As filed with the Securities and Exchange Commission on October 28,
1997 Securities Act File No. 33-30913 Investment Company Act File No.
811-5899
=================================================================
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. 25 [X]
---------
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 27 [X]
(Check appropriate box or boxes)
The Munder Funds Trust (Exact Name of Registrant as Specified in Charter)
One Exchange Place Boston, Massachusetts 02109 (Address of Principal
Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (810) 647-9200
Julie A. Tedesco, Esq. First Data Investor Services Group, Inc. 53 State
Street Boston, Massachusetts 02109 (Name and Address of Agent for Service)
Copies to:
Lisa Anne Rosen, Esq. Paul F. Roye, Esq.
Munder Capital Management Dechert Price & Rhoads
480 Pierce Street 1500 K Street, N.W., Suite 500
Birmingham, MI 48009 Washington, D.C. 20005
It is proposed that this filing will become effective immediately
upon filing pursuant to paragraph (b) of Rule 485.
The Registrant has elected to register an indefinite number of
shares of beneficial interest under the Securities Act of 1933 pursuant to Rule
24f-2 under the Investment Company Act of 1940. Registrant filed the notice
required by Rule 24f-2 with respect to its fiscal year ended June 30, 1997 on
August 28, 1997.
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds
(Equity Funds Class A, B and C Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund
Highlights; Fund Choices;
Structure and
Management of the Funds
5. Management of the Fund Structure and Management
of the Funds; Fund
Choices;
Dividends, Distributions
and Taxes; Performance
6. Capital Stock and Other Securities Structure and Management
of the Funds; Purchases
and Exchanges
of Shares; Redemptions of
Shares; Dividends,
Distributions and Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges of
Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds
(Income Funds Class A, B and C Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund
Highlights; Fund Choices;
Structure and
Management of the Funds
5. Management of the Fund Structure and Management
of the Funds; Fund
Choices; Dividends,
Distributions and Taxes;
Performance
6. Capital Stock and Other Securities Structure and Management
of the Funds; Purchases
and Exchanges
of Shares; Redemptions of
Shares; Dividends,
Distributions and Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges
of Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds
(Money Market Class A, B and C Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund
Highlights; Fund Choices;
Structure and
Management of the Funds
5. Management of the Fund Structure and Management
of the Funds; Fund
Choices; Dividends,
Distributions and Taxes;
Performance
6. Capital Stock and Other Securities Structure and Management
of the Funds; Purchases
and Exchanges
of Shares; Redemptions of
Shares; Dividends,
Distributions and Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges
of Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds Trust
(The Munder Index 500 Fund Class A and B Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund Highlights;
Fund Information; Structure
and Management of the Fund
5. Management of the Fund Structure and Management of
the Fund; Fund Information;
Dividends, Distributions and
Taxes; Performance
6. Capital Stock and Other Securities Structure and Management of
the Fund; Purchases and
Exchanges of Shares;
Redemptions of Shares;
Dividends, Distributions and
Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges of
Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds
(Class K Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund Highlights;
Fund Choices; Structure and
Management of the Funds
5. Management of the Fund Structure and Management of
the Funds; Fund Choices;
Dividends, Distributions and
Taxes; Performance
6. Capital Stock and Other Securities Structure and Management of
the Funds; Purchases of
Shares; Redemptions of Shares;
Dividends, Distributions and
Taxes
7. Purchase of Securities Being Offered Purchases of Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds
(Class Y Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights;
Financial Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund Highlights;
Fund Choices; Structure and
Management of the Funds
5. Management of the Fund Structure and Management of the
Funds; Fund Choices; Dividends,
Distributions and Taxes;
Performance
6. Capital Stock and Other Securities Structure and Management of the
Funds; Purchases and Exchanges
of Shares; Redemptions of Shares;
Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges of Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
THE MUNDER FUNDS, INC.
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
Prospectus for The Munder Funds Trust
(The Munder Index 500 Fund Class Y Shares)
Part A
--------
Item Heading
------ ----------
1. Cover Page Cover Page
2. Synopsis Fund Highlights; Financial
Information
3. Condensed Financial Information Financial Information
4. General Description of Registrant Cover Page; Fund Highlights;
Fund Information; Structure and
Management of the Fund
5. Management of the Fund Structure and Management of the
Fund; Fund Information;
Dividends, Distributions and Taxes;
Performance
6. Capital Stock and Other Securities Structure and Management of the
Fund; Purchases and Exchanges
of Shares; Redemptions of Shares;
Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Purchases and Exchanges of Shares
8. Redemption or Repurchase Redemptions of Shares
9. Pending Legal Proceedings Not Applicable
<PAGE>
Part B
--------
(The Munder Funds)
Item Heading
------ ----------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History See Prospectus --"Structure and
Management of the
Funds;" General; Trustees, Directors
and Officers
13. Investment Objectives and Policies Fund Investments; Investment
Limitations; Portfolio Transactions
14. Management of the Fund See Prospectus --"Structure and
Management of the Funds;"
Trustees, Directors and Officers;
Miscellaneous
15. Control Persons and Principal See Prospectus --
Holders of Securities "Structure and
Management of the Funds;" Miscellaneous
16. Investment Advisory and Other Investment Advisory and Other Service
Services Arrangements; See
Prospectus -- " Structure and
Management of the Funds "
17. Brokerage Allocation and Other Portfolio Transactions
Practices
18. Capital Stock and Other Securities See Prospectus --"Structure and
Management of the Funds;"
Additional Information Concerning Shares
<PAGE>
19. Purchase, Redemption and Pricing Additional Purchase and
of Securities Being Offered Redemption Information; Net Asset
Value; Additional
Information Concerning Shares
20. Tax Status Taxes
21. Underwriters Investment Advisory and Other Service
Arrangements
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
<PAGE>
THE MUNDER FUNDS TRUST
The purpose of this Post-Effective Amendment filing is to respond to the Staff's
comments with respect to Post-Effective Amendment No. 24 to the Trust's
Registration Statement and to bring the financial statements and other
information up to date under Section 10(a)(3) of the Securities Act of 1933, as
amended.
CLASS A, B & C SHARES
[LOGO OF THE MUNDER FUNDS]
Investments
for all seasons
Prospectus
OCTOBER 29, 1997
THE MUNDER EQUITY FUNDS
Accelerating Growth
Balanced
Growth & Income
International Equity
Micro-Cap Equity
Mid-Cap Growth
Multi-Season Growth
Real Estate Equity Investment
Small-Cap Value
Small Company Growth
Value
THE MUNDER FRAMLINGTON FUNDS
Framlington Emerging Markets
Framlington Healthcare
Framlington International Growth
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS A, CLASS B AND CLASS C SHARES
The Munder Funds Trust (the "Trust"), The Munder Funds, Inc. (the "Company")
and The Munder Framlington Funds Trust ("Framlington") are open-end investment
companies. This Prospectus describes investment portfolios offered by the
Trust (the "Trust Funds"), the Company (the "Company Funds") and Framlington
("Framlington Funds") described below (referred to as the "Funds"):
Munder Accelerating Growth Fund
Munder Balanced Fund
Munder Growth & Income Fund
Munder International Equity Fund
Munder Micro-Cap Equity Fund
Munder Mid-Cap Growth Fund
Munder Multi-Season Growth Fund
Munder Real Estate Equity Investment Fund
Munder Small-Cap Value Fund
Munder Small Company Growth Fund
Munder Value Fund
Munder Framlington Emerging Markets Fund
Munder Framlington Healthcare Fund
Munder Framlington International Growth Fund
Munder Capital Management (the "Advisor") serves as the investment adviser
of the Funds.
This Prospectus explains the objectives, policies, risks and fees of each
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
each of the Funds has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. You can
obtain the SAI free of charge by calling the Funds at (800) 438-5789. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
SAI and other information regarding the Funds.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Funds?.............................. 3
Financial Information...................................................... 5
Fund Choices
What Funds are offered?.................................................. 30
Who may want to invest in the Funds?..................................... 36
What are the Funds' investments and investment practices?................ 37
What are the risks of investing in the Funds?............................ 42
Performance
How is the Funds' performance calculated?................................ 43
Where can I obtain performance data?..................................... 44
Purchases and Exchanges of Shares
What share class should I choose for my investment?...................... 44
What price do I pay for shares?.......................................... 44
When can I purchase shares?.............................................. 47
What is the minimum required investment?................................. 47
How can I purchase shares?............................................... 47
How can I exchange shares?............................................... 48
Redemptions of Shares
What price do I receive for redeemed shares?............................. 48
When can I redeem shares?................................................ 50
How can I redeem shares?................................................. 50
When will I receive redemption amounts?.................................. 51
Structure and Management of the Funds
How are the Funds structured?............................................ 51
Who manages and services the Funds?...................................... 51
What are my rights as a shareholder?..................................... 54
Dividends, Distributions and Taxes
When will I receive distributions from the Funds?........................ 54
How will distributions be made?.......................................... 54
Are there tax implications of my investments in the Funds?............... 54
Additional Information..................................................... 55
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUNDS?
Q: What are the Funds' goals?
A: . The Accelerating Growth Fund, Framlington Emerging Markets Fund,
Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund, Small Company Growth Fund
and Value Fund primarily seek to provide long-term capital appreciation.
. The Balanced Fund, Growth & Income Fund and Real Estate Equity Investment
Fund seek to provide capital appreciation and current income.
Q: What are the Funds' strategies?
A: The Funds, other than the Balanced Fund, invest primarily in Equity
Securities. The Balanced Fund allocates its assets primarily among three types
of assets--Equity Securities, Fixed Income Securities and Cash Equivalents.
"Equity Securities" include common stocks, preferred stocks, warrants and
other securities convertible into common stock. "Fixed Income Securities" are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rates. "Cash Equivalents" are instruments which
are highly liquid and virtually free of investment risk.
Q: What are the Funds' risks?
The following table summarizes the primary risks of investing in the Funds:
<TABLE>
<CAPTION>
FUND RISK
- -------------------------------------------------------------------------------
<S> <C>
All Funds Potential loss of investment due to changes in
the stock market in general, changes in the
stock prices of particular companies and
perceptions about particular industries.
- -------------------------------------------------------------------------------
International Equity Fund, Because of large investments in foreign
Framlington International securities, the Funds are riskier than domestic
Growth Fund and Framlington funds due to factors such as freezes on
Emerging Markets Fund convertibility of currency, changes in exchange
rates, political instability and differences in
accounting and reporting standards.
- -------------------------------------------------------------------------------
Micro-Cap Equity Fund, Because of large investments in mid-
Small-Cap Value Fund, capitalization, small-capitalization and/or
Mid-Cap Growth Fund and emerging growth companies, the Funds are riskier
Small Company Growth Fund than large-capitalization funds since such
companies typically have greater earnings
fluctuations and greater reliance on a few key
customers than larger companies.
- -------------------------------------------------------------------------------
Real Estate Equity These Funds concentrate their investments in
Investment Fund and single industries and could experience larger
Framlington Healthcare Fund price fluctuations than funds invested in a
broader range of industries.
- -------------------------------------------------------------------------------
</TABLE>
Q: What are the options for investment in the Funds?
A: Each Fund offers five different investment options, or classes: Class A, B,
C, K and Y. Class K and Y shares, which are only offered to institutional and
other qualified investors, are offered in other prospectuses.
3
<PAGE>
<TABLE>
<CAPTION>
MAXIMUM FRONT MAXIMUM
CLASS RULE 12B-1 FEES * END SALES LOAD ** CDSC ***
----- ----------------- ----------------- --------
<S> <C> <C> <C>
Class A 0.25% 5.5% None+
Class B 1% None 5%
Class C 1% None 1%, if redeemed within
1 year of purchase
</TABLE>
- --------
* An annual fee for distributing shares and servicing shareholder
accounts based on the Fund's average daily net assets.
** A one-time fee charged at the time of purchase of shares. The fee
declines based on the amount you invest.
*** A contingent deferred sales charge ("CDSC") is a one-time fee charged
at the time of redemption. The fee declines based on the length of time
you hold the shares.
+A CDSC of 1% is imposed on certain redemptions of Class A Shares if
redeemed within one year of purchase.
(i) If you invest over $250,000, you must buy Class A or Class C Shares.
Q: How do I buy and sell shares of the Funds?
A: Funds Distributor Inc. (the "Distributor") sells shares of the Funds. You
may purchase shares from the Distributor through broker-dealers or other
financial institutions or from the Funds' transfer agent, First Data Investor
Services Group, Inc. (the "Transfer Agent"), by mailing the attached Account
Application Form with a check to the Transfer Agent. You must invest at least
$500 ($50 through the Automatic Investment Plan) initially and at least $50
for subsequent purchases.
Shares may be redeemed (sold back to the Fund) by mail or by telephone.
You may also acquire the Funds' shares by exchanging shares of the same
class of other funds of the Trust, the Company and Framlington, and exchange
Fund shares for shares of the same class of other funds of the Trust, the
Company and Framlington.
Q: What shareholder privileges do the Funds offer?
A:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
------------------------- ------------------------- -------------------------
<S> <C> <C>
Automatic Investment Plan Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal Plan Automatic Withdrawal Plan Automatic Withdrawal Plan
Retirement Plans Retirement Plans Retirement Plans
Telephone Exchanges Telephone Exchanges Telephone Exchanges
Rights of Accumulation Reinvestment Privilege Reinvestment Privilege
Letter of Intent
Quantity Discounts
Reinvestment Privilege
</TABLE>
Q: When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments. Dividends paid at least annually: Framlington Emerging Markets
Fund, Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund, Multi-
Season Growth Fund, Small-Cap Value Fund and Value Fund.
Dividends paid at least quarterly (if income is available): Accelerating
Growth Fund, Balanced Fund, Growth & Income Fund and Small Company Growth
Fund.
Dividends paid monthly: Real Estate Equity Investment Fund.
The Funds distribute capital gains at least annually. Unless you elect to
receive distributions in cash, all dividends and capital gain distributions of
a Fund will be automatically used to purchase additional shares of that Fund.
4
<PAGE>
Q: Who manages the Funds' assets?
A: Munder Capital Management is the Funds' investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Funds
other than the Framlington Funds. The Advisor provides overall investment
management services for the Framlington Funds. Framlington Overseas Investment
Management Limited (the "Sub-Advisor") is responsible for all purchases and
sales of securities held by the Framlington Funds.
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES (1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Funds will bear directly.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge on Purchase (as a % of
Offering Price)................................... 5.5% (2) None None
Sales Charge Imposed on Reinvested Dividends....... None None None
Maximum Deferred Sales Charge...................... None(3) 5% (4) None(5)
Redemption Fees(6)................................. None None None
Exchange Fees...................................... None None None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The sales charge declines as the amount invested increases.
(3) A 1% CDSC applies to redemptions of Class A Shares within one year of
investment that were purchased with no initial sales charge as part of an
investment of $1,000,000 or more.
(4) The CDSC payable upon redemption of Class B Shares declines over time.
(5) A 1% CDSC applies to redemptions of Class C Shares within one year of
purchase.
(6) The Transfer Agent may charge a fee of $7.50 for wire redemptions under
$5,000.
5
<PAGE>
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to each Fund, which investors in the Funds will bear
indirectly for the current fiscal year. Such expenses include payments to
Trustees, Directors, auditors, legal counsel and service providers (such as
the Advisor), registration fees and distribution fees. The fees shown below
for the Accelerating Growth Fund, Balanced Fund, Growth & Income Fund,
International Equity Fund and Small Company Growth Fund are based on fees in
the Funds' past fiscal year. The fees shown below for the Mid-Cap Growth Fund,
Real Estate Equity Investment Fund and Value Fund have been restated to
reflect the discontinuation of voluntary expense reimbursements effective as
of the date of this prospectus. The fees for the Multi-Season Growth Fund
reflect an anticipated voluntary advisory fee waiver for the current fiscal
year. The fees shown below for the Micro-Cap Equity Fund, Small-Cap Value Fund
and the Framlington Funds are based on estimated operating expenses for the
current fiscal year and reflect anticipated voluntary expense reimbursements
for the Micro-Cap Equity Fund and Framlington Healthcare Fund. The Advisor may
discontinue such voluntary waivers or expense reimbursements at any time in
its sole discretion. Because of the 12b-1 fee, you may over the long term pay
more than the amount of the maximum permitted front-end sales charge.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES ACCELERATING
(AS A % OF AVERAGE NET ASSETS) GROWTH FUND BALANCED FUND
- ------------------------------ ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees................... .75% .75% .75% .65% .65% .65%
12b-1 Fees...................... .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.................. .20% .20% .20% .32% .32% .32%
----- ----- ----- ----- ----- -----
Total Fund Operating Expenses... 1.20% 1.95% 1.95% 1.22% 1.97% 1.97%
===== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
ANNUAL FUND GROWTH & INCOME FUND EQUITY FUND MICRO-CAP EQUITY FUND
OPERATING EXPENSES ----------------------- ----------------------- -------------------------
(AS A % OF CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
AVERAGE NET ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .75% .75% .75% .75% .75% .75% 1.00% 1.00% 1.00%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses+......... .20% .20% .20% .26% .26% .26% .25%++ .25%++ .25%++
----- ----- ----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses+.............. 1.20% 1.95% 1.95% 1.26% 2.01% 2.01% 1.50%++ 2.25%++ 2.25%++
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
MID-CAP MULTI-SEASON REAL ESTATE EQUITY
ANNUAL FUND GROWTH FUND GROWTH FUND INVESTMENT FUND
OPERATING EXPENSES ----------------------- ----------------------- -----------------------
(AS A % OF CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
AVERAGE NET ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .74% .74% .74% .75%* .75%* .75%* .74% .74% .74%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.......... .25% .25% .25% .25% .25% .25% .36% .36% .36%
----- ----- ----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses............... 1.24% 1.99% 1.99% 1.25%* 2.00%* 2.00%* 1.35% 2.10% 2.10%
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP SMALL COMPANY
ANNUAL FUND VALUE FUND GROWTH FUND VALUE FUND
OPERATING EXPENSES ----------------------- ----------------------- -----------------------
(AS A % OF CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
AVERAGE NET ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .75% .75% .75% .75% .75% .75% .74% .74% .74%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.......... .38% .38% .38% .22% .22% .22% .28% .28% .28%
---- ----- ----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses............... 1.38 2.13% 2.13% 1.22% 1.97% 1.97% 1.27% 2.02% 2.02%
==== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
FRAMLINGTON FRAMLINGTON
EMERGING FRAMLINGTON INTERNATIONAL
ANNUAL FUND MARKETS FUND HEALTHCARE FUND GROWTH FUND
OPERATING EXPENSES ----------------------- ------------------------- -----------------------
(AS A % OF CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
AVERAGE NET ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... 1.25% 1.25% 1.25% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses+......... .29% .29% .29% .30%++ .30%++ .30%++ .30% .30% .30%
----- ----- ----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expenses+.............. 1.79% 2.54% 2.54% 1.55%++ 2.30%++ 2.30%++ 1.55% 2.30% 2.30%
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
6
<PAGE>
- --------
* The Advisor expects to voluntarily waive a portion of its advisory fees for
the current fiscal year. Without waivers, the ratio of advisory fees to
average net assets would be 1.00% and total fund operating expenses would
be 1.50%--Class A Shares; 2.25%--Class B Shares; and 2.25%--Class C Shares.
+ After expense reimbursements, if any.
++ The Advisor expects to voluntarily reimburse the Funds for certain
operating expenses. In the absence of such expense reimbursements, it is
estimated that total fund operating expenses would be: Micro-Cap Equity
Fund: 1.60%--Class A, 2.35%--Class B, and 2.35%--Class C and Framlington
Healthcare Fund: 1.76%--Class A, 2.51%--Class B and 2.51%--Class C.
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual
return, (2) redemption at the end of the time period (including the deduction
of the deferred sales charge, if any) and (3) no redemption at the end of the
time period. THIS EXAMPLE IS NOT A REPRESENTATION OF PAST OR FUTURE
PERFORMANCE OR OPERATING EXPENSES; ACTUAL PERFORMANCE OR OPERATING EXPENSES
MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
ACCELERATING BALANCED
GROWTH FUND FUND
----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption................... $ 67 $ 70 $ 30 $ 67 $ 70 $ 30
. No Redemption................ $ 67 $ 20 $ 20 $ 67 $ 20 $ 20
3 Years
. Redemption................... $ 91 $ 91 $ 61 $ 92 $ 92 $ 62
. No Redemption................ $ 91 $ 61 $ 61 $ 92 $ 62 $ 62
5 Years
. Redemption................... $117 $125 $105 $118 $126 $106
. No Redemption................ $117 $105 $105 $118 $106 $106
10 Years
. Redemption................... $193 $227 $227 $195 $230 $230
. No Redemption................ $193 $227 $227 $195 $230 $230
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INTERNATIONAL MICRO-CAP
INCOME FUND EQUITY FUND EQUITY FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 67 $ 70 $ 30 $ 67 $ 70 $ 30 $ 69 $ 73 $ 33
. No Redemption........ $ 67 $ 20 $ 20 $ 67 $ 20 $ 20 $ 69 $ 23 $ 23
3 Years
. Redemption........... $ 91 $ 91 $ 61 $ 93 $ 93 $ 63 $100 $100 $ 70
. No Redemption........ $ 91 $ 61 $ 61 $ 93 $ 63 $ 63 $100 $ 70 $ 70
5 Years
. Redemption........... $117 $125 $105 $120 $128 $108 $132 $140 $120
. No Redemption........ $117 $105 $105 $120 $108 $108 $132 $120 $120
10 Years
. Redemption........... $193 $227 $227 $199 $234 $234 $225 $250 $258
. No Redemption........ $193 $227 $227 $199 $234 $234 $225 $258 $258
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
MID-CAP MULTI-SEASON REAL ESTATE EQUITY
GROWTH FUND GROWTH FUND INVESTMENT FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 67 $ 70 $ 30 $ 67 $ 70 $ 30 $ 68 $ 71 $ 31
. No Redemption........ $ 67 $ 20 $ 20 $ 67 $ 20 $ 20 $ 68 $ 21 $ 21
3 Years
. Redemption........... $ 92 $ 92 $ 62 $ 93 $ 93 $ 63 $ 95 $ 96 $ 66
. No Redemption........ $ 92 $ 62 $ 62 $ 93 $ 63 $ 63 $ 95 $ 66 $ 66
5 Years
. Redemption........... $119 $127 $107 $120 $128 $108 $125 $133 $113
. No Redemption........ $119 $107 $107 $120 $108 $108 $125 $113 $113
10 Years
. Redemption........... $197 $232 $232 $198 $233 $233 $209 $243 $243
. No Redemption........ $197 $232 $232 $198 $233 $233 $209 $243 $243
<CAPTION>
SMALL-CAP SMALL COMPANY
VALUE FUND GROWTH FUND VALUE FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 68 $ 72 $ 32 $ 67 $ 70 $ 30 $ 67 $ 71 $ 31
. No Redemption........ $ 68 $ 22 $ 22 $ 67 $ 20 $ 20 $ 67 $ 21 $ 21
3 Years
. Redemption........... $ 96 $ 97 $ 67 $ 92 $ 92 $ 62 $ 93 $ 93 $ 63
. No Redemption........ $ 96 $ 67 $ 67 $ 92 $ 62 $ 62 $ 93 $ 63 $ 63
5 Years
. Redemption........... $127 $134 $114 $118 $126 $106 $121 $129 $109
. No Redemption........ $127 $114 $114 $118 $106 $106 $121 $109 $109
10 Years
. Redemption........... $212 $246 $246 $195 $230 $230 $200 $235 $235
. No Redemption........ $212 $246 $246 $195 $230 $230 $200 $235 $235
<CAPTION>
FRAMLINGTON FRAMLINGTON FRAMLINGTON
EMERGING HEALTHCARE INTERNATIONAL
MARKETS FUND FUND GROWTH FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 72 $ 76 $ 36 $ 70 $ 73 $ 33 $ 70 $ 73 $ 33
. No Redemption........ $ 72 $ 26 $ 26 $ 70 $ 23 $ 23 $ 70 $ 23 $ 23
3 Years
. Redemption........... $108 $109 $ 79 $101 $102 $ 72 $101 $102 $ 72
. No Redemption........ $108 $ 79 $ 79 $101 $ 72 $ 72 $101 $ 72 $ 72
5 Years
. Redemption........... $147 $155 $135 $135 $143 $123 $135 $143 $123
. No Redemption........ $147 $135 $135 $135 $123 $123 $135 $123 $123
10 Years
. Redemption........... $254 $288 $288 $230 $264 $264 $230 $264 $264
. No Redemption........ $254 $288 $288 $230 $264 $264 $230 $264 $264
</TABLE>
8
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors, except that Multi-Season Growth Fund's financial
statements for periods ended prior to June 30, 1995 were audited by another
independent auditor. Class B Shares of the Company's Funds were not offered
prior to March 1, 1994. This information should be read in conjunction with
the Funds' most recent Annual Reports, which are incorporated by reference
into the SAI. You may obtain the Annual Reports without charge by calling
(800) 438-5789.
<TABLE>
<CAPTION>
ACCELERATING GROWTH FUND(A)
--------------------------------
YEAR PERIOD
YEAR ENDED ENDED ENDED
6/30/97(I) 6/30/96 6/30/95(D)
CLASS A CLASS A CLASS A
---------- ------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period ....... $ 15.36 $ 14.82 $12.73
------- ------- ------
Income from investment operations:
Net investment income/(loss) ............... (0.04) (0.05) (0.01)
Net realized and unrealized gain/(loss) on
investments ............................... 0.62 2.92 2.10
------- ------- ------
Total from investment operations ........... 0.58 2.87 2.09
------- ------- ------
Less distributions:
Dividends from net investment income ....... -- -- --
Distributions from net realized gains ...... (1.38) (2.33) --
------- ------- ------
Total distributions ........................ (1.38) (2.33) --
------- ------- ------
Net asset value, end of period ............. $ 14.56 $ 15.36 $14.82
======= ======= ======
Total return (b) ........................... 4.83% 22.03% 16.42%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) ....... $ 6,270 $ 6,098 $4,701
Ratio of operating expenses to average net
assets .................................... 1.20% 1.20% 1.20%(c)
Ratio of net investment income/(loss) to
average net assets ........................ (0.32)% (0.42)% (0.21)%(c)
Portfolio turnover rate .................... 88% 112% 31%
Ratio of operating expenses to average net
assets without waivers .................... 1.20% 1.27% 1.44%(c)
Average commission rate (g) ................ $0.0588 $0.0548 N/A
</TABLE>
- --------
(a) The Munder Accelerating Growth Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on November 23, 1992, April 25, 1994
and September 26, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Amount represents less than $0.01 per share.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Amount rounds to less than 0.01%.
(i) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
10
<PAGE>
<TABLE>
<CAPTION>
ACCELERATING GROWTH FUND (A)
- ---------------------------------------------------------------------------------------------------------------
YEAR PERIOD YEAR PERIOD PERIOD PERIOD
YEAR ENDED ENDED ENDED YEAR ENDED ENDED ENDED ENDED YEAR ENDED ENDED
2/28/95(E) CLASS 2/28/94 2/28/93 6/30/97(I) 6/30/96 6/30/95(D) 2/28/95(E) 6/30/97(I) 6/30/96
A CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
- ---------------- ------- ------- ---------- ------- ---------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$13.98 $12.08 $11.74 $ 15.08 $ 14.70 $12.66 $12.88 $ 15.25 $ 16.30
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.03) (0.00)(f) 0.01 (0.15) (0.05) (0.02) (0.07) (0.15) (0.05)
(0.88) 2.17 0.62 0.62 2.76 2.06 0.19 0.59 1.33
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.91) 2.17 0.63 0.47 2.71 2.04 0.12 0.44 1.28
------------ ------ ------ ------- ------- ------ ------ ------- -------
-- (0.02) (0.01) -- -- -- -- -- --
(0.34) (0.25) (0.28) (1.38) (2.33) -- (0.34) (1.38) (2.33)
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.34) (0.27) (0.29) (1.38) (2.33) -- (0.34) (1.38) (2.33)
------------ ------ ------ ------- ------- ------ ------ ------- -------
$12.73 $13.98 $12.08 $ 14.17 $ 15.08 $14.70 $12.66 $ 14.31 $ 15.25
============ ====== ====== ======= ======= ====== ====== ======= =======
(6.45)% 18.00% 5.43% 4.15% 21.05% 16.11% 0.99% 3.89% 10.22%
============ ====== ====== ======= ======= ====== ====== ======= =======
$4,138 $5,152 $ 349 $ 538 $ 286 $ 67 $ 39 $ 281 $ 118
1.18% 1.03% 0.96%(c) 1.95% 1.95% 1.95%(c) 1.88%(c) 1.95% 1.95%(c)
(0.25)% (0.02)% 0.18%(c) (1.07)% (1.17)% (0.96)%(c) (0.95)%(c) (1.07)% (1.17)%(c)
90% 34% 56% 88% 112% 31% 90% 88% 112%
1.41% 1.28% 1.21%(c) 1.95% 2.02% 2.19%(c) 2.11%(c) 1.95% 2.02%(c)
N/A N/A N/A $0.0588 $0.0548 N/A N/A $0.0588 $0.0548
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND (A)
--------------------------------
PERIOD
YEAR ENDED YEAR ENDED ENDED
6/30/97(G) 6/30/96(G) 6/30/95(D)
CLASS A CLASS A CLASS A
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period ....... $ 12.35 $ 10.77 $ 9.95
------- ------- ------
Income from investment operations:
Net investment income ..................... 0.29 0.27 0.09
Net realized and unrealized gain/(loss) on
investments .............................. 1.30 1.55 0.85
------- ------- ------
Total from investment operations .......... 1.59 1.82 0.94
------- ------- ------
Less distributions:
Dividends from net investment income ...... (0.27) (0.24) (0.12)
Distributions from net realized gains ..... (0.66) -- --
------- ------- ------
Total distributions ....................... (0.93) (0.24) (0.12)
------- ------- ------
Net asset value, end of period ............. $ 13.01 $ 12.35 $10.77
======= ======= ======
Total return(b) ........................... 13.63% 17.06% 9.44%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) ...... $ 382 $ 375 $ 314
Ratio of operating expenses to average net
assets ................................... 1.22% 1.15% 1.16%(c)
Ratio of net investment income to average
net assets ............................... 2.30% 2.29% 2.51%(c)
Portfolio turnover rate ...................
Ratio of operating expenses to average net
assets without waivers ................... 125% 197% 52%
Average commission rate(f) ................ $0.0607 $0.0586 N/A
</TABLE>
- --------
(a) The Munder Balanced Fund Class A Shares, Class B Shares and Class C Shares
commenced operations on April 30, 1993, June 21, 1994 and January 24,
1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
12
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND (A)
--------------------------------------------------------------------------------------------
YEAR PERIOD PERIOD PERIOD
YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED ENDED YEAR ENDED ENDED
2/28/95(E) 2/28/94 6/30/97(G) 6/30/96(G) 6/30/95(D) 2/28/95(E) 6/30/97(G) 6/30/96(G)
CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
---------- ------- ---------- ---------- ---------- ---------- ---------- ----------
<C> <C> <C> <C> <C> <C> <C> <C> <S>
$10.35 $ 9.86 $ 12.33 $ 10.76 $ 9.93 $ 9.56 $ 12.35 $ 11.67
------ ------ ------- ------- ------ ------ ------- -------
0.19 0.14 0.19 0.18 0.06 0.07 0.18 0.05
(0.41) 0.47 1.30 1.56 0.84 0.37 1.32 0.67
------ ------ ------- ------- ------ ------ ------- -------
(0.22) 0.61 1.49 1.74 0.90 0.44 1.50 0.72
------ ------ ------- ------- ------ ------ ------- -------
(0.18) (0.12) (0.19) (0.17) (0.07) (0.07) (0.20) (0.04)
-- -- (0.66) -- -- -- (0.66) --
------ ------ ------- ------- ------ ------ ------- -------
(0.18) (0.12) (0.85) (0.17) (0.07) (0.07) (0.86) (0.04)
------ ------ ------- ------- ------ ------ ------- -------
$ 9.95 $10.35 $ 12.97 $ 12.33 $10.76 $ 9.93 $ 12.99 $ 12.35
====== ====== ======= ======= ====== ====== ======= =======
(2.07)% 6.20% 12.73% 16.24% 9.11% 4.65% 12.84% 6.20%
====== ====== ======= ======= ====== ====== ======= =======
$ 286 $ 321 $ 199 $ 75 $ 15 $ 19 $ 73 $ 3
1.22% 1.02%(c) 1.97% 1.90% 1.91%(c) 1.85%(c) 1.97% 1.90%(c)
1.89% 1.67%(c) 1.55% 1.54% 1.76%(c) 1.26%(c) 1.55% 1.54%(c)
116% 50% 125% 197% 52% 116% 125% 197%
1.57% 1.27%(c) 1.97% 2.01% 2.26%(c) 2.20%(c) 1.97% 2.01%(c)
N/A N/A $0.0607 $0.0586 N/A N/A $0.0607 $0.0586
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND(A)
--------------------------------
PERIOD
YEAR ENDED YEAR ENDED ENDED
6/30/97(H) 6/30/96(H) 6/30/95(D)
CLASS A CLASS A CLASS A
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period........ $ 13.04 $ 11.14 $10.42
------- ------- ------
Income from investment operations:
Net investment income...................... 0.31 0.32 0.10
Net realized and unrealized gain on
investments............................... 3.14 1.98 0.80
------- ------- ------
Total from investment operations........... 3.45 2.30 0.90
------- ------- ------
Less distributions:
Dividends from net investment income....... (0.32) (0.31) (0.18)
Distributions from net realized gains...... (0.96) (0.09) --
------- ------- ------
Total distributions........................ (1.28) (0.40) (0.18)
------- ------- ------
Net asset value, end of period.............. $ 15.21 $ 13.04 $11.14
======= ======= ======
Total return(b)............................ 28.10% 20.90% 8.69%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)....... $ 3,662 $ 1,025 $ 226
Ratio of operating expenses to average net
assets.................................... 1.20% 1.21% 1.09%(c)
Ratio of net investment income to average
net assets................................ 2.28% 2.56% 3.33%(c)
Portfolio turnover rate.................... 62% 37% 13%
Ratio of operating expenses to average net
assets without waivers.................... 1.20% 1.28% 1.51%(c)
Average commission rate(g)................. $0.0562 $0.0591 N/A
</TABLE>
- --------
(a) The Munder Growth & Income Fund Class A Shares, Class B Shares and Class C
Shares commenced operations on August 8, 1994, August 9, 1994 and December
5, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Amount represents less than $0.01 per share.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
14
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND(A)
- ----------------------------------------------------------------------------------------
PERIOD PERIOD PERIOD
PERIOD ENDED YEAR ENDED YEAR ENDED ENDED ENDED YEAR ENDED ENDED
2/28/95(E) CLASS 6/30/97(H) 6/30/96(H) 6/30/95(D) 2/28/95(E) 6/30/97(H) 6/30/96(H)
A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
- ---------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 10.10 $ 13.02 $ 11.13 $10.41 $10.10 $ 13.01 $ 12.60
------------ ------- ------- ------ ------ ------- -------
0.23 0.21 0.23 0.09 0.19 0.19 0.14
0.24 3.13 1.99 0.77 0.25 3.15 0.55
------------ ------- ------- ------ ------ ------- -------
0.47 3.34 2.22 0.86 0.44 3.34 0.69
------------ ------- ------- ------ ------ ------- -------
(0.15) (0.23) (0.24) (0.14) (0.13) (0.23) (0.19)
(0.00)(f) (0.96) (0.09) -- (0.00)(f) (0.96) (0.09)
------------ ------- ------- ------ ------ ------- -------
(0.15) (1.19) (0.33) (0.14) (0.13) (1.19) (0.28)
------------ ------- ------- ------ ------ ------- -------
$10.42 $ 15.17 $ 13.02 $11.13 $10.41 $ 15.16 $ 13.01
============ ======= ======= ====== ====== ======= =======
4.79% 27.16% 20.09% 8.30% 4.47% 27.17% 5.57%
============ ======= ======= ====== ====== ======= =======
$ 128 $ 641 $ 228 $ 57 $ 51 $ 766 $ 31
0.53%(c) 1.95% 1.96% 1.84%(c) 1.27%(c) 1.95% 1.96%(c)
4.72%(c) 1.53% 1.81% 2.58%(c) 3.96%(c) 1.53% 1.81%(c)
12% 62% 37% 13% 12% 62% 37%
1.53%(c) 1.95% 2.03% 2.26%(c) 2.27%(c) 1.95% 2.03%(c)
N/A $0.0562 $0.0591 N/A N/A $0.0562 $0.0591
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND(A)
--------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D)
CLASS A CLASS A CLASS A
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period........ $ 15.09 $ 13.42 $12.29
------- ------- ------
Income from investment operations:
Net investment income...................... 0.14 0.15 0.12
Net realized and unrealized gain/(loss) on
investments............................... 2.30 1.64 1.01
------- ------- ------
Total from investment operations........... 2.44 1.79 1.13
------- ------- ------
Less distributions:
Dividends from net investment income....... (0.21) (0.12) --
Distributions from net realized gains...... (1.59) -- --
Distributions from capital................. -- -- --
------- ------- ------
Total distributions........................ (1.80) (0.12) --
------- ------- ------
Net asset value, end of period.............. $ 15.73 $ 15.09 $13.42
------- ------- ------
Total return (b)........................... 17.98% 13.37% 9.28%
------- ------- ------
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)....... $ 6,710 $ 4,767 $1,400
Ratio of operating expenses to average net
assets.................................... 1.26% 1.26% 1.21%(c)
Ratio of net investment income to average
net assets................................ 0.98% 1.07% 2.57%(c)
Portfolio turnover rate.................... 46% 75% 14%
Ratio of operating expenses to average net
assets without waivers.................... 1.26% 1.33% 1.46%(c)
Average commission rate (h)................ $0.0065 $0.0288 N/A
</TABLE>
- --------
(a) The Munder International Equity Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on November 30, 1992, March 9, 1994
and September 29, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Amount represents less than $0.01 per share.
(h) Average commission rate paid per share of securities purchased and sold by
the Fund.
16
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND(A)
- ----------------------------------------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
2/28/95(E, F) 2/28/94 2/28/93 6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E,F) 6/30/97(F) 6/30/96(F)
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
- ------------- ------- ------- ---------- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$13.68 $10.64 $10.60 $ 14.91 $ 13.35 $12.26 $13.45 $ 15.02 $ 14.13
------ ------ ------ ------- ------- ------ ------ ------- -------
0.17 0.19 0.01 0.03 0.05 0.08 0.08 0.03 0.04
(1.48) 2.85 0.16 2.28 1.62 1.01 (1.21) 2.30 0.95
------ ------ ------ ------- ------- ------ ------ ------- -------
(1.31) 3.04 0.17 2.31 1.67 1.09 (1.13) 2.33 0.99
------ ------ ------ ------- ------- ------ ------ ------- -------
(0.02) -- (0.11) (0.06) (0.11) -- (0.00)(g) (0.08) (0.10)
-- -- (0.02) (1.59) -- -- -- (1.59) --
(0.06) -- -- -- -- -- (0.06) -- --
------ ------ ------ ------- ------- ------ ------ ------- -------
(0.08) -- (0.13) (1.65) (0.11) -- (0.06) (1.67) (0.10)
------ ------ ------ ------- ------- ------ ------ ------- -------
$12.29 $13.68 $10.64 $ 15.57 $ 14.91 $13.35 $12.26 $ 15.68 $ 15.02
------ ------ ------ ------- ------- ------ ------ ------- -------
(9.67)% 28.57% 1.60% 17.18% 12.53% 8.89% (8.38)% 17.18% 7.06%
------ ------ ------ ------- ------- ------ ------ ------- -------
$1,339 $1,450 $ 42 $ 1,151 $ 957 $ 128 $ 118 $ 2,259 $ 1,584
1.18% 1.13% 1.03%(c) 2.01% 2.01% 1.96%(c) 1.88%(c) 2.01% 2.01%(c)
1.31% 0.80% 0.42%(c) 0.23% 0.32% 1.82%(c) 0.61%(c) 0.23% 0.32%(c)
20% 15% 1% 46% 75% 14% 20% 46% 75%
1.43% 1.38% 1.28%(c) 2.01% 2.08% 2.21%(c) 2.13%(c) 2.01% 2.08%(c)
N/A N/A N/A $0.0065 $0.0288 N/A N/A $0.0065 $0.0288
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
MICRO-CAP EQUITY FUND(A)
----------------------------------------
PERIOD PERIOD PERIOD
ENDED ENDED ENDED
6/30/97(E) 6/30/97(E) 6/30/97(E)
CLASS A CLASS B CLASS C
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of
period ............................. $ 10.00 $ 11.00 $ 10.13
------- ------- -------
Income from investment operations:
Net investment loss ................ (0.05) (0.05) (0.03)
Net realized and unrealized gain on
investments ....................... 2.86 1.84 2.69
------- ------- -------
Total from investment operations ... 2.81 1.79 2.66
------- ------- -------
Less distributions:
Dividends from net investment
income ............................ -- -- --
------- ------- -------
Dividends from net realized gains .. -- -- --
------- ------- -------
Total distributions ................ -- -- --
------- ------- -------
Net asset value, end of period ...... $ 12.81 $ 12.79 $ 12.79
======= ======= =======
Total return (b) ................... 28.10% 16.27% 26.26%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) ............................ $ 184 $ 442 $ 111
Ratio of operating expenses to
average net assets ................ 1.50%(c) 2.25%(c) 2.25%(c)
Ratio of net investment loss to
average net assets ................ (0.88)%(c) (1.63)%(c) (1.63)%(c)
Portfolio turnover rate ............ 68% 68% 68%
Ratio of operating expenses to
average net assets without
waivers ........................... 7.90%(c) 8.65%(c) 8.65%(c)
Average commission rate (d) ........ $0.0578 $0.0578 $0.0578
</TABLE>
- --------
(a) The Munder Micro-Cap Equity Fund Class A Shares, Class B Shares and Class
C Shares commenced operations on December 26, 1996, February 24, 1997 and
March 31, 1997, respectively. The Munder Mid-Cap Growth Fund Class A
Shares, Class B Shares and Class C Shares commenced operations on December
22, 1995, January 26, 1996 and November 9, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
18
<PAGE>
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND(A)
- ---------------------------------------------------------------------------------- ---
YEAR PERIOD YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/97(E) 6/30/96(E) 6/30/97(E) 6/30/96(E)
CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
- ---------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 11.56 $ 10.55 $ 11.53 $ 10.57 $ 11.51 $ 10.40
------------- ------- ------- ------- ------- -------
(0.07) (0.04) (0.14) (0.08) (0.14) (0.09)
0.18 1.05 0.16 1.04 0.17 1.20
------------- ------- ------- ------- ------- -------
0.11 1.01 0.02 0.96 0.03 1.11
------------- ------- ------- ------- ------- -------
-- -- -- -- -- --
------------- ------- ------- ------- ------- -------
(1.20) -- (1.20) -- (1.20) --
------------- ------- ------- ------- ------- -------
(1.20) -- (1.20) -- (1.20) --
------------- ------- ------- ------- ------- -------
$ 10.47 $ 11.56 $ 10.35 $ 11.53 $ 10.34 $ 11.51
============= ======= ======= ======= ======= =======
0.90% 9.57% 0.07% 9.08% 0.17% 10.67%
============= ======= ======= ======= ======= =======
$ 63 $ 202 $ 106 $ 53 $ 1,110 $ 53
1.24% 1.20%(c) 1.99% 1.95%(c) 1.99% 1.95%(c)
(0.61)% (0.53)%(c) (1.36)% (1.28)%(c) (1.36)% (1.28)%(c)
162% 247% 162% 247% 162% 247%
1.46% 1.38%(c) 2.21% 2.13%(c) 2.21% 2.13%(c)
$ 0.0592 $0.0600 $0.0592 $0.0600 $0.0592 $0.0600
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
MULTI-SEASON GROWTH FUND(A)
------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(H) 6/30/96(H) 6/30/95(D, E, F) 12/31/94 12/31/93 6/30/97(H)
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS B
---------- ---------- ---------------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 14.83 $ 12.02 $10.38 $10.68 $10.16 $ 14.56
------- ------- ------ ------ ------ -------
Income from investment
operations:
Net investment
income/(loss)......... 0.04 0.06 0.01 0.01 (0.01) (0.08)
Net realized and
unrealized gain/(loss)
on investments........ 3.90 3.20 1.63 (0.27) 0.53 3.81
------- ------- ------ ------ ------ -------
Total from investment
operations............ 3.94 3.26 1.64 (0.26) 0.52 3.73
------- ------- ------ ------ ------ -------
Less distributions:
Dividends from net
investment income..... -- (0.05) -- -- -- --
Distributions from net
realized gains........ (0.75) (0.40) -- (0.04) -- (0.75)
------- ------- ------ ------ ------ -------
Total distributions.... (0.75) (0.45) -- (0.04) -- (0.75)
------- ------- ------ ------ ------ -------
Net asset value, end of
period................. $ 18.02 $ 14.83 $12.02 $10.38 $10.68 $ 17.54
======= ======= ====== ====== ====== =======
Total return (b)....... 27.57% 27.56% 15.80% (2.45)% 5.12% 26.61%
======= ======= ====== ====== ====== =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $16,693 $ 9,544 $9,409 $2,829 $2,104 $84,865
Ratio of operating
expenses to average
net assets............ 1.25% 1.26% 1.65%(c) 1.75% 1.75%(c) 2.00%
Ratio of net investment
income to average net
assets................ 0.25% 0.44% 0.28%(c) 0.04% (0.18)%(c) (0.50)%
Portfolio turnover
rate.................. 33% 54% 27% 48% 238% 33%
Ratio of operating
expenses to average
net assets without
waivers............... 1.50% 1.51% 1.97%(c) 3.05% 3.32%(c) 2.25%
Average commission rate
(g)................... $0.0599 $0.0592 N/A N/A N/A $0.0599
</TABLE>
- --------
(a) The Munder Multi-Season Growth Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on August 4, 1993, April 29, 1993 and
September 20, 1993, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On June 23, 1995, the Munder Multi-Season Growth Fund acquired the assets
and certain liabilities of the Ambassador Established Company Growth Fund.
(f) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
20
<PAGE>
<TABLE>
<CAPTION>
MULTI-SEASON GROWTH FUND(A)
- ---------------------------------------------------------------------------------------------------------------------
YEAR PERIOD YEAR PERIOD YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/96(H) 6/30/95(D,E,F) 12/31/94 12/31/93 6/30/97(H) 6/30/96(H) 6/30/95(D,E,F) 12/31/94 12/31/93
CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C CLASS C CLASS C CLASS C
- ---------------- -------------- -------- -------- ---------- ---------- -------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 11.85 $ 10.27 $ 10.65 $ 10.00 $ 14.57 $ 11.86 $10.28 $10.66 $10.19
-------------- ------- ------- ------- ------- ------- ------ ------ ------
(0.04) (0.03) (0.07) (0.04) (0.08) (0.04) (0.02) (0.07) (0.01)
3.15 1.61 (0.27) 0.69 3.82 3.15 1.60 (0.27) 0.48
-------------- ------- ------- ------- ------- ------- ------ ------ ------
3.11 1.58 (0.34) 0.65 3.74 3.11 1.58 (0.34) 0.47
-------------- ------- ------- ------- ------- ------- ------ ------ ------
-- -- -- -- -- -- -- -- --
(0.40) -- (0.04) -- (0.75) (0.40) -- (0.04) --
-------------- ------- ------- ------- ------- ------- ------ ------ ------
(0.40) -- (0.04) -- (0.75) (0.40) -- (0.04) --
-------------- ------- ------- ------- ------- ------- ------ ------ ------
$ 14.56 $ 11.85 $ 10.27 $ 10.65 $ 17.56 $ 14.57 $11.86 $10.28 $10.66
============== ======= ======= ======= ======= ======= ====== ====== ======
26.66% 15.38% (3.21)% 6.50% 26.66% 26.64% 15.37% (3.21)% 4.61%
============== ======= ======= ======= ======= ======= ====== ====== ======
$ 66,630 $54,349 $46,549 $46,860 $ 9,253 $ 5,605 $3,207 $2,071 $ 249
2.01% 2.40%(c) 2.50% 2.50%(c) 2.00% 2.01% 2.40%(c) 2.50% 2.50%(c)
(0.31)% (0.47)%(c) (0.71)% (0.69)%(c) (0.50)% (0.31)% (0.47)%(c) (0.65)% (0.99)%(c)
54% 27 48% 238% 33% 54% 27% 48% 238%
2.26% 2.72%(c) 2.89% 2.94%(c) 2.25% 2.26% 2.72%(c) 4.57% 15.47%(c)
$ 0.0592 N/A N/A N/A $0.0599 $0.0592 N/A N/A N/A
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY
INVESTMENT FUND(A)
------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
6/30/97 6/30/96(F) 6/30/95(D)
CLASS A CLASS A CLASS A
------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period.......... $ 11.22 $ 10.09 $10.00
------- ------- ------
Income from investment operations:
Net investment income........................ 0.44 0.45 0.36
Net realized and unrealized gain on
investments................................. 3.26 1.12 0.07
------- ------- ------
Total from investment operations............. 3.70 1.57 0.43
------- ------- ------
Less distributions:
Dividends from net investment income......... (0.48) (0.44) (0.34)
Distributions in excess of net investment
income...................................... (0.01) -- --
Distributions from paid-in-capital........... (0.03) -- --
------- ------- ------
Total distributions.......................... (0.52) (0.44) (0.34)
------- ------- ------
Net asset value, end of period................ $ 14.40 $ 11.22 $10.09
======= ======= ======
Total return(b).............................. 33.51% 15.92% 4.45%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)......... $ 1,426 $ 267 $ 223
Ratio of operating expenses to average net
assets...................................... 1.35% 1.25% 1.50%(c)
Ratio of net investment income to average net
assets...................................... 3.80% 4.25% 5.03%(c)
Portfolio turnover rate...................... 15% 17% 3%
Ratio of operating expenses to average net
assets without waivers and/or expenses
reimbursed.................................. 1.38% 1.52% 7.23%(c)
Average commission rate(e)................... $0.0600 $0.0600 N/A
</TABLE>
- --------
(a) The Munder Real Estate Equity Investment Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on September 30, 1994,
October 3, 1994 and January 5, 1996, respectively. The Munder Small-Cap
Value Fund Class A Shares, Class B Shares and Class C Shares commenced
operations on January 10, 1997, February 11, 1997 and January 13, 1997,
respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Average commission rate paid per share of securities purchased and sold by
the Fund.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
22
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY
INVESTMENT FUND(A) SMALL-CAP VALUE FUND(A)
- ------------------------------------------------------------- --------------------------------------
YEAR YEAR PERIOD YEAR PERIOD PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96(F) 6/30/95(D) 6/30/97 6/30/96(F) 6/30/97(F) 6/30/97(F) 6/30/97(F)
CLASS B CLASS B CLASS B CLASS C CLASS C CLASS A CLASS B CLASS C
------- ---------- ---------- ------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 11.22 $ 10.09 $10.00 $ 11.25 $ 10.76 $ 10.22 $ 10.76 $ 10.22
- ---------------- ------- ------ ------- ------- ------- ------- -------
0.36 0.38 0.30 0.36 0.18 0.09 0.05 0.05
3.24 1.11 0.07 3.26 0.47 1.77 1.24 1.78
- ---------------- ------- ------ ------- ------- ------- ------- -------
3.60 1.49 0.37 3.62 0.65 1.86 1.29 1.83
- ---------------- ------- ------ ------- ------- ------- ------- -------
(0.38) (0.36) (0.28) (0.39) (0.16) (0.04) (0.02) (0.03)
(0.01) -- -- (0.01) -- -- -- --
(0.03) -- -- (0.03) -- -- -- --
- ---------------- ------- ------ ------- ------- ------- ------- -------
(0.42) (0.36) (0.28) (0.43) (0.16) (0.04) (0.02) (0.03)
- ---------------- ------- ------ ------- ------- ------- ------- -------
$ 14.40 $ 11.22 $10.09 $ 14.44 $ 11.25 $ 12.04 $ 12.03 $ 12.02
================ ======= ====== ======= ======= ======= ======= =======
32.52% 15.05% 3.87% 32.57% 6.08% 18.20% 12.03% 17.92%
================ ======= ====== ======= ======= ======= ======= =======
$ 4,606 $ 1,707 $1,496 $ 537 $ 4 $ 1,164 $ 373 $ 197
2.10% 2.00% 2.25%(c) 2.10% 2.00%(c) 1.38%(c) 2.13%(c) 2.13%(c)
3.05% 3.50% 4.28%(c) 3.05% 3.50%(c) 1.93%(c) 1.18%(c) 1.18%(c)
15% 17% 3% 15% 17% 73% 73% 73%
2.13% 2.27% 7.98%(c) 2.13% 2.27%(c) 1.51%(c) 2.26%(c) 2.26%(c)
$ 0.0600 $0.0600 N/A $0.0600 $0.0600 $0.0361 $0.0361 $0.0361
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SMALL COMPANY
GROWTH FUND(A)
----------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(E)
CLASS A CLASS A CLASS A
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period....... $ 21.08 $ 15.28 $13.89
------- ------- ------
Income from investment operations:
Net investment loss....................... (0.12) (0.12) (0.02)
Net realized and unrealized gain/(loss) on
investments.............................. 3.64 7.16 1.41
------- ------- ------
Total from investment operations.......... 3.52 7.04 1.39
------- ------- ------
Less distributions:
Dividends from net investment income...... -- -- --
Distributions from net realized gains..... (2.99) (1.24) --
------- ------- ------
Total distributions ...................... (2.99) (1.24) --
------- ------- ------
Net asset value, end of period............. $ 21.61 $ 21.08 $15.28
======= ======= ======
Total return(b)........................... 18.88% 48.28% 10.01%
======= ======= ======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's)...... $11,646 $ 4,832 $2,871
Ratio of operating expenses to average net
assets................................... 1.22% 1.21% 1.21%(c)
Ratio of net investment loss to average
net assets............................... (0.62)% (0.66)% (0.41)%(c)
Portfolio turnover rate................... 98% 98% 39%
Ratio of operating expenses to average net
assets without waivers................... 1.22% 1.28% 1.46%(c)
Average commission rate(g)................ $0.0545 $0.0551 N/A
</TABLE>
- --------
(a) The Munder Small Company Growth Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on November 23, 1992, April 28, 1994
and September 26, 1995, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
24
<PAGE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------
YEAR PERIOD PERIOD PERIOD PERIOD
YEAR ENDED ENDED ENDED YEAR ENDED YEAR ENDED ENDED ENDED YEAR ENDED ENDED
2/28/95(D) CLASS 2/28/94 2/28/93(E) 6/30/97(F) 6/30/96(F) 6/30/95(E) 2/28/95(D) 6/30/97(F) 6/30/96(F)
A CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
- ---------------- ------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$14.37 $12.72 $12.32 $ 20.74 $ 15.15 $13.81 $13.54 $ 20.93 $ 17.05
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.07) (0.05) (0.01) (0.25) (0.26) (0.05) (0.05) (0.25) (0.21)
(0.39) 1.97 0.41 3.55 7.09 1.39 0.34 3.63 5.33
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.46) 1.92 0.40 3.30 6.83 1.34 0.29 3.38 5.12
------------ ------ ------ ------- ------- ------ ------ ------- -------
-- -- -- -- -- -- -- -- --
(0.02) (0.27) -- (2.99) (1.24) -- (0.02) (2.99) (1.24)
------------ ------ ------ ------- ------- ------ ------ ------- -------
(0.02) (0.27) -- (2.99) (1.24) -- (0.02) (2.99) (1.24)
------------ ------ ------ ------- ------- ------ ------ ------- -------
$13.89 $14.37 $12.72 $ 21.05 $ 20.74 $15.15 $13.81 $ 21.32 $ 20.93
============ ====== ====== ======= ======= ====== ====== ======= -------
(3.21)% 15.11% 3.25% 18.06% 47.26% 9.70% 2.13% 18.26% 31.97%
============ ====== ====== ======= ======= ====== ====== ======= =======
$2,697 $3,269 $ 742 $ 5,735 $ 990 $ 46 $ 39 $ 2,271 $ 76
1.23% 1.01% 0.96%(c) 1.97% 1.96% 1.96%(c) 1.85%(c) 1.97% 1.96%(c)
(0.40)% (0.36)% (0.29)%(c) (1.37)% (1.41)% (1.16)%(c) (1.02)%(c) (1.37)% (1.41)%(c)
45% 47% 46% 98% 98% 39% 45% 98% 98%
1.48% 1.26% 1.21%(c) 1.97% 2.03% 2.21%(c) 2.10%(c) 1.97% 2.03%(c)
N/A N/A N/A $0.0545 $0.0551 N/A N/A $0.0545 $0.0551
</TABLE>
25
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
26
<PAGE>
<TABLE>
<CAPTION>
VALUE FUND(A)
--------------------------------------------------------------------------
PERIOD PERIOD PERIOD
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/97(E) 6/30/96(E) 6/30/97(E) 6/30/96(E)
CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 11.57 $ 10.38 $ 11.55 $ 10.41 $ 11.54 $ 11.35
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment
income/(loss)......... 0.08 0.05 (0.01) (0.01) (0.01) (0.01)
Net realized and
unrealized gain on
investments........... 3.64 1.19 3.61 1.16 3.62 0.23
------- ------- ------- ------- ------- -------
Total from investment
operations............ 3.72 1.24 3.60 1.15 3.61 0.22
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income..... (0.09) (0.05) -- (0.01) -- (0.03)
Distributions from net
realized gains........ (1.22) -- (1.22) -- (1.22) --
------- ------- ------- ------- ------- -------
Total distributions.... (1.31) (0.05) (1.22) (0.01) (1.22) (0.03)
------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 13.98 $ 11.57 $ 13.93 $ 11.55 $ 13.93 $ 11.54
======= ======= ======= ======= ======= =======
Total return (b)....... 34.38% 11.95% 33.24% 11.09% 33.36% 1.90%
======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $ 1,587 $ 424 $ 935 $ 103 $ 527 $ 348
Ratio of operating
expenses to average
net assets............ 1.27% 1.20%(c) 2.02% 1.95%(c) 2.02% 1.95%(c)
Ratio of net investment
income/(loss) to
average net assets.... 0.70% 0.64%(c) (0.05)% (0.11)%(c) (0.05)% (0.11)%(c)
Portfolio turnover
rate.................. 139% 223% 139% 223% 139% 223%
Ratio of operating
expenses to average
net assets without
waivers and expenses
reimbursed............ 1.31% 1.30%(c) 2.06% 2.05%(c) 2.06% 2.05%(c)
Average commission rate
(d)................... $0.0508 $0.0602 $0.0508 $0.0602 $0.0508 $0.0602
</TABLE>
- --------
(a) The Munder Value Fund Class A Shares, Class B Shares and Class C Shares
commenced operations on September 14, 1995, September 19, 1995 and
February 9, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
27
<PAGE>
<TABLE>
<CAPTION>
FRAMLINGTON EMERGING
MARKETS FUND(A)
--------------------------------------
PERIOD PERIOD PERIOD
ENDED ENDED ENDED
6/30/97(E) 6/30/97(E) 6/30/97(E)
CLASS A CLASS B CLASS C
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 10.18 $ 11.13 $ 10.95
------- ------- -------
Income from investment operations:
Net investment income.................. 0.05 0.01 0.01
Net realized and unrealized gain on
investments........................... 2.71 1.79 1.96
------- ------- -------
Total from investment operations....... 2.76 1.80 1.97
------- ------- -------
Less distributions:
Dividends from net investment income... (0.02) (0.02) (0.00)(f)
Distributions from net realized gains.. -- -- --
------- ------- -------
Total distributions.................... (0.02) (0.02) (0.00)(f)
------- ------- -------
Net asset value, end of period.......... $ 12.92 $ 12.91 $ 12.92
------- ------- -------
Total return(b)........................ 27.16% 16.21% 18.03%
------- ------- -------
Ratios to average net
assets/supplemental data:
Net assets, end of period (in 000's)... $ 532 $ 134 $ 24
Ratio of operating expenses to average
net assets............................ 1.79%(c) 2.54%(c) 2.54%(c)
Ratio of net investment income to
average net assets.................... 1.14%(c) 0.39%(c) 0.39%(c)
Portfolio turnover rate................ 46% 46% 46%
Ratio of operating expenses to average
net assets without expenses
reimbursed............................ 5.43%(c) 6.18%(c) 6.18%(c)
Average commission rate(d)............. $0.0029 $0.0029 $0.0029
</TABLE>
- --------
(a) The Munder Framlington Emerging Markets Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on January 14, 1997,
February 25, 1997 and March 3, 1997, respectively. The Munder Framlington
Healthcare Fund Class A Shares, Class B Shares and Class C Shares
commenced operations on February 14, 1997, January 31, 1997 and January
13, 1997, respectively. The Munder Framlington International Growth Fund
Class A Shares, Class B Shares and Class C Shares commenced operations on
February 20, 1997, March 19, 1997 and February 13, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) Amount represents less than $0.01 per share.
28
<PAGE>
<TABLE>
<CAPTION>
FRAMLINGTON FRAMLINGTON INTERNATIONAL
HEALTHCARE FUND(A) GROWTH FUND(A)
--------------------------------- --------------------------------------
PERIOD PERIOD PERIOD PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/97 6/30/97 6/30/97(E) 6/30/97(E) 6/30/97(E)
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ---------- ---------- ----------
<C> <C> <C> <C> <C> <C> <S>
$ 11.30 $ 11.02 $ 10.40 $ 10.10 $ 9.85 $ 10.03
------- ------- ------- ------- ------- -------
(0.01) (0.02) (0.01) 0.05 0.01 0.01
(0.40) (0.15) 0.47 1.20 1.46 1.29
------- ------- ------- ------- ------- -------
(0.41) (0.17) 0.46 1.25 1.47 1.30
------- ------- ------- ------- ------- -------
-- -- -- -- -- --
-- -- -- -- -- --
------- ------- ------- ------- ------- -------
-- -- -- -- -- --
------- ------- ------- ------- ------- -------
$ 10.89 $ 10.85 $ 10.86 $ 11.35 $ 11.32 $ 11.33
------- ------- ------- ------- ------- -------
(3.63)% (1.54)% 4.42% 12.38% 14.92% 12.96%
------- ------- ------- ------- ------- -------
$ 664 $ 1,063 $ 164 $ 1,103 $ 128 $ 62
1.55%(c) 2.30%(c) 2.30%(c) 1.55%(c) 2.30%(c) 2.30%(c)
(0.95)%(c) (1.70)%(c) (1.70)%(c) 1.01%(c) 0.26%(c) 0.26%(c)
14% 14% 14% 15% 15% 15%
7.33%(c) 8.08%(c) 8.08%(c) 2.56%(c) 3.31%(c) 3.31%(c)
$0.1441 $0.1441 $0.1441 $0.0238 $0.0238 $0.0238
</TABLE>
29
<PAGE>
FUND CHOICES
WHAT FUNDS ARE OFFERED?
This Prospectus offers Class A, Class B and Class C Shares of the Funds
described below. This section summarizes each Fund's goal and investments. The
sections entitled "What are the Funds' Investments and Investment Practices?"
and "What are the Risks of Investing in the Funds?" and the SAI give more
information about the Funds' investment techniques and risks.
ACCELERATING GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's primary goal is to provide long-
term capital appreciation; its secondary goal is to provide income. Under
normal conditions, the Fund will invest at least 65% of its assets in Equity
Securities.
In choosing Equity Securities the Advisor considers, among other factors:
. the potential for accelerated earnings growth
. the maintenance of a substantial competitive advantage
. a focused management team
. a stable balance sheet
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
BALANCED FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide an attractive
investment return through a combination of growth of capital and current
income. The Fund will allocate its assets among three asset groups: Equity
Securities, Fixed Income Securities and Cash Equivalents.
. The Fund normally will invest at least 25% of its assets in Fixed Income
Securities and no more than 75% of its assets in Equity Securities. The
Fund will notify shareholders at least 30 days before changing this
policy.
The Advisor will allocate the Fund's assets to the three asset groups based
on its view of the following factors, among others:
. general market and economic conditions and trends
. interest rates and inflation rates
. fiscal and monetary developments
. long-term corporate earnings growth
The Advisor will try to take advantage of changing economic conditions by
adjusting the ratio of Equity Securities to Fixed Income Securities or Cash
Equivalents. For example, if the Advisor believes that rapid economic growth
will lead to better corporate earnings in the future, then it might increase
the Fund's Equity Securities holdings and reduce its Fixed Income Securities
and Cash Equivalents holdings.
PORTFOLIO MANAGEMENT. Leonard J. Barr II, James Robinson and Ann J. Conrad
jointly manage the Fund's assets. Mr. Barr, Mr. Robinson and Ms. Conrad have
managed the Fund since February 1995, June 1995 and its inception in March
1993, respectively. Mr. Barr is a Senior Vice President and Director of
Research of the
30
<PAGE>
Advisor. From April 1988 to February 1995, he was Vice President and Director
of Research for Old MCM, Inc. ("MCM"), the predecessor to the Advisor. Mr.
Robinson is, and has been, a Vice President and Chief Investment Officer-Fixed
Income of the Advisor or MCM since 1987. Ms. Conrad is a Vice President and
Director of Specialty Products of the Advisor, and held similar titles with
Woodbridge Capital Management, Inc. ("Woodbridge"), the Fund's previous
investment advisor, since June 1992.
GROWTH & INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide capital
appreciation and current income. It primarily invests in a broadly diversified
portfolio of dividend-paying Equity Securities and is designed for investors
seeking current income and capital appreciation from the equity markets.
. Under normal circumstances, the Fund will invest at least 65% of its
assets in income-producing common stocks and convertible preferred
stocks.
. The Fund may also purchase Fixed Income Securities which are convertible
into or exchangeable for common stock.
. The Fund may invest up to 35% of its assets in Fixed Income Securities,
including 20% of its assets in Fixed Income Securities that are rated
below investment grade.
The Advisor generally selects large, well-known companies that it believes
have favorable prospects for dividend growth and capital appreciation. The
Fund will seek to produce a current yield greater than the S&P 500.
The Fund focuses on dividend-paying Equity Securities because, over time,
dividend income has accounted for a significant portion of the total return of
the S&P 500. In addition, dividends are usually a more stable and predictable
source of return than capital appreciation. The Advisor believes that stocks
which distribute a high level of current income generally have more stable
prices than those which pay below average dividends.
PORTFOLIO MANAGEMENT. Otto Hinzmann, Jr. is the Fund's portfolio manager, a
position he has held since February 1995. Mr. Hinzmann has been a Vice
President and Director of Equity Management of the Advisor or MCM since
January 1987.
INTERNATIONAL EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Foreign Securities,
American Depositary Receipts ("ADRs") and European Depositary Receipts
("EDRs"). At least once a quarter, the Advisor creates a list of Foreign
Securities, ADRs and EDRs (the "Securities List") which the Fund may purchase
based on the country where the company is located, its competitive advantages,
its past financial record, its future prospects for growth and the market for
its securities. The Advisor updates the Securities List frequently (but at
least quarterly), adds new securities to the Securities List if they are
eligible and sells securities not on the updated Securities List as soon as
practicable.
After the Advisor creates the Securities List, it divides the list into two
sections. The first section is designed to provide broad coverage of
international markets. The second section increases exposure to securities
that the Advisor expects will perform better than other stocks in their
industry sectors and their markets as a whole. When the Advisor believes
broader market exposure will benefit the Fund, it will allocate up to 80% of
the Fund's assets in first section securities. When the Advisor identifies
strong potential for specific securities to perform well, the Fund may invest
up to 50% of its assets in second section securities.
. Under normal market conditions, at least 65% of the Fund's assets are
invested in Equity Securities in at least three foreign countries.
. The Fund emphasizes companies with a market capitalization of at least
$100 million.
31
<PAGE>
PORTFOLIO MANAGEMENT. Todd B. Johnson and Theodore Miller jointly manage the
Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, and Mr. Miller,
senior portfolio manager of the Fund, have managed the Fund since July 1992
and October 1996, respectively. Mr. Miller previously worked as the primary
analyst for the Fund (1996) and for Interacciones Global Inc. (1993-1995) and
McDonald & Co. Securities Inc. (1991-1993).
MICRO-CAP EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. It invests primarily in Equity Securities of smaller
capitalization companies. The Fund attempts to provide investors with
potentially higher returns than a fund that invests primarily in larger more
established companies. Since smaller capitalization companies are generally
not as well known to investors and have less of an investor following than
larger companies, they may provide higher returns due to inefficiencies in the
marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies having a market capitalization
of $200 million or less, which is considerably less than the market
capitalization of S&P 500 companies.
The Advisor will choose companies that:
. present the ability to grow significantly over the next several years
. may benefit from changes in technology, regulations and industry sector
trends
. are still in the developmental stage and may have limited product lines
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MID-CAP GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. The Fund invests at least 65% of its assets in the Equity
Securities of companies with market capitalizations between $100 million and
$5 billion. Its style, which focuses on both growth prospects and valuation,
is known as GARP (Growth at a Reasonable Price) and seeks to produce
attractive returns during various market environments.
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 10,000 companies over the past three
years. It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the Standard & Poor's Mid-Cap 400 Index
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MULTI-SEASON GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. This goal is "fundamental" and cannot be changed without
shareholder approval. Its style, which focuses on both growth prospects and
valuation, is known as GARP (Growth at a Reasonable Price) and seeks to
produce attractive returns during various market environments. The Fund
invests at least 65% of its assets in Equity Securities. The Fund generally
invests in Equity Securities with market capitalizations over $1 billion.
32
<PAGE>
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 5,500 companies over the past five years.
It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the S&P 500
PORTFOLIO MANAGEMENT. The portfolio managers of the Fund, Leonard J. Barr II
and Lee P. Munder, have managed the Fund since its inception in April 1993.
Mr. Barr is the Senior Vice President and Director of Research of the Advisor.
From April 1988 to April 1993 he held similar positions with MCM. Mr. Munder
is the President and Chief Executive Officer of the Advisor, positions he has
held with the Advisor or MCM since 1985.
REAL ESTATE EQUITY INVESTMENT FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide both capital
appreciation and current income. This goal is "fundamental" and cannot be
changed without shareholder approval. The Fund invests primarily in U.S.
companies which are principally engaged in the real estate industry or which
own significant real estate. A company is "principally engaged" in the real
estate industry if at least 50% of its assets, gross income or net profits are
attributable to ownership, construction, management or sale of residential,
commercial or industrial real estate. The Fund will not own real estate
directly.
Under normal conditions, the Fund invests at least 65% of its total assets
in Equity Securities of U.S. companies in the real estate industry including:
. equity real estate investment trusts ("REITS")
. brokers, home builders and real estate developers
. companies with substantial real estate holdings (for example, paper and
lumber producers, hotels and entertainment companies)
. manufacturers and distributors of building supplies
. mortgage REITS
. financial institutions which issue or service mortgages
In addition, the Fund may invest:
. up to 35% of its assets in companies other than real estate industry
companies
. in Fixed Income Securities including up to 5% of its assets in debt
securities rated below investment grade or unrated if secured by real
estate assets if the Advisor believes that the underlying collateral is
sufficient
. in REITS only if they are traded on a securities exchange or NASDAQ
PORTFOLIO MANAGEMENT. Peter K. Hoglund is the portfolio manager of the Fund,
a position he has held since October 1996. Mr. Hoglund formerly was the
primary analyst of the Fund (October 1994 to October 1996).
33
<PAGE>
SMALL-CAP VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. It invests
primarily in Equity Securities of smaller capitalization companies. The Fund
attempts to provide investors with potentially higher returns than a fund that
invests primarily in larger more established companies. Since small companies
are generally not as well known to investors and have less of an investor
following than larger companies, they may provide higher returns due to
inefficiencies in the marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies with market capitalizations
below $750 million, which is less than the market capitalization of S&P
500 companies.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
March 1997, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
SMALL COMPANY GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Equity Securities of
smaller capitalization companies. The Fund attempts to provide investors with
potentially higher returns than a fund that invests primarily in larger more
established companies. Since smaller capitalization companies are generally
not as well-known to investors and have less of an investor following than
larger companies, they may provide higher returns due to inefficiencies in the
marketplace.
. Under normal market conditions, the Fund will invest at least 65% of the
Fund's assets in Equity Securities of companies with market
capitalizations below $750 million, which is less than the market
capitalization of S&P 500 companies.
The Advisor considers these factors, among others, in choosing companies:
. above-average growth prospects
. participation in a fast-growing industry
. strategic niche position in a specialized market
. adequate capitalization
34
<PAGE>
PORTFOLIO MANAGEMENT. Carl Wilk and Michael P. Gura jointly manage the Fund.
Mr. Wilk, a Senior Portfolio Manager of the Advisor, has managed the Fund
since October 1996 and was the Fund's primary analyst (1995 to 1996). Prior to
joining the Advisor in 1995, Mr. Wilk was a Senior Equity Research Analyst at
Woodbridge. Mr. Gura has managed the Fund since March 1997. Prior to joining
the Advisor in 1995, Mr. Gura was a Vice President, Senior Equity Analyst for
Woodbridge (1994-1995) and an investment officer for Manufacturers National
Bank Trust Department (1989-1994).
VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. The Fund invests
primarily in the Equity Securities of well-established companies with
intermediate to large capitalizations, which typically exceed $750 million.
. The Fund will invest at least 65% of its assets in Equity Securities.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert, an Executive Vice President and Chief Investment Officer of
the Advisor, has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
October 1996, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
FRAMLINGTON EMERGING MARKETS FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests at least 65% of its assets in companies
in emerging market countries, as defined by the World Bank, the International
Finance Corporation, the United Nations or the European Bank for
Reconstruction and Development.
A company will be considered to be in an emerging market country if:
. the company is organized under the laws of, or has a principal office in,
an emerging market country
. the company's stock is traded primarily in an emerging market country,
. most of the company's assets are in an emerging market country, or
. most of the company's revenues or profits come from goods produced or
sold, investments made or services performed in an emerging market
country.
35
<PAGE>
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. William
Calvert heads the committee.
FRAMLINGTON HEALTHCARE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation by investing in companies providing healthcare and
medical services and products worldwide. Currently, most of such companies are
located in the United States.
The Fund will invest in:
. pharmaceutical producers
. biotechnology firms
. medical device and instrument manufacturers
. distributors of healthcare products
. healthcare providers and managers
. other healthcare service companies
Under normal conditions, the Fund will invest at least 65% of its assets in
healthcare companies, which are companies for which at least 50% of sales,
earnings or assets arise from or are dedicated to health services or medical
technology activities.
PORTFOLIO MANAGEMENT. Antony Milford is the Head of the Specialist Desk for
the Sub-Advisor. He is the Fund's primary portfolio manager, a position he has
held since the Fund's inception. Mr. Milford has managed funds for the Sub-
Advisor since 1971.
FRAMLINGTON INTERNATIONAL GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. Under normal market conditions, at least 65% of the
Fund's assets will be invested in Equity Securities in at least three foreign
countries.
The Sub-Advisor will choose companies that demonstrate:
. above-average profitability
. high quality management
. the ability to grow significantly in their countries
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. Simon
Key, Chief Investment Officer of the Sub-Advisor, heads the committee.
WHO MAY WANT TO INVEST IN THE FUNDS?
The Funds are designed for investors who desire potentially high capital
appreciation and who can accept short-term variations in return for
potentially greater returns over the long term. In general, the greater the
risk, the greater the potential reward. Investors who have a short time
horizon, who desire a high level of income or who are conservative in their
investment approach may wish to invest in other portfolios offered by the
Trust and the Company.
36
<PAGE>
WHAT ARE THE FUNDS' INVESTMENTS AND INVESTMENT PRACTICES?
Each Fund will invest in EQUITY SECURITIES, which include common stocks,
preferred stocks, warrants and other securities convertible into common
stocks. Many of the common stocks the Funds (other than Growth & Income Fund)
will buy will not pay dividends; instead, stocks will be bought for the
potential that their prices will increase, providing capital appreciation for
the Fund. The value of Equity Securities will fluctuate due to many factors,
including the past and predicted earnings of the issuer, the quality of the
issuer's management, general market conditions, the forecasts for the issuer's
industry and the value of the issuer's assets. Holders of Equity Securities
only have rights to value in the company after all debts have been paid, and
they could lose their entire investment in a company that encounters financial
difficulty. Warrants are rights to purchase securities at a specified time at
a specified price.
Each Fund may invest in CASH EQUIVALENTS, which are high-quality, short-term
money market instruments including, among other things, commercial paper,
bankers' acceptances and negotiable certificates of deposit of banks or
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies
or instrumentalities. These instruments will be used primarily pending
investment, to meet anticipated redemptions or as a temporary defensive
measure.
The Funds may enter into REPURCHASE AGREEMENTS. Under a repurchase
agreement, a Fund agrees to purchase securities from a seller and the seller
agrees to repurchase the securities at a later time, typically within seven
days, at a set price. The seller agrees to set aside collateral at least equal
to the repurchase price. This ensures that the Fund will receive the purchase
price at the time it is due, unless the seller defaults or declares
bankruptcy, in which event the Fund will bear the risk of possible loss due to
adverse market action or delays in liquidating the underlying obligation.
The Funds may purchase AMERICAN DEPOSITORY RECEIPTS ("ADRS"), EUROPEAN
DEPOSITORY RECEIPTS ("EDRS") and GLOBAL DEPOSITORY RECEIPTS ("GDRS"). ADRs are
issued by U.S. financial institutions and EDRs and GDRs are issued by European
financial institutions. They are receipts evidencing ownership of underlying
Foreign Securities.
The Funds may buy shares of registered MONEY MARKET FUNDS. The Funds will
bear a portion of the expenses of any investment company whose shares they
purchase, including operating costs and investment advisory, distribution and
administration fees. These expenses would be in addition to a Fund's own
expenses. Each Fund may invest up to 10% of its assets in other investment
companies and no more than 5% of its assets in any one investment company.
The Funds may purchase FIXED INCOME SECURITIES. Fixed Income Securities are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rate. Each Fund may purchase U.S. GOVERNMENT
SECURITIES, which are securities issued by, or guaranteed by, the U.S.
Government or its agencies or instrumentalities. Such securities include U.S.
Treasury bills, which have initial maturities of less than one year, U.S.
Treasury notes, which have initial maturities of one to ten years, U.S.
Treasury bonds, which generally have initial maturities of greater than ten
years, and obligations of the Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association and Government National Mortgage Association.
The Funds probably will not invest to a significant extent, or on a routine
basis, in U.S. Government Securities. Under normal market conditions, the
Funds will not invest to a significant extent, or on a routine basis, in U.S.
Government Securities.
Each Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
Investment Chart
The following chart summarizes the Funds' investments and investment
practices. The SAI contains more details. All percentages are based on a
Fund's total assets except where otherwise noted. See "What are the Risks of
Investing in the Funds?" for a description of the risks involved with the
Funds' investment practices.
37
<PAGE>
<TABLE>
<CAPTION>
ACCELER- GROWTH INTER- MICRO-
INVESTMENTS AND ATING & NATIONAL CAP
INVESTMENT PRACTICES GROWTH BALANCED INCOME EQUITY EQUITY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOREIGN SECURITIES. Includes
securities issued by non-U.S.
companies. Present more risks than
U.S. securities 25% 25% 25% Y 25%
- -------------------------------------------------------------------------------
LOWER-RATED DEBT SECURITIES. Fixed
Income Securities which are rated
below investment grade by Standard
& Poor's Ratings Service, Moody's
Investors Service Inc. or other
nationally recognized rating
agency. Considered riskier than
investment grade securities Y Y 20% Y Y
- -------------------------------------------------------------------------------
INVESTMENT-GRADE ASSET BACKED
SECURITIES. Includes debt
securities backed by mortgages,
installment sales contracts and
credit card receivables N Y N N N
- -------------------------------------------------------------------------------
STRIPPED SECURITIES. Includes
participations in trusts that hold
U.S. Treasury and agency
securities which represent either
the interest payments or principal
payments on the securities or
combinations of both N Y N N N
- -------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE
CONTRACTS. Obligations of a Fund
to purchase or sell a specific
currency at a future date at a set
price. May decrease a Fund's loss
due to a change in currency value,
but also limits gains from
currency changes Y Y Y Y Y
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND FORWARD
COMMITMENTS. Agreement by a Fund
to purchase securities at a set
price, with delivery and payment
in the future. The value of
securities may change between the
time the price is set and payment.
Not to be used for speculation Y Y Y Y Y
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
MULTI- REAL ESTATE SMALL FRAMLINGTON FRAMLINGTON
MID-CAP SEASON EQUITY SMALL-CAP COMPANY EMERGING FRAMLINGTON INTERNATIONAL
GROWTH GROWTH INVESTMENT VALUE GROWTH VALUE MARKETS HEALTHCARE GROWTH
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
25% 25% N 25% 25% 25% Y Y Y
- --------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- --------------------------------------------------------------------------------------------
N N N N N N N N N
- --------------------------------------------------------------------------------------------
N N N N N N N N N
- --------------------------------------------------------------------------------------------
Y Y N Y Y Y Y Y Y
- --------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
ACCELER- GROWTH INTER- MICRO-
INVESTMENTS AND ATING & NATIONAL CAP
INVESTMENT PRACTICES GROWTH BALANCED INCOME EQUITY EQUITY
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FUTURES AND OPTIONS ON
FUTURES. (1) Contracts in
which a Fund agrees, at
maturity, to make delivery
of or receive securities,
the cash value of an index
or foreign currency. Used
for hedging purposes or to
maintain liquidity Y Y Y Y Y
- -----------------------------------------------------------------------------------
OPTIONS. A Fund may buy
options giving it the right
to require a buyer to buy a
security held by the Fund
(put options), buy options
giving it the right to
require a seller to sell
securities to the Fund
(call options), sell
(write) options giving a
buyer the right to require
the Fund to buy securities
from the buyer or write
options giving a buyer the
right to require the Fund
to sell securities to the
buyer during a set time at
a set price. Options may
relate to stock indices,
individual securities,
foreign currencies and
futures contracts. See the
SAI for more details and
additional limitations Y Y Y Y Y
- -----------------------------------------------------------------------------------
REVERSE REPURCHASE
AGREEMENTS. A Fund sells
securities and agrees to
buy them back later at an
agreed upon time and price.
A method to borrow money
for temporary purposes Y Y Y Y Y
- -----------------------------------------------------------------------------------
ILLIQUID SECURITIES.
Typically there is no ready
market for these
securities, which inhibits
the ability to sell them
and to obtain their full
market value, or there are
legal restrictions on their
resale by the Fund 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
- -----------------------------------------------------------------------------------
LENDING SECURITIES. A Fund
may lend securities to
financial institutions
which pay for the use of
the securities. May
increase return. Slight
risk of borrower failing
financially 25% 25% 25% 25% 25%
</TABLE>
Key:
Y = investment allowed without restriction
N = investment not allowed
(1)The limitation on margins and premiums for futures is 5% of a Fund's assets
(2)Based on net assets
40
<PAGE>
<TABLE>
<CAPTION>
MULTI- REAL ESTATE SMALL FRAMLINGTON FRAMLINGTON
MID-CAP SEASON EQUITY SMALL-CAP COMPANY EMERGING FRAMLINGTON INTERNATIONAL
GROWTH GROWTH INVESTMENT VALUE GROWTH VALUE MARKETS HEALTHCARE GROWTH
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Y Y Y Y Y Y Y Y Y
- ---------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ---------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ---------------------------------------------------------------------------------------------
15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
- ---------------------------------------------------------------------------------------------
25% 25% 25% 25% 25% 25% 25% 25% 25%
</TABLE>
41
<PAGE>
WHAT ARE THE RISKS OF INVESTING IN THE FUNDS?
Investing in the Funds may be less risky than investing in individual stocks
due to the diversification of investing in a portfolio of many different
stocks; however, such diversification does not eliminate all risks. Because
the Funds invest mostly in Equity Securities, rises and falls in the stock
market in general, as well as in the value of particular Equity Securities
held by the Funds, can affect the Funds' performance. Your investment in the
Funds is not guaranteed. The net asset value of the Funds will change daily
and you might not recoup the amount you invest in the Funds.
The Funds are not meant to provide a vehicle for playing short-term swings
in the stock market. Consistent with a long-term investment approach,
investors in a Fund should be prepared and able to maintain their investments
during periods of adverse market conditions. By itself, no Fund constitutes a
balanced investment program and there is no guarantee that any Fund will
achieve its investment objective since there is uncertainty in every
investment.
A Fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. Each Fund is authorized to use options,
futures, and forward foreign currency exchange contracts, which are types of
derivative instruments. Derivative instruments are instruments that derive
their value from a different underlying security, index or financial
indicator. The use of derivative instruments exposes a Fund to additional
risks and transaction costs. Risks inherent in the use of derivative
instruments include: (1) the risk that interest rates, securities prices and
currency markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates or
currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select equity securities; (4)
the possible absence of a liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when
desired; (5) leverage risk, that is, the risk that adverse price movements in
an instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and (6) particularly in the case of privately-negotiated
instruments, the risk that the counterparty will not perform its obligations,
which could leave the Fund worse off than if it had not entered into the
position.
To the extent that a Fund invests in illiquid securities, the Fund risks not
being able to sell securities at the time and the price that it would like.
The Fund may therefore have to lower the price, sell substitute securities or
forego an investment opportunity, each of which might adversely affect the
Fund.
The risks of the various investment techniques the Funds use are described
in more detail in the SAI.
Micro-Cap Equity Fund, Small-Cap Value Fund, Mid-Cap Growth Fund and Small
Company Growth Fund
The Advisor believes that smaller companies can provide greater growth
potential and potentially higher returns than larger firms. Investing in
smaller companies, however, is riskier than investing in larger companies. The
stock of smaller companies may trade infrequently and in lower volume, making
it more difficult for a Fund to sell the stocks of smaller companies when it
chooses. Smaller companies may have limited product lines, markets, financial
resources and distribution channels, which makes them more sensitive to
changing economic conditions. Stocks of smaller companies historically have
had larger fluctuations in price than stocks of larger companies included in
the S&P 500.
Framlington Emerging Markets Fund, Framlington International Growth Fund and
International Equity Fund
Investing in any of the above-referenced Funds, with its larger investment
in foreign securities, may involve more risk than investing in a U.S. equity
fund for the following reasons: (1) there may be less public information
available about foreign companies than is available about U.S. companies; (2)
foreign companies are not generally subject to the uniform accounting,
auditing and financial reporting standards and practices applicable to U.S.
42
<PAGE>
companies; (3) foreign stock markets have less volume than the U.S. market,
and the securities of some foreign companies are less liquid and more volatile
than the securities of comparable U.S. companies; (4) there may be less
government regulation of stock exchanges, brokers, listed companies and banks
in foreign countries than in the U.S.; (5) the Fund may incur fees on currency
exchanges when it changes investments from one country to another; (6) the
Fund's foreign investments could be affected by expropriation, confiscatory
taxation, nationalization of bank deposits, establishment of exchange
controls, political or social instability or diplomatic developments; (7)
fluctuations in foreign exchange rates will affect the value of the Fund's
portfolio securities, the value of dividends and interest earned, gains and
loses realized on the sale of securities, net investment income and unrealized
appreciation or depreciation of investments; and (8) possible imposition of
dividend or interest withholding by a foreign country.
Real Estate Equity Investment Fund
The Fund will invest primarily in the real estate industry and may invest
more than 25% of its assets in any one sector of the real estate industry. As
a result, the Fund will be particularly vulnerable to declines in real estate
prices and new construction rates. The Fund may be riskier than a fund
investing in a broader range of industries.
Framlington Healthcare Fund
The Fund will invest most of its assets in the healthcare industry, which is
particularly affected by rapidly changing technology and extensive government
regulation, including cost containment measures. The Fund may be riskier than
a fund investing in a broader range of industries.
PERFORMANCE
HOW IS THE FUNDS' PERFORMANCE CALCULATED?
There are various ways in which the Funds may calculate and report their
performance. Performance is calculated separately for each class of shares.
One method is to show a Fund's total return. Cumulative total return is the
percentage change in the value of an amount invested in a class of shares of a
Fund over a stated period of time and takes into account reinvested dividends
plus in the case of Class A Shares, the payment of the maximum sales charge
and, in the case of Class B and Class C Shares, the maximum CDSC. Cumulative
total return most closely reflects the actual performance of a Fund. However,
a shareholder who opts to receive dividends in cash, a Class A shareholder who
paid a sales charge lower than 5.5%, or a Class B or C shareholder who paid
lower than the maximum CDSC will have a different return than the reported
performance.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of a Fund determined
by comparing the initial amount invested to the ending redeemable value of the
amount, taking into account reinvested dividends, the payment of the maximum
sales charge on Class A Shares, and the payment of the maximum CDSC on Class B
and Class C Shares.
Each Fund may also publish its current yield. Yield is the net investment
income generated by a share of a Fund during a 30-day period divided by the
maximum offering price on the 30th day. "Maximum offering price" includes the
sales charge for Class A Shares.
The Funds may sometimes publish total returns that do not take into account
sales charges and such returns will be higher than returns which include sales
charges. You should be aware that (i) past performance does not indicate how a
Fund will perform in the future; and (ii) each Fund's return and net asset
value will fluctuate, so you cannot necessarily use a Fund's performance data
to compare it to investment in certificates of deposit, savings accounts or
other investments that provide a fixed or guaranteed yield.
43
<PAGE>
Each Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. Each Fund may also compare its total return
to indices such as the S&P 500 and other broad-based indices. These indices
show the value of selected portfolios of securities (assuming reinvestment of
interest and dividends) which are not managed by a portfolio manager. The
Funds may report how they are performing in comparison to the Consumer Price
Index, an indication of inflation reported by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Funds' annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
PURCHASES AND EXCHANGES OF SHARES
WHICH SHARE CLASS SHOULD I CHOOSE FOR MY INVESTMENT?
Each of the Funds offers Class A, Class B and Class C Shares. Each Class has
its own cost structure, allowing you to choose the one that best meets your
requirements given the amount of your purchase and the intended length of your
investment. You should consider both ongoing annual expenses and initial or
contingent deferred sales charges in estimating the costs of investing in a
particular class of shares.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C>
. Front end sales charge. . No front end sales charge. . No front end sales charge
There are several ways to All your money goes to or CDSC, except for a CDSC
reduce these sales work for you right away. for redemptions made
charges. .Higher annual expenses than within the first year af-
.Lower annual expenses than Class A Shares. ter investing. All your
Class B and Class C Shares. .A CDSC on shares you sell money goes to work for you
within six years of pur- right away.
chase. .Shares do not convert to
.Automatic conversion to an-
Class A Shares approxi- other class.
mately six .Higher annual expenses than
years after issuance, thus Class A Shares.
reduc-
ing future annual expenses.
.CDSC is waived for certain
re demptions.
</TABLE>
Each Fund also issues Class K and Class Y Shares, which have different sales
charges, expense levels and performance. Class K and Class Y Shares are
available to limited types of investors. Call (800) 438-5789 to obtain more
information concerning Class K and Class Y Shares.
WHAT PRICE DO I PAY FOR SHARES?
Class A Shares are sold at the "net asset value next determined" by the
Funds plus any "applicable sales charge" and Class B and Class C Shares are
sold at the "net asset value next determined" by the Funds. These terms are
explained below. You should be aware that broker-dealers (other than the
Funds' Distributor) may charge investors additional fees if shares are
purchased through them.
44
<PAGE>
NET ASSET VALUE. Except in certain limited circumstances, each Fund
determines its net asset value ("NAV") on each day the New York Stock Exchange
("NYSE") is open for trading (a "Business Day") at the close of such trading
(normally 4:00 p.m. Eastern time). Each Fund calculates NAV separately for
each class of shares. The "net asset value next determined" is the NAV
calculated at 4:00 p.m. on the day the purchase order for shares is received,
if the purchase order is received prior to or at 4:00 p.m., and is the net
asset value calculated at 4:00 p.m. on the next Business Day, if the purchase
order is received after 4:00 p.m. NAV is calculated by totaling the value of
all of the assets of a Fund allocated to a particular class of shares,
subtracting the Fund's liabilities and expenses charged to that class and
dividing the result by the number of shares of that class outstanding.
APPLICABLE SALES CHARGE. Except in the circumstances described below, you
must pay a sales charge at the time of purchase of Class A Shares. The sales
charge as a percentage of your investment decreases as the amount you invest
increases. The current sales charge rates and commissions paid to selected
dealers are as follows:
<TABLE>
<CAPTION>
SALES CHARGE DEALER
AS A PERCENTAGE REALLOWANCE
OF AS A
---------------- PERCENTAGE
NET OF THE
YOUR ASSET OFFERING
INVESTMENT VALUE PRICE
---------- ----- -----------
<S> <C> <C> <C>
Less than $25,000............................... 5.50% 5.82% 5.00%
$25,000 but less than $50,000................... 5.25% 5.54% 4.75%
$50,000 but less than $100,000.................. 4.50% 4.71% 4.00%
$100,000 but less than $250,000................. 3.50% 3.63% 3.25%
$250,000 but less than $500,000................. 2.50% 2.56% 2.25%
$500,000 but less than $1,000,000............... 1.50% 1.52% 1.25%
$1,000,000 or more.............................. None* None* (see below)**
</TABLE>
- --------
*No initial sales charge applies on investments of $1 million or more.
However, a CDSC of 1% is imposed on certain redemptions within one year of
purchase. Class A Shares of the Trust Funds purchased on or before June 27,
1995 are subject to a different CDSC, which is described in the SAI.
**The Distributor will pay a 1% commission to dealers who initiate and are
responsible for purchases of $1 million or more.
The Distributor may pay the entire commission to dealers. If that occurs,
the dealer may be considered an "underwriter" under Federal securities laws.
SALES CHARGE WAIVERS. We will waive the initial sales charge on sales of
Class A Shares to the following types of purchasers:
(1) individuals with an investment account or relationship with the
Advisor;
(2) full-time employees and retired employees of the Advisor, employees of
the Funds' service providers and immediate family members of such
persons;
(3) registered broker-dealers that have entered into selling agreements
with the Distributor, for their own accounts or for retirement plans
for their employees or sold to registered representatives for full-
time employees (and their families) that certify to the Distributor at
the time of purchase that such purchase is for their own account (or
for the benefit of their families);
(4) certain qualified employee benefit plans as described below;
(5) individuals who reinvest a distribution from a qualified retirement
plan for which the Advisor serves as investment advisor;
(6) individuals who reinvest the proceeds of redemptions from Class Y
Shares of the Funds of the Trust, the Company or Framlington, within
60 days of redemption;
(7) banks and other financial institutions that have entered into
agreements with the Trust, the Company or Framlington to provide
shareholder services for customers ("Customers") (including Customers
of such banks and other financial institutions, and the immediate
family members of such Customers);
(8) fee-based financial planners or employee benefit plan consultants
acting for the accounts of their clients;
45
<PAGE>
(9) employer sponsored retirement plans which are administered by
Universal Pensions, Inc. ("UPI Plans"); and
(10) employer sponsored 401(k) plans that are administered by Merrill Lynch
Group Employee Services ("Merrill Lynch Plans") which meet the
criteria described below under "Qualified Employer Sponsored
Retirement Plans".
QUALIFIED EMPLOYER SPONSORED RETIREMENT PLANS
We will waive the initial sales charge on purchases of Class A Shares by
employer sponsored retirement plans that are qualified under Section 401(a) of
the Code (each, a "Qualified Employee Benefit Plan") that (1) invest
$1,000,000 or more in Class A Shares of investment portfolios offered by the
Trust, the Company or Framlington or (2) have at least 75 eligible plan
participants. In addition, we will waive the CDSC of 1% charged on certain
redemptions within one year of purchase for Qualified Employee Benefit Plan
purchases that meet the above criteria. A 1% commission will be paid by the
Distributor to dealers and other entities (as permitted by applicable Federal
and state law) who initiate and are responsible for Qualified Employee Benefit
Plan purchases that meet the above criteria. For purposes of this sales charge
waiver, Simplified Employee Pension Plans ("SEPs"), Individual Retirement
Accounts ("IRAs") and UPI Plans are not considered to be Qualified Employee
Benefit Plans.
We also will waive (i) the initial sales charge on Class A Shares on
purchases by UPI and (ii) the CDSC of 1% imposed on certain redemptions within
one year of purchase for UPI Plans. The Distributor will pay a 1% commission
to dealers and others (as permitted by applicable Federal and state law) who
initiate and are responsible for UPI Plan purchases.
We will waive the initial sales charge for all investments by Merrill Lynch
Plans if (i) the Plan is recordkept on a daily valuation basis by Merrill
Lynch Group Employee Services ("Merrill Lynch") and, on the date the plan
sponsor (the "Plan Sponsor") signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management, L.P. ("MLAM")
that are made available pursuant to a Services Agreement between Merrill Lynch
and the Funds' principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments"); or (ii) the Plan
is recordkept on a daily valuation basis by an independent recordkeeper whose
services are provided through a contract or alliance arrangement with Merrill
Lynch, and on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement, the Plan has $3 million or more in assets, excluding money
market funds, invested in Applicable Investments; or (iii) the Plan has 500 or
more eligible employees, as determined by the Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement.
SALES CHARGE REDUCTIONS. You may qualify for reduced sales charges in the
following cases:
. LETTER OF INTENT. If you intend to purchase at least $25,000 of Class A,
Class B and Class C Shares of the Funds you may wish to complete the
Letter of Intent Section of your Account Application Form. By doing so,
you agree to invest a certain amount over a 13-month period. You would
pay a sales charge on any Class A Shares you purchase during the 13
months based on the total amount to be invested under the Letter of
Intent. You can apply any investments you made in any of the funds during
the preceding 90-day period toward fulfillment of the Letter of Intent
(although there will be no refund of sales charges you paid during the
90-day period). You should inform the Transfer Agent that you have a
Letter of Intent each time you make an investment.
You are not obligated to purchase the amount specified in the Letter of
Intent. If you purchase less than the amount specified, however, you must
pay the difference between the sales charge paid and the sales charge
applicable to the purchases actually made. The Custodian will hold such
amount in escrow. The Custodian will pay the escrowed funds to your
account at the end of the 13 months unless you do not complete your
intended investment.
. QUANTITY DISCOUNTS. You may combine purchases of Class A Shares that are
made by you, your spouse, your children under age 21 and your IRA when
calculating the sales charge. You must notify your broker or the Transfer
Agent to qualify.
46
<PAGE>
. RIGHT OF ACCUMULATION. You may add the value of any shares of non-money
market funds of the Trust, the Company or Framlington you already own to
the amount of your next Class A Share investment for purposes of
calculating the sales charge at the time of current purchase. You must
notify your broker or the Transfer Agent to qualify.
Certain brokers may not offer these programs or may impose conditions on use
of these programs. You should consult with your broker prior to purchasing the
Funds' shares.
For further information on sales charge waivers and reductions call the
Funds at (800) 438-5789.
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment for Class A, Class B and Class C Shares of a
Fund is $500 and subsequent investments must be at least $50. Purchases in
excess of $250,000 must be for Class A or Class C Shares.
HOW CAN I PURCHASE SHARES?
You can purchase Class A, Class B and Class C Shares in a number of
different ways. You may place orders directly through the Transfer Agent or
the Distributor or through arrangements with your authorized broker.
. BY BROKER. Any broker authorized by the Distributor can sell you shares
of the Funds. Please note that brokers may charge you fees for their
services.
. BY MAIL. You may open an account by completing, signing and mailing the
attached Account Application Form and a check or other negotiable bank
draft (payable to the Munder Funds) for $500 or more to: THE MUNDER
FUNDS, C/O FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130,
WESTBOROUGH, MASSACHUSETTS 01581-5130. Be sure to specify on your Account
Application Form the class of shares being purchased. If the class is not
specified, your purchase will automatically be invested in Class A
Shares. For additional investments send a letter stating the Fund and
share class you wish to purchase, your name and your account number with
a check for $50 or more to the address listed above.
. BY WIRE. To open a new account, you should call the Funds at (800) 438-
5789 to obtain an account number and complete wire instructions prior to
wiring any funds. Within seven days of purchase, you must send a
completed Account Application Form containing your certified taxpayer
identification number to the Transfer Agent at the address provided
above. Wire instructions must state the Fund name, share class, your
registered name and your account number. Your bank wire should be sent
through the Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP you may arrange for
periodic investments in a Fund through automatic deductions from a
checking or savings account. To enroll in the AIP you should complete the
AIP Application Form or call the Funds at (800) 438-5789. The minimum
pre-authorized investment amount is $50. You may discontinue the AIP at
any time. We may discontinue the AIP on 30 days' written notice to you.
47
<PAGE>
. REINVESTMENT PRIVILEGE. Once a year you may reinvest redemption proceeds
from Class A, B and C Shares of a Fund (or Class A, B and C Shares of
another non-money market fund of the Trust, the Company or Framlington)
in shares of the same class of the same Fund without any sales charges,
if the reinvestment is made within 60 days of redemption. You or your
broker must notify the Transfer Agent in writing at the time of
reinvestment in order to eliminate the sales charge.
The Transfer Agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you. You will not be
issued a share certificate, unless you request one in writing. We reserve the
right to (i) reject any purchase order if, in our opinion, it is in the Funds'
best interest to do so and (ii) suspend the offering of shares of any Class
for any period of time.
See the SAI for further information regarding purchases of the Funds'
shares.
HOW CAN I EXCHANGE SHARES?
You may exchange shares of the Funds for shares of the same class of other
funds of the Trust, the Company or Framlington based on their relative net
asset values. Class A Shares of a money market fund of the Trust or the
Company that were (1) acquired through the use of the exchange privilege and
(2) can be traced back to a purchase of shares in one or more investment
portfolios of the Trust or the Company for which a sales charge was paid, can
be exchanged for Class A Shares of a fund of the Trust, the Company or
Framlington. Class B and Class C Shares will continue to age from the date of
the original purchase and will retain the same CDSC rate as they had before
the exchange.
You must meet the minimum purchase requirements for the fund of the Trust,
the Company or Framlington that you purchase by exchange. If you are
exchanging into shares of a fund with a higher sales charge, you must pay the
difference at the time of the exchange. Please note that a share exchange is a
taxable event and accordingly, you may realize a taxable gain or loss. Before
making an exchange request, read the Prospectus of the fund you wish to
purchase by exchange. You can obtain a Prospectus for any fund of the Trust,
the Company or Framlington by contacting your broker or the Funds at (800)
438-5789. Brokers may charge a fee for handling exchanges.
. EXCHANGES BY TELEPHONE. You may give exchange instructions by telephone
to the Funds at (800) 438-5789. You may not exchange shares by telephone
if you hold share certificates. We reserve the right to reject any
telephone exchange request and to place restrictions on telephone
exchanges.
. EXCHANGES BY MAIL. You may send exchange orders to your broker or to us
at the Munder Funds c/o First Data Investor Services Group, P.O. Box
5130, Westborough, Massachusetts 01581-5130.
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order. We will reduce the amount you receive
by the amount of any applicable CDSC. See "Purchases of Shares--What Price Do
I Pay for Shares?" for an explanation of how the net asset value next
determined is calculated.
48
<PAGE>
CONTINGENT DEFERRED SALES CHARGES. You pay a CDSC when you redeem:
. Class A Shares that are part of an investment of at least $1 million
within one year of buying them
. Class B Shares within six years of buying them
. Class C Shares within one year of buying them
The CDSC schedule for Class B shares purchased after June 27, 1995 is set
forth below. See the SAI for the CDSC schedule for Class B Shares purchased
before that time. The CDSC is based on the original net asset value at the
time of your investment or the net asset value at the time of redemption,
whichever is lower.
CLASS B SHARES
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
- -------------------- ----
<S> <C>
First..................................................................... 5.00%
Second.................................................................... 4.00%
Third..................................................................... 3.00%
Fourth.................................................................... 3.00%
Fifth..................................................................... 2.00%
Sixth..................................................................... 1.00%
Seventh and thereafter.................................................... 0.00%
</TABLE>
The Distributor pays sales commissions of 4.00% of the purchase price of
Class B Shares of the Funds to brokers at the time of sale that initiate and
are responsible for purchases of such Class B Shares of the Funds.
You will not pay a CDSC to the extent that the value of the redeemed shares
represents:
. reinvestment of dividends or capital gains distributions
. capital appreciation of shares redeemed
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions, then
any appreciation on shares redeemed, and then remaining shares held by you for
the longest period of time. We will calculate the holding period of shares of
a Fund acquired through an exchange of shares of the Munder Money Market Fund
from the date that the shares of the Fund were initially purchased.
CDSC WAIVERS. We will waive the CDSC payable upon redemptions of shares
which you purchased after June 27, 1995 for:
. redemptions made within one year after the death of a shareholder or
registered joint owner
. minimum required distributions made from an IRA or other retirement plan
account after you reach age 70 1/2
. involuntary redemptions made by the Fund
Consult the SAI for Class B Share CDSC waivers which apply when you redeem
shares purchased on or before June 27, 1995.
We will waive the CDSC for Class B Shares for all redemptions by Merrill
Lynch Plans if: (i) the Plan is recordkept on a daily valuation basis by
Merrill Lynch; or (ii) the Plan is recordkept on a daily valuation basis by an
independent recordkeeper whose services are provided through a contract or
alliance arrangement with Merrill Lynch; or (iii) the Plan has less than 500
eligible employees, as determined by the Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement.
49
<PAGE>
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by the Transfer Agent. A Fund may temporarily stop
redeeming shares when the NYSE is closed or trading on the NYSE is restricted,
when an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets or if the SEC orders the Fund to suspend
redemptions.
HOW CAN I REDEEM SHARES?
You may redeem shares of the Funds in several ways:
. BY MAIL. You may mail your redemption request to: THE MUNDER FUNDS, C/O
FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH,
MASSACHUSETTS 01581-5130. The redemption request should state the name of
the Fund, share class, account number, amount of redemption, account name
and where to send the proceeds. All account owners must sign. If a stock
certificate has been issued to you, you must endorse the stock
certificate and return it together with the written redemption request.
A SIGNATURE GUARANTEE is required for the following redemption
requests: (a) redemptions proceeds greater than $50,000; (b) redemption
proceeds not being made payable to the owner of the account; (c)
redemption proceeds not being mailed to the address of record on the
account or (d) if the redemption proceeds are being transferred to
another Munder Funds account with a different registration. You can
obtain a signature guarantee from a financial institution such as a
commercial bank, trust company, savings association or from a securities
firm having membership on a recognized securities exchange.
. BY TELEPHONE. You can redeem your shares by calling your broker or the
Funds at (800) 438-5789. There is no minimum requirement for telephone
redemptions paid by check. The Transfer Agent may deduct a wire fee
(currently $7.50) for wire redemptions under $5,000.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your Account Application Form, simply call the
Fund prior to 4:00 p.m. (Eastern Time), and request the funds be mailed
to the commercial bank or registered broker-dealer you designated on your
Account Application Form. We will send your redemption amount to you on
the next Business Day. We reserve the right at any time to change or
impose fees for this expedited redemption procedure.
We record all telephone calls for your protection and take measures to
identify the caller. If the Transfer Agent properly acts on telephone
instructions and follows the reasonable procedures to ensure against
unauthorized transactions, neither the Trust, the Company, the
Distributor nor the Transfer Agent will be responsible for any losses. If
these procedures are not followed, the Transfer Agent may be liable to
you for losses resulting from unauthorized instructions.
During periods of unusual economic or market activity, you may
experience difficulties or delays in effecting telephone redemptions. In
such cases you should consider placing your redemption request by mail.
. AUTOMATIC WITHDRAWAL PLAN ("AWP"). If you have an account value of $2,500
or more in a Fund, you may redeem shares on a monthly, quarterly, semi-
annual or annual basis. The minimum withdrawal is $50. We usually process
withdrawals on the 20th day of the month and promptly send you your
redemption amount. You may enroll in the AWP by completing the AWP
Application Form available through the Transfer Agent. To participate in
the AWP you must have your dividends automatically reinvested and may not
hold share certificates. You may change or cancel the AWP at any time
upon notice to the Transfer Agent. You should not buy Class A Shares (and
pay a sales charge) while you participate in the AWP and you must pay any
applicable CDSCs when you redeem shares.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
50
<PAGE>
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
We will typically send redemption amounts to you within seven Business Days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
STRUCTURE AND MANAGEMENT OF THE FUNDS
HOW ARE THE FUNDS STRUCTURED?
The Trust, the Company and Framlington are each an open-end management
investment company, which is a mutual fund that sells and redeems shares every
day that it is open for business. They are managed under the direction of
their governing Boards of Trustees and Directors, which are responsible for
the overall management of the Trust, the Company and Framlington and supervise
the Funds' service providers. The Trust and Framlington are organized as
Massachusetts business trusts and the Company is a Maryland corporation.
WHO MANAGES AND SERVICES THE FUNDS?
INVESTMENT ADVISOR. The Funds' investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for each Fund, provides
research and credit analysis, and is responsible for all purchases and sales
of portfolio securities (other than the Framlington Funds).
The Advisor is responsible for the overall management of the Framlington
Funds. Framlington Overseas Investment Management Limited, the sub-advisor of
the Framlington Funds, is responsible for buying and selling securities for
the Framlington Funds. It is an indirect subsidiary of Framlington Holdings
Limited which is, in turn, owned 49% by the Advisor and 51% by Credit
Commercial de France S.A., a French banking corporation listed on the Societe
des Bourses Francaises.
During the fiscal year ended June 30, 1997, the Advisor was paid an advisory
fee at an annual rate based on the average daily net assets of each Fund
(after waivers, if any) as follows:
<TABLE>
<S> <C>
Accelerating Growth Fund ... 0.75%
Balanced Fund .............. 0.65%
Growth & Income Fund ....... 0.75%
International Equity Fund .. 0.75%
Micro-Cap Equity Fund ...... 1.00%
Mid-Cap Growth Fund ........ 0.74%
Multi-Season Growth Fund ... 0.75%*
</TABLE>
<TABLE>
<S> <C>
Real Estate Equity Investment Fund
.................................. 0.74%
Small-Cap Value Fund .............. 0.75%
Small Company Growth Fund ......... 0.75%
Value Fund ........................ 0.74%
Framlington Emerging Markets Fund . 1.25%
Framlington Healthcare Fund ....... 1.00%
Framlington International Growth
Fund ............................. 1.00%
</TABLE>
- --------
*The Advisor waived advisory fees during the past fiscal year for the Multi-
Season Growth Fund. The Advisor is entitled to receive an annual fee equal
to 1.00% of the first $500 million of the Multi-Season Growth Fund's
average daily net assets and .75% of the Fund's average daily net assets
over $500 million.
The Sub-Advisor is entitled to receive an advisory fee equal to one half of
the fee paid to the Advisor by each of the Framlington Funds as compensation
for its services as Sub-Advisor. The Advisor pays fees to the Sub-Advisor and
the Framlington Funds pay no fees directly to the Sub-Advisor.
51
<PAGE>
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Funds and/or their
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor makes such payments out of its own
resources; there are no additional costs to the Funds or their shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Funds based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
PERFORMANCE OF FRAMLINGTON FUNDS MANAGED BY THE SUB-ADVISOR
The tables below contain certain performance information provided by the
Sub-Advisor relating to accounts managed by the Sub-Advisor and which have
investment objectives and policies similar to those of the corresponding
Framlington Funds. See "Fund Choices" and "What are the Funds' Investments and
Investment Practices?" In the case of the Healthcare portfolio performance,
the data relates to a unit trust organized under the laws of the United
Kingdom managed by the same personnel of the Sub-Advisor with similar
investment objectives and policies to the Framlington Healthcare Fund. In the
case of Emerging Markets portfolio performance, the data relates to a
Canadian-based institutional emerging markets portfolio managed by the same
personnel of the Sub-Advisor with similar investment objectives and policies
to the Framlington Emerging Markets Fund.
The trust account performance is provided by Micropal, an independent
research organization that is a recognized source of performance data in the
UK unit trust industry. The data is U.S. dollar adjusted on the basis of
exchange rates provided by Datastream using WM/Reuters closing rates. The
performance figures are net of brokerage commissions, actual investment
advisory fees and initial sales charges. The data assume the reinvestment of
net income and capital gain distributions. The trust account returns are
calculated using beginning offer and ending bid prices for periods ended
December 31, 1996.
You should not rely on the following performance data of the Sub-Advisor's
client accounts as an indication of future performance of the Framlington
Funds. It should be noted that the management of the Funds will be affected by
regulatory requirements under the Investment Company Act of 1940 (the "1940
Act") and requirements of the Internal Revenue Code of 1986, as amended, to
qualify as a regulated investment company.
<TABLE>
<CAPTION>
U.K. S&P HEALTHCARE
PERIOD ENDED HEALTH COMPOSITE INDEX
DECEMBER 31, 1996 PORTFOLIO CAPITAL CHANGE
----------------- --------- ---------------
<S> <C> <C>
1 Year............................................... 10.75% 18.48%
3 Years.............................................. 96.93% 100.49%
5 Years.............................................. 99.43% 45.60%
Inception on April 30, 1987.......................... 411.08% 239.64%
</TABLE>
Performance for the Health trust account is calculated on an offer-bid
basis; US Dollar adjusted total return net of all management fees but not
reflective of U.K. tax. Source: Micropal.
S&P Healthcare Composite Index performance shows capital change in U.S.
Dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
<TABLE>
<CAPTION>
MSCI
CANADIAN EMERGING
EMERGING MARKETS
PERIOD ENDED MARKETS FREE TOTAL
DECEMBER 31, 1996 ACCOUNT RETURN
----------------- -------- ----------
<S> <C> <C>
1 Year...................................................... 5.16 % 6.03 %
Inception on November 1, 1994............................... (3.68)% (12.37)%
</TABLE>
MSCI Emerging Markets Free Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
52
<PAGE>
The performance of the Canadian institutional account is measured by the
World Markets Company on a total return basis and has been re-calculated net
of the management fee charged the Canadian institutional account. The
inception date of the Canadian institutional account is November 1, 1994.
INDICES
The S&P Healthcare Composite Index is the composite Healthcare section of
the S&P 500 Index as defined and tracked by S&P. This index covers securities
listed in the USA only.
The MSCI Emerging Markets Free Index is maintained by Morgan Stanley Capital
International and covers 26 countries and represents the investment
opportunities in emerging markets available to foreign investors. Total return
is calculated using the prices of the companies tracked and assumes the
reinvestment of dividends.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Funds'
transfer agent. The Transfer Agent is a wholly owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Funds' administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Company, the Trust and Framlington in all aspects of their administration
and operations including the maintenance of financial records and fund
accounting. As compensation for its services, State Street is entitled to
receive fees, based on the aggregate daily net assets of the Funds and certain
other investment portfolios that are advised by the Advisor for which it
provides services, computed daily and payable monthly at the annual rate of
.051% of the first $7.5 billion of net assets, plus .045% of the next $2.5
billion of net assets, plus .03% of the next $2.5 billion of net assets, plus
.02% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Funds. State Street pays the Distributor a fee
for these services out of its own resources at no cost to the Funds.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Funds. No compensation is paid to the Custodian for
its services. State Street also serves as sub-custodian to the Fund. As
compensation for its services, the Sub-Custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Fund and certain other
investment portfolios that are advised by the Advisor for which the Sub-
Custodian provides services, computed daily and payable monthly at an annual
rate of 1.00% of average daily net assets. The Sub-Custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Funds' shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Funds' shares.
For an additional description of the services performed by the
Administrator, the Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
DISTRIBUTION SERVICES ARRANGEMENT
Under Rule 12b-1 of the 1940 Act, the Funds have adopted Service Plans with
respect to their Class A Shares and Service and Distribution Plans with
respect to their Class B and Class C Shares. Under the Plans, each Fund uses
its assets to finance activities relating to the distribution of its shares to
investors and the provision of certain shareholder services. The Distributor
is paid a service fee at an annual rate of up to 0.25% of the value of average
daily net assets of the Funds' Class A Shares. The Distributor also is paid a
service fee at an annual rate of 0.25% and a distribution fee at an annual
rate of up to 0.75% of the value of the average daily net assets of the Funds'
Class B and Class C Shares. The Distributor uses the service fees primarily to
pay ongoing trail commissions to securities dealers (which may include the
Distributor itself) and other financial organizations which provide
53
<PAGE>
shareholder services for the Funds. These services include, among other
things, processing new shareholder account applications, reporting to the
Fund's Transfer Agent all transactions by customers and serving as the primary
information source to customers concerning the Funds.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust, the Company or Framlington as a whole and affecting your particular
Fund. You will not vote by Class unless expressly required by law or when the
Trustees or Directors determine the matter to be voted on affects only the
interests of the holders of a particular class of shares. The Trust, the
Company and Framlington will not hold annual shareholder meetings, but special
meetings may be held at the written request of shareholders owning more than
10% of outstanding shares for the purpose of removing a Trustee or Director.
Under Massachusetts law, it is possible that a shareholder may be personally
liable for the Trust's or Framlington's obligations. If a shareholder were
required to pay a debt of a Fund, however, the Trust and Framlington have
committed to reimburse the shareholder in full from their assets. The SAI
contains more information regarding voting rights.
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Funds as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust, the
Company and Framlington.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUNDS?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on a Fund's investments. The Funds pass their earnings along to
investors in the form of dividends. Dividend distributions are the dividends
or interest earned on investments after expenses. The net income of the
Accelerating Growth Fund, Balanced Fund, Growth & Income Fund, Index 500 Fund
and Small Company Growth Fund is paid quarterly as a dividend. Dividends from
net income, if any, are paid at least annually by the Equity Selection Fund,
Framlington Emerging Markets Fund, Framlington Healthcare Fund, Framlington
International Growth Fund, International Equity Fund, Micro-Cap Equity Fund,
Mid-Cap Growth Fund, Multi-Season Growth Fund, Small-Cap Value Fund and Value
Fund; and monthly by the Real Estate Equity Investment Fund. Each Fund
distributes its net realized capital gains (including net short-term capital
gains), if any, at least annually.
It is possible that a Fund may make a distribution in excess of the Fund's
current and accumulated earnings and profits. You will treat such a
distribution as a return of capital which is applied against and reduces your
basis in your shares. You will treat the excess of any such distribution over
your basis in your shares, as gain from a sale or exchange of the shares.
HOW WILL DISTRIBUTIONS BE MADE?
The Funds will pay dividend and capital gains distributions in additional
shares of the same class of a Fund. If you wish to receive distributions in
cash, either indicate this request on your Account Application Form or notify
the Funds at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUNDS?
This section contains a brief summary of the tax implications of ownership
in the Funds' shares. A more detailed discussion of Federal income tax
considerations is contained in the SAI. You should consult your tax advisor
regarding the impact of owning the Funds' shares on your own personal tax
situation including the applicability of any state and local taxes.
54
<PAGE>
In general, as long as each Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. Each Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, a Fund may still be
liable for an excise tax on income that is not distributed in accordance with
a calendar year requirement; the Funds intend to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by a Fund will
generally be designated as long-term or short-term. Recent tax law changes
have added a new category of mid-term capital gain; it is expected that
regulations will be issued regarding the proper tax treatment of mid-term and
other gains by shareholders of RICs. Distributions from a Fund's long-term
capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from each Fund in which
you are a shareholder a statement of the amount and nature of the
distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by a
Fund and the other Funds may be subject to foreign withholding or other taxes.
A Fund may be permitted to pass on to its shareholders the right to a credit
or deduction for income or other tax credits earned from foreign investments
and it intends to do so if possible. These deductions or credits may be
subject to tax law limitations.
If a Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If a Fund elects to treat PFIC as a "qualified electing fund"
("QEF") and the PFIC furnishes certain financial information in the required
form to such Fund, the Fund will instead be required to include in income each
year its allocable share of the ordinary earnings and net capital gains of the
QEF, regardless of whether received, and such amounts will be subject to the
various distribution requirements described above. The Funds may also elect to
mitigate the tax effects of owning PFIC stock by making an annual mark-to-
market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Funds and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Funds, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and Audited Annual Reports on a regular basis from the Funds. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings the Funds will only send one copy of the
above communications to (1) accounts with the same primary record owner, (2)
joint tenant accounts, (3) tenant in common accounts and (4) accounts which
have the same address.
55
<PAGE>
PROEQABC97 / FO41B / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
Application [LOGO OF MUNDER FUNDS]
for new accounts
Please mail your complete application (printed or typed)
along with your check to:
The Munder Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 5130
Westborough, MA 01581-5130
If you have questions regarding this application, please telephone the Transfer
Agent at 1.800.438.5789
<TABLE>
<CAPTION>
1. ACCOUNT REGISTRATION
<S> <C>
- ---------------------------------------------------------------------------------------------------
Name Social Security Number
- ---------------------------------------------------------------------------------------------------
Joint Owner (if any) (If Joint Tenancy, use Social Security Number of first joint owner)
OR
Uniform Transfer to Minor:
for:
- ---------------------------------------------------------------------------------------------------
Custodian Name (one custodian only) Minor's Name (one minor only)
- ---------------------------------------------------------------------------------------------------
State (Custodian's State of Residence) Minor's Social Security Number
OR
[_] Trust [_] Corporation [_] Other (please specify)________________________________
- ---------------------------------------------------------------------------------------------------
Trust/Corporation Name
- ---------------------------------------------------------------------------------------------------
Trust Date Trust Identification Number
2. MAILING ADDRESS (address for reports, dividends, statements and redemption proceeds)
- ---------------------------------------------------------------------------------------------------
Street Apt.
- ---------------------------------------------------------------------------------------------------
City State Zip Code Telephone Number
Non-Resident Alien: [_] Yes [_] No If Yes, Country of Residence______________________
</TABLE>
<PAGE>
3. INITIAL INVESTMENT
With as little as $500* you can invest in any Munder Fund. Please be sure to
read the prospectus carefully before investing or sending money. You may
request an additional prospectus by calling 1.800.438.5789.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NAME OF FUND CLASS A CLASS B CLASS C INVESTMENT AMOUNT
[_] Munder Accelerating Growth Fund [_] [_] [_] $_________________
[_] Munder All-Season Aggressive Fund [_] [_] [_] $_________________
[_] Munder All-Season Moderate Fund [_] [_] [_] $_________________
[_] Munder All-Season Conservative Fund [_] [_] [_] $_________________
[_] Munder Balanced Fund [_] [_] [_] $_________________
[_] Munder Growth & Income Fund [_] [_] [_] $_________________
[_] Munder Index 500 Fund [_] [_] [_] $_________________
[_] Munder International Equity Fund [_] [_] [_] $_________________
[_] Munder Micro-Cap Equity Fund [_] [_] [_] $_________________
[_] Munder Mid-Cap Growth Fund [_] [_] [_] $_________________
[_] Munder Multi-Season Growth Fund [_] [_] [_] $_________________
[_] Munder Real Estate Equity Investment Fund [_] [_] [_] $_________________
[_] Munder Small-Cap Value Fund [_] [_] [_] $_________________
[_] Munder Small Company Growth Fund [_] [_] [_] $_________________
[_] Munder Value Fund [_] [_] [_] $_________________
[_] Munder Framlington Emerging Markets Fund [_] [_] [_] $_________________
[_] Munder Framlington Healthcare Fund [_] [_] [_] $_________________
[_] Munder Framlington International Growth Fund [_] [_] [_] $_________________
[_] Munder Bond Fund [_] [_] [_] $_________________
[_] Munder Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder International Bond Fund [_] [_] [_] $_________________
[_] Munder Short Term Treasury Fund [_] [_] [_] $_________________
[_] Munder Michigan Triple Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder U.S. Government Income Fund [_] [_] [_] $_________________
[_] Munder Cash Investment Fund [_] N/A N/A $_________________
[_] Munder Money Market Fund [_] N/A N/A $_________________
[_] Munder Tax-Free Money Market Fund [_] N/A N/A $_________________
[_] Munder U.S. Treasury Money Market Fund [_] N/A N/A $_________________
Total Amount Invested $_________________
[_] By Check (Payable to The Munder Funds)
[_] By Wire. Account Number:______________________(Account number assigned by Bank from which assets were wired.)
*$50 per Fund if the Automatic Investment Plan Option is being established at this time (please complete section 5).
</TABLE>
<PAGE>
4. DISTRIBUTION OPTION (check one. If none, "A" will be assigned)
[_] A. Reinvest dividends and capital gains in additional Fund shares.
[_] B. Pay dividends in cash; reinvest capital gains in additional Fund shares.
[_] C. Pay dividends and capital gains in cash.
[_] D. Please send my: [_] Dividends [_] Dividends & Capital Gains (choose one)
directly to my checking/savings account.
Fill out banking information in Section 10
5. AUTOMATIC INVESTMENT PLAN (optional)
YES, I(we) wish to participate in the Automatic Investment Plan (AIP). I(We)
authorize First Data Investor Services Group, Inc. (First Data), The Munder
Funds' transfer agent, to invest automatically $_________ ($50 minimum) for
me(us) on a [_] Monthly OR [_] Quarterly basis (please choose either the [_] 5th
or the [_] 20th of the month) and draw a bank draft in payment of each of these
investments against my (our) [_] Checking OR [_] Savings account. For the
purpose of verifying my(our) bank account number, I (we) have enclosed a blank
check or deposit slip marked void and have signed the bank authorization below.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Name of Fund Checking/Savings Account Number ABA Number (Bank Routing Number)
</TABLE>
Fill out banking information in Section 10
6. CHECKWRITING PRIVILEGES (optional)
Income & Money Market Class A shares only
If you are opening an account for any of The Munder Income and/or Money Market
Funds (Class A Shares only), you are entitled to the checkwriting option.
Redemption checks may be written for amounts of $500 or more. To obtain checks,
please complete the signature card below. All persons named in the Account
Registration in Section 1 must sign the signature card. For Corporate, Trust or
Partnership accounts, only authorized signers must sign. By signing this
signature card, you agree to be subject to the customary rules and regulations
governing checking accounts, as well as instructions and rules of the Fund now
in effect, and as amended from time to time, that pertain to the use of
redemption checks.
Please fill out the following Signature Card to be eligible for Checkwriting and
indicate the Fund(s) for which you are requesting this service:
- --------------------------------------------------------------------------------
Fund(s)
- --------------------------------------------------------------------------------
Fund(s)
Authorized Signatures (exactly as it appears in Part 1 of the Application):
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
Check here if more than one signature is required per check: [_] 2 [_] 3
Other: _____________________
<PAGE>
7. AUTOMATIC WITHDRAWAL PLAN (optional)
The minimum account balance must be $2,500 or more.
Fill out banking information in Section 10
YES, I authorize the redemption of shares from my Munder Fund account to meet
withdrawal payments on the 20th of each month.
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------
Name Of Fund That Shares Will Be Redeemed From Account Number (if applicable)
- --------------------------------------------------------------------------------------------------------------
Amount of Monthly Payment ($50 minimum per Fund) Start Date (Payment is to begin on the next
payment period unless a later date is indicated)
Payments will be made to: [_] Owner's address of record only OR [_] Other listed below:
______________________________________________________________________ [_] Checking OR [_] Savings Account
Name (if bank indicate account number)
- --------------------------------------------------------------------------------------------------------------
Address
For the purpose of verifying my(our) bank account number, I (we) have enclosed a blank check or deposit slip
marked void and have signed the bank authorization below.
- --------------------------------------------------------------------------------------------------------------
Name of Fund Account Number (if applicable) ABA Number (Bank Routing Number)
</TABLE>
8. REDUCED SALES CHARGE (optional)
[_] Rights Of Accumulation:
Investors may qualify for reduced sales charges by aggregating the total
purchases of all Munder Class A Shares, excluding Money Market Funds, to
determine the applicable sales charge for current purchases. To determine the
aggregated amount of all non-money market funds, you will need to total the
current purchases as well as shares that are already beneficially owned by the
investor for which a sales charge has already been paid. Please see the
prospectus for additional information regarding Rights of Accumulation.
I apply for the Rights of Accumulation reduced sales charges based on the
following accounts in The Munder Funds.
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
[_] Letters Of Intent:
You may qualify for reduced sales charges if you plan to make additional
investments in The Munder Funds within a 13 month period. By indicating a level
of anticipated investment and by signing this application, you agree to the
terms of the Letter of Intent as set forth in the Prospectus, and as follows:
"Although I am not obligated to do so, I intend to invest over a 13 month period
an aggregate amount of at least" (check one):
[_] $25,000 [_] $50,000 [_] $100,000
[_] $250,000 [_] $500,000 [_] $1,000,000
<PAGE>
9. TELEPHONE REDEMPTION & EXCHANGE AGREEMENT
Please check the box if you want this option.
[_] I(We) authorize First Data to act upon instructions received by telephone
from me(us) to redeem or to exchange shares of The Munder Funds.
1. I(We) relieve the Funds or First Data of any liability for the loss,
cost or expense for acting upon such instructions reasonably believed to
be from me(us).
2. I(We) assume responsibility for notifying the Funds within seven (7)
business days if a confirmation for the transaction is not received or
is incorrect.
3. If an exchange involves an initial investment into a Fund, the account
registration will carry the same registration as set forth above.
4. An exchange deemed to be the initial purchase of a Fund must meet the
minimum initial investment requirement of $500 per Fund unless the
shareholder is establishing an Automatic Investment Plan.
5. Redemption proceeds will be sent only to my account address of record.
- --------------------------------------------------------------------------------
Name Name
10. BANKING INFORMATION
To be completed with Section 4 (Distribution Option)
I(We) authorize The Munder Funds to deposit distributions into the following
[_] Checking [_] Savings account:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Bank Name Address
- ------------------------------------------------------------------------------------------
ABA Number (Bank Routing Number) Account Number Bank Account Registration
- ------------------------------------------------------------------------------------------
Wiring Instructions
</TABLE>
To be completed with Section 5 (Automatic Investment Plan)
Please note that your bank will clear and process each bank draft and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for The Munder Funds, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
To be completed with Section 7 (Automatic Withdrawal Plan)
Please note that your bank will clear and process each bank deposit and will
include it with your regular statement. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow the transfer agent for The Munder Funds to act as your Agent
with regard to the Automatic Withdrawal Plan (AWP). The AWP may be modified or
terminated at any time, upon thirty (30) days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
. Please Staple Void Check or Deposit Slip Here .
<PAGE>
11. AUTHORIZATIONS, CERTIFICATIONS AND SIGNATURES
By signing the application, I(we) hereby certify under the penalty of perjury
that the information on this application is true, complete and correct and that:
I(We) understand that this order is subject to acceptance by The Munder Funds.
I(We) agree that The Munder Funds, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Funds are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. An investment in the Funds involves
investment risks, including the possible loss of principal.
I(We) represent that I am (we are) of legal age and capacity and have read the
Prospectus(es) for The Munder Funds selected, and agree to its (their) terms.
First Data, is hereby appointed agent to receive dividends and distributions for
automatic reinvestment unless otherwise directed in Section 4.
I(We) understand and acknowledge that a sales charge may be levied against the
dollars that I(we) invest in The Munder Funds. (See the Prospectus(es) for
reduced sales charge information.)
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
below. Failure by non-exempt taxpayers to furnish us with the correct Taxpayer
Identification Number will result in withholding of 31% of all taxable dividends
paid and/or withholding on certain other payments (this is referred to as backup
withholding).
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
Taxpayer Identification Number Name of Taxpayer Whose Number Appears Above
</TABLE>
Taxpayer Identification:
I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me
by The Munder Funds, and
(2) I (the Investor) am not subject to backup withholding because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal Revenue Service ("IRS") that I
am, as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distributions and gross
redemption proceeds under the Federal income tax law.
[_] Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been
terminated.
Authorization:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
</TABLE>
<PAGE>
================================================================================
FOR DEALER USE ONLY
We hereby authorize First Data Investor Services Group, Inc., to act as our
agent in connection with transactions authorized by this Application and agree
to notify First Data Investor Services Group, Inc., of any purchase made under a
Letter of Intent or Right of Accumulation.
- --------------------------------------------------------------------------------
Dealer's Name Main Office Address
- --------------------------------------------------------------------------------
Representative's Name Branch # Rep #
- --------------------------------------------------------------------------------
Branch Address Telephone #
- --------------------------------------------------------------------------------
Authorized Signature of Dealer Title
================================================================================
<PAGE>
================================================================================
Shares of The Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
================================================================================
Distributor: Funds Distributor, Inc. APPABC - F078
<PAGE>
CLASS A, B & C SHARES
[LOGO OF THE MUNDER FUNDS]
Investments
for all seasons
Prospectus
OCTOBER 29, 1997
T H E M U N D E R I N C O M E F U N D S
Bond
Intermediate Bond
International Bond
U.S. Government Income
Michigan Triple Tax-Free Bond
Tax-Free Bond
Tax-Free Intermediate Bond
Short Term Treasury
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS A, CLASS B AND CLASS C SHARES
The Munder Funds Trust (the "Trust") and The Munder Funds, Inc. (the
"Company") are open-end investment companies. This Prospectus describes six
investment portfolios offered by the Trust (the "Trust Funds") and two
investment portfolios offered by the Company (referred to as the "Funds"):
Munder Bond Fund
Munder Intermediate Bond Fund
Munder International Bond Fund
Munder U.S. Government Income Fund
Munder Michigan Triple Tax-Free Bond Fund
Munder Tax-Free Bond Fund
Munder Tax-Free Intermediate Bond Fund
Munder Short Term Treasury Fund
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Funds.
This Prospectus explains the objectives, policies, risks and fees of each
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
each of the Funds has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. You can
obtain the SAI free of charge by calling the Funds at (800) 438-5789. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
SAI and other information regarding the Funds.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
SECURITIES OFFERED BY THIS PROSPECTUS HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Funds?.............................. 3
Financial Information...................................................... 6
Fund Choices
What Funds are offered?.................................................. 22
Who may want to invest in the Funds?..................................... 24
What are the Funds' investments and investment practices?................ 25
What are the risks of investing in the Funds?............................ 31
Performance
How is the Funds' performance calculated?................................ 32
Where can I obtain performance data?..................................... 32
Purchases and Exchanges of Shares
What share class should I choose for my investment?...................... 33
What price do I pay for shares?.......................................... 33
When can I purchase shares?.............................................. 36
What is the minimum required investment?................................. 36
How can I purchase shares?............................................... 36
How can I exchange shares?............................................... 37
Redemptions of Shares
What price do I receive for redeemed shares?............................. 37
When can I redeem shares?................................................ 39
How can I redeem shares?................................................. 39
When will I receive redemption amounts?.................................. 40
Structure and Management of the Funds
How are the Funds structured?............................................ 40
Who manages and services the Funds?...................................... 40
What are my rights as a shareholder?..................................... 41
Dividends, Distributions and Taxes
When will I receive distributions from the Funds?........................ 42
How will distributions be made?.......................................... 42
Are there tax implications of my investments in the Funds?............... 42
Additional Information .................................................... 43
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUNDS?
Q: What are the Funds' goals?
A: .
The Bond Fund seeks to provide a high level of current income with capital
appreciation as a secondary consideration.
.The Intermediate Bond Fund seeks to provide a competitive rate of return
which exceeds the inflation rate and the return provided by money market
instruments.
.The International Bond Fund seeks to realize a competitive total return
through a combination of current income and capital appreciation.
.The U.S. Government Income Fund seeks to provide high current income.
.The Tax-Free Intermediate Bond Fund and Tax-Free Bond Fund seek to provide
current interest income exempt from Federal income taxes.
.The Michigan Triple Tax-Free Bond Fund seeks to provide as high a level of
current interest income exempt from regular Federal income taxes, Michigan
state income tax and Michigan intangibles tax as is consistent with
prudent investment management and preservation of capital.
.The Short Term Treasury Fund seeks to provide an enhanced money market
return consistent with the preservation of capital.
Q: What are the Funds' strategies?
A: .
The Funds, other than the Michigan Triple Tax-Free Bond Fund, the Tax-Free
Bond Fund and the Tax-Free Intermediate Bond Fund (together, the "Tax-Free
Funds"), U.S. Government Income Fund and the Short Term Treasury Fund,
invest primarily in Fixed Income Securities. "Fixed Income Securities" are
securities which either pay interest at set times at either fixed or
variable rates, or which realize a discount upon maturity. Fixed Income
Securities include corporate bonds, debentures, notes and other similar
corporate debt instruments, zero coupon bonds (discount debt obligations
that do not make interest payments) and variable amount master demand
notes that permit the amount of indebtedness to vary in addition to
providing for periodic adjustments in the interest rates.
.The U.S. Government Income Fund invests primarily in obligations of the
U.S. government and its agencies and instrumentalities.
.The Short Term Treasury Fund invests only in U.S. Treasury securities and
repurchase agreements relating to U.S. Treasury securities.
.The Tax-Free Bond Fund and Tax-Free Intermediate Bond Fund invest
primarily in Municipal Obligations. "Municipal Obligations" are
obligations of states, territories and possessions of the United States
and the District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities, the interest on which is exempt from
regular Federal income tax.
.The Michigan Triple Tax-Free Bond Fund invests primarily in Michigan
Municipal Obligations. "Michigan Municipal Obligations" are municipal
obligations issued by the State of Michigan and its political
subdivisions, the interest on which is exempt from Federal income taxes,
Michigan state income tax and Michigan intangibles tax.
3
<PAGE>
Q: What are the Funds' risks?
A: The following table summarizes the primary risks of investing in the Funds:
<TABLE>
<CAPTION>
FUND RISK
---- ----
<C> <S>
All Funds Potential loss of investment due to changes in
the bond market in general, in the prices of
debt securities of particular companies and in
interest rates.
International Bond Fund Because of large investments in foreign
securities, the Fund is riskier than domestic
funds due to factors such as freezes on
convertibility of currency, changes in exchange
rates, political instability and differences in
accounting and reporting standards.
International Bond Fund, These "non-diversified" Funds concentrate their
Michigan Triple Tax-Free investments in fewer issuers than diversified
Bond Fund and Tax-Free funds, and could experience larger price
Intermediate Bond Fund fluctuations than diversified funds.
</TABLE>
Q: What are the options for investment in the Funds?
A: Each Fund offers five different investment options, or classes: Class A, B,
C, K and Y. Class K and Y Shares, which are only offered to institutional and
other qualified investors, are offered in other prospectuses.
<TABLE>
<CAPTION>
MAXIMUM FRONT
CLASS RULE 12B-1 FEES * END SALES LOAD ** MAXIMUM CDSC ***
----- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Class A 0.25% 4.0% None+
Class B 1% None 5%
Class C 1% None 1%, if redeemed within
1 year of purchase
</TABLE>
- --------
* An annual fee for distributing shares and servicing shareholder accounts
paid based on the Fund's average daily net assets.
** A one-time fee charged at the time of purchase of shares. The fee
declines based on the amount you invest.
*** A contingent deferred sales charge ("CDSC") is a one-time fee charged at
the time of redemption. The fee declines based on the length of time you
hold the shares.
+ A CDSC of 1% is imposed on certain redemptions of Class A Shares if
redeemed within one year of purchase.
(i) If you invest over $250,000, you must buy Class A or Class C Shares.
(ii) Class B Shares convert automatically to Class A Shares after six years.
Due to the level of Rule 12b-1 fees and the CDSC on Class B Shares versus
Class A or Class C Shares, both (i) and (ii) are to your economic benefit.
Q: How do I buy and sell shares of the Funds?
A: Funds Distributor Inc. (the "Distributor") sells shares of the Funds. You
may purchase shares from the Distributor through broker-dealers or other
financial institutions or from the Funds' transfer agent, First Data Investor
Services Group, Inc. ("Transfer Agent"), by mailing the attached Account
Application Form with a check to the Transfer Agent. You must invest at least
$500 ($50 through the Automatic Investment Plan) initially and at least $50
for subsequent purchases.
Shares may be redeemed (sold back to the Fund) by mail or by telephone.
You may also acquire the Funds' shares by exchanging shares of the same
class of other funds of the Trust, the Company and The Munder Framlington
Funds Trust ("Framlington"), and exchange Fund shares for shares of the same
class of other funds of the Trust, the Company and Framlington.
4
<PAGE>
Q: What shareholder privileges do the Funds offer?
A:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C>
Automatic Investment Plan Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal Plan Automatic Withdrawal Plan Automatic Withdrawal Plan
Retirement Plans Retirement Plans Retirement Plans
Telephone Exchanges Telephone Exchanges Telephone Exchanges
Rights of Accumulation Reinvestment Privilege Reinvestment Privilege
Free Check Writing*
Letter of Intent
Quantity Discounts
Reinvestment Privilege
</TABLE>
- --------
* Excluding the International Bond Fund
Q: When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments after expenses.
Dividends paid quarterly (if income is available): International Bond Fund.
Dividends paid monthly: Bond Fund, Intermediate Bond Fund, U.S. Government
Income Fund, the Tax-Free Funds and the Short Term Treasury Fund.
The Funds distribute capital gains at least annually. Unless you elect to
receive distributions in cash, all dividends and capital gain distributions of
a Fund will be automatically used to purchase additional shares of that Fund.
Q: Who manages the Funds' assets?
A: Munder Capital Management is the Funds' investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Funds.
5
<PAGE>
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Funds will bear directly.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge on Purchase (as a % of Offering
Price).............................................. 4%(2) None None
Sales Charge Imposed on Reinvested Dividends......... None None None
Maximum Deferred Sales Charge(3)..................... None(4) 5%(3) None(5)
Redemption Fees(6)................................... None None None
Exchange Fees........................................ None None None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The sales charge declines as the amount invested increases.
(3) The contingent deferred sales charge ("CDSC") payable upon redemption of
Class B Shares declines over time.
(4) A 1% CDSC applies to redemptions of Class A Shares within one year of
investment that were purchased with no initial sales charge as part of an
investment of $1,000,000 or more.
(5) A 1% CDSC applies to redemptions of Class C Shares within one year of
purchase.
(6) The Transfer Agent may charge a fee of $7.50 for wire redemptions under
$5,000.
6
<PAGE>
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to each Fund, which investors in the Funds will bear
indirectly for the current fiscal year. Such expenses include payments to
Trustees, Directors, auditors, legal counsel and service providers (such as
the Advisor), registration fees and distribution fees. The fees shown are
based on fees for the Funds' past fiscal year, except for the International
Bond Fund and Short Term Treasury Fund, for which other expenses are estimated
for the current fiscal year. Because of the 12b-1 fee, you may over the long
term pay more than the amount of the maximum permitted front-end sales charge.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING BOND FUND INTERMEDIATE BOND FUND INTERNATIONAL BOND FUND
EXPENSES ----------------------- ----------------------- -----------------------
(AS A % OF AVERAGE NET CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ---------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .50% .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.......... .21% .21% .21% .18% .18% .18% .35% .35% .35%
---- ----- ----- ---- ----- ----- ----- ----- -----
Total Fund Operating
Expenses............... .96% 1.71% 1.71% .93% 1.68% 1.68% 1.10% 1.85% 1.85%
==== ===== ===== ==== ===== ===== ===== ===== =====
<CAPTION>
U.S. GOVERNMENT MICHIGAN TRIPLE
ANNUAL FUND OPERATING INCOME FUND TAX-FREE BOND FUND TAX-FREE BOND FUND
EXPENSES ----------------------- ----------------------- -----------------------
(AS A % OF AVERAGE NET CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
- ---------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .50% .50% .50% .50% .50% .50% .50% .50% .50%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.......... .21% .21% .21% .13% .13% .13% .20% .20% .20%
---- ----- ----- ---- ----- ----- ----- ----- -----
Total Fund Operating
Expenses............... .96% 1.71% 1.71% .88% 1.63% 1.63% .95% 1.70% 1.70%
==== ===== ===== ==== ===== ===== ===== ===== =====
<CAPTION>
TAX-FREE INTERMEDIATE SHORT TERM
ANNUAL FUND OPERATING BOND FUND TREASURY FUND
EXPENSES ----------------------- -----------------------
(AS A % OF AVERAGE NET CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
ASSETS) SHARES SHARES SHARES SHARES SHARES SHARES
- ---------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .50% .50% .50% .25% .25% .25%
12b-1 Fees.............. .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses.......... .18% .18% .18% .27% .27% .27%
---- ----- ----- ---- ----- -----
Total Fund Operating
Expenses............... .93% 1.68% 1.68% .77% 1.52% 1.52%
==== ===== ===== ==== ===== =====
</TABLE>
7
<PAGE>
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual
return, (2) redemption at the end of the time period (including the deduction
of the deferred sales charge, if any) and (3) no redemption at the end of the
time period. THIS EXAMPLE IS NOT A REPRESENTATION OF PAST OR FUTURE
PERFORMANCE OR OPERATING EXPENSES; ACTUAL PERFORMANCE OR OPERATING EXPENSES
MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
INTERMEDIATE INTERNATIONAL
BOND FUND BOND FUND BOND FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 49 $ 67 $ 27 $ 49 $ 67 $ 27 $ 51 $ 69 $ 29
. No Redemption........ $ 49 $ 17 $ 17 $ 49 $ 17 $ 17 $ 51 $ 19 $ 19
3 Years
. Redemption........... $ 69 $ 84 $ 54 $ 68 $ 83 $ 53 $ 74 $ 88 $ 58
. No Redemption........ $ 69 $ 54 $ 54 $ 68 $ 53 $ 53 $ 74 $ 58 $ 58
5 Years
. Redemption........... $ 91 $113 $ 93 $ 89 $111 $ 91 $ 98 $120 $102
. No Redemption........ $ 91 $ 93 $ 93 $ 89 $ 91 $ 91 $ 98 $100 $100
10 Years
. Redemption........... $153 $202 $202 $150 $199 $199 $169 $217 $217
. No Redemption........ $153 $202 $202 $150 $199 $199 $169 $217 $217
<CAPTION>
U.S. GOVERNMENT MICHIGAN TRIPLE TAX-FREE
INCOME FUND TAX-FREE BOND FUND BOND FUND
----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption........... $ 49 $ 67 $ 27 $ 49 $ 67 $ 27 $ 49 $ 67 $ 27
. No Redemption........ $ 49 $ 17 $ 17 $ 49 $ 17 $ 17 $ 49 $ 17 $ 17
3 Years
. Redemption........... $ 69 $ 84 $ 54 $ 67 $ 81 $ 51 $ 69 $ 84 $ 54
. No Redemption........ $ 69 $ 54 $ 54 $ 67 $ 51 $ 51 $ 69 $ 54 $ 54
5 Years
. Redemption........... $ 91 $113 $ 93 $ 87 $109 $ 89 $ 91 $112 $ 92
. No Redemption........ $ 91 $ 93 $ 93 $ 87 $ 89 $ 89 $ 91 $ 92 $ 92
10 Years
. Redemption........... $153 $202 $202 $144 $193 $193 $152 $201 $201
. No Redemption........ $153 $202 $202 $144 $193 $193 $152 $201 $201
</TABLE>
<TABLE>
<CAPTION>
TAX-FREE INTERMEDIATE SHORT TERM
BOND FUND TREASURY FUND
----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1 Year
. Redemption................... $ 49 $ 67 $ 27 $ 48 $ 65 $ 25
. No Redemption................ $ 49 $ 17 $ 17 $ 48 $ 15 $ 15
3 Years
. Redemption................... $ 68 $ 83 $ 53 $ 64 $ 78 $ 48
. No Redemption................ $ 68 $ 53 $ 53 $ 64 $ 48 $ 48
5 Years
. Redemption................... $ 89 $111 $ 91 $ 81 $103 $ 83
. No Redemption................ $ 89 $ 91 $ 91 $ 81 $ 83 $ 83
10 Years
. Redemption................... $150 $199 $199 $132 $181 $181
. No Redemption................ $150 $199 $199 $132 $181 $181
</TABLE>
8
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors. Class B Shares were not offered prior to March 1, 1994.
Class C Shares of the International Bond, Tax-Free Bond and Tax-Free
Intermediate Bond Funds and Class A and C Shares of the Short Term Treasury
Fund were not offered during the periods shown. This information should be
read in conjunction with the Funds' most recent Annual Reports, which are
incorporated by reference into the SAI. You may obtain the Annual Reports
without charge by calling (800) 438-5789.
<TABLE>
<CAPTION>
BOND FUND (A)
--------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D)
CLASS A CLASS A CLASS A
------- ------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period............... $9.53 $9.70 $9.31
----- ----- -----
Income from investment operations:
Net investment income............................. 0.60 0.61 0.21
Net realized and unrealized gain/(loss) on
investments...................................... 0.03 (0.20) 0.38
----- ----- -----
Total from investment operations.................. 0.63 0.41 0.59
----- ----- -----
Less distributions:
Dividends from net investment income.............. (0.58) (0.58) (0.20)
Distributions from net realized gains............. -- -- --
----- ----- -----
Total distributions............................... (0.58) (0.58) (0.20)
----- ----- -----
Net asset value, end of period..................... $9.58 $9.53 $9.70
===== ===== =====
Total return (b).................................. 6.84% 4.24% 6.39%
===== ===== =====
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).............. $ 818 $ 895 $ 919
Ratio of operating expenses to average net assets. 0.96% 0.95% 0.95%(c)
Ratio of net investment income to average net
assets........................................... 6.34% 6.26% 6.47%(c)
Portfolio turnover rate........................... 279% 507% 99%
Ratio of operating expenses to average net assets
without waivers.................................. 0.96% 1.04% 1.19%(c)
</TABLE>
- --------
(a) The Munder Bond Fund Class A Shares, Class B Shares and Class C Shares
commenced operations on December 9, 1992, March 13, 1996 and March 25,
1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
10
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
--------------------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
2/28/95(E, F) 2/28/94 2/28/93 6/30/97 6/30/96 6/30/97 6/30/96
CLASS A CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
------------- ------- ------- ------- ------- ------- -------
<C> <C> <C> <C> <C> <C> <C> <S> <C> <C> <C> <C> <C> <C>
$9.91 $ 9.92 $9.61 $9.53 $9.68 $9.52 $9.74
------ ------ ----- ----- ----- ----- -----
0.61 0.58 0.11 0.54 0.16 0.66 0.16
(0.63) (0.03) 0.38 0.02 (0.14) (0.08) (0.21)
------ ------ ----- ----- ----- ----- -----
(0.02) 0.55 0.49 0.56 0.02 0.58 (0.05)
------ ------ ----- ----- ----- ----- -----
(0.58) (0.56) (0.09) (0.52) (0.17) (0.50) (0.17)
-- -- (0.09) -- -- -- --
------ ------ ----- ----- ----- ----- -----
(0.58) (0.56) (0.18) (0.52) (0.17) (0.50) (0.17)
------ ------ ----- ----- ----- ----- -----
$9.31 $ 9.91 $9.92 $9.57 $9.53 $9.60 $9.52
====== ====== ===== ===== ===== ===== =====
0.45% 5.61% 5.19% 5.97% 0.22% 6.19% (0.49)%
====== ====== ===== ===== ===== ===== =====
$880 $1,318 $ 116 $ 559 $ 294 $ 45 $ 51
0.92% 0.87% 0.76%(c) 1.71% 1.70%(c) 1.71% 1.70%(c)
6.57% 5.76% 5.05%(c) 5.59% 5.51%(c) 5.59% 5.51%(c)
165% 128% 77% 279% 507% 279% 507%
1.16% 1.01% 0.90% 1.71% 1.79%(c) 1.71% 1.79%(c)
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND(A)
----------------------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
6/30/97(F) 6/30/96 6/30/95(D) 2/28/95(E)
CLASS A CLASS A CLASS A CLASS A
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 9.31 $ 9.52 $ 9.27 $ 9.91
------ ------ ------ ------
Income from investment
operations:
Net investment income.......... 0.55 0.58 0.22 0.59
Net realized and unrealized
gain/(loss) on investments.... 0.02 (0.21) 0.25 (0.61)
------ ------ ------ ------
Total from investment
operations.................... 0.57 0.37 0.47 (0.02)
------ ------ ------ ------
Less distributions:
Dividends from net investment
income........................ (0.55) (0.58) (0.22) (0.61)
Distributions from net realized
gains......................... -- -- -- (0.01)
------ ------ ------ ------
Total distributions............ (0.55) (0.58) (0.22) (0.62)
------ ------ ------ ------
Net asset value, end of period.. $ 9.33 $ 9.31 $ 9.52 $ 9.27
====== ====== ====== ======
Total return (b)............... 6.34% 3.92% 5.15% 0.54%
====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's)........................ $6,104 $5,356 $5,470 $5,472
Ratio of operating expenses to
average net assets............ 0.93% 0.94% 0.95%(c) 0.93%
Ratio of net investment income
to average net assets......... 5.91% 6.08% 7.12%(c) 6.71%
Portfolio turnover rate........ 325% 494% 84% 80%
Ratio of operating expenses to
average net assets without
waivers....................... 0.93% 1.02% 1.19%(c) 1.18%
</TABLE>
- --------
(a) The Munder Intermediate Bond Fund Class A Shares, Class B Shares and Class
C Shares commenced operations on November 24, 1992, October 25, 1994 and
April 19, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
12
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
- ---------------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
2/28/94 2/28/93 6/30/97(F) 6/30/96 6/30/95(D) 2/28/95(E) 6/30/97(F) 6/30/96
CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C CLASS C
- ---------- ------------ ---------- ---------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.47 $10.26 $9.30 $9.51 $9.27 $9.22 $9.31 $9.40
------ ------ ----- ----- ----- ----- ----- -----
0.59 0.17 0.48 0.49 0.20 0.19 0.45 0.10
(0.20) 0.25 0.03 (0.19) 0.24 0.11 0.08 (0.06)
------ ------ ----- ----- ----- ----- ----- -----
0.39 0.42 0.51 0.30 0.44 0.30 0.53 0.04
------ ------ ----- ----- ----- ----- ----- -----
(0.58) (0.12) (0.49) (0.51) (0.20) (0.24) (0.49) (0.13)
(0.37) (0.09) -- -- -- (0.01) -- --
------ ------ ----- ----- ----- ----- ----- -----
(0.95) (0.21) (0.49) (0.51) (0.20) (0.25) (0.49) (0.13)
------ ------ ----- ----- ----- ----- ----- -----
$ 9.91 $10.47 $9.32 $9.30 $9.51 $9.27 $9.35 $9.31
====== ====== ===== ===== ===== ===== ===== =====
3.77% 4.15% 5.60% 3.22% 4.78% 3.33% 5.77% 0.39%
====== ====== ===== ===== ===== ===== ===== =====
$6,401 $ 542 $ 464 $ 103 $ 9 $ 7 $ 58 $ 52
0.86% 0.78%(c) 1.68% 1.69% 1.70%(c) 1.67%(c) 1.68% 1.69%(c)
5.75% 5.52%(c) 5.16% 5.33% 6.37%(c) 5.97%(c) 5.16% 5.33%(c)
155% 104% 325% 494% 84% 80% 325% 494%
1.00% 0.92%(c) 1.68% 1.77% 1.94%(c) 1.92%(c) 1.68% 1.77%(c)
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
BOND FUND(A)
------------------
PERIOD PERIOD
ENDED ENDED
6/30/97 6/30/97
CLASS A CLASS B
------- -------
<S> <C> <C>
Net asset value, beginning of period..................... $9.98 $9.85
----- -----
Income from investment operations:.......................
Net investment income................................... 0.10 0.01
Net realized and unrealized gain/(loss) on investments.. (0.18) (0.03)
----- -----
Total from investment operations........................ (0.08) (0.02)
----- -----
Less distributions:
Dividends from net investment income.................... (0.08) --
Distributions from net realized gains................... -- --
----- -----
Total distributions..................................... (0.08) --
----- -----
Net asset value, end of period........................... $9.82 $9.83
===== =====
Total return (b)........................................ (0.84)% (0.20)%
===== =====
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).................... $ 168 $ 21
Ratio of operating expenses to average net assets....... 1.14%(c) 1.89%(c)
Ratio of net investment income to average net assets.... 3.61%(c) 2.86%(c)
Portfolio turnover rate................................. 75% 75%
Ratio of operating expenses to average net assets
without waivers or
expenses reimbursed.................................... 1.18%(c) 1.93%(c)
</TABLE>
- --------
(a) The Munder International Bond Fund Class A Shares and Class B Shares
commenced operations on October 17, 1996 and June 9, 1997, respectively.
The Munder U.S. Government Income Fund Class A Shares, Class B Shares and
Class C Shares commenced operations on July 28, 1994, September 6, 1995
and August 12, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Amount represents less than $0.01 per share.
14
<PAGE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND (A)
--------------------------------------------------------------------------------------------
PERIOD YEAR PERIOD PERIOD
YEAR ENDED YEAR ENDED ENDED YEAR ENDED ENDED ENDED ENDED
6/30/97 6/30/96(F) 6/30/95(D) 2/28/95(E) 6/30/97 6/30/96(F) 6/30/97
CLASS A CLASS A CLASS A CLASS A CLASS B CLASS B CLASS C
---------------- ---------- ---------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
$ 9.98 $10.30 $ 9.88 $10.03 $ 9.98 $10.31 $10.11
--------------- ------ ------ ------ ------ ------ ------
0.65 0.71 0.24 0.42 0.58 0.49 0.54
0.07 (0.27) 0.41 (0.10) 0.07 (0.24) (0.06)
--------------- ------ ------ ------ ------ ------ ------
0.72 0.44 0.65 0.32 0.65 0.25 0.48
--------------- ------ ------ ------ ------ ------ ------
(0.61) (0.68) (0.23) (0.47) (0.54) (0.50) (0.49)
(0.00)(g) (0.08) -- -- (0.00)(g) (0.08) (0.00)(g)
--------------- ------ ------ ------ ------ ------ ------
(0.61) (0.76) (0.23) (0.47) (0.54) (0.58) (0.49)
--------------- ------ ------ ------ ------ ------ ------
$10.09 $ 9.98 $10.30 $ 9.88 $10.09 $ 9.98 $10.09
=============== ====== ====== ====== ====== ====== ======
7.50% 4.34% 6.66% 3.30% 6.77% 2.42% 4.87%
=============== ====== ====== ====== ====== ====== ======
$1,226 $ 259 $ 97 $ 69 $1,596 $ 498 $ 10
0.96% 0.97% 0.97%(c) 0.95%(c) 1.71% 1.72%(c) 1.71%(c)
6.51% 6.92% 6.96%(c) 7.02%(c) 5.76% 6.17%(c) 5.76%(c)
130% 133% 42% 143% 130% 133% 130%
0.96% 1.04% 1.21%(c) 1.19%(c) 1.71% 1.79%(c) 1.71%(c)
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN TRIPLE TAX-FREE BOND FUND (A)
---------------------------------------------------
YEAR YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/95(D, E) 2/28/95(E, F)
CLASS A CLASS A CLASS A CLASS A
---------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $9.35 $9.34 $9.24 $9.73
----- ----- ----- -----
Income from investment
operations:
Net investment income...... 0.44 0.48 0.16 0.44
Net realized and unrealized
gain/(loss) on
investments............... 0.28 0.01 0.10 (0.50)
----- ----- ----- -----
Total from investment
operations................ 0.72 0.49 0.26 (0.06)
----- ----- ----- -----
Less distributions:
Dividends from net
investment income......... (0.43) (0.48) (0.16) (0.43)
Distributions from net
realized gains............ (0.00)(g) -- -- --
----- ----- ----- -----
Total distributions........ (0.43) (0.48) (0.16) (0.43)
----- ----- ----- -----
Net asset value, end of
period..................... $9.64 $9.35 $9.34 $9.24
===== ===== ===== =====
Total return (b)........... 7.88% 5.25% 2.84% (0.16)%
===== ===== ===== =====
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's)................ $ 536 $ 446 $ 417 $ 444
Ratio of operating expenses
to average net assets..... 0.88% 0.51% 0.52%(c) 0.56%
Ratio of net investment
income to average net
assets.................... 4.57% 5.01% 5.06%(c) 4.81%
Portfolio turnover rate.... 19% 31% 8% 53%
Ratio of operating expenses
to average net assets
without waivers........... 1.02% 1.09% 1.26%(c) 1.30%
</TABLE>
- --------
(a) The Munder Michigan Triple Tax-Free Bond Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on February 15, 1994, July
5, 1994 and October 4, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Amount represents less than $0.01 per share.
16
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN TRIPLE TAX-FREE BOND FUND
--------------------------------------------------------------------------
PERIOD YEAR YEAR PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/94 6/30/97(E) 6/30/96(E) 6/30/95(D, E) 2/28/95(E, F) 6/30/97(E)
CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C
------- ---------- ---------- ------------- ------------- ----------
<C> <C> <C> <C> <C> <C> <S>
$9.93 $9.35 $9.34 $9.24 $9.17 $9.56
----- ----- ----- ----- ----- -----
0.01 0.36 0.41 0.14 0.24 0.26
(0.21) 0.29 0.00(g) 0.10 0.10 0.07
----- ----- ----- ----- ----- -----
(0.20) 0.65 0.41 0.24 0.34 0.33
----- ----- ----- ----- ----- -----
-- (0.36) (0.40) (0.14) (0.27) (0.26)
-- (0.00)(g) -- -- -- (0.00)(g)
----- ----- ----- ----- ----- -----
-- (0.36) (0.40) (0.14) (0.27) (0.26)
----- ----- ----- ----- ----- -----
$9.73 $9.64 $9.35 $9.34 $9.24 $9.63
===== ===== ===== ===== ===== =====
(2.01)% 7.09% 4.46% 2.58% 3.81% 3.57%
===== ===== ===== ===== ===== =====
$43 $ 312 $ 251 $ 254 $ 227 $ 90
0.46%(c) 1.63% 1.26% 1.27%(c) 1.29%(c) 1.63%(c)
3.76%(c) 3.82% 4.26% 4.31%(c) 4.08%(c) 3.82%(c)
0% 19% 31% 8% 53% 19%
1.20%(c) 1.77% 1.84% 2.01%(c) 2.03%(c) 1.77%(c)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE BOND FUND(A)
---------------------
YEAR PERIOD
ENDED ENDED
6/30/97(E) 6/30/96(E)
CLASS A CLASS A
---------- ----------
<S> <C> <C>
Net asset value, beginning of period..................... $10.33 $10.49
------ ------
Income from investment operations:
Net investment income................................... 0.47 0.34
Net realized and unrealized gain on investments......... 0.25 (0.14)
------ ------
Total from investment operations........................ 0.72 0.20
------ ------
Less distributions:
Dividends from net investment income.................... (0.47) (0.35)
Distributions from net realized gains................... (0.08) (0.01)
------ ------
Total distributions..................................... (0.55) (0.36)
------ ------
Net asset value, end of period........................... $10.50 $10.33
====== ======
Total return (b)........................................ 7.13% 1.87%
====== ======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's).................... $2,490 $1,141
Ratio of operating expenses to average net assets....... 0.95% 0.98%
Ratio of net investment income to average net assets.... 4.52% 4.42%
Portfolio turnover rate................................. 45% 15%
Ratio of operating expenses to average net assets
without waivers........................................ 0.95% 1.06%
</TABLE>
- --------
(a) The Munder Tax-Free Bond Fund Class A Shares and Class B Shares commenced
operations on October 9, 1995 and December 6, 1994, respectively. The Fund
is authorized to issue Class C Shares. As of June 30, 1997, the Fund had
not commenced selling Class C Shares.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Total net assets for Class B Shares were $164 at February 28, 1995.
18
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE BOND FUND
-----------------------------------------------
YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/95(D, E) 2/28/95(F)
CLASS B CLASS B CLASS B CLASS B
---------- ---------- ------------- ----------
<C> <C> <C> <C> <S>
$10.34 $10.29 $10.14 $ 9.72
------ ------ ------ ------
0.32 0.40 0.13 0.10
0.33 0.05 0.15 0.42
------ ------ ------ ------
0.65 0.45 0.28 0.52
------ ------ ------ ------
(0.39) (0.39) (0.13) (0.10)
(0.08) (0.01) -- --
------ ------ ------ ------
(0.47) (0.40) (0.13) (0.10)
------ ------ ------ ------
$10.52 $10.34 $10.29 $10.14
====== ====== ====== ======
6.43% 4.36% 2.80% 5.39%
====== ====== ====== ======
$ 240 $ 5 $ 1 $ 0(g)
1.70% 1.73% 1.77%(c) 1.67%(c)
3.77% 3.67% 3.63%(c) 3.95%(c)
45% 15% 12% 50%
1.70% 1.81% 2.01%(c) 1.91%(c)
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE INTERMEDIATE BOND FUND(A)
---------------------------------------------
YEAR YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E)
CLASS A CLASS A CLASS A CLASS A
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period.......................... $10.34 $10.36 $10.17 $10.44
------ ------ ------ ------
Income from investment
operations:
Net investment income........... 0.41 0.41 0.14 0.40
Net realized and unrealized
gain/(loss) on investments..... 0.10 (0.02) 0.19 (0.23)
------ ------ ------ ------
Total from investment
operations..................... 0.51 0.39 0.33 0.17
------ ------ ------ ------
Less distributions:
Dividends from net investment
income......................... (0.41) (0.41) (0.14) (0.42)
Distributions from net realized
gains.......................... (0.03) -- -- (0.02)
------ ------ ------ ------
Total distributions............. (0.44) (0.41) (0.14) (0.44)
------ ------ ------ ------
Net asset value, end of period... $10.41 $10.34 $10.36 $10.17
====== ====== ====== ======
Total return (b)................ 5.04% 3.79% 3.25% 2.05%
====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's)......................... $6,213 $5,012 $4,138 $4,551
Ratio of operating expenses to
average net assets............. 0.93% 0.96% 0.98%(c) 0.95%
Ratio of net investment income
to average net assets.......... 3.96% 3.91% 4.02%(c) 4.19%
Portfolio turnover rate......... 31% 20% 5% 52%
Ratio of operating expenses to
average net assets without
waivers or
expenses reimbursed............ 0.93% 1.04% 1.22%(c) 1.19%
</TABLE>
- --------
(a) The Munder Tax-Free Intermediate Bond Fund Class A Shares and Class B
Shares commenced operations on November 30, 1992 and May 16, 1996,
respectively. The Fund is authorized to issue Class C Shares. As of June
30, 1997, the Fund had not commenced selling Class C Shares. Munder Short
Term Treasury Fund Class B Shares commenced operations on April 4, 1997.
The Fund is authorized to issue Class A Shares and Class C Shares. As of
June 30, 1997 the Fund had not commenced selling Class A Shares or Class C
Shares.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
20
<PAGE>
<TABLE>
<CAPTION>
SHORT TERM
TAX-FREE INTERMEDIATE BOND FUND TREASURY FUND(A)
----------------------------------------------------- ----------------
YEAR PERIOD YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED
2/28/94 2/28/93 6/30/97(F) 6/30/96(F) 6/30/97(F)
CLASS A CLASS A CLASS B CLASS B CLASS B
------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 10.69 $10.39 $10.34 $10.36 $ 9.97
--------------- ------ ------ ------ ------
0.42 0.09 0.33 0.04 0.10
(0.14) 0.31 0.10 0.00 0.04
--------------- ------ ------ ------ ------
0.28 0.40 0.43 0.04 0.14
--------------- ------ ------ ------ ------
(0.42) (0.08) (0.34) (0.06) (0.10)
(0.11) (0.02) (0.03) -- --
--------------- ------ ------ ------ ------
(0.53) (0.10) (0.37) (0.06) (0.10)
--------------- ------ ------ ------ ------
$10.44 $10.69 $10.40 $10.34 $10.01
=============== ====== ====== ====== ======
2.62% 3.90% 4.24% 0.39% 1.44%
=============== ====== ====== ====== ======
$ 6,011 $1,262 $ 272 $ 50 $ 34
0.86% 0.79%(c) 1.68% 1.71%(c) 1.52%(c)
3.88% 4.09%(c) 3.21% 3.16%(c) 4.26%(c)
38% 57% 31% 20% 40%
1.00% 0.93%(c) 1.68% 1.79%(c) 1.55%(c)
</TABLE>
21
<PAGE>
FUND CHOICES
WHAT FUNDS ARE OFFERED?
This Prospectus offers Class A, Class B and Class C Shares of the Funds
described below. This section summarizes each Fund's goal and principal
investments. The sections entitled "What are the Funds' Investments and
Investment Practices?" and "What are the Risks of Investing in the Funds?" and
the SAI give more information about the Funds' investment techniques and
risks.
BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current income and, secondarily, capital appreciation.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Gregory A. Prost jointly manage
the Fund. Mr. Robinson and Mr. Prost have managed the Fund since March 1995
and May 1995, respectively. Mr. Robinson has been a Vice President and Chief
Investment Officer of the Advisor or Old MCM, Inc. ("MCM") since 1987. Mr.
Prost has been a Senior Fixed Income Portfolio of the Advisor or MCM since
1995. Prior to joining the Advisor, he was a Vice President and Senior Fund
Manager for First of America Investment Corp.
INTERNATIONAL BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to realize a competitive
total return through a combination of current income and capital appreciation.
Under normal market conditions, at least 65% of the Fund's assets will be
invested in Foreign Securities of issuers in at least three countries other
than the United States. The Fund's dollar-weighted average maturity will
generally be between three and 15 years. The Fund will invest mostly in:
. foreign debt obligations issued by foreign governments and their agencies,
instrumentalities or political subdivisions
. debt securities issued or guaranteed by supra-national organizations, such
as the World Bank
. debt securities of banks or bank holding companies
. corporate debt securities
. other debt securities, including those convertible into foreign stock.
PORTFOLIO MANAGEMENT. Gregory A. Prost and Sharon E. Fayolle jointly manage
the Fund. Mr. Prost, Senior Fixed Income Portfolio Manager of the Advisor or
MCM, has managed the Fund since October 1996. Prior to joining MCM in 1995, he
was a Vice President and Senior Fund Manager for First of America Investment
Corp. Ms. Fayolle, Vice President and Director of Money Market Trading for the
Advisor or MCM, has managed the Fund since October 1996. Prior to joining MCM
in 1996, she was a European Portfolio Manager for Ford Motor Company.
22
<PAGE>
INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
rate of return which, over time, exceeds the rate of inflation and the return
provided by money market instruments.
. Under normal conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between
three and eight years.
PORTFOLIO MANAGEMENT. Anne K. Kennedy and James C. Robinson jointly manage
the Fund. Ms. Kennedy, Vice President and Director of Corporate Bond Trading
of the Advisor or MCM since 1991, has managed the Fund since March 1995. Mr.
Robinson, Vice President and Chief Investment Officer of the Advisor or MCM
since 1987, has managed the Fund since March 1995.
U.S. GOVERNMENT INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide high current
income.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in U.S. Government Obligations.
. The Fund's dollar-weighted average maturity will generally be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Peter G. Root jointly manage the
Fund. Mr. Robinson, Vice President and Chief Investment Officer of the Advisor
or MCM since 1987, and Mr. Root, Vice President and Director of Government
Securities Trading of the Advisor since March 1995, have managed the Fund
since March 1995. Mr. Root joined MCM in 1991.
MICHIGAN TRIPLE TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide as high a
level of current interest income exempt from regular Federal income taxes,
Michigan state income and Michigan intangibles tax as is consistent with
prudent investment management and preservation of capital.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets are invested in Michigan Municipal Obligations.
. The Fund will invest primarily in Michigan Municipal Obligations which
have remaining maturities of between three and 30 years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current interest income exempt from Federal income taxes and to generate as
competitive a long-term rate of return as is consistent with prudent
investment management and preservation of capital.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax. This fundamental policy may only be
changed with shareholder approval.
23
<PAGE>
. The Fund invests primarily in intermediate-term and long-term Municipal
Obligations which have remaining maturities of between three and 30
years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
TAX-FREE INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
level of current interest income exempt from regular Federal income taxes and
a total return which, over time, exceeds the rate of inflation and the return
provided by tax-free money market instruments.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax.
. The Fund invests in Michigan Municipal Obligations from time to time.
. The Fund generally buys obligations with remaining maturities of ten
years or less.
. The Funds dollar-weighted average maturity will generally be between
three and eight years, but may be up to ten years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
SHORT TERM TREASURY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide investors with
an enhanced money market return consistent with capital preservation. Under
normal conditions, the Fund invests all of its assets in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. The Fund's dollar-weighted average portfolio maturity usually will
not exceed two years.
The Fund seeks to generate a total return which exceeds money market
instruments while minimizing the fluctuation of its net asset value. The Fund,
however, is not a money market fund and its net asset value may fluctuate.
PORTFOLIO MANAGEMENT. Sharon E. Fayolle, Vice President and Director of
Money Market Trading for the Advisor, has managed the Fund since October 1996.
Prior to joining the Advisor in 1996, she was a European Portfolio Manager for
Ford Motor Company.
WHO MAY WANT TO INVEST IN THE FUNDS?
The Funds are designed for investors who desire potentially higher returns
than more conservative fixed rate investments or money market funds and who
seek current income. The Tax-Free Funds may be desirable for investors who
seek primarily tax-exempt income. When you choose among the Funds, you should
consider both the expected yield of the Funds and potential changes in each
Fund's share price. The yield and potential price changes of a Fund's shares
depend on the quality and maturity of the obligations in its portfolio, as
well as on other market conditions.
24
<PAGE>
WHAT ARE THE FUNDS' INVESTMENTS AND INVESTMENT PRACTICES?
All of the Funds, other than the International Bond Fund, the Michigan
Triple Tax-Free Bond Fund and the Tax-Free Intermediate Bond Fund, are
classified as "diversified funds." With respect to 75% of each diversified
Fund's assets, each diversified fund cannot invest more than 5% of its assets
in one issuer (other than the U.S. Government and its agencies and
instrumentalities). In addition, each diversified fund cannot invest more than
25% of its assets in a single issuer. These restrictions do not apply to the
non-diversified funds.
The Tax-Free Funds will acquire long-term instruments only which are rated A
or better by Moody's Investors Service Inc. ("Moody's") or Standard & Poor's
Rating Service ("S&P") or, if unrated, are of comparable quality. Such Funds
will acquire short-term instruments only which (i) have short-term debt
ratings in the top two categories by at least one nationally recognized
statistical rating organization, (ii) are issued by an issuer with such
ratings or (iii), if unrated, are of comparable quality.
The Advisor does not intend to invest more than 25% of a Fund's assets in
securities whose issuers are in the same state, except that the Advisor may
invest more than 25% of the Michigan Triple Tax-Free Bond Fund's and the Tax-
Free Intermediate Bond Fund's assets in Michigan Municipal Obligations.
Each Tax-Free Fund may invest in short term money market instruments on a
temporary basis or for temporary investment purposes. Short term money market
instruments include U.S. government obligations, debt securities of issuers
having, a rating within the two highest categories of either S&P or Moody's,
and certificates of deposit or bankers' acceptances of domestic branches of
U.S. banks with at least $1 billion in assets.
Investment Charts
The following charts summarize the Funds' investments and investment
practices. The SAI contains more details. All percentages are based on a
Fund's total assets except where otherwise noted. See "What are the Risks of
Investing in the Funds?" for a description of the risks involved with the
Funds' investment practices.
25
<PAGE>
BOND FUNDS
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
INVESTMENTS AND INVESTMENT INTERMEDIATE INTERNATIONAL INCOME
PRACTICES BOND FUND BOND FUND BOND FUND FUND
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED INCOME SECURITIES. Y Y Y Y
Either pay interest at set
times at either fixed or
variable rates, or realize
a discount at maturity.
Includes corporate bonds,
debentures, notes and
other similar corporate
debt instruments, zero
coupon bonds (discount
debt obligations that do
not make interest
payments) and variable
master demand notes
(permit the amount of debt
to vary and provide for
periodic adjustments in
interest rates).
- ------------------------------------------------------------------------------
FOREIGN SECURITIES. 25% 25% Y 25%
Securities issued by
foreign governments and
their agencies,
instrumentalities or
political subdivisions,
supranational
organizations, and foreign
corporations. Does not
include bank obligations.
- ------------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Y Y Y Y
Includes debt securities
backed by mortgages,
installment sales
contracts and credit card
receivables.
- ------------------------------------------------------------------------------
INTEREST RATE AND CURRENCY Y(1) Y(1) Y Y(1)
SWAPS. Agreement to
exchange payments
calculated on the basis of
relative interest or
currency rates. Derivative
instruments used solely
for hedging.
- ------------------------------------------------------------------------------
INTEREST RATE CAPS AND N N Y N
FLOORS. Entitle purchaser
to receive payments of
interest to the extent
that a specified reference
rate exceeds or falls
below a predetermined
level.
- ------------------------------------------------------------------------------
U.S. GOVERNMENT Y Y Y Y
OBLIGATIONS. Includes
securities issued by, or
guaranteed by, the U.S.
Government or its agencies
or instrumentalities.
- ------------------------------------------------------------------------------
SHORT TERM MONEY MARKET Y Y Y Y
INSTRUMENTS. High quality
short-term instruments
including, among other
things, commercial paper,
bankers' acceptances,
certificates of deposit
and short-term corporate
obligations.
- ------------------------------------------------------------------------------
STRIPPED SECURITIES. Y Y Y Y
Includes participations in
trusts that hold U.S.
Treasury and agency
securities which represent
either the interest or
principal payments on the
securities or combinations
of both.
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. A Y Y Y Y
Fund buys securities and
agrees to sell them back
at a later time at a set
price.
- ------------------------------------------------------------------------------
REVERSE REPURCHASE Y Y Y Y
AGREEMENTS. A Fund sells
securities and agrees to
buy them back later at an
agreed upon time and
price. A method to borrow
money for temporary
purposes.
</TABLE>
- --------------------------------------------------------------------------------
26
<PAGE>
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
INVESTMENTS AND INVESTMENT INTERMEDIATE INTERNATIONAL INCOME
PRACTICES BOND FUND BOND FUND BOND FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY Y Y Y Y
EXCHANGE CONTRACTS.
Obligations of a Fund to
purchase or sell a specific
currency at a future date
at a set price. May
decrease a Fund's loss due
to a change in currency
value, but also limits
gains from currency
changes.
- -------------------------------------------------------------------------------
BANK OBLIGATIONS. U.S. Y Y Y Y
dollar denominated bank
obligations, including
certificates of deposit,
bankers' acceptances, bank
notes, time deposits issued
by U.S. or foreign banks or
savings institutions having
total assets in excess of
$1 billion.
- -------------------------------------------------------------------------------
SUPRANATIONAL ORGANIZATION N N Y N
OBLIGATION. Fixed Income
Securities issued or
guaranteed by supranational
organizations such as the
World Bank.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT Y Y Y Y
CONTRACTS. Agreements of a
Fund to make payments to an
insurance company's general
account in exchange for a
minimum level of interest
based on a index.
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS. A Fund 10%/5% 10%/5% 10%/5% 10%/5%
would bear the expenses in any in any in any in any
of money market funds whose 1 Fund 1 Fund 1 Fund 1 Fund
shares it purchased, in
addition to the Fund's own
expenses.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND Y Y Y Y
FORWARD COMMITMENTS.
Agreement by a Fund to
purchase securities at a
set price, with payment and
delivery in the future. The
value of the securities may
change between the time the
price is set and payment.
Not to be used for
speculation.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. 15%(2) 15%(2) 15%(2) 15%(2)
Typically there is no ready
market for these
securities, which limits
the ability to sell them
for full market value, or
they are restricted as to
resale.
- -------------------------------------------------------------------------------
FUTURES AND OPTIONS ON Y Y Y Y
FUTURES.(3) Contracts in
which a Fund has the right
or the obligation to make
delivery of, or receive,
securities, the cash value
of an index or foreign
currency. Used for hedging
purposes or to maintain
liquidity.
- -------------------------------------------------------------------------------
OPTIONS. A Fund may buy Y Y Y Y
options giving it the right
to require a buyer to buy a
security held by the Fund
(put options), buy options
giving it the right to
require a seller to sell
securities to the Fund
(call options), sell
(write) options giving a
buyer the right to require
the Fund to buy securities
from the buyer or write
options giving a buyer the
right to require the Fund
to sell securities to the
buyer during a set time at
a set price. Options may
relate to stock indices, or
individual securities and
foreign currencies. See the
SAI for more details and
additional limitations.
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE>
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
INVESTMENTS AND INVESTMENT INTERMEDIATE INTERNATIONAL INCOME
PRACTICES BOND FUND BOND FUND BOND FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BORROWING. Borrowing for 5%/33 1/3% 5%/33 1/3% 5%/33 1/3% 5%/33 1/3%
temporary purposes/
borrowing to meet
redemptions. Fundamental
policy that can only be
changed by shareholders.
- -------------------------------------------------------------------------------
LENDING SECURITIES. A Fund 25% 25% 25% 25%
may lend securities to
financial institutions
which pay for the use of
securities. May increase
return. Slight risk of
borrower failing
financially.
</TABLE>
- --------------------------------------------------------------------------------
KEY:
Y = Investment allowed without restriction
N = Investment not allowed
(1) Interest rate swaps only
(2) Based on net assets
(3) The limitation on margins and premiums for futures is 5% of a Fund's assets
28
<PAGE>
TAX-FREE FUNDS AND SHORT TERM TREASURY FUND
<TABLE>
<CAPTION>
MICHIGAN
SHORT TERM TRIPLE TAX-FREE
INVESTMENTS AND INVESTMENT TREASURY TAX-FREE TAX-FREE INTERMEDIATE
PRACTICES FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL OBLIGATIONS. Payable N Y Y Y
from the issuer's general
revenue, the revenue of a
specific project, current
revenues or a reserve fund.
- -------------------------------------------------------------------------------
MICHIGAN MUNICIPAL N Y Y Y
OBLIGATIONS. Municipal
Obligations issued by the
State of Michigan and its
political subdivisions.
- -------------------------------------------------------------------------------
FIXED INCOME SECURITIES. N Y Y Y
Either pay interest at set
times
at either fixed or variable
rates, or realize a discount
at maturity. Include
corporate bonds, debentures,
notes and other similar
corporate debt instruments,
zero coupon bonds (discount
debt obligations that do not
make interest payments) and
variable master demand notes
(permit the amount of debt to
vary and provide for periodic
adjustments in interest
rates).
- -------------------------------------------------------------------------------
FOREIGN SECURITIES. Securities N 25% 25% 25%
issued by foreign governments
and their agencies,
instrumentalities or
political subdivisions,
supranational organizations,
and foreign corporations.
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. A Fund Y Y Y Y
buys securities and agrees to
sell them back at a later
time at a set price.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT N N N N
CONTRACTS. Agreements of a
Fund to make payments to an
insurance company's general
account in exchange for a
minimum level of interest
based on an index.
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS. A Fund N Y Y Y
would bear the expenses
of money market funds whose
shares it purchased, in
addition to the Fund's own
expenses.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND N 25% 25% 25%
FORWARD COMMITMENTS.
Agreement by a Fund to
purchase securities at a set
price, with payment and
delivery in the future. The
value of the securities may
change between the time the
price is set and payment. Not
to be used for speculation.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically N 15%(2) 15%(2) 15%(2)
there is no ready market for
these securities, which
limits the ability to sell
them for full market value,
or they are restricted as to
resale.
- -------------------------------------------------------------------------------
BORROWING. Borrowing for 5%/33 1/3% 5%/33 1/3% 5%/33 1/3% 5%/33 1/3%
temporary purposes/ borrowing
to meet redemptions.
Fundamental policy that can
only be changed by
shareholders.
</TABLE>
- --------------------------------------------------------------------------------
29
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN
SHORT TERM TRIPLE TAX-FREE
INVESTMENTS AND INVESTMENT TREASURY TAX-FREE TAX-FREE INTERMEDIATE
PRACTICES FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LENDING SECURITIES. May lend 25% 25% 25% 25%
securities to financial
institutions which pay for the
use of securities. May increase
return. Slight risk of borrower
failing financially.
- -------------------------------------------------------------------------------
U.S. TREASURY SECURITIES. Y Y Y Y
Includes U.S. Treasury bills,
notes and bonds.
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Y N N N
Fund sells securities and
agrees to buy them back later
at an agreed upon time and
price. A method to borrow money
for temporary purposes.
</TABLE>
- --------------------------------------------------------------------------------
KEY:
Y = Investment allowed without restriction
N = Investment not allowed
(1) The limitation on foreign securities does not include foreign bank
obligations.
(2) Based on net assets
30
<PAGE>
WHAT ARE THE RISKS OF INVESTING IN THE FUNDS?
The value of each Fund's shares, like the value of most securities, will
rise and fall in response to changes in economic conditions, interest rates
and the market's perception of the underlying securities held by the Fund.
Investing in the Funds may be less risky than investing in individual Fixed
Income Securities due to the diversification of investing in a portfolio
containing many different Fixed Income Securities; however, such diversity
does not eliminate all risks. The Funds invest mostly in Fixed Income
Securities, whose values typically rise when interest rates fall and fall when
interest rates rise. Fixed Income Securities with shorter maturities (time
period until repayment) tend to be less affected by interest rate changes, but
generally offer lower yields than securities with longer maturities.
Securities with variable interest rates may exhibit greater price variations
than ordinary securities. Zero coupon bonds are subject to greater market
fluctuations from changing interest rates than debt obligations of comparable
maturities which make current distributions of interest.
Consistent with a long-term investment approach, investors in a Fund should
be prepared and able to maintain their investments during periods of adverse
market conditions. By itself, no Fund constitutes a balanced investment
program and there is no guarantee that any Fund will achieve its investment
objective since there is uncertainty in every investment. Current yield levels
should not be considered representative of yields for any future time.
A Fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. Some Funds are authorized to use options,
futures, currency swaps, interest rate swaps and/or forward foreign currency
exchange contracts, which are types of derivative instruments. Derivative
instruments are instruments that derive their value from a different
underlying security, index or financial indicator. The use of derivative
instruments exposes a Fund to additional risks and transaction costs. Risks
inherent in the use of derivative instruments include: (1) the risk that
interest rates, securities prices and currency markets will not move in the
direction that a portfolio manager anticipates; (2) imperfect correlation
between the price of derivative instruments and movements in the prices of the
securities, interest rates or currencies being hedged; (3) the fact that
skills needed to use these strategies are different than those needed to
select portfolio securities; (4) the possible absence of a liquid secondary
market for any particular instrument and possible exchange-imposed price
fluctuation limits, either of which may make it difficult or impossible to
close out a position when desired; (5) leverage risk, that is, the risk that
adverse price movements in an instrument can result in a loss substantially
greater than the Fund's initial investment in that instrument (in some cases,
the potential loss is unlimited); and (6) particularly in the case of
privately-negotiated instruments, the risk that the counterparty will not
perform its obligations, which could leave the Fund worse off than if it had
not entered into the position.
International Bond Fund, Michigan Triple Tax-Free Bond Fund and Tax-Free
Intermediate Bond Fund
These Funds are non-diversified and hold securities of a limited number of
issuers. The Funds may, therefore, pose a greater risk to investors than an
investment in a diversified fund. The Michigan Triple Tax-Free Bond Fund
invests primarily in Michigan Municipal Securities. If Michigan issuers suffer
serious financial difficulties jeopardizing their ability to pay their
obligations, the net asset value of such Fund may decline.
Investing in the International Bond Fund, with its larger investment in
Foreign Securities, may involve more risk than investing in a U.S. fund for
the following reasons: (1) there may be less public information available
about foreign companies than is available about U.S. companies; (2) foreign
companies are not generally subject to the uniform accounting, auditing and
financial reporting standards and practices applicable to U.S. companies; (3)
foreign markets have less volume than the U.S. market, and the securities of
some foreign companies are less liquid and more volatile than the securities
of comparable U.S. companies; (4) there may be less government regulation of
exchanges, brokers, listed companies and banks in foreign countries than in
the United States; (5) the Fund may incur fees on currency exchanges when it
changes investments from one country to another; (6) the Fund's foreign
investments could be affected by expropriation, confiscatory taxation,
nationalization of bank deposits, establishment of exchange controls,
political or social instability or diplomatic developments; (7) fluctuations
in foreign exchange rates will affect the value of the Fund's portfolio
securities, the value of dividends
31
<PAGE>
and interest earned, gains and losses realized on the sale of securities, net
investment income and unrealized appreciation or depreciation of investments;
and (8) the possible imposition of dividend or interest withholding by a
foreign country.
The risks of the various investment techniques the Funds use are described
in more detail in the SAI.
PERFORMANCE
HOW IS THE FUNDS' PERFORMANCE CALCULATED?
There are various ways in which the Funds may calculate and report their
performance. Performance is calculated separately for each class of shares.
One method is to show a Fund's total return. Cumulative total return is the
percentage change in an amount invested in a class of shares of a Fund over a
stated period of time and takes into account reinvested dividends plus in the
case of Class A Shares, the payment of the maximum sales charge and, in the
case of Class B and Class C Shares, the maximum CDSC. Cumulative total return
most closely reflects the actual performance of a Fund. However, a shareholder
who opts to receive dividends in cash, a Class A shareholder who paid a sales
charge lower than 4.0%, or a Class B or C shareholder who paid lower than the
maximum CDSC will have a different return than the reported performance.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of a Fund determined
by comparing the initial amount invested to the ending redeemable value of the
amount, taking into account reinvested dividends, the payment of the maximum
sales charge on Class A Shares, and the payment of the maximum CDSC on Class B
and Class C Shares.
Each Fund may also publish its current yield. Yield is the net investment
income generated by a share of a Fund during a 30-day period divided by the
maximum offering price on the 30th day. "Maximum offering price" includes the
sales charge for Class A Shares.
The Funds may sometimes publish total returns that do not take into account
sales charges and such returns will be higher than returns which include sales
charges. You should be aware that (i) past performance does not indicate how a
Fund will perform in the future and (ii) each Fund's return and net asset
value will fluctuate, so you cannot necessarily use a Fund's performance data
to compare it to investment in certificates of deposit, savings accounts or
other investments that provide a fixed or guaranteed yield.
Each Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. Each Fund may also compare its total return
to broad-based indices. These indices show the value of selected portfolios of
securities (assuming reinvestment of interest and dividends) which are not
managed by a portfolio manager. The Funds may report how they are performing
in comparison to the Consumer Price Index, an indication of inflation reported
by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Funds' annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
32
<PAGE>
PURCHASES AND EXCHANGES OF SHARES
WHICH SHARE CLASS SHOULD I CHOOSE FOR MY INVESTMENT?
Each of the Funds offers Class A, Class B and Class C Shares. Each Class has
its own cost structure, allowing you to choose the one that best meets your
requirements given the amount of your purchase and the intended length of your
investment. You should consider both ongoing annual expenses and initial or
contingent deferred sales charges in estimating the costs of investing in a
particular class of shares.
CLASS A CLASS B CLASS C
. Front end sales . No front end sales . No front end sales
charge. There are charge. All your charge or CDSC,
several ways to money goes to work except for a CDSC for
reduce these sales for you right away. redemptions made
charges. within the first year
after investing. All
your money goes to
work for you right
away.
. Higher annual
. Lower annual expenses than Class A
expenses than Class Shares.
B and Class C
Shares.
. A CDSC on shares you
sell within six years . Shares do not
of purchase. convert to another
class.
. Automatic conversion
to Class A Shares six . Higher annual
years after issuance, expenses than Class A
thus reducing future Shares.
annual expenses.
. CDSC is waived for
certain redemptions.
Each Fund also issues Class K and Class Y Shares, which have different sales
charges, expense levels and performance. Class K and Class Y Shares are
available to limited types of investors. Call (800) 438-5789 to obtain more
information concerning Class K and Class Y Shares.
WHAT PRICE DO I PAY FOR SHARES?
Class A Shares are sold at the "net asset value next determined" by the
Funds plus any "applicable sales charge" and Class B and Class C Shares are
sold at the "net asset value next determined" by the Funds. These terms are
explained below. You should be aware that broker-dealers (other than the
Funds' Distributor) may charge investors additional fees if shares are
purchased through them.
NET ASSET VALUE. Except in certain limited circumstances, each Fund
determines its net asset value ("NAV") at the close of trading on the New York
Stock Exchange ("NYSE") (normally 4:00 p.m. Eastern time) on each day the NYSE
is open for trading. Each Fund calculates its NAV separately for each class of
shares. The "net asset value next determined" is the NAV calculated at 4:00
p.m. on the day the purchase order for shares is received, if the purchase
order is received prior to or at 4:00 p.m., and is the net asset value
calculated at 4:00 p.m. on the next Business Day, if the purchase order is
received after 4:00 p.m. NAV is calculated by totaling the value of all of the
assets of a Fund allocated to a particular class of shares, subtracting the
Fund's liabilities and expenses charged to that class and dividing the result
by the number of shares of that class outstanding.
33
<PAGE>
APPLICABLE SALES CHARGE. Except in the circumstances described below, you
must pay a sales charge at the time of purchase of Class A Shares. The sales
charge as a percentage of your investment decreases as the amount you invest
increases. The current sales charge rates and commissions paid to selected
dealers are as follows:
<TABLE>
<CAPTION>
SALES CHARGE DISCOUNT TO
AS A PERCENTAGE OF SELECTED
-------------------- DEALERS AS A
YOUR NET ASSET PERCENTAGE OF
INVESTMENT VALUE INESTMENT
---------- --------- -------------
<S> <C> <C> <C>
Less than $100,000........................... 4.00% 4.17% 3.75%
$100,000 but less than $250,000.............. 3.00% 3.09% 2.75%
$250,000 but less than $500,000.............. 2.00% 2.04% 1.75%
$500,000 but less than $1,000,000............ 1.25% 1.27% 1.00%
$1,000,000 or more........................... None* None* (see below)**
</TABLE>
- --------
* No initial sales charge applies on investments of $1 million or more.
However, a CDSC of 1% is imposed on certain redemptions within one year of
purchase. Class A Shares of the Trust Funds purchased on or before June 27,
1995 are subject to a different CDSC, which is described in the SAI.
** The Distributor will pay 1% commission to dealers who initiate and are
responsible for purchases of $1 million or more.
The Distributor may pay the entire commission to dealers. If that occurs,
the dealer may be considered an "underwriter" under Federal securities laws.
SALES CHARGE WAIVERS. We will waive the initial sales charge on sales of
Class A Shares to the following types of purchasers:
(1) individuals with an investment account or relationship with the
Advisor;
(2) full-time employees and retired employees of the Advisor, employees of
the Funds' service providers and immediate family members of such
persons;
(3) registered broker-dealers that have entered into selling agreements
with the Distributor, for their own accounts or for retirement plans
for their employees or sold to registered representatives for full-
time employees (and their families) that certify to the Distributor at
the time of purchase that such purchase is for their own account (or
for the benefit of their families);
(4) certain qualified employee benefit plans as described below;
(5) individuals who reinvest a distribution from a qualified retirement
plan for which the Advisor serves as investment advisor;
(6) individuals who reinvest the proceeds of redemptions from Class Y
Shares of the Funds of the Trust, the Company or Framlington, within
60 days of redemption;
(7) banks and other financial institutions that have entered into
agreements with the Trust, the Company or Framlington to provide
shareholder services for customers ("Customers") (including Customers
of such banks and other financial institutions, and the immediate
family members of such Customers);
(8) fee-based financial planners or employee benefit plan consultants
acting for the accounts of their clients;
(9) employer sponsored retirement plans which are administered by
Universal Pensions, Inc. ("UPI Plans"); and
(10) employer sponsored 401(k) plans which are administered by Merrill
Lynch Group Employee Services ("Merrill Lynch Plans") which meet the
criteria described below under "Qualified Employer Sponsored
Retirement Plans."
34
<PAGE>
QUALIFIED EMPLOYER SPONSORED RETIREMENT PLANS
We will waive the initial sales charge on purchases of Class A Shares by
employer sponsored retirement plans that are qualified under Section 401(a) of
the Code (each, a "Qualified Employee Benefit Plan") that (1) invest
$1,000,000 or more in Class A Shares of investment portfolios offered by the
Trust, the Company or Framlington or (2) have at least 75 eligible plan
participants. In addition, we will waive the CDSC of 1% charged on certain
redemptions of Class A Shares within one year of purchase for Qualified
Employee Benefit Plan purchases that meet the above criteria. A 1% commission
will be paid by the Distributor to dealers and other entities (as permitted by
applicable Federal and state law) who initiate and are responsible for
Qualified Employee Benefit Plan purchases that meet the above criteria. For
purposes of this sales charge waiver, Simplified Employee Pension Plans
("SEPs"), Individual Retirement Accounts ("IRAs"), UPI Plans and Merrill Lynch
Plans are not considered to be Qualified Employee Benefit Plans.
We also will waive (i) the initial sales charge on Class A Shares on
purchases by UPI Plans and (ii) the CDSC of 1% imposed on certain redemptions
within one year of purchase for UPI Plans. The Distributor will pay a 1%
commission to dealers and others (as permitted by applicable Federal and state
law) who initiate and are responsible for UPI Plan purchases.
We will waive the initial sales charge for all investments in Class A Shares
by Merrill Lynch Plans if (i) the Plan is recordkept on a daily valuation
basis by Merrill Lynch Group Employee Services ("Merrill Lynch") and, on the
date the plan sponsor (the "Plan Sponsor") signs the Merrill Lynch
Recordkeeping Service Agreement, the Plan has $3 million or more in assets
invested in broker/dealer funds not advised or managed by Merrill Lynch Asset
Management, L.P. ("MLAM") that are made available pursuant to a Services
Agreement between Merrill Lynch and the Funds principal underwriter or
distributor and in funds advised or managed by MLAM (collectively, the
"Applicable Investments"); or (ii) the Plan is recordkept on a daily valuation
basis by an independent recordkeeper whose services are provided through a
contract or alliance arrangement with Merrill Lynch, and on the date the Plan
Sponsor signs the Merrill Lynch Recordkeeing Service Agreement, the Plan has
$3 million or more in assets, excluding money market funds, invested in
Applicable Investments; or (iii) the Plan has 500 or more eligible employees,
as determined by the Merrill Lynch Plan conversion manager, on the date the
Plan Sponsor signs the Merrill Lynch Recordkeeping Service Agreement.
SALES CHARGE REDUCTIONS. You may qualify for reduced sales charges in the
following cases:
. LETTER OF INTENT. If you intend to purchase at least $100,000 in Class A,
Class B and Class C Shares of the Funds and other non-money market funds
of the Trust or the Company (other than the Index 500 Fund), you may wish
to complete the Letter of Intent Section of your Account Application
Form. By doing so, you agree to invest a certain amount over a 13-month
period. You would pay a sales charge on any Class A Shares you purchase
during the 13 months based on the total amount to be invested under the
Letter of Intent. You can apply any investments you made in any of the
funds during the preceding 90-day period toward fulfillment of the Letter
of Intent (although there will be no refund of sales charges you paid
during the 90-day period). You should inform the Transfer Agent that you
have a Letter of Intent each time you make an investment.
You are not obligated to purchase the amount specified in the Letter of
Intent. If you purchase less than the amount specified, however, you must
pay the difference between the sales charge paid and the sales charge
applicable to the purchases actually made. The Custodian will hold such
amount in escrow. The Custodian will pay the escrowed funds to your
account at the end of the 13 months unless you do not complete your
intended investment.
. QUANTITY DISCOUNTS. You may combine purchases of Class A Shares that are
made by you, your spouse, your children under age 21 and your IRA when
calculating the sales charge. You must notify your broker or the Transfer
Agent to qualify.
. RIGHT OF ACCUMULATION. You may add the value of any shares of non-money
market funds of the Trust or the Company you already own to the amount of
your next Class A Share investment for purposes of calculating the sales
charge at the time of current purchase. You must notify your broker or
the Transfer Agent to qualify.
35
<PAGE>
Certain brokers may not offer these programs or may impose conditions on use
of these programs. You should consult with your broker prior to purchasing the
Funds' shares.
For further information on sales charge waivers and reductions call the
Funds at (800) 438-5789.
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment for Class A, Class B and Class C Shares of a
Fund is $500 and subsequent investments must be at least $50. Purchases in
excess of $250,000 must be for Class A or Class C Shares.
HOW CAN I PURCHASE SHARES?
You can purchase Class A, Class B and Class C Shares in a number of
different ways. You may place orders directly through the Transfer Agent or
the Distributor or through arrangements with your authorized broker.
. BY BROKER. Any broker authorized by the Distributor can sell you shares
of the Funds. Please note that brokers may charge you fees for their
services.
. BY MAIL. You may open an account by completing, signing and mailing the
attached Account Application Form and a check or other negotiable bank
draft (payable to the Munder Funds) for $500 or more to: THE MUNDER
FUNDS, C/O FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130,
WESTBOROUGH, MASSACHUSETTS 01581-5130. Be sure to specify on your Account
Application Form the class of shares being purchased. If the class is not
specified, your purchase will automatically be invested in Class A
Shares. For additional investments send a letter stating the Fund and
share class you wish to purchase, your name and your account number with
a check for $50 or more to the address listed above.
. BY WIRE. To open a new account, you should call the Funds at (800) 438-
5789 to obtain an account number and complete wire instructions prior to
wiring any funds. Within seven days of purchase, you must send a
completed Account Application Form containing your certified taxpayer
identification number to the Transfer Agent at the address provided
above. Wire instructions must state the Fund name, share class, your
registered name and your account number. Your bank wire should be sent
through the Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP you may arrange for
periodic investments in a Fund through automatic deductions from a
checking or savings account. To enroll in the AIP you should complete the
AIP Application Form or call the Funds at (800) 438-5789. The minimum
pre-authorized investment amount is $50. You may discontinue the AIP at
any time. We may discontinue the AIP on 30 days' written notice to you.
. REINVESTMENT PRIVILEGE. Once a year you may reinvest redemption proceeds
from Class A, B and C Shares of a Fund (or Class A, B and C Shares of
another non-money market fund of the Trust or the Company) in shares of
the same class of the same Fund without any sales charges, if the
reinvestment is made within 60 days of redemption. You or your broker
must notify the Transfer Agent in writing at the time of reinvestment in
order to eliminate the sales charge.
36
<PAGE>
See the SAI for further information regarding purchases of the Funds'
shares.
The Transfer Agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you. You will not be
issued a share certificate, unless you request one in writing. We reserve the
right to (i) reject any purchase order if, in our opinion, it is in the Funds'
best interest to do so and (ii) suspend the offering of shares of any Class
for any period of time.
HOW CAN I EXCHANGE SHARES?
You may exchange shares of the Funds for shares of the same class of other
Funds of the Trust, the Company or Framlington based on their relative net
asset values. Class A Shares of a money market fund of the Trust or the
Company that were (1) acquired through the use of the exchange privilege and
(2) can be traced back to a purchase of shares in one or more investment
portfolios of the Trust or the Company for which a sales charge was paid, can
be exchanged for Class A Shares of a fund of the Trust, the Company or
Framlington. Class B and Class C Shares will continue to age from the date of
the original purchase and will retain the same CDSC rate as they had before
the exchange.
You must meet the minimum purchase requirements for the fund of the Trust,
the Company or Framlington that you purchase by exchange. If you are
exchanging into shares of a Fund with a higher sales charge, you must pay the
difference at the time of exchange. Please note that a share exchange is a
taxable event and accordingly, you may realize a taxable gain or loss. Before
making an exchange request, read the Prospectus of the fund you wish to
purchase by exchange. You can obtain a Prospectus for any fund of the Trust,
the Company or Framlington by contacting your broker or the Funds at (800)
438-5789. Brokers may charge a fee for handling exchanges.
. EXCHANGES BY TELEPHONE. You may give exchange instructions by telephone
to the Funds at (800) 438-5789. You may not exchange shares by telephone
if you hold share certificates. We reserve the right to reject any
telephone exchange request and to place restrictions on telephone
exchanges.
. EXCHANGES BY MAIL. You may send exchange orders to your broker or to the
Transfer Agent at The Munder Funds, c/o First Data Investor Services
Group, P.O. Box 5130, Westborough, Massachusetts 01581-5130
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order. We will reduce the amount you receive
by the amount of any applicable CDSC. See "Purchases of Shares--What Price Do
I Pay for Shares?" for an explanation of how the net asset value next
determined is calculated.
CONTINGENT DEFERRED SALES CHARGES. You pay a CDSC when you redeem:
. Class A Shares that are part of an investment of at least $1 million
within one year of buying them
. Class B Shares within six years of buying them
. Class C Shares within one year of buying them
37
<PAGE>
These time periods include the time you held Class B or Class C Shares which
you may have exchanged for Class B or Class C Shares of the Funds.
The CDSC schedule for Class B Shares purchased after June 27, 1995 is set
forth below. See the SAI for the CDSC schedule for Class B Shares purchased
before that time. The CDSC is based on the original purchase price of your
investment or the net asset value at the time of redemption, whichever is
lower.
CLASS B SHARES
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
- -------------------- -----
<S> <C>
First..................................................................... 5.00%
Second.................................................................... 4.00%
Third..................................................................... 3.00%
Fourth.................................................................... 3.00%
Fifth..................................................................... 2.00%
Sixth..................................................................... 1.00%
Seventh and thereafter.................................................... 0.00%
</TABLE>
The Distributor pays sales commissions of 4.00% of the purchase price of
Class B Shares of Funds to brokers at the time of sale that initiate and are
responsible for purchases of such Class B Shares of the Funds.
You will not pay a CDSC to the extent that the value of redeemed shares
represents:
. reinvestment of dividends or capital gains distributions
. capital appreciation of shares redeemed
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions, then
any appreciation on shares redeemed, and then remaining shares held by you for
the longest period of time. We will calculate the holding period of shares of
a Fund acquired through an exchange of shares of the Munder Money Market Fund
from the date that the shares of the Fund were initially purchased.
CDSC WAIVERS. We will waive the CDSC payable upon redemptions of shares
which you purchased after June 27, 1995 for:
. redemptions made within one year after the death of a shareholder or
registered joint owner
. minimum required distributions made from an IRA or other retirement plan
account after you reach age 70 1/2
. involuntary redemptions made by the Fund
Consult the SAI for Class B Shares CDSC waivers which apply when you redeem
shares purchased on or before June 27, 1995.
We will waive the CDSC for all redemptions of Class B Shares by Merrill
Lynch Plans if: (i) the Plan is recordkept on a daily valuation basis by
Merrill Lynch; or (ii) the Plan is recordkept on a daily valuation basis by an
independent recordkeeper whose services are provided through a contract or
alliance arrangement with Merrill Lynch; or (iii) the Plan has less than 500
eligible employees, as determined by the Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement.
38
<PAGE>
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided required documents have
been received by the Transfer Agent. A Fund may temporarily stop redeeming
shares when the NYSE is closed or trading on the NYSE is restricted, when an
emergency exists and the Fund cannot sell its assets or accurately determine
the value of its assets or if the SEC orders the Fund to suspend redemptions.
HOW CAN I REDEEM SHARES?
You may redeem shares of the Funds in several ways:
. BY MAIL. You may mail your redemption request to: THE MUNDER FUNDS, C/O
FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH,
MASSACHUSETTS 01581-5130. The redemption request should state the name of
the Fund, share class, account number, amount of redemption, account name
and where to send the proceeds. All account owners must sign. If a stock
certificate has been issued to you, you must endorse the stock
certificate and return it together with the written redemption request.
A SIGNATURE GUARANTEE is required for the following redemption requests:
(a) redemptions proceeds greater than $50,000; (b) redemption proceeds not
being made payable to the owner of the account; (c) redemption proceeds
not being mailed to the address of record on the account or (d) if the
redemption proceeds are being transferred to another Munder Funds account
with a different registration. You can obtain a signature guarantee from a
financial institution such as a commercial bank, trust company, savings
association or from a securities firm having membership on a recognized
securities exchange.
. BY TELEPHONE. You can redeem your shares by calling your broker or the
Funds at (800) 438-5789. There is no minimum requirement for telephone
redemptions paid by check. The Transfer Agent may deduct a wire fee
(currently $7.50) for wire redemptions under $5,000.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your Account Application Form, simply call the
Fund prior to 4:00 p.m. (Eastern time), and request the funds be mailed to
the commercial bank or registered broker-dealer you designated on your
Account Application Form. We will send your redemption amount to you on
the next Business Day. We reserve the right at any time to change or
impose fees for this expedited redemption procedure.
We record all telephone calls for your protection and take measures to
identify the caller. If the Transfer Agent properly acts on telephone
instructions and follows the reasonable procedures to ensure against
unauthorized transactions, neither the Trust, the Company, the Distributor
nor the Transfer Agent will be responsible for any losses. If these
procedures are not followed, the Transfer Agent may be liable to you for
losses resulting from unauthorized instructions.
During periods of unusual economic or market activity, you may
experience difficulties or delays in effecting telephone redemptions. In
such cases you should consider placing your redemption request by mail.
. AUTOMATIC WITHDRAWAL PLAN ("AWP"). If you have an account value of $2,500
or more in a Fund, you may redeem shares on a monthly, quarterly, semi-
annual or annual basis. The minimum withdrawal is $50. We usually process
withdrawals on the 20th day of the month and promptly send you your
redemption amount. You may enroll in the AWP by completing the AWP
Application Form available through the Transfer Agent. To participate in
the AWP you must have your dividends automatically reinvested and may not
hold share certificates. You may change or cancel the AWP at any time
upon notice to the Transfer Agent. You should not buy Class A Shares (and
pay a sales charge) while you participate in the AWP and you must pay any
applicable CDSCs when you redeem shares.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
39
<PAGE>
. FREE CHECKWRITING. Free checkwriting is available to holders of Class A
Shares of the Funds (other than the International Bond Fund) who complete
the Signature Card Section of the Account Application Form. You may write
checks in the amount of $500 or more and you may not close a Fund account
by writing a check. We may change or terminate this program on 30 days'
notice to you.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
We will typically send redemption amounts to you within seven Business Days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
STRUCTURE AND MANAGEMENT OF THE FUNDS
HOW ARE THE FUNDS STRUCTURED?
The Trust and the Company are each an open-end management investment
company, which is a mutual fund that sells and redeems shares every day that
it is open for business. The Trust and the Company are managed under the
direction of their governing Boards of Trustees and Directors, which are
responsible for the overall management of the Trust and the Company and
supervise the Funds' service providers. The Trust is organized as a
Massachusetts business trust and the Company is a Maryland corporation.
WHO MANAGES AND SERVICES THE FUNDS?
INVESTMENT ADVISOR. The Funds' investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for each Fund, provides
research and credit analysis, and is responsible for all purchases and sales
of portfolio securities.
During the fiscal year ended June 30, 1997, the Advisor was paid an advisory
fee at an annual rate based on the average daily net assets of each Fund
(after waivers, if any) as follows:
<TABLE>
<S> <C>
Bond Fund................................................................. 0.50%
Intermediate Bond Fund.................................................... 0.50%
International Bond Fund................................................... 0.50%
U.S. Government Income Fund............................................... 0.50%
Michigan Triple Tax-Free Fund............................................. 0.50%
Tax-Free Bond Fund........................................................ 0.50%
Tax-Free Intermediate Bond Fund........................................... 0.50%
Short Term Treasury Fund.................................................. 0.25%
</TABLE>
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Funds and/or their
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor makes such payments out of its own
resources and there are no additional costs to the Funds or their
shareholders.
40
<PAGE>
The Advisor selects broker-dealers to execute portfolio transactions for the
Funds based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Funds'
transfer agent. The Transfer Agent is a wholly owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Funds' administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Company, the Trust and Framlington in all aspects of its administration
and operations including the maintenance of financial records and fund
accounting. As compensation for its services, State Street is entitled to
receive fees, based on the aggregate daily net assets of the Funds and certain
other investment portfolios that are advised by the Advisor for which it
provides services, computed daily and payable monthly at the annual rate of
.051% of the first $7.5 billion of net assets, plus .045% of the next $2.5
billion of net assets, plus .03% of the next $2.5 billion of net assets, plus
.02% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Funds. State Street pays the Distributor a fee
for these services out of its own resources at no cost to the Funds.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Funds. No compensation is paid to the Custodian for
its services. State Street also serves as Sub-Custodian to the Funds. As
compensation for its services, the Sub-Custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Funds and certain other
investment portfolios that are advised by the Advisor for which the Sub-
Custodian provides services, computed daily and payable monthly at an annual
rate of .01% of average daily net assets. The Sub-Custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Funds' shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Funds' shares.
For an additional description of the services performed by the
Administrator, the Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
DISTRIBUTION SERVICES ARRANGEMENT
Under Rule 12b-1 of the 1940 Act, the Funds have adopted Service Plans with
respect to their Class A Shares and Service and Distribution Plans with
respect to their Class B and Class C Shares. Under the Plans, each Fund uses
its assets to finance activities relating to the distribution of its shares to
investors and the provision of certain shareholder services. The Distributor
is paid a service fee at an annual rate of up to 0.25% of the value of average
daily net assets of the Funds' Class A Shares. The Distributor also is paid a
service fee at an annual rate of 0.25% and a distribution fee at an annual
rate of up to 0.75% of the value of the average daily net assets of the Funds'
Class B and Class C Shares. The Distributor uses the service fees primarily to
pay ongoing trail commissions to securities dealers (which may include the
Distributor itself) and other financial organizations which provide
shareholder services for the Funds. These services include, among other
things, processing new shareholder account applications, reporting to the
Fund's Transfer Agent all transactions by customers and serving as the primary
information source to customers concerning the Funds.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust or the Company as a whole and affecting your particular Fund. You
will not vote by Class unless
41
<PAGE>
expressly required by law or when the Trustees or Directors determine the
matter to be voted on affects only the interests of the holders of a
particular class of shares. The Trust and the Company will not hold annual
shareholder meetings, but special meetings may be held at the written request
of shareholders owning more than 10% of outstanding shares for the purpose of
removing a Trustee or Director. Under Massachusetts law, it is possible that a
shareholder may be personally liable for the Trust's obligations. If a
shareholder were required to pay a debt of a Fund, however, the Trust has
committed to reimburse the shareholder in full from its assets. The SAI
contains more information regarding voting rights.
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Funds as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust and the
Company.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUNDS?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on a Fund's investments. The Funds pass their earnings along to
investors in the form of dividends. Dividend distributions are the dividends
or interest earned on investments after expenses. The International Bond Fund
pays its net income quarterly as a dividend. The other Funds pay dividends of
net income monthly. Each Fund distributes its net realized capital gains
(including net short-term capital gains), if any, at least annually.
HOW WILL DISTRIBUTIONS BE MADE?
The Funds will pay dividend and capital gains distributions in additional
shares of the same class of the Funds. If you wish to receive distributions in
cash, either indicate this request on your Account Application Form or notify
the Fund at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUNDS?
FIXED INCOME CLASS A, B, C
In general, as long as each Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. Each Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, a Fund may still be
liable for an excise tax on income that is not distributed in accordance with
a calendar year requirement; the Funds intend to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by a Fund will
generally be designated as long-term or short-term. Recent tax law changes
have added a new category of mid-term capital gain; it is expected that
regulations will be issued regarding the proper tax treatment of mid-term and
other gains by shareholders of RICs. Distributions from a Fund's long-term
capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
42
<PAGE>
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from each Fund in which
you are a shareholder a statement of the amount and nature of the
distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by a
Fund may be subject to foreign withholding or other taxes. A Fund may be
permitted to pass on to its shareholders the right to a credit or deduction
for income or other tax credits earned from foreign investments and will do so
if possible. These deductions or credits may be subject to tax law
limitations.
If a Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If a Fund elects to treat a PFIC as a "qualified electing fund"
("QEF") and the PFIC furnishes certain financial information in the required
form to such Fund, the Fund will instead be required to include in income each
year its allocable share of the ordinary earnings and net capital gains on the
QEF, regardless of whether received, and such amounts will be subject to the
various distribution requirements described above. The Funds may also elect to
mitigate the tax effects of owning PFIC stock by making an annual mark-to-
market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Funds and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Funds, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and Audited Annual Reports on a regular basis from the Funds. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings the Funds will only send one copy of the
above communications to (1) accounts with the same primary record owner, (2)
joint tenant accounts, (3) tenant in common accounts and (4) accounts which
have the same address.
43
<PAGE>
PROINABC / F0418 / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
Application [LOGO OF MUNDER FUNDS]
for new accounts
Please mail your complete application (printed or typed)
along with your check to:
The Munder Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 5130
Westborough, MA 01581-5130
If you have questions regarding this application, please telephone the Transfer
Agent at 1.800.438.5789
<TABLE>
<CAPTION>
1. ACCOUNT REGISTRATION
<S> <C>
- ---------------------------------------------------------------------------------------------------
Name Social Security Number
- ---------------------------------------------------------------------------------------------------
Joint Owner (if any) (If Joint Tenancy, use Social Security Number of first joint owner)
OR
Uniform Transfer to Minor:
for:
- ---------------------------------------------------------------------------------------------------
Custodian Name (one custodian only) Minor's Name (one minor only)
- ---------------------------------------------------------------------------------------------------
State (Custodian's State of Residence) Minor's Social Security Number
OR
[_] Trust [_] Corporation [_] Other (please specify)________________________________
- ---------------------------------------------------------------------------------------------------
Trust/Corporation Name
- ---------------------------------------------------------------------------------------------------
Trust Date Trust Identification Number
2. MAILING ADDRESS (address for reports, dividends, statements and redemption proceeds)
- ---------------------------------------------------------------------------------------------------
Street Apt.
- ---------------------------------------------------------------------------------------------------
City State Zip Code Telephone Number
Non-Resident Alien: [_] Yes [_] No If Yes, Country of Residence______________________
</TABLE>
<PAGE>
3. INITIAL INVESTMENT
With as little as $500* you can invest in any Munder Fund. Please be sure to
read the prospectus carefully before investing or sending money. You may
request an additional prospectus by calling 1.800.438.5789.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NAME OF FUND CLASS A CLASS B CLASS C INVESTMENT AMOUNT
[_] Munder Accelerating Growth Fund [_] [_] [_] $_________________
[_] Munder All-Season Aggressive Fund [_] [_] [_] $_________________
[_] Munder All-Season Moderate Fund [_] [_] [_] $_________________
[_] Munder All-Season Conservative Fund [_] [_] [_] $_________________
[_] Munder Balanced Fund [_] [_] [_] $_________________
[_] Munder Growth & Income Fund [_] [_] [_] $_________________
[_] Munder Index 500 Fund [_] [_] [_] $_________________
[_] Munder International Equity Fund [_] [_] [_] $_________________
[_] Munder Micro-Cap Equity Fund [_] [_] [_] $_________________
[_] Munder Mid-Cap Growth Fund [_] [_] [_] $_________________
[_] Munder Multi-Season Growth Fund [_] [_] [_] $_________________
[_] Munder Real Estate Equity Investment Fund [_] [_] [_] $_________________
[_] Munder Small-Cap Value Fund [_] [_] [_] $_________________
[_] Munder Small Company Growth Fund [_] [_] [_] $_________________
[_] Munder Value Fund [_] [_] [_] $_________________
[_] Munder Framlington Emerging Markets Fund [_] [_] [_] $_________________
[_] Munder Framlington Healthcare Fund [_] [_] [_] $_________________
[_] Munder Framlington International Growth Fund [_] [_] [_] $_________________
[_] Munder Bond Fund [_] [_] [_] $_________________
[_] Munder Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder International Bond Fund [_] [_] [_] $_________________
[_] Munder Short Term Treasury Fund [_] [_] [_] $_________________
[_] Munder Michigan Triple Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder U.S. Government Income Fund [_] [_] [_] $_________________
[_] Munder Cash Investment Fund [_] N/A N/A $_________________
[_] Munder Money Market Fund [_] N/A N/A $_________________
[_] Munder Tax-Free Money Market Fund [_] N/A N/A $_________________
[_] Munder U.S. Treasury Money Market Fund [_] N/A N/A $_________________
Total Amount Invested $_________________
[_] By Check (Payable to The Munder Funds)
[_] By Wire. Account Number:______________________(Account number assigned by Bank from which assets were wired.)
*$50 per Fund if the Automatic Investment Plan Option is being established at this time (please complete section 5).
</TABLE>
<PAGE>
4. DISTRIBUTION OPTION (check one. If none, "A" will be assigned)
[_] A. Reinvest dividends and capital gains in additional Fund shares.
[_] B. Pay dividends in cash; reinvest capital gains in additional Fund shares.
[_] C. Pay dividends and capital gains in cash.
[_] D. Please send my: [_] Dividends [_] Dividends & Capital Gains (choose one)
directly to my checking/savings account.
Fill out banking information in Section 10
5. AUTOMATIC INVESTMENT PLAN (optional)
YES, I(we) wish to participate in the Automatic Investment Plan (AIP). I(We)
authorize First Data Investor Services Group, Inc. (First Data), The Munder
Funds' transfer agent, to invest automatically $_________ ($50 minimum) for
me(us) on a [_] Monthly OR [_] Quarterly basis (please choose either the [_] 5th
or the [_] 20th of the month) and draw a bank draft in payment of each of these
investments against my (our) [_] Checking OR [_] Savings account. For the
purpose of verifying my(our) bank account number, I (we) have enclosed a blank
check or deposit slip marked void and have signed the bank authorization below.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Name of Fund Checking/Savings Account Number ABA Number (Bank Routing Number)
</TABLE>
Fill out banking information in Section 10
6. CHECKWRITING PRIVILEGES (optional)
Income & Money Market Class A shares only
If you are opening an account for any of The Munder Income and/or Money Market
Funds (Class A Shares only), you are entitled to the checkwriting option.
Redemption checks may be written for amounts of $500 or more. To obtain checks,
please complete the signature card below. All persons named in the Account
Registration in Section 1 must sign the signature card. For Corporate, Trust or
Partnership accounts, only authorized signers must sign. By signing this
signature card, you agree to be subject to the customary rules and regulations
governing checking accounts, as well as instructions and rules of the Fund now
in effect, and as amended from time to time, that pertain to the use of
redemption checks.
Please fill out the following Signature Card to be eligible for Checkwriting and
indicate the Fund(s) for which you are requesting this service:
- --------------------------------------------------------------------------------
Fund(s)
- --------------------------------------------------------------------------------
Fund(s)
Authorized Signatures (exactly as it appears in Part 1 of the Application):
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
Check here if more than one signature is required per check: [_] 2 [_] 3
Other: _____________________
<PAGE>
7. AUTOMATIC WITHDRAWAL PLAN (optional)
The minimum account balance must be $2,500 or more.
Fill out banking information in Section 10
YES, I authorize the redemption of shares from my Munder Fund account to meet
withdrawal payments on the 20th of each month.
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------
Name Of Fund That Shares Will Be Redeemed From Account Number (if applicable)
- --------------------------------------------------------------------------------------------------------------
Amount of Monthly Payment ($50 minimum per Fund) Start Date (Payment is to begin on the next
payment period unless a later date is indicated)
Payments will be made to: [_] Owner's address of record only OR [_] Other listed below:
______________________________________________________________________ [_] Checking OR [_] Savings Account
Name (if bank indicate account number)
- --------------------------------------------------------------------------------------------------------------
Address
For the purpose of verifying my(our) bank account number, I (we) have enclosed a blank check or deposit slip
marked void and have signed the bank authorization below.
- --------------------------------------------------------------------------------------------------------------
Name of Fund Account Number (if applicable) ABA Number (Bank Routing Number)
</TABLE>
8. REDUCED SALES CHARGE (optional)
[_] Rights Of Accumulation:
Investors may qualify for reduced sales charges by aggregating the total
purchases of all Munder Class A Shares, excluding Money Market Funds, to
determine the applicable sales charge for current purchases. To determine the
aggregated amount of all non-money market funds, you will need to total the
current purchases as well as shares that are already beneficially owned by the
investor for which a sales charge has already been paid. Please see the
prospectus for additional information regarding Rights of Accumulation.
I apply for the Rights of Accumulation reduced sales charges based on the
following accounts in The Munder Funds.
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
[_] Letters Of Intent:
You may qualify for reduced sales charges if you plan to make additional
investments in The Munder Funds within a 13 month period. By indicating a level
of anticipated investment and by signing this application, you agree to the
terms of the Letter of Intent as set forth in the Prospectus, and as follows:
"Although I am not obligated to do so, I intend to invest over a 13 month period
an aggregate amount of at least" (check one):
[_] $25,000 [_] $50,000 [_] $100,000
[_] $250,000 [_] $500,000 [_] $1,000,000
<PAGE>
9. TELEPHONE REDEMPTION & EXCHANGE AGREEMENT
Please check the box if you want this option.
[_] I(We) authorize First Data to act upon instructions received by telephone
from me(us) to redeem or to exchange shares of The Munder Funds.
1. I(We) relieve the Funds or First Data of any liability for the loss,
cost or expense for acting upon such instructions reasonably believed to
be from me(us).
2. I(We) assume responsibility for notifying the Funds within seven (7)
business days if a confirmation for the transaction is not received or
is incorrect.
3. If an exchange involves an initial investment into a Fund, the account
registration will carry the same registration as set forth above.
4. An exchange deemed to be the initial purchase of a Fund must meet the
minimum initial investment requirement of $500 per Fund unless the
shareholder is establishing an Automatic Investment Plan.
5. Redemption proceeds will be sent only to my account address of record.
- --------------------------------------------------------------------------------
Name Name
10. BANKING INFORMATION
To be completed with Section 4 (Distribution Option)
I(We) authorize The Munder Funds to deposit distributions into the following
[_] Checking [_] Savings account:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Bank Name Address
- ------------------------------------------------------------------------------------------
ABA Number (Bank Routing Number) Account Number Bank Account Registration
- ------------------------------------------------------------------------------------------
Wiring Instructions
</TABLE>
To be completed with Section 5 (Automatic Investment Plan)
Please note that your bank will clear and process each bank draft and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for The Munder Funds, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
To be completed with Section 7 (Automatic Withdrawal Plan)
Please note that your bank will clear and process each bank deposit and will
include it with your regular statement. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow the transfer agent for The Munder Funds to act as your Agent
with regard to the Automatic Withdrawal Plan (AWP). The AWP may be modified or
terminated at any time, upon thirty (30) days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
. Please Staple Void Check or Deposit Slip Here .
<PAGE>
11. AUTHORIZATIONS, CERTIFICATIONS AND SIGNATURES
By signing the application, I(we) hereby certify under the penalty of perjury
that the information on this application is true, complete and correct and that:
I(We) understand that this order is subject to acceptance by The Munder Funds.
I(We) agree that The Munder Funds, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Funds are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. An investment in the Funds involves
investment risks, including the possible loss of principal.
I(We) represent that I am (we are) of legal age and capacity and have read the
Prospectus(es) for The Munder Funds selected, and agree to its (their) terms.
First Data, is hereby appointed agent to receive dividends and distributions for
automatic reinvestment unless otherwise directed in Section 4.
I(We) understand and acknowledge that a sales charge may be levied against the
dollars that I(we) invest in The Munder Funds. (See the Prospectus(es) for
reduced sales charge information.)
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
below. Failure by non-exempt taxpayers to furnish us with the correct Taxpayer
Identification Number will result in withholding of 31% of all taxable dividends
paid and/or withholding on certain other payments (this is referred to as backup
withholding).
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
Taxpayer Identification Number Name of Taxpayer Whose Number Appears Above
</TABLE>
Taxpayer Identification:
I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me
by The Munder Funds, and
(2) I (the Investor) am not subject to backup withholding because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal Revenue Service ("IRS") that I
am, as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distributions and gross
redemption proceeds under the Federal income tax law.
[_] Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been
terminated.
Authorization:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
</TABLE>
<PAGE>
================================================================================
FOR DEALER USE ONLY
We hereby authorize First Data Investor Services Group, Inc., to act as our
agent in connection with transactions authorized by this Application and agree
to notify First Data Investor Services Group, Inc., of any purchase made under a
Letter of Intent or Right of Accumulation.
- --------------------------------------------------------------------------------
Dealer's Name Main Office Address
- --------------------------------------------------------------------------------
Representative's Name Branch # Rep #
- --------------------------------------------------------------------------------
Branch Address Telephone #
- --------------------------------------------------------------------------------
Authorized Signature of Dealer Title
================================================================================
<PAGE>
================================================================================
Shares of The Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
================================================================================
Distributor: Funds Distributor, Inc. APPABC - F078
<PAGE>
CLASS A, B & C SHARES
[LOGO OF THE MUNDER FUNDS]
Investments for all seasons
Prospectus
OCTOBER 29, 1997
THE MUNDER MONEY MARKET FUNDS
Cash Investment
Money Market
Tax-Free Money Market
U.S. Treasury Money Market
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS A, CLASS B AND CLASS C SHARES
The Munder Funds Trust (the "Trust") and The Munder Funds, Inc. (the
"Company") are open-end investment companies. This Prospectus describes three
investment portfolios offered by the Trust (the "Trust Funds") and the Money
Market Fund offered by the Company (collectively, the "Funds"):
Munder Cash Investment Fund
Munder Money Market Fund
Munder Tax-Free Money Market Fund
Munder U.S. Treasury Money Market Fund
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Funds. Only Class A Shares of the Trust Funds are currently offered for
sale to retail investors. Class A, Class B and Class C Shares of the Money
Market Fund may be acquired only through an exchange of shares from the
corresponding classes of other funds of the Company, the Trust or Munder
Framlington Funds Trust ("Framlington").
This Prospectus explains the objectives, policies, risks and fees of each
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
each of the Funds has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. You can
obtain the SAI free of charge by calling the Funds at (800) 438-5789. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
SAI and other information regarding the Funds.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
ALTHOUGH THE FUNDS SEEK TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE, THERE CAN BE NO ASSURANCE THAT THE FUNDS CAN DO SO ON A CONTINUING
BASIS.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights............................................................
What are the key facts regarding the Funds?.............................. 3
Financial Information...................................................... 5
Fund Choices
What Funds are offered?.................................................. 12
Who may want to invest in the Funds?..................................... 12
What are the Funds' investments and investment practices?................ 13
What are the risks of investing in the Funds?............................ 15
Performance
How is the Funds' performance calculated?................................ 16
Where can I obtain performance data?..................................... 16
Purchases and Exchanges of Shares
What price do I pay for shares?.......................................... 16
When can I purchase shares?.............................................. 17
What is the minimum required investment?................................. 17
How can I purchase shares?............................................... 17
How can I exchange shares?............................................... 18
Redemptions of Shares
What price do I receive for redeemed shares?............................. 18
When can I redeem shares?................................................ 19
How can I redeem shares?................................................. 20
When will I receive redemption amounts?.................................. 20
Structure and Management of the Funds
How are the Funds structured?............................................ 21
Who manages and services the Funds?...................................... 21
What are my rights as a shareholder?..................................... 22
Dividends, Distributions and Taxes
When will I receive distributions from the Funds?........................ 22
How will distributions be made?.......................................... 23
Are there tax implications of my investments in the Funds?............... 23
Additional Information..................................................... 23
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUNDS?
Q: What are the Funds' goals?
A:
. The Cash Investment Fund and U.S. Treasury Money Market Fund seek as high
a level of current interest income as is consistent with maintaining
liquidity and stability of principal.
. The Money Market Fund seeks to provide current income consistent with the
preservation of capital and liquidity.
. The Tax-Free Money Market Fund seeks to provide as high a level of current
interest income exempt from Federal income taxes as is consistent with
maintaining liquidity and stability of principal.
Q: What are the Funds' strategies?
A: The Funds invest solely in dollar-denominated debt securities with
remaining maturities of 13 months or less and maintain an average dollar-
weighted portfolio maturity of 90 days or less.
Q: What are the Funds' risks?
A: It is expected that the Funds will maintain a net asset value of $1.00 per
share, although there is no assurance that they will be able to do so on a
continuous basis. A Fund's performance per share may change daily based on
many factors, including interest rate levels, the quality of the instruments
in the Fund's investment portfolio, national and international economic
conditions and general market conditions.
Q: What are the options for investment in the Funds?
A: The Money Market Fund offers four different investment options, or classes:
Class A, B, C and Y. The Trust Funds offer only Class A, Class K and Class Y
Shares. Class K and Class Y Shares, which are offered only to institutional
and other qualified investors, are offered in other prospectuses.
<TABLE>
<CAPTION>
MAXIMUM FRONT MAXIMUM
CLASS RULE 12B-1 FEES* END SALES LOAD** CDSC***
----- ---------------- ---------------- ----------------------
<S> <C> <C> <C>
Class A 0.25% None None
Class B 1% None 5%
Class C 1% None 1%, if redeemed within
1 year of purchase
</TABLE>
- --------
* An annual fee for distributing shares and servicing shareholder accounts
based on the Fund's average daily net assets.
** A one-time fee charged at the time of purchase of shares.
*** A contingent deferred sales charge ("CDSC") is a one-time fee charged at
the time of redemption. The fee declines based on the length of time you
hold the shares.
Class B Shares convert automatically to Class A Shares after six years. Due
to the level of Rule 12b-1 fees on Class B Shares versus Class A or Class C
Shares, this conversion is to your economic benefit.
Q: How do I buy and sell shares of the Funds?
A: This Prospectus offers to investors one class of shares of the Trust Funds,
Class A Shares. The Money Market Fund offers Class A, Class B and Class C
Shares which may be acquired only through an exchange of shares of the
corresponding classes of another fund of the Company, the Trust or
Framlington. Funds Distributor Inc. (the "Distributor") sells shares of the
Funds. You may purchase Class A Shares from the Distributor through broker-
dealers or other financial institutions or from the Funds' transfer agent,
First Data Investor Services Group, Inc. (the "Transfer Agent"), by mailing
the attached Account Application Form with a check to the Transfer Agent. You
must invest at least $500 ($50 through the Automatic Investment Plan)
initially and at least $50 for subsequent purchases.
3
<PAGE>
Shares may be redeemed (sold back to the Fund) by mail.
You may also acquire the Funds' shares by exchanging shares of the same
class of other funds of the Company, Munder and Framlington, and exchange Fund
shares for shares of the same class of other funds of the Company, Munder and
Framlington.
Q: What shareholder privileges do the Funds offer?
A:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C>
Automatic Investment Plan Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal Plan Automatic Withdrawal Plan Automatic Withdrawal Plan
Telephone Exchanges Telephone Exchanges Telephone Exchanges
Free Check Writing
</TABLE>
Q: When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments after expenses. The Funds declare dividends daily and pay them
monthly. The Funds distribute capital gains at least annually. Unless you
elect to receive distributions in cash, all dividends and capital gain
distributions of a Fund will be automatically used to purchase additional
shares of that Fund.
Q: Who manages the Funds' assets?
A: Munder Capital Management is the Funds' investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Funds.
4
<PAGE>
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Funds will bear directly.
<TABLE>
<CAPTION>
CASH INVESTMENT FUND
TAX-FREE MONEY MARKET FUND
U.S. TREASURY MONEY MARKET FUND MONEY MARKET FUND
------------------------------- -------------------------
CLASS A CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES
------------------------------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge on
Purchase
(as a % of Offering
Price)................. None None None None
Sales Charge Imposed on
Reinvested Dividends... None None None None
Maximum Deferred Sales
Charge................. None None(2) 5%(3) 1%(4)
Redemption Fees(5)...... None None None None
Exchange Fees........... None None None None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) A 1% CDSC applies to redemptions of shares acquired through the exchange
of Class A Shares of other funds purchased on or after June 27, 1995 as
part of an investment of $1,000,000 or more. See the SAI for a description
of Class A Shares acquired before June 27, 1995.
(3) The CDSC payable on redemption of Class B Shares declines over time.
(4) A 1% CDSC applies to redemptions within one year after the initial
investment in Class C Shares.
(5) The Funds' transfer agent may deduct a redemption fee of $7.50 for wire
redemptions under $5,000.
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to each Fund, which investors in the Funds will bear
indirectly. Such expenses include payments to Trustees, Directors, auditors,
legal counsel and service providers (such as the Advisor), registration fees,
and distribution fees. The fees shown are based on fees for the Funds' past
fiscal year. Because of the 12b-1 fee, you may over the long term pay more
than the amount of the maximum permitted front-end sales charge.
<TABLE>
<CAPTION>
ANNUAL FUND CLASS A SHARES
OPERATING EXPENSES --------------------------------------------------------
(AS A % OF AVERAGE NET TAX-FREE U.S. TREASURY
ASSETS) CASH INVESTMENT FUND MONEY MARKET FUND MONEY MARKET FUND
- ---------------------- -------------------- ----------------- -----------------
<S> <C> <C> <C>
Advisory Fees........... .35% .35% .35%
12b-1 Fees.............. .25% .25% .25%
Other Expenses.......... .20% .18% .19%
--- ---- ----
Total Fund Operating
Expenses............. .80% .78% .79%
=== ==== ====
<CAPTION>
ANNUAL FUND
OPERATING EXPENSES MONEY MARKET FUND
(AS A % OF AVERAGE NET --------------------------------------------------------
ASSETS) CLASS A SHARES CLASS B SHARES CLASS C SHARES
- ---------------------- -------------------- ----------------- -----------------
<S> <C> <C> <C>
Advisory Fees........... .40% .40% .40%
12b-1 Fees.............. .25% 1.00% 1.00%
Other Expenses.......... .24% .24% .24%
--- ---- ----
Total Fund Operating
Expenses............. .89% 1.64% 1.64%
=== ==== ====
</TABLE>
5
<PAGE>
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual return
and (2) redemption at the end of the time period. THIS EXAMPLE IS NOT A
REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR OPERATING EXPENSES; ACTUAL
OPERATING PERFORMANCE OR EXPENSES MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
CLASS A SHARES
------------------------------------------------------
U.S.
TAX-FREE TREASURY
CASH INVESTMENT MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
--------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1 Year.................. $ 8 $ 9 $ 8 $ 8
3 Years................. $26 $ 28 $25 $25
5 Years................. $44 $ 49 $43 $44
10 Years................. $99 $110 $97 $98
</TABLE>
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in Class B Shares, assuming (1) a
hypothetical 5% annual return, (2) redemption at the end of the following time
period and (3) no redemption at the end of the following time periods:
<TABLE>
<CAPTION>
MONEY MARKET FUND
CLASS B SHARES
- ----------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS*
- ---------------------- --------------------- --------------------- ---------------------
NO NO NO NO
REDEMPTION REDEMPTION REDEMPTION REDEMPTION REDEMPTION REDEMPTION REDEMPTION REDEMPTION
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$67 $17 $82 $52 $109 $89 $204 $194
</TABLE>
- --------
* Reflects conversion of Class B Shares to Class A Shares (which pay lower
ongoing expenses) approximately six years after date of original purchase.
The following example shows the amount of expenses you would pay (directly
or indirectly) on a $1,000 investment in Class C Shares, assuming (1) a
hypothetical 5% annual return, (2) redemption at the end of the following time
periods and (3) no redemption at the end of one year:
<TABLE>
<CAPTION>
MONEY MARKET FUND
CLASS C SHARES
-----------------------------------------------------------------------------------
1 YEAR
-----------------------------
NO
REDEMPTION REDEMPTION 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ------- ------- --------
<S> <C> <C> <C> <C>
$27 $17 $52 $89 $194
</TABLE>
6
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
7
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors, except that, for the periods ended prior to June 30,
1995 for the Money Market Fund, such financial highlights were audited by
another independent auditor. This information should be read in conjunction
with the Funds' most recent Annual Reports, which are incorporated by
reference into the SAI. You may obtain the Annual Reports without charge by
calling (800) 438-5789.
<TABLE>
<CAPTION>
CASH INVESTMENT FUND(A)
------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
------- -------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- ------- ------- ------- -------
Income from investment
operations:
Net investment income.. 0.047 0.049 0.018 0.039 0.026 0.007
------- -------- ------- ------- ------- -------
Total from investment
operations............ 0.047 0.049 0.018 0.039 0.026 0.007
------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income
income................ (0.047) (0.049) (0.018) (0.039) (0.026) (0.007)
------- -------- ------- ------- ------- -------
Total distributions.... (0.047) (0.049) (0.018) (0.039) (0.026) (0.007)
------- -------- ------- ------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======== ======= ======= ======= =======
Total return (b)....... 4.80% 5.02% 1.78% 3.97% 2.68% 0.69%
======= ======== ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $96,192 $116,622 $52,530 $40,239 $32,913 $ 2,296
Ratio of operating
expenses to average
net assets............ 0.80% 0.78% 0.77%(c) 0.80% 0.59% 0.53%(c)
Ratio of net investment
income to average net
assets................ 4.71% 4.88% 5.39%(c) 4.02% 2.68% 2.79%(c)
Ratio of operating
expenses to average
net assets without
waivers............... 0.80% 0.78% 0.79%(c) 0.83% 0.64% 0.58%(c)
</TABLE>
- --------
(a) The Munder Cash Investment Fund Class A Shares commenced operations on
December 1, 1992. The Munder Money Market Fund Class A Shares, Class B
Shares and Class C Shares commenced operations on July 3, 1995, February
16, 1994 and October 17, 1996, respectively.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end for
Cash Investment Fund was the last day of February and the fiscal year end
for Money Market Fund was December 31.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Cash Investment Fund as a
result of the consolidation of the investment advisory businesses of
Woodbridge Capital Management, Inc. and Munder Capital Management, Inc.
(f) On February 1, 1995 Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Money Market Fund as a
result of the consolidation of the investment advisory businesses of
Woodbridge Capital Management, Inc. and Munder Capital Management, Inc.
8
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND (A)
- -----------------------------------------------------------------------------------
YEAR PERIOD YEAR YEAR PERIOD PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/97 6/30/96 6/30/95(D, F) 12/31/94 6/30/97
CLASS A CLASS A CLASS B CLASS B CLASS B CLASS B CLASS C
------- ------- ------- ------- ------------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------- ------- ------- ------- ------- ------- -------
0.046 0.048 0.039 0.041 0.020 0.030 0.027
- ---------------- ------- ------- ------- ------- ------- -------
0.046 0.048 0.039 0.041 0.020 0.030 0.027
- ---------------- ------- ------- ------- ------- ------- -------
(0.046) (0.048) (0.039) (0.041) (0.020) (0.030) (0.027)
- ---------------- ------- ------- ------- ------- ------- -------
(0.046) (0.048) (0.039) (0.041) (0.020) (0.030) (0.027)
- ---------------- ------- ------- ------- ------- ------- -------
$1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
================ ======= ======= ======= ======= ======= =======
4.72% 4.83% 3.92% 4.13% 1.99% 2.97% 2.75%
================ ======= ======= ======= ======= ======= =======
$ 3,655 $ 23 $ 451 $ 124 $ 371 $ 501 $ 1,755
0.89% 0.87%(c) 1.64% 1.62% 1.60%(c) 1.60%(c) 1.64%(c)
4.61% 4.84%(c) 3.86% 4.09% 4.46%(c) 3.36%(c) 3.86%(c)
0.89% 0.87%(c) 1.64% 1.62% 1.66%(c) 3.34%(c) 1.64%(c)
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET FUND(A)
----------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
------- ------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------- ------ ------ ------ ------
Income from investment
operations:
Net investment income.. 0.028 0.029 0.011 0.023 0.020 0.006
------ ------- ------ ------ ------ ------
Total from investment
operations............ 0.028 0.029 0.011 0.023 0.020 0.006
------ ------- ------ ------ ------ ------
Less distributions:
Dividends from net
investment income..... (0.028) (0.029) (0.011) (0.023) (0.020) (0.006)
------ ------- ------ ------ ------ ------
Total distributions.... (0.028) (0.029) (0.011) (0.023) (0.020) (0.006)
------ ------- ------ ------ ------ ------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ====== ====== ====== ======
Total return (b)....... 2.78% 2.89% 1.09% 2.33% 1.99% 0.60%
====== ======= ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $5,205 $10,582 $8,530 $4,539 $4,525 $ 761
Ratio of operating
expenses to average
net assets............ 0.78% 0.78% 0.79%(c) 0.80% 0.58% 0.52%(c)
Ratio of net investment
income to average net
assets................ 2.76% 2.89% 3.26%(c) 2.29% 1.95% 2.06%(c)
Ratio of operating
expenses to average
net assets without
waivers............... 0.78% 0.80% 0.84%(c) 0.85% 0.63% 0.57%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Money Market Fund Class A Shares commenced operations
on November 29, 1992. The Munder U.S. Treasury Money Market Fund Class A
Shares commenced operations on November 24, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
10
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND(A)
--------------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
------- ------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
$1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ ------ ------
0.046 0.047 0.017 0.037 0.025 0.007
------- ------ ------ ------ ------ ------
0.046 0.047 0.017 0.037 0.025 0.007
------- ------ ------ ------ ------ ------
(0.046) (0.047) (0.017) (0.037) (0.025) (0.007)
------- ------ ------ ------ ------ ------
(0.046) (0.047) (0.017) (0.037) (0.025) (0.007)
------- ------ ------ ------ ------ ------
$1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ====== ====== ====== ====== ======
4.66% 4.77% 1.72% 3.72% 2.57% 0.74%
======= ====== ====== ====== ====== ======
$5,319 $1,620 $1,117 $3,815 $ 725 $ 43
0.79% 0.79% 0.80%(c) 0.80% 0.61% 0.53%(c)
4.54% 4.64% 5.13%(c) 3.63% 2.53% 2.61%(c)
0.79% 0.81% 0.85%(c) 0.85% 0.66% 0.58%(c)
</TABLE>
11
<PAGE>
FUND CHOICES
WHAT FUNDS ARE OFFERED?
This Prospectus describes Class A Shares of the Cash Investment Fund, U.S.
Treasury Money Market Fund and Tax-Free Money Market Fund and Class A, B and C
Shares of the Money Market Fund. This section summarizes each Fund's goal and
principal investments. The sections entitled "What are the Funds' Investments
and Investment Practices?" and "What are the Risks of Investing in the Funds?"
and the SAI give more information about the Funds' investment techniques and
risks.
CASH INVESTMENT FUND
. The Fund's primary goal is to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of
principal.
. The Fund invests in a broad range of short-term, high quality, U.S.
dollar-denominated instruments.
U.S. TREASURY MONEY MARKET FUND
. The Fund's goal is to provide as high a level of current interest income
as is consistent with maintaining liquidity and stability of principal.
. The Fund invests its assets solely in short-term bonds, bills and notes
issued by the U.S. Treasury (including "stripped" securities), and in
repurchase agreements relating to such obligations.
TAX-FREE MONEY MARKET FUND
. The Fund's goal is to provide as high a level of current interest income
exempt from Federal income taxes as is consistent with maintaining
liquidity and stability of principal.
. The Fund invests substantially all of its assets in short-term, U.S.
dollar-denominated Municipal Obligations, the interest on which is exempt
from regular Federal income tax. "Municipal Obligations" are obligations
of states, territories and possessions of the United States and the
District of Columbia, and their political subdivisions, agencies,
instrumentalities and authorities, the interest on which is exempt from
regular Federal income tax.
. Under normal market conditions, the Fund will invest at least 80% of its
net assets in Municipal Obligations.
MONEY MARKET FUND
. The Fund's goal is to provide current income consistent with the
preservation of capital and liquidity.
. The Fund invests its assets in a broad range of short-term, high quality,
U.S. dollar-denominated instruments, such as bank, commercial and other
obligations (including Federal, state and local government obligations)
that are available in the money markets.
WHO MAY WANT TO INVEST IN THE FUNDS?
The Funds are designed for investors who desire a high level of income and
liquidity, and stability of principal. The Munder Money Market Fund is also
designed to be acquired by the exchange of shares of other Munder Funds for
investors who: (1) own other Munder Funds; (2) wish to be out of the market
temporarily; and (3) do not desire to incur redemption fees or sales charges.
The Funds invest their assets conservatively and as a result, they will not
earn as high a level of current income as funds that invest in longer-term or
lower quality debt securities or equity securities. Investors who are more
aggressive in their investment approach or who desire a higher rate of return
may wish to invest in other funds offered by the Trust, the Company and
Framlington.
12
<PAGE>
WHAT ARE THE FUNDS' INVESTMENTS AND INVESTMENT PRACTICES?
Each Fund will invest primarily in ELIGIBLE SECURITIES (as defined by the
SEC) with remaining maturities of 397 days or less as defined by the SEC
(although securities subject to repurchase agreements, variable and floating
rate securities and certain other securities may bear longer maturities), and
the dollar-weighted average portfolio maturity of each Fund will not exceed 90
days. Eligible Securities consist of securities that are determined by the
Advisor, under guidelines established by the Boards of Trustees and Directors,
to present minimal credit risk. Each Fund may also hold uninvested cash
pending investment of late payments for purchase orders or during temporary
defensive periods.
Each Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
Each of the Funds may LEND SECURITIES to broker-dealers and other
financially sound institutional investors who will pay the Funds for the use
of the securities, thus increasing the Funds' returns. The borrower must set
aside cash or liquid securities equal to the value of the securities borrowed
at all times during the term of the loan. Loans may not exceed 25% of each
Fund's (except the Money Market Funds) total assets and 33 1/3% of the Money
Market Funds total assets. Risks involved in such transactions include
possible delay in recovering the loaned securities and possible loss of the
securities or the collateral if the borrower declares bankruptcy.
Investment Chart
The following chart summarizes the Funds' investments and investment
practices. The SAI contains more details. All percentages are based on a
Fund's total assets except where otherwise noted. See "What are the Risks of
Investing in the Funds?" for a description of the risks involved with the
Funds' investment practices.
13
<PAGE>
<TABLE>
<CAPTION>
U.S.
TAX-FREE TREASURY
INVESTMENTS AND CASH MONEY MONEY MONEY
INVESTMENT PRACTICES INVESTMENT MARKET MARKET MARKET
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL REVENUE OBLIGATIONS. N N May be N
Obligations the interest on which is more than
paid solely from the revenues of 25%
similar projects.
- ------------------------------------------------------------------------------
CORPORATE OBLIGATIONS:
. Commercial paper (including paper Y Y N N
of Canadian companies, Canadian
branches of U.S. companies, and
Europaper)
. Corporate bonds Y Y N N
. Other short-term obligations Y Y N N
. Variable Master Demand Notes Y Y N N
. Bond Debentures Y Y N N
. Notes Y Y N N
- ------------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Includes Y Y N N
debt securities backed by mortgages,
installment sales contracts and
credit card receivables.
- ------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS:
. Issued or guaranteed by U.S. Y Y N Y
Government
. Issued or guaranteed by U.S. Y Y N N
Government agencies and
instrumentalities
- ------------------------------------------------------------------------------
BANK OBLIGATIONS. U.S. dollar- Y Y N N
denominated only; includes
certificates of deposit, bankers'
acceptances, bank notes, deposit
notes and interest-bearing savings
and time deposits, issued by U.S. or
foreign banks or savings
institutions with total assets
greater than $1 billion.
- ------------------------------------------------------------------------------
STRIPPED SECURITIES:
. Participation in trusts that hold Y Y Y N
U.S. Treasury and agency
securities
. U.S. Treasury-issued receipts Y Y Y 35%
. Non-U.S. Treasury receipts Y Y Y N
- ------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS. Payable from 5% 5% 25% in any N
the issuer's general revenue, the one state
revenue of a specific project,
current revenues or a reserve fund.
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. A Fund agrees Y Y N Y
to purchase securities from a seller
and the seller agrees to repurchase
the securities at a later time at a
set price (maturities < 397 days).
- ------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Fund Y Y N N
sells securities and agrees to buy
them back later at an agreed upon
time and price. A method to borrow
money for temporary purposes.
- ------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. Y Y N N
Agreements of
a Fund to make payments to an
insurance company's general account
in exchange for a minimum level of
interest based on an index.
</TABLE>
- --------------------------------------------------------------------------------
14
<PAGE>
<TABLE>
<CAPTION>
U.S.
INVESTMENTS AND CASH MONEY TAX-FREE TREASURY
INVESTMENT PRACTICES INVESTMENT MARKET MONEY MONEY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MONEY MARKET FUNDS. Securities Y Y Y Y
issued by other investment (1940 Act (1940 Act (1940 Act (1940 Act
companies which invest in short- limits) limits) limits) limits)
term
debt securities and seek to
maintain $1.00 net asset
value per share used only to
manage daily cash portions.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND FORWARD Y Y Y Y
COMMITMENTS. Agreement by a Fund
to purchase securities at a set
price, with payment and delivery
in the future. The value of the
securities may change between the
time the price is set and payment.
Not
to be used for speculation.
- -------------------------------------------------------------------------------
FOREIGN SECURITIES. Debt 25% 25% N N
obligations issued by foreign
governments, and their agencies,
instrumentalities or political
subdivisions, supranational
organizations, and foreign
corporations or convertible into
foreign stock. Does not include
Bank Obligations.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically 10%(1) 10%(1) 10%(1) 10%(1)
there is no ready market for these
securities, which limits the
ability to sell them for full
market value, or there are legal
restrictions on their resale by a
Fund.
</TABLE>
Key:
Y = investment allowed without restriction
N = investment not allowed
(1) Based on net assets
WHAT ARE THE RISKS OF INVESTING IN THE FUNDS?
Each Fund attempts to maintain a constant net asset value of $1.00 per
share. However, your investment in the Funds is not guaranteed. By itself, no
Fund constitutes a balanced investment program and there is no guarantee that
any Fund will achieve its investment objective since there is uncertainty in
every investment.
A Fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. Because the Funds invest mostly in debt
instruments, rises and falls in interest rate levels in general, as well as in
the value of the instruments in the Funds' portfolios, can affect the Funds'
performance.
The Cash Investment Fund and Money Market Fund may invest in securities of
foreign issuers. Foreign securities are generally considered to be riskier
than securities issued by U.S. companies due to factors such as freezes on
convertibility of currency, the rise and fall of foreign currency exchange
rates, political instability and differences in accounting and reporting
standards.
Although the Cash Investment Fund, Money Market Fund and U.S. Treasury Money
Market Fund expect under normal market conditions to be as fully invested as
possible, each Fund may hold uninvested cash pending investment of late
payments for purchase orders (or other payments) or during temporary defensive
periods. Uninvested cash will not earn income. In general, investments in the
Cash Investment Fund, Money Market Fund and U.S. Treasury Money Market Fund
will not earn as high a level of current income as longer-term or lower
quality securities. Longer-term and lower quality securities, however,
generally have less liquidity, greater market risk and more fluctuation in
market value.
Although the Tax-Free Money Market Fund may invest more than 25% of its net
assets in municipal revenue obligations, the interest on which is paid solely
from revenues of similar projects, the Tax-Free Money Market
15
<PAGE>
Fund does not intend to do so on a regular basis. If it does, the Fund will be
riskier than a fund which does not concentrate to such an extent on similar
projects.
The risks of the various investment techniques the Funds use are described
in more detail in the SAI.
PERFORMANCE
HOW IS THE FUNDS' PERFORMANCE CALCULATED?
The current yield of shares in the Funds refers to the net income generated
by an investment in shares over a seven-day period (which period will be
stated in the advertisement). This income is then "annualized." That is, the
amount of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. "Effective yield" is calculated similarly but, when annualized,
the income earned by an investment in a class is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment. The "tax-equivalent yield" of
shares of the Tax-Free Money Market Fund may also be quoted from time to time,
which shows the level of taxable yield needed to produce an after-tax
equivalent to the tax-free yield of a particular class. This is done by
increasing the yield (calculated as above) by the amount necessary to reflect
the payment of Federal and/or state income taxes at a stated rate.
Each Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. The Funds may report how they are
performing in comparison to the Consumer Price Index, an indication of
inflation reported by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Funds' annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
PURCHASES AND EXCHANGES OF SHARES
WHAT PRICE DO I PAY FOR SHARES?
Class A Shares are sold at the Fund's net asset value next determined after
a purchase order and payment are received. If the Transfer Agent receives your
purchase order and payment by 2:45 p.m. (Eastern time) on a day the New York
Stock Exchange ("NYSE") is open for trading (a "Business Day"), you will
receive dividends on that day. You should be aware that broker-dealers (other
than the Funds' Distributor) may charge investors additional fees if shares
are purchased through them.
Except in certain limited circumstances, each Fund determines its net asset
value ("NAV") at 2:45 p.m. and as of the close of regular trading hours on the
NYSE (currently 4:00 p.m. New York time) (Eastern time) on each Business Day.
Each Fund calculates NAV separately for each class of shares. NAV is
calculated by totaling the value of all of the assets of a Fund allocated to a
particular class of shares, subtracting the Fund's liabilities and expenses
charged to that class and dividing the result by the number of shares of that
class outstanding. In seeking to maintain a stable net asset value of $1.00
per share with respect to each of the Funds, portfolio securities are valued
according to the amortized cost method. Under this method, securities are
valued initially at cost on the date of purchase. Thereafter, absent unusual
circumstances, a Fund assumes a constant proportionate amortization of any
premium or accretion of any discount until maturity of the security.
16
<PAGE>
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment for Class A Shares of a Trust Fund is $500
and subsequent investments must be at least $50.
HOW CAN I PURCHASE SHARES?
You can purchase Class A Shares in a number of different ways. You may place
orders for Class A Shares directly through the Transfer Agent or the
Distributor or through arrangements with your authorized broker. Class A,
Class B and Class C Shares of the Money Market Fund may be acquired only
through an exchange of shares from the corresponding class of another Fund of
the Company, the Trust or Framlington.
. BY BROKER. Any broker authorized by the Distributor can sell you Class A
Shares of the Funds. Please note that brokers may charge you fees for
their services.
. BY MAIL. You may open an account by completing, signing and mailing the
attached Account Application Form and a check or other negotiable bank
draft (payable to the Munder Funds) for $1,000 or more to: THE MUNDER
FUNDS, C/O FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130,
WESTBOROUGH, MASSACHUSETTS 01581-5130. For additional investments send a
letter stating the Fund and share class you wish to purchase, your name
and your account number with a check for $50 or more to the address
listed above.
. BY WIRE. To open a new account, you should call the Funds at (800) 438-
5789 to obtain an account number and complete wire instructions prior to
wiring any funds. Within seven days of purchase, you must send a
completed Account Application Form containing your certified taxpayer
identification number to the Transfer Agent at the address provided
above. Wire instructions must state the Fund name, share class, your
registered name and your account number. Your bank wire should be sent
through the Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire
procedures described above. Note that banks may charge fees for
transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP, you may arrange for
periodic investments in a Fund through automatic deductions from a
checking or savings account. To enroll in the AIP you should complete the
AIP Application Form or call the Funds at (800) 438-5789. The minimum
pre-authorized investment amount is $50. You may discontinue the AIP at
any time. We may discontinue the AIP on 30 days' written notice to you.
The Transfer Agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you. You will not be
issued a share certificate, unless you request one in writing. We reserve the
right to (i) reject any purchase order if, in our opinion, it is in the Funds'
best interest to do so and (ii) suspend the offering of shares for any period
of time.
See the SAI for further information regarding purchases of the Funds'
shares.
17
<PAGE>
HOW CAN I EXCHANGE SHARES?
You may exchange Class A Shares of the Funds for Class A Shares of other
funds of the Company, the Trust or Framlington based on their relative net
asset values and you may exchange Class B and C Shares of the Money Market
Fund for the corresponding class of shares of the other funds of the Company,
the Trust or Munder Framlington. Class A Shares of the Funds that were (1)
acquired through exchange and (2) can be traced back to a purchase of shares
in one or more funds of the Company, the Trust or Framlington for which a
sales charge was paid, can be exchanged for Class A Shares of a fund of the
Company, the Trust or Framlington. Class B and Class C Shares of the Money
Market Fund will continue to age from the date of the original purchase and
will retain the same CDSC rate as they had before the exchange.
You must meet the minimum purchase requirements for the fund of the Company,
the Trust or Framlington that you purchase by exchange. If you are exchanging
into shares of a fund with a higher sales charge, you must pay the difference
at the time of exchange. Please note that a share exchange is a taxable event
and accordingly, you may realize a taxable gain or loss. Before making an
exchange request, read the Prospectus of the fund you wish to purchase by
exchange. You can obtain a Prospectus for any fund of the Company, the Trust
or Framlington by contacting your broker or the Funds at (800) 438-5789.
Brokers may charge a fee for handling exchanges.
. EXCHANGES BY TELEPHONE. You may give exchange instructions by telephone
to the Funds at (800) 438-5789. You may not exchange shares by telephone
if you hold share certificates. We reserve the right to reject any
telephone exchange request and to place restrictions on telephone
exchanges.
. EXCHANGES BY MAIL. You may send exchange orders to your broker or us at
The Munder Funds, c/o First Data Investor Services Group, P.O. Box 5130,
Westborough, Massachusetts 01581-5130.
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order. If we receive your redemption request
by 2:45 p.m. (Eastern time), you will not receive dividends for that day. The
amount you receive will be reduced by the amount of any applicable CDSC. See
"Purchases of Shares--What Price Do I Pay for Shares?" for an explanation of
how the net asset value next determined is calculated.
CONTINGENT DEFERRED SALES CHARGES. You pay a CDSC when you redeem:
. Class A Shares of the Money Market Fund within one year
. Class A Shares of the Money Market Fund acquired through the exchange of
Class A Shares of other funds purchased before June 27, 1995 as part of
an investment of $500,000 or more
. Class B Shares of the Money Market Fund within six years
. Class C Shares of the Money Market Fund within one year
These time periods include the time you held the shares you exchanged to
acquire Money Market Fund shares.
18
<PAGE>
You pay a 1% CDSC when you redeem Class A Shares of the Money Market Fund:
. that you acquired through the exchange of initial Class A Shares of other
funds of the Company, the Trust or Framlington
. if you acquired the initial Class A Shares after June 27, 1995, and
. if the initial shares were purchased without a sales charge in connection
with an investment of $1,000,000 or more.
You pay a CDSC of 1% when you redeem Class C Shares of the Money Market Fund
within one year of the date you purchased the initial Class C Shares that you
exchanged to acquire Money Market Fund Shares.
The CDSC schedule for Class B Shares of the Money Market Fund purchased
after June 27, 1995 is set forth below. See the SAI for the CDSC schedule for
Class B Shares purchased before that time. The CDSC is based on the original
purchase price of your investment or the net asset value at the time of
redemption, whichever is lower.
MONEY MARKET FUND CLASS B SHARES
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
-------------------- -----
<S> <C>
First............................................................... 5.00%
Second.............................................................. 4.00%
Third............................................................... 3.00%
Fourth.............................................................. 3.00%
Fifth............................................................... 2.00%
Sixth............................................................... 1.00%
Seventh and thereafter.............................................. 0.00%
</TABLE>
Redeemed shares will not pay a CDSC to the extent that the value of such
shares represents:
. reinvestment of dividends or capital gains distributions
. capital appreciation of shares redeemed
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions, then
any appreciation on shares redeemed, and then remaining shares held by you for
the longest period of time.
CDSC WAIVERS. We will waive the CDSC payable upon redemptions of Class B
Shares of the Money Market Fund which you purchased after June 27, 1995 for
. redemptions made within one year after the death of a shareholder or
registered joint owner
. minimum required distributions made from an IRA or other retirement plan
account after you reach
age 70 1/2
. involuntary redemptions made by the Fund
Consult the SAI for Class A Share CDSC waivers and Class B Share CDSC
waivers which apply when you redeem shares of the Money Market Fund purchased
on or before June 27, 1995.
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by the Transfer Agent. A Fund may temporarily stop
redeeming shares when the NYSE is closed or trading on the NYSE is restricted,
when an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets or if the SEC orders the Fund to suspend
redemptions.
19
<PAGE>
HOW CAN I REDEEM SHARES?
You may redeem shares of the Funds in several ways:
. BY MAIL. You may mail your redemption request to: THE MUNDER FUNDS, C/O
FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH,
MASSACHUSETTS 01581-5130. The redemption request should state the name of
the Fund, share class, account number, amount of redemption, account name
and where to send the proceeds. All account owners must sign. If a stock
certificate has been issued to you, you must endorse the stock
certificate and return it together with the written redemption request.
A SIGNATURE GUARANTEE is required for the following redemption requests:
(a) redemptions proceeds greater than $50,000; (b) redemption proceeds not
being made payable to the owner of the account; (c) redemption proceeds
not being mailed to the address of record on the account or (d) if the
redemption proceeds are being transferred to another Munder funds account
with a different registration. You can obtain a signature guarantee from a
financial institution such as a commercial bank, trust company, savings
association or from a securities firm having membership on a recognized
securities exchange.
. BY TELEPHONE. You can redeem your shares by calling your broker or the
Funds at (800) 438-5789. There is no minimum requirement for telephone
redemptions paid by check. The Transfer Agent may deduct a wire fee
(currently $7.50) for wire redemptions under $5,000.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your Account Application Form, simply call the
Fund prior to 4:00 p.m. (Eastern time), and request the funds be mailed
to the commercial bank or registered broker-dealer you designated on your
Account Application Form. We will send your redemption amount to you on
the next Business Day. We reserve the right at any time to change or
impose fees for this expedited redemption procedure.
We record all telephone calls for your protection and take measures to
identify the caller. If the Transfer Agent properly acts on telephone
instructions and follows the reasonable procedures to ensure against
unauthorized transactions, neither the Trust, the Company, the
Distributor nor the Transfer Agent will be responsible for any losses. If
these procedures are not followed, the Transfer Agent may be liable to
you for losses resulting from unauthorized instructions.
During periods of unusual economic or market activity, you may experience
difficulties or delays in effecting telephone redemptions. In such cases,
you should consider placing your redemption request by mail.
. AUTOMATIC WITHDRAWAL PLAN ("AWP"). If you have an account value of $2,500
or more in a Fund, you may redeem shares on a monthly, quarterly, semi-
annual or annual basis. The minimum withdrawal is $50. We usually process
withdrawals on the 20th day of the month and promptly send you your
redemption amount. You may enroll in the AWP by completing the AWP
Application Form available through the Transfer Agent. To participate in
the AWP you must have your dividends automatically reinvested and may not
hold share certificates. You may change or cancel the AWP at any time
upon notice to the Transfer Agent. You must pay any applicable CDSCs when
you redeem shares.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
. FREE CHECKWRITING. Free checkwriting is available to holders of Class A
Shares of the Money Market Funds who complete the Signature Card Section
of the Account Application Form. You may write checks in the amount of
$500 or more and you may not close a Fund account by writing a check. We
may change or terminate this program on 30 days' notice to you.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
We will typically send redemption amounts to you within seven business days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
20
<PAGE>
STRUCTURE AND MANAGEMENT OF THE FUNDS
HOW ARE THE FUNDS STRUCTURED?
The Company and the Trust are each an open-end management investment
company, which is a mutual fund that sells and redeems shares every day that
it is open for business. They are managed under the direction of their
governing Boards of Trustees and Directors, which are responsible for the
overall management of the Company and the Trust and supervise the Funds'
service providers.
WHO MANAGES AND SERVICES THE FUNDS?
INVESTMENT ADVISOR. The Funds' investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for each Fund, provides
research and credit analysis, and is responsible for all purchases and sales
of portfolio securities.
During the fiscal year ended June 30, 1997, the Advisor was paid an advisory
fee at an annual rate based on the average daily net assets of each Fund as
follows:
<TABLE>
<CAPTION>
TAX-FREE U.S. TREASURY
CASH INVESTMENT MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
--------------- ------------ ------------- ------------
<S> <C> <C> <C>
.35% .35% .35% .40%
</TABLE>
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Funds and/or their
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor makes such payments out of its own
resources and there are no additional costs to the Funds or their
shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Funds based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Funds'
transfer agent. The Transfer Agent is a wholly-owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Funds' administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Company, the Trust and Framlington in all aspects of their administration
and operations including the maintenance of financial records and fund
accounting. As compensation for its services, State Street is entitled to
receive fees, based on the aggregate daily net assets of the Funds and certain
other investment portfolios that are advised by the Advisor for which it
provides services, computed daily and payable monthly at the annual rate of
.051% of the first $7.5 billion of net assets, plus .045% of the first $2.5
billion, plus .03% of the first $2.5 billion, plus .02% of net assets over
$12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Funds. State Street pays the Distributor a fee
for these services out of its own resources at no cost to the Funds.
21
<PAGE>
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Funds. No compensation is paid to the Custodian for
its services. State Street also serves as Sub-Custodian to the Funds. As
compensation for its services, the Sub-Custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Funds and certain other
investment portfolios that are advised by the Advisor for which the Sub-
Custodian provides services, computed daily and payable monthly at an annual
rate of .01% of average daily net assets. The Sub-Custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Funds' shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Funds' shares.
For an additional description of the services performed by the
Administrator, the Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
DISTRIBUTION SERVICES ARRANGEMENT
Under Rule 12b-1 of the 1940 Act, the Funds have adopted Service Plans with
respect to their Class A Shares and the Money Market Fund has adopted Service
and Distribution Plans with respect to its Class B and Class C Shares. Under
the Plans, each Fund uses its assets to finance activities relating to the
provision of certain shareholder services. The Distributor is paid a service
fee at an annual rate of up to 0.25% of the value of average daily net assets
of the Funds' Class A Shares. The Distributor also is paid a distribution fee
at an annual rate of up to 0.75% of the value of the average daily net assets
of the Money Market Fund's Class B and Class C Shares. The Distributor uses
the service fees primarily to pay ongoing trail commissions to securities
dealers (which may include the Distributor itself) and other financial
organizations which provide shareholder services for the Funds and the
distribution fees to finance activities relating to the distribution of Money
Market Fund's Shares. These services include, among other things, processing
new shareholder account applications, reporting to the Fund's Transfer Agent
all transactions by customers and serving as the primary information source to
customers concerning the Funds.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Company or the Trust as a whole and affecting your particular Fund. You
will not vote by Class unless expressly required by law or when the Trustees
or Directors determine the matter to be voted on affects only the interests of
the holders of a particular class of shares. The Company and the Trust will
not hold annual shareholder meetings, but special meetings may be held at the
written request of shareholders owning more than 10% of outstanding shares for
the purpose of removing a Trustee or Director. Under Massachusetts law, it is
possible that a shareholder may be personally liable for the Trust's
obligations. If a shareholder were required to pay a debt of a Fund, however,
the Trust is committed to reimburse the shareholder in full from its assets.
The SAI contains more information regarding voting rights.
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Funds as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Company and
Munder.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUNDS?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on a Fund's investments. The Funds pass their earnings along to
investors in the form of dividends. Dividend distributions
22
<PAGE>
are the dividends or interest earned on investments after expenses. The net
income of the Funds is declared daily and paid monthly. Each Fund's net
realized capital gains (including net short-term capital gains), if any, are
distributed at least annually.
HOW WILL DISTRIBUTIONS BE MADE?
We will pay dividend and capital gains distributions in additional shares of
the same class of a Fund. If you wish to receive distributions in cash, either
indicate this request on your Account Application Form or notify the Fund at
(800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUNDS?
In general, as long as the Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains, if any, that it
distributes in a timely manner to its shareholders. Each Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, the Fund may still
be liable for an excise tax on income that is not distributed in accordance
with a calendar year requirement; the Funds intend to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains, if any, derived from sales of portfolio securities held by a
Fund will generally be designated as long-term or short-term. Recent tax law
changes have added a new category of mid-term capital gain; it is expected
that regulations will be issued regarding the proper tax treatment of mid-term
and other gains by shareholders of RICs. Distributions from a Fund's long-term
capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from each Fund in which
you are a shareholder a statement of the amount and nature of the
distributions made to you during the year.
More information about the tax treatment of distributions from the Funds and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Funds, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and audited Annual Reports on a regular basis from the Funds. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings, the Funds will only send one copy of
the above communications to (1) accounts with the same primary record owner,
(2) joint tenant accounts, (3) tenant in common accounts and (4) accounts
which have the same address.
23
<PAGE>
PROMMAB97 / FO418 / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
Application [LOGO OF MUNDER FUNDS]
for new accounts
Please mail your complete application (printed or typed)
along with your check to:
The Munder Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 5130
Westborough, MA 01581-5130
If you have questions regarding this application, please telephone the Transfer
Agent at 1.800.438.5789
<TABLE>
<CAPTION>
1. ACCOUNT REGISTRATION
<S> <C>
- ---------------------------------------------------------------------------------------------------
Name Social Security Number
- ---------------------------------------------------------------------------------------------------
Joint Owner (if any) (If Joint Tenancy, use Social Security Number of first joint owner)
OR
Uniform Transfer to Minor:
for:
- ---------------------------------------------------------------------------------------------------
Custodian Name (one custodian only) Minor's Name (one minor only)
- ---------------------------------------------------------------------------------------------------
State (Custodian's State of Residence) Minor's Social Security Number
OR
[_] Trust [_] Corporation [_] Other (please specify)________________________________
- ---------------------------------------------------------------------------------------------------
Trust/Corporation Name
- ---------------------------------------------------------------------------------------------------
Trust Date Trust Identification Number
2. MAILING ADDRESS (address for reports, dividends, statements and redemption proceeds)
- ---------------------------------------------------------------------------------------------------
Street Apt.
- ---------------------------------------------------------------------------------------------------
City State Zip Code Telephone Number
Non-Resident Alien: [_] Yes [_] No If Yes, Country of Residence______________________
</TABLE>
<PAGE>
3. INITIAL INVESTMENT
With as little as $500* you can invest in any Munder Fund. Please be sure to
read the prospectus carefully before investing or sending money. You may
request an additional prospectus by calling 1.800.438.5789.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NAME OF FUND CLASS A CLASS B CLASS C INVESTMENT AMOUNT
[_] Munder Accelerating Growth Fund [_] [_] [_] $_________________
[_] Munder All-Season Aggressive Fund [_] [_] [_] $_________________
[_] Munder All-Season Moderate Fund [_] [_] [_] $_________________
[_] Munder All-Season Conservative Fund [_] [_] [_] $_________________
[_] Munder Balanced Fund [_] [_] [_] $_________________
[_] Munder Growth & Income Fund [_] [_] [_] $_________________
[_] Munder Index 500 Fund [_] [_] [_] $_________________
[_] Munder International Equity Fund [_] [_] [_] $_________________
[_] Munder Micro-Cap Equity Fund [_] [_] [_] $_________________
[_] Munder Mid-Cap Growth Fund [_] [_] [_] $_________________
[_] Munder Multi-Season Growth Fund [_] [_] [_] $_________________
[_] Munder Real Estate Equity Investment Fund [_] [_] [_] $_________________
[_] Munder Small-Cap Value Fund [_] [_] [_] $_________________
[_] Munder Small Company Growth Fund [_] [_] [_] $_________________
[_] Munder Value Fund [_] [_] [_] $_________________
[_] Munder Framlington Emerging Markets Fund [_] [_] [_] $_________________
[_] Munder Framlington Healthcare Fund [_] [_] [_] $_________________
[_] Munder Framlington International Growth Fund [_] [_] [_] $_________________
[_] Munder Bond Fund [_] [_] [_] $_________________
[_] Munder Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder International Bond Fund [_] [_] [_] $_________________
[_] Munder Short Term Treasury Fund [_] [_] [_] $_________________
[_] Munder Michigan Triple Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder U.S. Government Income Fund [_] [_] [_] $_________________
[_] Munder Cash Investment Fund [_] N/A N/A $_________________
[_] Munder Money Market Fund [_] N/A N/A $_________________
[_] Munder Tax-Free Money Market Fund [_] N/A N/A $_________________
[_] Munder U.S. Treasury Money Market Fund [_] N/A N/A $_________________
Total Amount Invested $_________________
[_] By Check (Payable to The Munder Funds)
[_] By Wire. Account Number:______________________(Account number assigned by Bank from which assets were wired.)
*$50 per Fund if the Automatic Investment Plan Option is being established at this time (please complete section 5).
</TABLE>
<PAGE>
4. DISTRIBUTION OPTION (check one. If none, "A" will be assigned)
[_] A. Reinvest dividends and capital gains in additional Fund shares.
[_] B. Pay dividends in cash; reinvest capital gains in additional Fund shares.
[_] C. Pay dividends and capital gains in cash.
[_] D. Please send my: [_] Dividends [_] Dividends & Capital Gains (choose one)
directly to my checking/savings account.
Fill out banking information in Section 10
5. AUTOMATIC INVESTMENT PLAN (optional)
YES, I(we) wish to participate in the Automatic Investment Plan (AIP). I(We)
authorize First Data Investor Services Group, Inc. (First Data), The Munder
Funds' transfer agent, to invest automatically $_________ ($50 minimum) for
me(us) on a [_] Monthly OR [_] Quarterly basis (please choose either the [_] 5th
or the [_] 20th of the month) and draw a bank draft in payment of each of these
investments against my (our) [_] Checking OR [_] Savings account. For the
purpose of verifying my(our) bank account number, I (we) have enclosed a blank
check or deposit slip marked void and have signed the bank authorization below.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Name of Fund Checking/Savings Account Number ABA Number (Bank Routing Number)
</TABLE>
Fill out banking information in Section 10
6. CHECKWRITING PRIVILEGES (optional)
Income & Money Market Class A shares only
If you are opening an account for any of The Munder Income and/or Money Market
Funds (Class A Shares only), you are entitled to the checkwriting option.
Redemption checks may be written for amounts of $500 or more. To obtain checks,
please complete the signature card below. All persons named in the Account
Registration in Section 1 must sign the signature card. For Corporate, Trust or
Partnership accounts, only authorized signers must sign. By signing this
signature card, you agree to be subject to the customary rules and regulations
governing checking accounts, as well as instructions and rules of the Fund now
in effect, and as amended from time to time, that pertain to the use of
redemption checks.
Please fill out the following Signature Card to be eligible for Checkwriting and
indicate the Fund(s) for which you are requesting this service:
- --------------------------------------------------------------------------------
Fund(s)
- --------------------------------------------------------------------------------
Fund(s)
Authorized Signatures (exactly as it appears in Part 1 of the Application):
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
Check here if more than one signature is required per check: [_] 2 [_] 3
Other: _____________________
<PAGE>
7. AUTOMATIC WITHDRAWAL PLAN (optional)
The minimum account balance must be $2,500 or more.
Fill out banking information in Section 10
YES, I authorize the redemption of shares from my Munder Fund account to meet
withdrawal payments on the 20th of each month.
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------
Name Of Fund That Shares Will Be Redeemed From Account Number (if applicable)
- --------------------------------------------------------------------------------------------------------------
Amount of Monthly Payment ($50 minimum per Fund) Start Date (Payment is to begin on the next
payment period unless a later date is indicated)
Payments will be made to: [_] Owner's address of record only OR [_] Other listed below:
______________________________________________________________________ [_] Checking OR [_] Savings Account
Name (if bank indicate account number)
- --------------------------------------------------------------------------------------------------------------
Address
For the purpose of verifying my(our) bank account number, I (we) have enclosed a blank check or deposit slip
marked void and have signed the bank authorization below.
- --------------------------------------------------------------------------------------------------------------
Name of Fund Account Number (if applicable) ABA Number (Bank Routing Number)
</TABLE>
8. REDUCED SALES CHARGE (optional)
[_] Rights Of Accumulation:
Investors may qualify for reduced sales charges by aggregating the total
purchases of all Munder Class A Shares, excluding Money Market Funds, to
determine the applicable sales charge for current purchases. To determine the
aggregated amount of all non-money market funds, you will need to total the
current purchases as well as shares that are already beneficially owned by the
investor for which a sales charge has already been paid. Please see the
prospectus for additional information regarding Rights of Accumulation.
I apply for the Rights of Accumulation reduced sales charges based on the
following accounts in The Munder Funds.
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
[_] Letters Of Intent:
You may qualify for reduced sales charges if you plan to make additional
investments in The Munder Funds within a 13 month period. By indicating a level
of anticipated investment and by signing this application, you agree to the
terms of the Letter of Intent as set forth in the Prospectus, and as follows:
"Although I am not obligated to do so, I intend to invest over a 13 month period
an aggregate amount of at least" (check one):
[_] $25,000 [_] $50,000 [_] $100,000
[_] $250,000 [_] $500,000 [_] $1,000,000
<PAGE>
9. TELEPHONE REDEMPTION & EXCHANGE AGREEMENT
Please check the box if you want this option.
[_] I(We) authorize First Data to act upon instructions received by telephone
from me(us) to redeem or to exchange shares of The Munder Funds.
1. I(We) relieve the Funds or First Data of any liability for the loss,
cost or expense for acting upon such instructions reasonably believed to
be from me(us).
2. I(We) assume responsibility for notifying the Funds within seven (7)
business days if a confirmation for the transaction is not received or
is incorrect.
3. If an exchange involves an initial investment into a Fund, the account
registration will carry the same registration as set forth above.
4. An exchange deemed to be the initial purchase of a Fund must meet the
minimum initial investment requirement of $500 per Fund unless the
shareholder is establishing an Automatic Investment Plan.
5. Redemption proceeds will be sent only to my account address of record.
- --------------------------------------------------------------------------------
Name Name
10. BANKING INFORMATION
To be completed with Section 4 (Distribution Option)
I(We) authorize The Munder Funds to deposit distributions into the following
[_] Checking [_] Savings account:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Bank Name Address
- ------------------------------------------------------------------------------------------
ABA Number (Bank Routing Number) Account Number Bank Account Registration
- ------------------------------------------------------------------------------------------
Wiring Instructions
</TABLE>
To be completed with Section 5 (Automatic Investment Plan)
Please note that your bank will clear and process each bank draft and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for The Munder Funds, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
To be completed with Section 7 (Automatic Withdrawal Plan)
Please note that your bank will clear and process each bank deposit and will
include it with your regular statement. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow the transfer agent for The Munder Funds to act as your Agent
with regard to the Automatic Withdrawal Plan (AWP). The AWP may be modified or
terminated at any time, upon thirty (30) days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
. Please Staple Void Check or Deposit Slip Here .
<PAGE>
11. AUTHORIZATIONS, CERTIFICATIONS AND SIGNATURES
By signing the application, I(we) hereby certify under the penalty of perjury
that the information on this application is true, complete and correct and that:
I(We) understand that this order is subject to acceptance by The Munder Funds.
I(We) agree that The Munder Funds, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Funds are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. An investment in the Funds involves
investment risks, including the possible loss of principal.
I(We) represent that I am (we are) of legal age and capacity and have read the
Prospectus(es) for The Munder Funds selected, and agree to its (their) terms.
First Data, is hereby appointed agent to receive dividends and distributions for
automatic reinvestment unless otherwise directed in Section 4.
I(We) understand and acknowledge that a sales charge may be levied against the
dollars that I(we) invest in The Munder Funds. (See the Prospectus(es) for
reduced sales charge information.)
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
below. Failure by non-exempt taxpayers to furnish us with the correct Taxpayer
Identification Number will result in withholding of 31% of all taxable dividends
paid and/or withholding on certain other payments (this is referred to as backup
withholding).
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
Taxpayer Identification Number Name of Taxpayer Whose Number Appears Above
</TABLE>
Taxpayer Identification:
I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me
by The Munder Funds, and
(2) I (the Investor) am not subject to backup withholding because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal Revenue Service ("IRS") that I
am, as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distributions and gross
redemption proceeds under the Federal income tax law.
[_] Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been
terminated.
Authorization:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
</TABLE>
<PAGE>
================================================================================
FOR DEALER USE ONLY
We hereby authorize First Data Investor Services Group, Inc., to act as our
agent in connection with transactions authorized by this Application and agree
to notify First Data Investor Services Group, Inc., of any purchase made under a
Letter of Intent or Right of Accumulation.
- --------------------------------------------------------------------------------
Dealer's Name Main Office Address
- --------------------------------------------------------------------------------
Representative's Name Branch # Rep #
- --------------------------------------------------------------------------------
Branch Address Telephone #
- --------------------------------------------------------------------------------
Authorized Signature of Dealer Title
================================================================================
<PAGE>
================================================================================
Shares of The Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
================================================================================
Distributor: Funds Distributor, Inc. APPABC - F078
<PAGE>
CLASS A, B & C SHARES
[LOGO OF THE MUNDER FUNDS]
Investments for all seasons
Prospectus
OCTOBER 29, 1997
THE MUNDER INDEX 500 FUND
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS A, CLASS B AND CLASS C SHARES*
The Munder Index 500 Fund (the "Fund") is a mutual fund that seeks to
provide price performance and income that is comparable to the Standard &
Poor's 500 Composite Stock Price Index. The Fund invests primarily in equity
securities. The Fund is a portfolio of The Munder Funds Trust (the "Trust"),
an open-end investment company.
- --------
*Class C Shares of the Fund are not currently available for purchase.
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Fund.
This Prospectus explains the objectives, policies, risks and fees of the
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
the Fund has been filed with the Securities and Exchange Commission (the
"SEC") and is incorporated by reference into this Prospectus. You can obtain
the SAI free of charge by calling the Fund at (800) 438-5789. In addition, the
SEC maintains a Web site (http://www.sec.gov) that contains the SAI and other
information regarding the Fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Fund?............................... 3
Financial Information...................................................... 4
Fund Information
Who may want to invest in the Fund?...................................... 8
What are the Fund's investments and investment practices?................ 8
What are the risks of investing in the Fund?............................. 10
Performance
How is the Fund's performance calculated?................................ 11
Where can I obtain performance data?..................................... 12
Purchases and Exchanges of Shares
What share class should I choose for my investment?...................... 12
What price do I pay for shares?.......................................... 12
When can I purchase shares?.............................................. 15
What is the minimum required investment?................................. 15
How can I purchase shares?............................................... 15
How can I exchange shares?............................................... 16
Redemptions of Shares
What price do I receive for redeemed shares?............................. 16
When can I redeem shares?................................................ 17
How can I redeem shares?................................................. 18
When will I receive redemption amounts?.................................. 18
Structure and Management of the Fund
How is the Fund structured?.............................................. 19
Who manages and services the Fund?....................................... 19
What are my rights as a shareholder?..................................... 20
Dividends, Distributions and Taxes
When will I receive distributions from the Fund?......................... 20
How will distributions be made?.......................................... 21
Are there tax implications of my investments in the Fund?................ 21
Additional Information..................................................... 22
Appendix A................................................................. A-1
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUND?
Q:
What is the Fund's goal?
A: The Fund seeks to provide price performance and income that is comparable
to the Standard & Poor's 500 Composite Stock Price Index ("S&P 500").
Q:
What is the Fund's strategy?
A: The Fund invests primarily in equity securities and it normally will hold
the securities of at least 80% of the issuers in the S&P 500. The Fund is
managed through a "quantitative" or "indexing" investment approach, which
attempts to duplicate the investment composition and performance of the S&P
500 through statistical procedures.
Q:
What are the Fund's risks?
A: The Fund's net asset value, which is determined on every business day, will
change daily. The net asset value changes are due to changes in the price of
securities owned by the Fund as a result of rises and falls in the stock
market in general, perceptions about the stocks of particular companies and
perceptions about particular industries. You should note that you could lose a
portion of the amount you invest in the Fund.
Q:
What are the options for investment in the Fund?
A: The Fund has registered 5 classes of shares: Class A, B, C, K and Y. Class
K and Y Shares, which are only offered to institutional and other qualified
investors, are offered in other prospectuses. Class C Shares are not currently
offered for sale.
<TABLE>
<CAPTION>
RULE 12B-1 MAXIMUM FRONT MAXIMUM
CLASS FEES * END SALES LOAD ** CDSC ***
----- ---------- ----------------- --------
<S> <C> <C> <C>
Class A 0.10% 2.5% None+
Class B 0.45% None 3%
Class C 1% None 1%, if redeemed within
1 year of purchase
</TABLE>
- --------
*An annual fee for distributing shares and servicing shareholder accounts
paid based on the Fund's average daily net assets.
**A one-time fee charged at the time of purchase of shares. The fee declines
based on the amount you invest.
***A contingent deferred sales charge ("CDSC") is a one-time fee charged at
the time of redemption. The fee declines based on the length of time you
hold the shares.
+A CDSC of 1% is imposed on certain redemptions of Class A Shares if redeemed
within 1 year of purchase.
(i) If you invest over $250,000, you must buy Class A or Class C Shares. (ii)
Class B Shares convert automatically to Class A Shares after six years. Due to
the level of Rule 12b-1 fees and the CDSC on Class B Shares versus Class A or
Class C Shares, both (i) and (ii) above are to your economic benefit.
Q:
How do I buy and sell shares of the Fund?
A: Funds Distributor Inc. (the "Distributor") sells shares of the Fund. You
may purchase shares from the Distributor through broker-dealers or other
financial institutions or from the Fund's transfer agent, First Data Investor
Services Group, Inc. (the "Transfer Agent"), by mailing the attached Account
Application Form with a check to the Transfer Agent. You must invest at least
$500 ($50 through the Automatic Investment Plan) initially and at least $50
for subsequent purchases.
Shares may be redeemed (sold back to the Fund) by mail or by telephone.
You may also acquire the Fund's shares by exchanging shares of the same
class of other funds of the Trust, The Munder Funds, Inc. (the "Company") and
The Munder Framlington Funds Trust ("Framlington"), and exchange Fund shares
for shares of the same class of other funds of the Trust, the Company and
Framlington.
3
<PAGE>
Q:What shareholder privileges does the Fund offer?
A:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C>
Automatic Investment
Plan Automatic Investment Plan Automatic Investment Plan
Automatic Withdrawal
Plan Automatic Withdrawal Plan Automatic Withdrawal Plan
Retirement Plans Retirement Plans Retirement Plans
Telephone Exchanges Telephone Exchanges Telephone Exchanges
Rights of Accumulation Reinvestment Privilege Reinvestment Privilege
Letter of Intent
Quantity Discounts
Reinvestment Privilege
</TABLE>
Q:
When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments after expenses. The Fund pays dividends at least quarterly (if
income is available) and distributes capital gains at least annually. Unless
you elect to receive distributions in cash, all dividends and capital gain
distributions will be automatically used to purchase additional shares of the
Fund.
Q:
Who manages the Fund's assets?
A: Munder Capital Management is the Fund's investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Fund.
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Fund will bear directly.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge on Purchase (as a % of Offering
Price)................................................ 2.5%(2) None None
Sales Charge Imposed on Reinvested Dividends........... None None None
Maximum Deferred Sales Charge.......................... None(3) 3%(4) 1%(5)
Redemption Fees(6)..................................... None None None
Exchange Fees.......................................... None None None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The sales charge declines as the amount invested increases.
(3) A 0.20% deferred sales charge applies to redemptions of Class A Shares
that were purchased with no initial sales charge as part of an investment
of $500,000 or more and are redeemed within one year of purchase.
(4) The contingent deferred sales charge ("CDSC") payable upon redemption of
Class B Shares declines over time.
(5) Payable on redemptions of Class C Shares within one year of purchase.
(6) The Transfer Agent may deduct a charge of $7.50 for wire redemptions under
$5,000.
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to the Fund, which investors in the Fund will bear indirectly
for the current fiscal year. Such expenses include payments to Trustees,
auditors, legal counsel and service providers (such as the Advisor),
registration fees, and distribution fees. The fees shown below have been
restated to reflect an anticipated waiver of advisory fees and the
discontinuation of voluntary expense reimbursements effective as of the date
of this Prospectus. Because of the 12b-1 fee, you may over the long term pay
more than the amount of the maximum permitted front-end sales charge.
4
<PAGE>
<TABLE>
<CAPTION>
ANNUAL FUND
OPERATING EXPENSES CLASS A CLASS B CLASS C
(AS A % OF AVERAGE NET ASSETS) SHARES SHARES SHARES
- ------------------------------ ------- ------- -------
<S> <C> <C> <C>
Advisory Fees (after waivers).......................... .07%+ .07%+ .07%+
12b-1 Fees (after waivers)............................. .10%+ .45%+ 1.00%
Other Expenses......................................... .22% .22% .22%
--- --- ----
Total Fund Operating Expenses........................ .39%+ .74%+ 1.29%+
=== === ====
</TABLE>
- --------
+ The Advisor expects to voluntarily waive a portion of its advisory fee
during the current fiscal year and the Distributor expects to voluntarily
waive a portion of its Rule 12b-1 fees with respect to Class A Shares and
Class B Shares. Class A Shares of the Fund pay a Rule 12b-1 fee up to .25%
of the value of average daily net assets and Class B Shares of the Fund pay
a Rule 12b-1 fee of up to 1.00% of the value of average daily net assets.
The Advisor and/or the Distributor may discontinue such waivers at any time
in their sole discretion. Without waivers the ratio of advisory fees to
average daily net assets would be .15% and the ratio of 12b-1 fees to
average daily net assets would be .25% for Class A Shares and 1.00% for
Class B Shares. Without waivers total operating expenses would be .62% for
Class A Shares and 1.37% for Class B Shares.
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual
return, (2) redemption at the end of the time period (including the deduction
of the deferred sales charge, if any) and (3) no redemption at the end of the
time period. THIS EXAMPLE IS NOT A REPRESENTATION OF PAST OR FUTURE
PERFORMANCE OR OPERATING EXPENSES; ACTUAL PERFORMANCE OR OPERATING EXPENSES
MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------- ------- -------
<S> <C> <C> <C>
1 Year
. Redemption.......................................... $29 $38 $ 23
. No Redemption....................................... $29 $ 8 $ 13
3 Years
. Redemption.......................................... $37 $44 $ 41
. No Redemption....................................... $37 $24 $ 41
5 Years
. Redemption.......................................... $46 $61 $ 71
. No Redemption....................................... $46 $41 $ 71
10 Years
. Redemption.......................................... $73 $97 $156
. No Redemption....................................... $73 $92 $156
</TABLE>
5
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors. Class C Shares of the Fund were not offered during the
periods shown. This information should be read in conjunction with the Fund's
most recent Annual Report, which is incorporated by reference into the SAI.
You may obtain the Annual Reports without charge by calling (800) 438-5789.
<TABLE>
<CAPTION>
INDEX 500 FUND(A)
----------------------------------------------
YEAR PERIOD
ENDED YEAR ENDED ENDED YEAR ENDED
6/30/97 6/30/96(F) 6/30/95(D) 2/28/95(E, F)
CLASS A CLASS A CLASS A CLASS A
------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 16.16 $ 13.80 $12.39 $12.06
------- ------- ------ ------
Income from investment
operations:
Net investment income.......... 0.34 0.33 0.09 0.29
Net realized and unrealized
gain on investments........... 5.04 3.09 1.46 0.50
------- ------- ------ ------
Total from investment
operations.................... 5.38 3.42 1.55 0.79
------- ------- ------ ------
Less distributions:
Dividends from net investment
income........................ (0.33) (0.34) (0.14) (0.29)
Distributions from net realized
gains......................... (0.27) (0.72) -- (0.17)
------- ------- ------ ------
Total distributions............ (0.60) (1.06) (0.14) (0.46)
------- ------- ------ ------
Net asset value, end of period.. $ 20.94 $ 16.16 $13.80 $12.39
======= ======= ====== ======
Total return(b)................ 33.97% 25.51% 12.58% 6.81%
======= ======= ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's)........................ $88,988 $21,800 $ 684 $ 429
Ratio of operating expenses to
average net assets............ 0.39% 0.36% 0.50%(c) 0.50%
Ratio of net investment income
to average net assets......... 1.91% 2.28% 2.41%(c) 2.49%
Portfolio turnover rate........ 11% 8% 6% 7%
Ratio of operating expenses to
average net assets without
waivers and/or expense
reimbursement................. 0.49% 0.54% 0.63%(c) 0.64%
Average commission rate(g)..... $0.0153 $0.0240 N/A N/A
</TABLE>
- --------
(a) The Munder Index 500 Fund Class A Shares and Class B Shares commenced
operations on December 9, 1992 and October 31, 1995, respectively. As of
June 30, 1997, the Fund had not begun selling Class C Shares.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year changed to June 30. Prior to this, the fiscal year end was the
last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
6
<PAGE>
<TABLE>
<CAPTION>
INDEX 500 FUND
---------------------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
2/28/94 2/28/93 6/30/97 6/30/96(F)
CLASS A CLASS A CLASS B CLASS B
------- ------- ------- ----------
<C> <C> <C> <C> <S>
$11.47 $11.61 $ 16.16 $ 14.76
------ ------ ------- -------
0.30 0.06 0.29 0.20
0.59 0.20 5.03 2.15
------ ------ ------- -------
0.89 0.26 5.32 2.35
------ ------ ------- -------
(0.30) (0.07) (0.27) (0.23)
-- (0.33) (0.27) (0.72)
------ ------ ------- -------
(0.30) (0.40) (0.54) (0.95)
------ ------ ------- -------
$12.06 $11.47 $ 20.94 $ 16.16
====== ====== ======= =======
7.89% 2.34% 33.57% 16.51%
====== ====== ======= =======
$489 $ 67 $61,738 $14,811
0.31% 0.25%(c) 0.74% 0.71%(c)
2.51% 2.54%(c) 1.56% 1.93%(c)
1% 22% 11% 8%
0.48% 0.38%(c) 0.84% 0.89%(c)
N/A N/A $0.0153 $0.0240
</TABLE>
7
<PAGE>
FUND INFORMATION
This Prospectus describes Class A, Class B and Class C Shares of the Fund.
This section summarizes the Fund's principal investments. The section entitled
"Investments and Investment Practices?" and "What are the Risks of Investing
in the Fund?" and the SAI give more information about the Fund's investment
techniques and risks.
GOALS AND PRINCIPAL INVESTMENTS. The goal of the Fund is to provide
performance and income that is comparable to the S&P 500. The S&P 500 is an
index of 500 stocks which emphasize large capitalization companies. See
Appendix A for more information on the S&P 500. The Fund will normally hold
the securities of at least 400 of the stocks in the S&P 500.
The Fund will try to achieve a correlation between the performance of its
portfolio and that of the S&P 500 of at least .95. A correlation of 1.0 would
mean that the Fund's price increases or decreases mirror exactly changes in
the S&P 500. The timing of purchases and redemptions, changes in securities
markets, level of the Fund's assets and other factors affect the Fund's
ability to exactly track the S&P 500's performance.
The Fund is managed through the use of a "quantitative" investment approach
and tries to mirror the composition and performance of the S&P 500 through
statistical procedures. The Advisor does not use traditional methods of fund
investment management, i.e., it does not select stocks on the basis of
economic, financial and market analysis. Because the Fund pays brokerage costs
and other fees, its return may be lower than that of the S&P 500.
PORTFOLIO MANAGEMENT. Todd B. Johnson and Kenneth A. Schluchter III jointly
manage the Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, has
served as the portfolio manager of the Fund since July 1992. Mr. Schluchter,
who has managed the Fund since June 1997, was previously a Systems Developer
and Data Analyst for Compuware Incorporated (1993-1995) and a Business Analyst
for Central Transport Incorporated (1989-1993).
WHO MAY WANT TO INVEST IN THE FUND?
The Fund is designed for investors who desire potentially high capital
appreciation and who can accept short-term variations in return for
potentially greater returns over the long term. In general, the greater the
risk, the greater the potential reward. Investors who have a short time
horizon, who desire a high level of income or who are conservative in their
investment approach may wish to invest in other portfolios offered by the
Trust.
WHAT ARE THE FUND'S INVESTMENTS AND INVESTMENT PRACTICES?
The Fund will invest in EQUITY SECURITIES, which includes common stocks,
preferred stocks, warrants and other securities convertible into common
stocks, including convertible bonds and convertible preferred stock. Many of
the common stocks the Fund will buy will not pay dividends; instead, stocks
will be bought for the potential that their prices will increase, providing
capital appreciation for the Fund. The value of Equity Securities will
fluctuate due to many factors, including the past and predicted earnings of
the issuer, the quality of the issuer's management, general market conditions,
the forecasts for the issuer's industry and the value of the issuer's assets.
Holders of Equity Securities only have rights to value in the company after
all debts have been paid, and they could lose their entire investment in a
company that encounters financial difficulty. Warrants are rights to purchase
securities at a specified time at a specified price.
The Fund may invest in FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS, which
are obligations of the Fund to purchase or sell a specific currency at a
future date at a set price. These contracts may decrease the Fund's loss due
to a change in currency value, but also limits gains from currency exchanges.
8
<PAGE>
The Fund may invest in MONEY MARKET INSTRUMENTS, which are high-quality,
short-term instruments including, among other things, commercial paper,
bankers' acceptances and negotiable certificates of deposit of banks or
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies
or instrumentalities. These instruments will be used primarily pending
investment, to meet anticipated redemptions or as a temporary defensive
measure.
The Fund may invest in FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS.
Futures contracts are contracts in which the Fund agrees, at maturity, to make
delivery of or receive securities, the cash value of an index or foreign
currency. Futures contracts and options on futures contracts are used for
hedging purposes or to maintain liquidity. The Fund may not purchase or sell a
futures contract unless immediately after any such transaction the sum of the
aggregate amount of margin deposits on its existing futures positions and the
amount of premiums paid for related options is 5% or less of its total assets.
The Fund will set aside cash or other liquid securities to "cover" the Fund's
position in futures.
The Fund may purchase or sell OPTIONS. The Fund may buy options giving it
the right to require a buyer to buy a security held by the Fund (put options),
buy options giving it the right to require a seller to sell securities to the
Fund (call options) sell (write) options giving a buyer the right to require
the Fund to buy securities from the buyer or write options giving a buyer the
right to require the Fund to sell securities to the buyer during a set time at
a set price. Options may relate to stock indices or individual securities. See
the SAI for more details and additional limitations.
The Fund may purchase securities on a "WHEN-ISSUED" basis and may purchase
or sell securities on a "FORWARD COMMITMENT" basis. Although the price to be
paid by the Fund is set at the time of the agreement, the Fund usually does
not pay for securities until they are received. The value of the securities
may change between the time the price is set and the time the price is paid.
When the Fund purchases securities for future delivery, the Trust's custodian
will set aside cash or other liquid securities to "cover" the Fund's position.
The Fund does not intend to purchase securities for future delivery for
speculative purposes.
The Fund may enter into REPURCHASE AGREEMENTS. Under a repurchase agreement,
the Fund agrees to purchase securities from a seller and the seller agrees to
repurchase the securities at a later time, typically within seven days, at a
set price. The seller agrees to set aside collateral equal to the price it has
to pay during the term of the agreement. This ensures that the Fund will
receive the purchase price at the time it is due, unless the seller defaults
or declares bankruptcy, in which event the Fund will bear the risk of possible
loss due to adverse market action or delays in liquidating the underlying
obligation.
The Fund may invest in REVERSE REPURCHASE AGREEMENTS. Under a reverse
repurchase agreement, the Fund sells securities and agrees to buy them back
later at an agreed upon time and price. Reverse repurchase agreements are used
to borrow money for temporary purposes.
The Fund may LEND SECURITIES to broker-dealers and other financially sound
institutional investors who will pay the Fund for the use of the securities,
thus potentially increasing the Fund's returns. The borrower must set aside
cash or liquid securities equal to the value of the securities borrowed at all
times during the terms of the loan. Loans may not exceed 25% of the value of
the Fund's total assets. Risks involved in such transactions include possible
delay in recovering the loaned securities and possible loss of the securities
or the collateral if the borrower fails financially.
The Fund may purchase AMERICAN DEPOSITARY RECEIPTS ("ADRS"), EUROPEAN
DEPOSITARY RECEIPTS ("EDRS") AND GLOBAL DEPOSITARY RECEIPTS ("GDRS"). ADRs are
issued by U.S. financial institutions and GDRs and EDRs are issued by European
financial institutions. They are receipts evidencing ownership of underlying
foreign securities.
The Fund may buy shares of registered MONEY MARKET FUNDS. The Fund will bear
a portion of the expenses of any investment company whose shares they
purchase, including operating costs and investment advisory, distribution and
administration fees. These expenses would be in addition to the Fund's own
expenses. The Fund
9
<PAGE>
may invest up to 10% of its assets in other investment companies and no more
than 5% of its assets in any one investment company.
The Fund may invest up to 15% of the value of its net assets in ILLIQUID
SECURITIES. Illiquid Securities are securities for which there is no ready
market, which inhibits the ability to sell them and obtain their full market
value, or which are legally restricted as to their resale by the Fund.
The Fund may purchase U.S. GOVERNMENT SECURITIES, which are securities
issued by, or guaranteed by, the U.S. Government or its agencies or
instrumentalities. Such securities include U.S. Treasury bills, which have
initial maturities of less than one year, U.S. Treasury notes, which have
initial maturities of one to ten years, U.S. Treasury bonds, which generally
have initial maturities of greater than ten years, and obligations of the
Federal Home Loan Mortgage Corporation, Federal National Mortgage Association
and Government National Mortgage Association. Under normal market conditions
the Fund will not invest to a significant extent, or on a routine basis, in
U.S. Government Securities.
The Fund may purchase FIXED INCOME SECURITIES. Fixed Income Securities are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rate.
The Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
The Fund may invest up to 25% of its assets in FOREIGN SECURITIES. Foreign
Securities are securities issued by non-U.S. companies. Investments in Foreign
Securities are riskier than investments in U.S. companies because (i) foreign
companies may be subject to different accounting, auditing and financial
reporting standards than U.S. companies, (ii) there is generally less public
information available about foreign companies, (iii) there may be less
governmental regulation and supervision of foreign stock exchanges, securities
markets and companies and (iv) foreign securities markets may be less liquid
and more volatile than U.S. securities markets.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Investing in the Fund may be less risky than investing in individual stocks
due to the diversification of investing in a portfolio of many different
stocks; however, such diversification does not eliminate all risks. Because
the Fund invests mostly in Equity Securities, rises and falls in the stock
market in general, as well as in the value of particular Equity Securities
held by the Fund, can affect the Fund's performance. Your investment in the
Funds is not guaranteed. The net asset value of the Fund will change daily and
you might not recoup the amount you invest in the Fund.
The Fund is not meant to provide a vehicle for playing short-term swings in
the stock market. Consistent with a long-term investment approach, investors
in the Fund should be prepared and able to maintain their investments during
periods of adverse market conditions. By itself, the Fund does not constitute
a balanced investment program and there is no guarantee that the Fund will
achieve its investment objective since there is uncertainty in every
investment.
A fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. The Fund is authorized to use options, futures,
and forward foreign currency exchange contracts, which are types of derivative
instruments. Derivative instruments are instruments that derive their value
from a different underlying security, index or financial indicator. The use of
derivative instruments exposes the Fund to additional risks and transaction
costs. Risks inherent in the use of derivative instruments include: (1) the
risk that interest rates,
10
<PAGE>
securities prices and currency markets will not move in the direction that a
portfolio manager anticipates; (2) imperfect correlation between the price of
derivative instruments and movements in the prices of the securities, interest
rates or currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select portfolio securities; (4)
the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when
desired; (5) leverage risk, that is, the risk that adverse price movements in
an instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and (6) particularly in the case of privately-negotiated
instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the Fund worse off than if it had not entered
into the position.
To the extent that the Fund invests in illiquid securities, the Fund risks
not being able to sell securities at the time and the price that it would
like. The Fund may therefore have to lower the price, sell substitute
securities or forego an investment opportunity, each of which might adversely
affect the Fund.
The risks of the various investment techniques the Fund uses are described
in more detail in the SAI.
PERFORMANCE
HOW IS THE FUND'S PERFORMANCE CALCULATED?
There are various ways in which the Fund may calculate and report its
performance. Performance is calculated separately for each class of shares.
One method is to show the Fund's total return. Cumulative total return is
the percentage change in the value of an amount invested in a class of shares
of the Fund over a stated period of time and takes into account reinvested
dividends plus in the case of Class A Shares, the payment of the maximum sales
charge and, in the case of Class B and Class C Shares, the maximum CDSC.
Cumulative total return most closely reflects the actual performance of the
Fund. However, a shareholder who opts to receive dividends in cash, a Class A
shareholder who paid a sales charge lower than the maximum sales charge, or a
Class B or C shareholder who paid lower than the maximum CDSC will have a
different return than the reported performance.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of the Fund
determined by comparing the initial amount invested to the ending redeemable
value of the amount, taking into account reinvested dividends, the payment of
the maximum sales charge on Class A Shares, and the payment of the maximum
CDSC on Class B and Class C Shares.
The Fund may also publish its current yield. Yield is the net investment
income generated by a share of the Fund during a 30-day period divided by the
maximum offering price on the 30th day. "Maximum offering price" includes the
sales charge for Class A Shares.
The Fund may sometimes publish total returns that do not take into account
sales charges and such returns will be higher than returns which include sales
charges. You should be aware that (i) past performance does not indicate how
the Fund will perform in the future and (ii) the Fund's return and net asset
value will fluctuate, so you cannot necessarily use the Fund's performance
data to compare it to investment in certificates of deposit, savings accounts
or other investments that provide a fixed or guaranteed yield.
The Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. The Fund may also compare its total return
to the S&P 500 and other broad-based indices. These indices show the value of
selected portfolios of securities (assuming reinvestment of interest and
dividends) which
11
<PAGE>
are not managed by a portfolio manager. The Fund may report how it is
performing in comparison to the Consumer Price Index, an indication of
inflation reported by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Fund's annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
PURCHASES AND EXCHANGES OF SHARES
WHICH SHARE CLASS SHOULD I CHOOSE FOR MY INVESTMENT?
The Fund has registered Class A, Class B and Class C Shares and currently
offers Class A and Class B Shares. Each Class has its own cost structure,
allowing you to choose the one that best meets your requirements given the
amount of your purchase and the intended length of your investment. You should
consider both ongoing annual expenses and initial or contingent deferred sales
charges in estimating the costs of investing in a particular class of shares.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C>
. Front end sales charge. . No front end sales charge. All . No front end sales charge or
There are several ways to your money goes to work for you CDSC, except for a CDSC for
reduce these sales charges. right away. redemptions made within the
first year after investing.
All your money goes to work
for you right away.
. Lower annual expenses than . Higher annual expenses than . Shares do not convert to
Class B Shares. Class A Shares. another class.
. A CDSC on shares you sell
within six years of purchase.
. Automatic conversion to Class
A Shares approximately six
years after issuance, thus re-
ducing future annual expenses.
. CDSC is waived for certain re-
demptions.
</TABLE>
The Fund also issues Class K and Class Y Shares, which have different sales
charges, expense levels and performance. Class K and Class Y Shares are
available to limited types of investors. Call (800) 438-5789 to obtain more
information concerning Class K and Class Y Shares.
WHAT PRICE DO I PAY FOR SHARES?
Class A Shares are sold at the "net asset value next determined" by the Fund
plus any "applicable sales charge" and Class B and Class C Shares are sold at
the "net asset value next determined" by the Fund. These terms are explained
below. You should be aware that broker-dealers (other than the Distributor)
may charge investors additional fees if shares are purchased through them.
NET ASSET VALUE. Except in certain limited circumstances, the Fund
determines its net asset value ("NAV") on each day the New York Stock Exchange
("NYSE") is open for trading (a "Business Day") at the
12
<PAGE>
close of such trading (normally 4:00 p.m. Eastern time). The Fund calculates
NAV separately for each class of shares. The "net asset value next determined"
is the NAV calculated at 4:00 p.m. on the day the purchase order for shares is
received, if the purchase order is received prior to or at 4:00 p.m., and is
the net asset value calculated at 4:00 p.m. on the next Business Day, if the
purchase order is received after 4:00 p.m. NAV is calculated by totaling the
value of all of the assets of the Fund allocated to a particular class of
shares, subtracting the Fund's liabilities and expenses charged to that class
and dividing the result by the number of shares of that class outstanding.
APPLICABLE SALES CHARGE. Except in the circumstances described below, you
must pay a sales charge at the time of purchase of Class A Shares. The sales
charge as a percentage of your investment decreases as the amount you invest
increases. The current sales charge rates and commissions paid to selected
dealers are as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A DISCOUNT TO
PERCENTAGE OF SELECTED
-------------------- DEALERS AS
YOUR NET ASSET A PERCENTAGE
YOUR INVESTMENT INVESTMENT VALUE OF INVESTMENT
- --------------- ---------- --------- -------------
<S> <C> <C> <C>
Less than $100,000........................... 2.50% 2.56% 2.25%
$100,000 but less than $250,000.............. 2.00% 2.04% 1.75%
$250,000 but less than $500,000.............. 1.50% 1.52% 1.25%
$500,000 but less than $1,000,000............ None* None* 0.20%
$1,000,000 but less than $3,000,000.......... None* None* 0.15%
$3,000,000 or more........................... None* None* 0.10%
</TABLE>
- --------
* There is no initial sales charge on purchases of $500,000 or more of Class
A Shares of the Fund; however, a CDSC in the amount of the Discount to
Selected Dealers shown above will be imposed on the lower of original
purchase price or the net asset value of the shares at the time of
redemption if such shares are redeemed within one year after the date of
purchase.
The Distributor may pay the entire commission to dealers. If that occurs,
the dealer may be considered an "underwriter" under Federal securities laws.
SALES CHARGE WAIVERS. We will waive the initial sales charge on sales of
Class A Shares to the following types of purchasers:
(1) individuals with an investment account or relationship with the
Advisor;
(2) full-time employees and retired employees of the Advisor, employees of
the Fund's service providers and immediate family members of such
persons;
(3) registered broker-dealers that have entered into selling agreements
with the Distributor, for their own accounts or for retirement plans
for their employees or sold to registered representatives for full-
time employees (and their families) that certify to the Distributor at
the time of purchase that such purchase is for their own account (or
for the benefit of their families);
(4) certain qualified employee benefit plans as described below;
(5) individuals who reinvest a distribution from a qualified retirement
plan for which the Advisor serves as investment advisor;
(6) individuals who reinvest the proceeds of redemptions from Class Y
Shares of the Funds of the Trust, the Company or Framlington, within
60 days of redemption;
(7) banks and other financial institutions that have entered into
agreements with the Trust, the Company or Framlington to provide
shareholder services for Customers (including Customers of such banks
and other financial institutions, and the immediate family members of
such Customers);
(8) fee-based financial planners or employee benefit plan consultants
acting for the accounts of their clients;
(9) employer sponsored retirement plans which are administered by
Universal Pensions, Inc. ("UPI Plans"); and
(10) employer sponsored 401(k) plans that are administered by Merrill Lynch
Group Employee Services ("Merrill Lynch") which meet the criteria
described below under "Qualified Employer Sponsored Retirement Plans".
13
<PAGE>
QUALIFIED EMPLOYER SPONSORED RETIREMENT PLANS
We will waive the initial sales charge for all investments by employer
sponsored retirement plans that are qualified under Section 401(a) of the Code
(each, a "Qualified Employee Benefit Plan") and UPI Plans in Class A Shares of
the Fund. In addition, the CDSC of up to 0.20% imposed on certain redemptions
within one year of purchase will be waived for Qualified Employee Benefit Plan
and UPI Plan purchases of Class A Shares of the Fund. The Distributor will pay
the following commissions to dealers and other entities (as permitted by
applicable Federal and state law) who initiate and are responsible for
Qualified Employee Benefit Plan and UPI Plan purchases of Class A Shares of
the Fund:
<TABLE>
<CAPTION>
DISCOUNT TO DEALER OR ENTITY
AMOUNT OF PURCHASE AS A PERCENTAGE OF OFFERING PRICE
- ------------------ ---------------------------------
<S> <C>
Less than $500,000............................ 0.25%
$500,000 but less than $1,000,000............. 0.20%
$1,000,000 but less than $3,000,000........... 0.15%
$3,000,000 or more............................ 0.10%
</TABLE>
The initial sales charge will be waived for all investments by Merrill Lynch
Plans if (i) the Plan is recordkept on a daily valuation basis by Merrill
Lynch Group Employee Services ("Merrill Lynch") and, on the date the plan
sponsor (the "Plan Sponsor") signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management, L.P. ("MLAM")
that are made available pursuant to a Services Agreement between Merrill Lynch
and the Funds principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments"); or (ii) the Plan
is recordkept on a daily valuation basis by an independent recordkeeper whose
services are provided through a contract or alliance arrangement with Merrill
Lynch, and on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement, the Plan has $3 million or more in assets, excluding money
market funds, invested in Applicable Investments; or (iii) the Plan has 500 or
more eligible employees, as determined by the Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement.
SALES CHARGE REDUCTIONS. You may qualify for reduced sales charges in the
following cases:
. LETTER OF INTENT. If you intend to purchase at least $500,000 of Class A,
Class B and Class C Shares of the Fund and other non-money market funds
of the Trust, the Company or Framlington, you may wish to complete the
Letter of Intent Section of your Account Application Form. By doing so,
you agree to invest a certain amount over a 13-month period. You would
pay a sales charge on any Class A Shares you purchase during the 13
months based on the total amount to be invested under the Letter of
Intent. You can apply any investments you made in any of the funds during
the preceding 90-day period toward fulfillment of the Letter of Intent
(although there will be no refund of sales charges you paid during the
90-day period). You should inform the Transfer Agent that you have a
Letter of Intent each time you make an investment.
. QUANTITY DISCOUNTS. You may combine purchases of Class A Shares that are
made by you, your spouse, your children under age 21 and your IRA when
calculating the sales charge. You must notify your broker or the Transfer
Agent to qualify.
. RIGHT OF ACCUMULATION. You may add the value of any Class A, Class B and
Class C Shares of non-money market funds of the Trust, the Company or
Framlington you already own to the amount of your next Class A Share
investment for purposes of calculating the sales charge at the time of
current purchase. You must notify your broker or the Transfer Agent to
qualify.
Certain brokers may not offer these programs or may impose conditions on use
of these programs. You should consult with your broker prior to purchasing the
Fund's shares.
For further information on sales charge waivers and reductions call the Fund
at (800) 438-5789.
14
<PAGE>
WHEN CAN I PURCHASE SHARES?
Shares of the Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment for Class A, Class B and Class C Shares of
the Fund is $500 and subsequent investments must be at least $50. Purchases in
excess of $250,000 must be for Class A or Class C Shares.
HOW CAN I PURCHASE SHARES?
You can purchase Class A, Class B and Class C Shares in a number of
different ways. You may place orders directly through the Transfer Agent or
the Distributor or through arrangements with your authorized broker.
. BY BROKER. Any broker authorized by the Distributor can sell you shares
of the Fund. Please note that brokers may charge you fees for their
services.
. BY MAIL. You may open an account by completing, signing and mailing the
attached Account Application Form and a check or other negotiable bank
draft (payable to the Munder Funds) for $500 or more to: THE MUNDER
FUNDS, C/O FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130,
WESTBOROUGH, MASSACHUSETTS 01581-5130. Be sure to specify on your Account
Application Form the class of shares being purchased. If the class is not
specified, your purchase will automatically be invested in Class A
Shares. For additional investments send a letter stating the Fund and
share class you wish to purchase, your name and your account number with
a check for $50 or more to the address listed above.
. BY WIRE. To open a new account, you should call the Fund at (800) 438-
5789 to obtain an account number and complete wire instructions prior to
wiring any funds. Within seven days of purchase, you must send a
completed Account Application Form containing your certified taxpayer
identification number to the Transfer Agent at the address provided
above. Wire instructions must state the Fund name, share class, your
registered name and your account number. Your bank wire should be sent
through the Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
You may make additional investments at any time using the wire procedures
described above. Note that banks may charge fees for transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP you may arrange for
periodic investments in the Fund through automatic deductions from a
checking or savings account. To enroll in the AIP you should complete the
AIP Application Form or call the Fund at (800) 438-5789. The minimum pre-
authorized investment amount is $50. You may discontinue the AIP at any
time. We may discontinue the AIP on 30 days' written notice to you.
. REINVESTMENT PRIVILEGE. Once a year you may reinvest redemption proceeds
from Class A and B Shares of the Fund in shares of the same class of the
Fund without any sales charges, if the reinvestment is made within 60
days of redemption. You or your broker must notify the Transfer Agent in
writing at the time of reinvestment in order to eliminate the sales
charge.
The Transfer Agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you. You will not be
issued a
15
<PAGE>
share certificate, unless you request one in writing. The Fund's management
reserves the right to (i) reject any purchase order if, in its opinion, it is
in the Fund's best interest to do so and (ii) suspend the offering of shares
of any class for any period of time.
See the SAI for further information regarding purchases of the Fund's
shares.
HOW CAN I EXCHANGE SHARES?
You may exchange shares of the Fund for shares of the same class of other
funds of the Trust, the Company or Framlington based on their relative net
asset values. Class A Shares of a money market fund of the Trust or the
Company that were (1) acquired through the use of the exchange privilege and
(2) can be traced back to a purchase of shares in one or more investment
portfolios of the Trust or the Company for which a sales charge was paid, can
be exchanged for Class A Shares of a fund of the Trust, the Company or
Framlington. Class B and Class C Shares will continue to age from the date of
the original purchase and will retain the same CDSC rate as they had before
the exchange.
You must meet the minimum purchase requirements for the fund of the Trust,
the Company or Framlington that you purchase by exchange. If you are
exchanging into shares of a fund with a higher sales charge, you must pay the
difference at the time of exchange. Please note that a share exchange is a
taxable event and accordingly, you may realize a taxable gain or loss. Before
making an exchange request, read the Prospectus of the fund you wish to
purchase by exchange. You can obtain a Prospectus for any fund of the Trust,
the Company or Framlington by contacting your broker or the Funds at (800)
438-5789. Brokers may charge a fee for handling exchanges.
. EXCHANGES BY TELEPHONE. You may give exchange instructions by telephone
to the Fund at (800) 438-5789. You may not exchange shares by telephone
if you hold share certificates. We reserve the right to reject any
telephone exchange request and to place restrictions on telephone
exchanges.
. EXCHANGES BY MAIL. You may send exchange orders to your broker or to us
at The Munder Funds c/o First Data Investor Services Group, P.O. Box
5130, Westborough, Massachusetts, 01581-5130.
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order. We will reduce the amount you receive
by the amount of any applicable CDSC. See "Purchases of Shares--What Price Do
I Pay for Shares?" for an explanation of how the net asset value next
determined is calculated.
CONTINGENT DEFERRED SALES CHARGES. You pay a CDSC when you redeem:
. Class A Shares that are part of an investment of at least $500,000 within
one year of buying them
. Class B Shares within six years of buying them
. Class C Shares within one year of buying them
These time periods include the time you held Class B or Class C Shares which
you may have exchanged for Class B or Class C Shares of the Fund.
16
<PAGE>
The CDSC schedule for Class B Shares purchased after June 27, 1995 is set
forth below. See the SAI for the CDSC schedule for Class B Shares purchased
before that time. The CDSC is based on the original net asset value at the
time of purchase of your investment or the net asset value at the time of
redemption, whichever is lower.
CLASS B SHARES
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE CDSC
- -------------------- -----
<S> <C>
First..................................................................... 3.00%
Second.................................................................... 2.50%
Third..................................................................... 2.00%
Fourth.................................................................... 1.50%
Fifth..................................................................... 1.00%
Sixth..................................................................... 0.50%
Seventh and thereafter.................................................... 0.00%
</TABLE>
The Distributor pays sales commissions of 2.00% of the purchase price of
Class B Shares of the Fund to brokers at the time of sale that initiate and
are responsible for purchases of such Class B Shares of the Fund.
You will not pay a CDSC to the extent that the value of the redeemed shares
represents:
. reinvestment of dividends or capital gains distributions
. capital appreciation of shares redeemed
When you redeem shares, we will assume that you are redeeming first shares
representing reinvestment of dividends and capital gains distributions, then
any appreciation on shares redeemed, and then remaining shares held by you for
the longest period of time. We will calculate the holding period of shares of
a Fund acquired through an exchange of shares of the Munder Money Market Fund
from the date that the shares of the Fund were initially purchased.
CDSC WAIVERS. We will waive the CDSC payable upon redemptions of shares
which you purchased after June 27, 1995 for:
. redemptions made within one year after the death of a shareholder or
registered joint owner
. minimum required distributions made from an IRA or other retirement plan
account after you reach age 70 1/2
. involuntary redemptions made by the Fund
Consult the SAI for Class B Share CDSC waivers which apply when you redeem
shares purchased on or before June 27, 1995.
We will waive the CDSC for Class B Shares for all redemptions by Merrill
Lynch Plans if: (i) the Plan is recordkept on a daily valuation basis by
Merrill Lynch; or (ii) the Plan is recordkept on a daily valuation basis by an
independent recordkeeper whose services are provided through a contract or
alliance arrangement with Merrill Lynch; or (iii) the Plan has less than 500
eligible employees, as determined by the Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement.
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by the Transfer Agent. The Fund may temporarily stop
redeeming shares when the NYSE is closed or trading on the NYSE is restricted,
when an emergency exists and the Fund cannot sell their assets or accurately
determine the value of their assets or if the SEC orders the Fund to suspend
redemptions.
17
<PAGE>
HOW CAN I REDEEM SHARES?
You may redeem shares of the Fund in several ways.
. BY MAIL. You may mail your redemption request to: THE MUNDER FUNDS, C/O
FIRST DATA INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH,
MASSACHUSETTS 01581-5130. The redemption request should state the name of
the Fund, share class, account number, amount of redemption, account name
and where to send the proceeds. All account owners must sign. If a stock
certificate has been issued to you, you must endorse the stock
certificate and return it together with the written redemption request.
A SIGNATURE GUARANTEE is required for the following redemption requests:
(a) redemption proceeds greater than $50,000; (b) redemption proceeds not
being made payable to the owner of the account; (c) redemption proceeds
not being mailed to the address of record on the account or (d) if the
redemption proceeds are being transferred to another Munder Funds account
with a different registration. You can obtain a signature guarantee from
a financial institution such as a commercial bank, trust company, savings
association or from a securities firm having membership on a recognized
securities exchange.
. BY TELEPHONE. You can redeem your shares by calling your broker or the
Fund at (800) 438-5789. There is no minimum requirement for telephone
redemptions paid by check. The Transfer Agent may deduct a wire fee
(currently $7.50) for wire redemptions under $5,000.
If you are redeeming at least $1,000 of shares and you have authorized
expedited redemption on your Account Application Form, simply call the
Fund prior to 4:00 p.m. (Eastern time), and request the funds be mailed
to the commercial bank or registered broker-dealer you designated on your
Account Application Form. We will send your redemption amount to you on
the next business day. We reserve the right at any time to change or
impose fees for this expedited redemption procedure.
We record all telephone calls for your protection and take measures to
identify the caller. If the Transfer Agent properly acts on telephone
instructions and follows the reasonable procedures to ensure against
unauthorized transactions, neither the Trust, the Distributor nor the
Transfer Agent will be responsible for any losses. If these procedures
are not followed, the Transfer Agent may be liable to you for losses
resulting from unauthorized instructions.
During periods of unusual economic or market activity, you may experience
difficulties or delays in effecting telephone redemptions. In such cases
you should consider placing your redemption request by mail.
. AUTOMATIC WITHDRAWAL PLAN ("AWP"). If you have an account value of $2,500
or more in the Fund, you may redeem shares on a monthly, quarterly, semi-
annual or annual basis. The minimum withdrawal is $50. We usually process
withdrawals on the 20th day of the month and promptly send you your
redemption amount. You may enroll in the AWP by completing the AWP
Application Form available through the Transfer Agent. To participate in
the AWP you must have your dividends automatically reinvested and may not
hold share certificates. You may change or cancel the AWP at any time
upon notice to the Transfer Agent. You should not buy Class A Shares (and
pay a sales charge) while you participate in the AWP and you must pay any
applicable CDSCs when you redeem shares.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
We will typically send redemption amounts to you within seven Business Days
after you redeem shares. We may hold redemption amounts from the sale of
shares you purchased by check until the purchase check has cleared, which may
be as long as 15 days.
18
<PAGE>
STRUCTURE AND MANAGEMENT OF THE FUND
HOW IS THE FUND STRUCTURED?
The Trust is an open-end management investment company, which is a mutual
fund that sells and redeems shares every day that it is open for business. The
Trust is managed under the direction of its Board of Trustees which is
responsible for the overall management of the Trust and supervises the Fund's
service providers. The Trust is organized as a Massachusetts business trust.
WHO MANAGES AND SERVICES THE FUND?
INVESTMENT ADVISOR. The Fund's investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for the Fund, provides
research and credit analysis, and is responsible for all purchases and sales
of portfolio securities. During the fiscal year ended June 30, 1997, the
Advisor was paid an advisory fee at an annual rate of .07% of the average
daily net assets of the Fund (after waivers). The Advisor waived advisory fees
during the past fiscal year for the Fund. The Advisor is entitled to receive
an annual fee equal to .20% of the first $250 million of the Fund's average
daily net assets, .12% of the next $250 million of the Fund's average daily
net assets and .07% of the Fund's average daily net assets over $500 million.
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor makes such payments out of its own
resources and there are no additional costs to the Fund or its shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Fund based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Fund's
transfer agent. The Transfer Agent is a wholly owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Fund's administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Trust in all aspects of its administration and operations including the
maintenance of financial records and fund accounting. As compensation for its
services, State Street is entitled to receive fees, based on the aggregate
daily net assets of the Fund and certain other investment portfolios that are
advised by the Advisor for which it provides services, computed daily and
payable monthly at the annual rate of .051% of the first $7.5 billion of net
assets, plus .045% of the next $2.5 billion of net assets, .03% of the next
$2.5 billion of net assets, plus .02% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Fund. State Street pays the Distributor a fee for
these services out of its own resources at no cost to the Fund.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Fund. No compensation is paid
19
<PAGE>
to the Custodian for its services. State Street also serves as Sub-Custodian
to the Fund. As compensation for its services, the Sub-Custodian is entitled
to receive fees, based on the aggregate average daily net assets of the Fund
and certain other investment portfolios that are advised by the Advisor for
which the Sub-Custodian provides services, computed daily and payable monthly
at an annual rate of 1.00% of average daily net assets. The Sub-Custodian also
receives certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Fund's shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Fund's shares.
For an additional description of the services performed by the
Administrator, the Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
DISTRIBUTION SERVICES ARRANGEMENT
Under Rule 12b-1 of the 1940 Act, the Fund has adopted Service Plans with
respect to its Class A Shares and Service and Distribution Plans with respect
to its Class B and Class C Shares. Under the Plans, the Fund uses its assets
to finance activities relating to the distribution of its shares to investors
and the provision of certain shareholder services. The Distributor is entitled
to receive a service fee at an annual rate of up to 0.25% of the value of
average daily net assets of the Fund's Class A Shares. The Distributor also is
entitled to receive a service fee at an annual rate of up to 0.25% and a
distribution fee at an annual rate of up to 0.75% of the value of the average
daily net assets of the Fund's Class B and Class C Shares. The Distributor
uses the service fees primarily to pay ongoing trail commissions to securities
dealers (which may include the Distributor itself) and other financial
organizations which provide shareholder services for the Fund. These services
include, among other things, processing new shareholder account applications,
reporting to the Transfer Agent all transactions by customers and serving as
the primary information source to customers concerning the Fund.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust as a whole and affecting the Fund. The Trust will not hold annual
shareholder meetings, but special meetings may be held at the written request
of shareholders owning more than 10% of outstanding shares for the purpose of
removing a Trustee. Under Massachusetts law, it is possible that a shareholder
may be personally liable for the Trust's obligations. If a shareholder were
required to pay a debt of the Fund, however, the Trust has committed to
reimburse the shareholder in full from its assets. The SAI contains more
information regarding voting rights.
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Fund as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUND?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on the Fund's investments. The Fund passes its earnings along
to investors in the form of dividends. Dividend distributions are the
dividends or interest earned on investments after expenses. The net income of
the Fund, if any, is paid quarterly as a dividend.
The Fund distributes its net realized capital gains (including net short-
term capital gains), if any, at least annually.
20
<PAGE>
HOW WILL DISTRIBUTIONS BE MADE?
The Fund will pay dividend and capital gains distributions in additional
shares of the same class of the Fund. If you wish to receive distributions in
cash, either indicate this request on your Account Application Form or notify
the Fund at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUND?
In general, as long as the Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. The Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, the Fund may still
be liable for an excise tax on income that is not distributed in accordance
with a calendar year requirement; the Fund intends to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by the Fund
will generally be designated as long-term or short-term. Recent tax law
changes have added a new category of mid-term capital gain; it is expected
that regulations will be issued regarding the proper tax treatment of mid-term
and other gains by shareholders of RICs. Distributions from the Fund's long-
term capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from the Fund a statement
of the amount and nature of the distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by the
Fund may be subject to foreign withholding or other taxes. The Fund may be
permitted to pass on to its shareholders the right to a credit or deduction
for income or other tax credits earned from foreign investments and it intends
to do so if possible. These deductions or credits may be subject to tax law
limitations.
If the Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If the Fund elects to treat a PFIC as a "qualified electing
fund" ("QEF") and the PFIC furnishes certain financial information in the
required form to the Fund, the Fund will instead be required to include in
income each year its allocable share of the ordinary earnings and net capital
gains of the QEF, regardless of whether received, and such amounts will be
subject to the various distribution requirements described above. The Fund may
also elect to mitigate the tax effects of owning PFIC stock by making an
annual mark-to-market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Fund and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Fund, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
21
<PAGE>
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and audited Annual Reports on a regular basis from the Fund. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings the Fund will only send one copy of the
above communications to (1) accounts with the same primary record owner, (2)
joint tenant accounts, (3) tenant in common accounts and (4) accounts which
have the same address.
22
<PAGE>
APPENDIX A
The Index 500 Fund is not sponsored, endorsed, sold or promoted by Standard
& Poor's Ratings Service, a division of McGraw-Hill Companies, Inc. ("S&P").
S&P makes no representation or warranty, express or implied, to the owners of
the Index 500 Fund or any member of the public regarding the advisability of
investing in securities generally or in the Index 500 Fund particularly or the
ability of the S&P 500 Index to trace general stock market performance. S&P's
only relationship to the Trust is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Trust or the Index 500 Fund. S&P has
no obligation to take the needs of the Trust or the owners of the Index 500
Fund into consideration in determining, composing or calculating the S&P 500
Index. S&P is not responsible for and has not participated in the
determination of the prices and amount of the Index 500 Fund or the timing of
the issuance or sale of the Index 500 Fund or in the determination or
calculation of the equation by which the Index 500 Fund is to be converted
into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Index 500 Fund.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Trust, owners of the Index 500
Fund, or any other person or entity from the use of the S&P 500 Index or any
data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability of fitness for a
particular purpose or use with respect to the S&P 500 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.
"Standard & Poor's", "S&P", "S&P 500", "Standard & Poor's 500", and "500"
are trademarks of McGraw-Hill, Inc. and have been licensed for use by the
Trust. The Index 500 Fund is not sponsored, endorsed, sold or promoted by S&P
and S&P makes no representation regarding the advisability of investing in the
Index 500 Fund.
A-1
<PAGE>
PROIXABC97 / FO418 / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
Application [LOGO OF MUNDER FUNDS]
for new accounts
Please mail your complete application (printed or typed)
along with your check to:
The Munder Funds
c/o First Data Investor Services Group, Inc.
P.O. Box 5130
Westborough, MA 01581-5130
If you have questions regarding this application, please telephone the Transfer
Agent at 1.800.438.5789
<TABLE>
<CAPTION>
1. ACCOUNT REGISTRATION
<S> <C>
- ---------------------------------------------------------------------------------------------------
Name Social Security Number
- ---------------------------------------------------------------------------------------------------
Joint Owner (if any) (If Joint Tenancy, use Social Security Number of first joint owner)
OR
Uniform Transfer to Minor:
for:
- ---------------------------------------------------------------------------------------------------
Custodian Name (one custodian only) Minor's Name (one minor only)
- ---------------------------------------------------------------------------------------------------
State (Custodian's State of Residence) Minor's Social Security Number
OR
[_] Trust [_] Corporation [_] Other (please specify)________________________________
- ---------------------------------------------------------------------------------------------------
Trust/Corporation Name
- ---------------------------------------------------------------------------------------------------
Trust Date Trust Identification Number
2. MAILING ADDRESS (address for reports, dividends, statements and redemption proceeds)
- ---------------------------------------------------------------------------------------------------
Street Apt.
- ---------------------------------------------------------------------------------------------------
City State Zip Code Telephone Number
Non-Resident Alien: [_] Yes [_] No If Yes, Country of Residence______________________
</TABLE>
<PAGE>
3. INITIAL INVESTMENT
With as little as $500* you can invest in any Munder Fund. Please be sure to
read the prospectus carefully before investing or sending money. You may
request an additional prospectus by calling 1.800.438.5789.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NAME OF FUND CLASS A CLASS B CLASS C INVESTMENT AMOUNT
[_] Munder Accelerating Growth Fund [_] [_] [_] $_________________
[_] Munder All-Season Aggressive Fund [_] [_] [_] $_________________
[_] Munder All-Season Moderate Fund [_] [_] [_] $_________________
[_] Munder All-Season Conservative Fund [_] [_] [_] $_________________
[_] Munder Balanced Fund [_] [_] [_] $_________________
[_] Munder Growth & Income Fund [_] [_] [_] $_________________
[_] Munder Index 500 Fund [_] [_] [_] $_________________
[_] Munder International Equity Fund [_] [_] [_] $_________________
[_] Munder Micro-Cap Equity Fund [_] [_] [_] $_________________
[_] Munder Mid-Cap Growth Fund [_] [_] [_] $_________________
[_] Munder Multi-Season Growth Fund [_] [_] [_] $_________________
[_] Munder Real Estate Equity Investment Fund [_] [_] [_] $_________________
[_] Munder Small-Cap Value Fund [_] [_] [_] $_________________
[_] Munder Small Company Growth Fund [_] [_] [_] $_________________
[_] Munder Value Fund [_] [_] [_] $_________________
[_] Munder Framlington Emerging Markets Fund [_] [_] [_] $_________________
[_] Munder Framlington Healthcare Fund [_] [_] [_] $_________________
[_] Munder Framlington International Growth Fund [_] [_] [_] $_________________
[_] Munder Bond Fund [_] [_] [_] $_________________
[_] Munder Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder International Bond Fund [_] [_] [_] $_________________
[_] Munder Short Term Treasury Fund [_] [_] [_] $_________________
[_] Munder Michigan Triple Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Bond Fund [_] [_] [_] $_________________
[_] Munder Tax-Free Intermediate Bond Fund [_] [_] [_] $_________________
[_] Munder U.S. Government Income Fund [_] [_] [_] $_________________
[_] Munder Cash Investment Fund [_] N/A N/A $_________________
[_] Munder Money Market Fund [_] N/A N/A $_________________
[_] Munder Tax-Free Money Market Fund [_] N/A N/A $_________________
[_] Munder U.S. Treasury Money Market Fund [_] N/A N/A $_________________
Total Amount Invested $_________________
[_] By Check (Payable to The Munder Funds)
[_] By Wire. Account Number:______________________(Account number assigned by Bank from which assets were wired.)
*$50 per Fund if the Automatic Investment Plan Option is being established at this time (please complete section 5).
</TABLE>
<PAGE>
4. DISTRIBUTION OPTION (check one. If none, "A" will be assigned)
[_] A. Reinvest dividends and capital gains in additional Fund shares.
[_] B. Pay dividends in cash; reinvest capital gains in additional Fund shares.
[_] C. Pay dividends and capital gains in cash.
[_] D. Please send my: [_] Dividends [_] Dividends & Capital Gains (choose one)
directly to my checking/savings account.
Fill out banking information in Section 10
5. AUTOMATIC INVESTMENT PLAN (optional)
YES, I(we) wish to participate in the Automatic Investment Plan (AIP). I(We)
authorize First Data Investor Services Group, Inc. (First Data), The Munder
Funds' transfer agent, to invest automatically $_________ ($50 minimum) for
me(us) on a [_] Monthly OR [_] Quarterly basis (please choose either the [_] 5th
or the [_] 20th of the month) and draw a bank draft in payment of each of these
investments against my (our) [_] Checking OR [_] Savings account. For the
purpose of verifying my(our) bank account number, I (we) have enclosed a blank
check or deposit slip marked void and have signed the bank authorization below.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Name of Fund Checking/Savings Account Number ABA Number (Bank Routing Number)
</TABLE>
Fill out banking information in Section 10
6. CHECKWRITING PRIVILEGES (optional)
Income & Money Market Class A shares only
If you are opening an account for any of The Munder Income and/or Money Market
Funds (Class A Shares only), you are entitled to the checkwriting option.
Redemption checks may be written for amounts of $500 or more. To obtain checks,
please complete the signature card below. All persons named in the Account
Registration in Section 1 must sign the signature card. For Corporate, Trust or
Partnership accounts, only authorized signers must sign. By signing this
signature card, you agree to be subject to the customary rules and regulations
governing checking accounts, as well as instructions and rules of the Fund now
in effect, and as amended from time to time, that pertain to the use of
redemption checks.
Please fill out the following Signature Card to be eligible for Checkwriting and
indicate the Fund(s) for which you are requesting this service:
- --------------------------------------------------------------------------------
Fund(s)
- --------------------------------------------------------------------------------
Fund(s)
Authorized Signatures (exactly as it appears in Part 1 of the Application):
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
- --------------------------------------------------------------------------------
Print Name Signature
Check here if more than one signature is required per check: [_] 2 [_] 3
Other: _____________________
<PAGE>
7. AUTOMATIC WITHDRAWAL PLAN (optional)
The minimum account balance must be $2,500 or more.
Fill out banking information in Section 10
YES, I authorize the redemption of shares from my Munder Fund account to meet
withdrawal payments on the 20th of each month.
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------
Name Of Fund That Shares Will Be Redeemed From Account Number (if applicable)
- --------------------------------------------------------------------------------------------------------------
Amount of Monthly Payment ($50 minimum per Fund) Start Date (Payment is to begin on the next
payment period unless a later date is indicated)
Payments will be made to: [_] Owner's address of record only OR [_] Other listed below:
______________________________________________________________________ [_] Checking OR [_] Savings Account
Name (if bank indicate account number)
- --------------------------------------------------------------------------------------------------------------
Address
For the purpose of verifying my(our) bank account number, I (we) have enclosed a blank check or deposit slip
marked void and have signed the bank authorization below.
- --------------------------------------------------------------------------------------------------------------
Name of Fund Account Number (if applicable) ABA Number (Bank Routing Number)
</TABLE>
8. REDUCED SALES CHARGE (optional)
[_] Rights Of Accumulation:
Investors may qualify for reduced sales charges by aggregating the total
purchases of all Munder Class A Shares, excluding Money Market Funds, to
determine the applicable sales charge for current purchases. To determine the
aggregated amount of all non-money market funds, you will need to total the
current purchases as well as shares that are already beneficially owned by the
investor for which a sales charge has already been paid. Please see the
prospectus for additional information regarding Rights of Accumulation.
I apply for the Rights of Accumulation reduced sales charges based on the
following accounts in The Munder Funds.
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
- --------------------------------------------------------------------------------
Name of Fund Account Number
[_] Letters Of Intent:
You may qualify for reduced sales charges if you plan to make additional
investments in The Munder Funds within a 13 month period. By indicating a level
of anticipated investment and by signing this application, you agree to the
terms of the Letter of Intent as set forth in the Prospectus, and as follows:
"Although I am not obligated to do so, I intend to invest over a 13 month period
an aggregate amount of at least" (check one):
[_] $25,000 [_] $50,000 [_] $100,000
[_] $250,000 [_] $500,000 [_] $1,000,000
<PAGE>
9. TELEPHONE REDEMPTION & EXCHANGE AGREEMENT
Please check the box if you want this option.
[_] I(We) authorize First Data to act upon instructions received by telephone
from me(us) to redeem or to exchange shares of The Munder Funds.
1. I(We) relieve the Funds or First Data of any liability for the loss,
cost or expense for acting upon such instructions reasonably believed to
be from me(us).
2. I(We) assume responsibility for notifying the Funds within seven (7)
business days if a confirmation for the transaction is not received or
is incorrect.
3. If an exchange involves an initial investment into a Fund, the account
registration will carry the same registration as set forth above.
4. An exchange deemed to be the initial purchase of a Fund must meet the
minimum initial investment requirement of $500 per Fund unless the
shareholder is establishing an Automatic Investment Plan.
5. Redemption proceeds will be sent only to my account address of record.
- --------------------------------------------------------------------------------
Name Name
10. BANKING INFORMATION
To be completed with Section 4 (Distribution Option)
I(We) authorize The Munder Funds to deposit distributions into the following
[_] Checking [_] Savings account:
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Bank Name Address
- ------------------------------------------------------------------------------------------
ABA Number (Bank Routing Number) Account Number Bank Account Registration
- ------------------------------------------------------------------------------------------
Wiring Instructions
</TABLE>
To be completed with Section 5 (Automatic Investment Plan)
Please note that your bank will clear and process each bank draft and will
include it with your regular statements. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow First Data, the transfer agent for The Munder Funds, to act as
your agent with regard to the Automatic Investment Plan (AIP). The AIP will
automatically terminate without notice if any bank draft is not paid upon
presentation by First Data, to your bank. The AIP may be modified or terminated
at any time, upon thirty (30)-days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
To be completed with Section 7 (Automatic Withdrawal Plan)
Please note that your bank will clear and process each bank deposit and will
include it with your regular statement. However, acceptance of this
authorization is conditional upon approval of your authorization by your bank,
which will allow the transfer agent for The Munder Funds to act as your Agent
with regard to the Automatic Withdrawal Plan (AWP). The AWP may be modified or
terminated at any time, upon thirty (30) days written notice.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Depositor Date Signature of Joint Depositor (if any) Date
</TABLE>
. Please Staple Void Check or Deposit Slip Here .
<PAGE>
11. AUTHORIZATIONS, CERTIFICATIONS AND SIGNATURES
By signing the application, I(we) hereby certify under the penalty of perjury
that the information on this application is true, complete and correct and that:
I(We) understand that this order is subject to acceptance by The Munder Funds.
I(We) agree that The Munder Funds, Funds Distributor, Inc., First Data, Munder
Capital Management or any of its affiliates, officers, directors or employees
will not be liable for any loss, expense or cost for acting upon instructions or
inquiries reasonably believed to be genuine. Shares of the Funds are not
insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. An investment in the Funds involves
investment risks, including the possible loss of principal.
I(We) represent that I am (we are) of legal age and capacity and have read the
Prospectus(es) for The Munder Funds selected, and agree to its (their) terms.
First Data, is hereby appointed agent to receive dividends and distributions for
automatic reinvestment unless otherwise directed in Section 4.
I(We) understand and acknowledge that a sales charge may be levied against the
dollars that I(we) invest in The Munder Funds. (See the Prospectus(es) for
reduced sales charge information.)
The Internal Revenue Service requires that all taxpayers provide their Taxpayer
Identification Numbers (Social Security Numbers) and sign in the space provided
below. Failure by non-exempt taxpayers to furnish us with the correct Taxpayer
Identification Number will result in withholding of 31% of all taxable dividends
paid and/or withholding on certain other payments (this is referred to as backup
withholding).
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
Taxpayer Identification Number Name of Taxpayer Whose Number Appears Above
</TABLE>
Taxpayer Identification:
I (the Investor) certify under penalties of perjury that:
(1) The Social Security Number or taxpayer identification number shown above is
correct and may be used for any custodial or trust account opened for me
by The Munder Funds, and
(2) I (the Investor) am not subject to backup withholding because:
(a) I am exempt from Backup Withholding
(b) I have not been notified by the Internal Revenue Service ("IRS") that I
am, as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
The certification in this paragraph is required from all non-exempt persons to
prevent backup withholding of 31% of all taxable distributions and gross
redemption proceeds under the Federal income tax law.
[_] Check here if you are subject to backup withholding or have not received a
notice from the IRS advising you that backup withholding has been
terminated.
Authorization:
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
- ----------------------------------------------------------------------------------------------------
Signature of Owner Date Name
</TABLE>
<PAGE>
================================================================================
FOR DEALER USE ONLY
We hereby authorize First Data Investor Services Group, Inc., to act as our
agent in connection with transactions authorized by this Application and agree
to notify First Data Investor Services Group, Inc., of any purchase made under a
Letter of Intent or Right of Accumulation.
- --------------------------------------------------------------------------------
Dealer's Name Main Office Address
- --------------------------------------------------------------------------------
Representative's Name Branch # Rep #
- --------------------------------------------------------------------------------
Branch Address Telephone #
- --------------------------------------------------------------------------------
Authorized Signature of Dealer Title
================================================================================
<PAGE>
================================================================================
Shares of The Munder Funds are not deposits or obligations of, or guaranteed or
endorsed by any bank, and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain investment risks, including the possible loss
of principal.
================================================================================
Distributor: Funds Distributor, Inc. APPABC - F078
<PAGE>
CLASS Y SHARES
[LOGO OF THE MUNDER FUNDS]
Investments
for all seasons
Prospectus
O C T O B E R 2 9 , 1 9 9 7
T H E M U N D E R I N D E X 5 0 0 F U N D
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS Y SHARES
The Munder Index 500 Fund (the "Fund") is a mutual fund that seeks to
provide price performance and income that is comparable to the Standard &
Poor's 500 Composite Stock Price Index. The Fund invests primarily in equity
securities. The Fund is a portfolio of The Munder Funds Trust (the "Trust"),
an open-end investment company.
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Fund.
This Prospectus explains the objectives, policies, risks and fees of the
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
the Fund has been filed with the Securities and Exchange Commission (the
"SEC") and is incorporated by reference into this Prospectus. You can obtain
the SAI free of charge by calling the Fund at (800) 438-5789. In addition, the
SEC maintains a Web site (http://www.sec.gov) that contains the SAI and other
information regarding the Fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Fund?............................... 3
Financial Information...................................................... 4
Fund Information
Who may want to invest in the Fund?...................................... 7
What are the Fund's investments and investment practices?................ 7
What are the risks of investing in the Fund?............................. 9
Performance
How is the Fund's performance calculated?................................ 10
Where can I obtain performance data?..................................... 10
Purchases and Exchanges of Shares
What price do I pay for shares?.......................................... 11
When can I purchase shares?.............................................. 11
What is the minimum required investment?................................. 11
How can I purchase shares?............................................... 11
How can I exchange shares?............................................... 12
Redemptions of Shares
What price do I receive for redeemed shares?............................. 13
When can I redeem shares?................................................ 13
How can I redeem shares?................................................. 13
When will I receive redemption amounts?.................................. 13
Structure and Management of the Fund
How is the Fund structured?.............................................. 13
Who manages and services the Fund?....................................... 13
What are my rights as a shareholder?..................................... 14
Dividends, Distributions and Taxes
When will I receive distributions from the Fund?......................... 15
How will distributions be made?.......................................... 15
Are there tax implications of my investments in the Fund?................ 15
Additional Information..................................................... 16
Appendix A................................................................. A-1
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUND?
Q: What is the Fund's goal?
A: The Fund seeks to provide price performance and income that is comparable
to the Standard & Poor's 500 Composite Stock Price Index ("S&P 500").
Q: What is the Fund's strategy?
A: The Fund invests primarily in equity securities and it normally will hold
the securities of at least 80% of the issuers in the S&P 500. The Fund is
managed through a "quantitative" or "indexing" investment approach, which
attempts to duplicate the investment composition and performance of the S&P
500 through statistical procedures.
Q: What are the Fund's risks?
A: The Fund's net asset value, which is determined on every business day, will
change daily. The net asset value changes are due to changes in the price of
securities owned by the Fund as a result of rises and falls in the stock
market in general, perceptions about the stocks of particular companies and
perceptions about particular industries. You should note that you could lose a
portion of the amount you invest in the Fund.
Q: What are the options for investment in the Fund?
A: The Fund has registered five classes of shares: Class A, B, C, K and Y.
Class A, B, C and K Shares are described in other prospectuses. Class C Shares
are not currently offered for sale.
Q: How do I buy and sell shares of the Fund?
A: Funds Distributor Inc. (the "Distributor") sells shares of the Fund. You
may purchase shares from the Distributor through broker-dealers or other
financial institutions or from the Fund's transfer agent, First Data Investor
Services Group, Inc. (the "Transfer Agent"), by mailing an Account Application
Form with a check to the Transfer Agent. Fiduciary and discretionary accounts
of institutions and institutional investors must invest at least $500,000
initially. Other types of investors are not subject to any minimum required
investment.
Shares may be redeemed (sold back to the Fund) by mail or by telephone.
You may also acquire the Fund's shares by exchanging shares of the same
class of other funds of the Trust, The Munder Funds, Inc. (the "Company") and
The Munder Framlington Funds Trust ("Framlington"), and exchange Fund shares
for shares of the same class of other funds of the Trust, the Company and
Framlington.
Q: What shareholder privileges does the Fund offer?
A: . Automatic Investment Plan
.Automatic Withdrawal Plan
.Retirement Plan
.Telephone Exchanges
.Reinvestment Privilege
.Redemption By Check
Q: When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments after expenses. The Fund pays dividends at least quarterly (if
income is available) and distributes capital gains at least annually. Unless
you elect to receive distributions in cash, all dividends and capital gain
distributions will be automatically used to purchase additional shares of the
Fund.
3
<PAGE>
Q: Who manages the Fund's assets?
A: Munder Capital Management is the Fund's investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Fund.
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Fund will bear directly.
<TABLE>
<S> <C>
Maximum Sales Charge on Purchase (as a % of Offering Price)................ None
Sales Charge Imposed on Reinvested Dividends............................... None
Maximum Deferred Sales Charge.............................................. None
Redemption Fees(2)......................................................... None
Exchange Fees.............................................................. None
</TABLE>
- --------
Notes:
(1)Does not include fees which institutions may charge for services they
provide to you.
(2)The Fund's transfer agent may charge a fee of $7.50 for wire redemptions
under $5,000.
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to the Fund, which investors in the Fund will bear indirectly
for the current fiscal year. Such expenses include payments to Trustees,
auditors, legal counsel and service providers (such as the Advisor),
registration fees, and distribution fees. The fees shown below have been
restated to reflect an anticipated waiver of advisory fees and the
discontinuation of voluntary expense reimbursements effective as of the date
of this Prospectus.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS)
- -----------------------------------------------
<S> <C>
Advisory Fees............................................................. .07%*
Other Expenses............................................................ .22%
----
Total Fund Operating Expenses............................................. .29%*
====
</TABLE>
- --------
* The Advisor expects to voluntarily waive a portion of its advisory fee
during the current fiscal year. The Advisor may discontinue such waiver at
any time in its sole discretion. Without waivers the ratio of advisory fees
to average daily net assets would be .15% and total fund operating expenses
would be .37%.
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual
return, (2) redemption at the end of the time period (including the deduction
of the deferred sales charge, if any) and (3) no redemption at the end of the
time period. THIS EXAMPLE IS NOT A REPRESENTATION OF PAST OR FUTURE
PERFORMANCE OR OPERATING EXPENSES; ACTUAL PERFORMANCE OR OPERATING EXPENSES
MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
1 YEAR 3 YEAR 5 YEAR 10 YEAR
------ ------ ------ -------
<S> <C> <C> <C>
$3 $9 $16 $37
</TABLE>
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors. This information should be read in conjunction with the
Fund's most recent Annual Report, which is incorporated by reference into the
SAI. You may obtain the Annual Reports without charge by calling (800) 438-
5789.
<TABLE>
<CAPTION>
INDEX 500 FUND(A)
-----------------------------------------------
YEAR YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED
6/30/97 6/30/96(F) 6/30/95(D) 2/28/95(E,F)
-------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 16.17 $ 13.81 $ 12.40 $ 12.07
-------- -------- -------- --------
Income from investment
operations:
Net investment income......... 0.35 0.36 0.11 0.32
Net realized and unrealized
gain on investments.......... 5.06 3.07 1.46 0.50
-------- -------- -------- --------
Total from investment
operations................... 5.41 3.43 1.57 0.82
-------- -------- -------- --------
Less distributions:
Dividends from net investment
income....................... (0.34) (0.35) (0.16) (0.32)
Distributions from net
realized gains............... (0.27) (0.72) -- (0.17)
-------- -------- -------- --------
Total distributions........... (0.61) (1.07) (0.16) (0.49)
-------- -------- -------- --------
Net asset value, end of period. $ 20.97 $ 16.17 $ 13.81 $ 12.40
======== ======== ======== ========
Total return(b)............... 34.19% 25.61% 12.69% 7.06%
======== ======== ======== ========
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's)....................... $338,406 $174,693 $124,902 $100,024
Ratio of operating expenses to
average net assets........... 0.29% 0.26% 0.25%(c) 0.25%
Ratio of net investment income
to average net assets........ 2.01% 2.38% 2.66%(c) 2.74%
Portfolio turnover rate....... 11% 8% 6% 7%
Ratio of operating expenses to
average net assets without
waivers and/or expense
reimbursement................ 0.39% 0.44% 0.38%(c) 0.39%
Average commission rate(g).... $ 0.0153 $ 0.0240 N/A N/A
</TABLE>
- --------
(a) The Munder Index 500 Fund Class Y Shares commenced operations on December
1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year changed to June 30. Prior to this, the fiscal year end was the
last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
5
<PAGE>
<TABLE>
<CAPTION>
INDEX 500 FUND(A)
-------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
2/28/94 2/28/93 2/29/92
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period............. $ 11.47 $ 11.02 $ 10.00
------- ------- -------
Income from investment operations:
Net investment income........................... 0.31 0.31 0.07
Net realized and unrealized gain on investments. 0.59 0.78 0.97
------- ------- -------
Total from investment operations................ 0.90 1.09 1.04
------- ------- -------
Less distributions:
Dividends from net investment income............ (0.30) (0.31) (0.02)
Distributions from net realized gains........... -- (0.33) --
------- ------- -------
Total distributions............................. (0.30) (0.64) (0.02)
------- ------- -------
Net asset value, end of period................... $ 12.07 $ 11.47 $ 11.02
======= ======= =======
Total return(b)................................. 7.97% 10.25% 10.44%
======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)............ $85,269 $58,164 $59,019
Ratio of operating expenses to average net
assets......................................... 0.25% 0.25% 0.13%(c)
Ratio of net investment income to average net
assets......................................... 2.61% 2.73% 2.59%(c)
Portfolio turnover rate......................... 1% 22% 0%
Ratio of operating expenses to average net
assets without waivers and/or expense
reimbursement.................................. 0.42% 0.47% 1.21%
Average commission rate(g)...................... N/A N/A N/A
</TABLE>
- --------
(a) The Munder Index 500 Fund Class Y Shares commenced operations on December
1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year changed to June 30. Prior to this, the fiscal year end was the
last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
6
<PAGE>
FUND INFORMATION
This Prospectus describes Class Y Shares of the Fund. This section
summarizes the Fund's principal investments. The section entitled "What are
the Fund's Investments and Investment Practices?" and "What are the Risks of
Investing in the Fund?" and the SAI give more information about the Fund's
investment techniques and risks.
GOALS AND PRINCIPAL INVESTMENTS. The goal of the Fund is to provide
performance and income that is comparable to the S&P 500. The S&P 500 is an
index of 500 stocks which emphasize large capitalization companies. See
Appendix A for more information on the S&P 500. The Fund will normally hold
the securities of at least 400 of the stocks in the S&P 500.
The Fund will try to achieve a correlation between the performance of its
portfolio and that of the S&P 500 of at least .95. A correlation of 1.0 would
mean that the changes in the Fund's price mirror exactly changes in the S&P
500. The timing of purchases and redemptions, changes in securities markets,
level of the Fund's assets and other factors affect the Fund's ability to
exactly track the S&P 500's performance.
The Fund is managed through the use of a "quantitative" investment approach
and tries to mirror the composition and performance of the S&P 500 through
statistical procedures. The Advisor does not use traditional methods of fund
investment management, i.e., it does not select stocks on the basis of
economic, financial and market analysis. Because the Fund pays brokerage costs
and other fees, its return may be lower than that of the S&P 500.
PORTFOLIO MANAGEMENT. Todd B. Johnson and Kenneth A. Schluchter III jointly
manage the Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, has
served as the portfolio manager of the Fund since July 1992. Mr. Schluchter,
who has managed the Fund since June 1997, was previously a Systems Developer
and Data Analyst for Compuware Incorporated (1993-1995) and a Business Analyst
for Central Transport Incorporated (1989-1993).
WHO MAY WANT TO INVEST IN THE FUND?
The Fund is designed for investors who desire potentially high capital
appreciation and who can accept short-term variations in return for
potentially greater returns over the long term. In general, the greater the
risk, the greater the potential reward. Investors who have a short time
horizon, who desire a high level of income or who are conservative in their
investment approach may wish to invest in other portfolios offered by the
Trust.
WHAT ARE THE FUND'S INVESTMENTS AND INVESTMENT PRACTICES?
The Fund will invest in Equity Securities, which includes common stocks,
preferred stocks, warrants and other securities convertible into common
stocks, including convertible bonds and convertible preferred stocks. Many of
the common stocks the Fund will buy will not pay dividends; instead, stocks
will be bought for the potential that their prices will increase, providing
capital appreciation for the Fund. The value of Equity Securities will
fluctuate due to many factors, including the past and predicted earnings of
the issuer, the quality of the issuer's management, general market conditions,
the forecasts for the issuer's industry and the value of the issuer's assets.
Holders of Equity Securities only have rights to value in the company after
all debts have been paid, and they could lose their entire investment in a
company that encounters financial difficulty. Warrants are rights to purchase
securities at a specified time at a specified price.
The Fund may invest in FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS, which
are obligations of the Fund to purchase or sell a specific currency at a
future date at a set price. These contracts may decrease the Fund's loss due
to a change in currency value, but also limits gains from currency exchanges.
7
<PAGE>
The Fund may invest in MONEY MARKET INSTRUMENTS, which are high-quality,
short-term instruments including, among other things, commercial paper,
bankers' acceptances and negotiable certificates of deposit of banks or
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies
or instrumentalities. These instruments will be used primarily pending
investment, to meet anticipated redemptions or as a temporary defensive
measure.
The Fund may invest in FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS.
Futures contracts are contracts in which the Fund agrees, at maturity, to make
delivery of or receive securities or the cash value of an index. Futures
contracts and options on futures contracts are used for hedging purposes or to
maintain liquidity. The Fund may not purchase or sell a futures contract
unless immediately after any such transaction the sum of the aggregate amount
of margin deposits on its existing futures positions and the amount of
premiums paid for related options is 5% or less of its total assets. The Fund
will set aside cash or other liquid securities to "cover" the Fund's position
in futures.
The Fund may purchase or sell OPTIONS. The Fund may buy options giving it
the right to require a buyer to buy a security held by the Fund (put options),
buy options giving it the right to require a seller to sell securities to the
Fund (call options), sell (write) options giving a buyer the right to require
the Fund to buy securities from the buyer or write options giving a buyer the
right to require the Fund to sell securities to the buyer during a set time at
a set price. Options may relate to stock indices or individual securities. See
the SAI for more details and additional limitations.
The Fund may purchase securities on a "WHEN-ISSUED" basis and may purchase
or sell securities on a "FORWARD COMMITMENT" basis. Although the price to be
paid by the Fund is set at the time of the agreement, the Fund usually does
not pay for securities until they are received. The value of the securities
may change between the time the price is set and the time the price is paid.
When the Fund purchases securities for future delivery, the Fund's custodian
will set aside cash or liquid securities to "cover" the Fund's position. The
Fund does not intend to purchase securities for future delivery for
speculative purposes.
The Fund may enter into REPURCHASE AGREEMENTS. Under a repurchase agreement,
the Fund agrees to purchase securities from a seller and the seller agrees to
repurchase the securities at a later time, typically within seven days, at a
set price. The seller agrees to set aside collateral equal to the price it has
to pay during the term of the agreement. This ensures that the Fund will
receive the purchase price at the time it is due, unless the seller defaults
or declares bankruptcy, in which event the Fund will bear the risk of possible
loss due to adverse market action or delays in liquidating the underlying
obligation.
The Fund may invest in REVERSE REPURCHASE AGREEMENTS. Under a reverse
repurchase agreement, the Fund sells securities and agrees to buy them back
later at an agreed upon time and price. Reverse repurchase agreements are used
to borrow money for temporary purposes.
The Fund may LEND SECURITIES to broker-dealers and other financially sound
institutional investors who will pay the Fund for the use of the securities,
thus potentially increasing the Fund's returns. The borrower must set aside
cash or liquid securities equal to the value of the securities borrowed at all
times during the terms of the loan. Loans may not exceed 25% of the value of
the Fund's total assets. Risks involved in such transactions include possible
delay in recovering the loaned securities and possible loss of the securities
or the collateral if the borrower fails financially.
The Fund may purchase AMERICAN DEPOSITARY RECEIPTS ("ADRS"), EUROPEAN
DEPOSITARY RECEIPTS ("EDRS") AND GLOBAL DEPOSITARY RECEIPTS ("GDRS"). ADRs are
issued by U.S. financial institutions and GDRs and EDRs are issued by European
financial institutions. They are receipts evidencing ownership of underlying
foreign securities.
The Fund may buy shares of registered MONEY MARKET FUNDS. The Fund will bear
a portion of the expenses of any investment company whose shares they
purchase, including operating costs and investment advisory, distribution and
administration fees. These expenses would be in addition to the Fund's own
expenses. The Fund may invest up to 10% of its assets in other investment
companies and no more than 5% of its assets in any one investment company.
8
<PAGE>
The Fund may invest up to 15% of the value of its net assets in ILLIQUID
SECURITIES. Illiquid Securities are securities for which there is no ready
market, which inhibits the ability to sell them and obtain their full market
value, or which are legally restricted as to their resale by the Fund.
The Fund may purchase FIXED INCOME SECURITIES. Fixed Income Securities are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rate.
The Fund may purchase U.S. GOVERNMENT SECURITIES, which are securities
issued by, or guaranteed by, the U.S. Government or its agencies or
instrumentalities. Such securities include U.S. Treasury bills, which have
initial maturities of less than one year, U.S. Treasury notes, which have
initial maturities of one to ten years, U.S. Treasury bonds, which generally
have initial maturities of greater than ten years, and obligations of the
Federal Home Loan Mortgage Corporation, Federal National Mortgage Association
and Government National Mortgage Association. Under normal market conditions,
the Fund will not invest to a significant extent, or on a routine basis, in
U.S. Government Securities.
The Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
The Fund may invest up to 25% of its assets in FOREIGN SECURITIES. Foreign
Securities are securities issued by non-U.S. companies. Investments in Foreign
Securities are riskier than investments in U.S. companies because (i) foreign
companies may be subject to different accounting, auditing and financial
reporting standards than U.S. companies, (ii) there is generally less public
information available about foreign companies, (iii) there may be less
governmental regulation and supervision of foreign stock exchanges, securities
markets and companies and (iv) foreign securities markets may be less liquid
and more volatile than U.S. securities markets.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Investing in the Fund may be less risky than investing in individual stocks
due to the diversification of investing in a portfolio of many different
stocks; however, such diversification does not eliminate all risks. Because
the Fund invests mostly in Equity Securities, rises and falls in the stock
market in general, as well as in the value of particular Equity Securities
held by the Fund, can affect the Fund's performance. Your investment in the
Funds is not guaranteed. The net asset value of the Fund will change daily and
you might not recoup the amount you invest in the Fund.
The Fund is not meant to provide a vehicle for playing short-term swings in
the stock market. Consistent with a long-term investment approach, investors
in the Fund should be prepared and able to maintain their investments during
periods of adverse market conditions. By itself, the Fund does not constitute
a balanced investment program and there is no guarantee that the Fund will
achieve its investment objective since there is uncertainty in every
investment.
A fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. The Fund is authorized to use options, futures
and forward foreign currency exchange contracts, which are types of derivative
instruments. Derivative instruments are instruments that derive their value
from a different underlying security, index or financial indicator. The use of
derivative instruments exposes the Fund to additional risks and transaction
costs. Risks inherent in the use of derivative instruments include: (1) the
risk that interest rates, securities prices and currency markets will not move
in the direction that a portfolio manager anticipates; (2) imperfect
correlation between the price of derivative instruments and movements in the
prices of the securities,
9
<PAGE>
interest rates or currencies being hedged; (3) the fact that skills needed to
use these strategies are different than those needed to select portfolio
securities; (4) the possible absence of a liquid secondary market for any
particular instrument and possible exchange-imposed price fluctuation limits,
either of which may make it difficult or impossible to close out a position
when desired; (5) leverage risk, that is, the risk that adverse price
movements in an instrument can result in a loss substantially greater than the
Fund's initial investment in that instrument (in some cases, the potential
loss is unlimited) and (6) particularly in the case of privately-negotiated
instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the Fund worse off than if it had not entered
into the position.
To the extent that the Fund invests in illiquid securities, the Fund risks
not being able to sell securities at the time and the price that it would
like. The Fund may therefore have to lower the price, sell substitute
securities or forego an investment opportunity, each of which might adversely
affect the Fund.
The risks of the various investment techniques the Fund uses are described
in more detail in the SAI.
PERFORMANCE
HOW IS THE FUND'S PERFORMANCE CALCULATED?
There are various ways in which the Fund may calculate and report its
performance. Performance is calculated separately for each class of shares.
One method is to show the Fund's total return. Cumulative total return is
the percentage change in the value of an amount invested in a class of shares
of the Fund over a stated period of time and takes into account reinvested
dividends. Cumulative total return most closely reflects the actual
performance of the Fund. However, a shareholder who opts to receive dividends
in cash will have a different return than the reported performance.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of the Fund
determined by comparing the initial amount invested to the ending redeemable
value of the amount, taking into account reinvested dividends.
The Fund may also publish its current yield. Yield is the net investment
income generated by a share of the Fund during a 30-day period divided by the
maximum offering price on the 30th day.
You should be aware that (i) past performance does not indicate how the Fund
will perform in the future and (ii) the Fund's return and net asset value will
fluctuate, so you cannot necessarily use the Fund's performance data to
compare it to investment in certificates of deposit, savings accounts or other
investments that provide a fixed or guaranteed yield.
The Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. The Fund may also compare its total return
to the S&P 500 and other broad-based indices. These indices show the value of
selected portfolios of securities (assuming reinvestment of interest and
dividends) which are not managed by a portfolio manager. The Fund may report
how it is performing in comparison to the Consumer Price Index, an indication
of inflation reported by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Fund's annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
10
<PAGE>
PURCHASES AND EXCHANGES OF SHARES
The following persons may purchase Class Y Shares:
. Fiduciary and discretionary accounts of institutions
. institutional investors (including banks, savings institutions, credit
unions and other financial institutions, pension, profit sharing and
employee benefit plans and trusts, insurance companies, investment
companies, investment advisors and broker-dealers acting either for their
own accounts or for the accounts of institutional investors)
. Directors, trustees, officers and employees of the Trust, the Company,
Framlington, the Advisor and the Distributor
. the Advisor's investment advisory clients
. family members of employees of the Advisor
The Fund also has registered Class A, B, C and K Shares, which have
different sales charges, expense levels and performance. Class K Shares are
available to limited types of investors. Call (800) 438-5789 to obtain more
information concerning the Fund's other classes of shares.
WHAT PRICE DO I PAY FOR SHARES?
Class Y Shares are sold at the net asset value next determined by the Fund
without any sales charge. You should be aware that broker-dealers (other than
the Fund's Distributor) may charge investors additional fees if shares are
purchased through them.
Except in certain limited circumstances, the Fund determines its net asset
value ("NAV") on each day the New York Stock Exchange ("NYSE") is open for
trading (a "Business Day") at the close of such trading (normally 4:00 p.m.
Eastern time). The Fund calculates NAV separately for each class of shares.
The "net asset value next determined" is the NAV calculated at 4:00 p.m. on
the day the purchase order for shares is received, if the purchase order is
received prior to or at 4:00 p.m., and is the net asset value calculated at
4:00 p.m. on the next Business Day, if the purchase order is received after
4:00 p.m. NAV is calculated by totaling the value of all of the assets of the
Fund allocated to a particular class of shares, subtracting the Fund's
liabilities and expenses charged to that class and dividing the result by the
number of shares of that class outstanding.
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment by fiduciary and discretionary accounts of
institutions and institutional investors for Class Y Shares of the Fund is
$500,000. Other types of investors are not subject to any minimum required
investment.
HOW CAN I PURCHASE SHARES?
You can purchase Class Y Shares in a number of different ways. You may place
orders for Class Y Shares directly through the Transfer Agent or the
Distributor or through arrangements with a financial institution.
. THROUGH A FINANCIAL INSTITUTION. You may purchase shares through a
financial institution through procedures established with that
institution. Confirmations of share purchases will be sent to the
institution.
. BY MAIL. You may open an account by mailing a completed and signed
Account Application Form and a check or other negotiable bank draft
(payable to the Munder Funds) to: THE MUNDER FUNDS, C/O FIRST DATA
INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH, MASSACHUSETTS 01581-
5130. You can obtain
11
<PAGE>
an Account Application Form by calling (800) 438-5789. For additional
investments, send a letter stating the Fund and share class you wish to
purchase, your name and your account number with a check for $50 or more
to the address listed above.
. BY WIRE. You may make additional investments in the Fund by wire. Wire
instructions must state the Fund name, share class, your registered name
and your account number. Your bank wire should be sent through the
Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA#011001234
DDA#16-798-3
Account No.:
Note that banks may charge fees for transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP, you may arrange for
periodic investments in the Fund through automatic deductions from a
checking or savings account. To enroll in the AIP, you should complete
the AIP Application Form or call the Fund at (800) 438-5789. The minimum
pre-authorized investment amount is $50. You may discontinue the AIP at
any time. We may discontinue the AIP on 30 days' written notice to you.
The Transfer Agent will send you confirmations of the opening of an account
and of all subsequent purchases, exchanges or redemptions in the account. If
your account has been set up by a broker or other investment professional,
account activity will be detailed in their statements to you. You will not be
issued a share certificate, unless you request one in writing. We reserve the
right to (i) reject any purchase order if, in our opinion, it is in the Fund's
best interest to do so and (ii) suspend the offering of shares of any Class
for any period of time.
You may pay for shares of the Fund with securities which the Fund is allowed
to hold.
See the SAI for further information regarding purchases of the Fund's
shares.
HOW CAN I EXCHANGE SHARES?
You may exchange Class Y Shares of the Fund for Class Y Shares of other
funds of the Trust, the Company or Framlington based on their relative net
asset values.
You must meet the minimum purchase requirements for the fund of the Trust,
the Company or Framlington that you purchase by exchange. You must pay any
difference in sales charge at the time of exchange. Please note that a share
exchange is a taxable event and accordingly, you may realize a taxable gain or
loss. Before making an exchange request, read the Prospectus of the fund you
wish to purchase by exchange. You can obtain a Prospectus for any fund of the
Trust, the Company or Framlington by contacting your broker or the Funds at
(800) 438-5789. Brokers may charge a fee for handling exchanges.
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
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<PAGE>
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order.
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by the Transfer Agent. The Fund may temporarily stop
redeeming shares when the NYSE is closed or trading on the NYSE is restricted,
when an emergency exists and the Fund cannot sell its assets or accurately
determine the value of its assets or if the SEC orders the Fund to suspend
redemptions.
HOW CAN I REDEEM SHARES?
Redemption orders are effected at the net asset value per share next
determined after receipt of the order by the Transfer Agent. Shares held by an
institution on behalf of its Customers must be redeemed in accordance with
instructions and limitations pertaining to the account at the institution.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
If we receive a redemption order for a Fund before 4:00 p.m. (Eastern time)
on a Business Day, we will normally wire payment to the redeeming institution
on the next Business Day. We may delay wiring redemption proceeds for up to
seven days if we feel an earlier payment would have a negative impact on the
Fund.
STRUCTURE AND MANAGEMENT OF THE FUND
HOW IS THE FUND STRUCTURED?
The Trust is an open-end management investment company, which is a mutual
fund that sells and redeems shares every day that it is open for business. The
Trust is managed under the direction of its Board of Trustees which is
responsible for the overall management of the Trust and supervises the Fund's
service providers. The Trust is organized as a Massachusetts business trust.
WHO MANAGES AND SERVICES THE FUND?
INVESTMENT ADVISOR. The Fund's investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for the Fund, provides
research and credit analysis, and is responsible for all purchases and sales
of portfolio securities. During the fiscal year ended June 30, 1997, the
Advisor was paid an advisory fee at an annual rate of .07% of the average
daily net assets of the Fund (after
13
<PAGE>
waivers and/or expense reimbursements). The Advisor waived advisory fees
during the past fiscal year for the Fund. The Advisor is entitled to receive
an annual fee equal to .20% of the first $250 million of the Fund's average
daily net assets, .12% of the next $250 million of the Fund's average daily
net assets and .07% of the Fund's average daily net assets over $500 million.
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Fund and/or its
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor makes such payments out of its own
resources and there are no additional costs to the Fund or its shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Fund based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Fund's
transfer agent. The Transfer Agent is a wholly-owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Fund's administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Trust in all aspects of its administration and operations including the
maintenance of financial records and fund accounting. As compensation for its
services, State Street is entitled to receive fees based on the aggregate
daily net assets of the Fund and certain other investment portfolios that are
advised by the Advisor for which it provides services, computed daily and
payable monthly at the annual rate of .051% of the first $7.5 billion of net
assets, plus .045% of the next $2.5 billion of net assets plus .03% of the
next $2.5 billion of net assets, plus .02% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Fund. State Street pays the Distributor a fee for
these services out of its own resources at no cost to the Fund.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Fund. No compensation is paid to the Custodian for
its services. State Street also serves as sub-custodian to the Fund. As
compensation for its services, the sub-custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Fund and certain other
investment portfolios that are advised by the Advisor for which the sub-
custodian provides services, computed daily and payable monthly at an annual
rate of .01% of average daily net assets. The sub-custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Fund's shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Fund's shares.
For an additional description of the services performed by the
Administrator, Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust as a whole and affecting the Fund. The Trust will not hold annual
shareholder meetings, but special meetings may be held at the written request
of shareholders owning more than 10% of outstanding shares for the purpose of
removing a Trustee. Under Massachusetts law, it is possible that a shareholder
may be personally liable for the Trust's obligations. If a shareholder were
required to pay a debt of the Fund, however, the Trust has committed to
reimburse the shareholder in full from its assets. The SAI contains more
information regarding voting rights.
14
<PAGE>
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Fund as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUND?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on the Fund's investments. The Fund passes its earnings along
to investors in the form of dividends. Dividend distributions are the
dividends or interest earned on investments after expenses. The net income of
the Fund, if any, is paid quarterly as a dividend.
The Fund distributes its net realized capital gains (including net short-
term capital gains), if any, at least annually.
HOW WILL DISTRIBUTIONS BE MADE?
The Fund will pay dividend and capital gains distributions in additional
shares of the same class of the Fund. If you wish to receive distributions in
cash, either indicate this request on your Account Application Form or notify
the Fund at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUND?
In general, as long as the Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. The Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, the Fund may still
be liable for an excise tax on income that is not distributed in accordance
with a calendar year requirement; the Fund intends to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by the Fund
will generally be designated as long-term or short-term. Recent tax law
changes have added a new category of mid-term capital gain; it is expected
that regulations will be issued regarding the proper tax treatment of mid-term
and other gains by shareholders of RICs. Distributions from the Fund's long-
term capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from the Fund a statement
of the amount and nature of the distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by the
Fund may be subject to foreign withholding or other taxes. The Fund may be
permitted to pass on to its shareholders the right to a credit or
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<PAGE>
deduction for income or other tax credits earned from foreign investments and
it intends to do so if possible. These deductions or credits may be subject to
tax law limitations.
If the Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If the Fund elects to treat a PFIC as a "qualified electing
fund" ("QEF") and the PFIC furnishes certain financial information in the
required form to the Fund, the Fund will instead be required to include in
income each year its allocable share of the ordinary earnings and net capital
gains of the QEF, regardless of whether received, and such amounts will be
subject to the various distribution requirements described above. The Fund may
also elect to mitigate the tax effects of owning PFIC stock by making an
annual mark-to-market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Fund and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Fund, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and audited Annual Reports on a regular basis from the Fund. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings, the Fund will only send one copy of the
above communications to (1) accounts with the same primary record owner, (2)
joint tenant accounts, (3) tenant in common accounts and (4) accounts which
have the same address.
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<PAGE>
APPENDIX A
The Index 500 Fund is not sponsored, endorsed, sold or promoted by Standard
& Poor's Ratings Service, a division of McGraw-Hill Companies, Inc. ("S&P").
S&P makes no representation or warranty, express or implied, to the owners of
the Index 500 Fund or any member of the public regarding the advisability of
investing in securities generally or in the Index 500 Fund particularly or the
ability of the S&P 500 Index to trace general stock market performance. S&P's
only relationship to the Trust is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Trust or the Index 500 Fund. S&P has
no obligation to take the needs of the Trust or the owners of the Index 500
Fund into consideration in determining, composing or calculating the S&P 500
Index. S&P is not responsible for and has not participated in the
determination of the prices and amount of the Index 500 Fund or the timing of
the issuance or sale of the Index 500 Fund or in the determination or
calculation of the equation by which the Index 500 Fund is to be converted
into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Index 500 Fund.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Trust, owners of the Index 500
Fund, or any other person or entity from the use of the S&P 500 Index or any
data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability of fitness for a
particular purpose or use with respect to the S&P 500 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.
"Standard & Poor's", "S&P", "S&P 500", "Standard & Poor's 500", and "500"
are trademarks of McGraw-Hill, Inc. and have been licensed for use by the
Trust. The Index 500 Fund is not sponsored, endorsed, sold or promoted by S&P
and S&P makes no representation regarding the advisability of investing in the
Index 500 Fund.
A-1
<PAGE>
PROIXY97 / F0418 / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
CLASS K SHARES
[LOGO OF THE MUNDER FUNDS]
Investments for all seasons
Prospectus
OCTOBER 29, 1997
THE MUNDER EQUITY FUNDS
Accelerating Growth
Balanced
Growth & Income
Index 500
International Equity
Micro-Cap Equity
Mid-Cap Growth
Multi-Season Growth
Real Estate Equity Investment
Small-Cap Value
Small Company Growth
Value
THE MUNDER FRAMLINGTON FUNDS
Framlington Emerging Markets
Framlington Healthcare
Framlington International Growth
THE MUNDER INCOME FUNDS
Bond
Intermediate Bond
International Bond
U.S. Government Income
Michigan Triple Tax-Free Bond
Tax-Free Bond
Tax-Free Intermediate Bond
Short Term Treasury
THE MUNDER MONEY MARKET FUNDS
Cash Investment
Tax-Free Money Market
U.S. Treasury Money Market
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS K SHARES
The Munder Funds Trust (the "Trust"), The Munder Funds, Inc. (the "Company")
and The Munder Framlington Funds Trust ("Framlington") are open-end investment
companies. This Prospectus describes the investment portfolios offered by the
Trust (the "Trust Funds"), the Company (the "Company Funds") and Framlington
("Framlington Funds") described below (referred to as the "Funds"):
Munder Accelerating Growth Fund Munder Framlington Healthcare Fund
Munder Balanced Fund Munder Framlington International
Munder Growth & Income Fund Growth Fund
Munder Index 500 Fund Munder Bond Fund
Munder International Equity Fund Munder Intermediate Bond Fund
Munder Micro-Cap Equity Fund Munder International Bond Fund
Munder Mid-Cap Growth Fund Munder U.S. Government Income Fund
Munder Multi-Season Growth Fund Munder Michigan Triple Tax-Free Bond
Munder Real Estate Equity Investment Fund *
Fund Munder Tax-Free Bond Fund
Munder Small-Cap Value Fund Munder Tax-Free Intermediate Bond
Munder Small Company Growth Fund Fund
Munder Value Fund Munder Short Term Treasury Fund
Munder Framlington Emerging Markets Munder Cash Investment Fund
Fund Munder Tax-Free Money Market Fund
Munder U.S. Treasury Money Market
Fund
- --------
*The Michigan Triple Tax-Free Bond Fund is offered only in the State of
Michigan.
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Funds.
This Prospectus explains the objectives, policies, risks and fees of each
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
each of the Funds has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. You can
obtain the SAI free of charge by calling the Funds at (800) 438-5789. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
SAI and other information regarding the Funds.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
ALTHOUGH EACH OF THE CASH INVESTMENT FUND, TAX-FREE MONEY MARKET FUND AND
U.S. TREASURY MONEY MARKET FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE
OF $1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT EACH FUND CAN DO SO ON A
CONTINUING BASIS.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Funds?.............................. 3
Financial Information...................................................... 6
Fund Choices
What Funds are offered?.................................................. 31
Who may want to invest in the Funds?..................................... 41
What are the Funds' investments and investment practices?................ 41
What are the risks of investing in the Funds?............................ 53
Performance
How is the Funds' performance calculated?................................ 55
Where can I obtain performance data?..................................... 55
Purchases of Shares
What price do I pay for shares?.......................................... 56
When can I purchase shares?.............................................. 56
How can I purchase shares?............................................... 56
Redemptions of Shares
What price do I receive for redeemed shares?............................. 56
When can I redeem shares?................................................ 56
How can I redeem shares?................................................. 57
When will I receive redemption amounts?.................................. 57
Structure and Management of the Funds
How are the Funds structured?............................................ 57
Who manages and services the Funds?...................................... 57
What are my rights as a shareholder?..................................... 63
Dividends, Distributions and Taxes
When will I receive distributions from the Funds?........................ 63
How will distributions be made?.......................................... 64
Are there tax implications of my investments in the Funds?............... 64
Additional Information..................................................... 65
Appendix A................................................................. 65
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUNDS?
Q: What are the Funds' goals?
A:. The Accelerating Growth Fund, Framlington Emerging Markets Fund,
Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund, Small Company Growth
Fund and Value Fund primarily seek to provide long-term capital
appreciation.
. The Index 500 Fund seeks to provide price performance and income that is
comparable to the Standard & Poor's 500 Composite Stock Price Index ("S&P
500").
. The Balanced Fund, Growth & Income Fund and Real Estate Equity Investment
Fund seek to provide capital appreciation and current income.
. The Bond Fund seeks to provide a high level of current income with
capital appreciation as a secondary consideration.
. The Intermediate Bond Fund seeks to provide a competitive rate of return
which exceeds the inflation rate and the return provided by money market
instruments.
. The International Bond Fund seeks to realize a competitive total return
through a combination of current income and capital appreciation.
. The U.S. Government Income Fund seeks to provide high current income.
. The Tax-Free Bond Fund and Tax-Free Intermediate Bond Fund seek to
provide current interest income exempt from Federal income taxes.
. The Michigan Triple Tax-Free Bond Fund seeks to provide as high a level
of current interest income exempt from regular Federal income taxes,
Michigan state income tax and Michigan intangibles tax as is consistent
with prudent investment management and preservation of capital.
. The Short Term Treasury Fund seeks to provide an enhanced money market
return consistent with the preservation of capital.
. The Cash Investment Fund and U.S. Treasury Money Market Fund seek as high
a level of current interest income as is consistent with maintaining
liquidity and stability of principal.
. The Tax-Free Money Market Fund seeks to provide as high a level of
current interest income exempt from Federal income taxes as is consistent
with maintaining liquidity and stability of principal.
Q: What are the Funds' strategies?
A:
BALANCED FUND
. This Fund allocates its assets primarily among three types of assets--
Equity Securities, Fixed Income Securities and Cash Equivalents. "Equity
Securities" include common stocks, preferred stocks, warrants and other
securities convertible into common stock, including convertible bonds and
convertible preferred stock. "Fixed Income Securities" are securities
which either pay interest at set times at either fixed or variable rates,
or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate
debt instruments, zero coupon bonds (discount debt obligations that do
not make interest payments) and variable amount master demand notes that
permit the amount of indebtedness to vary in addition to providing for
periodic adjustments in the interest rates. "Cash Equivalents" are
instruments which are highly liquid and virtually free of investment
risk.
ACCELERATING GROWTH FUND, FRAMLINGTON EMERGING MARKETS FUND, FRAMLINGTON
HEALTHCARE FUND, FRAMLINGTON INTERNATIONAL GROWTH FUND, GROWTH & INCOME
FUND, INTERNATIONAL EQUITY FUND, MICRO-CAP EQUITY FUND, MID-CAP GROWTH
FUND, MULTI-SEASON GROWTH FUND, REAL ESTATE EQUITY INVESTMENT FUND, SMALL-
CAP VALUE FUND, SMALL COMPANY GROWTH FUND AND VALUE FUND (THE "EQUITY
FUNDS")
. These Funds invest primarily in Equity Securities.
3
<PAGE>
Index 500 Fund
. This Fund invests primarily in Equity Securities and it normally will
hold the securities of at least 80% of the issuers in the S&P 500. The
Fund is managed through a "quantitative" or "indexing" investment
approach, which attempts to duplicate the investment composition and
performance of the S&P 500 through statistical procedures.
Bond Fund, Intermediate Bond Fund, International Bond Fund and U.S.
Government Income Fund (the "Bond Funds")
. These Funds, other than the U.S. Government Income Fund, invest primarily
in Fixed Income Securities.
. The U.S. Government Income Fund invests primarily in obligations of the
U.S. government and its agencies and instrumentalities.
Short Term Treasury Fund
. The Short Term Treasury Fund invests only in U.S. Treasury securities and
repurchase agreements relating to U.S. Treasury securities.
Michigan Triple Tax-Free Bond Fund, Tax-Free Bond Fund and Tax-Free
Intermediate Bond Fund (the "Tax-Free Funds")
. The Tax-Free Bond Fund and Tax-Free Intermediate Bond Fund invest
primarily in Municipal Obligations. "Municipal Obligations" are
obligations of states, territories and possessions of the United States
and the District of Columbia, and their political subdivisions, agencies,
instrumentalities and authorities, the interest on which is exempt from
regular Federal income tax.
. The Michigan Triple Tax-Free Bond Fund invests primarily in Michigan
Municipal Obligations. "Michigan Municipal Obligations" are municipal
obligations issued by the State of Michigan and its political
subdivisions, the interest on which is exempt from Federal income taxes,
Michigan state income tax and Michigan intangibles tax.
Cash Investment Fund, Tax-Free Money Market Fund and U.S. Treasury Money
Market Fund (the "Money Market Funds")
. The Funds invest solely in dollar-denominated debt securities with
remaining maturities of 13 months or less and maintain an average dollar-
weighted portfolio maturity of 90 days or less.
Each Fund implements a different investment strategy which is described in
this Prospectus.
4
<PAGE>
Q: What are the Funds' risks?
A: The following table summarizes the primary risks of investing in the Funds:
<TABLE>
<CAPTION>
FUND RISK
- -------------------------------------------------------------------------------
<C> <S>
Equity Funds and Balanced Fund Potential loss of investment due to changes in
the stock market in general, changes in the
stock prices of particular companies and
perceptions about particular industries.
- -------------------------------------------------------------------------------
Bond Funds, Tax-Free Funds and Potential loss of investment due to changes in
Short Term Treasury Fund the bond market in general, in the prices of
debt securities of particular companies and
in interest rates.
- -------------------------------------------------------------------------------
Money Market Funds Potential failure to maintain a $1.00 net
asset value.
- -------------------------------------------------------------------------------
International Equity Fund, Because of large investments in foreign
Framlington International securities, the Funds are riskier than
Growth Fund, Framlington domestic funds due to factors such as freezes
Emerging Markets Fund and on convertibility of currency, changes in
International Bond Fund exchange rates, political instability and
differences in accounting and reporting
standards.
- -------------------------------------------------------------------------------
Micro-Cap Equity Fund, Small- Because of large investments in mid-
Cap Value Fund, Mid-Cap Growth capitalization, small-capitalization and/or
Fund and Small Company Growth emerging growth companies, the Funds are
Fund riskier than large-capitalization funds since
such companies typically have greater
earnings fluctuations and greater reliance on
a few key customers than larger companies.
- -------------------------------------------------------------------------------
Real Estate Equity Investment These Funds concentrate their investments in
Fund and Framlington single industries and could experience larger
Healthcare Fund price fluctuations than funds invested in a
broader range of industries.
- -------------------------------------------------------------------------------
International Bond Fund, These "non-diversified" Funds concentrate
Michigan Triple Tax-Free Bond their investments in fewer issuers than
Fund and Tax-Free Intermediate diversified funds, and could experience
Bond Fund larger price fluctuations than diversified
funds.
</TABLE>
Q: What are the options for investment in the Funds?
A: Each Equity, Bond, and Tax-Free Fund and the Short Term Treasury Fund offer
five different investment options, or classes: Class A, B, C, K and Y. The
Money Market Funds offer Class A, K and Y Shares. Class A, B, C and Y Shares
are offered in other prospectuses.
Q: How do I buy and sell shares of the Funds?
A: Class K Shares of each Fund are available to customers ("Customers") of
banks and other institutions, and the immediate family members of such
Customers, that have entered into agreements with us to provide shareholder
services for Customers. You may purchase shares through such a bank or
financial institution.
Shares may be redeemed (sold back to the Fund) through your financial
institution or, in some cases, through the free checkwriting privilege.
Q: What shareholder privileges do the Funds offer?
. Free checkwriting (certain Funds only--See "Redemption of Shares").
Q: When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments after expenses. Dividends paid at least annually: Framlington
Emerging Markets Fund, Framlington Healthcare Fund, Framlington International
Growth Fund, International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth
5
<PAGE>
Fund, Multi-Season Growth Fund, Small-Cap Value Fund and Value Fund.
Dividends paid at least quarterly (if income is available): Accelerating
Growth Fund, Balanced Fund, Growth & Income Fund, Index 500 Fund, Small
Company Growth Fund and International Bond Fund.
Dividends paid monthly: Real Estate Equity Investment Fund, Bond Fund,
Intermediate Bond Fund, U.S. Government Income Fund, Michigan Triple Tax-Free
Bond Fund, Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund, Short Term
Treasury Fund, Cash Investment Fund, Tax-Free Money Market Fund, and U.S.
Treasury Money Market Fund.
The Funds distribute capital gains at least annually. Unless you elect to
receive distributions in cash, we will use all dividends and capital gain
distributions of a Fund to purchase additional shares of that Fund.
Q: Who manages the Funds' assets?
A: Munder Capital Management is the Funds' investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Funds
other than the Framlington Funds. The Advisor provides overall investment
management services for the Framlington Funds. Framlington Overseas Investment
Management Limited (the "Sub-Advisor") is responsible for all purchases and
sales of securities held by the Framlington Funds.
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Funds will bear directly.
<TABLE>
<S> <C>
Maximum Sales Charge on Purchase (as a % of Offering Price)................ None
Sales Charge Imposed on Reinvested Dividends............................... None
Maximum Deferred Sales Charge.............................................. None
Redemption Fees (2)........................................................ None
Exchange Fees.............................................................. None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The Funds' transfer agent may charge a fee of $7.50 for wire redemptions
under $5,000.
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to each Fund, which investors in the Funds will bear
indirectly for the current fiscal year. Such expenses include payments to
Trustees, Directors, auditors, legal counsel and service providers (such as
the Advisor) and registration fees. The fees shown below are based on fees for
the Funds' past fiscal year, except (i) the fees for the Index 500 Fund, Mid-
Cap Growth Fund, Real Estate Equity Investment Fund and Value Fund have been
restated to reflect the discontinuation of voluntary expense reimbursements
effective as of the date of this Prospectus, (ii) the fees for the Index 500
Fund and the Multi-Season Growth Fund reflect an anticipated voluntary
advisory fee waiver for the current fiscal year and (iii) the fees for the
Micro-Cap Equity, Small-Cap Value, Short Term Treasury and International Bond
Funds and the Framlington Funds are based on estimated operating expenses for
the current fiscal year and reflect anticipated voluntary expense
reimbursements for the Micro-Cap Equity Fund and Framlington Healthcare Fund.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING GROWTH
EXPENSES & INDEX INTERNATIONAL
(AS A % OF AVERAGE NET ACCELERATING BALANCED INCOME 500 EQUITY
ASSETS) GROWTH FUND FUND FUND FUND FUND
- ---------------------- ------------ -------- ------ ----- -------------
<S> <C> <C> <C> <C> <C>
Advisory Fees........... .75% .65% .75% .07%* .75%
Shareholder Servicing
Fees................... .25% .25% .25% .25% .25%
Other Expenses.......... .20% .32% .20% .22% .26%
----- ----- ----- ---- -----
Total Fund Operating
Expenses............... 1.20% 1.22% 1.20% .54%* 1.26%
===== ===== ===== ==== =====
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
MICRO- MULTI- REAL ESTATE
CAP MID-CAP SEASON EQUITY SMALL-CAP
ANNUAL FUND OPERATING EXPENSES EQUITY GROWTH GROWTH INVESTMENT VALUE
(AS A % OF AVERAGE NET ASSETS) FUND FUND FUND FUND FUND
- ------------------------------ ------ ------- ------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Advisory Fees...................... 1.00% .74% .75%* .74% .75%
Shareholder Servicing Fees......... .25% .25% .25% .25% .25%
Other Expenses+.................... .25%++ .25% .25% .11% .38%
----- ----- ----- ----- -----
Total Fund Operating Expense+...... 1.50%++ 1.24% 1.25%* 1.10% 1.38%
===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING FRAMLINGTON FRAMLINGTON
EXPENSES SMALL EMERGING FRAMLINGTON INTERNATIONAL
(AS A % OF AVERAGE NET COMPANY VALUE MARKETS HEALTHCARE GROWTH
ASSETS) GROWTH FUND FUND FUND FUND FUND
- ---------------------- ----------- ----- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Advisory Fees........... .75% .74% 1.25% 1.00% 1.00%
Shareholder Servicing
Fees................... .25% .25% .25% .25% .25%
Other Expenses+......... .22% .28% .29% .30%++ .30%
----- ----- ----- ----- -----
Total Fund Operating
Expenses+.............. 1.22% 1.27% 1.79% 1.55%++ 1.55%
===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING U.S. MICHIGAN
EXPENSES INTERMEDIATE INTERNATIONAL GOVERNMENT TRIPLE TAX-FREE
(AS A % OF AVERAGE NET BOND BOND BOND INCOME TAX-FREE BOND
ASSETS) FUND FUND FUND FUND BOND FUND FUND
- ---------------------- ---- ------------ ------------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees........... .50% .50% .50% .50% .50% .50%
Shareholder Servicing
Fees................... .25% .25% .25% .25% .25% .25%
Other Expenses.......... .21% .18% .35% .21% .13% .20%
---- ---- ----- ---- ---- ----
Total Fund Operating
Expenses............... .96% .93% 1.10% .96% .88% .95%
==== ==== ===== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING TAX-FREE U.S.
EXPENSES TAX-FREE SHORT TERM CASH MONEY TREASURY
(AS A % OF AVERAGE NET INTERMEDIATE TREASURY INVESTMENT MARKET MONEY MARKET
ASSETS) BOND FUND FUND FUND FUND FUND
- ---------------------- ------------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
Advisory Fees........... .50% .25% .35% .35% .35%
Shareholder Servicing
Fees................... .25% .25% .15% .15% .15%
Other Expenses.......... .18% .27% .20% .18% .19%
---- ---- ---- ---- ----
Total Fund Operating
Expenses............... .93% .77% .70% .68% .69%
==== ==== ==== ==== ====
</TABLE>
- --------
* The Advisor expects to voluntarily waive a portion of its advisory fees for
the current fiscal year. Without waiver, the ratio of advisory fees to
average net assets would be 1.00% for the Multi-Season Growth Fund and .15%
for the Index 500 Fund and total fund operating expenses would be 1.50% for
the Multi-Season Growth Fund and .62% for the Index 500 Fund.
+After expense reimbursements, if any.
++The Advisor expects to voluntarily reimburse the Funds for certain operating
expenses. In the absence of such expense reimbursements, it is estimated
that total fund operating expenses would be as follows: 1.76% for the
Framlington Healthcare Fund and 1.60% for the Micro-Cap Equity Fund.
7
<PAGE>
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Fund assuming (1) a 5% annual return
and (2) redemption at the end of the time periods. THIS EXAMPLE IS NOT A
REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR OPERATING EXPENSES; ACTUAL
PERFORMANCE OR OPERATING EXPENSES MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Accelerating Growth Fund........................ $12 $38 $66 $145
Balanced Fund................................... $12 $39 $67 $148
Growth & Income Fund............................ $12 $38 $66 $145
Index 500 Fund.................................. $ 6 $17 $30 $ 68
International Equity Fund....................... $13 $40 $69 $152
Micro-Cap Equity Fund........................... $15 $47 $82 $179
Mid-Cap Growth Fund............................. $13 $39 $68 $150
Multi-Season Growth Fund........................ $13 $40 $69 $151
Real Estate Equity Investment Fund.............. $14 $43 $74 $162
Small-Cap Value Fund............................ $14 $44 $76 $166
Small Company Growth Fund....................... $12 $39 $67 $148
Value Fund...................................... $13 $40 $70 $153
Framlington Emerging Markets Fund............... $18 $56 $97 $211
Framlington Healthcare Fund..................... $16 $49 $84 $185
Framlington International Growth Fund........... $16 $49 $84 $185
Bond Fund....................................... $10 $31 $53 $118
Intermediate Bond Fund.......................... $ 9 $30 $51 $114
International Bond Fund......................... $11 $35 $61 $134
U.S. Government Income Fund..................... $10 $31 $53 $118
Michigan Triple Tax-Free Bond Fund.............. $ 9 $28 $49 $108
Tax-Free Bond Fund.............................. $10 $30 $53 $117
Tax-Free Intermediate Bond Fund................. $ 9 $30 $51 $114
Cash Investment Fund............................ $ 7 $22 $39 $ 87
Short Term Treasury Fund........................ $ 8 $25 $43 $ 95
Tax-Free Money Market Fund...................... $ 7 $22 $38 $ 85
U.S. Treasury Money Market Fund................. $ 7 $22 $38 $ 86
</TABLE>
8
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors, except that, for periods ended prior to June 30, 1995
for the Multi-Season Growth Fund, such financial highlights were audited by
another independent auditor. This information should be read in conjunction
with the Funds' most recent Annual Reports, which are incorporated by
reference into the SAI. You may obtain the Annual Reports without charge by
calling (800) 438-5789.
<TABLE>
<CAPTION>
ACCELERATING GROWTH FUND(A)
-------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(H) 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
---------- -------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.36 $ 14.82 $ 12.73 $ 13.98 $ 12.08 $11.74
------- -------- ------- ------- ------- ------
Income from investment
operations:
Net investment
income/(loss)......... (0.05) (0.05) (0.01) (0.03) 0.00(g) 0.01
Net realized and
unrealized gain/(loss)
on investments........ 0.63 2.92 2.10 (0.88) 2.17 0.62
------- -------- ------- ------- ------- ------
Total from investment
operations............ 0.58 2.87 2.09 (0.91) 2.17 0.63
------- -------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income..... -- -- -- -- (0.02) (0.01)
Distributions from net
realized gains........ (1.38) (2.33) -- (0.34) (0.25) (0.28)
------- -------- ------- ------- ------- ------
Total distributions.... (1.38) (2.33) -- (0.34) (0.27) (0.29)
------- -------- ------- ------- ------- ------
Net asset value, end of
period................. $ 14.56 $ 15.36 $ 14.82 $ 12.73 $ 13.98 $12.08
======= ======== ======= ======= ======= ======
Total return(b)........ 4.83% 22.03% 16.42% (6.45)% 18.00% 5.43%
======= ======== ======= ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $87,693 $110,273 $85,685 $71,406 $53,914 $3,141
Ratio of operating
expenses to average
net assets............ 1.20% 1.20% 1.20%(c) 1.18% 1.03% 0.96%(c)
Ratio of net investment
income/(loss) to
average net assets.... (0.32)% (0.42)% (0.21)%(c) (0.25)% (0.03)% 0.18%(c)
Portfolio turnover
rate.................. 88% 112% 31% 90% 34% 56%
Ratio of operating
expenses to average
net assets without
waivers............... 1.20% 1.27% 1.44%(c) 1.41% 1.28% 1.21%(c)
Average commission rate
paid(f)............... $0.0588 $ 0.0548 N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder Accelerating Growth Fund Class K Shares commenced operations on
November 23, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) Amount represents less than $0.01 per share.
(h) Per share numbers have been calculated using the average shares method,
which more appropriately represents the per share data for the period
since the use of the undistributed net investment income method did not
accord with the results of operations.
9
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND(A)
-----------------------------------------------------
YEAR PERIOD PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
6/30/97(G) 6/30/96(G) 6/30/95(D) 2/28/95(E) 2/28/94
---------- ---------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 12.37 $ 10.78 $ 9.97 $10.35 $ 9.97
------- ------- ------ ------ ------
Income from investment
operations:
Net investment income.. 0.29 0.27 0.07 0.21 0.16
Net realized and
unrealized gain/(loss)
on investments........ 1.30 1.57 0.86 (0.42) 0.34
------- ------- ------ ------ ------
Total from investment
operations............ 1.59 1.84 0.93 (0.21) 0.50
------- ------- ------ ------ ------
Less distributions:
Dividends from net
investment income..... (0.27) (0.25) (0.12) (0.17) (0.12)
Distributions from net
realized gains........ (0.66) -- -- -- --
------- ------- ------ ------ ------
Total distributions.... (0.93) (0.25) (0.12) (0.17) (0.12)
------- ------- ------ ------ ------
Net asset value, end of
period................. $ 13.03 $ 12.37 $10.78 $ 9.97 $10.35
======= ======= ====== ====== ======
Total return(b)........ 13.64% 17.17% 9.33% (1.95)% 5.03%
======= ======= ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $ 6,588 $ 1,718 $ 168 $ 151 $ 102
Ratio of operating
expenses to average
net assets............ 1.22% 1.15% 1.16%(c) 1.22% 1.00%(c)
Ratio of net investment
income to average net
assets................ 2.30% 2.29% 2.51%(c) 1.89% 1.68%(c)
Portfolio turnover
rate.................. 125% 197% 52% 116% 50%
Ratio of operating
expenses to average
net assets without
waivers............... 1.22% 1.26% 1.51%(c) 1.57% 1.25%(c)
Average commission paid
rate(f)............... $0.0607 $0.0586 N/A N/A N/A
</TABLE>
- --------
(a) The Munder Balanced Fund Class K Shares commenced operations on April 16,
1993.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
10
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND (A)
----------------------------------------------
YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 13.05 $ 11.14 $ 10.43 $ 10.00
-------- -------- -------- --------
Income from investment
operations:
Net investment income....... 0.32 0.32 0.11 0.22
Net realized and unrealized
gain on investments........ 3.14 1.99 0.78 0.36
-------- -------- -------- --------
Total from investment
operations................. 3.46 2.31 0.89 0.58
-------- -------- -------- --------
Less distributions:
Dividends from net
investment income.......... (0.32) (0.31) (0.18) (0.15)
Distributions from net
realized gains............. (0.96) (0.09) -- (0.00)(h)
-------- -------- -------- --------
Total distributions......... (1.28) (0.40) (0.18) (0.15)
-------- -------- -------- --------
Net asset value, end of
period...................... $ 15.23 $ 13.05 $ 11.14 $ 10.43
======== ======== ======== ========
Total return(b)............. 28.12% 20.97% 8.57% 5.94%
======== ======== ======== ========
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's)................. $212,415 $192,592 $132,583 $105,629
Ratio of operating expenses
to average net assets...... 1.20% 1.21% 1.09%(c) 0.53%(c)
Ratio of net investment
income to average net
assets..................... 2.28% 2.56% 3.33%(c) 4.72%(c)
Portfolio turnover rate..... 62% 37% 13% 12%
Ratio of operating expenses
to average net assets
without waivers............ 1.20% 1.28% 1.51%(c) 1.53%(c)
Average commission rate
paid(g).................... $ 0.0562 $ 0.0591 N/A N/A
</TABLE>
- --------
(a) The Munder Growth & Income Fund Class K Shares commenced operations on
July 5, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Amount represents less than $0.01 per share.
11
<PAGE>
<TABLE>
<CAPTION>
INDEX 500 FUND (A)
--------------------------------------------------------------
YEAR PERIOD YEAR YEAR PERIOD
ENDED YEAR ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96(D) 6/30/95(E) 2/28/95(D,F) 2/28/94 2/28/93
------- ---------- ---------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 16.16 $ 13.80 $12.40 $12.06 $11.47 $11.60
------- ------- ------ ------ ------ ------
Income from investment
operations:
Net investment income.. 0.31 0.33 0.10 0.30 0.30 0.06
Net realized and
unrealized gain on
investments........... 5.04 3.07 1.44 0.50 0.59 0.21
------- ------- ------ ------ ------ ------
Total from investment
operations............ 5.35 3.40 1.54 0.80 0.89 0.27
------- ------- ------ ------ ------ ------
Less distributions:
Dividends from net
investment income..... (0.30) (0.32) (0.14) (0.29) (0.30) (0.07)
Distributions from net
realized gains........ (0.27) (0.72) -- (0.17) -- (0.33)
------- ------- ------ ------ ------ ------
Total distributions.... (0.57) (1.04) (0.14) (0.46) (0.30) (0.40)
------- ------- ------ ------ ------ ------
Net asset value, end of
period................. $ 20.94 $ 16.16 $13.80 $12.40 $12.06 $11.47
======= ======= ====== ====== ====== ======
Total return(b)........ 33.79% 25.37% 12.49% 6.90% 7.89% 2.43%
======= ======= ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $61,254 $17,068 $2,778 $1,746 $ 922 $ 96
Ratio of operating
expenses to average
net assets............ 0.54% 0.51% 0.50%(c) 0.50% 0.33% 0.25%(c)
Ratio of net investment
income to average net
assets................ 1.76% 2.13% 2.41%(c) 2.49% 2.51% 2.74%(c)
Portfolio turnover
rate.................. 11% 8% 6% 7% 1% 22%
Ratio of operating
expenses to average
net assets without
waivers and/or
expenses reimbursed... 0.64% 0.69% 0.63%(c) 0.64% 0.50% 0.38%(c)
Average commission rate
paid(g)............... $0.0153 $0.0240 N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder Index 500 Fund Class K Shares commenced operations on December
7, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
12
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY
FUND (A)
-----------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(D) 6/30/96(D) 6/30/95(E) 2/28/95(D, F) 2/28/94 2/28/93
---------- ---------- --------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.08 $ 13.42 $ 12.28 $ 13.68 $ 10.64 $10.46
-------- -------- ------- ------- ------- ------
Income from investment
operations:
Net investment income.. 0.14 0.15 0.11 0.17 0.19 0.01
Net realized and
unrealized gain/(loss)
on investments........ 2.31 1.63 1.03 (1.48) 2.85 0.30
-------- -------- ------- ------- ------- ------
Total from investment
operations............ 2.45 1.78 1.14 (1.31) 3.04 0.31
-------- -------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income..... (0.20) (0.12) -- (0.03) -- (0.11)
Distributions from net
realized gains........ (1.59) -- -- -- -- (0.02)
Distributions from
capital............... -- -- -- (0.06) -- --
Total distributions.... (1.79) (0.12) -- (0.09) -- (0.13)
-------- -------- ------- ------- ------- ------
Net asset value, end of
period................. $ 15.74 $ 15.08 $ 13.42 $ 12.28 $ 13.68 $10.64
======== ======== ======= ======= ======= ======
Total return(b)........ 18.09% 13.29% 9.28% (9.68)% 28.57% 2.96%
======== ======== ======= ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $135,593 $116,053 $73,168 $63,159 $37,536 $3,939
Ratio of operating
expenses to average
net assets............ 1.26% 1.26% 1.21%(c) 1.18% 1.11% 1.03%(c)
Ratio of net investment
income to average net
assets................ 0.98% 1.07% 2.57%(c) 1.31% 1.18% 0.39%(c)
Portfolio turnover
rate.................. 46% 75% 14% 20% 15% 1%
Ratio of operating
expenses to average
net assets without
waivers............... 1.26% 1.33% 1.46%(c) 1.43% 1.36% 1.28%(c)
Average commission rate
paid(g)............... $ 0.0065 $ 0.0288 N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder International Equity Fund Class K Shares commenced operations
on November 23, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
13
<PAGE>
<TABLE>
<CAPTION>
MICRO-CAP MID-CAP
EQUITY FUND(A) GROWTH FUND(A)
-------------- ----------------------
PERIOD YEAR PERIOD
ENDED ENDED ENDED
6/30/97 6/30/97(E) 6/30/96(E)
-------------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period . $ 10.12 $ 11.56 $ 10.53
------- ------- -------
Income from investment operations:
Net investment loss ................. (0.05) (0.07) (0.04)
Net realized and unrealized gain on
investments ........................ 2.75 0.18 1.07
------- ------- -------
Total from investment operations .... 2.70 0.11 1.03
------- ------- -------
Less Distributions:
Dividends from net investment income
.................................... -- -- --
Distributions from net realized gains
.................................... -- (1.20) --
------- ------- -------
Total distributions ................. -- (1.20) --
------- ------- -------
Net asset value, end of period ....... $ 12.82 $ 10.47 $ 11.56
======= ======= =======
Total return(b) ..................... 26.68% 0.90% 9.78%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in 000's)
.................................... $ 199 $ 1,100 $ 421
Ratio of operating expenses to
average net assets ................. 1.50%(c) 1.24% 1.20%(c)
Ratio of net investment loss to
average net assets ................. (0.88)%(c) (0.61)% (0.53)%(c)
Portfolio turnover rate ............. 68% 162% 247%
Ratio of operating expenses to
average net assets without expenses
reimbursed ......................... 7.90%(c) 1.46% 1.38%(c)
Average commission rate paid(d) ..... $0.0578 $0.0592 $0.0600
</TABLE>
- --------
(a) The Munder Micro-Cap Equity Fund Class K Shares commenced operations on
December 31, 1996. The Munder Mid-Cap Growth Fund Class K Shares commenced
operations on October 2, 1995.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
14
<PAGE>
<TABLE>
<CAPTION>
MULTI-SEASON GROWTH FUND(A)
-----------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/95(D, G)
---------- ---------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period .... $ 14.83 $ 12.02 $ 12.20
-------- -------- --------
Income from investment operations:
Net investment income .................. 0.04 0.06 0.00(h)
Net realized and unrealized gain/(loss)
on investments ........................ 3.89 3.20 0.18
-------- -------- --------
Total from investment operations ....... 3.93 3.26 0.18
-------- -------- --------
Less distributions:
Dividends from net investment income ... (0.01) (0.05) --
Distributions from net realized gains .. (0.75) (0.40) --
-------- -------- --------
Total distributions .................... (0.76) (0.45) --
-------- -------- --------
Net asset value, end of period .......... $ 18.00 $ 14.83 $ 12.02
======== ======== ========
Total return (b) ....................... 27.55% 27.56% (1.48)%
======== ======== ========
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) ... $237,330 $140,833 $104,767
Ratio of operating expenses to
average net assets .................... 1.25% 1.26% 1.20%(c)
Ratio of net investment income to
average net assets .................... 0.25% 0.44% 0.28%(c)
Portfolio turnover rate ................ 33% 54% 27%
Ratio of operating expenses to
average net assets without waivers .... 1.50% 1.51% 1.58%(c)
Average commission rate paid (f) ....... $ 0.0599 $ 0.0592 N/A
</TABLE>
- --------
(a) The Munder Multi-Season Growth Fund Class K Shares commenced operations on
June 23, 1995.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) On June 23, 1995, the Munder Multi-Season Growth Fund acquired the assets
and certain liabilities of the Ambassador Established Company Growth Fund.
(h) Amount represents less than $0.01 per share.
15
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SMALL-CAP
INVESTMENT FUND(A) VALUE FUND(A)
------------------ -------------
PERIOD PERIOD
ENDED ENDED
6/30/97 6/30/97(E)
------------------ -------------
<S> <C> <C>
Net asset value, beginning of period ........ $ 12.07 $ 10.08
------- -------
Income from investment operations:
Net investment income ...................... 0.40 0.09
Net realized and unrealized gain on
investments ............................... 2.38 1.91
------- -------
Total from investment operations ........... 2.78 2.00
------- -------
Less distributions:
Dividends from net investment income ....... (0.41) (0.04)
Distributions in excess of net investment
income .................................... (0.01) --
Distributions from paid-in capital ......... (0.03) --
------- -------
Total distributions ........................ (0.45) (0.04)
------- -------
Net asset value, end of period .............. $ 14.40 $ 12.04
======= =======
Total return(b) ............................ 23.11% 19.85%
======= =======
Ratios to average net assets/supplemental
data:
Net assets, end of period (in 000's) ....... $ 1,481 $50,769
Ratio of operating expenses to average net
assets .................................... 1.35%(c) 1.38%(c)
Ratio of net investment income to average
net assets ................................ 3.80%(c) 1.93%(c)
Portfolio turnover rate .................... 15% 73%
Ratio of operating expenses to average net
assets without waivers and/or expenses
reimbursed ................................ 1.38%(c) 1.51%(c)
Average commission rate paid(d) ............ $0.0600 $0.0361
</TABLE>
- --------
(a) The Munder Real Estate Equity Investment Fund Class K Shares commenced
operations on October 3, 1996. The Munder Small-Cap Value Fund Class K
Shares commenced operations on December 31, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
16
<PAGE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND (A)
--------------------------------------------------------------------
PERIOD YEAR YEAR PERIOD
YEAR ENDED YEAR ENDED ENDED ENDED ENDED ENDED
6/30/97(G) 6/30/96(G) 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
---------- ---------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 21.08 $ 15.28 $13.89 $ 14.37 $ 12.72 $12.32
-------- -------- ------- ------- ------- ------
Income from investment
operations:
Net investment loss ... (0.12) (0.12) (0.02) (0.04) (0.05) (0.01)
Net realized and
unrealized gain/(loss)
on investments ....... 3.65 7.16 1.41 (0.42) 1.97 0.41
-------- -------- ------- ------- ------- ------
Total from investment
operations ........... 3.53 7.04 1.39 (0.46) 1.92 0.40
-------- -------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income .... -- -- -- -- -- --
Distributions from net
realized gains ....... (2.99) (1.24) -- (0.02) (0.27) --
-------- -------- ------- ------- ------- ------
Total distributions ... (2.99) (1.24) -- (0.02) (0.27) --
-------- -------- ------- ------- ------- ------
Net asset value, end of
period ................ $ 21.62 $ 21.08 $15.28 $ 13.89 $ 14.37 $12.72
======== ======== ======= ======= ======= ======
Total return(b) ....... 18.93% 48.28% 10.01% (3.21)% 15.11% 3.25%
======== ======== ======= ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $152,766 $111,669 $52,077 $45,080 $32,431 $4,298
Ratio of operating
expenses to average
net assets ........... 1.22% 1.21% 1.21%(c) 1.23% 1.02% 0.95%(c)
Ratio of net investment
loss to average net
assets ............... (0.62)% (0.66)% (0.41)%(c) (0.40)% (0.38)% (0.28)%(c)
Portfolio turnover rate
...................... 98% 98% 39% 45% 47% 46%
Ratio of operating
expenses to average
net assets without
waivers .............. 1.22% 1.28% 1.46%(c) 1.48% 1.27% 1.20%(c)
Average commission rate
paid(f) .............. $ 0.0545 $ 0.0551 N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder Small Company Growth Fund Class K Shares commenced operations
on November 23, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
17
<PAGE>
<TABLE>
<CAPTION>
VALUE FUND(A)
---------------------
PERIOD
YEAR ENDED ENDED
6/30/97(E) 6/30/96(E)
---------- ----------
<S> <C> <C>
Net asset value, beginning of period .................. $ 11.57 $ 10.83
------- -------
Income from investment operations:
Net investment income ................................ 0.08 0.05
Net realized and unrealized gain on investments ...... 3.64 0.74
------- -------
Total from investment operations ..................... 3.72 0.79
------- -------
Less distributions:
Dividends from net investment income ................. (0.09) (0.05)
Distributions from net realized gains ................ (1.22) --
------- -------
Total distributions .................................. (1.31) (0.05)
------- -------
Net asset value, end of period ........................ $ 13.98 $ 11.57
======= =======
Total return(b) ...................................... 34.37% 7.33%
======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ................. $ 7,940 $ 1,018
Ratio of operating expenses to average net assets .... 1.27% 1.20%(c)
Ratio of net investment income to average net assets . 0.70% 0.64%(c)
Portfolio turnover rate .............................. 139% 223%
Ratio of operating expenses to average net assets
without waivers and/or expenses reimbursed .......... 1.31% 1.30%(c)
Average commission rate paid(d) ...................... $0.0508 $0.0602
</TABLE>
- --------
(a) The Munder Value Fund Class K Shares commenced operations on November 30,
1995.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
18
<PAGE>
<TABLE>
<CAPTION>
FRAMLINGTON FRAMLINGTON
EMERGING FRAMLINGTON INTERNATIONAL
MARKETS HEALTHCARE GROWTH
FUND(A) FUND(A) FUND(A)
----------- ----------- -------------
PERIOD PERIOD
ENDED ENDED PERIOD ENDED
6/30/97(E) 6/30/97 6/30/97(E)
----------- ----------- -------------
<S> <C> <C> <C>
Net asset value, beginning of
period ........................... $ 10.06 $ 9.45 $ 9.87
------- ------- -------
Income from investment operations:
Net investment income/(loss) ..... 0.05 (0.02) 0.05
Net realized and unrealized gain
on investments .................. 2.84 1.46 1.43
------- ------- -------
Total from investment operations . 2.89 1.44 1.48
------- ------- -------
Less distributions:
Dividends from net investment
income .......................... (0.03) -- --
Distributions from net realized
gains ........................... -- -- --
------- ------- -------
Total distributions .............. (0.03) -- --
------- ------- -------
Net asset value, end of period .... $ 12.92 $ 10.89 $ 11.35
======= ======= =======
Total return(b) .................. 28.69% 15.24% 14.99%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) .......................... $ 4,419 $ 119 $ 1,089
Ratio of operating expenses to
average net assets .............. 1.79%(c) 1.55%(c) 1.55%(c)
Ratio of net investment
income/(loss) to average net
assets .......................... 1.14%(c) (0.95)%(c) 1.01%(c)
Portfolio turnover rate .......... 46% 14% 15%
Ratio of operating expenses to
average net assets without
expenses reimbursed ............. 5.43%(c) 7.33%(c) 2.56%(c)
Average commission rate paid(d) .. $0.0029 $0.1441 $0.0238
</TABLE>
- --------
(a) The Munder Framlington Emerging Markets Fund Class K Shares commenced
operations on January 10, 1997. The Munder Framlington Healthcare Fund
Class K Shares commenced operations on April 1, 1997. The Munder
Framlington International Growth Fund Class K Shares commenced operations
on January 10, 1997.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
19
<PAGE>
<TABLE>
<CAPTION>
BOND FUND(A)
--------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(E) 2/28/95(D, F) 2/28/94 2/28/93
------- ------- ---------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 9.53 $ 9.69 $ 9.31 $ 9.91 $ 9.92 $ 9.66
------- ------- ------- ------- ------- ------
Income from investment
operations:
Net investment income . 0.61 0.61 0.21 0.62 0.56 0.12
Net realized and
unrealized gain/(loss)
on investments ....... 0.01 (0.19) 0.37 (0.64) (0.01) 0.38
------- ------- ------- ------- ------- ------
Total from investment
operations ........... 0.62 0.42 0.58 (0.02) 0.55 0.50
------- ------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income .... (0.58) (0.58) (0.20) (0.58) (0.56) (0.15)
Distributions from net
realized gains ....... -- -- -- -- -- (0.09)
------- ------- ------- ------- ------- ------
Total distributions ... (0.58) (0.58) (0.20) (0.58) (0.56) (0.24)
------- ------- ------- ------- ------- ------
Net asset value, end of
period ................ $ 9.57 $ 9.53 $ 9.69 $ 9.31 $ 9.91 $ 9.92
======= ======= ======= ======= ======= ======
Total return(b) ....... 6.72% 4.35% 6.28% 0.44% 5.61% 5.24%
======= ======= ======= ======= ======= ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $34,999 $32,211 $36,718 $33,842 $26,458 $3,671
Ratio of operating
expenses to average
net assets ........... 0.96% 0.95% 0.95%(c) 0.92% 0.88% 0.80%(c)
Ratio of net investment
income to average net
assets ............... 6.34% 6.26% 6.47%(c) 6.57% 5.76% 5.32%(c)
Portfolio turnover rate
...................... 279% 507% 99% 165% 128% 77%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.96% 1.04% 1.19%(c) 1.16% 1.02% 0.94%(c)
</TABLE>
- --------
(a) The Munder Bond Fund Class K Shares commenced operations on November 23,
1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
20
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND(A)
----------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
---------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 9.31 $ 9.51 $ 9.27 $ 9.91 $ 10.47 $ 10.26
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.55 0.58 0.22 0.56 0.59 0.17
Net realized and
unrealized gain/(loss)
on investments ....... 0.02 (0.20) 0.24 (0.57) (0.20) 0.25
-------- -------- -------- -------- -------- --------
Total from investment
operations ........... 0.57 0.38 0.46 (0.01) 0.39 0.42
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... (0.55) (0.58) (0.22) (0.62) (0.58) (0.12)
Distributions from net
realized gains ....... -- -- -- (0.01) (0.37) (0.19)
-------- -------- -------- -------- -------- --------
Total distributions ... (0.55) (0.58) (0.22) (0.63) (0.95) (0.21)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ................ $ 9.33 $ 9.31 $ 9.51 $ 9.27 $ 9.91 $ 10.47
======== ======== ======== ======== ======== ========
Total return(b) ....... 6.34% 4.04% 5.04% 0.54% 3.77% 4.15%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $325,331 $370,493 $300,596 $285,493 $112,332 $132,273
Ratio of operating
expenses to average
net assets ........... 0.93% 0.94% 0.95%(c) 0.93% 0.84% 0.79%(c)
Ratio of net investment
income to average net
assets ............... 5.91% 6.08% 7.12%(c) 6.71% 5.55% 5.56%(c)
Portfolio turnover rate
...................... 325% 494% 84% 80% 155% 104%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.93% 1.02% 1.19%(c) 1.18% 0.98% 0.93%(c)
</TABLE>
- --------
(a) The Munder Intermediate Bond Fund Class K Shares commenced operations on
November 20, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
21
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
BOND FUND(A) U.S. GOVERNMENT INCOME FUND(A)
------------- ------------------------------------------------
YEAR YEAR PERIOD PERIOD
PERIOD ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/97 6/30/96(F) 6/30/95(D) 2/28/95(E)
------------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $9.54 $ 9.98 $ 10.30 $ 9.89 $ 10.00
----- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.09 0.65 0.71 0.23 0.47
Net realized and
unrealized gain/(loss)
on investments ....... 0.20 0.07 (0.27) 0.41 (0.12)
----- -------- -------- -------- --------
Total from investment
operations ........... 0.29 0.72 0.44 0.64 0.35
----- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... -- (0.61) (0.68) (0.23) (0.46)
Distributions from net
realized gains ....... -- (0.00)(g) (0.08) -- --
----- -------- -------- -------- --------
Total distributions ... -- (0.61) (0.76) (0.23) (0.46)
----- -------- -------- -------- --------
Net asset value, end of
period ................ $9.83 $ 10.09 $ 9.98 $ 10.30 $ 9.89
===== ======== ======== ======== ========
Total return(b) ....... 3.04% 7.49% 4.32% 6.55% 3.68%
===== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $ 103 $197,479 $158,948 $174,674 $165,298
Ratio of operating
expenses to average
net assets ........... 1.14%(c) 0.96% 0.97% 0.97%(c) 0.95%(c)
Ratio of net investment
income to average net
assets ............... 3.61%(c) 6.51% 6.92% 6.96%(c) 7.02%(c)
Portfolio turnover rate
...................... 75% 130% 133% 42% 143%
Ratio of operating
expenses to average
net assets without
waivers and/or
expenses reimbursed .. 1.18%(c) 0.96% 1.04% 1.21%(c) 1.19%(c)
</TABLE>
- --------
(a) The Munder International Bond Fund Class K Shares commenced operations on
March 25, 1997. The Munder U.S. Government Income Fund Class K Shares
commenced operations on July 5, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Amount represents less than $0.01 per share.
22
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN TRIPLE TAX-FREE BOND FUND(A)
--------------------------------------------------------------
PERIOD
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED ENDED
6/30/97(D) 6/30/96(D) 6/30/95(D,E) 2/28/95(D,F) 2/28/94
---------- ---------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 9.34 $ 9.34 $ 9.24 $ 9.73 $ 10.00
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income . 0.43 0.48 0.16 0.44 0.05
Net realized and
unrealized gain/(loss)
on investments ....... 0.30 0.00(g) 0.10 (0.50) (0.30)
------- ------- ------- ------- -------
Total from investment
operations ........... 0.73 0.48 0.26 (0.06) (0.25)
------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... (0.43) (0.48) (0.16) (0.43) (0.02)
Distributions from net
realized gains ....... (0.00)(g) -- -- -- --
------- ------- ------- ------- -------
Total distributions ... (0.43) (0.48) (0.16) (0.43) (0.02)
------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 9.64 $ 9.34 $ 9.34 $ 9.24 $ 9.73
======= ======= ======= ======= =======
Total return(b) ....... 8.00% 5.14% 2.84% (0.16)% (2.48)%
======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $43,316 $29,476 $25,549 $27,731 $13,464
Ratio of operating
expenses to average
net assets ........... 0.88% 0.51% 0.52%(c) 0.56% 0.46%(c)
Ratio of net investment
income to average net
assets ............... 4.57% 5.01% 5.06%(c) 4.81% 3.48%(c)
Portfolio turnover rate
...................... 19% 31% 8% 53% 0%
Ratio of operating
expenses to average
net assets without
waivers .............. 1.02% 1.09% 1.26%(c) 1.30% 1.20%(c)
</TABLE>
- --------
(a) The Munder Michigan Triple Tax-Free Bond Fund Class K Shares commenced
operations on January 3, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Amount represents less than $0.01 per share.
23
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE BOND FUND(A)
-----------------------------------------------
PERIOD
YEAR ENDED YEAR ENDED PERIOD ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D,F) 2/28/95(E)
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period ................. $ 10.35 $ 10.30 $ 10.14 $ 10.00
-------- -------- -------- --------
Income from investment
operations:
Net investment income ..... 0.47 0.46 0.15 0.31
Net realized and unrealized
gain on investments 0.25 0.07 0.16 0.14
-------- -------- -------- --------
Total from investment
operations ............... 0.72 0.53 0.31 0.45
-------- -------- -------- --------
Less distributions:
Dividends from net
investment income ........ (0.47) (0.47) (0.15) (0.31)
Distributions from net
realized gains ........... (0.08) (0.01) -- --
-------- -------- -------- --------
Total distributions ....... (0.55) (0.48) (0.15) (0.31)
-------- -------- -------- --------
Net asset value, end of
period .................... $ 10.52 $ 10.35 $ 10.30 $ 10.14
======== ======== ======== ========
Total return(b) ........... 7.13% 5.12% 3.09% 4.64%
======== ======== ======== ========
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) ............... $190,243 $196,645 $232,040 $251,636
Ratio of operating expenses
to average net assets .... 0.95% 0.98% 1.02%(c) 0.93%(c)
Ratio of net investment
income to average net
assets ................... 4.52% 4.42% 4.38%(c) 4.69%(c)
Portfolio turnover rate ... 45% 15% 12% 50%
Ratio of operating expenses
to average net assets
without waivers .......... 0.95% 1.06% 1.26%(c) 1.17%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Bond Fund Class K Shares commenced operations on July
5, 1994.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the monthly average shares
method, which more appropriately presents the per share data for the period
since the use of the undistributed net investment income method did not
accord with the results of operations.
24
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE INTERMEDIATE BOND FUND(A)
-----------------------------------------------------------------
PERIOD YEAR PERIOD
YEAR ENDED YEAR ENDED ENDED YEAR ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 10.34 $ 10.37 $ 10.17 $ 10.44 $ 10.69 $ 10.47
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.41 0.41 0.14 0.38 0.42 0.23
Net realized and
unrealized gain/(loss)
on investments ....... 0.10 (0.03) 0.20 (0.21) (0.14) 0.24
-------- -------- -------- -------- -------- --------
Total from investment
operations ........... 0.51 0.38 0.34 0.17 0.28 0.47
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... (0.41) (0.41) (0.14) (0.42) (0.42) (0.23)
Distributions from net
realized gains ....... (0.03) -- -- (0.02) (0.11) (0.02)
-------- -------- -------- -------- -------- --------
Total distributions ... (0.44) (0.41) (0.14) (0.44) (0.53) (0.25)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ................ $ 10.41 $ 10.34 $ 10.37 $ 10.17 $ 10.44 $ 10.69
======== ======== ======== ======== ======== ========
Total return(b) ....... 5.04% 3.69% 3.35% 2.05% 2.62% 5.30%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $283,641 $333,768 $333,067 $345,658 $107,335 $113,189
Ratio of operating
expenses to average
net assets ........... 0.93% 0.96% 0.98%(c) 0.95% 0.84% 0.71%(c)
Ratio of net investment
income to average net
assets ............... 3.96% 3.91% 4.01%(c) 4.19% 3.93% 4.36%(c)
Portfolio turnover rate
...................... 31% 20% 5% 52% 38% 57%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.93% 1.04% 1.22%(c) 1.19% 0.98% 0.77%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Intermediate Bond Fund Class K Shares commenced
operations on February 9, 1987.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) This information represents results of operations of the St. Clair Tax-
Free Intermediate Fund, the predecessor fund of the Munder Tax-Free
Intermediate Bond Fund. The assets and liabilities of the St. Clair Tax-
Free Intermediate Fund were transferred to the Munder Funds Trust on
November 20, 1992. On June 22, 1992, Woodbridge Capital Management
replaced Manufacturers Bank, N.A. as investment advisor for the Fund.
25
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE INTERMEDIATE BOND FUND(A)
-----------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
7/31/92 7/31/91 7/31/90 7/31/89 7/31/88 7/31/87
(G) (G) (G) (G) (G) (G)
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 10.04 $ 9.91 $ 9.93 $ 9.91 $ 9.99 $10.00
-------- ------- ------- ------ ------ ------
Income from investment
operations:
Net investment income . 0.49 0.55 0.60 0.52 0.51 0.25
Net realized and
unrealized gain/(loss)
on investments ....... 0.51 0.26 (0.02) 0.02 (0.08) (0.01)
-------- ------- ------- ------ ------ ------
Total from investment
operations ........... 1.00 0.81 0.58 0.54 0.43 0.24
-------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net
investment income .... (0.49) (0.55) (0.60) (0.52) (0.51) (0.25)
Distributions from net
realized gains ....... (0.08) (0.13) -- -- -- --
-------- ------- ------- ------ ------ ------
Total distributions ... (0.57) (0.68) (0.60) (0.52) (0.51) (0.25)
-------- ------- ------- ------ ------ ------
Net asset value, end of
period ................ $ 10.47 $ 10.04 $ 9.91 $ 9.93 $ 9.91 $ 9.99
======== ======= ======= ====== ====== ======
Total return(b) ....... 10.31% 8.15% 6.02% 5.55% 4.43% 1.89%
======== ======= ======= ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $110,825 $50,740 $12,282 $1,350 $1,219 $1,888
Ratio of operating
expenses to average
net assets ........... 0.69% 0.61% 0.25% 0.54% 0.60% 0.26%(c)
Ratio of net investment
income to average net
assets ............... 4.83% 5.54% 6.13% 5.22% 5.17% 5.35%(c)
Portfolio turnover rate
...................... 200% 327% 119% 37% 28% 105%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.99% 1.05% 1.05% 3.58% 3.09% 1.06%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Intermediate Bond Fund Class K Shares commenced
operations on February 9, 1987.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) This information represents results of operations of the St. Clair Tax-
Free Intermediate Fund, the predecessor fund of the Munder Tax-Free
Intermediate Bond Fund. The assets and liabilities of the St. Clair Tax-
Free Intermediate Fund were transferred to the Munder Funds Trust on
November 20, 1992. On June 22, 1992, Woodbridge Capital Management
replaced Manufacturers Bank, N.A. as investment advisor for the Fund.
26
<PAGE>
<TABLE>
<CAPTION>
SHORT TERM
TREASURY FUND(A)
----------------
PERIOD
ENDED
6/30/97(D)
----------------
<S> <C>
Net asset value, beginning of period ......................... $ 9.96
------
Income from investment operations:
Net investment income ....................................... 0.12
Net realized and unrealized gain on investments ............. 0.06
------
Total from investment operations ............................ 0.18
------
Less distributions:
Dividends from net investment income ........................ (0.13)
------
Total distributions ......................................... (0.13)
------
Net asset value, end of period ............................... $10.01
======
Total return(b) ............................................. 1.78%
======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ........................ $1,426
Ratio of operating expenses to average net assets ........... 0.77%(c)
Ratio of net investment income to average net assets ........ 5.01%(c)
Portfolio turnover rate ..................................... 40%
Ratio of operating expenses to average net assets without
expense reimbursements ..................................... 0.80%(c)
</TABLE>
- --------
(a) The Munder Short Term Treasury Fund Class K Shares commenced operations on
April 2, 1997.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
27
<PAGE>
<TABLE>
<CAPTION>
CASH INVESTMENT FUND(A)
-----------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93(E)
-------- -------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.048 0.050 0.018 0.040 0.026 0.008
-------- -------- -------- -------- -------- --------
Total from investment
operations ........... 0.048 0.050 0.018 0.040 0.026 0.008
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... (0.048) (0.050) (0.018) (0.040) (0.026) (0.008)
-------- -------- -------- -------- -------- --------
Total distributions ... (0.048) (0.050) (0.018) (0.040) (0.026) (0.008)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return(b) ....... 4.90% 5.10% 1.81% 4.08% 2.68% 0.74%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $599,858 $547,523 $558,628 $559,212 $293,827 $248,382
Ratio of operating
expenses to average
net assets ........... 0.70% 0.68% 0.67%(c) 0.70% 0.56% 0.54%(c)
Ratio of net investment
income to average net
assets ............... 4.81% 4.98% 5.49%(c) 4.12% 2.65% 2.85%(c)
Ratio of operating
expenses to average
net assets without
waivers .............. 0.70% 0.68% 0.69%(c) 0.73% 0.61% 0.59%(c)
</TABLE>
- --------
(a) The Munder Cash Investment Fund Class K Shares commenced operations on
November 23, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
28
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET FUND(A)
---------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
-------- -------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.028 0.030 0.011 0.024 0.020 0.006
-------- -------- -------- -------- -------- --------
Total from investment
operations ........... 0.028 0.030 0.011 0.024 0.020 0.006
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... (0.028) (0.030) (0.011) (0.024) (0.020) (0.006)
-------- -------- -------- -------- -------- --------
Total distributions ... (0.028) (0.030) (0.011) (0.024) (0.020) (0.006)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return(b) ....... 2.90% 3.00% 1.12% 2.44% 1.99% 0.61%
======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $226,782 $192,591 $195,730 $195,926 $211,832 $105,609
Ratio of operating
expenses to average
net assets ........... 0.68% 0.68% 0.69%(c) 0.70% 0.57% 0.55%(c)
Ratio of net investment
income to average net
assets ............... 2.86% 2.99% 3.36%(c) 2.39% 1.96% 2.24%(c)
Ratio of operating
expenses to average
net assets without
waivers .............. 0.68% 0.70% 0.74%(c) 0.75% 0.62% 0.60%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Money Market Fund Class K Shares commenced operations
on November 23, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
29
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND(A)
-----------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93
------- ------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income . 0.047 0.048 0.017 0.037 0.025 0.007
------- ------- ------- ------- ------- -------
Total from investment
operations ........... 0.047 0.048 0.017 0.037 0.025 0.007
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... (0.047) (0.048) (0.017) (0.037) (0.025) (0.007)
------- ------- ------- ------- ------- -------
Total distributions ... (0.047) (0.048) (0.017) (0.037) (0.025) (0.007)
------- ------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total return(b) ....... 4.73% 4.89% 1.76% 3.83% 2.57% 0.74%
======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $41,877 $62,133 $74,210 $75,197 $72,433 $12,248
Ratio of operating
expenses to average
net assets ........... 0.69% 0.69% 0.70%(c) 0.70% 0.57% 0.53%(c)
Ratio of net investment
income to average net
assets ............... 4.64% 4.74% 5.23%(c) 3.73% 2.56% 2.60%(c)
Ratio of operating
expenses to average
net assets without
waivers .............. 0.69% 0.71% 0.75%(c) 0.75% 0.62% 0.58%(c)
</TABLE>
- --------
(a) The Munder U.S. Treasury Money Market Fund Class K Shares commenced
operations on November 25, 1992.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
30
<PAGE>
FUND CHOICES
WHAT FUNDS ARE OFFERED?
This Prospectus offers Class K Shares of the 26 funds described below. This
section summarizes each Fund's principal investments. The sections entitled
"What are the Funds' Investments and Investment Practices?" and "What are the
Risks of Investing in the Funds?" and the SAI give more information about the
Funds' investment techniques and risks. Capitalized terms are explained in the
section entitled "What are the Funds' Investments and Investment Practices?"
ACCELERATING GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's primary goal is to provide long-
term capital appreciation; its secondary goal is to provide income. Under
normal conditions, the Fund will invest at least 65% of its assets in Equity
Securities.
In choosing Equity Securities, the Advisor considers, among other factors:
. the potential for accelerated earnings growth
. the maintenance of a substantial competitive advantage
. a focused management team
. a stable balance sheet
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
BALANCED FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide an attractive
investment return through a combination of growth of capital and current
income. The Fund will allocate its assets among three asset groups: Equity
Securities, Fixed Income Securities and Cash Equivalents.
. The Fund normally will invest at least 25% of its assets in Fixed Income
Securities and no more than 75% of its assets in Equity Securities. The
Fund will notify shareholders at least 30 days before changing this
policy.
The Advisor will allocate the Fund's assets to the three asset groups based
on its view of the following factors, among others:
.general market and economic conditions and trends
.interest rates and inflation rates
.fiscal and monetary developments
.long-term corporate earnings growth
The Advisor will try to take advantage of changing economic conditions by
adjusting the ratio of Equity Securities to Fixed Income Securities or Cash
Equivalents. For example, if the Advisor believes that rapid economic growth
will lead to better corporate earnings in the future, then it might increase
the Fund's Equity Securities holdings and reduce its Fixed Income Securities
and Cash Equivalents holdings.
PORTFOLIO MANAGEMENT. Leonard J. Barr II, James Robinson and Ann J. Conrad
jointly manage the Fund's assets. Mr. Barr, Mr. Robinson and Ms. Conrad have
managed the Fund since February 1995, June 1995 and its inception in March
1993, respectively. Mr. Barr is a Senior Vice President and Director of
Research of the
31
<PAGE>
Advisor. From April 1988 to February 1995, he was Vice President and Director
of Research for Old MCM, Inc. ("MCM"), the predecessor to the Advisor. Mr.
Robinson is, and has been, a Vice President and Chief Investment Officer-Fixed
Income of the Advisor or MCM since 1987. Ms. Conrad is a Vice President and
Director of Specialty Products of the Advisor, and held similar titles with
Woodbridge Capital Management, Inc. ("Woodbridge"), the Fund's previous
investment advisor, since June 1992.
GROWTH & INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide capital
appreciation and current income. It primarily invests in dividend-paying
Equity Securities and is designed for investors seeking current income and
capital appreciation from the equity markets.
. Under normal circumstances, the Fund will invest at least 65% of its
assets in income-producing common stocks and convertible preferred
stocks.
. The Fund may also purchase Fixed Income Securities which are convertible
into or exchangeable for common stock.
. The Fund may invest up to 35% of its assets in Fixed Income Securities,
including 20% of its assets in Fixed Income Securities that are rated
below investment grade.
The Advisor generally selects large, well-known companies that it believes
have favorable prospects for dividend growth and capital appreciation. The
Fund will seek to produce a current yield greater than the S&P 500.
The Fund focuses on dividend-paying Equity Securities because, over time,
dividend income has accounted for a significant portion of the total return of
the S&P 500. In addition, dividends are usually a more stable and predictable
source of return than capital appreciation. The Advisor believes that stocks
which distribute a high level of current income have more stable prices than
those which pay below average dividends.
PORTFOLIO MANAGEMENT. Otto Hinzmann, Jr. is the Fund's portfolio manager, a
position he has held since February 1995. Mr. Hinzmann has been a Vice
President and Director of Equity Management of the Advisor or MCM since
January 1987.
INDEX 500 FUND
GOALS AND PRINCIPAL INVESTMENTS. The goal of the Fund is to provide
performance and income that is comparable to the S&P 500. The S&P 500 is an
index of 500 stocks which emphasize large capitalization companies. See
Appendix A for more information on the S&P 500. The Fund will normally hold
the securities of at least 400 of the stocks in the S&P 500.
The Fund will try to achieve a correlation between the performance of its
portfolio and that of the S&P 500 of at least .95. A correlation of 1.0 would
mean that changes in the Fund's price mirror exactly changes in the S&P 500.
The timing of purchases and redemptions, changes in securities markets, level
of the Fund's assets and other factors affect the Fund's ability to exactly
track the S&P 500's performance.
The Fund is managed through the use of a "quantitative" investment approach
and tries to mirror the composition and performance of the S&P 500 through
statistical procedures. The Advisor does not use traditional methods of fund
investment management, i.e., it does not select stocks on the basis of
economic, financial and market analysis. Because the Fund pays brokerage costs
and other fees, its return may be lower than that of the S&P 500.
PORTFOLIO MANAGEMENT. Todd B. Johnson and Kenneth A. Schluchter III jointly
manage the Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, has
served as the portfolio manager of the Fund since July 1992. Mr. Schluchter,
who has managed the Fund since June 1997, was previously a Systems Developer
and Data Analyst for Compuware Incorporated (1993-1995) and a Business Analyst
for Central Transport Incorporated (1989-1993).
32
<PAGE>
INTERNATIONAL EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Foreign Securities,
American Depositary Receipts ("ADRs") and European Depositary Receipts
("EDRs"). At least once a quarter, the Advisor creates a list of Foreign
Securities, ADRs and EDRs (the "Securities List") which the Fund may purchase
based on the country where the company is located, its competitive advantages,
its past financial record, its future prospects for growth and the market for
its securities. The Advisor updates the Securities List frequently (but at
least quarterly), adds new securities to the Securities List if they are
eligible and sells securities not on the updated Securities List as soon as
practicable.
After the Advisor creates the Securities List, it divides the list into two
sections. The first section is designed to provide broad coverage of
international markets. The second section increases exposure to securities
that the Advisor expects will perform better than other stocks in their
industry sectors and their markets as a whole. When the Advisor believes
broader market exposure will benefit the Fund, it will allocate up to 80% of
the Fund's assets in first section securities. When the Advisor identifies
strong potential for specific securities to perform well, the Fund may invest
up to 50% of its assets in second section securities.
. Under normal market conditions, at least 65% of the Fund's assets are
invested in Equity Securities in at least three foreign countries.
. The Fund will emphasize companies with a market capitalization of at
least $100 million.
PORTFOLIO MANAGEMENT. Todd B. Johnson and Theodore Miller jointly manage the
Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, and Mr. Miller,
senior portfolio manager of the Fund, have managed the Fund since July 1992
and October 1996, respectively. Mr. Miller previously worked as the primary
analyst for the Fund (1996) and for Interacciones Global Inc. (1993-1995) and
McDonald & Co. Securities Inc. (1991-1993).
MICRO-CAP EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. It invests primarily in Equity Securities of smaller
capitalization companies. The Fund attempts to provide investors with
potentially higher returns than a fund that invests primarily in larger more
established companies. Since smaller capitalization companies are generally
not as well known to investors and have less of an investor following than
larger companies, they may provide higher returns due to inefficiencies in the
marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies having a market capitalization
of $200 million or less, which is considerably less than the market
capitalization of S&P 500 companies.
The Advisor will choose companies that:
. present the ability to grow significantly over the next several years
. may benefit from changes in technology, regulations and industry sector
trends
. are still in the developmental stage and may have limited product lines
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MID-CAP GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. The Fund invests at least 65% of its assets in the Equity
Securities of companies with market capitalizations between $100 million and
$5 billion. Its style, which focuses on both growth prospects and valuation,
is known as GARP (Growth at a Reasonable Price) and seeks to produce
attractive returns during various market environments.
33
<PAGE>
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 10,000 companies over the past three
years. It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the Standard & Poor's Mid-Cap 400 Index
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MULTI-SEASON GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. This objective is considered "fundamental" and cannot be changed
without shareholder approval. Its style, which focuses on both growth
prospects and valuation, is known as GARP (Growth at a Reasonable Price) and
seeks to produce attractive returns during various market environments. The
Fund invests at least 65% of its assets in Equity Securities. The Fund
generally invests in Equity Securities of market capitalizations of over $1
billion.
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 5,500 companies over the past five years.
It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the S&P 500
PORTFOLIO MANAGEMENT. The portfolio managers of the Fund, Leonard J. Barr II
and Lee P. Munder, have managed the Fund since its inception in April 1993.
Mr. Barr is the Senior Vice President and Director of Research of the Advisor.
From April 1988 to April 1993 he held similar positions with MCM. Mr. Munder
is the President and Chief Executive Officer of the Advisor, positions he has
held with the Advisor or MCM since 1985.
REAL ESTATE EQUITY INVESTMENT FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide both capital
appreciation and current income. This goal is "fundamental" and cannot be
changed without shareholder approval. The Fund invests primarily in U.S.
companies which are principally engaged in the real estate industry or which
own significant real estate. A company is "principally engaged" in the real
estate industry if at least 50% of its assets, gross income or net profits are
attributable to ownership, construction, management or sale of residential,
commercial or industrial real estate. The Fund will not own real estate
directly.
Under normal conditions, the Fund invests at least 65% of its total assets
in Equity Securities of U.S. companies in the real estate industry including:
. equity real estate investment trusts ("REITS")
. brokers, home builders and real estate developers
. companies with substantial real estate holdings (for example, paper and
lumber producers, hotels and entertainment companies)
34
<PAGE>
. manufacturers and distributors of building supplies
. mortgage REITS
. financial institutions which issue or service mortgages
In addition, the Fund may invest:
. up to 35% of its assets in companies other than real estate industry
companies
. in Fixed Income Securities including up to 5% of its assets in debt
securities rated below investment grade or unrated if secured by real
estate assets if the Advisor believes that the underlying collateral is
sufficient
. in REITS only if they are traded on a securities exchange or NASDAQ
PORTFOLIO MANAGEMENT. Peter K. Hoglund is the portfolio manager of the Fund,
a position he has held since October 1996. Mr. Hoglund formerly was the
primary analyst of the Fund (October 1994 to October 1996).
SMALL-CAP VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. It invests
primarily in Equity Securities of smaller capitalization companies. The Fund
attempts to provide investors with potentially higher returns than a fund that
invests primarily in larger more established companies. Since small companies
are generally not as well known to investors and have less of an investor
following than larger companies, they may provide higher returns due to
inefficiencies in the marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies with market capitalizations
below $750 million, which is less than the market capitalization of S&P
500 companies.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
March 1997, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
SMALL COMPANY GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Equity Securities of
smaller capitalization companies. The Fund attempts to
35
<PAGE>
provide investors with potentially higher returns than a fund that invests
primarily in larger more established companies. Since smaller capitalization
companies are generally not as well-known to investors and have less of an
investor following than larger companies, they may provide higher returns due
to inefficiencies in the marketplace.
. Under normal market conditions, the Fund will invest at least 65% of the
Fund's assets in Equity Securities of companies with market
capitalizations below $750 million, which is less than the market
capitalization of S&P 500 companies.
The Advisor considers these factors, among others, in choosing companies:
. above-average growth prospects
. participation in a fast-growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Carl Wilk and Michael P. Gura jointly manage the Fund.
Mr. Wilk, a Senior Portfolio Manager of the Advisor, has managed the Fund
since October 1996 and was the Fund's primary analyst (1995 to 1996). Prior to
joining the Advisor in 1995, Mr. Wilk was a Senior Equity Research Analyst at
Woodbridge. Mr. Gura has managed the Fund since March 1997. Prior to joining
the Advisor in 1995, Mr. Gura was a Vice President, Senior Equity Analyst for
Woodbridge (1994-1995) and an investment officer for Manufacturers National
Bank Trust Department (1989-1994).
VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. The Fund invests
primarily in the Equity Securities of well-established companies with
intermediate to large capitalizations, which typically exceed $750 million.
. The Fund will invest at least 65% of its assets in Equity Securities.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast-growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
October 1996, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
36
<PAGE>
FRAMLINGTON EMERGING MARKETS FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund seeks to provide long-term capital
appreciation. The Fund invests at least 65% of its assets in companies in
emerging market countries, as defined by the World Bank, the International
Finance Corporation, the United Nations or the European Bank for
Reconstruction and Development.
A company will be considered to be in an emerging market country if:
. the company is organized under the laws of, or has a principal office in,
an emerging market country,
. the company's stock is traded primarily in an emerging market country,
. most of the company's assets are in an emerging market country, or
. most of the company's revenues or profits come from goods produced or
sold, investments made or services performed in an emerging market
country.
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. William
Calvert heads the committee.
FRAMLINGTON HEALTHCARE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation by investing in companies providing healthcare and
medical services and products worldwide. Currently, most of such companies are
located in the United States.
The Fund will invest in:
. pharmaceutical producers
. biotechnology firms
. medical device and instrument manufacturers
. distributors of healthcare products
. healthcare providers and managers
. other healthcare service companies
Under normal conditions, the Fund will invest at least 65% of its assets in
healthcare companies, which are companies for which at least 50% of sales,
earnings or assets arise from or are dedicated to health services or medical
technology activities.
PORTFOLIO MANAGEMENT. Antony Milford is the head of the Specialist Desk for
the Sub-Advisor. He is the Fund's primary portfolio manager, a position he has
held since the Fund's inception. Mr. Milford has managed funds for the Sub-
Advisor since 1971.
FRAMLINGTON INTERNATIONAL GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. Under normal market conditions, at least 65% of the
Fund's assets will be invested in Equity Securities in at least three foreign
countries.
The Sub-Advisor will choose companies that demonstrate:
. above-average profitability
37
<PAGE>
. high quality management
. the ability to grow significantly in their countries
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. Simon
Key, Chief Investment Officer of the Sub-Advisor, heads the committee.
BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current income and, secondarily, capital appreciation.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Gregory A. Prost jointly manage
the Fund. Mr. Robinson and Mr. Prost have managed the Fund since March 1995
and May 1995, respectively. Mr. Robinson has been a Vice President and Chief
Investment Officer of the Advisor or MCM since 1987. Mr. Prost has been a
Senior Fixed Income Portfolio Manager of the Advisor or MCM since 1995. Prior
to joining the Advisor, he was a Vice President and Senior Fund Manager for
First of America Investment Corp.
INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
rate of return which, over time, exceeds the rate of inflation and the return
provided by money market instruments.
. Under normal conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between
three and eight years.
PORTFOLIO MANAGEMENT. Anne K. Kennedy and James C. Robinson jointly manage
the Fund. Ms. Kennedy, Vice President and Director of Corporate Bond Trading
of the Advisor or MCM since 1991, has managed the Fund since March 1995. Mr.
Robinson, Vice President and Chief Investment Officer of the Advisor or MCM
since 1987, has managed the Fund since March 1995.
INTERNATIONAL BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to realize a competitive
total return through a combination of current income and capital appreciation.
Under normal market conditions, at least 65% of the Fund's assets will be
invested in Foreign Securities of issuers in at least three countries other
than the United States. The Fund's dollar-weighted average maturity will
generally be between three and 15 years. The Fund will invest mostly in:
. foreign debt obligations issued by foreign governments and their
agencies, instrumentalities or political subdivisions
. debt securities issued or guaranteed by supra-national organizations,
such as the World Bank
. debt securities of banks or bank holding companies
. corporate debt securities
. other debt securities, including those convertible into foreign stock.
PORTFOLIO MANAGEMENT. Gregory A. Prost and Sharon E. Fayolle jointly manage
the Fund. Mr. Prost, Senior Fixed Income Portfolio Manager of the Advisor or
MCM, has managed the Fund since October 1996. Prior to joining MCM in 1995, he
was a Vice President and Senior Fund Manager for First of America Investment
Corp. Ms. Fayolle, Vice President and Director of Money Market Trading for the
Advisor or MCM, has managed the Fund since October 1996. Prior to joining MCM
in 1996, she was a European Portfolio Manager for Ford Motor Company.
38
<PAGE>
U.S. GOVERNMENT INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide high current
income.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in U.S. government obligations.
. The Fund's dollar-weighted average maturity generally will be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Peter G. Root jointly manage the
Fund. Mr. Robinson, Vice President and Chief Investment Officer of the Advisor
or MCM since 1987, and Mr. Root, Vice President and Director of Government
Securities Trading of the Advisor since March 1995, have managed the Fund
since March 1995. Mr. Root joined MCM in 1991.
MICHIGAN TRIPLE TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide as high a
level of current interest income exempt from regular Federal income taxes,
Michigan state income and Michigan intangibles tax as is consistent with
prudent investment management and preservation of capital.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets are invested in Michigan Municipal Obligations.
. The Fund will invest primarily in Michigan Municipal Obligations which
have remaining maturities of between three and 30 years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank (1985-
1993).
TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current interest income exempt from Federal income taxes and to generate as
competitive a long-term rate of return as is consistent with prudent
investment management and preservation of capital.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax. This fundamental policy may only be
changed with shareholder approval.
. The Fund invests primarily in intermediate-term and long-term Municipal
Obligations which have remaining maturities of between three and 30
years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
39
<PAGE>
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank (1985-
1993).
TAX-FREE INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
level of current interest income exempt from regular Federal income taxes and
a total return which, over time, exceeds the rate of inflation and the return
provided by tax-free money market instruments.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax.
. The Fund invests in Michigan Municipal Obligations from time to time.
. The Fund generally buys obligations with remaining maturities of ten
years or less.
. The Fund's dollar-weighted average maturity will generally be between
three and eight years, but may be up to ten years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank (1985-
1993).
SHORT TERM TREASURY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide investors with
an enhanced money market return consistent with capital preservation. Under
normal conditions, the Fund invests all of its assets in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. The Fund's dollar-weighted average portfolio maturity usually will
not exceed two years.
The Fund seeks to generate a total return which exceeds money market
instruments while minimizing the fluctuation of its net asset value. The Fund,
however, is not a money market fund and its net asset value may fluctuate.
PORTFOLIO MANAGEMENT. Sharon E. Fayolle, Vice President and Director of
Money Market Trading for the Advisor, has managed the Fund since October 1996.
Prior to joining the Advisor in 1996, she was a European Portfolio Manager for
Ford Motor Company.
CASH INVESTMENT FUND
. The Fund's primary goal is to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of
principal.
. The Fund invests in a broad range of short-term, high quality, U.S.
dollar-denominated instruments.
TAX-FREE MONEY MARKET FUND
. The Fund's goal is to provide shareholders with as high a level of
current interest income exempt from Federal income taxes as is consistent
with maintaining liquidity and stability of principal.
. The Fund invests substantially all of its assets in short-term, U.S.
dollar-denominated Municipal Obligations, the interest on which is exempt
from regular Federal income tax.
. Under normal market conditions, the Fund will invest at least 80% of its
net assets in Municipal Obligations.
40
<PAGE>
U.S. TREASURY MONEY MARKET FUND
. The Fund's goal is to provide as high a level of current interest income
as is consistent with maintaining liquidity and stability of principal.
. The Fund invests its assets solely in short-term bonds, bills and notes
issued by the U.S. Treasury (including "stripped" securities), and in
repurchase agreements relating to such obligations.
WHO MAY WANT TO INVEST IN THE FUNDS?
Equity Funds
These Funds are designed for investors who desire potentially high capital
appreciation and who can accept short-term variations in return for
potentially greater returns over the long term. In general, the greater the
risk, the greater the potential reward. Investors who have a short time
horizon, who desire a high level of income or who are conservative in their
investment approach may wish to invest in other portfolios offered by the
Trust and the Company.
Bond Funds and Tax-Free Funds
These Funds are designed for investors who desire potentially higher returns
than more conservative fixed rate investments or money market funds and who
seek current income. The Tax-Free Funds may be desirable for investors who
seek current income which is primarily tax-exempt. When you choose among the
Funds, you should consider both the expected yield of the Funds and potential
changes in each Fund's share price. The yield and potential price changes of a
Fund's shares depend on the quality and maturity of the obligations in its
portfolio, as well as on other market conditions.
Short Term Treasury Fund and Money Market Funds
These Funds are designed for investors who desire a high level of income and
liquidity and, in the case of the Money Market Funds, stability of principal.
WHAT ARE THE FUNDS' INVESTMENTS AND INVESTMENT PRACTICES?
Each Equity Fund invests primarily in EQUITY SECURITIES, which include
common stocks, preferred stocks, warrants and other securities convertible
into common stocks. Many of the common stocks the Funds (other than Growth &
Income Fund) will buy will not pay dividends; instead, stocks will be bought
for the potential that their prices will increase, providing capital
appreciation for the Fund. The value of Equity Securities will fluctuate due
to many factors, including the past and predicted earnings of the issuer, the
quality of the issuer's management, general market conditions, the forecasts
for the issuer's industry and the value of the issuer's assets. Holders of
Equity Securities only have rights to value in the company after all debts
have been paid, and they could lose their entire investment in a company that
encounters financial difficulty. Warrants are rights to purchase securities at
a specified time at a specified price.
Each Fund may invest in CASH EQUIVALENTS, which are high-quality, short-term
money market instruments including, among other things, commercial paper,
bankers' acceptances and negotiable certificates of deposit of banks or
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies
or instrumentalities. These instruments will be used primarily pending
investment, to meet anticipated redemptions or as a temporary defensive
measure. If a Fund is investing defensively, it may not be pursuing its
investment objective.
All Funds may enter into REPURCHASE AGREEMENTS. Under a repurchase
agreement, a Fund agrees to purchase securities from a seller and the seller
agrees to repurchase the securities at a later time, typically within
41
<PAGE>
seven days, at a set price. The seller agrees to set aside collateral at least
equal to the repurchase price. This ensures that the Fund will receive the
purchase price at the time it is due, unless the seller defaults or declares
bankruptcy, in which event the Fund will bear the risk of possible loss due to
adverse market action or delays in liquidating the underlying obligation. With
respect to the Money Market Funds, the securities held subject to a repurchase
agreement may have stated maturities exceeding 397 days provided the
repurchase agreement itself matures in 397 days.
The Equity Funds may purchase ADRS, EDRS and GLOBAL DEPOSITORY RECEIPTS
("GDRS"). ADRs are issued by U.S. financial institutions and EDRs and GDRs are
issued by European financial institutions. They are receipts evidencing
ownership of underlying Foreign Securities.
The Funds (other than the U.S. Treasury Money Market Fund and Short Term
Treasury Fund) may buy shares of registered MONEY MARKET FUNDS. The Funds will
bear a portion of the expenses of any investment company whose shares they
purchase, including operating costs and investment advisory, distribution and
administration fees. These expenses would be in addition to a Fund's own
expenses. Each Fund may invest up to 10% of its assets in other investment
companies and no more than 5% of its assets in any one investment company.
Each Fund may purchase FIXED INCOME SECURITIES. Fixed Income Securities are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rate. Each Fund may purchase U.S. GOVERNMENT
SECURITIES, which are securities issued by, or guaranteed by, the U.S.
Government or its agencies or instrumentalities. Such securities include U.S.
Treasury bills, which have initial maturities of less than one year, U.S.
Treasury notes, which have initial maturities of one to ten years, U.S.
Treasury bonds, which generally have initial maturities of greater than ten
years, and obligations of the Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association and Government National Mortgage Association.
Each Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
All of the Funds, other than the International Bond Fund, the Michigan
Triple Tax-Free Bond Fund and the Tax-Free Intermediate Bond Fund, are
classified as "diversified funds." With respect to 75% of each diversified
Fund's assets, each diversified fund cannot invest more than 5% of its assets
in one issuer (other than the U.S. Government and its agencies and
instrumentalities). In addition, each diversified fund cannot invest more than
25% of its assets in a single issuer. These restrictions do not apply to the
non-diversified funds.
The Tax-Free Funds will acquire long-term instruments only which are rated
"A" or better by Moody's Investors Service Inc. ("Moody's") or Standard &
Poor's Rating Service ("S&P") or, if unrated, are of comparable quality. Such
Funds will acquire short-term instruments only which (i) have short-term debt
ratings in the top two categories by at least one nationally recognized
statistical rating organization, (ii) are issued by an issuer with such
ratings or (iii), if unrated, are of comparable quality.
The Advisor does not intend to invest more than 25% of a Fund's assets in
securities whose issuers are in the same state, except that the Advisor may
invest more than 25% of the Michigan Triple Tax-Free Bond Fund's and the Tax-
Free Intermediate Bond Fund's assets in Michigan Municipal Obligations.
Each Tax-Free Fund may invest in short-term money market instruments on a
temporary basis or for temporary investment purposes. Short-term money market
instruments include U.S. government obligations, debt securities of issuers
having a rating within the two highest categories of either S&P or Moody's,
and certificates of deposit or bankers' acceptances of domestic branches of
U.S. banks with at least $1 billion in assets.
42
<PAGE>
Each Money Market Fund will invest primarily in ELIGIBLE SECURITIES (as
defined by the SEC) with remaining maturities of 397 days or less as defined
by the SEC (although securities subject to repurchase agreements, variable and
floating rate securities and certain other securities may bear longer
maturities), and the dollar-weighted average portfolio maturity of each Money
Market Fund will not exceed 90 days. Eligible Securities consist of securities
that are determined by the Advisor, under guidelines established by the Boards
of Trustees and Directors, to present minimal credit risk. Each Money Market
Fund may also hold uninvested cash pending investment of late payments for
purchase orders or during temporary defensive periods.
Investment Charts
The following charts summarize the Funds' investments and investment
practices. The SAI contains more details. All percentages are based on a
Fund's total assets except where otherwise noted. See "What are the Risks of
Investing in the Funds?" for a description of the risks involved with the
Funds' investment practices.
43
<PAGE>
EQUITY FUNDS
<TABLE>
<CAPTION>
ACCELER- GROWTH INTER- MICRO-
INVESTMENTS AND ATING & INDEX NATIONAL CAP
INVESTMENT PRACTICES GROWTH BALANCED INCOME 500 EQUITY EQUITY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOREIGN SECURITIES. Includes 25% 25% 25% 25% Y 25%
securities issued by non-
U.S. companies. Present more
risks than U.S. securities.
- -------------------------------------------------------------------------------
LOWER-RATED DEBT SECURITIES. Y Y 20% Y Y Y
Fixed income securities
which are rated below
investment grade by Standard
& Poor's Ratings Service,
Moody's Investors Service
Inc. or other nationally
recognized rating agency.
Considered riskier than
investment grade securities.
- -------------------------------------------------------------------------------
INVESTMENT-GRADE ASSET BACKED N Y N N N N
SECURITIES. Includes debt
securities backed by
mortgages, installment sales
contracts and credit card
receivables.
- -------------------------------------------------------------------------------
STRIPPED SECURITIES. Includes N Y N N N N
participations in trusts
that hold U.S. Treasury and
agency securities which
represent either the
interest payments or
principal payments on the
securities or combinations
of both.
- -------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY Y Y Y Y Y Y
EXCHANGE CONTRACTS.
Obligations of a Fund to
purchase or sell a specific
currency at a future date at
a set price. May decrease a
Fund's loss due to a change
in currency value, but also
limits gains from currency
changes.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND Y Y Y Y Y Y
FORWARD COMMITMENTS.
Agreement by a Fund to
purchase securities at a set
price, with delivery and
payment in the future. The
value of securities may
change between the time the
price is set and payment.
Not to be used for
speculation.
- -------------------------------------------------------------------------------
FUTURES AND OPTIONS ON Y Y Y Y Y Y
FUTURES.(1) Contracts in
which a Fund agrees, at
maturity, to make delivery
of or receive securities,
the cash value of an index
or foreign currency. Used
for hedging purposes or to
maintain liquidity.
</TABLE>
Key:
Y=investment allowed without restriction
N=investment not allowed
(1)The limitation on margins and premiums for futures is 5% of a Fund's assets
44
<PAGE>
EQUITY FUNDS (CONTINUED)
<TABLE>
<CAPTION>
REAL
ESTATE
MID- MULTI- EQUITY SMALL- SMALL FRAMLINGTON FRAMLINGTON
CAP SEASON INVEST- CAP COMPANY EMERGING FRAMLINGTON INTERNATIONAL
GROWTH GROWTH MENT VALUE GROWTH VALUE MARKETS HEALTHCARE GROWTH
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
25% 25% N 25% 25% 25% Y Y Y
- ------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------
N N N N N N N N N
- ------------------------------------------------------------------------------------
N N N N N N N N N
- ------------------------------------------------------------------------------------
Y Y N Y Y Y Y Y Y
- ------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
</TABLE>
45
<PAGE>
EQUITY FUNDS (CONTINUED)
<TABLE>
<CAPTION>
ACCELER- GROWTH INTER- MICRO-
INVESTMENTS AND ATING & INDEX NATIONAL CAP
INVESTMENT PRACTICES GROWTH BALANCED INCOME 500 EQUITY EQUITY
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPTIONS. A Fund may buy Y Y Y Y Y Y
options giving it the
right to require a buyer
to buy a security held by
the Fund (put options),
buy options giving it the
right to require a seller
to sell securities to the
Fund (call options), sell
(write) options giving a
buyer the right to
require the Fund to buy
securities from the buyer
or write options giving a
buyer the right to
require the Fund to sell
securities to the buyer
during a set time at a
set price. Options may
relate to stock indices,
individual securities,
foreign currencies or
futures contracts. See
the SAI for more details
and additional
limitations.
- -----------------------------------------------------------------------------
REVERSE REPURCHASE Y Y Y Y Y Y
AGREEMENTS. A Fund sells
securities and agrees to
buy them back later at an
agreed upon time and
price. A method to borrow
money for temporary
purposes.
- -----------------------------------------------------------------------------
ILLIQUID SECURITIES. 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
Typically there is no
ready market for these
securities, which
inhibits the ability to
sell them and to obtain
their full market value,
or there are legal
restrictions on their
resale by the Fund.
- -----------------------------------------------------------------------------
LENDING SECURITIES. A Fund 25% 25% 25% 25% 25% 25%
may lend securities to
financial institutions
which pay for the use of
the securities. May
increase return. Slight
risk of borrower failing
financially.
</TABLE>
46
<PAGE>
EQUITY FUNDS (CONTINUED)
<TABLE>
<CAPTION>
REAL
ESTATE
MID- MULTI- EQUITY SMALL- SMALL FRAMLINGTON FRAMLINGTON
CAP SEASON INVEST- CAP COMPANY EMERGING FRAMLINGTON INTERNATIONAL
GROWTH GROWTH MENT VALUE GROWTH VALUE MARKETS HEALTHCARE GROWTH
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Y Y Y Y Y Y Y Y Y
- -------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- -------------------------------------------------------------------------------------
15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
- -------------------------------------------------------------------------------------
25% 25% 25% 25% 25% 25% 25% 25% 25%
</TABLE>
- --------
Key:
Y= investment allowed without restriction
N= investment not allowed
(1) The limitation on margins and premiums for futures is 5% of a Fund's assets
(2) Based on net assets
47
<PAGE>
BOND FUNDS
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
INVESTMENTS AND BOND INTERMEDIATE INTERNATIONAL INCOME
INVESTMENT PRACTICES FUND BOND FUND BOND FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOREIGN SECURITIES. Securities 25% 25% Y 25%
issued by foreign governments
and their agencies,
instrumentalities or political
subdivisions, supranational
organizations, and foreign
corporations. Does not include
Bank Obligations.
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Includes Y Y Y Y
debt securities backed by
mortgages, installment sales
contracts and credit card
receivables.
- -------------------------------------------------------------------------------
INTEREST RATE AND CURRENCY SWAPS. Y(1) Y(1) Y Y(1)
Agreement to exchange payments
calculated on the basis of
relative interest or currency
rates. Derivative instruments
used solely for hedging.
- -------------------------------------------------------------------------------
INTEREST RATE CAPS AND FLOORS. N N Y N
Entitle purchaser to receive
payments of interest to the
extent that a specified
reference rate exceeds or falls
below a predetermined level.
- -------------------------------------------------------------------------------
STRIPPED SECURITIES. Includes Y Y Y Y
participations in trusts that
hold U.S. Treasury and agency
securities which represent
either the interest or principal
payments on the securities or
combinations of both.
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Y Y Y Y
Fund sells securities and agrees
to buy them back later at an
agreed upon time and price. A
method to borrow money for
temporary purposes.
- -------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE Y Y Y Y
CONTRACTS. Obligations of a Fund
to purchase or sell a specific
currency at a future date at a
set price. May decrease a Fund's
loss due to a change in currency
value, but also limits gains
from currency changes.
- -------------------------------------------------------------------------------
BANK OBLIGATIONS. U.S. dollar Y Y Y Y
denominated bank obligations,
including certificates of
deposit, bankers' acceptances,
bank notes, time deposits issued
by U.S. or foreign banks or
savings institutions having
total assets in excess of $1
billion.
- -------------------------------------------------------------------------------
SUPRANATIONAL ORGANIZATION N N Y N
OBLIGATION. Fixed income
securities issued or guaranteed
by supranational organizations
such as the World Bank.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. Y Y Y Y
Agreements of a Fund to make
payments to an insurance
company's general account in
exchange for a minimum level of
interest based on an index.
</TABLE>
48
<PAGE>
BOND FUNDS (CONTINUED)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT
INVESTMENTS AND BOND INTERMEDIATE INTERNATIONAL INCOME
INVESTMENT PRACTICES FUND BOND FUND BOND FUND FUND
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WHEN-ISSUED PURCHASES AND Y Y Y Y
FORWARD COMMITMENTS.
Agreement by a Fund to
purchase securities at a set
price, with payment and
delivery in the future. The
value of the securities may
change between the time the
price is set and payment. Not
to be used for speculation.
- ------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically 15%(2) 15%(2) 15%(2) 15%(2)
there is no ready market for
these securities, which
limits the ability to sell
them for full market value,
or they are restricted as to
resale.
- ------------------------------------------------------------------------------
FUTURES AND OPTIONS ON Y Y Y Y
FUTURES.(3) Contracts in
which a Fund has the right or
the obligation to make
delivery of, or receive,
securities, the cash value of
an index or foreign currency.
Used for hedging purposes or
to maintain liquidity.
- ------------------------------------------------------------------------------
OPTIONS. A Fund may buy Y Y Y Y
options giving it the right
to require a buyer to buy a
security held by the Fund
(put options), buy options
giving it the right to
require a seller to sell
securities to the Fund (call
options), sell (write)
options giving a buyer the
right to require the Fund to
buy securities from the buyer
or write options giving a
buyer the right to require
the Fund to sell securities
to the buyer during a set
time at a set price. Options
may relate to stock indices,
individual securities or
foreign currencies. See the
SAI for more details and
additional limitations.
- ------------------------------------------------------------------------------
LENDING SECURITIES. A Fund may 25% 25% 25% 33 1/3%
lend securities to financial
institutions which pay for
the use of securities. May
increase return. Slight risk
of borrower declaring
bankruptcy.
</TABLE>
- --------
Key:
Y =Investment allowed without restriction
N =Investment not allowed
(1)Interest rate swaps only
(2)Based on net assets
(3)The limitation on margins and premiums for futures is 5% of a Fund's assets
49
<PAGE>
TAX-FREE FUNDS AND SHORT TERM TREASURY FUND
<TABLE>
<CAPTION>
MICHIGAN
SHORT TERM TRIPLE TAX-FREE
INVESTMENTS AND TREASURY TAX-FREE TAX-FREE INTERMEDIATE
INVESTMENT PRACTICES FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL OBLIGATIONS. Payable N Y Y Y
from the issuer's general
revenue, the revenue of a
specific project, current
revenues or a reserve fund.
- -------------------------------------------------------------------------------
MICHIGAN MUNICIPAL OBLIGATIONS. N Y Y Y
Municipal Obligations issued by
the State of Michigan and its
political subdivisions.
- -------------------------------------------------------------------------------
FOREIGN SECURITIES. Obligations N 10% 10% 10%
issued by foreign governments
and their agencies,
instrumentalities or political
subdivisions, supranational
organizations, and foreign
corporations.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. N N N N
Agreements of a Fund to make
payments to an insurance
company's general account in
exchange for a minimum level of
interest based on an index.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND Y Y Y Y
FORWARD COMMITMENTS. Agreement
by a Fund to purchase
securities at a set price, with
payment and delivery in the
future. The value of the
securities may change between
the time the price is set and
payment. May not be used for
speculation.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically N 15%(1) 15%(1) 15%(1)
there is no ready market for
these securities, which limits
the ability to sell them for
full market value, or they are
restricted as to resale.
- -------------------------------------------------------------------------------
LENDING SECURITIES. A Fund may 33 1/3% 33 1/3% 33 1/3% 33 1/3%
lend securities to financial
institutions which pay for the
use of securities. May increase
return. Slight risk of borrower
declaring bankruptcy.
- -------------------------------------------------------------------------------
U.S. TREASURY SECURITIES. Y Y Y Y
Includes U.S. Treasury bills,
notes and bonds.
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Y N N N
Fund sells securities and
agrees to buy them back later
at an agreed upon time and
price. A method to borrow money
for temporary purposes.
</TABLE>
- --------
Key:
Y=Investment allowed without restriction
N=Investment not allowed
(1)Based on net assets
50
<PAGE>
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S.
INVESTMENTS AND CASH TAX-FREE TREASURY
INVESTMENT PRACTICES INVESTMENT MONEY MONEY
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS:
. Commercial paper (including paper of Y N N
Canadian companies, Canadian branches
of U.S. companies, and Europaper)
. Corporate bonds Y N N
. Other short-term obligations Y N N
. Variable Master Demand Notes Y N N
. Bond Debentures Y N N
. Notes Y N N
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Includes debt Y N N
securities backed by mortgages,
installment sales contracts and credit
card receivables.
- -------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS:
. Issued or guaranteed by U.S. Government Y N Y
. Issued or guaranteed by U.S. Government Y N N
agencies and instrumentalities
- -------------------------------------------------------------------------------
BANK OBLIGATIONS. U.S. dollar-denominated Y N N
only; includes CDs, bankers' acceptances,
bank notes, deposit notes and interest-
bearing savings and time deposits, issued
by U.S. or foreign banks or savings
institutions with total assets greater
than $1 billion.
- -------------------------------------------------------------------------------
STRIPPED SECURITIES:
. Participation in trusts that hold U.S. Y Y N
Treasury and agency securities
. U.S. Treasury-issued receipts Y Y 35%
. Non-U.S. Treasury receipts Y Y N
- -------------------------------------------------------------------------------
MUNICIPAL REVENUE OBLIGATIONS. Obligations N Y N
the interest on which is paid solely from
the revenues of similar projects.
- -------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS. Payable from the 5% No more than N
issuer's general revenue, the revenue of a 25% in any
specific project, current revenues or a one state
reserve fund.
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Fund sells Y N Y
securities and agrees to buy them back
later at an agreed upon time and price. A
method to borrow money for temporary
purposes.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. Agreements Y N N
of a Fund to make payments to an insurance
company's general account in exchange for
a minimum level of interest based on an
index.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND FORWARD Y Y Y
COMMITMENTS. Agreement by a Fund to
purchase securities at a set price, with
payment and delivery in the future. The
value of the securities may change between
the time the price is set and payment. Not
to be used for speculation.
</TABLE>
51
<PAGE>
MONEY MARKET FUNDS (CONTINUED)
<TABLE>
<CAPTION>
U.S.
INVESTMENTS AND CASH TAX-FREE TREASURY
INVESTMENT PRACTICES INVESTMENT MONEY MONEY
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
FOREIGN SECURITIES. Debt obligations issued by 25% N N
foreign governments, and their agencies,
instrumentalities or political subdivisions,
supranational organizations, and foreign
corporations or convertible into foreign
stock. Does not include Bank Obligations.
- ------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically there is no 10%(1) 10%(1) 10%(1)
ready market for these securities, which
limits the ability to sell them for full
market value, or there are legal restrictions
on their resale by a Fund.
- ------------------------------------------------------------------------------
LENDING SECURITIES. A Fund may lend securities 25% 25% 25%
to financial institutions which pay for the
use of securities. May increase return.
Slight risk of borrower failing financially.
</TABLE>
Key:
Y=Investment allowed without restriction
N=Investment not allowed
(1)Based on net assets
52
<PAGE>
WHAT ARE THE RISKS OF INVESTING IN THE FUNDS?
All Funds
Consistent with a long-term investment approach, investors in a Fund should
be prepared and able to maintain their investments during periods of adverse
market conditions. By itself, no Fund constitutes a balanced investment
program and there is no guarantee that any Fund will achieve its investment
objective since there is uncertainty in every investment.
A fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. Certain Funds are authorized to use options,
futures, and forward foreign currency exchange contracts, which are types of
derivative instruments. Derivative instruments are instruments that derive
their value from a different underlying security, index or financial
indicator. The use of derivative instruments exposes a Fund to additional
risks and transaction costs. Risks inherent in the use of derivative
instruments include: (1) the risk that interest rates, securities prices and
currency markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates or
currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select portfolio securities; (4)
the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when
desired; (5) leverage risk, that is, the risk that adverse price movements in
an instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and (6) particularly in the case of privately-negotiated
instruments, the risk that the counterparty will not perform its obligations,
which could leave the Fund worse off than if it had not entered into the
position.
The risks of the various investment techniques the Funds use are described
in more detail in the SAI.
Equity Funds
Investing in these Funds may be less risky than investing in individual
stocks due to the diversification of investing in a portfolio of many
different stocks; however, such diversification does not eliminate all risks.
Because the Funds invest mostly in Equity Securities, rises and falls in the
stock market in general, as well as in the value of particular Equity
Securities held by the Funds, can affect the Funds' performance. Your
investment in the Funds is not guaranteed. The net asset value of the Funds
will change daily and you might not recoup the amount you invest in the Funds.
Bond Funds, Tax-Free Funds and Short Term Treasury Fund
The value of each Fund's shares, like the value of most securities, will
rise and fall in response to changes in economic conditions, interest rates
and the market's perception of the underlying securities held by the Fund.
Investing in the Funds may be less risky than investing in individual Fixed
Income Securities due to the diversification of investing in a portfolio
containing many different Fixed Income Securities; however, such diversity
does not eliminate all risks. The Funds invest mostly in Fixed Income
Securities, whose values typically rise when interest rates fall and fall when
interest rates rise. Fixed Income Securities with shorter maturities (time
period until repayment) tend to be less affected by interest rate changes, but
generally offer lower yields than securities with longer maturities. Current
yield levels should not be considered representative of yields for any future
time. Securities with variable interest rates may exhibit greater price
variations than ordinary securities. Zero coupon bonds are subject to greater
market fluctuations from changing interest rates than debt obligations of
comparable maturities which make current distributions of interest.
Money Market Funds
Each Money Market Fund attempts to maintain a constant net asset value of
$1.00 per share. However, your investment in the Funds is not guaranteed.
53
<PAGE>
Although the Cash Investment Fund and U.S. Treasury Money Market Fund expect
under normal market conditions to be as fully invested as possible, each Fund
may hold uninvested cash pending investment of late payments for purchase
orders (or other payments) or during temporary defensive periods. Uninvested
cash will not earn income. In general, investments in the Cash Investment Fund
and U.S. Treasury Money Market Fund will not earn as high a level of current
income as longer-term or lower quality securities. Longer-term and lower
quality securities, however, generally have less liquidity, greater market
risk and more fluctuation in market value.
Although the Tax-Free Money Market Fund may invest more than 25% of its nets
assets in municipal revenue obligations, the interest on which is paid solely
from revenues of similar projects, the Tax-Fee Money Market Fund does not
intend to do so on a regular basis. If it does, the Fund will be riskier than
a fund which does not concentrate to such an extent on similar projects.
Micro-Cap Equity Fund, Small-Cap Value Fund, Mid-Cap Growth Fund and Small
Company Growth Fund
The Advisor believes that smaller companies can provide greater growth
potential and potentially higher returns than larger firms. Investing in
smaller companies, however, is riskier than investing in larger companies. The
stock of smaller companies may trade infrequently and in lower volume, making
it more difficult for a Fund to sell the stocks of smaller companies when it
chooses. Smaller companies may have limited product lines, markets, financial
resources and distribution channels, which makes them more sensitive to
changing economic conditions. Stocks of smaller companies historically have
had larger fluctuations in price than stocks of larger companies included in
the S&P 500.
Framlington Emerging Markets Fund, Framlington International Growth Fund,
International Equity Fund and International Bond Fund
Investing in any of the Funds, with its larger investment in Foreign
Securities, may involve more risk than investing in a U.S. fund for the
following reasons: (1) there may be less public information available about
foreign companies than is available about U.S. companies; (2) foreign
companies are not generally subject to the uniform accounting, auditing and
financial reporting standards and practices applicable to U.S. companies; (3)
foreign markets have less volume than U.S. markets, and the securities of some
foreign companies are less liquid and more volatile than the securities of
comparable U.S. companies; (4) there may be less government regulation of
stock exchanges, brokers, listed companies and banks in foreign countries than
in the United States; (5) the Fund may incur fees on currency exchanges when
it changes investments from one country to another; (6) the Fund's foreign
investments could be affected by expropriation, confiscatory taxation,
nationalization of bank deposits, establishment of exchange controls,
political or social instability or diplomatic developments; (7) fluctuations
in foreign exchange rates will affect the value of the Fund's portfolio
securities, the value of dividends and interest earned, gains and loses
realized on the sale of securities, net investment income and unrealized
appreciation or depreciation of investments; and (8) possible imposition of
dividend or interest withholding by a foreign country.
Real Estate Equity Investment Fund
The Fund will invest primarily in the real estate industry and may invest
more than 25% of its assets in any one sector of the real estate industry. As
a result, the Fund will be particularly vulnerable to declines in real estate
prices and new construction rates. The Fund may be riskier than a fund
investing in a broader range of industries.
Framlington Healthcare Fund
The Fund will invest most of its assets in the healthcare industry, which is
particularly affected by rapidly changing technology and extensive government
regulation, including cost containment measures. The Fund may be riskier than
a fund investing in a broader range of industries.
International Bond Fund, Michigan Triple Tax-Free Bond Fund and Tax-Free
Intermediate Bond Fund
These Funds are non-diversified and hold securities of a limited number of
issuers. The Funds may, therefore, pose a greater risk to investors than an
investment in a diversified fund. The Michigan Triple Tax-Free
54
<PAGE>
Bond Fund invests primarily in Michigan Municipal Obligations. If Michigan
issuers suffer serious financial difficulties jeopardizing their ability to
pay their obligations, the value of such Fund may decline.
PERFORMANCE
HOW IS THE FUNDS' PERFORMANCE CALCULATED?
There are various ways in which the Funds may calculate and report their
performance. Performance is calculated separately for each class of shares.
One method is to show a Fund's total return. Cumulative total return is the
percentage change in the value of an amount invested in a class of shares of a
Fund over a stated period of time and takes into account reinvested dividends.
Cumulative total return most closely reflects the actual performance of a
Fund.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of a Fund determined
by comparing the initial amount invested to the ending redeemable value of the
amount, taking into account reinvested dividends.
Each Fund may also publish its current yield. Yield is the net investment
income generated by a share of a Fund during a 30-day period divided by the
maximum offering price on the 30th day.
The current yield of shares in the Money Market Funds refers to the net
income generated by an investment in shares over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. "Effective yield" is calculated similarly but,
when annualized, the income earned by an investment in a class is assumed to
be reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The "tax-
equivalent yield" of shares of the Tax-Free Funds and the Tax-Free Money
Market Fund may also be quoted from time to time, which shows the level of
taxable yield needed to produce an after-tax equivalent to the tax-free yield
of a particular class. This is done by increasing the yield (calculated as
above) by the amount necessary to reflect the payment of Federal and/or state
income taxes at a stated rate.
You should be aware that (i) past performance does not indicate how a Fund
will perform in the future; and (ii) each Fund's return and net asset value
will fluctuate, so you cannot necessarily use a Fund's performance data to
compare it to investment in certificates of deposit, savings accounts or other
investments that provide a fixed or guaranteed yield.
Each Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. Each Fund may also compare its total return
to broad-based indices. These indices show the value of selected portfolios of
securities (assuming reinvestment of interest and dividends) which are not
managed by a portfolio manager. The Funds may report how they are performing
in comparison to the Consumer Price Index, an indication of inflation reported
by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Funds' annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
55
<PAGE>
PURCHASES OF SHARES
Customers of banks and other institutions, and the immediate family members
of such Customers, that have entered into agreements with us to provide
shareholder services for Customers may purchase Class K Shares. Customers may
include individuals, trusts, partnerships and corporations. Each Fund also
issues other classes of shares, which have different sales charges, expense
levels and performance. Call (800) 438-5789 to obtain more information
concerning the Funds' other classes of shares.
WHAT PRICE DO I PAY FOR SHARES?
Class K Shares are sold at the "net asset value next determined" by the
Funds without any initial sales charge. Except in certain limited
circumstances, each Fund determines its net asset value ("NAV") on each day
the New York Stock Exchange is open for trading (a "Business Day") at the
close of such trading (normally 4:00 p.m. Eastern time). The Money Market
Funds also determine their NAVs at 2:45 p.m. (Eastern time). If we receive
your purchase order and payment for a Money Market Fund by 2:45 p.m. (Eastern
time) on a Business Day, you will receive dividends on that day. NAV is
calculated separately for each class of shares of a Fund. NAV is calculated by
totaling the value of all of the assets of a Fund allocated to a particular
class of shares, subtracting the Fund's liabilities and expenses charged to
that class and dividing the result by the number of shares of that class
outstanding.
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
HOW CAN I PURCHASE SHARES?
All share purchases are effected through a Customer's account at an
institution and confirmations of share purchases will be sent to the
institution involved. Institutions (or their nominees) will normally be the
holders of record of Fund shares acting on behalf of their Customers, and will
reflect their Customers' beneficial ownership of shares in the account
statements provided by them to their Customers.
You will not be issued a share certificate, unless you request one in
writing. We reserve the right to (i) reject any purchase order if, in our
opinion, it is in the Funds' best interest to do so and (ii) suspend the
offering of shares of any Class for any period of time.
You may pay for shares of each Fund, other than the Real Estate Equity
Investment Fund, with securities which the Fund is allowed to hold.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order.
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by First Data Investor Services Group, Inc. (the "Transfer
Agent"). A Fund may temporarily stop redeeming shares when the NYSE is closed
or trading on the NYSE is restricted, when an emergency exists and the Fund
cannot sell its assets or accurately determine the value of its assets or if
the SEC orders the Fund to suspend redemptions.
56
<PAGE>
HOW CAN I REDEEM SHARES?
Redemption orders are effected at the net asset value per share next
determined after receipt of the order by the Transfer Agent. Shares held by an
institution on behalf of its Customers must be redeemed in accordance with
instructions and limitations pertaining to the account at that institution.
. FREE CHECKWRITING. Free checkwriting is available to holders of Class K
Shares of the Bond Funds (other than the International Bond Fund), Tax-Free
Funds and Money Market Funds who complete the Signature Card Section of the
Account Application Form. You may write checks in the amount of $500 or more
and you may not close a Fund account by writing a check. We may change or
terminate this program on 30 days' notice to you.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
If we receive a redemption order for a Fund before 4:00 p.m. (Eastern time)
on a Business Day, we will normally wire payment to the redeeming institution
on the next Business Day. With respect to a Money Market Fund, if we receive a
redemption order before noon (Eastern time) on a Business Day, we will
normally wire payment on the same Business Day. We may delay wiring redemption
proceeds for up to seven days if we feel an earlier payment would have a
negative impact on the Fund.
STRUCTURE AND MANAGEMENT OF THE FUNDS
HOW ARE THE FUNDS STRUCTURED?
The Trust, the Company and Framlington are each an open-end management
investment company, which is a mutual fund that sells and redeems shares every
day that it is open for business. They are managed under the direction of
their governing Boards of Trustees and Directors, which are responsible for
the overall management of the Trust, the Company and Framlington and supervise
the Funds' service providers. The Trust and Framlington are organized as
Massachusetts business trusts and the Company is a Maryland corporation.
WHO MANAGES AND SERVICES THE FUNDS?
INVESTMENT ADVISOR. The Funds' investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
The Advisor provides overall investment management for each Fund (other than
the Framlington Funds), provides research and credit analysis, and is
responsible for all purchases and sales of portfolio securities.
The Advisor is responsible for the overall management of the Framlington
Funds. Framlington Overseas Investment Management Limited, the sub-advisor of
the Framlington Funds, is responsible for buying and selling securities for
the Framlington Funds. It is an indirect subsidiary of Framlington Holdings
Limited which is, in turn, owned 49% by the Advisor and 51% by Credit
Commercial de France S.A., a French banking corporation listed on the Societe
des Bourses Francaises.
57
<PAGE>
During the fiscal year ended June 30, 1997, the Advisor was paid an advisory
fee at an annual rate based on the average daily net assets of each Fund
(after waivers, if any) as follows:
<TABLE>
<S> <C>
Accelerating Growth Fund .............0.75%
Balanced Fund ........................0.65%
Growth & Income Fund .................0.75%
Index 500 Fund .......................0.07%
International Equity Fund ............0.75%
Micro-Cap Equity Fund ................1.00%
Mid-Cap Growth Fund ..................0.74%
Multi-Season Growth Fund .............0.75%
Real Estate Equity Investment Fund ...0.74%
Small-Cap Value Fund .................0.75%
Small Company Growth Fund ............0.75%
Value Fund ...........................0.74%
Framlington Emerging Markets Fund ....1.25%
</TABLE>
<TABLE>
<S> <C>
Framlington International Growth Fund
.....................................1.00%
Framlington Healthcare Fund ..........1.00%
Bond Fund ............................0.50%
Intermediate Bond Fund ...............0.50%
International Bond Fund ..............0.50%
U.S. Government Income Fund ..........0.50%
Michigan Triple Tax-Free Bond Fund ...0.50%
Tax-Free Bond Fund ...................0.50%
Tax-Free Intermediate Bond Fund ......0.50%
Short Term Treasury Fund .............0.25%
Cash Investment Fund .................0.35%
Tax-Free Money Market Fund ...........0.35%
U.S. Treasury Money Market Fund ......0.35%
</TABLE>
The Advisor waived advisory fees during the past fiscal year for the Index
500 Fund and the Multi-Season Growth Fund. The Advisor is entitled to receive
an annual fee equal to .20% of the first $250 million of the Index 500 Fund's
average daily net assets, .12% of the next $250 million of the Fund's average
daily net assets and .07% of the Fund's average daily net assets over $500
million. The Advisor is also entitled to receive an annual fee equal to 1.00%
of the first $500 million of the Multi-Season Growth Fund's average daily net
assets and .75% of the Fund's average daily net assets over $500 million.
The Sub-Advisor is entitled to receive an advisory fee equal to one-half of
the fee paid to the Advisor by each of the Framlington Funds as compensation
for its services as Sub-Advisor. The Advisor pays fees to the Sub-Advisor and
the Framlington Funds pay no fees directly to the Sub-Advisor.
The Advisor may, from time to time, make payments to banks, broker-dealers
or other financial institutions for certain services to the Funds and/or their
shareholders, including sub-administration, sub-transfer agency and
shareholder servicing. The Advisor may make such payments out of its own
resources and there are no additional costs to the Funds or their
shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Funds based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
PERFORMANCE INFORMATION. The tables below contain performance information
for certain Funds created through the conversion of a common or collective
trust fund which had investment objectives and policies materially equivalent
to those of the corresponding Funds. Immediately before and after the
conversion, the same person managed both the common or collective trust fund
and the corresponding Fund.
The table for each Fund
. includes the average annual total returns of the common or collective
trust fund and the average annual total returns of the corresponding Fund
linked together
. assumes that net investment income and dividends have been reinvested
. assumes that the common or collective trust fund paid the same levels of
fees and expenses as the corresponding Fund currently pays
. does not reflect any potential negative impact on the common and
collective trust funds' performance if they had been subjected to the
same regulatory restrictions (the 1940 Act and the Internal Revenue Code
of 1986, as amended) as the corresponding Fund
. indicates past performance only and does not predict future results
58
<PAGE>
<TABLE>
<CAPTION>
MUNDER ACCELERATING
PERIOD ENDED GROWTH FUND
JUNE 30, 1997 (CLASS K)* S&P 500**
------------- ------------------- ---------
<S> <C> <C>
1 Year ........................................... 4.83% 34.68%
3 Years .......................................... 18.02% 28.83%
5 Years .......................................... 14.69% 19.76%
Inception on January 1, 1990 ..................... 12.40% 16.24%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on November 23, 1992.
** S&P 500 performance shows total return in U.S. dollars but does not reflect
the deduction of fees, expenses and taxes. Source: Lipper Analytical
Services, Inc.
<TABLE>
<CAPTION>
MUNDER SMALL COMPANY
PERIOD ENDED GROWTH FUND RUSSELL 2000
JUNE 30, 1997 (CLASS K)* INDEX**
------------- -------------------- ------------
<S> <C> <C>
1 Year ....................................... 18.93% 16.33%
3 Years ...................................... 29.17% 20.07%
5 Years ...................................... 21.71% 17.88%
10 Years ..................................... 14.77% 11.16%
Inception on December 31, 1982 ............... 15.16% 13.01%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on November 23, 1992.
** Russell 2000 Index performance shows total return in U.S. dollars but does
not reflect the deduction of fees, expenses and taxes. Source: Lipper
Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER INTERNATIONAL FT/S&P ACTUARIES
PERIOD ENDED EQUITY FUND WORLD INDEX
JUNE 30, 1997 (CLASS K)* EX. U.S.**
------------- -------------------- ----------------
<S> <C> <C>
1 Year ................................... 18.09% 12.90%
3 Years .................................. 13.09% 9.09%
5 Years .................................. 11.20% 12.90%
Inception on September 30, 1990 .......... 11.41% 11.27%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on November 23, 1992.
** FT/S&P Actuaries World Index ex. U.S. performance shows total return in
U.S. dollars but does not reflect the deduction of fees, expenses and
taxes. Source: Ibbotson Associates, Inc.
<TABLE>
<CAPTION>
MUNDER
PERIOD ENDED INDEX 500 FUND S&P 500
JUNE 30, 1997 (CLASS K)* INDEX**
------------- -------------- -------
<S> <C> <C>
1 Year .................................................. 33.79% 34.68%
3 Years ................................................. 28.12% 28.83%
5 Years ................................................. 19.16% 19.76%
Inception on January 27, 1988 ........................... 16.64% 17.46%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on December 7, 1992.
** S&P 500 Index performance shows total return in U.S. dollars but does not
reflect the deduction of fees, expenses and taxes. Source: Lipper
Analytical Services, Inc.
<TABLE>
<CAPTION>
LEHMAN
BROTHERS
MUNDER GOV'T/CORP.
PERIOD ENDED BOND FUND BOND
JUNE 30, 1997 (CLASS K)* INDEX**
------------- ---------- -----------
<S> <C> <C>
1 Year .................................................. 6.72% 7.75%
3 Years ................................................. 7.20% 8.34%
5 Years ................................................. 5.21% 7.23%
10 Years ................................................ 7.52% 8.72%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on November 23, 1992.
** Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees, expenses
and taxes. Source: Lipper Analytical Services, Inc.
59
<PAGE>
<TABLE>
<CAPTION>
MUNDER
U.S. GOVERNMENT LEHMAN BROTHERS
PERIOD ENDED INCOME FUND GOV'T/CORP. BOND
JUNE 30, 1997 (CLASS K)* INDEX**
------------- --------------- ----------------
<S> <C> <C>
1 Year ........................................ 7.49% 7.75%
3 Years ....................................... 7.40% 8.34%
5 Years ....................................... 6.07% 7.23%
10 Years ...................................... 7.79% 8.72%
</TABLE>
- --------
*Converted from collective trust fund to mutual fund on July 5, 1994.
**Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees, expenses
and taxes.
Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER LEHMAN BROTHERS
INTERMEDIATE INTERMEDIATE
PERIOD ENDED BOND FUND GOV'T/CORP.
JUNE 30, 1997 (CLASS K)* BOND INDEX**
------------- ------------ ---------------
<S> <C> <C>
1 Year ............................................ 6.34% 7.22%
3 Years ........................................... 6.39% 7.51%
5 Years ........................................... 5.34% 6.49%
10 Years .......................................... 7.03% 8.16%
Inception on March 31, 1982 ....................... 8.83% 10.31%
</TABLE>
- --------
*Converted from collective trust fund to mutual fund on November 20, 1992.
**Lehman Brothers Intermediate Government/Corporate Bond Index performance
shows total return in U.S. dollars but does not reflect the deduction of
fees, expenses and taxes.
Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER
TAX-FREE
BOND FUND LEHMAN
PERIOD ENDED (CLASS 20-YEAR MUNI
JUNE 30, 1997 K)* BOND INDEX**
------------- --------- ------------
<S> <C> <C>
1 Year .................................................. 7.13% 9.42%
3 Years ................................................. 6.70% 8.86%
5 Years ................................................. 6.28% 7.86%
10 Years ................................................ 6.75% 9.05%
</TABLE>
- --------
*Converted from common trust fund to mutual fund on July 5, 1994.
**Lehman 20-Year Municipal Bond Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Lipper Analytical Services, Inc.
INDICES
The S&P 500 is an unmanaged index of common stock prices, including
reinvestment of dividends.
The Russell 2000 Index is a capitalization weighted total return index which
is comprised of 2,000 of the smallest capitalized U.S. domiciled companies
whose stock is traded in the United States on the New York Stock Exchange,
American Stock Exchange and the NASDAQ.
The FT/S&P Actuaries World Index ex. U.S. is an unmanaged index used to
portray global equity market excluding the U.S. The Index is weighted based on
the market capitalization of those stocks selected to represent each country
and includes gross reinvestment of dividends.
60
<PAGE>
The Lehman Brothers Government/Corporate Bond Index is weighted composite of
(i) Lehman Brothers Government Bond Index, which is comprised of all publicly
issued, non-convertible debt of the U.S. Government or any agency thereof,
quasi-Federal corporations, and corporate debt guaranteed by the U.S.
Government and (ii) Lehman Brothers Corporate Bond Index, which is comprised
of all public fixed-rate, non-convertible investment-grade domestic corporate
debt, excluding collateralized mortgage obligations.
The Lehman Brothers Intermediate Government/Corporate Bond Index is a
weighted composite of (i) Lehman Brothers Intermediate Government Bond Index,
which is comprised of all publicly issued, non-convertible debt of the U.S.
Government or any agency thereof, quasi-Federal corporations and corporate
debt guaranteed by the U.S. Government with a maturity of between one and ten
years and (ii) Lehman Brothers Corporate Bond Index.
The Lehman Brothers 20-Year Municipal Bond Index is a performance benchmark
for the long-term investment-grade tax-exempt bond market.
PERFORMANCE OF FRAMLINGTON ACCOUNTS MANAGED BY THE SUB-ADVISOR
The tables below contain certain performance information provided by the
Sub-Advisor relating to accounts managed by the Sub-Advisor and which have
investment objectives and policies similar to those of the corresponding
Framlington Funds. See "Fund Choices" and "What are the Funds' Investments and
Investment Practices?" In the case of the Healthcare portfolio performance,
the data relates to a unit trust organized under the laws of the United
Kingdom managed by the same personnel of the Sub-Advisor with similar
investment objectives and policies to the Framlington Healthcare Fund. In the
case of Emerging Markets portfolio performance, the data relates to a
Canadian-based institutional emerging markets portfolio managed by the same
personnel of the Sub-Advisor with similar investment objectives and policies
to the Framlington Emerging Markets Fund.
The trust account performance is provided by Micropal, an independent
research organization that is a recognized source of performance data in the
UK unit trust industry. The data is U.S. dollar adjusted on the basis of
exchange rates provided by Datastream using WM/Reuters closing rates. The
performance figures are net of brokerage commissions, actual investment
advisory fees and initial sales charges. The data assume the reinvestment of
net income and capital gain distributions. The trust account returns are
calculated using beginning offer and ending bid prices for periods ended
December 31, 1996.
You should not rely on the following performance data of the Sub-Advisor's
client accounts as an indication of future performance of the Framlington
Funds. It should be noted that the management of the Funds will be affected by
regulatory requirements under the Investment Company Act of 1940 (the "1940
Act") and requirements of the Internal Revenue Code of 1986, as amended, to
qualify as a regulated investment company.
<TABLE>
<CAPTION>
PERIOD ENDED U.K. S&P HEALTHCARE
DECEMBER 31, HEALTH COMPOSITE INDEX
1996 PORTFOLIO CAPITAL CHANGE
------------- --------- ---------------
<S> <C> <C>
1 Year .............................................. 10.75% 18.48%
3 Years ............................................. 96.93% 100.49%
5 Years ............................................. 99.43% 45.60%
Inception on April 30, 1987 ......................... 411.08% 239.64%
</TABLE>
Performance for the Health trust account is calculated on an offer-bid
basis; US Dollar adjusted total return net of all management fees but not
reflective of U.K. tax. Source: Micropal.
S&P Healthcare Composite Index performance shows capital change in U.S.
Dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
61
<PAGE>
<TABLE>
<CAPTION>
MSCI
PERIOD ENDED CANADIAN EMERGING MARKETS
DECEMBER 31, EMERGING MARKETS FREE
1996 ACCOUNT TOTAL RETURN
------------ ---------------- ----------------
<S> <C> <C>
1 Year ...................................... 5.16% 6.03%
Inception on November 1, 1994 ............... (3.68)% (12.37)%
</TABLE>
MSCI Emerging Markets Free Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
The performance of the Canadian institutional account is measured by the
World Markets Company on a total return basis and has been re-calculated net
of the management fee charged the Canadian institutional account. The
inception date of the Canadian institutional account is November 1, 1994.
INDICES
The S&P Healthcare Composite Index is the composite Healthcare section of
the S&P 500 Index as defined and tracked by S&P. This index covers securities
listed in the USA only.
The MSCI Emerging Markets Free Index is maintained by Morgan Stanley Capital
International and covers 26 countries and represents the investment
opportunities in emerging markets available to foreign investors. Total return
is calculated using the prices of the companies tracked and assumes the
reinvestment of dividends.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Funds'
transfer agent. The Transfer Agent is a wholly-owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Funds' administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Company, the Trust and Framlington in all aspects of their administration
and operations including the maintenance of financial records and fund
accounting. As compensation for its services, State Street is entitled to
receive fees, based on the aggregate daily net assets of the Funds and certain
other investment portfolios that are advised by the Advisor for which it
provides services, computed daily and payable monthly at the annual rate of
.051% of the first $7.5 billion of net assets, plus .045% of the next $2.5
billion of net assets, plus .03% of the next $2.5 billion, plus .02% of net
assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Funds. State Street pays the Distributor a fee
for these services out of its own resources at no cost to the Funds.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Funds. No compensation is paid to the Custodian for
its services. State Street also serves as Sub-Custodian to the Funds. As
compensation for its services, the Sub-Custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Funds and certain other
investment portfolios that are advised by the Advisor for which the Sub-
Custodian provides services, computed daily and payable monthly at an annual
rate of .01% of average daily net assets. The Sub-Custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Funds' shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Funds' shares.
The Funds have adopted a Shareholder Servicing Plan (the "Class K Plan")
under which Class K Shares are sold through institutions which enter into
shareholder servicing agreements with the Funds. The agreements require the
institutions to provide shareholder services to their Customers who from time
to time own of record or beneficially Class K Shares in return for payment by
a Fund at a rate not exceeding .25% (on an annualized
62
<PAGE>
basis) of the average daily net asset value of the Class K Shares beneficially
owned by the Customers. Class K Shares bear all fees paid to institutions
under the Class K Plan. Payments under the Class K Plan are not tied
exclusively to the shareholder expenses actually incurred by the institutions
and the payments may exceed service expenses actually incurred.
The services provided by institutions under the Class K Plan may include
processing purchase, exchange and redemption requests from Customers and
placing orders with the Transfer Agent; processing dividend and distribution
payments from the Funds on behalf of Customers; providing information
periodically to Customers showing their positions in Class K Shares; providing
sub-accounting with respect to Class K Shares beneficially owned by Customers
or the information necessary for sub-accounting; responding to inquires from
Customers concerning their investment in Class K Shares; arranging for bank
wires; and providing such other similar services as may be reasonably
requested.
For an additional description of the services performed by the
Administrator, the Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust, the Company or Framlington as a whole and affecting your particular
Fund. You will not vote by Class unless expressly required by law or when the
Trustees or Directors determine the matter to be voted on affects only the
interests of the holders of a particular class of shares. The Trust, the
Company and Framlington will not hold annual shareholder meetings, but special
meetings may be held at the written request of shareholders owning more than
10% of outstanding shares for the purpose of removing a Trustee or Director.
Under Massachusetts law, it is possible that a shareholder may be personally
liable for the Trust's or Framlington's obligations. If a shareholder were
required to pay a debt of a Fund, however, the Trust and Framlington have
committed to reimburse the shareholder in full from their assets. The SAI
contains more information regarding voting rights.
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Funds as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust, the
Company and Framlington.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUNDS?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on a Fund's investments. The Funds pass their earnings along to
investors in the form of dividends. Dividend distributions are the dividends
or interest earned on investments after expenses. The Accelerating Growth
Fund, Balanced Fund, Growth & Income Fund, Small Company Growth Fund and
International Bond Fund pay dividends quarterly. The Framlington Emerging
Markets Fund, Framlington Healthcare Fund, Framlington International Growth
Fund, International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund and Value Fund pay dividends at
least annually. The Bond Funds (other than the International Bond Fund), the
Tax-Free Funds and the Money Market Funds pay dividends monthly.
Each Fund's net realized capital gains (including net short-term capital
gains), if any, are distributed at least annually.
It is possible that a Fund may make a distribution in excess of the Fund's
current and accumulated earnings and profits. You will treat such a
distribution as a return of capital which is applied against and reduces your
basis in your shares. To the extent that the amount of any such distribution
exceeds your basis in your shares, the excess will be treated by you as gain
from a sale or exchange of the shares.
63
<PAGE>
HOW WILL DISTRIBUTIONS BE MADE?
The Funds will pay dividend and capital gains distributions in additional
shares of the same class of a Fund. If you wish to receive distributions in
cash, either indicate this request on your Account Application Form or notify
the Fund at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUNDS?
In general, as long as each Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. Each Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, a Fund may still be
liable for any excise tax on income that is not distributed in accordance with
a calendar year requirement; the Funds intend to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by a Fund will
generally be designated as long-term or short-term. Recent tax law changes
have added a new category of mid-term capital gain; it is expected that
regulations will be issued regarding the proper tax treatment of mid-term and
other gains by shareholders of RICs. Distributions from a Fund's long-term
capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from each Fund in which
you are a shareholder a statement of the amount and nature of the
distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by a
Fund may be subject to foreign withholding or other taxes. A Fund may be
permitted to pass on to its shareholders the right to a credit or deduction
for income or other tax credits earned from foreign investments and will do so
if possible. These deductions or credits may be subject to tax law
limitations.
If a Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If a Fund elects to treat a PFIC as a "qualified electing fund"
("QEF") and the PFIC furnishes certain financial information in the required
form to such Fund, the Fund will instead be required to include in income each
year its allocable share of the ordinary earnings and net capital gains of the
QEF, regardless of whether received, and such amounts will be subject to the
various distribution requirements described above. The Funds may also elect to
mitigate the tax effects of owning PFIC stock by making an annual mark-to-
market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Funds and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Funds, is contained in the SAI. You should consult your tax advisor
regarding the impact of owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
64
<PAGE>
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and audited Annual Reports on a regular basis from the Funds. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings, the Funds will only send one copy of
the above communications to (1) accounts with the same primary record owner,
(2) joint tenant accounts, (3) tenant in common accounts and (4) accounts
which have the same address.
APPENDIX A
The Index 500 Fund is not sponsored, endorsed, sold or promoted by S&P. S&P
makes no representation or warranty, express or implied, to the owners of the
Index 500 Fund or any member of the public regarding the advisability of
investing in securities generally or in the Index 500 Fund particularly or the
ability of the S&P 500 Index to trace general stock market performance. S&P's
only relationship to the Trust is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to the Trust or the Index 500 Fund. S&P has
no obligation to take the needs of the Trust or the owners of the Index 500
Fund into consideration in determining, composing or calculating the S&P 500
Index. S&P is not responsible for and has not participated in the
determination of the prices and amount of the Index 500 Fund or the timing of
the issuance or sale of the Index 500 Fund or in the determination or
calculation of the equation by which the Index 500 Fund is to be converted
into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Index 500 Fund.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or any data included therein and S&P shall have no liability for any
errors, omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by the Trust, owners of the Index 500
Fund, or any other person or entity from the use of the S&P 500 Index or any
data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability of fitness for a
particular purpose or use with respect to the S&P 500 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.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500," and "500"
are trademarks of McGraw-Hill, Inc. and have been licensed for use by the
Trust. The Index 500 Fund is not sponsored, endorsed, sold or promoted by S&P
and S&P makes no representation regarding the advisability of investing in the
Index 500 Fund.
65
<PAGE>
PROK97 / FO418 / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<PAGE>
CLASS Y SHARES
[LOGO OF THE MUNDER FUNDS]
Investments for all seasons
Prospectus
OCTOBER 29, 1997
THE MUNDER EQUITY FUNDS
Accelerating Growth
Balanced
Growth & Income
International Equity
Micro-Cap Equity
Mid-Cap Growth
Multi-Season Growth
Real Estate Equity Investment
Small-Cap Value
Small Company Growth
Value
THE MUNDER FRAMLINGTON FUNDS
Framlington Emerging Markets
Framlington Healthcare
Framlington International Growth
THE MUNDER INCOME FUNDS
Bond
Intermediate Bond
International Bond
U.S. Government Income
Michigan Triple Tax-Free Bond
Tax-Free Bond
Tax-Free Intermediate Bond
Short Term Treasury
THE MUNDER MONEY MARKET FUNDS
Cash Investment
Money Market
Tax-Free Money Market
U.S. Treasury Money Market
Prospectus begins on next page
<PAGE>
PROSPECTUS
CLASS Y SHARES
The Munder Funds Trust (the "Trust"), The Munder Funds, Inc. (the "Company")
and The Munder Framlington Funds Trust ("Framlington") are open-end investment
companies. This Prospectus describes the investment portfolios offered by the
Trust (the "Trust Funds"), the Company (the "Company Funds") and Framlington
("Framlington Funds") described below (referred to as the "Funds"):
Munder Accelerating Growth Fund Munder Framlington International
Munder Balanced Fund Growth Fund
Munder Bond Fund
Munder Growth & Income Fund Munder Intermediate Bond Fund
Munder International Equity Fund Munder International Bond Fund
Munder Micro-Cap Equity Fund Munder U.S. Government Income Fund
Munder Mid-Cap Growth Fund Munder Michigan Triple Tax-Free Bond
Munder Multi-Season Growth Fund Fund *
Munder Tax-Free Bond Fund
Munder Real Estate Equity Investment Munder Tax-Free Intermediate Bond
Fund Fund
Munder Small-Cap Value Fund Munder Short Term Treasury Fund
Munder Small Company Growth Fund Munder Cash Investment Fund
Munder Value Fund Munder Money Market Fund
Munder Framlington Emerging Markets Munder Tax-Free Money Market Fund
Fund
Munder Framlington Healthcare Fund Munder U.S. Treasury Money Market
- -------- Fund
*The Michigan Triple Tax-Free Bond Fund is offered only in the State of
Michigan.
Munder Capital Management (the "Advisor") serves as the investment advisor
of the Funds.
This Prospectus explains the objectives, policies, risks and fees of each
Fund. You should read this Prospectus carefully before investing and retain it
for future reference. A Statement of Additional Information ("SAI") describing
each of the Funds has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated by reference into this Prospectus. You can
obtain the SAI free of charge by calling the Funds at (800) 438-5789. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
SAI and other information regarding the Funds.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED OR GUARANTEED. AN
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED.
ALTHOUGH EACH OF THE CASH INVESTMENT FUND, MONEY MARKET FUND, TAX-FREE MONEY
MARKET FUND AND U.S. TREASURY MONEY MARKET FUND SEEKS TO MAINTAIN A CONSTANT
NET ASSET VALUE OF $1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT EACH FUND
CAN DO SO ON A CONTINUING BASIS.
SECURITIES OFFERED BY THIS PROSPECTUS 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.
CALL TOLL-FREE FOR SHAREHOLDER SERVICES:
(800) 438-5789
THE DATE OF THIS PROSPECTUS IS OCTOBER 29, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights
What are the key facts regarding the Funds?.............................. 3
Financial Information...................................................... 6
Fund Choices
What Funds are offered?.................................................. 29
Who may want to invest in the Funds?..................................... 39
What are the Funds' investments and investment practices?................ 39
What are the risks of investing in the Funds?............................ 49
Performance
How is the Funds' performance calculated?................................ 51
Where can I obtain performance data?..................................... 51
Purchases and Exchanges of Shares
What price do I pay for shares?.......................................... 52
When can I purchase shares?.............................................. 52
What is the minimum required investment?................................. 52
How can I purchase shares?............................................... 52
How can I exchange shares?............................................... 53
Redemptions of Shares
What price do I receive for redeemed shares?............................. 53
When can I redeem shares?................................................ 54
How can I redeem shares?................................................. 54
When will I receive redemption amounts?.................................. 54
Structure and Management of the Funds
How are the Funds structured?............................................ 54
Who manages and services the Funds?...................................... 54
What are my rights as a shareholder?..................................... 59
Dividends, Distributions and Taxes
When will I receive distributions from the Funds?........................ 60
How will distributions be made?.......................................... 60
Are there tax implications of my investments in the Funds?............... 60
Additional Information..................................................... 61
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
WHAT ARE THE KEY FACTS REGARDING THE FUNDS?
Q:What are the Funds' goals?
A:. The Accelerating Growth Fund, Framlington Emerging Markets Fund,
Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund, Small Company Growth Fund
and Value Fund primarily seek to provide long-term capital appreciation.
. The Balanced Fund, Growth & Income Fund and Real Estate Equity Investment
Fund seek to provide capital appreciation and current income.
. The Bond Fund seeks to provide a high level of current income with capital
appreciation as a secondary consideration.
. The Intermediate Bond Fund seeks to provide a competitive rate of return
which exceeds the inflation rate and the return provided by money market
instruments.
. The International Bond Fund seeks to realize a competitive total return
through a combination of current income and capital appreciation.
. The U.S. Government Income Fund seeks to provide high current income.
. The Tax-Free Bond Fund and Tax-Free Intermediate Bond Fund seek to provide
current interest income exempt from Federal income taxes.
. The Michigan Triple Tax-Free Bond Fund seeks to provide as high a level of
current interest income exempt from regular Federal income taxes, Michigan
state income tax and Michigan intangibles tax as is consistent with
prudent investment management and preservation of capital.
. The Short Term Treasury Fund seeks to provide an enhanced money market
return consistent with the preservation of capital.
. The Cash Investment Fund and U.S. Treasury Money Market Fund seek as high
a level of current interest income as is consistent with maintaining
liquidity and stability of principal.
. The Money Market Fund seeks to provide current income consistent with the
preservation of capital and liquidity.
. The Tax-Free Money Market Fund seeks to provide as high a level of current
interest income exempt from Federal income taxes as is consistent with
maintaining liquidity and stability of principal.
Q:What are the Funds' strategies?
A:
BALANCED FUND
. This Fund allocates its assets primarily among three types of assets--
Equity Securities, Fixed Income Securities and Cash Equivalents. "Equity
Securities" include common stocks, preferred stocks, warrants and other
securities convertible into common stock. "Fixed Income Securities" are
securities which either pay interest at set times at either fixed or
variable rates, or which realize a discount upon maturity. Fixed Income
Securities include corporate bonds, debentures, notes and other similar
corporate debt instruments, zero coupon bonds (discount debt obligations
that do not make interest payments) and variable amount master demand
notes that permit the amount of indebtedness to vary in addition to
providing for periodic adjustments in the interest rates. "Cash
Equivalents" are instruments which are highly liquid and virtually free of
investment risk.
ACCELERATING GROWTH FUND, FRAMLINGTON EMERGING MARKETS FUND, FRAMLINGTON
HEALTHCARE FUND, FRAMLINGTON INTERNATIONAL GROWTH FUND, GROWTH & INCOME FUND,
INTERNATIONAL EQUITY FUND, MICRO-CAP EQUITY FUND, MID-CAP GROWTH FUND, MULTI-
SEASON GROWTH FUND, REAL ESTATE EQUITY INVESTMENT FUND, SMALL-CAP VALUE FUND,
SMALL COMPANY GROWTH FUND AND VALUE FUND (THE "EQUITY FUNDS")
. These Funds invest primarily in equity securities.
3
<PAGE>
Bond Fund, Intermediate Bond Fund, International Bond Fund and U.S.
Government Income Fund (the "Bond Funds")
. These Funds, other than the U.S. Government Income Fund, invest primarily
in Fixed Income Securities.
. The U.S. Government Income Fund invests primarily in obligations of the
U.S. government and its agencies and instrumentalities.
Short Term Treasury Fund
. The Short Term Treasury Fund invests primarily in U.S. Treasury
securities and repurchase agreements relating to U.S. Treasury
securities.
Michigan Triple Tax-Free Bond Fund, Tax-Free Bond Fund and Tax-Free
Intermediate Bond Fund
. The Tax-Free Bond Fund and Tax-Free Intermediate Bond Fund invest
primarily in Municipal Obligations. "Municipal Obligations" are
obligations of states, territories and possessions of the United States
and the District of Columbia, and their political subdivisions, agencies,
instrumentalities and authorities, the interest on which is exempt from
regular Federal income tax.
. The Michigan Triple Tax-Free Bond Fund invests primarily in Michigan
Municipal Obligations. "Michigan Municipal Obligations" are municipal
obligations issued by the State of Michigan and its political
subdivisions, the interest on which is exempt from Federal income taxes,
Michigan state income tax and Michigan intangibles tax.
Cash Investment Fund, Money Market Fund, Tax-Free Money Market Fund and U.S.
Treasury Money Market Fund (the "Money Market Funds")
. The Funds invest solely in dollar-denominated debt securities with
remaining maturities of 13 months or less and maintain an average dollar-
weighted portfolio maturity of 90 days or less.
Each Fund implements a different investment strategy which is described in
this Prospectus.
4
<PAGE>
Q: What are the Funds' risks?
A: The following table summarizes the primary risks of investing in the Funds:
<TABLE>
<CAPTION>
FUND RISK
- -------------------------------------------------------------------------------
<C> <S>
Equity Funds and Balanced Fund Potential loss of investment due to
changes in the stock market in general,
changes in the stock prices of
particular companies and perceptions
about particular industries.
- -------------------------------------------------------------------------------
Bond Funds, Tax-Free Funds and Potential loss of investment due to
Short-Term Treasury Fund changes in the bond market in general,
in the prices of debt securities of
particular companies and in interest
rates.
- -------------------------------------------------------------------------------
Money Market Funds Potential failure to maintain a $1.00 net
asset value.
- -------------------------------------------------------------------------------
International Equity Fund, Because of large investments in foreign
Framlington International Growth securities, the Funds are riskier than
Fund, domestic funds due to factors such as
Framlington Emerging Markets Fund freezes on convertibility of currency,
and changes in exchange rates, political
International Bond Fund instability and differences in
accounting and reporting standards.
- -------------------------------------------------------------------------------
Micro-Cap Equity Fund, Because of large investments in mid-
Small-Cap Value Fund, capitalization, small-capitalization
Mid-Cap Growth Fund and and/or emerging growth companies, the
Small Company Growth Fund Funds are riskier than large-
capitalization funds since such
companies typically have greater
earnings fluctuations, and greater
reliance on a few key customers than
larger companies.
- -------------------------------------------------------------------------------
Real Estate Equity Investment Fund These Funds concentrate their investments
and Framlington Healthcare Fund in single industries and could
experience larger price fluctuations
than funds invested in a broader range
of industries.
- -------------------------------------------------------------------------------
International Bond Fund, These "non-diversified" Funds concentrate
Michigan Triple Tax-Free their investments in fewer issuers than
Bond Fund and Tax-Free diversified funds, and could experience
Intermediate Bond Fund larger price fluctuations than
diversified funds.
</TABLE>
Q: What are the options for investment in the Funds?
A: Each Equity, Bond and Tax-Free Fund and the Short Term Treasury Fund offers
five different investment options, or classes: Class A, B, C, K and Y. The
Money Market Fund offers Class A, B, C and Y Shares and Cash Investment Fund,
Tax-Free Money Market Fund and U.S. Treasury Money Market Fund offer Class A,
K and Y Shares. Class A, B, C and K Shares are offered in other prospectuses.
Q: How do I buy and sell shares of the Funds?
A: Funds Distributor Inc. (the "Distributor") sells shares of the Funds. You
may purchase shares from the Distributor through broker-dealers or other
financial institutions or from the Funds' transfer agent, First Data Investor
Services Group, Inc. (the "Transfer Agent"), by mailing an Account Application
Form with a check to the Transfer Agent. Fiduciary and discretionary accounts
of institutions and institutional investors must invest at least $500,000 for
all Funds except Real Estate Equity Investment Fund which requires an initial
investment of $250,000. Other types of investors are not subject to any
required minimum investment.
Shares may be redeemed (sold back to the Fund) through your bank or
financial institution or, in some cases, through the free checkwriting
privilege.
5
<PAGE>
You may also acquire the Funds' shares by exchanging shares of the same
class of other funds of the Trust, the Company and Framlington, and exchange
Fund shares for shares of the same class of other funds of the Trust, the
Company and Framlington.
Q:What shareholder privileges do the Funds offer?
A:. Automatic Investment Plan
. Automatic Withdrawal Plan
. Reinvestment Privilege
. Free Checkwriting (certain Funds only--See "Redemption of Shares")
Q:When and how are distributions made?
A: Dividend distributions are made from the dividends and interest earned on
investments. Dividends paid at least quarterly (if income is available):
Accelerating Growth Fund, Balanced Fund, Growth & Income Fund, Small Company
Growth Fund and International Bond Fund.
Dividends paid at least annually: Framlington Emerging Markets Fund,
Framlington Healthcare Fund, Framlington International Growth Fund,
International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund, Multi-
Season Growth Fund, Small-Cap Value Fund and Value Fund.
Dividends paid monthly: Real Estate Equity Investment Fund, Bond Fund,
Intermediate Bond Fund, U.S. Government Income Fund, Michigan Triple Tax-Free
Bond Fund, Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund, Short Term
Treasury Fund, Cash Investment Fund, Money Market Fund, Tax-Free Money Market
Fund and U.S. Treasury Money Market Fund.
The Funds distribute capital gains at least annually. Unless you elect to
receive distributions in cash, we will use all dividends and capital gain
distributions of a Fund to purchase additional shares of that Fund.
Q: Who manages the Funds' assets?
A: Munder Capital Management is the Funds' investment advisor. The Advisor is
responsible for all purchases and sales of the securities held by the Funds
other than the Framlington Funds. The Advisor provides overall investment
management services for the Framlington Funds. Framlington Overseas Investment
Management Limited (the "Sub-Advisor") is responsible for all purchases and
sales of securities held by the Framlington Funds.
FINANCIAL INFORMATION
SHAREHOLDER TRANSACTION EXPENSES(1)
The purpose of this table is to assist you in understanding the expenses a
shareholder in the Funds will bear directly.
<TABLE>
<S> <C>
Maximum Sales Charge on Purchase (as a % of Offering Price) ............... None
Sales Charge Imposed on Reinvested Dividends .............................. None
Maximum Deferred Sales Charge ............................................. None
Redemption Fees(2) ........................................................ None
Exchange Fees ............................................................. None
</TABLE>
- --------
Notes:
(1) Does not include fees which institutions may charge for services they
provide to you.
(2) The Funds' transfer agent may charge a fee of $7.50 for wire redemptions
under $5,000.
6
<PAGE>
FUND OPERATING EXPENSES
The purpose of this table is to assist you in understanding the expenses
charged directly to each Fund, which investors in the Funds will bear
indirectly for the current fiscal year. Such expenses include payments to
Trustees, Directors, auditors, legal counsel and service providers (such as
the Advisor), registration fees, and distribution fees. The fees shown below
are based on the fees for the Funds' past fiscal year except (i) the fees for
the Mid-Cap Growth Fund, Real Estate Equity Investment Fund and Value Fund
have been restated to reflect the discontinuation of voluntary expense
reimbursements effective as of the date of this Prospectus; (ii) the fees for
the Multi-Season Growth Fund reflect an anticipated voluntary advisory fee
waiver for the current fiscal year and (iii) the fees for the Framlington
Funds and the Micro-Cap Equity, Small-Cap Value, Short Term Treasury and
International Bond Funds are based on estimated operating expenses for the
current fiscal year and reflect anticipated voluntary expense reimbursements
for the Micro-Cap Equity Fund and Framlington Healthcare Fund.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES
(AS A % OF AVERAGE NET ACCELERATING BALANCED GROWTH & INTERNATIONAL MICRO-CAP
ASSETS) GROWTH FUND FUND INCOME FUND EQUITY FUND EQUITY FUND
- ---------------------- ------------ -------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Advisory Fees .......... .75% .65% .75% .75% 1.00%
Other Expenses+ ........ .20% .32% .20% .26% .25%++
---- ---- ---- ----- -----
Total Fund Operating
Expenses+ ............. .95% .97% .95% 1.01% 1.25%++
==== ==== ==== ===== =====
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES SMALL
(AS A % OF AVERAGE NET MID-CAP MULTI-SEASON REAL ESTATE EQUITY SMALL-CAP COMPANY
ASSETS) GROWTH FUND GROWTH FUND INVESTMENT FUND VALUE FUND GROWTH FUND
- ---------------------- ----------- ------------ ------------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Advisory Fees .......... .74% .75%* .74% .75% .75%
Other Expenses ......... .25% .25% .11% .38% .22%
---- ----- ---- ----- ----
Total Fund Operating
Expenses .............. .99% 1.00%* .85% 1.13% .97%
==== ===== ==== ===== ====
</TABLE>
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES FRAMLINGTON FRAMLINGTON FRAMLINGTON
(AS A % OF AVERAGE NET VALUE EMERGING HEALTHCARE INTERNATIONAL BOND
ASSETS) FUND MARKETS FUND FUND GROWTH FUND FUND
- ---------------------- ----- ------------ ----------- ------------- ----
<S> <C> <C> <C> <C> <C>
Advisory Fees ............... .74% 1.25% 1.00% 1.00% .50%
Other Expenses+ ............. .28% .29% .30%++ .30% .21%
----- ----- ----- ----- ----
Total Fund Operating
Expenses+ .................. 1.02% 1.54% 1.30%++ 1.30% .71%
===== ===== ===== ===== ====
</TABLE>
<TABLE>
<CAPTION>
INTER- U.S. MICHIGAN
NATIONAL GOVERNMENT TRIPLE TAX-FREE
ANNUAL FUND OPERATING EXPENSES INTERMEDIATE BOND INCOME TAX-FREE BOND
(AS A % OF AVERAGE NET ASSETS) BOND FUND FUND FUND BOND FUND FUND
- ------------------------------ ------------ -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Advisory Fees ............ .50% .50% .50% .50% .50%
Other Expenses ........... .18% .35% .21% .13% .20%
---- ---- ---- ---- ----
Total Fund Operating
Expenses ................ .68% .85% .71% .63% .70%
==== ==== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
U.S.
SHORT TAX-FREE TREASURY
TAX-FREE TERM CASH MONEY MONEY MONEY
ANNUAL FUND OPERATING EXPENSES INTERMEDIATE TREASURY INVESTMENT MARKET MARKET MARKET
(AS A % OF AVERAGE NET ASSETS) BOND FUND FUND FUND FUND FUND FUND
- ------------------------------ ------------ -------- ---------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees .......... .50% .25% .35% .40% .35% .35%
Other Expenses ......... .18% .27% .20% .24% .18% .19%
---- ---- ---- ---- ---- ----
Total Fund Operating
Expenses .............. .68% .52% .55% .64% .53% .54%
==== ==== ==== ==== ==== ====
</TABLE>
- --------
*The Advisor expects to voluntarily waive a portion of its advisory fees for
the current fiscal year. Without waiver, the ratio of advisory fees to
average net assets would be 1.00% and total fund operating expenses would
be at 1.25%.
+After expense reimbursements, if any.
++The Advisor expects to voluntarily reimburse the Funds for certain operating
expenses. In the absence of such expense reimbursements, it is estimated
that total fund operating expenses would be 1.51% for the Framlington
Healthcare Fund and 1.35% for the Micro-Cap Equity Fund.
7
<PAGE>
EXAMPLE
This example shows the amount of expenses you would pay (directly or
indirectly) on a $1,000 investment in the Funds assuming (1) a 5% annual
return and (2) redemption at the end of the time periods. THIS EXAMPLE IS NOT
A REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR OPERATING EXPENSES; ACTUAL
PERFORMANCE OR OPERATING EXPENSES MAY BE LARGER OR SMALLER THAN THOSE SHOWN.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Accelerating Growth Fund ....................... $10 $30 $53 $117
Balanced Fund .................................. $10 $31 $54 $119
Growth & Income Fund ........................... $10 $30 $53 $117
International Equity Fund ...................... $10 $32 $56 $124
Micro-Cap Equity Fund .......................... $13 $40 $69 $151
Mid-Cap Growth Fund ............................ $10 $32 $55 $121
Multi-Season Growth Fund ....................... $10 $32 $55 $122
Real Estate Equity Investment Fund ............. $11 $35 $61 $134
Small-Cap Value Fund ........................... $12 $36 $62 $137
Small Company Growth Fund ...................... $10 $31 $54 $119
Value Fund ..................................... $10 $32 $56 $125
Framlington Emerging Markets Fund .............. $16 $49 $84 $183
Framlington Healthcare Fund .................... $13 $41 $71 $157
Framlington International Growth Fund .......... $13 $41 $71 $157
Bond Fund ...................................... $ 7 $23 $40 $ 88
Intermediate Bond Fund ......................... $ 7 $22 $38 $ 85
International Bond Fund ........................ $ 9 $27 $47 $105
U.S. Government Income Fund .................... $ 7 $23 $40 $ 88
Michigan Triple Tax-Free Bond Fund ............. $ 6 $20 $35 $ 79
Tax-Free Bond Fund ............................. $ 7 $22 $39 $ 87
Tax-Free Intermediate Bond Fund ................ $ 7 $22 $39 $ 85
Short Term Treasury Fund ....................... $ 5 $17 $29 $ 65
Cash Investment Fund ........................... $ 6 $18 $31 $ 69
Money Market Fund .............................. $ 7 $20 $36 $ 80
Tax-Free Money Market Fund ..................... $ 5 $17 $30 $ 66
U.S. Treasury Money Market Fund ................ $ 6 $17 $30 $ 68
</TABLE>
8
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights were audited by Ernst & Young LLP,
independent auditors, except that, for periods ended prior to June 30, 1995
for the Multi-Season Growth Fund and Money Market Fund, such financial
highlights were audited by another independent auditor. This information
should be read in conjunction with the Funds' most recent Annual Reports,
which are incorporated by reference into the SAI. You may obtain the Annual
Reports without charge by calling (800) 438-5789.
<TABLE>
<CAPTION>
ACCELERATING GROWTH FUND(A)
-------------------------------------------------------------------------------
YEAR PERIOD YEAR YEAR PERIOD
YEAR ENDED ENDED ENDED YEAR ENDED ENDED ENDED ENDED
6/30/97(I) 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 2/29/92
---------- -------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period .... $ 15.47 $ 14.88 $ 12.77 $13.99 $ 12.08 $ 11.10 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income .. (0.01) (0.02) 0.00(f) 0.00(f) 0.02 0.06 0.03
Net realized and
unrealized gain on
investments ........... 0.63 2.94 2.11 (0.88) 2.16 1.26 1.08
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations ............ 0.62 2.92 2.11 (0.88) 2.18 1.32 1.11
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income ..... -- -- -- -- (0.02) (0.06) (0.01)
Distributions from net
realized gains ........ (1.38) (2.33) -- (0.34) (0.25) (0.28) --
-------- -------- -------- -------- -------- -------- --------
Total distributions .... (1.38) (2.33) -- (0.34) (0.27) (0.34) (0.01)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period ................. $ 14.71 $ 15.47 $ 14.88 $12.77 $ 13.99 $ 12.08 $ 11.10
======== ======== ======== ======== ======== ======== ========
Total return(b) ........ 5.07% 22.31% 16.52% (6.22)% 18.08% 12.07% 11.13%
======== ======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) ..... $154,038 $188,390 $193,701 $177,584 $240,680 $172,217 $151,336
Ratio of operating
expenses to average net
assets ................ 0.95% 0.95% 0.95%(c) 0.93% 0.95% 0.96% 0.20%(c)
Ratio of net investment
income/loss to average
net assets ............ (0.07)% (0.17)% 0.04%(c) 0.00%(h) 0.13% 0.40% 1.28%(c)
Portfolio turnover rate
....................... 88% 112% 31% 90% 34% 56% 73%
Ratio of operating
expenses to average net
assets without waivers
....................... 0.95% 1.02% 1.19%(c) 1.16% 1.20% 1.21% 1.20%(c)
Average commission
rate(g) ............... $ 0.0588 $ 0.0548 N/A N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder Accelerating Growth Fund Class Y Shares commenced operations on
December 1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder
(f) Amount represents less than $0.01 per share.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Amount rounds to less than 0.01%.
(i) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
9
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND (A)
-------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
6/30/97(G) 6/30/96(G) 6/30/95(D) 2/28/95(E) 2/28/94
---------- ---------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 12.35 $ 10.77 $ 9.95 $ 10.36 $ 10.00
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income . 0.31 0.30 0.10 0.21 0.16
Net realized and
unrealized gain/(loss)
on investments ....... 1.31 1.55 0.85 (0.42) 0.32
------- ------- ------- ------- -------
Total from investment
operations ........... 1.62 1.85 0.95 (0.21) 0.48
------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... (0.30) (0.27) (0.13) (0.20) (0.12)
Distributions from net
realized gains ....... (0.66) -- -- -- --
------- ------- ------- ------- -------
Total distributions ... (0.96) (0.27) (0.13) (0.20) (0.12)
------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 13.01 $ 12.35 $ 10.77 $ 9.95 $ 10.36
======= ======= ======= ======= =======
Total return(b) ....... 13.91% 17.35% 9.57% (1.91)% 4.81%
======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $70,314 $57,637 $48,844 $45,610 $43,997
Ratio of operating
expenses to average
net assets ........... 0.97% 0.90% 0.91%(c) 0.97% 0.95%(c)
Ratio of net investment
income to average net
assets ............... 2.55% 2.54% 2.76%(c) 2.14% 1.78%(c)
Portfolio turnover rate
...................... 125% 197% 52% 116% 50%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.97% 1.01% 1.26%(c) 1.32% 1.20%(c)
Average commission
rate(f) .............. $0.0607 $0.0586 N/A N/A N/A
</TABLE>
- --------
(a) The Munder Balanced Fund Class Y Shares commenced operations on April 13,
1993.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Average commission rate paid per share of securities purchased and sold by
the Fund.
(g) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
10
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND (A)
---------------------------------------------
YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED
6/30/97(H) 6/30/96(H) 6/30/95(D) 2/28/95(E)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $ 13.05 $ 11.14 $10.43 $10.00
------- ------- ------ ------
Income from investment
operations:
Net investment income ........ 0.35 0.35 0.11 0.25
Net realized and unrealized
gain on investments ......... 3.14 1.98 0.79 0.34
------- ------- ------ ------
Total from investment
operations .................. 3.49 2.33 0.90 0.59
------- ------- ------ ------
Less distributions:
Dividends from net investment
income ...................... (0.35) (0.33) (0.19) (0.16)
Distributions from net
realized gains .............. (0.96) (0.09) -- (0.00)(f)
------- ------- ------ ------
Total distributions .......... (1.31) (0.42) (0.19) (0.16)
------- ------- ------ ------
Net asset value, end of period
.............................. $ 15.23 $ 13.05 $11.14 $10.43
======= ======= ====== ======
Total return(b) .............. 28.43% 21.26% 8.69% 6.02%
======= ======= ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) ...................... $29,674 $20,464 $7,860 $4,142
Ratio of operating expenses to
average net assets .......... 0.95% 0.96% 0.84%(c) 0.28%(c)
Ratio of net investment income
to average net assets ....... 2.53% 2.81% 3.58%(c) 4.97%(c)
Portfolio turnover rate ...... 62% 37% 13% 12%
Ratio of operating expenses to
average net assets without
waivers ..................... 0.95% 1.03% 1.26%(c) 1.28%(c)
Average commission rate(g) ... $0.0562 $0.0591 N/A N/A
</TABLE>
- --------
(a) The Munder Growth & Income Fund Class Y Shares commenced operations on
July 5, 1994.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Amount represents less than $0.01 per share.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
11
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND(A)
--------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E,F) 2/28/94 2/28/93 2/29/92
---------- ---------- ---------- ------------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 15.15 $ 13.45 $ 12.30 $ 13.68 $ 10.64 $ 10.76 $ 10.00
-------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income . 0.18 0.19 0.12 0.20 0.19 0.11 0.11
Net realized and
unrealized gain/(loss)
on investments ....... 2.32 1.64 1.03 (1.47) 2.85 (0.10) 0.67
-------- ------- ------- ------- ------- ------- -------
Total from investment
operations ........... 2.50 1.83 1.15 (1.27) 3.04 0.01 0.78
-------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... (0.26) (0.13) -- (0.05) -- (0.11) (0.02)
Distributions from net
realized gains........ (1.59) -- -- -- -- (0.02) --
Distributions from
capital............... -- -- -- (0.06) -- -- --
-------- ------- ------- ------- ------- ------- -------
Total distributions.... (1.85) (0.13) -- (0.11) -- (0.13) (0.02)
-------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period................. $ 15.80 $ 15.15 $ 13.45 $ 12.30 $ 13.68 $ 10.64 $ 10.76
======== ======= ======= ======= ======= ======= =======
Total return (b)....... 18.35% 13.63% 9.35% (9.33)% 28.57% 0.09% 7.76%
======== ======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $107,831 $89,435 $75,000 $68,263 $68,954 $42,740 $33.357
Ratio of operating
expenses to average
net assets............ 1.01% 1.01% 0.96%(c) 0.93% 1.03% 1.02% 0.25%(c)
Ratio of net investment
loss to average net
assets................ 1.23% 1.32% 2.82%(c) 1.56% 1.65% 1.25% 4.16%(c)
Portfolio turnover
rate.................. 46% 75% 14% 20% 15% 1% 0%
Ratio of operating
expenses to average
net assets without
waivers............... 1.01% 1.08% 1.21%(c) 1.18% 1.28% 1.34% 1.33%(c)
Average commission rate
(h)................... $ 0.0065 $0.0288 N/A N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder International Equity Fund Class Y Shares commenced operations
on December 1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Amount represents less than $0.01 per share.
(h) Average commission rate paid per share of securities purchased and sold by
the Fund.
12
<PAGE>
<TABLE>
<CAPTION>
MICRO-CAP
EQUITY FUND(A) MID-CAP GROWTH FUND(A)
-------------- ------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED
6/30/97(E) 6/30/97(E) 6/30/96(E)
-------------- ---------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period
.................................... $ 10.00 $ 11.58 $ 10.00
------- ------- -------
Income from investment operations:
Net investment loss ................ (0.03) (0.04) (0.03)
Net realized and unrealized gain on
investments ....................... 2.86 0.17 1.61
------- ------- -------
Total from investment operations ... 2.83 0.13 1.58
------- ------- -------
Less distributions:
Dividends from net investment income
................................... -- -- --
Total distributions ................ -- (1.20) --
------- ------- -------
Net asset value, end of period ...... $ 12.83 $ 10.51 $ 11.58
======= ======= =======
Total return(b) .................... 28.30% 1.07% 15.80%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in 000's)
................................... $ 2,279 $23,472 $21,449
Ratio of operating expenses to
average net assets ................ 1.25%(c) 0.99% 0.95%(c)
Ratio of net investment loss to
average net assets ................ (0.63)%(c) (0.36)% (0.28)%(c)
Portfolio turnover rate ............ 68% 162% 247%
Ratio of operating expenses to
average net assets without waivers
................................... 7.65%(c) 1.21% 1.13%(c)
Average commission rate(d) ......... $0.0578 $0.0592 $0.0600
</TABLE>
- --------
(a) The Munder Micro-Cap Equity Fund Class Y Shares commenced operations on
December 26, 1996. The Munder Mid-Cap Growth Fund Class Y Shares commenced
operations on August 14, 1995.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
13
<PAGE>
<TABLE>
<CAPTION>
MULTI-SEASON GROWTH FUND(A)
--------------------------------------------------------
YEAR PERIOD
YEAR ENDED YEAR ENDED PERIOD ENDED ENDED ENDED
6/30/97(H) 6/30/96(H) 6/30/95(D,E,F) 12/31/94 12/31/93
---------- ---------- -------------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 14.94 $ 12.10 $ 10.43 $10.70 $10.20
-------- -------- ------- ------ ------
Income from investment
operations:
Net investment income . 0.08 0.09 0.00(i) 0.04 0.00(i)
Net realized and
unrealized gain/(loss)
on investments ....... 3.94 3.22 1.67 (0.27) 0.50
-------- -------- ------- ------ ------
Total from investment
operations ........... 4.02 3.31 1.67 (0.23) 0.50
-------- -------- ------- ------ ------
Less distributions:
Dividends from net
investment income .... (0.04) (0.07) -- -- --
Distributions from net
realized gains ....... (0.75) (0.40) -- (0.04) --
-------- -------- ------- ------ ------
Total distributions ... (0.79) (0.47) -- (0.04) --
-------- -------- ------- ------ ------
Net asset value, end of
period ................ $ 18.17 $ 14.94 $ 12.10 $10.43 $10.70
======== ======== ======= ====== ======
Total return(b) ....... 27.96% 27.85% 16.01% (2.17)% 4.90%
======== ======== ======= ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $176,027 $130,129 $87,604 $3,244 $2,322
Ratio of operating
expenses to average
net assets ........... 1.00% 1.01% 1.40%(c) 1.50% 1.50%(c)
Ratio of net investment
income to average net
assets ............... 0.50% 0.69% 0.53%(c) 0.29% 0.08%(c)
Portfolio turnover rate
...................... 33% 54% 27% 48% 238%
Ratio of operating
expenses to average
net assets without
waivers .............. 1.25% 1.26% 1.72%(c) 2.53% 2.70%(c)
Average commission
rate(g) .............. $ 0.0599 $ 0.0592 N/A N/A N/A
</TABLE>
- --------
(a) The Munder Multi-Season Growth Fund Class Y Shares commenced operations on
August 16, 1993.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
December 31.
(e) On June 23, 1995, the Munder Multi-Season Growth Fund acquired the assets
and certain liabilities of the Ambassador Established Company Growth Fund.
(f) On February 1, 1995, the Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Average commission rate paid per share of securities purchased and sold by
the Fund.
(h) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(i) Amount represents less than $0.01 per share.
14
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SMALL-CAP
INVESTMENT FUND(A) VALUE FUND(A)
------------------------------ -------------
YEAR PERIOD PERIOD
ENDED YEAR ENDED ENDED ENDED
6/30/97 6/30/96(F) 6/30/95(D) 6/30/97(F)
------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $ 11.22 $ 10.09 $10.00 $ 10.00
------- ------- ------ -------
Income from investment
operations:
Net investment income ........ 0.51 0.47 0.37 0.12
Net realized and unrealized
gain on investments ......... 3.22 1.13 0.08 1.96
------- ------- ------ -------
Total from investment
operations .................. 3.73 1.60 0.45 2.08
------- ------- ------ -------
Less distributions:
Dividends from net investment
income ...................... (0.51) (0.47) (0.36)
Distributions in excess of net
investment income ........... (0.01) -- --
Distributions from paid-in
capital ..................... (0.03) -- -- (0.04)
------- ------- ------ -------
Total distributions .......... (0.55) (0.47) (0.36) (0.04)
------- ------- ------ -------
Net asset value, end of period
.............................. $ 14.40 $ 11.22 $10.09 $ 12.04
======= ======= ====== =======
Total return(b) .............. 33.79% 16.20% 4.64% 20.86%
======= ======= ====== =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) ...................... $48,206 $19,125 $4,989 $18,271
Ratio of operating expenses to
average net assets .......... 1.10% 1.00% 1.25%(c) 1.13%(c)
Ratio of net investment income
to average net assets ....... 4.05% 4.50% 5.28%(c) 2.18%(c)
Portfolio turnover rate ...... 15% 17% 3% 73%
Ratio of operating expenses to
average net assets without
waivers and/or expenses
reimbursed .................. 1.13% 1.27% 6.98%(c) 1.26%(c)
Average commission rate(e) ... $0.0600 $0.0600 N/A $0.0361
</TABLE>
- --------
(a) The Munder Real Estate Equity Investment Fund Class Y Shares commenced
operations on October 3, 1994. The Munder Small-Cap Value Fund Class Y
Shares commenced operations on December 26, 1996.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Average commission rate paid per share of securities purchased and sold by
the Fund.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
15
<PAGE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH FUND(A)
-----------------------------------------------------------------------------
PERIOD YEAR YEAR PERIOD
YEAR ENDED YEAR ENDED ENDED YEAR ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(E) 2/28/95(D) 2/28/94 2/28/93 2/29/92
---------- ---------- ---------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 21.21 $ 15.33 $ 13.93 $ 14.38 $ 12.72 $ 11.49 $ 10.00
-------- -------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment loss ... (0.07) (0.07) (0.01) (0.02) (0.04) 0.04 0.03
Net realized and
unrealized gain/(loss)
on investments ....... 3.69 7.19 1.41 (0.41) 1.97 1.23 1.47
-------- -------- ------- ------- ------- ------- -------
Total from investment
operations ........... 3.62 7.12 1.40 (0.43) 1.93 1.27 1.50
-------- -------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... -- -- -- -- -- (0.04) (0.01)
Distributions from net
realized gains ....... (2.99) (1.24) -- (0.02) (0.27) -- --
-------- -------- ------- ------- ------- ------- -------
Total distributions ... (2.99) (1.24) -- (0.02) (0.27) (0.04) (0.01)
-------- -------- ------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 21.84 $ 21.21 $ 15.33 $ 13.93 $ 14.38 $ 12.72 $ 11.49
======== ======== ======= ======= ======= ======= =======
Total return(b) ....... 19.26% 48.65% 10.05% (3.00)% 15.19% 11.13% 15.01%
======== ======== ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental
data: .................
Net assets, end of
period (in 000's) .... $152,772 $107,492 $79,968 $72,207 $64,466 $48,569 $36,386
Ratio of operating
expenses to average
net assets ........... 0.97% 0.96% 0.96%(c) 0.98% 0.95% 0.96% 0.22%(c)
Ratio of net investment
loss to average net
assets ............... (0.37)% (0.41)% (0.16)%(c) (0.15)% (0.28)% 0.10% 1.16%(c)
Portfolio turnover rate
...................... 98% 98% 39% 45% 47% 46% 43%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.97% 1.03% 1.21%(c) 1.23% 1.20% 1.16% 0.97%(c)
Average commission
rate(g) .............. $ 0.0545 $ 0.0551 N/A N/A N/A N/A N/A
</TABLE>
- --------
(a) The Munder Small Company Growth Fund Class Y Shares commenced operations
on December 1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(e) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(g) Average commissions rate paid per share of securities purchased and sold
by the Fund.
16
<PAGE>
<TABLE>
<CAPTION>
VALUE FUND(A)
---------------------
PERIOD
YEAR ENDED ENDED
6/30/97(E) 6/30/96(E)
---------- ----------
<S> <C> <C>
Net asset value, beginning of period .................. $ 11.59 $ 10.00
------- -------
Income from investment operations:
Net investment income................................. 0.12 0.09
Net realized and unrealized gain on investments ...... 3.63 1.56
------- -------
Total from investment operations ..................... 3.75 1.65
------- -------
Less distributions:
Dividends from net investment income ................. (0.12) (0.06)
Distributions from net realized gains ................ (1.22) --
------- -------
Total distributions .................................. (1.34) (0.06)
------- -------
Net asset value, end of period ........................ $ 14.00 $ 11.59
======= =======
Total return(b) ...................................... 34.66% 16.52%
======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ................. $80,004 $35,432
Ratio of operating expenses to average net assets .... 1.02% 0.95%(c)
Ratio of net investment income/(loss) to average net
assets .............................................. 0.95% 0.89%(c)
Portfolio turnover rate .............................. 139% 223%
Ratio of operating expenses to average net assets
without waivers and expenses reimbursed ............. 1.06% 1.05%(c)
Average commission rate(d) ........................... $0.0508 $0.0602
</TABLE>
- --------
(a) The Munder Value Fund Class Y Shares commenced operations on August 18,
1995.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
17
<PAGE>
<TABLE>
<CAPTION>
FRAMLINGTON FRAMLINGTON FRAMLINGTON
EMERGING HEALTHCARE INTERNATIONAL
MARKETS FUND(A) FUND(A) GROWTH FUND(A)
--------------- ----------- --------------
PERIOD PERIOD
ENDED ENDED PERIOD ENDED
6/30/97(E) 6/30/97 6/30/97(E)
--------------- ----------- --------------
<S> <C> <C> <C>
Net asset value, beginning of
period ......................... $ 10.00 $ 10.00 $ 10.00
------- ------- -------
Income from investment
operations:
Net investment income .......... 0.07 (0.03) 0.07
Net realized and unrealized gain
on investments ................ 2.88 0.92 1.28
------- ------- -------
Total from investment operations
............................... 2.95 0.89 1.35
------- ------- -------
Less distributions:
Dividends from net investment
income ........................ (0.03) -- --
Distributions from net realized
gains ......................... -- -- --
------- ------- -------
Total distributions ............ (0.03) -- --
------- ------- -------
Net asset value, end of period .. $ 12.92 $ 10.89 $ 11.35
======= ======= =======
Total return(b) ................ 29.51% 8.90% 13.50%
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) ........................ $ 4,826 $ 2,086 $23,831
Ratio of operating expenses to
average net assets ............ 1.54%(c) 1.30%(c) 1.30%(c)
Ratio of net investment income
to average net assets ......... 1.39%(c) (0.70)%(c) 1.26%(c)
Portfolio turnover rate ........ 46% 14% 15%
Ratio of operating expenses to
average net assets without
expenses reimbursed ........... 5.18%(c) 7.08%(c) 2.31%(c)
Average commission rate(d) ..... $0.0029 $0.1441 $0.0238
</TABLE>
- --------
(a) The Munder Framlington Emerging Markets Fund, The Munder Framlington
Healthcare Fund and The Munder Framlington International Growth Fund Class
Y Shares all commenced operations on December 31, 1996.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Average commission rate paid per share of securities purchased and sold by
the Fund.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
18
<PAGE>
<TABLE>
<CAPTION>
BOND FUND (A)
-----------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED YEAR ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E,F) 2/28/94 2/28/93 2/29/92(A)
-------- -------- ---------- ------------ -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 9.53 $ 9.70 $ 9.31 $ 9.91 $ 9.92 $ 10.13 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income . 0.63 0.64 0.21 0.64 0.58 0.77 0.20
Net realized and
unrealized gain/(loss)
on investments ........ 0.03 (0.21) 0.39 (0.64) (0.03) (0.12) 0.07
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations ........... 0.66 0.43 0.60 0.00 0.55 0.65 0.27
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income .... (0.61) (0.60) (0.21) (0.60) (0.56) (0.77) (0.14)
Distributions from net
realized gains ....... -- -- -- -- -- (0.09) --
-------- -------- -------- -------- -------- -------- --------
Total distributions .... (0.61) (0.60) (0.21) (0.60) (0.56) (0.86) (0.14)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period ................ $ 9.58 $ 9.53 $ 9.70 $ 9.31 $ 9.91 $ 9.92 $ 10.13
======== ======== ======== ======== ======== ======== ========
Total return(b) ....... 7.09% 4.50% 6.48% 0.70% 5.63% 6.75% 2.70%
======== ======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $113,493 $113,020 $146,741 $141,704 $147,770 $154,078 $145,120
Ratio of operating
expenses to average
net assets ........... 0.71% 0.70% 0.70%(c) 0.67% 0.80% 0.76% 0.19%(c)
Ratio of net investment
income to average net
assets ............... 6.59% 6.51% 6.72%(c) 6.82% 5.70% 7.50% 8.32%(c)
Portfolio turnover rate
...................... 279% 507% 99% 165% 128% 77% 34%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.71% 0.79% 0.94%(c) 0.91% 0.94% 0.94% 0.93%(c)
</TABLE>
- --------
(a) The Munder Bond Fund Class Y Shares commenced operations on December 1,
1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
19
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND(A)
--------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 2/29/92
---------- -------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.31 $ 9.51 $ 9.27 $ 9.91 $ 10.47 $ 10.07 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.. 0.57 0.60 0.23 0.60 0.59 0.54 0.15
Net realized and
unrealized gain/(loss)
on investments........ 0.03 (0.20) 0.24 (0.59) (0.20) 0.49 0.02
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations............ 0.60 0.40 0.47 0.01 0.39 1.03 0.17
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income..... (0.58) (0.60) (0.23) (0.64) (0.58) (0.54) (0.10)
Distributions from net
realized gains........ -- -- -- (0.01) (0.37) (0.09) --
-------- -------- -------- -------- -------- -------- --------
Total distributions.... (0.58) (0.60) (0.23) (0.65) (0.95) (0.63) (0.10)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 9.33 $ 9.31 $ 9.51 $ 9.27 $ 9.91 $ 10.47 $ 10.07
======== ======== ======== ======== ======== ======== ========
Total return(b)........ 6.60% 4.29% 5.12% 0.78% 3.79% 10.56% 1.72%
======== ======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $161,606 $182,937 $157,484 $162,185 $162,738 $152,470 $114,014
Ratio of operating
expenses to average
net assets............ 0.68% 0.69% 0.70%(c) 0.68% 0.80% 0.77% 0.19%(c)
Ratio of net investment
income to average net
assets................ 6.16% 6.33% 7.37%(c) 6.96% 5.63% 5.53% 6.17%(c)
Portfolio turnover
rate.................. 325% 494% 84% 80% 155% 104% 23%
Ratio of operating
expenses to average
net assets without
waivers............... 0.68% 0.77% 0.94%(c) 0.93% 0.94% 0.95% 0.93%(c)
</TABLE>
- --------
(a) The Munder Intermediate Bond Fund Class Y Shares commenced operations on
December 1, 1991.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
20
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
BOND FUND(A) U.S. GOVERNMENT INCOME FUND(A)
------------- -----------------------------------------------
PERIOD YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/97 6/30/96(F) 6/30/95(D) 2/28/95(E)
------------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 10.00 $ 9.98 $ 10.30 $ 9.89 $ 10.00
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income . 0.25 0.68 0.74 0.24 0.44
Net realized and
unrealized gain/(loss)
on investments ....... (0.34) 0.07 (0.27) 0.41 (0.07)
------- ------- ------- ------- -------
Total from investment
operations ........... (0.09) 0.75 0.47 0.65 0.37
------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income .... (0.08) (0.64) (0.71) (0.24) (0.48)
Distributions from net
realized gains ....... N/A (0.00)(g) (0.08) ---- ----
------- ------- ------- ------- -------
Total distributions ... (0.08) (0.64) (0.79) (0.24) (0.48)
------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 9.83 $ 10.09 $ 9.98 $ 10.30 $ 9.89
======= ======= ======= ======= =======
Total return(b) ....... (0.90)% 7.75% 4.58% 6.64% 3.85%
======= ======= ======= ======= =======
Ratios to average net
assets /supplemental
data:
Net assets, end of
period (in 000's) .... $51,679 $55,098 $46,695 $12,862 $11,647
Ratio of operating
expenses to average
net assets ........... 0.89%(c) 0.71% 0.72% 0.72%(c) 0.70%(c)
Ratio of net investment
income to average net
assets ............... 3.86%(c) 6.76% 7.17% 7.21%(c) 7.27%(c)
Portfolio turnover rate
...................... 75% 130% 133% 42% 143%
Ratio of operating
expenses to average
net assets without
waivers .............. 0.93%(c) 0.71% 0.79% 0.96%(c) 0.94%(c)
</TABLE>
- --------
(a) The Munder International Bond Fund Class Y Shares commenced operations on
October 2, 1996 and the U.S. Government Income Fund Class Y Shares
commenced operations on July 5, 1994.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
21
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN TRIPLE TAX-FREE BOND FUND(A)
------------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/95(D, E) 2/28/95(E, F) 2/28/94
---------- ---------- ------------- ------------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.35 $ 9.34 $ 9.24 $ 9.73 $10.00
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income.. 0.46 0.44 0.17 0.50 0.05
Net realized and
unrealized gain/(loss)
on investments........ 0.29 0.07 0.10 (0.54) (0.30)
------ ------ ------ ------ ------
Total from investment
operations............ 0.75 0.51 0.27 (0.04) (0.25)
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income..... (0.45) (0.50) (0.17) (0.45) (0.02)
Distributions from net
realized gains........ (0.00)(g) -- -- -- --
------ ------ ------ ------ ------
Total distributions.... (0.45) (0.50) (0.17) (0.45) (0.02)
------ ------ ------ ------ ------
Net asset value, end of
period................. $ 9.65 $ 9.35 $ 9.34 $ 9.24 $ 9.73
====== ====== ====== ====== ======
Total return(b)........ 8.26% 5.51% 2.92% 0.10% (2.47)%
====== ====== ====== ====== ======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $ 652 $ 204 $ 771 $ 604 $2,252
Ratio of operating
expenses to average
net assets............ 0.63% 0.26% 0.27%(c) 0.31% 0.21%(c)
Ratio of net investment
income to average net
assets................ 4.82% 5.26% 5.31%(c) 5.06% 3.67%(c)
Portfolio turnover
rate.................. 19% 31% 8% 53% 0%
Ratio of operating
expenses to average
net assets without
waivers............... 0.77% 0.84% 1.01%(c) 1.05% 0.95%(c)
</TABLE>
- --------
(a) The Munder Michigan Triple Tax-Free Bond Fund Class Y Shares commenced
operations on January 3, 1994.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(g) Amount represents less than $0.01 per share.
22
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE BOND FUND(A)
----------------------------------------------
PERIOD
YEAR ENDED YEAR ENDED PERIOD ENDED ENDED
6/30/97(E) 6/30/96(E) 6/30/95(D,E) 2/28/95(F)
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ....................... $10.34 $10.29 $10.13 $10.06
------ ------ ------ ------
Income from investment
operations:
Net investment income ........ 0.50 0.49 0.16 0.30
Net realized and unrealized
gain
on investments .............. 0.25 0.06 0.16 0.10
------ ------ ------ ------
Total from investment
operations .................. 0.75 0.55 0.32 0.40
------ ------ ------ ------
Less distributions:
Dividends from net investment
income ...................... (0.50) (0.49) (0.16) (0.33)
Distributions from net
realized gains .............. (0.08) (0.01) -- --
------ ------ ------ ------
Total distributions .......... (0.58) (0.50) (0.16) (0.33)
------ ------ ------ ------
Net asset value, end of period
.............................. $10.51 $10.34 $10.29 $10.13
====== ====== ====== ======
Total return (b) ............. 7.40% 5.38% 3.17% 4.08%
====== ====== ====== ======
Ratios to average net
assets/supplemental data:
Net assets, end of period (in
000's) ...................... $3,946 $1,929 $1,498 $ 953
Ratio of operating expenses to
average net assets .......... 0.70% 0.73% 0.77%(c) 0.68%
Ratio of net investment income
to
average net assets .......... 4.77% 4.67% 4.63%(c) 4.94%
Portfolio turnover rate ...... 45% 15% 12% 50%
Ratio of operating expenses to
average net assets without
waivers ..................... 0.70% 0.81% 1.01%(c) 0.92%
</TABLE>
- --------
(a) The Munder Tax-Free Bond Fund Class Y Shares commenced operations on July
21, 1994.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
(f) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
23
<PAGE>
<TABLE>
<CAPTION>
SHORT TERM
TREASURY
TAX-FREE INTERMEDIATE BOND FUND(A) FUND(A)
--------------------------------------------------------------- ----------
YEAR YEAR PERIOD YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97(F) 6/30/96(F) 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 6/30/97
---------- ---------- ---------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $10.34 $10.37 $ 10.17 $ 10.44 $10.69 $10.40 $ 10.00
------ ------ ------- ------- ------ ------ -------
Income from investment
operations:
Net investment income.. 0.44 0.45 0.15 0.42 0.42 0.07 0.22
Net realized and
unrealized gain/(loss)
on investments........ 0.11 (0.04) 0.20 (0.23) (0.14) 0.31 0.01
------ ------ ------- ------- ------ ------ -------
Total from investment
operations............ 0.55 0.41 0.35 0.19 0.28 0.38 0.23
------ ------ ------- ------- ------ ------ -------
Less distributions:
Dividends from net
investment income..... (0.44) (0.44) (0.15) (0.44) (0.42) (0.07) (0.22)
Distributions from net
realized gains........ (0.03) -- -- (0.02) (0.11) (0.02) N/A
------ ------ ------- ------- ------ ------ -------
Total distributions.... (0.47) (0.44) (0.15) (0.46) (0.53) (0.09) (0.22)
------ ------ ------- ------- ------ ------ -------
Net asset value, end of
period................. $10.42 $10.34 $ 10.37 $ 10.17 $10.44 $10.69 $ 10.01
====== ====== ======= ======= ====== ====== =======
Total return(b)........ 5.40% 3.95% 3.43% 2.34% 2.64% 3.68% 2.30%
====== ====== ======= ======= ====== ====== =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $7,511 $5,285 $11,100 $10,709 $3,074 $ 489 $49,055
Ratio of operating
expenses to average
net assets............ 0.68% 0.71% 0.73%(c) 0.70% 0.80% 0.79%(c) 0.52%(c)
Ratio of net investment
income to average net
assets................ 4.21% 4.16% 4.27%(c) 4.44% 3.99% 4.08%(c) 5.26%(c)
Portfolio turnover
rate.................. 31% 20% 5% 52% 38% 57% 40%
Ratio of operating
expenses to average
net assets without
waivers............... 0.68% 0.79% 0.97%(c) 0.94% 0.94% 0.93%(c) 0.55%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Intermediate Bond Fund Class Y Shares commenced
operations on December 17, 1992 and the Munder Short Term Treasury Fund
Class Y Shares commenced operations on January 29, 1997.
(b) Total return represents aggregate total return for the period indicated
and does not reflect any applicable sales charges.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
(f) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed net investment income method did not accord
with the results of operations.
24
<PAGE>
<TABLE>
<CAPTION>
CASH INVESTMENT FUND(A)
-----------------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 2/29/92 2/28/91
-------- -------- ---------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.. 0.050 0.051 0.019 0.042 0.027 0.031 0.052 0.073
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations............ 0.050 0.051 0.019 0.042 0.027 0.031 0.052 0.073
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income..... (0.050) (0.051) (0.019) (0.042) (0.027) (0.031) (0.052) (0.073)
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions.... (0.050) (0.051) (0.019) (0.042) (0.027) (0.031) (0.052) (0.073)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total return(b)........ 5.07% 5.27% 1.87% 4.23% 2.70% 3.17% 5.30% 7.56%
======== ======== ======== ======== ======== ======== ======== ========
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $279,427 $317,825 $340,394 $324,793 $282,363 $320,296 $317,943 $317,545
Ratio of operating
expenses to average
net assets............ 0.55% 0.53% 0.52%(c) 0.55% 0.53% 0.48% 0.44% 0.45%(c)
Ratio of net investment
income to average net
assets................ 4.96% 5.13% 5.64%(c) 4.27% 2.66% 3.12% 5.12% 7.43%(c)
Ratio of operating
expenses to average
net assets without
waivers............... 0.55% 0.53% 0.54%(c) 0.58% 0.58% 0.59% 0.63% 0.65%(c)
</TABLE>
- --------
(a) The Munder Cash Investment Fund Class Y Shares commenced operations on
March 14, 1990.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
25
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND(A)
------------------------------------------------------
YEAR YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D, E) 12/31/94 12/31/93
-------- -------- ------------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------
Income from investment
operations:
Net investment income . 0.049 0.051 0.024 0.040 0.010
-------- -------- -------- -------- -------
Total from investment
operations ........... 0.049 0.051 0.024 0.040 0.010
-------- -------- -------- -------- -------
Less distributions:
Dividends from net
investment income .... (0.049) (0.051) (0.024) (0.040) (0.010)
-------- -------- -------- -------- -------
Total distributions ... (0.049) (0.051) (0.024) (0.040) (0.010)
-------- -------- -------- -------- -------
Net asset value, end of
period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
Total return(b) ....... 4.97% 5.17% 2.44% 3.88% 0.96%
======== ======== ======== ======== =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $124,621 $223,396 $263,513 $145,685 $90,086
Ratio of operating
expenses to average
net assets ........... 0.64% 0.62% 0.60%(c) 0.60% 0.60%(c)
Ratio of net investment
income to average net
assets ............... 4.86% 5.09% 5.46%(c) 3.81% 2.57%(c)
Ratio of operating
expenses to average
net assets without
waivers .............. 0.64% 0.62% 0.66%(c) 0.74% 0.73%(c)
</TABLE>
- --------
(a) The Munder Money Market Fund Class Y Shares commenced operations on August
18, 1993.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end
was December 31.
(e) On February 1, 1995, Munder Capital Management replaced Munder Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
26
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET FUND(A)
------------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 2/29/92 2/28/91
------- ------- ---------- ---------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- -------- -------
Income from investment
operations:
Net investment income . 0.030 0.031 0.012 0.026 0.020 0.025 0.039 0.051
------- ------- ------- ------- ------- ------- -------- -------
Total from investment
operations ........... 0.030 0.031 0.012 0.026 0.020 0.025 0.039 0.051
------- ------- ------- ------- ------- ------- -------- -------
Less distributions:
Dividends from net
investment income .... (0.030) (0.031) (0.012) (0.026) (0.020) (0.025) (0.039) (0.051)
------- ------- ------- ------- ------- ------- -------- -------
Total distributions ... (0.030) (0.031) (0.012) (0.026) (0.020) (0.025) (0.039) (0.051)
------- ------- ------- ------- ------- ------- -------- -------
Net asset value, end of
period ................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======== =======
Total return (b) ...... 3.04% 3.16% 1.19% 2.59% 2.02% 2.50% 3.99% 5.28%
======= ======= ======= ======= ======= ======= ======== =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's) .... $22,951 $25,594 $23,430 $30,884 $53,798 $94,749 $102,453 $94,546
Ratio of operating
expenses to average
net assets ........... 0.53% 0.53% 0.54%(c) 0.55% 0.54% 0.50% 0.44% 0.45%(c)
Ratio of net investment
income to average net
assets ............... 3.01% 3.14% 3.51%(c) 2.54% 2.00% 2.45% 3.89% 5.30%(c)
Ratio of operating
expenses to average
net assets without
waivers .............. 0.53% 0.55% 0.59%(c) 0.60% 0.59% 0.58% 0.62% 0.66%(c)
</TABLE>
- --------
(a) The Munder Tax-Free Money Market Fund Class Y Shares commenced operations
on March 14, 1990.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
27
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND(A)
---------------------------------------------------------------------------------
YEAR YEAR PERIOD YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/97 6/30/96 6/30/95(D) 2/28/95(E) 2/28/94 2/28/93 2/29/92 2/28/91
-------- -------- ---------- ---------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- -------- ------- -------
Income from investment
operations:
Net investment income.. 0.048 0.049 0.018 0.039 0.026 0.030 0.050 0.068
-------- -------- -------- -------- -------- -------- ------- -------
Total from investment
operations............ 0.048 0.049 0.018 0.039 0.026 0.030 0.050 0.068
-------- -------- -------- -------- -------- -------- ------- -------
Less distributions:
Dividends from net
investment income..... (0.048) (0.049) (0.018) (0.039) (0.026) (0.030) (0.050) (0.068)
-------- -------- -------- -------- -------- -------- ------- -------
Total distributions.... (0.048) (0.049) (0.018) (0.039) (0.026) (0.030) (0.050) (0.068)
-------- -------- -------- -------- -------- -------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======= =======
Total return(b)........ 4.91% 5.02% 1.80% 4.01% 2.59% 3.05% 5.08% 6.97%
======== ======== ======== ======== ======== ======== ======= =======
Ratios to average net
assets/supplemental
data:
Net assets, end of
period (in 000's)..... $233,549 $309,873 $231,055 $240,590 $245,800 $102,429 $83,619 $88,498
Ratio of operating
expenses to average
net assets............ 0.54% 0.54% 0.55%(c) 0.55% 0.53% 0.51% 0.44% 0.45%(c)
Ratio of net investment
income to average net
assets................ 4.79% 4.89% 5.38%(c) 3.88% 2.56% 2.98% 4.95% 6.94%(c)
Ratio of operating
expenses to average
net assets without
waivers............... 0.54% 0.56% 0.60%(c) 0.60% 0.58% 0.60% 0.63% 0.066%(c)
</TABLE>
- --------
(a) The Munder U.S. Treasury Money Market Fund Class Y Shares commenced
operations on March 14, 1990.
(b) Total return represents aggregate total return for the period indicated.
(c) Annualized.
(d) Fiscal year end changed to June 30. Prior to this, the fiscal year end was
the last day of February.
(e) On February 1, 1995, Munder Capital Management replaced Woodbridge Capital
Management, Inc. as investment advisor for the Fund as a result of the
consolidation of the investment advisory businesses of Woodbridge Capital
Management, Inc. and Munder Capital Management, Inc.
28
<PAGE>
FUND CHOICES
WHAT FUNDS ARE OFFERED?
This Prospectus offers Class Y Shares of the 26 funds described below. This
section summarizes each Fund's principal investments. The sections entitled
"What are the Funds' Investments and Investment Practices?" and "What are the
Risks of Investing in the Funds?" and the SAI give more information about the
Funds' investment techniques and risks.
ACCELERATING GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's primary goal is to provide long-
term capital appreciation; its secondary goal is to provide income. Under
normal conditions, the Fund will invest at least 65% of its assets in Equity
Securities.
In choosing Equity Securities, the Advisor considers, among other factors:
. the potential for accelerated earnings growth
. the maintenance of a substantial competitive advantage
. a focused management team
. a stable balance sheet
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
BALANCED FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide an attractive
investment return through a combination of growth of capital and current
income. The Fund will allocate its assets among three asset groups: Equity
Securities, Fixed Income Securities and Cash Equivalents.
. The Fund normally will invest at least 25% of its assets in Fixed Income
Securities and no more than 75% of its assets in Equity Securities. The
Fund will notify shareholders at least 30 days before changing this
policy.
The Advisor will allocate the Fund's assets to the three asset groups based
on its view of the following factors, among others:
. general market and economic conditions and trends
. interest rates and inflation rates
. fiscal and monetary developments
. long-term corporate earnings growth
The Advisor will try to take advantage of changing economic conditions by
adjusting the ratio of Equity Securities to Fixed Income Securities or Cash
Equivalents. For example, if the Advisor believes that rapid economic growth
will lead to better corporate earnings in the future, then it might increase
the Fund's Equity Securities holdings and reduce its Fixed Income Securities
and Cash Equivalents holdings.
PORTFOLIO MANAGEMENT. Leonard J. Barr II, James Robinson and Ann J. Conrad
jointly manage the Fund's assets. Mr. Barr, Mr. Robinson and Ms. Conrad have
managed the Fund since February 1995, June 1995 and its inception in March
1993, respectively. Mr. Barr is a Senior Vice President and Director of
Research of the Advisor. From April 1988 to February 1995, he was Vice
President and Director of Research for Old MCM, Inc.
29
<PAGE>
("MCM"), the predecessor to the Advisor. Mr. Robinson is, and has been, a Vice
President and Chief Investment Officer--Fixed Income of the Advisor or MCM
since 1987. Ms. Conrad is a Vice President and Director of Specialty Products
of the Advisor, and held similar titles with Woodbridge Capital Management,
Inc. ("Woodbridge"), the Fund's previous investment advisor, since June 1992.
GROWTH & INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide capital
appreciation and current income. It primarily invests in dividend-paying
Equity Securities and is designed for investors seeking current income and
capital appreciation from the equity markets.
. Under normal circumstances, the Fund will invest at least 65% of its
assets in income-producing common stocks and convertible preferred
stocks.
. The Fund may also purchase Fixed Income Securities which are convertible
into or exchangeable for common stock.
. The Fund may invest up to 35% of its assets in Fixed Income Securities,
including 20% of its assets in Fixed Income Securities that are rated
below investment grade.
The Advisor generally selects large, well-known companies that it believes
have favorable prospects for dividend growth and capital appreciation. The
Fund will seek to produce a current yield greater than the S&P 500.
The Fund focuses on dividend-paying Equity Securities because, over time,
dividend income has accounted for a significant portion of the total return of
the S&P 500. In addition, dividends are usually a more stable and predictable
source of return than capital appreciation. The Advisor believes that stocks
which distribute a high level of current income have more stable prices than
those which pay below average dividends.
PORTFOLIO MANAGEMENT. Otto Hinzmann, Jr. is the Fund's portfolio manager, a
position he has held since February 1995. Mr. Hinzmann has been a Vice
President and Director of Equity Management of the Advisor or MCM since
January 1987.
INTERNATIONAL EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Foreign Securities and
ADRs and EDRs. At least once a quarter, the Advisor creates a list of Foreign
Securities and ADRs and EDRs (the "Securities List") which the Fund may
purchase based on the country where the company is located, its competitive
advantages, its past financial record, its future prospects for growth and the
market for its securities. The Advisor updates the Securities List frequently
(but at least quarterly), adds new securities to the Securities List if they
are eligible and sells securities not on the updated Securities List as soon
as practicable.
After the Advisor creates the Securities List, it divides the list into two
sections. The first section is designed to provide broad coverage of
international markets. The second section increases exposure to securities
that the Advisor expects will perform better than other stocks in their
industry sectors and their markets as a whole. When the Advisor believes
broader market exposure will benefit the Fund, it will allocate up to 80% of
the Fund's assets in first section securities. When the Advisor identifies
strong potential for specific securities to perform well, the Fund may invest
up to 50% of its assets in second section securities.
. Under normal market conditions, at least 65% of the Fund's assets are
invested in Equity Securities in at least three foreign countries.
. The Fund will emphasize companies with a market capitalization of at
least $100 million.
30
<PAGE>
PORTFOLIO MANAGEMENT. Todd B. Johnson and Theodore Miller jointly manage the
Fund. Mr. Johnson, a Chief Investment Officer of the Advisor, and Mr. Miller,
senior portfolio manager of the Fund, have managed the Fund since July 1992
and October 1996, respectively. Mr. Miller previously worked as the primary
analyst for the Fund (1996) and for Interacciones Global Inc. (1993-1995) and
McDonald & Co. Securities Inc. (1991-1993).
MICRO-CAP EQUITY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. It invests primarily in Equity Securities of smaller
capitalization companies. The Fund attempts to provide investors with
potentially higher returns than a fund that invests primarily in larger more
established companies. Since smaller capitalization companies are generally
not as well known to investors and have less of an investor following than
larger companies, they may provide higher returns due to inefficiencies in the
marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies having a market capitalization
of $200 million or less, which is considerably less than the market
capitalization of S&P 500 companies.
The Advisor will choose companies that:
. present the ability to grow significantly over the next several years
. may benefit from changes in technology, regulations and industry sector
trends
. are still in the developmental stage and may have limited product lines
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MID-CAP GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. The Fund invests at least 65% of its assets in the Equity
Securities of companies with market capitalizations between $100 million and
$5 billion. Its style, which focuses on both growth prospects and valuation,
is known as GARP (Growth at a Reasonable Price) and seeks to produce
attractive returns during various market environments.
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 10,000 companies over the past three
years. It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the Standard & Poor's Mid-Cap 400 Index
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Advisor makes investment decisions for the Fund.
MULTI-SEASON GROWTH FUND
GOAL AND OBJECTIVES. The Fund's goal is to provide long-term capital
appreciation. This objective is considered "fundamental" and cannot be changed
without shareholder approval. Its style, which focuses on both
31
<PAGE>
growth prospects and valuation, is known as GARP (Growth at a Reasonable
Price) and seeks to produce attractive returns during various market
environments. The Fund invests at least 65% of its assets in Equity
Securities. The Fund generally invests in Equity Securities of market
capitalizations of over $1 billion.
The Advisor chooses the Fund's investments as follows: The Advisor reviews
the earnings growth of approximately 5,500 companies over the past five years.
It invests in approximately 50 to 100 companies based on:
. superior earnings growth
. financial stability
. relative market value
. price changes compared to the S&P 500
PORTFOLIO MANAGEMENT. The portfolio managers of the Fund, Leonard J. Barr II
and Lee P. Munder, have managed the Fund since its inception in April 1993.
Mr. Barr is the Senior Vice President and Director of Research of the Advisor.
From April 1988 to April 1993, he held similar positions with MCM. Mr. Munder
is the President and Chief Executive Officer of the Advisor, positions he has
held with the Advisor or MCM since 1985.
REAL ESTATE EQUITY INVESTMENT FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide both capital
appreciation and current income. This goal is "fundamental" and cannot be
changed without shareholder approval. The Fund invests primarily in U.S.
companies which are principally engaged in the real estate industry or which
own significant real estate. A company is "principally engaged" in the real
estate industry if at least 50% of its assets, gross income or net profits are
attributable to ownership, construction, management or sale of residential,
commercial or industrial real estate. The Fund will not own real estate
directly.
Under normal conditions, the Fund invests at least 65% of its total assets
in Equity Securities of U.S. companies in real estate industry including:
. equity real estate investment trusts ("REITS")
. brokers, home builders and real estate developers
. companies with substantial real estate holdings (for example, paper and
lumber producers, hotels and entertainment companies)
. manufacturers and distributors of building supplies
. mortgage REITS
. financial institutions which issue or service mortgages
In addition, the Fund may invest:
. up to 35% of its assets in companies other than real estate industry
companies
. in Fixed Income Securities, including up to 5% of its assets in Fixed
Income Securities rated below investment grade or unrated if secured by
real estate assets if the Advisor believes that the underlying collateral
is sufficient
. in REITS only if they are traded on a securities exchange or NASDAQ
PORTFOLIO MANAGEMENT. Peter K. Hoglund is the portfolio manager of the Fund,
a position he has held since October 1996. Mr. Hoglund formerly was the
primary analyst of the Fund (October 1994 to October 1996).
32
<PAGE>
SMALL-CAP VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. It invests
primarily in Equity Securities of smaller capitalization companies. The Fund
attempts to provide investors with potentially higher returns than a fund that
invests primarily in larger more established companies. Since small companies
are generally not as well known to investors and have less of an investor
following than larger companies, they may provide higher returns due to
inefficiencies in the marketplace.
. Under normal market conditions, the Fund will invest at least 65% of its
assets in Equity Securities of companies with market capitalizations
below $750 million, which is less than the market capitalization of S&P
500 companies.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
March 1997, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
SMALL COMPANY GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. The Fund invests primarily in Equity Securities of
smaller capitalization companies. The Fund attempts to provide investors with
potentially higher returns than a fund that invests primarily in larger more
established companies. Since smaller capitalization companies are generally
not as well known to investors and have less of an investor following than
larger companies, they may provide higher returns due to inefficiencies in the
marketplace.
. Under normal market conditions, the Fund will invest at least 65% of the
Fund's assets in Equity Securities of companies with market
capitalizations below $750 million, which is less than the market
capitalization of S&P 500 companies.
The Advisor considers these factors, among others, in choosing companies:
. above-average growth prospects
. participation in a fast-growing industry
33
<PAGE>
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Carl Wilk and Michael P. Gura jointly manage the Fund.
Mr. Wilk, a Senior Portfolio Manager of the Advisor, has managed the Fund
since October 1996 and was the Fund's primary analyst (1995 to 1996). Prior to
joining the Advisor in 1995, Mr. Wilk was a Senior Equity Research Analyst at
Woodbridge. Mr. Gura has managed the Fund since March 1997. Prior to joining
the Advisor in 1995, Mr. Gura was a Vice President, Senior Equity Analyst for
Woodbridge (1994-1995) and an investment officer for Manufacturers National
Bank Trust Department (1989-1994).
VALUE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation, with income as a secondary objective. The Fund invests
primarily in the Equity Securities of well-established companies with
intermediate to large capitalizations, which typically exceed $750 million.
. The Fund will invest at least 65% of its assets in Equity Securities.
The Advisor will concentrate on companies that it believes are undervalued.
A company's Equity Securities may be undervalued because it is temporarily
overlooked or out of favor due to general economic conditions, a market
decline, industry conditions or developments affecting the particular company.
The Fund will usually invest in Equity Securities of companies with low
price/earnings ratios, low price/cash flow ratios and low price/book values
compared to the general market.
In addition to valuation, the Advisor considers these factors, among others,
in choosing companies:
. a stable or improving earnings record
. sound finances
. above-average growth prospects
. participation in a fast growing industry
. strategic niche position in a specialized market
. adequate capitalization
PORTFOLIO MANAGEMENT. Gerald Seizert and Edward Eberle jointly manage the
Fund. Mr. Seizert has managed the Fund since it commenced operations. Prior to
joining the Advisor in 1995, Mr. Seizert was a Director and Managing Partner
of Loomis, Sayles & Company, L.P. Mr. Eberle, who has managed the Fund since
October 1996, was formerly the primary analyst for the Fund. Prior to joining
the Advisor in 1995, he was an Executive Vice President and Portfolio Manager
for Westpointe Financial Corporation.
FRAMLINGTON EMERGING MARKETS FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund seeks to provide long-term capital
appreciation. The Fund invests at least 65% of its assets in companies in
emerging market countries, as defined by the World Bank, the International
Finance Corporation, the United Nations or the European Bank for
Reconstruction and Development.
A company will be considered to be in an emerging market country if:
. the company is organized under the laws of, or has a principal office in,
an emerging market country,
34
<PAGE>
. the company's stock is traded primarily in an emerging market country,
. most of the company's assets are in an emerging market country, or
. most of the company's revenues or profits come from goods produced or
sold, investments made or services performed in an emerging market
country.
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. William
Calvert heads the committee.
FRAMLINGTON HEALTHCARE FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation by investing in companies providing healthcare and
medical services and products worldwide. Currently, most of such companies are
located in the United States.
The Fund will invest in:
. pharmaceutical producers
. biotechnology firms
. medical device and instrument manufacturers
. distributors of healthcare products
. healthcare providers and managers
. other healthcare service companies
Under normal conditions, the Fund will invest at least 65% of its assets in
healthcare companies, which are companies for which at least 50% of sales,
earnings or assets arise from or are dedicated to health services or medical
technology activities.
PORTFOLIO MANAGEMENT. Antony Milford is the head of the Specialist Desk for
the Sub-Advisor. He is the Fund's primary portfolio manager, a position he has
held since the Fund's inception. Mr. Milford has managed funds for the Sub-
Advisor since 1971.
FRAMLINGTON INTERNATIONAL GROWTH FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide long-term
capital appreciation. Under normal market conditions, at least 65% of the
Fund's assets will be invested in Equity Securities in at least three foreign
countries.
The Sub-Advisor will choose companies that demonstrate:
. above-average profitability
. high quality management
. the ability to grow significantly in their countries
PORTFOLIO MANAGEMENT. A committee of professional portfolio managers
employed by the Sub-Advisor makes investment decisions for the Fund. Simon
Key, Chief Investment Officer of the Sub-Advisor, heads the committee.
35
<PAGE>
BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current income and, secondarily, capital appreciation.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Gregory A. Prost jointly manage
the Fund. Mr. Robinson and Mr. Prost have managed the Fund since March 1995
and May 1995, respectively. Mr. Robinson has been a Vice President and Chief
Investment Officer of the Advisor or MCM since 1987. Mr. Prost has been a
Senior Fixed Income Portfolio Manager of the Advisor or MCM since 1995. Prior
to joining the Advisor, he was a Vice President and Senior Fund Manager for
First of America Investment Corp.
INTERNATIONAL BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to realize a competitive
total return through a combination of current income and capital appreciation.
Under normal market conditions, at least 65% of the Fund's assets will be
invested in Foreign Securities of issuers in at least three countries other
than the United States. The Fund's dollar-weighted average maturity will
generally be between three and 15 years. The Fund will invest mostly in:
. foreign debt obligations issued by foreign governments and their
agencies, instrumentalities or political subdivisions
. debt securities issued or guaranteed by supra-national organizations,
such as the World Bank
. debt securities of banks or bank holding companies
. corporate debt securities
. other debt securities, including those convertible into foreign stock.
PORTFOLIO MANAGEMENT. Gregory A. Prost and Sharon E. Fayolle jointly manage
the Fund. Mr. Prost, Senior Fixed Income Portfolio Manager of the Advisor or
MCM, has managed the Fund since October 1996. Prior to joining MCM in 1995, he
was a Vice President and Senior Fund Manager for First of America Investment
Corp. Ms. Fayolle, Vice President and Director of Money Market Trading for the
Advisor or MCM, has managed the Fund since October 1996. Prior to joining MCM
in 1996, she was a European Portfolio Manager for Ford Motor Company.
INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
rate of return which, over time, exceeds the rate of inflation and the return
provided by money market instruments.
. Under normal conditions, at least 65% of the Fund's assets will be
invested in Fixed Income Securities.
. The Fund's dollar-weighted average maturity will generally be between
three and eight years.
PORTFOLIO MANAGEMENT. Anne K. Kennedy and James C. Robinson jointly manage
the Fund. Ms. Kennedy, Vice President and Director of Corporate Bond Trading
of the Advisor or MCM since 1991, has managed the Fund since March 1995. Mr.
Robinson, Vice President and Chief Investment Officer of the Advisor or MCM
since 1987, has managed the Fund since March 1995.
36
<PAGE>
U.S. GOVERNMENT INCOME FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide high current
income.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in U.S. Government obligations.
. The Fund's dollar-weighted average maturity will generally be between six
and fifteen years.
PORTFOLIO MANAGEMENT. James C. Robinson and Peter G. Root jointly manage the
Fund. Mr. Robinson, Vice President and Chief Investment Officer of the Advisor
or MCM since 1987, and Mr. Root, Vice President and Director of Government
Securities Trading of the Advisor since March 1995, have managed the Fund
since March 1995. Mr. Root joined MCM in 1991.
MICHIGAN TRIPLE TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide as high a
level of current interest income exempt from regular Federal income taxes,
Michigan state income and Michigan intangibles tax as is consistent with
prudent investment management and preservation of capital.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets are invested in Michigan Municipal Obligations.
. The Fund will invest primarily in Michigan Municipal Obligations which
have remaining maturities of between three and 30 years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
TAX-FREE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a high level
of current interest income exempt from Federal income taxes and to generate as
competitive a long-term rate of return as is consistent with prudent
investment management and preservation of capital.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax. This fundamental policy may only be
changed with shareholder approval.
. The Fund invests primarily in intermediate-term and long-term Municipal
Obligations which have remaining maturities of between three and 30
years.
. The Fund's dollar-weighted average maturity will generally be between ten
and twenty years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
37
<PAGE>
TAX-FREE INTERMEDIATE BOND FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide a competitive
level of current interest income exempt from regular Federal income taxes and
a total return which, over time, exceeds the rate of inflation and the return
provided by tax-free money market instruments.
. Under normal market conditions, at least 65% of the Fund's assets will be
invested in Municipal Obligations.
. Except during temporary defensive periods, at least 80% of the Fund's net
assets will be invested in Municipal Obligations whose interest is exempt
from regular Federal income tax.
. The Fund invests in Michigan Municipal Obligations from time to time.
. The Fund generally buys obligations with remaining maturities of ten
years or less.
. The Fund's dollar-weighted average maturity will generally be between
three and eight years, but may be up to ten years.
PORTFOLIO MANAGEMENT. Talmadge D. Gunn, Vice President and Director of Tax-
Exempt Trading of the Advisor since 1993, manages the Fund. Mr. Gunn formerly
was an Assistant Vice President and Securities Trader at Comerica Bank.
SHORT TERM TREASURY FUND
GOAL AND PRINCIPAL INVESTMENTS. The Fund's goal is to provide investors with
an enhanced money market return consistent with capital preservation. Under
normal conditions, the Fund invests all of its assets in U.S. Treasury
securities and repurchase agreements fully collateralized by U.S. Treasury
securities. The Fund's dollar-weighted average portfolio maturity usually will
not exceed two years.
The Fund seeks to generate a total return which exceeds money market
instruments while minimizing the fluctuation of its net asset value. The Fund,
however, is not a money market fund and its net asset value may fluctuate.
PORTFOLIO MANAGEMENT. Sharon E. Fayolle, Vice President and Director of
Money Market Trading for the Advisor, has managed the Fund since October 1996.
Prior to joining the Advisor in 1996, she was a European Portfolio Manager for
Ford Motor Company.
CASH INVESTMENT FUND
. The Fund's primary goal is as high a level of current interest income as
is consistent with maintaining liquidity and stability of principal.
. The Fund invests in a broad range of short-term, high quality, U.S.
dollar-denominated instruments.
U.S. TREASURY MONEY MARKET FUND
. The Fund's goal is to provide as high a level of current interest income
as is consistent with maintaining liquidity and stability of principal.
. The Fund invests its assets solely in short-term bonds, bills and notes
issued by the U.S. Treasury (including "stripped" securities), and in
repurchase agreements relating to such obligations.
38
<PAGE>
TAX-FREE MONEY MARKET FUND
. The Fund's goal is to provide shareholders with as high a level of
current interest income exempt from Federal income taxes as is consistent
with maintaining liquidity and stability of principal.
. The Fund invests substantially all of its assets in short-term, U.S.
dollar-denominated Municipal Obligations, the interest on which is exempt
from regular Federal income tax.
. Under normal market conditions, the Fund will invest at least 80% of its
net assets in Municipal Obligations.
MONEY MARKET FUND
. The Fund's goal is to provide current income consistent with the
preservation of capital and liquidity.
. The Fund invests its assets in a broad range of short-term, high quality,
U.S. dollar-denominated instruments, such as bank, commercial and other
obligations (including Federal, state and local government obligations)
that are available in the money markets.
WHO MAY WANT TO INVEST IN THE FUNDS?
Equity Funds
These Funds are designed for investors who desire potentially high capital
appreciation and who can accept short-term variations in return for
potentially greater returns over the long term. In general, the greater the
risk, the greater the potential reward. Investors who have a short time
horizon, who desire a high level of income or who are conservative in their
investment approach may wish to invest in other portfolios offered by the
Trust and the Company.
Bond Funds and Tax-Free Funds
These Funds are designed for investors who desire potentially higher returns
than more conservative fixed rate investments or money market funds and who
seek current income. The Michigan Triple Tax-Free Bond Fund, Tax-Free Bond
Fund and Tax-Free Intermediate Bond Fund may be desirable for investors who
seek primarily tax-exempt income. When you choose among the Funds, you should
consider both the expected yield of the Funds and potential changes in each
Fund's share price. The yield and potential price changes of a Fund's shares
depend on the quality and maturity of the obligations in its portfolio, as
well as on other market conditions.
Short Term Treasury Fund and Money Market Funds
These Funds are designed for investors who desire a high level of income and
liquidity and, in the case of the Money Market Funds, stability of principal.
WHAT ARE THE FUNDS' INVESTMENTS AND INVESTMENT PRACTICES?
Each Equity Fund invests primarily in EQUITY SECURITIES, which include
common stocks, preferred stocks, warrants and other securities convertible
into common stocks. Many of the common stocks the Funds (other than Growth &
Income Fund) will buy will not pay dividends; instead, stocks will be bought
for the potential that their prices will increase, providing capital
appreciation for the Funds. The value of Equity Securities will fluctuate due
to many factors, including the past and predicted earnings of the issuer, the
quality of the issuer's management, general market conditions, the forecasts
for the issuer's industry and the value of the issuer's assets.
39
<PAGE>
Holders of Equity Securities only have rights to value in the company after
all debts have been paid, and they could lose their entire investment in a
company that encounters financial difficulty. Warrants are rights to purchase
securities at a specified time at a specified price.
Each Fund may invest in CASH EQUIVALENTS, which are high-quality, short-term
money market instruments including, among other things, commercial paper,
bankers' acceptances and negotiable certificates of deposit of banks or
savings and loan associations, short-term corporate obligations and short-term
securities issued by, or guaranteed by, the U.S. Government and its agencies
or instrumentalities. These instruments will be used primarily pending
investment, to meet anticipated redemptions or as a temporary defensive
measure. If a Fund is investing defensively, it may not be pursuing its
investment objective.
All Funds may enter into REPURCHASE AGREEMENTS. Under a repurchase
agreement, a Fund agrees to purchase securities from a seller and the seller
agrees to repurchase the securities at a later time, typically within seven
days, at a set price. The seller agrees to set aside collateral at least equal
to the repurchase price. This ensures that the Fund will receive the purchase
price at the time it is due, unless the seller defaults or declares
bankruptcy, in which event the Fund will bear the risk of possible loss due to
adverse market action or delays in liquidating the underlying obligation. With
respect to the Money Market Funds, the securities held subject to a repurchase
agreement may have stated maturities exceeding 397 days provided the
repurchase agreement itself matures in 397 days.
The Equity Funds may purchase AMERICAN DEPOSITORY RECEIPTS ("ADRS"),
EUROPEAN DEPOSITARY RECEIPTS ("EDRS") and GLOBAL DEPOSITORY RECEIPTS ("GDRS").
ADRs are issued by U.S. financial institutions and GDRs and EDRs are issued by
European financial institutions. They are receipts evidencing ownership of
underlying Foreign Securities.
The Funds (other than the U.S. Treasury Money Market Fund and Short Term
Treasury Fund) may buy shares of registered MONEY MARKET FUNDS. The Funds will
bear a portion of the expenses of any investment company whose shares they
purchase, including operating costs and investment advisory, distribution and
administration fees. These expenses would be in addition to a Fund's own
expenses. Each Fund may invest up to 10% of its assets in other investment
companies and no more than 5% of its assets in any one investment company.
All Funds may purchase FIXED INCOME SECURITIES. Fixed Income Securities are
securities which either pay interest at set times at either fixed or variable
rates, or which realize a discount upon maturity. Fixed Income Securities
include corporate bonds, debentures, notes and other similar corporate debt
instruments, zero coupon bonds (discount debt obligations that do not make
interest payments) and variable amount master demand notes that permit the
amount of indebtedness to vary in addition to providing for periodic
adjustments in the interest rate. Each Fund may purchase U.S. GOVERNMENT
SECURITIES, which are securities issued by, or guaranteed by, the U.S.
Government or its agencies or instrumentalities. Such securities include U.S.
Treasury bills, which have initial maturities of less than one year, U.S.
Treasury notes, which have initial maturities of one to ten years, U.S.
Treasury bonds, which generally have initial maturities of greater than ten
years, and obligations of the Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association and Government National Mortgage Association.
Each Fund may BORROW MONEY in an amount up to 5% of its assets for temporary
purposes and in an amount up to 33 1/3% of its assets to meet redemptions.
This is a "fundamental" policy which only can be changed by shareholders.
All of the Funds, other than the International Bond Fund, the Michigan
Triple Tax-Free Bond Fund and the Tax-Free Intermediate Bond Fund, are
classified as "diversified funds." With respect to 75% of each diversified
Fund's assets, each diversified fund cannot invest more than 5% of its assets
in one issuer (other than the U.S. Government and its agencies and
instrumentalities). In addition, each diversified fund cannot invest more than
25% of its assets in a single issuer. These restrictions do not apply to the
non-diversified funds.
40
<PAGE>
The Tax-Free Funds will acquire long-term instruments only which are rated
"A" or better by Moody's Investors Service Inc. ("Moody's") or Standard &
Poor's Rating Service ("S&P") or, if unrated, are of comparable quality. Such
Funds will acquire short-term instruments only which (i) have short-term debt
ratings in the top two categories by at least one nationally recognized
statistical rating organization, (ii) are issued by an issuer with such
ratings or (iii), if unrated, are of comparable quality.
The Advisor does not intend to invest more than 25% of a Fund's assets in
securities whose issuers are in the same state, except that the Advisor may
invest more than 25% of the Michigan Triple Tax-Free Bond Fund's and the Tax-
Free Intermediate Bond Fund's assets in Michigan Municipal Obligations.
Each Tax-Free Fund may invest in short-term money market instruments on a
temporary basis or for temporary investment purposes. Short-term money market
instruments include U.S. government obligations, debt securities of issuers
having a rating within the two highest categories of either S&P or Moody's,
and certificates of deposit or bankers' acceptances of domestic branches of
U.S. banks with at least $1 billion in assets.
Each Money Market Fund will invest primarily in ELIGIBLE SECURITIES (as
defined by the SEC) with remaining maturities of 397 days or less as defined
by the SEC (although securities subject to repurchase agreements, variable and
floating rate securities and certain other securities may bear longer
maturities), and the dollar-weighted average portfolio maturity of each Money
Market Fund will not exceed 90 days. Eligible Securities consist of securities
that are determined by the Advisor, under guidelines established by the Boards
of Trustees and Directors, to present minimal credit risk. Each Fund may also
hold uninvested cash pending investment of late payments for purchase orders
or during temporary defensive periods.
Investment Charts
The following charts summarize the Funds' investments and investment
practices. The SAI contains more details. All percentages are based on a
Fund's total assets except where otherwise noted. See "What are the Risks of
Investing in the Funds?" for a description of the risks involved with the
Funds' investment practices.
41
<PAGE>
EQUITY FUNDS
<TABLE>
<CAPTION>
ACCELE- GROWTH INTER- MICRO-
INVESTMENTS AND RATING & NATIONAL CAP
INVESTMENT PRACTICES GROWTH BALANCED INCOME EQUITY EQUITY
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOREIGN SECURITIES. Includes
securities issued by non-U.S.
companies. Present more risks than
U.S. securities 25% 25% 25% Y 25%
- -------------------------------------------------------------------------------
LOWER-RATED DEBT SECURITIES. Fixed
income securities which are rated
below investment grade by Standard &
Poor's Ratings Service, Moody's
Investors Service Inc. or other
nationally recognized rating agency.
Considered riskier than investment
grade securities Y Y 20% Y Y
- -------------------------------------------------------------------------------
INVESTMENT-GRADE ASSET BACKED
SECURITIES. Includes debt securities
backed by mortgages, installment
sales contracts and credit card
receivables N Y N N N
- -------------------------------------------------------------------------------
STRIPPED SECURITIES. Includes
participations in trusts that hold
U.S. Treasury and agency securities
which represent either the interest
payments or principal payments on the
securities or combinations of both N Y N N N
- -------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE
CONTRACTS. Obligations of a Fund to
purchase or sell a specific currency
at a future date at a set price. May
decrease a Fund's loss due to a
change in currency value, but also
limits gains from currency changes Y Y Y Y Y
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND FORWARD
COMMITMENTS. Agreement by a Fund to
purchase securities at a set price,
with delivery and payment in the
future. The value of securities may
change between the time the price is
set and payment. Not to be used for
speculation Y Y Y Y Y
- -------------------------------------------------------------------------------
FUTURES AND OPTIONS ON FUTURES.(1)
Contracts in which a Fund has the
right or the obligation to make
delivery of or receive securities,
the cash value of an index or foreign
currency. Used for hedging purposes
or to maintain liquidity Y Y Y Y Y
- -------------------------------------------------------------------------------
OPTIONS. A Fund may buy options giving
it the right to require a buyer to
buy a security held by the Fund (put
options), buy options giving it the
right to require a seller to sell
securities to the Fund (call
options), sell (write) options giving
a buyer the right to require the Fund
to buy securities from the buyer or
write options giving a buyer the
right to require the Fund to sell
securities to the buyer during a set
time at a set price. Options may
relate to stock indices, individual
securities, foreign currencies or
futures contracts. See the SAI for
more details and additional
limitations Y Y Y Y Y
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Fund
sells securities and agrees to buy
them back later at an agreed upon
time and price. A method to borrow
money for temporary purposes Y Y Y Y Y
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically there
is no ready market for these
securities, which inhibits the
ability to sell them and to obtain
their full market value, or there are
legal restrictions on their resale by
the Fund 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
- -------------------------------------------------------------------------------
LENDING SECURITIES. May lend
securities to financial institutions
which pay for the use of the
securities. May increase return.
Slight risk of borrower failing
financially 25% 25% 25% 25% 25%
</TABLE>
Key:
Y= investment allowed without restriction
N= investment not allowed
(1) The limitation on margins and premiums for futures is 5% of a Fund's assets
(2) Based on net assets
42
<PAGE>
EQUITY FUNDS (CONTINUED)
<TABLE>
<CAPTION>
REAL
MID- MULTI- ESTATE SMALL- SMALL FRAMLINGTON FRAMLINGTON
CAP SEASON EQUITY CAP COMPANY EMERGING FRAMLINGTON INTERNATIONAL
GROWTH GROWTH INVESTMENT VALUE GROWTH VALUE MARKETS HEALTHCARE GROWTH
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
25% 25% N 25% 25% 25% Y Y Y
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
N N N N N N N N N
- ------------------------------------------------------------------------------------------
N N N N N N N N N
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
Y Y Y Y Y Y Y Y Y
- ------------------------------------------------------------------------------------------
15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2) 15%(2)
- ------------------------------------------------------------------------------------------
25% 25% 25% 25% 25% 25% 25% 25% 25%
</TABLE>
43
<PAGE>
BOND FUNDS
<TABLE>
<CAPTION>
INTER- INTER- U.S.
BOND MEDIATE NATIONAL GOVERNMENT
INVESTMENTS AND INVESTMENT PRACTICES FUND BOND FUND BOND FUND INCOME FUND
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FOREIGN SECURITIES. Securities issued 25% 25% Y 25%
by foreign governments and their
agencies, instrumentalities or
political subdivisions, supranational
organizations, and foreign
corporations.
- ------------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Includes debt Y Y Y Y
securities backed by mortgages,
installment sales contracts and
credit card receivables.
- ------------------------------------------------------------------------------
INTEREST RATE AND CURRENCY SWAPS. Y(1) Y(1) Y Y(1)
Agreement to exchange payments
calculated on the basis of relative
interest or currency rates.
Derivative instruments used solely
for hedging.
- ------------------------------------------------------------------------------
INTEREST RATE CAPS AND FLOORS. Entitle N N Y N
purchaser to receive payments of
interest to the extent that a
specified reference rate exceeds or
falls below a predetermined level.
- ------------------------------------------------------------------------------
STRIPPED SECURITIES. Includes Y Y Y Y
participations in trusts that hold
U.S. Treasury and agency securities
which represent either the interest
or principal payments on the
securities or combinations of both.
- ------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Fund Y Y Y Y
sells securities and agrees to buy
them back later at an agreed upon
time and price. A method to borrow
money for temporary purposes.
- ------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY EXCHANGE Y Y Y Y
CONTRACTS. Obligations of a Fund to
purchase or sell a specific currency
at a future date at a set price. May
decrease a Fund's loss due to a
change in currency value, but also
limits gains from currency changes.
- ------------------------------------------------------------------------------
U.S. BANK OBLIGATIONS. U.S. dollar Y Y Y Y
denominated bank obligations,
including certificates of deposit,
bankers' acceptances, bank notes,
time deposits issued by U.S. banks or
savings institutions having total
assets in excess of $1 billion.
- ------------------------------------------------------------------------------
SUPRANATIONAL ORGANIZATION OBLIGATION. N N Y N
Fixed income securities issued or
guaranteed by supranational
organizations such as the World Bank.
- ------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. Y Y Y Y
Agreements of a Fund to make payments
to an insurance company's general
account in exchange for a minimum
level of interest based on an index.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
U.S.
INTER- INTER- GOVERNMENT
BOND MEDIATE NATIONAL INCOME
INVESTMENTS AND INVESTMENT PRACTICES FUND BOND FUND BOND FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WHEN-ISSUED PURCHASES AND FORWARD Y Y Y Y
COMMITMENTS. Agreement by a Fund to
purchase securities at a set price,
with payment and delivery in the
future. The value of the securities
may change between the time the price
is set and payment. Not to be used
for speculation.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically there 15%(2) 15%(2) 15%(2) 15%(2)
is no ready market for these
securities, which limits the ability
to sell them for full market value,
or they are restricted as to resale.
- -------------------------------------------------------------------------------
FUTURES AND OPTIONS ON FUTURES.(3) Y Y Y Y
Contracts in which a Fund has the
right or the obligation to make
delivery of, or receive, securities,
the cash value of an index or foreign
currency. Used for hedging purposes
or to maintain liquidity.
- -------------------------------------------------------------------------------
OPTIONS. A Fund may buy options giving Y Y Y Y
it the right to require a buyer to
buy a security held by the Fund (put
options), buy options giving it the
right to require a seller to sell
securities to the Fund (call
options), sell (write) options giving
a buyer the right to require the Fund
to buy securities from the buyer or
write options giving a buyer the
right to require the Fund to sell
securities to the buyer during a set
time at a set price. Options may
relate to stock indices, individual
securities or foreign currencies. See
the SAI for more details and
additional limitations.
- -------------------------------------------------------------------------------
LENDING SECURITIES. May lend 25% 25% 25% 25%
securities to financial institutions
which pay for the use of securities.
May increase return. Slight risk of
borrower failing financially.
</TABLE>
Key:
Y= Investment allowed without restriction
N= Investment not allowed
(1) Interest rate swaps only
(2) Based on net assets
(3) The limitation on margins and premiums for futures is 5% of a Fund's
assets
45
<PAGE>
TAX-FREE FUNDS AND SHORT TERM TREASURY FUND
<TABLE>
<CAPTION>
SHORT MICHIGAN TAX-FREE
TERM TRIPLE INTER-
TREASURY TAX-FREE TAX-FREE MEDIATE
INVESTMENTS AND INVESTMENT PRACTICES FUND BOND FUND BOND FUND BOND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL OBLIGATIONS. Payable from N Y Y Y
the issuer's general revenue, the
revenue of a specific project,
current revenues or a reserve fund.
- -------------------------------------------------------------------------------
MICHIGAN MUNICIPAL OBLIGATIONS. N Y Y Y
Municipal Obligations issued by the
State of Michigan and its political
subdivisions.
- -------------------------------------------------------------------------------
FOREIGN SECURITIES. Securities issued N 25% 25% 25%
by foreign governments and their
agencies, instrumentalities or
political subdivisions,
supranational organizations, and
foreign corporations.
- -------------------------------------------------------------------------------
SHORT-TERM MONEY MARKET INSTRUMENTS. Y Y Y Y
High quality short-term instruments
including, among other things,
commercial paper, bankers'
acceptances certificates of deposit
and short-term corporate
obligations.
- -------------------------------------------------------------------------------
GUARANTEED INVESTMENT CONTRACTS. N N N N
Agreements of a Fund to make
payments to an insurance company's
general account in exchange for a
minimum level of interest based on
an index.
- -------------------------------------------------------------------------------
WHEN-ISSUED PURCHASES AND FORWARD N Y Y Y
COMMITMENTS. Agreement by a Fund to
purchase securities at a set price,
with payment and delivery in the
future. The value of the securities
may change between the time the
price is set and payment. May not be
used for speculation.
- -------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically there N 15%(1) 15%(1) 15%(1)
is no ready market for these
securities, which limits the ability
to sell them for full market value,
or they are restricted as to resale.
- -------------------------------------------------------------------------------
LENDING SECURITIES. May lend 25% 25% 25% 25%
securities to financial institutions
which pay for the use of securities.
May increase return. Slight risk of
borrower failing financially.
- -------------------------------------------------------------------------------
U.S. TREASURY SECURITIES. Includes Y Y Y Y
U.S. Treasury bills, notes and
bonds.
- -------------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS. A Fund Y N N N
sells securities and agrees to buy
them back later at an agreed upon
time and price. A method to borrow
money for temporary purposes.
</TABLE>
Key:
Y= Investment allowed without restriction
N= Investment not allowed
(1) Based on net assets
46
<PAGE>
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
U.S.
INVESTMENTS AND INVESTMENT CASH MONEY TAX-FREE TREASURY
PRACTICES INVESTMENT MARKET MONEY MONEY
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS:
. Commercial paper
(including paper of
Canadian cos., Canadian
branches of U.S. cos.,
and Europaper) Y Y N N
. Corporate bonds Y Y N N
. Other short-term
obligations Y Y N N
. Variable Master Demand
Notes Y Y N N
. Bond Debentures Y Y N N
. Notes Y Y N N
- -----------------------------------------------------------------------------
ASSET-BACKED SECURITIES. Y Y N N
Includes debt securities
backed by mortgages,
installment sales
contracts and credit card
receivables.
- -----------------------------------------------------------------------------
U.S. GOVERNMENT
OBLIGATIONS:
. Issued or guaranteed by
U.S. Government Y Y N Y
. Issued or guaranteed by
U.S. Government agencies
and instrumentalities Y Y N N
- -----------------------------------------------------------------------------
BANK OBLIGATIONS. U.S. Y Y N N
dollar--denominated only;
includes CDs, bankers'
acceptances, bank notes,
deposit notes and
interest-bearing savings
and time deposits, issued
by U.S. or savings
institutions with total
assets greater than $1
billion.
- -----------------------------------------------------------------------------
STRIPPED SECURITIES:
. Participation in trusts
that hold U.S. treasury
and agency securities Y Y Y N
. U.S. Treasury-issued
receipts Y Y Y 35%
. Non-U.S. Treasury
receipts Y Y Y N
- -----------------------------------------------------------------------------
MUNICIPAL REVENUE N N Y N
OBLIGATIONS. Obligations
the interest on which is
paid solely from the
revenues of similar
projects.
- -----------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS. 5% 5% no more N
Payable from the issuer's than
general revenue, the 25% in any
revenue of a specific one state
project, current revenues
or a reserve fund.
- -----------------------------------------------------------------------------
REVERSE REPURCHASE Y Y N Y
AGREEMENTS. A Fund sells
securities and agrees to
buy them back later at an
agreed upon time and
price. A method to borrow
money for temporary
purposes.
- -----------------------------------------------------------------------------
GUARANTEED INVESTMENT Y Y N N
CONTRACTS. Agreements of a
Fund to make payments to
an insurance company's
general account in
exchange for a minimum
level of interest based on
an index.
</TABLE>
- --------------------------------------------------------------------------------
47
<PAGE>
<TABLE>
<CAPTION>
U.S.
INVESTMENTS AND INVESTMENT CASH MONEY TAX-FREE TREASURY
PRACTICES INVESTMENT MARKET MONEY MONEY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WHEN-ISSUED PURCHASES AND Y Y Y Y
FORWARD COMMITMENTS.
Agreement by a Fund to
purchase securities at a set
price, with payment and
delivery in the future. The
value of the securities may
change between the time the
price is set and payment. Not
to be used for speculation.
- --------------------------------------------------------------------------------
FOREIGN SECURITIES. Debt 25% 25% N N
obligations issued by foreign
governments, and their
agencies, instrumentalities
or political subdivisions,
supranational organizations,
and foreign corporations or
convertible into foreign
stock.
- --------------------------------------------------------------------------------
ILLIQUID SECURITIES. Typically 10%(1) 10%(1) 10%(1) 10%(1)
there is no ready market for
these securities, which
limits the ability to sell
them for full market value,
or there are legal
restrictions on their resale
by a Fund.
- --------------------------------------------------------------------------------
LENDING SECURITIES. May lend 25% 33 1/3% 25% 25%
securities to financial
institutions which pay for
the use of securities. May
increase return. Slight risk
of borrower failing
financially.
</TABLE>
- --------------------------------------------------------------------------------
KEY:
Y = Investment allowed without restriction
N = Investment not allowed
(1) Based on net assets
48
<PAGE>
WHAT ARE THE RISKS OF INVESTING IN THE FUNDS?
All Funds
Consistent with a long-term investment approach, investors in a Fund should
be prepared and able to maintain their investments during periods of adverse
market conditions. By itself, no Fund constitutes a balanced investment
program and there is no guarantee that any Fund will achieve its investment
objective since there is uncertainty in every investment.
A fund's risk is mostly dependent on the types of securities it purchases
and its investment techniques. Certain Funds are authorized to use options,
futures, and forward foreign currency exchange contracts, which are types of
derivative instruments. Derivative instruments are instruments that derive
their value from a different underlying security, index or financial
indicator. The use of derivative instruments exposes a Fund to additional
risks and transaction costs. Risks inherent in the use of derivative
instruments include: (1) the risk that interest rates, securities prices and
currency markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates or
currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select portfolio securities; (4)
the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when
desired; (5) leverage risk, that is, the risk that adverse price movements in
an instrument can result in a loss substantially greater than the Fund's
initial investment in that instrument (in some cases, the potential loss is
unlimited); and (6) particularly in the case of privately-negotiated
instruments, the risk that the counterparty will not perform its obligations,
which could leave the Fund worse off than if it had not entered into the
position.
The risks of the various investment techniques the Funds use are described
in more detail in the SAI.
Equity Funds
Investing in these Funds may be less risky than investing in individual
stocks due to the diversification of investing in a portfolio of many
different stocks; however, such diversification does not eliminate all risks.
Because the Funds invest mostly in Equity Securities, rises and falls in the
stock market in general, as well as in the value of particular Equity
Securities held by the Funds, can affect the Funds' performance. Your
investment in the Funds is not guaranteed. The net asset value of the Funds
will change daily and you might not recoup the amount you invest in the Funds.
Bond Funds, Tax-Free Funds and Short Term Treasury Fund
The value of each Fund's shares, like the value of most securities, will
rise and fall in response to changes in economic conditions, interest rates
and the market's perception of the underlying securities held by the Fund.
Investing in the Funds may be less risky than investing in individual Fixed
Income Securities due to the diversification of investing in a portfolio
containing many different Fixed Income Securities; however, such diversity
does not eliminate all risks. The Funds invest mostly in Fixed Income
Securities, whose values typically rise when interest rates fall and fall when
interest rates rise. Fixed Income Securities with shorter maturities (time
period until repayment) tend to be less affected by interest rate changes, but
generally offer lower yields than securities with longer maturities. Current
yield levels should not be considered representative of yields for any future
time. Securities with variable interest rates may exhibit greater price
variations than ordinary securities. Zero coupon bonds are subject to greater
market fluctuations from changing interest rates than debt obligations of
comparable maturities which make current distributions of interest.
Money Market Funds
Each Money Market Fund attempts to maintain a constant net asset value of
$1.00 per share. However, your investment in the Funds is not guaranteed.
49
<PAGE>
Although the Cash Investment Fund, Money Market Fund and U.S. Treasury Money
Market Fund expect under normal market conditions to be as fully invested as
possible, each Fund may hold uninvested cash pending investment of late
payments for purchase orders (or other payments) or during temporary defensive
periods. Uninvested cash will not earn income. In general, investments in the
Cash Investment Fund, Money Market Fund and U.S. Treasury Money Market Fund
will not earn as high a level of current income as longer-term or lower
quality securities. Longer-term and lower quality securities, however,
generally have less liquidity, greater market risk and more fluctuation in
market value.
Although the Tax-Free Money Market Fund may invest more than 25% of its nets
assets in municipal revenue obligations, the interest on which is paid solely
from revenues of similar projects, the Tax-Fee Money Market Fund does not
intend to do so on a regular basis. If it does, the Fund will be riskier than
a fund which does not concentrate to such an extent on similar projects.
Micro-Cap Equity Fund, Small-Cap Value Fund, Mid-Cap Growth Fund and Small
Company Growth Fund
The Advisor believes that smaller companies can provide greater growth
potential and potentially higher returns than larger firms. Investing in
smaller companies, however, is riskier than investing in larger companies. The
stock of smaller companies may trade infrequently and in lower volume, making
it more difficult for a Fund to sell the stocks of smaller companies when it
chooses. Smaller companies may have limited product lines, markets, financial
resources and distribution channels, which makes them more sensitive to
changing economic conditions. Stocks of smaller companies historically have
had larger fluctuations in price than stocks of larger companies included in
the S&P 500.
Framlington Emerging Markets Fund, Framlington International Growth Fund,
International Equity Fund and International Bond Fund
Investing in any these Funds, with its larger investment in Foreign
Securities, may involve more risk than investing in a U.S. fund for the
following reasons: (1) there may be less public information available about
foreign companies than is available about U.S. companies; (2) foreign
companies are not generally subject to the uniform accounting, auditing and
financial reporting standards and practices applicable to U.S. companies; (3)
foreign markets have less volume than U.S. markets, and the securities of some
foreign companies are less liquid and more volatile than the securities of
comparable U.S. companies; (4) there may be less government regulation of
stock exchanges, brokers, listed companies and banks in foreign countries than
in the United States; (5) the Fund may incur fees on currency exchanges when
it changes investments from one country to another; (6) the Fund's foreign
investments could be affected by expropriation, confiscatory taxation,
nationalization of bank deposits, establishment of exchange controls,
political or social instability or diplomatic developments; (7) fluctuations
in foreign exchange rates will affect the value of the Fund's portfolio
securities, the value of dividends and interest earned, gains and loses
realized on the sale of securities, net investment income and unrealized
appreciation or depreciation of investments; and (8) possible imposition of
dividend or interest withholding by a foreign country.
Real Estate Equity Investment Fund
The Fund will invest primarily in the real estate industry and may invest
more than 25% of its assets in any one sector of the real estate industry. As
a result, the Fund will be particularly vulnerable to declines in real estate
prices and new construction rates. The Fund may be riskier than a fund
investing in a broader range of industries.
Framlington Healthcare Fund
The Fund will invest most of its assets in the healthcare industry, which is
particularly affected by rapidly changing technology and extensive government
regulation, including cost containment measures. The Fund may be riskier than
a fund investing in a broader range of industries.
50
<PAGE>
International Bond Fund, Michigan Triple Tax-Free Bond Fund and Tax-Free
Intermediate Bond Fund
These Funds are non-diversified and hold securities of a limited number of
issuers. The Funds may, therefore, pose a greater risk to investors than an
investment in a diversified fund. The Michigan Triple Tax-Free Bond Fund
invests primarily in Michigan Municipal Obligations. If Michigan issuers
suffer serious financial difficulties jeopardizing their ability to pay their
obligations, the value of such Fund may decline.
PERFORMANCE
HOW IS THE FUNDS' PERFORMANCE CALCULATED?
There are various ways in which the Funds may calculate and report their
performance. Performance is calculated separately for each class of shares.
One method is to show a Fund's total return. Cumulative total return is the
percentage change in the value of an amount invested in a class of shares of a
Fund over a stated period of time and takes into account reinvested dividends.
Cumulative total return most closely reflects the actual performance of a
Fund.
Average annual total return refers to the average annual compounded rates of
return over a specified period on an investment in shares of a Fund determined
by comparing the initial amount invested to the ending redeemable value of the
amount, taking into account reinvested dividends.
Each Fund may also publish its current yield. Yield is the net investment
income generated by a share of a Fund during a 30-day period divided by the
maximum offering price on the 30th day.
The current yield of shares in the Money Market Funds refers to the net
income generated by an investment in shares over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. "Effective yield" is calculated similarly but,
when annualized, the income earned by an investment in a class is assumed to
be reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The "tax-
equivalent yield" of shares of the Tax-Free Money Market Fund may also be
quoted from time to time, which shows the level of taxable yield needed to
produce an after-tax equivalent to the tax-free yield of a particular class.
This is done by increasing the yield (calculated as above) by the amount
necessary to reflect the payment of Federal and/or state income taxes at a
stated rate.
You should be aware that (i) past performance does not indicate how a Fund
will perform in the future; and (ii) each Fund's return and net asset value
will fluctuate, so you cannot necessarily use a Fund's performance data to
compare it to investment in certificates of deposit, savings accounts or other
investments that provide a fixed or guaranteed yield.
Each Fund may compare its performance to that of other mutual funds, such as
the performance of similar funds reported by Lipper Analytical Services, Inc.
or information reported in national financial publications (such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times) or
in local or regional publications. Each Fund may also compare its total return
to broad-based indices. These indices show the value of selected portfolios of
securities (assuming reinvestment of interest and dividends) which are not
managed by a portfolio manager. The Funds may report how they are performing
in comparison to the Consumer Price Index, an indication of inflation reported
by the U.S. Government.
WHERE CAN I OBTAIN PERFORMANCE DATA?
The Wall Street Journal and certain local newspapers report information on
the performance of mutual funds. In addition, performance information is
contained in the Funds' annual report dated June 30 of each year and semi-
annual report dated December 31 of each year, which will automatically be
mailed to shareholders. To obtain copies of financial reports or performance
information, call (800) 438-5789.
51
<PAGE>
PURCHASES AND EXCHANGES OF SHARES
The following persons may purchase Class Y Shares:
. Fiduciary and discretionary accounts of institutions
. institutional investors (including banks, savings institutions, credit
unions and other financial institutions, pension, profit sharing and
employee benefit plans and trusts, insurance companies, investment
companies, investment advisors and broker-dealers acting either for their
own accounts or for the accounts of institutional investors)
. Directors, trustees, officers and employees of the Trust, the Company,
Framlington, the Advisor and the Distributor
. the Advisor's investment advisory clients
. family members of employees of the Advisor
Each Fund also issues other classes of shares, which have different sales
charges, expense levels and performance. Call (800) 438-5789 to obtain more
information concerning the Funds' other classes of shares.
WHAT PRICE DO I PAY FOR SHARES?
Class Y Shares are sold at the net asset value next determined by the Funds
without any initial sales charge. You should be aware that broker-dealers
(other than the Funds' Distributor) may charge investors additional fees if
shares are purchased through them.
Except in certain limited circumstances, each Fund determines its net asset
value ("NAV") on each day the New York Stock Exchange ("NYSE") is open for
trading (a "Business Day") at the close of such trading (normally 4:00 p.m.
Eastern time). The Money Market Funds also determine their NAVs at 2:45 p.m.
(Eastern time). If we receive your purchase order and payment for a Money
Market Fund by 2:45 p.m. (Eastern time) on a Business Day, you will receive
dividends on that day. Each Fund calculates NAV separately for each class of
shares of a Fund. NAV is calculated by totaling the value of all of the assets
of a Fund allocated to a particular class of shares, subtracting the Fund's
liabilities and expenses charged to that class and dividing the result by the
number of shares of that class outstanding.
WHEN CAN I PURCHASE SHARES?
Shares of each Fund are sold on a continuous basis and can be purchased on
any Business Day.
WHAT IS THE MINIMUM REQUIRED INVESTMENT?
The minimum initial investment by fiduciary and discretionary accounts of
institutions and institutional investors for Class Y Shares of the Real Estate
Equity Investment Fund is $250,000 and $500,000 for Class Y Shares of all
other Funds. Other types of investors are not subject to any minimum required
investment.
HOW CAN I PURCHASE SHARES?
You can purchase Class Y Shares in a number of different ways. You may place
orders for Class Y Shares directly through the Transfer Agent or the
Distributor or through arrangements with a financial institution.
. THROUGH A FINANCIAL INSTITUTION. You may purchase shares through a
financial institution through procedures established with that
institution. Confirmations of share purchases will be sent to the
institution.
52
<PAGE>
. BY MAIL. You may open an account by mailing a completed and signed
Account Application Form and a check or other negotiable bank draft
(payable to the Munder Funds) to: THE MUNDER FUNDS, C/O FIRST DATA
INVESTOR SERVICES GROUP, P.O. BOX 5130, WESTBOROUGH, MASSACHUSETTS 01581-
5130. You can obtain an Account Application Form by calling (800) 438-
5789. For additional investments, send a letter stating the Fund and
share class you wish to purchase, your name and your account number with
a check for $50 or more to the address listed above.
. BY WIRE. You may make additional investments in the Funds by wire. Wire
instructions must state the Fund name, share class, your registered name
and your account number. Your bank wire should be sent through the
Federal Reserve Bank Wire System to:
Boston Safe Deposit and Trust Company
Boston, MA
ABA# 011001234
DDA# 16-798-3
Account No.:
Note that banks may charge fees for transmitting wires.
. AUTOMATIC INVESTMENT PLAN ("AIP"). Under the AIP, you may arrange for
periodic investments in a Fund through automatic deductions from a
checking or savings account. To enroll in the AIP you should complete the
AIP Application Form or call the Funds at (800) 438-5789. The minimum
pre-authorized investment amount is $50. You may discontinue the AIP at
any time. We may discontinue the AIP on 30 days' written notice to you.
You will not be issued a share certificate, unless you request one in
writing. We reserve the right to (i) reject any purchase order if, in our
opinion, it is in the Funds' best interest to do so and (ii) suspend the
offering of shares of any Class for any period of time. You may pay for shares
of each Fund, other than the Real Estate Equity Investment Fund, with
securities which the Fund is allowed to hold.
See the SAI for further information regarding purchases of the Funds'
shares.
HOW CAN I EXCHANGE SHARES?
You may exchange Class Y Shares of the Funds for Class Y Shares of other
funds of the Trust, the Company or Framlington based on their relative net
asset values.
You must meet the minimum purchase requirements for the fund of the Trust,
the Company or Framlington that you purchase by exchange. You must pay any
difference in sales charge at the time of exchange. Please note that a share
exchange may be a taxable event and accordingly, you may realize a taxable
gain or loss. Before making an exchange request, read the Prospectus of the
fund you wish to purchase by exchange. You can obtain a Prospectus for any
fund of the Trust, the Company or Framlington by contacting your broker or the
Funds at (800) 438-5789. Brokers may charge a fee for handling exchanges.
We may modify or terminate the exchange privilege at any time. You will be
given notice of any material modifications except where notice is not
required.
REDEMPTIONS OF SHARES
WHAT PRICE DO I RECEIVE FOR REDEEMED SHARES?
The redemption price is the net asset value next determined after we receive
the redemption request in proper order.
53
<PAGE>
WHEN CAN I REDEEM SHARES?
You can redeem shares on any Business Day, provided all required documents
have been received by the Transfer Agent. A Fund may temporarily stop
redeeming shares when the NYSE is closed or trading on the NYSE is restricted,
when an emergency exists and the Funds cannot sell their assets or accurately
determine the value of their assets or if the SEC orders the Funds to suspend
redemptions.
HOW CAN I REDEEM SHARES?
Redemption orders are effected at the net asset value per share next
determined after receipt of the order by the Transfer Agent. Shares held by an
institution on behalf of its customers must be redeemed in accordance with
instructions and limitations pertaining to the account at that institution.
. INVOLUNTARY REDEMPTION. We may redeem your account if its value falls
below $500 as a result of redemptions (but not as a result of a decline
in net asset value). You will be notified in writing and allowed 60 days
to increase the value of your account to the minimum investment level.
. FREE CHECKWRITING. Free checkwriting is available to holders of Class Y
Shares of the Bond Funds (other than International Bond Fund), Tax-Free
Funds and Money Market Funds who complete the Signature Card Section of
the Account Application Form. You may write checks in the amount of $500
or more and you may not close a Fund account by writing a check. We may
change or terminate this program on 30 days' notice to you.
WHEN WILL I RECEIVE REDEMPTION AMOUNTS?
If we receive a redemption order for a Fund before 4:00 p.m. (Eastern time)
on a Business Day, we will normally wire payment to the redeeming institution
on the next Business Day. With respect to a Money Market Fund, if we receive a
redemption order before noon (Eastern time) on a Business Day, we will
normally wire payment on the same Business Day. We may delay wiring redemption
proceeds for up to seven days if we feel an earlier payment would have a
negative impact on the Fund.
STRUCTURE AND MANAGEMENT OF THE FUNDS
HOW ARE THE FUNDS STRUCTURED?
The Trust, the Company and Framlington are each an open-end management
investment company, which is a mutual fund that sells and redeems shares every
day that it is open for business. They are managed under the direction of
their governing Boards of Trustees and Directors, which are responsible for
the overall management of the Trust, the Company and Framlington and supervise
the Funds' service providers. The Trust and Framlington are organized as
Massachusetts business trusts and the Company is a Maryland corporation.
WHO MANAGES AND SERVICES THE FUNDS?
INVESTMENT ADVISOR. The Funds' investment advisor is Munder Capital
Management, a Delaware general partnership with its principal offices at 480
Pierce Street, Birmingham, Michigan 48009. The principal partners of the
Advisor are MCM, Munder Group LLC, Woodbridge and WAM Holdings, Inc. ("WAM").
MCM was founded in February, 1985 as a Delaware corporation and was a
registered investment advisor. Woodbridge and WAM are indirect, wholly-owned
subsidiaries of Comerica Incorporated. Mr. Lee P. Munder, the Advisor's chief
executive officer, indirectly owns or controls a majority of the partnership
interests in the Advisor. As of June 30, 1997, the Advisor and its affiliates
had approximately $41 billion in assets under management, of which $22 billion
were invested in equity securities, $8 billion were invested in money market
or other short-term instruments, and $11 billion were invested in other fixed
income securities.
54
<PAGE>
The Advisor provides overall investment management for each Fund (other than
the Framlington Funds), provides research and credit analysis, and is
responsible for all purchases and sales of portfolio securities.
The Advisor is responsible for the overall management of the Framlington
Funds. Framlington Overseas Investment Management Limited, the sub-advisor of
the Framlington Funds, is responsible for buying and selling securities for the
Framlington Funds. It is an indirect subsidiary of Framlington Holdings Limited
which is, in turn, owned 49% by the Advisor and 51% by Credit Commercial de
France S.A., a French banking corporation listed on the Societe des Bourses
Francaises.
During the fiscal year ended June 30, 1997, the Advisor was paid an advisory
fee at an annual rate based on the average daily net assets of each Fund (after
waivers if any) as follows:
<TABLE>
<S> <C>
Accelerating Growth Fund........... 0.75%
Balanced Fund...................... 0.65%
Growth & Income Fund............... 0.75%
International Equity Fund.......... 0.75%
Micro-Cap Equity Fund.............. 1.00%
Mid-Cap Growth Fund................ 0.74%
Multi-Season Growth Fund........... 0.75%
Real Estate Equity Investment Fund. 0.74%
Small-Cap Value Fund............... 0.75%
Small Company Growth Fund.......... 0.75%
Value Fund......................... 0.74%
Framlington Emerging Markets Fund.. 1.25%
Framlington Healthcare Fund........ 1.00%
</TABLE>
<TABLE>
<S> <C>
Framlington International Growth
Fund............................. 1.00%
Bond Fund......................... 0.50%
Intermediate Bond Fund............ 0.50%
International Bond Fund........... 0.50%
U.S. Government Income Fund....... 0.50%
Michigan Triple Tax-Free Fund..... 0.50%
Tax-Free Bond Fund................ 0.50%
Tax-Free Intermediate Bond Fund... 0.50%
Short Term Treasury Fund.......... 0.25%
Money Market Fund................. 0.40%
Cash Investment Fund.............. 0.35%
Tax-Free Money Market Fund........ 0.35%
U.S. Treasury Money Market Fund... 0.35%
</TABLE>
The Advisor waived advisory fees during the past fiscal year for the Multi-
Season Growth Fund. The Advisor is also entitled to receive an annual fee equal
to 1.00% of the first $500 million of the Multi-Season Growth Fund's average
daily net assets and .75% of the Fund's average daily net assets over $500
million.
The Sub-Advisor is entitled to receive an advisory fee equal to one-half of
the fee paid to the Advisor by each of the Framlington Funds as compensation
for its services as Sub-Advisor. The Advisor pays fees to the Sub-Advisor and
the Framlington Funds pay no fees directly to the Sub-Advisor.
The Advisor may, from time to time, make payments to banks, broker-dealers or
other financial institutions for certain services to the Funds and/or their
shareholders, including sub-administration, sub-transfer agency and shareholder
servicing. The Advisor makes such payments out of its own resources and there
are no additional costs to the Funds or their shareholders.
The Advisor selects broker-dealers to execute portfolio transactions for the
Funds based on best price and execution terms. The Advisor may consider as a
factor the number of shares sold by the broker-dealer.
PERFORMANCE INFORMATION. The tables below contain performance information for
certain Funds created through the conversion of a common or collective trust
fund which had investment objectives and policies materially equivalent to
those of the corresponding Funds. Immediately before and after the conversion,
the same person managed both the common or collective trust fund and the
corresponding Fund.
The table for each Fund
. includes the average annual total returns of the common or collective
trust fund and the average annual total returns of the corresponding Fund
linked together
. assumes that net investment income and dividends have been reinvested
. assumes that the common or collective trust fund paid the same levels of
fees and expenses as the corresponding Fund currently pays
. does not reflect any potential negative impact on the common and
collective trust funds' performance if they had been subjected to the
same regulatory restrictions (the 1940 Act and the Internal Revenue Code
of 1986, as amended) as the corresponding Fund
. indicates past performance only and does not predict future results
55
<PAGE>
<TABLE>
<CAPTION>
MUNDER ACCELERATING
PERIOD ENDED GROWTH FUND
JUNE 30, 1997 (CLASS Y)* S&P 500**
------------- ------------------- ---------
<S> <C> <C>
1 Year............................................ 5.07% 34.68%
3 Years........................................... 18.29% 28.83%
5 Years........................................... 14.91% 19.76%
Inception on January 1, 1990...................... 12.64% 16.24%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** S&P 500 performance shows total return in U.S. dollars but does not reflect
the deduction of fees, expenses and taxes. Source: Lipper Analytical
Services, Inc.
<TABLE>
<CAPTION>
MUNDER SMALL COMPANY
PERIOD ENDED GROWTH FUND RUSSELL 2000
JUNE 30, 1997 (CLASS Y)* INDEX**
------------- -------------------- ------------
<S> <C> <C>
1 Year........................................ 19.26% 16.33%
3 Years....................................... 29.50% 20.07%
5 Years....................................... 21.94% 17.88%
10 Years...................................... 15.03% 11.16%
Inception on December 31, 1982................ 15.42% 13.01%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** Russell 2000 Index performance shows total return in U.S. dollars but does
not reflect the deduction of fees, expenses and taxes. Source: Lipper
Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER INTERNATIONAL
PERIOD ENDED EQUITY FUND FT/S&P ACTUARIES
JUNE 30, 1997 (CLASS Y)* WORLD INDEX EX. U.S.**
------------- -------------------- ----------------------
<S> <C> <C>
1 Year.............................. 18.35% 12.90%
3 Years............................. 13.37% 9.09%
5 Years............................. 11.42% 12.90%
Inception on September 30, 1990..... 11.65% 11.27%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** FT/S&P Actuaries World Index ex. U.S. performance shows total return in
U.S. dollars but does not reflect the deduction of fees, expenses and
taxes. Source: Ibbotson Associates, Inc.
<TABLE>
<CAPTION>
MUNDER
PERIOD ENDED INDEX 500 FUND S&P 500
JUNE 30, 1997 (CLASS Y)* INDEX**
------------- -------------- -------
<S> <C> <C>
1 Year................................................... 34.19% 34.68%
3 Years.................................................. 28.49% 28.83%
5 Years.................................................. 19.40% 19.76%
Inception on January 27, 1988............................ 16.90% 17.46%
</TABLE>
- --------
* Converted from collective trust fund to mutual fund on December 1, 1991.
** S&P 500 Index performance shows total return in U.S. dollars but does not
reflect the deduction of fees, expenses and taxes. Source: Lipper
Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER
BOND FUND LEHMAN BROTHERS
PERIOD ENDED (CLASS GOV'T/CORP. BOND
JUNE 30, 1997 Y)* INDEX**
------------- --------- ----------------
<S> <C> <C>
1 Year............................................... 6.98% 7.75%
3 Years.............................................. 7.48% 8.34%
5 Years.............................................. 5.42% 7.23%
10 Years............................................. 7.76% 8.72%
</TABLE>
- --------
*Converted from collective trust fund to mutual fund on December 1, 1991.
**Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees, expenses
and taxes.
Source: Lipper Analytical Services, Inc.
56
<PAGE>
<TABLE>
<CAPTION>
MUNDER
U.S. GOVERNMENT LEHMAN BROTHERS
PERIOD ENDED INCOME FUND GOV'T/CORP. BOND
JUNE 30, 1997 (CLASS Y)* INDEX**
------------- --------------- ----------------
<S> <C> <C>
1 Year......................................... 7.75% 7.75%
3 Years........................................ 7.66% 8.34%
5 Years........................................ 6.34% 7.23%
10 Years....................................... 8.06% 8.72%
</TABLE>
- --------
*Converted from collective trust fund to mutual fund on July 5, 1994.
**Lehman Brothers Government/Corporate Bond Index performance shows total
return in U.S. dollars but does not reflect the deduction of fees, expenses
and taxes.
Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
LEHMAN
MUNDER BROTHERS
INTERMEDIATE INTERMEDIATE
PERIOD ENDED BOND FUND GOV'T/CORP.
JUNE 30, 1997 (CLASS Y)* BOND INDEX**
------------- ------------ ------------
<S> <C> <C>
1 Year................................................ 6.60% 7.22%
3 Years............................................... 6.83% 7.51%
5 Years............................................... 5.54% 6.49%
10 Years.............................................. 7.27% 8.16%
Inception on March 31, 1982........................... 9.06% 10.31%
</TABLE>
- --------
*Converted from collective trust fund to mutual fund on December 1, 1991.
**Lehman Brothers Intermediate Government/Corporate Bond Index performance
shows total return in U.S. dollars but does not reflect the deduction of
fees, expenses and taxes.
Source: Lipper Analytical Services, Inc.
<TABLE>
<CAPTION>
MUNDER
TAX-FREE
BOND FUND LEHMAN
PERIOD ENDED (CLASS 20-YEAR MUNI
JUNE 30, 1997 Y)* BOND INDEX**
------------- --------- ------------
<S> <C> <C>
1 Year................................................... 7.40% 9.42%
3 Years.................................................. 6.93% 8.86%
5 Years.................................................. 6.52% 7.86%
10 Years................................................. 7.01% 9.05%
</TABLE>
- --------
*Converted from common trust fund to mutual fund on July 21, 1994.
**Lehman 20-Year Municipal Bond Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Lipper Analytical Services, Inc.
INDICES
The S&P 500 is an unmanaged index of common stock prices, including
reinvestment of dividends.
The Russell 2000 Index is a capitalization weighted total return index which
is comprised of 2,000 of the smallest capitalized U.S. domiciled companies
whose stock is traded in the United States on the New York Stock Exchange,
American Stock Exchange and the NASDAQ.
The FT/S&P Actuaries World Index ex. U.S. is an unmanaged index used to
portray global equity market excluding the U.S. The Index is weighted based on
the market capitalization of those stocks selected to represent each country
and includes gross reinvestment of dividends.
The Lehman Brothers Government/Corporate Bond Index is weighted composite of
(i) Lehman Brothers Government Bond Index, which is comprised of all publicly
issued, non-convertible debt of the U.S. Government or any agency thereof,
quasi-Federal corporations, and corporate debt guaranteed by the U.S.
Government and (ii) Lehman Brothers Corporate Bond Index, which is comprised
of all public fixed-rate, non-convertible investment-grade domestic corporate
debt, excluding collateralized mortgage obligations.
57
<PAGE>
The Lehman Brothers Intermediate Government/Corporate Bond Index is a
weighted composite of (i) Lehman Brothers Intermediate Government Bond Index,
which is comprised of all publicly issued, non-convertible debt of the U.S.
Government or any agency thereof, quasi-Federal corporations and corporate
debt guaranteed by the U.S. Government with a maturity of between one and ten
years and (ii) Lehman Brothers Corporate Bond Index.
The Lehman Brothers 20-Year Municipal Bond Index is a performance benchmark
for the long-term investment-grade tax-exempt bond market.
PERFORMANCE OF FRAMLINGTON ACCOUNTS MANAGED BY THE SUB-ADVISOR
The tables below contain certain performance information provided by the
Sub-Advisor relating to accounts managed by the Sub-Advisor and which have
investment objectives and policies similar to those of the corresponding
Framlington Funds. See "Fund Choices" and "What are the Funds' Investments and
Investment Practices." In the case of the Healthcare portfolio performance,
the data relates to a unit trust organized under the laws of the United
Kingdom managed by the same personnel of the Sub-Advisor with similar
investment objectives and policies to the Framlington Healthcare Fund. In the
case of Emerging Markets portfolio performance, the data relates to a
Canadian-based institutional emerging markets portfolio managed by the same
personnel of the Sub-Advisor with similar investment objectives and policies
to the Framlington Emerging Markets Fund.
The trust account performance is provided by Micropal, an independent
research organization that is a recognized source of performance data in the
UK unit trust industry. The data is U.S. dollar adjusted on the basis of
exchange rates provided by Datastream using WM/Reuters closing rates. The
performance figures are net of brokerage commissions, actual investment
advisory fees and initial sales charges. The data assume the reinvestment of
net income and capital gain distributions. The trust account returns are
calculated using beginning offer and ending bid prices for periods ended
December 31, 1996.
You should not rely on the following performance data of the Sub-Advisor's
client accounts as an indication of future performance of the Framlington
Funds. It should be noted that the management of the Funds will be affected by
regulatory requirements under the Investment Company Act of 1940 (the "1940
Act") and requirements of the Internal Revenue Code of 1986, as amended, to
qualify as a regulated investment company.
<TABLE>
<CAPTION>
PERIOD ENDED U.K. S&P HEALTHCARE
DECEMBER 31, HEALTH COMPOSITE INDEX
1996 PORTFOLIO CAPITAL CHANGE
------------ --------- ---------------
<S> <C> <C>
1 Year............................................... 10.75% 18.48%
3 Years.............................................. 96.93% 100.49%
5 Years.............................................. 99.43% 45.60%
Inception on April 30, 1987.......................... 411.08% 239.64%
</TABLE>
Performance for the Health trust account is calculated on an offer-bid
basis; US Dollar adjusted total return net of all management fees but not
reflective U.K. tax. Source: Micropal.
S&P Healthcare Composite Index performance shows capital change in U.S.
Dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
<TABLE>
<CAPTION>
MSCI
EMERGING
CANADIAN MARKETS
PERIOD ENDED EMERGING FREE
DECEMBER 31, MARKETS TOTAL
1996 ACCOUNT RETURN
------------ -------- --------
<S> <C> <C>
1 Year....................................................... 5.16 % 6.03 %
Inception on November 1, 1994................................ (3.68)% (12.37)%
</TABLE>
58
<PAGE>
MSCI Emerging Markets Free Index performance shows total return in U.S.
dollars but does not reflect the deduction of fees, expenses and taxes.
Source: Datastream.
The performance of the Canadian institutional account is measured by the
World Markets Company on a total return basis and has been re-calculated net
of the management fee charged the Canadian institutional account. The
inception date of the Canadian institutional account is November 1, 1994.
INDICES
The S&P Healthcare Composite Index is the composite Healthcare section of
the S&P 500 Index as defined and tracked by S&P. This index covers securities
listed in the USA only.
The MSCI Emerging Markets Free Index is maintained by Morgan Stanley Capital
International, covers 26 countries and represents the investment opportunities
in emerging markets available to foreign investors. Total return is calculated
using the prices of the companies tracked and assumes the reinvestment of
dividends.
TRANSFER AGENT. First Data Investor Services Group, Inc. is the Funds'
transfer agent. The Transfer Agent is a wholly-owned subsidiary of First Data
Corporation and is located at 53 State Street, Boston, Massachusetts 02109.
ADMINISTRATOR. State Street Bank and Trust Company ("State Street" or the
"Administrator") is the Funds' administrator. State Street is located at 225
Franklin Street, Boston, Massachusetts 02110. State Street generally assists
the Company, the Trust and Framlington in all aspects of their administration
and operations including the maintenance of financial records and fund
accounting. As compensation for its services, State Street is entitled to
receive fees, based on the aggregate daily net assets of the Funds and certain
other investment portfolios that are advised by the Advisor for which it
provides services, computed daily and payable monthly at the annual rate of
.051% of the first $7.5 billion of net assets, plus .045% of the next $2.5
billion of net assets, plus .03% of the next $2.5 billion of net assets, plus
.02% of net assets over $12.5 billion.
State Street has entered into a Sub-Administration Agreement with the
Distributor under which the Distributor provides certain administrative
services with respect to the Funds. State Street pays the Distributor a fee
for these services out of its own resources at no cost to the Funds.
CUSTODIAN. Comerica Bank (the "Custodian"), whose principal business address
is One Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, provides
custodial services to the Funds. No compensation is paid to the Custodian for
its services. State Street also serves as Sub-Custodian to the Funds. As
compensation for its services, the Sub-Custodian is entitled to receive fees,
based on the aggregate average daily net assets of the Funds and certain other
investment portfolios that are advised by the Advisor for which the Sub-
Custodian provides services, computed daily and payable monthly at an annual
rate of 1.00% of average daily net assets. The Sub-Custodian also receives
certain transaction based fees.
DISTRIBUTOR. Funds Distributor Inc. is the distributor of the Funds' shares
and is located at 60 State Street, Boston, Massachusetts 02109. It markets and
sells the Funds' shares.
For an additional description of the services performed by the
Administrator, Transfer Agent, the Custodian, the Sub-Custodian and the
Distributor, see the SAI.
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
All shareholders have equal voting, liquidation and other rights. You are
entitled to one vote for each share you hold and a fractional vote for each
fraction of a share you hold. You will be asked to vote on matters affecting
the Trust, the Company or Framlington as a whole and affecting your particular
Fund. You will not vote by Class unless expressly required by law or when the
Trustees or Directors determine the matter to be voted on affects only the
interests of the holders of a particular class of shares. The Trust, the
Company and Framlington will not hold annual shareholder meetings, but special
meetings may be held at the written request of shareholders owning more than
10% of outstanding shares for the purpose of removing a Trustee or Director.
Under Massachusetts law, it is possible that a shareholder may be personally
liable for the Trust's or Framlington's obligations. If a shareholder were
required to pay a debt of a Fund, however, the Trust and Framlington have
committed to reimburse the shareholder in full from their assets. The SAI
contains more information regarding voting rights.
59
<PAGE>
Comerica Bank currently has the right to vote a majority of the outstanding
shares of the Funds as agent, custodian or trustee for its customers and
therefore it is considered to be a controlling person of the Trust, the
Company and Framlington.
DIVIDENDS, DISTRIBUTIONS AND TAXES
WHEN WILL I RECEIVE DISTRIBUTIONS FROM THE FUNDS?
As a shareholder, you are entitled to your share of net income and capital
gains, if any, on a Fund's investments. The Funds pass their earnings along to
investors in the form of dividends. Dividend distributions are the dividends
or interest earned on investments after expenses. The Accelerating Growth
Fund, Balanced Fund, Growth & Income Fund, Small Company Growth Fund and
International Bond Fund pay dividends quarterly. The Framlington Emerging
Markets Fund, Framlington Healthcare Fund, Framlington International Growth
Fund, International Equity Fund, Micro-Cap Equity Fund, Mid-Cap Growth Fund,
Multi-Season Growth Fund, Small-Cap Value Fund and Value Fund pay dividends at
least annually. The Bond Funds (other than the International Bond Fund) and
the Cash Investment Fund, Money Market Fund, U.S. Treasury Money Market Fund
and Tax-Free Money Market Fund pay dividends monthly.
Each Fund's net realized capital gains (including net short-term capital
gains), if any, are distributed at least annually.
It is possible that a Fund may make a distribution in excess of the Fund's
current and accumulated earnings and profits. You will treat such a
distribution as a return of capital which is applied against and reduces your
basis in your shares. To the extent that the amount of any such distribution
exceeds your basis in your shares, the excess will be treated by you as gain
from a sale or exchange of the shares.
HOW WILL DISTRIBUTIONS BE MADE?
Dividend and capital gains distributions will be paid in additional shares
of the same class of a Fund. If you wish to receive distributions in cash,
either indicate this request on your Account Application Form or notify the
Fund at (800) 438-5789.
ARE THERE TAX IMPLICATIONS OF MY INVESTMENTS IN THE FUNDS?
In general, as long as each Fund meets the requirements to qualify as a
regulated investment company ("RIC") under Federal tax laws, it will not be
subject to Federal income tax on its income and capital gains that it
distributes in a timely manner to its shareholders. Each Fund intends to
qualify annually as a RIC. Even if it qualifies as a RIC, a Fund may still be
liable for an excise tax on income that is not distributed in accordance with
a calendar year requirement; the Funds intend to avoid the excise tax by
making timely distributions.
Generally, you will owe tax on the amounts distributed to you, regardless of
whether you receive these amounts in cash or reinvest them in additional Fund
shares. Shareholders not subject to tax on their income generally will not be
required to pay any tax on amounts distributed to them. Federal income tax on
distributions to an IRA or to a qualified retirement plan will generally be
deferred.
Capital gains derived from sales of portfolio securities held by a Fund will
generally be designated as long-term or short-term. Recent tax law changes
have added a new category of mid-term capital gain; it is expected that
regulations will be issued regarding the proper tax treatment of mid-term and
other gains by shareholders of RICs. Distributions from a Fund's long-term
capital gains are generally taxed at the long-term capital gains rate
regardless of how long you have owned shares in the Fund. Dividends from other
sources are generally taxed as ordinary income.
60
<PAGE>
Dividends and capital gain distributions are generally taxable when you
receive them; however, if a distribution is declared in October, November or
December, but not paid until January of the following year, it will be
considered to be paid on December 31 in the year in which it was declared.
Shortly after the end of each year, you will receive from each Fund in which
you are a shareholder a statement of the amount and nature of the
distributions made to you during the year.
If you redeem, transfer or exchange Fund shares, you may have taxable gain
or a loss. If you hold Fund shares for six months or less, and during that
time you receive a capital gain dividend, any loss you realize on the sale of
these Fund shares will be treated as a long-term loss to the extent of the
earlier distribution.
Dividends and certain interest income earned from foreign securities by a
Fund may be subject to foreign withholding or other taxes. A Fund may be
permitted to pass on to its shareholders the right to a credit or deduction
for income or other tax credits earned from foreign investments and will do so
if possible. These deductions or credits maybe subject to tax law limitations.
If a Fund invests in certain "passive foreign investment companies"
("PFICs"), it will be subject to Federal income tax (and possibly additional
interest charges) on a portion of any "excess distribution" or gain from the
disposition of such shares, even if it distributes such income to its
shareholders. If a Fund elects to treat a PFIC as a "qualified electing fund"
("QEF") and the PFIC furnishes certain financial information in the required
form to such Fund, the Fund will instead be required to include in income each
year its allocable share of the ordinary earnings and net capital gains of the
QEF, regardless of whether received, and such amounts will be subject to the
various distribution requirements described above. The Funds may also elect to
mitigate the tax effects of owning PFIC stock by making an annual mark-to-
market election with respect to PFIC shares.
More information about the tax treatment of distributions from the Funds and
about other potential tax liabilities, including backup withholding for
certain taxpayers and information about tax aspects of dispositions of shares
of the Funds, is contained in the SAI. You should consult your tax advisor
regarding the impact owning Fund shares on your own personal tax situation,
including the applicability of any state and local taxes.
ADDITIONAL INFORMATION
SHAREHOLDER COMMUNICATIONS. You will receive unaudited Semi-Annual Reports
and Audited Annual Reports on a regular basis from the Funds. In addition, you
will also receive updated Prospectuses or Supplements to this Prospectus. In
order to eliminate duplicate mailings, the Funds will only send one copy of
the above communications to (1) accounts with the same primary record owner,
(2) joint tenant accounts, (3) tenant in common accounts and (4) accounts
which have the same address.
61
<PAGE>
PROY97 / FO41B / 10-97
Investment Advisor: Munder Capital Management
Distributed by: Funds Distributor, Inc.
<TABLE>
<CAPTION>
<S> <C>
Munder Accelerating Growth Fund Munder Framlington International Growth Fund
Munder Balanced Fund Munder Framlington Healthcare Fund
Munder Equity Selection Fund* Munder Bond Fund
Munder Index 500 Fund Munder Intermediate Bond Fund
Munder Growth & Income Fund Munder International Bond Fund
Munder International Equity Fund Munder Short Term Treasury Fund
Munder Micro-Cap Equity Fund Munder U.S. Government Income Fund
Munder Mid-Cap Growth Fund Munder Michigan Triple Tax-Free Bond Fund
Munder Multi-Season Growth Fund Munder Tax-Free Bond Fund
Munder Real Estate Equity Investment Fund Munder Tax-Free Intermediate Bond Fund
Munder Small-Cap Value Fund Munder Cash Investment Fund
Munder Small Company Growth Fund Munder Money Market Fund
Munder Value Fund Munder Tax-Free Money Market Fund
Munder Framlington Emerging Markets Fund Munder U.S. Treasury Money Market Fund
</TABLE>
(collectively, the "Funds")
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information, which has been filed with the
Securities and Exchange Commission (the "SEC"), provides supplementary
information pertaining to all classes of shares representing interests in each
of the investment portfolios listed above. The Munder Funds, Inc. (the
"Company") currently offers a selection of fourteen investment portfolios, ten
of which are described in this Statement of Additional Information; The Munder
Funds Trust (the "Trust") currently offers a selection of fifteen investment
portfolios, each of which is described in this Statement of Additional
Information; and The Munder Framlington Funds Trust ("Framlington") currently
offers a selection of three investment portfolios, each of which is described in
this Statement of Additional Information. This Statement of Additional
Information is not a prospectus, and should be read only in conjunction with the
Trust's, Framlington's and the Company's Prospectuses dated October 29, 1997. A
copy of each Prospectus may be obtained through Funds Distributor, Inc. (the
"Distributor"), or by calling (800) 438-5789. This Statement of Additional
Information is dated October 29, 1997. Shares of the Funds are not deposits
or obligations of, or guaranteed or endorsed by any bank, and are not insured or
guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency. An investment in the Funds involves investment
risks, including the possible loss of principal.
- ------------------------
* As of the date of this Statement of Additional Information, the Munder Equity
Selection Fund is not currently available for purchase.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TABLE OF CONTENTS
Page
General................................................................................................ 3
Fund Investments....................................................................................... 4
Risk Factors and Special Considerations -- Index 500 Fund...............................................21
Risk Factors and Special Considerations -- Michigan Bond Fund and
Tax-Free Intermediate Bond Fund...................................................................22
Investment Limitations..................................................................................24
Trustees, Directors and Officers........................................................................29
Investment Advisory and Other Service Arrangements......................................................34
Portfolio Transactions..................................................................................50
Additional Purchase and Redemption Information..........................................................53
Net Asset Value.........................................................................................56
Performance Information.................................................................................57
Taxes...................................................................................................66
Additional Information Concerning Shares................................................................73
Miscellaneous...........................................................................................75
Registration Statement..................................................................................89
Financial Statements....................................................................................89
Appendix A.............................................................................................A-1
Appendix B.............................................................................................B-1
</TABLE>
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information or in
each Prospectus in connection with the offering made by each Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Funds or the Distributor. The Prospectuses do not
constitute an offering by the Funds or by the Distributor in any jurisdiction in
which such offering may not lawfully be made.
<PAGE>
GENERAL
The following Funds are described in this Statement of Additional Information:
The Munder Funds Trust
Munder Accelerating Growth Fund ("Accelerating Growth Fund") Munder Balanced
Fund ("Balanced Fund") Munder Growth & Income Fund ("Growth & Income Fund")
Munder Index 500 Fund ("Index 500 Fund") Munder International Equity Fund
("International Equity Fund") Munder Small Company Growth Fund ("Small Company
Growth Fund") Munder Bond Fund ("Bond Fund") Munder Intermediate Bond Fund
("Intermediate Bond Fund") Munder U.S. Government Income Fund ("U.S. Income
Fund") Munder Michigan Triple Tax-Free Bond Fund ("Michigan Bond Fund") Munder
Tax-Free Bond Fund ("Tax-Free Bond Fund") Munder Tax-Free Intermediate Bond Fund
("Tax-Free Intermediate Bond Fund") Munder Cash Investment Fund ("Cash
Investment Fund") Munder Tax-Free Money Market Fund ("Tax-Free Money Market
Fund") Munder U.S. Treasury Money Market Fund ("U.S. Treasury Money Market
Fund")
The Munder Funds, Inc.
Munder Equity Selection Fund ("Equity Selection Fund") Munder Micro-Cap Equity
Fund ("Micro-Cap Fund") Munder Mid-Cap Growth Fund ("Mid-Cap Fund") Munder
Multi-Season Growth Fund ("Multi-Season Fund") Munder Real Estate Equity
Investment Fund ("Real Estate Fund") Munder Small-Cap Value Fund ("Small-Cap
Value Fund") Munder Value Fund ("Value Fund") Munder International Bond Fund
("International Bond Fund") Munder Short Term Treasury Fund ("Short Term
Treasury Fund") Munder Money Market Fund ("Money Market Fund")
The Munder Framlington Funds Trust
Munder Framlington Emerging Markets Fund ("Emerging Markets Fund")
Munder Framlington Healthcare Fund ("Healthcare Fund")
Munder Framlington International Growth Fund ("International Growth Fund")
......The Trust was organized on August 30, 1989 under the name "PDB Fund,"
which was changed in November, 1989 to "Opportunity Funds", in February, 1990 to
"Ambassador Funds" and in June, 1995 to "The Munder Funds Trust." The Tax-Free
Intermediate Bond Fund originally commenced operations on February 9, 1987 as a
separate portfolio of the St. Clair Tax-Free Fund, Inc. On November 20, 1992,
the St. Clair Tax-Free Intermediate Bond Fund was reorganized as the Ambassador
Tax-Free Intermediate Bond Fund. The Company was organized as a Maryland
corporation on November 18, 1992. Framlington was organized as a Massachusetts
business trust on October 30, 1996.
<PAGE>
.........As stated in each Prospectus, the investment advisor of each Fund
is Munder Capital Management (the "Advisor"). The principal partners of the
Advisor are Old MCM, Inc., Munder Group LLC, Woodbridge Capital Management, Inc.
and WAM Holdings, Inc. ("WAM"). Mr. Lee P. Munder, the Advisor's Chief Executive
Officer, indirectly owns or controls a majority of the partnership interests of
the Advisor.
.........Framlington Overseas Investment Management Limited (the
"Sub-Advisor") serves as sub-advisor for the three Framlington Funds. The
Sub-Advisor is a subsidiary of Framlington Group Limited, incorporated in
England and Wales which, through its subsidiaries, provides a wide range of
investment services. Framlington Group Limited is a wholly owned subsidiary of
Framlington Holdings Limited which is, in turn, owned 49% by the Advisor and 51%
by Credit Commercial de France S.A., a French banking corporation listed on the
Societe des Bourses Francaises. .........Capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in each
Prospectus.
FUND INVESTMENTS
.........The following supplements the information contained in each
Prospectus concerning the investment objectives and policies of the Funds. With
the exception of the investment objectives of Multi-Season Fund, Real Estate
Fund and Money Market Fund, each Fund's investment objective is a
non-fundamental policy and may be changed without the authorization of the
holders of a majority of the Fund's outstanding shares. The Tax-Free Bond Fund
and Tax-Free Money Market Fund each have a fundamental policy to invest at least
80% of its respective assets in municipal obligations bearing tax-exempt
interest; all other investment policies, other than those specifically
designated as fundamental, are non-fundamental policies and may be changed
without the authorization of the holders of a majority of a Fund's outstanding
shares. There can be no assurance that a Fund will achieve its objective. A
description of applicable credit ratings is set forth in Appendix A hereto. For
purposes of this Statement of Additional Information, the Accelerating Growth
Fund, Equity Selection Fund, Growth & Income Fund, Index 500 Fund, International
Equity Fund, Micro-Cap Fund, Mid-Cap Fund, Multi-Season Fund, Real Estate Fund,
Small-Cap Value Fund, Small Company Growth Fund, Value Fund, International
Growth Fund, Emerging Markets Fund and Healthcare Fund are referred to as the
"Equity Funds"; The Bond Fund, Intermediate Bond Fund, and U.S. Income Fund are
referred to as the "Bond Funds"; the Michigan Bond Fund, Tax-Free Bond Fund and
Tax-Free Intermediate Bond Fund are referred to as the "Tax-Free Bond Funds" and
Cash Investment Fund, Money Market Fund, Tax-Free Money Fund and U.S. Treasury
Money Market Fund are referred to as the "Money Market Funds."
.........Borrowing. The Funds are authorized to borrow money in amounts up to 5%
of the value of their total assets at the time of such borrowings for temporary
purposes, and are authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act"), to
meet redemption requests. This borrowing may be unsecured. The 1940 Act requires
the Funds to maintain continuous asset coverage of 300% of the amount borrowed.
If the 300% asset coverage should decline as a result of market fluctuations or
other reasons, the Funds may be required to sell some of their portfolio
holdings within three days to reduce the debt and restore the 300% asset
coverage, even though it may be disadvantageous from an investment standpoint to
sell securities at that time. Borrowed funds are subject to interest costs that
may or may not be offset by amounts earned on the borrowed funds. A Fund may
also be required to maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fees to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate. Each Fund may, in connection with permissible borrowings,
transfer as collateral, securities owned by the Funds. .........
......Foreign Securities. Each Equity Fund (except Real Estate Fund,
International Equity Fund, International Growth Fund, Emerging Markets Fund and
Healthcare Fund), each Bond Fund, each Tax-Free Bond Fund, the Balanced Fund,
the Cash Investment Fund and the Money Market Fund may invest up to 25% of its
assets in foreign securities. Under normal market conditions, the International
Equity Fund, International Bond Fund and International Growth Fund will each
invest at least 65% of its assets in securities of issuers located in at least
three countries other than the United States. The Emerging Markets Fund will
invest at least 65% of its assets in emerging market countries. There is no
limit on the Healthcare Fund's investments in foreign securities. The Mid-Cap
Fund and the Multi-Season Fund typically will only purchase foreign securities
which are represented by American Depositary Receipts ("ADRs") listed on a
domestic securities exchange or included in the NASDAQ National Market System,
or foreign securities listed directly on a domestic securities exchange or
included in the NASDAQ National Market System. ADRs are receipts typically
issued by a United States bank or trust company evidencing ownership of the
underlying foreign securities. Certain such institutions issuing ADRs may not be
sponsored by the issuer. A non-sponsored depositary may not provide the same
shareholder information that a sponsored depositary is required to provide under
its contractual arrangements with the issuer. ......The International
Bond Fund will primarily invest in foreign debt obligations denominated in
foreign currencies, including the European Currency Unit ("ECU"), which are
issued by foreign governments and governmental agencies, instrumentalities or
political subdivisions; debt securities issued or guaranteed by supranational
organizations (as defined below); corporate debt securities; bank or bank
holding company debt securities and other debt securities including those
convertible into foreign stock. For the purposes of the 65% minimum with respect
to the International Bond Fund's designation as an international bond fund, the
securities described in this paragraph are considered "international bonds."
.........Income and gains on foreign securities may be subject to foreign
withholding taxes. Investors should consider carefully the substantial risks
involved in securities of companies and governments of foreign nations, which
are in addition to the usual risks inherent in domestic investments.
There may be less publicly available information about foreign
companies comparable to the reports and ratings published about companies in the
United States. Foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to United States
companies. Foreign markets have substantially less volume than the New York
Stock Exchange and securities of some foreign companies are less liquid and more
volatile than securities of comparable United States companies. Commission rates
in foreign countries, which are generally fixed rather than subject to
negotiation as in the United States, are likely to be higher. In many foreign
countries there is less government supervision and regulation of stock
exchanges, brokers, and listed companies than in the United States. Such
concerns are particularly heightened for emerging markets and Eastern European
countries.
.........Investments in companies domiciled in developing countries may be
subject to potentially higher risks than investments in developed countries.
These risks include (i) less social, political and economic stability; (ii) the
small current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict a
Fund's investment opportunities, including restrictions on investment in issuers
or industries deemed sensitive to national interest; (iv) foreign taxation; (v)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain Eastern European countries, of a capital
market structure or market-oriented economy; and (vii) the possibility that
recent favorable economic developments in Eastern Europe may be slowed or
reversed by unanticipated political or social events in such countries.
Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of East European countries expropriated large amounts of
private property in the past, in many cases without adequate compensation, and
there can be no assurance that such expropriation will not occur in the future.
In the event of such expropriation, the Fund could lose a substantial portion of
any investments it has made in the affected countries. Further, no accounting
standards exist in Eastern European countries. Finally, even though certain
Eastern European currencies may be convertible into United States dollars, the
conversion rates may be artificial to the actual market values and may be
adverse to a Fund.
The Advisor (Sub-Advisor with respect to the Framlington Funds)
endeavors to buy and sell foreign currencies on as favorable a basis as
practicable. Some price spread on currency exchange (to cover service charges)
may be incurred, particularly when the Fund changes investments from one country
to another or when proceeds of the sale of Fund shares in U.S. dollars are used
for the purchase of securities in foreign countries. Also, some countries may
adopt policies which would prevent the Fund from transferring cash out of the
country or withhold portions of interest and dividends at the source. There is
the possibility of expropriation, nationalization or confiscatory taxation,
withholding and other foreign taxes on income or other amounts, foreign exchange
controls (which may include suspension of the ability to transfer currency from
a given country), default in foreign government securities, political or social
instability or diplomatic developments that could affect investments in
securities of issuers in foreign nations.
Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Fund due to subsequent declines in
value of the portfolio security or, if the fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
A Fund may be affected either unfavorably or favorably by fluctuations
in the relative rates of exchange between the currencies of different nations,
by exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within a Fund from the perspective of U.S. investors, and may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by a Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. The Advisor or Sub-Advisor, as the case may be,
will attempt to avoid unfavorable consequences and to take advantage of
favorable developments in particular nations where, from time to time, it places
a Fund's investments.
The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.
Forward Foreign Currency Transactions. In order to protect against a
possible loss on investments resulting from a decline or appreciation in the
value of a particular foreign currency against the U.S. dollar or another
foreign currency, the Equity Funds (excluding the Real Estate Fund), the
Balanced Fund, the Bond Funds and the International Bond Fund are authorized to
enter into forward foreign currency exchange contracts ("forward currency
contracts"). These contracts involve an obligation to purchase or sell a
specified currency at a future date at a price set at the time of the contract.
Forward currency contracts do not eliminate fluctuations in the values of
portfolio securities but rather allow a Fund to establish a rate of currency
exchange for a future point in time.
When entering into a contract for the purchase or sale of a security, a
Fund may enter into a forward foreign currency exchange contract for the amount
of the purchase or sale price to protect against variations, between the date
the security is purchased or sold and the date on which payment is made or
received, in the value of the foreign currency relative to the U.S. dollar or
other foreign currency.
When the Advisor (Sub-Advisor with respect to the Framlington Funds)
anticipates that a particular foreign currency may decline substantially
relative to the U.S. dollar or other leading currencies, in order to reduce
risk, a Fund may enter into a forward contract to sell, for a fixed amount, the
amount of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency. Similarly, when the obligations
held by a Fund create a short position in a foreign currency, the Fund may enter
into a forward contract to buy, for a fixed amount, an amount of foreign
currency approximating the short position. With respect to any forward foreign
currency contract, it will not generally be possible to match precisely the
amount covered by that contract and the value of the securities involved due to
the changes in the values of such securities resulting from market movements
between the date the forward contract is entered into and the date it matures.
In addition, while forward contracts may offer protection from losses resulting
from declines or appreciation in the value of a particular foreign currency,
they also limit potential gains which might result from changes in the value of
such currency. A Fund will also incur costs in connection with forward foreign
currency exchange contracts and conversions of foreign currencies and U.S.
dollars.
A separate account consisting of cash or liquid securities equal to the
amount of a Fund's assets that could be required to consummate forward contracts
will be established with the Funds' Custodian except to the extent the contracts
are otherwise "covered." For the purpose of determining the adequacy of the
securities in the account, the deposited securities will be valued at market or
fair value. If the market or fair value of such securities declines, additional
cash or securities will be placed in the account daily so that the value of the
account will equal the amount of such commitments by the Fund. A forward
contract to sell a foreign currency is "covered" if a Fund owns the currency (or
securities denominated in the currency) underlying the contract, or holds a
forward contract (or call option) permitting the Fund to buy the same currency
at a price no higher than the Fund's price to sell the currency. A forward
contract to buy a foreign currency is "covered" if a Fund holds a forward
contract (or put option) permitting the Fund to sell the same currency at a
price as high as or higher than the Fund's price to buy the currency.
Futures Contracts and Related Options. The Equity Funds, the Balanced Fund,
the Bond Funds, the Tax-Free Bond Funds and the International Bond Fund
currently expect that they may purchase and sell futures contracts on
interest-bearing securities or securities or bond indices, and may purchase and
sell call and put options on futures contracts. For a detailed description of
futures contracts and related options, see Appendix B to this Statement of
Additional Information.
Interest Rate Swap Transactions. Each of the Bond Funds and the
International Bond Fund may enter into interest rate swap agreements for
purposes of attempting to obtain a particular desired return at a lower cost to
the Funds than if the Funds had invested directly in an instrument that yielded
that desired return. Interest rate swap transactions involve the exchange by a
Bond Fund or the International Bond Fund with another party of its commitments
to pay or receive interest, such as an exchange of fixed rate payments for
floating rate payments. Typically, the parties with which the Bond Funds and the
International Bond Fund will enter into interest rate swap transactions will be
brokers, dealers or other financial institutions known as "counterparties."
Certain Federal income tax requirements may, however, limit the Bond Funds' and
the International Bond Fund's ability to engage in certain interest rate
transactions. Gains from transaction in interest rate swaps distributed to
shareholders of the Bond Funds and the International Bond Fund will be taxable
as ordinary income or, in certain circumstances, as long-term capital gains to
the shareholders.
Each of the Bond Funds' and the International Bond Fund's obligations (or
rights) under a swap agreement will generally be equal only to the net amount to
be paid or received under the agreement based on the relative values of the
positions held by each party to the agreement (the "net amount"). Each of the
Bond Funds' and the International Bond Fund's obligations under a swap agreement
will be accrued daily (offset against any amounts owed to the Fund). Accrued but
unpaid net amounts owed to a swap counterparty will be covered by the
maintenance of a segregated account consisting of cash, U.S. Government
securities or other high-grade debt securities, to avoid any potential
leveraging of a Fund's portfolio.
The Bond Funds and the International Bond Fund will not enter into any
interest rate swap transaction unless the credit quality of the unsecured senior
debt or the claims-paying ability of the other party to the transaction is rated
in one of the highest four rating categories by at least one
nationally-recognized statistical rating organization ("NRSRO") or is believed
by the Advisor to be equivalent to that rating. If the other party to a
transaction defaults, the Bond Funds and the International Bond Fund will have
contractual remedies pursuant to the agreements related to the transactions.
The use of interest rate swaps is a highly specialized activity that
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. If the Advisor is incorrect in its
forecasts of market values, interest rates and other applicable factors, the
investment performance of each of the Bond Funds and the International Bond Fund
would be lower than it would have been if interest rate swaps were not used. The
swaps market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swaps market has
become relatively liquid in comparison with other similar instruments traded in
the interbank market. The swaps market is a relatively new market and is largely
unregulated. It is possible that developments in the swaps market, including
potential government regulation, could adversely affect the Bond Funds' and the
International Bond Fund's ability to terminate existing swap agreements or to
realize amounts to be received under such agreements.
Investment Company Securities. The Funds (other than the Short Term Treasury
Fund) may invest in securities issued by other investment companies. As a
shareholder of another investment company, a Fund would bear its pro rata
portion of the other investment company's expenses, including advisory fees.
These expenses would be in addition to the expenses each Fund bears directly in
connection with its own operations. Each Fund currently intends to limit its
investments in securities issued by other investment companies so that, as
determined immediately after a purchase of such securities is made: (i) not more
than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more than 3% of the outstanding voting stock
of any one investment company will be owned by the Fund. Lending of
Portfolio Securities. To enhance the return on its portfolio, each of the Funds
may lend securities in its portfolio (subject to a limit of 25% of each Fund's,
other than the Money Market Fund's, total assets; and 33 1/3% of the Money
Market Fund's total assets) to securities firms and financial institutions,
provided that each loan is secured continuously by collateral in the form of
cash, high quality money market instruments or short-term U.S. Government
securities adjusted daily to have a market value at least equal to the current
market value of the securities loaned. These loans are terminable at any time,
and the Funds will receive any interest or dividends paid on the loaned
securities. In addition, it is anticipated that a Fund may share with the
borrower some of the income received on the collateral for the loan or the Fund
will be paid a premium for the loan. The risk in lending portfolio securities,
as with other extensions of credit, consists of possible delay in recovery of
the securities or possible loss of rights in the collateral should the borrower
fail financially. In determining whether the Funds will lend securities, the
Advisor (Sub-Advisor with respect to the Framlington Funds) will consider all
relevant facts and circumstances. The Funds will only enter into loan
arrangements with broker-dealers, banks or other institutions which the Advisor
(Sub-Advisor with respect to the Framlington Funds) has determined are
creditworthy under guidelines established by the Boards of Trustees/Directors.
Lower-Rated Debt Securities. It is expected that each Fund (other than
the Money Market Funds, Index 500 Fund and Growth & Income Fund) will invest not
more than 5% of its total assets in securities that are rated below investment
grade by Standard & Poor's or Moody's. The Growth & Income Fund may invest up to
20% of the value of its total assets in such securities. Such securities are
also known as junk bonds. The yields on lower-rated debt and comparable unrated
securities generally are higher than the yields available on higher-rated
securities. However, investments in lower-rated debt and comparable unrated
securities generally involve greater volatility of price and risk of loss of
income and principal, including the possibility of default by or bankruptcy of
the issuers of such securities. Lower-rated debt and comparable unrated
securities (a) will likely have some quality and protective characteristics
that, in the judgment of the rating organization, are outweighed by large
uncertainties or major risk exposures to adverse conditions and (b) are
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. Accordingly,
it is possible that these types of factors could, in certain instances, reduce
the value of securities held in each Fund's portfolio, with a commensurate
effect on the value of each of the Fund's shares. Therefore, an investment in
the Funds should not be considered as a complete investment program and may not
be appropriate for all investors.
While the market values of lower-rated debt and comparable unrated
securities tend to react more to fluctuations in interest rate levels than the
market values of higher-rated securities, the market values of certain lower
rated debt and comparable unrated securities also tend to be more sensitive to
individual corporate developments and changes in economic conditions than
higher-rated securities. In addition, lower-rated debt securities and comparable
unrated securities generally present a higher degree of credit risk. Issuers of
lower-rated debt and comparable unrated securities often are highly leveraged
and may not have more traditional methods of financing available to them so that
their ability to service their debt obligations during an economic downturn or
during sustained periods of rising interest rates may be impaired. The risk of
loss due to default by such issuers is significantly greater because lower-rated
debt and comparable unrated securities generally are unsecured and frequently
are subordinated to the prior payment of senior indebtedness. The Funds may
incur additional expenses to the extent that they are required to seek recovery
upon a default in the payment of principal or interest on their portfolio
holdings. The existence of limited markets for lower-rated debt and comparable
unrated securities may diminish each of the Fund's ability to (a) obtain
accurate market quotations for purposes of valuing such securities and
calculating its net asset value and (b) sell the securities at fair value either
to meet redemption requests or to respond to changes in the economy or in
financial markets.
Lower-rated debt securities and comparable unrated securities may have
call or buy-back features that permit their issuers to call or repurchase the
securities from their holders. If an issuer exercises these rights during
periods of declining interest rates, the Funds may have to replace the security
with a lower yielding security, thus resulting in a decreased return to the
Funds.
Money Market Instruments. As described in their Prospectuses, the
Equity Funds, the Balanced Fund, the Bond Funds, the International Bond Fund,
the Tax-Free Bond Funds, and the Money Market Funds may invest from time to time
in "money market instruments," a term that includes, among other things, bank
obligations, commercial paper, variable amount master demand notes and corporate
bonds with remaining maturities of 397 days or less.
Bank obligations include bankers' acceptances, negotiable certificates
of deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Advisor (Sub-Advisor with
respect to the Framlington Funds) deems the instrument to present minimal credit
risks, such investments may nevertheless entail risks that are different from
those of investments in domestic obligations of U.S. banks due to differences in
political, regulatory and economic systems and conditions. All investments in
bank obligations are limited to the obligations of financial institutions having
more than $1 billion in total assets at the time of purchase.
Investments by a Fund in commercial paper will consist of issues rated
at the time A-1 and/or P-1 by Standard & Poor's Rating Service, a division of
McGraw-Hill Companies, Inc. ("S&P"), or Moody's Investors Service, Inc.
("Moody's"). In addition, the Funds may acquire unrated commercial paper and
corporate bonds that are determined by the Advisor (Sub-Advisor with respect to
the Framlington Funds) at the time of purchase to be of comparable quality to
rated instruments that may be acquired by such Fund as previously described.
The Funds may also purchase variable amount master demand notes which
are unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master notes only when the Advisor deems the investment to
involve minimal credit risk.
Mortgage-Related Securities. There are a number of important
differences among the agencies and instrumentalities of the U.S. Government that
issue mortgage-related securities and among the securities that they issue.
Mortgage-related securities guaranteed by the Government National Mortgage
Association ("GNMA") include GNMA Mortgage Pass-Through Certificates (also known
as "Ginnie Maes") which are guaranteed as to the timely payment of principal and
interest by GNMA and such guarantee is backed by the full faith and credit of
the United States. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-related securities issued by the
Federal National Mortgage Association ("FNMA") include FNMA Guaranteed Mortgage
Pass-Through Certificates (also known as "Fannie Maes") which are solely the
obligations of the FNMA and are not backed by or entitled to the full faith and
credit of the United States, but are supported by the right of the issuer to
borrow from the Treasury. FNMA is a government-sponsored organization owned
entirely by private stockholders. Fannie Maes are guaranteed as to timely
payment of the principal and interest by FNMA. Mortgage-related securities
issued by the Federal Home Loan Mortgage Corporation ("FHLMC") include FHLMC
Mortgage Participation Certificates (also known as "Freddie Macs" or "PCs").
FHLMC is a corporate instrumentality of the United States, created pursuant to
an Act of Congress, which is owned entirely by Federal Home Loan Banks. Freddie
Macs are not guaranteed by the United States or by any Federal Home Loan Banks
and do not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of
interest, which is guaranteed by the FHLMC. FHLMC guarantees either ultimate
collection or timely payment of all principal payments on the underlying
mortgage loans. When FHLMC does not guarantee timely payment of principal, FHLMC
may remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.
Municipal Obligations. Opinions relating to the validity of municipal
obligations and to the exemption of interest thereon from regular Federal income
tax are rendered by bond counsel or counsel to the respective issuers at the
time of issuance. Neither the Trust nor the Advisor will review the proceedings
relating to the issuance of municipal obligations or the bases for such
opinions.
An issuer's obligations under its municipal obligations are subject to
the provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Federal or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or upon the ability of municipalities to levy
taxes. The power or ability of an issuer to meet its obligations for the payment
of interest on and principal of its municipal obligations may be materially
adversely affected by litigation or other conditions.
From time to time proposals have been introduced before Congress for the
purpose of restricting or eliminating the Federal income tax exemption for
interest on municipal obligations. For example, under the Tax Reform Act of 1986
interest on certain private activity bonds must be included in an investor's
Federal alternative minimum taxable income, and corporate investors must include
all tax-exempt interest in their Federal alternative minimum taxable income. The
Trust cannot predict what legislation, if any, may be proposed in Congress in
the future as regards the Federal income tax status of interest on municipal
obligations in general, or which proposals, if any, might be enacted. Such
proposals, if enacted, might materially adversely affect the availability of
municipal obligations for investment by the Tax-Free Bond Funds and the Tax-Free
Money Market Fund and the liquidity and value of such Funds. In such an event
the Board of Trustees would reevaluate the Fund's investment objective and
policies and consider changes in its structure or possible dissolution.
The Cash Investment Fund and the Money Market Fund each may, when
deemed appropriate by the Advisor in light of the Fund's investment objective,
invest in high quality municipal obligations issued by state and local
governmental issuers, the interest on which may be taxable or tax-exempt for
Federal income tax purposes, provided that such obligations carry yields that
are competitive with those of other types of money market instruments of
comparable quality. The Cash Investment Fund and the Money Market Fund each do
not expect to invest more than 5% of its net assets in such municipal
obligations during the current fiscal year.
Non-Domestic Bank Obligations. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits ("ETDs"), which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule Bs
which are obligations issued by Canadian branches of foreign or domestic banks;
Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated
certificates of deposit issued by a U.S. branch of a foreign bank and held in
the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are
U.S. dollar-denominated bankers' acceptances issued by a U.S. branch of a
foreign bank and held in the United States.
Options. The Equity Funds, Balanced Fund, Bond Funds, International
Bond Fund and Tax-Free Bond Funds (other than Tax-Free Intermediate Bond Fund)
may write covered call options, buy put options, buy call options and write
secured put options. Such options may relate to particular securities and may or
may not be listed on a national securities exchange and issued by the Options
Clearing Corporation. Options trading is a highly specialized activity which
entails greater than ordinary investment risk. Options on particular securities
may be more volatile than the underlying securities, and therefore, on a
percentage basis, an investment in options may be subject to greater fluctuation
than an investment in the underlying securities themselves. For risks associated
with options on foreign currencies, see Appendix B to this Statement of
Additional Information.
A call option for a particular security gives the purchaser of the
option the right to buy, and a writer the obligation to sell, the underlying
security at the stated exercise price at any time prior to the expiration of the
option, regardless of the market price of the security. The premium paid to the
writer is in consideration for undertaking the obligations under the option
contract. A put option for a particular security gives the purchaser the right
to sell the underlying security at the stated exercise price at any time prior
to the expiration date of the option, regardless of the market price of the
security.
The writer of an option that wished to terminate its obligation may
effect a "closing purchase transaction." This is accomplished by buying an
option of the same series as the option previously written. The effect of the
purchase is that the writer's position will be canceled by the clearing
corporation. However, a writer may not effect a closing purchase transaction
after being notified of the exercise of an option. Likewise, an investor who is
the holder of an option may liquidate its position by effecting a "closing sale
transaction." The cost of such a closing purchase plus transaction costs may be
greater than the premium received upon the original option, in which event each
Fund will have incurred a loss in the transaction. There is no guarantee that
either a closing purchase or a closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call option
will permit the Funds to write another call option on the underlying security
with either a different exercise price or expiration date or both, or in the
case of a written put option, will permit the Funds to write another put option
to the extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other Fund investments. If a Fund desires to sell a
particular security from its portfolio on which it has written a call option, it
will effect a closing transaction prior to or concurrent with the sale of the
security.
The Equity Funds, Balanced Fund, Bond Funds, Tax-Free Bond Funds (other
than the Tax-Free Intermediate Bond Fund) and International Bond Fund may write
options in connection with buy-and-write transactions; that is, the Funds may
purchase a security and then write a call option against that security. The
exercise price of the call the Funds determine to write will depend upon the
expected price movement of the underlying security. The exercise price of a call
option may be below ("in-the-money"), equal to ("at-the-money") or above
("out-of-the-money") the current value of the underlying security at the time
the option is written. Buy-and-write transactions using in-the-money call
options may be used when it is expected that the price of the underlying
security will remain flat or decline moderately during the option period.
Buy-and-write transactions using out-of-the-money call options may be used when
it is expected that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. If the call options are exercised in such transactions, the
maximum gain to the relevant Fund will be the premium received by it for writing
the option, adjusted upwards or downwards by the difference between the Fund's
purchase price of the security and the exercise price. If the options are not
exercised and the price of the underlying security declines, the amount of such
decline will be offset in part, or entirely, by the premium received.
In the case of a call option on a security, the option is "covered" if a
Fund owns the security underlying the call or has an absolute and immediate
right to acquire that security without additional cash consideration (or, if
additional cash consideration is required, cash or liquid securities in such
amount as are held in a segregated account by its custodian) upon conversion or
exchange of other securities held by it. For a call option on an index, the
option is covered if a Fund maintains with its custodian cash or liquid
securities equal to the contract value. A call option is also covered if a Fund
holds a call on the same security or index as the call written where the
exercise price of the call held is (i) equal to or less than the exercise price
of the call written, or (ii) greater than the exercise price of the call written
provided the difference is maintained by the portfolio in cash or liquid
securities in a segregated account with its custodian. Each of the Funds will
limit its investment in uncovered call options purchased or written by the Fund
to 33 1/3% of the Fund's total assets. The Funds will write put options only if
they are "secured" by cash or liquid securities maintained in a segregated
account by the Funds' custodian in an amount not less than the exercise price of
the option at all times during the option period.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the relevant Fund's gain will be limited to the
premium received. If the market price of the underlying security declines or
otherwise is below the exercise price, the Fund may elect to close the position
or take delivery of the security at the exercise price and the Fund's return
will be the premium received from the put option minus the amount by which the
market price of the security is below the exercise price.
Each of the Funds may purchase put options to hedge against a decline
in the value of its portfolio. By using put options in this way, each Fund will
reduce any profit it might otherwise have realized in the underlying security by
the amount of the premium paid for the put option and by transaction costs. Each
of the Funds may purchase call options to hedge against an increase in the price
of securities that it anticipates purchasing in the future. The premium paid for
the call option plus any transaction costs will reduce the benefit, if any,
realized by the Funds upon exercise of the option, and, unless the price of the
underlying security rises sufficiently, the option may expire worthless to the
Fund.
When a Fund purchases an option, the premium paid by it is recorded as
an asset of the Fund. When the Fund writes an option, an amount equal to the net
premium (the premium less the commission) received by the Fund is included in
the liability section of the Fund's statement of assets and liabilities as a
deferred credit. The amount of this asset or deferred credit will be
subsequently marked-to-market to reflect the current value of the option
purchased or written. The current value of the traded option is the last sale
price or, in the absence of a sale, the average of the closing bid and asked
prices. If an option purchased by the Fund expires unexercised the Fund realizes
a loss equal to the premium paid. If the Fund enters into a closing sale
transaction on an option purchased by it, the Fund will realize a gain if the
premium received by the Fund on the closing transaction is more than the premium
paid to purchase the option, or a loss if it is less. If an option written by
the Fund expires on the stipulated expiration date or if the Fund enters into a
closing purchase transaction, it will realize a gain (or loss if the cost of a
closing purchase transaction exceeds the net premium received when the option is
sold) and the deferred credit related to such option will be eliminated. If an
option written by the Fund is exercised, the proceeds of the sale will be
increased by the net premium originally received and the Fund will realize a
gain or loss.
There are several risks associated with transactions in options on
securities and indices. For example, there are significant differences between
the securities and options markets that could result in an imperfect correlation
between these markets, causing a given transaction not to achieve its
objectives. An option writer, unable to effect a closing purchase transaction,
will not be able to sell the underlying security (in the case of a covered call
option) or liquidate the segregated account (in the case of a secured put
option) until the option expires or the optioned security is delivered upon
exercise with the result that the writer in such circumstances will be subject
to the risk of market decline or appreciation in the security during such
period.
There is no assurance that a Fund will be able to close an unlisted
option position. Furthermore, unlisted options are not subject to the
protections afforded purchasers of listed options by the Options Clearing
Corporation, which performs the obligations of its members who fail to do so in
connection with the purchase or sale of options.
In addition, a liquid secondary market for particular options, whether
traded over-the-counter or on a national securities exchange ("Exchange") may be
absent for reasons which include the following: there may be insufficient
trading interest in certain options; restrictions may be imposed by an Exchange
on opening transactions or closing transactions or both; trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities; unusual or unforeseen
circumstances may interrupt normal operations on an Exchange; the facilities of
an Exchange or the Options Clearing Corporation may not at all times be adequate
to handle current trading value; or one or more Exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that Exchange (or in that class or series of options)
would cease to exist, although outstanding options that had been issued by the
Options Clearing Corporation as a result of trades on that Exchange would
continue to be exercisable in accordance with their terms.
Currency transactions, including options on currencies and currency
futures, are subject to risks different from those of other portfolio
transactions. Because currency control is of great importance to the issuing
governments and influences economic planning and policy, purchases and sales of
currency and related instruments can be negatively affected by government
exchange controls, blockages, and manipulations or exchange restrictions imposed
by governments. These can result in losses to the Fund if it is unable to
deliver or receive currency or funds in settlement of obligations and could also
cause hedges it has entered into to be rendered useless, resulting in full
currency exposure as well as the incurring of transaction costs. Buyers and
sellers of currency futures are subject to the same risks that apply to the use
of futures generally. Further, settlement of a currency futures contract for the
purchase of most currencies must occur at a bank based in the issuing nation.
Trading options on currency futures is relatively new, and the ability to
establish and close out positions on such options is subject to the maintenance
of a liquid market which may not always be available. Currency exchange rates
may fluctuate based on factors extrinsic to that country's economy.
Real Estate Securities. The Real Estate Fund may invest without limit
in shares of real estate investment trusts ("REITs"). REITs pool investors'
funds for investment primarily in income producing real estate or real estate
loans or interests. A REIT is not taxed on income distributed to shareholders if
it complies with several requirements relating to its organization, ownership,
assets, and income and a requirement that it distribute to its shareholders at
least 95% of it taxable income (other than net capital gains) for each taxable
year. REITs can generally be classified as Equity REITs, Mortgage REITs and
Hybrid REITs. Equity REITs, which invest the majority of their assets directly
in real property, derive their income primarily from rents. Equity REITs can
also realize capital gains by selling properties that have appreciated in value.
Mortgage REITs, which invest the majority of their assets in real estate
mortgages, derive their income primarily from interest payments. Hybrid REITs
combine the characteristics of both Equity REITs and Mortgage REITs. The Fund
will not invest in real estate directly, but only in securities issued by real
estate companies. However, the Real Estate Fund may be subject to risks similar
to those associated with the direct ownership of real estate (in addition to
securities markets risks) because of its policy of concentration in the
securities of companies in the real estate industry. These include declines in
the value of real estate, risks related to general and local economic
conditions, dependency on management skill, heavy cash flow dependency, possible
lack of availability of mortgage funds, overbuilding, extended vacancies of
properties, increased competition, increases in property taxes and operating
expenses, changes in zoning laws, losses due to costs resulting from the
clean-up of environmental problems, liability to third parties for damages
resulting from environmental problems, casualty or condemnation losses,
limitations on rents, changes in neighborhood values, the appeal of properties
to tenants and changes in interest rates.
In addition to these risks, Equity REITs may be affected by changes in
the value of the underlying property owned by the trusts, while Mortgage REITs
may be affected by the quality of any credit extended. Further, Equity and
Mortgage REITs are dependent upon management skills and generally may not be
diversified. Equity and Mortgage REITs are also subject to heavy cash flow
dependency, defaults by borrowers and self-liquidation. In addition, Equity and
Mortgage REITs could possibly fail to qualify for the beneficial tax treatment
available to real estate investment trusts under the Internal Revenue Code of
1986, as amended (the "Code"), or to maintain their exemptions from registration
under the 1940 Act. The above factors may also adversely affect a borrower's or
a lessee's ability to meet its obligations to the REIT. In the event of a
default by a borrower or lessee, the REIT may experience delays in enforcing its
rights as a mortgagee or lessor and may incur substantial costs associated with
protecting investments.
Repurchase Agreements. The Funds may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System, any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). The
Short Term Treasury Fund will only invest in repurchase agreements fully
collateralized by U.S. Treasury securities. The Advisor (Sub-Advisor with
respect to the Framlington Funds) will review and continuously monitor the
creditworthiness of the seller under a repurchase agreement, and will require
the seller to maintain liquid assets in a segregated account in an amount that
is greater than the repurchase price. Default by, or bankruptcy of, the seller
would, however, expose a Fund to possible loss because of adverse market action
or delays in connection with the disposition of underlying obligations. With
respect to the Money Market Funds, the securities held subject to a repurchase
agreement may have stated maturities exceeding thirteen months, provided the
repurchase agreement itself matures in 397 days or less.
The repurchase price under the repurchase agreements described in each
Prospectus generally equals the price paid by a Fund plus interest negotiated on
the basis of current short-term rates (which may be more or less than the rate
on the securities underlying the repurchase agreement).
Securities subject to repurchase agreements will be held by the Trust's,
Framlington's or the Company's custodian (or sub-custodian) in the Federal
Reserve/Treasury book-entry system or by another authorized securities
depositary. Repurchase agreements are considered to be loans by a Fund under the
1940 Act.
Reverse Repurchase Agreements. Each Fund (except the Tax-Free Money Market
Fund and Tax-Free Bond Funds) may borrow funds for temporary or emergency
purposes by selling portfolio securities to financial institutions such as banks
and broker/dealers and agreeing to repurchase them at a mutually specified date
and price ("reverse repurchase agreements"). Reverse repurchase agreements
involve the risk that the market value of the securities sold by a Fund may
decline below the repurchase price. A Fund will pay interest on amounts obtained
pursuant to a reverse repurchase agreement. While reverse repurchase agreements
are outstanding, a Fund will maintain in a segregated account, cash, U.S.
Government securities or other liquid high-grade debt securities of an amount at
least equal to the market value of the securities, plus accrued interest,
subject to the agreement.
Rights and Warrants. As stated in their Prospectuses, the Equity Funds
and the Balanced Fund may purchase warrants, which are privileges issued by
corporations enabling the owners to subscribe to and purchase a specified number
of shares of the corporation at a specified price during a specified period of
time. Subscription rights normally have a short life span to expiration. The
purchase of warrants involves the risk that a Fund could lose the purchase value
of a warrant if the right to subscribe to additional shares is not exercised
prior to the warrant's expiration. Also, the purchase of warrants involves the
risk that the effective price paid for the warrant added to the subscription
price of the related security may exceed the value of the subscribed security's
market price such as when there is no movement in the level of the underlying
security.
Stand-by Commitments. The Balanced Fund, the Cash Investment Fund, the Money
Market Fund, the Tax-Free Bond Funds and the Tax-Free Money Market Fund may each
enter into stand-by commitments with respect to municipal obligations held by
it. Under a stand-by commitment, a dealer agrees to purchase at the Fund's
option a specified municipal obligation at its amortized cost value to the Fund
plus accrued interest, if any. Stand-by commitments may be exercisable by a Fund
at any time before the maturity of the underlying municipal obligations and may
be sold, transferred or assigned only with the instruments involved.
The Trust expects that stand-by commitments will generally be available
without the payment of any direct or indirect consideration. However, if
necessary or advisable, a Fund may pay for a stand-by commitment either
separately in cash or by paying a higher price for municipal obligations which
are acquired subject to the commitment (thus reducing the yield to maturity
otherwise available for the same securities). The total amount paid in either
manner for outstanding stand-by commitments held by a Fund will not exceed 1/2
of 1% of the value of such Fund's total assets calculated immediately after each
stand-by commitment is acquired.
The Balanced Fund, Cash Investment Fund, Money Market Fund, Tax-Free Bond
Funds and the Tax-Free Money Market Fund intend to enter into stand-by
commitments only with dealers, banks and broker/dealers which, in the Advisor's
opinion, present minimal credit risks. The Tax-Free Bond Funds and the Tax-Free
Money Market Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and do not intend to exercise their rights thereunder for
trading purposes. The acquisition of a stand-by commitment will not affect the
valuation of the underlying municipal obligation. The actual stand-by commitment
will be valued at zero in determining net asset value. Accordingly, where a Fund
pays directly or indirectly for a stand-by commitment, its cost will be
reflected as an unrealized loss for the period during which the commitment is
held by such Fund and will be reflected in realized gain or loss when the
commitment is exercised or expires. Stock Index Futures, Options on
Stock and Bond Indices and Options on Stock and Bond Index Futures Contracts.
The Equity Funds, the Balanced Fund, the Bond Funds and the Tax-Free Bond Funds
(other than the Tax-Free Intermediate Bond Fund) may purchase and sell stock
index futures, options on stock and bond indices and options on stock index
futures contracts as a hedge against movements in the equity and bond markets.
The Tax-Free Intermediate Bond Fund may purchase and sell bond index futures
contracts. The International Bond Fund may purchase and sell options on bond
index futures contracts as a hedge against movements in the bond markets.
A stock index futures contract is an agreement in which one party
agrees to deliver to the other 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 the last trading day of the contract and the price at which the
agreement is made. No physical delivery of securities is made.
Options on stock and bond indices are similar to options on specific
securities, described above, except that, rather than the right to take or make
delivery of the specific security at a specific price, an option on a stock or
bond index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing level of that stock or bond index is greater
than, in the case of a call option, or less than, in the case of a put option,
the exercise price of the option. This amount of cash is equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. Unlike options on specific securities, all settlements of options on
stock or bond indices are in cash, and gain or loss depends on general movements
in the stocks included in the index rather than price movements in particular
stocks.
If the Advisor (Sub-Advisor with respect to the Framlington Funds)
expects general stock or bond market prices to rise, it might purchase a stock
index futures contract, or a call option on that index, as a hedge against an
increase in prices of particular securities it ultimately wants to buy. If in
fact the index does rise, the price of the particular securities intended to be
purchased may also increase, but that increase would be offset in part by the
increase in the value of the futures contract or index option resulting from the
increase in the index. If, on the other hand, the Advisor (Sub-Advisor with
respect to the Framlington Funds) expects general stock or bond market prices to
decline, it might sell a futures contract, or purchase a put option, on the
index. If that index does in fact decline, the value of some or all of the
securities in the Funds' portfolio may also be expected to decline, but that
decrease would be offset in part by the increase in the value of the Fund's
position in such futures contract or put option.
The Equity Funds, the Balanced Fund, the Bond Funds and the Tax-Free
Bond Funds (other than Tax-Free Intermediate Bond Fund) may purchase and write
call and put options on stock index futures contracts and each such Fund and the
International Bond Fund may purchase and write call and put options on bond
index futures contracts. Each such Fund may use such options on futures
contracts in connection with its hedging strategies in lieu of purchasing and
selling the underlying futures or purchasing and writing options directly on the
underlying securities or indices. For example, such Funds may purchase put
options or write call options on stock and bond index futures (only bond index
futures in the case of the International Bond Fund), rather than selling futures
contracts, in anticipation of a decline in general stock or bond market prices
or purchase call options or write put options on stock or bond index futures,
rather than purchasing such futures, to hedge against possible increases in the
price of securities which such Funds intend to purchase.
In connection with transactions in stock or bond index futures, stock or
bond index options and options on stock or bond index futures, such Funds will
be required to deposit as "initial margin" an amount of cash and short-term U.S.
Government securities equal to between 5% to 8% of the contract amount.
Thereafter, subsequent payments (referred to as "variation margin") are made to
and from the broker to reflect changes in the value of the option or futures
contract. No such Fund may at any time commit more than 5% of its total assets
to initial margin deposits on futures contracts, index options and options on
futures contracts.
Stripped Securities. Certain Funds may acquire U.S. Government obligations
and their unmatured interest coupons that have been separated ("stripped") by
their holder, typically a custodian bank or investment brokerage firm. Having
separated the interest coupons from the underlying principal of the U.S.
Government obligations, the holder will resell the stripped securities in
custodial receipt programs with a number of different names, including "Treasury
Income Growth Receipts" ("TIGRs") and "Certificate of Accrual on Treasury
Securities" ("CATS"). The stripped coupons are sold separately from the
underlying principal, which is usually sold at a deep discount because the buyer
receives only the right to receive a future fixed payment on the security and
does not receive any rights to periodic interest (cash) payments. The underlying
U.S. Treasury bonds and notes themselves are held in book-entry form at the
Federal Reserve Bank or, in the case of bearer securities (i.e., unregistered
securities which are ostensibly owned by the bearer or holder), in trust on
behalf of the owners. Counsel to the underwriters of these certificates or other
evidences of ownership of U.S. Treasury securities have stated that, in their
opinion, purchasers of the stripped securities most likely will be deemed the
beneficial holders of the underlying U.S. Government obligations for federal tax
and securities purposes. The Trust is not aware of any binding legislative,
judicial or administrative authority on this issue.
Only instruments which are stripped by the issuing agency will be
considered U.S. Government obligations. Securities such as CATS and TIGRs which
are stripped by their holder do not qualify as U.S. Government obligations.
Within the past several years the Treasury Department has facilitated
transfers of ownership of zero coupon securities by accounting separately for
the beneficial ownership of particular interest coupon and principal payments on
Treasury securities through the Federal Reserve book-entry record-keeping
system. The Federal Reserve program as established by the Treasury Department is
known as "STRIPS" or "Separate Trading of Registered Interest and Principal of
Securities." Under the STRIPS program, a Fund is able to have its beneficial
ownership of zero coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other evidences
of ownership of the underlying U.S. Treasury securities.
In addition, the Bond Fund, Intermediate Bond Fund, International Bond
Fund and U.S. Government Income Fund may invest in stripped mortgage-backed
securities ("SMBS"), which represent beneficial ownership interests in the
principal distributions and/or the interest distributions on mortgage assets.
SMBS are usually structured with two classes that receive different proportions
of the interest and principal distributions on a pool of mortgage assets. One
type of SMBS will have one class receiving some of the interest and most of the
principal from the mortgage assets, while the other class will receive most of
the interest and the remainder of the principal. In the most common case, one
class of SMBS will receive all of the interest (the interest-only or "IO"
class), while the other class will receive all of the principal (the
principal-only or "PO" class). SMBS may be issued by FNMA or FHLMC.
The original principal amount, if any, of each SMBS class represents
the amount payable to the holder thereof over the life of such SMBS class from
principal distributions of the underlying mortgage assets, which will be zero in
the case of an IO class. Interest distributions allocable to a class of SMBS, if
any, consist of interest at a specified rate on its principal amount, if any, or
its notional principal amount in the case of an IO class. The notional principal
amount is used solely for purposes of the determination of interest
distributions and certain other rights of holders of such IO class and does not
represent an interest in principal distributions of the mortgage assets.
Yields on SMBS will be extremely sensitive to the prepayment experience
on the underlying mortgage loans, and there are other associated risks. For IO
classes of SMBS and SMBS that were purchased at prices exceeding their principal
amounts there is a risk that a Fund may not fully recover its initial
investment.
The determination of whether a particular government-issued IO or PO
backed by fixed-rate mortgages is liquid may be made under guidelines and
standards established by the Board of Directors/Trustees. Such securities may be
deemed liquid if they can be disposed of promptly in the ordinary course of
business at a value reasonably close to that used in the calculation of a Fund's
net asset value per share.
Supranational Bank Obligations. Supranational banks are international
banking institutions designed or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., The World
Bank). Obligations of supranational banks may be supported by appropriated but
unpaid commitments of their member countries and there is no assurance these
commitments will be undertaken or met in the future.
U.S. Government Obligations. The Funds may purchase obligations issued
or guaranteed by the U.S. Government and, except in the case of the U.S.
Treasury Money Market Fund, U.S. Government agencies and instrumentalities.
Obligations of certain agencies and instrumentalities of the U.S. Government,
such as those of the GNMA, are supported by the full faith and credit of the
U.S. Treasury. Others, such as those of the Export-Import Bank of the United
States, are supported by the right of the issuer to borrow from the U.S.
Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury Bills,
Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, FNMA, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, FHLMC, Federal Intermediate Credit
Banks and Maritime Administration.
Variable and Floating Rate Instruments. Debt instruments may be
structured to have variable or floating interest rates. Variable and floating
rate obligations purchased by a Fund may have stated maturities in excess of a
Fund's maturity limitation if the Fund can demand payment of the principal of
the instrument at least once during such period on not more than thirty days'
notice (this demand feature is not required if the instrument is guaranteed by
the U.S. Government or an agency thereof). These instruments may include
variable amount master demand notes that permit the indebtedness to vary in
addition to providing for periodic adjustments in the interest rates. The
Advisor will consider the earning power, cash flows and other liquidity ratios
of the issuers and guarantors of such instruments and, if the instrument is
subject to a demand feature, will continuously monitor their financial ability
to meet payment on demand. Where necessary to ensure that a variable or floating
rate instrument is equivalent to the quality standards applicable to a Fund, the
issuer's obligation to pay the principal of the instrument will be backed by an
unconditional bank letter or line of credit, guarantee or commitment to lend.
The Money Market Funds will invest in variable and floating rate instruments
only when the Advisor deems the investment to involve minimal credit risk.
In determining average weighted portfolio maturity of the Funds, an
instrument will usually be deemed to have a maturity equal to the longer of the
period remaining until the next interest rate adjustment or the time the Fund
involved can recover payment of principal as specified in the instrument.
Variable rate U.S. Government obligations held by the Funds, however, will be
deemed to have maturities equal to the period remaining until the next interest
rate adjustment.
The absence of an active secondary market for certain variable and
floating rate notes could make it difficult to dispose of the instruments, and a
Fund could suffer a loss if the issuer defaulted or during periods that a Fund
is not entitled to exercise its demand rights.
Variable and floating rate instruments held by a Fund will be subject
to the Fund's limitation on illiquid investments when the Fund may not demand
payment of the principal amount within seven days absent a reliable trading
market.
Guaranteed Investment Contracts. The Bond Funds, the International Bond
Fund, the Cash Investment Fund and the Money Market Fund may make limited
investments in guaranteed investment contracts ("GICs") issued by U.S. insurance
companies. Pursuant to such contracts, a Fund makes cash contributions to a
deposit fund of the insurance company's general account. The insurance company
then credits to the Fund on a monthly basis interest which is based on an index
(in most cases this index is expected to be the Salomon Brothers CD Index), but
is guaranteed not to be less than a certain minimum rate. A GIC is normally a
general obligation of the issuing insurance company and not funded by a separate
account. The purchase price paid for a GIC becomes part of the general assets of
the insurance company, and the contract is paid from the company's general
assets. A Fund will only purchase GICs from insurance companies which, at the
time of purchase, have assets of $1 billion or more and meet quality and credit
standards established by the Advisor pursuant to guidelines approved by the
Board of Directors/Trustees. Generally, GICs are not assignable or transferable
without the permission of the issuing insurance companies, and an active
secondary market in GICs does not currently exist. Therefore, GICs will normally
be considered illiquid investments, and will be acquired subject to the
limitation on illiquid investments.
When-Issued Purchases and Forward Commitments (Delayed-Delivery
Transactions). When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by a Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.
When a Fund agrees to purchase securities on a when-issued or forward
commitment basis, the Custodian will set aside cash or liquid portfolio
securities equal to the amount of the commitment in a separate account.
Normally, the Custodian will set aside portfolio securities to satisfy a
purchase commitment, and in such a case the Fund may be required subsequently to
place additional assets in the separate account in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it sets aside portfolio securities to cover such purchase
commitments than when it sets aside cash. Because a Fund's liquidity and ability
to manage its portfolio might be affected when it sets aside cash or portfolio
securities to cover such purchase commitments, the Advisor expects that its
commitments to purchase when-issued securities and forward commitments will not
exceed 25% of the value of a Fund's total assets absent unusual market
conditions.
A Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, a Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a taxable capital gain or loss.
When a Fund engages in when-issued and forward commitment transactions,
it relies on the other party to consummate the trade. Failure of such party to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or
a forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Fund starting on the day the Fund agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until they
are paid for and delivered on the settlement date.
Yields and Ratings. The yields on certain obligations, including the
money market instruments in which each Fund may invest (such as commercial paper
and bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other NRSROs represent
their respective opinions as to the quality of the obligations they undertake to
rate. Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices.
With respect to each of the Money Market Funds, securities (other than U.S.
Government securities) must be rated (generally, by at least two NRSROs) within
the two highest rating categories assigned to short-term debt securities. In
addition, each of the Cash Investment Fund and the Money Market Fund (a) will
not invest more than 5% of its total assets in securities rated in the second
highest rating category by such NRSROs and will not invest more than 1% of its
total assets in such securities of any one issuer, and (b) intends to limit
investments in the securities of any single issuer (other than securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) to not
more than 5% of the Fund's total assets at the time of purchase, provided that
the Fund may invest up to 25% of its total assets in the securities of any one
issuer rated in the highest rating category by an NRSRO for a period of up to
three business days. Unrated and certain single rated securities (other than
U.S. Government securities) may be purchased by the Money Market Funds, but are
subject to a determination by the Advisor, in accordance with procedures
established by the Boards of Trustees and Directors, that the unrated and single
rated securities are of comparable quality to the appropriate rated securities.
Other. Subsequent to its purchase by a Fund, a rated security may cease
to be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Boards of Trustees and Directors or the Advisor
(Sub-Advisor with respect to the Framlington Funds), pursuant to guidelines
established by the Boards, will consider such an event in determining whether
the Fund involved should continue to hold the security in accordance with the
interests of the Fund and applicable regulations of the SEC.
It is possible that unregistered securities purchased by a Fund in
reliance upon Rule 144A under the Securities Act of 1933, as amended, could have
the effect of increasing the level of the Fund's illiquidity to the extent that
qualified institutional buyers become, for a period, uninterested in purchasing
these securities.
RISK FACTORS AND SPECIAL CONSIDERATIONS -- INDEX 500 FUND
Traditional methods of fund investment management typically involve
relatively frequent changes in a portfolio of securities on the basis of
economic, financial and market analysis. Index funds such as the Index 500 Fund
are not managed in this manner. Instead, with the aid of a computer program, the
Advisor purchases and sells securities for the Fund in an attempt to produce
investment results that substantially duplicate the performance of the common
stocks included in the S&P 500 Index ("S&P 500"), taking into account
redemptions, sales of additional Fund shares, and other adjustments as described
below.
The Fund does not expect to hold at any particular time all of the
stocks included in the S&P 500. The Advisor believes, however, that through the
application of capitalization weighing and sector balancing techniques it will
be able to construct and maintain the Fund's investment portfolio so that it
reasonably tracks the performance of the S&P 500. The Advisor will compare the
industry sector diversification of the stocks the Fund would acquire solely on
the basis of their weighted capitalizations with the industry sector
diversification of all issuers included in the S&P 500. This comparison is made
because the Advisor believes that, unless the Fund holds all stocks included in
the S&P 500, the selection of stocks for purchase by the Fund solely on the
basis of their weighted market capitalizations would tend to place heavier
concentration in certain industry sectors that are dominated by the larger
corporations, such as communications, automobile, oil and energy. As a result,
events disproportionately affecting such industries could affect the performance
of the Fund differently than the performance of the S&P 500. Conversely, if
smaller companies were not purchased by the Fund, the representation of
industries included in the S&P 500 that are not dominated by the most heavily
market-capitalized companies would be reduced or eliminated.
For these reasons, the Advisor will identify the sectors which are (or,
except for sector balancing, would be) most underrepresented in the Fund's
portfolio and will purchase balancing securities in these sectors until the
portfolio's sector weightings closely match those of the S&P 500. This process
continues until the portfolio is fully invested (except for cash holdings).
Redemptions of a substantial number of shares of the Fund could reduce
the number of issuers represented in the Fund's investment portfolio, which
could, in turn, adversely affect the accuracy with which the Fund tracks the
performance of the S&P 500.
If an issuer drops in ranking, or is eliminated entirely from the S&P
500, the Advisor may be required to sell some or all of the common stock of such
issuer then held by the Fund. Sales of portfolio securities may be made at times
when, if the Advisor were not required to effect purchases and sales of
portfolio securities in accordance with the S&P 500, such securities might not
be sold. Such sales may result in lower prices for such securities than may been
realized or in losses that may not have been incurred if the Advisor were not
required to effect the purchases and sales. The failure of an issuer to declare
or pay dividends, the institution against an issuer of potentially materially
adverse legal proceedings, the existence or threat of defaults materially and
adversely affecting an issuer's future declaration and payment of dividends, or
the existence of other materially adverse credit factors will not necessarily be
the basis for the disposition of portfolio securities, unless such event causes
the issuer to be eliminated entirely from the S&P 500. However, although the
Advisor does not intend to screen securities for investment by the Fund by
traditional methods of financial and market analysis, the Advisor will monitor
the Fund's investment with a view towards removing stocks of companies which
exhibit extreme financial distress or which may impair for any reason the Fund's
ability to achieve its investment objective.
The Fund will invest primarily in the common stocks that constitute the
S&P 500 in accordance with their relative capitalization and sector weightings
as described above. It is possible, however, that the Fund will from time to
time receive, as part of a "spin-off" or other corporate reorganization of an
issuer included in the S&P 500, securities that are themselves outside the S&P
500. Such securities will be disposed of by the Fund in due course consistent
with the Fund's investment objective.
In addition, the Index 500 Fund may invest in Standard & Poor's
Depository Receipts ("SPDRs"). SPDRs are securities that represent ownership in
the SPDR Trust, a long-term unit investment trust which is intended to provide
investment results that generally correspond to the price and yield performance
of the S&P 500. SPDR holders are paid a "Dividend Equivalent Amount" that
corresponds to the amount of cash dividends accruing to the securities in the
SPDR Trust, net of certain fees and expenses charged to the Trust. Because of
these fees and expenses, the dividend yield for SPDRs may be less than that of
the S&P 500. SPDRs are traded on the American Stock Exchange.
The Fund may also purchase put and call options on the S&P 500 and S&P
100 stock indices, which are traded on national securities exchanges. In
addition, the Fund may enter into transactions involving futures contracts (and
futures options) on these two stock indices and may purchase securities of other
investment companies that are structured to seek a similar correlation to the
S&P 500. These transactions are effected in an effort to have fuller exposure to
price movements in the S&P 500 pending investment of purchase orders or while
maintaining liquidity to meet potential shareholder redemptions. Transactions in
option and stock index futures contracts may be desirable to hedge against a
price movement in the S&P 500 at times when the Fund is not fully invested in
stocks that are included in the S&P 500. For example, by purchasing a futures
contract, the Fund may be able to reduce the potential that cash inflows will
disrupt its ability to track the S&P 500, since the futures contracts may serve
as a temporary substitute for stocks which may then be purchased in an orderly
fashion. Similarly, because futures contracts only require a small initial
margin deposit, the Fund may be able, as an effective matter, to be fully
invested in the S&P 500 while keeping a cash reserve to meet potential
redemptions. See Appendix B to this Statement of Additional Information.
RISK FACTORS AND SPECIAL CONSIDERATIONS -- MICHIGAN BOND FUND AND
TAX-FREE INTERMEDIATE BOND FUND
The information set forth below is derived in substantial part from the
official statements prepared in connection with the issuance of Michigan
municipal bonds and similar obligations and other sources that are generally
available to investors. The information is provided as general information
intended to give a recent historical description and is not intended to indicate
future or continuing trends in the financial or other positions of the State of
Michigan (the "State"). The Company has not independently verified this
information.
The State's Constitution limits the amount of total State revenues
raised from taxes and other sources. State revenues (excluding federal aid and
revenues for payment of principal and interest on general obligation bonds) in
any fiscal year are limited to a specified percentage of State personal income
in the prior calendar year or average of the prior three calendar years,
whichever is greater. The percentage is based upon the ratio of the 1978-79
fiscal year revenues to total 1977 State personal income. If any fiscal year
revenues exceed the revenue limitation by 1%, the entire amount exceeding the
limitation must be rebated in the following fiscal year's personal income tax or
single business tax. Annual excesses of less than 1% may be transferred into the
State's Budget Stabilization Fund. The State may raise taxes in excess of the
limit in emergency situations.
The State Constitution limits the purposes for which State general
obligation debt may be issued. Such debt is limited to short-term debt for State
operating purposes, short and long-term debt for the purpose of making loans to
school districts and long-term debt for voter approved purposes. The State's
Constitution also directs or restricts the use of certain revenues.
The State finances its operations through the State's General Fund and
special revenue funds. The General Fund receives revenues of the State that are
not specifically required to be included in the special revenue funds. General
Fund revenues are obtained approximately 55% from the payment of State taxes and
45% from federal and non-tax revenue sources. Tax revenues credited to the
General Fund include the personal income tax, the single business tax and
approximately 15% of the sales tax collections.
Expenditures are not permitted by the State Constitution to exceed
available revenues. The State Constitution requires that the Governor, with the
approval of the appropriating committees of the State House and Senate, reduce
expenditures whenever it appears that the actual revenues will be less than the
originally projected revenues upon which the budget was based.
In 1994, a ballot proposal ("Proposal A") to implement extensive
property tax and school finance reform measures was subject to voter approval
and in fact approved on March 15, 1994. Under Proposal A as approved, effective
May 1, 1994, the State sales and use tax increased from 4% to 6%, the State
income tax decreased from 4.6% to 4.4%, the cigarette tax increased from $.25 to
$.75 per pack, and an additional tax of 16% of the wholesale price is imposed on
certain other tobacco products. As of January 1, 1995, a 0.75% real estate
transfer tax also became effective. In 1994, a State education property tax of 6
mills was imposed on all real property and personal property currently subject
to the general property tax. In addition, all school boards can now, with voter
approval, levy up to the lesser of 18 mills or the number of mills levied in
1993 for school operating purposes, on non-homestead property. Proposal A
contained additional provisions regarding the ability of local school districts
to levy taxes as well as a limit on assessment increases for each parcel of
property, beginning in 1995 to the lesser of 5% or the rate of inflation. When
property is subsequently sold, its assessed value is adjusted equal to 50% of
true cash value. Under Proposal A, much of the additional revenue generated by
these taxes is dedicated to the State School Aid Fund.
Proposal A shifts significant portions of the cost of local school
operations from local school districts to the State and raises additional State
revenues to fund these additional State expenses. These additional revenues will
be included within the State's constitutional revenue limitations and may impact
the State's ability to raise additional revenues in the future.
The State is a party to various legal proceedings seeking damages or
injunctive or other relief. In addition to routine litigation, certain of these
proceedings could, if unfavorably resolved from the point of view of the State,
substantially affect State programs or finances. These lawsuits involve programs
generally in the areas of corrections, highway maintenance, social services, tax
collection, commerce and budgetary reductions to school districts and
governmental units and court funding.
The principal sectors of Michigan's diversified economy are manufacturing of
durable goods (including automobiles and components and office equipment),
tourism and agriculture. The health of the State's economy, and in particular
its durable goods manufacturing industry, is susceptible to a long-term increase
in the cost of energy and energy related products. As reflected in historical
employment figures, the State's economy has lessened its dependence upon durable
goods manufacturing. In 1960, employment in such industry accounted for 33% of
the State's work force. By 1996, this figure had fallen to 15%. However,
manufacturing (including auto-related manufacturing) continues to be an
important part of the State's economy. The particular industries are highly
cyclical and in the period 1996-1997 are expected to operate at somewhat less
than full capacity, but at higher levels than in the immediate prior years. This
factor can usually adversely affect the revenue streams of the State and its
political subdivisions because it adversely impacts tax sources, particularly
sales, income taxes and single business taxes.
As of the date of this Statement of Additional Information, the State's
general obligation bonds are rated "A2" by Moody's and "AA" by Fitch. To the
extent that either the Michigan Bond Fund or the Tax-Free Intermediate Bond Fund
is comprised of revenue or general obligations of local governments or
authorities, rather than general obligations of the State of Michigan itself,
ratings on such Michigan obligations will be different from those given to the
State of Michigan and their value may be independently affected by economic
matters not directly impacting the State.
INVESTMENT LIMITATIONS
Each Fund is subject to the investment limitations enumerated in this
section which may be changed with respect to a particular Fund only by a vote of
the holders of a majority of such Fund's outstanding shares (as defined under
"Miscellaneous Shareholder Approvals").
No Fund of the Trust may:
1. Purchase securities of any one issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities or
certificates of deposit for any such securities) if more than 5% of the value of
the Fund's total assets (taken at current value) would be invested in the
securities of such issuer, or more than 10% of the issuer's outstanding voting
securities would be owned by the Fund or the Trust, except that (a) with respect
to each Fund, other than the Michigan Bond Fund and the Tax-Free Intermediate
Bond Fund, up to 25% of the value of the Fund's total assets (taken at current
value) may be invested without regard to these limitations and (b) with respect
to the Michigan Bond Fund and the Tax-Free Intermediate Bond Fund, up to 50% of
the value of the Fund's total assets may be invested without regard to these
limitations so long as no more than 25% of the value of the Fund's total assets
are invested in the securities of any one issuer. For purposes of this
limitation, a security is considered to be issued by the entity (or entities)
whose assets and revenues back the security. A guarantee of a security is not
deemed to be a security issued by the guarantor when the value of all securities
issued and guaranteed by the guarantor, and owned by the Fund, does not exceed
10% of the value of the Fund's total assets.
2. Borrow money or issue senior
securities except that each Fund may borrow from banks and enter into reverse
repurchase agreements for temporary purposes in amounts up to one-third of the
value of its total assets at the time of such borrowing; or mortgage, pledge or
hypothecate any assets, except in connection with any such borrowing and then in
amounts not in excess of one-third of the value of the Fund's total assets at
the time of such borrowing. No Fund will purchase securities while its aggregate
borrowings (including reverse repurchase agreements and borrowing from banks) in
excess of 5% of its total assets are outstanding. Securities held in escrow or
separate accounts in connection with a Fund's investment practices are not
deemed to be pledged for purposes of this limitation.
3. Purchase any securities
which would cause 25% or more of the value of the Fund's total assets at the
time of purchase to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that (a) there is no limitation with respect to (i) instruments that are issued
(as defined in Investment Limitation No. 1 above) or guaranteed by the United
States, any state, territory or possession of the United States, the District of
Columbia or any of their authorities, agencies, instrumentalities or political
subdivisions, (ii) with respect to the Money Market Funds only, instruments
issued by domestic branches of U.S. banks and (iii) repurchase agreements
secured by the instruments described in clauses (i) and, with respect to the
Money Market Funds, (ii); (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of the parents; and (c) utilities will be
divided according to their services, for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a separate
industry.
4. Purchase or sell real estate, except that each Fund may
purchase securities of issuers which deal in real estate and
may purchase securities which are secured by interests in real
estate.
5. Acquire any other investment company or investment company
security except in connection with a merger, consolidation,
reorganization or acquisition of assets or where otherwise
permitted by the 1940 Act.
6. Act as an underwriter of securities within the meaning of the
Securities Act of 1933, as amended, except to the extent that
the purchase of obligations directly from the issuer thereof,
or the disposition of securities, in accordance with the
Fund's investment objective, policies and limitations may be
deemed to be underwriting.
7. Write or sell put options, call options, straddles, spreads,
or any combination thereof except for transactions in options
on securities, securities indices, futures contracts, options
on futures contracts and transactions in securities on a
when-issued or forward commitment basis, and except that each
Equity and Bond Fund may enter into forward currency contracts
in accordance with its investment objectives and policies.
Notwithstanding the above, the Tax-Free Intermediate Bond Fund
may not write or purchase options, including puts, calls,
straddles, spreads, or any combination thereof.
8. Purchase securities of companies for the purpose of exercising
control.
9. Purchase securities on margin, make short sales of securities
or maintain a short position, except that (a) this investment
limitation shall not apply to a Fund's transactions in futures
contracts and related options, a Fund's sale of securities
short against the box or a Fund's transactions in securities
on a when-issued or forward commitment basis, and (b) a Fund
may obtain short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities.
10. Purchase or sell commodity contracts, or invest in oil, gas or
mineral exploration or development programs, except that each
Fund may, to the extent appropriate to its investment
policies, purchase publicly traded securities of companies
engaging in whole or in part in such activities, may enter
into futures contracts and related options, and may engage in
transactions in securities on a when-issued or forward
commitment basis, and except that each Equity and Bond Fund
may enter into forward currency contracts in accordance with
its investment objectives and policies.
11. Make loans, except that each Fund may purchase and hold debt
instruments (whether such instruments are part of a public
offering or privately negotiated), may enter into repurchase
agreements and may lend portfolio securities in accordance
with its investment objective and policies.
In addition, the Tax-Free Intermediate Bond Fund may not:
1. Purchase or retain securities of any issuer if the officers or
Trustees of the Trust or its Advisor own beneficially more
than one-half of 1% of the securities of such issuer together
own beneficially more than 5% of such securities.
2. Invest more than 10% of its total assets in the securities of
issuers which together with any predecessors have a record of
less than three years continuous operation.
3. Participate on a joint or joint and several basis in any securities
trading account.
No Fund of Framlington may:
1. Purchase securities (except U.S. Government securities) if
more than 5% of its total assets will be invested in the
securities of any one issuer, except that up to 25% of the
assets of the Fund may be invested without regard to this 5%
limitation;
2. Invest 25% or more of its total assets in securities issued by
one or more issuers conducting their principal business
activities in the same industry (except that the Healthcare
Fund will invest more than 25% of its total assets in
securities of issuers conducting their principal business
activities in healthcare industries);
3. Borrow money or enter into reverse repurchase agreements
except that the Fund may (i) borrow money or enter into
reverse repurchase agreements for temporary purposes in
amounts not exceeding 5% of its total assets and (ii) borrow
money for the purpose of meeting redemption requests, in
amounts (when aggregated with amounts borrowed under clause
(i)) not exceeding 33 1/3% of its total assets;
4. Pledge, mortgage or hypothecate its assets other than to
secure borrowings permitted by restriction 3 above (collateral
arrangements with respect to margin requirements for options
and futures transactions are not deemed to be pledges or
hypothecations for this purpose);
5. Make loans of securities to other persons in excess of 25% of
the Fund's total assets; provided the Fund may invest without
limitation in short-term debt obligations (including
repurchase agreements) and publicly distributed debt
obligations;
6. Underwrite securities of other issuers, except insofar as the
Fund may be deemed an underwriter under the Securities Act of
1933, as amended, in selling portfolio securities;
7. Purchase or sell real estate or any interest therein,
including interests in real estate limited partnerships,
except securities issued by companies (including real estate
investment trusts) that invest in real estate or interests
therein.
8. Purchase securities on margin, or make short sales of
securities, except for the use of short-term credit necessary
for the clearance of purchases and sales of portfolio
securities, but the Fund may make margin deposits in
connection with transactions in options, futures and options
of futures;
9. Make investments for the purpose of exercising control or
management;
10. Invest in commodities or commodity futures contracts, provided
that this limitation shall not prohibit the purchase or sale
by the Fund or forward foreign currency exchange contracts,
financial futures contracts and options on financial futures
contracts, foreign currency futures contracts, and options on
securities, foreign currencies and securities indices, as
permitted by the Fund's Prospectus; or
11. Issue senior securities, except as permitted by the 1940 Act.
Additional investment restrictions adopted by each Fund of Framlington
which may be changed by the Board of Trustees, provide that each Fund may not:
1. Invest more than 15% of its net assets in illiquid securities;
2. Own more than 10% (taken at market value at the time of
purchase) of the outstanding voting securities of any single
issuer; or
3. Invest in other investment companies except as permitted under the
1940 Act.
No Fund of the Company may:
1. Invest more than 25% of its total assets in any one industry
(securities issued or guaranteed by the United States
Government, its agencies or instrumentalities are not
considered to represent industries) (except that the Real
Estate Fund will invest more than 25% of its assets in
securities of issuers in the real estate industry);
2. (For each Fund except the International Bond Fund) with
respect to 75% of the Fund's assets, invest more than 5% of
the Fund's assets (taken at a market value at the time of
purchase) in the outstanding securities of any single issuer
or own more than 10% of the outstanding voting securities of
any one issuer, in each case other than securities issued or
guaranteed by the United States Government, its agencies or
instrumentalities;
3. (For each Fund except Short Term Treasury Fund) borrow money
or issue senior securities (as defined in the 1940 Act) except
that the Funds may borrow (i) for temporary purposes in
amounts not exceeding 5% of its total assets and (ii) to meet
redemption requests, in amounts (when aggregated with amounts
borrowed under clause (i)) not exceeding 33 1/3% of its total
assets;
4. Pledge, mortgage or hypothecate its assets other than to
secure borrowings permitted by restriction 3 above (collateral
arrangements with respect to margin requirements for options
and futures transactions are not deemed to be pledges or
hypothecations for this purpose);
5. Make loans of securities to other persons in excess of 25% of
a Fund's total assets and 33 1/3% of the Money Market Fund's
total assets; provided the Funds may invest without limitation
in short-term debt obligations (including repurchase
agreements) and publicly distributed debt obligations;
6. Underwrite securities of other issuers, except insofar as a
Fund may be deemed an underwriter under the Securities Act of
1933, as amended, in selling portfolio securities;
7. (For each Fund except the Real Estate Fund) purchase or sell
real estate or any interest therein, including interests in
real estate limited partnerships, except securities issued by
companies (including real estate investment trusts) that
invest in real estate or interests therein. The Real Estate
Fund may not buy or sell real estate; however, this
prohibition does not apply to the purchase or sale of (i)
securities which are secured by real estate, (ii) securities
representing interests in real estate, (iii) securities of
companies operating in the real estate industry including real
estate investment trusts, and (iv) the holding and sale of
real estate acquired as a result of the ownership of
securities.
8. Purchase securities on margin, or make short sales of
securities, except for the use of short-term credit necessary
for the clearance of purchases and sales of portfolio
securities, but the Funds (with the exception of the Money
Market Fund and Short Term Treasury Fund) may make margin
deposits in connection with transactions in options, futures
and options on futures;
9. Make investments for the purpose of exercising control or
management; or
10. Invest in commodities or commodity futures contracts, provided
that this limitation shall not prohibit the purchase or sale
by the Mid-Cap, Multi-Season, Real Estate, Value and
International Bond Funds of forward foreign currency exchange
contracts, financial futures contracts and options on
financial futures contracts, and options on securities and on
securities, foreign currencies and on securities indices, as
permitted by each Fund's prospectus.
In addition, the Short Term Treasury Fund may not:
1. Borrow money or enter into reverse repurchase agreements
except that the Fund may (i) borrow money or enter into
reverse repurchase agreements for temporary purposes in
amounts exceeding 5% of its total assets and (ii) borrow money
for the purpose of meeting redemption requests, in amounts
(when aggregated with amounts borrowed under clause (i)) not
exceeding 33 1/3% of its total assets; or
2. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by restriction 1 above; or 3. Issue any
senior securities (as such term is defined in Section 18(f) of the 1940
Act) except to the extent the
activities permitted by other enumerated Investment
Limitations for the Company above may be deemed to give rise
to a senior security.
Additional investment restrictions adopted by each Fund of the Company,
which may be changed by the Board of Directors, provide that a Fund may not:
1. Invest more than 15% of its net assets (10% of net assets for
the Money Market Fund) (taken at market value at the time of
purchase) in securities which cannot be readily resold because
of legal or contractual restrictions and (in the case of
International Bond Fund and Short Term Treasury Fund only)
which are not otherwise marketable;
2. (For each Fund except the International Bond Fund and Short
Term Treasury Fund) own more than 10% (taken at market value
at the time of purchase) of the outstanding voting securities
of any single issuer;
3. (For each Fund except Short Term Treasury Fund) purchase or
sell interests in oil, gas or other mineral exploration or
development plans or leases);
4. Invest in other investment companies except as permitted under the
1940 Act.
In addition, the International Bond Fund may not with respect to 50% of
the Fund's assets, invest more than 5% of the Fund's assets (taken at a market
value at the time of purchase) in the outstanding securities of any single
issuer or own more than 10% of the outstanding voting securities of any one
issuer, in each case other than securities issued or guaranteed by the United
States Government, its agencies or instrumentalities, at the close of each
quarter of its taxable year.
If a percentage limitation is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in the
value of a Fund's investments will not constitute a violation of such
limitation, except that any borrowing by a Fund that exceeds the fundamental
investment limitations stated above must be reduced to meet such limitations
within the period required by the 1940 Act (currently three days). Otherwise, a
Fund may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.
TRUSTEES, DIRECTORS AND OFFICERS
The trustees, directors and executive officers of the Trust,
Framlington and the Company, and their business addresses and principal
occupations during the past five years, are:
<TABLE>
<CAPTION>
<S> <C> <C>
Positions
With Trust, Company and Principal Occupation
Name, Address and Age Framlington During Past Five Years
Charles W. Elliott1 Chairman of the Board of Senior Advisor to the President - Western
3338 Bronson Boulevard Trustees and Directors Michigan University since July 1995;
Kalamazoo, MI 49008 Executive Vice President - Administration
Age: 65 & Chief Financial Officer, Kellogg Company from January 1987
through June 1995; before that Price Waterhouse. Board of
Directors, Steelcase Financial Corporation.
John Rakolta, Jr. Trustee/Director and Vice Chairman, Walbridge Aldinger
1876 Rathmor Chairman of the Boards of Company (construction company).
Bloomfield Hills, MI 48304 Trustees and Directors
Age: 50
Thomas B. Bender Trustee/Director Investment Advisor, Financial &
7 Wood Ridge Road Investment Management Group
Glen Arbor, MI 49636 (since April, 1991); Vice President
Age: 64 Institutional Sales, Kidder, Peabody & Co. (Retired April,
1991).
David J. Brophy Trustee/Director Professor, University of Michigan;
1025 Martin Place Director, River Place Financial Corp.;
Ann Arbor, MI 48104 Trustee, Renaissance Assets Trust.
Age: 61
<PAGE>
Positions
With Trust, Company and Principal Occupation
Name, Address and Age Framlington During Past Five Years
Dr. Joseph E. Champagne Trustee/Director Corporate and Executive Consultant since
319 Snell Road September 1995; prior to that Chancellor,
Rochester, MI 48306 Lamar University from September 1994
Age: 59 until September 1995; before that Consultant to Management,
LamarUniversity; President and Chief Executive Officer, Crittenton Corporation
(holding company that owns healthcare facilities) and Crittenton
Development Corporation until August 1993; before that President, Oakland
University of Rochester, MI, until August 1991; Member, Board of Directors,
Ross Operating Valve of Troy, MI.
Thomas D. Eckert Trustee/Director President and COO, Mid-Atlantic
10726 Falls Pointe Drive Group of Pulte Home Corporation
Great Falls, VA 22066 (developer of residential land and
Age: 50 construction of housing units).
Lee P. Munder President President and CEO of the Advisor; Chief
480 Pierce Street Executive Officer and President of Old
Suite 300 MCM; Chief Executive Officer of World
Birmingham, MI 48009 Asset Management; and Director, LPM
Age: 52 Investment Services, Inc. ("LPM").
Terry H. Gardner Vice President, Vice President and Chief Financial
480 Pierce Street Chief Financial Officer Officer of the Advisor,
Suite 300 and Treasurer Vice President and Chief
Birmingham, MI 48009 Financial Officer of Old MCM (February
Age: 37 1993 to present); Manager of Arthur Andersen & Co. (1991 to
February
1993); Secretary of LPM.
Paul Tobias Vice President Executive Vice President and Chief
480 Pierce Street Operating Officer of the
Suite 300 Advisor (since April 1995) and
Birmingham, MI 48009 Executive Vice President of
Age: 45 Comerica, Inc.
Gerald Seizert Vice President Executive Vice President and Chief
480 Pierce Street Investment Officer/Equities of the
Suite 300 Advisor (since April 1995);
Birmingham, MI 48009 Managing Director (1991-1995),
Age: 45 Director (1992-1995) and Vice President (1984-1991) of
Loomis,
Sayles and Company, L.P.
Positions
With Trust, Company and Principal Occupation
Name, Address and Age Framlington During Past Five Years
Elyse G. Essick Vice President Vice President and Director of
480 Pierce Street Marketing for the Advisor;
Suite 300 Vice President and Director of
Birmingham, MI 48009 Client Services of Old MCM
Age: 38 (August 1988 to December 1994).
James C. Robinson Vice President Vice President and Chief Investment
480 Pierce Street Officer/Fixed Income for the Advisor;
Suite 300 Vice President and Director of Fixed
Birmingham, MI 48009 Income of Old MCM (1987-1994).
Age: 35
Leonard J. Barr, II Vice President Vice President and Director of Core
480 Pierce Street Equity Research of the Advisor;
Suite 300 Director and Senior Vice President
Birmingham, MI 48009 of Old MCM (since 1988);
Age: 52 Director of LPM.
Lisa A. Rosen Secretary, Assistant General Counsel of the Advisor since
480 Pierce Street Treasurer May, 1996; Formerly, Counsel, First Data
Suite 300 Investor Services Group, Inc.; Assistant
Birmingham, MI 48009 Vice President and Counsel with The
Age: 30 Boston Company Advisors, Inc.; Associate
with Hutchins, Wheeler & Dittmar.
Ann F. Putallaz Vice President Vice President and Director of
480 Pierce Street Fiduciary Services of the Advisor
Suite 300 (since January 1995); Director of
Birmingham, MI 48009 Client and Marketing Services of
Age: 51 Woodbridge.
Richard H. Rose Assistant Treasurer Senior Vice President, First Data
First Data Investor Services Investor Services Group, Inc.
Group, Inc. (since May 6, 1994). Formerly,
One Exchange Place Senior Vice President, The Boston
8th Floor Company Advisors, Inc. since
Boston, MA 02109 November 1989.
Age: 42
Teresa M.R. Hamlin Assistant Secretary Counsel, First Data Investor Services
First Data Investor Services Group, Inc. (since 1995). Formerly
Group, Inc. Paralegal Manager, The Boston Company
One Exchange Place Advisors, Inc.
8th Floor
Boston, MA 02109
Age: 33
Positions
With Trust, Company and Principal Occupation
Name, Address and Age Framlington During Past Five Years
Julie A. Tedesco Assistant Secretary Counsel, First Data Investor Services
First Data Investor Services Group, Inc. (since May, 1994); Formerly
Group, Inc. Assistant Vice President and Counsel
One Exchange Place of The Boston Company Advisors, Inc.
8th Floor (since July, 1992).
Boston, MA 02109
Age: 40
</TABLE>
Trustees of the Trust and Framlington and Directors of the Company receive
an aggregate fee from the Trust, Framlington the Company and St. Clair Funds,
Inc. ("St. Clair") for service on those organizations respective Boards
comprised of an annual retainer fee of $20,000, and a fee of $1,500 for each
Board meeting attended; and are reimbursed for all out-of-pocket expenses
relating to attendance at meetings.
The following table summarizes the compensation paid by the Trust,
Framlington, the Company and St. Clair to their respective Trustees/Directors
for the year ended June 30, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Aggregate Com-
pensation from Pension Estimated
the Trust, the Retirement Annual
Company, Benefits Accrued Benefits Total
Name of Person Framlington as Part of upon from the
Position and St. Clair Fund Expenses Retirement Fund Complex
Charles W. Elliott $20,000 None None $20,000
Chairman
John Rakolta, Jr. $18,500 None None $18,500
Vice Chairman
Thomas B. Bender $20,000 None None $20,000
Trustee and Director
David J. Brophy $20,000 None None $20,000
Trustee and Director
Dr. Joseph E. Champagne $20,000 None None $20,000
Trustee and Director
Thomas D. Eckert $20,000 None None $20,000
Trustee and Director
</TABLE>
No officer, director or employee of the Advisor, Sub-Advisor, Comerica
Incorporated ("Comerica"), the Sub-Custodian, the Distributor, the Administrator
or the Transfer Agent currently receives any compensation from the Trust,
Framlington or the Company. As of October 7, 1997, the Trustees and officers of
the Trust, as a group, owned less than 1% of all classes of outstanding shares
of the Funds of the Trust, the Trustees and officers of Framlington as a group
owned less than 1% of all classes of outstanding shares of the Funds of
Framlington except the Healthcare Fund in which Trustees and officers as a group
owned 2.90% of Class Y shares of the Fund, and the Directors and officers of the
Company, as a group, owned less than 1% of all classes of outstanding shares of
the Funds of the Company, except the Micro-Cap Equity Fund in which Directors
and officers as a group owned 2.60% of Class Y shares of the Fund.
Lee P. Munder and Terry H. Gardner are administrators of a pension plan for
employees of Munder Capital Management, which as of October 7, 1997, owned
102,610.490 Class Y shares of the Money Market Fund, 41,407.000 Class Y shares
of the International Bond Fund, 41,277.125 Class Y shares of the Bond Fund,
9,264.459 Class Y shares of the Emerging Markets Fund, 20,020.000 Class Y shares
of the International Growth Fund, 49,974.000 Class Y shares of the Multi-Season
Growth Fund, 18,408.729 Class Y shares of the Small-Cap Value Fund, 32,774.090
Class Y shares of the Value Fund, 15,845.000 Class Y shares of the Mid-Cap
Growth Fund, 20,583.528 Class Y shares of the Real Estate Equity Investment
Fund, 11,448.779 Class Y shares of the International Equity Fund, 10,035.000
Class Y shares of the Small Company Growth Fund and 12,594.000 Class Y shares of
the Accelerating Growth Fund, which represented less than 1% of the outstanding
Class Y shares of those Funds. As of the same date, the pension plan owned
9,017.000 Class Y shares of the Healthcare Fund and 5,238.095 Class Y shares of
the Micro-Cap Equity Fund, which represented 2.00% and 1.00%, respectively, of
the outstanding Class Y shares of those Funds. As of October 7, 1997,
Munder Capital Management and affiliates of Munder Capital Management, through
common ownership, owned beneficially 30,000 Class Y shares of the Real Estate
Equity Investment Fund and 1,368,208.010 Class Y shares of the Money Market
Fund, which represented 0.77% and 1.98% of the outstanding Class Y shares of
those Funds, respectively. Shareholder and Trustee Liability. Under
Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
trust. However, the Trust's and Framlington's Declaration of Trust, as amended,
each provide that shareholders shall not be subject to any personal liability in
connection with the assets of the Trust or Framlington for the acts or
obligations of the Trust or Framlington, and that every note, bond, contract,
order or other undertaking made by the Trust or Framlington shall contain a
provision to the effect that the shareholders are not personally liable
thereunder. Each Declaration of Trust, as amended, provides for indemnification
out of the trust property of any shareholder held personally liable solely by
reason of his or her being or having been a shareholder and not because of his
or her acts or omissions or some other reason. Each Declaration of Trust, as
amended, also provides that the Trust and Framlington shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Trust or Framlington, and shall satisfy any judgment thereon.
Thus, the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust or
Framlington itself would be unable to meet its obligations. Each
Declaration of Trust, as amended, further provides that all persons having any
claim against the Trustees, the Trust or Framlington shall look solely to the
trust property for payment; that no Trustee of the Trust or Framlington shall be
personally liable for or on account of any contract, debt, tort, claim, damage,
judgment or decree arising out of or connected with the administration or
preservation of the trust property or the conduct of any business of the Trust
or Framlington; and that no Trustee shall be personally liable to any person for
any action or failure to act except by reason of his own bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties as a trustee.
With the exception stated, each Declaration of Trust, as amended, provides that
a Trustee is entitled to be indemnified against all liabilities and expenses
reasonably incurred by him in connection with the defense or disposition of any
proceeding in which he may be involved or with which he may be threatened by
reason of being or having been a Trustee, and that the Trustees will indemnify
officers, representatives and employees of the Trust and Framlington to the same
extent that Trustees are entitled to indemnification.
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICE ARRANGEMENTS
Investment Advisor. The Advisor of each Fund is Munder Capital
Management, a Delaware general partnership. The Advisor replaced Woodbridge
Capital Management, Inc. ("Woodbridge") as investment advisor to the investment
portfolios of the Trust and replaced Munder Capital Management, Inc. as
investment advisor to the investment portfolios of the Company on January 31,
1995, upon the closing of an agreement (the "Joint Venture Agreement") among Old
MCM, Inc., Comerica, Woodbridge and WAM, pursuant to which Old MCM, Inc.
contributed its investment advisory business and Comerica contributed the
investment advisory businesses of its indirect subsidiaries, Woodbridge and
World Asset Management, to the Advisor. The general partners of the Advisor are
Woodbridge, WAM, Old MCM, and Munder Group, LLC. Woodbridge and WAM are
wholly-owned subsidiaries of Comerica Bank -- Ann Arbor, which in turn is a
wholly-owned subsidiary of Comerica Incorporated, a publicly-held bank holding
company.
New Investment Advisory Agreements ("Advisory Agreements") between the
Advisor and the Trust on behalf of each investment portfolio of the Trust were
approved by the Board of Trustees of the Trust on November 23, 1994 and by the
shareholders of those funds at a meeting on March 29, 1995. Advisory Agreements
between the Advisor and the Company on behalf of the Multi-Season Fund, Real
Estate Fund and Money Market Fund were approved by the Board of Directors of the
Company on November 9, 1994 and by the shareholders of those Funds at a meeting
on February 24, 1995. The Advisory Agreements for the Mid-Cap Growth and Value
Funds were approved by the Board of Directors of the Company on July 31, 1995
and by shareholders on August 14, 1995. The Advisory Agreement for the
International Bond Fund was approved by the Board of Directors of the Company on
May 6, 1996 and by the shareholders on October 1, 1996. The Advisory Agreements
for the Equity Selection Fund, Micro-Cap Fund and Small-Cap Value Fund were
approved by the Board of Directors of the Company on August 6, 1996 and by
shareholders on November 18, 1996. The Advisory Agreement for the Short Term
Treasury Fund was approved by the Board of Directors of the Company on November
7, 1996 and by the shareholders on December 16, 1996. Under the terms of the
Advisory Agreements, the Advisor furnishes continuing investment supervision to
the Funds and is responsible for the management of the Funds' portfolios. The
responsibility for making decisions to buy, sell or hold a particular security
rests with the Advisor, subject to review by the Trust's and the Company's
Boards of Trustees and Directors.
The Advisory Agreements between the Advisor and Framlington on behalf of
each investment portfolio of Framlington were approved by the Board of Trustees
of Framlington on November 7, 1996 and by shareholders on December 31, 1996.
Under the terms of the Advisory Agreements, the Advisor furnishes overall
investment management for the International Growth Fund, the Emerging Markets
Fund and the Healthcare Fund, provides research and credit analysis, oversees
the purchase and sale of portfolio securities by the Sub-Advisor, maintains
books and records with respect to the Funds' securities transactions and
provides periodic and special reports to the Board of Trustees as requested.
The Company's and Framlington's Advisory Agreements will continue in
effect for a period of two years from their effective dates. The Trust's
Advisory Agreement was approved for an initial period from January 1, 1995 to
July 31, 1995. On July 31, 1995, the continuance of the Trust's Advisory
Agreement was approved and an amendment to the Trust's Advisory Agreement was
approved whereby the Advisor reduced the annual investment advisory fees payable
by certain portfolios of the Trust effective October 28, 1995. If not sooner
terminated, each Advisory Agreement will continue in effect for successive one
year periods thereafter, provided that each continuance is specifically approved
annually by (a) the vote of a majority of the Board of Trustees/Directors who
are not parties to the Advisory Agreement or interested persons (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of voting on
approval, and (b) either (i) the vote of a majority of the outstanding voting
securities of the affected Fund, or (ii) the vote of a majority of the Board of
Trustees/Directors. Each Advisory Agreement is terminable with respect to a Fund
by vote of the Board of Trustees/Directors, or by the holders of a majority of
the outstanding voting securities of the Fund, at any time without penalty, on
60 days' written notice to the Advisor. The Advisor may also terminate its
advisory relationship with respect to a Fund without penalty on 90 days' written
notice to the Trust, Framlington or the Company, as applicable. Each Advisory
Agreement terminates automatically in the event of its assignment (as defined in
the 1940 Act).
The Sub-Advisor is a subsidiary of Framlington Group Limited, which is
incorporated in England and Wales and, through its subsidiaries, provides a wide
range of investment services. Framlington Group Limited is a wholly owned
subsidiary of Framlington Holdings Limited which is, in turn, owned 49% by the
Advisor and 51% by Credit Commercial de France S.A., a French banking
corporation listed on the Societe des Bourses Francaises.
Under the terms of the sub-advisory agreement with the Sub-Advisor, the
Sub-Advisor provides sub-advisory services to the International Growth, Emerging
Markets and Healthcare Funds. Subject to supervision of the Advisor, the
Sub-Advisor is responsible for the management of each Fund's portfolio,
including all decisions regarding purchases and sales of portfolio securities by
the Funds. The Sub-Advisor is also responsible for arranging the execution of
all portfolio management decisions, including the selection of brokers to
execute trades and the negotiation of brokerage commissions in connection
therewith.
Framlington's Sub-Advisory Agreement, with respect to each Fund, will
continue in effect with respect to each Fund for a period of two years from its
effective date. If not sooner terminated, the Sub-Advisory Agreement will
continue in effect for successive one year periods thereafter, provided that
each continuance is specifically approved annually by (a) the vote of a majority
of the Board of Trustees who are not parties to the Sub-Advisory Agreement or
interested persons (as defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on approval, and (b) either (i) with respect to
a Fund, the vote of a majority of the outstanding voting securities of that
Fund, or (ii) the vote of a majority of the Board of Trustees. The Sub-Advisory
Agreement is terminable by vote of the Board of Trustees, or, with respect to a
Fund, by the holders of a majority of the outstanding voting securities of that
Fund, at any time without penalty, on 60 days' written notice to the
Sub-Advisor, or by the Advisor on 90 days' written notice to the Sub-Advisor.
The Sub-Advisor may also terminate its sub-advisory relationship with a Fund
without penalty on 90 days' written notice to Framlington. The Sub-Advisory
Agreement terminates automatically in the event of its assignment (as defined in
the 1940 Act).
For the advisory services provided and expenses assumed by it, the
Advisor has agreed to a fee from each Fund computed daily and payable monthly at
the rates set forth below:
1.25% of average daily net assets
oEmerging Markets Fund
1.00% of the first $500 million of average daily net assets and .75%
of net assets in excess of $500 million oMulti-Season Fund*
1.00% of the first $250 million of average daily net assets and .75%
of net assets in excess of $250 million oInternational Growth
Fund
oHealthcare Fund**
1.00% of average daily net assets
oMicro-Cap Fund**
.75% of average daily net assets
oAccelerating Growth Fund
oEquity Selection Fund
oGrowth & Income Fund
oInternational Equity Fund
oSmall-Cap Value Fund
oSmall Company Growth Fund
.74% of average daily net assets
oMid-Cap Fund
oReal Estate Fund
oValue Fund
.65% of average daily net assets
oBalanced Fund
.50% of average daily net assets
oBond Fund
oIntermediate Bond Fund
oInternational Bond Fund
oU.S. Income Fund
oMichigan Bond Fund
oTax-Free Bond Fund
oTax-Free Intermediate Bond Fund
.40% of average daily net assets
oMoney Market Fund
.35% of average daily net assets
oCash Investment Fund
oTax-Free Money Fund
oU.S. Treasury Fund
.25% of average daily net assets
oShort Term Treasury Fund
.20% of the first $250 million of average daily net assets;
0.12 of the next $250 million of net assets and .07% of net
assets in excess of $500 million
oIndex 500 Fund*
- -------------------------------
* The Advisor expects to receive, after waivers, an advisory fee at the
annual rate of .75% of average daily net assets of Multi-Season Fund
and .07% of average daily net assets of the Index 500 Fund during the
current fiscal year.
** The Advisor expects to voluntarily reimburse expenses during the
current fiscal year with respect to the Micro-Cap Fund and the
Healthcare Fund.
The Advisor may discontinue such fee waivers and/or expense
reimbursements at any time, in its sole discretion.
For its services, the Advisor pays the Sub-Advisor a monthly fee equal
on an annual basis to up to 0.50% of average daily net assets up to $250
million, reduced to .375% of average daily net assets in excess of $250 million
for the International Growth Fund and the Healthcare Fund, and up to .625% of
average daily net assets for the Emerging Markets Fund.
For the period February 1, 1995 through February 28, 1995, the Advisor
received fees, after waivers, of: $144,906 Accelerating Growth Fund, $22,937 -
Balanced Fund, $0 - Growth & Income Fund, $5,407 - Index 500 Fund, $75,502 -
International Equity Fund, $68,046 - Small Company Growth Fund, $67,126 - Bond
Fund, $172,014 - Intermediate Bond Fund, $67,252 - U.S. Government Income Fund,
$0 - Michigan Bond Fund, $96,599 - Tax-Free Bond Fund, $137,594 - Tax-Free
Intermediate Bond Fund, $246,455 - Cash Investment Fund, $62,910 - Tax-Free
Money Market Fund and $83,125 - U.S. Treasury Money Market Fund.
Net fees accrued to Old MCM, Inc., the Company's former investment
advisor, for services provided pursuant to the former advisory agreements (which
provided for the same fee rates as the Advisory Agreements) for the year ended
December 31, 1994 (and for the Real Estate Fund for the period from commencement
of operations to December 31, 1994) were $555,273 for the Multi-Season Fund,
$3,166 for the Real Estate Fund and $620,204 for the Money Market Fund. For such
periods, the Advisor voluntarily reimbursed expenses for the Multi-Season, Real
Estate and Money Market Funds in the following amounts of $285,571, $68,336 and
$218,109, respectively.
For the period March 1, 1995 through June 30, 1995, the Advisor
received fees after waivers of: $659,256 - Accelerating Growth Fund, $103,145 -
Balanced Fund, $243,681 - Growth & Income Fund, $27,024 - Index 500 Fund,
$357,460 - International Equity Fund, $316,025 - Small Company Growth Fund,
$300,222 - Bond Fund, $767,122 - Intermediate Bond Fund, $304,666 - U.S.
Government Income Fund, $0 - Michigan Bond Fund, $410,093 - Tax-Free Bond Fund,
$593,601 - Tax-Free Intermediate Bond Fund, $1,144,037 - Cash Investment Fund,
$273,285 - Tax-Free Money Market Fund and $373,285 - U.S. Treasury Money Market
Fund.
For the period from January 1, 1995 through June 30, 1995, the Advisor
received fees after waivers of $272,521 for the Multi-Season Fund, $0 for the
Real Estate Fund and $431,213 for the Money Market Fund. For such period, the
Advisor voluntarily reimbursed expenses for the Multi-Season and Real Estate
Funds, in the following amounts of $34,525 and $141,161, respectively.
For the period from July 1, 1995 through October 27, 1995, the Advisor
received fees after waivers of $709,799 for the Accelerating Growth Fund,
$107,536 for the Balanced Fund, $364,938 for the Growth & Income Fund, $31,087
for the Index 500 Fund, $379,355 for the International Equity Fund, $358,622 for
the Small Company Growth Fund, $300,502 for the Bond Fund, $771,815 for the
Intermediate Bond Fund, $290,956 for the U.S. Government Fund, $0 for the
Michigan Bond Fund, $367,467 for the Tax-Free Bond Fund, $572,916 for the
Tax-Free Intermediate Fund, $1,159,247 for the Cash Investment Fund, $266,552
for the Tax-Free Money Market Fund and $341,421 for the U.S. Treasury Money
Market Fund. For the period from October 28, 1995 through June 30,
1996, the Advisor received fees after waivers of $1,411,737 for the Accelerating
Growth Fund, $246,967 for the Balanced Fund, $970,328 for the Growth & Income
Fund, $72,265 for the Index 500 Fund, $946,880 for the International Equity
Fund, $920,847 for the Small Company Growth Fund, $537,663 for the Bond Fund,
$1,809,598 for the Intermediate Bond Fund, $661,896 for the U.S. Government
Fund, $0 for the Michigan Bond Fund, $709,274 for the Tax-Free Bond Fund,
$1,185,441 for the Tax-Free Intermediate Fund, $2,478,073 for the Cash
Investment Fund, $660,687 for the Money Market Fund, $610,215 for the Tax-Free
Money Market Fund and $823,717 for the U.S. Treasury Money Market Fund.
For the fiscal year ended June 30, 1996 (and for the period from
commencement of operations to June 30, 1996 for the Mid-Cap and Value Funds) the
Advisor received fees after waivers, if any, of $2,275,469 for the Multi-Season
Fund, $114,330 for the Real Estate Fund, $1,025,924 for the Money Market Fund,
$113,145 for the Mid-Cap Fund and $189,909 for the Value Fund.
For the fiscal year ended June 30, 1996, the Advisor voluntarily reimbursed
expenses in the following amounts: $34,671 for the Real Estate Fund, $24,500 for
the Mid-Cap Fund, $70,016 for the Value Fund and $21,376 for the Index 500 Fund.
For the fiscal year ended June 30, 1997 (and for the period from
commencement of operations to June 30, 1997 for the International Growth,
Emerging Markets, Healthcare, Micro-Cap, Small-Cap Value, Short Term Treasury
and International Bond Funds), the Advisor received fees after waivers, if any,
of $2,040,543 for the Accelerating Growth Fund, $445,259 for the Balanced Fund,
$1,650,704 for the Growth & Income Fund, $249,764 for the Index 500 Fund,
$1,720,496 for the International Equity Fund, $1,884,242 for the Small Company
Growth Fund, $751,954 for the Bond Fund, $2,554,647 for the Intermediate Bond
Fund, $1,175,733 for the U.S. Government Fund, $132,451 for the Michigan Bond
Fund, $1,006,688 for the Tax-Free Bond Fund, $1,584,769 for the Tax-Free
Intermediate Fund, $3,454,159 for the Cash Investment Fund, $879,155 for the
Tax-Free Money Market Fund, $1,101,183 for the U.S. Treasury Money Market Fund,
$3,189,742 for the Multi-Season Fund, $259,015 for the Real Estate Fund,
$599,286 for the Money Market Fund, $180,531 for the Mid-Cap Fund, $401,505 for
the Value Fund, $71,843 for the International Growth Fund, $25,210 for the
Emerging Markets Fund, $11,440 for the Healthcare Fund, $6,479 for the Micro-Cap
Equity Fund, $20,442 for the Small-Cap Value Fund, $51,885 for the Short Term
Treasury Fund and $143,476 for the International Bond Fund.
The Sub-Advisor is entitled to an advisory fee equal to up to one-half
of the fee paid to the Advisor by each of the Framlington Funds as compensation
for its services as Sub-Advisor. The Advisor pays fees to the Sub-Advisor and
the Framlington Funds pay no fees directly to the Sub-Advisor.
For the fiscal year ended June 30, 1997 the Advisor voluntarily waived
advisory fees and/or reimbursed expenses in the amounts of $1,063,248 for the
Multi-Season Fund, $10,143 for the Real Estate Fund, $52,965 for the Mid-Cap
Fund, $17,688 for the Value Fund, $360,721 for the Index 500 Fund and $51,815
for the Michigan Bond Fund. For the period ended June 30, 1997, the
Advisor voluntarily reimbursed expenses in the amounts of $41,485 for the
Micro-Cap Fund, $16,708 for the Small-Cap Value Fund, $72,552 for the
International Growth Fund, $73,369 for the Emerging Markets Fund, and $66,145
for the Healthcare Fund, $9,944 for the International Bond Fund and $5,153 for
the Short Term Treasury Fund.
The Equity Selection Fund was not available for purchase as of the date
of this Statement of Additional Information.
Distribution Agreements. The Trust, Framlington and the Company have
entered into distribution agreements, under which the Distributor, as agent,
sells shares of each Fund on a continuous basis. The Distributor has agreed to
use appropriate efforts to solicit orders for the purchase of shares of each
Fund, although it is not obligated to sell any particular amount of shares. The
Distributor pays the cost of printing and distributing prospectuses to persons
who are not holders of shares of the Funds (excluding preparation and printing
expenses necessary for the continued registration of the shares) and of printing
and distributing all sales literature. The Distributor's principal offices are
located at 60 State Street, Boston, Massachusetts 02109.
Distribution Services Arrangements - Class A, Class B and Class C
Shares. Each Fund has adopted a Service and Distribution Plan with respect to
its Class A Shares pursuant to which it uses its assets to finance activities
relating to the provision of certain shareholder services. Under the Service and
Distribution Plans for Class A Shares, the Distributor is paid an annual service
fee at the rate of up to 0.25% of the value of average daily net assets of the
Class A Shares of each Fund. Each Fund has also adopted a Service and
Distribution Plan with respect to its Class B and Class C Shares, pursuant to
which it uses its assets to finance activities relating to the distribution of
its shares to investors and provision of certain shareholder services. Under the
Service and Distribution Plans for Class B and Class C Shares, the Distributor
is paid an annual service fee of up to 0.25% of the value of average daily net
assets of the Class B and Class C Shares of each Fund and an annual distribution
fee at the rate of up to 0.75% of the value of average daily net assets of the
Class B and Class C Shares of each Fund.
Under the terms of the Service and Distribution Plans (collectively,
the "Plans"), each Plan continues from year to year, provided such continuance
is approved annually by vote of the Board of Trustees/Directors, including a
majority of the Board of Trustees/Directors who are not interested persons of
the Trust, Framlington or the Company, as applicable, and who have no direct or
indirect financial interest in the operation of that Plan (the "Non-Interested
Plan Directors"). The Plans may not be amended to increase the amount to be
spent for the services provided by the Distributor without shareholder approval,
and all amendments of the Plans also must be approved by the Trustees/Directors
in the manner described above. Each Plan may be terminated at any time, without
penalty, by vote of a majority of the Non-Interested Plan Directors or by a vote
of a majority of the outstanding voting securities of the relevant class of the
respective Fund (as defined in the 1940 Act) on not more than 30 days' written
notice to any other party to the Plan. Pursuant to each Plan, the Distributor
will provide the Boards of Trustees and Directors periodic reports of amounts
expended under the Plan and the purpose for which such expenditures were made.
The Trustees/Directors have determined that the Plans will benefit the
Trust, Framlington, the Company and their respective shareholders by (i)
providing an incentive for broker or bank personnel to provide continuous
shareholder servicing after the time of sale; (ii) retention of existing
accounts; (iii) facilitating portfolio management flexibility through continued
cash flow into the Funds; and (iv) maintaining a competitive sales structure in
the mutual fund industry.
With respect to Class B and Class C Shares of each Fund, the
Distributor expects to pay sales commissions to dealers authorized to sell a
Fund's Class B and Class C Shares at the time of sale. The Distributor will use
its own funds (which may be borrowed) to pay such commissions pending
reimbursement by the relevant Service and Distribution Plan. In addition, the
Advisor may use its own resources to make payments to the Distributor or dealers
authorized to sell the Funds' shares to support their sales efforts.
<PAGE>
Fees paid to the Distributor Pursuant to Class A Service Plans
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- -------------------------------------------- ----------------- ---------------- ----------------- ----------------
FISCAL YEAR FISCAL YEAR FISCAL
ENDED PERIOD ENDED ENDED YEAR
2/28/95 6/30/95 6/30/96 ENDED
FUNDS OF THE TRUST 6/30/97
- -------------------------------------------- ----------------- ---------------- ----------------- ----------------
Accelerating Growth Fund $1,339.97 $51.86 $1,916.29 $16,419
Balanced Fund $116.01 $0.17 $136.95 $981
Growth & Income Fund $0.00 $76.92 $268.00 $5,324
Index 500 Fund $176.46 $203.84 $23,640.46 $48,763
International Equity Fund $617.32 $1.38 $1,946.82 $13,505
Small Company Growth Fund $794.65 $10.80 $1,158.43 $17,843
Bond Fund $17.48 $15.24 $29.40 $2,203
Intermediate Bond Fund $230.93 $0.51 $345.66 $13,919
Michigan Triple Tax-Free Bond Fund $663.53 $0.00 $23.32 $1,206
Tax-Free Bond Fund $0.00 $0.00 $0.03 $4,973
Tax-Free Intermediate Bond Fund $6.17 $10.80 $85.26 $14,678
- -------------------------------------------- ----------------- ---------------- ----------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -------------------------------------------- ----------------- ---------------- -----------------
FISCAL YEAR FISCAL
PERIOD ENDED ENDED YEAR
6/30/95 6/30/96 ENDED
FUNDS OF THE COMPANY 6/30/97
- -------------------------------------------- ----------------- ---------------- -----------------
Multi-Season Fund $427.88 $1,945.49 $30,811
Real Estate Fund $422.10 $179.10 $1,559
Mid-Cap Fund N/A $51.87 $373
Value Fund N/A $41.77 $2,347
Money Market Fund N/A N/A $1,198*
Micro-Cap Fund N/A N/A $79*
Small-Cap Value Fund N/A N/A $558*
International Bond Fund N/A N/A $39*
- -------------------------------------------- ----------------- ---------------- -----------------
</TABLE>
- -----------------------------------
* Figures reflect period from commencement of operations to June 30, 1997.
- -------------------------------------------- -----------------
<TABLE>
<CAPTION>
<S> <C>
FISCAL
PERIOD ENDED
6/30/97
FUNDS OF FRAMLINGTON
- -------------------------------------------- -----------------
International Growth Fund $759
Emerging Markets Fund $285
Healthcare Fund $241
- -------------------------------------------- -----------------
</TABLE>
<PAGE>
<PAGE>
Fees paid to the Distributor Pursuant to Class B Service and Distribution Plans
for the fiscal year ended June 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
--------------------- ------------------
DISTRIBUTION
AND SERVICER
FEES CDSC's
- --------------------------------------------
--------------------- ------------------
Accelerating Growth Fund $3,607 $150.00
Balanced Fund $1,249 $0.00
Growth & Income Fund $3,519 $535.41
Index 500 Fund $153,426 $0.00
International Equity Fund $10,398 $318.86
Micro-Cap Fund* $513 $0.00
Mid-Cap Fund $658 $0.00
Multi-Season Fund $731,958 $26,020.64
Real Estate Fund $27,446 $0.00
Small-Cap Value Fund* $648 $0.00
- -------------------------------------------- --------------------- ------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
--------------------- ------------------
DISTRIBUTION
AND SERVICER
FEES CDSC's
- -------------------------------------------- --------------------- ------------------
Small Company Growth Fund $21,679 $930.13
Value Fund $2,689 $0.00
International Growth Fund* $175 $0.00
Emerging Markets Fund* $95 $0.00
Healthcare Fund* $1,240 $0.00
Bond Fund $5,482 $447.26
International Bond Fund* $11 $0.00
Intermediate Bond Fund $2,627 $0.00
Short Term Treasury Fund* $116 $0.00
U.S. Government Income Fund $13,452 $0.00
Michigan Bond Fund $2,779 $0.00
Tax-Free Bond Fund $566 $0.00
Tax-Free Intermediate Bond Fund $1,782 $0.00
Money Market Fund $1,925 $711.20
- -------------------------------------------- --------------------- ------------------
- -------------------------------
* Figures reflect period from commencement of operations to June 30, 1997.
</TABLE>
<PAGE>
Fees paid to the Distributor Pursuant to Class B Service and Distribution Plans
for the fiscal year ended June 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
--------------------- ------------------ -------------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- --------------------------------------------
--------------------- ------------------ -------------------
Accelerating Growth Fund $1,268.42 $422.83 $238.16
Balanced Fund $400.45 $133.48 $199.11
Growth & Income Fund $1,147.15 $382.37 $300.00
Index 500 Fund $15,750.66 $4,500.20 $1,207.75
International Equity Fund $3,131.06 $1,043.68 $1.008.01
Mid-Cap Growth Fund $88.71 $29.54 $0.00
Multi-Season Fund $454,197.35 $151,399.12 $155,014.33
Real Estate Fund $12,014.27 $4,004.75 $4,278.33
Small Company Growth Fund $2,247.94 $749.31 $100.00
Value Fund $424.07 $141.36 $181.56
Bond Fund $590.01 $196.67 $861.49
Intermediate Bond Fund $206.34 $68.79 $0.00
U.S. Government Income Fund $3,656.37 $1,218.79 $199.27
Michigan Bond Fund $1,923.70 $641.24 $405.63
Tax-Free Bond Fund $131.90 $43.96 $979.34
Tax-Free Intermediate Bond Fund $298.44 $99.48 $0.53
Money Market Fund $1,496.13 $498.72 $0.00
- -------------------------------------------- --------------------- ------------------ -------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fees paid to the Distributor Pursuant to Class B Service and Distribution Plans
for the period ended June 30, 1995*
--------------------- ----------------- -------------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- --------------------------------------------
--------------------- ----------------- -------------------
Accelerating Growth Fund $137.64 $45.26 $350.16
Balanced Fund $44.96 $15.16 $200.96
Growth & Income Fund $135.37 $44.52 $0.00
International Equity Fund $311.35 $103.16 $0.00
Multi-Season Fund** $187,381.57 $62,460.53 $101,519.47
Real Estate Fund** $4,532.31 $1,510.77 $430.62
Small Company Growth Fund $107.62 $35.70 $0.00
Intermediate Bond Fund $19.61 $6.50 $0.00
Michigan Triple Tax Free Fund $631.87 $208.93 $361.42
Tax-Free Bond Fund $2.85 $0.95 $0.00
Money Market Fund** $1,774.98 $591.66 $0.00
- -------------------------------------------- --------------------- ----------------- -------------------
* As of June 30, 1995, the following funds had not commenced selling Class B Shares: Bond Fund, Index 500 Fund, U.S. Government
Income Fund, Tax Free Intermediate Bond Fund.
** Figures reflect the period 01/01/95 - 06/30/95. All other funds reflect the period 03/01/95 - 06/30/95.
</TABLE>
<PAGE>
<PAGE>
Fees paid to the Distributor Pursuant to Class B Service and Distribution Plans
for the fiscal year ended February 28, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
---------------------- ----------------- -----------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- -------------------------------------------- ---------------------- ----------------- -----------------
Accelerating Growth Fund $113.37 $15.95 $0.00
Balanced Fund $66.05 $7.42 $0.00
Growth & Income Fund $117.51 $20.45 $0.00
International Equity Fund $315.98 $49.15 $0.00
Multi-Season Growth Fund* $481,834.00 $0.00 $159,185.00
- -------------------------------------------- ---------------------- ----------------- -----------------
---------------------- ----------------- -----------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- -------------------------------------------- ---------------------- ----------------- -----------------
Real Estate Fund** $1,064.00 $0.00 $0.00
Small Company Growth Fund $72.07 $14.30 $0.00
Intermediate Bond Fund $16.61 $2.96 $0.00
Michigan Triple Tax Free Fund $515.28 $91.47 $0.00
Tax-Free Bond Fund $0.12 $0.04 $0.00
Money Market Fund** $1,799 $0.00 $0.00
- -------------------------------------------- ---------------------- ----------------- -----------------
* Figures reflect period from 01/01/94 - 12/31/94. Such amounts were paid to a previous distributor.
** Figures reflect period from commencement of operations to 12/31/94. Such amounts were paid to a previous distributor.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fees paid to the Distributor Pursuant to Class C Service and Distribution Plans
for the fiscal year ended June 30, 1997*
---------------------- ----------------
DISTRIBUTION
AND SERVICER
FEES CDSC's
- --------------------------------------------
---------------------- ----------------
Accelerating Growth Fund $2,146 $0.00
Balanced Fund $337 $0.00
Growth & Income Fund $2,683 $0.00
International Growth Fund** $63 $0.00
Emerging Markets Fund** $49 $0.00
Healthcare Fund** $125 $0.00
International Equity Fund $18,452 $0.00
Mid-Cap Fund $985 $0.00
Multi-Season Fund $73,808 $391.84
Real Estate Fund $1,829 $2.38
Micro-Cap Fund** $48 $0.00
Small-Cap Value Fund** $223 $0.00
Small Company Growth Fund $13,938 $212.00
Value Fund $4,397 $0.00
Bond Fund $787 $0.00
Intermediate Bond Fund $1,136 $0.00
U.S. Government Income Fund $93 $0.00
Michigan Bond Fund $568 $0.00
Money Market Fund $5,932 $0.00
- -------------------------------------------- ---------------------- ----------------
- ---------------------------------
* As of June 30, 1997, the following funds had not commenced selling Class
C Shares: Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund,
International Bond Fund and Short Term Treasury Fund.
** Figures reflect period from commencement of operations to June 30, 1997.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fees paid to the Distributor Pursuant to Class C Service and Distribution Plans
for the fiscal year ended June 30, 1996*
--------------------- ----------------- ----------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- --------------------------------------------
--------------------- ----------------- ----------------
Accelerating Growth Fund $263.46 $87.82 $188.66
Balanced Fund $3.69 $1.21 $100.01
Growth & Income Fund $89.74 $29.90 $0.00
International Equity Fund $3,585.39 $1,195.13 $293.87
Mid-Cap Growth Fund $129.03 $43.00 $2.18
Multi-Season Growth Fund $32,127.47 $10,709.17 $798.25
Real Estate Fund $13.33 $4.43 $7.50
Small Company Growth Fund $171.21 $57.06 $149.87
Value Fund $855.88 $285.29 $0.00
Bond Fund $92.46 $30.80 $0.00
Intermediate Bond Fund $73.80 $24.58 $0.00
- -------------------------------------------- --------------------- ----------------- ----------------
* As of June 30, 1996, the following funds had not commenced selling Class
C Shares: Index 500 Fund, U.S. Government Income Fund, Michigan Bond
Fund, Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund and Money
Market Fund.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fees paid to the Distributor Pursuant to Class C Service and Distribution Plan
for the fiscal period ended June 30, 1995*
--------------------- ----------------- ----------------
DISTRIBUTION SERVICER FEES CDSC's
FEES
- -------------------------------------------- --------------------- ----------------- ----------------
Multi-Season Growth Fund** $9,464.61 $3,154.86 $256.15
Real Estate Fund** $1.28 $0.43 $0.00
- -------------------------------------------- --------------------- ----------------- ----------------
* As of June 30, 1995, the Funds of the Trust had not commenced selling Class C Shares.
** Figures reflect period 01/01/95-06/30/95.
</TABLE>
The following amounts were paid by each Fund under its Class B Service
and Distribution Plans during the fiscal year ended June 30, 1997.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Printing and
Mailing of Interest,
Prospectuses Carrying or
to other than other
Current Compensation to Compensation Compensation Financing
Advertising Shareholders Underwriters to Dealers to Personnel Charges
Accelerating Growth Fund $0 $0 $0 $387 $0 $889
Balanced Fund $0 $0 $0 $128 $0 $284
Index 500 Fund $0 $0 $0 $4,061 $0 $54,546
International Growth Fund* $0 $0 $0 $0 $0 $183
Emerging Markets Fund* $0 $0 $0 $0 $0 $85
Healthcare Fund* $0 $0 $0 $0 $0 $809
Growth & Income Fund $0 $0 $0 $297 $0 $936
International Equity Fund $0 $0 $0 $739 $0 $2,264
Micro-Cap Equity Fund* $0 $0 $0 $0 $0 $351
Mid-Cap Growth Fund $0 $0 $0 $77 $0 $127
Multi-Season Fund $0 $0 $0 $152,100 $0 $38,460
Real Estate Fund $0 $0 $0 $4,337 $0 $5,926
Short Term Treasury Fund* $0 $0 $0 $0 $0 $35
Small-Cap Value Fund* $0 $0 $0 $0 $0 $289
Small Company Growth Fund $0 $0 $0 $278 $0 $7,962
Value Fund $0 $0 $0 $235 $0 $749
Bond Fund $0 $0 $0 $119 $0 $`0
Intermediate Bond Fund $0 $0 $0 $240 $0 $168
International Bond Fund $0 $0 $0 $0 $0 $15
U.S. Government Fund $0 $0 $0 $326 $0 $0
Michigan Bond Fund $0 $0 $0 $646 $0 $192
Tax-Free Bond Fund $0 $0 $0 $8 $0 $223
Tax-Free Intermediate Bond
Fund $0 $0 $0 $8 $0 $615
Money Market Fund $0 $0 $0 $483 $0 $0
- ----------------------------
* Figures reflect period from commencement of operations to June 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
The following amounts were paid by each Fund under its Class C Service
and Distribution Plans during the fiscal year ended June 30, 1997.
Printing and
Mailing of Interest,
Prospectuses Carrying or
to other than Compensation other
Current to Underwriters Compensation to Compensation Financing
Advertising Shareholders Dealers to Personnel Charges
Accelerating Growth Fund $0 $0 $0 $129 $0 $80
Balanced Fund $0 $0 $0 $4 $0 $11
International Growth Fund* $0 $0 $0 $0 $0 $10
Emerging Markets Fund* $0 $0 $0 $0 $0 $4
Healthcare Fund* $0 $0 $0 $0 $0 $24
Growth & Income Fund $0 $0 $0 $89 $0 $5
International Equity Fund $0 $0 $0 $3,352 $0 $354
Micro-Cap Equity Fund* $0 $0 $0 $0 $0 $11
Mid-Cap Growth Fund $0 $0 $0 $114 $0 $37
Multi-Season Fund $0 $0 $0 $22,863 $0 $0
Real Estate Fund $0 $0 $0 $17 $0 $148
Short Term Treasury Fund* $0 $0 $0 $0 $0 $0
Small-Cap Value Fund* $0 $0 $0 $0 $0 $30
Small Company Growth Fund $0 $0 $0 $29 $0 $364
Value Fund $0 $0 $0 $833 $0 $57
Bond Fund $0 $0 $0 $37 $0 $0
Intermediate Bond Fund $0 $0 $0 $79 $0 $1,411
U.S. Government Fund $0 $0 $0 $8 $0 $0
Michigan Bond Fund $0 $0 $0 $0 $0 $0
Tax-Free Bond Fund $0 $0 $0 $0 $0 $40
Tax-Free Intermediate Bond
Fund $0 $0 $0 $0 $0 $0
Money Market Fund $0 $0 $0 $5,277 $0 $0
- ------------------------------------
* Figures reflect fiscal period from commencement of operations to June 30, 1997.
</TABLE>
Shareholder Servicing Arrangements - Class K Shares. As stated in each
Fund's Prospectus, Class K Shares are sold to investors through institutions
which enter into Shareholder Servicing Agreements with the Trust, Framlington or
the Company to provide support services to their Customers who beneficially own
Class K Shares in consideration of the Funds' payment of not more than .25% (on
an annualized basis) of the average daily net asset value of the Class K Shares
beneficially owned by the Customers.
Services provided by institutions under their service agreements may
include: (i) aggregating and processing purchase and redemption requests for
Class K Shares from Customers and placing net purchase and redemption orders
with the Distributor; (ii) providing Customers with a service that invests the
assets of their accounts in Class K Shares pursuant to specific or
pre-authorized instructions; (iii) processing dividend payments on behalf of
Customers; (iv) providing information periodically to Customers showing their
positions in Class K Shares; (v) arranging for bank wires; (vi) responding to
Customer inquiries relating to the services performed by the institutions; (vii)
providing subaccounting with respect to Class K Shares beneficially owned by
Customers or the information necessary for subaccounting; (viii) if required by
law, forwarding shareholder communications from the Trust, the Framlington Trust
or the Company (such as proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to Customers;
(ix) forwarding to Customers proxy statements and proxies containing any
proposals regarding the Trust's or Framlington's or the Company's arrangements
with institutions; and (x) providing such other similar services as the Trust,
Framlington or the Company may reasonably request to the extent the institutions
are permitted to do so under applicable statutes, rules and regulations.
Pursuant to the Trust's, Framlington's and the Company's agreements
with such institutions, the Boards of Trustees and Directors will review, at
least quarterly, a written report of the amounts expended under Trust's, the
Framlington's and the Company's agreements with Institutions and the purposes
for which the expenditures were made. In addition, the arrangements with
Institutions must be approved annually by a majority of the Boards of Trustees
and Directors, including a majority of the Trustees/Directors who are not
"interested persons" as defined in the 1940 Act, and have no direct or indirect
financial interest in such arrangements.
The Boards of Trustees and Directors have approved the arrangements
with Institutions based on information provided by the service contractors that
there is a reasonable likelihood that the arrangements will benefit the Funds
and their shareholders by affording the Funds greater flexibility in connection
with the servicing of the accounts of the beneficial owners of their shares in
an efficient manner.
Administration Agreement. State Street Bank and Trust Company ("State
Street"), whose principal business address is 225 Franklin Street, Boston,
Massachusetts, 02110, serves as administrator for the Trust, Framlington and the
Company pursuant to administration agreements (each, an "Administration
Agreement"). State Street has agreed to maintain office facilities for the
Trust, Framlington and the Company; provide accounting and bookkeeping services
for the Funds, oversee the computation of each Fund's net asset value, net
income and realized capital gains, if any; furnish statistical and research
data, clerical services, and stationery and office supplies; prepare and file
various reports with the appropriate regulatory agencies; and prepare various
materials required by the SEC. State Street may enter into an agreement with one
or more third parties pursuant to which such third parties will provide
administrative services on behalf of the Funds.
Each Administration Agreement provides that the Administrator
performing services thereunder shall not be liable under the Agreement except
for its bad faith, negligence or willful misconduct in the performance of its
duties and obligations thereunder.
Prior to November 1, 1997, First Data Investor Services Group, Inc.
("Investor Services Group") located at 53 State Street, Boston, Massachusetts
02109 served as administrator to the Funds.
For the period ended February 28, 1995, the administration fees of
Investor Services Group accrued as follows: Accelerating Growth Fund - $198,140;
Balanced Fund - $34,625; Growth & Income Fund - $41,047; Index 500 Fund -
$69,871; International Equity Fund - $94,485; Small Company Growth Fund -
$83,027; Bond Fund - $133,388; Intermediate Bond Fund - $335,642; U.S.
Government Income Fund - $142,297; Michigan Bond Fund - $17,168; Tax-Free Bond
Fund - $217,868; Tax-Free Intermediate Bond Fund - $272,285; Cash Investment
Fund - $669,287; Tax-Free Money Market Fund $179,189; and U.S. Treasury Money
Market Fund - $212,383.
For the period ended June 30, 1995 and the fiscal years ended June 30,
1996 and June 30, 1997, the administration fees of Investor Services Group
accrued as follows: Accelerating Growth Fund - $101,130, $322,120 and $307,521;
Balanced Fund - $18,258, $62,095 and $77,364; Growth & Income Fund - $48,503,
$202,655 and $248,644; Index 500 Fund - $44,411, $188,416 and $405,016;
International Equity Fund - $54,832, $201,299 and $259,162; Small Company Growth
Fund - $48,480, $194,176 and $283,755; Bond Fund - $69,084, 190,967 and
$169,932; Intermediate Bond Fund - $176,525, $587,790 and $577,425; U.S.
Government Income Fund - $70,106, $216,970 and $265,637; Michigan Bond Fund -
$10,784, $31,899 and $41,620; Tax-Free Bond Fund - $94,378, $245,271 and
$227,508; Tax-Free Intermediate Bond Fund - $136,609, $400,485 and $358,214;
Cash Investment Fund - $376,101, $1,183,419 and $1,115,110; Tax-Free Money
Market Fund - $89,841 $285,214 and $283,803; and U.S. Treasury Money Market Fund
- - $122,730, $378,955 and $355,592, respectively.
For the period May 1, 1995 through June 30, 1995, administration fees
of Investor Services Group accrued were $17,266, $1,150 and $48,129, for the
Multi-Season Fund, Real Estate Fund and Money Market Fund, respectively.
For the fiscal year ended June 30, 1996, administration fees of
Investor Services Group accrued were: $345,388 - Multi-Season Fund, $19,120 -
Real Estate Fund and $292,172 - Money Market Fund. For the period ended June 30,
1996, administration fees of the Administrator accrued were: $18,006 - Mid-Cap
Fund and $29,705 - Value Fund.
For the fiscal year ended June 30, 1997, administration fees of
Investor Services Group accrued were $480,310-Multi-Season Fund; $39,493-Real
Estate Fund, $27,562-Mid-Cap Growth Fund; $169,405-Money Market Fund and
$61,224-Value Fund.
For the period ended June 30, 1997, administration fees of Investor Services
Group accrued were $730-Micro-Cap Fund; $14,220-Small-Cap Value Fund;
$32,343-International Bond Fund and $23,349-Short Term Treasury Fund.
For the period ended June 30, 1997, administration fees of Investor
Services Group accrued were $9,644- Emerging Markets Fund; $9,644-Healthcare
Fund and $9,644-International Growth Fund.
Custodian, Sub-Custodian and Transfer Agency Agreements. Comerica Bank,
whose principal business address is One Detroit Center, 500 Woodward Avenue,
Detroit, MI 48226, maintains custody of the Funds' assets pursuant to custodian
agreements (each, a "Custody Agreement") with each of the Trust, Framlington and
the Company. Under each Custody Agreement, the Custodian (i) maintains a
separate account in the name of each Fund, (ii) holds and transfers portfolio
securities on account of each Fund, (iii) accepts receipts and makes
disbursements of money on behalf of each Fund, (iv) collects and receives all
income and other payments and distributions on account of each Fund's securities
and (v) makes periodic reports to the Boards of Trustees and Directors
concerning each Fund's operations. For the period ended June 30, 1997, the
Custodian earned $122,406 for its services to the Funds of the Company, $691,406
for its services to the Funds of the Trust and $8,713 for its services to the
Funds of Framlington. Effective November 1, 1997, no compensation will be paid
to the Custodian for its services. The Custodian has entered into a Sub-Custody
Agreement with State Street pursuant to which State Street will serve as
Sub-Custodian to the Funds. As compensation for its services, State Street is
entitled to receive fees, based on the aggregate average daily net assets of the
Funds and certain other investment portfolios that are advised by the Advisor
for which the Sub-Custodian provides services, computed daily and payable
monthly at an annual rate of .01% of average daily net assets. The Sub-Custodian
also receives certain transaction based fees.
The Custodian is authorized to select one or more domestic or foreign banks
or trust companies to serve as sub-custodian on behalf of the Trust, Framlington
or the Company. In addition, the Trust, Framlington and the Company and the
Custodian have entered into respective sub-custody agreements with Morgan
Stanley Trust Company ("Morgan Stanley") relating to the custody of foreign
securities held by certain Funds of the Trust and each Fund of Framlington and
the Company (except the Real Estate Fund), and Morgan Stanley, in turn, has
entered into additional agreements with financial institutions and depositories
located in foreign countries with respect to the custody of such securities. As
of October 1997, State Street will replace Morgan Stanley as Sub-Custodian
relating to the custody of foreign securities held by the Funds.
Investor Services Group serves as the transfer and dividend disbursing
agent for the Funds pursuant to transfer agency agreements (the "Transfer Agency
Agreement") with each of the Trust, Framlington and the Company, under which
Investor Services Group (i) issues and redeems shares of each Fund, (ii)
addresses and mails all communications by each Fund to its record owners,
including reports to shareholders, dividend and distribution notices and proxy
materials for its meetings of shareholders, (iii) maintains shareholder
accounts, (iv) responds to correspondence by shareholders of the Funds and (v)
makes periodic reports to the Boards of Trustees and Directors concerning the
operations of each Fund.
Comerica. As stated in the Funds' Class K Shares Prospectus, Class K
Shares of the Funds are sold to customers of banks and other institutions. Such
banks and institutions may include Comerica Incorporated (a publicly-held bank
holding company), its affiliates and subsidiaries ("Comerica") and other
institutions that have entered into agreements with the Company, the Trust and
Framlington providing for shareholder services for their customers.
Banking laws and regulations currently 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 underwriting securities, but such banking laws and regulations do not
prohibit such a holding company or affiliate or banks generally from acting as
investment advisor, administrator, 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 customers. The Advisor and the Custodian are subject to such
banking laws and regulations.
The Advisor and the Custodian believe they may perform the services for
the Trust, Framlington and the Company contemplated by their respective
agreements with each of them without violation of applicable banking laws and
regulations. It should be noted, however, that there have been no cases deciding
whether bank and non-bank subsidiaries of a registered bank holding company may
perform services comparable to those that are to be performed by these
companies, and future changes in either Federal or state statutes and
regulations relating to permissible activities of banks and their subsidiaries
or affiliates, as well as future judicial or administrative decisions or
interpretations of current and future statutes and regulations, could prevent
these companies from continuing to perform certain services for the Funds.
Should future legislative, judicial or administrative action prohibit
or restrict the activities of such companies in connection with the provision of
services on behalf of the Trust, Framlington or the Company, the Trust,
Framlington or the Company might be required to alter materially or discontinue
the arrangements with the institutions and change the method of operations. It
is not anticipated, however, that any change in the Funds' method of operations
would affect the net asset value per share of the Funds or result in a financial
loss to any shareholder of the Funds.
It should be noted that future changes in either Federal or state
statutes and regulations relating to permissible activities of banks and their
subsidiaries or affiliates, as well as future judicial or administrative
decisions or interpretations of current and future statutes and regulations,
could prevent Comerica and certain other institutions from continuing to perform
certain services for Class K shares of the Funds.
Should future legislative, judicial or administrative action prohibit
or restrict the activities of Comerica and/or other institutions in connection
with the provision of services on behalf of Class K shares of the Fund, the
Trust, Framlington or the Company might be required to alter materially or
discontinue the arrangements with the institutions and change the method of
operations with respect to Comerica and certain other institutions. It is not
anticipated, however, that any change in the Funds' method of operations would
affect the net asset value per share of the Funds or result in a financial loss
to any holder of Class K shares of the Funds.
<PAGE>
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board Members, the Advisor or
the Sub-Advisor, as the case may be, makes decisions with respect to and places
orders for all purchases and sales of portfolio securities for the Funds.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers. Transactions on foreign
stock exchanges involve payment for brokerage commissions which are generally
fixed.
For the period from March 1, 1995 to June 30, 1995, the Accelerating
Growth Fund, Balanced Fund, Growth & Income Fund, Index 500 Fund, International
Equity Fund and Small Company Growth Fund paid in brokerage commissions
$123,045, $13,238, $62,706, $5,047, $127,871 and $65,661, respectively. The
other Funds of the Trust did not pay brokerage commissions for the period from
March 1, 1995 to June 30, 1995.
For the period from January 1, 1995 to June 30, 1995, the Multi-Season
Fund and the Real Estate Fund paid $62,889 and $14,627, respectively, in
brokerage commissions. The other Funds of the Company did not pay brokerage
commissions for the period from January 1, 1995 to June 30, 1995.
For the fiscal year ended June 30, 1996, the Funds paid brokerage
commissions as follows: $474,252 - Accelerating Growth Fund, $52,376-Balanced
Fund, $202,292 - Growth & Income Fund, $41,009 - Index 500 Fund, $428,699 -
International Equity Fund, $424,580 - Multi-Season Fund, $40,182 - Real Estate
Fund and $203,936 - Small Company Growth Fund. The other Funds of the Company
and the Trust did not pay brokerage commissions during the fiscal year ended
June 30, 1996.
For the period ended June 30, 1996, the Mid-Cap Fund and the Value
Fund paid brokerage commissions of $83,397 and $169,335,
respectively.
For the fiscal year ended June 30, 1997, the Funds paid brokerage
commissions as follows: $506,861-Accelerating Growth Fund, $54,221-Balanced
Fund, $336,161-Growth & Income Fund, $61,393 - Index 500 Fund,
$155,081-International Equity Fund, $366,346-Multi-Season Fund, $50,137-Mid-Cap
Fund, $66,879-Real Estate Fund and $355,997-Small Company Growth Fund. The other
Funds of the Company and the Trust did not pay brokerage commissions during the
fiscal year ended June 30, 1997.
For the period ended June 30, 1997, Funds paid brokerage commissions as
follows: $2,045-Micro-Cap Fund, $82,304-Small-Cap Value Fund, $228,545-Value
Fund, $0-International Bond Fund, $0-Short Term Treasury Fund., $43,256-Emerging
Markets Fund, $87,694-International Growth Fund and $3,325-Healthcare Fund.
Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, the Advisor will
normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from underwriters includes an underwriting commission or concession, and the
prices at which securities are purchased from and sold to dealers include a
dealer's mark-up or mark-down.
The Funds may participate, if and when practicable, in bidding for the
purchase of portfolio securities directly from an issuer in order to take
advantage of the lower purchase price available to members of a bidding group.
The Funds will engage in this practice, however, only when the Advisor or
Sub-Advisor, as the case may be, believes such practice to be in the Funds'
interests.
Since the Money Market Funds will invest only in short-term debt
instruments, their annual portfolio turnover rates will be relatively high, but
brokerage commissions are normally not paid on money market instruments, and
portfolio turnover is not expected to have a material effect on the net
investment income of a Money Market Fund. The portfolio turnover rate of a Fund
is calculated by dividing the lesser of a Fund's annual sales or purchases of
portfolio securities (exclusive of purchases or sales of securities whose
maturities at the time of acquisition were thirteen months or less for the Money
Market Funds or one year or less for the Equity and Bond Funds) by the monthly
average value of the securities held by the Fund during the year. The Equity and
Bond Funds may engage in short-term trading to achieve their investment
objectives. Portfolio turnover may vary greatly from year to year as well as
within a particular year.
Each Fund's portfolio turnover rate is included in the prospectuses
under the section entitled "Financial Highlights." For the fiscal year ended
June 30, 1997, the portfolio turnover rate for the Bond Fund and the
Intermediate Bond Fund was 279% and 325%, respectively. The portfolio turnover
of the Bond Fund and the Intermediate Bond Fund was affected by fluctuating
interest rate conditions which at times required increased dispositions and
acquisitions of securities to maintain each Fund's maturity structure.
In its Advisory Agreements, the Advisor (and, in the case of the Funds
of Framlington, the Sub-Advisor pursuant to the Sub-Advisory Agreement) agrees
to select broker-dealers in accordance with guidelines established by the Boards
of Trustees and Directors from time to time and in accordance with applicable
law. In assessing the terms available for any transaction, the Advisor or
Sub-Advisor, as the case may be, shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker-dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In addition, the Advisory and Sub-Advisory Agreements
authorize the Advisor or Sub-Advisor, as the case may be, subject to the prior
approval of the Boards of Trustees and Directors, to cause the Funds to pay a
broker-dealer which furnishes brokerage and research services a higher
commission than that which might be charged by another broker-dealer for
effecting the same transaction, provided that the Advisor or Sub-Advisor, as the
case may be, determines in good faith that such commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either the particular transaction or the
overall responsibilities of the Advisor to the Funds. Such brokerage and
research services might consist of reports and statistics on specific companies
or industries, general summaries of groups of bonds and their comparative
earnings and yields, or broad overviews of the securities markets and the
economy.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by the Advisor or Sub-Advisor,
as the case may be, and does not reduce the advisory fees payable to the Advisor
or Sub-Advisor by the Funds. It is possible that certain of the supplementary
research or other services received will primarily benefit one or more other
investment companies or other accounts for which investment discretion is
exercised. Conversely, a Fund may be the primary beneficiary of the research or
services received as a result of portfolio transactions effected for such other
account or investment company.
Portfolio securities will not be purchased from or sold to the Advisor,
Sub-Advisor, Distributor or any affiliated person (as defined in the 1940 Act)
of the foregoing entities except to the extent permitted by SEC exemptive order
or by applicable law.
Investment decisions for each Fund and for other investment accounts
managed by the Advisor and Sub-Advisor are made independently of each other in
the light of differing conditions. However, the same investment decision may be
made for two or more of such accounts. In such cases, simultaneous transactions
are inevitable. Purchases or sales are then averaged as to price and allocated
as to amount in a manner deemed equitable to each such account. While in some
cases this practice could have a detrimental effect on the price or value of the
security as far as a Fund is concerned, in other cases it is believed to be
beneficial to a Fund. To the extent permitted by law, the Advisor or
Sub-Advisor, as the case may be, may aggregate the securities to be sold or
purchased for a Fund with those to be sold or purchased for other investment
companies or accounts in executing transactions.
A Fund will not purchase securities during the existence of any
underwriting or selling group relating to such securities of which the Advisor,
Sub-Advisor or any affiliated person (as defined in the 1940 Act) thereof is a
member except pursuant to procedures adopted by the Trust's or Framlington Board
of Trustees and the Company's Board of Directors in accordance with Rule 10f-3
under the 1940 Act.
The Trust and the Company are required to identify the securities of their
regular brokers or dealers (as defined in Rule 10b-1 under the 1940) Act or
their parent companies held by them as of the close of their most recent fiscal
year and state the value of such holdings. As of June 30, 1997, Accelerating
Growth Fund held securities of Lehman Brothers valued at $12,289,000; Balanced
Fund held securities of Lehman Brothers valued at $6,364,000; Index 500 Fund
held securities of Merrill Lynch & Company, Inc. valued at $14,635,000, J.P.
Morgan & Company, Inc. valued at $1,472,000, Morgan Stanley Group, Inc. valued
at $1,890,000, Merrill Lynch & Company, Inc. valued at $1,509,000 and Salomon,
Inc. valued at $462,000; Growth & Income Fund held securities of Lehman Brothers
valued at $17,927,000; Micro-Cap Fund held securities of Lehman Brothers valued
at $392,000; Mid-Cap Fund held securities of Lehman Brothers valued at
$2,820,000; Multi-Season Fund held securities of Lehman Brothers valued at
$45,933,000; Real Estate Fund held securities of Lehman Brothers valued at
$5,052,000; Small-Cap Value Fund held securities of Lehman Brothers valued at
$5,329,000; Small Company Growth Fund held securities of Lehman Brothers valued
at $19,459,000; Value Fund held securities of Lehman Brothers valued at
$2,072,000, Morgan Stanley, Dean Witter, Discover & Co. valued at $1,662,000 and
Salomon, Inc. valued at $1,641,000; Bond Fund held securities of Lehman Brothers
valued at $10,102,000; Intermediate Bond Fund held securities of Lehman Brothers
valued at $11,428,000; International Bond Fund held securities of J.P. Morgan
Securities valued at $400,000 and Lehman Brothers valued at $2,495,000; Short
Term Treasury Fund held securities of Lehman Brothers valued at $767,000; U.S.
Income Fund held securities of Lehman Brothers valued at $8,975,000; Cash
Investment Fund held securities of J.P. Morgan & Company, Inc. valued at
$48,000,000, Sanwa Securities Company valued at $117,972,000, Lehman Brothers
valued at $70,724,000, Societe Generale Securities Corp. valued at $45,000,000,
and PaineWebber valued at $48,000,000; Money Market Fund held securities of
Sanwa Business Credit Corporation valued at $4,990,000, Lehman Brothers valued
at $26,198,000 and Morgan Guaranty Trust & Co. valued at $4,998,000; and U.S.
Treasury Money Market Fund held securities of J.P. Morgan & Company, Inc. valued
at $13,000,000, Goldman Sachs Group, L.P. valued at $13,000,000, Merrill Lynch &
Company, Inc. valued at $13,000,000, Lehman Brothers valued at $70,507,000,
PaineWebber, Inc. valued at $13,000,000 and Sanwa Securities Company valued at
$13,000,000.
Except as noted in the Prospectuses and this Statement of Additional
Information the Funds' service contractors bear all expenses in connection with
the performance of their services and the Funds bear the expenses incurred in
their operations. These expenses include, but are not limited to, fees paid to
the Advisor, Sub-Advisor, Administrator, Custodian, Sub-Custodian and Transfer
Agent; fees and expenses of officers and Board of Trustees/Directors; taxes;
interest; legal and auditing fees; certain fees and expenses in registering and
qualifying the Fund and its shares for distribution under Federal and state
securities laws; expenses of preparing prospectuses and statements of additional
information and of printing and distributing prospectuses and statements of
additional information to existing shareholders; the expense of reports to
shareholders, shareholders' meetings and proxy solicitations; fidelity bond and
directors' and officers' liability insurance premiums; the expense of using
independent pricing services; and other expenses which are not assumed by the
Administrator. Any general expenses of the Trust, Framlington or the Company
that are not readily identifiable as belonging to a particular investment
portfolio of the Trust, Framlington or the Company are allocated among all
investment portfolios of the Trust, Framlington or the Company by or under the
direction of the Boards of Trustees and Directors in a manner that the Boards of
Trustees and Directors determine to be fair and equitable. The Advisor,
Sub-Advisor, Administrator, Custodian, Sub-Custodian and Transfer Agent may
voluntarily waive all or a portion of their respective fees from time to time.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Purchases and redemptions are discussed in the Funds' Prospectuses and
such information is incorporated herein by reference.
Purchases. As described in the Prospectuses, shares of the Funds may be
purchased in a number of different ways. Such alternative sales arrangements
permit an investor to choose the method of purchasing shares that is more
beneficial depending on the amount of the purchase, the length of time the
investor expects to hold shares and other relevant circumstances. An investor
may place orders directly through the Transfer Agent or the Distributor or
through arrangements with his/her authorized broker.
Retirement Plans. Shares of any of the Funds may be purchased in
connection with various types of tax deferred retirement plans, including
individual retirement accounts ("IRAs"), qualified plans, deferred compensation
for public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs. An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.
Redemptions. As described in the Fund's Prospectuses, shares of the
Funds may be redeemed in a number of different ways:
o By Mail
o By Telephone
o Automatic Withdrawal Plan
The redemption price for Fund shares is the net asset value next determined
after receipt of the redemption request in proper order. The redemption proceeds
will be reduced by the amount of any applicable contingent deferred sales charge
("CDSC").
Contingent Deferred Sales Charge - Class B Shares. Class B Shares
redeemed within six years of purchase are subject to a CDSC. The CDSC is based
on the original net asset value at the time of investment or the net asset value
at the time of redemption, whichever is lower.
The CDSC Schedule for Class B Shares of the Trust Funds purchased
before June 27, 1995 is set forth below. The Prospectuses describe the CDSC
Schedule for Class B Shares of Funds of the Trust, the Company and Framlington
purchased after June 27, 1995.
Class B Shares of the Trust Funds
Purchased on or before June 27, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Redemption During CDSC
----------------- ----
1st Year Since Purchase ................................ 4.00%
2nd Year Since Purchase ............................... 4.00%
3rd Year Since Purchase 3.00%
4th Year Since Purchase ................................ 3.00%
5th Year Since Purchase ................................ 2.00%
6th Year Since Purchase ................................ 1.00%
</TABLE>
CDSC Waivers - Class B Shares of the Trust Funds Purchased on or before
June 27, 1995. The CDSC will be waived with respect to Class B Shares of the
Trust Funds purchased on or before June 27, 1995 in the following circumstances:
(1) total or partial redemptions made within one year following the
death or disability of a shareholder or registered joint
owner;
(2) minimum required distributions made in connection with an IRA or
other retirement plan following attainment of age 59 1/2;
and
(3) redemptions pursuant to a Fund's right to liquidate a shareholder's account
involuntarily.
CDSC Waivers - Class B Shares of the Company Funds Purchased on or
before June 27, 1995. The CDSC will be waived on the following types of
redemptions with respect to Class B Shares of the Company Funds purchased on or
before June 27, 1995:
(1) redemptions by investors who have invested a lump sum amount of $1
million or more in the Fund;
(2) redemptions by the officers, directors, and employees of the
Advisor or the Distributor and such persons' immediate
families;
(3) dealers or brokers who have a sales agreement with the Distributor, for
their own accounts, or for retirement plans for their employees or sold
to registered representatives or full time employees (and their
families) that certify to the Distributor at the time of purchase that
such purchase is for their own account (or for the benefit of their
families);
(4) involuntary redemptions effected pursuant to the Fund's right to
liquidate shareholder accounts having an aggregate net
asset value of less than $500; and
(5) redemptions the proceeds of which are reinvested in the Fund within 90
days of the redemption.
Contingent Deferred Sales Charge - Class A and Class C Shares. The
Prospectuses describe the CDSC for Class A or C Shares of the Funds of the
Trust, the Company and Framlington purchased after June 27, 1995.
Class A Shares of the Trust Funds purchased on or before June 27, 1995
without a sales charge by reason of a purchase of $500,000 or more are subject
to a CDSC of 1.00% of the lower of the original purchase price or the net asset
value at the time of redemption if such shares are redeemed within two years of
the date of purchase. Class A Shares of the Trust Funds purchased on or before
June 27, 1995 that are redeemed will not be subject to the CDSC to the extent
that the value of such shares represents: (1) reinvestment of dividends or other
distributions; (2) Class A Shares redeemed more than two years after their
purchase; (3) a minimum required distribution made in connection with IRA or
other retirement plans following attainment of age 59 1/2; or (4) total or
partial redemptions made within one year following the death or disability of a
shareholder or registered joint owner.
No CDSC is imposed to the extent that the current market value of the
shares redeemed does not exceed (a) the current net asset value of shares
purchased through reinvestment of dividends or capital gain distributions plus
(b) the current net asset value of shares purchased more than one year prior to
the redemption, plus (c) increases in the net asset value of the shareholder's
shares above the purchase payments made during the preceding one year.
The holding period of Class A or Class C Shares of a Fund acquired
through an exchange of the corresponding class of shares of the Munder Money
Market Fund (which are available only by exchange of Class A or Class C Shares
of the Fund, as the case may be) and the Company Funds and the non-money market
funds of the Trust will be calculated from the date that the Class A or Class C
Shares of the Fund were initially purchased.
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate.
It will be assumed that the redemption is made first of amounts representing all
Class A Shares on which a front-end sales charge has been assessed; then of
shares acquired pursuant to the reinvestment of dividends and distributions; and
then of amounts representing the cost of shares purchased one year or more prior
to the redemption.
Other Information. Redemption proceeds are normally paid in cash;
however, each Fund may pay the redemption price in whole or part by a
distribution in kind of securities from the portfolio of the particular Fund, in
lieu of cash, in conformity with applicable rules of the SEC. If shares are
redeemed in kind, the redeeming shareholder might incur transaction costs in
converting the assets into cash. The Funds are obligated to redeem shares solely
in cash up to the lesser of $250,000 or 1% of its net assets during any 90-day
period for any one shareholder.
The Funds reserve the right to suspend or postpone redemptions during
any period when: (i) trading on the New York Stock Exchange is restricted, as
determined by the SEC, or the New York Stock Exchange is closed for other than
customary weekend and holiday closings; (ii) the SEC has by order permitted such
suspension or postponement for the protection of shareholders; or (iii) an
emergency, as determined by the SEC, exists, making disposal of portfolio
securities or valuation of net assets of a Fund not reasonably practicable.
The Funds may involuntarily redeem an investor's shares if the net
asset value of such shares is less than $500; provided that involuntary
redemptions will not result from fluctuations in the value of an investor's
shares. A notice of redemption, sent by first-class mail to the investor's
address of record, will fix a date not less than 30 days after the mailing date,
and shares will be redeemed at the net asset value at the close of business on
that date unless sufficient additional shares are purchased to bring the
aggregate account value up to $500 or more. A check for the redemption proceeds
payable to the investor will be mailed to the investor at the address of record.
Exchanges. In addition to the method of exchanging shares described in
the Funds' Prospectuses, a shareholder exchanging at least $1,000 of shares (for
which certificates have not been issued) and who has authorized expedited
exchanges on the application form filed with the Transfer Agent may exchange
shares by telephoning the Funds at (800) 438-5789. Telephone exchange
instructions must be received by the Transfer Agent by 4:00 p.m., New York City
time. The Funds, Distributor and Transfer Agent reserve the right at any time to
suspend or terminate the expedited exchange procedure or to impose a fee for
this service. During periods of unusual economic or market changes, shareholders
may experience difficulties or delays in effecting telephone exchanges. Neither
the Funds nor the Transfer Agent will be responsible for any loss, damages,
expense or cost arising out of any telephone exchanges effected upon
instructions believed by them to be genuine. The Transfer Agent has instituted
procedures that it believes are reasonably designed to insure that exchange
instructions communicated by telephone are genuine, and could be liable for
losses caused by unauthorized or fraudulent instructions in the absence of such
procedures. The procedures currently include a recorded verification of the
shareholder's name, social security number and account number, followed by the
mailing of a statement confirming the transaction, which is sent to the address
of record.
<PAGE>
NET ASSET VALUE
Money Market Funds. The value of the portfolio securities of the Money
Market Funds is calculated using the amortized cost method of valuation. Under
this method the market value of an instrument is approximated by amortizing the
difference between the acquisition cost and value at maturity of the instrument
on a straight-line basis over the remaining life of the instrument. The effect
of changes in the market value of a security as a result of fluctuating interest
rates is not taken into account. The market value of debt securities usually
reflects yields generally available on securities of similar quality. When such
yields decline, market values can be expected to increase, and when yields
increase, market values can be expected to decline.
As indicated, the amortized cost method of valuation may result in the
value of a security being higher or lower than its market price, the price a
Fund would receive if the security were sold prior to maturity. The Boards of
Trustees and Directors have established procedures reasonably designed, taking
into account current market conditions and the Funds' investment objectives, for
the purpose of maintaining a stable net asset value of $1.00 per share for each
Fund for purposes of sales and redemptions. These procedures include a review by
the Board of Trustees and Directors, at such intervals as they deem appropriate,
of the extent of any deviation of net asset value per share, based on available
market quotations, from the $1.00 amortized cost per share. Should that
deviation exceed 1/2 of 1% for a Fund, the Boards of Trustees and Directors will
promptly consider whether any and, if any, what action should be initiated. If
the Board of Trustees or Directors believes that the extent of any deviation
from a Fund's $1.00 amortized cost price per share may result in material
dilution of other unfair results to new or existing investors, it will take such
steps as it considers appropriate to eliminate or reduce any such dilution or
unfair results to the extent reasonably practicable. Such action may include
redeeming shares in kind, selling portfolio securities prior to maturity,
reducing or withholding dividends, shortening the average portfolio maturity,
reducing the number of outstanding shares without monetary consideration, and
utilizing a net asset value per share as determined by using available market
quotations.
Pursuant to Rule 2a-7, each of the Money Market Funds will maintain a
dollar-weighted average portfolio maturity appropriate to its objective of
maintaining a stable net asset value per share, provided that such Funds will
not purchase any security with a remaining maturity (within the meaning of Rule
2a-7 under the 1940 Act) greater than 397 days (securities subject to repurchase
agreements, variable and floating rate securities, and certain other securities
may bear longer maturities), nor maintain a dollar-weighted average portfolio
maturity which exceeds 90 days. In addition, the Funds may acquire only U.S.
dollar-denominated obligations that present minimal credit risks and that are
"First Tier Securities" at the time of investment. First Tier Securities are
those that are rated in the highest rating category by at least two nationally
recognized security rating organizations NRSROs or by one if it is the only
NRSRO rating such obligation or, if unrated, determined to be of comparable
quality. A security is deemed to be rated if the issuer has any security
outstanding of comparable priority and security which has received a short-term
rating by an NRSRO. The Advisor will determine that an obligation presents
minimal credit risks or that unrated investments are of comparable quality, in
accordance with guidelines established by the Board of Directors or Trustees.
There can be no assurance that a constant net asset value will be maintained for
each Money Market Fund.
All Funds. In determining the approximate market value of portfolio
investments, the Trust, Framlington or the Company may employ outside
organizations, which may use matrix or formula methods that take into
consideration market indices, matrices, yield curves and other specific
adjustments. This may result in the securities being valued at a price different
from the price that would have been determined had the matrix or formula methods
not been used. All cash, receivables and current payables are carried on the
Trust's, Framlington's or the Company's books at their face value. Other assets,
if any, are valued at fair value as determined in good faith under the
supervision of the Board Members.
In-Kind Purchases
With the exception of the Real Estate Fund, payment for shares may, in
the discretion of the Advisor, be made in the form of securities that are
permissible investments for the Funds as described in the Prospectuses. Shares
of the Real Estate Fund will not be issued for consideration other than cash.
For further information about this form of payment please contact the Transfer
Agent. In connection with an in-kind securities payment, a Fund will require,
among other things, that the securities (a) meet the investment objectives and
policies of the Funds; (b) are acquired for investment and not for resale; (c)
are liquid securities that are not restricted as to transfer either by law or
liquidity of markets; (d) have a value that is readily ascertainable by a
listing on a nationally recognized securities exchange; and (e) are valued on
the day of purchase in accordance with the pricing methods used by the Fund and
that the Fund receive satisfactory assurances that (i) it will have good and
marketable title to the securities received by it; (ii) that the securities are
in proper form for transfer to the Fund; and (iii) adequate information will be
provided concerning the basis and other tax matters relating to the securities.
PERFORMANCE INFORMATION
Yield of the Money Market Funds
The Money Market Funds' current and effective yields are computed using
standardized methods required by the SEC. The annualized yield is computed by:
(a) determining the net change in the value of a hypothetical account having a
balance of one share at the beginning of a seven-calendar day period; (b)
dividing the net change by the value of the account at the beginning of the
period to obtain the base period return; and (c) annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value of the
account reflects the value of additional shares purchased with dividends
declared and all dividends declared on both the original share and such
additional shares, but does not include realized gains and losses or unrealized
appreciation and depreciation. Compound effective yields are computed by adding
1 to the base period return (calculated as described above), raising the sum to
a power equal to 365/7 and subtracting 1. Based on the foregoing computations,
the annualized yields for all share classes of the Cash Investment, Money
Market, Tax-Free Money Market and U.S. Treasury Money Market Funds for the
seven-day period ended June 30, 1997 were: 5.19% (Class Y) and 5.04% (Class K)
and 4.94% (Class A) for the Cash Investment Fund; 4.80% (Class A), 4.04% (Class
B), and 5.05% (Class Y) for the Money Market Fund; 3.60% (Class Y), 3.45% (Class
K) and 3.35% (Class A) for the Tax-Free Money Market Fund; and 4.96% (Class Y),
4.81% (Class K) and 4.82% (Class A) for the U.S. Treasury Money Market Fund.
The effective yields for all share classes of the Money Market, Cash
Investment, Tax-Free Money Market and U.S. Treasury Money Market Funds for the
seven-day period ended June 30, 1997 were: 4.91% (Class A), 4.12% (Class B) and
5.18% (Class Y) for the Money Market Fund; 5.32% (Class Y), 5.17% (Class K) and
5.06% (Class A) for the Cash Investment Fund; 3.66% (Class Y), 3.51% (Class K)
and 3.41% (Class A) for the Tax-Free Money Market Fund; and 5.08% (Class Y),
4.93% (Class K) and 4.71% (Class A) for the U.S. Treasury Money Market Fund.
In addition, a standardized "tax-equivalent yield" may be quoted for
the Tax-Free Money Market Fund, which is computed by: (a) dividing the portion
of the Fund's yield (as calculated above) that is exempt from Federal income tax
by one minus a stated Federal income tax rate; and (b) adding the figure
resulting from (a) above to that portion, if any, of the yield that is not
exempt from Federal income tax. For the seven-day period ended June 30, 1997,
the tax-equivalent yield for Class Y, Class K and Class A Shares of the Tax-Free
Money Market Fund was 5.22% (Class Y), 5.00% (Class K) and 4.94% (Class A)
calculated for all share classes based on a stated tax rate of 31%. The fees
which may be imposed by institutions on their Customers are not reflected in the
calculations of yields for the Funds.
Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yields of each Fund will fluctuate, they cannot be
compared with yields on savings accounts or other investment alternatives that
provide an agreed to or guaranteed fixed yield for a stated period of time.
However, yield information may be useful to an investor considering temporary
investments in money market instruments. In comparing the yield of one money
market fund to another, consideration should be given to each Fund's investment
policies including the types of investments made, lengths of maturities of the
portfolio securities, and whether there are any special account charges which
may reduce the effective yield.
Yield and Performance of the Non-Money Market Funds
The Bond Funds', International Bond Fund's and Short Term Treasury
Fund's 30-day (or one month) standard yield described in the applicable
Prospectus is calculated for each Fund in accordance with the method prescribed
by the SEC for mutual funds:
......... a - b
......... YIELD = 2[(------+1)6 - 1]
......... cd
Where: a = dividends and interest earned by a Fund during the period;
b = expenses accrued for the period (net of reimbursements and
waivers);
c = average daily number of shares outstanding during the
period entitled to receive dividends;
d = maximum offering price per share on the last day of the
period.
For the purpose of determining interest earned on debt obligations
purchased by a Fund at a discount or premium (variable "a" in the formula), each
Fund computes the yield to maturity of such instrument based on the market value
of the obligation (including actual accrued interest) at the close of business
on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by a Fund, dividend income
is recognized by accruing 1/360 of the stated dividend rate of the security for
each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discounts based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by a Fund to all shareholder accounts in proportion to the length of the
base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula). A Fund's maximum offering price per share for purposes of the formula
includes the maximum sales charge imposed -- currently 5.50% of the per share
offering price for Class A Shares of the Equity Funds (with the exception of the
Index 500 Fund) and the Balanced Fund and 4.00% of the per share offering price
for Class A Shares of the Bond Fund, International Bond Fund, Short Term
Treasury Fund and Tax-Free Bond Funds. Effective September 20, 1995, the maximum
sales charge imposed by Class A Shares of the Index 500 Fund was reduced from
5.50% to 2.50% of the per share offering price of such shares. The
tax-equivalent yield for each Fund below is based on a stated federal tax rate
of 31% and, with respect to Michigan Bond Fund, a Michigan state tax rate of 4%.
Class A Shares
The standard yields and/or tax-equivalent yields of the Class A Shares
of the following Funds for the 30-day period ended June 30, 1997 were:
<TABLE>
<CAPTION>
<S> <C> <C>
30-Day Tax-Equivalent
Yield 30-Day Yield
Bond Fund 5.45% N/A
Intermediate Bond Fund 5.47% N/A
U.S. Government Income Fund 5.77% N/A
International Bond Fund 3.46% N/A
Short Term Treasury Fund N/A N/A
Michigan Bond Fund 4.24% 4.42%
Tax-Free Bond Fund 4.27% 6.19%
Tax-Free Intermediate Bond Fund 3.63% 5.26%
</TABLE>
Class B Shares
The standard yields and/or tax-equivalent yields of the Class B Shares
of the following Funds for the 30-day period ended June 30, 1997 were:
<TABLE>
<CAPTION>
<S> <C> <C>
30-Day Tax-Equivalent
Yield 30-Day Yield
Bond Fund 4.93% N/A
Intermediate Bond Fund 4.96% N/A
U.S. Government Income Fund 5.25% N/A
International Bond Fund N/A N/A
Short Term Treasury Fund 4.46% N/A
Michigan Bond Fund 3.67% 3.82%
Tax-Free Bond Fund 3.68% 5.33%
Tax-Free Intermediate Bond Fund 3.03% 4.39%
</TABLE>
Class C Shares
The standard yields and/or tax-equivalent yields of the Class C Shares
of the following Funds for the 30-day period ended June 30, 1997 were:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
30-Day Tax-Equivalent
Yield 30-Day Yield
Bond Fund 4.92% N/A
Intermediate Bond Fund 4.93% N/A
U.S. Government Income Fund 5.24% N/A
International Bond Fund N/A N/A
Short Term Treasury Fund N/A N/A
Michigan Bond Fund 3.67% 3.82%
Tax-Free Bond Fund N/A N/A
Tax-Free Intermediate Bond Fund N/A N/A
</TABLE>
Class K Shares
The standard yields and/or tax-equivalent yields of the Class K Shares
of the following Funds for the 30-day period ended June 30, 1997 were:
<TABLE>
<CAPTION>
<S> <C> <C>
30-Day Tax-Equivalent
Yield 30-Day Yield
Bond Fund 5.69% N/A
Intermediate Bond Fund 5.71% N/A
U.S. Government Income Fund 6.01% N/A
International Bond Fund 3.61% N/A
Short Term Treasury Fund 5.22% N/A
Michigan Bond Fund 4.42% 4.60%
Tax-Free Bond Fund 4.44% 6.43%
Tax-Free Intermediate Bond Fund 3.78% 5.48%
</TABLE>
Class Y Shares
The standard yields and/or tax-equivalent yields of the Class Y Shares
of the following Funds for the 30-day period ended June 30, 1997 were:
<TABLE>
<CAPTION>
<S> <C> <C>
30-Day Tax-Equivalent
Yield 30-Day Yield
Bond Fund 5.94% N/A
Intermediate Bond Fund 5.96% N/A
U.S. Government Income Fund 6.26% N/A
Short Term Treasury Fund 5.47% N/A
International Bond Fund 3.86% N/A
Michigan Bond Fund 4.67% 4.86%
Tax-Free Bond Fund 4.70% 6.81%
Tax-Free Intermediate Bond Fund 4.02% 5.83%
</TABLE>
Each Fund that advertises its "average annual total return" computes
such return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
T = (ERV)1/n -1
P
Where: T = average annual total return
ERV = ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year
(or other) periods at the end of the
applicable period (or a fractional
portion thereof)
P hypothetical initial payment of $1,000
n = period covered by the computation,
expressed in years.
Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment. The formula for calculating aggregate total
return is as follows:
(ERV) - 1
Aggregate Total Return = P
The calculations are made assuming that (1) all dividends and capital
gain distributions are reinvested on the reinvestment dates at the price per
share existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value (variable "ERV" in the
formula) is determined by assuming complete redemption of the hypothetical
investment after deduction of all non-recurring charges at the end of the
measuring period. The Funds' average annual total return and load adjusted
aggregate total return quotations for Class A Shares will reflect the deduction
of the maximum sales charge charged in connection with the purchase of such
shares; and the Funds' load adjusted average annual total return and load
adjusted aggregate total return quotations for Class B Shares will reflect any
applicable CDSC; provided that the Funds may also advertise total return data
without reflecting any applicable CDSC sales charge imposed on the purchase of
Class A Shares or Class B Shares in accordance with the views of the SEC.
Quotations which do not reflect the sales charge will, of course, be higher than
quotations which do.
Based on the foregoing calculation, set forth below are the average
annual total return figures for the Class A, B, C, K and Y Shares of each of the
following Funds for the 12 month and 5 year periods ended June 30, 1997 and
since commencement of operations.
Fund-Inception Date
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Accelerating Period Ended Period Ended through Period Ended Period Ended through
Growth Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ----------- -------- -------- -------- --------- --------- ---------
Class A - 11/23/92 4.83% N/A 12.69% (.93)% N/A 11.32%
Class B - 4/25/94 4.15% N/A 13.08% (.55)% N/A 12.36%
Class C - 9/26/95 3.89% N/A 8.00% 2.95% N/A 8.00%
Class K - 11/23/92 4.83% N/A 12.69% 4.83% N/A 12.69%
Class Y - 12/1/91 5.07% 14.91% 13.88% 5.09% 14.91% 13.88%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Balanced Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ------------- -------- -------- -------- --------- --------- ---------
Class A - 4/30/93 13.63% N/A 10.46% 7.38% N/A 8.97%
Class B - 6/21/94 12.73% N/A 14.25% 7.73% N/A 13.49%
Class C - 1/24/96 12.84% N/A 13.43% 11.84% N/A 13.43%
Class K-4/16/93 13.64% N/A 10.11% 13.64% N/A 10.11%
Class Y - 4/13/93 13.91% N/A 10.20% 13.91% N/A 10.20%
12 Month 5 Year Inception 12 Month 5 Year Inception
Growth & Period Ended Period Ended through Period Ended Period Ended through
Income Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ----------- -------- -------- -------- --------- --------- ---------
Class A - 8/8/94 28.10% N/A 21.65% 21.05% N/A 19.30%
Class B - 8/9/94 27.16% N/A 20.81% 22.16% N/A 20.08%
Class C - 12/5/95 27.17% N/A 20.64% 26.17% N/A 20.64%
Class K - 7/5/94 28.12% N/A 21.36% 28.12% N/A 21.36%
Class Y - 7/5/94 28.43% N/A 21.63% 28.43% N/A 21.63%
12 Month 5 Year Inception 12 Month 5 Year Inception
Index 500 Period Ended Period Ended through Period Ended Period Ended through
Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ---- -------- -------- -------- --------- --------- ---------
Class A - 12/9/92 33.97% N/A 19.26% 30.62% N/A 18.60%
Class B - 10/31/95 33.57% N/A 30.39% 30.57% N/A 29.13%
Class K - 12/7/92 33.79% N/A 19.20% 33.79% N/A 19.20%
Class Y - 12/1/91 34.19% 19.40% 19.27% 34.19% 19.40% 19.27%
12 Month 5 Year Inception 12 Month 5 Year Inception
International Period Ended Period Ended through Period Ended Period Ended through
Equity Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ----------- -------- -------- -------- --------- --------- ---------
Class A - 11/30/92 17.98% N/A 12.63% 11.49% N/A 11.25%
Class B - 3/9/94 17.18% N/A 8.64% 12.18% N/A 7.88%
Class C - 9/29/95 17.18% N/A 13.81% 16.18% N/A 13.81%
Class K - 11/23/92 18.09% N/A 12.92% 18.09% N/A 12.92%
Class Y - 12/1/91 18.35% 11.42% 11.64% 18.35% 11.42% 11.64%
12 Month 5 Year Inception 12 Month 5 Year Inception
International Growth Period Ended Period Ended through Period Ended Period Ended through
Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97 6/30/97** 6/30/97**
Class A- 2/20/97 N/A N/A 12.38%++ N/A N/A 6.20%++
Class B - 3/19/97 N/A N/A 14.92%++ N/A N/A 9.92%++
Class C - 2/13/97 N/A N/A 12.96%++ N/A N/A 11.96%++
Class K - 1/10/97 N/A N/A 14.99%++ N/A N/A 14.99%++
Class Y - 12/31/96 N/A N/A 13.50%++ N/A N/A 13.50%++
12 Month 5 Year Inception 12 Month 5 Year Inception
Emerging Period Ended Period Ended through Period Ended Period Ended through
Markets Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ------------ -------- -------- -------- --------- --------- ---------
Class A - 1/14/97 N/A N/A 27.16%++ N/A N/A 20.16%++
Class B - 2/25/97 N/A N/A 16.21%++ N/A N/A 11.21%++
Class C - 3/3/97 N/A N/A 18.03%++ N/A N/A 17.03%++
Class K - 1/10/97 N/A N/A 28.69%++ N/A N/A 28.69%++
Class Y - 12/31/96 N/A N/A 29.51%++ N/A N/A 29.51%++
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Healthcare Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------------- -------- -------- -------- --------- --------- ---------
Class A - 2/14/97 N/A N/A (3.63)%++ N/A N/A (8.93)%++
Class B - 1/31/97 N/A N/A (1.54)%++ N/A N/A (6.47)%++
Class C - 1/13/97 N/A N/A 4.42%++ N/A N/A 3.42%++
Class K - 4/1/97 N/A N/A 15.24%++ N/A N/A 15.24%++
Class Y - 12/31/96 N/A N/A 8.90%++ N/A N/A 8.90%++
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Micro-Cap Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- -------------- -------- -------- -------- --------- --------- ---------
Class A - 12/26/96 N/A N/A 28.10%++ N/A N/A 21.05%++
Class B - 2/24/97 N/A N/A 16.27%++ N/A N/A 11.27%++
Class C - 3/31/97 N/A N/A 26.26%++ N/A N/A 25.26%++
Class K - 12//31/96 N/A N/A 26.68%++ N/A N/A 26.68%++
Class Y - 12/26/96 N/A N/A 28.30%++ N/A N/A 28.30%++
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Small-Cap Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- -------------- -------- -------- -------- --------- --------- ---------
Class A - 1/10/97 N/A N/A 18.20%++ N/A N/A 11.70%++
Class B - 2/11/97 N/A N/A 12.03%++ N/A N/A 7.03%++
Class C - 1/13/97 N/A N/A 17.92%++ N/A N/A 16.92%++
Class K - 12/31/96 N/A N/A 19.85%++ N/.A N/A 19.85%++
Class Y - 12/26/96 N/A N/A 20.86%++ N/A N/A 20.86%++
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Mid-Cap Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ------------ -------- -------- -------- --------- --------- ---------
Class A - 12/22/95 .90% N/A 6.81% (4.65)% N/A 2.92%
Class B - 1/26/96 .07% N/A 6.32% (4.42)% N/A 3.64%
Class C - 11/9/95 .17% N/A 6.48% (.73)% N/A 6.48%
Class K -10/2/95 .90% N/A 6.04% .90% N/A 6.04%
Class Y - 8/14/95 1.07% N/A 8.73% 1.07% N/A 8.73%
12 Month 5 Year Inception 12 Month 5 Year Inception
International Period Ended Period Ended through Period Ended Period Ended through
-
Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------- -------- -------- -------- --------- --------- ---------
Class A - 10/17/96 N/A N/A (.84)%++ N/A N/A (4.81)%
Class B - 6/9/97 N/A N/A (.20)%++ N/A N/A (5.19)%++
Class K - 3/24/97 N/A N/A 3.04%++ N/A N/A 3.04%++
Class Y - 10/2/96 N/A N/A (.90)%++ N/A N/A (.90)%++
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Multi-Season Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
Class A - 8/4/93 27.57% N/A 18.37% 20.55% N/A 16.67%
Class B - 4/29/93 26.61% N/A 16.75% 21.61% N/A 16.46%
Class C - 9/20/93 26.66% N/A 18.04% 25.66% N/A 18.09%
Class K - 6/23/95 27.55% N/A 26.32% 27.55% N/A 26.32%
Class Y - 8/16/93 27.96% N/A 18.78% 27.96% N/A 18.78%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Real Estate Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ---------------- -------- -------- -------- --------- --------- ---------
Class A - 9/30/94 33.51% N/A 19.08% 26.17% N/A 16.66%
Class B - 10/3/94 32.52% N/A 18.25% 27.52% N/A 17.43%
Class C - 1/5/96 32.57% N/A 25.78% 31.57% N/A 25.78%
Class K - 10/3/96 N/A N/A 23.11%++ N/A N/A 23.11%++
Class Y - 10/3/94 33.79% N/A 19.42% 33.79% N/A 19.42%
12 Month 5 Year Inception 12 Month 5 Year Inception
Small Company Period Ended Period Ended through Period Ended Period Ended through
Growth Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ----------- -------- -------- -------- --------- --------- ---------
Class A - 11/23/92 18.88% N/A 19.04% 12.34% N/A 17.59%
Class B - 4/28/94 18.06% N/A 23.39% 13.06% N/A 22.79%
Class C - 9/26/95 18.26% N/A 28.76% 17.26% N/A 28.76%
Class K - 11/23/92 18.93% N/A 19.05% 18.93% N/A 19.05%
Class Y - 12/1/91 19.26% 21.94% 20.16% 19.26% 21.94% 20.16%
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Value Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ---------- -------- -------- -------- --------- --------- ---------
Class A - 9/14/95 34.38% N/A 25.55% 26.99% N/A 21.66%
Class B - 9/19/95 33.24% N/A 24.63% 28.24% N/A 22.73%
Class C - 2/9/96 33.36% N/A 24.67% 32.36% N/A 24.67%
Class K - 11/30/95 34.37% N/A 26.02% 34.37% N/A 26.02%
Class Y - 8/18/95 34.66% N/A 27.26% 34.66% N/A 27.26%
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------- -------- -------- -------- --------- --------- ---------
Class A - 12/9/92 6.84% N/A 6.32% 2.56% N/A 5.37%
Class B - 3/13/96 5.97% N/A 4.74% .97% N/A 1.73%
Class C - 3/25/96 6.19% N/A 4.45% 5.19% N/A 4.45%
Class K - 11/23/92 6.72% N/A 6.24% 6.72% N/A 6.24%
Class Y - 12/1/91 7.09% 5.40% 6.05% 6.99% 5.40% 6.05%
12 Month 5 Year Inception 12 Month 5 Year Inception
Intermediate Period Ended Period Ended through Period Ended Period Ended through
Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------- -------- -------- -------- --------- --------- ---------
Class A - 11/24/92 6.34% N/A 5.19% 2.08% N/A 4.26%
Class B - 10/25/94 5.60% N/A 6.37% .60% N/A 5.35%
Class C - 4/19/96 5.77% N/A 5.14% 4.77% N/A 5.14%
Class K - 11/20/92 6.34% N/A 5.18% 6.34% N/A 5.18%
Class Y - 12/1/91 6.60% 5.54% 5.86% 6.60% N/A 5.86%
12 Month 5 Year Inception 12 Month 5 Year Inception
U.S. Government Period Ended Period Ended through Period Ended Period Ended through
Income Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ----------- -------- -------- -------- --------- --------- ---------
Class A - 7/28/94 7.50% N/A 7.51% 3.20% N/A 6.02%
Class B - 9/6/95 6.77% N/A 5.04% 1.77% N/A 2.96%
Class C - 8/12/96 N/A N/A 4.87%++ N/A N/A 3.88%++
Class K - 7/5/94 7.49% N/A 7.43% 7.49% N/A 7.43%
Class Y - 7/5/94 7.75% N/A 7.70% 7.75% N/A 7.70%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12 Month 5 Year Inception 12 Month 5 Year Inception
Short Term Treasury Period Ended Period Ended through Period Ended Period Ended through
Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
Class B - 4/4/97 N/A N/A 1.44%++ N/A N/A (3.56)%++
Class K - 4/2/97 N/A N/A 1.78%++ N/A N/A 1.78%++
Class Y - 1/29/97 N/A N/A 2.30%++ N/A N/A 2.30%++
12 Month 5 Year Inception 12 Month 5 Year Inception
Michigan Period Ended Period Ended through Period Ended Period Ended through
Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------- -------- -------- -------- --------- --------- ---------
Class A - 2/15/94 7.88% N/A 4.03% 3.57% N/A 2.78%
Class B - 7/5/94 7.09% N/A 6.04% 2.09% N/A 5.13%
Class C - 10/4/96 N/A N/A 3.57%++ N/A N/A 2.57%++
Class K - 1/3/94 8.00% N/A 3.75% 8.00% N/A 3.75%
Class Y - 1/3/94 8.26% N/A 4.02% 8.26% N/A 4.02%
12 Month 5 Year Inception 12 Month 5 Year Inception
Period Ended Period Ended through Period Ended Period Ended through
Tax-Free Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- ------------------ -------- -------- -------- --------- --------- ---------
Class A - 10/9/95 7.13% N/A 5.20% 2.85% N/A 2.74%
Class B - 12/6/94 6.43% N/A 7.47% 1.43% N/A 6.42%
Class K - 7/5/94 7.13% N/A 6.73% 7.13% N/A 6.73%
Class Y - 7/21/94 7.40% N/A 6.85% 7.40% N/A 6.85%
Tax-Free 12 Month 5 Year Inception 12 Month 5 Year Inception
Intermediate Period Ended Period Ended through Period Ended Period Ended through
Bond Fund 6/30/97* 6/30/97* 6/30/97* 6/30/97** 6/30/97** 6/30/97**
- --------- -------- -------- -------- --------- --------- ---------
Class A - 11/30/92 5.04% N/A 4.52% .84% N/A 3.60%
Class B - 5/16/96 4.24% N/A 4.13% (.76)% N/A .58%
Class K - 2/9/87+++ 5.04% 4.83% 5.58% 5.04% N/A 5.58%
Class Y - 12/17/92 5.40% N/A 4.74% 5.40% N/A 4.74%
</TABLE>
* Figures do not include the effect of the sales charge.
** Figures include the effect of the applicable sales charge.
++ Aggregate total return.
+++ For the 10 year period ended June 30, 1997, the average annual total
return for Class K Shares was 5.27%.
As of June 30, 1997, the following Classes had not commenced
operations: Class A Shares of Short Term Treasury Fund, Class B Shares of
International Bond Fund, Class C Shares of each of Tax-Free Bond, Intermediate
Bond Fund, Short Term Treasury Fund and Tax-Free Intermediate Bond Fund.
The Equity Selection Fund was not available for purchase as of the date
of this Statement of Additional Information.
All Funds. The performance of any investment is generally a function
of portfolio quality and maturity, type of investment
and operating expenses.
From time to time, in advertisements or in reports to shareholders, a
Fund's yields or total returns may be quoted and compared to those of other
mutual funds with similar investment objectives and to stock or other relevant
indices. For example, a Fund's yield may be compared to the IBC/Donoghue's Money
Fund Average, which is an average compiled by Donoghue's MONEY FUND REPORT of
Holliston, MA 01746, a widely recognized independent publication that monitors
the performance of money market funds, or to the data prepared by Lipper
Analytical Services, Inc., a widely recognized independent service that monitors
the performance of mutual funds. In addition, as stated in the Funds'
Prospectuses, the tax-equivalent yield (and hypothetical examples illustrating
the effect of tax-equivalent yields) of a Fund may be quoted in advertisements
or reports to shareholders. Hypothetical examples showing the difference between
a taxable and a tax-free investment may also be provided to shareholders.
The foregoing performance data reflects the imposition of the maximum
sales load on Class A Shares but does not reflect payments under the Trust's
Class K Plan or Class A Plan, which were not imposed before December 31, 1993.
TAXES
The following summarizes certain additional federal and state income
tax considerations generally affecting the Funds and their shareholders that are
not described in the Funds' Prospectuses. No attempt is made to present a
detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussion here and in the applicable Prospectus is not intended as a
substitute for careful tax planning. This discussion is based upon present
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the
regulations promulgated thereunder, and judicial and administrative ruling
authorities, all of which are subject to change, which change may be
retroactive. Prospective investors should consult their own tax advisors with
regard to the federal tax consequences of the purchase, ownership and
disposition of Fund shares, as well as the tax consequences arising under the
laws of any state, foreign country, or other taxing jurisdiction.
General. Each Fund intends to elect and qualify to be taxed separately as a
regulated investment company under the Internal Revenue Code of 1986, as amended
(the "Code"). As a regulated investment company, each Fund generally is exempt
from federal income tax on its net investment income and realized capital gains
which it distributes to shareholders, provided that it distributes an amount
equal to the sum of (a) at least 90% of its investment company taxable income
(net investment income and the excess of net short-term capital gain over net
long-term capital loss), if any, for the year and (b) at least 90% of its net
tax-exempt interest income, if any, for the year (the "Distribution
Requirement") and satisfies certain other requirements of the Code that are
described below. Distributions of investment company taxable income and net
tax-exempt interest income made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year will
satisfy the Distribution Requirement. In addition to satisfaction of
the Distribution Requirement, each Fund must derive with respect to a taxable
year at least 90% of its gross income from dividends, interest, certain payments
with respect to securities loans and gains from the sale or other disposition of
stock or securities or foreign currencies, or from other income derived with
respect to its business of investing in such stock, securities, or currencies
(the "Income Requirement"); also, for taxable years beginning before August 6,
1997, each Fund must derive less than 30% of its gross income from the sale or
other disposition of securities and certain other investments held for less than
three months (the "Short-Short Test"). Interest (including original issue
discount and "accrued market discount") received by a Fund at maturity or on
disposition of a security held for less than three months will not be treated
(in contrast to other income which is attributable to realized market
appreciation) as gross income from the sale or other disposition of securities
held for less than three months for this purpose.
In addition to the foregoing requirements, at the close of each quarter
of its taxable year, at least 50% of the value of each Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.
Distributions of net investment income received by a Fund from
investments in debt securities (other than interest on tax-exempt municipal
obligations held by the Tax-Free Bond Funds and Tax-Free Money Market Fund) and
any net realized short-term capital gains distributed by a Fund will be taxable
to shareholders as ordinary income and will not be eligible for the dividends
received deduction for corporations.
Each Fund intends to distribute to shareholders any excess of net long-term
capital gain over net short-term capital loss ("net capital gain") for each
taxable year. Such gain is distributed as a capital gain dividend and is taxable
to shareholders as gain from the sale or exchange of a capital asset held for
more than one year, regardless of the length of time a shareholder has held his
or her Fund shares and regardless of whether the distribution is paid in cash or
reinvested in shares. The Funds expect that capital gain dividends will be
taxable to shareholders as mid-term or long-term gain. Capital gain dividends
are not eligible for the dividends received deduction. In the case of
corporate shareholders, distributions of a Fund for any taxable year generally
qualify for the dividends received deduction to the extent of the gross amount
of "qualifying dividends" received by such Fund for the year and if certain
holding period requirements are met. Generally, a dividend will be treated as a
"qualifying dividend" if it has been received from a domestic corporation.
If for any taxable year any Fund does not qualify as a regulated investment
company, all of its taxable income will be subject to tax at regular corporate
rates without any deduction for distributions to shareholders. In such event,
all distributions (whether or not derived from exempt-interest income) would be
taxable as ordinary income and would be eligible for the dividends received
deduction in the case of corporate shareholders to the extent of such Fund's
current and accumulated earnings and profits. Shareholders will be
advised annually as to the federal income tax consequences of distributions made
by the Funds each year. The Code imposes a non-deductible 4% excise tax
on regulated investment companies that fail to distribute in each calendar year
an amount equal to specified percentages of their ordinary taxable income and
capital gain net income (excess of capital gains over capital losses). Each Fund
intends to make sufficient distributions or deemed distributions of its ordinary
taxable income and capital gain net income each calendar year to avoid liability
for this excise tax.
The Trust, the Framlington Trust and the Company will be required in
certain cases to withhold and remit to the United States Treasury 31% of taxable
distributions, including gross proceeds realized upon sale or other dispositions
paid to any shareholder (i) who has provided an incorrect tax identification
number or no number at all, (ii) who is subject to backup withholding by the
Internal Revenue Service for failure to report the receipt of taxable interest
or dividend income properly, or (iii) who has failed to certify that he is not
subject to backup withholding or that he is an "exempt recipient."
Disposition of Shares. Upon a redemption, sale or exchange of his or her
shares, a shareholder will realize a taxable gain or loss depending upon his or
her basis in the shares. Such gain or loss will be treated as capital gain or
loss if the shares are capital assets in the shareholder's hands and will be
long-term, mid-term or short-term, generally, depending upon the shareholder's
holding period for the shares. Any loss realized on a redemption, sale or
exchange will be disallowed to the extent the shares disposed of are replaced
(including through reinvestment of dividends) within a period of 61 days
beginning 30 days before and ending 30 days after the shares are disposed of. In
such a case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss. Any loss realized by a shareholder on the sale of Fund shares
held by the shareholder for six months or less will be treated as a long-term
capital loss to the extent of any distributions of net capital gains received or
treated as having been received by the shareholder with respect to such shares
and treated as long-term capital gains. Furthermore, a loss realized by a
shareholder on the redemption, sale or exchange of shares of a Fund with respect
to which exempt-interest dividends have been paid will, to the extent of such
exempt-interest dividends, be disallowed if such shares have been held by the
shareholder for six months or less.
In some cases, shareholders will not be permitted to take sales charges
into account for purposes of determining the amount of gain or loss realized on
the disposition of their stock. This prohibition generally applies where (1) the
shareholder incurs a sales charge in acquiring the stock of a Fund, (2) the
stock is disposed of before the 91st day after the date on which it was
acquired, and (3) the shareholder subsequently acquires the stock of the same or
another fund and the otherwise applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase of regulated investment
company shares. The term "reinvestment right" means any right to acquire stock
of one or more funds without the payment of a sales charge or with the payment
of a reduced sales charge. Sales charges affected by this rule are treated as if
they were incurred with respect to the stock acquired under the reinvestment
right. This provision may be applied to successive acquisitions of Fund shares.
Although each Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, each Fund may be subject
to the tax laws of such states or localities. Tax-Free Bond Funds and
Tax-Free Money Market Fund. The Michigan Bond Fund, Tax-Free Bond Fund, Tax-Free
Intermediate Bond Fund, and Tax-Free Money Market Fund are designed to provide
investors with current tax-exempt interest income. Shares of the Funds would not
be suitable for tax-exempt institutions and may not be suitable for retirement
plans qualified under Section 401 of the Code, H.R. 10 plans and individual
retirement accounts since such plans and accounts are generally tax-exempt and,
therefore, not only would not gain any additional benefit from the Funds'
dividends being tax-exempt but also such dividends would be taxable when
distributed to the beneficiary. In addition, the Funds may not be an appropriate
investment for entities which are "substantial users" of facilities financed by
private activity bonds or "related persons" thereof. "Substantial user" is
defined under U.S. Treasury Regulations to include a non-exempt person who
regularly uses a part of such facilities in his trade or business and (a) whose
gross revenues derived with respect to the facilities financed by the issuance
of bonds are more than 5% of the total revenues derived by all users of such
facilities, (b) who occupies more than 5% of the entire usable area of such
facilities, or (c) for whom such facilities or a part thereof were specifically
constructed, reconstructed or acquired. "Related persons" generally include
certain related natural persons, affiliated corporations, a partnership and its
partners and an S corporation and its shareholders. In order for the
Funds to pay exempt-interest dividends with respect to any taxable year, at the
close of each quarter of each Fund's taxable year at least 50% of the value of
the Fund's assets must consist of tax-exempt municipal obligations.
Exempt-interest dividends distributed to shareholders are not included in the
shareholder's gross income for regular federal income tax purposes. However, all
shareholders required to file a federal income tax return are required to report
the receipt of exempt-interest dividends and other tax-exempt interest on their
returns. Moreover, while such dividends and interest are exempt from regular
federal income tax, they may be subject to alternative minimum tax in two
circumstances. First, exempt-interest dividends derived from certain "private
activity" bonds issued after August 7, 1986 will generally constitute an item of
tax preference for both corporate and non-corporate taxpayers. Second,
exempt-interest dividends derived from all bonds, regardless of the date of
issue, must be taken into account by corporate taxpayers in determining the
amount of certain adjustments for alternative minimum tax purposes. Receipt of
exempt-interest dividends may result in collateral federal income tax
consequences to certain other taxpayers, including financial institutions,
property and casualty insurance companies, individual recipients of Social
Security or Railroad Retirement benefits, and foreign corporations engaged in a
trade or business in the United States. Prospective investors should consult
their own tax advisors as to such consequences. The percentage of total
dividends paid by the Fund with respect to any taxable year which qualifies as
federal exempt-interest dividends will be the same for all shareholders
receiving dividends during such year. If a shareholder receives an
exempt-interest dividend with respect to any share and such share is held for
six months or less, any loss on the sale or exchange of such share will be
disallowed to the extent of the amount of such dividends. Interest on
indebtedness incurred by a shareholder to purchase or carry shares of the Funds
generally is not deductible for federal income tax purposes if the Funds
distribute exempt-interest dividends during the shareholder's taxable year.
Investors may be subject to state and local taxes on income derived
from an investment in a Fund. In certain states, income derived from a Fund
which is attributable to interest on obligations of that state or any
municipality or political subdivision thereof may be exempt from taxation.
Shareholders are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in a Fund. Persons who
may be "substantial users" (or "related persons" of substantial users) of
facilities financed by industrial development bonds should consult their tax
advisers before investing in a Fund. Michigan Tax Considerations -
Michigan Bond Fund and Tax-Free Intermediate Bond Fund. As stated in the
Michigan Bond Fund Prospectus and the Tax-Free Intermediate Bond Fund
Prospectus, dividends paid by the Fund that are derived from interest
attributable to tax-exempt Michigan Municipal Obligations will be exempt from
Michigan Income Tax, Michigan Intangibles Tax and Michigan Single Business Tax.
Conversely, to the extent that the Fund's dividends are derived from interest on
obligations other than Michigan Municipal Obligations, such dividends will be
subject to Michigan Income, Intangibles and Michigan Single Business Taxes, even
though the dividends may be exempt for federal Income Tax purposes. In
particular, gross interest income and dividends derived from obligations or
securities of the State of Michigan and its political subdivisions, exempt from
federal Income Tax, are exempt from Michigan Income Tax under Act No. 281,
Public Acts of Michigan, 1967, as amended, and are exempt from Michigan Single
Business Tax under Act No. 228, Public Acts of Michigan, 1975, as amended. The
Michigan Income Tax act levies a flat-rate income tax on individuals, estates,
and trusts. The Single Business Tax Act levies a tax upon the "adjusted tax
base" of most individuals, corporations, financial organizations, partnerships,
joint ventures, estates, and trusts with "business activity" in Michigan.
Bonds or other similar obligations of the State of Michigan or of a
political subdivision of the State of Michigan are exempt from Michigan
Intangibles Tax under Act No. 301, Public Acts of Michigan, 1939, as amended. In
1986, the Michigan Department of Treasury issued a Bulletin stating that holders
of interests in investment companies who are subject to the Michigan intangibles
tax will be exempt from the tax to the extent that the investment portfolio
consists of items such as Michigan Municipal Obligations.
The transfer of obligations or securities of the State of Michigan and
its political subdivisions by the Fund, as well as the transfer of Fund shares
by a shareholder, is subject to Michigan taxes measured by gain on the sale,
payment, or other disposition thereof.
International Equity Fund, International Growth Fund, Emerging Markets Fund
and International Bond Fund. Income received by the International Equity Fund,
the International Growth Fund, the Emerging Markets Fund and the International
Bond Fund from sources within foreign countries may be subject to withholding
and other foreign taxes. The payment of such taxes will reduce the amount of
dividends and distributions paid to the Funds' shareholders. So long as a Fund
qualifies as a regulated investment company, certain distribution requirements
are satisfied, and more than 50% of the value of the Fund's assets at the close
of the taxable year consists of securities of foreign corporations, the Fund may
elect, subject to limitation, to pass through its foreign tax credits to its
shareholders. The Fund may qualify for and make this election in some, but not
necessarily all, of its taxable years. If a Fund were to make an election, an
amount equal to the foreign income taxes paid by the Fund would be included in
the income of its shareholders and the shareholders would be entitled to credit
their portions of this amount against their U.S. tax due, if any, or to deduct
such portions from their U.S. taxable income, if any. Shortly after any year for
which it makes such an election, a Fund will report to its shareholders, in
writing, the amount per share of such foreign tax that must be included in each
shareholder's gross income and the amount which will be available for deduction
or credit. No deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions. Certain limitations are imposed on the extent to
which the credit (but not the deduction) for foreign taxes may be claimed.
Shareholders who choose to utilize a credit (rather than a deduction) for
foreign taxes will be subject to limitations, including the restriction that the
credit may not exceed the shareholder's United States tax (determined without
regard to the availability of the credit) attributable to his or her total
foreign source taxable income. For this purpose, the portion of dividends and
distributions paid by the Fund from its foreign source income will be treated as
foreign source income. The Fund's gains and losses from the sale of securities
will generally be treated as derived from United States sources and certain
foreign currency gains and losses likewise will be treated as derived from
United States sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from the Fund which qualifies as foreign source income. In addition,
only a portion of the foreign tax credit will be allowed to offset any
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by the
Fund.
Taxation of Certain Financial Instruments. Special rules govern the
Federal income tax treatment of financial instruments that may be held by some
of the Funds. These rules may have a particular impact on the amount of income
or gain that the Funds must distribute to their respective shareholders to
comply with the Distribution Requirement, on the income or gain qualifying under
the Income Requirement and on their ability to comply with the Short-Short Test,
all described above.
Market Discount. If a Fund purchases a debt security at a price lower than
the stated redemption price of such debt security, the excess of the stated
redemption price over the purchase price is "market discount". If the amount of
market discount is more than a de minimis amount, a portion of such market
discount must be included as ordinary income (not capital gain) by the Fund in
each taxable year in which the Fund owns an interest in such debt security and
receives a principal payment on it. In particular, the Fund will be required to
allocate that principal payment first to the portion of the market discount on
the debt security that has accrued but has not previously been includable in
income. In general, the amount of market discount that must be included for each
period is equal to the lesser of (i) the amount of market discount accruing
during such period (plus any accrued market discount for prior periods not
previously taken into account) or (ii) the amount of the principal payment with
respect to such period. Generally, market discount accrues on a daily basis for
each day the debt security is held by a Fund at a constant rate over the time
remaining to the debt security's maturity or, at the election of the Fund, at a
constant yield to maturity which takes into account the semi-annual compounding
of interest. Gain realized on the disposition of a market discount obligations
must be recognized as ordinary interest income (not capital gain) to the extent
of the "accrued market discount." Original Issue Discount. Certain debt
securities acquired by the Funds may be treated as debt securities that were
originally issued at a discount. Very generally, original issue discount is
defined as the difference between the price at which a security was issued and
its stated redemption price at maturity. Although no cash income on account of
such discount is actually received by a Fund, original issue discount that
accrues on a debt security in a given year generally is treated for federal
income tax purposes as interest and, therefore, such income would be subject to
the distribution requirements applicable to regulated investment companies.
Some debt securities may be purchased by the Fund, at a discount that
exceeds the original issue discount on such debt securities, if any. This
additional discount represents market discount for federal income tax purposes
(see above).
Hedging Transactions. The taxation of equity options and
over-the-counter options on debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Certain options, futures and forward contracts in which a Fund may
invest may be "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
gains or losses; however, foreign currency gains or losses arising from certain
section 1256 contracts may be treated as ordinary income or loss. Also, section,
1256 contracts held by a Fund at the end of each taxable year (and generally for
purposes of the 4% excise tax, on October 31 of each year) are
"marked-to-market" with the result that unrealized gains or losses are treated
as though they were realized.
Generally, hedging transactions, if any, undertaken by a Fund may
result in "straddles" for federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Funds. In addition,
losses realized by a Fund on positions that are part of a straddle may be
deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Funds are
not entirely clear. The hedging transactions may increase the amount of
short-term capital gain realized by the Funds which is taxed as ordinary income
when distributed to shareholders.
The Funds may make one or more of the elections available under the
Code which are applicable to straddles. If a Fund makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
The Short-Short Test for taxable years beginning before August 6, 1997, and
the diversification requirements applicable to the Funds' assets may limit the
extent to which the Funds will be able to engage in transactions in options,
futures or forward contracts. Constructive Sales. Recently enacted
rules may affect the timing and character of gain if a Fund engages in
transactions that reduce or eliminate its risk of loss with respect to
appreciated financial positions. If the Fund enters into certain transactions in
property while holding substantially identical property, the Fund would be
treated as if it had sold and immediately repurchased the property and would be
taxed on any gain (but not loss) from the constructive sale. The character of
gain from a constructive sale would depend upon the Fund's holding period in the
property. Loss from a constructive sale would be recognized when the property
was subsequently disposed of, and its character would depend on the Fund's
holding period and the application of various loss deferral provisions of the
Code.
Currency Fluctuations-"Section 988" Gains or Losses. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time a Fund accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities generally are treated as ordinary income and loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain futures, forward contracts and options, gains or
losses attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security or contract and the date of disposition
also are treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
Passive Foreign Investment Companies. Certain Funds may invest in shares of
foreign corporations that may be classified under the Code as passive foreign
investment companies ("PFICs"). In general, a foreign corporation is classified
as a PFIC if at least on-half of its assets constitute investment-type assets,
or 75% or more of its gross income investment-type income. If a Fund receives a
so-called "excess distribution" with respect to PFIC stock, the Fund itself may
be subject to a tax on a portion of the excess distribution, whether or not the
corresponding income is distributed by the Fund to shareholders. In general,
under the PFIC rules, an excess distribution is treated as having been realized
ratably over the period during which the Fund held the PFIC shares. Each Fund
will itself be subject to tax on the portion, if any, of an excess distribution
that is so allocated to prior Fund taxable years and an interest factor will be
added to the tax, as if the tax had been payable in such prior taxable years.
Certain distributions from a PFIC as well as gain from the sale of PFIC shares
are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
excess distributions might have been classified as capital gain. The
Funds may be eligible to elect alternative tax treatment with respect to PFIC
shares. Under an election that currently is available in some circumstances, a
Fund generally would be required to include in its gross income its share of the
earnings of a PFIC on a current basis, regardless of whether distributions were
received from the PFIC in a given year. If this election were made, the special
rules, discussed above, relating to the taxation of excess distributions, would
not apply. In addition, another election would involve marking to market the
Fund's PFIC shares at the end of each taxable year, with the result that
unrealized gains would be treated as though they were realized and reported as
ordinary income. Any mark-to market losses and any loss from an actual
disposition of Fund shares would be deductible as ordinary losses to the extent
of any net mark-to-market gains included in income in prior years. Other
Taxation
The foregoing discussion relates only to U.S. federal income tax law and
certain state taxes as applicable to U.S. persons (i.e., U.S. citizens and
residents and domestic corporations, partnerships, trusts and estates).
Distributions by the Funds, and dispositions of Fund shares also may be subject
to other state and local taxes, and their treatment under state and local income
tax laws may differ from the U.S. federal income tax treatment. Shareholders
should consult their tax advisers with respect to particular questions of U.S.
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisers regarding U.S. and foreign tax consequences of
ownership of shares of the Fund, including the likelihood that distributions to
them would be subject to withholding of U.S. federal income tax at a rate of 30%
(or at a lower rate under a tax treaty).
ADDITIONAL INFORMATION CONCERNING SHARES
The Trust and Framlington are Massachusetts business trusts. Under each
Declaration of Trust, the beneficial interest in the Trust or Framlington may be
divided into an unlimited number of full and fractional transferable shares. The
Company is a Maryland corporation. The Trust's and Framlington's Declaration of
Trust and the Company's Articles of Incorporation authorize the Boards of
Trustees and Directors to classify or reclassify any unissued shares of the
Trust, Framlington and the Company into one or more classes by setting or
changing, in any one or more respects, their respective designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations, qualifications and terms and conditions of redemption. Pursuant to
such authority, the Trust's Board of Trustees has authorized the issuance of an
unlimited number of shares of beneficial interest in the Trust, representing
interests in the Accelerating Growth, Balanced, Growth & Income, Index 500,
International Equity, Small Company Growth, Bond, Intermediate Bond, U.S.
Government Income, Michigan Bond, Tax-Free Bond, Tax-Free Intermediate Bond,
Cash Investment, Tax-Free Money Market and U.S. Treasury Money Market Funds. The
shares of each Fund (other than the Cash Investment Fund, Tax-Free Money Market
Fund and U.S. Treasury Money Market Fund) are offered in five separate classes:
Class A, Class B, Class C, Class K and Class Y Shares. Class C Shares of the
Index 500 Fund are not currently available for purchase. The Cash Investment
Fund, Tax-Free Money Market Fund and U.S. Treasury Money Market Fund offer only
Class Y Shares, Class K Shares and Class A Shares. Pursuant to the authority of
Framlington's Declaration of Trust, the Trustees have authorized the issuance of
an unlimited number of shares of beneficial interest in Framlington representing
interests in the International Growth Fund, Emerging Markets Fund and Healthcare
Fund. The shares of each Fund are offered in five separate classes: Class A,
Class B, Class C, Class K and Class Y shares. Pursuant to the authority of the
Company's Articles of Incorporation, the Directors have authorized the issuance
of shares of common stock representing interests in the Equity Selection Fund,
Micro-Cap Fund, Mid-Cap Fund, Multi-Season Fund, Real Estate Fund, Small-Cap
Value Fund, Value Fund, International Bond Fund, Money Market Fund, All-Season
Conservative Fund, All-Season Moderate Fund and All-Season Aggressive Fund,
Financial Services Fund and NetNet Fund, respectively. The shares of each Fund
(other than the Money Market Fund, All-Season Conservative Fund, All-Season
Moderate Fund and All-Season Aggressive Fund, Financial Services Fund and the
NetNet Fund) are offered in five separate classes: Class A, Class B, Class C,
Class K and Class Y Shares. The Money Market Fund offers only Class A, Class B
and Class C Shares (which may be acquired only through an exchange of shares
from the corresponding classes of other funds of the Trust, Framlington the
Company) and Class Y Shares. The All-Season Conservative Fund, All-Season
Moderate Fund and All-Season Aggressive Fund offer only Class A, Class B and
Class Y Shares. The NetNet Fund and Financial Services Fund each offer only one
class of shares.
At a meeting on April 25 and 26, 1995, the Boards of the Trust and the
Company, and at a meeting on November 7, 1996, the Board of Framlington Trust
adopted plans pursuant to Rule 18f-3 under the 1940 Act ("Multi-Class Plans") on
behalf of each Fund. At a meeting on February 4, 1997, the Trust, Framlington
and the Company adopted Amended and Restated Multi-Class Plans on behalf of each
Fund. Each Multi-Class Plan provides that shares of each class of a Fund are
identical, except for one or more expense variables, certain related rights,
exchange privileges, class designation and sales loads assessed due to differing
distribution methods.
In the event of a liquidation or dissolution of each of the Trust,
Framlington or the Company or an individual Fund, shareholders of a particular
Fund would be entitled to receive the assets available for distribution
belonging to such Fund, and a proportionate distribution, based upon the
relative net asset values of the Trust's, Framlington Trust's or the Company's
respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution. Shareholders of a Fund are entitled to
participate in the net distributable assets of the particular Fund involved on
liquidation, based on the number of shares of the Fund that are held by each
shareholder.
Holders of all outstanding shares of a particular Fund will vote
together in the aggregate and not by class on all matters, except that only
Class A Shares of a Fund will be entitled to vote on matters submitted to a vote
of shareholders pertaining to the Fund's Class A Plan, only Class B Shares will
be entitled to vote on matters submitted to a vote of shareholders pertaining to
the Fund's Class B Plan, only Class C Shares of a Fund will be entitled to vote
on matters submitted to a vote of shareholders pertaining to the Fund's Class C
Plan, and only Class K Shares of a Fund will be entitled to vote on matters
submitted to a vote of shareholders pertaining to the Class K Plan. Further,
shareholders of all of the Funds, as well as those of any other investment
portfolio now or hereafter offered by the Trust, Framlington or the Company,
will vote together in the aggregate and not separately on a Fund-by-Fund basis,
except as otherwise required by law or when permitted by the Boards of Trustees
and Directors. Rule 18f-2 under the 1940 Act provides that any matter required
to be submitted to the holders of the outstanding voting securities of an
investment company such as the Trust, Framlington or the Company shall not be
deemed to have been effectively acted upon unless approved by the holders of a
majority of the outstanding shares of each Fund affected by the matter. A Fund
is affected by a matter unless it is clear that the interests of each Fund in
the matter are substantially identical or that the matter does not affect any
interest of the Fund. Under the Rule, the approval of an investment advisory
agreement, sub-advisory agreement or any change in a fundamental investment
policy would be effectively acted upon with respect to a Fund only if approved
by a majority of the outstanding shares of such Fund. However, the Rule also
provides that the ratification of the appointment of independent auditors, the
approval of principal underwriting contracts and the election of trustees may be
effectively acted upon by shareholders of the Trust, Framlington or the Company
voting together in the aggregate without regard to a particular Fund.
Shares of each of the Trust, Framlington and the Company have
noncumulative voting rights and, accordingly, the holders of more than 50% of
each of the Trust's, Framlington's and the Company's outstanding shares
(irrespective of class) may elect all of the trustees or directors. Shares have
no preemptive rights and only such conversion and exchange rights as the Board
may grant in its discretion. When issued for payment as described in the
applicable Prospectus, shares will be fully paid and non-assessable by each of
the Trust, Framlington and the Company.
Shareholder meetings to elect trustees or directors will not be held
unless and until such time as required by law. At that time, the trustees then
in office will call a shareholders' meeting to elect trustees. Except as set
forth above, the trustees will continue to hold office and may appoint successor
trustees. Meetings of the shareholders of the Trust, Framlington or the Company
shall be called by the trustees or directors upon the written request of
shareholders owning at least 10% of the outstanding shares entitled to vote.
The Trust's and Framlington's Declaration of Trust, as amended,
authorizes the Board of Trustees, without shareholder approval (unless otherwise
required by applicable law), to: (i) sell and convey the assets belonging to a
class of shares to another management investment company for consideration which
may include securities issued by the purchaser and, in connection therewith, to
cause all outstanding shares of such class to be redeemed at a price which is
equal to their net asset value and which may be paid in cash or by distribution
of the securities or other consideration received from the sale and conveyance;
(ii) sell and convert the assets belonging to one or more classes of shares into
money and, in connection therewith, to cause all outstanding shares of such
class to be redeemed at their net asset value; or (iii) combine the assets
belonging to a class of shares with the assets belonging to one or more other
classes of shares if the Board of Trustees reasonably determines that such
combination will not have a material adverse effect on the shareholders of any
class participating in such combination and, in connection therewith, to cause
all outstanding shares of any such class to be redeemed or converted into shares
of another class of shares at their net asset value. However, the exercise of
such authority may be subject to certain restrictions under the 1940 Act. The
Trust's and Framlington's Board of Trustees may authorize the termination of any
class of shares after the assets belonging to such class have been distributed
to its shareholders.
MISCELLANEOUS
Counsel. The law firm of Dechert Price & Rhoads, 1500 K Street, N.W.,
Washington, DC 20005, has passed upon certain legal matters in connection with
the shares offered by the Funds and serves as counsel to the Trust, Framlington
and the Company.
Independent Auditors. Ernst & Young LLP, 200 Clarendon Street, Boston,
Massachusetts 02116, serves as the Trust's, Framlington's and the Company's
independent auditors.
As of October 7, 1997, Comerica Bank, One Detroit Center, 500 Woodward Ave.,
Detroit, Michigan 48226, held of record substantially all of the outstanding
shares of the Funds as agent, custodian or trustee for its customers. As of such
date, the following persons were beneficial owners of 5% or more of the
outstanding shares of a Fund because they possessed voting or investment power
with respect to such shares: Percent of
<TABLE>
<CAPTION>
<S> <C> <C>
Total Shares
Name of Fund Name and Address Outstanding
Cash Investment Fund - A National Financial Services 99.219%
for the exclusive benefit of
its customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
Tax-Free Money Market - A National Financial Services 83.783%
for the exclusive benefit of
its customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
Paxton Mendelssohn II 11.152%
100 Renaissance Center
Ste 2750
Detroit, MI 48243
U.S. Treasury Money Market - A Var & Co. 83.769%
First Trust Co.
180 East 5th Street
St. Paul, MN 55101
National Financial Services 99.965%
for the exclusive benefit of
its customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
Accelerating Growth Fund - A Donaldson Lufkin & Jenrette 9.102%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303
Appel Equity Group LTD 8.018%
150 Great Neck Road #301
Great Neck, NY 11021
Credit Suisse First Boston Corp. 21.833%
11 Madison Avenue 4th Floor
New York, NY 10010
Marin Associates LTD 6.224%
150 Great Neck Road # 301
Great Neck, NY 11021-3309
Pembroke Limited 15.042%
P.O. Box 5430
Incline Village, NV 89450
Accelerating Growth Fund - B Donaldson Lufkin & Jenrette 5.057%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303
First of Michigan Corp. on behalf 37.703%
of its clients
300 River Place Ste 4000
Detroit, MI 48207
MLPF&S for the sole benefit of
its 29.824% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
<PAGE>
Accelerating Growth Fund - C Ira H. Buchalter 8.365%
Madelyn Buchalter JTWROS
P.O. Box 9497
Saint Thomas, VI 00801
MLPF&S for the sole benefit of
its 91.186% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Small Company Growth Fund - Y Morgan Stanley Trust Company 6.767%
on behalf of its clients
One Pierrepoint Plaza 8th Floor
Brooklyn, NY 11201
Donaldson Lufkin & Jenrette 23.389%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303
Credit Suisse First Boston Corp. 14.864%
11 Madison Avenue 4th Floor
New York, NY 10010
MLPF&S for the sole benefit of
its 7.346% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Small Company Growth Fund - B MLPF&S for the sole benefit of its 75.696%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Small Company Growth Fund - C MLPF&S for the sole benefit of its 66.466%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Abner Sheffer 5.603%
7 Piccadilly Road
Great Neck, NY 11023
Index 500 Fund - A MLPF&S for the sole benefit of its 55.089%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
<PAGE>
Key Trust Company TTEE 7.034%
for the benefit of its clients
P.O. Box 94871
Cleveland, OH 44101-4871
Index 500 Fund - B MLPF&S for the sole benefit of its 65.517%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
International Equity - A MLPF&S for the sole benefit of its 49.578%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
International Equity - C MLPF&S for the sole benefit of its 63.273%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Prudential Securities 34.544%
for the benefit of its clients
199 Water Street, 33rd Floor
New York, NY 10292
Intermediate Bond Fund - A MLPF&S for the sole benefit of its 7.803%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Intermediate Bond Fund - B MLPF&S for the sole benefit of its 66.352%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Bear Stearns Securities Corp. 9.708%
1 Metrotech Center North
Brooklyn, NY 11201-3872
Intermediate Bond Fund - C MLPF&S for the sole benefit of its 79.370%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
First of Michigan Corp. on behalf 15.110%
of its clients
300 River Place Ste 4000
Detroit, MI 48207
Bond Fund - A Arcadia Bank Successor TTEE 9.908%
for the Jack L. Barry Estate Trust
P.O. Box 50566
Kalamazoo, MI 49005-0566
Paine Webber for the benefit of 5.977%
The Grand Rapids Foundation
99 Monroe NW Ste 500
Grand Rapids, MI 49503-2931
Bond Fund - B MLPF&S for the sole benefit of its 92.906%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Bond Fund - C MLPF&S for the sole benefit of its 100.000%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Tax-Free Intermediate Bond - A MLPF&S for the sole benefit of its 11.821%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Tax-Free Intermediate Bond - B MLPF&S for the sole benefit of its 98.040%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Balanced Fund - A Kaye J. Clark 5.592%
31821 Hickory Lane
Warren, MI 48093
Paul Ochmanek IRA 6.118%
732 Dover
Dearborn Heights, MI 48127
Carl Ottman TTEE 15.365%
The Carl Ottman Trust
10627 South Grayling Road
Roscommon, MI 48653
John B. Baum 5.462%
2474 Chippewa Trail
Hastings, MI 49058
Julie A. Prince TTEE 6.539%
The Jessie Fund Irrvoc. Trust
124 Quarton Drive
Orange Park, FL 32073
Balanced Fund - B MLPF&S for the sole benefit of its 75.711%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Donaldson Lufkin & Jenrette 14.540
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303
Balanced Fund - C First of Michigan Corp. on behalf 8.394%
of its clients
300 River Place Ste 4000
Detroit, MI 48207
MLPF&S for the sole benefit of
its 71.615% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Scienstry Inc. 19.989%
811 East Plano Parkway, Ste 110A
Plano, TX 75074
Michigan Triple Tax-Free Bond Fund - A MLPF&S for the sole benefit of its 17.978%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Stephen Stubbs & Mary Louise Stubbs 5.729%
co-TTEES Stephen Stubbs Trust
27027 Mound Road
Warren, MI 48092
Donald Dick 10.650%
Catherine Dick
Deborah Evans
15810 Stout Street
Detroit, MI 48223
Reino Kellman 11.843%
27095 Bennett
Redford, MI 48240
Charles Schwab & Co., Inc. for the 8.850%
benefit
of its clients
101 Montgomery Street
San Francisco, CA 94104
Leora Smith 5.253%
40 Greble
Battle Creek, MI 49017
Michigan Triple Tax-Free Bond Fund - B Henry Oelkers 24.633%
3004 Geneva
Dearborn, MI 48124
Jeanne Brown TTEE Jeanne Brown Rev 13.868%
Trust
210 Artesian Street
Harbor Springs, MI 49740-9405
Sophie Czerwinski 11.698%
22160 Cloverlawn
Oak Park, MI 48237
Martin G. Janower 23.329%
Rena Janower
6216 Cromwell
West Bloomfield, MI 48322
Michigan Triple Tax-Free Bond Fund - C MLPF&S for the sole benefit of its 99.988%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Tax-Free Bond Fund - A Miaz & Co. 12.775%
1000 North Water St. 14th Floor
Milwaukee, WI 53202
Barnett Banks Trust Co. 6.340%
P.O. Box 40200
Jacksonville, FL 32203-0200
MLPF&S for the sole benefit of
its 11.177% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Tax-Free Bond Fund - B MLPF&S for the sole benefit of its 99.831%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Tax-Free Bond Fund - C MLPF&S for the sole benefit of its 99.973%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Growth & Income Fund - A MLPF&S for the sole benefit of its 17.517%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Deborah Butcher 9.412%
c/o Precious Moments, Inc.
2210 Dean Street Unit G
St. Charles, IL 60175
Growth & Income Fund - B MLPF&S for the sole benefit of its 69.994%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Growth & Income Fund - C Marian Sherman 10.863%
8469 Ridge Road
East Jordan, MI 49727-8469
MLPF&S for the sole benefit of
its 83.549% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
U.S. Government Income Fund - A MLPF&S for the sole benefit of its 17.777%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Riggs Bank NA 19.686%
P.O. Box 96211
Washington, DC 20090-6211
U.S. Government Income Fund - B MLPF&S for the sole benefit of its 99.268%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
U.S. Government Income Fund - C Raymond James & Assoc. Custodian
Ellen L. Konrad IRA 66.394%
6624 Southeast Knight Street
Portland, OR 97206
MLPF&S for the sole benefit of
its 33.605% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
<PAGE>
Multi-Season Growth Fund - C MLPF&S for the sole benefit of its 94.864%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Real Estate Equity Investment - A MLPF&S for the sole benefit of its 30.452%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Delaware Charter GTEE & Tr. Co. 5.353%
120 West 12th Street
Kansas City, MO 64105
Painewebber for the benefit of 5.341%
Sharron Catallo Living Trust
29 Buffalo
Clarkston, MI 48346-2101
Real Estate Equity Investment - B MLPF&S for the sole benefit of its 68.398%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Real Estate Equity Investment - C MLPF&S for the sole benefit of its 66.055%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Money Market Fund - A IBJ Schroder Bank & Trust Co. 96.387%
for the benefit of its clients
One State Street
New York, NY 10004
Money Market Fund - B Raymond James & Assoc. Custodian 7.650%
for Robert Burgo IRA
534 Princeton Street
DesPlaines, IL 60016-2002
JMS Inc. 35.228%
845 Medway Road
Philadelphia, PA 19115
A.G. Edwards & Sons Custodian 9.340%
Wayland Stephenson IRA
321 Samarkand Drive
Santa Barbara, CA 93105
<PAGE>
First of Michigan Corp. on behalf 5.266%
of its clients
300 River Place Ste 4000
Detroit, MI 48207
Prudential Securities 17.326%
for the benefit of its clients
199 Water Street, 33rd Floor
New York, NY 10292
Gruntal & Co 11.623%
14 Wall Street
New York, NY 10005
Money Market Fund - C William Harold Newman 23.168%
1205 Longleaf Drive
Fayetteville, NC 28305
Abe Rosenblatt 11.162%
Doris Rosenblatt JTWROS
19706 Waters Pond Lane #501
Boca Raton, FL 33434
Mid-Cap Growth Fund - A Lesli Babbs 23.812%
1846 D North Sedgwick #D
Chicago, IL 60614-5329
Painewebber for the benefit of 16.834%
Jenness Hollidge
357 Devonshire #115
Rochester Hills, MI 48307-4020
Prudential Securities 16.544%
for the benefit of its clients
199 Water Street, 33rd Floor
New York, NY 10292
Smith Barney Inc. for the benefit of its 5.762%
clients
388 Greenwich Street
New York, NY 10013
Mid-Cap Growth Fund - B MLPF&S for the sole benefit of its 88.210%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
<PAGE>
Mid-Cap Growth Fund - C MLPF&S for the sole benefit of its 75.952%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Prudential Securities 12.274%
for the benefit of its clients
199 Water Street, 33rd Floor
New York, NY 10292
Value Fund - A Smith Barney Inc. for the benefit of its 5.058%
clients
388 Greenwich Street
New York, NY 10013
MLPF&S for the sole benefit of
its 11.616% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Value Fund - B MLPF&S for the sole benefit of its 82.369%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Value Fund - C Prudential Securities 6.322%
for the benefit of its clients
199 Water Street, 33rd Floor
New York, NY 10292
MLPF&S for the sole benefit of
its 67.329% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
International Bond Fund - A Delaware Charter Gtee & Trust Co. 93.845%
120 West 12th Street
Kansas City, MO 64105
International Bond Fund - B MLPF&S for the sole benefit of its 74.132%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Micro-Cap Equity Fund - A National Financial Services 8.228%
for the exclusive benefit of
its customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
MLPF&S for the sole benefit of
its 31.037% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Gregory Naden 15.723%
938 Pebble Beach Drive
Madison, WI 53717-1173
Micro-Cap Equity Fund - B MLPF&S for the sole benefit of its 38.090%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Micro-Cap Equity Fund - C Donaldson Lufkin Jenrette 7.896%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-9998
MLPF&S for the sole benefit of
its 53.093% customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Small-Cap Value Fund - A MLPF&S for the sole benefit of its 6.017%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
McDonald & Co. Securities 22.215%
on behalf of its clients
260 Brown Street
Birmingham, MI 48009
Small-Cap Value Fund - B MLPF&S for the sole benefit of its 44.100%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Paine Webber for the benefit of 5.687%
The Dreiford Group
6508 80th Street
Cabin John, MD 20818-1209
Small-Cap Value Fund - C MLPF&S for the sole benefit of its 13.793%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
<PAGE>
Short Term Treasury Fund - Y First Bank NA 27.821%
P.O. Box 64010
St. Paul, MN 55164-0010
First Trust National Association 13.962%
535 Griswold Street Ste 740
Detroit, MI 48226
Short Term Treasury Fund - B MLPF&S for the sole benefit of its 98.053%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington International Growth - A Paine Webber for the benefit of 18.182%
RDM Holding LTD
350 North Woodward
Birmingham, MI 48009-5388
Framlington International Growth - B MLPF&S for the sole benefit of its 63.390%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington International Growth - C MLPF&S for the sole benefit of its 87.365%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Smith Barney Inc. 7.833%
388 Greenwich Street
New York, NY 10013
Framlington Emerging Markets - A Paine Webber for the benefit of 28.159
RDM Holding LTD
350 North Woodward
Birmingham, MI 48009-5388
Delaware Charter GTEE & Tr. Co. 13.533%
120 West 12th Street
Kansas City, MO 64105
Framlington Emerging Markets - B Wexford Clearing Services Corp. 50.682%
C/O CTC Illinois Trust Company
Attn: Sonny Panaligan
Chicago, IL 60606-6905
<PAGE>
MLPF&S for the sole benefit of
its 12.239 customers 4800 Deer
Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington Emerging Markets - C MLPF&S for the sole benefit of its 49.379%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington Healthcare - A MLPF&S for the sole benefit of its 66.478%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington Healthcare - B MLPF&S for the sole benefit of its 42.642%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
Framlington Healthcare - B MLPF&S for the sole benefit of its 90.803%
customers
4800 Deer Lake Drive East 3rd Floor
Jacksonville, FL 32246-6484
</TABLE>
As of October 7, 1997, Munder Capital Management, on behalf of their clients
owned 24.488% of the Accelerating Growth Fund Class Y Shares, 6.776% of the
Balanced Fund Class Y shares, 85.128% of the Bond Fund Class Y shares, 50.845%
of the Michigan Triple Tax-Free Bond Fund Class Y shares, 29.054% of the Growth
& Income Fund Class Y shares, 73.195% of the International Equity Class Y
shares, 44.936% of the Small Company Growth Fund Class K shares, 65.658% of the
Intermediate Bond Fund Class Y shares, 99.990% of the International Bond Fund
Class K shares, 99.114% of the International Bond Fund Class Y shares, 65.499%
of the Tax-Free Bond Fund Class K shares, 98.323% of the Real Estate Equity
Investment Fund Class Y shares, 13.830% of the Mid-Cap Growth Fund Class K
shares, 99.135% of the Mid-Cap Growth Fund Class Y shares, 91.453% of the
Micro-Cap Equity Fund Class Y shares, 67.190% of the Micro-Cap Equity Fund Class
K shares, 9.511% of the Multi-Season Growth Fund Class A shares, 52.239% of the
Multi-Season Growth Fund Class Y shares, 22.007% of the Tax-Free Intermediate
Bond Fund Class Y shares, 87.862% of the U.S. Government Income Fund Class Y
shares, 99.438% of the Money Market Fund Class Y shares, 86.314% of the Short
Term Treasury Fund Class Y shares, 58.373% of the Value Fund Class A shares,
19.141% of the Value Fund Class K shares, 94.790% of the Value Fund Class Y
shares, 28.563% of the Index 500 Fund Class Y shares, 61.175% of the Framlington
Emerging Markets Fund Class A shares, 85.440% of the Framlington Emerging
Markets Fund Class Y shares, 8.327% of the Framlington Healthcare Fund Class A
shares, 24.911% Framlington Healthcare Fund Class K shares, 96.574% of the
Framlington Healthcare Fund Class Y shares, 89.226% of the Framlington
International Growth Fund Class A shares, 68.299% of the Framlington
International Growth Fund Class K shares, 99.260% of the Framlington
International Growth Fund Class Y shares, 89.297% of the Small-Cap Value Fund
Class Y shares, and 42.845% of the Small-Cap Value Fund Class A shares.
The Munder All-Season Aggressive Fund, as of October 7, 1997, held the
following positions in Class Y shares of The Munder Funds: 21.58% of the
Framlington Emerging Markets Fund, 31.87% of the Framlington Healthcare Fund,
10.95% of the Framlington International Growth Fund, 33.56% of the Micro-Cap
Equity Fund, 13.54% of the Mid-Cap Growth Fund, 5.87% of the Real Estate Equity
Investment Fund, 14.05% of the Small-Cap Value Fund, and 5.09% of the Value
Fund.
Shareholder Approvals. As used in this Statement of Additional
Information and in each Prospectus, a "majority of the outstanding shares" of a
Fund or investment portfolio means the lesser of (a) 67% of the shares of the
particular Fund or portfolio represented at a meeting at which the holders of
more than 50% of the outstanding shares of such Fund or portfolio are present in
person or by proxy, or (b) more than 50% of the outstanding shares of such Fund
or portfolio.
REGISTRATION STATEMENT
This Statement of Additional Information and each of the Fund's
Prospectuses do not contain all the information included in the Fund's
registration statement filed with the SEC under the 1933 Act with respect to the
securities offered hereby, certain portions of which have been omitted pursuant
to the rules and regulations of the SEC. The registration statement, including
the exhibits filed therewith, may be examined at the offices of the SEC in
Washington, D.C.
Statements contained herein and in each of the Fund's Prospectuses as
to the contents of any contract of other documents referred to are not
necessarily complete, and, in such instance, reference is made to the copy of
such contract or other documents filed as an exhibit to the Fund's registration
statement, each such statement being qualified in all respects by such
reference.
FINANCIAL STATEMENTS
The financial statements for the Trust, Framlington and the Company
including the notes thereto, dated June 30, 1997 have been audited by Ernst &
Young LLP and are incorporated by reference into this Statement of Additional
Information from the Annual Reports of the Trust, Framlington and the Company
dated as of June 30, 1997. The information under the caption "Financial
Highlights" of the Funds for the period from commencement of operations through
June 30, 1997, appearing in the related Prospectuses dated October 29, 1997 has
been derived from the financial statements audited by Ernst & Young LLP except
for periods ended prior to June 30, 1995 for the Multi-Season Fund and Money
Market Fund, which have been derived from the financial statements audited by
other independent auditors. Such financial statements and financial highlights
are included or incorporated by reference herein in reliance upon their reports
given upon the authority of such firms as experts in accounting and auditing.
<PAGE>
A-3
APPENDIX A
- Rated Investments -
Corporate Bonds
Excerpts from Moody's Investors Services, Inc. ("Moody's") description
of its bond ratings:
"Aaa": Bonds that are rated "Aaa" are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
"Aa": Bonds that are rated "Aa" are judged to be of high-quality by all
standards. Together with the "Aaa" group they comprise what are generally known
as "high-grade" bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.
"A": Bonds that are rated "A" possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
"Baa": Bonds that are rated "Baa" are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appears adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
"Ba": Bonds that are rated "Ba" are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and thereby
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
"B": Bonds that are rated "B" generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
"Caa": Bonds that are rated "Caa" are of poor standing. These issues may be
in default or present elements of danger may exist with respect to principal or
interest.
Moody's applies numerical modifiers (1, 2 and 3) with respect to bonds
rated "Aa" through "B". The modifier 1 indicates that the bond being rated ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the bond ranks in the lower
end of its generic rating category.
<PAGE>
Excerpts from Standard & Poor's Corporation ("S&P") description of its
bond ratings:
"AAA": Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
"AA": Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from "AAA" issues by a small degree.
"A": Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
"BBB": Bonds rated "BBB" are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
"BB", "B" and "CCC": Bonds rated "BB" and "B" are regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligations. "BB" represents a
lower degree of speculation than "B" and "CCC" the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
To provide more detailed indications of credit quality, the "AA" or "A"
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
Commercial Paper
The rating "Prime-1" is the highest commercial paper rating assigned by
Moody's. These issues (or related supporting institutions) are considered to
have a superior capacity for repayment of short-term promissory obligations.
Issues rated "Prime-2" (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics of "Prime-1" rated issues, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions.
Ample alternate liquidity is maintained.
Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debt having original maturities of no more than
365 days. Commercial paper rated "A-1" by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are denoted
"A-1+." Commercial paper rated "A-2" by S&P indicates that capacity for timely
payment is strong. However, the relative degree of safety is not as high as for
issues designated "A-1."
<PAGE>
APPENDIX A
- Rated Investments -
Commercial Paper
Rated commercial paper purchased by a Fund must have (at the time of
purchase) the highest quality rating assigned to short-term debt securities or,
if not rated, or rated by only one agency, are determined to be of comparative
quality pursuant to guidelines approved by a Fund's Boards of Trustees and
Directors. Highest quality ratings for commercial paper for Moody's and S&P are
as follows:
Moody's: The rating "Prime-1" is the highest commercial paper rating
category assigned by Moody's. These issues (or related supporting institutions)
are considered to have a superior capacity for repayment of short-term
promissory obligations.
S&P: Commercial paper ratings of S&P are current assessments of the
likelihood of timely payment of debts having original maturities of no more than
365 days. Commercial paper rated in the "A-1" category by S&P indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted "A-1+".
<PAGE>
B-8
APPENDIX B
As stated in the applicable Prospectuses, the Equity Funds, the
Balanced Fund and the Bond Funds may enter into certain futures transactions and
options for hedging purposes. Such transactions are described in this Appendix.
I. Interest Rate Futures Contracts
Use of Interest Rate Futures Contracts. Bond prices are established in
both the cash market and the futures market. In the cash market, bonds are
purchased and sold with payment for the full purchase price of the bond being
made in cash, generally within five business days after the trade. In the
futures market, only a contract is made to purchase or sell a bond in the future
for a set price on a certain date. Historically, the prices for bonds
established in the futures markets have tended to move generally in the
aggregate in concert with the cash market prices and have maintained fairly
predictable relationships. Accordingly, the Funds may use interest rate futures
contracts as a defense, or hedge, against anticipated interest rate changes and
not for speculation. As described below, this would include the use of futures
contract sales to protect against expected increases in interest rates and
futures contract purchases to offset the impact of interest rate declines.
The Funds presently could accomplish a similar result to that which it
hopes to achieve through the use of futures contracts by selling bonds with long
maturities and investing in bonds with short maturities when interest rates are
expected to increase, or conversely, selling short-term bonds and investing in
long-term bonds when interest rates are expected to decline. However, because of
the liquidity that is often available in the futures market, the protection is
more likely to be achieved, perhaps at a lower cost and without changing the
rate of interest being earned by the Funds, through using futures contracts.
Description of Interest Rate Futures Contracts. An interest rate
futures contract sale would create an obligation by a Fund, as seller, to
deliver the specific type of financial instrument called for in the contract at
a specific future time for a specified price. A futures contract purchase would
create an obligation by the Fund, as purchaser, to take delivery of the specific
type of financial instrument at a specific future time at a specific price. The
specific securities delivered or taken, respectively, at settlement date, would
not be determined until or at near that date. The determination would be in
accordance with the rules of the exchange on which the futures contract sale or
purchase was made.
Although interest rate futures contracts by their terms call for actual
delivery or acceptance of securities, in most cases the contracts are closed out
before the settlement date without making or taking of delivery of securities.
Closing out a futures contract sale is effected by the Fund's entering into a
futures contract purchase for the same aggregate amount of the specific type of
financial instrument and the same delivery date. If the price of the sale
exceeds the price of the offsetting purchase, the Fund is immediately paid the
difference and thus realizes a gain. If the offsetting purchase price exceeds
the sale price, the Fund pays the difference and realizes a loss. Similarly, the
closing out of a futures contract purchase is effected by the Fund entering into
a futures contract sale. If the offsetting sale price exceeds the purchase
price, the Fund realizes a gain, and if the purchase price exceeds the
offsetting sale price, the Fund realizes a loss.
Interest rate futures contracts are traded in an auction environment on
the floors of several exchanges -principally, the Chicago Board of Trade, the
Chicago Mercantile Exchange and the New York Futures Exchange. The Funds would
deal only in standardized contracts on recognized exchanges. Each exchange
guarantees performance under contract provisions through a clearing corporation,
a nonprofit organization managed by the exchange membership.
A public market now exists in futures contracts covering various
financial instruments including long-term United States Treasury Bonds and
Notes, Government National Mortgage Association (GNMA) modified pass-through
mortgage backed securities, three-month United States Treasury Bills, and
ninety-day commercial paper. The Funds may trade in any interest rate futures
contracts for which there exists a public market, including, without limitation,
the foregoing instruments.
Example of Futures Contract Sale. The Funds would engage in an interest
rate futures contract sale to maintain the income advantage from continued
holding of a long-term bond while endeavoring to avoid part or all of the loss
in market value that would otherwise accompany a decline in long-term securities
prices. Assume that the market value of a certain security held by a particular
Fund tends to move in concert with the futures market prices of long-term United
States Treasury bonds ("Treasury Bonds"). The adviser wishes to fix the current
market value of the portfolio security until some point in the future. Assume
the portfolio security has a market value of 100, and the adviser believes that,
because of an anticipated rise in interest rates, the value will decline to 95.
The fund might enter into futures contract sales of Treasury bonds for an
equivalent of 98. If the market value of the portfolio security does indeed
decline from 100 to 95, the equivalent futures market price for the Treasury
bonds might also decline from 98 to 93.
In that case, the five point loss in the market value of the portfolio
security would be offset by the five point gain realized by closing out the
futures contract sale. Of course, the futures market price of Treasury bonds
might well decline to more than 93 or to less than 93 because of the imperfect
correlation between cash and futures prices mentioned below.
The adviser could be wrong in its forecast of interest rates and the
equivalent futures market price could rise above 98. In this case, the market
value of the portfolio securities, including the portfolio security being
protected, would increase. The benefit of this increase would be reduced by the
loss realized on closing out the futures contract sale.
If interest rate levels did not change, the Fund in the above example
might incur a loss of 2 points (which might be reduced by an offsetting
transaction prior to the settlement date). In each transaction, transaction
expenses would also be incurred.
Example of Futures Contract Purchase. The Funds would engage in an
interest rate futures contract purchase when they are not fully invested in
long-term bonds but wish to defer for a time the purchase of long-term bonds in
light of the availability of advantageous interim investments, e.g., shorter
term securities whose yields are greater than those available on long-term
bonds. A Fund's basic motivation would be to maintain for a time the income
advantage from investing in the short-term securities; the Fund would be
endeavoring at the same time to eliminate the effect of all or part of an
expected increase in market price of the long-term bonds that the Fund may
purchase.
For example, assume that the market price of a long-term bond that the
Fund may purchase, currently yielding 10% , tends to move in concert with
futures market prices of Treasury bonds. The adviser wishes to fix the current
market price (and thus 10% yield) of the long-term bond until the time (four
months away in this example) when it may purchase the bond. Assume the long-term
bond has a market price of 100, and the adviser believes that, because of an
anticipated fall in interest rates, the price will have risen to 105 (and the
yield will have dropped to about 91/2%) in four months. The Fund might enter
into futures contracts purchases of Treasury bonds for an equivalent price of
98. At the same time, the Fund would assign a pool of investments in short-term
securities that are either maturing in four months or earmarked for sale in four
months, for purchase of the long-term bond at an assumed market price of 100.
Assume these short-term securities are yielding 15%. If the market price of the
long-term bond does indeed rise from 100 to 105, the equivalent futures market
price for Treasury bonds might also rise from 98 to 103. In that case, the 5
point increase in the price that the Fund pays for the long-term bond would be
offset by the 5 point gain realized by closing out the futures contract
purchase.
The adviser could be wrong in its forecast of interest rates; long-term
interest rates might rise to above 10%; and the equivalent futures market price
could fall below 98. If short-term rates at the same time fall to 10% or below,
it is possible that the Fund would continue with its purchase program for
long-term bonds. The market price of available long-term bonds would have
decreased. The benefit of this price decrease, and thus yield increase, will be
reduced by the loss realized on closing out the futures contract purchase.
If, however, short-term rates remained above available long-term rated,
it is possible that the Fund would discontinue its purchase program for
long-term bonds. The yield on short-term securities in the portfolio, including
those originally in the pool assigned to the particular long-term bond, would
remain higher than yields on long-term bonds. The benefit of this continued
incremental income will be reduced by the loss realized on closing out the
futures contract purchase. In each transaction, expenses would also be incurred.
II. Index Futures Contracts
General. A bond index assigns relative values of the bonds included in
the index and the index fluctuates with changes in the market values of the
bonds included. The Chicago Board of Trade has designed a futures contract based
on the Bond Buyer Municipal Bond Index. This Index is composed of 40 term
revenue and general obligation bonds and its composition is updated regularly as
new bonds meeting the criteria of the Index are issued and existing bonds
mature. The Index is intended to provide an accurate indicator of trends and
changes in the municipal bond market. Each bond in the Index is independently
priced by six dealer-to-dealer municipal bond brokers daily. The 40 prices then
are averaged and multiplied by a coefficient. The coefficient is used to
maintain the continuity of the Index when its composition changes.
A stock index assigns relative values to the stocks included in the
index and the index fluctuates with changes in the market values of the stocks
included. Some stock index futures contracts are based on broad market indices,
such as the Standard & Poor's 500 or the New York Stock Exchange Composite
Index. In contrast, certain exchanges offer futures contracts on narrower market
indices, such as the Standard & Poor's 100 or indices based on an industry or
market segment, such as oil and gas stocks.
Futures contracts are traded on organized exchanges regulated by the
Commodity Futures Trading Commission. Transactions on such exchanges are cleared
through a clearing corporation, which guarantees the performance of the parties
to each contract.
A Fund will sell index futures contracts in order to offset a decrease
in market value of its portfolio securities that might otherwise result from a
market decline. A Fund will purchase index futures contracts in anticipation of
purchases of securities. In a substantial majority of these transactions, a Fund
will purchase such securities upon termination of the long futures position, but
a long futures position may be terminated without a corresponding purchase of
securities.
In addition, a Fund may utilize index futures contracts in anticipation
of changes in the composition of its portfolio holdings. For example, in the
event that a Fund expects to narrow the range of industry groups represented in
its holdings it may, prior to making purchases of the actual securities,
establish a long futures position based on a more restricted index, such as an
index comprised of securities of a particular industry group. A Fund may also
sell futures contracts in connection with this strategy, in order to protect
against the possibility that the value of the securities to be sold as part of
the restructuring of the portfolio will decline prior to the time of sale.
<PAGE>
Examples of Stock Index Futures Transactions. The following are
examples of transactions in stock index
futures (net of commissions and premiums, if any).
ANTICIPATORY PURCHASE HEDGE: Buy the Future
Hedge Objective: Protect Against Increasing Price
<TABLE>
<CAPTION>
<S> <C> <C>
Portfolio Futures
-Day Hedge is Placed-
Anticipate buying $62,500 in Equity Securities Buying 1 Index Futures at 125
Value of Futures = $62,500/Contract
-Day Hedge is Lifted-
Buy Equity Securities with Actual Cost = $65,000 Sell 1 Index Futures at 130
Increase in Purchase Price = $2,500 Value of Futures = $65,000/Contract
Gain on Futures = $2,500
HEDGING A STOCK PORTFOLIO: Sell the Future
Hedge Objective: Protect Against Declining
Value of the Portfolio
Factors:
Value of Stock Portfolio = $1,000,000 Value of Futures Contract - 125 X $500 =
$62,500 Portfolio Beta Relative to the Index = 1.0
Portfolio Futures
-Day Hedge is Placed-
Anticipate Selling $1,000,000 in Equity Securities Sell 16 Index Futures at 125
Value of Futures = $1,000,000
-Day Hedge is Lifted-
Equity Securities - Own Stock Buy 16 Index Futures at 120 with Value = $960,000
Value of Futures = $960,000
Loss in Portfolio Value = $40,000 Gain on Futures = $40,000
</TABLE>
III. Margin Payments
Unlike purchase or sales of portfolio securities, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Initially,
the Fund will be required to deposit with the broker or in a segregated account
with the Custodian an amount of cash or cash equivalents, known as initial
margin, based on the value of the contract. The nature of initial margin in
futures transactions is different from that of margin in security transactions
in that futures contract margin does not involve the borrowing of funds by the
customer to finance the transactions. Rather, the initial margin is in the
nature of a performance bond or good faith deposit on the contract which is
returned to the Fund upon termination of the futures contract assuming all
contractual obligations have been satisfied. Subsequent payments, called
variation margin, to and from the broker, will be made on a daily basis as the
price of the underlying instruments fluctuates making the long and short
positions in the futures contract more or less valuable, a process known as
marking-to-the-market. For example, when a particular Fund has purchased a
futures contract and the price of the contract has risen in response to a rise
in the underlying instruments, that position will have increased in value and
the Fund will be entitled to receive from the broker a variation margin payment
equal to that increase in value. Conversely, where the Fund has purchased a
futures contract and the price of the futures contract has declined in response
to a decrease in the underlying instruments, the position would be less valuable
and the Fund would be required to make a variation margin payment to the broker.
At any time prior to expiration of the futures contract, the Adviser or
Sub-Advisor may elect to close the position by taking an opposite position,
subject to the availability of a secondary market, which will operate to
terminate the Fund's position in the futures contract. A final determination of
variation margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or gain.
IV. Risks of Transactions in Futures Contracts
There are several risks in connection with the use of futures by the
Funds as hedging devices. One risk arises because of the imperfect correlation
between movements in the price of the futures and movements in the price of the
instruments which are the subject of the hedge. The price of the future may move
more than or less than the price of the instruments being hedged. If the price
of the futures moves less than the price of the instruments which are the
subject of the hedge, the hedge will not be fully effective but, if the price of
the instruments being hedged has moved in an unfavorable direction, the Fund
would be in a better position than if it had not hedged at all. If the price of
the instruments being hedged has moved in a favorable direction, this advantage
will be partially offset by the loss on the futures. If the price of the futures
moves more than the price of the hedged instruments, the Fund involved will
experience either a loss or gain on the futures which will not be completely
offset by movements in the price of the instruments which are the subject of the
hedge. To compensate for the imperfect correlation of movements in the price of
instruments being hedged and movements in the price of futures contracts, the
Fund may buy or sell futures contracts in a greater dollar amount than the
dollar amount of instruments being hedged if the volatility over a particular
time period of the prices of such instruments has been greater than the
volatility over such time period of the futures, or if otherwise deemed to be
appropriate by the Adviser or Sub-Advisor. Conversely, the Funds may buy or sell
fewer futures contracts if the volatility over a particular time period of the
prices of the instruments being hedged is less than the volatility over such
time period of the futures contract being used, or if otherwise deemed to be
appropriate by the Adviser or Sub-Advisor. It is also possible that, when the
Fund had sold futures to hedge its portfolio against a decline in the market,
the market may advance and the value of instruments held in the Fund may
decline. If this occurred, the Fund would lose money on the futures and also
experience a decline in value in its portfolio securities.
Where futures are purchased to hedge against a possible increase in the
price of securities before a Fund is able to invest its cash (or cash
equivalents) in an orderly fashion, it is possible that the market may decline
instead; if the Fund then concludes not to invest its cash at that time because
of concern as to possible further market decline or for other reasons, the Funds
will realize a loss on the futures contract that is not offset by a reduction in
the price of the instruments that were to be purchased.
In instances involving the purchase of futures contracts by the Funds,
an amount of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the Custodian and/or
in a margin account with a broker to collateralize the position and thereby
insure that the use of such futures is unleveraged.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between movements in the futures and the
instruments being hedged, the price of futures may not correlate perfectly with
movement in the cash market due to certain market distortions. Rather than
meeting additional margin deposit requirements, investors may close futures
contracts through off-setting transactions which could distort the normal
relationship between the cash and futures markets. Second, with respect to
financial futures contracts, the liquidity of the futures market depends on
participants entering into off-setting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced thus producing distortions. Third, from
the point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market. Therefore,
increased participation by speculators in the futures market may also cause
temporary price distortions. Due to the possibility of price distortion in the
futures market, and because of the imperfect correlation between the movements
in the cash market and movements in the price of futures, a correct forecast of
general market trends or interest rate movements by the Adviser or Sub-Advisor
may still not result in a successful hedging transaction over a short time
frame.
Positions in futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures. Although the Funds
intend to purchase or sell futures only on exchanges or boards of trade where
there appear to be active secondary markets, there is no assurance that a liquid
secondary market on any exchange or board of trade will exist for any particular
contract or at any particular time. In such event, it may not be possible to
close a futures investment position, and in the event of adverse price
movements, the Funds would continue to be required to make daily cash payments
of variation margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the futures
contract can be terminated. In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee that the price of
the securities will in fact correlate with the price movements in the futures
contract and thus provide an offset on a futures contract.
Further, it should be noted that the liquidity of a secondary market in
a futures contract may be adversely affected by "daily price fluctuation limits"
established by commodity exchanges which limit the amount of fluctuation in a
futures contract price during a single trading day. Once the daily limit has
been reached in the contract, no trades may be entered into at a price beyond
the limit, thus preventing the liquidation of open futures positions. The
trading of futures contracts is also subject to the risk of trading halts,
suspensions, exchange or clearing house equipment failures, government
intervention, insolvency of a brokerage firm or clearing house or other
disruptions of normal activity, which could at times make it difficult or
impossible to liquidate existing positions or to recover excess variation margin
payments.
Successful use of futures by the Funds is also subject to the Adviser's
or Sub-Advisor's ability to predict correctly movements in the direction of the
market. For example, if a particular Fund has hedged against the possibility of
a decline in the market adversely affecting securities held by it and securities
prices increase instead, the Fund will lose part or all of the benefit to the
increased value of its securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
the Fund has insufficient cash, it may have to sell securities to meet daily
variation margin requirements. Such sales of securities may be, but will not
necessarily be, at increased prices which reflect the rising market. The Funds
may have to sell securities at a time when they may be disadvantageous to do so.
V. Options on Futures Contracts
The Funds may purchase and write options on the futures contracts
described above. A futures option gives the holder, in return for the premium
paid, the right to buy (call) from or sell (put) to the writer of the option a
futures contract at a specified price at any time during the period of the
option. Upon exercise, the writer of, the option is obligated to pay the
difference between the cash value of the futures contract and the exercise
price. Like the buyer or seller of a futures contract, the holder, or writer, of
an option has the right to terminate its position prior to the scheduled
expiration of the option by selling, or purchasing an option of the same series,
at which time the person entering into the closing transaction will realize a
gain or loss. A Fund will be required to deposit initial margin and variation
margin with respect to put and call options on futures contracts written by it
pursuant to brokers' requirements similar to those described above. Net option
premiums received will be included as initial margin deposits.
Investments in futures options involve some of the same considerations
that are involved in connection with investments in future contracts (for
example, the existence of a liquid secondary market). In addition, the purchase
or sale of an option also entails the risk that changes in the value of the
underlying futures contract will not correspond to changes in the value of the
option purchased. Depending on the pricing of the option compared to either the
futures contract upon which it is based, or upon the price of the securities
being hedged, an option may or may not be less risky than ownership of the
futures contract or such securities. In general, the market prices of options
can be expected to be more volatile than the market prices on underlying futures
contract. Compared to the purchase or sale of futures contracts, however, the
purchase of call or put options on futures contracts may frequently involve less
potential risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). The writing of an option on a
futures contract involves risks similar to those risks relating to the sale of
futures contracts.
VI. Currency Transactions
The Fund may engage in currency transactions in order to hedge the
value of portfolio holdings denominated in particular currencies against
fluctuations in relative value. Currency transactions include forward currency
contracts, currency futures, options on currencies, and currency swaps. A
forward currency contract involves a privately negotiated obligation to purchase
or sell (with delivery generally required) a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. A currency swap is
an agreement to exchange cash flows based on the notional difference among two
or more currencies and operates similarly to an interest rate swap as described
in the Statement of Additional Information. The Fund may enter into currency
transactions with counterparties which have received (or the guarantors of the
obligations which have received) a credit rating of A-1 or P-1 by S&P or
Moody's, respectively, or that have an equivalent rating from a NRSRO or are
determined to be of equivalent credit quality by the Advisor.
The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.
The Fund will not enter into a transaction to hedge currency exposure
to an extent greater after netting all transactions intended wholly or partially
to offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging as described below.
The Fund may also cross-hedge currencies by entering into transactions
to purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which the Fund expects
to have portfolio exposure.
To reduce the effect of currency fluctuations on the value of existing
or anticipated holdings of portfolio securities, the Fund may also engage proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a commitment or option to sell a currency whose
changes in value are generally considered to be correlated to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, in exchange for U.S. dollars. The amount of the
commitment or option would not exceed the value of the Fund's securities
denominated in correlated currencies. For example, if the Advisor or Sub-Advisor
considers that the Austrian schilling is correlated to the German mark (the
"D-mark"), the Fund holds securities denominated in shillings and the Advisor or
Sub-Advisor believes that the value of the schillings will decline against the
U.S. dollar, the Advisor or Sub-Advisor may enter into a commitment or option to
sell D-marks and buy dollars. Currency hedging involves some of the same risks
and considerations as other transactions with similar instruments. Currency
transactions can result in losses to the Fund if the currency being hedged
fluctuates in value to a degree or in a direction that is not anticipated.
Further, there is the risk that the perceived correlation between various
currencies may not be present or may not be present during the particular time
that the Fund is engaging in proxy hedging. If a Fund enters into a currency
hedging transaction, the Fund will comply with the asset segregation
requirements. Under such requirements, the Fund will segregate liquid, high
grade assets with the custodian to the extent the Fund's obligations are not
otherwise "covered" through ownership of the underlying currency.
Currency transactions are subject to risks different from those of
other portfolio transactions. Because currency control is of great importance to
the issuing governments and influences economic planning and policy, purchases
and sales of currency and related instruments can be negatively affected by
government exchange controls, blockages, and manipulations or exchange
restrictions imposed by governments. These can result in losses to the Fund if
it is unable to deliver or receive currency or funds in settlement of
obligations and could also cause hedges it has entered into to be rendered
useless, resulting in full currency exposure as well as incurring transaction
costs. Buyers and sellers of currency futures are subject to the same risks that
apply to the use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in the
issuing nation. Trading options on currency futures is relatively new, and the
ability to establish and close to positions on such options is subject to the
maintenance of a liquid market which may not always be available. Currency
exchange rates may fluctuate based on factors extrinsic to that country's
economy.
VII. Other Matters
Accounting for futures contracts will be in accordance with generally
accepted accounting principles.
- --------
1Trustee/Director is an "interested person" of the Trust, Framlington or the
Company as defined in the 1940 Act.
<PAGE>
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
Included in Part A:
Financial Highlights
Included in Part B:
The Registrant's Annual Reports for the fiscal year
ended June 30, 1997 and the Reports of Independent
Auditors dated August 15, 1997, are incorporated by
reference to the Definitive 30b-2 filed (EDGAR Form
N-30D) on September 10, 1997 as Accession
#0000927405-97-000362.
(b) Exhibits:
(1) (a) Declaration of Trust of the Registrant dated August 30,
1989 is incorporated herein by reference to Exhibit (1) to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on September 1, 1989.
(b) Amendment No. 1 to Declaration of Trust of the Registrant is
incorporated herein by reference to Exhibit (1)(b) to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A filed with the Commission on November
21, 1989.
(c) Amendment No. 2 to Declaration of Trust of the Registrant is
incorporated herein by reference to Exhibit (1)(c) to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 22, 1990.
(d) Amendment No. 3 to the Declaration of Trust is incorporated
herein by reference to Exhibit 1(d) to Post-Effective
Amendment No. 20 filed with the Commission on June 28, 1995.
(e) Certificate of Classification of Shares dated August 30, 1991
pertaining to Class D shares; Class E shares; Class F shares;
Class G shares; Class H shares; and Class I shares is
incorporated herein by reference to Exhibit (1)(d) to
Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on August 3, 1992.
(f) Certificate of Classification of Shares pertaining to Class
A-1 shares and Class A-2 shares; Class B-1 shares and Class
B-2 shares; Class C-1 shares and Class C-2 shares; Class D-1
shares and Class D-2 shares; Class E-1 shares and Class E-2
shares; Class F-1 shares and Class F-2 shares; Class G-1
shares and Class G-2 shares; Class H-1 shares and Class H-2
shares; Class I-1 shares and Class I-2 shares; Class J shares;
Class J-1 shares; and Class J-2 shares; and Class K shares;
Class K-1 shares and Class K-2 shares is incorporated herein
by reference to Exhibit (1)(e) to Post-Effective Amendment No.
7 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on August 3, 1992.
(g) Certificate of Classification of Shares pertaining to Class L
shares, Class L-1 shares and Class L-2 shares is incorporated
herein by reference to Exhibit (1)(f) to Post-Effective
Amendment No. 10 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on April 30, 1993.
(h) Certificate of Classification of Shares pertaining to Class M
shares, Class M-1 shares and Class M-2 shares is incorporated
herein by reference to Exhibit (1)(g) to Post-Effective
Amendment No. 11 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on June 29, 1993.
(i) Certificate of Classification of Shares pertaining to Class N
shares, Class N-1 shares and Class N-2 shares is incorporated
herein by reference to Exhibit (1)(h) to Post-Effective
Amendment No. 14 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on December 30, 1993.
(j) Certificate of Classification of Shares pertaining to Class O
shares, Class O-1 shares and Class O-2 shares; Class P shares,
Class P-1 shares and Class P-2 shares is incorporated herein
by reference to Exhibit 1(i) to Post-Effective Amendment No.
15 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on February 28, 1994.
(k) Certificate of Classification of Shares pertaining to Class
A-3 shares; Class D-3 shares; Class E-3 shares; Class G-3
shares; Class H-3 shares; Class I-3 shares; Class J-3 shares;
Class K-3 shares; Class L-3 shares; Class M-3 shares; Class
N-3 shares; Class O shares; Class O-1 shares; Class O-2
shares; Class O-3 shares; Class P shares; Class P-1 shares;
Class P-2 shares and Class P-3 shares is incorporated herein
by reference to Exhibit (1)(j) to Post-Effective Amendment No.
17 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on June 28, 1994.
(l) Certificate of Classification of Shares pertaining to Class
D-4 shares, E-4 shares, F-4 shares, G-4 shares, H-4 shares,
I-4 shares, K-4 shares, L-4 shares, M-4 shares, N-4 shares,
O-4 shares and P-4 shares is incorporated herein by reference
to Exhibit 1(L) to Post-Effective Amendment No. 20 filed with
the Commission on June 28, 1995.
(m) Certificate of Classification of Shares pertaining to Class
F-3 for the Index Fund Class B Shares is incorporated herein
by reference to Exhibit 1(m) to Post-Effective Amendment No.
23 filed with the Commission on October 28, 1996.
(2) Registrant's Code of Regulations is incorporated herein by
reference to Exhibit (2) to the Registrant's Registration
Statement on Form N-1A filed with the Commission on September
1, 1989.
(3) Not Applicable
(4) Registrant's Code of Regulations is incorporated herein by
reference to Exhibit (2) to the Registrant's Registration
Statement on Form N-1A filed with the Commission on September
1, 1989.
(5) (a) Investment Advisory Agreement between Registrant and
Comerica Bank-Detroit dated March 14, 1990 is incorporated
herein by reference to Exhibit (5) to Post-Effective Amendment
No. 2 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on October 1, 1990.
(b) Addendum No. 1 to Investment Advisory Agreement between
Registrant and Comerica Bank dated November 30, 1991 with
respect to the Growth Stock Fund, Small Company Growth Stock
Fund, Indexed Stock Fund, International Stock Fund,
Intermediate Bond Fund and Bond Fund is incorporated herein by
reference to Exhibit (5)(b) to Post-Effective Amendment No. 6
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on April 30, 1992.
(c) Assumption and Guarantee between Comerica Bank and Woodbridge
Capital Management, Inc. is incorporated herein by reference
to Exhibit (5)(c) to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on June 29, 1993.
(d) Addendum No. 2 to Investment Advisory Agreement between
Registrant and Woodbridge Capital Management, Inc. is
incorporated herein by reference to Exhibit (5)(d) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(e) Addendum No. 3 to Investment Advisory Agreement between Registrant and
Woodbridge Capital Management, Inc. with respect to the Balanced Fund is
incorporated herein by reference to Exhibit (5)(e) to Post-Effective Amendment
No. 11 to the Registrant's Registration Statement on Form N-1A filed with the
Commission on June 29, 1993.
(f) Addendum No. 4 to Investment Advisory Agreement between Registrant and
Woodbridge Capital Management, Inc. with respect to the Tax-Free Bond Fund is
incorporated herein by reference to Exhibit (5)(f) to Post-Effective Amendment
No. 11 to the Registrant's Registration Statement on Form N-1A filed with the
Commission on June 29, 1993.
(g) Addendum No. 5 to Investment Advisory Agreement between
Registrant and Woodbridge Capital Management, Inc. with
respect to the Michigan Tax-Free Bond Fund is incorporated
herein by reference to Exhibit 5(g) to Post-Effective
Amendment No. 15 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on February 28, 1994.
(h) Addendum No. 6 to Investment Advisory Agreement between
Registrant and Woodbridge Capital Management, Inc. with
respect to the Income Bond Fund and the Income Stock Fund is
incorporated herein by reference to Exhibit 5(h) to
Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 28, 1994.
(i) Addendum No. 7 to Investment Advisory Agreement between
Registrant and Woodbridge Capital Management, Inc. dated July
19, 1994 is incorporated herein by reference to Exhibit 5(i)
to Post-Effective Amendment No. 18 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on November 25, 1994.
(j) Investment Advisory Agreement between Registrant and Munder
Capital Management dated January 31, 1995 is incorporated
herein by reference to exhibit 5(j) to Post-Effective
Amendment No. 20 filed with the Commission on June 28, 1995.
(k) Form of Amendment No. 1 to Investment Advisory Agreement
between the Munder Funds Trust and Munder Capital Management
dated October 28, 1995 is incorporated herein by reference to
Exhibit 5(k) to Post-Effective Amendment No. 21 filed with the
Commission on August 29, 1995.
(6) (a) Distribution Agreement between Registrant and TBC Funds
Distributor, Inc. dated March 14, 1990 is incorporated herein
by reference to Exhibit (6) to Post-Effective Amendment No. 2
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on October 1, 1990.
(b) Amendment No. 1 to Distribution Agreement between Registrant
and TBC Funds Distributor, Inc., dated November 30, 1991 with
respect to the Growth Stock Fund, Small Company Growth Stock
Fund, Indexed Stock Fund, International Stock Fund,
Intermediate Bond Fund and Bond Fund is incorporated herein by
reference to Exhibit (6)(b) to Post-Effective Amendment No. 6
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on August 3, 1992.
(c) Amended and Restated Distribution Agreement between Registrant
and Funds Distributor, Inc. dated November 20, 1992 is
incorporated herein by reference to Exhibit (6)(c) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(d) Amendment No. 1 to Amended and Restated Distribution Agreement
dated January 22, 1993 between Registrant and Funds
Distributor, Inc. with respect to the Balanced Fund is
incorporated herein by reference to Exhibit (6)(d) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(e) Distribution Agreement between Registrant and Funds
Distributor, Inc. dated April 15, 1993 is incorporated herein
by reference to Exhibit (6)(e) to Post-Effective Amendment No.
11 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on June 29, 1993.
(f) Form of Amendment No. 1 to Distribution Agreement between
Registrant and Funds Distributor, Inc., dated April 15, 1993
with respect to the Michigan Tax-Free Bond Fund is
incorporated herein by reference to Exhibit (6)(f) to
Post-Effective Amendment No. 13 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on September 30, 1993.
(g) Form of Amendment No. 2 to Distribution Agreement between
Registrant and Funds Distributor, Inc., dated April 15, 1993
with respect to the Income Bond Fund and the Income Stock Fund
to be filed by amendment.
(h) Amended and Restated Distribution Agreement between Registrant
and Funds Distributor, Inc. dated January 21, 1994 is
incorporated herein by reference to Exhibit (6)(h) to
Post-Effective Amendment No. 17 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 28, 1994.
(i) Amendment dated July 14, 1995 to Distribution Agreement dated
January 21, 1994 between Registrant and Funds Distributor,
Inc. is incorporated herein by reference to Exhibit 6(i) to
Post-Effective Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 28, 1996.
(7) Not Applicable
(8) (a) Custodian Agreement between Registrant and Provident
National Bank dated November 13, 1989 is incorporated herein
by reference to Exhibit (8)(a) to Post-Effective Amendment No.
2 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on October 1, 1990.
(b) Custodian Agreement between Provident National Bank and State
Street Bank and Trust Company dated June 13, 1983 and an
Amendment thereto dated November 21, 1989 is incorporated
herein by reference to Exhibit (8)(b) to Post-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on October 1, 1990.
(c) Custodian Agreement between State Street Bank and Trust
Company and State Street London Limited dated November 13,
1985 is incorporated herein by reference to Exhibit (8)(c) to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 1, 1990.
(d) Amendment No. 1 to Custodian Agreement between Registrant and
Provident National Bank dated November 29, 1991 is
incorporated herein by reference to Exhibit (8)(d) to
Post-Effective Amendment No. 6 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on April 30, 1992.
(e) Sub-Custodian Agreement between Boston Safe Deposit & Trust
Company, Provident National Bank and Registrant dated November
29, 1991 with respect to the International Stock Fund, Growth
Stock Fund, Small Company Growth Stock Fund, Bond Fund and
Intermediate Bond Fund is incorporated herein by reference to
Exhibit (8)(e) to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on June 29, 1993.
(f) Amendment No. 2 to Custodian Agreement between Registrant and
Provident National Bank with respect to the Core Growth Stock
Fund and Tax-Free Intermediate Bond Fund is incorporated
herein by reference to Exhibit (8)(f) to Post-Effective
Amendment No. 11 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on June 29, 1993.
(g) Amendment No. 3 to Custodian Agreement between Registrant and
Provident National Bank with respect to the Balanced Fund is
incorporated herein by reference to Exhibit (8)(g) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(h) Amendment No. 4 to Custodian Agreement between Registrant and
PNC Bank, National Association with respect to the Tax-Free
Bond Fund is incorporated herein by reference to Exhibit
(8)(h) to Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(i) Amendment No. 5 to Custodian Agreement between Registrant and
Provident National Bank with respect to the Michigan Tax-Free
Bond Fund is incorporated herein by reference to Exhibit 8(i)
to Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 28, 1994.
(j) Amendment No. 6 to Custodian Agreement between Registrant and
Provident National Bank with respect to the Income Bond Fund
and the Income Stock Fund is incorporated herein by reference
to Exhibit 8(j) to Post-Effective Amendment No. 15 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on February 28, 1994.
(k) Custody Agreement between Registrant and Comerica Bank dated
June 13, 1994 with respect to the Money Market Fund, U.S.
Treasury Fund, Tax-Free Money Market Fund, Bond Fund, Income
Bond Fund, Intermediate Bond Fund, Tax-Free Bond Fund,
Tax-Free Intermediate Bond Fund, Michigan Tax-Free Bond Fund,
Core Growth Fund, Growth Stock Fund, Small Company Growth
Stock Fund, International Stock Fund, Indexed Stock Fund,
Income Stock Fund, and Balanced Fund is incorporated herein by
reference to Exhibit 8(k) to Post-Effective Amendment No. 23
to the Registrant's Registration Statement on Form N-1A filed
with the Commission of October 28, 1996.
(l) Sub-Custodian Agreement between Registrant and Boston Safe
Deposit and Trust Company dated June 13, 1994 with respect to
the International Stock Fund, Growth Stock Fund, Small Company
Growth Stock Fund, Bond Fund, and Intermediate Bond Fund is
incorporated herein by reference to Exhibit 8(l) to
Post-Effective Amendment No. 18 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on November 25, 1994.
(m) Form of Amendment to Custody Agreement dated May 6, 1997
is incorporated herein by reference to Exhibit 8(m) to
Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on August 29, 1997.
(9) (a) Administration Agreement between Registrant and The Boston
Company Advisors, Inc. dated March 14, 1990 is incorporated
herein by reference to Exhibit (9)(a) to Post-Effective
Amendment No. 2 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on October 1, 1990.
(b) Amendment No. 1 to Administration Agreement between Registrant
and The Boston Company Advisors, Inc., dated November 30, 1991
with respect to the Growth Stock Fund, Small Company Growth
Stock Fund, Indexed Stock Fund, International Stock Fund,
Intermediate Bond Fund and Bond Fund is incorporated herein by
reference to Exhibit (9)(b) to Post-Effective Amendment No. 6
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on April 30, 1992.
(c) Amendment No. 2 to Administration Agreement between Registrant
and The Boston Company Advisors, Inc. with respect to the Core
Growth Stock Fund and Tax-Free Intermediate Bond Fund is
incorporated herein by reference to Exhibit (9)(c) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(d) Amendment No. 3 to Administration Agreement between Registrant and The
Boston Company Advisors, Inc. with respect to the Balanced Fund is incorporated
herein by reference to Exhibit (9)(d) to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with the Commission on
June 29, 1993.
(e) Amendment No. 4 to Administration Agreement between Registrant and The
Boston Company Advisors, Inc. with respect to the Tax-Free Bond Fund is
incorporated herein by reference to Exhibit (9)(e) to Post-Effective Amendment
No. 11 to the Registrant's Registration Statement on Form N-1A filed with the
Commission on June 29, 1993.
(f) Amendment No. 5 to Administration Agreement between Registrant
and The Boston Company Advisors, Inc. with respect to the
Michigan Tax-Free Bond Fund is incorporated herein by
reference to Exhibit 9(f) to Post-Effective Amendment No. 15
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on February 28, 1994.
(g) Amendment No. 6 to Administration Agreement between Registrant
and The Boston Company Advisors, Inc. with respect to the
Income Bond Fund and the Income Stock Fund is incorporated
herein by reference to Exhibit 9(g) to Post-Effective
Amendment No. 15 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on February 28, 1994.
(h) Administration Agreement dated July 1, 1994 between Registrant
and The Shareholder Services Group, Inc. with respect to the
Money Market Fund, U.S. Treasury Fund, Tax-Free Money Market
Fund, Bond Fund, Income Bond Fund, Intermediate Bond Fund,
Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund, Michigan
Tax-Free Bond Fund, Established Company Growth Fund, Growth
Fund, Small Company Growth Fund, International Stock Fund,
Indexed Stock Fund, Growth & Income Fund, and Balanced Fund is
incorporated herein by reference to Exhibit 9(h) to
Post-Effective Amendment No. 20 filed with the Commission on
June 28, 1995.
(i) Administration Agreement dated May 1, 1995 between Registrant
and The Shareholder Services Group, Inc., with respect to the
Established Company Growth Fund, Growth Fund, Growth & Income
Fund, Small Company Growth Fund, International Stock Fund,
Indexed Stock Fund, Balanced Fund, Bond Fund, Income Bond
Fund, Intermediate Bond Fund, Money Market Fund, U.S. Treasury
Fund, Tax-Free Bond Fund, Tax-Free Intermediate Bond Fund,
Michigan Tax-Free Bond Fund and Tax-Free Money Market Fund is
incorporated herein by reference to Exhibit 9(i) to
Post-Effective Amendment No. 23 filed with the Commission on
October 28, 1996.
(j) Form of Amendment to Administration Agreement dated February 4,
1997 is incorporated herein by reference to Exhibit 9(j) to Post-Effective
Amendment No. 24 filed with the Commission on August 29, 1997.
(k) Form of Amendment to Administration Agreement dated May 6, 1997 is
incorporated herein by reference to Exhibit 9(k) to Post-Effective
Amendment No. 24 filed with the Commission on August 29, 1997.
(l) Administration and Accounting Services Agreement between
Registrant and Provident Financial Processing Corporation
dated March 14, 1989 is incorporated herein by reference to
Exhibit (9)(b) to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on October 1, 1990.
(m) Amendment No. 1 to Administration and Accounting Services
Agreement between Registrant and Provident Financial
Processing Corporation dated November 29, 1991 with respect to
the Growth Stock Fund, Small Company Growth Stock Fund,
Indexed Stock Fund, International Stock Fund, Intermediate
Bond Fund and Bond Fund is incorporated herein by reference to
Exhibit (9)(d) to Post-Effective Amendment No. 6 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on April 30, 1992.
(n) Amendment No. 2 to Administration and Accounting Services
Agreement between Registrant and Provident Financial
Processing Corporation with respect to the Core Growth Stock
Fund and Tax-Free Intermediate Bond Fund is incorporated
herein by reference to Exhibit (8)(i) to Post-Effective
Amendment No. 11 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on June 29, 1993.
(o) Amendment No. 3 to Administration and Accounting Services
Agreement between Registrant and Provident Financial
Processing Corporation with respect to the Balanced Fund is
incorporated herein by reference to Exhibit (8)(j) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(p) Amendment No. 4 to Administration and Accounting Services
Agreement between Registrant and PFPC Inc. with respect to the
Tax-Free Bond Fund is incorporated herein by reference to
Exhibit (8)(k) to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on June 29, 1993.
(q) Amendment No. 5 to Administration and Accounting Services
Agreement between Registrant and PFPC Inc. with respect to the
Michigan Tax-Free Bond Fund is incorporated herein by
reference to Exhibit 9(m) to Post-Effective Amendment No. 15
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on February 28, 1994.
(r) Amendment No. 6 to Administration and Accounting Services
Agreement between Registrant and PFPC Inc. with respect to the
Income Bond Fund and the Income Stock Fund is incorporated
herein by reference to Exhibit 9(n) to Post-Effective
Amendment No. 15 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on February 28, 1994.
(s) Transfer Agency Agreement between Registrant and Provident
Financial Processing Corporation dated November 13, 1989 is
incorporated herein by reference to Exhibit (9)(c) to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 1, 1990.
(t) Amendment No. 1 to Transfer Agency Agreement between
Registrant and Provident Financial Processing Corporation
dated November 29, 1991 with respect to the Growth Stock Fund,
Small Company Growth Stock Fund, Indexed Stock Fund,
International Stock Fund, Intermediate Bond Fund and Bond Fund
is incorporated herein by reference to Exhibit (9)(f) to
Post-Effective Amendment No. 6 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on April 30, 1992.
(u) Amendment No. 2 to Transfer Agency Agreement between
Registrant and Provident Financial Processing Corporation with
respect to the Core Growth Stock Fund and Tax-Free
Intermediate Bond Fund is incorporated herein by reference to
Exhibit (9)(o) to Post-Effective Amendment No. 11 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on June 29, 1993.
(v) Amendment No. 3 to Transfer Agency Agreement between
Registrant and Provident Financial Processing Corporation with
respect to the Balanced Fund is incorporated herein by
reference to Exhibit (9)(p) to Post-Effective Amendment No. 11
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on June 29, 1993.
(w) Amendment No. 4 to Transfer Agency Agreement between
Registrant and PFPC Inc. with respect to the Tax-Free Bond
Fund is incorporated herein by reference to Exhibit (9)(q) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(x) Amendment No. 5 to Transfer Agency Agreement between
Registrant and PFPC Inc. with respect to the Michigan Tax-Free
Bond Fund is incorporated herein by reference to Exhibit 9(t)
to Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 28, 1994.
(y) Amendment No. 6 to Transfer Agency Agreement between
Registrant and PFPC Inc. with respect to the Income Bond Fund
and the Income Stock Fund is incorporated herein by reference
to Exhibit 9(u) to Post-Effective Amendment No. 15 to the
Registrant's Registration Statement on Form N-1A filed with
the Commission on February 28, 1994.
(z) Transfer Agency and Registrar Agreement between Registrant and
The Shareholder Services Group, Inc. dated August 8, 1994 is
incorporated herein by reference to Exhibit 9(w) to
Post-Effective Amendment No. 18 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on November 25, 1994.
(aa) Transfer Agency and Registrar Agreement between The Munder
Funds Trust and The Shareholder Services Group, Inc., dated
June 28, 1995 is incorporated herein by reference to Exhibit
9(y) to Post-Effective Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 28, 1996.
(bb) Form of Amendment to Transfer Agency and Registrar
Agreement dated February 4, 1997 is incorporated herein by
reference to Exhibit 9(bb) to Post-Effective Amendment No. 24
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on August 29, 1997.
(cc) Form of Amendment to Transfer Agency and Registrar
Agreement dated May 6, 1997 is incorporated herein by
reference to Exhibit 9(cc) to Post-Effective Amendment 24 to
the Registrant's Registration Statement on Form N-1A filed
with the Commission on August 29, 1997.
(dd) Fee Letter Agreement among Registrant, Provident National
Bank, Provident Financial Processing Corporation and The
Boston Company Advisors, Inc. dated March 14, 1990 is
incorporated herein by reference to Exhibit (9)(g) to
Post-Effective Amendment No. 5 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 15, 1991.
(ee) Fee Letter Agreement among Registrant, Provident National
Bank, Provident Financial Processing Corporation and The
Boston Company Advisors, Inc. dated November 29, 1991 is
incorporated herein by reference to Exhibit (9)(k) to
Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on August 3, 1992.
(ff) Form of Service Plan for Investor Shares is incorporated
herein by reference to Exhibit (9)(k) to Post-Effective
Amendment No. 7 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on August 3, 1992.
(gg) Servicing Agreement for Investor Shares dated November 23,
1992 is incorporated herein by reference to Exhibit (9)(s) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(hh) Agreement and Plan of Reorganization by and among St. Clair
Fixed Income Fund, Inc.; St. Clair Tax-Free Fund, Inc.; and
Ambassador Funds dated September 30, 1992 is incorporated
herein by reference to Exhibit (9)(t) to Post-Effective
Amendment No. 11 to the Registrant's Registration Statement
on Form N-1A filed with the Commission on June 29, 1993.
(ii) Shareholder Servicing Plan for Retail A Shares is
incorporated herein by reference to Exhibit (9)(cc) to
Post-Effective Amendment No. 17 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 28, 1994.
(10) Opinion and Consent of Counsel is incorporated by reference to the
Rule 24f-2 Notice filed on August 28, 1997, Accession Number
0000927405-97-000310.
(11) (a) Consent of Ernst & Young LLP is filed herein.
(11) (b) Consent of Arthur Andersen LLP is incorporated by
reference to Exhibit (11c) to Post-Effective Amendment No. 21
filed with the Commission on August 29, 1995.
(11) (c) Powers of Attorney are incorporated herein by reference to
Exhibit 11(c) to Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on August 29,
1997.
(11) (d) Certified Resolution of Board Authorizing Signature on behalf
of Registrant pursuant to Power of Attorney is incorporated herein by reference
to Exhibit 11(d) to Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A filed with the Commission on August 29,
1997.
(12) Not Applicable.
(13) Purchase Agreement between Registrant and Shearson Lehman
Hutton Inc. dated November 13, 1989 is incorporated herein by
reference to Exhibit (13) to Post-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form N-1A filed
with the Commission on October 1, 1990.
(14) Not Applicable
(15) (a) Distribution and Service Plan between Registrant and Funds
Distributor, Inc. for Retail A Shares is incorporated herein
by reference to Exhibit (15)(a) to Post-Effective Amendment
No. 11 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on June 29, 1993.
(b) Distribution and Servicing Agreement for Retail A Shares is
incorporated herein by reference to Exhibit (15)(b) to
Post-Effective Amendment No. 11 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on June 29, 1993.
(c) Distribution and Service Plan between Registrant and Funds
Distributor, Inc. for Retail B Shares is incorporated herein
by reference to Exhibit 15(c) to Post-Effective Amendment No.
15 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on February 28, 1994.
(d) Distribution and Service Plan between Registrant and Funds
Distributor, Inc. for Ambassador Money Market Fund Retail B
Shares is incorporated herein by reference to Exhibit 15(d) to
Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 28, 1994.
(e) Form of Distribution and Servicing Agreement for Retail B
Shares is incorporated herein by reference to Exhibit 15(e) to
Post-Effective Amendment No. 15 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on February 28, 1994.
(f) Amended and Restated Distribution Agreement and Service Plan -
Class A Shares, dated January 21, 1994, is incorporated herein
by reference to Exhibit 15(f) of Post-Effective Amendment No.
23 to the Registrant's Registration Statement on Form N-1A
filed with the Commission on October 28, 1996.
(g) Distribution and Servicing Agreement dated February 10, 1994
is incorporated herein by reference to Exhibit 15(g) of
Post-Effective Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 28, 1996.
(h) Form of Class B Shares Distribution and Service Plan is
incorporated herein by reference to Exhibit 15(h) of
Post-Effective Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 28, 1996.
(i) Form of Class B Shares Distribution and Servicing incorporated
herein by reference to Exhibit 15(i) of Post-Effective
Amendment No. 23 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on October 28, 1996.
(j) Form of Class C Shares Distribution and Service Plan is
incorporated herein by reference to Exhibit 15(j) of
Post-Effective Amendment No. 23 to the Registrant's
Registration Statement on Form N-1A filed with the Commission
on October 28, 1996.
(k) Form of Class C Shares Distribution and Servicing Agreement
incorporated herein by reference to Exhibit 15(k) of
Post-Effective Amendment No. 23 to the Registration Statement
on Form N-1A filed with the Commission on October 28, 1996.
(l) Service Plan dated July 31, 1995 is incorporated herein by
reference to Exhibit 15(l) of Post-Effective Amendment No. 23
to the Registrant's Registration Statement on Form N-1A filed
with the Commission on October 28, 1996.
(m) Form of Servicing Agreement (Class K Shares) is incorporated
herein by reference to Exhibit 15(m) of Post-Effective
Amendment No. 23 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on October 28, 1996.
(n) Amended and Restated Service Plan for Class K Shares is
incorporated herein by reference to Exhibit 15(n) of Post-Effective Amendment
No. 24 to the Registrant's Registration Statement on Form N-1A filed with the
Commission on August 29, 1997.
(16) Schedules for computation of performance quotations are filed
herein.
(17) Financial Data Schedules are filed herein.
(18) Form of Amended and Restated Multi-Class Plan is incorporated
herein by reference to Exhibit 18 of Post-Effective Amendment No. 24 to the
Registrant's Registration Statement on Form N-1A filed with the Commission on
August 29, 1997.
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable.
Item 26. Number of Holders of Securities
The following information is as of August 22, 1997 for Class A Shares
(formerly, Retail A Shares), Class B Shares (formerly, Retail B Shares), Class K
Shares (formerly, Investor Shares) and Class Y Shares (formerly, Fiduciary
Shares):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Title of Class Number of Number of Number of Number of Number of
- --------------
Record Record Record Record Record
Holders Holders Holders Holders Holders
(Class Y (Class K (Class A (Class B (Class C
Shares) Shares) Shares) Shares) Shares)
Class A Shares 13 200 64 0 0
(Cash Investment)
Class B Shares 8 23 27 0 0
(Tax-Free Money Market)
Class C Shares 3 3 4 0 0
(U.S. Treasury Money Market)
Class D Shares 23 14 359 29 4
(Accelerating Growth)
Class E Shares 89 19 461 180 86
(Small Company Growth)
Class F Shares 49 12 1089 1544 0
(Index 500)
Class G Shares 40 8 228 31 4
(International Equity)
Class H Shares 17 44 201 11 3
(Intermediate Bond)
Class I Shares 16 1 58 4 1
(Bond)
Class K Shares 4 22 87 2 1
(Tax-Free Intermediate Bond)
Class L Shares 11 2 33 7 2
(Balanced)
Class M Shares 5 4 22 4 2
(Tax-Free Bond)
Class N Shares 5 1 25 12 2
(Michigan Triple Tax-Free Bond)
Class O Shares 11 7 32 4 1
(U.S. Government Income)
Class P Shares 18 4 99 25 4
(Growth & Income)
</TABLE>
Item 27. Indemnification
Indemnification of Registrant's principal underwriter against certain
losses is provided for in Section V of the Distribution Agreement incorporated
herein by reference as Exhibit 6 (e) hereto. Indemnification of The Shareholder
Services Group in its capacity as administrator is provided for in Section 13 of
the Administration Agreement incorporated herein by reference as Exhibit 9(h)
hereto. Indemnification of Registrant's Custodian and Transfer Agent is provided
for, respectively, in Section 22 of the Custodian Agreement incorporated herein
by reference as Exhibit 8(l) hereto and Section 17 of the Transfer Agency
Agreement incorporated herein by reference as Exhibit 9(w) hereto. Registrant
has obtained a major insurance carrier a trustees' and officers' liability
policy covering certain types of errors and omissions. In addition, Section 9.3
of the Registrant's Agreement and Declaration of Trust incorporated herein by
reference as Exhibit 1(a) hereto provides as follows:
Indemnification of Trustees, Officers, Representatives and
Employees. The Trust shall indemnify each of its Trustees against all
liabilities and expenses (including amounts paid in satisfaction of
judgments, in compromise, as fines and penalties, and as counsel fees)
reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal in which he may be involved or with which he may be
threatened, while as a Trustee or thereafter, by reason of his being or
having been such a Trustee except with respect to any matter as to
which he shall have been adjudicated to have acted in bad faith,
willful misfeasance, gross negligence or reckless disregard of his
duties, provided that as to any matter disposed of by a compromise
payment by such person, pursuant to a consent decree or otherwise, no
indemnification either for said payment or for any other expenses shall
be provided unless the Trust shall have received a written opinion from
independent legal counsel approved by the Trustees to the effect that
if either the matter of willful misfeasance, gross negligence or
reckless disregard of duty, or the matter of bad faith had been
adjudicated, it would in the opinion of such counsel have been
adjudicated in favor of such person. The rights accruing to any person
under these provisions shall not exclude any other right to which he
may be lawfully entitled, provided that no person may satisfy any right
of indemnity or reimbursement hereunder except out of the property of
the Trust. The Trustees may make advance payments in connection with
the indemnification under this Section 9.3, provided that the
indemnified person shall have given a written undertaking to reimburse
the Trust in the event it is subsequently determined that he is not
entitled to such indemnification.
The Trustees shall indemnify officers, representatives and
employees of the Trust to the same extent that Trustees are entitled to
indemnification pursuant to this Section 9.3.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
Section 9.6 of the Registrant's Agreement and Declaration of Trust,
incorporated herein by reference as Exhibit 1(a), also provides for the
indemnification of shareholders of the Registrant. Section 9.6 states as
follows:
Indemnification of Shareholders. In case any Shareholder or
former Shareholder shall be held to be personally liable solely by
reason of his being or having been a Shareholder and not because of his
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other legal
representatives or, in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled out of the
assets belonging to the classes of Shares with the same alphabetical
designation as that of the Shares owned by such Shareholder to be held
harmless from and indemnified against all loss and expense arising from
such liability. The Trust shall, upon request by the Shareholder,
assume the defense of any claim made against any Shareholder for any
act or obligations of the Trust and satisfy any judgment thereon from
such assets.
Item 28. Business and Other Connections of Investment Adviser
(a) Munder Capital Management (the "Adviser") performs investment
advisory services for Registrant and other investment companies and
institutional and individual investors.
MUNDER CAPITAL MANAGEMENT
<TABLE>
<CAPTION>
<S> <C>
Name Position with Adviser
Old MCM, Inc. Partner
Munder Group LLC Partner
WAM Holdings, Inc. Partner
Woodbridge Capital Management, Inc. Partner
Lee P. Munder President and Chief
Executive Officer
Leonard J. Barr, II Senior Vice President and
Director of Research
Ann J. Conrad Vice President and Director of Special Equity Products
Clark Durant Vice President and Co-Director of The Private Management Group
Terry H. Gardner Vice President and Chief Financial Officer
Elyse G. Essick Vice President and Director of Client Services
Sharon E. Fayolle Vice President and Director of Money Market Trading
Otto G. Hinzmann Vice President and Director of Equity Portfolio Management
Anne K. Kennedy Vice President and Director of Corporate Bond Trading
Richard R. Mullaney Vice President and Director of The Private Management Group
Ann F. Putallaz Vice President and Director of Fiduciary Services
Peter G. Root Vice President and Director of Government Securities Trading
Lisa A. Rosen General Counsel and Director of Mutual Fund Operations
James C. Robinson Executive Vice President and Chief Investment Officer/Fixed Income
Gerald L. Seizert Executive Vice President and Chief Investment Officer/Equity
Paul D. Tobias Executive Vice President and Chief Operating Officer
</TABLE>
- -------------------
For further information relating to the Investment Adviser's officers, reference
is made to Form ADV filed under the Investment Advisers Act of 1940 by Munder
Capital Management, SEC File No. 801-32415.
Item 29. Principal Underwriters
(a) Funds Distributor, Inc. ("FDI"), located at 60 State Street, Boston,
Massachusetts 02109, is the principal underwriter of the Funds. FDI is
an indirectly wholly-owned subsidiary of Boston Institutional Group,
Inc. a holding company, all of whose outstanding shares are owned by
key employees. FDI is a broker dealer registered under the Securities
Exchange Act of 1934, as amended. FDI acts as principal underwriter of
the following investment companies other than the Registrant:
Harris Insight Funds Trust RCM Capital Funds, Inc
The Munder Funds, Inc. Monetta Fund, Inc..
St. Clair Funds, Inc. Monetta Trust
The Munder Framlington Funds Trust Burridge Funds
BJB Investment Funds The JPM Series Trust
The PanAgora Institutional Funds The JPM Series Trust II
RCM Equity Funds, Inc. HT Insight Funds, Inc.
Waterhouse Investors Cash Management Fund, Inc. d/b/a Harris Insight Funds
The JPM Pierpont Funds The Brinson Funds
The JPM Institutional Funds WEBS Index Fund, Inc.
The Skyline Funds The Montgomery Funds
Orbitex Group of Funds The Montgomery Funds II
(b) The following is a list of the executive officers, directors and
partners of Funds Distributor, Inc.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Director, President and Chief Executive Officer - Marie E. Connolly
Executive Vice President - Richard W. Ingram
Executive Vice President - Donald R. Roberson
Senior Vice President, General Counsel, - John E. Pelletier
Secretary and Clerk
Senior Vice President - Michael S. Petrucelli
Director, Senior Vice President, Treasurer and - Joseph F. Tower, III
Chief Financial Officer
Senior Vice President - Paula R. David
Senior Vice President - Bernard A. Whalen
Director - William J. Nutt
</TABLE>
(c) Not Applicable.
Item 30. Location of Accounts and Records
(1) Munder Capital Management, 480 Pierce Street, Birmingham, Michigan
48009 (records relating to its functions as
investment adviser).
(2) Comerica Bank, One Detroit Center, 500 Woodward Avenue, Detroit,
Michigan 48226 (records relating to its functions as custodian).
(3) Funds Distributor, Inc., 60 State Street, Boston, Massachusetts 02109
(records relating to its functions as distributor).
(4) First Data Investor Services Group, Inc., 53 State Street,
Exchange Place, Boston, Massachusetts or 4400 Computer Drive,
Westborough, Massachusetts 01581 (records relating to its
functions as Administrator and Transfer Agent)
(5) Dechert Price & Rhoads, 1500 K Street, NW, Washington, D.C. 20005
(records relating to its function as fund counsel).
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's most recent
annual report to shareholders, upon request without charge.
(d) Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question of
removal of a trustee or trustees of Registrant when requested
in writing to do so by the holders of at least 10% of
Registrant's outstanding shares. Registrant undertakes
further, in connection with the meeting, to comply with the
provisions of Section 16(c) of the Investment Company Act of
1940, as amended, relating to communications with the
shareholders of certain common-law trusts.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
certifies that this Post-Effective Amendment No. 25 to the Registration
Statement meets the requirements for effectiveness pursuant to Rule 485(b) of
the Securities Act of 1933, as amended, and the Registrant has duly caused this
Post-Effective Amendment No. 25 to the Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized, in the City of Boston
and the Commonwealth of Massachusetts on the 28th day of October, 1997.
The Munder Funds Trust
By: *
Lee P. Munder
President
*By: /s/ Julie A. Tedesco
Julie A. Tedesco
as Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statements been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Signatures Title Date
* President and Chief October 28, 1997
- ---------------------------
Lee P. Munder Executive Officer
* Trustee October 28, 1997
- ---------------------------
Charles W. Elliott
* Trustee October 28, 1997
- ---------------------------
Joseph E. Champagne
* Trustee October 28, 1997
- ---------------------------
Thomas B. Bender
* Trustee October 28, 1997
- ---------------------------
Thomas D. Eckert
* Trustee October 28, 1997
- ---------------------------
John Rakolta, Jr.
* Trustee October 28, 1997
- ---------------------------
David J. Brophy
* Vice President, October 28, 1997
- ---------------------------
Terry H. Gardner Treasurer and
Chief Financial
Officer
</TABLE>
* By: /s/ Julie A. Tedesco
Julie A. Tedesco
as Attorney-in-Fact
* The Powers of Attorney are incorporated herein by reference to
Post-Effective Amendment No. 24 to the Registrant's Registration Statement on
Form N-1A filed with the Commission on August 29, 1997.
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
11(a) Consent of Ernst & Young LLP
16 Schedules for computation of performance quotations
17 Financial Data Schedules
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in The Munder Equity Funds Class A, Class B and Class C Shares; The
Munder Income Funds Class A, Class B and Class C Shares; The Munder Money Market
Funds Class A, Class B and Class C Shares; The Munder Funds Class Y Shares; The
Munder Funds Class K Shares; The Munder Index 500 Fund Class A, Class B and
Class C Shares; and The Munder Index 500 Class Y Shares Prospectuses and
"Independent Auditors" and "Financial Statements" in The Munder Funds Statement
of Additional Information included in Post-Effective Amendment No. 25 to the
Registration Statement (Form N-1A, No.
33-30913) of The Munder Funds Trust.
We also consent to the incorporation by reference into The Munder Funds
Statement of Additional Information of our reports dated August 15, 1997 with
respect to the financial statements and financial highlights of the Munder
Accelerating Growth Fund, Munder Balanced Fund, Munder Growth & Income Fund,
Munder Index 500 Fund, Munder International Equity Fund, Munder Small Company
Growth Fund, Munder Bond Fund, Munder Intermediate Bond Fund, Munder U.S.
Government Income Fund, Munder Michigan Triple Tax-Free Bond Fund, Munder
Tax-Free Bond Fund, Munder Tax-Free Intermediate Bond Fund, Munder Cash
Investment Fund, Munder Tax-Free Money Market Fund and Munder U.S. Treasury
Money Market Fund portfolios of The Munder Funds Trust, included in the Annual
Reports of The Munder Funds.
ERNST & YOUNG LLP
October 27, 1997
Boston, Massachusetts
THE MUNDER FUNDS TRUST
THE MUNDER FUNDS, INC.
Schedule of Computation
(Exhibit 16)
1. Yield for a seven-day period
Formula: (Base period return/1) x 365/7 = Yield
2. Effective yield for a seven-day period
Formula: (1 + base period return)365/7 - 1 = Effective Yield
3. Tax-Equivalent Yield for a seven-day period
Formula: (7-day yield) / (1 - stated tax rate) = Tax-Equivalent Yield
(31% Stated Tax Rate)
4. 30-Day SEC Yield:
Formula: 2*(((A - B + 1)/(C*D)) + 1)^6 - 1)
A = interest earned during the period
B = expenses accrued during the period
C = average fund shares outstanding during the period
D = maximum offering price per share on the last day of the
period
5. Tax-Equivalent Yield:
Formula: (SEC Yield) / (1- Tax Rate) = Tax-Equivalent Yield
(31% Tax Rate)
6. Average Annual Total Return for a 12 month period (without sales
charge): Formula: (ERV/P)^1 - 1 also: (ERV)^1/n - 1
P
ERV = Ending redeemable value assuming redemption of the
last day of the period.
P = The initial hypothetical investment of $1000 N = Period
covered by the computation, expressed in years
7. Average Annual Total Return since inception (without sales charge):
Formula: ((ERV/P)^(1/N)) - 1
N = Number of year and portion of a year
ERV = Ending redeemable value assuming redemption of the last day
of the period. P = The initial hypothetical investment of $1000
8. Average Annual Total Return for a 12 month period (with sales charge):
Formula: (Load Adjusted ERV/P)^1 - 1
ERV = Ending redeemable value assuming
redemption of the last day of the period and
deduction of any applicable sales charge.
P = The initial hypothetical investment of $1000.
9. Average Annual Total Return since inception (with sales charge):
Formula: ((Load Adjusted ERV/P)^(1/N)) - 1
N = Number of years and portion of a year.
ERV = Ending redeemable value assuming
redemption of the last day of the period and
deduction of any applicable sales charge.
P = The initial hypothetical investment of $1000
10. Average Annual Total Return for five-years (without sales charge):
Formula: ((ERV/P)^(1/N)) - 1
N = Number of years and portion of a year.
ERV = Ending redeemable value assuming redemption of
the last day of the period. P = The initial
hypothetical investment of $1000
11. Average Annual Total Return for five-years (with sales charge):
Formula: ((Load Adjusted ERV/P)^(1/N)) - 1
N = Number of years and portion of a year.
ERV = Ending redeemable value assuming
redemption of the last day of the period and
deduction of any applicable sales charge.
P = The initial hypothetical investment of $1000
12. Average Annual Total Return for ten-years (without sales charge):
Formula: ((ERV/P)^(1/N)) - 1
N = Number of years and portion of a year.
ERV = Ending redeemable value assuming redemption of
the last day of the period. P = The initial
hypothetical investment of $1000
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 051
<NAME> MUNDER ACCELERATING GROWTH CL-A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 190,164,347
<INVESTMENTS-AT-VALUE> 243,557,950
<RECEIVABLES> 6,578,681
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 37,592
<TOTAL-ASSETS> 250,174,223
<PAYABLE-FOR-SECURITIES> 854,860
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 499,359
<TOTAL-LIABILITIES> 1,354,219
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,397,098
<SHARES-COMMON-STOCK> 430,699
<SHARES-COMMON-PRIOR> 397,121
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,434,657
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53,393,603
<NET-ASSETS> 6,270,002
<DIVIDEND-INCOME> 1,349,242
<INTEREST-INCOME> 1,055,407
<OTHER-INCOME> 0
<EXPENSES-NET> 2,849,436
<NET-INVESTMENT-INCOME> (444,787)
<REALIZED-GAINS-CURRENT> 25,529,024
<APPREC-INCREASE-CURRENT> (15,381,711)
<NET-CHANGE-FROM-OPS> 9,702,526
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (522,917)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,376,349
<NUMBER-OF-SHARES-REDEEMED> (7,376,019)
<SHARES-REINVESTED>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 052
<NAME> MUNDER ACCELERATING GROWTH CL-B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 190,164,347
<INVESTMENTS-AT-VALUE> 243,557,950
<RECEIVABLES> 6,578,681
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 37,592
<TOTAL-ASSETS> 250,174,223
<PAYABLE-FOR-SECURITIES> 854,860
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 499,359
<TOTAL-LIABILITIES> 1,354,219
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 513,730
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 053
<NAME> MUNDER ACCELERATING GROWTH CL-C
<S> <C>
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<NUMBER-OF-SHARES-REDEEMED> (121,579)
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<NET-CHANGE-IN-ASSETS> (56,344,244)
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-END> 14.31
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 054
<NAME> MUNDER ACCELERATING GROWTH CL-K
<S> <C>
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<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
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<SENIOR-LONG-TERM-DEBT> 0
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<ACCUMULATED-NET-GAINS> 22,434,657
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<INTEREST-INCOME> 1,055,407
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<EXPENSES-NET> 2,849,436
<NET-INVESTMENT-INCOME> (444,787)
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<NUMBER-OF-SHARES-SOLD> 15,187,815
<NUMBER-OF-SHARES-REDEEMED> (16,346,825)
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<NET-CHANGE-IN-ASSETS> (56,344,244)
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<PER-SHARE-NAV-END> 14.56
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 055
<NAME> MUNDER ACCELERATING GROWTH CL-Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 190,164,347
<INVESTMENTS-AT-VALUE> 243,557,950
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<NET-INVESTMENT-INCOME> (444,787)
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<NET-CHANGE-IN-ASSETS> (56,344,244)
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<GROSS-EXPENSE> 2,849,436
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<PER-SHARE-NII> (0.01)
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<PER-SHARE-NAV-END> 14.71
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 121
<NAME> MUNDER BALANCED CL-A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
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<OTHER-ITEMS-ASSETS> 10,506
<TOTAL-ASSETS> 80,303,409
<PAYABLE-FOR-SECURITIES> 557,329
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<PAID-IN-CAPITAL-COMMON> 296,427
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<ACCUMULATED-NII-CURRENT> 14,675
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<ACCUM-APPREC-OR-DEPREC> 11,018,979
<NET-ASSETS> 381,694
<DIVIDEND-INCOME> 369,346
<INTEREST-INCOME> 2,042,427
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<NUMBER-OF-SHARES-SOLD> 8,188
<NUMBER-OF-SHARES-REDEEMED> (11,276)
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<ACCUMULATED-NII-PRIOR> 11,028
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 680,086
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<PER-SHARE-NAV-END> 13.01
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 122
<NAME> MUNDER BALANCED CL-B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 68,198,455
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<OTHER-ITEMS-ASSETS> 10,506
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<ACCUMULATED-NII-CURRENT> 14,675
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<ACCUMULATED-NET-GAINS> 3,309,886
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<ACCUM-APPREC-OR-DEPREC> 11,018,979
<NET-ASSETS> 198,932
<DIVIDEND-INCOME> 369,346
<INTEREST-INCOME> 2,042,427
<OTHER-INCOME> 0
<EXPENSES-NET> 680,086
<NET-INVESTMENT-INCOME> 1,731,687
<REALIZED-GAINS-CURRENT> 4,253,299
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<DISTRIBUTIONS-OF-GAINS> (5,581)
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<NUMBER-OF-SHARES-SOLD> 9,389
<NUMBER-OF-SHARES-REDEEMED> (331)
<SHARES-REINVESTED> 198
<NET-CHANGE-IN-ASSETS> 17,747,835
<ACCUMULATED-NII-PRIOR> 11,028
<ACCUMULATED-GAINS-PRIOR> 2,304,090
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-DIVIDEND> (0.19)
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<PER-SHARE-NAV-END> 12.97
<EXPENSE-RATIO> 1.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 123
<NAME> MUNDER BALANCED CL-C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 68,198,455
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<ACCUMULATED-NII-CURRENT> 14,675
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<ACCUM-APPREC-OR-DEPREC> 11,018,979
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<DIVIDEND-INCOME> 369,346
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<EXPENSES-NET> 680,086
<NET-INVESTMENT-INCOME> 1,731,687
<REALIZED-GAINS-CURRENT> 4,253,299
<APPREC-INCREASE-CURRENT> 3,076,915
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (697)
<DISTRIBUTIONS-OF-GAINS> (1,603)
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<NUMBER-OF-SHARES-SOLD> 5,410
<NUMBER-OF-SHARES-REDEEMED> (2)
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<NET-CHANGE-IN-ASSETS> 17,747,835
<ACCUMULATED-NII-PRIOR> 11,028
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<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> 1.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 124
<NAME> MUNDER BALANCED CL-K
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 68,198,455
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<ACCUMULATED-NET-GAINS> 3,309,886
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 125
<NAME> MUNDER BALANCED CL-Y
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
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<ACCUMULATED-NET-GAINS> 3,309,886
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<ACCUM-APPREC-OR-DEPREC> 11,018,979
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 101
<NAME> MUNDER BOND CL-A
<S> <C>
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<INVESTMENTS-AT-COST> 153,853,239
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 102
<NAME> MUNDER BOND CL-B
<S> <C>
<PERIOD-TYPE> 12-MOS
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<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 153,853,239
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 103
<NAME> MUNDER BOND CL-C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
<PERIOD-END> 30-JUN-97
<INVESTMENTS-AT-COST> 153,853,239
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 104
<NAME> MUNDER BOND CL-K
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> 30-JUN-97
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 105
<NAME> MUNDER BOND CL-Y
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>011
<NAME> MUNDER CASH INVESTMENT CL-A
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>012
<NAME> MUNDER CASH INVESTMENT CL-K
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<SERIES>
<NUMBER>013
<NAME> MUNDER CASH INVESTMENT CL-Y
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> MUNDER INDEX 500 CL-A
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER INDEX 500 CL-B
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER INDEX 500 CL-K
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NUMBER>075
<NAME> MUNDER INDEX 500 CL-Y
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NUMBER>091
<NAME> MUNDER INTERMEDIATE BOND CL-A
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>092
<NAME> MUNDER INTERMEDIATE BOND CL-B
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>093
<NAME> MUNDER INTERMEDIATE BOND CL-C
<S> <C>
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<FISCAL-YEAR-END> 30-JUN-97
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>095
<NAME> MUNDER INTERMEDIATE BOND CL-Y
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<SERIES>
<NUMBER>095
<NAME> MUNDER INTERMEDIATE BOND CL-Y
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<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>081
<NAME>MUNDER INTERNATIONAL EQUITY CL-A
<S> <C>
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<TABLE> <S> <C>
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<NUMBER>082
<NAME>MUNDER INTERNATIONAL EQUITY CL-B
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<TABLE> <S> <C>
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<NAME>MUNDER INTERNATIONAL EQUITY CL-C
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER MICHIGAN TRIPLE TAX-FREE CL-B
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER MICHIGAN TRIPLE TAX-FREE CL-C
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER MICHIGAN TRIPLE TAX-FREE CL-K
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NUMBER>135
<NAME> MUNDER MICHIGAN TRIPLE TAX-FREE CL-Y
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> MUNDER SMALL COMPANY GROWTH CL-A
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NUMBER>062
<NAME> MUNDER SMALL COMPANY GROWTH CL-B
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NUMBER>063
<NAME> MUNDER SMALL COMPANY GROWTH CL-C
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
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<NUMBER>064
<NAME> MUNDER SMALL COMPANY GROWTH CL-K
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>065
<NAME> MUNDER SMALL COMPANY GROWTH CL-Y
<S> <C>
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<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>161
<NAME>Munder Tax Free Bond CL-A
<S> <C>
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<TABLE> <S> <C>
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<S> <C>
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<TABLE> <S> <C>
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<SERIES>
<NUMBER>164
<NAME>Munder Tax Free Bond CL-K
<S> <C>
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<TABLE> <S> <C>
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<NUMBER>165
<NAME>Munder Tax Free Bond CL-Y
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<SERIES>
<NUMBER> 111
<NAME> MUNDER TAX-FREE INTERMEDIATE BOND CL-A
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 112
<NAME> MUNDER TAX-FREE INTERMEDIATE BOND CL-B
<S> <C>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 114
<NAME> MUNDER TAX-FREE INTERMEDIATE BOND CL-K
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 115
<NAME> MUNDER TAX-FREE INTERMEDIATE BOND CL-Y
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>021
<NAME> MUNDER TAX-FREE MONEY MARKET CL
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>022
<NAME> MUNDER TAX-FREE MONEY MARKET CL
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>023
<NAME> MUNDER TAX-FREE MONEY MARKET CL
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>151
<NAME>US GOVT INCOME CL-A
<S> <C>
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<TABLE> <S> <C>
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<NUMBER>152
<NAME>US GOVT INCOME CL-B
<S> <C>
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