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UAM FUNDS
ENHANCED MONTHLY INCOME PORTFOLIO
INSTITUTIONAL CLASS SHARES
SUPPLEMENT DATED JANUARY 26, 1996
TO THE PROSPECTUS DATED APRIL 25, 1995
AS SUPPLEMENTED OCTOBER 4, 1995 AND OCTOBER 31, 1995
The information under the heading "Details on Investment Policies - Investment
Objective and Principal Policies" on pages 4-7 of the Prospectus is hereby
supplemented as follows:
FOREIGN SECURITIES. The Adviser may invest up to 25% of the
Portfolio's assets in preferred securities of foreign issuers. The
Adviser will make such investments when it believes it would be
advantageous for the Portfolio for reasons relating to the quality of
the investment, the opportunity to better diversify the Portfolio's
investments, the ability to take advantage of tax situations, or to
earn a higher yield than for other comparable securities.
While such securities may involve greater risks than do securities of
domestic issuers (e.g., risks related to currency and exchange rate
fluctuations, changes in tax laws and treaties, war and
expropriation), the Adviser has adopted certain policies to reduce
such risks.
First, foreign issuer securities investments will be made only in U.S.
dollar denominated securities. As a result, direct or overt currency
risks will be eliminated. Currency and exchange rate changes may
affect such securities in indirect ways such as changing the issuer's
profitability and business conditions. Second, the Portfolio will
only invest in foreign securities which have been registered with the
Securities and Exchange Commission and rated by a major U.S. rating
agency such as Moody's or S&P. Finally, such investments must be made
in accordance with the ratings requirements (investment grade or
better) as discussed in the Prospectus.
The information under the heading "Details on Investment Policies - Risk
Factors" on page 10 of the Prospectus is hereby supplemented as follows:
The Portfolio's investments in securities of foreign issuers involve
risks of exchange rate and currency fluctuations (indirectly because
only U.S. dollar denominated securities may be purchased); of adverse
changes in foreign economic and business conditions impacting foreign
issuers; of adverse changes in tax laws and treaties affecting the tax
treatment of such securities; and of the effects of such problems as
trade conflicts, wars and expropriation.
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[SPECTRUM LOGO]
ASSET MANAGEMENT, INC. - INVESTMENT ADVISER
FOUR HIGH RIDGE PARK - STAMFORD, CT 06905
(203) 322-0189
PROSPECTUS
APRIL 25, 1995
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ENHANCED MONTHLY THE REGIS FUND, INC.
INCOME PORTFOLIO THE REGIS SERVICE CENTER
INSTITUTIONAL CLASS SHARES C/O MUTUAL FUNDS SERVICE COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
</TABLE>
The Enhanced Monthly Income Portfolio seeks to provide a high level of
monthly income consistent with capital preservation. The Portfolio intends to
achieve this objective through diversified investments in preferred stock and
fixed income securities combined with the use of hedging strategies intended to
minimize fluctuations of capital. The Investment Adviser intends to manage the
Portfolio so that it is suitable for investment by hospitals, HMO's, and other
organizations related to the health care industry, as well as for other
substantial investors such as non-profit corporations, foundations, endowments,
pension plans or individuals looking to achieve returns above average money
market securities. There can be no assurance that the Portfolio will achieve its
stated objective.
Please keep this Prospectus for future reference, since it contains
information that you should understand before you invest. You may also wish to
review the Enhanced Monthly Income Portfolio's "Statement of Additional
Information" dated April 25, 1995 which was filed with the Securities and
Exchange Commission and has been incorporated by reference into this Prospectus.
(It is legally considered to be a part of this Prospectus.) Please call or write
The Regis Fund, Inc. at the above address to obtain a free copy of this
Statement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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FEES AND EXPENSES
Investors will be charged various fees and expenses incurred in managing the
Enhanced Monthly Income Portfolio (the "Portfolio") including:
SHAREHOLDER TRANSACTION EXPENSES: These are the costs entailed in buying,
selling or exchanging shares of the Portfolio. The Portfolio does not charge
investors for shareholder transaction expenses. However, transaction fees may be
charged if you are a customer of a broker-dealer or other financial intermediary
who has established a shareholder servicing relationship with the Fund on behalf
of their customers. Please see "Buying, Selling and Exchanging Shares" for
further information.
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Sales Load Imposed on Purchases: NONE
Sales Load Imposed on Reinvested Dividends: NONE
Deferred Sales Load: NONE
Redemption Fees: NONE
Exchange Fees: NONE
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ESTIMATED ANNUAL FUND OPERATING EXPENSES: These expenses, which cover the
cost of administration, marketing and shareholder communication, and are usually
quoted as a percentage of net assets, are factored into the Portfolio's share
price and not billed directly to shareholders. They include:
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Investment Advisory Fees:.......................................... 0.60%
Administrative Fees:............................................... 0.13%
12b-1 Fees:........................................................ NONE
Distribution Costs:................................................ NONE
Other Expenses:.................................................... 0.14%
---
Total Operating Expenses:.......................................... 0.87%*
---
---
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The fees and expenses set forth above are estimated amounts for the
Portfolio's first year of operations assuming average daily net assets of $50
million.
* SPECTRUM ASSET MANAGEMENT, INC. HAS VOLUNTARILY AGREED TO WAIVE A PORTION
OF ITS ADVISORY FEES OR REIMBURSE EXPENSES, IF NECESSARY, IN ORDER TO GUARANTEE
THE PORTFOLIO'S TOTAL OPERATING EXPENSES (EXCLUDING INTEREST, TAXES AND
EXTRAORDINARY EXPENSES) FROM EXCEEDING 1.00% OF ITS AVERAGE DAILY NET ASSETS.
Investors can get a better idea of how the Portfolio's operating expenses
will affect their own investments by examining the following chart. The chart
shows how much a hypothetical investor would pay in expenses, assuming that he
or she made an initial investment of $1,000, earned a 5% annual rate of return
and redeemed his or her investment at the end of the time period indicated.
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1 3
YEAR YEARS
--- -----
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Expenses:....................................................................... $9 $28
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THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN ABOVE.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING IN THE BODY OF THIS PROSPECTUS. CROSS-REFERENCES IN THIS
SUMMARY ARE TO HEADINGS IN THE BODY OF THE PROSPECTUS.
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INVESTMENT OBJECTIVE: High level of income consistent with capital
preservation.
PRINCIPAL INVESTMENTS: Utility and corporate preferred securities,
monthly income preferred stock, and short to
intermediate term investment grade or better
debt securities, including U.S. Treasury
securities; combined with a cross-hedge using
U.S. Government securities futures. See
"Details on Investment Policies."
INVESTOR SUITABILITY: Hospitals, HMO's, PPO's, medical foundations
and other health care organizations; other
substantial investors such as non-profit
corporations, foundations, endowments, pension
plans or individuals looking to achieve
returns above average money market securities.
INVESTMENT ADVISER: Spectrum Asset Management, Inc., an investment
counseling firm founded in 1987; the Adviser
presently manages over $750 million in assets
for institutions, pension plans and
endowments. See "The Investment Adviser."
SHARES AVAILABLE THROUGH: Spectrum Asset Management, Inc., a selling
dealer for the Fund. See "How to Buy Shares by
Mail" and "How to Buy Shares by Wire."
COMMISSION: No-Load
DIVIDENDS AND DISTRIBUTIONS: Pays dividends from available income monthly;
distributes available net long-term capital
gains annually.
REINVESTMENT: Distributions will be reinvested in Fund
shares automatically, unless an investor
elects to receive cash distributions.
INITIAL PURCHASE: $500,000 minimum
SUBSEQUENT PURCHASE: $1,000 minimum
REDEMPTIONS: Available anytime, without cost; at the
Portfolio's net asset value next determined
after receipt of a redemption request. The
Portfolio's share price will fluctuate with
market and economic conditions. Therefore,
your investment may be worth more or less when
redeemed than when purchased. See "How to Sell
Shares."
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PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating total return. Total return
includes all interest and dividend payments plus the net change in value on all
securities in the Portfolio over a specific period of time. To find out the
average annual return, we simply divide this aggregate number by the number of
years in the period in question. In calculating total return, we always assume
that all interest and dividend payments have been reinvested in the Portfolio.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported in
financial and industry publications, and various indices, all as further
described in the Portfolio's Statement of Additional Information.
Since this is a new Portfolio, we can offer no information about past
performance. When this information becomes available, you will find it, together
with comparisons to appropriate indices, in the Portfolio's Annual Report to
Shareholders, which may be obtained without charge.
Write to "The Regis Fund, Inc." at the address on the front cover of this
Prospectus or call 1-800-638-7983 to obtain your free copy of the Portfolio's
Annual Report to Shareholders, when it becomes available. Shareholders will
receive the Annual Report automatically.
DETAILS ON INVESTMENT POLICIES
INVESTMENT OBJECTIVE AND PRINCIPAL POLICIES
The Enhanced Monthly Income Portfolio's investment objective is to provide a
high level of monthly income consistent with capital preservation. The Adviser
seeks to achieve this objective by diversifying the Portfolio's assets in
investment grade preferred and fixed-income securities, of short to intermediate
term, which will be hedged with U.S. Government securities futures to minimize
capital fluctuations of the Portfolio caused by interest rates movements. The
Adviser intends to concentrate the Portfolio's investments (i.e., 25%) in the
utilities industry. The Portfolio's objective is fundamental and can be changed
only upon approval by vote of the holders of a majority of the Portfolio's
shares.
CONCENTRATION IN UTILITIES SECURITIES. The Adviser intends to concentrate
investments in preferred and fixed income securities in the utilities industry
which includes companies engaged in the manufacture, production, generation,
transmission and sale of gas and electric energy. It also includes issuers
engaged in the communications field, including entities such as telephone,
telegraph, satellite, microwave and other companies providing communication
facilities for the public benefit, but not those in public broadcasting.
PREFERRED SECURITIES. The Adviser may invest the Portfolio's assets in a
broad variety of preferred securities consisting of monthly income preferred
securities ("MIPS"), stated auction rate preferred stocks ("STRAPS"), adjustable
rate preferred stock ("ARPS"), perpetual preferred stock, and sinking fund
preferred stock. MIPS are relatively new securities combining both debt and
equity features. While somewhat complex, MIPS are a way for companies to issue
debt with some of the positive attributes of debt, such as deductibility of
interest, with the positive attributes of preferred stock such as a preferred
(though subordinated) interest rate (referred to as dividends), inclusion of
call provisions, and inclusion on the equity side of a debt/equity ratio. For
investors, MIPS offer monthly income payments and yield advantages over
comparable investments, but no portion of the income generated by the MIPS is
eligible for the dividends received deduction by corporate investors at any
level. Adjustable rate preferred stock is preferred stock that has a dividend
rate which is adjusted periodically, typically every three months, to reflect
changes in the general level of interest rates. The dividend rate on an
adjustable rate preferred stock is determined by applying an adjustment formula,
established at the time the stock is issued, which generally involves a fixed
relationship to rates on specific classes of debt securities issued by the U.S.
Treasury, with limits on the minimum and maximum dividend rates that may be
paid. Sinking fund preferred stock provides for the issuer to redeem the
outstanding preferred stock according to a mandatory retirement schedule.
Perpetual preferred securities
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have no sinking fund or maturity features, but include a call feature, usually
at par or above par. Dutch auction money market preferred stock is preferred
stock in which the dividend is reset at "Dutch auction" from time to time,
typically every 49 days (buyers submit bids; the price for all buyers is the
marginal price at which the entire issue can be sold). STRAPS pay a
fixed-dividend for a specified time which resets according to a prescribed
formula related to the then prevailing yield curve.
In selecting specific preferred stock and securities issues, the Adviser
will consider not only current yield but all variables that would affect the
value of a security (i.e., conversion features, sinking fund provisions, call
features or redemption characteristics). Preferred securities' market values and
risks reflect their varying blends of common stock and debt features. As a
general rule, the market value of preferred stock with a fixed dividend rate and
no conversion elements varies inversely with interest rates and perceived credit
risk. Preferred securities have a preference over common stock in liquidation
(and generally dividends as well) but are usually subordinated to the
liabilities of the issuer in all respects. Because preferred stock is junior to
debt securities and other obligations of the issuer, deterioration in the credit
quality of the issuer may cause greater changes in the value of a preferred
stock than in a more senior debt security with similar stated yield
characteristics. Securities with conversion features may behave more like common
stock while Dutch auction and adjustable rate preferred securities may behave
more like short-term debt.
The Adviser will also carefully analyze the underlying fundamentals of all
securities in the Portfolio, with particular emphasis on interest and dividend
coverage. For example, with respect to utility securities the Adviser will
review the customer mix, regulatory climate, energy sources, quality of
management, non-utility diversification, if any, and construction expenditures
relative to internal cash generation. While the investment philosophy of the
Adviser is primarily one of buy and hold, the Adviser will seek to optimize
total returns by trading the Portfolio when it believes market, economic or
other conditions make it advantageous to do so, for example, by taking advantage
of market or pricing inefficiencies of certain securities to improve dividend
income without eroding capital.
FIXED INCOME SECURITIES in which the Portfolio may invest consist of notes
and bonds issued by the U.S. Government and corporations, mortgage-backed debt
securities, asset-backed securities, and various short-term instruments such as
U.S. Treasury bills, commercial paper, bankers' acceptances, and certificates of
deposit. Mortgage-backed securities differ from bonds in that the principal is
paid back by the borrower over the length of the loan rather than returned in a
lump sum at maturity. Certain mortgage-backed securities (such as "GNMAs") are
called "Pass-Through" securities because both interest and principal payments
(including pre-payments) are passed through to the holder of the security. Other
mortgage-backed securities are collateralized by mortgage obligations (such as
"CMOs" and "REMICs"), which behave like pass-through securities although the tax
and accounting treatment can differ. When prevailing interest rates rise, the
value of a mortgage-backed security may decrease as do other types of debt
securities. When prevailing interest rates decline, however, the value of
mortgage-backed securities may not rise on a comparable basis with other debt
securities because of the prepayment feature. Additionally, if a mortgage-backed
security is purchased at a premium above its principal value because its fixed
rate of interest exceeds the prevailing level of yields, the decline in price to
par may result in a loss of the premium in the event of prepayment.
Asset-backed securities are collateralized by shorter term loans such as
automobile loans, computer leases, or credit card receivables. The payments from
the collateral are passed through to the security holder. The collateral behind
asset-backed securities tends to have prepayment rates that do not vary with
interest rates. In addition, the short-term nature of the loans reduces the
impact of any change in prepayment level. Due to amortization, the average life
for these securities is also the conventional measurement for maturity.
Certificates of deposit are negotiable short-term obligations issued by
commercial banks or savings and loan associations collateralized by funds
deposited in the issuing institution. Variable rate certificates of deposit are
certificates of deposit on which the interest rate is periodically adjusted
prior to their stated
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maturity based upon a specified market rate. A banker's acceptance is a time
draft drawn on a commercial bank by a borrower usually in connection with an
international commercial transaction (to finance the import, export, transfer or
storage of goods).
The preferred securities and fixed income securities described above are the
basic investments in which the Portfolio will be invested. However, within the
realm of preferred and fixed income securities, new types of securities are
constantly being developed. The Adviser intends to invest in such securities,
when it makes sense to do so and is consistent with the Portfolio's objective.
If any such new, complex or unusual securities will be used substantially, then
this Prospectus will be amended to include a description of such securities.
INVESTMENT GRADE SECURITIES are considered to be those having one of the
four highest grades assigned by Moody's Investors Services, Inc. ("Moody's")
(Aaa, Aa, A or Baa) or Standard and Poor's Corporation ("S&P") (AAA, AA, A or
BBB). The Portfolio may invest up to 5% of its assets in debt securities rated
below investment grade ( i.e., below Baa or BBB). If the Portfolio holds a
security that is downgraded to a rating below Baa or BBB and, as a result of
such downgrade, more than 5% of the Fund's assets would be invested in
securities rated below Baa or BBB, the Portfolio would take steps to reduce its
investments in such securities to 5% or less of its assets as promptly as
possible. Securities rated Baa by Moody's or BBB by S&P may possess speculative
characteristics and may be more sensitive to changes in the economy and the
financial condition of issuers than higher rated bonds. Investments in lower
rated securities involve a greater possibility that adverse changes, or
perceived changes, in the business or financial condition of the issuer or in
general economic conditions may impair the ability of the issuer to make timely
payment of interest and repayment of principal. The prices of such securities
tend to fluctuate more than those of higher rated securities. To the extent that
there is no established or a relatively inactive secondary market in a
particular rated security, it could be difficult at times to sell or value such
security. Mortgage-backed securities in which the Portfolio may invest will
either carry a guarantee from an agency of the U.S. Government or a private
issuer of the timely payment of principal and interest or are considered by the
Adviser to be of investment grade quality.
As a matter of operating policy, the Adviser will invest at least 60% of the
Portfolio's assets in securities of companies or issuers whose debt or fixed
income securities are rated at least A or better by at least one rating agency.
However, the Adviser may invest up to 5% of the Portfolio's assets in
non-investment grade or unrated securities when warranted in the Adviser's
judgment. In the event of a downgrade of the rating of a stock held in the
Portfolio, the Adviser will attempt to liquidate the particular issue within a
90 day period. Ratings of fixed income securities and preferred stock differ to
some degree. A detailed discussion of securities ratings is included in the
Statement of Additional Information.
DURATION POLICY. The Adviser will invest the Portfolio's assets so that its
average duration will not exceed 2 to 3 years (for securities for which a
duration can be determined). Duration compares interest rate risk between
securities with different coupons and different maturities, summarizing in a
single number the yield sensitivity of a bond -- how a bond's maturity and
coupon rate affect its exposure to interest rate risk. Duration involves the
application of several principles: as the maturity of a bond increases, duration
increases: as the coupon of a bond increases, duration decreases; generally, the
lower the coupon payment, the higher the duration; and duration decreases as the
frequency of the coupon payment increases.
CROSS-HEDGING STRATEGY. The Adviser does not make interest rate projections
and seeks to preserve capital by implementing and maintaining a constant
cross-hedge. Preferred securities investments of the type described above are
subject to market fluctuation based largely, but not exclusively on the
preferred securities' sensitivity to changes in interest rates. By maintaining a
hedge consisting of U.S. Government futures contracts, the Adviser seeks to
reduce interest rate related risk.
The Adviser monitors the correlation between the preferred and fixed-income
securities and the U.S. Government futures markets. A short position established
in Government futures contracts offsets the principal fluctuations of the
preferred stock and fixed-income portfolio caused by interest rate movements.
This strategy enables the Adviser to invest across the yield curve, realizing
higher dividend yields, while
6
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managing interest rate volatility. The formula used by the Adviser to analyze
and guide its hedging investments is derived by evaluating the history of price
movements in the preferred stock, fixed-income and U.S. Government securities
markets. The Adviser uses sophisticated quantitative analytical techniques,
including regression analyses and price and yield volatility analyses, to create
the necessary statistical data to monitor and adjust the hedging investments.
The Portfolio's preferred and fixed-income securities portfolio and its
futures positions produce offsetting capital gains and losses as interest rates
change. As the goal is to achieve a netting effect of realized capital gains and
losses, the Portfolio's rate of return will be primarily dividend and interest
income. The hedging positions that the Portfolio expects to hold normally
appreciate in value when interest rates rise. If any gain on these instruments
were realized and used by the Portfolio to acquire additional preferred
securities and fixed-income securities, an increase in the Portfolio's dividend
and interest income would result. Conversely, should interest rates decline,
these hedging positions would be expected to decline in value and, if necessary,
the sale of some of the Portfolio's holdings of preferred securities and
fixed-income securities to finance hedge losses would cause a decrease in the
Portfolio's dividend and interest income.
The Portfolio's use of hedging instruments and the availability of gains for
investment in additional preferred securities and fixed-income securities may be
limited by the restrictions and distribution requirements imposed on the
Portfolio in connection with its qualification as a regulated investment company
under the Internal Revenue Code of 1986 and by restrictions on the use of
futures and related instruments by commodities and securities laws. See
"Dividends, Capital Gains Distributions and Taxes." The Adviser does not believe
that these restrictions and requirements will materially adversely affect the
management of the Portfolio or the ability of the Portfolio to achieve its
investment objective.
The Portfolio may enter into futures contracts provided that not more than
5% of the Portfolio's total assets are at the time of acquisition required as
margin deposit to secure obligations under such contracts. The primary risks
associated with the use of futures and options are (1) imperfect correlation
between the change in market value of the securities held by the Portfolio and
the prices of futures and options relating to the bonds purchased or sold by the
Portfolio; and (2) possible lack of a liquid secondary market for a futures
contract or option and the resulting inability to close a futures position which
could have an adverse impact on the Portfolio's ability to hedge. In the opinion
of the Adviser, the risk that the Portfolio will be unable to close out a
futures position or options contract will be minimized by only entering into
futures contracts or options transactions traded on national exchanges and for
which there appears to be a liquid secondary market.
OTHER INVESTMENT POLICIES
The policies discussed above are the principal policies of the Portfolio.
The Portfolio may also, under normal circumstances, utilize the following
securities, investments or investment techniques.
REPURCHASE AGREEMENTS
In a repurchase agreement, the Portfolio purchases a security and, at the
same time, arranges to sell it back to the original seller on a predetermined
date. The repurchase agreement states the price that the seller will pay for the
security plus the interest rate that the purchaser will receive while holding
it. In effect, the Portfolio is lending its funds to the seller at an agreed
upon interest rate and receiving a security as collateral for the loan.
Repurchase agreements can range from overnight to a fixed term. They are a
common way to earn interest on short-term funds.
The seller under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than (1) the
repurchase price if such securities mature in one year or less or (2) 101% of
the repurchase price if such securities mature in more than one year. The
Administrator and the
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Adviser will mark to market daily the value of the securities purchased, and the
Adviser will, if necessary, require the seller to maintain additional securities
to ensure that the value is in compliance with the previous sentence.
There are some risks involved in repurchase agreements. If the seller
defaults on its agreement to buy back the securities and the value of those
securities falls, the Portfolio may incur losses in selling these securities on
the open market. Also, if the seller enters bankruptcy, the bankruptcy court may
decide that the securities are collateral not within the control of the
Portfolio and therefore are subject to sale by the trustee in the bankruptcy.
Finally, it is possible that the Portfolio may not be able to prove its
ownership of the underlying securities.
The Adviser believes that these risks can be controlled by carefully
reviewing the securities involved in a repurchase agreement as well as the
credit rating of the other party in the transaction. The Portfolio may invest in
repurchase agreements collateralized by U.S. government securities, certificates
of deposit, bankers' acceptances and other short-term securities as outlined
above.
WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
Occasionally the Portfolio will invest in securities whose terms and
characteristics are already known but which have not yet been issued. These are
called "when-issued" or "forward delivery" securities. Usually these securities
are purchased within a month of their issue date. "Delayed settlements" occur
when the Portfolio agrees to buy or sell securities at some time in the future,
making no payment until the transaction is actually completed.
The Portfolio will maintain a separate account of cash, U.S. Government
securities or other high-grade debt obligations at least equal to the value of
the purchase commitments until payment is made. Typically, no income accrues on
securities purchased on a delayed delivery basis prior to the time delivery of
the securities is made although the Portfolio may earn income on securities it
has deposited in a segregated account.
The Portfolio engages in these types of purchases in order to buy securities
that fit with its investment objectives at attractive prices -- not to increase
its investment leverage.
Securities purchased on a when-issued basis may decline or appreciate in
market value prior to their actual delivery to the Portfolio.
RESTRICTED AND ILLIQUID SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified
institutional investors under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Directors, the Adviser determines the
liquidity of such investments by considering all relevant factors. Provided that
a dealer or institutional trading market in such securities exists, these
restricted securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. The Portfolio may also invest up to 15% of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or because of legal or contractual restrictions on
resale. The prices realized from the sales of these securities could be less
than those originally paid by the Portfolio or less than what may be considered
the fair value of such securities.
LENDING OF PORTFOLIO SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors who need to borrow securities in order to complete certain
transactions, such as covering short sales, avoiding failures to deliver
securities or completing arbitrage operations. The Portfolio will not loan
portfolio securities to the extent that greater than one-third of its assets at
fair market value would be committed to loans. By lending its investment
securities, the Portfolio attempts to increase its income through the receipt of
interest on the loan. Any gain or loss in the market price of the securities
loaned that might occur during the term of the loan would be for the account of
the Portfolio. The Portfolio may lend its investment securities to qualified
8
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brokers, dealers, domestic and foreign banks or other financial institutions, so
long as the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, as amended, (the "1940
Act"), or the Rules and Regulations or interpretations of the Securities and
Exchange Commission (the "Commission") thereunder, which currently require that
(a) the borrower pledge and maintain with the Portfolio collateral consisting of
cash, an irrevocable letter of credit issued by a domestic U.S. bank or
securities issued or guaranteed by the U.S. Government having a value at all
times not less than 100% of the value of the securities loaned, (b) the borrower
add to such collateral whenever the price of the securities loaned rises (i.e.,
the borrower "marks to the market" on a daily basis), (c) the loan be made
subject to termination by the Portfolio at any time, and (d) the Portfolio
receives reasonable interest on the loan (which may include the Portfolio
investing any cash collateral in interest bearing short-term investments). All
relevant facts and circumstances, including the creditworthiness of the broker,
dealer or institution, will be considered in making decisions with respect to
the lending of securities, subject to review by the Fund's Board of Directors.
At the present time, the Staff of the Commission does not object if an
investment company pays reasonable negotiated fees in connection with loaned
securities so long as such fees are set forth in a written contract and approved
by the investment company's Board of Directors. The Portfolio will continue to
retain any voting rights with respect to the loaned securities. If a material
event occurs affecting an investment on a loan, the loan must be called and the
securities voted.
INVESTMENT LIMITATIONS
To help reduce the Portfolio's exposure to risk in specific situations, it
has adopted certain limitations associated with its investments and investment
practices. These policies and limitations are considered at the time of
purchase. The sale of instruments is not required in the event of a subsequent
change in circumstances.
The Portfolio's limitations are as follows:
(a) With respect to 75% of its assets, the Portfolio may not own more than
5% of the securities of any single issuer (other than investments
issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities);
(b) With respect to 75% of its assets, the Portfolio may not own more
than 10% of the outstanding voting securities of any one issuer;
(c) The Portfolio may not invest more than 5% of its assets in securities
of issuers (other than securities issued or guaranteed by the U.S.
or foreign governments or their political subdivisions) that have
(with predecessors) less than 3 years of continuous operation;
(d) The Portfolio may not make loans except by purchasing debt securities
in accordance with its investment objective and policies or entering
into repurchase agreements or by lending its portfolio securities
to banks, brokers, dealers or other financial institutions as long as
the loans are made in compliance with the 1940 Act and the rules,
regulations and interpretations of the Commission;
(e) The Portfolio may not borrow except from banks in extraordinary
circumstances for temporary or emergency purposes. In this situation,
the Portfolio may not (i) borrow more than 33 1/3 of its gross
assets and (ii) cannot buy additional securities if it borrows more
than 5% of its total assets; and
(f) Pledge, mortgage or hypothecate more than 33 1/3% of its total assets
at fair market value.
The Portfolio's investment objective and investment limitations (a), (b),
(d) and (e)(i) listed above are fundamental policies and may be changed only
with the approval of the holders of a majority of the outstanding voting
securities of the Portfolio. The other investment limitations described here and
those not
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specified as fundamental in the Statement of Additional Information, as well as
the Portfolio's investment policies, are not fundamental and the Fund's Board of
Directors may change them without shareholder approval.
PORTFOLIO TURNOVER AND BROKERAGE
This Portfolio is managed for production of monthly income, rather than
short-term trading profits. It is expected that the annual portfolio turnover
rate for the Portfolio will not exceed 100%. (A turnover rate of 100% would mean
that all securities in the Portfolio would be replaced within a one-year
period.) However, portfolio turnover depends to a great degree on market
conditions. Occasionally, when the market shifts suddenly or when the prospects
for individual securities change quickly, the Adviser may find it necessary to
sell securities which have not been in the Portfolio for very long. High rates
of portfolio turnover necessarily result in heavier brokerage and portfolio
trading costs which is paid by the Portfolio. Higher rates of turnover may
result in the realization of capital gains. To the extent net short-term capital
gains are realized, any distributions resulting from such gains are considered
ordinary income for federal income tax purposes. The Portfolio will not normally
engage in short-term trading, but it reserves the right to do so.
The Portfolio's Investment Advisory Agreement authorizes the Adviser to
select the brokers or dealers that will execute the purchases and sales of
investment securities for the Portfolio. The Agreement directs the Adviser to
use its best efforts to obtain the best available price and most favorable
execution for all the Portfolio's transactions.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of shares which may be made
through such broker-dealer firms. However, the Adviser may place portfolio
orders with qualified broker-dealers who recommend the Portfolio or who act as
agents in the purchase of shares of the Portfolio for their clients.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Adviser. If a purchase or sale of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the Adviser is considered at or about the
same time, transactions in such securities will be allocated among the Portfolio
and clients in a fair and reasonable manner. Although there is no specified
formula for allocating such transactions, the various allocation methods used by
the Adviser, and the result of such allocations, are subject to periodic review
by the Fund's Board of Directors.
RISK FACTORS
Prospective investors should understand that the Portfolio's performance
will be affected by a variety of factors. Preferred stock has a preference over
common stock in liquidation (and generally dividends as well) but is
subordinated to the liabilities of the issuer in all respects. As a general
rule, the market value of preferred stock with a fixed dividend rate and no
conversion element varies inversely with interest rates and perceived credit
risk. Because preferred stock is junior to debt securities and other obligations
of the issuer, deterioration in the credit quality of the issuer will cause
greater changes in the value of a preferred stock than in a more senior debt
security with similar stated yield characteristics. Also, the tax status of
certain securities may change.
In addition, you should consider the following factors that could effect the
Portfolio's rate of return:
- The Portfolio may invest in repurchase agreements which entail a risk of
loss should the seller default on its transaction.
- The Portfolio may lend its investment securities which entails a risk of
loss should a borrower fail financially (See "Lending of Portfolio
Securities").
- The Portfolio may engage in strategies to seek to hedge its investments
against changes in security prices and interest rates by the use of
futures contracts. These strategies involve the risk of imperfect
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correlation in the movements in the price of futures and movements in the
price of securities and interest rates which are the subject of the hedge.
(See "Details on Investment Policies -- Cross-Hedging Strategy").
- Such hedging strategies like other investment techniques and strategies,
if employed incorrectly, may adversely affect the Portfolio.
- By concentrating its investments in the utilities industry, the Portfolio
is exposed to changes in and possible adverse economic and industry
conditions over time, including e.g., changes in government regulations,
resource depletion, changing technologies and credit market constraints.
BUYING, SELLING AND EXCHANGING SHARES
Shares of the Portfolio are offered through RFI Distributors, a division of
Regis Retirement Plan Services, Inc., to investors at net asset value without a
sales commission. The minimum initial investment is $500,000 with certain
exceptions determined from time to time by the officers of the Fund. The minimum
for subsequent investments is $1,000. Generally, purchases should be made
through Spectrum Asset Management, Inc., which is a selling dealer in addition
to being the Portfolio's Adviser. Purchases may also be made directly through
The Regis Service Center or the Fund's Distributor, RFI Distributors.
Shares of the Portfolio may be purchased by customers of broker-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions or other account
fees on the purchase and redemption of Portfolio shares . Each Service Agent is
responsible for transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions regarding purchases
and redemptions. Shareholders who are customers of Service Agents should consult
their Service Agent for information regarding these fees and conditions. Certain
Service Agents may receive compensation from the Fund, the Fund's Distributor,
the Adviser, or any of the Adviser's affiliates. A salesperson and any other
person entitled to receive compensation for selling or servicing Portfolio
shares may receive different compensation with respect to one particular class
of shares over another in the Fund.
Service Agents may enter confirmed purchase orders on behalf of their
customers. If you buy shares of the Portfolio in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE"), and transmit it to the Fund's Transfer Agent prior to
the close of the Transfer Agent's business day and to the Distributor to receive
that day's share price. Proper payment for the order must be received by the
Transfer Agent no later than the time when the Portfolio is priced on the
following business day. Service Agents are responsible to their customers, the
Fund and the Fund's Distributor for timely transmission of all subscription and
redemption requests, investment information, documentation and money.
HOW TO BUY SHARES BY MAIL
If you have never invested in this Portfolio before, you will have to fill
out an Account Registration Form which can be obtained by calling the Fund at
1-800-638-7983. You will notice that the form includes a carbon copy. Once you
have filled out the information on the form, please remove the carbon, separate
the two copies and sign both. We require an original signature on both forms.
Mail one copy, along with a check, to:
The Regis Fund, Inc.
The Regis Service Center
c/o Mutual Funds Service Company
P.O. Box 2798
Boston, MA 02208-2798
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Mail the other copy, without the check, to:
RFI Distributors
One International Place, 44th Floor
100 Oliver Street
Boston, MA 02110
NOTE: If purchases are made through Spectrum Asset Management, Inc., the
appropriate copies automatically will be forwarded to RFI Distributors.
To make additional investments to an account you have already established,
simply mail your check to The Regis Service Center at the above address. Make
sure that your account number, account name, and the name of the Portfolio are
clearly indicated on the check so that we can properly credit your account.
For both initial and additional investments, your funds will be credited to
your account at the next share price calculated for the Portfolio after receipt.
Investments received by 4 p.m. will be invested at the share price calculated
after the market closes on the same day. (For example, if your check arrives on
Tuesday morning, you will purchase shares at the price calculated after the
market close on Tuesday.)
HOW TO BUY SHARES BY WIRE
To make an initial investment by wire, you must first telephone the Fund at
1-800-638-7983. A representative will then ask you to provide the account number
from which you plan to wire the funds, the bank or financial institution, its
address, phone number and your social security or taxpayer identification
number. You will then tell the representative which Portfolio you wish to invest
in and, how much you want to invest. The representative will then provide you
with an account number. Please write it down and keep it for your records.
Once you have an account number, call your bank and instruct them to wire a
specified amount to the Fund's custodian, Morgan Guaranty Trust Company of New
York ("Custodian Bank").
You will be asked to provide the following information:
Morgan Guaranty Trust Company of New York
New York, NY 10015
ABA# 0210-0023-8
DDA Acct.# 001-75-058
F/B/O The Regis Fund, Inc.
Ref: Enhanced Monthly Income Portfolio
Your account number: ____________________________
Your account name: ____________________________
After you have instructed the bank to wire the money, you must forward a
completed Account Registration Form to The Regis Service Center as soon as
possible. You can obtain forms by calling The Regis Service Center at
1-800-638-7983. Federal Funds purchases will be accepted only on days when the
NYSE and the Custodian Bank are open for business.
Once you have made the initial purchase, you may buy additional shares by
wire at any time by following the instructions above. On all wired purchases,
funds will be invested at the share price calculated after the next market
close.
IN-KIND PURCHASES
Under certain circumstances, investors who own securities may be able to
exchange them directly for shares of the Portfolio without converting their
investments into cash first. The Portfolio will accept such in-kind purchases
only if the securities offered for exchange meet the Portfolio's investment
criteria, which are set forth in the "Details on Investment Policies" section of
this Prospectus. Once accepted, the shares will be
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valued according to the process described in "How Share Prices are Determined"
at the same time the Portfolio's shares are valued. Once a value has been
determined for both, an exchange will be made. All dividends, interest,
subscription, or other rights pertaining to these securities become the Fund's
property; if you receive any such items, you must deliver them to the Fund
immediately.
The Fund will not accept securities for exchange unless they meet the
following criteria:
- The securities are eligible to be included in the Portfolio and market
quotes can readily be obtained for them.
- The investor assures the Fund that the securities are not subject to any
restrictions under the Securities Act of 1933 or any other law or
regulation.
- The value of the securities exchanged does not increase the Portfolio's
position in any specific issuer's security to more than 5% of the
Portfolio's net assets.
For tax purposes, the IRS generally treats any exchange of securities for
Portfolio shares as a sale of the securities. This means that if you exchange
securities which have appreciated in value since you bought them, you will
realize capital gains and incur a tax liability. If you are interested in such
an exchange, we suggest you discuss any potential tax liability with your tax
adviser before proceeding.
HOW TO SELL SHARES
You may sell shares by telephone or mail at any time, free of charge. Your
shares will be valued at the next price calculated after we receive your
instructions to sell.
BY MAIL
To redeem by mail, include
- your share certificates, if we have issued them to you;
- a letter which tells us how many shares you wish to redeem or,
alternatively, what dollar amount you wish to receive;
- a signature guaranteed by your bank, broker or other financial institution
(See "Signature Guarantees" below); and
- any other necessary legal documents, in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit-sharing
plans and other organizations.
If you are not sure which documents to send, please contact The Regis
Service Center at 1-800-638-7983.
BY TELEPHONE
To redeem shares by telephone, you must have completed an Account
Registration Form and returned it to the Fund. Once this form is on file, simply
call the Fund and request the redemption amount to be mailed to you or wired to
your bank. The Fund and the Fund's Transfer Agent will employ reasonable
precautions to make sure that the instructions communicated by telephone are
genuine. You will be asked to provide certain personal identification when you
open an account, and again, when you request a telephone redemption. In
addition, all telephone transaction requests will be recorded and investors may
be required to provide additional telecopied written instructions of such
transaction requests. Neither the Fund nor the Transfer Agent will be
responsible for any loss, additional cost or expense for following transaction
instructions received by telephone that it reasonably believes are genuine.
To change the commercial bank or the account designated to receive
redemption proceeds, a written request must be sent to the Fund at the address
on the cover of this Prospectus. Requests to change the bank
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<PAGE>
or account must be signed by each shareholder and each signature must be
guaranteed. You cannot redeem shares by telephone if you hold stock certificates
for these shares. Please contact one of the Fund's representatives at
1-800-638-7983 for further details.
SIGNATURE GUARANTEES
To protect your account, the Fund and the Fund's Transfer Agent from fraud,
signature guarantees are required for certain redemptions. Signature guarantees
are used to verify that the person who authorizes a redemption is, in fact, the
registered shareholder. They are required whenever you:
- redeem shares and request that the proceeds be sent to someone other than
the registered shareholder(s) or to an address which is not the registered
address; or
- transfer shares from one Portfolio to another.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. (The Regis
Service Center can provide you with a full definition of the term.) You can
obtain a signature guarantee at almost any bank as well as through most brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations. Broker-dealers
guaranteeing signatures must be a member of a clearing corporation or maintain
net capital of at least $100,000. Credit unions must be authorized to issue
signature guarantees. Signature guarantees will be accepted from any eligible
guarantor institution which participates in a signature guarantee program. A
notary public cannot provide a signature guarantee.
The signature guarantee must appear either:
- on the written request for redemption; or
- on a separate instrument for assignment (a "stock power") which should
specify the total number of shares to be redeemed; or
- on all stock certificates tendered for redemption, and, if shares held by
the Fund are also being redeemed, then on the letter or stock power.
FURTHER INFORMATION ON SELLING SHARES
Normally, the Fund will make payment for all shares sold under this
procedure within one business day after we receive a request. In no event will
payment be made more than seven days after receipt of a redemption (sale)
request in good order. The Fund may suspend the right of redemption or postpone
the date at times when both the NYSE and Custodian Bank are closed or under any
emergency circumstances as determined by the Commission.
If the Fund's Board of Directors determines that it would be detrimental to
the best interests of the remaining shareholders of the Fund to make payments
wholly or partly in cash, the Fund may pay the redemption proceeds in whole or
in part by a distribution in-kind of liquid securities held by the Portfolio
instead of cash in conformity with applicable rules of the Commission. Investors
may incur brokerage charges when they sell portfolio securities received in
payment of redemptions.
HOW TO EXCHANGE SHARES
You may exchange Institutional Class Shares of the Portfolio for any other
Institutional Class Shares of a Portfolio included in The Regis Family of Funds
which is comprised of The Regis Fund, Inc. and The Regis Fund II. (See the list
of Portfolios comprising The Regis Family of Funds - Institutional Class Shares
at the end of this Prospectus.) When you exchange shares you sell your old
shares and buy new ones, both at the price calculated after the next market
close. There is no sales charge for exchanges.
Exchange requests may be made by phone or letter. Telephone exchanges may be
made only if the Fund holds all share certificates and if the registration of
the two accounts is identical. Telephone exchanges
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received before 4 p.m. will be processed at the share price set after the market
close the same day. Exchanges received after 4 p.m. will be executed at the
share price determined at the market close the following day. For additional
information regarding responsibility for the authenticity of telephoned
transaction instructions, see "How to Sell Shares By Telephone" above. The
exchange privilege is only available with respect to Portfolios that are
registered for sale in a shareholder's state of residence.
Neither the Fund nor the Fund's Transfer Agent will take responsibility for
ensuring it is indeed the shareholder issuing the exchange orders; however, we
may use some of the precautions described above for selling shares. The Fund may
also limit both the frequency and the amount of exchanges permitted if it is in
the interest of the Fund's shareholders.
Please review a Portfolio's investment objectives before shifting money into
it. Make sure its objectives and strategies fit with your long-term goals.
Before exchanging into a Portfolio, read its Prospectus. You may obtain one for
the Portfolio(s) you are interested in by calling The Regis Service Center at
1-800-638-7983. Remember, every time you exchange shares of one Portfolio for
another, your transaction is counted as a sale of the first security and a
purchase of the second. As a result, you may incur a tax liability by exchanging
shares if your investment has appreciated since you bought it. Consult your tax
adviser to determine your liability for capital gains taxes.
HOW SHARE PRICES ARE DETERMINED
We calculate the value of each share of the Portfolio every day that the
NYSE is open. This means that shares are valued after the market close,
generally at 4 p.m. Eastern time on Monday through Friday, except for major
holidays when the NYSE is closed.
To determine how much each share is worth, we add up the total market value
of all the securities in the Portfolio plus cash and other assets, deduct
liabilities and then divide by the total number of shares outstanding.
For stocks, we use the last quoted trading price as the market value. For
listed stocks, we use the price quoted by the exchange on which the stock is
primarily traded. Listed stocks which have not been traded on the valuation date
or for which market quotations are not readily available are valued at a price
between the last price asked and the last price bid. Over-the-counter and
unlisted securities are valued based on a matrix system which considers such
factors as security prices, yields and maturities.
Bonds and other fixed income securities including fixed-dividend preferred
securities are valued according to the broadest and most representative market
which will ordinarily be the over-the-counter market. Net asset value includes
interest on fixed income securities, which is accrued daily. In addition, bonds
and other fixed income securities may be valued on the basis of prices provided
by a pricing service when such prices are believed to reflect the fair market
value of such securities. The prices provided by a pricing service are
determined without regard to bid or last sale prices but take into account
institutional size trading in similar groups of securities and any developments
related to the specific securities. Securities not priced in this manner are
valued at the most recent quoted bid price, or, when stock exchange valuations
are used, at the latest quoted sale price on the day of valuation. If there is
no such reported sale, the latest quoted bid price will be used. Securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost, if it approximates market value. In the event that amortized cost does not
approximate market value, market prices as determined above will be used.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the Fund's Board of Directors.
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DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS
The Portfolio will pay monthly dividends to you from the preferred stock
dividends, preferred security interest and fixed-income security interest earned
by its investments. If any net capital gains are realized, the Portfolio will
normally distribute such gains with the last dividend for the fiscal year. The
dividends and capital gains are either distributed to you in cash or reinvested
at the Portfolio's new after-dividend price, depending on your instructions to
the Portfolio. Unless you specifically tell us to distribute dividend income in
cash, however, we will assume you want this income reinvested.
Undistributed net investment income is included in the Portfolio's net
assets for the purpose of calculating net asset value per share. Therefore, on
the "ex-dividend" date, the net asset value per share excludes the dividend
(i.e., is reduced by the per share amount of the dividend). Dividends paid
shortly after the purchase of shares by an investor, although in effect a return
of capital, are taxable to shareholders.
Reinvested dividend distributions will affect your tax liability. By law,
you must pay taxes on any dividend or interest income you receive on your
investments whether distributed in cash or reinvested in shares. The Portfolio
will send you a statement at the end of the year telling you exactly how much
dividend income you have earned for tax purposes.
CAPITAL GAINS
Capital gains are another source of appreciation to the Portfolio.
Basically, a capital gain is an increase in the value of a stock or bond.
You can incur capital gains in two ways. First, if the Portfolio buys a
stock or bond at one price, then sells it at a higher price, it will realize a
capital gain. At the end of the year, the capital gains the Portfolio has made
are added up and capital losses are subtracted. The total is then divided by the
number of shares outstanding. You will receive a statement at the end of the
year informing you of your share of the Portfolio's capital gains.
The second way to incur capital gains is to sell or trade your shares. If
you sell shares at a higher price than you bought them, you will be responsible
for paying taxes on your gain. There are several ways to determine your tax
liability, and we suggest you contact a qualified tax adviser to help you decide
which is best for you.
TAXES
The Portfolio intends to qualify each year as a "regulated investment
company" under Federal tax law, and if it qualifies, the Portfolio will not be
liable for Federal income taxes, because it will have distributed all its net
investment income and net realized capital gains to shareholders. Shareholders
will then have to pay taxes on dividends, whether they are distributed as cash
or are reinvested in shares, and on net short-term capital gains. Dividends and
short-term capital gains will be taxed as ordinary income. Long-term capital
gains distributions are taxed as long-term capital gains.
In order to qualify for the corporate dividends received deduction,
corporate shareholders must satisfy certain holding period requirements for the
Portfolio's shares. Specifically, the deduction is only permitted when the
Portfolio's shares have been held for a MINIMUM of 46 days. The holding period
requirements apply to each block of Portfolio shares acquired including each
block of shares received in payment of the Portfolio's monthly dividends. Unless
shareholders specifically account for and identify the shares purchased or
redeemed for holding period purposes, tax regulations currently require
investors to use a first-in, first-out approach to track purchases and sales. No
portion of the income generated by a MIPS investment is eligible for the
dividends received deduction, so no portion of such income can be designated by
the Portfolio as
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eligible for the dividends received deduction for corporate investors. Corporate
investors are advised to consult with their tax advisers on their eligibility
for the dividends received deduction with respect to dividends received from the
Portfolio.
Whether paid in cash or additional shares of the Portfolio and regardless of
the length of time the shares in the Portfolio have been owned by the
shareholder, distribution from long-term capital gains are taxable to
shareholders as such but are not eligible for the dividends received deduction.
Shareholders are notified annually by the Fund as to the Federal tax status of
dividends and distributions paid by the Portfolio. Such dividends and
distributions may also be subject to state and local taxes.
Redemptions of shares in the Portfolio are taxable events for Federal income
tax purposes. A shareholder may also be subject to state and local taxes on such
redemptions.
The Portfolio intends to declare and pay dividend and capital gains
distributions so as to avoid imposition of the Federal Excise Tax. To do so, the
Portfolio expects to distribute an amount equal to (1) 98% of its calendar year
ordinary income, (2) 98% of its capital gains net income (the excess of short
and long-term capital gains over short and long-term capital losses) for the
one-year period ending October 31st, and (3) 100% of any undistributed ordinary
or capital gains net income from the prior fiscal year. Dividends declared in
October, November, or December to shareholders of record in such month will be
deemed to have been paid by the Fund and received by the shareholders on
December 31st of such calendar year, provided that the dividends are paid before
February 1 of the following year.
The Fund is required by Federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions and redemptions) paid
to shareholders who have not complied with IRS regulations. In order to avoid
this withholding requirement, you must certify on the Account Registration Form
or on a separate form supplied by the Fund that your Social Security or Taxpayer
Identification Number you have provided is correct and that you are not
currently subject to backup withholding or that you are exempt from backup
withholding.
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions
from the Portfolio. Shareholders should consult with their tax advisers with
respect to the tax status of distributions from the Fund in their state and
locality.
THE INVESTMENT ADVISER
Spectrum Asset Management, Inc., the "Adviser", is a Connecticut corporation
formed in 1987 and is located at Four High Ridge Park, Stamford, CT 06905. The
Adviser is a wholly-owned subsidiary of United Asset Management Corporation and
provides investment management services to corporations, pension plans, and
endowments. As of the date of this Prospectus, the Adviser had in excess of $750
million in assets under management. Since its inception, the Adviser has
concentrated all of its advisory services in the management of diversified
portfolios of fixed-dividend, utility preferred stocks for its clients. At all
times, portfolios have been hedged with U.S. Government securities futures and
options to minimize principal fluctuations of the portfolios caused by interest
rate changes. At this time the Adviser does not offer any other types of money
management services to its clients, specializing only in the area of hedged,
fixed-dividend, utility preferred portfolios.
The Adviser is registered as a broker-dealer and investment adviser with the
Commission and is a member firm of the National Association of Securities
Dealers, Inc. The Adviser is also registered with the Commodity Futures Trading
Commission and the National Futures Association and operates as a commodity
trading adviser and introducing broker.
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Under an Investment Advisory Agreement (the "Agreement") with the Fund,
dated as of April 25, 1995, the Adviser, subject to the control and supervision
of the Fund's Board of Directors and in conformance with the stated investment
objective and policies of the Portfolio, manages the investment and reinvestment
of the assets of the Portfolio. In this regard, it is the responsibility of the
Adviser to make investment decisions for the Portfolio and to place purchase and
sale orders for the Portfolio's investments.
As compensation for the services rendered by the Adviser under the
Agreement, the Portfolio pays the Adviser an annual fee, in monthly
installments, calculated by applying the following annual percentage rate to the
Portfolio's average daily net assets for the month: 0.60%.
The Adviser may, from time to time, waive its advisory fees, or reimburse
the Portfolio for certain expenses in order to reduce the Portfolio's expense
ratio. AS OF THE DATE OF THIS PROSPECTUS, THE ADVISER HAS VOLUNTARILY AGREED TO
REIMBURSE THE PORTFOLIO, IF NECESSARY, IN ORDER TO KEEP ITS TOTAL ANNUAL
OPERATING EXPENSES FROM EXCEEDING 1.00% OF ITS AVERAGE DAILY NET ASSETS. THE
PORTFOLIO WILL NOT REIMBURSE THE ADVISER FOR ANY ADVISORY FEES WHICH ARE WAIVED
OR PORTFOLIO EXPENSES WHICH THE ADVISER MAY BEAR ON BEHALF OF THE PORTFOLIO.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Adviser and its parent company may also make payments to
unaffiliated brokers who perform distribution, marketing, shareholder and other
services with respect to the Portfolio.
INVESTMENT PROFESSIONALS
Scott Fleming, Mark Lieb, L. Philip Jacoby, IV and Patrick G. Hurley are
primarily responsible for the day-to-day investment management of the Portfolio.
SCOTT T. FLEMING--Chairman of the Board of Directors, Chief Financial
Officer, and one of the principals of Spectrum Asset Management, Inc. Mr.
Fleming was a Director and Principal of DBL Preferred Management, Inc., a
wholly-owned subsidiary of Drexel Burnham Lambert, Inc. Prior to joining DBL,
Mr. Fleming was a financial analyst with EG&G, Inc., where he was responsible
for all outside money managers as well as managing a significant Adjustable Rate
Preferred Stock portfolio. He is currently licensed as a Financial/Operations
Principal (Series 27), a General Securities Principal (Series 24), Securities
Registered Representative (Series 7), Blue Sky Law (Series 63), and registered
with the NFA as an Associated Person (Series 3) with Spectrum Asset Management,
Inc., CTA. M.B.A. Finance, Babson College, B.S. Accounting, Bentley College.
MARK A. LIEB--Director, President, Chief Executive Officer, and one of the
principals of Spectrum Asset Management, Inc.; Director of the parent company,
United Asset Management Corporation. Mr. Lieb was a Founder, Director and
Partner of DBL Preferred Management, Inc., a wholly-owned corporate cash
management subsidiary of Drexel Burnham Lambert, Inc. He was instrumental in the
formation, continual development and execution of all aspects of the subsidiary
including portfolio management. Mr. Lieb's prior employment included the
development of the preferred stock trading desk at Mosley Hallgarten &
Estabrook. He is a licensed Securities Representative (Series 7), Blue Sky Law
(Series 63), General Securities Principal (Series 24), and registered with the
NFA as an Associated Person (Series 3) with Spectrum Asset Management, Inc.,
CTA. M.B.A. Finance, University of Hartford; B.A. Economics, Central Connecticut
State College.
L. PHILLIP JACOBY, IV--Vice President of Portfolio Management, Spectrum
Asset Management, Inc. Prior to joining Spectrum, Mr. Jacoby was a Senior
Investment Officer at USL Capital Corporation (a subsidiary of Ford Motor
Corporation) and was a co-manager of a significant preferred stock portfolio and
Vice President, Institutional Sales at E.F. Hutton, Inc. He is a licensed
General Securities Representative (Series 7), a General Securities Principal
(Series 24), a Municipal Securities Principal (Series 53). B.S.B.A., Finance,
Boston University.
18
<PAGE>
PATRICK G. HURLEY--Hedge Manager. Mr. Hurley came to Spectrum Asset
Management, Inc. from James Money Management, Inc. where he served as a
Government Securities Trader and Computer Specialist. Prior to joining James,
Mr. Hurley was with Oppenheimer & Co., Inc. where he held positions as an
Assistant Trader--Fixed Income and Programmer/Analyst. In both positions at
Oppenheimer, he was an integral part of the fixed income arbitrage group which
concentrated on the hedged trading of U.S. Treasury Bond and Note Futures. He is
currently a licensed General Securities Representative (Series 7), and
registered with the NFA as an Associated Person (Series 3) with Spectrum Asset
Management, Inc., CTA. B.S. Electrical Engineering (Computer Concentration),
University of Notre Dame.
FUND ADMINISTRATION
THE ADMINISTRATOR
United States Trust Company of New York ("U.S. Trust"), through its
affiliate, Mutual Funds Service Company, provides all administrative, fund
accounting, dividend disbursing and transfer agent services to the Fund.
The Chase Manhattan Corporation, the parent company of The Chase Manhattan
Bank, N.A. ("Chase"), and U.S. Trust have entered into a merger agreement which,
when completed, will transfer U.S. Trust's securities processing businesses,
including Mutual Funds Service Company, to Chase. It is anticipated that this
transaction will be completed in the summer of 1995 and will not affect the
nature or quality of the administrative services furnished to the Fund and its
Portfolios.
According to the Fund Administration Agreement, the Portfolio pays the
administrator a fee for its services. This fee is a portion of the total fee
paid by all the Regis Fund Portfolios. On an annualized basis, this total fee
equals: 0.20 of 1% of the first $200 million in combined Fund assets, plus 0.12
of 1% of the next $800 million in combined Fund assets, plus 0.08 of 1% on
assets over $1 billion but less than $3 billion, and 0.06 of 1% on assets over
$3 billion. Fees are allocated among the Portfolios on the basis of their
relative assets and are subject to a designated minimum fee schedule per
Portfolio which ranges from $2,000 per month upon inception of a Portfolio to
$70,000 annually after two years.
THE DISTRIBUTOR
RFI Distributors (the "Distributor"), a division of Regis Retirement Plan
Services, Inc., a wholly-owned subsidiary of United Asset Management
Corporation, distributes the shares of the Fund. Under the Fund's Distribution
Agreement (the "Agreement"), the Distributor, as agent of the Fund, agrees to
use its best efforts as sole distributor of the Fund's shares. The Distributor
does not receive any fee or other compensation under the Agreement with respect
to the Portfolio. The Agreement continues in effect as long as the Fund's Board
of Directors, including a majority of the Directors who are not parties to the
Agreement or interested persons of any such party, approve it on an annual
basis. The Agreement provides that the Fund will bear the costs of the
registration of its shares with the Commission and various states and the
printing of its prospectuses, statements of additional information and reports
to shareholders. Shares of the Portfolio are also sold through the Adviser's
brokerage division pursuant to a selling-dealer agreement with the Distributor.
The Adviser does not receive any compensation under the Agreement.
CUSTODIAN
Morgan Guaranty Trust Company of New York serves as custodian of the Fund's
assets.
ACCOUNTANTS
Price Waterhouse LLP acts as the independent accountants for the Fund and
audits its financial statements annually.
REPORTS
Investors will receive unaudited semi-annual financial statements and annual
financial statements audited by Price Waterhouse LLP.
19
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by writing to the Fund at the address
listed on the cover of this Prospectus or by calling 1-800-638-7983.
LITIGATION
The Fund is not involved in any litigation.
PRINCIPAL BUSINESS ADDRESS OF DISTRIBUTOR
RFI Distributors
One International Place, 44th Floor
100 Oliver Street
Boston, Massachusetts 02110
GENERAL FUND INFORMATION
The Portfolio is one of a series of investment portfolios available through
The Regis Fund, Inc., an open-end investment company known as a "mutual fund."
The Fund was organized under the name "ICM Fund, Inc." on October 11, 1988 as a
Maryland Corporation. Each of the Portfolios which make up the Fund have
different investment objectives and policies. Together, the Portfolios offer a
diverse set of risk and return characteristics to suit a wide range of investor
needs. In addition, several of the Fund's Portfolios offer two separate classes
of shares: Institutional Class Shares and Institutional Service Class Shares.
Shares of each class represent equal, pro rata interests in a Portfolio and
accrue dividends in the same manner except that Institutional Service Class
Shares bear certain fees payable by that class to financial institutions for
services they provide to the owners of such shares. (See "Description of Shares
and Voting Rights" below for further details.) The Portfolio currently offers
only one class of shares.
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Directors. The Directors set broad policies
for the Fund and elect its Officers.
The Fund's Articles of Incorporation permits the Fund to issue three billion
shares of common stock, with an $.001 par value. The Directors have the power to
designate one or more series ("Portfolios") of shares of beneficial interest
without further action by shareholders.
The shares of each Portfolio of the Fund are fully paid and nonassessable,
have no preference as to conversion, exchange, dividends, retirement or other
features and have no pre-emptive rights. The shares of each Portfolio have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Directors can elect 100% of the Directors
if they choose to do so. A shareholder is entitled to one vote for each full
share held (and a fractional vote for each fractional share held), then standing
in his or her name on the books of the Fund. Both Institutional Class and
Institutional Service Class Shares represent an interest in the same assets of a
Portfolio and are identical in all respects except that the Institutional
Service Class Shares bear certain expenses related to shareholder servicing, may
bear expenses related to the distribution of such shares and have exclusive
voting rights with respect to matters relating to such distribution
expenditures. The Fund will not ordinarily hold shareholder meetings except as
required by the 1940 Act, and other applicable laws. The Fund has undertaken
that its Directors will call a meeting of shareholders if such a meeting is
requested in writing by the holders of not less than 10% of the outstanding
shares of the Fund. To the extent required by the undertaking, the Fund will
assist shareholder communications in such matters.
The Regis Fund, Inc. and The Regis Fund II comprise The Regis Family of
Funds and together they offer investors a broad variety of portfolios managed by
a selection of well-known investment managers.
20
<PAGE>
DIRECTORS AND OFFICERS
The Officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Directors. The Directors set broad policies
for the Fund and elect its Officers. The following is a list of the Directors
and Officers of the Fund and a brief statement of their present positions and
principal occupations during the past five years.
<TABLE>
<S> <C>
JOHN T. BENNETT, JR. Director of the Fund; President of Squam Investment
College Road--RFD 3 Management Company, Inc. and Great Island Investment
Meredith, NH 03253 Company, Inc.; President of Bennett Management Company
from 1988 to 1993.
J. EDWARD DAY Director of the Fund; Retired Partner in the Washington
5804 Brookside Drive office of the law firm Squire, Sanders & Dempsey;
Chevy Chase, MD 20815 Director, Medical Mutual Liability Insurance Society of
Maryland; formerly, Chairman of the Montgomery County,
Maryland, Revenue Authority.
PHILIP D. ENGLISH Director of the Fund; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Director of Chektec
Baltimore, MD 21201 Inc., BioTrax, Inc. and Cyber Scientific, Inc.
WILLIAM A. HUMENUK Director of the Fund; Partner in the Philadelphia office
4000 Bell Atlantic Tower of the law firm Dechert Price & Rhoads; Director, Hofler
1717 Arch Street Corp.
Philadelphia, PA 19103
NORTON H. REAMER* Director, President and Chairman of the Fund; President,
One International Place Chief Executive Officer and a Director of United Asset
Boston, MA 02110 Management Corporation; Director, Partner or Trustee of
each of the Investment Companies of the Eaton Vance Group
of Mutual Funds.
ROBERT B. RUSSELL, II* Director and Vice President of the Fund; Principal and
803 Cathedral Street Chief Operating Officer of Investment Counselors of
Baltimore, MD 21201 Maryland, Inc. ("ICM"); Executive Vice President of ICM
from 1978 to 1992.
PETER M. WHITMAN, JR.* Director of the Fund; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI")
Boston, MA 02111 since 1988; Director and Chief Executive Officer of H. T.
Investors, Inc., a subsidiary of DSI.
WILLIAM H. PARK* Vice President and Assistant Treasurer of the Fund;
One International Place Executive Vice President and Chief Financial Officer of
Boston, MA 02110 United Asset Management Corporation.
ROBERT R. FLAHERTY* Treasurer of the Fund; Manager of Fund Administration and
73 Tremont Street Compliance of the Administrator since March 1995; formerly
Boston, MA 02108 Senior Manager of Deloitte & Touche LLP from 1985 to 1995.
KARL O. HARTMANN* Secretary of the Fund; Senior Vice President, Secretary
73 Tremont Street and General Counsel of Administrator; Senior Vice
Boston, MA 02108 President, Secretary and General Counsel of Leland,
O'Brien, Rubinstein Associates, Inc., from November 1990
to November 1991; Vice President and Associate General
Counsel of The Boston Company Advisors, Inc. from August
1988 to November 1990.
HARVEY M. ROSEN* Assistant Secretary of the Fund; Senior Vice President of
73 Tremont Street the Administrator.
Boston, MA 02108
<FN>
- ------------------------
* This person is deemed to be an "interested person" of the Fund as that term is
defined in the 1940 Act.
</TABLE>
21
<PAGE>
THE REGIS FAMILY OF FUNDS--INSTITUTIONAL CLASS SHARES
ACADIAN ASSET MANAGEMENT, INC.
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
CHICAGO ASSET MANAGEMENT COMPANY
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio
COOKE & BIELER, INC.
C&B Balanced Portfolio
C&B Equity Portfolio
C.S. MCKEE & CO., INC.
McKee International Equity Portfolio
McKee Domestic Equity Portfolio
McKee U.S. Government Portfolio
DEWEY SQUARE INVESTORS CORPORATION
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FIDUCIARY MANAGEMENT ASSOCIATES, INC.
FMA Small Company Portfolio
INVESTMENT COUNSELORS OF MARYLAND, INC.
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
MURRAY JOHNSTONE INTERNATIONAL LTD.
MJI International Equity Portfolio
NWQ INVESTMENT MANAGEMENT COMPANY
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
RICE, HALL JAMES & ASSOCIATES
Rice, Hall James Small Cap Portfolio
SIRACH CAPITAL MANAGEMENT, INC.
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
SPECTRUM ASSET MANAGEMENT, INC.
SAMI Preferred Stock Income Portfolio
Enhanced Monthly Income Portfolio
STERLING CAPITAL MANAGEMENT COMPANY
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Short-Term Fixed Income Portfolio
THOMPSON, SIEGEL & WALMSLEY, INC.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
22
<PAGE>
[SPECTRUM LOGO]
ASSET MANAGEMENT, INC. - INVESTMENT ADVISER
FOUR HIGH RIDGE PARK - STAMFORD, CT 06905
(203) 322-0189
<TABLE>
<S> <C>
ENHANCED MONTHLY THE REGIS FUND, INC.
INCOME PORTFOLIO THE REGIS SERVICE CENTER
INSTITUTIONAL CLASS SHARES C/O MUTUAL FUNDS SERVICE COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
1-800-638-7983
</TABLE>
PROSPECTUS
APRIL 25, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Fees and Expenses.............................. 2
Prospectus Summary............................. 3
Performance Calculations....................... 4
Details on Investment Policies................. 4
Buying, Selling and Exchanging Shares.......... 11
How Share Prices are Determined................ 15
Dividends, Capital Gains Distributions and
Taxes........................................ 16
<CAPTION>
PAGE
---------
<S> <C>
The Investment Adviser......................... 17
Fund Administration............................ 19
General Fund Information....................... 20
Directors and Officers......................... 21
The Regis Family of Funds--Institutional Class
Shares....................................... 22
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR ITS REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING
MAY NOT LAWFULLY BE MADE.
