a copy of which is attached to this Combined Prospectus/Proxy Statement
as Appendix A. The Plan provides, among other things, for the transfer of all
of the assets of the Cardinal Fund to the Quality Growth Fund in exchange for
the assumption by the Quality Growth Fund of all of the liabilities of the
Cardinal Fund and for a number of Shares calculated based on the value of the
net assets of the Cardinal Fund acquired by the Quality Growth Fund and the net
asset value per share of the Quality Growth Fund, all as more fully described
below under "Information about the Reorganization." After receipt of Shares,
the Cardinal Fund will dissolve, distributing the Shares to its shareholders in
complete liquidation, and the Cardinal Fund will be terminated. Prior to the
date of such transfer (the "Exchange Date"), the Cardinal Fund will declare a
distribution to its shareholders which, together with all previous
distributions, will have the effect of distributing to its shareholders all of
its investment company taxable income (computed without regard to the deduction
for dividends paid) and net realized capital gains, if any, through the Exchange
Date.
At a meeting held on June 21, 2000, the Trustees of Fifth Third Funds in
attendance voted unanimously to approve the Transaction and to recommend that
shareholders of the Cardinal Fund also approve the Transaction. Approval of
reorganization of the Cardinal Fund requires the affirmative vote of a majority
of all votes attributable to the voting securities of the Cardinal Fund voting
separately as a fund, defined as the lesser of (a) sixty seven percent (67%) or
more of the votes attributable to all voting securities of the Cardinal Fund
present at such meeting, if holders of more than 50% of the votes attributable
to the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the votes attributable to the outstanding voting securities of
the Cardinal Fund.
A shareholder of the Cardinal Fund objecting to the proposed Transaction is
not entitled under either Massachusetts law or Fifth Third Funds' Declaration of
Trust to demand payment for or an appraisal of his or her particular Cardinal
Fund shares if the Transaction is consummated over his or her objection.
However, shares of the Cardinal Fund are redeemable for cash at their net asset
value on days on which both the New York Stock Exchange and the Federal Reserve
Bank of Cleveland are open for business ("Business Days").
In the event that this proposal is not approved by the shareholders of the
Cardinal Fund, such Fund will continue to be managed as a separate fund in
accordance with its current investment objectives and policies, and the Trustees
of the Fifth Third Funds may consider alternatives in the best interests of the
shareholders. However, if approval of the Plan is obtained, the reorganization
of the Cardinal Fund will be consummated.
Investment Objectives and Policies. Below is a brief comparison of the
----------------------------------
investment objectives and policies of the Cardinal Fund and the Quality Growth
Fund. The following discussion is qualified in its entirety by the disclosure on
such subjects contained in this Combined Prospectus/Proxy Statement.
The securities currently held by the Funds are substantially similar.
Consequently, the proposed reorganization should not result in higher than
normal portfolio turnover.
Fundamental Objective The Quality Growth Fund seeks growth of capital.
---------------------
Income is a secondary objective. Similarly, the Cardinal Fund seeks long-term
growth of capital and income. Current income is a secondary objective.
-10-
<PAGE>
Investment Policies Under normal market conditions, the Quality Growth
-------------------
Fund invests at least 65% of total assets in common stocks of high quality
growth companies. High quality growth companies are companies, in the opinion
of Fifth Third Bank, that offer excellent prospects for consistent, above-
average revenue and earnings growth. To determine whether a company is of high
quality, the Quality Growth Fund generally looks for a strong record of earnings
growth, as well as its current ratio of debt to capital and the quality of its
management. Most of the companies in which the Fund invests are U.S. companies
with a market capitalization greater than $100 million. To achieve its
secondary objective of income, the Quality Growth Fund may rely on dividend
income that it receives from common stocks and interest income it receives from
other investments, including convertible securities. The Quality Growth Fund
reserves the right to invest up to 35% of total assets in those securities. At
the time of investment, those securities are rated investment grade, that is, in
the BBB major rating category or higher by Moody's, or their unrated
equivalents.
Similarly, under normal market conditions, the Cardinal Fund invests at
least 65% of total assets in common stocks that have the potential for long-term
growth. Those stocks primarily are issued by large-capitalization, U.S.
companies which the Cardinal Fund believes are in a strong financial condition,
have a significant market presence and have healthy growth prospects. Large-cap
companies have, at the time of investment, market capitalizations no smaller
than 90% of the market capitalizations of the companies in the S&P 500.
Additional Investment Policies The additional investment policies of the
------------------------------
Funds are substantially similar.
Each Fund may:
- enter into repurchase agreements;
- seek additional income or fees by lending portfolio securities to
qualified institutions;
- invest in restricted and illiquid securities;
- use derivatives for hedging (attempting to offset a potential
loss in one position by establishing an interest in an opposite
position). Each Fund also may use derivatives for speculation
(investing for potential income or capital gain);
- invest in securities prior to their date of issue (when-issued
securities).
While each Fund ordinarily does not trade securities for short-term
profits, each Fund may sell any security at any time it believes best, which may
result in short-term trading.
During unusual market conditions, each Fund may place up to 100% of total
assets in cash or high-quality, short-term debt securities. To the extent that a
Fund does this, it is not pursuing its goal.
Investment Restrictions
-----------------------
Each Fund has adopted the following investment limitations. Unless
otherwise indicated, the investment policies described below may be changed by
the Board of Trustees of the Trust (the "Trustees") without shareholder
approval.
Issuing Senior Securities and Borrowing Money. The Funds will not issue
---------------------------------------------
senior securities except that each Fund may borrow money directly or through
reverse repurchase agreements in amounts up to one-third of the value of its
total assets, including the amount borrowed and except to the extent that each
Fund may enter into futures contracts, as applicable. The Funds will not borrow
money or engage in reverse repurchase agreements for investment leverage, but
rather as a temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling each Fund to meet redemption requests
when the liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. Neither Fund will purchase any securities while any borrowings
in excess of 5% of its total assets are outstanding.
Selling Short and Buying on Margin. The Funds will not sell any securities
----------------------------------
short or purchase any securities on margin, but may obtain such short-term
credits as are necessary for clearance of purchases and sales of securities.
-11-
<PAGE>
The deposit or payment by the Funds of initial or variation margin in connection
with futures contracts or related options transactions is not considered the
purchase of a security on margin.
Lending Cash or Securities. Neither Fund will lend any of its assets
--------------------------
except portfolio securities up to one-third of the value of total assets. This
shall not prevent each Fund from purchasing or holding U.S. government
obligations, money market instruments, publicly or non-publicly issued municipal
bonds, variable rate demand notes, bonds, debentures, notes, certificates of
indebtedness, or other debt securities, entering into repurchase agreements, or
engaging in other transactions where permitted by each Fund's investment
objectives, policies and limitations or the Trust's Declaration of Trust.
Pledging Assets. The Funds will not mortgage, pledge, or hypothecate any
---------------
assets, except to secure permitted borrowings. For purposes of this limitation,
where applicable, (a) the deposit of assets in escrow in connection with the
writing of covered put or call options and the purchase of securities on a when-
issued basis and (b) collateral arrangements with respect to: (i) the purchase
and sale of stock options (and options on stock indices) and (ii) initial or
variation margin for futures contracts, will not be deemed to be pledges of each
Fund's assets.
Investing in Commodities. Neither Fund will purchase or sell commodities,
------------------------
commodity contracts, or commodity futures contracts except to the extent that
each Fund may engage in transactions involving futures contracts or options on
futures contracts.
Investing in Real Estate. Neither Fund will purchase or sell real estate,
------------------------
including limited partnership interests, although each Fund may invest in
securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in real
estate.
Diversification of Investments. With respect to 75% of the value of their
------------------------------
respective total assets, neither Fund will purchase securities issued-by any one
issuer (other than cash, cash items or securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by such securities), if as a result more
than 5% of the value of its total assets would be invested in the securities of
that issuer. Each Fund will not acquire more than 10% of the outstanding voting
securities of any one issuer.
Concentration of Investments. The Quality Growth Fund will not invest 25%
----------------------------
or more of the value of its respective total assets in any one industry, except
that this Fund may invest more than 25% of the value of its total assets in
securities issued or guaranteed by the U.S. government, its agencies, or
instrumentalities and repurchase agreements collateralized by such securities.
Underwriting. Each Fund will not underwrite any issue of securities,
------------
except as each Fund may be deemed to be an underwriter under the Securities Act
of 1933 in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
The above limitations cannot be changed with respect to a Fund without
approval of the holders or a majority of that Fund's Shares. The following
limitations may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these limitations
becomes effective.
Investing in Restricted Securities. The Funds will not invest more than 10%
----------------------------------
of the value of their respective net assets in securities that are subject to
restrictions on resale under federal securities law.
Investing in Illiquid Securities. The Funds will not invest more than 15%
--------------------------------
of the value of their respective net assets in illiquid securities, including,
as applicable, repurchase agreements providing for settlement more than seven
days after notice, over-the-counter options, certain restricted securities not
determined by the Trustees to be liquid, and non-negotiable time deposits with
maturities over seven days.
-12-
<PAGE>
Investing in Securities of Other Investment Companies. With respect to 100%
-----------------------------------------------------
of their total assets, the Funds will limit their respective investments in
other investment companies to no more than 3% of the total outstanding voting
stock of any investment company, invest no more than 5% of their respective
total assets in any one investment company, and will invest no more than 10% of
their respective total assets in investment companies in general. The Funds
will purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets. It should be noted that
investment companies incur certain expenses such as management fees and,
therefore, any investment by a Fund in shares of another investment company
would be subject to such expenses.
Investing in New Issuers. The Quality Growth Fund will not invest more than
------------------------
5% of the value of its respective total assets in securities of issuers which
have records of less than three years of continuous operations, including the
operation of any predecessor.
Investing in Issuers Whose Securities are Owned by Officers and Trustees of
---------------------------------------------------------------------------
the Trust. Neither Fund may purchase or retain the securities of any issuer
---------
if the officers and Trustees of the Trust or its investment advisor, owning
individually more than 1/2 of 1% of the issuer's securities, together own more
than 5% of the issuer's securities.
Investing in Minerals. Neither Fund may purchase interests in oil, gas, or
---------------------
other mineral exploration or development programs or leases, except they may
purchase the securities of issuers which invest in or sponsor such programs.
Arbitrage Transactions. Neither Fund may enter into transactions for the
----------------------
purpose of engaging in arbitrage.
Purchasing Securities to Exercise Control. Neither Fund may purchase
-----------------------------------------
securities of a company for the purpose of exercising control or management.
Investing in Warrants. The Funds may not invest more than 5% of their net
---------------------
assets in warrants, including those acquired in units or attached to other
securities. To comply with certain state restrictions, the Funds will limit
their investment in such warrants not listed on the New York or American Stock
Exchanges to 2% of their net assets. (If state restrictions change, this latter
restriction may be revised without notice to shareholders.) For purposes of this
investment restriction, warrants will be valued at the lower of cost or market,
except that warrants acquired by the Funds in units with or attached to
securities may be deemed to be without value.
Distributions. Distribution procedures are substantially similar for the two
-------------
Funds. All dividends and capital gains will be automatically reinvested unless
the Shareholder requests otherwise. The Shareholder can receive them in cash or
by electronic funds transfer to a bank account if the Shareholder is not a
participant in an IRA account or in a tax qualified plan. There are no sales
charges for reinvested distributions. Dividends are higher for Investment A
shares than for Investment C shares, because Investment A shares have lower
operating expenses. Distributions are made on a per share basis regardless of
how long the Shareholder has owned Shares. Therefore, if the Shareholder
invests shortly before the distribution date, some of the investment will be
returned to the Shareholder in the form of a taxable distribution. Dividends,
if any, are declared and paid monthly by the Quality Growth Fund and quarterly
by the Cardinal Fund. Capital gains, if any, are distributed at least annually.
Long-term capital gains distributed to Shareholders will be treated as long-term
capital gains regardless of how long Shareholders have held Shares.
Distribution Plan and Administrative Services Agreement (Investment C
---------------------------------------------------------------------
Shares Only). With respect to Investment A Shares and Investment C Shares of
------------
the Funds, the Trust has adopted a Plan pursuant to Rule l2b-1 which was
promulgated by the Securities and Exchange Commission pursuant to the Investment
Company Act of 1940. The Plan provides for payment of fees to the distributor
to finance any activity which is principally intended to result in the sale of a
Fund's Shares subject to the Plan. Such activities may include the advertising
and marketing
-13-
<PAGE>
of Shares; preparing printing, and distributing prospectuses and sales
literature to prospective shareholders, brokers, or administrators; and
implementing and operating the Plan. Pursuant to the Plan, the distributor may
enter into agreements to pay fees to brokers for distribution and administrative
support services and to other participating financial institutions and persons
for distribution assistance and support services to the Funds and their
shareholders. The administrative services are provided by a representative who
has knowledge of the shareholder's particular circumstances and goals, and
include, but are not limited to: communicating account openings; communicating
account closings; entering purchase transactions; entering redemption
transactions; providing or arranging to provide accounting support for all
transactions, wiring funds and receiving funds for Share purchases and
redemptions, confirming and reconciling all transactions, reviewing the activity
in Fund accounts, and providing training and supervision of broker personnel;
posting and reinvesting dividends to Fund accounts or arranging for this service
to be performed by the Funds' transfer agent; and maintaining and distributing
current copies of prospectuses and shareholder reports to the beneficial owners
of Shares and prospective shareholders.
The Trustees expect that the Plan will result in the sale of a sufficient
number of Shares so as to allow a Fund to achieve economic viability. It is
also anticipated that an increase in the size of a Fund will facilitate more
efficient portfolio management and assist a Fund in seeking to achieve its
investment objective.
Pursuant to the Plan, with respect to Investment A Shares, the Funds are
authorized to pay the distributor a monthly distribution fee computed at the
annual rate of up to 0.25% of the average aggregate net asset value of the
Investment A Shares of each applicable Fund held during the month.
Pursuant to the Plan, with respect to Investment C Shares, the Funds are
authorized to pay the distributor a monthly distribution fee computed at the
annual rate of up to 0.75% of the average aggregate net asset value of the
Investment C Shares of each applicable Fund held during the month. For the
fiscal year ended July 31, 1999, the distributor received $119,000 pursuant to
the Plan.
With respect to Investment C Shares, the Trust may enter into an
Administrative Service Agreement to permit the payment of fees to financial
institutions, including Fifth Third Bank, to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. Benefits to shareholders of Investment C
Shares of the Funds may include: (1) providing personal services to
shareholders; (2) investing shareholder assets with a minimum of delay and
administrative detail; (3) enhancing shareholder recordkeeping systems; and (4)
responding promptly to shareholders' requests and inquiries concerning their
accounts.
For the fiscal year ended July 31, 1999, the Funds paid $59,000 to Fifth
Third Bank to compensate BHC Securities, Inc. for providing administrative
services to Investment C Shares of the Funds.
Purchase Procedures. Purchase procedures are substantially similar for the two
-------------------
Funds.
Purchasing and Adding to Shares
---------------------------------
The Shareholder may purchase shares on days when the New York Stock
Exchange is open for regular trading and the Federal Reserve Bank of Cleveland
is open for business. The purchase price will be the next NAV after the
purchase order, completed application and full payment have been received by the
Funds or its transfer agent. All orders must be received by the Funds or its
transfer agent prior to 4:00 p.m. Cincinnati time in order to receive that day's
NAV.
Institutional Shares only may be purchased through the Trust and Investment
Department of Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, qualified employee retirement plans subject to minimum
requirements that may be established by the distributor of Fund shares, or
broker-dealers, investment advisers, financial planners or other financial
institutions which have an agreement with Fifth Third Bank to place trades for
themselves or their clients for a fee. In order to purchase Institutional
shares through one of those entities, the Shareholder must have an account with
it. That account will be governed by its own rules and regulations, which
-14-
<PAGE>
may be more stringent than the rules and regulations governing an investment in
the Funds, and the Shareholder should consult his/her account documents for full
details. Shares in the Funds may be held in an omnibus account in the name of
that institution.
The Shareholder may purchase Investment A and Investment C shares through
Fifth Third Securities, Inc. as well as broker-dealers and financial
institutions which have a sales agreement with the distributor of Fund shares.
(Special rules apply for former shareholders of the Cardinal Funds. See below.)
In order to purchase Investment A shares through Fifth Third Securities, Inc. or
another financial institution, the Shareholder must open an account with that
institution. That account will be governed by its own rules and regulations,
which may be more stringent than the rules and regulations governing an
investment in the Funds, and the Shareholder should consult his/her account
documents for full details. Shares in the Funds will be held in an omnibus
account in the name of that institution.
The entity through which Shares are purchased is responsible for
transmitting orders to the Funds by 4:00 p.m. Cincinnati time and it may have an
earlier cut-off time for purchase requests. Consult that entity for specific
information. Regarding Institutional Shares, if the purchase order has been
received by the Funds prior to the time designated by the Funds for receiving
orders, the Shareholder will receive the dividend declared for that day.
Minimum Investments
--------------------
The minimum initial investment in Investment A Shares, Investment C Shares,
or Institutional Shares of the Funds offered by this Prospectus is $1,000.
Subsequent investments must be in amounts of at least $50. An institutional
investor's minimum investment will be calculated by combining all accounts it
maintains with the Fifth Third Funds.
All purchases must be in U.S. dollars. A fee may be charged for any checks
that do not clear. Third-party checks are not accepted.
The Funds may reject a purchase order for any reason.
Systematic Investment Program
------------------------------
The Shareholder may make monthly systematic investments in Investment A
shares of the Funds from his/her bank account. There is no minimum amount
required for initial amounts invested into the Funds. The Shareholder may elect
to make systematic investments on the 1st or the 15th of each month, or both.
If the 1st or the 15th is not a day on which the Funds are open for business,
the purchase will be made on the previous day the Funds are open for business.
Please contact Fifth Third Securities, Inc. or your financial institution for
more information.
Former Cardinal Funds Shareholders
----------------------------------
If held in his/her name (rather than through a brokerage account) shares of
any of the Cardinal Funds at the time those funds were merged into one of the
Fifth Third Funds, and the Shareholder continues to hold in his/her name the
shares of the Fifth Third Fund that the Shareholder received in the merger or by
way of a subsequent exchange, the Shareholder may purchase additional shares of
that Fifth Third Fund directly from the Funds rather than through Fifth Third
Securities, Inc. or another financial institution. The Funds reserve the right
to change or eliminate these privileges at any time.
Exchange privilege. Exchange privileges are substantially similar for the two
------------------
Funds. Each Fund's shares may be exchanged for shares of the class of any other
Funds of Fifth Third which the shareholder qualifies to purchase directly so
long as the shareholder maintains the applicable minimum account balance in each
Fund in which he or she owns shares and satisfies the minimum initial and
subsequent purchase amounts of the Fund into which the shares are exchanged.
Notes on exchanges
------------------
-15-
<PAGE>
To prevent disruption in the management of the Funds, market timing
strategies and frequent exchange activity may be limited by the Funds. Although
not anticipated, the Funds may reject exchanges, or change or terminate rights
to exchange shares at any time. Shares of the new Fund must be held in the same
account name, with the same registration and tax identification numbers, as the
shares of the old Fund. The Exchange Privilege (including automatic exchanges)
may be changed or eliminated at any time. The exchange privilege is available
only in states where shares of the Funds may be sold. All exchanges are based on
the relative net asset value next determined after the exchange order is
received by the Funds. Regarding Investment A and Investment C Shares, when
exchanging from a Fund that has no sales charge or a lower sales charge to a
Fund with a higher sales charge, the Shareholder will pay the difference.
Automatic Exchanges (Investment A and Investment C Shares)
----------------------------------------------------------
The Shareholder can use the Funds' Automatic Exchange feature to purchase
shares of the Funds at regular intervals through regular, automatic redemptions
from a Fund.
Former Cardinal Funds Shareholders
----------------------------------
If the Shareholder held in his/her name (rather than through a brokerage
account) shares of any of the Cardinal Funds at the time those funds were merged
into one of the Funds, and the Shareholder continues to hold in his/her name the
shares of the Fifth Third Fund the Shareholder received in the merger or by way
of a subsequent exchange, the Shareholder may exchange his/her Fifth Third Fund
shares for Investment A shares of any other Fifth Third Fund directly by
contacting the Funds rather than going through Fifth Third Securities, Inc. or
another financial institution.
Redemption Procedures. Redemption procedures are substantially similar for the
---------------------
two Funds. Shares are redeemed at the next computed net asset value after a
Fund receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although Fifth Third Bank does not charge
for telephone redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions.
Investment C Shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge. The contingent deferred sales charge may be
reduced with respect to a particular shareholder where a financial institution
selling Investment C Shares elects not to receive a commission from the
distributor with respect to its sale of such Shares.
Redemption in Kind
------------------
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Trust is obligated to redeem Shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of a Fund's net
asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Trust will pay
all or a portion of the remainder of the redemption in portfolio instruments,
valued in the same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable.
Postponement of Redemptions
---------------------------
No Fund may suspend the right of redemption or postpone the date of payment
of redemption proceeds for more than seven days, except that (a) it may elect to
suspend the redemption of shares or postpone the date of payment of redemption
proceeds: (1) during any period that the NYSE is closed (other than customary
weekend and holiday closings) or trading on the NYSE is restricted; (2) during
any period in which an emergency exists as a result of which disposal of
portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Fund's net asset values; or (3) during such
other periods as the SEC may by order permit for the protection of investors;
and (b) the payment of redemption proceeds may be postponed as otherwise
provided in the Statement of Additional Information.
-16-
<PAGE>
Federal Tax Considerations. Consummation of the Transaction is subject to the
--------------------------
condition that Fifth Third Funds receive an opinion of Ropes & Gray, counsel to
Fifth Third Funds, to the effect that, based upon certain representations and
assumptions and subject to certain qualifications, the Transaction will not
result in the recognition of gain or loss for Federal income tax purposes for
either of the Funds, or the shareholders or the Cardinal Fund.
RISK FACTORS
------------
Investment in the Quality Growth Fund may be subject to the following
principal risks:
The principal risks of investing in the Fund include the risks of investing
in equity securities, such as the risk of sudden and unpredictable drops in
value and the potential for extended periods of lackluster performance.
Generally, growth oriented stocks may be sensitive to market movements.
The prices of growth stocks tend to reflect future expectations, and when those
expectations change or are not met, share prices generally fall. Stocks of
smaller companies tend to be volatile and more sensitive to long-term market
declines than stocks of larger companies, in part because they generally do not
have the financial resources that larger companies have.
Stocks that pay regular dividends tend to be less volatile than stocks that
do not. A regular dividend provides investors some return of their investment,
to an extent, supporting the stock's price, even during periods when the prices
of equity securities generally are falling. However, dividend-paying stocks,
especially those that pay significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets, which tend to reinvest
most profits into research, development, plant and equipment to accommodate
expansion.
Prices of convertible securities, which include bonds and preferred stocks,
may be affected by the prices of the underlying security, which generally is
common stock.
Investment in the Cardinal Fund may be subject to the following principal risks:
The principal risks of investing in the Fund include the risks of investing
in equity securities, such as the risk of sudden and unpredictable drops in
value or periods of lackluster performance.
Generally, growth oriented stocks may be sensitive to market movements.
The prices of growth stocks tend to reflect future expectations, and when those
expectations change or are not met, share prices generally fall.
Significant investment in large companies also creates various risks for
the Fund. For instance, larger, more established companies tend to operate in
mature markets, which often are very competitive. Larger companies also do not
tend to respond quickly to competitive challenges, especially to challenges
caused by technology or consumer preferences.
Stocks that pay regular dividends tend to be less volatile than stocks that
do not. A regular dividend provides investors some return of their investment,
to an extent, supporting a stock's price, even during periods when the prices of
equity securities generally are falling. However, dividend-paying stocks,
especially those that pay significant dividends, also tend to appreciate less
quickly than stocks of companies in emerging markets, which tend to reinvest
profits into research, development, plant and equipment to accommodate
expansion.
The above discussion is qualified in its entirety by the disclosure in this
Combined Prospectus/Proxy Statement and the Statement of Additional Information.
-17-
<PAGE>
INFORMATION ABOUT THE TRANSACTION
---------------------------------
Plan of Reorganization; Securities. The proposed Plan provides that the Quality
----------------------------------
Growth Fund will acquire all of the assets of the Cardinal Fund in exchange for
the assumption by the Quality Growth Fund of all of the liabilities of the
Cardinal Fund and for Shares all as of the Exchange Date (defined in the Plan to
be on or about October 30, 2000, or such other date as determined by the
Trustees.) The following discussion of the Plan is qualified in its entirety by
the full text of the Plan, which is attached as Appendix A to this Combined
Prospectus/Proxy Statement.
As a result of the Transaction, each shareholder of the Cardinal Fund will
receive that number of full and fractional Shares equal in value at the Exchange
Date to the value of the portion of the net assets of the Cardinal Fund
transferred to the Quality Growth Fund attributable to the shareholder (based on
the proportion of the outstanding shares of the Cardinal Fund owned by the
shareholder as of the Valuation Time). The portfolio securities of the Cardinal
Fund will be valued in accordance with the generally employed valuation
procedures of Fifth Third Funds. The reorganization is being accounted for as a
tax-free business combination. At a meeting held on June 21, 2000, all of the
Trustees, including the Independent Trustees, unanimously determined that the
reorganization would be in the best interests of their registered investment
company and existing shareholders and that the economic interests of their
existing shareholders would not be diluted as a result of effecting the
reorganization.
Immediately following the Exchange Date, the Cardinal Fund will distribute
pro rata to its shareholders of record as of the close of business on the
Exchange Date the full and fractional Shares received by it, and the Cardinal
Fund will be liquidated and dissolved. Such liquidation and distribution will be
accomplished by the establishment of accounts on the share records of the
Quality Growth Fund in the name of such Cardinal Fund's shareholders, each
account representing the respective number of full and fractional Shares due
such shareholder. All Cardinal Shareholders will receive Shares of the Fifth
Third Class (Investment A, Investment C, or Institutional) that corresponds to
the Class of the Cardinal Fund that they hold.
The consummation of the reorganization is subject to the conditions set
forth in the Plan. The Plan may be terminated and the reorganization abandoned
at any time, before or after approval by the shareholders, prior to the Exchange
Date by consent of Fifth Third Funds or, if any condition set forth in the Plan
has not been fulfilled and has not been waived by the party entitled to its
benefits, by such party.
All fees and expenses, including accounting expenses, portfolio transfer
taxes (if any) or other similar expenses incurred directly in connection with
the consummation of the Transaction contemplated by the Plan will be allocated
ratably between the two Funds in proportion to their net assets as of the
Exchange Date except that (a) the costs of the proxy materials and proxy
solicitations will be borne by Fifth Third Bank and (b) such fees and expenses
will be paid by the party directly incurring such expenses if and to the extent
that payment by the other party would result in the disqualification of the
Quality Growth Fund or the Cardinal Fund, as the case may be, as a "regulated
investment company" within the meaning of Section 851 of the Code.
The Board of Trustees of Fifth Third Funds have determined that the
interests of the existing shareholders of the Cardinal Fund and the Quality
Growth Fund will not be diluted as a result of the Transaction. Full and
fractional Shares will be issued to the Cardinal Fund's shareholders in
accordance with the procedure under the Plan as described above. Each Quality
Growth Share will be fully paid and nonassessable when issued, will be
transferable without restriction, and will have no preemptive or conversion
rights. Fifth Third Funds' Declaration of Trust permits Fifth Third Funds to
divide its shares of any series, without shareholder approval, into one or more
classes of shares having such preferences and special or relative rights and
privileges as the Trustees may determine. Shares of the Cardinal Fund and the
Quality Growth Fund are currently divided into three classes: Investment A,
Investment C and Institutional Shares. Cardinal Fund Shareholders holding
Investment A, Investment C, or Institutional Shares, will receive Investment A,
Investment C, or Institutional Shares, respectively, of the Quality Growth Fund.
-18-
<PAGE>
Under Massachusetts law, Fifth Third Funds' shareholders, could, under
certain circumstances, be held personally liable for the obligations of Fifth
Third Funds. However, the Declaration of Trust disclaims shareholder liability
for acts or obligations of Fifth Third Funds. The Declaration of Trust provides
for indemnification out of Fifth Third Funds property for all loss and expense
of any shareholder held personally liable for the obligations of Fifth Third
Funds. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Fifth Third Funds
would be unable to meet its obligations. The likelihood of such circumstances is
remote.
Reasons For The Proposed Reorganization. A meeting was held on June 21, 2000,
----------------------------------------
for the Fifth Third Funds' Trustees, at which meeting all of the Trustees,
including the Independent Trustees, unanimously determined that the
reorganization would be in the best interests of Fifth Third Funds and existing
shareholders of both the Cardinal Fund and the Quality Growth Fund. The
Trustees also unanimously determined that the economic interests of such
shareholders would not be diluted as a result of effecting the reorganization.
At this same meeting, all of the Trustees, including the Independent Trustees,
unanimously approved the proposed reorganization. Fifth Third Funds' Trustees
have unanimously recommended approval of the Plan.
In electing to approve the Plan and recommend it to shareholders of the
Cardinal Fund, the Trustees acted upon information provided to them, indicating
that the proposed Transaction would operate in the best interests of the
Cardinal Fund and Quality Growth Fund shareholders. In particular, the Trustees
determined that the proposed Transaction offered the following benefits:
. Continuity and Efficiency of Management: Both the Cardinal Fund and
---------------------------------------
the Quality Growth Fund are managed by Steven E. Folker. Mr. Folker
has been the portfolio manager for the Quality Growth Fund since 1993
and for the Cardinal Fund since 1998. Currently, he is the Chief
Equity Strategist for Fifth Third Investment Advisors and is Vice
President and Trust officer of Fifth Third Bank. He is also a
chartered financial analyst, has over 16 years of investment
experience and is a member of the Cincinnati Society of Financial
Analysts. He earned a B.B.A. in Finance & Accounting and an M.S. in
Finance, Investments & Banking from the University of Wisconsin. As a
result of the proposed Transaction, Mr. Folker would manage one
portfolio instead of two similar portfolios, thereby increasing the
likelihood of enhanced investment management efficiencies.
. Tax-Free Nature of Transaction; Lack of Dilution: The Fifth Third
------------------------------------------------
Funds' Trustees were informed that the proposed Transaction involving
the Cardinal Fund and the Quality Growth Fund would be accomplished
without resulting in the imposition of federal income taxes on the
Cardinal Fund or its shareholders or the Quality Growth Fund. Also,
the Fifth Third Funds' Trustees were informed that the interests of
the Cardinal Fund and the Quality Growth Fund shareholders would not
be materially diluted as a result of the proposed Transaction, and
that the Cardinal Fund shareholders would receive, in the aggregate,
shares of the Quality Growth Fund equal in value to the market value
of the assets of the Cardinal Fund.
. Total Return: The total return of the Quality Growth Fund compares
------------
favorably with that of the Cardinal Fund. For information regarding
the total return of each of the Funds, see "Financial Highlights"
herein. Of course, past performance does not predict future results.
. Assets: As of June 30, 2000, the Quality Growth Fund had total assets
------
of approximately $1,043,353,900 compared with approximately
$247,396,682 in total assets for the Cardinal Fund. The merger is
expected to result in greater investment leverage and market presence
for the Quality Growth Fund. In addition, former Cardinal Fund
shareholders would benefit from the resulting economies of scale
attributable to the larger asset size of the Quality Growth Fund.
. Performance of Fifth Third Funds; Fees and Expenses: The Board
---------------------------------------------------
received information relating to the performance of the Quality Growth
Fund into which the interests of shareholders of the
-19-
<PAGE>
Cardinal Fund would be merged. This information was presented both on
an absolute basis and in comparison to relevant benchmarks and
industry averages. The Board determined that the long-term
performance of the Quality Growth Fund has been superior to that of
the Cardinal Fund. The Trustees also received information about the
fees and expenses charged or to be charged to Fifth Third
shareholders. The Board determined that in light of the above-
mentioned potential benefits to be gained from the proposed
Transaction and the expiration of the two-year waiver period on the
fees and expenses of the Cardinal Fund, the overall advantages
outweigh the increase in total expenses of the Cardinal Fund.
While this is presently the case, there was no guarantee that this
would remain the case in the future.
. Alleviation of Hardships: For the two year period ended June 30, 2000,
------------------------
the Cardinal Fund has experienced net share redemptions of
approximately $87 million. In this environment, the Advisor has been
forced to sell securities to meet these redemptions, often in an
unfavorable market. Such portfolio transactions result in capital
gains or losses that impact distributions to shareholders. Without the
benefit of positive cash flows, the Advisor's ability to actively
manage or restructure the portfolio has been limited to selling
securities. As mentioned above, this results in capital gains or
losses that affect current fund shareholders.
Federal Income Tax Consequences. As a condition to Fifth Third Funds'
-------------------------------
obligations to consummate the reorganization, Fifth Third Funds will receive an
opinion from Ropes & Gray, counsel to Fifth Third Funds, to the effect that, on
the basis of the existing provisions of the Code, current administrative rules,
court decisions, and certain representations by Fifth Third Funds, for federal
income tax purposes: (i) under Section 361 of the Code, no gain or loss will be
recognized by the Cardinal Fund as a result of the reorganization; (ii) under
Section 354 of the Code, no gain or loss will be recognized by the shareholders
of the Cardinal Fund on the distribution of Shares to them in exchange for their
shares of the Cardinal Fund; (iii) under Section 358 of the Code, the tax basis
of Shares that any Cardinal shareholder receives in place of his or her Cardinal
shares will be the same, in the aggregate, as the tax basis of the Cardinal
shares exchanged; (iv) under Section 1223(1) of the Code, a shareholder's
holding period for the Shares received pursuant to the Plan will be determined
by including the holding period for the Cardinal shares exchanged for the Shares
provided that the shareholder held the Cardinal shares as a capital asset; (v)
under Section 1032 of the Code, no gain or loss will be recognized by the
Quality Growth Fund by the receipt of the assets of the Cardinal Fund in
exchange for Shares and the assumption by the Quality Growth Fund of the
liabilities of the Cardinal Fund; (vi) under Section 362(b) of the Code, the tax
basis in the hands of the Quality Growth Fund of the assets of the Cardinal Fund
transferred to the Quality Growth Fund in the reorganization will be, in the
aggregate, the same as the tax basis of such assets in the hands of the Cardinal
Fund immediately prior to the transfer; and (vii) under Section 1223(2) of the
Code, the holding period of the assets of the Cardinal Fund in the hands of the
Quality Growth Fund will include the periods during which such assets were held
by the Cardinal Fund.
Voting Rights. Each shareholder of the Cardinal Fund is entitled to one
-------------
vote per share and a proportionate fractional vote for any fractional share.
The former shareholders of the Cardinal Fund, as holders of Investment A,
Investment C or Institutional Shares of the Quality Growth Fund, will vote
separately as a fund or a class on matters relating solely to that fund or
class. On all other matters, they will vote in the aggregate with shareholders
of the Quality Growth Fund. As shareholders of the considerably larger Quality
Growth Fund following the Transaction, the former shareholders of the Cardinal
Fund will possess less proportional voting power when they vote separately as
Quality Growth Fund shareholders, or shareholders of the classes thereof, than
they had when they voted separately as shareholders of the smaller Cardinal
Fund.
-20-
<PAGE>
Capitalization. The following tables (UNAUDITED) set forth as of June 30,
--------------
2000 (i) the capitalization of the Cardinal Fund, (ii) the capitalization of the
Quality Growth Fund, and (iii) the pro forma capitalization of the Quality
Growth Fund as adjusted giving effect to the proposed acquisition of assets at
net asset value:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Cardinal Fund Quality
-------------- Growth Fund
--------------------------------------------------------------------------------------------
Investment A Investment C Institutional Investment A Investment C Institutional
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets ($) 242,541,063 1,147,237 3,238,379 207,542,770 13,918,059 820,835,653
---------------------------------------------------------------------------------------------------------------
Shares 12,924,569.724 62,102.684 170,629.447 7,816,827.543 534,771.329 30,776,957.157
---------------------------------------------------------------------------------------------------------------
Net Asset Value 18.77 18.47 18.98 26.55 26.02 26.67
per Share ($)
---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Pro Forma Combined
------------------------------------------------
Investment A Investment C Institutional
-------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 450,083,833 15,065,296 824,074,032
-------------------------------------------------------------------
Shares 16,951,863.170 578,853.380 30,898,450.420
-------------------------------------------------------------------
Net Asset Value 26.55 26.02 26.67
per Share ($)
-------------------------------------------------------------------
</TABLE>
-21-
<PAGE>
INFORMATION ABOUT THE QUALITY GROWTH FUND AND THE CARDINAL FUND
---------------------------------------------------------------
QUALITY GROWTH FUND
Investment Objectives/Goals Growth of capital. Income is a secondary
objective.
Principal Investment Under normal market conditions, the Fund
Strategies invests at least 65% of total assets in
common stocks of high quality growth
companies.
High quality growth companies are companies,
in the opinion of Fifth Third Bank, that
offer excellent prospects for consistent,
above-average revenue and earnings growth.
To determine whether a company is of high
quality, the Fund generally looks for a
strong record of earnings growth, as well as
its current ratio of debt to capital and the
quality of its management. Most of the
companies in which the Fund invests are U.S.
companies with a market capitalization
greater than $100 million.
To achieve its secondary objective of
income, the Fund may rely on dividend income
that it receives from common stocks and
interest income it receives from other
investments, including convertible
securities. The Fund reserves the right to
invest up to 35% of total assets in those
securities. At the time of investment, those
securities are rated investment grade, that
is, in the BBB major rating category or
higher by Standard & Poor's(R) or in the Baa
major rating category or higher by Moody's,
or their unrated equivalents.
Principal Investment Risks The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value and the
potential for extended periods of lackluster
performance. Loss of money also is a risk of
investing in the Fund.
Stocks that pay regular dividends tend to be
less volatile than stocks that do not. A
regular dividend provides investors some
return of their investment, to an extent,
------------------------- supporting the stock's price, even during
An investment in the Fund periods when the prices of equity securities
is not a deposit of Fifth generally are falling. However, dividend-
Third Bank or any other paying stocks, especially those that pay
bank and is not insured significant dividends, also tend to
or guaranteed by the FDIC appreciate less quickly than stocks of
or any other government companies in emerging markets, which tend to
agency. reinvest most profits into research,
------------------------- development, plant and equipment to
accommodate expansion.
Generally, growth oriented stocks may be
sensitive to market movements. The prices of
growth stocks tend to reflect future
expectations, and when those expectations
change or are not met, share prices
generally fall. Stocks of smaller companies
tend to be volatile and more sensitive to
long-term market declines than stocks of
larger companies, in part because they
generally do not have the financial
resources that larger companies have.
Prices of convertible securities, which
include bonds and preferred stocks, may be
affected by the prices of the underlying
security, which generally is common stock.
-22-
<PAGE>
QUALITY GROWTH FUND, Continued
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares and Institutional shares will differ from the returns for
Investment A shares (which are shown in the bar chart) because of differences in
expenses of each class. The table assumes that shareholders redeem their fund
shares at the end of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
Year-by-Year Total Returns as of 12/31
For Investment A Shares
[GRAPH]
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
5.12% 34.39% 8.03% -1.06% 0.07% 31.59% 23.68% 32.70% 30.05% 23.51%
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q4 1998 28.18%
Worst quarter: Q4 1987 -21.61%
Year to Date Return (1/1/00 to 6/30/00) 5.27 %
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception
Date Past Year Past 5 Years Past 10 Years Since Inception
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares 1/1/83 17.95% 27.06% 17.48% 17.58%
(with 4.50% sales charge)
----------------------------------------------------------------------------------------------------------
Investment C Shares 4/25/96 22.99% N/A N/A 27.26%
(with applicable
Contingent Deferred Sales
Charge)
----------------------------------------------------------------------------------------------------------
Institutional Shares 8/11/98 23.86% N/A N/A 34.00%
----------------------------------------------------------------------------------------------------------
(Since 12/31/82)
S&P 500(R) Index 21.04% 28.55% 18.20% 18.35%
----------------------------------------------------------------------------------------------------------
(Since 4/30/96)
S&P 500(R) Index 26.78%
----------------------------------------------------------------------------------------------------------
(Since 7/31/98)
S&P 500(R) Index 22.71%
----------------------------------------------------------------------------------------------------------
</TABLE>
-23-
<PAGE>
CARDINAL FUND
Investment Objectives/Goals Long-term growth of capital and income.
Current income is a secondary objective.
Principal Investment Under normal market conditions, the Fund
Strategies invests at least 65% of total assets in
common stocks that have the potential for
long-term growth. Those stocks primarily are
issued by large-capitalization, U.S.
companies which the Fund believes are in a
strong financial condition, have a
significant market presence and have healthy
growth prospects. Large-cap companies have,
at the time of investment, market
capitalizations comparable to the market
capitalizations of those companies in the
S&P 500 Index.
With income as a secondary objective, the
Fund attaches some significance to a
company's dividend payment history as well
as prospects for future dividend growth.
The Fund reserves the right to invest up to
35% of total assets in other securities,
such as government and corporate bonds.
Principal Investment Risks The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value or periods of
lackluster performance. Loss of money also
is a risk of investing in the Fund.
Generally, growth oriented stocks may be
sensitive to market movements. The prices of
------------------------- growth stocks tend to reflect future
An investment in the Fund expectations, and when those expectations
is not a deposit of Fifth change or are not met, share prices
Third Bank or any other generally fall.
bank and is not insured
or guaranteed by the FDIC Significant investment in large companies
or any other government also creates various risks for the Fund. For
agency. instance, larger, more established companies
------------------------- tend to operate in mature markets, which
often are very competitive. Larger companies
also do not tend to respond quickly to
competitive challenges, especially to
challenges caused by technology or consumer
preferences.
Stocks that pay regular dividends tend to be
less volatile than stocks that do not. A
regular dividend provides investors some
return of their investment, to an extent,
supporting a stock's price, even during
periods when the prices of equity securities
generally are falling. However, dividend-
paying stocks, especially those that pay
significant dividends, also tend to
appreciate less quickly than stocks of
companies in emerging markets, which tend to
reinvest profits into research, development,
plant and equipment to accommodate
expansion.
-24-
<PAGE>
CARDINAL FUND, Continued
Volatility and Performance Information
The bar chart and table provide an indication of the risks of an investment in
the Fund by showing its performance from year to year and over time, as well as
compared to a broad-based securities index. The Standard and Poor's 500
Composite Stock Price Index (the "S&P 500") is an unmanaged index of 500
selected common stocks, most of which are listed on the New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment C shares and Institutional shares will differ from the returns for
Investment A shares (which are shown in the bar chart) because of differences in
expenses of each class. The table assumes that shareholders redeem their fund
shares at the end of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
Year-by-Year Total Returns as of 12/31
For Investment A Shares/1/
[GRAPH]
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
-6.20% 32.37% 9.84% 5.88% -3.12% 27.27% 19.89% 30.64% 24.21% 23.12%
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q4 1998 22.73%
Worst quarter: Q4 1987 -16.69%
Year to Date Return (1/1/00 to 6/30/00) 5.51%
Average Annual Total Returns (for the periods ended December 31, 1999)
<TABLE>
<CAPTION>
Inception
Date Past Year Past 5 Years Past 10 Years Since Inception
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment A Shares/1/ 5/31/75 17.60% 23.83% 15.08% 16.00%
(with 4.50% sales charge)
-----------------------------------------------------------------------------------------------------------------
Investment C Shares 10/22/98 22.78% N/A N/A 34.35%
(with applicable
Contingent Deferred Sales
Charge)
-----------------------------------------------------------------------------------------------------------------
Institutional Shares/1/ 1/2/97 24.43% N/A N/A 26.39%
-----------------------------------------------------------------------------------------------------------------
(Since 5/31/75)
S&P 500(R) Index 21.04% 28.55% 18.20% 16.12%
-----------------------------------------------------------------------------------------------------------------
(Since 10/31/98)
S&P 500(R) Index 29.96%
-----------------------------------------------------------------------------------------------------------------
(Since 12/31/96)
S&P 500(R) Index 7.90% 27.56%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ For periods prior to September 21, 1998, reflects performance of Investor
Shares, with respect to Investment A Shares, and Institutional Shares, with
respect to Institutional Shares, of the Cardinal Fund. On September 21, 1998,
The Cardinal Fund, a registered open-end investment company managed by The Ohio
Company, was merged into Fifth Third Cardinal Fund.
-25-
<PAGE>
Additional Information About the Investments of the Funds. The primary
----------------------------------------------------------
investments and investment strategies of the Quality Growth Fund and the
Cardinal Fund are described above. Below are descriptions of some additional
investments and strategies of the Funds, some of their risks as well as other
risks of investing in the Funds. A list of the Funds' investments is included
in the Funds' most recent annual or semi-annual report to shareholders. Please
note, though, that the Funds may adjust the composition of their portfolios as
market and economic conditions change.
The success of achieving the Funds' investment strategies depends on the
skill of Fifth Third Bank to assess the potential of the securities in which the
Funds invest as well as to evaluate and anticipate changing economic and market
conditions.
International Exposure Many U.S. companies in which the Funds may
(Applies to the Quality Growth invest generate significant revenues and
Fund and the Cardinal Fund) earnings from abroad. As a result, those
companies and the prices of their securities
may be affected by weaknesses in global and
regional economies and the relative value of
foreign currencies to the U.S. dollar. Taken
as a whole, those factors could adversely
affect the price of Fund shares.
Foreign Securities Foreign securities are generally more
(Applies to the Quality Growth volatile than their domestic counterparts, in
only) part because of higher political and
economical risks, lack of reliable
information and fluctuations in currency
exchange rates. Those risks are usually
higher in less developed countries.
In addition, foreign securities may be more
difficult to resell and the markets for them
less efficient than for comparable U.S.
securities. Even where a foreign security
increases in price in its local currency, the
appreciation may be diluted by the negative
effect of exchange rates when the security's
value is converted to U.S. dollars. Foreign
withholding taxes also may apply and errors
and delays may occur in the settlement
process for foreign securities.
The fund may use foreign currencies and
related instruments to hedge its foreign
investments.
Repurchase Agreements The Funds may enter into repurchase
(Applies to the Quality Growth agreements. A repurchase agreement is an
Fund and the Cardinal Fund) agreement in which a Fund buys securities
from a bank or other financial institution
and agrees to sell it back at a specified
time and place. The risks of repurchase
agreements include the risk that a
counterparty will not buy back the securities
as required and the securities decline in
value. To mitigate those risks, the Funds
intend to enter repurchase agreements only
with high quality counterparties and purchase
only high quality, short-term debt
securities.
Securities Lending The Funds may seek additional income or fees
(Applies to the Quality Growth by lending portfolio securities to qualified
Fund and the Cardinal Fund) institutions. By reinvesting any cash
collateral it receives in these transactions,
the Funds could realize additional gains or
losses. If the borrower fails to return the
securities and the invested collateral has
declined in value, the Funds could lose
money.
Restricted and Illiquid Any securities that are thinly traded or
Securities whose resale is restricted can be difficult
(Applies to the Quality Growth to sell at a desired time and price. Some of
Fund and the Cardinal Fund) those securities are new and complex, and
trade only among institutions; the markets
for these securities are still developing and
may not function as efficiently as
established markets. Owning a large
percentage of restricted or illiquid
securities could hamper a Fund's ability to
raise cash in order to meet redemptions.
Also, because there may not be an established
market price for these securities, a Fund may
have to estimate their value, which means
that their valuation (and, to a much smaller
extent, the valuation of the fund) may have a
subjective element.
-26-
<PAGE>
Derivatives Derivatives, a category that includes
(Applies to the Quality Growth warrants, options and futures, are financial
Fund and the Cardinal Fund) instruments whose value derives from another
security, an index or currency. The Funds may
use derivatives for hedging (attempting to
offset a potential loss in one position by
establishing an interest in an opposite
position). This includes the use of currency-
based derivatives for hedging its positions
in foreign securities. The Funds may also use
derivatives for speculation (investing for
potential income or capital gain).
While hedging can guard against potential
risks, it adds to a Fund's expenses and can
eliminate some opportunities for gains. There
is also a risk that a derivative intended as
a hedge may not perform as expected.
The main risk with derivatives is that some
types can amplify a gain or loss, potentially
earning or losing substantially more money
than the actual cost of the derivative.
With some derivatives, whether used for
hedging or speculation, there is also the
risk that the counterparty may fail to honor
its contract terms, causing a loss for a
Fund.
When-Issued Securities The Funds may invest in securities prior to
(Applies to the Quality Growth its date of issue. These securities could
Fund and the Cardinal Fund) fall in value by the time they are actually
issued, which may be any time from a few days
to over a year.
Bonds The value of any bond held by the Funds is
(Applies to the Quality Growth likely to decline when interest rates rise;
Fund and the Cardinal Fund) this risk is greater for bonds with longer
maturities. A less significant risk is that a
bond issuer could default on principal or
interest payments, causing a loss for the
Funds.
Short-Term Trading While the Funds ordinarily do not trade
(Applies to the Quality Growth securities for short-term profits, they may
Fund and the Cardinal Fund) sell any security at any time they believe
best, which may result in short-term trading.
Short-term trading can increase a Fund's
transaction costs and may increase your tax
liability if there are capital gains.
Defensive Investing During unusual market conditions, the Funds
(Applies to the Quality Growth may place up to 100% of total assets in cash
Fund and the Cardinal Fund) or high-quality, short-term debt securities.
To the extent that the Funds do this, they
are not pursuing their goal.
Quality Growth Management Discussion and Analysis.
--------------------------------------------------
An interview with Steven E. Folker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The total return for the Fund was 26.48% on Investment A Shares (before the
deduction of sales charge), compared to 20.20% for the S&P 500 Index, one of the
Fund's benchmarks.
Q. What economic or market conditions contributed to the Fund's performance?
A. The period began with a decline in corporate profits partly due to weak
overseas economies. But the Federal Reserve Board (the Fed) lowered the federal
funds rate three times, for a total rate cut of 0.75 percentage points, which
helped set off a stock market rally and a surge of economic growth. By June,
the Fed was forced to raise the federal funds rate by 0.25 percentage points,
due to concerns about strong economic growth and the potential for
-27-
<PAGE>
rising inflation. The market also was marked by the strong performance of three
industry sectors-technology, communication services and capital goods.
Q. How did you manage the Fund in that environment?
A. We decreased the Fund's weighting in technology early in the period due to
the sector's high valuations. When technology stocks sold off later in the
period, we bought back many of the large-company stocks in the sector at
attractive prices. As a result, we increased the Fund's technology holdings by
8% during the period. We also found opportunities in capital goods and
communication services stocks, which offered attractive valuations.*
Q. What stocks helped boost the Fund's returns?
A. The portfolio's strongest performers were all in the technology sector, which
was up 62% during the 12-month period. The best performing stocks included
Texas Instruments (3.6% of net assets), Oracle (1.6%), Cisco Systems (3.7%) and
Intel (5.4%).*
Q. Did you avoid any sectors?
We avoided sectors that showed too great a dependence on the economic cycle or
signs of sluggish long-term growth. Those sectors included basic materials,
utilities, and consumer staples. We also reduced the Fund's exposure in the
health care sector due in part to concerns about Medicare reform.
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. We believe that the economy will continue to grow, creating modest
inflationary pressures, but inflation should remain low. As international
economies continue to strengthen, the United States should benefit from their
prosperity. We will carefully monitor the valuations of the stocks the Fund
owns to be sure that they are at reasonable levels. We also will continue to
look for opportunities among sectors that show impressive growth potential,
including the technology and consumer cyclical.
Q. What were the Fund's top holdings as of July 31, 1999?
A. The Fund's top five holdings were Intel Corporation (5.4% of net assets),
Home Depot (4.7%), Tyco International (4.3%), Freddie Mac (4.0%), and Bank of
New York (4.0%).*
____________________
* The composition of the Fund's portfolio is subject to change.
-28-
<PAGE>
Growth of $10,000 Invested in the Fifth Third Quality Growth Fund
<TABLE>
<CAPTION>
Investment Investment Institutional S&P 500 S&P/BARRA Lipper Growth
C Shares** A Shares* Shares Stock Index Growth Index Fund Average
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000 10,000
7/90 11,109 10,638 11,139 10,647 11,185 10,558
7/91 13,047 12,542 13,133 12,007 12,916 12,062
7/92 14,906 14,401 15,079 13,539 14,503 13,430
7/93 15,041 14,546 15,232 14,713 14,717 15,174
7/94 15,520 15,009 15,716 15,477 15,465 15,918
7/95 19,120 18,491 19,362 19,509 20,217 19,953
7/96 21,511 20,837 21,819 22,739 23,782 21,911
7/97 32,859 32,087 33,599 34,590 37,214 31,543
7/98 37,266 36,619 38,345 41,282 46,486 35,638
7/99 46,865 46,317 48,620 49,623 57,739 41,859
</TABLE>
Average Annual Total Return for the Period Ended July 31, 19991
<TABLE>
<CAPTION>
Investment A* Investment C** Institutional***
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year....................20.82%.................25.76%.................26.80%
5 Year....................24.12%.................24.74%.................25.34%
10 Year...................16.56%.................16.70%.................17.13%
------------------------------------------------------------------------------------------
</TABLE>
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
/1/The quoted performance of the Quality Growth Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, and prior to the Quality Growth Fund's commencement of
operations on 11/20/92, as adjusted to reflect the expenses associated with the
Fund (without waivers or reimbursements). These collectively managed accounts
were not registered with the Securities and Exchange Commission and, therefore,
were not subject to the investment restrictions imposed by law on registered
mutual funds. If such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.5%
**Investment C Shares were initially offered 4/25/96. The performance figures
for Investment C Shares for periods prior to such date represent the performance
for Investment A Shares of the Fund. Investment C shareholders that redeem
within one year of purchase are subject to a contingent deferred sales charge of
1.00%. Investment C Shares are also subject to administrative service fees at a
maximum rate of 0.25% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-
1 fees of up to 0.25% of the average daily net asset value of Investment A
Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Stock Index
and the S&P/BARRA Growth Index, both of which are unmanaged indices generally
representative of the stock market, and the Lipper Growth Funds Average,
representative of the average of the total returns reported by all of the mutual
funds designated by Lipper, Inc. falling into this category. The S&P 500 Stock
Index and the S&P/BARRA Growth Index do not reflect the deduction of fees
associated with a mutual fund. The Lipper Growth Funds Average and the Fund's
performance reflect the deduction of fees for these value-added services.
Cardinal Fund Management Discussion and Analysis.
-------------------------------------------------
An interview with Steven E. Folker, portfolio manager.
-29-
<PAGE>
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund posted a total return of 34.60% for Investment A Shares (before the
deduction of sales charge), during the period compared to a 20.20% return for
the S&P 500 Stock Index, one of the Fund's benchmarks.
Q. What economic or market conditions contributed to the Fund's performance?
A. The stock market was characterized by low inflation, low interest rates and
strong corporate earnings during much of the period. A decline in corporate
profits due to weak overseas economies hurt stock prices in the fall and helped
convince the Federal Reserve Board to lower interest rates three times in late
1998. That caused the stock market and the economy to rebound sharply. The
bull market broadened in late April as investors began to favor shares of small-
and mid-cap companies. Stronger-than-expected economic growth and inflationary
concerns during the second half of the period caused the Fed to raise rates
slightly in June.
Q. How did you manage the Fund in that environment?
A. We found opportunities in undervalued shares of technology companies during
the October correction. As a result, we increased the Fund's technology
holdings by 8% during the period. We also found opportunities in other
undervalued sectors such as consumer cyclicals and capital goods. Strong
performers for the Fund included Texas Instruments (1.1% of net assets), Applied
Materials 1.9%) and KLA-Tencor Corporation (0.3%) in the technological sector*
Q. Did you avoid any sectors?
A. We remained underweighted in basic materials, consumer staples, and energy
sectors, due to their low long-term growth potential and high economic
sensitivity.
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. In our view, inflation will likely remain low while corporate earnings will
continue to strengthen during the next several months. We will look for
opportunities among both large- and mid-cap companies in undervalued sectors.
We will also weed out stocks that become overvalued.
Q. What were the Fund's top holdings as of July 31, 1999?
A. The Fund's top five holdings were Microsoft (5.5% of net assets.), Lucent
Technologies (4.1%), General Electric (4.1%), Marsh & McLennan Companies (4.1%)
and Intel Corporation (3.7%).*
------------------
* The composition of the Fund's portfolio is subject to change.
-30-
<PAGE>
Growth of $10,000 Invested in the Fifth Third Cardinal Fund
<TABLE>
<CAPTION>
Investment Investment Institutional S&P 500
C Shares** A Shares* Shares Stock Index
---------------------------------------------------------------
<S> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000
7/90 10,261 9,799 10,261 10,647
7/91 11,555 11,035 11,555 12,007
7/92 13,491 12,884 13,491 13,539
7/93 14,086 13,453 14,086 14,713
7/94 14,916 14,245 14,916 15,477
7/95 16,723 15,970 16,723 19,509
7/96 18,905 18,054 18,905 22,739
7/97 28,292 27,019 28,292 34,590
7/98 32,392 30,934 32,410 41,282
7/99 38,639 37,211 39,285 49,623
</TABLE>
Average Annual Total Return for the Period Ended July 31, 19991
<TABLE>
<CAPTION>
Investment A* Investment C** Institutional***
-----------------------------------------------------------------------------
<S> <C> <C> <C>
1 Year.............. 14.90% 19.29% 21.21%
5 Year.............. 20.06% 20.97% 21.37%
10 Year............. 14.05% 14.47% 14.66%
-----------------------------------------------------------------------------
</TABLE>
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
/1/The quoted performance of the Fifth Third Cardinal Fund includes performance
of its predecessor fund, The Cardinal Fund, an open-end investment company
advised by the Cardinal Management Group, for periods dating back to 5/31/75 and
prior to the Fifth Third Cardinal Fund's commencement of operations on 9/21/98.
The performance for the Fund shown for the periods prior to 9/21/98 reflects the
deduction of fees associated with The Cardinal fund. If the fees associated with
the Fund had been deducted, performance would have been lower. The performance
also reflects reinvestment of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.5%.
**Investment C Shares were initially offered 9/21/98. The performance figures
for Investment C Shares for periods prior to such date represent the performance
for Investment A Shares of the Fund. Investment C shareholders that redeem
within one year of purchase are subject to a contingent deferred sales charge of
1.00%. Investment C Shares are also subject to administrative service fees at a
maximum rate of 0.25% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-
1 fees of up to 0.25% of the average daily net asset value of Investment A
Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Index, a
managed index generally representative of the stock market. It is also measured
against the Lipper Growth Fund's Average, representative of the average of the
total returns reported by all of the mutual funds designated by Lipper, Inc. as
falling into this category. The Standard & Poor's 500 Index does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. However, the Lipper Growth Funds Average
and the Fund's performance do reflect the deduction of fees for these value-
added services.
Fund Management.
----------------
Investment Advisor - Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263, serves as investment manager to the Quality Growth Fund
and the Cardinal Fund. Fifth Third Bank is a subsidiary of Fifth Third Bancorp.
-31-
<PAGE>
As of September 30, 1999, Fifth Third Bank had approximately $18 billion of
assets under management, including approximately $4.6 billion of assets held by
mutual funds.
The management fees paid by the Funds for the fiscal year ended July 31,
1999 are as follows:
<TABLE>
<CAPTION>
As a percentage of
average net assets
---------------------------------------------------------------------------------------------------------
<S> <C>
Fifth Third Quality Growth Fund 0.80%
---------------------------------------------------------------------------------------------------------
Fifth Third Cardinal Fund 0.60%
---------------------------------------------------------------------------------------------------------
</TABLE>
Portfolio Manager - Steven E. Folker has been the portfolio manager for the
Quality Growth Fund since 1993 and the Cardinal Fund since 1998. Currently, he
is the Chief Equity Strategist for Fifth Third Investment Advisors and is Vice
President and Trust Officer of Fifth Third Bank. He is also a Chartered
Financial Analyst, has over 16 years of investment experience and is a member of
the Cincinnati Society of Financial Analysts. He earned a B.B.A. in Finance &
Accounting and an M.S. in Finance, Investments & Banking from the University of
Wisconsin.
Legal Proceedings - There are no pending material legal proceedings to
which Fifth Third Funds, the Quality Growth Fund, or the Cardinal Fund is a
party.
Net Asset Value - Quality Growth Fund and Cardinal Fund. The price of Fund
-------------------------------------------------------
shares is based on the Fund's Net Asset Value (NAV). The value of each portfolio
instrument held by the Funds is determined by using market prices. Under
special circumstances, such as when an event occurs after the close of the
exchange on which a Fund's portfolio securities are principally traded, which,
in the investment manager's opinion has materially affected the price of those
securities, the Fund may use fair value pricing. Each Fund's NAV is calculated
at 4:00 p.m. Cincinnati time each day the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Each Fund's NAV may change on days when shareholders will not be able to
purchase or redeem Fund shares. The Funds will be closed on those days that
Fifth Third Bank is closed and on the following holidays: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas.
Purchasing and Adding to Your Shares - Quality Growth Fund and Cardinal Fund.
-----------------------------------------------------------------------------
You may purchase shares on the days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds or its transfer
agent. All orders must be received by the Funds or its transfer agent prior to
4:00 p.m. Cincinnati time in order to receive that day's NAV.
You may purchase Investment A and Investment C shares through Fifth Third
Securities, Inc. as well as broker-dealers and financial institutions which have
a sales agreement with the distributor of Fund shares. (Special rules apply for
former shareholders of the Cardinal Fund. See below.) In order to purchase
Investment A shares through Fifth Third Securities, Inc. or another financial
institution, you must open an account with that institution. That account will
be governed by its own rules and regulations, which may be more stringent than
the rules and regulations governing an investment in the Funds, and you should
consult your account documents for full details. Your shares in the Funds will
be held in an omnibus account in the name of that institution.
Regarding Investment A and Investment C shares, the entity through which you are
purchasing your shares is responsible for transmitting orders to the Funds by
4:00 p.m. Cincinnati time and it may have an earlier cut-off time for purchase
requests. Consult that entity for specific information.
Institutional shares only may be purchased through the Trust and Investment
Department of Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, qualified employee retirement plans subject to minimum
-32-
<PAGE>
requirements that may be established by the distributor of Fund shares, or
broker-dealers, investment advisers, financial planners or other financial
institutions which have an agreement with Fifth Third Bank to place trades for
themselves or their clients for a fee. In order to purchase Institutional
shares through one of those entities, you must have an account with it.
Regarding Institutional shares, the entity through which you are purchasing your
shares is responsible for transmitting the order to the Funds, and it may have
an earlier cut-off time for purchase requests. Consult that entity for specific
information.
Minimum Investments The minimum initial investment in Investment
A shares, Investment C shares, or
Institutional shares of the Funds offered by
this Prospectus is $1,000. Subsequent
investments must be in amounts of at least
$50.
All purchases must be in U.S. dollars. A fee
may be charged for any checks that do not
clear. Third-party checks are no accepted.
For details, contact the Trust toll-free at
1-888-799-5353 or write to: Fifth Third
Funds, c/o Fifth Third Bank, 38 Fountain
Square Plaza, Cincinnati, Ohio 45263.
The Funds may reject a purchase order for any
reason.
Systematic Investment Program You may make monthly systematic investments
(Investment A shares and in Investment A shares of the Funds from
Investment C shares only) your bank account. There is no minimum
amount required for initial amounts invested
into the Funds. You may elect to make
systematic investments on the 1/st/ or the
15/th/ of each month, or both. If the 1/st/
or the 15/th/ of the month is not a day on
which the Fund is open for business, the
purchase will be made on the previous day the
Fund is open for business. Please contact
Fifth Third Securities, Inc. or your
financial institution for more information.
Avoid 31% Tax Withholding
Each Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To
avoid this withholding, make sure you provide your correct Tax Identification
Number.
Instructions for Purchases by Former Cardinal Fund Shareholders
(Investment A shares and Investment C shares only)
If you held in your name (rather than through brokerage account) shares of the
Cardinal Fund at the time the Fund was merged into the Fifth Third Funds, and
you continue to hold in your name the shares of the Cardinal Fund that you
received in the merger or by way of a subsequent exchange, you may purchase
additional shares of that Fifth Third Fund directly from the Funds rather than
through Fifth Third Securities, Inc. or another financial institution. The
Funds reserve the right to change or eliminate these privileges at any time:
By Mail For Subsequent Investments:
1. Use the investment slip attached to your account
statements. Or, if unavailable, provided the following
information:
. Fund name
-33-
<PAGE>
. Share class
. Amount invested
. Account name and account number
2. Make check, bank draft or money payable to "Fifth Third
Funds" and include your account number on the check.
3. Mail or deliver investment slip and full payment to the
following address:
By Regular Mail: By Express Mail:
Fifth Third Funds Fifth Third Funds
P.O. Box 182706 c/o BISYS Fund Services
Columbus, OH 43218-2706 3435 Stelzer Road
Columbus, OH 43219-3035
By Wire Transfer For Subsequent Investments:
Instruct your bank to wire transfer your investments to:
Fifth Third Bank
Cincinnati, OH
ABA # 042000314
A/C # 99944318
Reference: Fifth Third Funds
FCC: Shareholder name, Fund name, and Account number
Note: Your bank may charge a wire transfer fee.
Systematic To begin making systematic investments or to increase the
Investment amounts you already are investing:
Program
[_] Write a letter of instruction indicating:
. Your bank name, address, account number, and
ABA routing number
. The amount you wish to invest automatically
[_] Attach a voided personal check.
[_] Mail To:
Fifth Third Funds
P.O. Box 182706
Columbus, Ohio 43218-2706
Redemption - Quality Growth Fund and Cardinal Fund.
---------------------------------------------------
Selling Your Shares
You may sell your shares on days when the New York Stock Exchange is open for
regular trading and the Federal Reserve Bank of Cleveland is open for business.
Your sales price will be the next NAV after your sell order is received by the
Funds, its transfer agent, or your investment representative. All orders must
be received by the Funds or its transfer agent prior to the time the Fund
calculates its NAV in order to receive that day's NAV. Normally you will
receive your proceeds within a week after your request is received.
You may sell Investment A shares through Fifth Third Securities, Inc. or the
financial institution through which you purchased them. (Special rules apply
for certain former shareholders of the Cardinal Fund. See below.)
The entity through which you are selling your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off for sale
requests. Consult that entity for specific information.
-34-
<PAGE>
In order to sell your Institutional shares, call the Trust and Investment
Department at Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, the sponsor of your qualified employee retirement plan or
the broker-dealer, investment adviser, financial planner or other institution
through which you purchased your shares.
Systematic Withdrawal Plan - Investment A Shares and Investment C Shares
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the first day of that period that the Fund is open for business. Please contact
Fifth Third Securities, Inc. or your financial institution for more information.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
longer if permitted by the SEC. If you experience difficulty making a telephone
redemption during periods of drastic economic or market change, for Investment A
Shares and Investment C Shares, you can send to the Funds your request by
regular mail to: Fifth Third Funds, P.O. Box 182706, Columbus, Ohio 43218-2706,
or by express mail to: Fifth Third Funds, c/o BISYS Fund Services, 3435 Stelzer
Road, Columbus, Ohio 43219-3035. For Institutional Shares, you can send to the
Funds your request by regular mail to: Fifth Third Funds, 38 Fountain Square
Plaza, Cincinnati, Ohio 45263.
Instructions for Sales by Former Cardinal Fund Shareholders - Investment A
Shares
If you held in your name (rather than through brokerage account) shares of the
Cardinal Fund at the time the Fund was merged into Fifth Third Funds, and you
continue to hold in your name the shares of the Fifth Third Fund you received in
the merger or by way of a subsequent exchange, you may sell your Fifth Third
Fund shares directly by contacting the Funds rather than through Fifth Third
Securities, Inc. or another financial institution.
By telephone Call 1-800-282-5706 with instructions as to how you
Shares may be wish receive your funds (mail, wire). The Funds make
redeemed in any every effort to insure that telephone redemptions are
amount less than only made by authorized traders. All telephone calls
$50,000 by are recorded for your protection and you will be asked
telephone. for information to verify your identity.
By mail 1. Write a letter of instruction indicating:
. your Fund and account number
. amount you wish to redeem
. address where your check should be sent
. account owner(s) signature
2. Mail to:
Fifth Third Funds
P.O. Box 182706
Columbus, OH 43218-2706
By overnight service 1. Write a letter of instruction indicating:
. your Fund and account number
. amount you wish to redeem
. address where your check should be sent
. account owner(s) signature
2. Send to:
Fifth Third Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-3035
-35-
<PAGE>
By Wire Transfer Call 1-800-282-5706 to request a wire transfer
(Option available only if
previously set up on If you call by the time designated by the Funds,
account) your payment will normally be wired to your bank
on the next business day.
The Fund charges a wire transfer fee of $8.
Note: Your financial institution may also charge
a separate fee.
Systematic Withdrawal To activate this feature 1-800-282-5706.
Plan
When Written Redemption Requests are Required
You must request redemptions writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Redemption requests requiring a signature guarantee, which include each of
the following.
. Redemptions over $50,000
. Your account address has changed within the last 30 days
. The check is not being mailed to the address on your account
. The redemption proceeds are being transferred to another Fund account
with a different registration
. The redemption proceeds are being wired to instructions currently not on
your account
Signature guarantees may be obtained from a U.S. stock exchange member, a U.S.
commercial bank or trust company, or any other financial institution that is a
member of the STAMP (Securities Transfer Agents Medallion Program), MSP (New
York Stock Exchange Medallion Signature Program) or SEMP (Stock Exchanges
Medallion Program). Members are subject to dollar limitations, which must be
considered when requesting their guarantee. The Transfer Agent may reject any
signature guarantee if it believes the transaction would otherwise be improper.
The Trust does not accept signatures guaranteed by notary public.
Redemptions Within 15 Days of Initial Investment
When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has cleared
(which may require up to 15 business days). You can avoid this delay by
purchasing shares with a certified check, or by wire.
Closing of Small Accounts - Investment A shares, Investment C shares, and
Institutional shares
If your account falls below $1,000 because of redemptions, a Fund may ask you to
increase your balance. If it is still below the minimum after 30 days, the Fund
may close your account and send you the proceeds at the current NAV.
Dividends and Distributions - Quality Growth Fund and Cardinal Fund.
--------------------------------------------------------------------
Distribution Arrangements/ Regarding Investment A Shares and Investment C
Sales Charges Shares, this section describes the sales charges
and fees you will pay as an investor and ways to
qualify for reduced sales charges.
<TABLE>
<CAPTION>
Investment A Investment C
<S> <C> <C>
Sales Charge (Load) Front-end sales charge; No front-end sales charge.
reduced sales charges A contingent deferred sales
available. charge (CDSC) will be
imposed on shares redeemed
within 12 months
</TABLE>
-36-
<PAGE>
<TABLE>
<S> <C> <C>
after purchase.
Distribution/Service Subject to annual Subject to annual
(12b-1) Fee distribution and shareholder distribution and
servicing fees of up to 0.25% shareholder servicing fees
of the Fund's assets. of up to 1.00% of the
Fund's assets.
Fund Expenses Lower annual expenses than Higher annual expenses than
Investment C shares. Investment A shares
</TABLE>
Calculation of Sales Charges
Investment A Shares Investment A shares are sold at their public
offering price. This price includes the initial
sales charge. Therefore, part of the money you
send to the Funds will be used to pay the sales
charge. The remainder is invested in Fund shares.
The sales charge decreases with larger purchases.
There is no sales charge on reinvested dividends
and distributions.
The current sales charge rates are as follows:
<TABLE>
<CAPTION>
Sales Charge as a % of Sales Charge as a %
Your Investment Offering Price of Your Investment
<S> <C> <C>
Less than $50,000 4.50% 4.71%
-------------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00% 4.17%
-------------------------------------------------------------------------------------------
$100,000 but less than $150,000 3.00% 3.09%
-------------------------------------------------------------------------------------------
$150,000 but less than $250,000 2.00% 2.04%
-------------------------------------------------------------------------------------------
$250,000 but less than $500,000 1.00% 1.01%
-------------------------------------------------------------------------------------------
$500,000 or more 0.00% 0.00%
-------------------------------------------------------------------------------------------
</TABLE>
If you have a Club 53 Account, One Account
Advantage or Platinum One Account through Fifth
Third Bank, you are eligible for the following
reduced sales charges:
<TABLE>
<CAPTION>
Sales Charge as a % of Sales Charge as a %
Your Investment Offering Price of Your Investment
<S> <C> <C>
Less than $50,000 3.97% 4.13%
-----------------------------------------------------------------------------------------
$50,000 but less than $100,000 3.47% 3.59%
-----------------------------------------------------------------------------------------
$100,000 but less than $150,000 2.47% 2.53%
-----------------------------------------------------------------------------------------
$150,000 but less than $250,000 1.47% 1.49%
-----------------------------------------------------------------------------------------
$250,000 but less than $500,000 0.47% 0.47%
-----------------------------------------------------------------------------------------
$500,000 and above 0.00% 0.00%
-----------------------------------------------------------------------------------------
</TABLE>
If you purchase $500,000 or more of Investment A
shares and do not pay a sales charge, and you sell
any of those shares before the first anniversary
of purchase, you will pay a 1% contingent deferred
sales charge, or CDSC, in the portion redeemed at
the time of redemption. The CDSC will be based
upon the lowest of the NAV at the time of purchase
and the NAV at the time of redemption. In any
sales, certain shares not subject to the CDSC
(i.e., shares purchased with reinvested dividends
or distributions) will be redeemed first followed
by shares
-37-
<PAGE>
subject to the lowest CDSC (typically shares held
for the longest time).
Sales Charge Reductions You may qualify for reduced sales charges under
the following circumstances:
. Letter of Intent. You inform the Fund in
writing that you intend to purchase at least
$50,000 of Investment A shares over a 13-
month period to qualify for a reduced sales
charge. You must include up to 4.5% of the
total amount you intend to purchase with your
letter of intent. Shares purchased under the
non-binding Letter of Intent will be held in
escrow until the total investment has been
completed. In the event the Letter of Intent
is not completed, sufficient escrowed shares
will be redeemed to pay any applicable front-
end sales charges.
. Rights of Accumulation. When the value of
shares you already own plus the amount you
intend to invest reaches the amount needed to
qualify for reduced sales charges, your added
investment will qualify for the reduced sales
charge.
. Combination Privilege. Combine accounts of
multiple Funds (excluding the Money Market
Fund) or accounts of immediate family
household members (spouse and children under
21) to achieve reduced sales charges.
Sales Charge Waivers The following transactions qualify for waivers of
sales charges that apply to Investment A shares:
. Shares purchased by investment
representatives through fee-based investment
products or accounts.
. Reinvestment of distributions from a deferred
compensation plan, agency, trust, or custody
account that was maintained by the Advisor or
its affiliates or invested in any Fifth Third
Fund.
. Shares purchased for trust or other advisory
accounts established with the Advisor or its
affiliates.
. Shares purchased by directors, trustees,
employees, and family members of the Advisor
and its affiliates and any organization that
provides services to the Funds; retired Fund
trustees; dealers who have an agreement with
the Distributor; and any trade organization
to which the Adviser or the Administrator
belongs.
. Shares purchased in connection with 401(k)
plans, 403(b) plans and other employer-
sponsored qualified retirement plans, "wrap"
type programs non-transactional fee fund
programs, and programs offered by fee-based
financial planners and other types of
financial institutions (including omnibus
service providers).
. Distributions from Qualified Retirement
Plans. There also is no sales charge for Fund
shares purchased with distributions from
qualified retirement plans or other
administered by Fifth Third Bank.
Investment C Shares Class C shares are offered at NAV, without
any up-front sales charge. Therefore, all the
money you send to the Funds is used to
purchase Fund shares. If you sell your
Investment C shares before the first
anniversary of purchase, however, you will
pay a 1% contingent deferred sales charge or
CDSC, at the time of redemption. The CDSC
will be based upon the lower of the NAV at
the time of purchase and the NAV at the time
of redemption. In any sale, certain shares
not subject to the CDSC (i.e., shares
purchased with reinvested dividends
-38-
<PAGE>
or distributions) will be redeemed first, followed
by shares subject to the lowest CDSC (typically
shares held for the longest time).
Reinstatement Privilege If you have sold Investment A or C shares and
decide to reinvest in the Fund within a 90 day
period, you will not be charged the applicable
sales load on amounts up to the value of the
shares you sold. You must provide a written
reinstatement request and payment within 90 days
of the date your instructions to sell were
processed.
Distributions/ 12b-1 fees compensate the Distributor and other
Service (12b-1) Fees dealers and investment representatives for
services and expenses related to the sale and
distribution of the Fund's shares and/or for
providing shareholder services. 12b-1 fees are
paid from Fund assets on an ongoing basis, and
will increase the cost of your investment. 12b-1
fees may cost you more than paying other types of
sales charges.
The 12b-1fees vary by share class as follows:
. Investment A shares may pay a 12b-1 fee of up
to 0.25% of the average daily net assets of a
Fund.
. Investment C shares pay a 12b-1 fee of up to
1.00% of the average daily net assets of the
applicable Fund. The Distributor may use up
to 0.25% of the 12b-1 fee for shareholder
servicing and up to 0.75% for distribution.
This will cause expenses for Investment C
shares to be higher and dividends to be lower
than for Investment A shares. The higher 12b-
1 fee on Investment C shares, together with
the CDSC, help the Distributor sell
Investment C shares without an "up-front"
sales charge. In particular, these fees help
to defray the Distributor's costs of
advancing brokerage commission to investment
representatives.
Over time shareholders will pay more than the
equivalent of the maximum permitted front-end
sales charge because 12b-1 distribution and
service fees are paid out of the Fund's
assets on an on-going basis.
Dealers Incentives BISYS, the distributor of Fund shares, in its
discretion, may pay all dealers selling
Investment A shares all or a portion of the
sales charges it normally retains.
DIVIDENDS AND CAPITAL GAINS All dividends and capital gains will be
(Investment A Shares, Investment automatically reinvested unless you request
C Shares, and Institutional otherwise. You can receive them in cash or by
Shares) electronic funds transfer to your bank
account if you are not a participant in an
IRA account or in a tax qualified plan. There
are no sales charges for reinvested
distributions. Institutional share dividends
are higher than Investment A share dividends
which are higher than Investment C share
dividends. This is because Institutional
shares have lower operating expenses than
Investment A shares which have lower
operating expenses than Investment C shares.
-39-
<PAGE>
Distributions are made on a per share basis
regardless of how long you've owned your shares.
Therefore, if you invest shortly before the
distribution date, some of your investment will be
returned to you in the form of a taxable
distribution.
Dividends, if any, are declared and paid monthly
by the Quality Growth Fund. Dividends, if any, are
declared and paid quarterly by the Cardinal Fund.
Capital Gains, if any, are distributed at least
annually.
Taxes - Quality Growth Fund and Cardinal Fund.
----------------------------------------------
Federal Income Tax
Each Fund expects to distribute substantially all of its investment income
(including net capital gains) to its shareholders. Unless otherwise exempt or
as discussed below, shareholders are required to pay federal income tax on any
dividends and other distributions, including capital gains distributions
received. This applies whether dividends and other distributions are received
in cash or as additional shares. Distributions representing long-term capital
gains, if any, will be taxable to shareholders as long-term capital gains no
matter how long the shareholders have held the shares. No federal income tax is
due on any dividend earned in an IRA or qualified retirement plan until
distributed.
This is a brief summary of certain federal income tax consequences relating to
an investment in the Funds, and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments under federal, state and
local laws.
Financial Highlights - Quality Growth Fund and Cardinal Fund.
-------------------------------------------------------------
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions). With respect to financial
highlights for periods through July 31, 1999, the information has been audited
by Ernst & Young LLP, except that the financial highlights for the Cardinal Fund
for each of the respective years or periods ended September 30, 1997 were
audited by other auditors whose report dated November 14, 1997 expressed an
unqualified opinion. Ernst & Young LLP's report, along with the Funds'
financial statements, are included in the annual report, which is available upon
request. The information for the period ended January 31, 2000 has not been
audited.
-40-
<PAGE>
Financial Highlights
Fifth Third Quality Growth Fund
Investment A Shares
<TABLE>
<CAPTION>
Six Months
Ended Year Ended July 31,
Jan. 31, 2000 ------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
Per Share Data ----------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 23.31 $ 20.26 $ 19.23 $ 13.16 $ 11.79 $ 9.70
-----------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income/(loss) (0.04) (0.06) 0.03 0.08 0.12 0.14
Net realized and unrealized
gains/(losses) from
investments 2.15 5.06 2.49 6.75 1.37 2.09
-----------------------------------------------------------------------------------------------------------
Total from Investment
Operations 2.11 5.00 2.52 6.83 1.49 2.23
-----------------------------------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income -- -- (0.03) (0.09) (0.12) (0.14)
Net realized gains on
investments (1.17) (1.95) (1.46) (0.67) -- --
Total Distributions (1.17) (1.95) (1.49) (0.76) (0.12) (0.14)
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 24.25 $ 23.31 $ 20.26 $ 19.23 $ 13.16 $ 11.79
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Total Return (excludes sales
charge) 9.18%(a) 26.48% 14.12% 54.02% 12.69% 23.21%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.24%(b) 1.21% 1.00% 1.00% 0.99% 1.00%
Net investment income/(loss) (0.36%(b) (0.29%) 0.10% 0.45% 0.98% 1.44%
Expense
waiver/reimbursement(c) 0.02%(b) 0.08% 0.37% 0.36% 0.03% 0.05%
-----------------------------------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period
(000s) $161,663 $116,963 $520,068 $399,683 $134,469 $82,594
Portfolio turnover(d) 7% 34% 45% 37% 37% 34%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
<PAGE>
Financial Highlights
Fifth Third Quality Growth Fund
Investment C Shares
<TABLE>
<CAPTION>
Six Months
Ended Year Ended July 31, Period Ended
Jan. 31, 2000 ------------------------ July 31,
(Unaudited) 1999 1998 1997 1996*
Per Share Data -------------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 22.97 $20.10 $19.18 $13.16 $13.37
--------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income/(loss) (0.09) (0.18) (0.07) (0.03) --
Net realized and unrealized
gains/(losses) from investments 2.11 5.00 2.45 6.72 (0.21)
--------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.02 4.82 2.38 6.69 (0.21)
--------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- -- -- -- --
Net realized gain on investment (1.17) (1.95) (1.46) (0.67) --
Total Distributions (1.17) (1.95) (1.46) (0.67) --
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 23.82 $22.97 $20.10 $19.18 $13.16
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 8.92%(a) 25.76 % 13.41 % 52.79 % 12.50%(e)
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 1.74%(b) 1.80 % 1.63 % 1.75 % 1.77%(b)
Net investment income/(loss) (0.29%) (0.89)% (0.54)% (0.32)% 0.26%(b)
Expense waiver/reimbursement(c) 0.08% 0.30 % 0.39 % 0.26 % 0.06%(b)
------------------------------------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 11,636 $9,775 $8,357 $3,146 $ 420
Portfolio turnover(d) 7% 34 % 45 % 37 % 37%
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
(a) Not annualized
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C shares
for the period from April 25, 1996 to July 31, 1996.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Fifth Third Quality Growth Fund
Institutional Shares
Six Months
Ended Period Ended
Jan. 31, 2000 July 31, 1999*
(Unaudited)
Per share data ---------------- --------------
<S> <C> <C>
Net asset value, beginning of period $ 23.37 $ 19.45
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income/(loss) (0.01) (0.02)
Net realized and unrealized gains/(losses)
from investments 2.14 5.89
--------------------------------------------------------------------------------------------------
Total from investment operations 2.13 5.87
--------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income - -
Net realized gain on investments (1.17) (1.95)
--------------------------------------------------------------------------------------------------
Total distributions (1.17) (1.95)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.33 $ 23.37
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Total return (excludes sales charge) 9.24% (a) 32.08% (a)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 0.99% (b) 1.00% (b)
Net investment income/(loss) (0.11%)(b) (0.10%)(b)
Expense waiver/reimbursement(c) 0.02% (b) 0.05% (b)
--------------------------------------------------------------------------------------------------
Supplemental data:
Net assets at end of period (000s) $683,078 $583,753
Portfolio turnover(d) 7% 34%
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund**
Investment A Shares
<TABLE>
<CAPTION>
Six Months
Ended Period ended Year Ended September 30,
Jan. 31, 2000 July 31, --------------------------------------
(Unaudited) 1999* 1998 1997 1996 1995
Per Share Data ------------- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 19.38 $ 14.87 $ 16.65 $ 13.13 $ 13.23 $ 12.73
------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income (0.01) (0.01) 0.14 0.14 0.25 0.36
Net realized and
unrealized
gains/(losses) from
investments 1.50 5.08 0.27 4.64 1.95 1.32
Total from Investment
Operations 1.49 5.07 0.41 4.78 2.20 1.68
------------------------------------------------------------------------------------------------------
Distributions to
shareholders from:
Net investment income -- (0.01) (0.14) (0.13) (0.26) (0.35)
In excess of net
investment income -- -- (0.04) -- -- --
Net realized gains (3.74) (0.55) (2.01) (1.13) (2.04) (0.83)
------------------------------------------------------------------------------------------------------
Total Distributions (3.74) (0.56) (2.19) (1.26) (2.30) (1.18)
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 17.13 $ 19.38 $ 14.87 $ 16.65 $ 13.13 $ 13.23
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Total Return (excludes
sales charge) 8.09%(a) 34.60% (a) 2.50% 39.17% 17.96% 14.84%
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C> <C>
Ratios to Average Net
Assets:
Expenses (0.17%)(b) 1.04% (b) 0.92% 1.06% 0.75% 0.70%
Net investment
income/(loss) (0.17%)(b) (0.07%)(b) 0.76% 0.97% 1.90% 2.89%
Expense
waiver/reimbursement(c) 0.06%(b) 0.07% (b) 0.09% 0.06% 0.10% 0.00%
------------------------------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of
period (000s) $238,353 $243,790 $232,903 $267,908 $229,042 $226,181
Portfolio turnover(d) 0% 15% 15% 13% 58% 20%
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund**
Investment C Shares
<TABLE>
<CAPTION>
Six Months
Ended Period ended
Jan. 31, 2000 July 31,
(Unaudited) 1999*
Per Share Data ------------- ------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 19.22 $15.63
-----------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (0.05) (0.05)
Net realized and unrealized gains/(losses) from investments 1.47 4.19
Total from Investment Operations 1.42 4.14
-----------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income -- --
In excess of net investment income -- --
Net realized gains (3.74) (0.55)
-----------------------------------------------------------------------------------------------
Total Distributions (3.74) (0.55)
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 16.90 $19.22
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 7.78%(a) 26.99% (a)
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C>
Ratios to Average Net Assets:
Expenses 1.57%(b) 1.65% (b)
Net investment income/(loss) (0.66%)(b) (0.66%)(b)
Expense waiver/reimbursement(c) 0.31%(b) 0.24% (b)
-----------------------------------------------------------------------------------------------
Supplemental data:
Net Assets at end of period (000s) $ 976 $ 839
Portfolio turnover(d) 0% 15%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 22, 1998 (date of
commencement of operations) to July 31, 1999.
** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<PAGE>
Financial Highlights
Fifth Third Cardinal Fund***
Institutional Shares
<TABLE>
<CAPTION>
Six Months
Ended
Jan. 31, 2000 Period Ended Year Ended Period Ended
(Unaudited) July 31, 1999* Sept. 30, 1998 Sept. 30, 1997**
Per share data ------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $19.51 $14.86 $ 16.64 $ 12.92
-----------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income 0.02 0.04 0.15 0.12
Net realized and unrealized
gains/(losses) from
investments 1.52 5.17 0.28 3.70
-----------------------------------------------------------------------------------------------
Total from investment
operations 1.54 5.21 0.43 3.82
-----------------------------------------------------------------------------------------------
Distributions to shareholders
from:
Net investment income - (0.01) (0.15) (0.10)
In excess of net investment
income - - (0.05) -
Net realized gain on
investments (3.74) (0.55) (2.01) -
-----------------------------------------------------------------------------------------------
Total distributions (3.74) (0.56) (2.21) (0.10)
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Net asset value, end of period $17.31 $19.51 $ 14.86 $ 16.64
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Total return (excludes sales
charge) 8.31%(a) 35.61%(a) 2.60% 29.77%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Ratios to Average Net Assets:
Expenses 0.82%(b) 0.82%(b) 0.84% 1.00%
Net investment income/(loss) 0.14%(b) 0.16%(b) 0.85% 1.04%
Expense waiver/reimbursement(c) 0.07%(b) 0.07%(b) 0.09% 0.00%
-----------------------------------------------------------------------------------------------
Supplemental data:
Net assets at end of period
(000s) $2,858 $6,946 $25,542 $26,881
Portfolio turnover(d) 0% 15% 15% 0.13%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the period from January 2, 1997 (date of
commencement of operations) to September 30, 1997.
*** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
<PAGE>
Information Filed With The Securities And Exchange Commission. Fifth Third Funds
--------------------------------------------------------------
is subject to the informational requirements of the Securities Exchange Act of
1934 and in accordance therewith file reports and other information with the
SEC. Reports, proxy and information statements, registration statements and
other information filed by Fifth Third Funds can be inspected and copied at the
public reference facilities of the SEC at 450 Fifth Street, N.W. Washington,
D.C. 20549. Copies of such filings may also be available at the following SEC
regional offices: 90 Devonshire Street, Suite 700, Boston, MA 02109; 500 West
Madison Street, Suite 1400, Chicago, IL 60611-2511; and 601 Walnut Street,
Suite 1005E, Philadelphia, PA 19106. Copies of such materials can also be
obtained by mail from the Public Reference Branch, Office of Consumer Affairs
and Information Services, SEC, Washington, D.C. 20549 at prescribed rates.
VOTING INFORMATION
------------------
Proxies are being solicited from shareholders of the Cardinal Fund by the
Trustees of Fifth Third Funds for the Special Meeting of Shareholders to be held
on October 17, 2000, at the offices of Fifth Third Bank, 38 Fountain Square
Plaza, Cincinnati, Ohio 45263 at 10:00 a.m., Eastern time, or at such later time
made necessary by adjournment. This Combined Prospectus/Proxy Statement and the
enclosed form of proxy are being mailed to shareholders on or about August
------
[DATE], 2000. The costs of the proxy materials and proxy solicitations will be
------
borne by Fifth Third Bank. A proxy may be revoked at any time at or before the
meeting by submitting to Fifth Third Funds a subsequently dated proxy,
delivering a written notice of revocation to Fifth Third Funds at 3435 Stelzer
Road, Columbus, Ohio 43219 or as otherwise described in the "Introduction"
above. All properly executed proxies received in time for the Meeting will be
voted as specified in the proxy, or, if no specification is made, FOR the
proposal (set forth in item (1) of the Notice of Special Meeting to implement
the reorganization of the Cardinal Fund by the transfer of all of its assets to
the Quality Growth Fund, in exchange for Fifth Third Investment A, Investment C
and Institutional shares of the Quality Growth Fund (collectively, "Shares") and
the assumption by the Quality Growth Fund of all of the liabilities of the
Cardinal Fund followed by the dissolution and liquidation of the Cardinal Fund
and the distribution of Shares to the shareholders of the Cardinal Fund. All
Cardinal Fund shareholders will receive shares of the Fifth Third Class
(Investment A, Investment C or Institutional) that corresponds to the Class of
the Cardinal Fund Shares that they hold. The Transaction contemplated by the
Plan of Reorganization will be consummated only if approved by the affirmative
vote of a majority of all votes attributable to the voting securities of the
Cardinal Fund voting as a Fund, as described above. In the event the
shareholders do not approve the reorganization, the Trustees of Fifth Third
Funds will consider possible alternative arrangements in the best interests of
Fifth Third Funds and its shareholders.
Proxies are being solicited by mail. Shareholders of record of each Fifth
Third Fund at the close of business on August 18, 2000, (the "Record Date"),
will be entitled to vote at the Special Meeting of Shareholders or any
adjournment thereof. Each Share is entitled to one vote as of the close of
business on August 18, 2000. Shareholders are entitled to one vote per share
and a proportionate fractional vote for any fractional share. The holders of a
majority of votes attributable to the outstanding voting shares of a Fifth Third
Fund represented in person or by proxy at the meeting will constitute a quorum
for such Fund for the meeting, and a majority of the shares of a Fifth Third
Fund voted on the Transaction is necessary to approve the Transaction.
As of August 18, 2000, there were outstanding the following amount of
Shares of Investment A, Investment C and Institutional Class of the Cardinal
Fund:
Investment A Shares:
Investment C Shares:
Institutional Shares:
Votes cast by proxy, telephone, the Internet or in person at the meeting
will be counted by the inspector of election appointed by Fifth Third Funds.
The inspector of election will count the total number of votes cast "for"
approval of the proposal for purposes of determining whether sufficient
affirmative votes have been cast. The inspector of election will count shares
represented by proxies that reflect abstentions as shares that are present and
entitled to vote on the matter for purposes of determining the presence of a
quorum; however, the inspector of
-47-
<PAGE>
election will not count "broker non-votes" (i.e., shares held by brokers or
nominees as to which (i) instructions have not been received from the beneficial
owners or the persons entitled to vote and (ii) the broker or nominee does not
have the discretionary voting power on a particular matter) as shares that are
present and entitled to vote on the matter for purposes of determining the
presence of a quorum. For purposes of determining whether an issue has been
approved, abstentions have the effect of a negative vote on the proposal, and
broker non-votes are treated as "against" votes in those instances where
approval of an issue requires a certain percentage of all votes outstanding, but
are given no effect in those instances where approval of an issue requires a
certain percentage of the votes constituting the quorum for such issue.
Fifth Third Funds' Trustees know of no matters other than those set forth
herein to be brought before the meeting. If, however, any other matters
properly come before the meeting, it is the Trustees' intention that proxies
will be voted on such matters in accordance with the judgment of the persons
named in the enclosed form of proxy.
As of August 18, 2000, the officers and Trustees of Fifth Third Funds as a
group beneficially owned less than 1% of the outstanding shares of Investment A,
Investment C and Institutional Shares of any of the Fifth Third Funds [CONFIRM].
The information in the following table shows, to the best of the knowledge of
Fifth Third Funds, the shareholders who owned of record or beneficially 5% or
more of the indicated Fund and Class. The table also shows, as far as
practicable, the percentage of record and beneficial ownership of these same
shareholders upon consummation of the Transaction calculated on the basis of
holdings as of the August 18, 2000 record date. Those shareholders who
beneficially own 25% or more of the outstanding shares of a Fund may be deemed
to be controlling persons of that Fund under the 1940 Act.
<TABLE>
<CAPTION>
Approximate Approximate
Percent of Percent of Percent of
Beneficial Record Beneficial
Ownership Ownership Ownership
Percent of Record Ownership as of Upon Upon
Name and Address as of 8/18/2000 8/18/2000 Consummation Consummation
------------------ --------------------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
FIFTH THIRD
QUALITY GROWTH FUND
FIFTH THIRD
CARDINAL FUND
</TABLE>
[Please confirm that 5% or more of any class will not be held subject to any
voting trust or similar agreement.]
THE BOARD OF TRUSTEES OF FIFTH THIRD FUNDS, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE PLAN.
INTEREST OF CERTAIN PERSONS IN THE TRANSACTION
----------------------------------------------
Fifth Third Bank may be deemed to have an interest in the merger because it
provides investment advisory services to the Fifth Third Funds pursuant to an
advisory agreement with Fifth Third Funds. Future growth of assets of Fifth
Third Funds can be expected to increase the total amount of fees payable to
Fifth Third Bank and to reduce the amount of fees required to be waived to
maintain total fees of the Funds at agreed upon levels.
FIFTH THIRD FUNDS
-----------------
-48-
<PAGE>
General
-------
For a general discussion of the Fifth Third Funds, see the Fifth Third
Prospectuses. For the convenience of Fifth Third Funds shareholders, certain
cross-references to the Prospectuses are set forth below.
Financial Information
---------------------
For information on per-share income and capital changes of a Fifth Third
Fund, see "Financial Highlights" in the Fifth Third Prospectus pertaining to
such Fund.
Expenses
--------
For a discussion of a Fifth Third Fund's expenses, see "Fee Tables" and
"Expense Examples" in the Fifth Third Prospectus pertaining to such Fund.
Investment Objectives and Policies
----------------------------------
For a discussion of a Fifth Third Fund's investment objective and policies,
see "Fundamental Objective" and "Principal Investment Strategies" in the Fifth
Third Prospectus pertaining to such Fund.
Trustees
--------
Overall responsibility for management of Fifth Third Funds rests with its
Board of Trustees who are elected by the shareholders of Fifth Third Funds.
There are currently three Trustees, none of whom is considered to be an
"interested person" of Fifth Third Funds as defined in the Investment Company
Act of 1940. The Trustees, in turn, elect the officers of Fifth Third Funds to
supervise actively its day-to-day operations.
The Trustees of Fifth Third Funds, their addresses and principal
occupations during the past five years are set forth as follows:
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation
---------------- --------------------
Name and Address Birthdate With Fifth Third During Past 5 Years
---------------- --------- ---------------- -------------------
<S> <C> <C> <C>
Albert E. Harris July 2, 1932 Chairman Chairman of the Board of Trustees of Fifth
5905 Graves Road, Third Funds, formerly Chairman of the Board,
Cincinnati, OH 45243 ED Holdings, Inc. (retired July, 1993).
Edward Burke Carey July 2, 1945 Trustee Member of the Board of Trustees, President of
394 East Town Street, Carey Leggett Realty Advisors.
Columbus, OH 43215
Lee A. Carter December 17, 1938 Trustee Member of the Board of Trustees, formerly
425 Walnut Street, President, Local Marketing Corporation
Cincinnati, OH 45202 (retired December 31, 1993).
</TABLE>
Investment Advisor
------------------
For a discussion of Fifth Third Bank and the services performed by it and
its fees with respect to a Fifth Third Fund, see "The Advisor" in the Fifth
Third Prospectus pertaining to such Fund.
Administrator
-------------
-49-
<PAGE>
For a discussion of the activities of BISYS Fund Services LP as the Fifth
Third Funds' administrator, the services performed by it and its fees with
respect to a Fifth Third Fund, see "Fund Administration" in the Fifth Third
Prospectus pertaining to such Fund.
Distributor
-----------
For a discussion of the activities of BISYS Fund Services LP as
distributor, see "The Distributor" in the Distribution Plan and Administrative
Services Agreement in the Fifth Third Funds Statement of Additional Information.
Redemption or Repurchase of Shares
----------------------------------
For a discussion concerning redemption or repurchase of shares of the Fifth
Third Funds, see "Redemption of Shares - Purchasing and Selling Fund Shares" in
any Fifth Third Funds Prospectus.
Dividends and Distributions
---------------------------
For a discussion of the Fifth Third Funds' policies with respect to
dividends and distributions of a Fifth Third Fund, see "Dividends and Capital
Gains" in the Fifth Third Funds Prospectus pertaining to such Fund.
Exchange Privileges
-------------------
For a discussion of a Fifth Third Funds shareholder's right to exchange
particular Class shares of a Fifth Third Fund for other Class shares of the same
Fifth Third Fund, or the same Class shares or other Class shares of another
Fifth Third Fund, see "Exchanging Your Shares" in any Fifth Third Funds
Prospectus.
Legal Proceedings
-----------------
There are no pending material legal proceedings to which Fifth Third Funds
is a party.
Shareholder Inquiries
---------------------
Shareholder inquiries relating to the Fifth Third Funds may be addressed to
Fifth Third Funds' administrator by writing to Fifth Third Funds, 3435 Stelzer
Road, Columbus, Ohio 43219 or by calling 1-888-799-5353.
-50-
<PAGE>
[BACK COVER PAGE]
No person has been authorized to give any information or to make any
representations not contained in this Combined Prospectus/Proxy Statement in
connection with the offering made by this Combined Prospectus/Proxy Statement
and, if given or made, such information or representations must not be relied
upon as having been authorized by Fifth Third Funds. This Combined
Prospectus/Proxy Statement does not constitute an offering by Fifth Third Funds
in any jurisdiction in which such offering may not lawfully be made.
<PAGE>
APPENDIX A
FORM OF PLAN OF REORGANIZATION
<PAGE>
FIFTH THIRD FUNDS
Fifth Third Cardinal Fund and
Fifth Third Quality Growth Fund
PLAN OF REORGANIZATION
This Plan of Reorganization having been approved by the Board of Trustees of
Fifth Third Funds is made as of June 21, 2000, by Fifth Third Funds (the
"Plan"). The capitalized terms used herein shall have the meaning ascribed to
them in this Plan.
OVERVIEW OF PLAN OF REORGANIZATION
(1) The Fifth Third Cardinal Fund (the "Cardinal Fund") will sell, assign,
convey, transfer and deliver to the Fifth Third Quality Growth Fund (the
"Quality Growth Fund") on the Exchange Date all of the properties and assets
existing at the Valuation Time in the Cardinal Fund. In consideration therefor,
the Quality Growth Fund shall, on the Exchange Date, assume all of the
liabilities of the Cardinal Fund for a number of full and fractional Shares of
the Quality Growth Fund having an aggregate net asset value equal to the value
of the assets of the Cardinal Fund transferred to the Quality Growth Fund on
such date less the value of the liabilities of the Cardinal Fund assumed by the
Quality Growth Fund on that date. It is intended that the reorganization
described in this Plan shall be a tax-free reorganization under the Internal
Revenue Code of 1986, as amended (the "Code").
(2) Upon consummation of the transactions described in paragraph (1) of
this Plan, the Cardinal Fund shall distribute in complete liquidation to its
shareholders of record as of the Exchange Date the Shares of beneficial interest
("Shares") of the Quality Growth Fund received by it, each shareholder being
entitled to receive the number of such Shares of the Quality Growth Fund equal
to the proportion which the number of Shares of the Cardinal Fund held by such
shareholder bears to the number of such Shares of the Cardinal Fund outstanding
on such date.
FACTUAL BASIS OF THE PLAN
1. (a) Fifth Third Funds is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts and has power to
own all of its properties and assets and to carry out the transactions involved
under this Plan. Each of Fifth Third Funds, the Cardinal Fund and the Quality
Growth Fund has all necessary federal, state and local authorizations to carry
on its business as now being conducted and to carry out this Plan.
(b) Fifth Third Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and such registration has not been revoked or rescinded and is in full force and
effect. The Cardinal Fund and the Quality Growth Fund have elected to qualify
and have qualified as regulated investment companies under Part I of Subchapter
M of the Code as of and since their first taxable year and the Cardinal Fund and
the Quality Growth Fund qualify and intend to continue to qualify as regulated
investment companies for the taxable year ending upon their liquidation. The
Cardinal Fund and the Quality Growth Fund have been regulated investment
companies under such Sections of the Code at all times since their inception.
(c) The statement of assets and liabilities, statement of operations,
and statements of changes in net assets financial highlights and schedule of
investments (indicating their market values) for the Cardinal Fund and the
Quality Growth Fund for the year ended July 31, 2000, fairly present the
financial position of the Cardinal Fund
-1-
<PAGE>
and the Quality Growth Fund as of such date and said statements of operations
and changes in net assets and financial highlights fairly reflect the results of
operations, changes in net assets and financial highlights for the periods
covered thereby in conformity with generally accepted accounting principles.
(d) The prospectus of each of the Cardinal Fund and the Quality Growth Fund
dated November 30, 1999, as filed with the Securities and Exchange Commission
(the "Commission") (the "Prospectuses") and the Statement of Additional
Information for Fifth Third Funds, dated November 30, 1999 (as revised February
1, 2000 and June 1, 2000), as filed with the Commission, did not as of such
date, and will not as of the Exchange Date contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Fifth Third Funds, the Cardinal Fund, or the
Quality Growth Fund, threatened against Fifth Third Funds, the Cardinal Fund or
the Quality Growth Fund which assert liability on the part of Fifth Third Funds,
the Cardinal Fund or the Quality Growth Fund.
(f) The Cardinal Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of July 31, 2000, referred to in Section
1(c) hereof and those incurred in the ordinary course of Fifth Third Funds'
business as an investment company since that date.
(g) As used in this Plan, the term "Investments" shall mean the Cardinal
Fund's investments shown on the schedule of its portfolio investments as of July
31, 2000, referred to in Section 1(c) hereof as supplemented with such changes
as Fifth Third Funds or the Cardinal Fund shall make after that date.
(h) Fifth Third Funds and each of the Cardinal Fund and the Quality Growth
Fund have filed or will file all federal and state tax returns which, to the
knowledge of Fifth Third Funds' officers, are required to be filed by Fifth
Third Funds and each of the Cardinal Fund and the federal and state taxes shown
to be due on said returns or on any Quality Growth Fund and have paid or will
pay all assessments received by Fifth Third Funds or each of the Cardinal Fund
and the Quality Growth Fund. All tax liabilities of Fifth Third Funds and each
of the Cardinal Fund and the Quality Growth Fund have been adequately provided
for on its books, and no tax deficiency or liability of Fifth Third Funds or
either of the Cardinal Fund and the Quality Growth Fund has been asserted, and
no question with respect thereto has been raised by the Internal Revenue Service
or by any state or local tax authority for taxes in excess of those already
paid.
(i) At both the Valuation Time and the Exchange Date and except for
shareholder approval, Fifth Third Funds and the Cardinal Fund will have full
right, power and authority to sell, assign, transfer and deliver the Investments
and any other assets and liabilities transferred by it pursuant to this Plan. At
the Exchange Date, subject only to the delivery of the Shares, Investments and
any such other assets and liabilities as contemplated by this Plan, the Quality
Growth Fund will acquire the Investments and any such other assets subject to no
encumbrances, liens or security interests whatsoever and without any
restrictions upon the transfer thereof.
(j) At both the Valuation Time and the Exchange Date, Fifth Third Funds and
the Quality Growth Fund will have full right, power and authority to purchase
the Investments and any other assets and assume the liabilities of the Cardinal
Fund to be transferred to it pursuant to this Plan.
(k) The Cardinal Fund and the Quality Growth Fund are qualified and will at
all times through the Exchange Date qualify for taxation as a "regulated
investment company" under Sections 851 and 852 of the Code.
(l) At the Exchange Date, the Cardinal Fund will have sold such of its
assets, if any, as necessary to assure that, after giving effect to the
acquisition of its assets pursuant to this Plan, the Quality Growth Fund will
-2-
<PAGE>
remain a "diversified company" within the meaning of Section 5(b)(1) of the 1940
Act and in compliance with such other mandatory investment restrictions as are
set forth in its Prospectuses and Statement of Additional Information.
SPECIFICS OF PLAN
2. Reorganization. (a) Subject to the requisite approval of the shareholders of
--------------
the Cardinal Fund and to the other terms and conditions contained herein
(including the Cardinal Fund's distribution to its shareholders of all of its
investment company taxable income and net capital gain (as described in Section
7(l)), the Cardinal Fund will sell, assign, convey, transfer and deliver to the
Quality Growth Fund and the Quality Growth Fund will acquire from the Cardinal
Fund, on the Exchange Date all of the Investments and all of the cash and other
assets of the Cardinal Fund in exchange for that number of Shares of the Quality
Growth Fund provided for in Section 3 and the assumption by the Quality Growth
Fund of all of the liabilities of the Cardinal Fund. Pursuant to this Plan, the
Cardinal Fund will, as soon as practicable after the Exchange Date, distribute
in liquidation all of the Quality Growth Fund's Shares received by it to its
shareholders in exchange for their Shares of the Cardinal Fund.
(b) Fifth Third Funds, on behalf of the Cardinal Fund, will pay or cause
to be paid to the Quality Growth Fund any interest and cash dividends received
by it on or after the Exchange Date with respect to the Investments transferred
to the Quality Growth Fund hereunder. Fifth Third Funds, on behalf of the
Cardinal Fund, will transfer to the Quality Growth Fund any rights, stock
dividends or other securities received by the Cardinal Fund after the Exchange
Date as stock dividends or other distributions on or with respect to the
Investments transferred, which rights, stock dividends and other securities
shall be deemed included in the assets transferred to the Quality Growth Fund at
the Exchange Date and shall not be separately valued, in which case any such
distribution that remains unpaid as of the Exchange Date shall be included in
the determination of the value of the assets of the Cardinal Fund acquired by
the Quality Growth Fund.
3. Exchange Date; Valuation Time. On the Exchange Date, the Quality Growth Fund
-----------------------------
will deliver to the Cardinal Fund a number of Shares of the Quality Growth Fund
having an aggregate net asset value equal to the value of the assets of the
Cardinal Fund acquired by the Quality Growth Fund, less the value of the
liabilities of the Cardinal Fund assumed, determined as hereafter provided in
this Section.
(a) The valuation time shall be 4:00 p.m. (Eastern Time) October, 2000,
-------
or such earlier or later day as may be established by the proper officers of
Fifth Third Funds (the "Valuation Time").
(b) The net asset value of Shares of the Quality Growth Fund to be
delivered to the Cardinal Fund, the value of the assets of the Cardinal Fund,
and the value of the liabilities of the Cardinal Fund to be assumed by the
Quality Growth Fund in each case shall be computed as of the Valuation Time
pursuant to the valuation procedures customarily used by Fifth Third Funds.
(c) No formula will be used to adjust the net asset value of the Cardinal
Fund or the Quality Growth Fund to take into account differences in realized and
unrealized gains and losses.
(d) Fifth Third Funds, on behalf of the Quality Growth Fund, shall issue
its Shares to the Cardinal Fund on one share deposit receipt registered in the
name of the Cardinal Fund. The Cardinal Fund shall distribute in liquidation
Shares of the Quality Growth Fund received by it hereunder pro rata to its
shareholders by redelivering such share deposit receipt to Fifth Third Funds'
transfer agent, which will as soon as practicable set up open accounts for each
shareholder of the Cardinal Fund in accordance with written instructions
furnished by Fifth Third Funds.
(e) The Quality Growth Fund shall assume all liabilities of the Cardinal
Fund, whether accrued or contingent, in connection with the acquisition of
assets and subsequent dissolution of the Cardinal Fund or
-3-
<PAGE>
otherwise, except that recourse for assumed liabilities relating to the Cardinal
Fund will be limited to the Quality Growth Fund.
4. Expenses and Fees. (a) All fees and expenses incurred by the Cardinal Fund
-----------------
and/or the Quality Growth Fund as a direct result of the transactions
contemplated by this Plan, will be allocated ratably between the two Funds in
proportion to their net assets as of the Exchange Date except that (a) the costs
of proxy materials and proxy solicitations will be borne by Fifth Third Bank
and (b) such fees and expenses will be paid by the party directly incurring such
expenses if and to the extent that payment by the other party would result in
the disqualification of the Quality Growth Fund or the Cardinal Fund, as the
case may be, as a "regulated investment company" within the meaning of Section
851 of the Code.
(b) Notwithstanding any other provisions of this Plan, if for any reason
the transaction contemplated by this Plan is not consummated, no entity shall be
liable to the other entity for any damages resulting therefrom, including,
without limitation, consequential damages.
5. Exchange Date. Delivery of the assets of the Cardinal Fund to be
-------------
transferred, assumption of the liabilities of the Cardinal Fund to be assumed,
and the delivery of the Quality Growth Fund Shares to be issued shall be made at
the offices of Fifth Third Funds, 3435 Stelzer Road, Columbus, Ohio 43219, at
10:00 a.m. Eastern standard time on the next full business day following the
Valuation Time, or at such other time and date established by the proper
officers of Fifth Third Funds, the date and time upon which such delivery is to
take place being referred to herein as the "Exchange Date."
6. Special Meeting of Shareholders: Dissolution. (a) The Cardinal Fund will
--------------------------------------------
call a special meeting of its shareholders as soon as is practicable after the
effective date of the registration statement filed with the Commission by Fifth
Third Funds on Form N-14 relating to the Shares of the Quality Growth Fund
issuable hereunder (the "Registration Statement"), and the proxy statement of
the Cardinal Fund included therein (the "Proxy Statement") for the purpose of
considering the sale of all of the assets of the Cardinal Fund to and the
assumption of all of the liabilities of the Cardinal Fund by the Quality Growth
Fund as herein provided, adopting this Plan, and authorizing the liquidation and
dissolution of the Cardinal Fund, and it shall be a condition to the obligations
of each of the parties hereto that the holders of the Shares of the Cardinal
Fund shall have approved this Plan and the transactions contemplated herein in
the manner required by law and Fifth Third Funds' Declaration of Trust at such a
meeting on or before the Valuation Time.
(b) The Cardinal Fund will liquidate and dissolve in the manner provided
in Fifth Third Funds' Declaration of Trust and in accordance with applicable
law, provided that the Cardinal Fund will not make any distributions of Shares
of the Quality Growth Fund to its shareholders without first paying or
adequately providing for the payment of all of its debts, obligations and
liabilities.
7. Conditions to Be Met Regarding the Transaction. The intention of Fifth Third
----------------------------------------------
Funds to consummate the transactions described herein are subject to the
following conditions:
(a) This Plan shall have been adopted and the transactions contemplated
hereby, including the liquidation and dissolution of the Cardinal Fund, shall
have been approved by the shareholders of the Cardinal Fund in the manner
required by law.
(b) The officers of Fifth Third Funds shall cause the preparation of a
statement of the assets and liabilities of the Cardinal Fund, with values
determined as provided in Section 3, together with a list of Investments with
their respective tax costs, all as of the Valuation Time, certified on Fifth
Third Funds' behalf by its President (or any Vice President) and Treasurer, and
a certificate of both such officers, dated the Exchange Date, that there has
been no material adverse change in the financial position of the Cardinal Fund
since July 31,
-4-
<PAGE>
2000, other than changes in the Investments since that date or changes in the
market value of the Investments, or changes due to net redemptions of Shares of
the Cardinal Fund, dividends paid or losses from operations.
(c) The officers of Fifth Third Funds shall cause the preparation of a
statement of the Quality Growth Fund's net assets, together with a list of
portfolio holdings with values determined as provided in Section 3 hereof, all
as of the Valuation Time certified on Fifth Third Funds' behalf by its President
(or any Vice President) and Treasurer.
(d) The President (or any Vice President) and Treasurer of Fifth Third
Funds shall certify that as of the Valuation Time and as of the Exchange Date
all the elements in Section 1 of this Plan are true and correct in all material
respects as if made at and as of such dates and that each of the Cardinal Fund
and the Quality Growth Fund has complied with and satisfied all the conditions
on its part under the Plan to be performed or satisfied at or prior to such
dates.
(e) Fifth Third Funds shall have received a letter from Arthur Andersen
LLP dated the Exchange Date stating that such firm reviewed (i) the federal and
state income tax returns of the Cardinal Fund related to the year ended July 31,
2000, and (ii) to the extent returns have not been prepared or filed, all
available information of the Cardinal Fund for the period from July 31, 2000, to
the Exchange Date, and that, in the course of such review, nothing came to their
attention which caused them to believe that such returns and/or available
information did not properly reflect, in all material respects, the federal and
state income taxes of the Cardinal Fund for the periods covered thereby, or that
the Cardinal Fund would not qualify as a regulated investment company for
federal income tax purposes.
(f) There shall not be any material litigation pending with respect to the
matters contemplated by this Plan.
(g) Fifth Third Funds shall have received an opinion of Ropes & Gray dated
the Exchange Date to the effect that: (i) Fifth Third Funds is a business trust
duly established and validly existing under the laws of the Commonwealth of
Massachusetts, and neither Fifth Third Funds, the Cardinal Fund, nor the Quality
Growth Fund is, to the knowledge of such counsel, required to qualify to do
business as a foreign association in any jurisdiction; (ii) Fifth Third Funds
and the Cardinal Fund have power to sell, assign, convey, transfer and deliver
the Investments and other assets contemplated hereby and, upon consummation of
the transactions contemplated hereby in accordance with the terms of this Plan,
Fifth Third Funds and the Cardinal Fund will have duly sold, assigned, conveyed,
transferred and delivered such Investments and other assets to the Quality
Growth Fund; (iii) the adoption of this Plan did not, and the consummation of
the transactions contemplated hereby will not, violate Fifth Third Funds'
Declaration of Trust or Bylaws, as amended or any provision of any agreement
known to such counsel to which Fifth Third Funds is a party or by which it is
bound; (iv) no consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Fifth Third Funds of
the transactions contemplated hereby, except such as have been obtained under
the Securities Act of 1933 (the "1933 Act"), the Securities Exchange Act of 1934
("the 1934 Act") and the 1940 Act; (v) this Plan has been duly authorized,
executed and delivered by Fifth Third Funds and is a valid and binding
obligation of Fifth Third Funds; and (vi) the Shares of the Quality Growth Fund
to be delivered to the Cardinal Fund as provided for by this Plan are duly
authorized and upon such delivery will be validly issued and will be fully paid
and nonassessable by Fifth Third Funds and no shareholder of Fifth Third Funds
has any preemptive right to subscription or purchase in respect thereof.
(h) Fifth Third Funds shall have received an opinion of Ropes & Gray
addressed to Fifth Third Funds and dated the Exchange Date to the effect that
for Federal income tax purposes: (i) no gain or loss will be recognized by the
Cardinal Fund upon the transfer of the assets and Investments to the Quality
Growth Fund in exchange for Shares of the Quality Growth Fund and the assumption
by the Quality Growth Fund of the liabilities of the Cardinal Fund or upon the
distribution of Shares of the Quality Growth Fund by the Cardinal Fund to its
-5-
<PAGE>
shareholders in liquidation; (ii) no gain or loss will be recognized by the
shareholders of the Cardinal Fund upon the exchange of their Shares for the
Shares of the Quality Growth Fund; (iii) the basis of the Shares of the Quality
Growth Fund Shares a shareholder of the Cardinal Fund receives in connection
with the exchange will be the same as the basis of his or her Cardinal Fund
Shares exchanged therefor; (iv) a Cardinal Fund shareholder's holding period for
his or her Quality Growth Fund Shares will be determined by including the period
for which he or she held the Shares of the Cardinal Fund exchanged therefor,
provided that he or she held such Shares of the Cardinal Fund as capital assets;
(v) no gain or loss will be recognized by the Quality Growth Fund upon the
receipt of the assets transferred to the Quality Growth Fund pursuant to this
Plan in exchange for the Shares of the Quality Growth Fund and the assumption by
the Quality Growth Fund of the liabilities of the Cardinal Fund; (vi) the basis
in the hands of the Quality Growth Fund of the assets of the Cardinal Fund will
be the same as the basis of the assets in the hands of the Cardinal Fund
immediately prior to the transfer; and (vii) the Quality Growth Fund's holding
periods of the assets of the Cardinal Fund will include the period for which
such assets were held by the Cardinal Fund.
(i) The assets of the Cardinal Fund to be acquired by the Quality Growth
Fund will include no assets which the Quality Growth Fund, by reason of
limitations contained in its Declaration of Trust or of investment restrictions
disclosed in its Prospectuses in effect on the Exchange Date, may not properly
acquire.
(j) The Registration Statement shall have become effective under the 1933
Act, and no stop order suspending such effectiveness shall have been instituted
or to the knowledge of Fifth Third Funds, contemplated by the Commission.
(k) Fifth Third Funds shall have received from the Commission such order
or orders as Ropes & Gray deems reasonably necessary or desirable under the 1933
Act, the 1934 Act, the 1940 Act in connection with the transactions contemplated
hereby, and that all such orders shall be in full force and effect.
(l) Prior to the Exchange Date, the Cardinal Fund and the Quality Growth
Fund shall have declared a dividend or dividends which, together with all
previous such dividends, shall have the effect of distributing to its
shareholders all of its investment company taxable income for its taxable years
ending on or after July 31, 2000, and on or prior to the Exchange Date (computed
without regard to any deduction for dividends paid), and all of its net capital
gain realized in each of its taxable years ending on or after July 31, 2000 and
on or prior to the Exchange Date (after reduction for any capital loss
carryover).
(m) The custodian of Fifth Third Funds shall have delivered to Fifth
Third Funds a certificate identifying all of the assets of the Cardinal Fund
held by such custodian as of the Valuation Time.
(n) The transfer agent of Fifth Third Funds shall have provided to Fifth
Third Funds (i) a certificate setting forth the number of Shares of the Cardinal
Fund outstanding as of the Valuation Time and (ii) the name and address of each
holder of record of any such Shares of the Cardinal Fund and the number and
class of Shares held of record by each such shareholder.
(o) Fifth Third Funds, on behalf of the Quality Growth Fund, shall have
executed and delivered an Assumption of Liabilities dated as of the Exchange
Date pursuant to which the Quality Growth Fund will assume all of the
liabilities of the Cardinal Fund existing at the Valuation Time in connection
with the transactions contemplated by this Plan.
(p) Fifth Third Funds, on behalf of the Cardinal Fund, shall have executed
and delivered an instrument of transfer ("Transfer Document") and any other
certificates or documents Fifth Third Funds may deem necessary or desirable to
transfer the Cardinal Fund's entire right, title and interest in and to the
Investments and all other assets of the Cardinal Fund.
-6-
<PAGE>
8. No Broker. There is no person who has dealt with Fifth Third Funds, the
---------
Cardinal Fund or the Quality Growth Fund who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission arising
out of the transactions contemplated by this Plan.
9. Termination. Fifth Third Funds may, by consent of its Trustees, terminate
-----------
this Plan, and Fifth Third Funds, after consultation with counsel, may modify
this Plan in any manner deemed necessary or desirable.
10. Rule 145. Pursuant to Rule 145 under the 1933 Act, Fifth Third Funds will,
--------
in connection with the issuance of any Shares of the Quality Growth Fund to any
person who at the time of the transaction contemplated hereby is deemed to be an
affiliate of a party to the transaction pursuant to Rule 145(c), cause to be
affixed upon the certificates issued to such person (if any) a legend as
follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO FIFTH THIRD
FUNDS OR ITS PRINCIPAL UNDERWRITER UNLESS (i) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(ii) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO FIFTH THIRD FUNDS SUCH
REGISTRATION IS NOT REQUIRED.
and, further, Fifth Third Funds will issue stop transfer instructions to Fifth
Third Funds' transfer agent with respect to such Shares.
11. Declaration of Trust. Copies of the Declaration of Trust of Fifth Third
--------------------
Funds and any amendments thereto so filed are on file with the Secretary of
State of Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the trustees of Fifth Third Funds, as trustees and not
individually, and that the obligations of this instrument are not binding upon
any of the trustees, officers or shareholders of Fifth Third Funds individually
but are binding only upon the assets and property of Fifth Third Funds.
The names "Fifth Third Funds" and "Trustees of Fifth Third Funds" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust filed on September 15, 1988, as amended, to which reference is hereby made
and a copy of which is on file at the office of the Secretary of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of Fifth
Third Funds entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any series of Shares of the Trust must look solely
to the assets of the Trust belonging to such series for the enforcement of any
claims against the Trust.
-7-
<PAGE>
Appendix B - Form of Proxy
Fifth Third Cardinal Fund
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, OCTOBER 17, 2000
This proxy is solicited on behalf of the Trustees of Fifth Third Funds.
The undersigned hereby appoints JEFFREY C. CUSICK and RODNEY L. RUEHLE, and each
of them with full power of substitution as proxy of the undersigned, and hereby
authorizes them to represent and to vote, as designated below, at the Special
Meeting of Shareholders of the Fifth Third Cardinal Fund on October 17, 2000 at
10:00 a.m., Eastern time, and at any adjournments thereof, all of the units of
beneficial interest ("Shares") of the Fund which the undersigned would be
entitled to vote if personally present.
1. Approval of the Plan of Reorganization by Fifth Third Funds providing for
the transfer of all of the assets of the Fifth Third Cardinal Fund
("Cardinal fund") to the Fifth Third Quality Growth Fund ("Quality Growth
Fund") in exchange for Shares of the Quality Growth Fund and the assumption
by the Quality Growth Fund of all of the liabilities of the Cardinal fund,
followed by the dissolution and liquidation of the Cardinal Fund and the
distribution of Shares of the Quality Growth Fund to the shareholders of
the Cardinal Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To transact any other business as may properly come before the meeting or
any adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this Proxy will be voted
FOR Proposals (1) and (2) and to authorize the Proxies, in their discretion, to
vote upon such other matters as may properly come before the meeting. The
Trustees recommend a vote FOR items (1) and (2).
NOTE: Please sign exactly as the name appears on this card. EACH joint owner
should sign. When signing as executor, administrator, attorney, trustee or
guardian, or as custodian for a minor, please give the full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
<PAGE>
Please be sure to sign and date this Proxy.
________________________________________
Signature of Shareholder(s)
________________________________________
Signature of Shareholder(s)
Dated:______________, 2000
PLEASE EXECUTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE
OR
Vote On-Line
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Go to the Web Site www.proxyvote.com.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Call the toll-free number found on your Proxy Card.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
*DO NOT MAIL THE PROXY CARD IF VOTING BY INTERNET OR TELEPHONE.
-2-
<PAGE>
FIFTH THIRD FUNDS
Statement of Additional Information
-----------------------------------
This Statement of Additional Information contains information which may be
of interest to investors but which is not included in the Combined
Prospectus/Proxy Statement (the "Prospectus") of the Cardinal Fund dated August
[DATE], 2000, relating to the transfer of assets and liabilities from the Fifth
Third Cardinal Fund to the Fifth Third Quality Growth Fund.
The Statement of Additional Information for the Fifth Third Funds dated
November 30, 1999 (revised February 1, 2000 and June 1, 2000), has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement of Additional Information is not a prospectus and is
authorized for distribution only when it accompanies or follows delivery of the
Prospectus. This Statement of Additional Information should be read in
conjunction with that Prospectus. A copy of the Prospectus may be obtained,
without charge, by writing Fifth Third Funds, 3435 Stelzer Road, Columbus, Ohio
43219 or by calling 1-800-779-5353.
Audited financial statements for the Fifth Third Cardinal Fund and the
Fifth Third Quality Growth Fund for the period ended July 31, 1999, are
contained in the Fifth Third Annual Report, which is incorporated herein by
reference. Unaudited financial statements for the Fifth Third Cardinal Fund and
the Fifth Third Quality Growth Fund for the period ending January 31, 2000 are
contained in the Fifth Third Semi-Annual report, which is incorporated herein by
reference.
The date of this Statement of Additional Information is August 24, 2000.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C>
Financial Statements of the combined
Funds on a pro-forma basis for the
period ending January 31, 2000 (unaudited)................................. B-3
</TABLE>
-2-
<PAGE>
Fifth Third Quality Growth Fund
Fifth Third Cardinal Fund
ProForma Combining Schedule of Portfolio Investments
1/31/00
(Amounts in thousands, except shares)
(Unaudited)
-----------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Pro Forma
Quality Pro Forma Growth Cardinal Combined
Growth Cardinal Combined Market Market Market
Shares Shares Amount/Shares Description Value Value Value
-------------- ---------------- ---------------- ------------------------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock (96.3%)
Banking (9.2%)
- 45,000 45,000 Amsouth Bancorporation $ - $ 785 $ 785
944,000 30,000 974,000 Bank of New York Co., Inc. 38,350 1,219 39,569
- 157,500 157,500 Charter One Financial, Inc. - 3,061 3,061
- 37,500 37,500 Citigroup, Inc. - 2,154 2,154
97,000 - 97,000 First Tennessee National Corp. 2,534 - 2,534
- 72,600 72,600 Huntington Bancshares, Inc. - 1,565 1,565
679,000 30,000 709,000 Mellon Financial Corp. 23,298 1,029 24,327
100,000 - 100,000 Regions Financial Corp. 2,425 - 2,425
102,000 - 102,000 South Trust Corp. 3,105 - 3,105
540,000 - 540,000 Wells Fargo Co. 21,600 - 21,600
------------ ----------- ------------
91,312 9,813 101,125
------------ ----------- ------------
Beverages (0.8%)
195,000 75,000 270,000 PepsiCo, Inc. 6,654 2,559 9,213
------------ ----------- ------------
Business Services (1.3%)
314,000 - 314,000 Cintas Corp. 14,709 - 14,709
------------ ----------- ------------
Chemicals (0.1%)
- 20,000 20,000 Dupont (E.I) de Nemours & Co. - 1,180 1,180
------------ ----------- ------------
Computer Software & Services (10.1%)
165,000 30,000 195,000 Computer Sciences Corp. (b) 15,159 2,756 17,915
393,000 160,000 553,000 Microsoft Corp. (b) 38,465 15,660 54,125
676,000 105,000 781,000 Oracle Corp. (b) 33,768 5,245 39,013
------------ ----------- ------------
87,392 23,661 111,053
------------ ----------- ------------
Computer Systems & Equipment (5.8%)
400,000 104,000 504,000 Cisco Systems, Inc. (b) 43,800 11,388 55,188
- 100,000 100,000 Compaq Computer Corp. - 2,737 2,737
- 104,000 104,000 Dell Computer Corp. - 4,011 4,011
- 20,000 20,000 IBM Corp. - 2,244 2,244
------------ ----------- ------------
43,800 20,380 64,180
------------ ----------- ------------
Consumer Cyclicals (0.8%)
202,000 - 202,000 Carnival Corp. 9,103 - 9,103
------------ ----------- ------------
Consumer Products (1.5%)
150,000 - 150,000 Newell Rubbermaid, Inc. 4,500 - 4,500
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
62,000 60,000 122,000 Procter & Gamble Co. 6,254 6,052 12,306
------------ ------------ -----------
10,754 6,052 16,806
------------ ------------ -----------
Electrical Equipment (2.7%)
132,000 95,000 227,000 General Electric Co. 17,606 12,671 30,277
------------ ------------ -----------
Electronics (18.4%)
- 65,000 65,000 Applied Materials, Inc. - 8,921 8,921
140,000 - 140,000 EMC Corp. 14,910 - 14,910
555,000 134,000 689,000 Intel Corp. 54,910 13,258 68,168
- 20,000 20,000 KLA-Tencor Corp. - 1,173 1,173
396,000 160,000 556,000 Lucent Technologies, Inc. 21,879 8,840 30,719
- 20,000 20,000 PRI Automation, Inc. - 1,403 1,403
411,000 80,000 491,000 Tellabs, Inc. 22,194 4,320 26,514
434,000 40,000 474,000 Texas Instruments, Inc. 46,818 4,315 51,133
------------ ------------ -----------
160,711 42,230 202,941
------------ ------------ -----------
Energy (3.8%)
45,000 - 45,000 Chevron Corp. 3,760 - 3,760
138,615 99,011 237,626 Exxon Mobil Corp. 11,574 8,267 19,841
- 30,000 30,000 Royal Dutch Petroleum Co. - 1,651 1,651
163,000 40,000 203,000 Schlumberger Ltd. 9,953 2,442 12,395
31,540 - 31,540 Transocean Sedco Forex, Inc. 1,003 - 1,003
- 120,000 120,000 Williams Cos., Inc. - 4,650 4,650
------------ ------------ -----------
26,290 17,010 43,300
------------ ------------ -----------
Financial Services (6.9%)
168,000 - 168,000 Capital One Financial Corp. 6,888 - 6,888
- 42,500 42,500 Fannie Mae - 2,547 2,547
567,000 - 567,000 Freddie Mac 28,456 - 28,456
247,000 135,000 382,000 Marsh & McLennan Cos., Inc. 23,218 12,690 35,908
- 60,000 60,000 T. Rowe Price Associates, Inc. - 2,333 2,333
------------ ------------ -----------
58,562 17,570 76,132
------------ ------------ -----------
Healthcare (4.3%)
114,000 - 114,000 Baxter International, Inc. 7,282 - 7,282
- 30,000 30,000 Biomet, Inc. - 1,194 1,194
389,000 135,000 524,000 Guidant Corp. (b) 20,471 2,631 23,102
217,000 140,000 357,000 Medtronic, Inc. 9,928 6,405 16,333
------------ ------------ -----------
37,681 10,230 47,911
------------ ------------ -----------
Insurance (1.0%)
- 56,250 56,250 American International Group, Inc. - 5,857 5,857
137,000 40,000 177,000 Cincinnati Financial Corp. 3,939 1,150 5,089
------------ ------------ -----------
3,939 7,007 10,946
------------ ------------ -----------
Manufacturing (6.1%)
147,000 - 147,000 Dana Corp. 3,455 - 3,455
329,000 - 329,000 Illinois Tool Works, Inc. 19,247 - 19,247
- 80,000 80,000 Textron, Inc. - 4,775 4,775
696,000 150,000 846,000 Tyco International, Ltd. 29,754 6,413 36,167
65,000 - 65,000 Zebra Technologies Corp.,Class A (b) 3,847 - 3,847
------------ ------------ -----------
56,303 11,188 67,491
------------ ------------ -----------
Media/ Publishing (2.6%)
- 20,000 20,000 Gannett Co., Inc. - 1,390 1,390
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
505,000 - 505,000 Interpublic Group of Cos., Inc. 23,230 - 23,230
- 20,000 20,000 New York Times Co., Class A - 913 913
- 80,000 80,000 Tribune Co. - 3,375 3,375
------- ------- ---------
23,230 5,678 28,908
------- ------- ---------
Medical Distribution (1.9%)
387,000 53,000 440,000 Cardinal Health, Inc. 18,503 2,534 21,037
------- ------- ---------
Office Equipment & Supplies (1.7%)
120,000 - 120,000 Avery Dennison Corp. 8,130 - 8,130
210,000 - 210,000 Pitney Bowes, Inc. 10,290 - 10,290
------- ------- ---------
18,420 - 18,420
------- ------- ---------
Pharmaceutical (5.9%)
170,000 75,000 245,000 American Home Products Corp. 8,001 3,529 11,530
- 80,000 80,000 Amgen, Inc. - 5,095 5,095
115,000 - 115,000 Bristol-Myers Squibb Co. 7,590 - 7,590
- 40,000 40,000 Johnson & Johnson - 3,443 3,443
- 40,000 40,000 Merck & Company, Inc. - 3,153 3,153
317,000 150,000 467,000 Pfizer, Inc. 11,531 5,456 16,987
115,000 - 115,000 Schering-Plough Corp. 5,060 - 5,060
100,000 30,000 130,000 Warner Lambert, Inc. 9,494 2,848 12,342
------- ------- ---------
41,676 23,524 65,200
------- ------- ---------
Retail (7.8%)
570,000 - 570,000 Home Depot, Inc. 32,276 - 32,276
- 60,000 60,000 Kohl's Corp. - 4,208 4,208
496,000 70,000 566,000 Lowe's Cos., Inc. 22,134 3,124 25,258
345,000 100,000 445,000 Wal-Mart Stores, Inc. 18,889 5,475 24,364
------- ------- ---------
73,299 12,807 86,106
------- ------- ---------
Telecommunications (3.6%)
- 40,000 40,000 GTE Corp. - 2,933 2,933
556,000 150,000 706,000 MCI WorldCom, Inc. (b) 25,541 6,891 32,432
- 50,000 50,000 Qwest Communications
International, Inc. - 1,969 1,969
- 40,000 40,000 Sprint Corp. (FON Group) - 2,588 2,588
------- ------- ---------
25,541 14,381 39,922
------- ------- ---------
Total Common Stock 825,485 240,475 1,065,960
------- ------- ---------
Repurchase Agreements (3.7%)
$ 39,019 $ 2,143 $ 41,162 Warburg Dillon Repurchase
Agreement 39,019 2,143 41,162
------- ------- ---------
Total Repurchase Agreements 39,019 2,143 41,162
------- ------- ---------
------- ------- ---------
Total (Cost $649,713)(a) 864,504 242,618 1,107,122
------- ------- ---------
</TABLE>
Percentages indicated are based on net assets of $1,098,564.
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
Unrealized appreciation $ 485,413
Unrealized depreciation $ (28,004)
---------
Net unrealized appreciation $ 457,409
=========
-5-
<PAGE>
Fifth Third Quality Growth Fund
Fifth Third Cardinal Fund
Pro Forma Combining Statement of Assets and Liabilities
1/31/00
(Amounts in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Fifth Third Fifth Third Pro Forma
Quality Growth Cardinal Pro Forma Combined
Fund Fund Adjustments (Note 1)
--------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in securities, at value
(cost $561,833 and $87,880, respectively) $ 864,504 $ 242,618 $ - $ 1,107,122
Interest and dividends receivable 511 110 - 621
Receivable for Fund shares sold 1,130 43 - 1,173
Other assets 20 131 - 151
------------- -------------- ---------- ------------
Total Assets 866,165 242,902 - 1,109,067
------------- -------------- ---------- ------------
LIABILITIES:
Payable for capital shares redeemed 216 71 - 287
Payable for investments purchased 8,715 - - 8,715
Call options written, at value (premiums received $444) - 300 - 300
Accrued expenses and other payables:
Advisory fees 584 125 - 709
Administration fees 162 14 - 176
Distribution fees - Investment A shares 34 164 - 198
Distribution fees - Investment C shares 5 - - 5
Shareholder servicing - Investment C shares 5 1 - 6
Accounting fees 20 7 - 27
Custodian fees 4 1 - 5
Other 43 32 - 75
------------- -------------- ---------- ------------
Total Liabilities 9,788 715 - 10,503
------------- -------------- ---------- ------------
NET ASSETS:
Institutional shares 683,078 2,858 - 685,936
Investment A shares 161,663 238,353 - 400,016
Investment C shares 11,636 976 - 12,612
------------- -------------- ---------- ------------
$ 856,377 $ 242,187 $ - $ 1,098,564
============= ============== ========== ============
CAPITAL SHARES OUTSTANDING
Institutional shares 28,075 165 (48)(a) 28,192
Investment A shares 6,667 13,914 (4,085)(a) 16,496
Investment C shares 489 58 (17)(a) 530
------------- -------------- ---------- ------------
35,231 14,137 (4,150)(a) 45,218
============= ============== ========== ============
Net Asset Value
Institutional shares - offering and redemption
price per share $ 24.33 $ 17.31 $ 24.33
============= ============== ============
Investment A shares - redemption price per share $ 24.25 $ 17.13 $ 24.25
============= ============== ============
Investment A shares - maximum sales charge 4.50% 4.50% 4.50%
------------- -------------- ------------
Investment A shares - POP $ 25.39 $ 17.94 $ 25.39
============= ============== ============
Investment C shares - offering price per share* $ 23.82 $ 16.90 $ 23.82
============= ============== ============
COMPOSITION OF NET ASSETS
Capital $ 528,332 $ 84,110 $ - $ 612,442
Undistributed (distributions in excess of)
net investment income (657) (201) - (858)
Undistributed net realized gains (losses)
from investment transactions 26,031 3,396 - 29,427
Net unrealized appreciation (depreciation) of
investments 302,671 154,882 - 457,553
------------- -------------- ---------- ------------
Net Assets, January 31, 2000 $ 856,377 $ 242,187 $ - $ 1,098,564
============= ============== ========== ============
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Adjustment to convert Fifth Third Cardinal Shares Outstanding to Fifth Third
Quality Growth Shares Outstanding based on Fifth Third Quality Growth's NAV's.
-6-
<PAGE>
Fifth Third Quality Growth Fund
Fifth Third Cardinal Fund
Pro Forma Combining Statement of Operations
1/31/00
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Fifth Third Fifth Third Pro Forma
Quality Growth Cardinal Pro Forma Combined
Fund Fund Adjustments (Note 1)
---------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income $ 762 $ 90 $ - $ 852
Dividend Income 2,675 1,029 - 3,704
Income from securities lending 5 5 - 10
---------------- ---------------- ------------- --------------
3,442 1,124 - 4,566
---------------- ---------------- ------------- --------------
EXPENSES:
Advisory fees 3,134 746 254 (a) 4,134
Administration fees 678 213 - 891
Shareholder servicing fees (Investment C shares) 13 1 - 14
12b-1 fees (Investment A shares) 171 304 - 475
12b-1 fees (Investment C shares) 40 3 - 43
Accounting fees 77 38 (14)(b) 101
Transfer agent fees 31 66 - 97
Custodian fees 13 6 - 19
Trustee fees and expenses 3 1 - 4
Other expenses 40 31 (31)(c) 40
---------------- ---------------- ------------- --------------
Total Expenses: 4,200 1,409 209 5,818
Less Waivers
Other expenses (101) (84) 84 (d) (101)
---------------- ---------------- ------------- --------------
Net Expenses: 4,099 1,325 293 5,717
---------------- ---------------- ------------- --------------
Net Investment Income (Loss) (657) (201) (293) (1,151)
---------------- ---------------- ------------- --------------
Realized/Unrealized Gains from
Investments
Net realized gains from investment and options
transactions 26,032 3,784 - 29,816
Net change in unrealized appreciation from investments 43,997 15,620 - 59,617
---------------- ---------------- ------------- --------------
Net realized/unrealized gains (losses) from investments 70,029 19,404 - 89,433
Change in net assets resulting from --------------- ---------------- ------------- --------------
Operations: $ 69,372 $ 19,203 $ (293) $ 88,282
================ ================ ============= ==============
</TABLE>
Notes to Pro Forma Financial Statements
(a) Adjustment to reflect the Fifth Third Quality Growth contractual fee
structure for Advisory fees (0.80% of net assets).
(b) Adjustment to reflect savings of combined asset fee for Accounting
services.
(c) Reduction reflects expected savings when the two funds merge.
(d) To reflect waiver reduction from combination of assets.
-7-
<PAGE>
Fifth Third Funds
Note to Pro Forma Financial Statements
(Unaudited)
_________
1. Basis of Combination:
---------------------
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflect the
accounts of two investment portfolios offered by the Fifth Third Funds: Fifth
Third Quality Growth Fund and Fifth Third Cardinal Fund as if the proposed
reorganization occurred as of and for the six months ended January 31, 2000.
These statements have been derived from books and records utilized in
calculating daily net asset value at January 31, 2000.
The Reorganization Agreement provides that on the Closing Date of the
Reorganization, all of the assets and liabilities will be transferred such that
at and after the Reorganization, the assets and liabilities of the Fifth Third
Cardinal Fund will become the assets and liabilities of the Fifth Third Quality
Growth Fund.
In exchange for the transfer of assets and liabilities, the Fifth Third
Quality Growth Fund will issue to the Fifth Third Cardinal Fund full and
fractional shares of the Fifth Third Quality Growth Fund, and the Fifth Third
Cardinal Fund will make a liquidating distribution of such shares to its
shareholders. The number of shares of the Fifth Third Quality Growth Fund so
issued will be equal in value to the full and fractional shares of the Fifth
Third Cardinal Fund that are outstanding immediately prior to the
Reorganization. At and after the Reorganization, all debts, liabilities and
obligations of Fifth Third Cardinal Fund will attach to the Fifth Third Quality
Growth Fund and may thereafter be enforced against the Fifth Third Quality
Growth Fund to the same extent as if the Fifth Third Quality Growth Fund had
incurred them. The pro forma statements give effect to the proposed transfer
described above.
Under the purchase method of accounting for business combinations under
generally accepted accounting principles, the basis on the part of the Fifth
Third Quality Growth Fund, of the assets of the Fifth Third Cardinal Fund will
be the fair market value of such assets on the Closing Date of the
Reorganization. The Fifth Third Quality Growth Fund will recognize no gain or
loss for federal tax purposes on its issuance of shares in the Reorganization,
and the basis to the Fifth Third Quality Growth Fund of the assets of the Fifth
Third Cardinal Fund received pursuant to the Reorganization will equal the fair
market value of the consideration furnished, and costs incurred, by the Fifth
Third Quality Growth Fund in the Reorganization -- i.e., the sum of the
liabilities assumed, the fair market value of the Fifth Third Quality Growth
Fund shares issued, and such costs. For accounting purposes, the Fifth Third
Quality Growth Fund is the surviving portfolio of this Reorganization. The pro
forma statements reflect the combined results of operations of the Fifth Third
Cardinal Fund and the Fifth Third Quality Growth Fund. However, should such
Reorganization be effected, the statements of operations of the Fifth Third
Quality Growth Fund will not be restated for pre-combination period results of
the Fifth Third Cardinal Fund.
(Continued)
-8-
<PAGE>
Fifth Third Funds
Note to Pro Forma Financial Statements
(Unaudited)
_________
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds incorporated by reference
in the Statement of Additional Information.
The Fifth Third Quality Growth Fund and the Fifth Third Cardinal Fund are
each separate portfolios of the Fifth Third Funds, which are registered as open-
end management companies under the Investment Company Act of 1940. The
investment objectives of each fund are listed below.
Fifth Third Quality Growth Fund seeks to provide growth of capital by
investing primarily in common stocks of high-quality companies, generally
leaders in their industries, with minimum market capitalization of $100
million.
Fifth Third Cardinal Fund seeks to provide long-term growth of capital and
income by investing primarily in common stocks of exchange-listed or over-
the-counter securities of companies having a market capitalization of at
least $10 million.
Expenses
--------
Fifth Third Bank serves as the Fifth Third Funds' investment advisor, fund
accountant, custodian and sub-administrator. BISYS Fund Services Limited
Partnership d/b/a BISYS Fund Services (BISYS) serves as the administrator of the
Fifth Third Funds. BISYS Fund Services Ohio ("BISYS Ohio") serves as the
transfer and dividend disbursing agent for the Fifth Third Funds. BISYS and
BISYS Ohio are subsidiaries of The BISYS Group, Inc.
Fifth Third Cardinal Fund:
--------------------------
The Fifth Third Cardinal Fund issues three classes of shares, Institutional
Shares, Investment A Shares and Investment C Shares. Each class of shares has
identical rights and privileges except with respect to fees paid under
shareholder servicing or distribution plans, expenses allocable exclusively to
each class of shares, voting rights on matters affecting a single class of
shares, and the exchange privilege of each class of shares. Investment A Shares
are subject to an initial sales charge upon purchase. Investment C Shares are
subject to a contingent deferred sales change (CDSC) upon redemption.
(Continued)
-9-
<PAGE>
Fifth Third Funds
Note to Pro Forma Financial Statements
(Unaudited)
_________
Under the terms of the investment advisory agreement between the Fifth
Third Cardinal Fund and Fifth Third Bank ("Fifth Third"), Fifth Third is
entitled to receive fees computed at an annual rate based on average daily net
assets. Such fees are accrued daily and paid monthly. For the six months ended
January 31, 2000, total investment advisory fees incurred by the Fifth Third
Cardinal Fund were as follows:
Percentage Fee Total Fees
-------------- ----------
0.60% $746
Fifth Third Quality Growth Fund:
--------------------------------
The Fifth Third Quality Growth Fund issues three classes of shares,
Institutional Shares, Investment A Shares and Investment C Shares. Each class of
shares has identical rights and privileges except with respect to fees paid
under shareholder servicing or distribution plans, expenses allocable
exclusively to each class of shares, voting rights on matters affecting a single
class of shares, and the exchange privilege of each class of shares. Investment
A Shares are subject to an initial sales charge upon purchase. Investment C
Shares are subject to a contingent deferred sales change (CDSC) upon redemption.
Under the terms of the investment advisory agreement between the Fifth
Third Quality Growth Fund and Fifth Third Bank ("Fifth Third"), Fifth Third is
entitled to receive fees computed at an annual rate based on average daily net
assets. Such fees are accrued daily and paid monthly. For the six months ended
January 31, 2000, total investment advisory fees incurred by the Fifth Third
Quality Growth Fund were as follows:
Percentage Fee Total Fees
-------------- ----------
0.80% $3,134
Pro Forma Adjustments and Pro Forma Combined Columns
----------------------------------------------------
The pro forma adjustments and pro forma combined columns of the Statements
of Operations reflect the adjustments necessary to show expenses at the rates
which would have been
(Continued)
-10-
<PAGE>
Fifth Third Funds
Note to Pro Forma Financial Statements
(Unaudited)
_________
in effect if the Fifth Third Cardinal Fund were included in the Fifth Third
Quality Growth Fund for the six months ended January 31, 2000. Investment
advisory, administration, 12b-1, shareholder service, and accounting fees in the
pro forma combined column are calculated at the rates in effect for the Fifth
Third Quality Growth Fund based upon the combined net assets of the
corresponding Fifth Third Cardinal Fund and the Fifth Third Quality Growth Fund.
Certain pro forma adjustments were made to estimate the benefit of combining
operations of separate funds into one survivor fund.
The pro forma Schedules of Portfolio Investments give effect to the
proposed transfer of such assets as if the Reorganization had occurred at
January 31, 2000.
2. Portfolio Valuation, Securities Transactions and Related Income:
----------------------------------------------------------------
Investments in common stocks, corporate bonds, municipal bonds, commercial
paper and U.S. Government securities of the Funds are valued on the basis of
valuations provided by dealers or an independent pricing service approved by the
Board of Trustees. The differences between cost and market values of such
investments are reflected as unrealized appreciation or depreciation.
Security transactions are recorded on trade date. Realized gains and losses
from sales of investments are calculated on the identified cost basis. Interest
income, including accretion of discount and amortization of premium on
investments, is accrued daily. Dividend income is recorded on the ex-dividend
date.
3. Capital Shares:
---------------
The pro forma net asset values per share assume the issuance of shares of
the Fifth Third Quality Growth Fund, which would have occurred at January 31,
2000 in connection with the proposed reorganization. The pro forma number of
shares outstanding consists of the following:
--------------------------------------------------------------------------------
Shares
Outstanding at Additional Shares Pro Forma Shares
January 31, Assumed in the at January 31,
2000 Reorganization 2000
(000's) (000's) (000's)
--------------------------------------------------------------------------------
Fifth Third Quality
Growth Fund 35,231 9,987 45,218
--------------------------------------------------------------------------------
-11-
<PAGE>
FIFTH THIRD FUNDS
Registration Statement on Form N-14
PART C. OTHER INFORMATION
Item 15. Indemnification
---------------
The information required by this item is incorporated by reference to
Item 25 of Post-Effective Amendment No. 7 (filed September 27, 1991) to
Registrant's Registration Statement on Form N-1A (File No. 33-24848) under the
Securities Act of 1933 and the Investment Company Act of 1940 (File No. 811-
5669).
<TABLE>
<CAPTION>
Item 16. Exhibits
--------
<S> <C>
(1) (a) Declaration of Trust, including Amendment No. 1 through 7, is incorporated by reference to Post-Effective
Amendment No. 15 on Form N-1A filed February 28, 1995.
(1) (b) Amendment No. 8 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-lA filed on or about October 28, 1996).
(1) (c) Amendment No. 9 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 18 on Form N-1A filed on or about October 1, 1996).
(1) (d) Amendment No. 10 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September 30, 1997).
(1) (e) Amendment No. 11 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed on or about January 21, 1998).
(1) (f) Amendment No. 12 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30, 1998).
(1) (g) Amendment No. 13 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30, 1998).
(1) (h) Amendment No. 14 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed on or about October 1, 1999).
(1) (i) Amendment No. 15 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed on or about March 15, 2000).
(1) (j) Amendment No. 16 to the Declaration of Trust (incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on or about June 14, 2000).
(2) (a) By-Laws of the Registrant (incorporated by reference to Registrant's Post-Effective Amendment No. 15 on
Form N-1A filed February 28, 1995).
(3) Not Applicable.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(4) Form of Plan of Reorganization is filed herewith.
(5) (a) Rights of Shareholders
----------------------
The following portions of Registrant's Declaration of Trust and the Bylaws incorporated as Exhibit (a)
hereto, define the rights of shareholders:
</TABLE>
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided into
transferable Shares, without par value. Subject to the provisions of
Section 5 of this Article III, each Share shall have voting rights as
provided in Article VIII hereof, and holders of the Shares of any Series
shall be entitled to receive dividends, when and as declared with
respect thereto in the manner provided in Article X, Section 1 hereof.
The Shares of any Series may be issued in two or more Classes, as the
Trustees may authorize pursuant to Article XII, Section 8 hereof. Unless
the Trustees have authorized the issuance of Shares of a Series in two
or more Classes, each Share of a Series shall represent an equal
proportionate interest in the assets and liabilities of the Series with
each other Share of the same Series, none having priority or preference
over another. If the Trustees have authorized the issuance of Shares of
a Series in two or more Classes, then the Classes may have such
variations as to dividend, redemption, and voting rights, net asset
values, expenses borne by the Classes, and other matters as the Trustees
have authorized provided that each Share of a Class shall represent an
equal proportionate interest in the assets and liabilities of the Class
with each other Share of the same Class, none having priority or
preference over another. The number of Shares authorized shall be
unlimited. The Trustees may from time to time divide or combine the
Shares of any Series or Class into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Series or
Class.
Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.
Fifth Third Balanced Fund:
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Bond Fund for Income;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Cardinal Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Prime Money Market Fund;
Investment A Shares;
Investment B Shares;
Institutional Shares;
Fifth Third Equity Income Fund;
-2-
<PAGE>
Investment A Shares;
Investment B Shares;
Institutional Shares;
Fifth Third Government Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third International Equity Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Mid Cap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Ohio Tax Free Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Pinnacle Fund
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Quality Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Quality Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third U.S. Government Securities Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares; and
Fifth Third U.S. Treasury Money Market Fund;
Institutional Shares;
Fifth Third Technology Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
-3-
<PAGE>
Fifth Third Ohio Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Shares of any Series or Class established in this Section 5 shall have the
following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration received by the
Trust for the issue or sale of Shares of a particular Series or Class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series or
Class for all purposes, subject only to the rights of creditors, and shall
be so recorded upon the books of account of the Trust. Such consideration,
assets, income, earnings, profits and proceeds thereof, from whatever
source derived, including, without limitation, any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the same
may be, are herein referred to as "assets belonging to" that Series or
Class. In the event that there are any assets, income, earnings, profits
and proceeds thereof, funds or payments which are not readily identifiable
as belonging to any particular Series or Class (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or
among any one or more of the Series or Classes established and designated
from time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Assets so allocated to
a particular Series or Class shall belong to that Series or Class. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
(b) Liabilities Belonging to Series or Class. The assets belonging to each
particular Series or Class shall be charged with the liabilities of the
Trust in respect to that Series or Class and all expenses, costs, charges
and reserves attributable to that Series or Class, and any general
liabilities of the Trust which are not readily identifiable as belonging to
any particular Series or Class shall be allocated and charged by the
Trustees to and among any one or more of the Series or Classes established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves so charged to a Series or Class are
herein referred to as "liabilities belonging to" that Series or Class. Each
allocation of liabilities belonging to a Series or class by the Trustees
shall be conclusive and binding upon the Shareholders of all Series or
Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases and Indemnification.
Notwithstanding any other provisions of this Declaration, including,
without limitation, Article X, no dividend or distribution (including,
without limitation, any distribution paid upon termination of the Trust or
of any Series or Class) with respect to, nor any redemption or repurchase
of the Shares of any Series or Class shall be effected by the Trust other
than from the assets belonging to such Series or Class, nor except as
specifically provided in Section 1 of Article XI hereof, shall any
Shareholder of any particular Series or Class otherwise have any right or
claim against the assets belonging to any other Series or Class except to
the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series or Class.
(d) Voting. Notwithstanding any of the other provisions of this Declaration,
including, without limitation, Section 1 of Article VIII, only Shareholders
of a particular Series or Class shall be entitled to vote on any matters
affecting such Series or Class. Except with respect to matters as to which
any particular Series or Class is affected, all of the Shares of each
Series or Class shall, on matters as to which such Series or Class is
entitled to vote, vote with other Series or Classes so entitled as a single
class. Notwithstanding the foregoing, with respect to matters which would
otherwise be voted on by two or more Series or Classes as a single class,
the Trustees may, in their sole discretion, submit such matters to the
Shareholders of any or all such Series or Classes, separately.
-4-
<PAGE>
(e) Fraction. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole Share of that
Series or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of the
Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to provide that
the holders of Shares of any Series or Class shall have the right to
exchange said Shares for Shares of one or more other Series or Classes in
accordance with such requirements and procedures as may be established by
the Trustees.
(g) Combination of Series or Classes. The Trustees shall have the authority,
without the approval of the Shareholders of any Series or Class, unless
otherwise required by applicable law, to combine the assets and liabilities
belonging to a single Series or Class with the assets and liabilities of
one or more other Series or Classes.
(h) Elimination of Series or Classes. At any time that there are no Shares
outstanding of any particular Series or Class previously established and
designated, the Trustees may amend this Declaration of Trust to abolish
that Series or Class and to rescind the establishment and designation
thereof.
ARTICLE IV
THE TRUSTEES
Section 2. Election of Trustees at Meeting of Shareholders.
On a date fixed by the Trustees, which shall be subsequent to the initial
public offering of Shares, the Shareholders shall elect Trustees. The
number of Trustees shall be determined by the Trustees pursuant to Article
IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust, and until
its termination as hereinafter provided; except (a) that any Trustee may
resign his office at any time by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has become mentally or physically
incapacitated may be retired by written instrument signed by a majority of
the other Trustees, specifying the date of his retirement; and (d) a
Trustee may be removed at any special meeting of Shareholders of the Trust
by a vote of two-thirds of the outstanding Shares.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held separate and
apart from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees or any successor Trustee. All of the
assets belonging to each Series or Class or owned by the Trust shall at all
times be considered as vested in the Trustees. No Shareholder shall be
deemed to have a severable ownership interest in any individual asset
belonging to any Series or Class or owned by the Trust or any right of
partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in a Series or Class.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d), the
shareholders shall have power to vote, (i) for the election of Trustees as
provided in Article IV, Section 2; (ii) for the removal of Trustees as
provided
-5-
<PAGE>
in Article IV, Section 3(d); (iii) with respect to any investment adviser
or sub-investment adviser as provided in Article VII, Section 1; (iv) with
respect to the amendment of this Declaration of Trust as provided in
Article XII, Section 7; (v) to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a
class action on behalf of the Trust or the Shareholders; and (vi) with
respect to such additional matters relating to the Trust as may be required
by law, by this Declaration of Trust, or the By-Laws of the Trust or any
regulation of the Trust or the Commission or any State, or as the Trustees
may consider desirable. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares of a Series or Class are issued, the
Trustees may exercise all rights of Shareholders of such Series or Class
with respect to matters affecting such Series or Class, and may take any
action with respect to the Trust or such Series or Class required or
permitted by law, this Declaration of Trust or any By-Laws of the Trust to
be taken by Shareholders.
Section 2. Meetings.
A Shareholders meeting shall be held as specified in Section 2 of Article
IV at the principal office of the Trust or such other place as the Trustees
may designate. Special meetings of the Shareholders may be called by the
Trustees or the Chief Executive Officer of the Trust and shall be called by
the Trustees upon the written request of Shareholders owning at least one-
tenth of the outstanding Shares of all Series and Classes entitled to vote.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for the
transaction of any business at any meeting of Shareholders there must be
present, in person or by proxy, holders of more than fifty percent of the
total number of outstanding Shares of all Series and Classes entitled to
vote at such meeting. When any one or more Series or Classes is entitled to
vote as a single Series or Class, more than fifty percent of the shares of
each such Series or Class entitled to vote shall constitute a quorum at a
Shareholder's meeting of that Series or Class. If a quorum shall not be
present for the purpose of any vote that may properly come before the
meeting, the Shares present in person or by proxy and entitled to vote at
such meeting on such matter may, by plurality vote, adjourn the meeting
from time to time to such place and time without further notice than by
announcement to be given at the meeting until a quorum entitled to vote on
such matter shall be present, whereupon any such matter may be voted upon
at the meeting as though held when originally convened. Subject to any
applicable requirement of law or of this Declaration of Trust or the By-
Laws, a plurality of the votes cast shall elect a Trustee, and all other
matters shall be decided by a majority of the votes cast and entitled to
vote thereon.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends to the
Shareholders of any Series or Class, and the amount of such dividends
and the payment of them shall be wholly in the discretion of the
Trustees. Such dividends may be accrued and automatically reinvested
in additional Shares (or fractions thereof) of the relevant Series or
Class or paid in cash or additional Shares of such Series or Class,
all upon such terms and conditions as the Trustees may prescribe.
(d) All dividends and distributions on Shares of a particular Series or
Class shall be distributed pro rata to the holders of that Series or
Class in proportion to the number of Shares of that Series or Class
held by such holders and recorded on the books of the Trust or its
transfer agent at the date and time of record established for that
payment.
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<PAGE>
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at any time
desires to dispose of Shares of such Series or Class recorded in his
name, he may deposit a written request (or such other form of request
as the Trustees may from time to time authorize) requesting that the
Trust purchase his Shares, together with such other instruments or
authorizations to effect the transfer as the Trustees may from time to
time require, at the office of the Transfer Agent, and the Trust shall
purchase his Shares out of assets belonging to such Series or Class.
The purchase price shall be the net asset value of his shares reduced
by any redemption charge as the Trustees from time to time may
determine.
Payment for such Shares shall be made by the Trust to the Shareholder of
record within that time period required under the 1940 Act after the
request (and, if required, such other instruments or authorizations of
transfer) is deposited, subject to the right of the Trustees to postpone
the date of payment pursuant to Section 4 of this Article X. If the
redemption is postponed beyond the date on which it would normally occur by
reason of a declaration by the Trustees suspending the right of redemption
pursuant to Section 4 of this Article X, the right of the Shareholder to
have his Shares purchased by the Trust shall be similarly suspended, and he
may withdraw his request (or such other instruments or authorizations of
transfer) from deposit if he so elects; or, if he does not so elect, the
purchase price shall be the net asset value of his Shares determined next
after termination of such suspension (reduced by any redemption charge),
and payment therefor shall be made within the time period required under
the 1940 Act.
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares of any
Series or Class in any Shareholder's account for their then current net
asset value and promptly make payment to the shareholder (which payment may
be reduced by any applicable redemption charge), if at any time the total
investment in the account does not have a minimum dollar value determined
from time to time by the Trustees in their sole discretion.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of Shareholders
The Trustees, officers, employees or agents of the Trust shall have no
power to bind any Shareholder of any Series or Class personally or to call
upon such Shareholder for the payment of any sum of money or assessment
whatsoever, other than such as the Shareholder may at any time agree to pay
by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of any Series or Class shall be liable
solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind, against, or with respect to the Trust or any Series
or Class arising out of any action taken or omitted for or on behalf of the
Trust or such Series or Class, and the Trust or such Series or Class shall
be solely liable therefor and resort shall be had solely to the property of
the relevant Series or Class of the Trust for the payment or performance
thereof.
Each Shareholder or former Shareholder of any Series or Class (or their
heirs, executors, administrators or other legal representatives or, in case
of a corporate entity, its corporate or general successor) shall be
entitled to be indemnified and reimbursed by the Trust to the full extent
of such liability and the costs of any litigation or other proceedings in
which such liability shall have been determined, including, without
limitation, the fees and disbursements of counsel if, contrary to the
provisions hereof, such Shareholder or former Shareholder of such Series or
Class shall be held to be personally liable. Such indemnification and
reimbursement shall come exclusively from the assets of the relevant Series
or Class.
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<PAGE>
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any act or
obligation of the Trust or any Series or Class and satisfy any judgment
thereon.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all persons
having dealings with the Trust or any Series or Class shall be informed
that the property of the Shareholders and the Trustees, officers, employees
and agents of the Trust or any Series or Class shall not be subject to
claims against or obligations of the Trust or any other Series or Class to
any extent whatsoever. The Trustees shall cause to be inserted in any
written agreement, undertaking or obligation made or issued on behalf of
the Trust or any Series or Class (including certificates for Shares of any
Series or Class) an appropriate reference to the provisions of this
Declaration, providing that neither the Shareholders, the Trustees, the
officers, the employees nor any agent of the Trust or any Series or Class
shall be liable thereunder, and that the other parties to such instrument
shall look solely to the assets belonging to the relevant Series or Class
for the payment of any claim thereunder or for the performance thereof; but
the omission of such provisions from any such instrument shall not render
any Shareholder, Trustee, officer, employee or agent liable, nor shall the
Trustee, or any officer, agent or employee of the Trust or any Series or
Class be liable to anyone for such omission. If, notwithstanding this
provision, any Shareholder, Trustee, officer, employee or agent shall be
held liable to any other person by reason of the omission of such provision
from any such agreement, undertaking or obligation, the Shareholder,
Trustee, officer, employee or agent shall be indemnified and reimbursed by
the Trust.
ARTICLE XII
MISCELLANEOUS
Section 3. Establishment of Record Dates.
The Trustees may close the Share transfer books of the Trust maintained
with respect to any Series or Class for a period not exceeding sixty (60)
days preceding the date of any meeting of Shareholders of the Trust or any
Series or Class, or the date for the payment of any dividend or the making
of any distribution to Shareholders, or the date for the allotment of
rights, or the date when any change or conversion or exchange of Shares of
any Series or Class shall go into effect; or in lieu of closing the Share
transfer books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of Shareholders
of the Trust or any Series or Class, or the date for the payment of any
dividend or the making of any distribution to Shareholders of any Series or
Class, or the date for the allotment of rights, or the date when any change
or conversion or exchange of Shares of any Series or Class shall go into
effect, or the last day on which the consent or dissent of Shareholders of
any Series or Class may be effectively expressed for any purpose, as a
record date for the determination of the Shareholders entitled to notice
of, and, to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend or distribution, or to any
such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of shares, or to exercise the right to give
such consent or dissent, and in such case such Shareholders and only such
Shareholders as shall be Shareholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend or distribution, or to receive such allotment or
rights, or to exercise such rights, as the case may be, notwithstanding,
after such date fixed aforesaid, any transfer of any Shares on the books of
the Trust maintained with respect to any Series or Class. Nothing in the
foregoing sentence shall be construed as precluding the Trustees from
setting different record dates for different Series or Classes.
Section 4. Termination of Trust
(c) Subject to a Majority Shareholder Vote by such Series or Class, the
Trustees may at any time sell and convert into money all the assets
of the Trust or any Series or Class. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities,
accrued or contingent,
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<PAGE>
belonging to each Series or Class, the Trustees shall distribute the
remaining assets belonging to each Series or Class ratably among the
holders of the outstanding Shares of that Series or Class.
Section 5. Offices of the Trust, Filing of Copies, Headings, Counterparts.
The Trust shall maintain a usual place of business in Massachusetts, which,
initially, shall be 2 Oliver Street, c/o CT Corporate Systems, Boston,
Massachusetts, and shall continue to maintain an office at such address
unless changed by the Trustees to another location in Massachusetts. The
Trust may maintain other offices as the Trustees may from time to time
determine. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Massachusetts Secretary of State and the Boston City
Clerk, as well as any other governmental office where such filing may from
time to time be required. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings shall control. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
BYLAWS
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings.
A special meeting of the shareholders of the Trust or of a particular
Series or Class shall be called by the Secretary whenever ordered by the
Trustees, the Chairman or requested in writing by the holder or holders of
at least one-tenth of the outstanding shares of the Trust or of the
relevant Series or Class, entitled to vote. If the Secretary, when so
ordered or requested, refuses or neglects for more than two days to call
such special meeting, the Trustees, Chairman or the shareholders so
requesting may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the
Secretary.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 2. No Indemnification.
No indemnification shall be provided hereunder to a Trustee or officer
against any liability to the Trust or any Series or Class or the
Shareholders of any Series or Class by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of his office.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the shareholders of each
Series or Class a written financial report of the transactions of that Series or
Class including financial statements which shall at least annually be certified
by independent public accountants.
(6) (a) Investment Advisory Contract of the Registrant through
and including Exhibit J (incorporated by reference to
Registrant's Post-Effective Amendment No. 15 on Form N-1A
filed February 28, 1995).
(6) (b) Exhibits K-M to Investment Advisory Contract of
Registrant (incorporated by reference to Registrant's
Post-Effective Amendment No. 22 on Form N-1A filed on or
about September
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<PAGE>
30, 1997).
(6) (c) Exhibits N-O to Investment Advisory Contract (incorporated
by reference to Registrant's Post-Effective Amendment No. 28
on Form N-1A filed on or about October 30, 1998).
(6) (d) Sub-Advisory Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 13 on Form N-1A
filed June 1, 1994).
(6) (e) Investment Advisory Contract of the Fifth Third Pinnacle
Fund (incorporated by reference to Registrant's Post-
Effective Amendment No. 28 on Form N-1A filed on or about
October 30, 1998).
(6) (f) Form of Sub-Advisory Agreement through and including Exhibit
A for the Fifth Third Ohio Tax Exempt Money Market Fund
between Fifth Third Bank and Fort Washington Investment
Advisors, Inc. (incorporated by Reference to Registrant's
Post-Effective Amendment No. 33 on Form N-1A filed on June
14, 2000.
(7) (a) Distribution Agreement of the Registrant (incorporated by
reference to Registrant's Post-Effective Amendment No. 17 on
Form N-1A filed on or about January 18, 1996).
(7) (b) Amended Schedules A-C to Distribution Agreement Amendment
No. 28 on (incorporated by reference to Registrant's Post-
Effective Form N-1A filed on or about October 30, 1998).
(8) Not Applicable.
(9) (a) Custody Agreement of the Registrant (incorporated by
reference to Registrant's Post-Effective Amendment No.25 on
Form N-lA filed on or about November 28, 1997).
(9) (b) Amended Exhibit B to Custody Agreement (incorporated by
reference to Registrant's Post-Effective Amendment No. 22 on
Form N-1A filed on or about September 30, 1997).
(9) (c) Amendment dated May 18, 1999 to the Custody Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed on or about October 1,
1999).
(9) (d) [Foreign] Custody Agreement dated May 25, 1999 between Fifth
Third Bank and The Bank of New York (incorporated by
reference to Registrant's Post-Effective Amendment No. 29 on
Form N-1A filed on or about October 1, 1999).
(9) (e) Foreign Custody Manager Agreement dated May 25, 1999 between
the Registrant and The Bank of New York (incorporated by
reference to Registrant's Post-Effective Amendment No. 29 on
Form N-1A filed on or about October 1, 1999).
(9) (f) [Foreign Custody Manager] Letter Agreement dated May 25,
1999 between the Registrant and Fifth Third Bank
(incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed on or about October 1,
1999).
(10) (a) Administrative Service Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed on or about October 28,
1996).
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<PAGE>
(10) (b) Form of Amended Exhibit A to Administrative Service
Agreement (incorporated by reference to Registrant's Post-
Effective Amendment No. 33 on Form N-1A filed on June 14,
2000.)
(10) (c) Transfer Agency and Accounting Services Agreement of the
Registrant (incorporated by reference to Registrant's Post-
Effective Amendment No. 15 on Form N-1A filed February 28,
1995).
(10) (d) Form of Amended Schedule A to Transfer Agency and Accounting
Services Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 33 on Form N-1A
filed on June 14, 2000).
(10) (e) Management and Administration Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September
30, 1997).
(10) (f) Form of Amendment to Management and Administration Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on June 14, 2000.)
(10) (g) Form of Amended Schedule A to Management and Administration
Agreement (incorporated by reference to Registrant's Post-
Effective Amendment No. 33 on Form N-1A filed on June 14,
2000.)
(10) (h) Sub-Administration Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A
filed on or about September 30, 1997).
(10) (i) Form of Amendment to Sub-Administration Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on June 14, 2000).
(10) (j) Form of Amended Schedule A to Sub-Administration Agreement
(incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed on June 14, 2000).
(10) (k) Form of Sub-Transfer Agency Agreement through and including
Exhibits A, B, and C (incorporated by reference to
Registrant's Post-Effective Amendment No. 33 on Form N-1A
filed on June 14, 2000).
(10) (l) Initial Capital Understanding (incorporated by reference to
Registrant's Post-Effective Amendment No. 15 on Form N-1A
filed February 28, 1995).
(10) (m) Amended Rule l2b-1 Plan through and including Exhibits A and
B (incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998).
(10) (n) Form of Rule 12b-1 Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 28 on Form N-1A
filed on or about October 30, 1998).
(10) (o) Form of Investment B Rule 12b-1 Plan through and including
Exhibits A and B (incorporated by reference to Registrant's
Post-Effective Amendment No. 33 on Form N-1A filed on June
14, 2000).
(10) (p) Form of Investment B Rule 12b-1 Agreement through and
including Exhibits A and B (incorporated by reference to
Registrant's Post-Effective Amendment No. 33 on Form N-1A
filed on June 14, 2000).
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<PAGE>
(10) (q) Financial Data Schedules (incorporated by reference to
Registrant's Form N-SAR filed on or about September 29,
1999).
(10) (r) Amended and Restated Multiple Class Plan through and
including Exhibit A, as last amended March 15, 2000
(incorporated by reference Registrant's Post-Effective
Amendment No. 33 on Form N-1A files on June 14, 2000).
(11) Opinion and Consent of Ropes & Gray is filed herewith.
(12) Form of Opinion of Ropes & Gray as to Tax Matters is filed
herewith.
(13) Not Applicable
---------------------------------
(14) (a) Consent of Ernst & Young LLP is filed herewith.
(14) (b) Consent of Ropes & Gray is filed herewith.
(15) Not Applicable.
(16) Executed Powers of Attorney are filed herewith.
(17) (a) Statement of Additional Information dated November 30, 1999,
as revised February 1, 2000 and June 1, 2000 is filed
herewith.
(17) (b) Codes of Ethics (incorporated by reference to Registrant's
Post-Effective Amendment No. 31 on Form N-1A filed on or
about March 15, 2000).
Item 17. Undertakings
------------
(1) The registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus
which is a part of this registration statement by any person
or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the
applicable registration form for reofferings by persons who
may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used
until the amendment is effective, and that, in determining
any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement
for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial
bona fide offering of them.
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<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Washington, District of
Columbia, on the 25th day of July, 2000.
Fifth Third Funds
Registrant
/s/ Stephen G. Mintos
-----------------------------------
* Stephen G. Mintos, President
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* /s/ Stephen G. Mintos President July 25, 2000
-----------------------
Stephen G. Mintos (Principal Executive Officer)
* /s/ Gary R. Tenkman Treasurer July 25, 2000
----------------------
Gary R. Tenkman (Principal Financial and
Accounting Officer)
* /s/ Edward Burke Carey Trustee July 25, 2000
------------------------
Edward Burke Carey
* /s/ Lee A. Carter Trustee July 25, 2000
----------------------
Lee A. Carter
* /s/ Albert E. Harris Chairman and Trustee July 25, 2000
----------------------
Albert E. Harris
/s/ Alan G. Priest
* By------------------ July 25, 2000
Alan G. Priest,
Attorney-in-fact, pursuant to Powers of Attorney filed herewith
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<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
(4) Form of Plan of Reorganization
(11) Opinion and Consent of Ropes & Gray
(12) Form of Opinion of Ropes & Gray as to Tax Matters
(14) (a) Consent of Ernst & Young, LLP
(14) (b) Consent of Ropes & Gray
(16) Powers of Attorney
(17)(a) Statement of Additional Information of Fifth Third
