SUBJECT TO COMPLETION, DATED APRIL 9, 1999
STEWARDSHIP FUNDS
PROSPECTUS
____________, 1999
o Large-Cap Equity Fund
o Small-Cap Equity Fund
MANAGED BY
FIRST AMERICAN NATIONAL BANK
Questions?
Call 1-888-FAM-VALUE
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
CAREFULLY REVIEW THIS DESCRIPTION OF THE FUNDS - OBJECTIVES,
IMPORTANT SECTION RISK/RETURN AND EXPENSES
TO LEARN ABOUT EACH
FUND'S GOAL, MAIN __ Overview
INVESTMENT STRATEGIES __ Large-Cap Equity Fund
AND RISKS, PAST __ Small-Cap Equity Fund
PERFORMANCE, AND FEES.
REVIEW THIS SECTION ADDITIONAL INVESTMENT STRATEGIES AND RISKS
FOR ADDITIONAL
INFORMATION ON INVESTMENT __ Family Values Policies
STRATEGIES AND RISKS. __ Large-Cap Equity Fund
__ Small-Cap Equity Fund
__ Applicable to All Funds
__ Year 2000 Risk
REVIEW THIS SECTION FOR FUND MANAGEMENT
DETAILS ON THE
PEOPLE AND ORGANIZATIONS __ The Investment Adviser
WHO OVERSEE THE FUNDS. __ Portfolio Managers
__ The Administrator and Distributor
REVIEW THIS SECTION FOR SHAREHOLDER INFORMATION
DETAILS ON HOW
SHARES ARE VALUED, HOW TO __ Alternative Purchase Methods
PURCHASE, SELL AND EXCHANGE __ Pricing of Fund Shares
SHARES, RELATED CHARGES AND __ Purchasing and Adding to Your Shares
PAYMENTS OF DIVIDENDS AND __ Selling Your Shares
DISTRIBUTIONS. __ Exchanging Your Shares
__ General Policies on Selling Shares
__ Distribution Arrangements/Sales Charges
__ Dividends, Distributions and Taxes
BACK COVER
WHERE TO LEARN MORE
ABOUT THE FUNDS
OVERVIEW
The Funds The Stewardship Funds consist of two
separate Funds, each with its own investment
strategy and risk/return profile. The Funds
seek capital appreciation and invest
primarily in common stocks. The differences
in investment strategy between the Funds
determine the types of securities in which
each Fund invests and can be expected to
affect the degree of risk each Fund is
subject to and its yield or return. Because
you could lose money by investing in a Fund,
be sure to read all risk disclosure carefully
before investing.
Each Fund invests in the securities of
companies which, in the opinion of the Fund's
management, not only meet traditional
investment standards, but also show evidence
that they conduct their business in a manner
that does not conflict with traditional
family values ("Family Values Policies").
Consequently, the Funds will NOT invest in
companies that directly profit from or
promote:
o abortion
o pornography
o non-marriage lifestyles
o alcohol
o tobacco
o gambling
You should be aware that the Stewardship
Funds:
o Are not bank deposits
o Are not guaranteed, endorsed or insured by
any bank, financial institution or
government entity such as the Federal
Deposit Insurance Corporation
o Are not guaranteed to achieve their stated
goals
WHO MAY WANT TO
INVEST? Consider investing in the Funds if you are:
o seeking to have continuity between your
investments and your personal values
o seeking a long-term goal such as retirement
o looking to add a growth component to your
portfolio
o willing to accept the risks of investing in
the stock markets
The Funds may not be appropriate if you are:
o pursuing a short-term goal or investing
emergency reserves
o uncomfortable with an investment that will
go up and down in value
<PAGE>
DESCRIPTION OF THE FUNDS--OBJECTIVES, RISK/RETURN AND EXPENSES
LARGE-CAP EQUITY FUND
Investment Objective The Fund seeks to provide investors with
Objective long-term capital appreciation.
PRINCIPAL INVESTMENT The Fund invests primarily in the common
STRATEGIES stocks of large U.S. companies with market
capitalizations over $1 billion that the
Adviser believes have the potential to
provide capital appreciation and growth of
income. These companies must offer products
or services and undertake activities that are
consistent with the Fund's Family Values
Policies.
In choosing stocks for the Fund, the
Adviser's strategy is to select well managed
U.S. companies that have demonstrated
sustained patterns of profitability, strong
balance sheets, and the potential to achieve
predictable, above-average earnings growth.
The Adviser seeks to diversify the Fund's
portfolio within the various industries
typically comprising, what the Adviser
believes to be, the classic growth segments
of the U.S. economy: Technology, Consumer
Non-Durables, Health Care, Business Equipment
and Services, Retail, and Capital Goods.
The Fund invests for long-term growth rather
than short-term profits.
PRINCIPAL INVESTMENT RISKS Stocks and other equity securities fluctuate
in price, often based on factors unrelated to
the issuers' value, and such fluctuations can
be pronounced. The value of your investment
in the Fund will fluctuate in response to
movements in the stock market and the
activities of individual portfolio companies.
As a result, you could lose money by
investing in the Fund, particularly if there
is a sudden decline in the share prices of
the Fund's holdings or an overall decline in
the stock market.
Over time, growth companies are expected to
increase their earnings at an above-average
rate. If these expectations are not met, the
stock price can fall drastically--even if
earnings show an absolute increase.
The risks and returns of different industries
can vary over the long-term and short-term.
Because of this, the Fund's performance could
suffer during times when the stocks of the
classic growth industries in which it is
invested are out of favor.
PERFORMANCE BAR CHART AND TABLE
As of the date of this prospectus, the Fund had not completed a year of
operations. Accordingly, no performance information is provided.
FEES AND EXPENSES
If you purchase and Shareholder
hold shares of the Transaction
Large-Cap Equity Fees (fees
Fund, you will pay paid by you CLASS CLASS B
certain fees and directly) A SHARES SHARES
expenses, which are
described in the
tables. Shareholder Maximum sales
transaction fees are charge (load)
paid from your on purchases 4.75%1 None
account. Annual Fund AS A % OF
operating expenses OFFERING PRICE
are paid out of Fund
assets, and are
reflected in the
share price. ------------------------------------------------
Maximum deferred None2 4.00%3
sales charge
(CDSC) AS A %
OF LOWER OF
PURCHASE OR
SALE PRICE
Annual Fund CLASS CLASS
Operating A SHARES B SHARES
Expenses
(fees paid from
Fund assets)
--------------------------------------------------
Management Fee .75% .75%
--------------------------------------------------
Distribution
(12b-1) Fee .25% .75%
--------------------------------------------------
Other Expenses 1.78% 1.88%
--------------------------------------------------
Total Annual Fund 2.78% 3.38%
Operating Expenses4
--------------------------------------------------
Fee Waiver
and/or (.93%) (1.03%)
Expense Reimbursement
--------------------------------------------------
Net Expenses 1.85% 2.35%
--------------------------------------------------
- ------------
1 Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. See "Distribution Arrangements."
2 Shares bought as part of an investment of $1 million or more are not
subject to an initial sales charge, but may be charged a CDSC of 1.00% if
sold within one year of purchase. See "Distribution Arrangements."
3 The CDSC, which is charged if the shares are sold within six years of
purchase, declines as follows: 4%, 3%, 3%, 2%, 2%, 1% to 0% in the seventh
year. Approximately seven years after purchase, Class B shares
automatically convert to Class A shares.
4 Other expenses are based on estimated amounts for the current fiscal year.
The Adviser has agreed to waive receipt of its fees and/or assume other
expenses of the Fund until ------, 2000, so that the Fund's total annual
operating expenses do not exceed 1.85% for Class A and 2.35% for Class B.
The expenses noted above do not reflect any other fee waivers or expense
reimbursement arrangements that may be in effect.
EXPENSE EXAMPLE
Use the example at right LARGE-CAP EQUITY 1 3
to help you compare the FUND Year Years
cost of investing in the Fund
with the cost of investing in CLASS A SHARES $654 $1,029
other mutual funds. It ---------------------------------------------
illustrates the amount of CLASS B SHARES
fees and expenses you would pay, Assuming $638 $1,033
assuming the following: Redemption
o $10,000 investment Assuming no
o 5% annual return Redemption $238 $733
o no changes in the Fund's ---------------------------------------------
operating expenses
o reinvestment of all dividends
and distributions
Because actual returns and operating
expenses will be different,
this example is for comparison only.
<PAGE>
DESCRIPTION OF THE FUNDS--OBJECTIVES, RISK/RETURN AND EXPENSES
SMALL-CAP EQUITY FUND
Investment Objective The Fund seeks to provide investors with
capital appreciation.
PRINCIPAL INVESTMENT
STRATEGIES The Fund invests primarily in the common
stocks of U.S. companies with market
capitalizations of less than $1.5 billion.
These companies must offer products or
services and undertake activities that are
consistent with the Fund's Family Values
Policies.
In choosing stocks for the Fund, the Fund's
Sub-Adviser, Womack Asset Management, seeks
investment opportunities in smaller, well
managed U.S. companies whose shares are
undervalued relative to the companies' growth
potential. The Sub-Adviser employs a
growth-oriented approach which involves
fundamental analysis of the company's
published financial statements with technical
analysis (which relies on price and volume
movements of the company's stock) to discern
potential and risk.
The Sub-Adviser focuses on individual stock
selection (a "bottom-up" approach) rather
than on forecasting stock market trends (a
"top-down" approach). The Sub-Adviser
considers, among other factors:
o projected earnings growth
o relative price strength
o business fundamentals
PRINCIPAL INVESTMENT Stocks and other equity securities fluctuate
RISKS in price, often based on factors unrelated to
the issuers' value, and such fluctuations can
be pronounced. The value of your investment
in the Fund will fluctuate in response to
movements in the stock market and the
activities of individual portfolio companies.
As a result, you could lose money by
investing in the Fund, particularly if there
is a sudden decline in share prices of the
Fund's holdings or an overall decline in the
stock market.
The Fund invests in small-cap companies which
carry additional risks. Smaller companies
typically have more limited product lines,
markets and financial resources, and have
less predictable earnings than larger
companies and their securities trade less
frequently and in more limited volume than
those of larger, more established companies.
As a result, small-cap stocks and thus the
Fund's shares may fluctuate significantly
more in value than larger-cap stocks and
funds that focus on them.
Over time, growth companies are expected to
increase their earnings at an above-average
rate. If these expectations are not met, the
stock price can fall drastically--even if
earnings show an absolute increase.
PERFORMANCE BAR CHART AND TABLE
As of the date of this prospectus, the Fund had not completed a year of
operations. Accordingly, no performance information is provided.
FEES AND EXPENSES
If you purchase and Shareholder
hold shares of the Transaction
Small-Cap Equity Fees (fees
Fund, you will pay paid by you CLASS A CLASS B
certain fees and directly) SHARES SHARES
expenses, which are
described in the
tables. Shareholder Maximum sales
transaction fees are charge (load)
paid from your on purchases AS
account. Annual Fund A % OF OFFERING
operating expenses PRICE 4.75%(1) None
are paid out of Fund ----------------------------------------------
assets, and are
reflected in the Maximum deferred
share price. sales charge
(CDSC) AS A %
OF LOWER OF
PURCHASE OR SALE
PRICE None(2) 4.00%(3)
Annual Fund
Operating
Expenses CLASS CLASS
(fees paid from A SHARES B SHARES
Fund assets)
-----------------------------------------------
Management Fee .95% .95%
-----------------------------------------------
Distribution
(12b-1) Fee .25% .75%
-----------------------------------------------
Other Expenses 2.83% 2.93%
-----------------------------------------------
Total Annual Fund
Operating
Expenses4 4.03% 4.63%
-----------------------------------------------
Fee Waiver
and/or Expense
Reimbursement (2.18%) (2.28%)
-----------------------------------------------
Net Expenses 1.85% 2.35%
-----------------------------------------------
- ------------------
1 Sales charges may be reduced depending upon the amount invested or, in
certain circumstances, waived. See "Distribution Arrangements."
2 Shares bought as part of an investment of $1 million or more are not subject
to an initial sales charge, but may be charged a CDSC of 1.00% if sold within
one year of purchase. See "Distribution Arrangements."
3 The CDSC, which is charged if the shares are sold within six years of
purchase, declines as follows: 4%, 3%, 3%, 2%, 2%, 1% to 0% in the seventh
year. Approximately seven years after purchase, Class B shares automatically
convert to Class A shares.
4 Other expenses are based on estimated amounts for the current fiscal year.
The Adviser has agreed to waive receipt of its fees and/or assume other
expenses of the Fund until _____________, 2000, so that the Fund's total
annual operating expenses do not exceed 1.85% for Class A and 2.35% for Class
B. The expenses noted above do not reflect any other fee waivers or expense
reimbursement arrangements that may be in effect.
<PAGE>
EXPENSE EXAMPLE
Use the example at SMALL-CAP EQUITY FUND 1 3
right to help you Year Years
compare the cost of CLASS A SHARES $654 $1,029
investing in the -------------------------------------------------
Fund with the cost CLASS B SHARES
of investing in Assuming Redemption $638 $1,033
other mutual funds. Assuming no Redemption $238 $733
It illustrates the -------------------------------------------------
amount of fees and
expenses you would
pay, assuming the
following:
o $10,000 investment
o 5% annual return
o no changes in the
Fund's operating
expenses
o reinvestment of all
dividends and
distributions
Because actual
returns and
operating expenses
will be different,
this example is for
comparison only.
<PAGE>
ADDITIONAL INVESTMENT STRATEGIES AND RISKS
Family Values Policies--The Adviser will engage one or more independent
research groups to provide the data required by the Adviser to evaluate Family
Values Policies. The Adviser also may use commercially available computer data
bases, and review evaluations published or made available by "watchdog" groups.
These groups generally review publicly available information about corporations
to determine whether they are involved in the businesses of alcohol production,
tobacco production or casino gambling, or whether their primary business,
products or services involve pornography, abortion or non-marriage lifestyles.
Corporations that are involved in such activities will be excluded from the pool
of investment opportunities available to the Funds. The Adviser also reserves
the right to exercise its best judgment to exclude investment in other companies
whose corporate practices may not fall within the exclusions described above,
but nevertheless could be found offensive to what it considers to be basic
traditional family values. These values represent the beliefs and actions which
support the creation, maintenance, and strengthening of the traditional family
unit--two or more people, related by blood, marriage or adoption. The
development of suitable research techniques is largely within the discretion and
judgment of the Adviser. In addition, the Board of Directors may change, subject
to prior notice to shareholders, the ethical standards of the Funds.
The Adviser will attempt to monitor and respond to changes in business policies
by the companies selected for investment. If after investment by a Fund it is
determined that the issuer does not satisfy the Family Values Policies, the
Adviser will seek to sell the securities as soon as reasonably practicable,
which may cause the Fund to sell the securities at a time when it may be
disadvantageous to do so from a purely financial standpoint.
The Family Values Policies will be applied to the Funds' investments in domestic
equity and fixed-income securities and, when the necessary information is
available, to foreign securities, including American Depositary Receipts (ADRs).
The Family Values Policies will not be applied to investments in government
securities.
The Funds' Family Values Policies limit the availability of investment
opportunities more than is customary with other mutual funds, including other
funds managed by the Adviser. The Adviser believes, however, that there are
sufficient investment opportunities which meet the Funds' ethical standards to
permit full investment in accordance with their investment objectives.
LARGE-CAP EQUITY FUND--The Fund will invest at least 70% of its total assets in
large-cap equity securities. The Fund also may invest in debt securities of
domestic issuers rated no lower than investment grade (Baa/BBB) by a credit
rating agency, such as Moody's Investors Service, Inc., Standard & Poor's
Ratings Group, Fitch IBCA, Inc. or Duff & Phelps Credit Rating Co., or, if
unrated, deemed to be of comparable quality by the Adviser.
SMALL-CAP EQUITY FUND--The Fund will invest at least 65% of its total assets in
small-cap equity securities. The Fund also may invest in debt securities of
domestic issuers rated no lower than investment grade (Baa/BBB) by a credit
rating agency, or, if unrated, deemed to be of comparable quality by the
Adviser.
APPLICABLE TO ALL FUNDS--While the Funds typically invest primarily in common
stocks, the equity securities in which they may invest also include convertible
securities and preferred stocks. Convertible securities are exchangeable for a
certain amount of another form of an issuer's securities, usually common stock,
at a prestated price. Convertible securities generally are subordinated to other
similar but non-convertible securities of the same issuer and, thus, typically
have lower credit ratings than similar non-convertible securities. Preferred
stock pays dividends at a specified rate and has preference over common stock in
the payment of dividends and the liquidation of assets. Preferred stock
ordinarily does not carry voting rights.
To a limited extent, each Fund may invest in debt securities. These securities
will be subject primarily to interest rate and credit risks. Interest rate risk
is the potential for a decline in bond prices due to rising interest rates. In
general, the prices of debt securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Credit risk is the possibility that the issuer of the security
will fail to make timely payments of interest or principal to the Fund. The
credit risk of a Fund depends on the quality of its investments. Certain debt
securities that may be purchased by the Funds, such as those rated Baa by
Moody's and BBB by S&P, Fitch and Duff, may be subject to such risk with respect
to the issuing entity and to greater market fluctuations than certain lower
yielding, higher rated securities.
Under adverse market conditions, each Fund may invest some or all of its assets
in money market instruments. Although the Fund would do this to avoid losses, it
could reduce the benefit from any upswing in the market. During such periods,
the Fund may not achieve its investment objective.
Each Fund may invest, to a limited extent, in securities issued by other
investment companies, including those managed by the Adviser, which principally
invest in securities of the type in which the Fund invests. Such investments
will involve duplication of advisory fees and certain other expenses.
Each Fund may invest some assets in derivative securities, such as options and
futures. These instruments would be used primarily to hedge the Fund's portfolio
but may be used to increase returns; however, they sometimes may reduce returns
or increase volatility. In addition, derivatives can be illiquid and highly
sensitive to changes in their underlying security, interest rate or index, and
as a result can be highly volatile. A small investment in certain derivatives
could have a potentially large impact on the Fund's performance.
Each Fund may lend its portfolio securities to brokers, dealers and other
financial institutions, which could subject the Fund to risk of loss if the
institution breaches it agreement with the Fund. In connection with such loans,
the Fund will receive collateral consisting of cash or U.S. Government
securities which will be maintained at all times in an amount equal to 100% of
the current market value of the loaned securities.
YEAR 2000 RISK--Like other funds and business organizations around the world,
the Funds could be adversely affected if the computer systems used by the
Adviser or Sub-Adviser and the Funds' other service providers do not properly
process and calculate date-related information for the year 2000 and beyond. In
addition, Year 2000 issues may adversely affect the companies or other issuers
in which the Funds invest where, for example, such entities incur substantial
costs to address Year 2000 issues or suffer losses caused by the failure to
adequately or timely do so.
The Adviser, the Sub-Adviser and the Funds' other service providers (i.e.,
Administrator, Transfer Agent, Fund Accounting Agent, Custodian and Distributor)
have assured the Funds that they have developed and are implementing clearly
defined and documented plans intended to minimize risks to services critical to
the Funds' operations associated with Year 2000 issues. The Adviser, the
Sub-Adviser and service providers are likewise seeking assurances from their
respective vendors and suppliers that such entities are addressing Year 2000
issues.
While the ultimate costs or consequences of incomplete or untimely resolution of
Year 2000 issues by the Adviser, the Sub-Adviser or the Funds' service providers
cannot be accurately assessed at this time, the Funds currently have no reason
to believe that the Year 2000 plans of the Adviser, the Sub-Adviser and the
Funds' service providers will not be completed by December 31, 1999, or that the
anticipated costs associated with full implementation of their plans will have a
material adverse impact on either their business operations or financial
condition or those of the Funds. If any systems upon which the Funds are
dependent are not Year 2000 ready by December 31, 1999, administrative errors
and account maintenance failures would likely occur.
FUND MANAGEMENT
INVESTMENT ADVISERS
First American National Bank, located at First American Center, 315 Deaderick
Street, Nashville, Tennessee 37237, serves as each Fund's investment adviser.
The Adviser is a wholly-owned subsidiary of First American Corporation, a
registered bank holding company. First American National Bank, and its
affiliates, provide personal trust, estate, employee benefit trust, corporate
trust and custody services to over 7,000 accounts, as well as investment
advisory services. The Adviser, and its affiliates, as of December 31, 1998, had
approximately $10 billion under trust and approximately $6 billion under
management.
The Adviser is responsible for making investment decisions for each Fund,
placing purchase and sale orders and providing research, statistical analysis
and continuous supervision of each Fund's investment portfolio. The Adviser has
engaged Womack Asset Management, Inc. to serve as the Small-Cap Equity Fund's
sub-investment adviser to provide investment advisory assistance and the
day-to-day management of that Fund's investments, as well as investment research
and statistical information.
Womack Asset Management, Inc., located at 1667 Lelia Drive, Suite 101, Jackson,
Mississippi 39216, is a registered investment adviser formed in February 1997.
Womack Asset Management provides investment management services to one other
investment company portfolio and to client discretionary accounts totaling
approximately $160 million as of December 31, 1998.
Set forth below is the investment advisory fee rate payable to the Adviser by
the indicated Fund:
NAME OF FUND ANNUAL RATE
- ---------------------------------- ------------------
Large-Cap Equity Fund .75%
Small-Cap Equity Fund .95%
PRIMARY PORTFOLIO MANAGERS
The primary portfolio manager for each Fund is as follows:
LARGE-CAP EQUITY FUND--Ronald E. Lindquist. Mr. Lindquist, who has over 30
years' experience as a portfolio manager, has been the Large-Cap Equity Fund's
primary portfolio manager since its inception, and has been employed by the
Adviser since May 1998. Since 1978, he was employed by Deposit Guaranty National
Bank and Commercial National Bank, affiliates of the Adviser.
SMALL-CAP EQUITY FUND--William A. Womack. He has been the Small-Cap Equity
Fund's primary portfolio manager since its inception. Mr. Womack formed Womack
Management in February 1997. For more than 12 years prior thereto, he was a
Senior Vice President and Trust Investment Officer of Deposit Guaranty National
Bank.
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services Ohio, Inc. (the "Administrator"), 3435 Stelzer Road,
Columbus, Ohio 43219-3035, serves as each Fund's administrator. The
administrative services of the Administrator include providing office space,
equipment and clerical personnel to the Funds and supervising custodial,
auditing, valuation, bookkeeping, legal and dividend dispersing services.
BISYS Fund Services Limited Partnership (the "Distributor"), an affiliate of the
Administrator, serves as the distributor of each Fund's shares. The Distributor
may provide financial assistance in connection with pre-approved seminars,
conferences and advertising to the extent permitted by applicable state or
self-regulatory agencies, such as the National Association of Securities
Dealers.
SHAREHOLDER INFORMATION
ALTERNATIVE PURCHASE METHODS
Each Fund offers Class A shares and Class B shares. Each Class A share and Class
B share represents an identical pro-rata interest in the relevant Fund's
investment portfolio.
You will need to choose a share class before making your initial investment. (If
only one share class is available through your program, you can refer just to
that information). In making your choice, you should weigh the impact of all
potential costs over the length of your investment, including sales charges and
annual fees. For example, in some cases, it may be more economical to pay an
initial sales charge than to choose a class with no initial sales charge but a
contingent deferred sales charge (CDSC) and higher annual fees.
o Class A shares may be appropriate for investors who prefer to pay the
Fund's sales charge up-front rather than upon the sale of their shares, or
want to take advantage of the reduced sales charges available on larger
investments.
o Class B shares may be appropriate for investors who want to avoid a
front-end sales charge, put 100% of their investment dollars to work
immediately and/or have a longer-term investment horizon.
Your investment representative can help you choose the share class that is
appropriate for you.
PRICING OF FUND SHARES
o HOW NAV IS CALCULATED
The NAV of each class is calculated by adding the total value of the Fund's
investments and other assets attributable to such class, subtracting its
liabilities and then dividing that figure by the number of outstanding shares of
the class:
Per share net asset value (NAV) for each Fund is determined and its shares are
priced at the close of regular trading on the New York Stock Exchange, normally
at 4:00 p.m. Eastern time, on days the Exchange is open, except Columbus Day and
Veterans' Day.
Your order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is received by the Fund less any applicable sales
charge as noted in the section on "Distribution Arrangements/Sales Charges."
This is what is known as the offering price.
NAV =
TOTAL ASSETS - LIABILITIES
- --------------------------
Number of Class Shares
Outstanding
You can find each Fund's
NAV daily in THE WALL STREET
JOURNAL and other newspapers.
Each Fund's investments are valued each business day generally by using
available market quotations or at fair value which may be determined by one or
more pricing services approved by the Board of Directors. Each pricing service's
procedures are reviewed under the general supervision of the Board of Directors.
For further information regarding the methods employed in valuing the Funds'
investments, see the Statement of Additional Information.
SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
You may purchase MINIMUM INVESTMENT
Class A shares and -------------------------------
Class B shares ACCOUNT TYPE INITIAL SUBSEQUENT
through a number of
institutions, CLASS A OR B
including the Regular $1,000 $100
Adviser and its (non-retirement)
affiliates, directly Retirement
from the (IRA) $ 100 $ 50
Distributor, or Automatic
through banks, Investment Plan $ 250 $ 25
brokers and other
investment
representatives. All purchases must be in U.S. dollars. A fee will
Certain investment be charged for any checks that do not clear.
representatives may Third-party checks are not accepted.
charge additional
fees and may require A Fund may waive the minimum purchase requirements
higher minimum and may reject any purchase order in whole or in
investments or part.
impose other
limitations on
buying and selling
shares. If you
purchase shares
through an
investment
representative, that
party is responsible
for transmitting
orders in a timely
manner and may have
an earlier cut-off
time for purchase
and sale requests.
Consult your
investment
representative for
specific information.
- -------------------------------------------------------------------------------
Avoid 31% Tax Withholding
A Fund is required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
Fund with their certified taxpayer identification number in compliance with IRS
rules. To avoid this, make sure you provide your correct Tax Identification
Number (Social Security Number for most investors) on your account application.
- -------------------------------------------------------------------------------
<PAGE>
SHAREHOLDER INFORMATION
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
If purchasing through an investment representative, simply tell your
representative that you wish to purchase shares of the Funds and he or she will
take care of the necessary documentation. For all other purchases, follow the
instructions below.
BY REGULAR MAIL
Initial Investment:
1. Carefully read and complete the account application. Establishing your
account privileges now saves you the inconvenience of having to add them
later.
2. Make check, bank draft or money order payable to "Stewardship Funds."
3. Mail to: Stewardship Funds
P.O. Box 182207
Columbus, Ohio 43218-2207.
Subsequent Investment:
1. Use the investment slip attached to your account statement. Or, if
unavailable,
2. Include the following information on a piece of paper:
o Stewardship Funds/Fund name
o Share class
o Amount invested
o Account name
o Account number
Include your account number on your check.
3. Mail to: Stewardship Funds
Columbus, Ohio 43218-2207.
BY OVERNIGHT SERVICE
See instructions 1-2 above for subsequent investments.
Send to: Stewardship Funds,
c/o BISYS Fund Services,
Attn: T.A. Operations, 3435 Stelzer Road, Columbus, Ohio 43219.
ELECTRONIC PURCHASES
Your bank must participate in the Automated Clearing House (ACH) and must be a
United States Bank. Your bank or broker may charge for this service.
<PAGE>
Establish an electronic purchase option on your account application or call
1-800-000-0000. Your account can generally be set up for electronic purchases
within 15 days.
Call 1-800-000-0000 to arrange a transfer from your bank account.
SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES - CONTINUED
ELECTRONIC VS. WIRE TRANSFER
Wire transfers allow financial institutions to
send funds to each other, almost instantaneously.
With an electronic purchase or sale, the
transaction is made through the Automated Clearing
House (ACH) and may take up to eight days to
clear. There is generally no fee for ACH
transactions.
BY WIRE TRANSFER
NOTE: YOUR BANK MAY CHARGE A WIRE TRANSFER FEE.
For initial investment:
Fax the completed account application, along with a request for a confirmation
number to 1-800-000-0000. Follow the instructions below after receiving your
confirmation number.
For initial and subsequent investments:
Instruct your bank to wire transfer your investment to:
The Bank of New York
Routing Number: ABA #021000018
DDA#
Include:
Your name
Your confirmation number
After instructing your bank to wire the funds, call 1-800-000-0000 to advise us
of the amount being transferred and the name of your bank
You can add to your account by using the convenient options described below. The
Funds reserve the right to change or eliminate these privileges at any time with
60 days' notice.
<PAGE>
SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES - CONTINUED
AUTOMATIC INVESTMENT PLAN DIRECTED DIVIDEND OPTION
You can make automatic investments By selecting the appropriate box in
in the Funds from your bank the account application, you can
account, through payroll deduction elect to receive your distributions
or from your federal employment, (capital gains and dividends)
Social Security or other regular in cash (check) or have them
government checks. Automatic reinvested in another Fund
investments can be as little as without a sales charge. You must
$25, once you've invested the maintain the minimum balance
$250 minimum required to open the in each Fund into which you plan to
account. reinvest distributions or the
reinvestment will be suspended and
To invest regularly from your bank your distributions paid to you.
account: The Fund may modify or terminate
Complete the Automatic Investment this reinvestment option without
Plan portion on your Account notice. You can change or terminate
Application. your participation in the
Make sure you note: reinvestment option at any time.
o Your bank name, address and account
number
o The amount you wish to invest
automatically (minimum $25)
o How often you want to invest
(every month, 4 times a year,
twice a year or once a year)
o Attach a voided personal check.
To invest regularly from your paycheck or
government check: Call 1-800-000-0000 for an
enrollment form.
<PAGE>
SHAREHOLDER INFORMATION
SELLING YOUR SHARES
You may sell your -------------------------------------------------
shares at any time. WITHDRAWING MONEY FROM YOUR FUND INVESTMENT
Your sales price
will be the next NAV As a mutual fund shareholder, you are technically
after your sell selling shares when you request a withdrawal in
order is received by cash. This is also known as redeeming shares or a
the Fund, its redemption of shares.
transfer agent, or -------------------------------------------------
your investment
representative. CONTINGENT DEFERRED SALES CHARGE
Normally you will When you sell Class B shares, you will be charged
receive your a fee for any shares that have not been held for a
proceeds within a sufficient length of time. These fees will be
week after your deducted from the money paid to you. See the
request is received. section on "Distribution Arrangements/Sales
See section on Charges" below for details.
"General Policies on
Selling Shares" INSTRUCTIONS FOR SELLING SHARES
below.
If you are selling your shares through your
financial adviser or broker, ask him or her for
redemption procedures. Your adviser and/or broker
may have transaction minimums and/or transaction
times which will affect your redemption. For all
other sales transactions, follow the instructions
below.
By telephone 1. Call 1-800-000-0000 with instructions
(UNLESS YOU HAVE as to how you wish to receive your funds
DECLINED TELEPHONE (mail, wire, electronic transfer). (See "General
SALES PRIVILEGES) Policies on Selling Shares--Verifying
Telephone Redemptions" below)
- -------------------------------------------------------------------------------
By mail 1. Call 1-800-000-0000 to request redemption
forms or write a letter of instruction indicating:
o your Fund and account number
o amount you wish to redeem
o address where your check should be sent
o account owner signature
2. Mail to:
Stewardship Funds
P.O. Box 182207
Columbus, OH 43218-2207
- -------------------------------------------------------------------------------
By overnight service See instruction 1 above.
(See "General 2. Send to
Policies on Selling Stewardship Funds
Shares--Redemptions c/o BISYS Fund Services
in Writing Required" Attn: T.A. Operations
below) 3435 Stelzer Road
Columbus, OH 43219
<PAGE>
SHAREHOLDER INFORMATION
SELLING YOUR SHARES - CONTINUED
Wire transfer Call 1-800-000-0000 to request a wire
YOU MUST INDICATE transfer.
THIS OPTION ON YOUR
APPLICATION. If you call by 4 p.m. Eastern time,
your payment will normally be wired
The Fund may charge to your bank on the next business day.
a wire transfer fee.
Note: Your financial
institution may
also charge a
separate fee.
- -------------------------------------------------------------------------------
Electronic Redemptions Call 1-800-000-0000 to request an
electronic redemption.
Your bank must participate If you call by 4 p.m. Eastern time, the NAV of
in the Automated Clearing your shares will normally be determined on the
House (ACH) and must be a same day and the proceeds credited within
U.S. bank. 8 days.
Your bank may charge for
this service.
SYSTEMATIC WITHDRAWAL PLAN
You can receive automatic payments from your account on a monthly, quarterly,
semi-annual or annual basis. The minimum withdrawal is $25. To activate this
feature:
o Make sure you've checked the appropriate box on the account application. Or
call 1-800-000-0000.
o Include a voided personal check.
o Your account must have a value of $5,000 or more to start withdrawals.
o If the value of your account falls below $500, you may be asked to add
sufficient funds to bring the account back to $500, or the Fund may close
your account and mail the proceeds to you.
<PAGE>
SHAREHOLDER INFORMATION
SELLING YOUR SHARES - CONTINUED
GENERAL POLICIES ON SELLING SHARES
REDEMPTIONS IN WRITING REQUIRED
You must request redemption in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Redemption requests requiring a signature guarantee which include each
of the following.
o Redemptions over $10,000
o Your account registration or the name(s) in your account has changed within
the last 15 days
o The check is not being mailed to the address on your account o The check is
not being made payable to the owner of the account
o The redemption proceeds are being transferred to another Fund account with
a different registration.
A signature guarantee can be obtained from a financial institution, such as a
bank, broker-dealer, or credit union, or from members of the STAMP
(Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange
Signature Program) or SEMP (Stock Exchanges Medallion Program). Members are
subject to dollar limitations which must be considered when requesting their
guarantee. The Transfer Agent may reject any signature guarantee if it
believes the transaction would otherwise be improper.
VERIFYING TELEPHONE REDEMPTIONS
The Fund makes every effort to insure that telephone redemptions are only made
by authorized shareholders. All telephone calls are recorded for your protection
and you will be asked for information to verify your identity. Given these
precautions, unless you have specifically indicated on your application that you
do not want the telephone redemption feature, you may be responsible for any
fraudulent telephone orders. If appropriate precautions have not been taken, the
Transfer Agent may be liable for losses due to unauthorized transactions.
<PAGE>
SHAREHOLDER INFORMATION
SELLING YOUR SHARES - CONTINUED
REDEMPTIONS WITHIN 15 DAYS OF INITIAL INVESTMENT
Before selling recently purchased shares, please note that if your initial
investment was by check, the Fund may delay sending you the proceeds until the
Transfer Agent is satisfied that the check has cleared (which may require up to
15 business days). You can avoid this delay by purchasing shares with a
certified check.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the SEC in order to protect remaining shareholders.
REDEMPTION IN KIND
The Fund reserves the right to make payment in securities rather than cash,
known as "redemption in kind." This could occur under extraordinary
circumstances, such as a very large redemption that could affect Fund operations
(for example, more than 1% of the Fund's net assets). If the Fund deems it
advisable for the benefit of all shareholders, redemption in kind will consist
of securities equal in market value to your shares. When you convert these
securities to cash, you might have to pay brokerage charges.
CLOSING OF SMALL ACCOUNTS
If your account falls below $500, the Fund may ask you to increase your balance.
If it is still below $500 after 45 days, the Fund may close your account and
send you the proceeds at the current NAV.
UNDELIVERABLE REDEMPTION CHECKS
For any shareholder who chooses to receive distributions in cash: If
distribution checks (1) are returned and marked as "undeliverable" or (2) remain
uncashed for six months, your account will be changed automatically so that all
future distributions are reinvested in your account. Checks that remain uncashed
for six months will be canceled and the money reinvested in the Fund.
<PAGE>
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES
This section describes the sales charges and distribution fees you will pay as
an investor in Class A or Class B shares and ways to qualify for reduced sales
charges.
CALCULATION OF SALES CHARGES
CLASS A SHARES
Class A shares are sold at their public offering price. This price includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions.
The current sales charge rates are as follows:
SALES CHARGE SALES CHARGE
AS A % OF AS A % OF
YOUR INVESTMENT OFFERING PRICE YOUR INVESTMENT
- ---------------------------------------------------------------------------
Up to $49,999 4.75% 4.99%
- ---------------------------------------------------------------------------
$50,000 up to $99,999 4.00% 4.17%
- ---------------------------------------------------------------------------
$100,000 up $249,999 3.25% 3.36%
- ---------------------------------------------------------------------------
$250,000 up $499,999 2.50% 2.56%
- ---------------------------------------------------------------------------
$500,000 up $999,999 1.75% 1.78%
- ---------------------------------------------------------------------------
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
- --------
1 There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of 1.00% will be charged
at the time of redemption of Class A shares purchased without an initial
sales charge as part of an investment of at least $1 million and redeemed
within one year of purchase. This charge will be based on the lower of your
cost for the shares or the shares' NAV at the time of redemption. There is
no CDSC on reinvested distributions. The Distributor may pay financial
representatives an amount up to 1% of the net asset value of Class A shares
purchased by their clients that are subject to a CDSC.
<PAGE>
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES - CONTINUED
CLASS B SHARES
Class B shares are offered at NAV, without any up-front sales charge. Therefore,
all the money you invest is used to purchase Fund shares. However, if you sell
your Class B shares before the sixth anniversary of purchase, you will have to
pay a contingent deferred sales charge (CDSC) at the time of redemption. The
CDSC will be based on the lower of the NAV at the time of purchase or the NAV at
the time of redemption according to the schedule below. There is no CDSC on
reinvested dividends or distributions.
ALL FUNDS - CLASS B SHARES
- -----------------------------------------------------------------------------
CDSC AS A % OF DOLLAR
YEARS SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
- -----------------------------------------------------------------------------
0-1 4.00%
1-2 3.00%
2-3 3.00%
3-4 2.00%
4-5 2.00%
5-6 1.00%
more than 6 None
- -----------------------------------------------------------------------------
If you sell some but not all of your Class B shares, certain shares not subject
to the CDSC (i.e., shares purchased with reinvested dividends) will be redeemed
first, followed by shares subject to the lowest CDSC (typically shares held for
the longest time).
CONVERSION FEATURE - CLASS B SHARES
o Class B shares automatically convert to Class A shares of the same Fund after
seven years from the end of the month of purchase.
o After conversion, your shares will be subject to the lower distribution and
shareholder servicing fees charged on Class A shares which will increase your
investment return compared to the Class B shares.
o You will not pay any sales charge or fees when your shares convert, nor will
the transaction be subject to any tax.
o If you purchased Class B shares of one Fund which you exchanged for Class B
shares of another Fund, your holding period will be calculated from the time
of your original purchase of Class B shares of the first Fund. The dollar
value of Class A shares you receive will equal the dollar value of the Class
B shares converted.
<PAGE>
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES - CONTINUED
SALES CHARGE REDUCTIONS
Reduced sales charges for Class A shares are available to shareholders with
investments of $50,000 or more. In addition, you may qualify for reduced sales
charges under the following circumstances.
o Letter of Intent. You inform the Fund in writing that you intend to purchase
enough shares over a 13-month period to qualify for a reduced sales charge.
You must include a minimum of 5% of the total amount you intend to purchase
with your letter of intent.
o Rights of Accumulation. Additional investments will qualify for reduced sales
charges, when the value of shares you already own plus the amount of your
added investment reaches the designated amount for the reduced sales charge.
o Combination Privilege. You inform the Fund in writing that you are eligible
to combine accounts of multiple Funds or accounts of immediate family
household members (spouse and children under 21) to achieve reduced sales
charges.
SALES CHARGE WAIVERS
CLASS A SHARES
The following qualify for waivers or reductions of sales charges:
o Shares purchased by investment representatives through fee-based investment
products or accounts.
o Proceeds from redemptions from another mutual fund complex within 90 days
after redemption, if you can demonstrate to the Fund that you paid a sales
charge for those shares, to the extent of such charge.
o Reinvestment of distributions from a deferred compensation plan, agency,
trust, or custody account that was maintained by the Adviser or its
affiliates or invested in any Fund.
o Shares purchased for trust or other advisory accounts established with the
Adviser or its affiliates.
o Shares purchased by full-time employees (and their family members) of the
Adviser or the Administrator; current and retired directors of the Adviser or
any of its affiliates; current and retired Fund directors; dealers who have
an agreement with the Distributor; and any trade organization to which the
Adviser or the Administrator belongs.
REINSTATEMENT PRIVILEGE
If you have sold Class A or B shares and decide to reinvest in the Fund within a
90-day period, you will not be charged the applicable sales load on amounts up
to the value of the shares you sold. You must provide a written reinstatement
request and payment within 90 days of the date your instructions to sell were
processed.
<PAGE>
SHAREHOLDER INFORMATION
DISTRIBUTION ARRANGEMENTS/SALES CHARGES - CONTINUED
CLASS B SHARES
The CDSC will be waived under certain circumstances, including the following:
o Distributions from retirement plans if the distributions are made following
the death or disability of shareholders or plan participants.
o Redemptions from accounts other than retirement accounts following the death
or disability of the shareholder.
o Returns of excess contributions to retirement plans.
o Distributions of less than 10% of the annual account value under a Systematic
Withdrawal Plan.
o Shares issued in a plan of reorganization sponsored by the Adviser, or shares
redeemed involuntarily in a similar situation.
DISTRIBUTION (12B-1) FEES
12b-1 fees compensate the Distributor and other dealers and investment
representatives for services and expenses relating to the sale and distribution
of the Fund's shares. Because 12b-1 fees are paid from Fund assets on an ongoing
basis, over time they will increase the cost of your investment and may cost you
more than paying other types of sales charges.
o The 12b-1 fees vary by share class as follows:
o Class A shares pay a 12b-1 fee of .25% of the average daily net assets
represented by Class A of the Fund.
o Class B shares pay a 12b-1 fee of .75% of the average daily net assets
represented by Class B of the Fund. This will cause expenses for Class B
shares to be higher and dividends to be lower than for Class A shares.
o The higher 12b-1 fee on Class B shares, together with the CDSC, help the
Distributor sell Class B shares without an "up-front" sales charge. In
particular, these fees help to defray the Distributor's costs of advancing
brokerage commissions to investment representatives.
Long-term shareholders may pay indirectly more than the equivalent of the
maximum permitted front-end sales charge due to the recurring nature of 12b-1
distribution fees.
<PAGE>
SHAREHOLDER INFORMATION
EXCHANGING YOUR SHARES
INSTRUCTIONS FOR EXCHANGING SHARES
You can exchange Exchanges may be made by sending a written
your shares in one request to Stewardship Funds, P.O.
Fund for shares of Box 182207, Columbus OH 43218-2207, or by
the same class of calling 1-800-000-0000. Please provide
another Fund, the following information:
usually without o Your name and telephone number
paying additional o The exact name on your account and
sales charges (see account number
"Notes" below). No o Taxpayer identification number (usually
transaction fees are your Social Security number)
charged for o Dollar value or number of shares to be
exchanges. exchanged
o The name of the Fund from which the
You must meet the exchange is to be made
minimum investment o The name of the Fund into which
requirements for the the exchange is being made.
Fund into which you
are exchanging. See "Selling your Shares" for important
Exchanges from one information about telephone transactions.
Fund to another are
taxable. IMPORTANT INFORMATION ABOUT EXCHANGES. If
shares of the Fund are purchased by check,
those shares cannot be exchanged until the
check has been collected. This could take 10
days or more. The Fund may reject an exchange
request from a shareholder who has made more
than five exchanges between investment
portfolios offered by Fund management in a
year, or more than three exchanges in a
calendar quarter. Although unlikely, the
Funds may reject any exchanges or, upon
60-days' notice shareholders, change or
terminate the exchange privilege. The
exchange privilege is available only in
states where shares of the new Fund may be
sold.
NOTES ON EXCHANGES
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference.
The registration and tax identification numbers of the two accounts must be
identical.
Be sure to read the prospectus carefully of any Fund into which you wish to
exchange shares.
<PAGE>
SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
All dividends and distributions will be automatically reinvested in Fund shares
unless you request otherwise. There are no sales charges for reinvested
dividends and distributions. Each share class will generate a different dividend
because each has different expenses. Capital gains, if any, are distributed at
least annually.
Each Fund usually pays its shareholders dividends from its net investment income
quarterly.
Dividends paid by a Fund are taxable to most U.S. shareholders as ordinary
income (unless your investment is in an IRA or tax-advantaged account).
An exchange of shares is considered a sale, and any related gains may subject to
applicable taxes.
Dividends are taxable in the year in which they are paid, even if they appear on
your account statement the following year. Dividends and distributions are
treated in the same manner for Federal income tax purposes whether you receive
them in cash or in additional shares.
DISTRIBUTIONS ARE MADE ON A PER SHARE BASIS REGARDLESS OF HOW LONG YOU'VE OWNED
YOUR SHARES. THEREFORE, IF YOU INVEST SHORTLY BEFORE THE DISTRIBUTION DATE, SOME
OF YOUR INVESTMENT WILL BE RETURNED TO YOU IN THE FORM OF A DISTRIBUTION.
You will be notified in January each year about the Federal tax status of
distributions made by the Fund. Depending on your residence for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes.
Foreign shareholders may be subject to special withholding requirements. There
is a penalty on certain pre-retirement distributions from retirement accounts.
Because everyone's tax situation is unique, you should consult your tax
professional about Federal, state and local tax consequences.
<PAGE>
For more information about the Funds, the following document is available free
upon request:
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Funds, including its operations and investment policies.
It is incorporated by reference and is legally considered a part of this
prospectus.
YOU CAN GET FREE COPIES OF THE SAI, OR REQUEST OTHER INFORMATION AND DISCUSS
YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING A BROKER OR BANK THAT SELLS THE
FUNDS. OR CONTACT THE FUNDS AT:
STEWARDSHIP FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
TELEPHONE: 1-888-FAM-VALUE
You can review information about the Funds, including the Funds' SAI, at the
Public Reference Room of the Securities and Exchange Commission. You can get
text-only copies:
o For a fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009 or calling 1-800-SEC-0330.
o Free from the Commission's Website at http://www.sec.gov.
Investment Company Act file no. 811-06076.
