1933 Act File No. 33-26516
1940 Act File No. 811-5752
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 15 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 15 X
INDEPENDENCE ONE MUTUAL FUNDS
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on August 23, 1995 pursuant to paragraph (b)(1)(v)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i)
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on June 15, 1995; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of INDEPENDENCE ONE
MUTUAL FUNDS which consists of 4 portfolios: (1) Independence One
Michigan Municipal Cash Fund; (2a) Independence One Prime Money Market
Fund - Class A Shares; (2b) Independence One Prime Money Market Fund -
Class B Shares; (3) Independence One U.S. Treasury Money Market Fund;
(4) Independence One U.S. Government Securities Fund, (5) Independence
One Equity Plus Fund; (6) Independence One Fixed Income Fund; and
(7) Independence One Michigan Municipal Bond Fund, relates only to
Independence One Equity Plus Fund, and is comprised of the following
(all Funds have been referenced below to maintain consistency among the
Registrant's filings and to facilitate the cross-referencing process):
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-7) Cover Page.
Item 2. Synopsis (1-7) Summary of Fund Expenses.
Item 3. Condensed Financial
Information (1, 2a,3,4) Financial Highlights;
(1-7) Performance Information.
Item 4. General Description of
Registrant (1-7) General Information; (1-7)
Investment Objective; (1-7)
Investment Policies; (1-7)
Investment Limitations; (1,2,7)
Investment Risks; (7) Michigan
Municipal Securities; Non-
Diversification; (5) Equity
Investment Considerations, Standard
& Poor's.
Item 5. Management of the Fund (1-7) Independence One Mutual Funds
Information; (1-7) Management of
Independence One Mutual Funds; (7)
Sub-Adviser; (1,3-7) Distribution of
Fund Shares; (2a) Distribution of
Class A Shares; (2b) Distribution of
Class B Shares; (1-7) Administration
of the Fund; (1,3) Distribution
Plan; (2a) Shareholder Services
Plan; (2a, 2b) Other Classes of
Shares.
Item 6. Capital Stock and Other
Securities (1-7) Dividends; (1-7) Capital
Gains; (1-7) Shareholder
Information; (1-7) Voting Rights; (1-
7) Massachusetts Partnership Law; (1-
7) Effect of Banking Laws; (1-7) Tax
Information; (1-7) Federal Income
Tax; (1) State and Local Taxes; (7)
Michigan Taxes; Other State and
Local Taxes.
Item 7. Purchase of Securities Being
Offered (1-7) Net Asset Value; (1,3-7)
Investing in the Fund; (2a)
Investing in Class A Shares; (2b)
Investing in Class B Shares;
Item 8 Redemption or Repurchase (1,3-7) Redeeming Shares; (2a)
Redemming Class A Shares; (2b)
Redeeming Class B Shares;
(1-7) Exchange Privilege.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (1-7) Cover Page.
Item 11. Table of Contents (1-7) Table of Contents.
Item 12. General Information and
History (1-7) General Information About the
Fund.
Item 13. Investment Objectives and
Policies (1-7) Investment Objective and
Policies; (7) Michigan Investment
Risks.
Item 14. Management of the Fund (1-7) Independence One Mutual Funds
Management.
Item 15. Control Persons and Principal
Holders of Securities Not applicable.
Item 16. Investment Advisory and Other
Services (1-7) Investment Advisory Services;
(1-7) Administrative Services.
Item 17. Brokerage Allocation (1-7) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered (1-7) Purchasing Shares; (1-7)
Determining Net Asset Value; (1-7)
Redeeming Shares; (1-7) Exchange
Privilege.
Item 20. Tax Status (1-4) Tax Status.
Item 21. Underwriters (1,3,4) Distribution Plan; (2a)
Shareholder Services Plan.
Item 22. Calculation of Yield
Quotations of Money Market
Funds (1-7) Performance Comparisons;
Yield; (1,7) Tax Equivalent Yield;
(1-3) Effective Yield; (4-7) Yield;
(5-7) Total Return.
Item 23. Financial Statements (4) filed in Part
A; (1, 2a, 2b, 3) financial
statements dated April 30, 1994 are
incorporated into each Fund's prospectus
by reference to Part A of Registrant's
Post- Effective Amendment No. 10 as
filed on February 28, 1995 (File
Nos. 33- 26516 and 811-5752),
specifically the section entitled
"Financial Statements;" and each Fund's
unaudited financial statements dated
October 31, 1994 are incorporated into
each Fund's Statement of Additional
Information by reference to the Funds' Semi-
Annual Reports dated October 31, 1994 as filed
on January 3, 1995 (File No. 811-5752); (5-7)
to be filed by amendment.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED JULY 21, 1995
INDEPENDENCE ONE EQUITY PLUS FUND
(A PORTFOLIO OF INDEPENDENCE ONE MUTUAL FUNDS)
PROSPECTUS
The shares of Independence One Equity Plus Fund (the "Fund") offered by
this prospectus represent interests in the Fund which is a diversified
portfolio and one of a series of investment portfolios in Independence
One Mutual Funds (the "Trust"), an open-end management investment company
(a mutual fund). Michigan National Bank professionally manages the Fund's
portfolio.
The investment objective of the Fund is total return. The Fund will
pursue this objective by attempting to provide investment results that
correspond to or exceed the aggregate price and dividend performance of
the Standard & Poor's 100 Composite Stock Price Index (the "S&P 100") by
investing primarily in the common stocks comprising the S&P 100. The Fund
is neither affiliated with nor sponsored by Standard & Poor's ("S&P").
Shares of the Fund are intended to be sold as an investment vehicle for
institutions, corporations, fiduciaries and individuals. Shareholders can
invest, reinvest, or redeem shares at any time without charge or penalty
imposed by the Fund. Shareholders have access to other portfolios of the
Trust through an exchange program.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
MICHIGAN NATIONAL BANK, ARE NOT ENDORSED OR GUARANTEED BY MICHIGAN
NATIONAL BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before
you invest in shares of the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Statement of Additional Information dated
, 1995 with the Securities and Exchange Commission. The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information free of charge, obtain other
information, or make inquiries about the Fund by writing to the Fund or
calling toll-free 1-800-334-2292.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated , 1995
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
GENERAL INFORMATION 2
- ------------------------------------------------------
INVESTMENT INFORMATION 2
- ------------------------------------------------------
Investment Objective 2
Investment Policies 2
Acceptable Investments 3
Stock Index Futures and Options 4
Temporary Investments 5
Equity Investment Considerations 5
Investment Limitations 6
INDEPENDENCE ONE MUTUAL FUND
INFORMATION 6
- ------------------------------------------------------
Management of the Trust 6
Board of Trustees 6
Investment Adviser 6
Advisory Fees 6
Adviser's Background 6
Sub-Adviser 7
Distribution of Fund Shares 8
Administration of the Fund 8
Administrative Services 8
Custodian 8
Transfer Agent and
Dividend Disbursing Agent 8
Independent Auditors 8
Expenses of the Fund 8
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN THE FUND 9
- ------------------------------------------------------
Share Purchases 9
To Place an Order 9
Minimum Investment Required 9
What Shares Cost 10
Certificates and Confirmations 10
Dividends and Capital Gains 10
EXCHANGING SECURITIES FOR FUND SHARES 10
- ------------------------------------------------------
EXCHANGE PRIVILEGE 11
- ------------------------------------------------------
Exchange by Telephone 12
Written Exchange 12
REDEEMING FUND SHARES 12
- ------------------------------------------------------
By Telephone 13
By Mail 13
Accounts with Low Balances 14
SHAREHOLDER INFORMATION 14
- ------------------------------------------------------
Voting Rights 14
Massachusetts Partnership Law 14
EFFECT OF BANKING LAWS 15
- ------------------------------------------------------
TAX INFORMATION 15
- ------------------------------------------------------
Federal Income Tax 15
PERFORMANCE INFORMATION 16
- ------------------------------------------------------
STANDARD & POOR'S 17
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).............................. None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).................................................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable).................................................. None
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................... None
Exchange Fee............................................................................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of projected average net assets)
<TABLE>
<S> <C>
Management Fee (after waiver)(1)......................................................................... .20%
12b-1 Fees............................................................................................... None
Total Other Expenses (after waiver)(2)................................................................... .31%
Total Fund Operating Expenses(3).................................................................... .51%
</TABLE>
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver by the investment adviser. The adviser can terminate this
voluntary waiver at any time at its sole discretion. The maximum management
fee is 0.40%.
(2) Total Other Expenses are estimated to be .35% absent the anticipated
voluntary waiver by the administrator.
(3) The Total Fund Operating Expenses are estimated to be .75% absent the
anticipated voluntary waivers detailed in notes (1) and (2).
*Annual Fund Operating Expenses in the table above are estimated based on
expenses expected to be incurred during the fiscal year ending April 30, 1996.
During the course of this period, expenses may be more or less than the amount
shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR A MORE COMPLETE DESCRIPTION OF THE VARIOUS COSTS AND
EXPENSES, SEE "INDEPENDENCE ONE MUTUAL FUNDS INFORMATION" AND "INVESTING IN THE
FUND." Wire-transferred redemptions of less than $5,000 may be subject to
additional fees.
<TABLE>
<S> <C> <C>
EXAMPLE 1 YEAR 3 YEAR
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return; and (2) redemption at the end of each time period.
The Fund charges no redemption fees............................................................. $5 $16
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THIS
EXAMPLE IS BASED ON ESTIMATED DATA FOR THE FISCAL YEAR ENDING APRIL 30, 1996.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated
January 9, 1989. The Declaration of Trust permits the Trust to offer separate
series of shares representing interests in separate portfolios of securities.
The shares in any one portfolio may be offered in separate classes. This
prospectus relates only to the Trust's portfolio known as Independence One
Equity Plus Fund. As of the date of this prospectus, the Fund does not offer
separate classes of shares.
Shares of the Fund are designed primarily for individuals and institutions as a
convenient means of accumulating an interest in a professionally-managed,
diversified portfolio investing substantially in the common stocks of companies
with very large market capitalization. A minimum initial investment of $1,000 is
required. Subsequent investments must be in the amount of at least $100.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is total return. The investment objective
cannot be changed without the approval of shareholders. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the investment policies described in this prospectus.
INVESTMENT POLICIES
The Fund will pursue its investment objective by attempting to provide
investment results that correspond to or exceed the aggregate price and dividend
performance of the S&P 100 by investing primarily in the stocks comprising the
S&P 100. Unless indicated otherwise, the investment policies of the Fund may be
changed by the Board of Trustees ("Trustees") without the approval of
shareholders. Shareholders will be notified before any material change in these
policies becomes effective.
The S&P 100 is a capitalization-weighted index of 100 stocks from a broad range
of industries. It provides a measure of overall large company performance
because it comprises 100 blue chip stocks from diverse industry groups. The
component stocks are weighted according to the total market value of their
outstanding shares. The impact of a component's price change is proportional to
the issue's total market value, which is the share price times the number of
shares outstanding. These are summed for all 100 stocks and divided by a
predetermined base value. The base value for the S&P 100 is adjusted to reflect
changes in capitalization resulting from mergers, acquisitions, stock rights and
substitutions. Inclusion of a particular stock in the S&P 100 in no way implies
an opinion by S&P as to its investment attractiveness, nor is S&P a sponsor or
in any way affiliated with the Fund.
Under normal circumstances, at least 80% of the Fund's assets will be invested
to correspond as closely as possible to the relative weighting of the S&P 100.
With respect to this 80% investment level, the Fund will attempt to achieve a
high degree of correlation between the performance of its
portfolio and that of the S&P 100. In managing this portion of the Fund's
assets, Michigan National Bank (the "Adviser") and Sosnoff Sheridan Group (the
"Sub-Adviser") (collectively, the "Advisers") will utilize a technique called
index fund management which entails the use of a computer program to track the
S&P 100 on a daily basis. The Advisers will purchase and sell securities from
the Fund's portfolio as necessary to continually and accurately duplicate the
composition of the S&P 100, as appropriate, as it changes over time. The
Advisers will continually assess the validity of the adjustments made to the
Fund's portfolio.
With respect to the remaining 20% of the Fund's assets, the Advisers will
normally select common stocks that are included in the S&P 100, the weightings
of which may or may not be identical to that of the S&P 100. These weightings
will be determined by the Advisers in an effort to exceed the total return
performance of the S&P 100. Several criteria are considered in selecting those
stocks that, in the Advisers' opinion, are likely to have above-average
performance. These criteria include: (1) projections by securities analysts of
the stock's earnings and dividend growth; (2) growth potential, as measured by
reinvestment of a high portion of a company's current earnings; (3) improving
earnings outlook, as determined based upon surveys of Wall Street securities
analysts; (4) technical measures, such as rising trading volume indicating an
increasing investor interest in a stock; and (5) dividend yield, with preference
being given to high-yield stocks and stocks of companies which pay no dividends
and retain their earnings to finance growth.
The Fund's ability to provide investment results that correspond to or exceed
the aggregate price and dividend performance of the S&P 100 will depend partly
on the size and timing of cash flows into and out of the Fund. Investment
changes to accommodate these cash flows will be made to maintain the similarity
of the Fund's portfolio to the S&P 100, with respect to the 80% investment level
described above, to the maximum practicable extent. With respect to the
reciprocal 20% investment level described above, changes will be made to
accommodate cash flows, as appropriate. From time to time, adjustments may be
made in the Fund because of changes in the composition of the S&P 100 as
announced by S&P. It is anticipated that these adjustments will occur
infrequently, and therefore, the accompanying costs, including brokerage fees,
custodial expenses, and transfer taxes, are expected to be relatively low.
Portfolio turnover is also expected to be lower than for most other investment
companies. The adverse financial situation of an issuer may not directly result
in the elimination of its securities from the portfolio, unless the securities
are removed from the
S&P 100. The Fund reserves the right to remove an investment from the Fund if,
in the Advisers' opinion, the merit of the investment has been substantially
impaired by extraordinary events or financial conditions.
ACCEPTABLE INVESTMENTS
In addition to the investment policies described above, the Fund may utilize
stock index futures contracts and options on stocks, stock indices and stock
index futures contracts for the purposes of managing cash flows into and out of
the Fund's portfolio and potentially reducing transactional costs. The Fund will
only enter into stock index futures contracts for the purpose of offsetting
risks from other positions.
The Fund may hold cash reserves which may be invested in temporary investments
which include, but are not limited to, short-term money market instruments,
U.S. government securities (including variable rate U.S. government
securities), and repurchase agreements. The Fund may also lend portfolio
securities to generate additional income.
STOCK INDEX FUTURES AND OPTIONS. The Fund may utilize stock index futures
contracts, options, and options on futures contracts, subject to the limitation
that the value of these futures contracts and options will not exceed 20% of the
Fund's total assets. Also the Fund will not purchase options to the extent that
more than 5% of the value of the Fund's total assets would be invested in
premiums on open option positions.
These contracts and options will serve three purposes. First, the contracts,
some of which require a small margin, will allow the Fund to maintain sufficient
liquidity to meet redemption requests, thereby handling cash flows into and out
of the Fund. In addition, the contracts will increase the level of Fund assets
that may be devoted to attempting to approximate the investment return of the
S&P 100. Third, participation in futures contracts could potentially reduce
transaction costs, since transaction costs associated with futures and options
contracts can be lower than costs stemming from direct investments in stocks.
There are several risks accompanying the utilization of futures contracts to
effectively anticipate market movements. First, positions in futures contracts
may be closed only on an exchange or board of trade that furnishes a secondary
market for such contracts. While the Fund plans to utilize futures contracts
only if an active market for such contracts exists, there is no guarantee that a
liquid market will exist for the contracts at a specified time. Furthermore,
because, by definition, futures contracts look to projected price levels in the
future, and not to current levels of valuation, market circumstances may result
in there being a discrepancy between the price of the stock index future and the
movement in the corresponding stock index. The absence of a perfect price
correlation between the futures contract and its underlying stock index could
stem from investors choosing to close futures contracts by offsetting
transactions, rather than satisfying additional margin requirements. This could
result in a distortion of the relationship between the index and futures market.
In addition, because the futures market imposes less burdensome margin
requirements than the securities market, an increased amount of participation by
speculators in the futures market could result in price fluctuations.
The effective use of futures and options as hedging techniques depends on the
correlation between their prices and the behavior of the Fund's portfolio
securities as well as the Adviser's ability to accurately predict the direction
of stock prices, interest rates and other relevant economic factors. In
addition, daily limits on the fluctuation of futures and options prices could
cause the Fund to be unable to timely liquidate its futures or options position
and cause it to suffer greater losses than would otherwise be the case. In this
regard, the Fund may be unable to anticipate the extent of its losses from
futures transactions. The Statement of Additional Information includes a further
discussion of futures and options transactions.
In view of these considerations, the Fund will comply with the following
restrictions when purchasing and selling futures contracts. First, the Fund
will not participate in futures transactions if the sum of its initial margin
deposits on open contracts will exceed 5% of the market value of the Fund's
total assets, after taking into account the unrealized profits and losses on
those contracts it has entered into. Second, the Fund will not enter into these
contracts for speculative purposes. Third, since the Fund does not constitute a
commodity pool, it will not market itself as such, nor serve as a vehicle for
trading in the commodities futures or commodity options markets. In this
regard, the Fund will disclose to all prospective investors the limitations on
its futures and options transactions, and make clear that these transactions
are entered into only for bona fide hedging purposes, or other permissible
purposes pursuant to regulations promulgated by the Commodity Futures Trading
Commission ("CFTC"). Finally, the Fund intends to claim an exclusion from
registration as a commodity pool operator under the regulations promulgated by
the CFTC.
TEMPORARY INVESTMENTS. For temporary defensive purposes and to maintain
liquidity, the Fund may invest in cash and cash items, including:
. short-term money market instruments;
. securities issued and/or guaranteed as to payment of principal and
interest by the U.S. government, its agencies or instrumentalities; and
. repurchase agreements.
U.S. GOVERNMENT SECURITIES. The Fund is permitted to invest in U.S.
government securities which are either issued or guaranteed by the U.S.
government, its agencies, or instrumentalities. These securities include,
but are not limited to, the following:
. direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds; and
. notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; and Student Loan
Marketing Association.
Some of the short-term U.S. government securities the Fund may purchase
carry variable interest rates. These securities have a rate of interest
subject to adjustment at least annually. This adjusted interest rate is
ordinarily tied to some objective standard, such as a published interest
rate or interest rate index.
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which
banks, broker/dealers, and other recognized financial institutions sell
U.S. government securities or other securities to the Fund and agree at the
time of sale to repurchase them at a mutually agreed upon time and price
within one year from the date of acquisition. To the extent that the
original seller does not repurchase the securities from the Fund, the Fund
could receive less than the repurchase price on any sale of such
securities.
EQUITY INVESTMENT CONSIDERATIONS
As described above, the Fund invests primarily in the common stocks comprising
the S&P 100. As with other mutual funds that invest primarily in common stocks,
the Fund is subject to market risks. That is, the possibility exists that common
stocks will decline over short or even extended periods of time, and the United
States equity market tends to be cyclical, experiencing both periods when stock
prices generally increase and periods when stocks prices generally decrease.
INVESTMENT LIMITATION
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for at least a
percentage of its cash value with an agreement to buy it back on a set date)
except, under certain circumstances, the Fund may borrow up to one-third of the
value of its total assets and pledge securities to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
INDEPENDENCE ONE MUTUAL FUNDS INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trustees are responsible for managing the Trust's
business affairs and for exercising all of the Trust's powers except those
reserved for the shareholders. An Executive Committee of the Board of Trustees
handles the Board's responsibilities between meetings of the Board.
INVESTMENT ADVISER. Pursuant to an investment advisory contract with the Trust,
investment decisions for the Fund are made by Michigan National Bank, as the
Fund's investment adviser (the "Adviser"), subject to direction by the Trustees.
The Adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase or sale of portfolio instruments, for
which it receives an annual fee from the assets of the Fund.
ADVISORY FEES. The Adviser receives an annual investment advisory fee
equal to 0.40 of 1% of the Fund's average daily net assets. The Adviser has
undertaken to reimburse the Fund, up to the amount of the advisory fee, for
operating expenses in excess of limitations established by certain states.
The Adviser may voluntarily choose to waive a portion of its fee or
reimburse certain expenses of the Fund.
ADVISER'S BACKGROUND. Michigan National Bank, a national banking
association, is a wholly-owned subsidiary of Michigan National Corporation
("MNC"). Through its subsidiaries and affiliates, MNC, Michigan's fifth
largest bank holding company in terms of total assets, as of December 31,
1994, offers a full range of financial services to the public, including
commercial lending, depository services, cash management, brokerage
services, retail banking, mortgage banking, investment advisory services
and trust services. Independence One Capital Management Corporation
("IOCM"), a nationally recognized investment advisory subsidiary of MNC,
provides investment advisory services for trust and other managed assets.
IOCM and the Trust Division of Michigan National Bank (the "Trust
Division") have managed custodial assets totaling $9 billion. Of this
amount, IOCM and the Trust Division have investment discretion over $2.2
billion.
Michigan National Bank has managed mutual funds since May 1989. The Trust
Division has managed pools of commingled funds since 1964. In addition,
Michigan National Bank presently manages its own investment portfolio of
approximately $300 million in taxable, short-term instruments.
As part of its regular banking operations, Michigan National Bank may make
loans to or provide credit support for obligations issued by public
companies or municipalities. Thus, it may be possible, from time to time,
for the Fund to hold or acquire the securities of issuers which are also
lending clients of Michigan National Bank. The lending relationship will
not be a factor in the selection of securities.
Sharon Dischinger is Second Vice President and Portfolio Manager for
Michigan National Bank and Independence One Capital Management Corporation
in Farmington Hills, and has been responsible for management of the Fund's
portfolio since its inception. Ms. Dischinger joined Michigan National Bank
in 1990 and is currently the head equity trader. She is also a General
Securities Representative. Prior to Michigan National Bank, Ms. Dischinger
was the head equity trader at Morison Asset Management.
On February 4, 1995, the Board of Directors of MNC approved a definitive
agreement for the acquisition of that company by National Australia Bank
Limited ("NAB"), which is a transnational banking organization,
headquartered in Melbourne, Australia. On June 2, 1995, shareholders of MNC
approved the merger. As a result, upon completion of the merger, MNC and
its subsidiaries, including the Adviser, would become direct or indirect
subsidiaries of NAB. It is anticipated that the merger will be completed in
the third or fourth quarter of 1995. It is also anticipated that operations
will continue to be conducted under the Michigan National Corporation and
Michigan National Bank names.
Under provisions of the Investment Company Act of 1940, completion of the
merger would result in an assignment, and termination, of the Fund's
current investment advisory contract with the Adviser. In view of the
pending merger, the Fund's Board of Trustees has approved a new investment
advisory contract ("New Advisory Contract") between the Trust and Michigan
National Bank, as a subsidiary of National Australia Bank Limited (the "New
Adviser"). The terms of the New Advisory Contract are identical in all
material respects to the present advisory contract, i.e., Michigan National
Bank will continue to provide investment advisory services to the Fund, and
there will be no change in either the Fund's investment objective or
investment policies, or the fees payable by the Fund for advisory services.
The New Advisory Contract would become effective upon consummation of the
merger, which is subject to the satisfaction of certain conditions
including, among others, the receipt of all necessary regulatory approvals.
SUB-ADVISER. Pursuant to the terms of an investment sub-advisory agreement
between the Adviser and Sosnoff Sheridan Corporation (doing business as Sosnoff
Sheridan Group), the Sub-Adviser furnishes certain investment advisory services
to the Adviser, including investment research, statistical and other factual
information, and recommendations, based on its analysis, and assists the Adviser
in identifying securities for potential purchase and/or sale on behalf of the
Fund's portfolio. For the services provided and the expenses incurred by the
Sub-Adviser pursuant to the sub-advisory agreement, the Sub-Adviser is entitled
to receive an annual fee of 0.035% of the average daily value of the Fund's
equity securities payable by the Adviser. The Sub-Adviser may elect to waive
some or all of its fee. In no event shall the Fund be responsible for any fees
due to the Sub-Adviser for its services to the Adviser. The Sub-Adviser, located
at 440 South LaSalle Street, Suite 2301, Chicago, Illinois, 60605, is a
corporation controlled by Thomas Sosnoff, its Director and President, and Scott
Sheridan, its Director, Executive Vice-President and Secretary. Although
Messrs. Sosnoff and Sheridan have experience in providing index management
services, they have not previously served as a sub-adviser to an investment
company. In the event that the Sub-Adviser, for any reason, ceases to furnish
sub-advisory services to the Fund, the Adviser will assume direct
responsibility for all advisory functions.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for shares of the Fund.
It is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides the Fund with certain administrative personnel and
services necessary to operate the Fund, such as certain legal and accounting
services. Federated Administrative Services provides these at an annual rate as
specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
<C> <S>
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least $50,000
for each portfolio in Independence One Mutual Funds. Federated Administrative
Services may choose voluntarily to waive a portion of its fee.
CUSTODIAN. Michigan National Bank, Farmington Hills, Michigan, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, Massachusetts, is transfer agent for the shares of the Fund and dividend
disbursing agent for the Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund are KPMG Peat
Marwick LLP, Pittsburgh, Pennsylvania.
EXPENSES OF THE FUND
The Fund pays all of its own expenses and its allocable share of the Trust's
expenses. These expenses include, but are not limited to, the cost of:
organizing the Trust and continuing its existence; Trustees' fees; investment
advisory and administrative services; printing prospectuses and other Fund
documents for shareholders; registering the Trust, the Fund and shares of the
Fund; taxes and commissions; issuing, purchasing, repurchasing and redeeming
shares; fees for custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents, and registrars; printing, mailing, auditing,
accounting, and legal expenses; reports to shareholders and government
agencies; meetings of Trustees and shareholders and proxy solicitations
therefor; insurance premiums; association membership dues; and such nonrecurring
and extraordinary items as may arise. However, the Adviser may voluntarily waive
and/or reimburse some expenses.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per share fluctuates. It is determined by adding the
market value of all securities and other assets of the Fund, subtracting the
liabilities of the Fund, and dividing the remainder by the total number of
shares outstanding.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares of the Fund may be purchased through Michigan National Bank, Independence
One Brokerage Services, Inc. ("Independence One"), or through brokers or dealers
which have a sales agreement with the distributor. Texas residents must purchase
shares through Federated Securities Corp. at 1-800-618-8573. Investors may
purchase shares of the Fund on days on which both the New York Stock Exchange
and the Federal Reserve Wire System are open for business. In connection with
the sale of Fund shares, the distributor may from time to time offer certain
items of nominal value to any shareholder or investor. The Fund reserves the
right to reject any purchase request.
TO PLACE AN ORDER. Investors may call toll-free 1-800-344-2292 to purchase
shares of the Fund through Michigan National Bank or Independence One. In
addition, investors may purchase shares of the Fund by calling their authorized
broker directly. Payments may be made either by check or wire transfer of
federal funds.
Payment by wire must be received before 4:00 p.m. (Eastern time). It is the
responsibility of Michigan National Bank, Independence One or broker/dealers to
transmit orders to the Fund by 5:00 p.m. (Eastern time) in order for shares to
be purchased at that day's price. For settlement of an order, payment must be
received within three business days of receipt of the order by check or wire
transfer. To purchase by check, the check must be included with the order and
made payable to "Independence One Equity Plus Fund." Checks must be converted
into federal funds to be considered received.
Federal funds should be wired as follows: Federated Services Company c/o
Michigan National Bank, Farmington Hills, Michigan; Account Number: 6856238933;
For Credit to: Independence One Equity Plus Fund; Fund Number (this number can
be found on the account statement or by contacting the Fund); Group Number or
Order Number; Nominee or Institution Name; and ABA Number 072000805.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $1,000. Subsequent investments
must be in amounts of at least $100.
WHAT SHARES COST
Shares of the Fund are sold at their net asset value next determined after an
order is received. There is no sales charge imposed by the Fund.
The net asset value is determined at the close of the New York Stock Exchange
(normally 4:00 p.m. Eastern time) Monday through Friday, except on: (i) days on
which there are not sufficient changes in the value of the Fund's portfolio
securities that its net asset value might be materially affected; (ii) days
during which no shares are tendered for redemption and no orders to purchase
shares are received; and (iii) on the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder of record. Share certificates are not issued unless
shareholders so request by contacting their Michigan National Bank or
Independence One representative or authorized broker in writing.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.
DIVIDENDS AND CAPITAL GAINS
Dividends are declared and paid quarterly. Capital gains realized by the Fund,
if any, will be distributed at least once every 12 months. Dividends and capital
gains are automatically reinvested on payment dates in additional shares without
a sales charge unless cash payments are requested by shareholders in writing to
the Fund through their Michigan National Bank or Independence One representative
or authorized broker. Shares purchased with reinvested dividends are credited to
shareholder accounts on the following day.
EXCHANGING SECURITIES FOR FUND SHARES
- --------------------------------------------------------------------------------
The Fund may accept securities in exchange for Fund shares. The Fund will allow
such exchanges only upon the prior approval of the Fund and a determination by
the Fund and the Adviser that the securities to be exchanged are acceptable.
Any securities exchanged must meet the investment objective and policies of the
Fund, must have a readily ascertainable market value, and must be liquid. The
market value of any securities exchanged in an initial investment, plus any
cash, must be at least equal to the minimum investment in the Fund. The Fund
acquires the exchanged securities for investment and not for resale.
Securities accepted by the Fund will be valued in the same manner as the Fund
values its assets. The basis of the exchange will depend on the net asset value
of Fund shares on the day the securities are valued. One share of the Fund will
be issued for the equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be considered
in valuing the securities. All interest, dividends, subscription or other rights
attached to the securities become the property of the Fund, along with the
securities.
If an exchange is permitted, it will be treated as a sale for federal income tax
purposes. Depending upon the cost basis of the securities exchanged for Fund
shares, a gain or loss may be realized by the investor.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
All shareholders of the Fund are shareholders of the Trust, which consists of
the Fund, Independence One Fixed Income Fund, Independence One Michigan
Municipal Bond Fund, Independence One U.S. Government Securities Fund and the
following money market funds: Independence One Michigan Municipal Cash Fund;
Independence One Prime Money Market Fund; and Independence One U.S. Treasury
Money Market Fund. Shareholders of the Fund have access to these funds
("participating funds") through an exchange program.
With the exception of Independence One Prime Money Market Fund, the
participating funds currently offer only one class of shares. If such funds
should add a second class of shares, exchanges may be limited to shares of the
same class of each fund. Shareholders of the Fund have access to both Class A
and Class B Shares of Independence One Prime Money Market Fund through the
exchange program.
Shares of the Fund may be exchanged for shares of participating funds at net
asset value.
Shareholders who exercise this exchange privilege must exchange shares having a
net asset value at least equal to the minimum investment of the participating
fund into which they are exchanging. Prior to any exchange, the shareholder must
receive a copy of the current prospectus of the participating fund into which
the exchange is being made.
The exchange privilege is available to shareholders residing in any state in
which the participating fund shares being acquired may legally be sold. Upon
receipt by the transfer agent of proper instructions and all necessary
supporting documents, shares submitted for exchange will be redeemed at the
next-determined net asset value. If the exchanging shareholder does not have an
account in the participating fund whose shares are being acquired, a new account
will be established with the same registration, dividend, and capital gain
options as the account from which shares are exchanged, unless otherwise
specified by the shareholder. In the case where the new account registration is
not identical to that of the existing account, a signature guarantee is
required. (See "Redeeming Fund Shares--By Mail.") Exercise of this privilege is
treated as a redemption and new purchase for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may be
realized. The Fund reserves the right to modify or terminate the exchange
privilege at any time. Shareholders would be notified prior to any modification
or termination. Shareholders may obtain further information on the exchange
privilege by calling their Michigan National Bank or Independence One
representative or authorized broker.
EXCHANGE BY TELEPHONE. Shareholders may provide instructions for exchanges
between participating funds by telephone to their Michigan National Bank or
Independence One representative by calling 1-800-334-2292. In addition,
investors may exchange shares by calling their authorized brokers directly.
Shares may be exchanged by telephone only between fund accounts having identical
shareholder registrations.
An authorization form permitting the Fund to accept telephone exchange requests
must first be completed. It is recommended that investors requests this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through a Michigan National Bank or Independence One representative
or authorized broker. Telephone exchange instructions may be recorded.
Telephone exchange instructions must be received by Michigan National Bank,
Independence One or an authorized broker and transmitted to the transfer agent
before 4:00 p.m. (Eastern time) for shares to be exchanged the same day.
Shareholders who exchange into a fund will not receive a dividend from the Fund
on the date of the exchange.
Shareholders may have difficulty in making exchanges by telephone through banks,
brokers, and other financial institutions during times of drastic economic or
market changes. If shareholders cannot contact their Michigan National Bank or
Independence One representative or authorized broker by telephone, it is
recommended that an exchange request be made in writing and sent by mail for
next day delivery. Send mail requests to: Independence One Mutual Funds, 27777
Inkster Road, Mail Code 10-52, Farmington Hills, Michigan 48333-9065.
Any shares held in certificate form cannot be exchanged by telephone but must be
forwarded to Federated Services Company, the transfer agent, by a Michigan
National Bank or Independence One representative or authorized broker and
deposited to the shareholder's account before being exchanged.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
WRITTEN EXCHANGE. A shareholder wishing to make an exchange by written request
may do so by sending it to: Independence One Mutual Funds, 27777 Inkster Road,
Mail Code 10-52, Farmington Hills, Michigan 48333-9065. In addition, an investor
may exchange shares by sending a written request to their authorized broker
directly.
REDEEMING FUND SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests cannot
be executed on days on which the New York Stock Exchange is closed or on federal
holidays restricting wire transfers. Telephone or written requests for
redemption must be received in proper form and can be made to the Fund through a
Michigan National Bank or Independence One representative or authorized broker.
Although the transfer agent does not charge for telephone redemptions, it
reserves the right to charge a fee for the cost of wire-transferred redemptions
of less than $5,000.
BY TELEPHONE. Shares may be redeemed by telephoning a Michigan National Bank or
an Independence One representative at 1-800-334-2292. In addition, shareholders
may redeem shares by calling their authorized brokers directly. Redemption
requests must be received and transmitted to the transfer agent before 4:00 p.m.
(Eastern time) in order for shares to be redeemed at that day's net asset value.
The Michigan National Bank or Independence One representative or authorized
broker is responsible for promptly submitting redemption requests and providing
proper written redemption instructions to the transfer agent. Registered
broker/dealers may charge customary fees and commissions for this service. If at
any time, the Fund shall determine it necessary to terminate or modify this
method of redemption, shareholders would be promptly notified.
For calls received before 4:00 p.m. (Eastern time) proceeds will normally be
wired the next day to the shareholder's account at a domestic commercial bank
that is a member of the Federal Reserve System or a check will be sent to the
address of record. In no event will proceeds be wired or a check sent more than
seven days after a proper request for redemption has been received.
An authorization form permitting the Fund to accept telephone redemption
requests must first be completed. It is recommended that investors request this
privilege at the time of their initial application. If not completed at the time
of initial application, authorization forms and information on this service can
be obtained through a Michigan National Bank or Independence One representative
or authorized broker. Telephone redemption instructions may be recorded.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail," should be considered.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
BY MAIL. Shareholders may redeem shares by sending a written request to the
Fund through their Michigan National Bank or Independence One representative or
authorized broker. The written request should include the shareholder's name,
the Fund name, the class designation, the account number, and the share or
dollar amount requested. Shareholders redeeming through Michigan National Bank
or Independence One should mail written requests to: Independence One Mutual
Funds, 27777 Inkster Road, Mail Code 10-52, Farmington Hills, Michigan
48333-9065. Investors redeeming through an authorized broker should mail written
requests directly to their broker.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or a
redemption payable other than to the shareholder of record must have signatures
on written redemption requests guaranteed by:
. a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund, which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
. a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
. any other "eligible guarantor institution", as defined in the Securities
& Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days after receipt of a proper written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $1,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $1,000 because of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the Trust's outstanding
shares.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of shareholders for such acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument that the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use the
property of the Fund to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder for
any act or obligation of the Trust. Therefore, financial loss resulting from
liability as a shareholder will occur only if the Trust cannot meet its
obligations to indemnify shareholders and pay judgments against them from its
assets.
EFFECT OF BANKING LAWS
- --------------------------------------------------------------------------------
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Federal Bank Holding Company Act of
1956 or any bank or non-bank affiliate thereof from sponsoring, organizing,
controlling or distributing the shares of a registered, open-end investment
company continuously engaged in the issuance of its shares, and prohibit banks
generally from issuing, underwriting, selling or distributing securities.
However, such banking laws and regulations do not prohibit such a holding
company affiliate or banks generally from acting as an investment adviser,
transfer agent or custodian to such an investment company or from purchasing
shares of such a company as agent for and upon the order of their customer.
Michigan National Bank is subject to such banking laws and regulations.
Michigan National Bank believes, based on the advice of its counsel, that
Michigan National Bank may perform the services for the Fund contemplated by its
advisory agreement with the Trust without violation of the Glass-Steagall Act or
other applicable banking laws or regulations. Changes in either federal or state
statutes and regulations relating to the permissible activities of banks and
their subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of such or future statutes and regulations, could
prevent Michigan National Bank from continuing to perform all or a part of the
above services for its customers and/or the Fund. If it were prohibited from
engaging in these customer-related activities, the Trustees would consider
alternative advisers and means of continuing available investment services. In
such event, changes in the operation of the Fund may occur, including possible
termination of any automatic or other Fund share investment and redemption
services then being provided by Michigan National Bank. It is not expected that
existing shareholders would suffer any adverse financial consequences (if
another adviser with equivalent abilities to Michigan National Bank is found) as
a result of any of these occurrences.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios, if any, will not be combined for tax purposes with
those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and 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 their shares.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return and yield.
Total return represents the change, over a specific period of time, in the value
of an investment in the Fund after reinvesting all income and capital gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the offering price per share of the Fund on the last
day of the period. This number is then annualized using semi-annual compounding.
The tax-equivalent yield of the Fund is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Fund would have had to earn to
equal its actual yield, assuming a specific tax rate. The yield and the
tax-equivalent yield do not necessarily reflect income actually earned by the
Fund and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
PERFORMANCE INFORMATION FOR PREDECESSOR COMMON EQUITY FUND. _The Fund is the
successor to the Michigan National Bank Common Equity Fund (the "Common Equity
Fund"), a pooled investment fund previously managed by the Fund's Adviser. It is
anticipated that the assets from the Common Equity Fund will be transferred to
the Fund in connection with the Fund's commencement of operations.
Set forth below are certain performance data for the Common Equity Fund, as well
as for the equity portfolio of the Michigan National Bank Pension Plan, which is
also currently managed by the Fund's Adviser. This information is deemed
relevant because each of these accounts (referred to collectively as the
"Similarly Managed Accounts") has been managed using substantially the same
investment objective, policies, and limitations as those used by the Fund.
However, the past performance data shown below is not necessarily indicative of
the Fund's future performance. The Fund is subject to active management, and its
investments will vary from time to time. Although the Fund's investments will be
substantially identical to the past portfolio investments of the Similarly
Managed Accounts, the nature of all these products is such that their
performance history can be substantially affected by the length of their
operating history and the timing and size of cash flows into and out of them. In
that regard, the Adviser has indicated that such factors are the primary reasons
for the differences in the historical performance of these products, as shown
below. Moreover, neither of the Similarly Managed Accounts incurred expenses
that correspond to the advisory, administrative, and other fees to which the
Fund is subject. Accordingly, the performance information shown below has been
adjusted to reflect the anticipated total expenses for the Fund, net of
voluntary waivers. This adjustment has the effect of lessening the actual
performance for each Similarly Managed Account. The aggregate total returns for
the period from inception* through June 30, 1995 for Common Equity Fund and
Pension Plan were 21.55% and 19.92%, respectively.
* The inception dates for Common Equity Fund and Pension Plan are January 1,
1995, and January 6, 1995, respectively.
STANDARD & POOR'S
- --------------------------------------------------------------------------------
"Standard & Poor's", "S&P", and "S&P 100" are trademarks of the McGraw-Hill
Companies, Inc. and have been licensed for use by Michigan National Bank. The
Fund is not sponsored, endorsed, sold or promoted by, or affiliated with,
Standard & Poor's ("S&P").
S&P makes no representation or warranty, express or implied, to the owners of
the Fund or any member of the public regarding the advisability of investing in
securities generally or in the Fund particularly or the ability of the Standard
& Poor's 100 Index ("S&P 100 Index") to track general stock market performance.
S&P's only relationship to Michigan National Bank (the "Licensee") is the
licensing of certain trademarks and trade names of S&P and of the S&P 100 Index
which is determined, composed and calculated by S&P without regard to the
Licensee or the Fund. S&P has no obligation to take the needs of the Licensee or
the owners of the Fund into consideration in the determination of, the
timing of, prices at, or quantities of the Fund to be issued or in the
determination or calculation of the equation by which the Fund is to be
converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 100 INDEX
OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF THE S&P 100 INDEX OR ANY DATA INCLUDED THEREIN IN
CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE. S&P
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 100 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR
ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
INDEPENDENCE ONE
MUTUAL FUNDS
INDEPENDENCE ONE
EQUITY PLUS FUND
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
INVESTMENT ADVISER
Michigan National Bank
27777 Inkster Road
Mail Code 10-52
Farmington Hills, Michigan 48333-9065
SUB-ADVISER
Sosnoff Sheridan Corporation
440 South LaSalle Street
Suite 2301
Chicago, Illinois 60605
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
CUSTODIAN
Michigan National Bank
27777 Inkster Road
Mail Code 10-52
Farmington Hills, Michigan 48333-9065
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Federated Services Company
P.O. Box 8600
Boston, Massachusetts 02266-8600
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
One Mellon Bank Center
Pittsburgh, Pennsylvania 15219
Independence One
Equity Plus Fund
Distributed by Federated Securities Corp.
Prospectus dated
, 1995
G00979-08 (5/95)
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED JULY 21, 1995
INDEPENDENCE ONE EQUITY PLUS FUND
(A PORTFOLIO OF INDEPENDENCE ONE MUTUAL FUNDS)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of Independence One Equity Plus Fund (the "Fund"), a
portfolio in Independence One Mutual Funds (the "Trust"), dated
, 1995. This Statement is not a prospectus itself. To
receive a copy of the prospectus, write the Fund or call toll-free at
1-800-334-2292.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated , 1995
FEDERATED SECURITIES CORP.
--------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A
PROSPECTUS.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Types of Investments 1
Portfolio Turnover 3
Investment Limitations 3
INDEPENDENCE ONE MUTUAL FUNDS MANAGEMENT 5
- ---------------------------------------------------------------
Officers and Trustees 5
Fund Ownership 7
Trustees' Compensation 7
Trustee Liability 7
INVESTMENT ADVISORY SERVICES 7
- ---------------------------------------------------------------
Adviser to the Fund 7
Advisory Fees 7
ADMINISTRATIVE SERVICES 8
- ---------------------------------------------------------------
CUSTODIAN 8
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 8
- ---------------------------------------------------------------
PURCHASING SHARES 8
- ---------------------------------------------------------------
Conversion to Federal Funds 8
DETERMINING NET ASSET VALUE 9
- ---------------------------------------------------------------
DETERMINING MARKET VALUE OF SECURITIES 9
- ---------------------------------------------------------------
REDEEMING SHARES 9
- ---------------------------------------------------------------
Redemption in Kind 9
TAX STATUS 9
- ---------------------------------------------------------------
The Fund's Tax Status 9
Shareholders' Tax Status 10
Capital Gains 10
TOTAL RETURN 10
- ---------------------------------------------------------------
YIELD 10
- ---------------------------------------------------------------
PERFORMANCE COMPARISONS 10
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE FUND
- --------------------------------------------------------------------------------
The Fund is a portfolio in Independence One Mutual Funds (the "Trust"), which
was established as a Massachusetts business trust under a Declaration of Trust
dated January 9, 1989.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Fund's investment objective is total return. This investment objective
cannot be changed without the approval of shareholders.
TYPES OF INVESTMENTS
In addition to the common stocks described in the prospectus, the Fund may also
invest in temporary investments which include, but are not limited to,
short-term money market instruments and U.S. government obligations, and
securities in such proportions as, in the judgment of the Adviser, prevailing
market conditions warrant. The following discussion supplements the description
of the Fund's investment policies in the prospectus. Unless otherwise indicated,
the investment policies described below may be changed by the Board of Trustees
(the "Trustees") without shareholder approval. Shareholders will be notified
before any material change in the policies becomes effective.
U.S. GOVERNMENT OBLIGATIONS
The types of U.S. government obligations in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are
backed by:
.the full faith and credit of the U.S. Treasury;
.the issuer's right to borrow from the U.S. Treasury;
.the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
.the credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. government are:
.Farm Credit System, including the National Bank for Cooperatives, Farm
Credit Banks, and Banks for Cooperatives;
.Farmers Home Administration;
.Federal Home Loan Banks;
.Federal Home Loan Mortgage Corporation;
.Federal National Mortgage Association;
.Government National Mortgage Association; and
.Student Loan Marketing Association.
VARIABLE RATE U.S. GOVERNMENT SECURITIES
In the case of certain U.S. government securities purchased by the Fund
that carry variable interest rates, these rates will reduce the changes
in the market value of such securities from their original purchase
prices.
Accordingly, the potential for capital appreciation or capital
depreciation should not be greater than the potential for capital
appreciation or capital depreciation of fixed interest rate U.S.
government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities.
The Fund may purchase variable rate U.S. government securities upon the
determination by the Trustees that the interest rate as adjusted will
cause the instrument to have a current market value that approximates its
par value on the adjustment date.
MONEY MARKET INSTRUMENTS
The Fund may invest in the following money market instruments:
.instruments of domestic and foreign banks and savings and loans having
capital, surplus, and undivided profits of over $100,000,000, or if the
principal amount of the instrument is insured is insured in full by the
Federal Deposit Insurance Corporation ("FDIC");
.commercial paper issued by domestic or foreign corporations rated A-1 by
Standard & Poor's Ratings Group ("S&P") Prime-1 by Moody's Investors
Service, Inc., or F-1 by Fitch Investors Service, Inc. or, if unrated,
of comparable quality as determined by the Fund's investment adviser;
.time and savings deposits whose accounts are insured by the Bank
Insurance Fund ("BIF") or in institutions whose accounts are insured by
the Savings Association Insurance Fund, which is also administered by
the FDIC, including certificates of deposit issued by, and other time
deposits in, foreign branches of BIF-insured banks; or
.bankers' acceptances.
REPURCHASE AGREEMENTS
The Fund requires its custodian to take possession of the securities
subject to repurchase agreements and these securities will be marked to
market daily. To the extent that the original seller does not repurchase
the securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities. In the event that a
defaulting seller of the securities filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject
to repurchase agreements, a court of competent jurisdiction would rule in
favor of the Fund and allow retention or disposition of such securities.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are
deemed by the Fund's adviser to be creditworthy pursuant to guidelines
established by the Trustees.
STOCK INDEX FUTURES AND OPTIONS
The Fund may utilize stock index futures contracts, options, and options
on futures contracts as discussed in the prospectus.
A stock index futures contract is a bilateral agreement which obligates
the seller to deliver (and the purchaser to take delivery of) an amount
of cash equal to a specific dollar amount times the difference between
the value of a specific stock index at the close of trading of the
contract and the price at which the agreement is originally made. There
is no physical delivery of the stocks constituting the index, and no
price is paid upon entering into a futures contract. In general,
contracts are closed out prior to their expiration. The Fund, when
purchasing or selling a futures contract, will initially be required to
deposit in a segregated account in the broker's name with the Fund's
custodian an amount of cash or U.S. government securities approximately
equal to 5-10% of the contract value. This amount is known as "initial
margin," and it is subject to change by the exchange or board of trade on
which the contract is traded. Subsequent payments to and from the broker
are made on a daily basis as the price of the index or the securities
underlying the futures contract fluctuates. These payments are known as
"variation margins," and the fluctuation in value of the long and short
positions in the futures contract is a process referred to as "marking to
market." The Fund may decide to close its position on a contract at any
time prior to the contract's expiration. This is accomplished by the Fund
taking an opposite position at the then prevailing price, thereby
terminating its existing position in the contract. Because both the
initial and variation margin resemble a performance bond or good faith
deposit on the contract, they are returned to the Fund upon the
termination of the contract, assuming that all contractual obligations
have been satisfied. Therefore, the margin utilized in futures contracts
is readily distinguishable from the margin employed in security
transactions, since futures contracts margin does not involve the
borrowing of funds to finance the transaction.
A put option gives the Fund, in return for a premium, the right to sell
the underlying security to the writer (seller) at a specified price
during the term of the option. Put options on stock indices are similar
to put options on stocks except for the delivery requirements. Instead of
giving the Fund the right to make delivery of stock at a specified price,
a put option on a stock index gives the Fund, as holder, the right to
receive an amount of cash upon exercise of the option.
The Fund may also write covered call options. As the writer of a call
option, the Fund has the obligation upon exercise of the option during
the option period to deliver the underlying security upon payment of the
exercise price.
The Fund may only: (1) buy listed put options on stock indices; (2) buy
listed put options on securities held in its portfolio; and (3) sell
listed call options either on securities held in its portfolio or on
securities which it has the right to obtain without payment of further
consideration (or has segregated cash in the amount of any such
additional consideration). The Fund will maintain its positions in
securities, option rights, and segregated cash subject to puts and calls
until the options are exercised, closed, or expired.
REVERSE REPURCHASE AGREEMENTS
The Fund also may enter into reverse repurchase agreements under certain
circumstances. This transaction is similar to borrowing cash. In a
reverse repurchase agreement, the Fund transfers possession of a
portfolio instrument to another person, such as a financial institution,
broker, or dealer, in return for a percentage of the instrument's market
value in cash, and agrees that on a stipulated date in the future the
Fund will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable the Fund to avoid selling portfolio
instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not
ensure that the Fund will be able to avoid selling portfolio instruments
at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund,
in a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These securities are marked
to market daily and maintained until the transaction is settled.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are subject
to termination at the option of the Fund or the borrower. The Fund may
pay reasonable administrative and custodial fees in connection with a
loan and may pay a negotiated portion of the interest earned on the cash
or equivalent collateral to the borrower or placing broker. The Fund does
not have the right to vote securities on loan. In circumstances where the
Fund does not, the Fund would terminate the loan and regain the right to
vote if that were considered important with respect to the investment.
PORTFOLIO TURNOVER
The Fund may trade or dispose of portfolio securities as considered necessary to
meet its investment objective. It is not anticipated that the portfolio trading
engaged in by the Fund will result in its annual rate of portfolio turnover
exceeding 100%.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund 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 transactions. The deposit or payment by the Fund of initial
or variation margin in connection with futures contracts or related
options transactions is not considered the purchase of a security on
margin.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities except that the Fund may borrow
money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amount
borrowed. The Fund will not purchase any securities while borrowings in
excess of 5% of the value of the Fund's total assets are outstanding.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. For the purpose of this limitation, the
following are not deemed to be pledges: margin deposits for the purchase
and sale of futures contracts and related options, and segregation or
collateral arrangements made in connection with options activities.
INVESTING IN REAL ESTATE
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in the 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.
INVESTING IN COMMODITIES, COMMODITY CONTRACTS, OR COMMODITY FUTURES
CONTRACTS
The Fund will not purchase or sell commodities, commodity contracts or
commodity futures contracts except to the extent that the Fund may engage
in transactions involving futures contracts and related options.
UNDERWRITING
The Fund will not underwrite any issue of securities, except as it 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.
DIVERSIFICATION OF INVESTMENTS
With respect to securities comprising 75% of the value of its assets, the
Fund will not purchase securities of any one issuer (other than
securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities) if, as a result, more than 5% of the
value of its total assets would be invested in the securities of that
issuer. Also, the Fund will not acquire more than 10% of the voting
securities of any one issuer.
CONCENTRATION OF INVESTMENTS
The Fund will not invest 25% or more of the value of its total assets in
any one industry, except that the Fund may invest 25% or more of the
value of its total assets in securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, and repurchase agreements
secured by such instruments.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except portfolio securities up
to one-third of the value of its total assets. This shall not prevent the
Fund from purchasing U.S. government obligations, money market
instruments, bonds, debentures, notes, certificates of indebtedness, or
other debt securities, entering into repurchase agreements, or engaging
in other transactions where permitted by the Fund's investment objective,
policies and limitations.
The above investment limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund can acquire up to 3% of the total outstanding stock of other
investment companies. The Fund will not be subject to any other
limitations with regard to the acquisition of securities of other
investment companies so long as the public offering price of the Fund's
shares does not include a sales load exceeding 1-1/2 percent. The Fund
will purchase securities of investment companies only in open-market
transactions involving only customary broker's commissions, and the
Adviser will waive its advisory fee on assets invested in securities of
open-end investment companies. However, these limitations are not
applicable if the securities are acquired in a merger, consolidation,
reorganization, or acquisition of assets.
INVESTING IN RESTRICTED SECURITIES
The Fund will not invest more than 5% of its total assets in securities
subject to restrictions on resale under the federal securities laws,
except for certain restricted securities which meet the criteria for
liquidity as established by the Trustees.
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of the value of its net assets in
illiquid obligations including repurchase agreements providing for
settlement in more than seven days after notice, over-the-counter
options, certain securities not determined by the Trustees to be liquid,
and non-negotiable fixed income time deposits with maturities over seven
days.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, except it may purchase the
securities of issuers which invest in or sponsor such programs.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have less than three years of operations
including the operation of any predecessor.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE TRUST
The Fund will not purchase or retain the securities of any issuer if the
officers and Trustees of the Trust or its investment adviser, owning
individually more than .5 of 1% of the issuer's securities, together own
more than 5% of the issuer's securities.
INVESTING IN PUT OPTIONS
The Fund will not purchase put options on securities, other than put
options on stock indices, unless the securities are held in the Fund's
portfolio and not more than 5% of the value of the Fund's total assets
would be invested in premiums on open put option positions.
WRITING COVERED CALL OPTIONS
The Fund will not write call options on securities unless the securities
are held in the Fund's portfolio or unless the Fund is entitled to them
in deliverable form without further payment or after segregating cash in
the amount of any further payment.
INVESTING IN WARRANTS
The Fund will not invest more than 5% of its assets in warrants,
including those acquired in units or attached to other securities. To
comply with certain state restrictions, the Fund will limit its
investment in such warrants not listed on nationally recognized stock
exchanges to 2% of its total assets. (If state restrictions change, this
latter restriction may be revised without notice to shareholders.) For
purposes of this investment restriction, warrants acquired by the Fund in
units or attached to securities may be deemed to be without value.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Fund will not purchase securities of a company for purposes of
exercising control or management.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
For purposes of its policies and limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings and loan, having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items."
The Fund does not intend to borrow money in excess of 5% of the value of its
total assets during the current year.
To comply with registration requirements in certain states, the Fund (1) will
limit the aggregate value of the assets underlying covered call options or put
options written by the Fund to not more than 25% of its net assets, (2) will
limit the premiums paid for options purchased by the Fund to 5% of its net
assets, and (3) will limit the margin deposits on futures contracts entered into
by the Fund to 5% of its net assets. (If state requirements change, these
restrictions may be revised without shareholder notification.)
INDEPENDENCE ONE MUTUAL FUNDS MANAGEMENT
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, birthdates, principal
occupations, and present positions, including any affiliation with Michigan
National Bank, Michigan National Corporation, Federated Investors, Federated
Securities Corp., Federated Administrative Services, and Federated Services
Company.
- --------------------------------------------------------------------------------
Robert E. Baker
4327 Stoneleigh Road
Bloomfield Hills, MI
Birthdate: May 6, 1930
Trustee
Retired; formerly, Vice Chairman, Chrysler Financial Corporation.
- --------------------------------------------------------------------------------
Harold Berry
100 Galleria Officentre,
Suite 219
Southfield, MI
Birthdate: September 17, 1925
Trustee
Managing Partner, Berry Enterprises; Chairman, Independent Sprinkler Companies,
Inc.; formerly, Chairman, Executive Committee, Federal Enterprises, Inc.;
Chairman, Berry, Ziegelman & Company.
- --------------------------------------------------------------------------------
Clarence G. Frame+
W-875 First Bank Building
332 Minnesota Street
St. Paul, MN
Birthdate: July 26, 1918
Trustee
Director, Tosco Corporation, Chicago Milwaukee Corporation, and Voyageur Funds
Group; formerly, Vice Chairman, First Bank System, Inc. and President, The First
National Bank of St. Paul, a subsidiary of First Bank System, Inc.
- --------------------------------------------------------------------------------
Harry J. Nederlander+*
231 S. Woodward,
Suite 219
Birmingham, MI
Birthdate: September 5, 1917
Trustee
Chairman, Nederlander Enterprises.
- --------------------------------------------------------------------------------
Thomas S. Wilson
Two Championship Drive
Auburn Hills, MI
Birthdate: October 9, 1949
Trustee
President and Executive Administrator, Detroit Pistons; President, Arena
Associates, Inc.
- --------------------------------------------------------------------------------
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
Executive Vice President, Treasurer and Director, Federated Securities Corp.;
Chairman, Treasurer and Trustee, Federated Administrative Services; Vice
President, Treasurer and Trustee, Federated Investors.
- --------------------------------------------------------------------------------
Jeffrey W. Sterling
Federated Investors Tower
Pittsburgh, PA
Birthdate: February 5, 1947
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services.
- --------------------------------------------------------------------------------
Jay S. Neuman
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 22, 1950
Secretary
Corporate Counsel, Federated Investors; Prior to January 1991, Associate
Counsel, The Boston Company
Advisors, Inc.
- --------------------------------------------------------------------------------
+Member of the Trust's Executive Committee. The Executive Committee of the Board
of Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board
*This Trustee is deemed to be an "interested person" of the Fund or Trust as
defined in the Investment Company Act of 1940.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the outstanding shares of the Fund.
TRUSTEES' COMPENSATION
<TABLE>
<CAPTION>
AGGREGATE
NAME, POSITION COMPENSATION
WITH TRUST FROM TRUST*
<S> <C>
Robert E. Baker $8,500
Trustee
Harold Berry $8,500
Trustee
Clarence G. Frame $8,500
Trustee
Harry J. Nederlander $8,500
Trustee
Thomas S. Wilson $7,650
Trustee
</TABLE>
* Information is furnished for the fiscal year ended April 30, 1995. The
aggregate compensation is provided for the Trust which was comprised of four
portfolios at April 30, 1995. The Trust is the only investment company in the
Fund Complex.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE FUND
The Fund's investment adviser is Michigan National Bank (the "Adviser").
The Adviser shall not be liable to the Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or sale
of any security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
Because of the internal controls maintained by Michigan National Bank to
restrict the flow of non-public
information, Fund investments are typically made without any knowledge of
Michigan National Bank's or
its affiliates' lending relationships with an issuer.
ADVISORY FEES
For its advisory services, Michigan National Bank receives an annual investment
advisory fee as described in the prospectus.
STATE EXPENSE LIMITATIONS
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses)
exceed 2-1/2% per year of the first $30 million of average net assets,
2% per year of the next $70 million of average net assets, and 1-1/2% per
year of the remaining average net assets, the Adviser will reimburse the
Trust for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the Adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fee.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for the fees set forth in the
prospectus.
CUSTODIAN
- --------------------------------------------------------------------------------
Michigan National Bank, Farmington Hills, Michigan, is custodian for the
securities and cash of the Fund. For the services to be provided to the Trust
pursuant to the Custodian Agreement, the Trust pays the custodian an annual fee
based upon the average daily net assets of the Fund and which is payable
monthly. The custodian will also charge transaction fees and out-of-pocket
expenses.
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the Adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The Adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Trustees.
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the Adviser
and may include:
.advice as to the advisability of investing in securities;
.security analysis and reports;
.economic studies;
.industry studies;
.receipt of quotations for portfolio evaluations; and
.similar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the Adviser for other
accounts. To the extent that receipt of these services may supplant services for
which the Adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days when
both the New York Stock Exchange and the Federal Reserve Wire System are open
for business. The procedure for purchasing shares of the Fund is explained in
the prospectus under "Investing in the Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds before shareholders
begin to earn dividends. Michigan National Bank acts as the shareholder's agent
in depositing checks and converting them to federal funds.
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
Net asset value generally changes each day. The days on which net asset value is
calculated by the Fund are described in the prospectus.
DETERMINING MARKET VALUE OF SECURITIES
- --------------------------------------------------------------------------------
The market values of the Fund's portfolio securities are determined as follows:
.for equity securities, according to the last sale price on a national
securities exchange, if applicable;
.in the absence of recorded sales for listed equity securities, according to the
mean between the last closing bid and asked prices;
.for unlisted equity securities, latest bid prices;
.for bonds and other fixed income securities, as determined by an independent
pricing service;
.for short-term obligations, according to the mean between bid and asked prices
as furnished by an independent pricing service, or for short-term obligations
with remaining maturities of 60 days or less at the time of purchase, at
amortized cost; or
.for all other securities, at fair value as determined in good faith by the
Trustees.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect: institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
The Fund will value futures contracts and options at their market values
established by the exchanges at the close of options trading on such exchanges
unless the Trustees determine in good faith that another method of valuing
option positions is necessary.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at the next computed net asset value after Federated
Services Company receives the redemption request. Redemption procedures are
explained in the prospectus under "Redeeming Fund Shares."
REDEMPTION IN KIND
Although the Fund intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio. To satisfy registration
requirements in a particular state, redemption in kind will be made (for any
shareholder requesting redemption) in readily marketable securities to the
extent that such securities are available. If this state's policy changes, the
Fund reserves the right to redeem in kind by delivering those securities it
deems appropriate.
Redemption in kind will be made in conformity with applicable SEC rules, taking
such securities at the same value employed in determining net asset value and
selecting the securities in a manner the Trustees determine to be fair and
equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940 under which the Fund is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's net
asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE FUND'S TAX STATUS
The Fund expects to pay no federal income tax because it intends to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Fund must, among other
requirements:
.derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
.derive less than 30% of its gross income from the sale of securities held less
than three months;
.invest in securities within certain statutory limits; and
.distribute to its shareholders at least 90% of its net income earned during the
year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends received as cash or
additional shares. The dividends received deduction for corporations will apply
to ordinary income distributions to the extent the distribution represents
amounts that would qualify for the dividends received deduction to the Fund if
the Fund were a regular corporation, and to the extent designated by the Fund as
so qualifying. These dividends, and any short-term capital gains, are taxable as
ordinary income.
CAPITAL GAINS
Long-term capital gains distributed to shareholders will be treated as long-term
capital gains regardless of how long shareholders have held shares.
TOTAL RETURN
- --------------------------------------------------------------------------------
The average annual total return for the Fund is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the net asset value per share at the end of the period. The number of shares
owned at the end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, less any applicable sales charge, adjusted
over the period by any additional shares, assuming the reinvestment of all
dividends and distributions.
YIELD
- --------------------------------------------------------------------------------
The yield for the Fund is determined each day by dividing the net investment
income per share (as defined by the SEC) earned by the Fund over a thirty-day
period by the maximum offering price per share of the Fund on the last day of
the period. This value is then annualized using semi-annual compounding. This
means that the amount of income generated during the thirty-day period is
assumed to be generated each month over a 12-month period and is reinvested
every six months. The yield does not necessarily reflect income actually earned
by the Fund because of certain adjustments required by the SEC and, therefore,
may not correlate to the dividends or other distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the Fund,
the performance will be reduced for those shareholders paying those fees.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The Fund's performance depends upon such variables as:
.portfolio quality;
.average portfolio maturity;
.type of instruments in which the portfolio is invested;
.changes in interest rates and market value of portfolio securities;
.changes in the Fund's expenses; and
.various other factors.
The Fund's performance fluctuates on a daily basis largely because net earnings
and the maximum offering price per share fluctuate daily. Both net earnings and
offering price per share are factors in the computation of yield and total
return.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance, investors
should consider all relevant factors, such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may include:
.STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS AND STANDARD & POOR'S 100
INDEX, a composite indices of common stocks in industry, transportation, and
financial and public utility companies can be used to compare to the total
returns of funds whose portfolios are invested primarily in common stocks. In
addition, the Standard & Poor's index assumes reinvestments of all dividends
paid by stocks listed on its index. Taxes due on any of these distributions are
not included, nor are brokerage or other fees calculated in Standard & Poor's
figures.
.LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and takes
into account any change in the maximum offering price over a specific period of
time. From time to time, the Fund will quote is Lipper ranking in the "index
funds" category in advertising and sales literature.
.MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for two
weeks.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on nonstandardized base periods. These total returns also
represent the historic change in the value of an investment in the Fund based on
quarterly reinvestment of dividends over a specified period of time.
G001198-01 (5/95)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements:
Independence One U.S. Government
Securities Fund - filed in Part A; Independence
One Michigan Municipal Cash Fund, Independence
One U.S. Treasury Money Market Fund Money
Market Fund, and Independence One Prime Money
Market Fund - financial statements dated April
30, 1994 are incorporated into each Fund's
prospectus by reference to Part A of
Registrant's Post-Effective Amendment No. 10 as
filed on February 28, 1995 (File Nos. 33-26516
and 811-5752), specifically the section
entitled "Financial Statements;" and each
Fund's unaudited financial statements dated
October 31, 1994 are incorporated into each
Fund's Statement of Additional Information by
reference to the Funds' Semi-Annual Reports
dated October 31, 1994 as filed on January 3,
1995 (File No. 811-5752); Independence One
Equity Plus Fund, Independence One Fixed Income
Fund, and Independence One Michigan Municipal
Bond Fund - to be filed by amendment.
(b) Exhibits:
(1) Conformed Copy of Declaration of Trust of the
Registrant (1.);
(i) Amendment No. 1 to the Declaration of Trust
dated January 9, 1989 (2.);
(ii) Amendment No. 2 to the Declaration of Trust
dated January 9, 1989 (2.);
(iii) Amendment No. 3 to the Declaration of Trust
dated January 9, 1989 (4.);
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on January 13, 1989. (File
Nos. 33-26516 and 811-5752)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 5, 1989. (File Nos. 33-26516
and 811-5752)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on June 27, 1990. (File Nos. 33-
26516 and 811-5752)
(iv) Amendment No. 4 to the Declaration of Trust.
dated April 8, 1991 (6.);
(v) Amendment No. 5 to the Declaration of Trust.
dated September 26, 1991 (6.);
(vi) Amendment No. 6 to the Declaration of Trust.
dated December 9, 1991; (10)
(vii) Amendment No. 8 to the Declaration of Trust,
dated December 6, 1994; (10)
(viii) Certification dated December 6, 1994; (10)
(ix) Amendment No. 9 to the Declaration of Trust
dated May 4, 1995; (12)
(2) Copy of By-Laws of the Registrant (1.);
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant (7.);
(ii) Copy of Specimen Certificate for Shares of
Beneficial Interest of Independence One Equity Plus
Fund, Independence One Fixed Income fund, and
Independnece One Michigan Municipal Bond Fund (to be
filed by Amendment);
(5) Conformed copy of Investment Advisory Contract of the
Registrant as amended (8.);
(i) Conformed copy of Investment Sub-Advisory
Contract for Independence One U.S. Government
Securities Fund (8);
(ii) Conformed copy of Exhibit G to the Present
Investment Advisory Contract of the
Registrant to add Independence One Fixed Income
Fund to the Present Investment
Advisory Contract of the Registrant; (to be
filed by Amendment)
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on January 13, 1989. (File
Nos. 33-26516 and 811-5752)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed June 24, 1992. (File Nos. 33-26516
and 811-5752)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed June 24, 1993. (File Nos. 33-26516
and 811-5752)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed February 8, 1995. (File Nos. 33-
26516 and 811-5752)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1995. (File Nos. 33-
26516 and 811-5752)
(iii) Conformed copy of Exhibit H to the Present
Investment Advisory Contract of the
Registrant to add Independence One Michigan
Municipal Bond Fund to the Present Investment
Advisory Contract of the Registrant; (to be
filed by Amendment)
(iv) Conformed copy of Exhibit I to the Present
Investment Advisory Contract of the
Registrant to add Independence One Equity
Plus Fund to the Present Investment Advisory
Contract of the Registrant; (to be filed by
Amendment)
(v) Conformed copy of Investment Sub-Advisory
Agreement for Independence One Equity Plus
Fund; (to be filed by Amendment)
(6) Copy of Distributor's Contract of Registrant (1.);
(i) Conformed Copy of Exhibit D to the
Distributor's Contract; (10)
(ii) Conformed Copy of Exhibit E to the
Distributor's Contract; (10)
(iii) Conformed copy of Exhibit F to the
Distributor's Contract;+
(iv) Conformed copy of Exhibit G to the
Distributor's Contract;+
(v) Conformed copy of Exhibit H to the
Distributor's Contract;+
(vi) Conformed copy of Exhibit I to the
Distributor's Contract; +
(7) Not applicable;
(8) (i) Copy of Custodian Agreement of the
Registrant (1.);
(ii) Copy of the new Agency Agreement of the
Registrant (3.);
(iii) Copy of the new Administrative Services
Agreement of the Registrant (3.);
(iv) Copy of Amendment No. 1 to Exhibit A of
Custodian Agreement of the Registrant (7.);
(v) Copy of Amendment No. 1 to Exhibit A of Agency
Agreement of the Registrant (7.);
____________________
+All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed on January 13, 1989. (File
Nos. 33-26516 and 811-5752)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed on December 12, 1989. (File Nos. 33-
26516 and 811-5752)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed February 8, 1995. (File Nos. 33-
26516 and 811-5752)
(9) (i) Conformed Copy of Agreement for Fund Accounting,
Shareholder Recordingkeeping, and Custody Services
Procurement; (10)
(ii) Conformed copy of Shareholder Services Plan; +
(iii) Copy of Exhibit 1 to the Shareholder Services Plan
of the Registrant; (12)
(iv) Conformed copy of of Shareholder Services
Agreement; +
(v) Copy of Exhibit 1 ot the Shareholder Services
Agreement of the Registrant; (12)
(vi) Conformed copy of Multiple Class Plan; +
(10) Copy of Opinion and Consent of Counsel as to
legality of shares being registered (2.);
(11) Not applicable;
(12) Not applicable;
(13) Conformed Copy of Initial Capital Understanding
(2.);
(14) Not applicable;
(15) (i) Copy of Distribution Plan (5.);
(ii) Copy of Sales Agreement with Federated
Securities Corp. and Administrative Agreement -
Appendix B (2.);
(iii) Conformed copy of Exhibit B of Distribution Plan
(8);
(iv) Copy of Schedule A of Sales Agreement with
Federated Securities Corp. (7.);
(v) Copy of Fee Schedule for Rule 12b-1 Agreement
with Federated Securities Corp. (7.);
(16) Copy of Schedule for Computation of Performance
Data for Independence One U.S. Government
Securities Fund - Trust Shares (8);
_____________
+All exhibits have been filed electronically.
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed on May 5, 1989. (File Nos. 33-26516
and 811-5752)
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed May 3, 1991. (File Nos. 33-26516 and
811-5752)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 2, 1992. (File Nos. 33-
26516 and 811-5752)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed June 24, 1993. (File Nos. 33-26516
and 811-5752)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed February 8, 1995. (File Nos. 33-
26516 and 811-5752)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed on June 28, 1995. (File Nos. 33-
26516 and 811-5752)
(17) Not applicable (Financial Data Schedules);
(18) (i) Copy of Power of Attorney dated June, 1992
with respect to Harold Berry (6.);
(ii) Conformed copy of Power of Attorney filed
on behalf of Gonzales, Baker, Frame,
Nederlander, VanAndel, and Wilson;(9.)
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class Portfolio name as of May 18, 1995
Shares of Independence One Prime
beneficial Money Market Fund (Class A) 2,854
interest
Independence One Prime
Money Market Fund (Class B) 5
Independence One U.S. 818
Treasury Money Market Fund
Independence One Michigan 1,151
Municipal Cash Fund
Independence One U.S. 7
Government Securities Fund
Item 27. Indemnification: (4.)
_____________
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed on June 27, 1990. (File Nos. 33-
26516 and 811-5752)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5. on Form N-1A filed June 24, 1992. (File Nos. 33-26516
and 811-5752)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed June 29, 1994. (File Nos. 33-26516
and 811-5752)
Item 28. Business and Other Connections of Investment Adviser:
Michigan National Bank, a national banking association (the
"Adviser"), is a wholly owned subsidiary of Michigan National
Corporation ("MNC"). Through its subsidiaries and affiliates,
MNC, Michigan's fifth largest bank holding company in terms of
total assets, as of December 31, 1994, offers a full range of
financial services to the public including commercial lending,
depository services, cash management, brokerage services, retail
banking, credit card services, mortgage banking, investment
advisory services and trust services. Independence One Capital
Management Corporation ("IOCM"), a nationally recognized
investment advisory subsidiary of MNC, provides investment
advisory services for trust and other managed assets. IOCM and
the Trust Division have investment discretion over $2.2 billion.
Michigan National Bank has managed mutual funds since May 1989.
The Trust Division has managed pools of commingled funds since
1964. In addition, Michigan National Bank presently manages its
own investment portfolio of approximately $300 million in taxable,
short-term instruments. For more information on the business of
the Adviser, see the Prospectus under the heading "Management of
the Trust--Investment Adviser."
The officers and directors of the Adviser and any other business,
profession, vocation or employment of a substantial nature in
which each such officer and director is or has been engaged during
the past two years is set forth below. Unless otherwise noted,
the position listed under Other Business, Profession, Vocation or
Employment is with Michigan National Bank. The business address
of each such director and officer is 27777 Inkster Road,
Farmington Hills, Michigan, 48333-9065.
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or
Employment
Daniel T. Carroll Director Director, Michigan
National Corporation;
Chairman and
President, The Carroll
Group.
John S. Carton Director Director, Michigan
National Corporation;
Chairman, President,
and CEO, Development
Company.
Sidney E. Forbes Director Director, Michigan
National Corporation;
Partner, Forbes/Cohen
Properties.
Other Substantial
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or
Employment
Sue Ling Gin Director Director, Michigan
National Corporation;
Chairman and Chief
Executive Officer,
Flying Food Fare, Inc.
Morton E. Harris Director Director, Michigan
National Corporation;
Managing Partner,
Spectrum Associates.
Gerald B. Mitchell Director Director, Michigan
National Corporation;
Retired Chairman and
Chief Executive
Officer, Dana
Corporation.
Robert J. Mylod Director, Chairman, Director, Chairman,
and Chief Executive and Chief Exective
Officer Officer, Michigan
National Corporation.
William F. Pickard Director Director, Michigan
National Corporation,
Chairman and Chief
Executive Officer,
Regal Plastics
Company.
Douglas E. Ebert Director, President President and Chief
and Chief Operating Operating Officer,
Officer Michigan National
Corporation
Stanton Kinnie Smith, Jr. Director Director, Michigan
National Corporation;
Vice Chairman, CMS
Energy Corporation.
Walter H. Teninga Director Director, Michigan
National Corporation;
Retired President and
CEO, American Club
Stores, Inc.
Stephen A. VanAndel Director Director, Michigan
National Corporation; Vice President and
Chairman, Amway Corporation.
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or
Employment
Richard T. Walsh Director Director, Michigan
National Corporation;
Consultant.
James A. Williams Director Director, Michigan
National Corporation;
Chairman and President
Williams, Schaefer,
Ruby & Williams.
Lawrence L. Gladchun Senior Vice Senior Vice
President, General President,
Counsel and Secretary General Counsel and
Secretary, Michigan
National Corporation.
Richard C. Webb Senior Vice Senior Vice
President President,
Commercial Banking Michigan National
Corporation.
Joseph J. Whiteside Executive Vice President
and Chief Financial
Officer
William D. Ritsema Senior Vice Senior Vice
President, Credit President,
Administration Michigan National
Corporation.
Robert V. Panizzi First Vice First Vice President,
President and Michigan National
Controller Corporation.
Marc L. Belsky First Vice President First Vice President
Planning and Analysis Michigan National
Corporation.
Edward H. Sondker First Vice President President and CEO
Independence One Bank
of California
National Australia Bank Limited ("NAB") is a transnational banking
organization headquartered at 500 Bourke Street, Melbourne, Australia.
NAB is a publicly owned company, whose shares are widely held and traded
on the Australian Stock Exchange Limited. On February 4, 1995, the
Board of Directors of MNC approved a definitive agreement for the
acquisition (the "Merger") of MNC by NAB. Shareholders of MNC approved
the Merger on June 2, 1995. As a result, MNC and its subsidiaries,
including the Adviser, would become direct or indirect subsidiaries of
NAB upon completion of the Merger. It is anticipated that the Merger
will be completed during the third or fourth quarter of 1995, and that
operations will continue to be conducted under the Michigan National
Corporation and Michigan National Bank names.
On May 4, 1995, the Trust's Board of Trustees approved the present
investment advisory contract (the "Present Advisory Contract") between the
Trust, on behalf of Independence Once Equity Plus Fund, Independence One Fixed
Income Fund and Independence One Michigan Municipal Bond Fund (collectively,
the "Portfolios"), and Michigan National Bank, as a subsidiary of MNC. Under
the provisions of the Investment Company Act of 1940, completion of the Merger
would result in an assignment, and termination of the Portfolios' Present
Advisory Contract with the Adviser. Also on May 4, 1995, in view of the
pending Merger, the Portfolios' Board of Trustees approved a new investment
advisory contract (the "New Advisory Contract") between the Trust, on behalf
of the Portfolios, and Michigan National Bank, as a subsidiary of NAB. The
Merger is subject to the satisfaction of certain conditions including, among
others, the receipt of all necessary regulatory approvals. The New Advisory
Contract would become effective upon consummation of the Merger.
The following information appeared in NAB's Annual Report for its
fiscal year ended September 30, 1994.
NAB, together with its subsidiaries (collectively, the "Group"),
is one of the four major Australian commercial banks ("trading banks" in
Australian terminology) which together account for approximately 70.2%
of commercial banking assets in Australia as of September 1994,
according to the Reserve Bank of Australia Bulletin. The Group
undertakes a range of banking, financial and related activities in
Australia and elsewhere in the world, including commercial banking,
savings banking, finance and life insurance and merchant and investment
banking. As of September 30, 1994, Group assets totalled $125.9
billion, of which approximately 56.5% was domiciled in Australia, and
Group deposits totalled $78.8 billion, of which approximately 50.8% was
domiciled in Australia.
NAB was established as "The National Bank of Australasia" in 1858
in Victoria, Australia. Through internal expansion and the acquisition
of other banks, NAB developed into a national commerical bank. In its
present form, NAB is the product of the merger in 1981 of The National
Bank of Australasia Limited and Commerical Banking Company of Sydney
Limited, the latter Bank being established in 1834 in New South Wales,
Australia.
At September 30, 1994 the Group had 49,163 full-time and part-time
employees worldwide (43,871 full-time equivalents).
Banking, the Group's principal business activity, is conducted in
Australia by NAB and internationally by NAB and certain subsidiaries.
As of September 30, 1994, NAB was the second largest commercial bank in
Australia (according to the Reserve Bank of Australia Bulletin) based on
domestic assets of $75 billion. The Group is the largest Australian
banking group based on its global assets of $125.9 billion.
Consistent with its philosophy of providing customers with a
comprehensive range of financial products and services, in 1985 the
Group established a life insurance and funds management entity, National
Australia Financial Management Limited. This entity and its
subsidiaries provide the Australian market with a range of personal
financial planning services, personal life and disability insurance,
personal superannuation and managed investments, corporate
superannuation, group life insurance and various investment management
services. At September 30, 1994, funds under managment amounted to $4.0
billion. Two of the Group's banking subsidiaries in the United Kindom,
Yorkshire Bank and Northern Bank, offer certain insurance and investment
products through subsidiaries, mainly in the areas of funds managment
and other investment related products.
At November 11, 1994, the directors* and principal executive
officer of NAB were as follows:
________________
*The Directors of NAB are classified as either Executive or Non-
Executive, with the former being those Directors engaged in the full-
time employment of NAB. Mr. Donald Argus is the only Executive
Director.
Name and Position Position/Directorship Principal
with NAB Held Since
Occupation(s)
William Robert Mitchel Irvine 1992/1979
Barrister and
Chairman and Director Solicitor;
Director, National
Australia Bank
Superannuation Fund Pty
Ltd. and Bank of
New Zealand; Chairman,
National Australia
Financial Managment
Limited and National
Australia Group (UK)
Limited; former Partner,
Hedderwick
Fookes & Alston,
Solicitors.
Brian Thorley Loton 1992/1988 Chairman,
The
Vice-Chariman Broken Hill
and Director Proprietary
Company
Limited;
Director,
Amcor
Limited and
Australian Foundation
Investment Company
Limited; Alternate
Director, National
Australia Group (UK)
Limited; former Managing
Director, The Broken
Hill Proprietary
Company Limited.
Name and Position Position/Directorship Principal
with NAB Held Since
Occupation(s)
David Kennedy Macfarlane 1992/1985 Chairman
Vice-Chairman NAB's
and Director Principal
Board
Audit
Committee;
Director,
Bank of New
Zealand; Alternate
Director, National
Australia Group (UK))
Limited; 33 years'
experience with James Hardie
Industries Limited,
12 years of which
as Managing Director.
Donald Robert Argus 1990/1989 Director,
Managing Director and National
Chief Executive Officer Australia
Bank
Superannuation
Fund Pty
Ltd, Bank
of New
Zealand, Clydesdale
Bank PLC National
Australia Financial
Management Limited,
National Australia
Group (UK)
Limited, National
Irish Bank ,
Limited Northern
Bank Limited and
Yorkshire Bank PLC.
Name and Position Position/Directorship Principal
with NAB Held Since
Occupation(s)
David Charles Keith Allen 1992 Managing
Director Director,
Woodside
Petroleum
Limited.
Peter John Waraker Cottrell 1985 Chairman,
Director Email
Limited;
member
of NAB's
Principal Board Audit
Committee.
Dr. Christopher Michael Deeley 1992 Non-
Executive
Director Director and
Chairman,
North
Limited;
Director, Goodman
Fielder Limited;
former Managing
Director and Chief
Executive, ICI Australia
Limited.
David Alexander Tange Dickins 1981
Chartered
Director Accountant;
Alternate
Director,
Bank of New
Zealand; former
Partner, Court & Co.
Chartered Accountants;
former Director, The
Commercial Banking
Company of Sydney
Limited.
Name and Position Position/Directorship Principal
with NAB Held Since
Occupation(s)
The Lord Nickson 1991 Chairman,
Director Clydesdale
Bank
PLC;
Director, National
Australia
Group
(UK)
Limited.
Mark Richard Rayner 1985 Director and
Director Group
Executive,
CRA
Limited;
Deputy
Chairman and
former Managing
Director, Comalco
Limited,
Chairman, Pasminco
Limited; member of
NAB's Principal
Board Audit
Committee.
Joseph Charles Trethowan 1984 Vice
Chairman
Director of Directors
and
Chairman,
Audit
Committee of
National Australia
Financial Managment
Limited; member of
NAB's Principal Board Audit
Committee; former
Chairman and General
Manager, State
Electricity Commission
of Victoria.
Name and Position Position/Directorship Principal
with NAB Held Since
Occupation(s)
Andrew Trunbull 1992 Non-
Executive
Director Chairman and
former Managing
Director and Chief
Executive Officer,
Burns Philip and
Company
Limited.
Sir Bruce Dunstan Watson 1992 Former
Director Chairman,
Director,
and Chief
Executive
Officer, MIM
Holdings
Limited.
The address of the Directors and principal executive officer of NAB is
c/o 500 Bourke Street, Melbourne, Australia.
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Cash Management Trust;
Automated Government Money Trust; BayFunds; The Biltmore
Funds; The Biltmore Municipal Funds; California Municipal
Cash Trust; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated
Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index
Trust; Federated Institutional Trust; Federated Intermediate
Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock
Trust; Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; First Priority Funds; First Union Funds; Fixed
Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fountain Square Funds; Fund for
U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Independence One
Mutual Funds; Insight Institutional Series, Inc.; Insurance
Management Series; Intermediate Municipal Trust;
International Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; New York Municipal Cash Trust; 111 Corcoran Funds;
Peachtree Funds; The Planters Funds; RIMCO Monument Funds;
The Shawmut Funds; Short-Term Municipal Trust; SouthTrust
Vulcan Funds; Star Funds; The Starburst Funds; The Starburst
Funds II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Tower Mutual
Funds; Trademark Funds; Trust for Financial Institutions;
Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations;
The Virtus Funds; Vision Fiduciary Funds, Inc.; Vision Group
of Funds, Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty
Term Trust, Inc.- 1999.
(b)
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief __
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive
Vice President and
Federated Investors Tower President, and
Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated
Securities
Corp.
John W. McGonigle Director,
Executive Vice __
Federated Investors Tower President, and
Assistant
Pittsburgh, PA 15222-3779 Secretary,
Federated
Securities Corp.
John B. Fisher President-
Institutional Sales, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard W. Boyd Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph L. Epstein Vice President, __
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Craig S. Gonzales Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Stephen A. LaVersa Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Robert D. Oehlschlager Vice President, __
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President,
--
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President,
__
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2)
(3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Philip C. Hetzel Assistant Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice
President, __
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice
President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary,
Assistant
Federated Investors Tower Federated Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1
through 31a-3 promulgated thereunder are maintained at one of the
following locations:
Independence One Mutual Funds Federated Investors Tower
(Registrant) Pittsburgh, PA 15222-3779
Federated Services Company P.O. Box 8600
("Transfer Agent, Dividend Boston, Massachusetts 02266-
8600
Disbursing Agent and Portfolio
Recordkeeper")
Federated Administrative Services Federated Investors Tower
(Administrator) Pittsburgh, PA 15222-3779
Michigan National Bank 27777 Inkster Road
(Adviser) Mail Code 10-52
Farmington Hills, MI 48333
Michigan National Bank 27777 Inkster Road
Company Mail Code 10-52
(Custodian) Farmington Hills, MI 48333
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus for Independence One U.S. Government Securities Fund is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
Registrant hereby undertakes to file a post-effective amendment on
behalf of Independence One Equity Plus Fund, Independence One
Fixed Income Fund and Independence One Michigan Municipal Bond
Fund using financial statements for each respective fund, which
need not be certified , within four to six months from the date of
Post-Effective Amendment No. 12.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, INDEPENDENCE ONE MUTUAL
FUNDS, certifies that it meets all of the requirements for effectiveness
of this Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 24th day of July, 1995.
INDEPENDENCE ONE MUTUAL FUNDS
BY: /s/ Jay S. Neuman
Jay S. Neuman, Secretary
Attorney in Fact for Edward C. Gonzales
July 24, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/ Jay S. Neuman
Jay S. Neuman Attorney In Fact July 24, 1995
SECRETARY For the Persons
Listed Below
NAME TITLE
Edward C. Gonzales* President and Treasurer
(Principal Financial and
Accounting Officer)
Robert E. Baker.* Trustee
Harrold Berry* Trustee
Clarence G. Frame* Trustee
Harry J. Nederlander* Trustee
Thomas S. Wilson* Trustee
* By Power of Attorney
Exhibit 6(iii) on Form N-1A
Exhibit No. 1(i) under Item 601/Reg. S-K
Exhibit F
to the
Distributor's Contract
Independence One Mutual Funds
Independence One Prime Money Market Fund
Class A Shares
In consideration of the mutual covenants set forth in the
Distributor's Contract dated September 26, 1991 between
Independence One Mutual Funds and Federated Securities Corp.,
Independence One Mutual Funds executes and delivers this Exhibit
on behalf of Independence One Prime Money Market Fund, and with
respect to the Class A Shares thereof, first set forth in this
Exhibit.
Witness the due execution hereof this 7th day of March, 1995.
ATTEST: Independence One Mutual Funds
/s/ Jay S. Neuman By: /s/ E. C. Gonzales
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John W. McGonigle
Secretary Executive Vice President
(SEAL)
Exhibit 6(iv) on Form N-1A
Exhibit No. 1(ii) under Item 601/Reg. S-K
Exhibit G
to the
Distributor's Contract
Independence One Mutual Funds
Independence One Fixed Income Fund
In consideration of the mutual covenants set forth in the
Distributor's Contract dated September 26, 1991 between
Independence One Mutual Funds and Federated Securities Corp.,
Independence One Mutual Funds executes and delivers this Exhibit
on behalf of Independence One Fixed Income Fund, first set forth
in this Exhibit.
Witness the due execution hereof this 4th day of May, 1995.
ATTEST: Independence One Mutual Funds
/s/ Jay S. Neuman By: /s/ E. C. Gonzales
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John W. McGonigle
Secretary Executive Vice President
(SEAL)
Exhibit 6(v) on Form N-1A
Exhibit No. 1(iii) under Item 601/Reg. S-K
Exhibit H
to the
Distributor's Contract
Independence One Mutual Funds
Independence One Michigan Municipal Bond Fund
In consideration of the mutual covenants set forth in the
Distributor's Contract dated September 26, 1991 between
Independence One Mutual Funds and Federated Securities Corp.,
Independence One Mutual Funds executes and delivers this Exhibit
on behalf of Independence One Michigan Municipal Bond Fund,
first set forth in this Exhibit.
Witness the due execution hereof this 4th day of May, 1995.
ATTEST: Independence One Mutual Funds
/s/ Jay S. Neuman By: /s/ E. C. Gonzales
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John W. McGonigle
Secretary Executive Vice President
(SEAL)
Exhibit 6(vi) on Form N-1A
Exhibit No. 1(iv) under Item 601/Reg. S-K
Exhibit I
to the
Distributor's Contract
Independence One Mutual Funds
Independence One Equity Plus Fund
In consideration of the mutual covenants set forth in the
Distributor's Contract dated September 26, 1991 between
Independence One Mutual Funds and Federated Securities Corp.,
Independence One Mutual Funds executes and delivers this Exhibit
on behalf of Independence One Equity Plus Fund, first set forth
in this Exhibit.
Witness the due execution hereof this 6th day of June, 1995.
ATTEST: Independence One Mutual Funds
/s/ Jay S. Neuman By: /s/ E. C. Gonzales
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ Richard B. Fisher By: /s/ John W. McGonigle
Assistant Secretary Executive Vice President
(SEAL)
-1-
Exhibit 9(ii) on Form N-1A
Exhibit No. 10(i) under Item 601/Reg. S-K
INDEPENDENCE ONE MUTUAL FUNDS
SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of the 6th day of December, 1994, by and between
Independence One Mutual Funds ("Trust"), on behalf of its portfolios ("Funds")
and/or classes of shares of the Funds ("Classes") set forth on the Exhibits
hereto, and who have approved a Shareholder Services Plan (the "Plan") and
this form of Agreement and Michigan National Bank ("MNB").
1. The Trust hereby appoints MNB to render or cause to be rendered
personal services to shareholders of the Funds/Classes and/or the maintenance
of accounts of shareholders of the Funds/Classes ("Services"). In addition to
providing Services directly to shareholders of the Funds/Classes, MNB is
hereby appointed the Funds'/Classes' agent to select, negotiate and
subcontract for the performance of Services. MNB hereby accepts such
appointments. MNB agrees to provide or cause to be provided Services which,
in its best judgment (subject to supervision and control of the Trust's Board
of Trustees), are necessary or desirable for shareholders of the
Funds/Classes. MNB further agrees to provide the Trust, upon request, a
written description of the Services which MNB is providing hereunder.
2. During the term of this Agreement, each Fund/Class will pay MNB
and MNB agrees to accept as full compensation for its services rendered
hereunder a fee at an annual rate, calculated daily and payable monthly, up to
0.25% of 1% of average net assets of each Fund/Class.
For the payment period in which this Agreement becomes effective or
terminates with respect to any Fund/Class, there shall be an appropriate
proration of the monthly fee on the basis of the number of days that this
Agreement is in effect with respect to such Fund/Class during the month. To
enable the Funds/Classes to comply with an applicable exemptive order, MNB
represents that the fees received pursuant to this Agreement will be disclosed
to and authorized by any person or entity receiving Services, and will not
result in an excessive fee to MNB.
3. This Agreement shall continue in effect for one year from the date
of its execution, and thereafter for successive periods of one year only if
the form of this Agreement is approved at least annually by the Board of
Trustees, including a majority of the members of the Board who are not
interested persons of the Trust and have no direct or indirect financial
interest in the operation of the Plan or in any related documents to the Plan
("Independent Trustees") cast in person at a meeting called for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the
vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of any Fund/Class as
defined in the Investment Company Act of 1940 on sixty (60) days'
written notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment
as defined in the Investment Company Act of 1940; and
(c) by any party to the Agreement without cause by giving the
other party at least sixty (60) days' written notice of its intention
to terminate.
5. MNB agrees to obtain any taxpayer identification number
certification from each shareholder of the Funds/Classes to which it provides
Services that is required under Section 3406 of the Internal Revenue Code, and
any applicable Treasury regulations, and to provide each Fund/Class or its
designee with timely written notice of any failure to obtain such taxpayer
identification number certification in order to enable the implementation of
any required backup withholding.
6. MNB shall not be liable for any error of judgment or mistake of
law or for any loss suffered by any Fund/Class in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties
under this Agreement. MNB shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for such Fund/Class) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice. Any person, even though also an officer, director, partner,
employee or agent of MNB, who may be or become a member of the Trust's Board,
officer, employee or agent of any Fund/Class, shall be deemed, when rendering
services to such Fund/Class or acting on any business of such Fund/Class
(other than services or business in connection with the duties of MNB
hereunder) to be rendering such services to or acting solely for such
Fund/Class and not as an officer, director, partner, employee or agent or one
under the control or direction of MNB even though paid by MNB.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination
is sought.
8. MNB is expressly put on notice of the limitation of liability as
set forth in the Trust's Declaration of Trust and agrees that the obligations
assumed by each Fund/Class pursuant to this Agreement shall be limited in any
case to such Fund/Class and its assets and that MNB shall not seek
satisfaction of any such obligations from the shareholders of such Fund,
Class, the Trustees, Officers, Employees or Agents of such Fundor Class, or
any of them.
9. The execution and delivery of this Agreement have been authorized
by the MNB and signed by an authorized officer of MNB, acting as such.
10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if delivered to
the Trust at the following address: Federated Investors Tower, Pittsburgh, PA
15222-3779, Attention: President; and if delivered to MNB at 27777 Inkster
Road, Farmington Hills, MI 48334, Attention: Stacey A. Gray.
.
11. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written. If any provision of this Agreement shall be
held or made invalid by a court or regulatory agency decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4 hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by Pennsylvania law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the Investment Company Act of 1940 or any rule or regulation promulgated by
the Securities and Exchange Commission thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.
13. This Agreement shall not be assigned by any party without the
prior written consent of MNB in the case of assignment by any Fund/Class, or
of the Trust in the case of assignment by MNB, except that any party may
assign to a successor all of or a substantial portion of its business to a
party controlling, controlled by, or under common control with such party.
Nothing in this Section 14 shall prevent MNB from delegating its
responsibilities to another entity to the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Independence One Mutual Funds
By: /s/ E.C. Gonzales
Title: President
Attest: /s/ Jay S. Neuman
Michigan National Bank
By: /s/ Robert J. Stapleton
Title: Senior Vice President
Attest: /s/ Stacey A. Gray
-1-
Exhibit 9(iv) on Form N-1A
Exhibit No. 10(ii) under Item 601/Reg. S-K
INDEPENDENCE ONE MUTUAL FUNDS
SHAREHOLDER SERVICES PLAN
This Shareholder Services Plan ("Plan") is adopted as of this 6th day of
December, 1994, by the Board of Trustees (the "Board") of Independence One
Mutual Funds (the "Trust"), a Massachusetts business trust, with respect to
those portfolios of the Trust (the "Funds") and/or those classes of shares of
the Funds ("Classes") set forth on the Exhibits hereto.
1. This Plan is adopted to allow the Funds and/or Classes to make
payments as contemplated herein to obtain certain personal services for
shareholders and/or the maintenance of shareholder accounts ("Services").
2. This Plan is designed to compensate Michigan National Bank ("MNB")
for providing personal services and/or the maintenance of shareholder accounts
to the Funds/Classes and their shareholders. In compensation for the services
provided pursuant to this Plan, MNB may be paid a monthly fee computed at the
annual rate not to exceed .25 of 1% of the average aggregate net asset value
of the shares of each Fund/Class held during the month.
3. Any payments made by the Funds/Classes to MNB pursuant to this
Plan will be made pursuant to a "Shareholder Services Agreement" between MNB
and the Trust, on behalf of each Fund/Class.
4. Quarterly in each year that this Plan remains in effect, MNB shall
prepare and furnish to the Board, and the Board shall review, a written report
of the amounts expended under the Plan.
5. This Plan shall become effective with regard to each Fund/Class
(i) after approval by majority votes of: (a) the Board; and (b) the members
of the Board who are not interested persons of such Fund/Class and have no
direct or indirect financial interest in the operation of this Plan or in any
related documents to the Plan ("Independent Trustees"), cast in person at a
meeting called for the purpose of voting on the Plan.
6. This Plan shall remain in effect with respect to each Fund/Class
presently set forth on an Exhibit and any subsequent Fund/Class added pursuant
to an Exhibit during the initial year of this Plan for the period of one year
from the date set forth above and may be continued thereafter if this Plan is
approved with respect to each Fund/Class at least annually by a majority of
the Board and a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on the renewal of such Plan. If this
Plan is adopted with respect to a Fund/Class after the first annual approval
by the Trustees as described above, this Plan will be effective as to that
Fund/Class upon execution of the applicable Exhibit and will continue in
effect until the next annual approval of this Plan by the Board and thereafter
for successive periods of one year subject to approval as described above.
7. All material amendments to this Plan must be approved by a vote of
the Board and of the Independent Trustees, cast in person at a meeting called
for such purpose.
8. This Plan may be terminated as follows:
(a) at any time, without the payment of any penalty, by the
vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of any Fund/Class as
defined in the Investment Company Act of 1940 on sixty (60) days'
written notice to the parties to this Plan; or
(b) by any party to the Plan without cause by giving the other
party at least sixty (60) days' written notice of its intention to
terminate.
9. While this Plan shall be in effect, the selection and nomination
of Independent Trustees shall be committed to the discretion of the
Independent Trustees then in office.
10. All agreements with any person relating to the implementation of
this Plan shall be in writing and any agreement related to this Plan shall be
subject to termination, without penalty, pursuant to the provisions of
Paragraph 8 herein.
11. This Plan shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Witness the due execution hereof this as of the date set forth above.
Independence One Mutual Funds
By: /s/ E.C. Gonzales
Title: President
Attest: /s/ Jay S. Neuman
Michigan National Bank
By: /s/ Robert J. Stapleton
Title: Senior Vice President
Attest: /s/ Stacey A. Gray
Exhibit 9(vi) on Form N-1A
Exhibit No. 10(iii) under Item 601/Reg. S-K
INDEPENDENCE ONE MUTUAL FUNDS
MULTIPLE CLASS PLAN
This Multiple Class Plan ("Plan") is adopted by INDEPENDENCE ONE
MUTUAL FUNDS (the "Trust"), a Massachusetts business trust, with
respect to the classes of shares ("Classes") of the portfolios of the
Trust (the "Funds") set forth in exhibits hereto.
Purpose
1. This Plan is adopted pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Rule"), in connection with the
issuance by the Trust of more than one class of shares of any or all
of the Funds ("Covered Classes") in reliance on the Rule .
2. Separate Arrangements/Class Differences
The Funds set forth on Exhibit A offer two classes of shares which are
titled Class A Shares and Class B Shares. The only expenses allocated
to the shares as a class are expenses that may be incurred with
respect to Class A Shares under the Trust's Shareholder Services Plan
adopted with respect to Class A Shares.
Class B Shares are designed primarily for institutions, corporations,
and fiduciaries.
Class A Shares may be purchased by all types of investors, including
individuals. Checkwriting privileges, as they relate to Class A
Shares, are as described in the applicable prospectus.
The minimum initial investments in the Covered Classes are
$1,000,000.00 for Class B Shares and $1,000.00 for Class A Shares.
Subsequent investments may be made in the amount of $100.00 for all
Covered Classes.
Shareholders are entitled to one vote for each share held on the record
date for any action requiring a vote by the shareholders and a
proportionate fractional vote for each fractional share held.
Shareholders of the Trust will vote in the aggregate and not by Fund
or class except (i) as otherwise expressly required by law or when the
Trustees determine that the matter to be voted upon affects only the
interests of the shareholders of a particular Fund or class, and (ii)
only holders of Class A Shares will be entitled to vote on matters
submitted to shareholder vote with respect to the Shareholder Services
Plan applicable to such class.
3. Expense Allocations
The expenses incurred pursuant to the Shareholder Services Plan will
be borne solely by the Class A Shares class of the applicable Fund,
and constitute the only expenses allocated to one class and not the
other.
4. Exchange Features
A shareholder may exchange shares of one Fund for the appropriate class
of shares of any other Fund in the Trust.
Effectiveness
5. This Plan shall become effective with respect to each Class, (i) to the
extent required by the Rule, after approval by a majority vote of: (a)
the Trust's Board of Trustees; (b) the members of the Board of the
Trust who are not interested persons of the Trust and have no direct
or indirect financial interest in the operation of the Trust's Plan;
and/or (ii) upon execution of an exhibit adopting this Plan with
respect to such Class.
6. Amendment
This Plan may be amended at any time, with respect to any Class, by a
majority vote of: (i) the Trust's Board of Trustees; and (ii) the
members of the Board of Trustees who are not interested persons of the
Trust and have no direct or indirect financial interest in the
operation of this Plan.
INDEPENDENCE ONE MUTUAL FUNDS
EXHIBIT A
to the
Multiple Class Plan
Independence One Prime Money Market Fund:
Class A Shares
Class B Shares
This Multiple Class Plan is adopted by Independence One Mutual
Funds with respect to the Classes of Shares of the portfolio of
Independence One Mutual Funds set forth above.
Witness the due execution hereof this 6th day of June, 1995.
Independence One Mutual Funds
By:/s/ E. C. Gonzales
Title: President
Date: 7/3/95
